Free Carrier (FCA): Definition, Applications & Practical Examples

It depends on the delivery location. If FCA specifies the seller's premises, the seller must load goods onto the buyer's vehicle. If FCA names another location (terminal, warehouse), the seller only makes goods available; the buyer handles unloading from the seller's vehicle. This distinction significantly impacts cost allocation.

No. Under FCA, neither seller nor buyer has a mandatory insurance obligation according to Incoterms rules. However, buyers should arrange coverage immediately, as risk transfers at carrier handover. The insurance gap between seller's delivery and buyer's policy activation creates vulnerability that requires careful contract management.

Absolutely. FCA is ideal for air freight because it accommodates delivery to airline cargo facilities or freight forwarder warehouses. The seller delivers goods to the air cargo terminal, clears export formalities, and risk transfers when the carrier accepts custody. This is far more practical than FOB, which doesn't apply to air transport.

The seller must provide documentation proving goods were handed to the carrier at the agreed location. This typically includes a carrier's receipt, forwarder's certificate of receipt, or warehouse receipt showing date, time, and condition of goods. For letter of credit transactions, banks require this proof before releasing payment.

When FCA designates a container freight station (CFS), the seller delivers unpacked goods to the CFS where they're consolidated with other shipments. The seller's responsibility ends at CFS delivery after export clearance. The buyer arranges and pays for containerization, main carriage, and all subsequent costs.

The seller must notify the buyer when goods are ready for collection. If the carrier fails to appear, the seller's obligations are fulfilled once goods are appropriately identified and available. The buyer bears additional storage costs and risks after the agreed delivery date, though specific contract terms should address such delays.

Yes, FCA works excellently for LCL shipments. The seller delivers goods to the consolidation warehouse or freight forwarder's facility, where they're combined with other cargo. This arrangement clearly delineates responsibilities: the seller handles delivery and export clearance, while the buyer manages consolidation costs and onward transport.

The seller must complete all export formalities, including obtaining export licenses, preparing customs declarations, paying export duties (if any), and securing required certificates. The seller provides the buyer with all export documentation needed for import clearance. This obligation distinguishes FCA from EXW, where the buyer handles export procedures.

No. FCA requires one specific, clearly defined delivery location. Ambiguity creates disputes about when risk transfers and who bears loading costs. The contract must state either a precise address (seller's warehouse) or a designated facility (Hamburg Container Terminal, Gate 5). Vague terms like "seller's city" are insufficient.

The buyer must give the seller timely instructions about the carrier's identity, pickup timing, and any special handling requirements. For export clearance purposes, the buyer may need to provide import licenses or certificates if required by the destination country. Adequate advance notice ensures smooth handover coordination.

Under FCA, the transport document presented to banks is typically a forwarder's cargo receipt or carrier's receipt, not a bill of lading. Banks verify that the document shows goods were delivered to the carrier at the named location. The credit terms must explicitly specify acceptable proof of delivery, as traditional shipping documents may not apply.