FCA Incoterms: What Free Carrier Means
for E-Commerce Sellers (2026)
FCA is the Incoterm the ICC actually recommends for container shipments. Most sellers have never heard of it. Here is what it means, how it differs from FOB, and when you should use it.
Quick Answer:
FCA (Free Carrier) is an Incoterms 2020 rule where the seller delivers goods to a carrier at a named place. It works for any transport mode: air, ocean freight, multimodal, or rail. The seller handles export clearance and delivery to the carrier. The buyer arranges main carriage, insurance, import clearance, duties, and final delivery. The ICC recommends FCA over FOB for containerized cargo because risk transfers at a verifiable handover point rather than at the ship's rail where a sealed container cannot be inspected. In practice, most Chinese suppliers still quote FOB, but FCA is technically more accurate for container shipments.
What Is FCA (Free Carrier)?
FCA is one of 11 Incoterms published by the International Chamber of Commerce (ICC). Unlike FOB, which applies only to ocean freight transport, FCA works with any mode of transport: ocean freight, air, rail, or multimodal.
Under FCA, the seller delivers goods to a carrier or another person nominated by the buyer. The named place determines who handles loading:
Scenario A: Delivery at seller's premises (factory or warehouse).
The seller loads goods onto the buyer's collecting vehicle. Risk transfers once the goods are loaded.
Scenario B: Delivery at another named place (port terminal, carrier depot, airport).
The seller delivers goods to the named location, ready for unloading from the seller's vehicle. Risk transfers when the goods arrive at the location and are available to the carrier. The seller does not unload.
In both scenarios, the seller handles export customs clearance. The buyer handles everything after the handover: main carriage, insurance, import clearance, duties, and delivery.
For e-commerce sellers, FCA is most relevant in two situations: air freight shipments (where FOB does not apply because there is no vessel) and containerized ocean freight shipments (where FCA is technically more accurate than FOB).
Key Takeaway: FCA = seller delivers to a carrier at a named place and clears export. Everything after that is yours.
FCA vs FOB: The Difference That Matters for Container Shipments
This is the section that explains why FCA exists alongside FOB, and why the ICC prefers FCA for modern containerized trade.
The Container Problem with FOB
FOB says risk transfers when goods are "loaded on board the vessel." This works perfectly for bulk cargo (grain, coal, oil) where you can see the goods crossing the ship's rail and verify their condition at that moment.
But e-commerce sellers ship in containers. Your container is packed and sealed at the factory, trucked to the port, and loaded onto the vessel by a crane. Nobody opens the container at the ship's rail. Nobody verifies the goods at the point of loading. If something was damaged inside the container before it reached the vessel, was it the seller's fault or the buyer's?
Under FOB, this creates a gray area. Under FCA, the handover happens at a clear point: when the sealed container reaches the carrier at the terminal. That is a verifiable moment with documentation.
Side-by-Side Comparison
| Factor | FCA | FOB |
|---|---|---|
| Transport modes | Any (air, ocean freight, multimodal, rail) | Ocean freight and inland waterway only |
| Risk transfer point | When goods are delivered to carrier at named place | When goods are loaded on board the vessel |
| Loading responsibility | Seller loads if at seller's premises; otherwise buyer | Seller loads onto vessel |
| Export clearance | Seller handles | Seller handles |
| Works for containers? | Yes (ICC recommended) | Technically no, but universally used |
| Works for air freight? | Yes | No |
| Bill of lading | New 2020 provision: buyer can instruct carrier to issue on-board B/L to seller | Seller receives B/L after loading |
| Common usage in China | Rare (suppliers default to FOB) | Very common |
The Practical Reality
Despite the ICC's recommendation, FOB remains the dominant term for ocean freight container shipments from China. Suppliers, freight forwarders, and buyers all use FOB because everyone understands it and the practical difference for standard shipments is minimal.
FCA becomes important in three situations:
- Air freight. FOB literally does not apply to air shipments. FCA with the named place as the airport is the correct term.
- Letter of credit transactions. Banks require on-board bills of lading. The Incoterms 2020 update to FCA allows the buyer to instruct the carrier to issue an on-board B/L to the seller after loading. This solves a problem that caused payment delays under FCA in previous versions.
- Dispute resolution. If cargo is damaged between the terminal and the vessel, FCA provides a clearer liability boundary than FOB for containerized goods.
Key Takeaway: FCA is technically better than FOB for containers, but FOB is what your Chinese supplier quotes. Know the difference, use FOB in practice, and consider FCA for air freight and LC transactions.
Whether your supplier quotes FCA, FOB, or anything else, you can simplify everything with DDP. One carrier, one price, factory to warehouse.
Get DDP Rates →FCA Responsibilities Breakdown
Seller's Obligations Under FCA
| Obligation | What It Means |
|---|---|
| A1: General | Provide goods and commercial invoice per contract |
| A2: Delivery | Deliver goods to the carrier at the named place. Load if at seller's premises. |
| A3: Risk transfer | Risk passes when goods are delivered to the carrier |
| A4: Transport | No obligation to arrange main carriage |
| A5: Insurance | No obligation to provide insurance |
| A6: Delivery/transport document | Provide proof of delivery. May obtain on-board B/L if buyer instructs carrier to issue one. |
| A7: Export clearance | Handle export formalities and obtain export licenses |
| A8: Checking and packaging | Package and mark goods for transport |
| A9: Cost allocation | Pay all costs until delivery to carrier, including export clearance |
| A10: Notices | Notify buyer that goods have been delivered to the carrier |
Buyer's Obligations Under FCA
| Obligation | What It Means |
|---|---|
| B1: General | Pay the agreed price |
| B2: Taking delivery | Take delivery when goods are handed to the carrier |
| B3: Risk transfer | Bear all risk from the moment goods are delivered to the carrier |
| B4: Transport | Arrange and pay for main carriage from the named place |
| B5: Insurance | No obligation, but recommended |
| B6: Proof of delivery | Accept the delivery document. If B/L requested, instruct carrier to issue to seller. |
| B7: Import clearance | Handle all import formalities, duties, and taxes |
| B8: Inspection | Pay for pre-shipment inspection if required |
| B9: Cost allocation | Pay all costs from the point of delivery to the carrier |
| B10: Notices | Nominate the carrier and give seller sufficient notice |
FCA in the Incoterms Spectrum
Where FCA sits relative to other terms your supplier might quote:
| Term | Seller Handles | Buyer Handles | Use Case |
|---|---|---|---|
| EXW | Makes goods available at factory | Everything from factory door onward | Rarely appropriate for importers |
| FCA | Delivery to carrier + export clearance | Freight + insurance + import + duties + delivery | Air freight, container terminals |
| FOB | Delivery on board vessel + export clearance | Freight + insurance + import + duties + delivery | Ocean freight (traditional) |
| DDP | Everything from factory to destination | Nothing | One price, zero logistics work |
For most e-commerce sellers, the choice comes down to FOB/FCA (you manage freight and customs) or DDP (the carrier manages everything). See our DDP vs DAP vs FOB guide for the full comparison.
Common Mistakes with FCA
Mistake 1: Using FCA without specifying the named place precisely.
"FCA China" is too vague. "FCA Shenzhen Yantian Container Terminal" is clear. The named place determines where risk transfers and who pays for inland transport. If you write "FCA Shenzhen" and the supplier interprets it as their factory (Scenario A), they load the goods. If the carrier interprets it as the port terminal (Scenario B), nobody loads. Spell it out.
Mistake 2: Not arranging a carrier before the goods are ready.
Under FCA, the buyer nominates the carrier. If your freight forwarder is slow to confirm a booking and the goods sit at the terminal, you pay storage fees because the goods are already in your risk zone.
Mistake 3: Confusing FCA with CPT.
FCA: the seller delivers to a carrier at the named place. The buyer pays for main carriage. CPT (Carriage Paid To): the seller arranges and pays for carriage to the destination. Under CPT, the seller books the freight. Under FCA, you book the freight.
Mistake 4: Forgetting the B/L provision for LC transactions.
If you are paying by letter of credit and the bank requires an on-board B/L, make sure your purchase order states that the buyer will instruct the carrier to issue one to the seller per Incoterms 2020 FCA A6/B6. Without this clause, the seller has no document to present to the bank for payment.
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Run a DDP Auction →Frequently Asked Questions
What does FCA mean in shipping?
FCA stands for Free Carrier. The seller delivers goods to a carrier nominated by the buyer at a named place. The seller handles export clearance. The buyer arranges main carriage, insurance, import customs, duties, and delivery.
What is the difference between FCA and FOB?
FOB applies only to ocean freight transport and risk transfers on board the vessel. FCA works for any mode (air, ocean freight, multimodal, rail) and risk transfers when goods reach the carrier at the named place. For containerized shipments, FCA provides a clearer risk transfer point. For a full comparison, see DDP vs DAP vs FOB.
Why does the ICC recommend FCA over FOB for containers?
Because FOB transfers risk at the ship's rail, but a sealed container cannot be inspected at that point. FCA transfers risk at a verifiable handover to the carrier, which provides clearer liability boundaries for containerized cargo.
Can FCA be used for air freight?
Yes. FCA works with any transport mode, making it the appropriate Incoterm for air freight. FOB technically applies only to ocean freight and inland waterway transport. For air shipments, use FCA with the airport or carrier's warehouse as the named place.
Is FCA or DDP better for Amazon sellers?
For most Amazon sellers, DDP is simpler because the carrier handles everything including customs and duties. FCA requires you to arrange freight, customs clearance, and delivery separately. If you want the simplest option, use DDP. If you want to control each step, FCA gives you that flexibility. See our DDP shipping guide.
Related Incoterms and Resources
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