GlossaryTopic

FCA (Free Carrier)

Term 12 of 30 · Topic

In one sentence

FCA (Free Carrier) is an Incoterm under which the seller hands over the goods, already cleared for export, to the carrier nominated by the buyer at an agreed place. From that point, risk and costs pass to the buyer.

Area: International Logistics Industry

Definition

FCA (Free Carrier) is one of the eleven Incoterms of the International Chamber of Commerce (ICC) that define the exact point where the seller fulfills its delivery obligation and where risk transfers to the buyer. Under FCA, the seller delivers the goods already cleared for export to the carrier or other person nominated by the buyer, at a previously agreed place.

The key to FCA is that the place of delivery determines who bears each cost and risk. If the agreed place is the seller's premises, the seller must load the goods onto the means of transport sent by the buyer. If it is any other place (a port, a warehouse, a terminal), the seller delivers the goods on its own vehicle, ready for unloading, with no obligation to unload them. From that moment, the buyer bears the main carriage, the insurance and all risk of loss or damage.

FCA is a flexible term that works for any mode of transport (land, air, sea or multimodal), unlike FOB, which applies only to transport by water. It is a core concept in the operations covered by the International Logistics practice, where choosing the right Incoterm determines how responsibilities are allocated in each foreign trade operation.

FCA belongs to the Incoterms 2020 family, the standardized rules that govern buyer and seller obligations in an international sale. Its full name is Free Carrier, and it answers one of the most frequent questions in any foreign trade operation: where does the seller's responsibility end and where does the buyer's begin?

How FCA works in practice

Under FCA, the seller completes delivery when it places the goods, cleared for export, at the disposal of the carrier the buyer chose. The decisive detail is the named place, which must always be stated precisely alongside the term (for example, "FCA Seller's Warehouse, Pilar, Buenos Aires"). There are two scenarios:

Delivery at the seller's premises: the seller is responsible for loading the goods onto the vehicle sent by the buyer. Delivery is complete once they are loaded.
Delivery at another place: the seller brings the goods to that point and makes them available on its own means of transport, ready for unloading. Unloading is for the buyer's account.

In both cases the seller handles and pays for export customs clearance, while the buyer bears international freight, insurance (if it buys it) and import clearance at destination.

Why choosing the right Incoterm matters

The wrong choice can lead to hidden costs, disputes over who pays for damage, or customs delays. The ICC itself recommends using FCA instead of FOB when goods travel in a container: in a containerized shipment, the seller hands the cargo over at the terminal well before it goes on board, so under FOB it would bear risk on goods it no longer controls. FCA closes that gap by transferring risk at the actual point of delivery.

FCA vs FOB and EXW

The difference between these three terms lies in who clears the goods for export and where risk transfers:

Aspect	EXW	FCA	FOB
Mode of transport	Any	Any	Sea/inland waterway only
Export clearance	Buyer	Seller	Seller
Loading at origin	Buyer	Seller (if at its premises)	Seller
Risk transfer	Seller's premises	Nominated carrier	On board the vessel
Recommended for containers	No	Yes	No

FCA is a middle ground: it places more responsibility on the seller than EXW (the minimum-obligation term), but less than arrival terms such as DDP, where the seller delivers at destination with all duties paid.

A concrete example in Argentina

A small winery in Mendoza exports bottled wine to an importer in Brazil. They agree on FCA Winery, Maipú. The seller packs the goods, issues the commercial invoice and the packing list, hires a customs broker for export clearance and loads the pallets onto the truck sent by the buyer's freight forwarder. At that instant, with the goods loaded, the risk of an accident on the road to the port already belongs to the Brazilian importer.

Common mistakes when using FCA

Not specifying the exact place: writing only "FCA Buenos Aires" leaves it ambiguous where risk transfers.
Confusing delivery with unloading: unless delivery is at the seller's premises, the seller does not unload the goods at the delivery point.
Using FOB for containers: it exposes the seller to risk while the cargo waits at the terminal.
Taking insurance for granted: FCA does not require the seller to buy transport insurance.

Understanding FCA precisely is part of professionalizing a foreign trade operation, where each term clearly sets the boundaries of responsibility between the parties.

Frequently asked questions

FAQs about FCA (Free Carrier)

What is FCA (Free Carrier) in international trade?

FCA, or Free Carrier, is an International Chamber of Commerce Incoterm under which the seller fulfills its delivery obligation when it places the goods, already cleared for export, at the disposal of the carrier nominated by the buyer at an agreed place. From that point, the risk and costs of the main carriage pass to the buyer. It is valid for any mode of transport.

What is the difference between FCA and FOB?

The main difference is the mode of transport and the point where risk transfers. FOB applies only to sea or inland waterway transport and transfers risk when the goods are on board the vessel. FCA works for any mode of transport and transfers risk when the goods are handed over to the nominated carrier, which is usually before they are loaded onto the vessel. That is why the International Chamber of Commerce recommends FCA instead of FOB for container shipments.

Who pays freight and insurance under FCA?

Under FCA the buyer pays for the main carriage and, if it wants, buys insurance, since the term does not require the seller to insure the goods. The seller only bears costs up to the agreed place of delivery, including export customs clearance. Once the goods are handed over to the buyer's carrier, all subsequent costs are for the buyer's account.

Who handles export clearance under FCA?

Under FCA, export customs clearance is the seller's responsibility. This sets it apart from EXW, where the buyer must arrange and pay for export. Under FCA the seller delivers the goods already cleared and ready to leave the country of origin, which simplifies the operation for the foreign buyer.

Why is FCA recommended instead of FOB for containers?

Because in a container shipment the seller hands the cargo over at the port terminal days before it is actually loaded on the vessel. Under FOB, risk only transfers once the goods are on board, so the seller would remain responsible for the cargo the whole time it waits at the terminal, without having control over it. FCA solves this by transferring risk at the actual moment of delivery to the carrier.

When should you avoid using FCA?

When the sale is paid by letter of credit and the bank requires a bill of lading with an on-board notation: under FCA the seller delivers before shipment and does not control that issuance, so the parties need to agree on the on-board notation option provided in Incoterms 2020 or the payment gets stuck. It is also a poor fit if the buyer has no agent at origin and does not want to manage freight: an arrival term such as DDP serves it better.

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