FCA Incoterms (Free Carrier)
FCA (Free Carrier) is one of the most versatile and commonly used Incoterms in international trade. Under FCA, the seller delivers goods, cleared for export, to a carrier nominated by the buyer at a named place. It offers a balanced distribution of responsibilities between buyer and seller.
At Named Place
Any Mode
Seller
What Does FCA Mean in Shipping?
FCA (Free Carrier) is an international commercial term (Incoterm) published by the International Chamber of Commerce (ICC). It defines the point at which the seller fulfills their delivery obligation by handing over goods, cleared for export, to a carrier or another person nominated by the buyer at the seller's premises or another named place.
Under FCA terms, the seller bears all costs and risks up to and including delivery to the named place. Once the goods are delivered to the carrier, the risk transfers to the buyer, who then becomes responsible for the main carriage, insurance, and import formalities.
FCA is particularly popular because it works with any mode of transport and provides clearer risk allocation than EXW while still giving buyers control over the main carriage arrangements.
Key Features of FCA:
- Works with any mode of transport (sea, air, road, rail, multimodal)
- Seller handles export customs clearance
- Risk transfers when goods delivered to carrier at named place
- Buyer arranges and pays for main carriage
- More balanced than EXW, more flexible than FOB
Key Responsibilities Under FCA Terms
Seller's Obligations
The seller is responsible for preparing goods, export clearance, and delivering to the named place or carrier.
Buyer's Obligations
The buyer handles main carriage, insurance, import formalities, and final delivery.
Advantages and Disadvantages of FCA
Advantages
Flexibility in Transport Mode
FCA can be used with any mode of transport—sea, air, road, rail, or multimodal—making it highly versatile for various shipping needs.
Clear Risk Transfer Point
The risk transfers at a clearly defined point (delivery to carrier), reducing disputes about when responsibility changes hands.
Seller Handles Export Formalities
The seller manages export customs clearance, which is typically easier for them as the local party familiar with their country's regulations.
Buyer Controls Main Carriage
Buyers can negotiate their own freight rates and choose carriers, potentially achieving cost savings through preferred logistics partners.
Disadvantages
Buyer Bears Most Transport Risk
Once goods are delivered to the carrier, all transit risks transfer to the buyer, requiring comprehensive insurance coverage.
Coordination Complexity
The buyer must coordinate with carriers in the seller's country, which can be challenging without local knowledge or contacts.
Potential for Miscommunication
Unclear specification of the "named place" can lead to disputes about delivery location and associated costs.
Insurance Gaps Possible
If not carefully managed, there can be coverage gaps between the seller's and buyer's insurance policies at the transfer point.
FCA Cost Breakdown
Understanding who pays for what under FCA terms helps avoid disputes and budget surprises.
| Cost Item | Seller | Buyer |
|---|---|---|
| Packaging & Labeling | ||
| Loading at Origin | ||
| Export Customs Clearance | ||
| Delivery to Carrier/Named Place | ||
| Main Carriage (Freight) | ||
| Cargo Insurance | ||
| Import Customs Clearance | ||
| Import Duties & Taxes | ||
| Delivery to Final Destination |
FCA vs FOB vs EXW Comparison
| Aspect | FCA | FOB | EXW |
|---|---|---|---|
| Transport Mode | Any mode | Sea/inland waterway only | Any mode |
| Export Clearance | Seller | Seller | Buyer |
| Risk Transfer Point | Delivery to carrier | On board vessel | Seller's premises |
| Loading Responsibility | Seller (at own premises) | Seller | Buyer |
| Best For | Multimodal, containerized cargo | Bulk sea cargo | Experienced buyers with logistics network |
| ICC Recommendation | Recommended for most trades | Sea freight only | Limited use cases |
FCA vs FOB: Key Difference
While both involve seller export clearance, FCA is more flexible as it works with any transport mode and is better suited for containerized cargo. FOB is specifically for sea transport where goods are loaded directly onto a vessel. FCA is increasingly preferred for container shipping as it provides a clearer handover point.
FCA vs EXW: Key Difference
FCA provides significantly more seller involvement than EXW. Under FCA, the seller handles export clearance and delivers to the carrier, whereas EXW places all responsibilities on the buyer from the seller's premises. FCA is generally recommended by the ICC over EXW for international trade.
When to Use FCA in International Trade
Ideal Scenarios for FCA
- Containerized cargo shipped via multiple transport modes
- Buyer has preferred freight forwarders or carriers
- Delivery to inland terminals or freight stations
- Air freight shipments requiring terminal delivery
- When seller should handle export but not freight
Consider Alternatives When
- Buyer lacks logistics experience in seller's country
- Traditional bulk cargo shipped directly by sea (use FOB)
- Buyer wants seller to arrange freight (use CPT or CIP)
- Buyer needs full door-to-door service (use DDP or DAP)
- High-value goods needing seller-arranged insurance (use CIP)
Frequently Asked Questions
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