FCA (Free Carrier) is one of the most widely used Incoterms® 2020 rules in international trade. The seller delivers the goods to the carrier or another person nominated by the buyer at the agreed place. The seller is responsible for export clearance.
FCA offers two delivery variants depending on the agreed place:
If the named place is the seller's premises: delivery is completed when the goods are loaded on the means of transport provided by the buyer.
If the named place is another place: delivery is completed when the goods, having been loaded on the seller's means of transport, reach the named other place and are ready for unloading from the seller's means of transport and at the disposal of the carrier nominated by the buyer.
FCA can be used with any mode of transport (sea, air, road, rail, multimodal). It is the ICC-recommended alternative to EXW for exports, as the seller retains control of export formalities and documentary proof of goods leaving the territory.
New in Incoterms® 2020: FCA now provides an optional mechanism allowing the seller to obtain a bill of lading with an on-board notation, useful in the context of documentary credits or letters of credit.
Risk transfers at the moment of delivery to the carrier at the agreed place. Costs are allocated in the same way: the seller bears all costs up to delivery (including export), while the buyer bears main carriage, insurance, and import costs.
How does the on-board bill of lading option work under FCA Incoterms 2020?
Under FCA Incoterms 2020, Article A6/B6 provides an optional mechanism: if agreed in the contract, the buyer instructs its carrier to issue a bill of lading with an on-board notation to the seller, at the buyer's cost and risk. The carrier is not obliged to comply and can only issue such a document once goods are actually loaded on board the vessel. Once issued, the seller must provide this document to the buyer.
Can the seller obtain an on-board bill of lading under FCA?
Yes, but only through the optional mechanism introduced in Incoterms 2020. The seller cannot obtain the on-board bill of lading directly - the buyer must instruct its carrier to issue it to the seller. The carrier may or may not accede to this request, as it can only issue such a document once goods are physically on board. This mechanism must be explicitly agreed upon in the sales contract.
Why was the on-board bill of lading mechanism added to FCA in 2020?
The ICC added this mechanism to solve a practical problem with documentary credits (letters of credit). Banks typically require an on-board bill of lading as proof of shipment, but under FCA, delivery occurs before loading on the vessel (at the inland carrier handover). Without this option, sellers using FCA for containerized maritime shipments could not present the transport document required by their letter of credit.
What is the difference between FCA seller's premises and FCA named place?
At FCA seller's premises, the seller is responsible for loading the goods onto the buyer's vehicle, and risk transfers once loading is completed. At FCA another named place (terminal, warehouse), the seller brings goods on its own vehicle; risk transfers when goods are ready for unloading and at the disposal of the buyer's carrier. The seller is not responsible for unloading at another place. This distinction is critical for determining who bears loading risk.
Who is responsible for loading under FCA at the seller's premises?
The seller is responsible for loading when delivery takes place at the seller's premises (Article A2a). This is a major advantage over EXW, where loading responsibility is contractually the buyer's but practically often performed by the seller, creating a legal grey area. Under FCA at seller's premises, the seller clearly bears both the cost and risk of loading onto the buyer's transport.
Is FCA better than EXW for export shipments?
Yes, FCA is the ICC-recommended minimum Incoterm for any export shipment. Under FCA, the seller handles export clearance (Article A7) and retains documentary proof of goods leaving the territory (SAD, ECS exit certificate), enabling VAT zero-rating justification. The foreign buyer does not need an EORI number in the seller's country. FCA resolves all major EXW export pain points.
Who arranges and pays for main carriage under FCA?
The buyer arranges and pays for main carriage from the named place of delivery (Article B4). However, if the parties agree, the seller may contract for carriage on usual terms but at the buyer's risk and cost (Article A4). This flexibility allows the seller to leverage its freight relationships when beneficial, while keeping the cost allocation with the buyer.
What happens if the buyer fails to nominate a carrier under FCA?
If the buyer fails to nominate a carrier within the agreed time, or if the nominated carrier fails to take the goods into its charge, the buyer bears all risks of loss or damage from the agreed date or the end of the agreed delivery period (Article B3). The buyer also bears any additional costs incurred (Article B9d). The goods must have been clearly identified as the contract goods for this provision to apply.
Can FCA be used for maritime transport instead of FOB?
Yes, and the ICC recommends FCA over FOB for containerized maritime shipments. With FOB, risk transfers when goods are placed on board the vessel, but containers are typically handed to the carrier at a terminal well before loading on the vessel. FCA's risk transfer at the carrier handover point better reflects this reality. The optional on-board bill of lading mechanism in FCA addresses the documentary credit requirements that previously favored FOB.
How does FCA affect customs value calculation?
The FCA price includes all costs up to delivery to the carrier plus export clearance costs. To calculate customs value on a CIF basis (standard for EU imports), you must add: international freight from the FCA delivery point to the first point of entry into the EU, and insurance. This calculation is simpler than with EXW, since loading, inland transport to the carrier, and export costs are already included in the FCA price.
When does risk transfer under FCA?
Risk transfers at the moment of delivery, which depends on the delivery variant. At the seller's premises: when goods are loaded onto the buyer's vehicle. At any other place: when goods, on the seller's vehicle, reach the agreed place and are ready for unloading at the disposal of the buyer's carrier (Articles A2/A3). The precise delivery point should be specified in the contract to avoid disputes.
Does the seller handle export clearance under FCA?
Yes, the seller must carry out and pay for all export clearance formalities under FCA (Article A7a), including export licenses, security clearance, pre-shipment inspection, and any other official authorization. This is one of FCA's key advantages: the seller retains the SAD and ECS exit certificate, providing documentary proof of export for VAT zero-rating purposes.
What is the difference between FCA and CPT?
The main difference is who arranges and pays for main carriage. Under FCA, the buyer arranges and pays for carriage from the delivery point. Under CPT, the seller arranges and pays for carriage to the named destination. However, in both cases, risk transfers at the same point: when goods are handed to the first carrier. CPT is preferred when the seller wants to control the transport chain.
Is insurance mandatory under FCA?
No, neither party has a contractual obligation to procure insurance under FCA (Articles A5 and B5). However, the buyer bears all risks from the moment of delivery to the carrier, so cargo insurance is strongly recommended. If insurance is needed as a contractual obligation, the parties should consider using CIP instead, which requires the seller to procure insurance to the destination.
How should the FCA delivery point be specified in a contract?
The contract should state "FCA [precise address] Incoterms 2020" and clearly indicate whether the place is the seller's premises or another location. For example: "FCA Seller's Warehouse, 15 Industry Road, 69200 Venissieux, France - Incoterms 2020" or "FCA Cargo Terminal 3, Roissy-CDG Airport, 95700 Roissy-en-France - Incoterms 2020". Specifying whether it is the seller's premises determines loading responsibility.
Why is FCA recommended for containerized shipments?
FCA is recommended for containerized shipments because the risk transfer point (delivery to the carrier at the terminal or seller's premises) matches the reality of container logistics, where goods leave the seller's control at the inland handover point, not when loaded on the vessel. FOB's risk transfer on board the vessel does not reflect containerized practice. Additionally, FCA's optional on-board bill of lading mechanism supports letter of credit requirements.
Common mistakes
1Not specifying whether the delivery place is the seller's premises or another location, creating confusion about loading responsibility.
2Using EXW instead of FCA for exports, depriving the seller of documentary proof of exit and creating tax risk.
3The buyer failing to nominate a carrier in time, ending up bearing early risk transfer.
Seller vs buyer obligations
Obligation
Seller
Buyer
Export formalities
Loading
Main transport
Transport insurance
Unloading
Import formalities
Risk transfer diagram
ICC Explanatory notes
Delivery and transfer of risks
Under FCA, "Free Carrier (named place)" means that the seller delivers the goods to the buyer in one or other of two ways:
First: when the named place is the seller's premises, the goods are delivered when they are loaded on the means of transport arranged by the buyer.
Second: when the named place is another place, the goods are delivered when, having been loaded on the seller's means of transport, they reach the named other place and are ready for unloading from that seller's means of transport and at the disposal of the carrier or of another person nominated by the buyer.
Whichever of the two is chosen as the place of delivery, that place identifies where risk transfers to the buyer and the time from which costs are for the buyer's account.
Critical point: the distinction between delivery at the seller's premises and delivery at another place is fundamental as it determines who is responsible for loading onto the main vehicle.
Applicable mode of transport
FCA may be used irrespective of the mode of transport selected, including multimodal transport. This is one of its major advantages over maritime-only Incoterms (FAS, FOB, CFR, CIF).
This makes it the most versatile and most recommended Incoterm for modern international trade, where multimodal transport (container + truck + vessel, for example) is the norm.
Place and precise point of delivery
The parties are well advised to specify as clearly as possible the precise point within the named place of delivery. A named precise point of delivery makes it clear to both parties when the goods are delivered and when risk transfers to the buyer.
Where the precise point is not identified, the seller has the right to select the point "that best suits its purpose" within the named place. That point becomes the point of delivery, from which risk and costs transfer to the buyer.
Recommendation: the buyer should specify the precise point to avoid the seller choosing an unfavorable point.
Recommended wording: "FCA [exact address of delivery place] Incoterms® 2020"
New in Incoterms® 2020: FCA provides an optional mechanism for obtaining a bill of lading with an on-board notation.
In certain situations (documentary credit, letter of credit), the FCA seller may need a bill of lading stating that the goods have been placed on board the vessel. If the parties have so agreed in the contract:
The buyer must instruct its carrier to issue a bill of lading with an on-board notation to the seller.
The carrier may or may not accede to the buyer's request (the carrier is only entitled to issue such a bill of lading once the goods are on board).
If and when the bill of lading is issued to the seller by the carrier at the buyer's cost and risk, the seller must provide that same document to the buyer.
Important: even where this optional mechanism is adopted, the seller is under no obligation to the buyer as to the terms of the contract of carriage. The dates of delivery inland and loading on board will necessarily be different, which may create difficulties under a letter of credit.
Critical points
Two delivery variants
The place of delivery determines who loads - frequent confusion between delivery at seller's premises and elsewhere.
FCA has two very different delivery variants:
Seller's premises: the seller is responsible for loading onto the buyer's vehicle. Risk transfers once loading is completed.
Other place: the seller brings the goods to the agreed place on its own vehicle. Risk transfers when the goods are ready for unloading and at the disposal of the buyer's carrier. The seller is not responsible for unloading.
This distinction is a source of confusion if the parties do not clearly identify the place of delivery. It is essential to specify in the contract whether delivery takes place at the seller's premises or at another point.
Recommendation: always explicitly indicate whether the agreed place is "the seller's premises" or a third-party location (terminal, warehouse, inland port).
Export clearance by the seller
The seller is responsible for export clearance - a major advantage over EXW.
Under FCA, the seller must carry out and pay for export clearance formalities. This is a considerable advantage over EXW:
The seller retains documentary proof of the export (SAD, ECS exit certificate).
The seller can justify VAT zero-rating for exports.
The foreign buyer does not need an EORI number in the seller's country or fiscal representation.
However, the seller has no obligation to clear the goods for import, pay import duties, or carry out import customs formalities.
Recommendation: FCA is the minimum recommended Incoterm for any export sale. Never use EXW when FCA is possible.
Carrier nomination by the buyer
The buyer must nominate a carrier in due time - failure to nominate = early risk transfer.
Under FCA, the buyer has the obligation to nominate a carrier or another person to take delivery of the goods. If the buyer fails to do so within the agreed time:
The buyer bears all risks of loss of or damage from the agreed date or the end of the agreed period.
The buyer bears additional costs incurred as a result of this failure.
This requires that the goods have been clearly identified as the contract goods.
Recommendation: the buyer must notify the seller (in accordance with B10):
The name of the carrier or nominated person
The selected time for taking delivery
The mode of transport to be used
The point of receipt within the named place of delivery
Detailed seller obligations (A1-A10)
Article A1General obligations
The seller must provide the goods and the commercial invoice in conformity with the contract of sale and any other evidence of conformity that may be required by the contract.
Any document to be provided by the seller may be in paper or electronic form as agreed or, where there is no agreement, as is customary.
Article A2Delivery
The seller must deliver the goods to the carrier or another person nominated by the buyer at the named point, if any, at the named place, or procure goods so delivered.
The seller must deliver the goods:
on the agreed date, or
at the time within the agreed period notified by the buyer under B10(b), or
if no such time is notified, then at the end of the agreed period.
Delivery is completed either:
a) If the named place is the seller's premises, when the goods have been loaded on the means of transport provided by the buyer; or
b) In any other case, when the goods are placed at the disposal of the carrier or another person nominated by the buyer on the seller's means of transport ready for unloading.
If no specific point has been notified by the buyer under B10(d) within the named place of delivery, and if there are several points available, the seller may select the point that best suits its purpose.
Article A3Transfer of risks
The seller bears all risks of loss of or damage to the goods until they have been delivered in accordance with A2, with the exception of loss or damage in the circumstances described in B3.
Article A4Carriage
The seller has no obligation to the buyer to make a contract of carriage. However, the seller must provide the buyer, at the buyer's request, risk and cost, with any information in the possession of the seller, including transport-related security requirements, that the buyer needs for arranging carriage.
If agreed, the seller must contract for carriage on the usual terms at the buyer's risk and cost.
The seller must comply with any transport-related security requirements up to delivery.
Article A5Insurance
The seller has no obligation to the buyer to make a contract of insurance. However, the seller must provide the buyer, at the buyer's request, risk and cost, with information in the possession of the seller that the buyer needs for obtaining insurance.
Article A6Delivery/transport document
The seller must provide the buyer at the seller's cost with the usual proof that the goods have been delivered in accordance with A2.
The seller must provide assistance to the buyer, at the buyer's request, risk and cost, in obtaining a transport document.
Where the buyer has instructed the carrier to issue to the seller a transport document under B6, the seller must provide any such document to the buyer.
Article A7Export/import clearance
a) Export clearance: where applicable, the seller must carry out and pay for all export clearance formalities required by the country of export, such as:
export licence;
security clearance for export;
pre-shipment inspection; and
any other official authorisation.
b) Assistance with import clearance: where applicable, the seller must assist the buyer, at the buyer's request, risk and cost, in obtaining any documents and/or information related to all transit/import clearance formalities, including security requirements and pre-shipment inspection, needed by any country of transit or the country of import.
Article A8Checking/packaging/marking
The seller must pay the costs of those checking operations (such as checking quality, measuring, weighing, counting) that are necessary for the purpose of delivering the goods in accordance with A2.
The seller must, at its own cost, package the goods, unless it is usual for the particular trade to transport the type of goods sold unpackaged. The seller must package and mark the goods in the manner appropriate for their transport, unless the parties have agreed on specific packaging or marking requirements.
Article A9Allocation of costs
The seller must pay:
a) All costs relating to the goods until they have been delivered in accordance with A2, other than those payable by the buyer under B9.
b) The costs of providing the usual proof to the buyer under A6 that the goods have been delivered.
c) Where applicable, duties, taxes and any other costs related to export clearance under A7(a).
d) The buyer for all costs and charges related to providing assistance in obtaining documents and information in accordance with B7(a).
Article A10Notices
The seller must give the buyer sufficient notice either that the goods have been delivered in accordance with A2 or that the carrier or another person nominated by the buyer has failed to take the goods within the time agreed.
Detailed buyer obligations (B1-B10)
Article B1General obligations
The buyer must pay the price of the goods as provided in the contract of sale.
Any document to be provided by the buyer may be in paper or electronic form as agreed or, where there is no agreement, as is customary.
Article B2Taking delivery
The buyer must take delivery of the goods when they have been delivered under A2.
Article B3Transfer of risks
The buyer bears all risks of loss of or damage to the goods from the time they have been delivered under A2.
If:
a) the buyer fails to nominate a carrier or another person under A2 or to give notice in accordance with B10; or
b) the carrier or person nominated by the buyer under B10(a) fails to take the goods into its charge,
then, the buyer bears all risks of loss of or damage to the goods:
(i) from the agreed date, or in the absence of an agreed date,
(ii) from the time selected by the buyer under B10(b); or, if no such time has been notified,
(iii) from the end of any agreed period for delivery,
provided that the goods have been clearly identified as the contract goods.
Article B4Carriage
The buyer must contract or arrange at its own cost for the carriage of the goods from the named place of delivery, except when the contract of carriage is made by the seller as provided for in A4.
Article B5Insurance
The buyer has no obligation to the seller to make a contract of insurance.
Article B6Delivery/transport document
The buyer must accept the proof that the goods have been delivered in accordance with A2.
If the parties have so agreed, the buyer must instruct the carrier to issue to the seller, at the buyer's cost and risk, a transport document stating that the goods have been loaded (such as a bill of lading with an onboard notation).
Article B7Export/import clearance
a) Assistance with export clearance: where applicable, the buyer must assist the seller at the seller's request, risk and cost in obtaining any documents and/or information related to all export clearance formalities, including security requirements and pre-shipment inspection, needed by the country of export.
b) Import clearance: where applicable, the buyer must carry out and pay for all formalities required by any country of transit and the country of import, such as:
import licence and any licence required for transit;
security clearance for import and any transit;
pre-shipment inspection; and
any other official authorisation.
Article B8Checking/packaging/marking
The buyer has no obligation to the seller.
Article B9Allocation of costs
The buyer must pay:
a) All costs relating to the goods from the time they have been delivered under A2, other than those payable by the seller under A9.
b) The seller for all costs and charges related to providing assistance in obtaining documents and information in accordance with A4, A5, A6 and A7(b).
c) Where applicable, duties, taxes and any other costs related to transit or import clearance under B7(b).
d) Any additional costs incurred, either because:
(i) the buyer fails to nominate a carrier or another person under B10, or
(ii) the carrier or person nominated by the buyer under B10 fails to take the goods into its charge,
provided that the goods have been clearly identified as the contract goods.
Article B10Notices
The buyer must notify the seller of:
a) the name of the carrier or another person nominated within sufficient time as to enable the seller to deliver the goods in accordance with A2;
b) the selected time, if any, within the period agreed for delivery when the carrier or person nominated will receive the goods;
c) the mode of transport to be used by the carrier or the person nominated including any transport-related security requirements; and
d) the point where the goods will be received within the named place of delivery.
FCA vs EXW comparison
Critère
FCA
EXW
Export formalities
Seller
Buyer
Loading
Seller (if seller's premises)
Buyer (ambiguous in practice)
Transfer of risks
To carrier or at seller's premises
Seller's premises (made available)
Proof of export
Seller holds the SAD
None for the seller
Export VAT
Seller justifies zero-rating
Tax risk for the seller
Recommended use
All modes, domestic and international
Domestic or intra-EU only
Critère
FCA
CPT
Main carriage
Buyer arranges and pays
Seller arranges and pays
Transfer of risks
To carrier at place of delivery
To first carrier (same point)
Contract of carriage
By the buyer
By the seller
Insurance
No obligation
No obligation
Seller's costs
Up to delivery + export
Up to destination + export + freight
Impact on customs value
Incoterm FCA belongs to group FOB. This group determines which adjustments (AK/BA) are applied to the invoiced price to calculate customs value.
Exports outside the EU: FCA is the minimum recommended Incoterm as the seller manages export formalities and retains proof of exit.
Multimodal transport: ideal for containerized shipments combining road, rail, and sea.
Replacing EXW: whenever an export is involved, FCA is preferable for tax and documentary reasons.
Sales with documentary credit: the optional on-board bill of lading mechanism facilitates banking operations.
When to avoid FCA
If the seller wants to control transport: use CPT or CIP.
If the seller must provide insurance: use CIP.
In pure maritime with on-board loading: consider FOB for more clarity on risk transfer at the port.
Recommended contractual clauses
Precise location: specify the exact address and whether it is the seller's premises or another place ("FCA [full address] Incoterms® 2020").
Carrier nomination: the buyer must notify the carrier name, transport mode, and point of receipt within sufficient time.
On-board bill of lading: if needed, explicitly provide for the optional B6 mechanism in the contract.
Delivery window: specify delivery dates or periods.
Packaging: specify packaging requirements for the intended transport (container, pallet, etc.).
Analysis by profile
Advantages
L'acheteur garde une maîtrise de la logistique transport (hors chargement moyen de transport du préacheminement). N'est pas en charge des formalités douanières depuis le pays d'expédition, pas de représentation fiscale à prévoir. Flexibilité sur le choix des prestataires, les délais et les coûts.
Disadvantages
Obligations fortes. L'acheteur doit être familiarisé avec la logistique de transport et avoir identifié en amont des partenaires de confiance.
Recommendations
Anticiper la coordination avec le vendeur et le transporteur.
Contractuellement, bien définir le lieu et l'endroit de livraison.
Assurance transport principal conseillée.
Important : Transport insurance is recommended for this Incoterm.
Comparative analysis (radar)
FCA
Compare with
Common mistakes
1
Not specifying whether the delivery place is the seller's premises or another location, creating confusion about loading responsibility.
2
Using EXW instead of FCA for exports, depriving the seller of documentary proof of exit and creating tax risk.
3
The buyer failing to nominate a carrier in time, ending up bearing early risk transfer.
4
Neglecting the optional on-board bill of lading mechanism when a documentary credit requires it.
5
Not specifying the precise point of delivery within the named place, leaving the seller to choose the point that best suits its purpose.
FCA 2020: On-Board Bill of Lading & Delivery Rules - The Trade Hub