QUICK ANSWER Under the FCA Incoterm, Free Carrier, one of the Incoterms 2020 rules, the seller hands the goods to the carrier the buyer has chosen, either loaded at the seller's own premises or delivered to another named place such as a forwarder's warehouse or the origin terminal, with export clearance done by the seller. Risk moves to the buyer at that handover, and the buyer pays and controls everything after it: the main freight, insurance if wanted, and the import side. For containerized and air cargo it is the term the ICC itself points buyers toward instead of FOB.
FCA is the workhorse of the Incoterms 2020 set for container and air freight, and the term most US importers should understand before FOB. Here is what it obligates each side to do, where it beats FOB, and the one change Incoterms 2020 made that removed its last real drawback.
What FCA means in practice
FCA belongs to the seven Incoterms 2020 rules that work for any transport mode, and it splits the shipment at the first carrier. The seller produces the goods, clears them for export, and delivers them to the carrier or another person the buyer names, at an agreed point. From that point on, the move belongs to the buyer: the buyer's carrier, the buyer's freight rate, the buyer's risk.
In a purchase order it reads as FCA plus a place: "FCA Shenzhen, seller's warehouse" or "FCA Yantian CFS". That named place is not decoration. It is the exact spot where cost and risk change hands, which is why vague FCA terms cause most FCA disputes.
The two delivery points, and why they matter
The rule has two delivery scenarios, and the seller's loading duty differs between them. At the seller's premises, the seller must load the goods onto the collecting truck; delivery happens when the cargo is on the vehicle. At any other named place, the seller delivers by getting the goods there on its own truck, ready for unloading; the unloading itself is the buyer's side of the line.
Pick the point deliberately. Name the supplier's own dock and the supplier's risk ends at its gate, before any trucking; name your forwarder's origin warehouse and the supplier trucks the goods there at its own cost and risk, with your side taking over at a facility you control. For consolidated cargo the second version is the practical one.
What each side owes under FCA
Who does what under FCA
| Obligation | Seller | Buyer |
|---|---|---|
| Goods, invoice, packaging and marking | Yes | |
| Export permits and export customs clearance | Yes | |
| Loading at the seller's premises | Yes | |
| Delivery to the named place | Yes, on its own transport | |
| Main carriage, ocean or air | Yes, buyer contracts and pays | |
| Unloading at the named place away from seller's premises | Yes | |
| Insurance of the main carriage | Neither side is obligated | Buys it if wanted |
| Import clearance and US duty | Yes | |
| Risk after handover to the carrier | Yes |
The insurance row surprises people: unlike CIF, where the seller must insure the ocean leg at least minimally, FCA obligates nobody to insure anything. A buyer who wants cover arranges cargo insurance on its own terms, which in practice means better cover than a seller's minimum policy.
Where FCA beats FOB on containers
FOB transfers risk when the goods pass on board the vessel. A container does not travel that way: the supplier hands it to the terminal or a CFS days before any crane touches it, and between gate-in and loading it sits in a stack that neither party physically controls. Under FOB that window is legally the seller's risk while the container is entirely out of the seller's hands, a mismatch that gets messy exactly when something goes wrong in the yard.
FCA closes the gap by moving the risk transfer to the actual handover, the terminal gate or the CFS door. That is why the ICC's own guidance steers containerized cargo to FCA and reserves FOB for bulk and breakbulk that is genuinely delivered on board the vessel. The commercial outcome is almost identical to FOB, buyer books and pays the ocean leg either way, so the switch costs nothing and removes the ambiguity. The FOB side of that comparison is covered in our FOB guide.
FCA vs EXW: one big difference
EXW hands the buyer everything, including export clearance in the seller's country, which a foreign buyer is poorly placed to do. FCA keeps export formalities with the seller, where they belong, and usually includes loading. That single difference is why the standard advice is to convert EXW offers into FCA at the same price and rarely accept the reverse. The full comparison lives in our FOB vs EXW guide.
The on-board bill of lading fix in Incoterms 2020
FCA's one historical weakness was paperwork. Sellers paid under a letter of credit need a bill of lading with an on-board notation, and under FCA the seller's job ends before the container is on board, so the carrier had no reason to give the seller that document. Incoterms 2020 added an optional mechanism: the parties can agree that the buyer instructs its carrier to issue an on-board bill of lading to the seller once the goods are loaded. If your supplier sells against a letter of credit, write that option into the contract; if payment runs on open account or transfer, you will likely never need it.
One FCA shipment, worked through
A furniture importer buys $48,000 of goods "FCA Shenzhen, forwarder's warehouse, Incoterms 2020". The supplier trucks the cartons to the consolidation warehouse and clears the export; its risk and cost end at that door. The importer's forwarder consolidates the cargo, books the ocean leg to Los Angeles, and the importer pays the freight, handles the US entry and duty, and carries the risk from the warehouse door onward, insured under its own policy. When a stack collapse at the origin terminal damages two pallets after gate-in, the claim runs through the importer's insurer without any argument about whether risk had passed: it had, at the warehouse door, days earlier and in writing.
When a US importer should buy FCA
Buy FCA when the cargo flies: air freight has no ship's rail, so FOB does not fit it and FCA is the natural term. Buy FCA when cargo consolidates, naming the origin warehouse where your buyers consolidation runs. And buy FCA for standard containers whenever you want FOB economics without the FOB risk gap. The main reason to prefer FOB instead is habit, and the main reason to accept CIF instead, the seller controlling the freight, is usually a reason to negotiate away from it.
KEY TAKEAWAY FCA works when the named place is precise. "FCA Shenzhen" invites a dispute; "FCA Shenzhen, [named warehouse], loaded, export cleared, Incoterms 2020" prices the same and settles in advance who owns every meter of the move.
How Platton runs an FCA shipment
Your carrier from the named place
Under FCA the buyer contracts the main carriage, which is where Platton comes in: ocean or air booked from the named place, on rates you see, with the origin handover coordinated against the supplier's delivery. The US side you carry under FCA, customs clearance, drayage and delivery, can ride on the same booking or stay yours.
The handover, documented
Delivery under FCA is a moment, so it gets a record: when and where the supplier delivered, what was received and in what condition. If a claim ever hinges on which side of the named place the damage happened, that record answers it.
Advice on the term itself
The right term shifts by route and mode. Before a purchase order is signed, we will tell you plainly whether FCA, FOB or something else fits the shipment, and what the named place should say, so the term on the purchase order matches how the freight will actually run.
Common Questions About FCA
What does FCA mean in shipping?
FCA stands for Free Carrier. The seller delivers the goods, export cleared, to a carrier or person the buyer nominates at a named place, either loaded at the seller's premises or arriving at another agreed location. From that handover the buyer carries the risk and pays for the main freight, any insurance and the import side.
Who pays the freight under FCA?
The buyer. The seller pays only to get the goods to the named place, including export clearance; the buyer contracts and pays the main ocean or air carriage, destination charges, import clearance and delivery. That is the point of the term for importers: the freight is bought at your rates, by your forwarder, under your control.
Where does risk transfer under FCA?
At the named place, at the moment of handover. At the seller's premises that is when the goods are loaded on the collecting vehicle; anywhere else it is when the seller's truck arrives with the goods ready for unloading. Everything after that moment, terminal stacking included, is the buyer's risk, which is why buyers under FCA arrange their own cargo insurance.
Does the seller load the truck under FCA?
At the seller's own premises, yes, loading is the seller's duty and delivery happens once the goods are on the vehicle. At any other named place the seller only has to get the goods there; unloading them off the seller's truck is on the buyer's side of the split. The two scenarios are written into the rule itself.
Can FCA be used for sea containers?
Yes, and it is the recommended choice. Containers are handed over at terminals and CFS warehouses days before vessel loading, so a term that transfers risk on board leaves a gap nobody controls. FCA transfers risk at the actual handover point, which is why ICC guidance points containerized cargo to FCA rather than FOB.
What changed for FCA in Incoterms 2020?
One practical addition: the parties can agree that the buyer instructs its carrier to issue the seller a bill of lading with an on-board notation after loading. That closed the financing gap that used to make sellers on letters of credit insist on FOB, and it is optional, so contracts that do not need it can ignore it.
Related Freight Forwarding Guides
Incoterms 2020 explained: all 11 rules and who pays what under each.
FOB vs EXW: the export-clearance difference that decides between them.
CIF incoterm: what a seller-controlled freight term hides.
Bill of lading: the document behind the on-board notation question.
Buying on FCA and need the freight side?
Send the named place, the cargo and the destination, and you get a rate for the legs FCA puts on your side, ocean or air, with the origin handover and the US delivery included.
