Structuring Supplier Delivery Schedules and Extended Payment Terms under Working Capital Deficits
Staggering delivery tranches and anchoring payment term clocks to warehouse intake reduces working capital consumption without raising bank debt.
Free Carrier
Meaning
Trade term requiring the seller to deliver goods to a carrier or another person nominated by the buyer at the seller’s premises or another named place. The seller is responsible for export clearance but holds no obligation for the main carriage or import formalities. It establishes a clear handoff where the buyer takes over the management of the logistics chain.
Loading Duty
Fulfilling the obligation of the seller happens when the goods are placed onto the vehicle provided by the buyer if the named place is the seller’s facility. If the transfer happens elsewhere, the seller is responsible for the transport to that spot but not for the final unloading. This free carrier arrangement requires precise coordination between the factory and the freight forwarder.
Risk Handoff
Liability shifts the moment the carrier takes physical possession of the cargo. Under free carrier terms, the buyer pays for the ocean or air freight and any subsequent insurance. This allows the purchaser to use their own contracted rates and preferred routes.
Production Readiness
Yields must align with the pickup schedule to avoid storage fees at the terminal. A supplier’s forecast must be accurate so the buyer can book the carrier at the right time. Misalignment leads to idle transport capacity and increased costs for the purchasing department.