FCA Incoterms: Free Carrier, Risk Transfer and Who Pays What
FCA, Free Carrier, is the most flexible rule in Incoterms 2020 and the one we recommend most often. The seller clears the goods for export and hands them to a carrier nominated by the buyer. Risk passes at that handover.
The two variants
FCA behaves differently depending on where delivery happens, and this catches people out.
Delivery at the seller's premises. The seller loads the goods onto the buyer's collecting vehicle. Delivery is complete once loading is finished.
Delivery at any other named place. The seller brings the goods to the named place ready for unloading, but does not unload them. Delivery is complete when the goods are placed at the carrier's disposal on the arriving vehicle.
So the same three letters put the loading obligation in different places depending on the named point. Name that point precisely.
Where risk passes
Risk passes on delivery to the carrier, at origin. From that moment the goods travel at the buyer's risk even though the buyer may not physically see them for weeks.
Why FCA is the right rule for containers
Container cargo is handed over at a yard or terminal, often days before the vessel loads. FOB, CFR and CIF all assume the seller controls the goods until they are on board, which leaves the seller carrying risk for a period when it has no access to the cargo and no ability to protect it.
FCA matches what actually happens. Risk moves when control moves. The International Chamber of Commerce says plainly that FCA, not FOB, is the correct rule for containerized shipments, and it remains one of the most widely ignored pieces of guidance in trade.
The on board bill of lading option
The historic objection to FCA was documentary. Sellers being paid under a letter of credit usually need an on board bill of lading, and because FCA delivery completes before loading, the seller had no right to demand one. Many sellers used FOB instead purely to satisfy the bank.
Incoterms 2020 added an optional mechanism: the parties can agree that the buyer instructs the carrier to issue an on board bill of lading to the seller. It has to be written into the contract and the credit has to accept it, but it removes the reason for misusing FOB. We cover the mechanics in Incoterms and letters of credit.
Common mistakes
Not naming the delivery point precisely. Because the loading obligation flips depending on the point, a vague named place creates a real dispute about who should have loaded.
Assuming the seller arranges the main carriage. Under FCA the buyer contracts for carriage. If you want the seller to arrange it, use CPT or CIP.
Where this rule sits
FCA sits between EXW and the carriage paid rules. It solves the export clearance gap that makes EXW awkward, without committing the seller to arranging the main journey.
For the full set, see our guide to all 11 Incoterms 2020 rules, or work through how to choose the right rule for a given shipment. Our Mastering Incoterms 2020 course covers every rule with worked examples from Gulf trade lanes.
Frequently asked questions
What does FCA mean in Incoterms?
Free Carrier. The seller clears the goods for export and delivers them to a carrier nominated by the buyer, at which point risk passes to the buyer.
Is FCA better than FOB for containers?
Yes. FOB leaves risk with the seller until the goods are loaded on the vessel, even though a container leaves the seller control days earlier. FCA moves risk when control moves.
Who loads the goods under FCA?
It depends on the named place. At the seller premises the seller loads. At any other named place the seller delivers ready for unloading and does not unload.
Can a seller get an on board bill of lading under FCA?
Only if the parties agree the optional mechanism added in Incoterms 2020, where the buyer instructs the carrier to issue one to the seller. It must be written into the contract.
Who arranges the main carriage under FCA?
The buyer. If you want the seller to contract for carriage, use CPT or CIP instead.
