Incoterm 'Free Carrier' (FCA)

The seller is responsible for arranging the transit to a designated pick-up point where the risks and the costs are transferred to the buyer in an FCA shipping arrangement.

Updated: December 8, 2024

Incoterm 'Free Carrier' (FCA)
Free Carrier or Free Carrier Agreement, is abbreviated as FCA. The seller is responsible for arranging the transit to a designated pick-up point where the risks and the costs are transferred to the buyer in an FCA shipping arrangement. The seller is only responsible for the goods until they are dispatched to designated point. From there it is the responsibility of the buyer. The designated point could be the warehouse or the factory of the seller but is normally a transport hub or terminal. Complete responsibility for the goods is taken up by the buyer after the transfer has been made.

Responsibility of Seller:


It is not the responsibility of the seller to unload the goods and reload them onto the mode of transport of the buyer if the designated point of collection arranged by the forwarder of buyer is away from the own premises of seller. The seller is responsible for loading the goods of buyer on to the container/pallet/truck if the specified point of loading is the own premises of seller.

The seller is responsible for arranging the export clearance but not for anything after that event in an FCA shipping agreement because it is the full responsibility of buyer after the transfer of goods from the seller to the buyer. The seller is responsible for employing the freight or forwarding company responsible for the transit until the point of transfer.

Buyer's Responsibility:

Once the goods arrive at the designated point and are handed over to the buyer's nominated carrier, the buyer assumes full responsibility. This includes the transportation, import documentation, and insurance.

Seller's Benefits:

The primary advantage for the seller in an FCA agreement is that their responsibility ends once the goods are successfully dispatched to the buyer's designated forwarder, freeing them from further obligations.

Buyer's Benefits:

The seller is responsible for transporting the goods to the buyer's chosen pick-up point, which is the main benefit for the buyer. Once the goods reach the carrier and the title transfers, they become the buyer's asset, which can be included in their inventory. The buyer is then responsible for transporting the goods to the final destination.

General Benefits:

Both the buyer and seller operate within their areas of expertise, with the seller managing the dispatch of goods from their location and the buyer handling the logistics on their end. The FCA agreement is considered fair as it divides responsibilities clearly and effectively between the two parties.

Shipping Types Benefiting from FCA:

The FCA shipping agreement is particularly beneficial for overland transit, especially in regions like Central Asia or Europe. This method works well when goods are transported by vehicle directly to their destination, and both the buyer and seller share responsibilities. It is widely used by manufacturers and traders for international shipments.

FCA vs. Other Shipping Methods:

Compared to an Ex Works (EXW) agreement, FCA places more responsibility on the seller, who must manage the export documentation and the goods until they are handed over to the buyer's nominated carrier. In contrast, in an EXW arrangement, the buyer handles all aspects of transport and documentation, with the seller's responsibilities typically limited to packaging and labeling.

In a Free on Board (FOB) agreement, the seller's responsibility ends once the ship is loaded at the port, unlike the FCA agreement where it ends at a designated transfer point such as a hub or terminal.

Conclusion:

The FCA shipping agreement effectively shares the responsibility for transporting goods between the buyer and seller. This reduces the workload for both parties while ensuring that each operates within their area of expertise. Sellers also benefit by having more time to seek new buyers. FCA is particularly preferred by sellers handling road or air freight logistics, as opposed to sea shipments.