Incoterm® FCA (Free Carrier): The flexible and secure option for your logistics
Incoterm FCA (Free Carrier) is one of the most versatile and recommended rules of Incoterms® 2020. Under this term, the seller delivers the goods to the carrier that you, as the buyer, have designated, at an agreed place.
It is the perfect option if you want to have more control over your logistics chain without assuming 100% of the responsibility from the first minute.
How does FCA work? Two delivery points
Incoterm FCA has two possible delivery locations, which makes it very flexible:
Delivery at the seller's premises
Delivery point:
Delivery takes place at the seller's warehouse, factory, or premises.
Loading:
The seller is responsible for loading the goods onto the transport vehicle contracted by the buyer.
Risk transfer:
At the moment the goods are loaded, the risk passes from the seller to the buyer.
Delivery at another agreed point (for example, a Terminal)
Delivery point:
Delivery takes place at an external location to the seller's premises (e.g., a port, airport, truck terminal).
Loading:
The seller is responsible for transport to that point, but is not obliged to unload the goods from the transport vehicle.
Risk transfer:
At the moment the vehicle arrives at the agreed point, the risk passes from the seller to the buyer.
Responsibilities under Incoterm FCA
Seller's responsibility
Properly package and pack the goods.
Deliver the goods at the agreed place and date.
Manage and pay for export customs clearance and its costs.
If delivery is at their premises, load the goods onto the vehicle.
Your responsibility as buyer
Contract and pay for the main carriage from the delivery point to your final destination.
Assume the risk of the goods from the moment of delivery.
Pay for the costs of main carriage, import customs, insurance, and transport at destination.
When is it advisable to use FCA?
There are some specific situations where it is recommended to use this Incoterm:
You are the buyer and want to control the main carriage
It allows you to choose your own carrier and negotiate better freight rates.
You send your cargo in a full container (FCL)
FCA is one of the most widely used Incoterms for FCL cargo, as it gives you control over logistics from origin.
You seek a balance of responsibilities
You avoid the complexity of EXW for the buyer (loading at origin and export customs clearance are the seller's responsibility), but you maintain control over the main carriage costs.
Important changes in Incoterms 2020 (FCA and the B/L)
One of the most important novelties of Incoterms 2020 was the option for the buyer, under an FCA agreement, to instruct their carrier to issue a Bill of Lading (B/L) with the "on board" notation. This is crucial for operations with Letters of Credit, where proof of loading onto the vessel is required.
Other Incoterms
Ex Works
The least responsibility for the seller. The goods are delivered at their warehouse or factory. The buyer assumes all costs and risks from that point.
Carriage Paid To
The seller pays for transport to the agreed destination.
Carriage and Insurance Paid To
The seller pays for transport and insurance to the agreed destination.
Delivered at Place Unloaded
The seller assumes all costs and risks until the goods are delivered and unloaded at the agreed destination (e.g., a terminal or warehouse).
Delivered At Place
The seller delivers when the goods are made available at the agreed place.
Delivered Duty Paid
The seller assumes all costs and risks until final delivery.
Free Alongside Ship
The seller delivers the goods to the carrier designated by the buyer.
Free On Board
The seller delivers when the goods pass the ship's rail.
Cost and Freight
The seller pays the cost and freight to the destination port.
Cost, Insurance and Freight
The seller pays the cost, insurance and freight to the destination port.