Every international shipment requires a clear agreement on who is responsible for what. Incoterms are intended for exactly that purpose. Incoterms are a set of international trade rules established by the International Chamber of Commerce (ICC). The FCA Incoterm is one of the most widely used rules in world trade today.
Choosing the wrong Incoterm can lead to confusion, unexpected costs and disputes between buyer and seller. FCA is distinguished by its flexibility. The rule can be used for all modes of transportation and suits a wide range of international trade situations.
In this article, we will discuss everything you need to know about the FCA Incoterm. You will learn what FCA means, how the two delivery options work, what the buyer and seller are responsible for, and when FCA is the right choice for your shipment.
What is the FCA-Incoterm?
FCA stands for Free Carrier. It is one of the 11 trading rules within Incoterms® 2020, published by the International Chamber of Commerce (ICC). Under the FCA Incoterm, the seller delivers the goods to the carrier designated by the buyer, at an agreed place and time. The buyer chooses the carrier and determines the delivery location.
FCA can be used for all modes of transportation, including road, rail, air and sea. The rule is particularly suitable for containerized cargo and multimodal shipments, where goods are transported via more than one mode of transportation.
Because of this flexibility, FCA is one of the most widely used Incoterms in international trade. Both small companies and large exporters use it regularly.
An important rule to remember is that the exact delivery point must be clearly defined in the sales contract. The more specifically the location is defined, the clearer the responsibilities are for both parties.
FCA-A and FCA-B: two delivery options explained
Under FCA, there are two delivery scenarios: FCA-A and FCA-B. The main difference between these two options is where the goods are delivered and who is responsible for loading.
Both options are valid under Incoterms® 2020, but in practice they work in different ways. It is therefore important to always agree on the exact delivery location in advance, including the full address, before finalizing the sales contract.
FCA-A: delivery on the seller’s premises.
Under FCA-A, the seller delivers the goods to its own location, such as a factory or warehouse. The seller is responsible for loading the goods onto the buyer’s vehicle.
This is the main difference from EXW, where the buyer is responsible for loading. FCA-A is therefore often seen as a more suitable and balanced alternative to EXW.
Below is how the responsibilities are divided under FCA-A:
- The seller loads the goods onto the buyer’s vehicle at the agreed location
- The seller arranges all export formalities and export documents
- The buyer organizes and pays for transportation to the final destination
- Buyer arranges import formalities and local import documents
- Risk passes to the buyer after the seller loads the goods
FCA-B: delivery at an externally agreed location
In FCA-B, the seller delivers the goods to a pre-arranged remote location. This can be an airport, port or railroad terminal, for example. The seller transports the goods to this agreed location and delivers them there ready for unloading.
FCA-B is particularly suitable for multimodal shipments, where goods are transported via more than one means of transportation.
Below you can see how responsibilities are divided under FCA-B:
- The seller transports the goods to the agreed external delivery point
- The seller delivers the goods ready for unloading at the agreed location
- The seller arranges all export formalities and export documents
- The buyer arranges for the carrier to pick up the goods at the agreed location
- Risk passes to the buyer when the goods arrive at the agreed location and are ready to be unloaded
Responsibilities of seller and buyer under FCA
Under FCA terms, both parties have clearly defined responsibilities. The division of duties depends on the agreed location of delivery: either the seller’s premises (FCA-A) or an externally agreed location (FCA-B).
We address both scenarios below. According to the ICC, a good understanding of these FCA responsibilities in advance helps avoid disputes and unexpected costs for both parties.
| Responsibility | Seller | Buyer |
| Packaging and marking of goods for transport | ✅ | ❌ |
| Export customs clearance and documents | ✅ | ❌ |
| Loading of goods on seller’s premises (FCA-A) | ✅ | ❌ |
| Delivery of goods to the named remote location (FCA-B) | ✅ | ❌ |
| Informing the buyer when the goods have been delivered | ✅ | ❌ |
| Designating the carrier and mode of transportation | ❌ | ✅ |
| Transportation from the delivery site to the destination | ❌ | ✅ |
| Import customs clearance and documents | ❌ | ✅ |
| Unloading goods at the final destination | ❌ | ✅ |
| Insurance | Optional | Optional |
The seller’s obligations under FCA are clear. The seller packages the goods, handles all export formalities and delivers the goods to the agreed point. Under FCA-A, the seller also loads the goods onto the buyer’s vehicle.
Under FCA-B, the seller transports the goods to the said remote location and delivers them ready for unloading. The seller must also notify the buyer once the goods have been delivered.
The buyer takes over from the delivery point. The buyer appoints the carrier, arranges all transportation to the final destination and handles import customs clearance in the destination country. Unloading the goods at the final destination is also the responsibility of the buyer.
Insurance is not mandatory for either party under FCA. Both the seller and buyer can choose to independently insure the goods based on their own assessment and risk profile.
How costs are shared among FCA
Under FCA, cost sharing is directly tied to the agreed-upon delivery point. The seller covers all costs up to that point. From then on, all costs pass to the buyer.
Understanding this FCA cost allocation in advance helps both parties correctly assess the transaction and avoid unexpected costs.
- Seller pays for: Packing and marking of goods, export documentation, export customs clearance, loading at the seller’s premises (FCA-A) and transportation to the named remote location (FCA-B).
- Buyer pays: Transportation from the delivery point to the final destination, import customs clearance, import duties and taxes, and unloading at the destination.
- Insurance: Insurance is not mandatory for either party under FCA. Both the seller and buyer can choose to independently insure the goods based on their own needs.
FCA versus EXW and FOB: what’s the difference?
FCA is sometimes confused with EXW and FOB. All three terms place great responsibility on the buyer, but they differ in important ways. Choosing the wrong Incoterm can lead to loading disputes, customs problems and unexpected costs.
If you are unsure between these three terms, the table below clarifies the differences.
| FCA | EXW | FOB | |
| Transportation modes | All modes | All modes | Sea and inland waterways |
| Who loads the goods | Seller (FCA-A) | Buyer | Seller |
| Export customs clearance | Seller | Buyer | Seller |
| Point of risk transfer | Named point of delivery | Seller’s business location prior to loading | Aboard ship at named port |
| Suitable for containers | Yes | Yes | No |
| Suitable for bulk loading | Yes | Yes | Yes |
| Suitable for Letter of Credit | Yes, with on-board B/L | No | Yes |
The main difference between FCA and EXW is loading. Under EXW, the buyer is responsible for loading the goods at the seller’s premises. Under FCA, the seller handles the loading. In practice, many sellers already load the goods under EXW, which technically makes it FCA.
FOB is only suitable for sea and inland waterway transport. It is not the right choice for container loads or multimodal transport. FCA is the better and more flexible option for most modern international trade scenarios.
When should you use the FCA-Incoterm?
FCA is one of the most flexible Incoterms available. It suits a wide range of international trade situations for both small businesses and large exporters. However, it is not the right choice for every shipment.
FCA is a good option when goods are transported in containers or on pallets. It also works well when multiple modes of transport are used, such as road transport combined with sea or air freight.
Buyers who want complete control over transportation arrangements and costs benefit most from FCA. Sellers who want to limit their responsibility to export customs clearance and delivery at a named point also prefer this Incoterm. FCA is suitable for trade both inside and outside the EU.
However, FCA is not the right choice when the buyer cannot arrange transportation from the seller’s location. It is also less appropriate when payment is made via a Letter of Credit without an “on board” Bill of Lading arrangement.
Get professional support for your FCA customs obligations
FCA is a clear and practical Incoterm that works for most international trade situations. The seller arranges export customs clearance and delivers the goods at the agreed point.
From then on, the buyer takes control. When both parties understand their responsibilities in advance, shipments run smoothly and disputes are avoided.
One area where companies often need support is customs clearance. Under FCA, the seller is responsible for export formalities. If this is not handled correctly, it can delay the entire shipment.
If you are looking for a professional and AEO-certified customs service provider in the Netherlands, can The Customs Company help you. They offer direct connections with Dutch Customs and Portbase and provide 24/7 support for efficient customs clearance.
Choosing the right Incoterm is the first step. Working with the right customs partner ensures that everything that follows goes without delays.
