What is FCA (Free Carrier)?

FCA is a flexible rule. It works for containers, air freight and road, and it suits sellers who want to be done at their own door or a nearby terminal. It is often a better choice than FOB when goods are handed over at a container terminal rather than loaded straight onto a ship. For the full list of rules, see what are Incoterms.

This is a general explanation, not legal, tax or customs advice.

Why FCA matters

The buyer controls the main journey, so it picks the forwarder and the freight price. The seller keeps its job small: pack the goods, clear export and hand them over.

FCA also fixes the awkward part of EXW. Under EXW the buyer collects from the seller's door and handles export. Under FCA the seller clears export, which is easier for a seller who knows its own export rules.

Where delivery happens

The named place decides who loads.

• At the seller's premises: delivery is complete when the goods are loaded on the buyer's collecting vehicle. The seller loads.
• At any other place (a terminal, a warehouse, a port): delivery is complete when the goods arrive on the seller's vehicle, ready for unloading, at that place. The buyer's carrier unloads.

Always name the place precisely, and where possible the exact point within it.

Who does what under FCA

The seller

• Clears the goods for export.
• Delivers them to the buyer's carrier at the named place.
• Carries the risk until delivery.
• Provides the commercial invoice and the usual proof that delivery took place.

The buyer

• Nominates the carrier and pays the main carriage.
• Carries the risk from delivery.
• Clears the goods for import and pays the duties and taxes.

Neither side has to arrange insurance under FCA.

Where risk passes

Risk passes at the point of delivery described above, not at the destination. Once the carrier has the goods, loss or damage is the buyer's.

The FCA bill of lading option

Incoterms 2020 added a useful detail. If the buyer agrees, it can instruct its carrier to issue an on-board bill of lading to the seller after loading. This helps when a letter of credit asks for one. The seller still ends its responsibility at delivery, and the buyer carries the extra risk and cost.

An example from product sales

Say a plastics distributor sells 10 pallets of granules at $12,000, FCA its warehouse. The buyer's forwarder collects. The seller loads the truck, clears export for $650 and hands over the export documents. Its FCA price is $12,650.

The forwarder then arranges freight, which the buyer pays, plus import duties and taxes. If the goods are damaged on the motorway, the loss is the buyer's, because delivery already happened at the warehouse.

Common mistakes with FCA

• Vague named place. "FCA Rotterdam" could mean any of several sites.
• Forgetting who loads. It depends on whether the place is the seller's premises.
• Treating FCA as EXW. Under FCA the seller clears export.
• Using FOB for containers. FCA fits better when goods go to a terminal rather than onto the ship.

Related terms

• Incoterms: the 11 rules FCA belongs to.
• EXW: the buyer collects and clears export.
• FOB: the sea rule, delivered on board.
• DAP: the seller delivers to the buyer's place.
• Landed cost: the buyer's full cost after freight, duty and fees.

How PromptLab handles it

Choose FCA in the trade terms field on the sales order, which lists the 11 Incoterms 2020 rules, and write the named place in the order's note. If a customer always buys on FCA, store it as the account's preferred terms and each new order fills it in.

Frequently asked questions

What does FCA mean?

FCA means Free Carrier. The seller delivers export-cleared goods to the carrier the buyer nominates at a named place.

Who pays freight under FCA?

The buyer pays the main carriage. The seller pays only the costs up to delivery, including export clearance.

What is the difference between FCA and FOB?

FOB applies only to sea and inland waterway transport and delivers on board the ship. FCA works for any transport mode and delivers to a carrier at a named place.

What is the difference between FCA and EXW?

Under EXW the buyer collects the goods and clears export. Under FCA the seller clears export and delivers to the buyer's carrier.

Who is responsible for loading under FCA?

It depends on the named place. At the seller's premises the seller loads. At any other place the seller delivers on its vehicle, ready for unloading.