Free Carrier (FCA)
After export clearance, the seller delivers the goods to the buyer's nominated carrier at the named place; usable for any transport mode.
Free Carrier (FCA) means the seller delivers the export-cleared goods to a carrier (or another person) nominated by the buyer at the named place, where risk passes. There are two cases: if the named place is the seller's premises, the seller must load the goods onto the buyer's collecting vehicle; if it is any other place (e.g. a forwarder's warehouse or terminal), the seller delivers when the goods are placed at that point ready for unloading on the arriving means of transport, without unloading.
FCA suits any mode of transport and is the rule most recommended to replace FOB in the container/multimodal era. For Chinese exporters its advantages are: the seller handles export clearance (helpful for VAT refund) but bears costs and risk only up to the delivery point, with main freight and insurance on the buyer. Incoterms 2020 added a facilitation provision: in maritime trade the parties may agree that the buyer instructs its carrier to issue an on-board bill of lading to the seller, solving the old problem that FCA sellers could not obtain an on-board B/L for letter-of-credit settlement. Common pitfall: state the delivery point and cost-split point precisely in the contract to avoid ambiguity between "forwarder's warehouse" and "terminal."
FAQ
- What is the difference between FCA and FOB, and which should I use for container cargo?
- FOB applies only to sea/inland-waterway transport and risk passes when goods are loaded on board; FCA applies to any mode and delivery occurs at a buyer-named place such as a terminal or forwarder's warehouse. Container cargo is usually handed to the carrier at the terminal, not loaded over the ship's rail, so ICC recommends FCA over FOB for containers and multimodal — avoiding the seller bearing risk for goods already at the terminal but not yet on board.
- Under FCA, can the seller get an on-board B/L for an L/C?
- Yes. Incoterms 2020 added a provision allowing the parties, in maritime trade, to agree that the buyer instructs the carrier to issue an on-board B/L to the seller after loading. It is optional and must be expressly agreed in the contract/L/C, otherwise the carrier has no obligation to issue it.
Sources: https://iccwbo.org/business-solutions/incoterms-rules/incoterms-2020/