FCA (Free Carrier)
FCA is a flexible, multimodal Incoterm where the seller completes export formalities and hands the goods to a carrier chosen by the buyer. It is the modern rule recommended over FOB for containerized and road shipments; the key to using it correctly is naming the exact place of delivery.
FCA (Free Carrier), under Incoterms 2020, is the term where the seller delivers the export-cleared goods to a carrier nominated by the buyer at a named place; risk and the costs up to that point pass to the buyer on delivery, and it can be used for any mode of transport.
Where risk and cost pass
In FCA the transfer point is set by two scenarios, depending on what the named place is. Knowing the right point determines who bears damage and cost.
- If the place of delivery is the seller's own premises: the goods are delivered when loaded onto the vehicle sent by the buyer; risk passes to the buyer at that moment.
- If the place is somewhere else (port terminal, cargo depot, logistics hub): the goods are delivered when placed at the disposal of the buyer's carrier on the seller's arriving vehicle, ready for unloading; unloading is on the buyer.
- Cost splits at the same point as risk: the seller covers charges up to delivery and export clearance, while the buyer takes on main carriage (freight), insurance and import costs.
- Difference from CPT and CIP: under FCA the buyer pays the main freight; the seller does not undertake carriage to the destination.
When to use it
FCA suits situations where you want the buyer to control carriage and where you ship containers or use multiple modes.
- Containerized cargo: since goods are delivered to a terminal/depot rather than onto the ship, FCA is technically the correct rule instead of FOB.
- Road, air, rail and multimodal transport: a single rule covers every mode.
- When the buyer has its own carriage contract or freight discount: the buyer nominates the carrier.
- Micro-export and express courier shipments: goods can be delivered to the courier operator's terminal under FCA.
Watch-outs and common mistakes
Most FCA mistakes come from naming the place vaguely and from the bill-of-lading issue under a letter of credit.
- Naming the place incompletely: "FCA Istanbul" is not enough; write a full address like "FCA Sabiha Gokcen cargo terminal" or "FCA Ikitelli seller warehouse, Incoterms 2020".
- The L/C issue: under FCA the seller hands goods to the carrier but cannot automatically obtain an on-board bill of lading; if the L/C requires one, there is a discrepancy risk.
- The Incoterms 2020 fix: if the parties agree, the buyer can instruct the carrier to issue an on-board bill of lading to the seller; this option must be stated clearly in the contract.
- Unloading confusion: when the place is outside the seller's premises, unloading is the buyer's responsibility; settle this in advance.
- Insurance gap: FCA imposes no insurance obligation on the seller; the buyer bears the main carriage risk and should arrange its own policy.
How it connects to Sighthem
In Sighthem the Incoterm is selected early in the sales process, at the proforma and quote stage, so the risk and cost boundary flows correctly into commercial documents from the start.
- On the proforma/quote you fill in FCA and the named place, and it carries over to the commercial invoice the same way.
- Since export clearance is on the seller, GTIP and customs details are held on the product card.
- The transport and customs documents of a shipment that passes to the buyer's carrier under FCA (bill of lading, packing list, origin documents) are tracked in the shipment's document set.
- Naming the exact place and keeping documents consistent helps prevent L/C discrepancies and late-delivery penalties.
Frequently Asked Questions
What is the difference between FCA and FOB?
FOB is sea-only and risk passes when goods are loaded onto the ship at the loading port. FCA covers any mode and risk passes when goods are handed to the buyer's carrier at the named place (terminal, warehouse or seller's premises). Because containerized cargo is delivered to a terminal rather than onto the ship, FCA is the correct rule for those shipments, not FOB.
Who handles export and import clearance under FCA?
Export clearance and licenses are the seller's responsibility. Import clearance, duties and destination-country formalities are on the buyer, who also pays the main carriage freight.
Why must the named place be written precisely under FCA?
Because the point where risk and cost pass depends directly on the named place. A vague phrase like "FCA Istanbul" leaves it unclear whether delivery is at the seller's warehouse or a terminal and who handles unloading. A full place such as "FCA Sabiha Gokcen cargo terminal, Incoterms 2020" prevents disputes.
Can FCA be used with a letter of credit?
Yes, but an L/C often requires an on-board bill of lading, and under FCA the seller hands goods to the carrier and cannot automatically obtain that document. Incoterms 2020 addresses this: if the parties agree, the buyer can instruct the carrier to issue an on-board bill of lading to the seller. This option must be stated clearly in the contract.
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