Incoterms rule
FCA — Free Carrier
FCA covers the handover of goods to a carrier the buyer has appointed. Almost everything that goes wrong with it comes from naming the place too loosely.
What FCA is for
FCA is the rule for a handover. The seller readies the goods and deals with the export formality in its own country; the buyer appoints the carrier and takes the movement on from the agreed handover point. It is a general-purpose rule and works with any transport mode, including a movement that uses more than one.
That makes it the natural choice for the large share of international trade where the goods pass to a carrier well before they reach a vessel, an aircraft or a border — which is to say most containerised and most consolidated freight.
The named place does most of the work
FCA followed by a city name is not a complete term. A city contains the seller's factory, a haulier's depot, a container yard, a rail terminal and an airport, and the choice between them changes who loads, who unloads, who pays for the leg in between and where each side's exposure ends.
The discipline is to name the actual place: the address, the terminal, the depot. If the parties cannot agree what to write, that is a sign they have not agreed the commercial deal either, and finding out at quotation stage is far cheaper than finding out when a vehicle is standing at a gate.
Two handovers, two different jobs
The rule behaves differently depending on the place chosen, and this is the part most often missed. When the named place is the seller's own premises, the practical expectation is that the seller loads the goods onto the collecting vehicle, because the seller controls the equipment and the site.
When the named place is anywhere else — a terminal, a depot, a haulier's yard — the seller's job is to get the goods there on its vehicle and make them available for the buyer's side to take off. The seller is not expected to unload at a place it does not control. Two shipments described with the same three letters can therefore involve materially different work, and the price should reflect which one is meant.
Why FCA suits containers better than a maritime rule
A container is handed over to the ocean carrier's system at a terminal or a depot, sometimes days before the vessel it will travel on is even alongside. The seller has no access to it after the gate, and no ability to affect what happens to it there.
A rule built around a handover at the ship's side does not describe that. FCA does: it puts the handover where the handover physically happens. For containerised cargo, and for anything moving through a consolidation point, it is the rule that matches reality.
Bills of lading and documentary credits
There is a known tension. Where payment runs through a documentary credit, the credit often calls for an ocean bill of lading annotated to show the goods loaded on board. Under FCA, the seller's obligation has already been discharged before any vessel is involved, so the seller cannot obtain that annotation as a matter of course.
The current revision of the rules acknowledges the problem and provides an optional mechanism the parties can agree to. Whether it is workable depends on the carrier, the bank and the terms of the credit, so it is settled with the bank and the carrier before the credit is issued rather than discovered at presentation.
In practice
What this means for a shipment.
- The rule's intent is that the seller's part ends when the goods are handed to the carrier the buyer has appointed, at the named place; the sale contract governs the parties
- Export formalities in the country of departure sit with the seller under this rule, which is the practical difference from Ex Works
- Name the place precisely — an address or a named terminal, never just a city
- At the seller's premises, expect the seller to load; anywhere else, expect the seller to deliver ready for the buyer's side to take off
- This rule works for any mode, which is why it fits containers, air freight and multimodal movements
- If payment runs through a documentary credit, agree the transport document question with the bank before the credit is issued
Written independently for a commercial audience. The Incoterms rules themselves are an ICC publication protected by copyright and revised from time to time; consult the current ICC text for the authoritative wording and name the applicable version in the contract.
Use the reference
Apply the definition to the actual contract and shipment.
A reference explains the role of a rule or document. The applicable edition, terms and requirements still need to be confirmed for the case.
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