Free Carrier (FCA)

Free Carrier (FCA) is the Incoterms 2020 rule under which the seller clears the goods for export and hands them to the carrier, or another person, that the buyer has nominated at a named place. Delivery and risk pass at that handover. The buyer books and pays the main carriage, insures if it wishes, clears import and pays the duty. FCA works for any mode of transport, including sea, air and multimodal moves, and it is the rule the ICC points to for containerized cargo.

Two ways to deliver under FCA

• At the seller's premises: the seller loads the goods onto the buyer's collecting truck or container, and delivery happens once they are loaded
• At any other named place, such as a container terminal, an airport cargo terminal or the buyer's forwarder's warehouse: the seller brings the goods there on its own transport and delivery happens when they are placed at the carrier's disposal, ready for unloading. Unloading from the seller's truck is the buyer's side of the line

Because risk passes at that exact point, write it into the contract as precisely as you can: "FCA seller's factory, Tiruppur" and "FCA container freight station, Chennai" allocate loading, trucking and risk quite differently. Incoterms 2020 also recognizes that the buyer may collect with its own vehicle rather than a third-party carrier.

Who does what under FCA

• Seller: packs the goods, clears them for export, delivers at the named place and, at its own premises, loads them
• Buyer: nominates the carrier and tells the seller when and where to deliver, books and pays the main carriage, files the Importer Security Filing, clears import, pays duty and arranges delivery
• Insurance: neither party is obliged to insure. The buyer carries the risk from the handover, so it usually does

FCA vs FOB for containers

Under FOB the seller carries the risk until the goods are on board the vessel, yet a container is handed over at the terminal gate, often days before loading, and the seller has no control of it in between. ICC guidance is that FOB should not normally be used for containers and that FCA fits: delivery and risk pass where the container actually changes hands. FCA also works for air, where "FOB airport" is not a real Incoterms rule.

The on-board bill of lading option

Sellers paid by letter of credit often need an on-board bill of lading, and under FCA the goods are delivered before they are loaded. Incoterms 2020 answers this in articles A6/B6: buyer and seller may agree that, after loading, the buyer has its carrier give the seller a bill of lading marked on board, which the seller passes on to the buyer, usually through the banks. The option binds buyer and seller, not the carrier, so confirm with the carrier or NVOCC at booking that it will issue the document that way.

FCA vs EXW

At the seller's premises FCA gives the same commercial result as EXW with less ambiguity: the seller loads the truck and files the export declaration in its own country, which a foreign buyer usually cannot do. The Incoterms explainer compares the two rules line by line.

FCA and your US customs value

US customs value is the price actually paid or payable to the seller, which 19 CFR 152.102(f) defines as excluding the costs of transportation and insurance incident to the international shipment. Under FCA you buy the main carriage from your own forwarder, so there is normally nothing to deduct from the invoice. Trucking the seller pays to reach a named terminal is part of its price and, under 19 CFR 152.103(a)(5), normally stays in the value. Packing, assists and selling commissions you pay are still added under 19 CFR 152.103(b). Estimate the duty stack in the tariff simulator.

Buying FCA through Airlift

Airlift is an FMC-licensed NVOCC (OTI license 016162) with its own offices in Chennai and other Indian cities, Ho Chi Minh City, Dhaka and Phnom Penh. On the India, Vietnam, Bangladesh and Cambodia lanes we can collect from the factory or receive at the named terminal, book the ocean freight or air freight leg, issue the house bill of lading to you, file the ISF and coordinate the entry through our licensed customs-broker network (customs clearance). If your supplier's bank needs an on-board bill of lading, tell us at booking. FCA does not require either party to insure, so add cargo insurance from the handover point if you want the move covered.