Any transport mode · Incoterms 2020
FCA Incoterm: Free Carrier (Incoterms 2020)
The modern workhorse — seller clears export and hands over to the buyer's carrier at a named point.
FCA at a glance
Under FCA the seller delivers the goods, cleared for export, to the carrier or party nominated by the buyer at a named place. Risk passes at that handover, and the buyer controls the main transport.
- Full term
- FCA — Free Carrier
- Transport mode
- Any transport mode
- Delivery point
- Named place — either the seller's premises (loaded on the buyer's vehicle) or another agreed point (on the seller's vehicle, ready for unloading)
- Risk transfers
- When the goods are handed over to the buyer's nominated carrier at the named place
- Export clearance
- Seller
- Import clearance
- Buyer
What FCA means in practice
FCA fixes the two problems that make EXW awkward for international trade: the seller clears the goods for export (its home turf), and the handover point is defined precisely enough that everyone knows where risk changes hands.
The rule has two flavours. If the named place is the seller's premises, delivery happens when the goods are loaded onto the buyer's collecting vehicle — so the seller carries loading risk. If the named place is somewhere else, such as a container terminal or forwarder's warehouse, delivery happens when the seller's truck arrives there ready for unloading — the seller does not unload.
For containerised freight, FCA has become the practitioner favourite over FOB, because containers are handed to the carrier at a terminal days before they are lifted aboard a vessel. FCA puts the risk handover where the physical handover actually happens. The 2020 revision also addressed the classic letter-of-credit objection: the parties can agree that the buyer instructs its carrier to issue an on-board bill of lading to the seller, which banks typically require.
Buyer vs seller responsibilities
| Task | Responsible |
|---|---|
| Packaging & export marking | Seller |
| Loading at origin | Depends — Seller loads if handover is at the seller's premises; if handover is elsewhere, the seller delivers ready for unloading and the buyer's side unloads. |
| Pre-carriage (inland transport, origin) | Depends — Seller carries the goods to the named place if it is not the seller's own premises. |
| Export clearance | Seller |
| Origin terminal handling | Buyer — Typically part of the buyer's carriage contract once the goods are handed over — check who the terminal bills in practice. |
| Main international transport | Buyer |
| Cargo insurance | Buyer — Neither party is obliged to insure. The buyer carries risk from handover, so cover is normally arranged in the buyer's interest. |
| Import clearance | Buyer |
| Import duties & taxes | Buyer |
| Delivery to final destination | Buyer |
| Unloading at destination | Buyer |
"Depends" reflects the two FCA delivery scenarios — at the seller's premises versus at another named place. Name the exact point (and who loads/unloads there) in the contract to remove the ambiguity.
Where costs transfer — and where risk transfers
Cost transfer
The seller pays for packing, export clearance and getting the goods to the named handover point — including loading the buyer's truck when handover is at the seller's own site. From the handover, the buyer pays: terminal charges under its carriage contract, main freight, insurance if taken, import clearance, duties and final delivery.
One recurring cost dispute is origin terminal handling charges (THC) for containers: they are sometimes billed to the shipper, sometimes wrapped into the buyer's freight contract. The rule points the cost at the buyer's side after handover, but the cleanest fix is to state in the contract who absorbs origin THC.
Risk transfer
Risk passes when the goods are handed to the buyer's nominated carrier at the named place — loaded on the collecting vehicle at the seller's premises, or arriving ready for unloading at any other named point.
Cost and risk transfer together under FCA, which is part of its appeal. Contrast this with CPT or CIP, where the seller keeps paying for carriage long after risk has already moved to the buyer.
When FCA works well
- Containerised sea freight where goods are delivered to a terminal — FCA aligns risk transfer with the real physical handover, unlike FOB.
- Air, road or rail shipments where the buyer wants to control the main carriage with its own carrier or forwarder.
- Buyers with strong freight contracts who want the seller to handle export clearance but nothing beyond origin.
- Multi-supplier consolidation at an origin warehouse: each seller delivers FCA to the consolidation point, and the buyer runs the export shipment from there.
- Letter-of-credit deals for containerised cargo, using the 2020 option of instructing the carrier to issue an on-board bill of lading to the seller.
When to think twice about FCA
- The buyer has no carrier network or forwarder at origin and would rather pay the seller to organise the main transport — CPT/CIP or a D-rule fits better.
- Bulk commodities loaded directly onto a chartered vessel, where the market convention and the physical flow genuinely match FOB or FAS.
- Sellers who want to keep control of freight as part of their commercial offer (quoting a delivered price) — a C- or D-rule reflects that strategy.
- Contracts that name only a city ("FCA Rotterdam") without a precise point — the ambiguity undermines the rule's main advantage.
FCA in the real world
Vietnamese furniture exporter, container to Rotterdam
A Dutch retailer buys a full container of furniture from a manufacturer near Ho Chi Minh City on "FCA Cat Lai Terminal, Ho Chi Minh City (Incoterms 2020)" terms. The seller trucks the container to Cat Lai, files the Vietnamese export declaration, and hands the container to the ocean carrier nominated by the retailer's forwarder.
Risk passes when the terminal takes the container in. Four days later — before the vessel loads — a storage stack incident damages the container. Because the parties chose FCA rather than FOB, there is no argument about whether risk had passed: it had, and the retailer's cargo insurer handles the claim without disputing the transfer point.
The retailer pays ocean freight under its own service contract (protecting its negotiated rates), handles EU import clearance, and delivers to its own distribution centre.
Common mistakes with FCA
Naming a city instead of a precise point
"FCA Shanghai" could mean the factory, a forwarder's warehouse or a terminal — each with different loading obligations and risk moments. Name the exact facility.
Confusing the two delivery scenarios
At the seller's premises the seller loads the buyer's truck; anywhere else the seller only arrives ready for unloading. Parties who don't know which scenario applies argue about loading damage and waiting time.
Assuming FCA includes insurance
Neither party is obliged to insure under FCA. Buyers carry risk from handover at origin — often weeks before arrival — and should arrange cargo cover from that point, not from vessel departure.
Using FOB out of habit for containers
Quoting habits die hard. If the goods are containerised and handed over at a terminal, FCA generally mirrors reality better than FOB — the container leaves the seller's control days before it crosses a ship's rail.
TradeIntel insight
FCA rewards buyers who know their freight economics. Handing the main carriage to the buyer only creates value if the buyer's rates and carrier relationships are genuinely better than the seller's — otherwise you have taken on risk earlier in the chain for no saving. Before switching a lane from CIF or CPT to FCA, benchmark the freight you would actually pay, including origin terminal charges, not just the ocean or air rate.
Is FCA right for your shipment?
Answer eight questions about your shipment and capability profile — the TradeIntel Incoterms Assessment explains which rules fit and why.
Frequently asked questions
What is the difference between the two FCA delivery scenarios?
If the named place is the seller's premises, delivery happens when the goods are loaded on the buyer's collecting vehicle — the seller bears loading risk. If it is any other place, delivery happens when the seller's vehicle arrives there ready for unloading; unloading is the buyer's side of the line.
Why is FCA often recommended over FOB for containers?
Containers are handed to the carrier at a terminal, often days before vessel loading. FOB keeps risk with the seller until the goods are on board, creating a gap where the seller bears risk over cargo it no longer controls. FCA moves risk at the terminal handover, where control actually changes. That said, conventions like FOB remain workable where both parties understand the gap.
Can FCA be used with a letter of credit?
Yes. The traditional objection was that banks want an on-board bill of lading, which an FCA seller could not demand. Since the 2020 revision the parties can agree that the buyer instructs its carrier to issue an on-board B/L to the seller, closing that gap for containerised L/C business.
Who pays origin terminal handling charges under FCA?
After handover they sit on the buyer's side, usually inside the buyer's freight contract. In practice terminals sometimes bill the shipper, so well-drafted contracts state explicitly who absorbs origin THC to avoid double-charging disputes.
Does the seller arrange insurance under FCA?
No obligation exists for either party. Since the buyer carries risk from the origin handover, buyers normally arrange their own cargo insurance starting at that point — not from sailing or flight departure.
Is FCA suitable for air freight?
Yes — FCA works for any transport mode. A typical air pattern is handover to the buyer's nominated forwarder at the origin airport or the forwarder's export warehouse, with the seller having completed export clearance.
Related Incoterms guidance
Reviewed for practical procurement and logistics relevance by TradeIntel.
TradeIntel provides educational decision support and does not provide legal, tax, customs or contractual advice. Incoterms should be incorporated into a complete sales contract with a precisely named place or port.