What is FCA (Free Carrier)?

FCA (Free Carrier) is an Incoterm that defines the point where the seller delivers the goods to a carrier or another party nominated by the buyer, either at the seller’s premises or at another specified location. Once the goods are handed over, the risk is transferred to the buyer.

This term is suitable for all modes of transport, including multimodal, and resolves the legal uncertainties of traditional terms like FOB, CFR, CIF, especially when delivery does not occur at seaports but in inland locations.

Key Features of FCA

1. Definition & Characteristics

• The seller fulfills the delivery obligation when the goods are handed over to the carrier named by the buyer, at a specified location.
• The risk transfers at the point of delivery—even if the goods have not yet been loaded onto the ship or aircraft.
• FCA is more favorable to the seller than FOB, as the seller’s responsibility ends earlier.

2. Delivery and Risk Transfer Scenarios

✅ Scenario 1: Delivery at Seller’s Premises

• Seller loads the goods onto the buyer’s nominated truck.
• Risk transfers immediately upon loading.

✅ Scenario 2: Delivery at a Location Other Than Seller’s Premises

• Seller loads the goods onto their own truck and transports them to the buyer’s carrier.
• Upon unloading the goods for the carrier’s disposal (not actual unloading), the delivery is complete and risk transfers.

✅ Risk Transfer Rule

• Once the agreed delivery method and point are confirmed and the goods are handed over, all risks and costs are borne by the buyer.

3. General Obligations of the Seller

The seller must provide:

• Goods as per the contract
• A commercial invoice
• Transport documents (e.g., AWB, CMR, Bill of Lading)
• Additional documents as required (e.g., Packing List, Certificate of Origin)

4. Delivery Location and Carrier Handover

• The delivery location can be a port, airport, container freight station, or any specified site.
• If delivery is at seller’s premises and full-container-load (FCL), the seller must:
  • Load the goods into the container
  • Secure the cargo
  • Seal the container

If delivery is off-site, the seller must deliver the goods (still loaded on their vehicle) to the buyer’s carrier without unloading.

5. Choice of Delivery Method and Location

• The buyer may reserve the right to specify the delivery point and mode of transport at a later stage, but:
  • The scope and deadline for exercising that right must be defined.
• If no such right is reserved and the carrier has multiple receiving points, the seller may choose the most suitable within the agreed location.

Risk Transfer in FCA

1. What is Considered Risk?

Risk refers to loss or damage due to accidental events.
It excludes:

• Inherent product issues
• Poor packaging
• Missing or unclear labels

2. When Risk Transfers

• Upon delivery to the carrier or nominated party.
• Even if delivery is delayed by buyer’s failure to nominate a carrier or provide timely notice, risk may still transfer at the agreed date or upon contract expiry (Incoterms B3).
• This is called premature passing of risk.

3. Conditions for Risk Transfer

• Goods must be identified to the contract (clearly marked or documented).
• The delivery method and point must be agreed upon and confirmed.
• Delivery must be executed as defined—either at the seller’s location or elsewhere.

Insurance Under FCA

Insurance is not mandatory for the seller under FCA.
However, for cargo safety, buyers are advised to obtain insurance coverage starting:

• From the time goods leave the seller’s warehouse
• Until they arrive at the buyer’s designated location

Note:
There is typically an uninsured gap between when the seller delivers to the carrier and when the goods leave the seller’s storage facility.

Expenses and Cost Allocation

• Seller pays for pre-carriage and delivery to the agreed point.
• Buyer pays for main carriage, import duties, insurance, and any additional logistics beyond the point of delivery. 
  

Practical Notes and Best Practices

1. Clarify the exact delivery point, not just the general area (as with EXW).
2. FCA allows Bill of Lading to state “Shipped on Board”, which is essential for LC and D/P payment methods.
3. Document control is key: Without a negotiable Bill of Lading, the seller may lose leverage if using AWB, SWB, FCR, etc.
4. In ocean freight:
5. If delivery is at seller’s premises: Seller must seal containers for FCL, or load goods onto buyer’s transport for LCL.
6. If delivery is off-site: Seller covers local delivery unless it’s part of the freight contract.
7. In air freight: If buyer doesn’t collect from seller’s premises, seller delivers to airport consolidation center.

Related Terms: CPT vs FCA vs CFR

• CPT (Carriage Paid To) is an extension of FCA where the seller arranges and pays for main transport.
• Key Difference from CFR:
• Under CPT, risk transfers upon carrier handover, not upon vessel loading (as in CFR).
• CPT supports all modes of transport; CFR is limited to sea and inland waterway shipping.

No matter how Trump’s tariff policy changes, these basic trade knowledge still need to be mastered.