FCA Meaning: Free Carrier Explained (With Examples)

FCA meaning: Free Carrier for any mode of transport

FCA means Free Carrier, an Incoterms 2020 rule under which the seller delivers goods at an agreed place to a carrier or other person nominated by the buyer.

It works for road, rail, air, sea and combinations of these. “Free” does not mean free shipping: the buyer normally arranges and pays for transport after delivery.

Read the Incoterms overview for the wider framework. FCA allocates delivery obligations, costs and cargo risk; agree ownership, payment and product acceptance separately.

Who pays and who carries risk under FCA?

This table assumes both parties perform their agreed obligations. Risk means loss of or damage to the goods, rather than responsibility for completing paperwork. Paying for export clearance does not extend the seller’s cargo risk beyond FCA delivery. The seller normally pays for suitable packaging and marking, although packaging is not required where the trade usually transports those goods unpackaged.

Where does risk transfer? The named place changes loading duties

At the seller’s premises: the seller loads the goods onto transport arranged by the buyer. Delivery and risk transfer normally occur once loading is complete.

At another named place: the seller brings the goods there on transport it provides. Delivery occurs when the goods are on the arriving vehicle, ready for unloading and at the disposal of the buyer’s nominated carrier or person. The seller does not have to unload them.

Name the full address and precise collection or terminal point, followed by Incoterms 2020. “FCA China” leaves too much unresolved. Agree terminal handling charges, collection notices and handover evidence before dispatch.

Risk can transfer before delivery if the buyer fails to nominate a carrier or give the required notices, or the nominated recipient fails to take charge of the goods. FCA specifies the relevant timing, and the goods must be clearly identified as the contract goods.

Who handles export clearance and import clearance?

The seller handles and pays for applicable export formalities, including applicable export duties and taxes. The buyer handles and pays for applicable import and third-country transit formalities, including the relevant duties and taxes.

For a China purchase, confirm how the seller will arrange export declarations and provide shipment documents. A factory quotation needs a workable export arrangement, even when collection is from the factory.

Using a broker does not change FCA’s allocation between buyer and seller under their sales contract. For the contrast with buyer-led export arrangements, see EXW explained.

When should I use FCA, especially for containers?

Consider FCA when you want to select your forwarder and arrange onward freight while the seller handles applicable export clearance. Confirm that you can arrange collection and the remaining transport.

Containers are commonly handed to a carrier or terminal before vessel loading. FCA can align risk transfer with that handover. FOB transfers risk on board the vessel and applies only to sea or inland waterway transport.

If you want the seller to pay onward carriage, compare CPT and CIP; their risk transfer still occurs at origin when goods are delivered to the carrier. If you want the seller to retain risk to an agreed destination delivery point, compare DAP, DPU and DDP.

Can FCA provide an on-board bill of lading?

Incoterms 2020 includes an optional arrangement: if agreed in the sales contract, the buyer instructs its carrier to issue the seller a bill of lading with an on-board notation after vessel loading, at the buyer’s cost and risk. The seller then provides it to the buyer, often through the banks.

This can help where a letter of credit requires that document. Confirm carrier acceptance and bank requirements beforehand; FCA alone does not guarantee issuance.

The notation does not postpone FCA delivery or risk transfer until vessel loading. The inland handover date and on-board date can differ.

China example: factory collection versus terminal delivery

Illustrative example, assuming both parties perform their obligations: an overseas buyer orders storage boxes from a Chinese factory and appoints a forwarder. Under FCA at the factory’s specified loading point, the seller packs the goods, loads the collecting truck and handles applicable export clearance. The buyer bears cargo risk after loading and pays for onward transport, import clearance and destination unloading.

Alternatively, the parties name the forwarder’s receiving point at a Chinese container terminal. The seller pays for transport there and retains risk until the goods are on the arriving vehicle, ready for unloading and at the nominated recipient’s disposal. The buyer bears unloading risk and onward transport costs from that delivery point; applicable export clearance remains the seller’s responsibility.

UK valuation example: an FCA invoice alone may not be the customs value. Under HMRC’s transaction-value method, relevant transport, insurance, loading and handling costs to the UK border must be included if absent from the price. Import VAT valuation starts with the customs value and adds applicable import duties and other import charges, excluding VAT itself, plus relevant incidental expenses to the first UK destination and transport-related expenses to a further UK destination known at import. Avoid counting costs twice.

Which neighbouring term should I compare before accepting a quote?

Compare EXW for factory collection, FOB for vessel-based delivery, and CPT or CIP when the seller pays onward carriage. For sea-freight quotes, check CFR and CIF.

Consult the Incoterms chart when comparing responsibilities. Ask for the exact FCA point, export costs, handling charges and excluded freight before comparing prices; use the Incoterms price converter alongside the actual quotations.