FCA Incoterms: Free Carrier Explained

What Does FCA Mean in Shipping?

FCA (Free Carrier) is one of the 11 Incoterms 2020 rules. The International Chamber of Commerce (ICC) publishes these rules. Under FCA, the seller must deliver goods — cleared for export — to a carrier or person the buyer names, at a named place. Once that handoff happens, all risk and further costs pass to the buyer.

FCA sits in the "F" group of Incoterms, along with FOB and FAS. All F-terms share one simple rule: the seller delivers goods to a carrier the buyer sets up. The buyer then signs and pays for the main carriage (freight). The ICC says FCA is now the most-recommended Incoterm for container freight. That's because it matches how modern container logistics actually work.

A key feature of FCA: the delivery point comes in two forms. If the named place is the seller's own site (factory or warehouse), the seller must load the goods onto the buyer's transport. If the named place is somewhere else instead — a port, airport, or freight terminal — the seller just drops the goods there. The seller does NOT have to unload them from their own transport.

FCA Seller and Buyer Obligations

FCA creates a clean split. The seller handles all tasks up to export and handoff to the carrier. The buyer then handles main carriage, insurance, import clearance, and all costs at the destination. The table below lists each duty.

FCA Cost Example: China to USA Shipment

Here is a real-world cost breakdown. It shows who pays what on an FCA shipment of 500 units of consumer electronics, from Guangzhou, China to Los Angeles, USA (1×40ft FCL container, goods value $45,000). Named place: FCA Nansha Port, Guangzhou.

FCA vs FOB: Why the ICC Recommends FCA for Containers

FOB (Free on Board) has long been the default Incoterm for ocean freight. But the ICC has favored FCA over FOB for container shipments since the 2010 revision. The reason is simple: FOB risk transfers when goods cross the ship's rail. Container cargo, though, gets dropped at the terminal long before it's loaded. The seller loses control of the container at the terminal gate. Yet FOB, on paper, still holds the seller responsible until the container is loaded on the vessel — a gap of 1-7 days where neither side truly controls the cargo.

FCA fixes this gap. Risk transfers as soon as the goods reach the carrier at the named place. If you write 'FCA Nansha Port, Guangzhou,' risk passes when the container arrives at the port terminal. That timing matches the real, physical way containers get handled.

Despite the ICC's advice, FOB still wins out due to habit, letter of credit rules, and plain familiarity. For new contracts — especially container ocean freight — FCA is the more correct choice. It is also the lower-risk pick for sellers.

When to Use FCA: Best Scenarios

FCA works best in three cases: the buyer wants full control over the main carriage, the shipment uses multimodal transport, or the seller wants a clean risk handoff at origin. Here are the most common scenarios.

• Container ocean freight: FCA is the ICC's preferred term for container shipping. Risk transfers at the terminal gate, which matches how containers are actually handled. Write 'FCA [Port Terminal]' for clarity.
• Air freight where buyer controls routing: Buyers who have volume discounts with airlines or air freight forwarders like FCA at the origin airport. The seller delivers to the airport cargo terminal, and the buyer's forwarder takes over from there.
• Buyer has their own freight forwarder: Firms with forwarders they already trust like FCA. It lets them control carrier choice, routing, and costs. The seller's only job is getting goods to the named place.
• Multimodal shipments: FCA works across all transport modes. Say goods move by truck to a rail terminal, then to a port, then onto a vessel. FCA gives you one clean handoff point, instead of the mode-specific limits of FOB or FAS.
• Amazon FBA and e-commerce fulfillment: Sellers shipping to Amazon FBA warehouses often use FCA at the origin port or factory. The buyer's (Amazon seller's) forwarder then handles ocean freight, customs, and FBA delivery.
• When L/C requires on-board bill of lading: Incoterms 2020 added a new option. It lets the buyer tell their carrier to issue an on-board B/L to the seller under FCA. This fix solved the old L/C compatibility problem that had kept many traders stuck on FOB.

Common FCA Mistakes to Avoid

FCA is simple, but these common mistakes cause disputes, delays, and surprise costs.

• Mistake: Not stating whether delivery is at the seller's site or elsewhere. 'FCA Guangzhou' is vague. Is it the factory? The port? A freight terminal? State it clearly: 'FCA Seller's Warehouse, 123 Industrial Road, Guangzhou' or 'FCA Nansha Container Terminal, Guangzhou.' The site sets who loads the goods.
• Mistake: Mixing up FCA with EXW. Under EXW, the buyer does all tasks, including export clearance. Under FCA, the seller handles export customs clearance instead. This is a key gap — the buyer cannot legally clear goods for export in most countries.
• Mistake: Using FOB for container cargo when FCA works better. FOB risk transfers on board the vessel, but containers get dropped at the terminal days before loading. During that gap, neither side has clear duty under FOB. FCA closes this gap.
• Mistake: Seller skips proof of delivery. Under FCA, the seller should get a receipt or transport paper showing goods went to the carrier at the named place. Without this paper, the seller cannot prove the handoff took place if a dispute comes up.
• Mistake: Forgetting origin THC under FCA at port. When the named place is a port terminal, the buyer may owe origin Terminal Handling Charges (THC) as part of the freight deal. Spell out who pays THC in the sales contract, to dodge surprise costs.
• Mistake: Assuming FCA covers freight. FCA means the seller hands off to the carrier — the buyer signs and pays for all freight from that point on. If you want the seller to pay freight, use CPT (Carriage Paid To) or CIF instead.

How to Write FCA in a Contract

The right format follows the ICC Incoterms 2020 standard: FCA [Named Place of Delivery] Incoterms 2020. The named place must be exact enough to show just where the seller's job ends.

A few examples help. 'FCA Seller's Factory, 456 Huangpu Road, Shenzhen, China Incoterms 2020' means delivery at the seller's own site — the seller loads. 'FCA Yantian International Container Terminal, Shenzhen, China Incoterms 2020' means delivery at the terminal — the seller drops off but does not load onto the vessel. 'FCA Shanghai Pudong International Airport, Cargo Terminal 2, China Incoterms 2020' means air freight drop-off at the airport cargo terminal.

For letter of credit deals, add the on-board B/L clause from Incoterms 2020 A6/B6. The buyer tells their carrier to issue an on-board bill of lading to the seller, who can then show it to the bank. This fix solved the main old block to using FCA with L/Cs.

FCA vs Other Incoterms: Quick Comparison

FCA sits between EXW (buyer does all tasks) and CPT (seller pays freight). Knowing where FCA fits helps you pick the right Incoterm for your supply chain.

Frequently Asked Questions: FCA Incoterms