FCA Incoterm (Free Carrier) – Definition

Quick Overview

FCA (Free Carrier) is an Incoterm under which the seller delivers goods, cleared for export, to a carrier or place named by the buyer, who then arranges the main carriage. The rule defines seller's and buyer's main obligations, insurance, and is often compared with EXW and FOB.

FCA explained in 30 seconds

Seller’s Main Obligations (FCA)

• Issue the commercial invoice and packing list.
• Clear the goods for export and bear all export duties, taxes, and formalities.
• Load the goods on the buyer‑nominated vehicle if the named place is the seller’s facility; otherwise, place them ready for pickup at the agreed point.
• Provide the buyer with the transport document (B/L, AWB, CMR) showing “FCA, [Named Place], Incoterms 2020.”
• Notify the buyer that delivery has occurred.
• Bear risk and costs up to the hand‑over point.

Buyer’s Main Obligations (FCA)

• Pay for the goods as set out in the sales contract.
• Arrange and pay for the main carriage, choosing and instructing the carrier.
• Handle transit and import customs clearance, duties, VAT, and any local taxes.
• Organise on‑carriage from the named place to the final destination.
• Obtain cargo insurance for the legs under its risk (optional but strongly recommended).

Insurance Under FCA

Incoterms impose no mandatory cargo‑insurance requirement.

A clearly drafted sales contract should spell out who buys which policy to avoid gaps. (Trade Finance Global)

FCA Compared with Related Terms

*If the named FCA place is not the seller’s premises, loading/unloading is for the party that contracts the carrier.

Worked example: FCA at a seller’s warehouse

Hypothetical example. A US buyer purchases machinery from a supplier in Shenzhen. The contract specifies FCA [the supplier’s full warehouse address and agreed loading point], Shenzhen, China, Incoterms® 2020. The buyer nominates the carrier that will collect the goods.

Because the agreed FCA point is the seller’s premises, the seller loads the goods onto the buyer-nominated collecting vehicle and completes the export formalities. Delivery and the ordinary transfer of risk occur when that loading is completed. The buyer arranges and pays for the onward journey, including the ocean leg to the United States, and handles US import formalities.

The parties should put the precise handover point in the contract and confirm which origin, ocean and destination charges are included in their respective transport contracts. This example does not represent a live freight quote.

When Does FCA Make Sense?

• Container exports where the buyer wants to leverage its own freight contracts.
• Intermodal projects (rail + sea + truck) needing a clean risk cut‑off at origin.
• Situations where banks require an on‑board B/L but physical loading happens inland.
• Deliveries from large exporters whose sites can safely load trucks or containers.

Common Pitfalls & Mitigation

FCA vs EXW vs FOB - Choosing the Right "Buyer Arranges Main Carriage" Incoterm

Required Documents at a Glance

• Commercial Invoice & Packing List
• Export customs declaration and licences/certificates of origin or conformity
• Bill of Lading / Air Waybill / CMR marked “FCA [Named Place] Incoterms 2020”
• Any agreed insurance certificate or carrier instructions

Key Takeaways

1. Risk passes under FCA when the goods are handed over to the buyer’s carrier—loaded if at the seller’s premises.
2. The seller handles export clearance and origin loading; the buyer controls freight, transit, and import.
3. Clear contract wording on the exact delivery point, documentary requirements, and insurance split prevents costly disputes.
4. The new on‑board B/L option makes FCA a practical alternative to FOB for containerised sea shipments financed by L/Cs.

Sources & Further Reading

• ICC – Incoterms® 2020 Rules
• ICC Academy – “Incoterms 2020: FCA or FOB?”
• International Trade Administration – “Know Your Incoterms” & “Free Carrier (FCA)”
• Shipping Solutions – “Incoterms 2020 FCA: Spotlight on Free Carrier”
• xNova International – “Incoterms 2020: EXW, FOB and FCA – Correct Use and Recommendations”