FCA Incoterms | Free Carrier Explained

1. What does FCA Mean in shipping terms?

FCA stands for “Free Carrier” in shipping terms.It is one of the 11 Incoterms 2020 rules set by the International Chamber of Commerce (ICC).The core idea of FCA: The seller delivers the goods to the carrier nominated by the buyer.The seller must complete export customs clearance before delivery.Once the goods are handed over to the nominated carrier, the risk of loss or damage to the goods transfers from the seller to the buyer.FCA applies to all modes of transport, including multi-modal transport (e.g., road + sea, air + rail).

2. What are the Buyers and Sellers Responsibilities with FCA Agreements?

Seller’s Responsibilities

• Provide goods that meet the requirements of the sales contract.
• Package the goods properly (unless the buyer specifies otherwise).
• Complete export customs clearance procedures (e.g., obtain export licenses, prepare customs documents).
• Deliver the goods to the carrier or another person nominated by the buyer at the agreed place.
• Notify the buyer immediately after delivering the goods to the carrier.
• Provide the buyer with documents needed for the buyer to take delivery of the goods (e.g., delivery note).
• Bear all risks and costs related to the goods before delivering them to the carrier.

Buyer’s Responsibilities

• Nominate a carrier (or other person) to receive the goods.
• Inform the seller of the carrier’s details, delivery place, and delivery time in advance.
• Pay the agreed price for the goods to the seller.
• Arrange the main transport (e.g., sea freight, air freight) from the delivery place.
• Bear all risks and costs related to the goods after they are handed over to the carrier.
• Complete import customs clearance procedures (e.g., pay import duties, obtain import licenses).
• Take delivery of the goods from the carrier at the destination.

3. Advantages and Disadvantages for the Buyer

Advantages

• More control over logistics: The buyer can choose a trusted carrier, which helps ensure the safety and timeliness of goods transport.
• Flexible transport options: FCA allows the use of any mode of transport, which is suitable for complex transport needs (e.g., multi-modal transport).
• Cost-saving potential: The buyer can negotiate transport rates directly with the carrier, possibly getting better prices than those offered by the seller.
• Clear risk transfer: Risk transfers when the goods are handed over to the carrier, so the buyer can better manage risk (e.g., arrange insurance in a timely manner).

Disadvantages

• Higher operational complexity: The buyer needs to handle more logistics tasks (e.g., booking transport, coordinating with the carrier), which requires professional knowledge.
• Responsibility for export-related issues (indirectly): If the seller fails to complete export clearance (though it’s the seller’s responsibility), the buyer may face delays in transport.
• Potential additional costs: If the carrier charges extra fees (e.g., storage fees at the delivery place), the buyer has to bear them.
• Dependence on accurate information: The buyer must provide correct carrier details to the seller; otherwise, delivery may be delayed.

4. When to Use an FCA Agreement?

• When the buyer wants to control the main transport (e.g., choose a specific carrier or transport route).
• When the goods are transported by multiple modes of transport (e.g., road transport from the seller’s warehouse to the port, then sea transport to the destination).
• When the goods are not suitable for traditional sea transport only (e.g., perishable goods that need air transport).
• When the seller’s warehouse or the delivery place is not a port (FOB is only for sea transport and requires delivery at a port).
• When the buyer has more experience in logistics and can better manage transport costs and risks.

5. FCA Agreements for China Importing: are they a good idea?

Why FCA can be a good idea for China importing

• China’s import market has diverse transport needs: Many goods imported into China use multi-modal transport (e.g., rail from Europe to China, then road to inland cities), and FCA is suitable for this.
• Chinese buyers can leverage local logistics networks: Many Chinese importers have long-term partnerships with reliable carriers, so choosing FCA allows them to use these resources.
• Cost control for high-value goods: For high-value goods (e.g., electronic products, machinery), Chinese buyers can arrange insurance and transport by themselves to reduce risks and costs.
• Clear export clearance from the seller: Chinese customs have strict requirements for import documents; FCA requires the seller to complete export clearance, which reduces the buyer’s workload in document verification.

Potential challenges for China importing

• Language and cultural barriers: If the seller is from a non-Chinese-speaking country, coordinating delivery details (e.g., carrier information, delivery time) may be difficult.
• Logistics delays in China: During peak seasons (e.g., Chinese New Year), domestic transport in China may be delayed, and the buyer has to bear the related risks.
• Import customs complexity: Chinese import customs procedures are relatively strict; the buyer needs to be familiar with customs rules to avoid clearance delays.

6. FCA Agreement FAQ’s

If you want to know the details of other incoterms, you can visit Incoterms Guide [Updated 2025] With Chart.