Incoterms : FCA – Free Carrier

Posted by Posted date Incoterms 2000 38 comments

    FCA Incoterms

FCA – Free Carrier – named place. It is important to note that this incoterm can be used for any mode of transportation.

While it is my opinion that no single incoterm is better than another, this particular incoterm allows for a great deal of flexibility as it can be used for either airfreight or seafreight shipments. In order for this incoterm to be used correctly the shipper or consignee must state a named place, i.e. Free Carrier – freight forwarders facility Los Angeles, California. Free Carrier can also technically be stated FCA – shipper’s facility. In this scenario the only difference between FCA and EXW would be that the shipper would be responsible for loading the cargo onto a truck at the dock.

Under the terms of FCA, the seller must deliver the goods to a carrier nominated by the buyer at a specified named place. The seller fulfills his obligation to deliver when he has handed over the goods, cleared for export, into the charge of the carrier named by the buyer at the named place or point.

Payment Responsibilities Outlined Below:

Seller’s Responsibilities
1. Warehouse storage at point of origin
2. Warehouse labor at point of origin
3. Export packing
4. Loading at point of origin

Buyer’s Responsibilities
1. Inland freight
2. Port of receiving charges
3. Forwarder’s fee
4. Loading on ocean carrier/airline
5. Ocean/air freight charges
6. Charges in foreign airport/port
7. Customs duties and taxes abroad
8. Delivery charges to final destination

This interpretation is provided as a guide only.

Incoterms are published by the International Chamber of Commerce and are available on their website and official publication “Incoterms 2000″. For a complete and official overview please refer to the ICC’s publication.

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  • Ashok Krishnana June 15, 2006 9:31 pm edit

    nice description.

    Please provide the same for remaining incoterms.

    thanks

    -Merv Hughes

  • 3plwire June 17, 2006 12:15 am edit

    yes, I agree, we need to do more of these. We have been far too lax in posting on Incoterms. We will get right on it and take care of the rest next week. Well, I should say we will do our best :-)) Little kids + Logistics careers don’t make for a lot of free time :-)))

  • Ina July 7, 2008 11:42 am edit

    Very clear definition by sperating responsibilites of sellers and buyers.
    Would like to add one more point of responsibilities for both parties to this Incoterm:
    Seller:
    Report Export
    Buyer:
    Declare Import

  • Jz August 4, 2008 2:28 am edit

    i m new in this so thanks for the person who write the info..
    its very easy to understand..

  • Jz August 4, 2008 2:29 am edit

    i couldnt find the FAs, can anyone help me with it?

  • 3plwire August 4, 2008 7:18 am edit
  • jz August 18, 2008 12:05 am edit

    hihi,,,
    thank you very much for the link. it helps me alot.
    i have a question for u, i newin this logistics company but i dont really know bout logistics..
    do u mind to tell me wat should i learn or read other than this incoterms..???
    thanks

  • Bernard September 22, 2008 9:28 pm edit

    who’s responsibility for customs clearance at port of loading?

  • 3plwire September 23, 2008 11:02 am edit

    Bernard – Normally, but not always, the export customs clearance would be the responsibility of the seller under FCA terms. Be sure to negotiate this point clearly when working with your vendor to avoid any surprises when the shipping date comes up.

  • Tom Kulwicki October 30, 2008 8:40 am edit

    Can a seller assume the risk from the delivered point (i.e. sellers location)

    through to the point of delivery (at the buyers location) after the cargo was tendered to the
    buyer’s carrier at the FCA point of seller’s location?

  • 3plwire October 30, 2008 5:51 pm edit

    Tom – Not sure if I completely understand your question and from a legal perspective you’re best off consulting a trade attorney, but it sounds like you want the seller to assume risk all the way through to the point of delivery at the buyer’s location. That sounds more like DDU (Delivery Duty Unpaid) than FCA terms to me. For more on DDU terms check here:

    http://www.3plwire.com/2006/09/30/incoterms-ddu-delivery-duty-unpaid/

  • Tom Kulwicki November 6, 2008 12:28 pm edit

    The buyer is actually arranging for their own carrier to pickup at
    the sellers location – FCA. But, the buyer still wants the seller
    to assume risk (on their carrier) from the true FCA point of delivery (i.e. the
    sellers location when the goods are tendered to the buyer’s carrier) to
    the final destination (the buyer’s location via an intrastate move).

    Acording to FCA, true legal responsibility of the goods transfers to the buyer
    when the goods are ‘delivered’ to their carrier at the sellers location. DDU states
    that the seller is responsible for the cost of transport which is not the case here.
    This buyer is requesting FCA sellers location with a legal twist on risk assumption.

  • 3plwire November 6, 2008 4:17 pm edit

    Good to hear from you again Tom. I’m still confused as to why the buyer expects the seller to assume all risk up to the point of final destination under FCA terms, which clearly does not match the definition of FCA. I would suggest speaking with a trade attorney to discuss your options; perhaps you can agree to DDU or DDP terms but with freight payable to the buyer instead of the seller or stick with FCA but with the understanding that the seller needs to assume risk to final destination…? Sounds confusing, so best to get some legal advice and the buyer better spell it out very clearly in their contract with the seller and take extra steps to make sure both parties understand where risk and responsibility, as well as freight charges, ends for both of them.

  • Emma November 17, 2008 2:00 pm edit

    Hi – just discovered your site – it’s great!

    Could you please clarify a point for me “FCA Shippers Facility” for this term who is responsible for customs documentation and formalities – seller or buyer? Look forward to your feedback.

  • 3plwire November 17, 2008 2:25 pm edit

    Hi Emma – glad you like the site, hope you check it out on a regular basis as we try to link to and write about the pressing issues of the day.

    My usual disclaimer abides: you should always consult a trade attorney to discuss your options. All we can provide is an interpretation. That being said, my personal experience with FCA terms is that the shipper/suppiler is responsible for customs documentation and formalities. As always make sure the exact terms of the transaction are made clear not only through the incoterm chosen but also through the specific language of your sales contract or purchase order.

  • nermine gbr December 2, 2008 4:06 am edit

    very nice , very clear , i love this page.

  • Candace April 23, 2009 2:45 pm edit

    This seems like quite a silly question, but I am a bit confused with the incoterms. Most of our Vendors still use FOB, has FCA replaced this? If purchasing internationally and FCA is used, the Vendor is responsible for reporting the export to Customs, correct? Does this mean that the buyer has no obligations with customs clearance, or do we still need to report as well?

  • chand May 6, 2009 8:29 am edit

    hi candace , both FOB and FCA are in use . if FCA is used seller has responsiblity for export clearance, unless mentioned otherwise in the contract. Buyer has to handle only import clearance.

    hope i cleared ur doubts

  • Shikha Jain May 8, 2009 10:23 pm edit

    As per Incoterms FOB can be used for seafreight only while FCA can be used for sea/air freight. Please tell what is the equivalent term of FOB in case of airfreight which inclues seller’s responsibility till loading.

    many sellers are using FOB for airfreight also . Is it correct……

  • Dignus May 19, 2009 4:05 am edit

    Dear all,

    I a am new to exports, and my company sells FOB Qingdao.
    Usually, we don’t have any forwarder and we ask our customers to have a forwarder in Qingdao to book the boat.

    This time, one of our customer didnt had any forwarders in China and asked us to book the boat for them with their transport company in Qingdao.

    In FOB Qingdao contracts, usually, the seller has to have a forwarder or not?
    or is it FAS?

  • 3plwire May 28, 2009 10:01 am edit

    Dignus – I would imagine that any company buying under FOB terms would choose their own freight provider and ask you to book the shipment accordingly. Normally the buyer’s freight provider is a freight forwarder or ocean consolidator.

    However, if I am understanding your question correctly, then your customer doesn’t have a freight forwarder – but they do have a transport company in Qingdao? What do you mean when you say transport company?

    It is not necessary for your customer to use a freight forwarder, I know some companies that deal with the ocean carriers directly without using a freight forwarder. Is this the case with your customer? Are you being asked to book directly with the steamship line and deliver the container to the terminal? There’s certainly no issue with that, perhaps it’s a bit more complex than booking through a freight forwarder but the key thing is that your customer has assigned some kind of freight provider at origin in Qingdao for you to book the shipment with.

    If the transport company you are referring to is not an ocean carrier or international freight provider, or for some reason they can not accept your booking, then I would complain to your buyer.

  • 3plwire May 28, 2009 10:08 am edit

    Shikha Jain – You are correct that many sellers are using FOB for airfreight also. It is very common, although technically incorrect. So don’t be surprised to see sellers worldwide selling product via airfreight on FOB terms.

    Unfortunately there is not really an equivalent incoterm for airfreight with the same definition of FOB, hence people often just using FOB, but a more correct incoterm would be FCA with the origin point and risks/responsibilities carefully negotiated with the buyer.

  • R Chandru August 19, 2009 12:27 pm edit

    FCA terms have been defined clearly. I understood from the terms defined that Seller bears the responsibility of delivering the goods at the place of buyer’s nominated carrier after clearing the same from Customs. The seller bears the entire cost incurred till the point it is delivered to buyer’s nominated Carrier.

  • R Chandru August 19, 2009 12:29 pm edit

    It is clearly understood the term defined for FCA.

  • Candy September 1, 2009 1:44 pm edit

    We have a customer requesting FCA Origin with TTOP. Can you explain what they are requesting? Our standard ship method is either ExWorks or FCA Shipper Factory. It seems to me that the customer is requesting that our company be responsible for both the freight, customs, and ownership (title) of the product until XX determination.

    Thank you

  • Lily July 13, 2010 1:30 am edit

    We live in a small but very well efficiently structured city. Hence, our buyer usually will have their own forwarder come pick up the goods or have us deliver the cargo to their logistic people for their arrangement for shipments of their orders.

    For the former, Exworks is used. But what incoterm can I use when the buyer wants us to deliver the goods to their forwarder and their forwarder will arrange for the shipment therefrom. Will FCA do fine? Please assist. Thanks

  • 3plwire July 15, 2010 10:08 pm edit

    FCA (named place)would work in this instance. FCA freight forwarders facility. Keep in mind that the risk of loss or damage to the goods and financial responsibility to deliver the goods to their facility would fall upon you as the seller. FCA is a very flexible Incoterm that can be used for both air and ocean shipments.

  • cleef October 18, 2010 12:47 pm edit

    FCA terms has always been a point of contention for us and our exporters, and this change doesn’t seem to clear that up. Under FCA the USPPI is responsible to deliver the goods, customs cleared, or with the AES filed and the ITN number available to the carrier. If the USPPI does not want this responsibility, but would rather have their usual freight forwarder, not NVOCC, perform this work, then it would appear they would have this right to do so. If not, what proof does the USPPI have that the cargo was actually exported to the buyer of the goods. How do they know if the documents were delivered to the buyer overseas? Wouldn’t this be a routed transaction and a FPPI proven and the USPPI supply information required? I still see a lot of problems with FCA.

  • Nicolas February 2, 2011 1:07 pm edit

    Question:

    FCA or EXW

    We are selling goods, that our customer is going to pick up at our facility. We will coordinate the transport for them, they will pay for the freight to the export land port and the freight to the final destination. We will have the goods insured with our bond until the final destination. Then our customer will clear customs, pay duties, forwarder and he will contract freight from export land port to his destination.

  • Olga December 11, 2011 7:31 am edit

    Our company is exporter of Marble & Granite and 99.00 % of our shipments are containerized.
    Recently ,all our goods were shipped , based on FOB , CFR & CIF terms of delivery.
    But based on Incoterms 2010, FCA term of delivery needs to be applied for containerized cargo.
    I have a question , concerning B/L` ownership.
    Can it be released to buyer without notification of shipper ?
    And other question , if Freight & Insurance would be paid by seller,which terms of delivery can be used instead CFR & CIF for the containerized cargo.
    Thanks .

  • 3plwire December 21, 2011 5:51 pm edit

    I fully admit to not being 100% up to date on the 2010 incoterms changes, but I am not aware of FCA replacing FOB, CFR, or CIF. All of those incoterms are still in place and can definitely be used for containerized cargo moving by sea. Can you point to the specific reference where you are getting the info that FCA would replace these? Because FCA is very different than FOB, CFR, or CIF, it does not make sense that it would replace those at all for containerized cargo.

    For freight and insurance paid by the seller for containerized cargo by sea you should be able to use CIF or CIP. I always recommend companies use CIP as it is a much more flexible incoterm that covers any and all modes of transport.

    My usual disclaimer: this is a personal interpretation based on the limited info provided and should be used as a guide only. A professional trade attorney should be consulted if any doubt.

  • Uwe July 26, 2012 3:27 am edit

    Recently we have come across the term fca airport. This has triggered some different opinions on who is paying for what. Does this term put liability on the shipper to pay for airport charges, x-ray (cargo scanning) and any other charges until cargo is handed over to the airline? Or are those airport related charges due to the buyer?

    I would love to get an independent opinion.

    Thanks

  • nick November 30, 2012 12:09 pm edit

    If the terms are not FCA selllers premises and for example for airfreight
    FCA a named airport of terminal /cfs the seller must pay for the inland trucking to that point.
    Uwe If theterm is FCA named airport once delivered all costs are for the buyer.

    FOB CRF AND CIF are no longer incoterms for container cargo since 01.01.2011 and the ICC advises they should no longer be used despite the fact that everyone does

  • Linda July 26, 2013 4:20 pm edit

    Question, can FCA be used if the buyer / vendor are both in the uk and the goods are not being exported, Would this cause a problem ?

  • 3plwire July 31, 2013 6:14 am edit

    Hi Linda, I am not 100 percent sure of the answer although Incoterms are typically used for international shipments as opposed to domestic related shipments. The UK might have a similar standard of terms that would address shipments of this nature. Perhaps some of our UK readers could shed some light on the subject.

  • pino September 16, 2013 12:51 pm edit

    FCA and air freight.
    If
    - contractual term of delivery is FCA – Seller’s premises
    - goods will be air-freighted
    - airport is 30km from Seller’s premises

    then
    - who, between Seller and Buyer, shall pay for custom clearance, x-ray scanning and other charges from Airport?

    Note: Buyer arranges and pays the transportation (truck) from Seller’s premises up to Airport.

    Thanks for clarifying above doubt.

  • tewodros gizachew December 23, 2013 5:53 am edit

    the exporters or the sellers deliver the goods to the specified carrier and place. the title and risk pass to the buyer when the seller delivers goods to the carrier. if the place chosen is the seller’s place of business, the selle4 must load the seller must load the goods onto the transport vehicle; otherwise, the buyer is responsible for loading the good.

  • Javier January 21, 2014 7:16 pm edit

    Incredible points. Solid arguments. Keep up the great work.

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