FCA Incoterms 2020: Free Carrier Meaning, Risks and FCA vs FOB

FCA (Free Carrier) is one of the most useful Incoterms when you buy from China, but also one of the least understood. This guide explains what FCA means, the two delivery options in Incoterms 2020, who pays what, where the risk passes, and how FCA compares with FOB and EXW.

Key points
• Under FCA, the seller hands the goods to a carrier or other person named by the buyer, at an agreed place. That is the point of delivery.
• FCA works for every mode of transport: sea, air, rail, road and express.
• The seller clears the goods for export. The buyer pays the main freight, insurance and import costs.
• The risk passes to the buyer at delivery, which can be earlier than under FOB.
• For container shipments, the ICC recommends FCA instead of FOB.

What Does FCA Mean?

FCA (Free Carrier) is one of the 11 Incoterms 2020 rules published by the International Chamber of Commerce (ICC). The seller delivers the goods to the carrier, or another person, nominated by the buyer at a named place. That place is always written after the term, for example “FCA Shenzhen warehouse, Incoterms 2020”.

Unlike FOB, FCA is not tied to a ship. It can be used for any transport, which is why it is common for air freight, express, rail and container shipments from China.

Two Ways to Deliver Under FCA

Where exactly delivery happens depends on the named place:

Always write a precise address, not just a city. “FCA Shenzhen” can mean a factory, a warehouse or a port, and the costs and risks are different for each.

Who Pays What Under FCA

Under FCA, neither side has to insure the goods. Because the buyer carries the risk for the main journey, the buyer should arrange cargo insurance.

Where the Risk Passes Under FCA

The risk passes from seller to buyer at delivery, at the named place. If the goods are damaged after they are handed to your carrier at the Shenzhen warehouse, for example while waiting at the port or on the ship, that is your risk.

This is earlier than under FOB, where the risk passes when the goods are on board the ship. In practice, it matches how container shipping really works: containers are handed over at a terminal or warehouse days before loading, and FCA reflects that.

What Changed for FCA in Incoterms 2020

• On-board bills of lading: the buyer and seller can agree that the buyer will instruct its carrier to issue an on-board bill of lading to the seller. This helps when payment is by letter of credit, which often requires one.
• Own transport allowed: the seller or buyer may use their own vehicles for the journey to or from the named place, instead of a third-party carrier.
• Security costs: the rules are clearer about who pays for security-related requirements, such as export screening.

See all the changes in our guide to Incoterms 2020.

FCA vs FOB vs EXW

FCA vs FOB: FOB only works for sea freight, and the ICC says it should not be used for containers handed over before loading. FCA fits containers, air freight and express. If your supplier quotes FOB for an LCL or FCL shipment, FCA at the forwarder’s warehouse or the container yard is often more accurate.

FCA vs EXW: under EXW, the buyer is responsible for export clearance. A foreign buyer cannot easily clear goods for export in China, so in practice the supplier often does it anyway, and the contract no longer matches reality. FCA puts export clearance with the seller, where it belongs. Read more in FOB vs EXW.

How to Use FCA When Buying from China

1. Name your forwarder’s warehouse as the delivery place. For example: “FCA JIEYI warehouse, [address], Shenzhen, Incoterms 2020”. The supplier delivers the goods there, and your forwarder takes over.
2. Give your supplier the exact address and a contact before production ends, so they can book the delivery.
3. Agree who unloads and who pays, especially for heavy goods or pallets.
4. Confirm export clearance. Under FCA the supplier must clear the goods for export. Small factories without export rights may need help.
5. Arrange cargo insurance from the delivery point, because the risk is yours from there.

Common FCA Mistakes

• A vague named place, such as “FCA China” or “FCA Shenzhen”.
• Not agreeing on loading or unloading, which leads to extra charges or damaged goods at handover.
• Assuming the seller insures the goods. Under FCA nobody has to.
• Forgetting export clearance when the supplier has no export licence.
• Using FOB for air freight. FOB is a sea-only term. For air, use FCA at the airport or the forwarder’s warehouse.

FCA Example: Three Suppliers, One Warehouse

A buyer orders from three factories in Guangdong and names one warehouse as the FCA place for all of them.

The result is one container, one bill of lading and one import, with each supplier responsible only for getting its own goods to the warehouse.

FCA vs FOB: Where the Origin Charges Go

Under FCA the buyer pays a few more origin charges, but sees them clearly in its own forwarder’s quote, instead of having them built into the supplier’s price.

FCA Checklist

1. Write the exact delivery address and “Incoterms 2020” on the order.
2. Send the supplier the warehouse contact, opening hours and delivery booking rules.
3. Confirm who handles export customs, and get the export declaration details.
4. Agree the shipping marks so cartons from each supplier can be identified. See shipping marks.
5. Arrange cargo insurance from the delivery point.
6. If you pay by letter of credit, agree whether an on-board bill of lading is needed.

How JIEYI Works with FCA

We have warehouses in Dongguan, Shenzhen and Guangzhou. Name one of them as your FCA delivery place, and your suppliers deliver there. From that point we handle everything: receiving and checking the cartons, measuring and weighing, consolidation, booking and the main freight by sea, air, rail or express, and customs clearance and delivery at destination, including DDP if you want it.

• Supplier has no export licence? We can handle export customs clearance in China for them.
• Buying from several suppliers? They each deliver FCA to the same warehouse, and we ship everything together. See pickup and consolidation.
• Supplier prefers FCA factory? We collect from the factory anywhere in Guangdong.

FAQ

What does FCA mean in shipping?

FCA means Free Carrier. The seller delivers the goods, cleared for export, to the carrier or person named by the buyer at an agreed place. From that point, the buyer pays the freight and carries the risk.

Who pays the freight under FCA?

The buyer pays the main freight. The seller only pays to bring the goods to the named place, if that place is not the seller’s own premises.

Is FCA better than FOB?

For containers, air freight and express, yes. FCA matches the real handover point. FOB is only meant for sea cargo loaded directly on board the ship.

Can FCA be used for air freight?

Yes. FCA works for all transport modes, including air freight and express.

Who clears customs under FCA?

The seller handles export clearance in China. The buyer handles import clearance, duties and taxes at destination.

Does FCA include insurance?

No. Neither party has to insure under FCA. The buyer usually buys cargo insurance, because the risk passes to the buyer at delivery.

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Checked on 2 November 2026 against the ICC Incoterms 2020 rules. Buying FCA from suppliers in China? Send us your suppliers’ locations and get a quote within 2 hours.