What is FCA in Incoterms
What is FCA?
FCA (Free Carrier) One of the international trade terms Incoterms (Incoterms)Developed by the International Chamber of Commerce (ICC). FCA means "Free Carrier"i.e. seller fulfills its delivery obligations by transferring the goods to the carrier designated by the buyer, in a pre-agreed place.
The term is popular in international trade, especially when a buyer wants to control logistics or use their own freight forwarder.
How does FCA work?
The essence of the FCA condition:
- Seller: must deliver the goods and put them at the disposal of the carrier designated by the buyer at the agreed point (this can be a warehouse, port, terminal, etc.).
- Buyer: organizes international transportation, registration of export / import documentation after the point of transfer of goods.
Example:
If the condition sounds like FCA Shanghai warehouseThe seller must deliver the goods to a warehouse in Shanghai and hand them over to a carrier designated by the buyer. From this moment, the responsibility for the goods passes to the buyer.
Difference from other Incoterms conditions
| Conditions | Who arranges the delivery? | Where does the risk pass? |
| EXW | Total buyer | The seller's factory. |
| FCA | Buyer since transfer to carrier | Place of delivery |
| FOB | Seller before loading on ship | At the port of shipment. |
| CIF/CFR | Seller (to the port of arrival) | At the port of shipment. |
How is the price formed at FCA?
It is important to understand that when choosing FCA:
The price includes:
- The cost of the goods (EXW);
- Internal delivery to the point of transfer (warehouse, terminal, etc.);
- Loading on the transport of the buyer;
- Processing customs declaration.
The price does not include:
- International transport;
- Cargo insurance;
- Import cleaning (declaration, duties, VAT);
- Further logistics to the buyer's warehouse.
FCA price formula:
FCA = EXW + domestic delivery + export clearance + loading on the vehicle
Example:
Let’s say you buy a batch of equipment from China with the condition of FCA Ningbo warehouse.
- Cost of goods: $10,000
- Internal delivery to the warehouse: $300
- Loading and Export Declaration: $200
Total: FCA = $10,500
Further, the buyer himself organizes sea delivery, freight, insurance, customs clearance in Russia and delivery to the warehouse.
Parties' obligations under the FCA
The seller must:
- Package and label the goods;
- Bring it to the specified point;
- Make an Export Declaration (EX);
- Load the goods on the vehicle, if the point is its warehouse;
- Notify the buyer of the readiness of the goods.
The buyer must:
- Appoint the carrier and inform the seller;
- Pay freight, insurance, import duties;
- Accept the goods from the carrier and organize logistics to the warehouse;
- Import customs.
Risks and Features of FCA
| Risk/feature | Details. |
| The point of transfer should be clearly stated | That's the key. Uncertainty of place of transmission = disputes |
| Export customs - on the seller | The seller is obliged to issue export, which requires a legal entity / counterparty in the country of departure |
| Customers need to understand the logistics market | Mistakes in choosing a carrier or route - the risk of increasing the cost |
| Control of transport – the buyer | It is good if the buyer has experience or a logistician. |
| Not suitable for inexperienced importers | It’s best to choose CIF/DDP if you’re not ready for your own logistics. |
When is it beneficial to use FCA?
FCA is the best choice if:
You want to control freight and insurance yourself.
You have logistics partners ready to pick up the goods in the country of departure;
It is important to avoid cheating the seller on international delivery;
You take responsibility for the delivery time and route.
FCA (Free Carrier) It is one of the most flexible and common Incoterms terms for international trade. It is balanced between the obligations of the seller and the buyer and is often used in shipments from China, Turkey, the UAE and other countries where the buyer wants to control the freight.
However, when choosing an FCA, you need to be prepared – understand your area of responsibility, own the logistics and specify the transfer point.
CouncilWhen using FCA, always require the seller to:
the exact address of the delivery of the goods;
a copy of the export declaration;
Act or CMR when transferring goods to your carrier.
