FCA (Free Carrier) - Definition
Free Carrier, or FCA, is an Incoterms® rule that can be used with any mode of transport. This includes air freight, sea freight, rail freight, road transport, and also combinations of these. Unlike rules limited only to maritime shipping, FCA works wherever the seller and buyer agree on a specific place of delivery, regardless of how the goods will continue their journey afterward.
Under this rule, the seller is responsible for export clearance and for delivering the goods to a carrier nominated by the buyer at the agreed place. The identity of that carrier matters. It can be a shipping line, airline, trucking company, railway operator, or a freight forwarder acting on the buyer’s behalf. FCA is part of the Incoterms® 2020 rules published by the International Chamber of Commerce (https://iccwbo.org/) and belongs to the group of rules that can be applied across all transport modes. It is widely used in international trade, especially when the exact point of handover needs to be clearly defined.
One thing that sets FCA apart is the requirement to name the place of delivery precisely. The buyer should specify the exact location in the sales contract, because a vague or incomplete address can create confusion about when and where the risk transfers. The more precise the location, the clearer the responsibilities for both sides.
How Does the Transfer of Risk Work Under FCA Incoterms?
The moment when risk transfers from the seller to the buyer depends directly on the agreed place of delivery. There are two main scenarios, and each affects the seller’s responsibilities differently.
- If the named place of delivery is the seller’s premises or place of business, the seller must load the goods onto the transport arranged by the buyer. Risk transfers to the buyer once the goods have been loaded onto that vehicle.
- If the named place is somewhere else, such as a terminal, warehouse, or forwarder’s facility, the seller must transport the goods to that location and make them available to the carrier, ready for unloading from the seller’s vehicle. In this situation, the seller is not responsible for unloading. Risk transfers when the goods arrive at the agreed place and are still on the seller’s vehicle, ready to be taken over.
Summarizing, when delivery takes place at the seller’s premises, the seller carries the risk during loading. When delivery takes place elsewhere, the seller’s risk ends once the goods are delivered to that location and made available to the carrier.
Seller and Buyer Obligations Under FCA
Under FCA, both sides have clearly defined tasks that need to be handled in the right order. The seller takes care of everything up to the agreed place of delivery, including export formalities and getting the goods to the carrier. From that moment on, the buyer steps in and takes over the rest of the process, from main transport to import procedures. Being clear about this handover point helps avoid confusion and keeps the shipment moving without unnecessary issues.
What the Seller Is Responsible For
The seller’s responsibilities under FCA are clearly defined and end at the named place of delivery. The seller must:
- Goods and documentation – provide the goods along with the commercial invoice and any documents required under the sales contract.
- Packaging and marking – ensure the goods are properly packed and labeled for export.
- Export formalities – handle export licenses, export clearance, and all required procedures in the country of origin.
- Transport to the named place – deliver the goods to the agreed location at the seller’s cost and risk.
- Delivery and loading where applicable – hand the goods over to the buyer’s carrier; if delivery is at the seller’s premises, also load the goods onto the collecting vehicle.
- Pre-shipment inspection – cover the cost of any inspection required for export.
- Proof of delivery – provide evidence that the delivery has been completed.
The seller is fully responsible for export clearance. Once the goods are handed over at the agreed place, the seller’s obligations end.
What Falls to the Buyer in FCA Incoterms
From the moment delivery is completed, responsibility shifts to the buyer. The buyer arranges and pays for the main carriage, whether by sea, air, rail, or road, and also any further transport to the final destination. If delivery takes place outside the seller’s premises, the buyer is responsible for unloading the goods from the seller’s vehicle.
The buyer also handles all import formalities in the destination country, including customs clearance, duties, taxes, and any additional charges. Any pre-shipment inspection required for import purposes is also the buyer’s responsibility. From the point of delivery onward, the buyer bears the risk of loss or damage to the goods.
FCA vs. EXW: When Does the Distinction Matter?
The difference between FCA and EXW (Ex Works) is often not taken into consideration, but it has clear consequences, especially when it comes to export formalities.
Under EXW, the seller’s responsibility ends at their own premises. The buyer takes care of loading, export clearance, and everything that follows. In practice, this can create problems because export clearance usually requires the seller, as the exporter, to handle the process. A buyer may not be able to complete these formalities in the seller’s country.
FCA addresses this issue. When delivery takes place at the seller’s premises under FCA, the seller handles both loading and export clearance, while the buyer arranges the main transport. The handover still happens early in the logistics chain, but responsibilities are split in a more workable way.
For international transactions, FCA is often a more practical alternative to EXW. The seller manages export formalities, the buyer controls the transport, and the transfer of risk is clearly defined.
Considerations When Using FCA
There are a few other points worth including in any contract that uses FCA.
- First, the place of delivery should be described in detail. A city name alone is not enough. The contract should specify the exact address or facility, because this determines both the division of responsibilities and the moment when risk transfers.
- Second, the buyer should provide the seller with carrier details and collection arrangements in advance. Missing or unclear information at this stage can lead to disputes about whether delivery has been completed correctly.
- Third, visibility and coordination can be significantly improved through telematics solutions. Tools like GPS tracking, real-time status updates, and transport management systems, such as those offered by us (Arealcontrol), allow both parties to monitor the movement of goods, confirm handover at the exact delivery point, and keep documentation aligned with actual operations. This reduces uncertainty around the moment of delivery and helps prevent disputes, especially in complex or multi-leg shipments.
When container shipping and bills of lading are involved, additional considerations may arise. Goods are often handed over inland before being loaded onto a vessel, which means an on-board bill of lading may not be available at the time of FCA delivery. Incoterms® 2020 introduced a solution for this.
If FCA is used together with sea freight and letter of credit arrangements, this point should be clearly addressed in the contract to avoid complications later on.
