FCA (Free Carrier)

FCA (Free Carrier) is an Incoterm defined by the International Chamber of Commerce (ICC) that specifies the point at which the seller’s responsibility for the goods ends and the buyer’s responsibility begins. Under FCA, the seller delivers the goods, cleared for export, to a carrier or another person nominated by the buyer at a named place. Once the goods are handed over to the carrier at the agreed location, the risk of loss or damage transfers from the seller to the buyer. The buyer arranges and pays for the main carriage (ocean freight, air freight, or trucking) from that point forward.

How FCA Works in Practice

FCA can be used with any mode of transport and is one of the most flexible Incoterms. The named place in the FCA agreement determines exactly where the transfer of responsibility occurs. Two common scenarios illustrate the difference.

In the first scenario, “FCA Seller’s Factory” (for example, FCA Shenzhen), the seller loads the goods onto the buyer’s truck or the carrier’s vehicle at the factory. Once loaded, risk transfers to the buyer. The buyer’s freight forwarder arranges pickup and all subsequent transportation.

In the second scenario, “FCA Named Terminal or Port” (for example, FCA Shanghai Port), the seller transports the goods to the named location (such as a port terminal or CFS) and delivers them to the carrier at that point. The seller bears the cost and risk of getting the goods to the terminal. Once the carrier receives the goods at the terminal, risk transfers to the buyer.

This distinction matters because it determines who pays for and manages the inland transport from factory to port at the origin end. Under FCA Seller’s Factory, the buyer handles everything from the factory door onward. Under FCA Named Port, the seller covers the origin inland leg.

FCA vs. FOB

FOB (Free on Board) is the most commonly used Incoterm in China-to-U.S. trade, but FCA is technically the more appropriate term for containerized ocean freight. FOB was designed for bulk cargo loaded directly onto a vessel, where the risk transfer point is the ship’s rail. For containerized freight, the goods are delivered to a terminal or CFS, stuffed into a container, and then loaded onto the vessel by the terminal operator. The seller has no control over the cargo once it enters the terminal, yet under FOB, the seller technically bears risk until the goods cross the ship’s rail.

FCA resolves this mismatch by transferring risk at the point the goods are delivered to the carrier (at the terminal, CFS, or other named place), regardless of when the container is physically loaded onto the vessel. In practice, many Chinese suppliers and Amazon sellers continue to use “FOB” in their contracts and commercial invoices, with both parties understanding the operational reality. But for precise legal allocation of risk, FCA is the correct Incoterm for containerized shipments.

Seller’s Obligations Under FCA

The seller must deliver the goods in conformity with the contract, package them appropriately for transport, and clear them for export (obtaining any necessary export licenses or permits and completing export customs formalities). The seller pays all costs up to the point of delivery to the carrier at the named place. The seller also provides the buyer with proof of delivery (typically a receipt or transport document).

A notable provision in the 2020 version of Incoterms allows the buyer to instruct the carrier to issue an on-board bill of lading to the seller after loading, which the seller then forwards to the buyer. This addresses a common problem in letter of credit transactions, where the bank requires an on-board bill of lading but the seller under FCA has already transferred the goods to the carrier before vessel loading occurs.

Buyer’s Obligations Under FCA

The buyer contracts and pays for the main carriage from the named place to the destination. The buyer bears all risk from the moment the goods are delivered to the carrier. The buyer is responsible for import customs clearance, duties, and taxes at the destination country. The buyer also arranges and pays for any inland transport at the destination end, from the port or airport to the final warehouse.

For Amazon sellers sourcing from overseas, FCA gives the buyer control over the freight forwarder selection and shipping route from an early point in the supply chain. This control is valuable because the buyer can negotiate freight rates, choose carriers, and manage transit times according to their own priorities rather than relying on the supplier’s logistics arrangements.