FCA (Free Carrier) is an Incoterms® 2020 rule for any mode or combination of modes. The seller delivers the goods to the buyer’s nominated carrier or another nominated person at the named place.
Delivery and Risk Transfer
The exact delivery rule depends on the named place. If delivery is at the seller’s premises, the seller delivers by loading the goods onto the buyer’s collecting vehicle. If delivery is at another place, the seller delivers when the goods reach that place on the seller’s vehicle and are ready for unloading by the carrier or other nominated person.
Key Responsibilities
| Activity | Seller | Buyer |
|---|---|---|
| Export clearance | Yes | — |
| Delivery to nominated carrier/person | Yes | Nominates |
| Main carriage | No | Yes |
| Import clearance/duties | No | Yes |
| Insurance | No mandatory insurance obligation | Arrange as appropriate |
Why FCA Is Important for Containers
ICC notes that FOB is not appropriate when goods are handed over to a carrier before they are loaded on board a vessel, which is common for containerized cargo delivered to a terminal. FCA is often the cleaner rule for that situation.
On-Board Bill of Lading Option
Incoterms® 2020 introduced an FCA mechanism under which the parties may agree that the buyer instructs its carrier to issue an on-board bill of lading to the seller after loading. This can help where a bank requires an on-board bill of lading under a letter of credit.
Example
FCA Port Terminal, Jebel Ali: the seller clears the goods for export and delivers them to the buyer’s nominated carrier at the specified terminal point. Risk transfers there. The buyer then bears the risk and arranges the ocean freight onward.
Common Mistakes
- Failing to specify the exact FCA delivery point.
- Using FOB for container-terminal delivery simply because the shipment moves by sea.
- Assuming the seller pays the main freight under FCA.
- Confusing risk transfer with arrival at destination.
Reference: ICC Incoterms® 2020 explanatory notes for FCA and the official Incoterms® rules.
