Free Carrier (FCA) is one of the most useful Incoterms for international trade because it fits containers, air freight, road freight, rail, and multimodal routes. It is also one of the most misunderstood terms because people treat it like FOB. That mistake is expensive.
FCA is a handover term. The seller gets the goods to a specific place and hands them over to the buyer’s nominated carrier. Once the carrier takes charge at the named place, the buyer carries the risk and the buyer controls the main transport.
Delivery occurs at the seller’s facility. The seller loads the goods onto the buyer’s collecting vehicle. Risk transfers after loading and handover to the carrier.
Delivery occurs at a terminal, port, forwarder warehouse, or consolidation point. The seller delivers to that location. Unloading rules depend on what the named place requires and what the parties agree.
| Topic | Seller Under FCA | Buyer Under FCA |
|---|---|---|
| Delivery | Delivers to the carrier or nominated party at the named place | Nominates carrier and specifies pickup or delivery instructions |
| Loading | Loads if delivery is at seller’s premises | Typically responsible for loading only if delivery is not at seller’s premises and contract says so |
| Export clearance | Handles export formalities and export customs | Provides buyer-side data needed for export filings |
| Main carriage | No obligation unless seller agrees to book transport as a service | Books and pays main carriage after delivery point |
| Insurance | No obligation | No obligation, but buyer usually insures once risk transfers |
| Import clearance and duties | No obligation | Clears import and pays duties and taxes |
Risk transfers at the named place when the goods are delivered to the carrier or nominated party. That is why the named place must be specific. “FCA port” is sloppy. “FCA, Terminal X, Gate Y, Port of Hamburg, Incoterms 2020” is workable.
Write it like this:
'FCA, [Full Address or Terminal Name], [City], [Country], Incoterms 2020.'
If pickup is at seller premises, say so clearly:
'FCA Seller’s Warehouse, [Full Address], Incoterms 2020. Seller loads on buyer’s collecting truck.'
EXW pushes almost everything onto the buyer, including export clearance in many cases, which is often unrealistic for foreign buyers. FCA is usually the cleaner choice because it keeps export clearance with the seller and provides a defined handover to the carrier.
FOB is designed for non-containerized sea shipments where delivery is tied to the goods being on board a vessel. For containers, FOB creates operational confusion because the container is handed to the terminal before the vessel is loaded. FCA is typically the correct term for container shipments because it matches how containers are actually delivered to carriers.
A recurring problem is documentary credit requirements that call for an “on-board” bill of lading, while the seller is delivering under FCA. If the buyer’s carrier or forwarder does not cooperate, the seller can be stuck: delivery is completed, but the seller cannot produce the required transport document to get paid.
Operational fix that belongs in the contract and LC:
'FCA, [Terminal/Forwarder], Incoterms 2020. Buyer instructs carrier to provide an on-board notation or equivalent carrier confirmation acceptable under the documentary credit.'
If the named place is a city or a port without a terminal, nobody agrees on what “delivered” means. That is how storage and waiting time disputes start.
FCA depends on the buyer nominating a carrier and providing pickup instructions. If the buyer delays, the seller ends up storing cargo and arguing about who pays.
If delivery is at seller premises, the seller loads. If delivery is elsewhere, clarify who unloads and who pays terminal handling to complete delivery.
Export documents, certificates, and transport proofs must be aligned to the buyer’s import clearance plan. Late or incorrect data causes clearance delays and charges.
Example wording:
'FCA, [Named Place], Incoterms 2020. Buyer shall nominate the carrier and provide pickup instructions no later than [date/time]. If carrier nomination is delayed, Buyer bears storage and handling charges from [time] onward.'
The seller clears export customs and handles export formalities unless the parties agree otherwise in the contract.
The buyer pays the main carriage after delivery, because the buyer controls the carrier nomination and the transport contract.
Yes, if delivery is at the seller’s premises. If delivery is at another named place, loading and unloading duties should be stated in the contract because operations depend on the location.
Risk transfers when the goods are delivered to the carrier or nominated party at the named place. The named place is the risk line.
In many container shipments, FCA is a better fit than FOB because containers are delivered to a terminal or forwarder before loading on the vessel. FCA matches that handover.
Disclaimer: This explainer is for general information only and does not constitute legal, tax, or customs advice. Incoterms allocate delivery obligations, costs, and risk, but they do not replace a properly drafted sales contract. Obtain jurisdiction-specific advice for customs, VAT, and documentary credit rules.
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