FCA (Free Carrier): Delivery, Risk and the On-Board B/L Option
FCA Free Carrier under Incoterms 2020: the two delivery cases, who pays what, the on-board bill of lading option and why FCA beats FOB for containers.
Key takeaways
- Under FCA the seller clears the goods for export and hands them to the carrier nominated by the buyer at the named place.
- At the seller's premises, delivery is complete once the goods are loaded on the buyer's vehicle; anywhere else, once they arrive on the seller's vehicle ready for unloading.
- FCA works for every mode and is the right replacement for FOB when goods are handed over at a container terminal.
- Incoterms 2020 let the parties agree that the buyer's carrier will issue an on-board bill of lading to the seller, which suits letters of credit.
- Name the place precisely: it fixes the moment risk passes and who pays the loading.
FCA, Free Carrier, is the most versatile rule of Incoterms® 2020 and, for containerised exports, usually the most accurate one. The seller clears the goods for export and hands them over to the carrier, or another person nominated by the buyer, at an agreed place. Risk passes at that handover. The buyer then organises and pays the main carriage, insures the goods if it wishes, clears them for import and pays the duties.
FCA does what many exporters wrongly ask FOB to do. This lesson explains its two delivery scenarios, the cost split, the bill of lading option introduced in 2020 and the traps to avoid.
When should you use FCA?
Use FCA when the buyer controls the main transport, through its own carrier or freight forwarder, and you want your responsibility to end in your own country. It works for every mode: road, rail, air, sea and multimodal.
It is the natural choice for:
- full containers delivered to a port or inland terminal;
- groupage cargo handed to a forwarder's warehouse;
- air freight handed to an airline's handling agent;
- goods collected at your factory by the buyer's trucker, with you loading and clearing for export.
FCA is not ideal when the buyer has no logistics organisation of its own and expects you to arrange the freight: then a C rule such as CPT is more honest.
Where does delivery happen under FCA?
The rule has two scenarios, and the named place decides which one applies.
| Named place | Delivery is complete when… | Who loads/unloads |
|---|---|---|
| The seller's premises | the goods are loaded on the means of transport provided by the buyer | Seller loads |
| Any other place (terminal, forwarder's warehouse, airport) | the goods arrive on the seller's vehicle, ready for unloading, at the disposal of the buyer's carrier | Buyer unloads |
Risk passes at that moment. If the buyer fails to nominate a carrier, or the carrier does not turn up, risk can pass from the agreed date, provided the goods are identified as the contract goods. Under the 2020 edition either party may use its own means of transport: the seller may bring the goods with its own truck and the buyer may collect them with its own fleet.
Who pays what under FCA?
| Step | Seller | Buyer |
|---|---|---|
| Packaging, marking, checking | Yes | |
| Loading at seller's premises (if named place) | Yes | |
| Pre-carriage to a named terminal or warehouse | Yes | |
| Export clearance, export duties | Yes | |
| Unloading at a named place other than seller's premises | Yes | |
| Main carriage and terminal charges after delivery | Yes | |
| Cargo insurance | Yes, in its own interest | |
| Unloading at destination | Yes | |
| Import clearance, duties and taxes | Yes |
The seller has no obligation to contract for the main carriage. If the parties agree, the seller may book it on the buyer's behalf, but at the buyer's risk and cost.
Documents and the on-board bill of lading option
Under FCA the seller must give the buyer the usual proof that the goods have been delivered, such as a forwarder's receipt or a road or air consignment note. It must also clear the goods for export, providing the export declaration and any licences.
The difficulty comes with sea freight paid by letter of credit. Banks often require a bill of lading showing that goods are on board a named vessel. But under FCA the seller hands over the goods before loading and has no contract with the carrier. Incoterms 2020 solved this with an optional clause: if the parties agree, the buyer must instruct its carrier to issue an on-board bill of lading to the seller, at the buyer's cost and risk. The seller then tenders that bill of lading to the buyer, typically through the banks.
An alternative is to ask for a credit that accepts a multimodal transport document showing the goods were taken in charge, which UCP 600 allows. Then no on-board notation is needed.
Insurance
Neither party has an insurance obligation. The seller bears the risk of pre-carriage up to delivery and should cover it; the buyer should cover the main journey from the handover. See cargo insurance for the clauses available.
Worked example: olive oil from Bejaia to Montreal
An olive oil producer in Bejaia sells one 20-foot container of 1,300 cartons of extra virgin olive oil to an importer in Montreal at USD 54 per carton, FCA Port of Bejaia container terminal, Incoterms® 2020, total USD 70,200. Payment is by a sight letter of credit requiring an on-board bill of lading, latest shipment 15 March 2026. The contract includes the 2020 on-board bill of lading option.
- The seller stuffs the container at its plant, clears it for export and trucks it to the terminal on 10 March 2026. Risk passes when the truck arrives, ready for unloading.
- The buyer's forwarder has booked the space with the shipping line. The terminal unloads the container at the buyer's cost.
- The vessel loads on 14 March. Following the buyer's instruction, the line issues an on-board bill of lading to the seller as shipper.
- The seller presents the bill of lading, invoice, packing list and certificate of origin to its bank within the credit's presentation period and is paid.
Had a crane damaged the container at the terminal on 12 March, the loss would have been the buyer's, covered by the buyer's insurance, even though the box was not yet on board. Under FOB it would have been the seller's.
FCA compared with FOB and EXW
| Point | EXW | FCA | FOB |
|---|---|---|---|
| Transport modes | Any | Any | Sea and inland waterway |
| Export clearance | Buyer | Seller | Seller |
| Risk passes | Goods available at seller's place | Handover to buyer's carrier | Goods on board the vessel |
| Suits containers | Poorly | Yes | No |
| On-board B/L for the seller | No | Optional, if agreed | Yes |
Compare all the rules in the Incoterms matrix, and read FOB to see why the old habit persists.
Common mistakes with FCA
- "FCA Algiers": a city is not a delivery point. Name the terminal, warehouse or address.
- Not saying who pays origin terminal handling charges: carriers often bill them to the shipper. Agree it in the contract.
- Forgetting the bill of lading clause when the letter of credit requires an on-board bill of lading.
- Treating FCA as "FOB for any mode" without adjusting the delivery point, which shifts risk to a different moment than the parties expect.
Frequently asked questions
What does FCA mean in shipping?
FCA, Free Carrier, means the seller clears the goods for export and hands them to the carrier or other person nominated by the buyer at an agreed place. Risk passes at that handover; the buyer pays the main transport, insurance and import costs.
Who pays loading under FCA?
If the named place is the seller's premises, the seller loads the goods onto the buyer's vehicle and pays for it. If the named place is elsewhere, such as a terminal, the seller brings the goods there on its own vehicle and the buyer is responsible for unloading them.
Can I get an on-board bill of lading under FCA?
Yes, if you agree it in the contract. Incoterms 2020 provide that the buyer then instructs its carrier to issue an on-board bill of lading to the seller, at the buyer's cost and risk. The carrier is not bound by the sales contract, so check with the buyer's forwarder in advance.
Is FCA better than FOB for container shipments?
Yes. Containers are handed to the carrier at a terminal, often days before loading. Under FCA risk passes at that handover, while under FOB the seller would keep the risk until the box is on board a ship it no longer controls.