FCA (Free Carrier) is an Incoterms 2020 rule where the seller delivers goods, cleared for export, to a carrier or place named by the buyer, and risk transfers to the buyer at that exact handover point. From that moment the buyer pays main carriage, insurance, import duties, and every cost downstream. FCA is the most flexible rule in the Incoterms 2020 framework because it works for any mode (air, road, rail, sea, or multimodal) and it fits both the seller's premises handover and the terminal handover. This guide covers what FCA covers, who pays what, where risk transfers, the on board Bill of Lading option unique to Incoterms 2020, and how FCA compares with FOB, EXW, and CPT.
Key Takeaways
Definition
FCA (Free Carrier) is an Incoterms 2020 rule in which the seller delivers the goods, cleared for export, to a carrier or place named by the buyer at the named place of delivery. Risk of loss or damage transfers from seller to buyer at that named place. The buyer pays main carriage, insurance, and every cost after the handover. FCA applies to any mode of transport (air, road, rail, sea, multimodal) and to both the seller's premises and a terminal handover.
FCA (Free Carrier) is one of the 11 rules published by the International Chamber of Commerce (ICC) under Incoterms 2020. In shipping, FCA means the seller's responsibility ends the moment the goods are handed over, cleared for export, to the carrier or place the buyer names. From that handover point the buyer bears the risk and cost of main carriage, insurance, import clearance, and inland delivery at destination.
Written in full on contracts: FCA [Named Place of Delivery]. Examples:
FCA has two delivery variants, and picking the wrong one is the single most common FCA mistake:
The wording of the named place drives the variant. "FCA [Seller's Address]" is Variant A. "FCA [Terminal Name or Carrier Depot]" is Variant B.
Yes. FCA is one of the 11 rules published by the ICC as Incoterms 2020. It sits in the any mode family alongside EXW, CPT, CIP, DAP, DPU, and DDP. FCA is the ICC's recommended rule for containerized cargo, replacing FOB for that use case since Incoterms 2010.
Under FCA, the seller pays every cost up to the named handover point and the buyer pays every cost after. This matrix breaks the full cost stack down line by line so a quote or purchase order can be reconciled without guessing.
| Cost or Responsibility | Seller | Buyer |
|---|---|---|
| Export packaging | Yes | |
| Marking, checking, and quality control at origin | Yes | |
| Export clearance and licence | Yes | |
| Loading onto buyer's vehicle (Variant A only) | Yes | |
| Inland transport to named place (Variant B only) | Yes | |
| Unloading at named place (Variant B) | Yes (buyer's carrier) | |
| Origin terminal handling charges after handover | Yes | |
| Main carriage (air, ocean, road, rail) | Yes | |
| Cargo insurance | Yes (optional, buyer's choice) | |
| Import clearance and duties | Yes | |
| ISF filing (US ocean imports) | Yes | |
| Destination terminal handling | Yes | |
| Inland transport at destination | Yes |
Under FCA Incoterms, the buyer pays for main carriage from the named place of delivery to the final destination. The seller only pays up to the named handover point. If the named place is the seller's warehouse, the seller pays only for export packaging, export clearance, and loading. Every cost from the container leaving the warehouse gate onward sits with the buyer.
No. FCA does not include insurance. Neither the seller nor the buyer is required to insure the cargo under FCA. If the buyer wants coverage during transit, the buyer must arrange cargo insurance independently. Buyers who want the seller to bundle insurance into the price should use CIP (Carriage and Insurance Paid To) instead.
Under FCA the seller has a defined set of obligations ending at the named handover point:
The seller has no obligation to the buyer to arrange the main carriage, purchase insurance, or clear the goods for import.
Risk transfers under FCA at the named place of delivery, at the moment the goods are handed over to the carrier. The exact moment depends on the variant:
Worked example. A US importer buys electronics from a supplier in Shenzhen under "FCA Yantian Container Yard, Incoterms 2020". The supplier trucks the loaded container from its factory to Yantian CY and hands it over to the buyer's nominated forwarder. A crane damages the container while it is being lifted onto the vessel two days later. The buyer files the marine insurance claim, because risk transferred at Yantian CY at handover, well before the vessel loading. If the buyer chose not to purchase cargo insurance, the buyer absorbs the loss.
This is the single reason the ICC recommends FCA over FOB for containers. Under FOB the seller carries risk until the container is on board the vessel at the origin port. Under FCA the seller carries risk only to the container yard or the seller's own gate. On a modern containerized shipment the buyer's nominated forwarder already controls the container from the seller's factory gate, so FCA aligns risk with control. FOB creates a risk gap between the factory gate and the vessel rail that neither party can insure cleanly.
Watch out
Using FOB for containerized cargo loaded at the seller's factory opens a risk gap between the factory gate and the vessel rail that neither party can insure cleanly. The ICC has recommended FCA over FOB for containers since Incoterms 2010.
Under Incoterms 2020 the ICC added an optional feature to FCA that was not present in Incoterms 2010: the parties can agree that the buyer's carrier issues an on board Bill of Lading back to the seller once the goods are loaded on the vessel. If they agree, the seller is obliged to tender the on board BL to the buyer, usually through the banks, and the buyer is obliged to instruct its carrier to issue that BL.
Why this matters. Under a Letter of Credit (LOC) payment, the seller's bank often requires an on board Bill of Lading to release payment. Under standard FCA the risk transfer point is at the container yard, which is before the goods are on board, so the seller cannot naturally obtain an on board BL. The Incoterms 2020 option closes that gap. It is the single change that makes FCA workable on LOC financed container trade.
Practical implication for a 2026 contract. If the seller finances the shipment through a Letter of Credit that requires an on board BL, the sale contract must explicitly state that the on board BL option under FCA Incoterms 2020 applies. Without that clause the buyer's carrier has no obligation to issue an on board BL back to the seller. Example clause: "FCA Yantian Container Yard, Incoterms 2020, with on board Bill of Lading option per A6/B6 of the FCA rule."
FCA and FOB are the two rules buyers weigh most often on ocean cargo. FOB is sea and inland waterway only; FCA is any mode. Risk transfers at different points, and the container era mistake sits at the top of the ICC's advisory list.
| Aspect | FCA (Free Carrier) | FOB (Free On Board) |
|---|---|---|
| Modes | Any mode (air, road, rail, sea, multimodal) | Sea and inland waterway only |
| Who pays main freight | Buyer | Buyer |
| Who provides insurance | Buyer (optional) | Buyer (optional) |
| Where seller's duty ends | At the named place (seller's premises or terminal) | On board the vessel at origin port |
| Where risk transfers | At carrier handover (factory, CFS, or terminal) | On board the vessel at origin port |
| Loading obligation | Seller loads at Variant A; carrier at Variant B | Seller loads on vessel |
| On board BL available | Yes, by agreement under Incoterms 2020 | Yes, by default |
| Best for containerized cargo | Yes, ICC recommended | No, ICC advises FCA instead |
| Best for bulk or breakbulk maritime | No | Yes |
| Export clearance | Seller | Seller |
Use FCA when the cargo is containerized and loaded at the seller's factory, when the mode is air, road, rail, or multimodal, or when the parties want risk to transfer at the container yard rather than the vessel rail. Use FOB when the cargo is bulk or breakbulk moving on a single vessel and the buyer wants risk to transfer at the traditional on board point.
EXW (Ex Works) is the lightest touch Incoterm for the seller. FCA is one step heavier because the seller adds export clearance and delivery to the named place.
| Aspect | FCA | EXW (Ex Works) |
|---|---|---|
| Export clearance | Seller | Buyer |
| Delivery to named place | Seller | Not applicable (buyer collects at seller's premises) |
| Loading at seller's premises | Seller (Variant A) | Buyer |
| Best for | International trade with seller handling export | Buyer with full origin capability |
The ICC recommends FCA over EXW for cross border sales because EXW leaves the buyer with the seller's country export clearance obligation, which the buyer usually cannot perform without a local agent.
Both any mode rules. Under FCA the buyer arranges main carriage. Under CPT the seller arranges main carriage but the buyer still bears the risk after the first carrier handover.
| Aspect | FCA | CPT (Carriage Paid To) |
|---|---|---|
| Who arranges main carriage | Buyer | Seller |
| Who pays main carriage | Buyer | Seller |
| Where risk transfers | At the named place (first carrier handover) | At the first carrier handover |
| Best for | Buyer has carrier contracts | Seller has carrier contracts; buyer wants a landed origin price |
Under FCA, the seller provides:
The buyer is responsible for:
For forwarders coordinating the export declaration, the transport document, and the ISF numbers behind FCA shipments, Customs Management Software for Forwarders keeps the export record, the ISF filing status, and the supporting documents tied to the same shipment file the operations team uses. Software that manages Incoterm rules on every shipment record, like our Ocean Freight Management Software, tags the Incoterm on the shipment file and validates that the mode matches the rule before the booking is confirmed.
Nothing changed to the FCA rule in 2026. Here is why searchers keep asking:
Practical implication for a 2026 contract: writing "FCA Yantian Container Yard, Incoterms 2020" on a purchase order is correct and enforceable. Writing "FCA Yantian, Incoterms 2026" is not, because no such Incoterms version exists.
FCA is the ICC recommended rule for the majority of modern container trade, yet it remains one of the most misread Incoterms because two variants sit under a single three letter code and the on board BL option was only added in 2020. Getting the named place wording exactly right on the purchase order (with the correct variant, the correct address, and the on board BL clause if needed) is the difference between a clean risk transfer and a claim dispute after a container is damaged on the drayage move. Match the mode to the rule, name the place precisely, and confirm the on board BL clause with the seller's bank before the booking is accepted.
FCA stands for Free Carrier. It is an Incoterms 2020 rule for any mode of transport. Under FCA, the seller delivers goods, cleared for export, to a carrier or place named by the buyer, and risk transfers to the buyer at that handover point. The buyer pays main carriage from the named place to the final destination. FCA is the ICC's recommended Incoterm for containerized cargo, replacing FOB for that use case.
The buyer pays the freight under FCA Incoterms. The seller pays only up to the named handover point (packaging, export clearance, and delivery to the named place). Every cost after that (main carriage, cargo insurance, import clearance, duties, destination inland transport) is the buyer's cost.
The buyer pays all import duties, taxes, and customs clearance fees at the destination country under FCA. The seller is only responsible for export clearance and any export duties at the origin country. This split is identical to FOB, CPT, and CIP on the duty question.
The seller packages the goods, clears them for export, and delivers to the named place (loading onto the buyer's carrier at the seller's premises under Variant A, or delivering to a terminal or carrier depot under Variant B). The buyer nominates the carrier, arranges and pays main carriage, buys insurance if wanted, files import declarations, pays duties, and arranges destination inland delivery.
Risk transfers at the named place of delivery, at the moment the goods are handed over to the buyer's carrier. If the named place is the seller's premises, risk transfers when loading onto the buyer's collecting vehicle is complete. If the named place is a terminal or carrier depot, risk transfers when the goods are placed at the disposal of the buyer's carrier at that place, ready for unloading.
FCA works for any mode; FOB works for sea and inland waterway only. Under FCA risk transfers at the container yard or the seller's premises. Under FOB risk transfers only when the goods are on board the vessel at the origin port. Both leave main freight to the buyer. The ICC recommends FCA over FOB for containerized cargo because FCA aligns risk with control on a modern container move. See our complete guide to FOB in shipping for the buyer and seller obligations under FOB.
Under FCA the seller clears the goods for export and delivers to the named place. Under EXW the seller only makes the goods available at its own premises; the buyer handles export clearance and loading. FCA is safer for cross border trade because the seller is on the ground for the export declaration; EXW leaves the buyer trying to file an export declaration in a country where it usually has no legal presence. See our guide to EXW meaning in international trade for the full EXW obligations.
No, and there is no formal term "FCA shipping point" in the Incoterms text. Buyers sometimes use the phrase informally to mean "FCA at the seller's premises" (Variant A of FCA). The correct written form on a contract is "FCA [Seller's Address], Incoterms 2020". Do not write "FCA Shipping Point" on an international purchase order, because the phrase is not defined anywhere in the Incoterms 2020 rules and can be argued in a dispute.
No. FCA does not require either party to purchase cargo insurance. The buyer bears risk after the handover point, so the buyer usually purchases marine or cargo insurance to cover the main carriage. Buyers who want the seller to include insurance in the invoice price should use CIP (Carriage and Insurance Paid To) instead of FCA.
Yes, if the parties agree to the on board BL option added to FCA in Incoterms 2020. Under standard FCA the risk transfer point is at the container yard, before the goods are on board the vessel, so the seller cannot naturally obtain an on board Bill of Lading. Incoterms 2020 adds an option in the FCA rule (A6/B6) allowing the parties to agree that the buyer will instruct its carrier to issue an on board BL back to the seller once the container is loaded. This option is required in practice when the seller is paid through a Letter of Credit that stipulates an on board BL.
FCA (Free Carrier) is the most flexible rule in the Incoterms 2020 framework and the ICC's recommended replacement for FOB on container trade. The two variants (seller's premises and any other named place) cover almost every practical handover scenario, the on board Bill of Lading option added in 2020 makes FCA workable under Letter of Credit financing, and the rule works for every mode of transport. Match the variant to the handover point, name the place precisely on the contract, and add the on board BL clause when the seller's bank requires it.
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