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What is Free Carrier (FCA) Incoterm? Know shipping terms, benefits, and example
Free Carrier (FCA) Incoterm states that the exporter is responsible for delivering goods to the destination specified by the importer. Learn more about it here.
International trade can be complicated, with risks like delays, damage, and financial loss. To make these transactions easier, the International Chamber of Commerce (ICC) created Incoterms — standard rules that define the roles of buyers and sellers. One of these rules is FCA (Free Carrier) Incoterm, which specifies that the seller must deliver the goods to a carrier or location chosen by the buyer. In this blog, we’ll explain what FCA is, how it works, and what responsibilities it gives to exporters and importers.
What is Free Carrier (FCA) Incoterm?
Free Carrier (FCA) Incoterm states that the exporter is responsible for delivering goods either at their own premises (loaded onto the vehicle) or at a location chosen by the importer, such as an airport, warehouse, office, or port. The term 'free' indicates that the exporter takes responsibility of goods during transit, while the importer is free from these duties. The exporter usually covers the transport costs up to that location and is liable for the goods during this stage.1
What are FCA shipping terms?
The FCA shipping terms outline the responsibilities of the exporter and importer in the delivery process. Some key aspects are as follows:
● Exporter’s responsibility: The exporter must deliver the goods to the agreed location and take care of export paperwork, customs clearance, packaging, and pre-shipment inspection costs. If the goods are picked up from the exporter’s location, the exporter has to load them onto the buyer’s vehicle.
● Importer’s responsibility: The importer takes over once the goods are delivered. They pay for the goods, handle unloading, cover further transport costs, and complete all import formalities, including duties and taxes. Risk shifts to the buyer upon delivery.2
Free Carrier (FCA) Incoterm 2020 rule - Key changes and updates
In 2020, the ICC updated the Incoterms. Here's a breakdown of some key updates to the Free Carrier (FCA) terms:
● Bill of lading: If both parties agree, the buyer must ask its carrier to issue an on-board bill of lading for the seller to simplify letters of credit payments.
● Delivery location: Incoterms 2020 clarifies that the seller's responsibility ends when goods are either loaded onto the buyer’s vehicle at the seller’s premises or handed over at the named terminal/place without unloading.3
How does Free Carrier (FCA) Incoterm work?
Under the FCA Incoterm, the exporter must deliver the goods to a location in their own country that the importer has chosen, such as a warehouse, terminal, or transport hub. Once the goods are handed over to the carrier at that point, the risk transfers to the importer. The exporter handles export paperwork and clearance, while the importer arranges the main transport. The exporter doesn’t have to unload the goods unless agreed, and once delivery is complete, the goods become the importer’s responsibility.4
Example of FCA Incoterm
Let's explore an example of FCA Incoterm to understand how it works:
Let’s say, Asha, an exporter in India, is shipping products to Daniel in the United States under an FCA agreement. Daniel chooses a logistics company he regularly works with, and Asha agrees. Asha’s job is to deliver the goods to that logistics company’s facility. Once she hands over the goods there, all responsibility and risk shift to Daniel.
In this scenario, if any damage or loss occurs after Asha has delivered the goods to the facility, it would be Daniel’s responsibility, as the risk transferred to him at the FCA delivery point.
Let’s say, Asha, an exporter in India, is shipping products to Daniel in the United States under an FCA agreement. Daniel chooses a logistics company he regularly works with, and Asha agrees. Asha’s job is to deliver the goods to that logistics company’s facility. Once she hands over the goods there, all responsibility and risk shift to Daniel.
In this scenario, if any damage or loss occurs after Asha has delivered the goods to the facility, it would be Daniel’s responsibility, as the risk transferred to him at the FCA delivery point.
Documents required for FCA Incoterm
The following are some documents that are commonly required in FCA transactions:
Transport document:
Transport document issued by the carrier to the shipper as proof of shipment, ownership, and contract details. This may be a bill of lading, air waybill, or road consignment note depending on the transport mode.
Commercial invoice:
Commercial invoice is a document from the exporter to the importer covering details of goods, price, quantity, and terms. It is used for customs and payment processes.
Export license:
It is an official government authorization that allows the export of certain controlled goods or goods to specific destinations, required where applicable.
Insurance certificate:
This is a proof of insurance coverage, provided if agreed between buyer and seller and specified in the FCA contract.
Packing list:
Packing list is a document prepared by the shipper detailing items in the shipment such as description, quantity, weight, dimensions of items, and any relevant shipping and handling details.5
Exporter / seller obligations under FCA Incoterms
Under FCA Incoterms, the exporter or seller’s responsibilities are:
Goods packaging:
The exporter must securely package the goods so they stay protected in transit and meet all relevant transport and product regulations.
Compliance:
The exporter must ensure that the goods meet all contractual specifications such as quality, quantity, and description agreed in the sales contract, as well as all export regulations in their country. This includes complying with any licensing or inspection requirements.
Delivery location:
The exporter must deliver the goods to the agreed location such as a port, airport, or transport hub, and hand them over to the buyer’s carrier. Delivery is complete at this point.
Loading responsibility:
If the goods are picked up from the exporter’s premises, the exporter must load them onto the buyer’s vehicle. If delivered elsewhere, loading is not the exporter’s job.
Risk management:
The exporter is responsible for the goods until they are delivered to the agreed location. After that, the risk transfers to the buyer.
Shipping costs:
The exporter covers all costs up to the delivery point, including packaging, export paperwork, and loading. The buyer pays costs after delivery, such as freight and import duties.
Notification of delivery:
The exporter must inform the buyer once the goods are delivered and share any needed transport details for tracking.6
Importer / buyer obligations under FCA Incoterms
In the FCA Incoterms, these are the importer's key responsibilities:
Receiving the goods:
The buyer is responsible for accepting delivery at the agreed location, ensuring timely receipt and readiness to take possession.
Arranging transportation:
The buyer arranges and pays for all transport from the delivery point to the final destination, having control over carrier selection and shipping method.
Managing import procedures:
The buyer handles all import customs clearance, documentation, duties, taxes, and any related costs for bringing the goods into their country.
Risk transfer:
The buyer assumes all risks of loss or damage to the goods from the moment the seller delivers them to the buyer’s carrier at the agreed location.7
What are the benefits of FCA Incoterm?
Some benefits of FCA Incoterms are:
Versatility:
FCA works with any mode of transport, making it suitable for both small domestic transactions and large-scale international shipments.
Clear responsibilities:
It provides clear guidelines on delivery points, risk transfer, and the responsibilities of both the buyer and seller, ensuring that there is no confusion in the contract.
Simplified carrier cost management:
Both parties can choose their own carriers and transport methods for their respective portions of the journey, simplifying cost management.8
What are the drawbacks of FCA Incoterm?
While there are several advantages, there are also a few drawbacks of FCA Incoterms that parties should be aware of:
Logistical challenges:
Coordinating multi-modal transportation can be complex and costly for sellers, especially for those with limited experience in global shipping.
Regional discrepancies:
Variations in local customs and practices can lead to different interpretations of FCA terms, which may complicate cross-border transactions.9
When to use FCA Incoterm?
FCA Incoterm is highly flexible, making it suitable for various situations where both parties agree on its terms:
Multimodal transport:
FCA is ideal when goods are transported using multiple modes, such as land, water, and sea, since it can be used across all transport methods.
Buyer-arranged shipping:
FCA allows the buyer to have control over the shipping process, including selecting their carrier. It works well as the seller's responsibility ends upon delivery to the agreed location or carrier.
Customs clearance by seller:
FCA works for sellers who can efficiently handle export clearance at their location while allowing the buyer to manage subsequent logistics.10
Delivery terms in FCA Incoterms
The seller’s delivery responsibilities vary based on the location:
● At the seller’s premises: The seller is responsible for loading the goods onto the buyer’s transport. Once loaded, the buyer assumes responsibility for the goods.
● At a buyer-specified location within the seller’s country: The seller delivers the goods to the agreed site, such as a warehouse or terminal. Responsibility transfers to the buyer once the goods arrive at this location.
In both scenarios, the seller’s obligations end once the goods are loaded or delivered to the designated location, with all subsequent risks and costs shifting to the buyer.11
Cost involved in FCA Incoterm
Under the Free Carrier (FCA) Incoterm, the allocation of costs between the buyer and seller is defined, as follows:
For seller/exporter:
● Costs for loading and delivering the goods to the agreed location.
● Duties and taxes associated with export clearance.
● Documentation fees, including export licenses and other required paperwork.
For buyer/importer:
● All transportation costs from the delivery point onward.
● Import duties, taxes, and customs clearance fees in the destination country.
● Insurance for goods in transit, if required.12
Insurance of goods in FCA Incoterm
Although insurance is not compulsory, it is recommended to protect goods during transit:
● Seller: The seller is not required to provide insurance beyond the delivery point but can help arrange coverage if requested by the buyer.
● Buyer: Once the risk transfers at the delivery point, the buyer is responsible for obtaining insurance to safeguard against potential loss or damage during transportation.13
Difference between FCA and FOB Incoterm
FOB (Free on Board) is used only for sea shipments, where the seller is responsible until the goods are loaded onto the ship.
In contrast, FCA can be used with any transport mode, and the seller’s responsibility ends when the goods are delivered to the buyer’s carrier at the agreed place. The buyer usually handles loading if the delivery is not at the seller’s premises. Also, with FCA, the seller typically handles the export declaration after delivery to the buyer’s transport.14
In contrast, FCA can be used with any transport mode, and the seller’s responsibility ends when the goods are delivered to the buyer’s carrier at the agreed place. The buyer usually handles loading if the delivery is not at the seller’s premises. Also, with FCA, the seller typically handles the export declaration after delivery to the buyer’s transport.14
Conclusion
FCA (Free Carrier) Incoterm provides clear guidelines on delivery, risk transfer, and responsibilities of both the buyer and seller, making it versatile for multiple modes of transport. By defining the seller's and buyer's obligations, it helps streamline international trade and reduces confusion in cross-border transactions. For businesses looking to expand globally through ecommerce, Amazon Global Selling can help with proper understanding and implementation of export documentation to ensure smoother shipping operations and effective risk management.
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Frequently Asked Questions
1. What is the difference between FCA and DDP?
Under DDP (Delivered Duty Paid), the exporter is responsible for covering transportation, customs clearance, and delivery to the importer's final location. However, under FCA, the exporter's responsibility ends once the goods are delivered to the buyer's carrier at a previously agreed upon location.
2. Are FCA and EXW the same?
No, Ex Works or EXW requires the exporter to deliver the goods at their own premises, and the importer handles the rest. FCA states that the exporter must deliver goods to a specific location and the importer takes over from there.
3. Who pays freight in FCA Incoterms?
Under FCA Incoterms, freight cost is usually paid by the importer.
4. Who does customs clearance in FCA?
Under FCA, the exporter is responsible for export customs clearance while the importer handles import customs clearance at the destination.
5. What does FCA origin mean for shipping?
FCA origin means that the exporter can deliver goods at a decided place, which can be the exporter's premises or any other named place.
6. What is transport of risk in FCA incoterm?
Under FCA, the risk transfers from the seller to the buyer at the agreed delivery point. If delivery is at the seller’s premises, risk passes once the goods are loaded onto the buyer’s transport. If delivery is at a buyer-specified location, risk transfers when the goods arrive at that spot.
Published on November 29, 2022.
Updated on December 3, 2025.
Sources:
1. https://www.aitworldwide.com/resources/incoterms/incoterms-fca-free-carrier/
2. https://dclcorp.com/blog/shipping/fca-free-carrier-incoterm/
3. https://www.tradefinanceglobal.com/incoterms/fca-free-carrier/
4. https://www.investopedia.com/terms/f/fca.asp
5. https://www.tradefinanceglobal.com/incoterms/fca-free-carrier/
6. https://www.shopify.com/in/blog/fca-incoterms
7. https://www.shopify.com/in/blog/fca-incoterms
8. https://guidedimports.com/blog/what-does-fca-mean-incoterms/
9. https://guidedimports.com/blog/what-does-fca-mean-incoterms/
10. https://www.tradefinanceglobal.com/incoterms/fca-free-carrier/
11. https://www.aitworldwide.com/resources/incoterms/incoterms-fca-free-carrier/
12. https://www.credlix.com/blogs/fca-incoterms-explained-how-costs-risks-and-responsibilities-are-shared
13. https://www.credlix.com/blogs/fca-incoterms-explained-how-costs-risks-and-responsibilities-are-shared
14. https://www.investopedia.com/terms/f/fca.asp
Updated on December 3, 2025.
Sources:
1. https://www.aitworldwide.com/resources/incoterms/incoterms-fca-free-carrier/
2. https://dclcorp.com/blog/shipping/fca-free-carrier-incoterm/
3. https://www.tradefinanceglobal.com/incoterms/fca-free-carrier/
4. https://www.investopedia.com/terms/f/fca.asp
5. https://www.tradefinanceglobal.com/incoterms/fca-free-carrier/
6. https://www.shopify.com/in/blog/fca-incoterms
7. https://www.shopify.com/in/blog/fca-incoterms
8. https://guidedimports.com/blog/what-does-fca-mean-incoterms/
9. https://guidedimports.com/blog/what-does-fca-mean-incoterms/
10. https://www.tradefinanceglobal.com/incoterms/fca-free-carrier/
11. https://www.aitworldwide.com/resources/incoterms/incoterms-fca-free-carrier/
12. https://www.credlix.com/blogs/fca-incoterms-explained-how-costs-risks-and-responsibilities-are-shared
13. https://www.credlix.com/blogs/fca-incoterms-explained-how-costs-risks-and-responsibilities-are-shared
14. https://www.investopedia.com/terms/f/fca.asp
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