Incoterms® 2020 · Any mode of transport
FCA (Free Carrier) under Incoterms® 2020
Under FCA the seller clears the goods for export and delivers them to the carrier or another person nominated by the buyer, at the seller's premises or another named place. It is a flexible rule for any mode of transport and the ICC's recommended alternative to FOB for containerised cargo.
- Risk transfer
- If the named place is the seller's premises, risk passes once the goods are loaded on the buyer's means of transport; at any other place, it passes when the goods, on the seller's means of transport and ready for unloading, are placed at the disposal of the buyer's carrier.
- Cost transfer
- The seller pays the costs up to delivery at the named place, including export clearance; the buyer pays main carriage and all costs thereafter.
- Mode of transport
- Any mode of transport
- Insurance
- Not required, agreed between the parties
Who does what along the delivery chain
- 1Loading at seller's premisesSeller
- 2Export clearanceSeller
- 3Transport to port/terminal of departureSeller
- 4Loading onto main carriageBuyer
- 5Main carriageBuyer
- 6Cargo insuranceNot required / negotiable
- 7Unloading at destinationBuyer
- 8Import clearanceBuyer
- 9Import duties & taxesBuyer
- 10Delivery to final destinationBuyer
Seller's obligations
- Provide the goods, a commercial invoice and suitable packaging.
- Carry out and pay for export clearance, including export-related security requirements.
- Load the goods onto the buyer's vehicle when the named place is the seller's premises.
- Transport the goods to the named place when it is not the seller's premises.
- Provide the buyer with the usual proof of delivery.
- If agreed, present the on-board bill of lading that the buyer has instructed its carrier to issue.
- Notify the buyer that the goods have been delivered or that the carrier failed to take them.
Buyer's obligations
- Pay the price as provided in the contract.
- Contract and pay for carriage from the named place, or carry the goods with its own means of transport.
- Notify the seller of the carrier's name, the exact delivery point and the collection time.
- Unload the goods from the seller's vehicle when the named place is not the seller's premises.
- Carry out and pay for import and transit clearance and import duties.
- Bear risks and costs if it fails to nominate a carrier or the carrier fails to take the goods on time.
- Decide whether to insure the goods.
Use it when
- Exporting containers, air cargo, road or multimodal shipments where the buyer arranges main carriage.
- The buyer nominates the forwarder or shipping line (nominated cargo).
- The seller wants risk to pass when it hands over to the carrier rather than when goods are on board.
- Replacing EXW when the seller will clear the goods for export.
Avoid it when
- Bulk cargo is delivered directly onto the vessel at the port, where FOB fits better.
- The seller wants to control and earn margin on main carriage, where CPT/CIP fits better.
- Payment by L/C requires an on-board B/L but the contract has no clause instructing the carrier to issue one.
Common mistakes
- No precise named place, so it is unclear who loads or unloads.
- Assuming that under FCA at a port the seller must load the vessel as under FOB.
- Not agreeing who pays origin THC when delivery is at a container yard.
- Using an L/C that requires an on-board B/L without adding the Incoterms 2020 bill-of-lading option to the contract.
Practice in Vietnam
More Vietnamese exporters are moving from FOB to FCA for container cargo, for example "FCA Cat Lai Port" or "FCA Song Than ICD". When the named place is the seller's warehouse, the seller simply loads the container onto the truck sent by the buyer's forwarder, clears export customs and provides the documents. When the named place is a port or ICD, the seller hauls the container to the yard and gates it in; risk passes there. In practice, origin THC and local charges in Vietnam are usually collected by the carrier or forwarder from the shipper, so the contract should state who bears them. For L/C shipments, include the clause by which the buyer instructs its carrier to issue an on-board bill of lading to the seller.
Worked example
A garment manufacturer in Dong Nai sells jackets to a German importer on "FCA Company A Warehouse, Long Thanh Industrial Park, Dong Nai, Vietnam, Incoterms® 2020". The buyer's nominated forwarder sends a 40HC container to the warehouse; the seller stuffs it, loads the container onto the truck and clears export customs. Risk passes to the buyer as soon as the container is on the truck. The buyer pays haulage to Cat Lai, ocean freight to Hamburg, destination charges and German import duties.
Frequently asked questions
How does FCA differ from FOB?
FOB is for sea transport only and risk passes when the goods are on board. FCA works for any mode and risk passes when the goods are handed to the carrier at the named place, usually earlier and in line with how containers are actually delivered.
Who loads under FCA?
At the seller's premises, the seller loads the buyer's vehicle. At any other place, the seller does not have to unload its own vehicle; the buyer or its carrier unloads.
Can an FCA seller get an on-board bill of lading?
Yes, if the contract says so. Incoterms 2020 allow the buyer to instruct its carrier to issue an on-board B/L to the seller, at the buyer's cost and risk; the seller then presents it to the buyer or the bank.
Can FCA be used for air freight?
Yes. FCA Tan Son Nhat or Noi Bai airport, at the air cargo terminal or agent's warehouse, is common for air exports.
Incoterms® is a registered trademark of the International Chamber of Commerce (ICC). This content is for general guidance and does not replace legal or banking advice for a specific transaction.
Incoterms® 2020 responsibility matrix
| Rule | Loading at seller's premises | Export clearance | Transport to port/terminal of departure | Loading onto main carriage | Main carriage | Cargo insurance | Unloading at destination | Import clearance | Import duties & taxes | Delivery to final destination |
|---|---|---|---|---|---|---|---|---|---|---|
| EXW | B | B | B | B | B | – | B | B | B | B |
| FCA | S | S | S | B | B | – | B | B | B | B |
| FAS | S | S | S | B | B | – | B | B | B | B |
| FOB | S | S | S | S | B | – | B | B | B | B |
| CFR | S | S | S | S | S | – | B | B | B | B |
| CIF | S | S | S | S | S | S* | B | B | B | B |
| CPT | S | S | S | S | S | – | B | B | B | B |
| CIP | S | S | S | S | S | S* | B | B | B | B |
| DAP | S | S | S | S | S | – | B | B | B | S |
| DPU | S | S | S | S | S | – | S | B | B | S |
| DDP | S | S | S | S | S | – | B | S | S | S |
- S Seller
- B Buyer
- S* Seller obligation (insurance)
- – Not required / negotiable
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