Incoterms 2020 · Any mode
FCA (Free Carrier): who pays what
The short answer
Who pays what under FCA
| Step | Under FCA |
|---|---|
| Export clearance | Seller |
| Main freight | Buyer |
| Cargo insurance | Buyer (not required) |
| US customs clearance | Buyer |
| US import duty and fees | Buyer |
| Unloading at destination | Buyer |
| Risk passes to the buyer | At the named place: when loaded onto the buyer's vehicle if that place is the seller's premises, otherwise when the goods are placed at the disposal of the buyer's carrier |
In the contract, FCA is followed by the place where the goods are handed to the buyer's carrier: for example "FCA Yantian container yard, Incoterms 2020".
What FCA means for a US importer
FCA is the rule built for containers. A container is handed to the carrier at a terminal or container yard, often days before it is loaded on the ship. Under FCA the risk passes at that handover, which matches how container shipping actually works.
The buyer controls the freight: you (or your forwarder) book the ocean shipment and pick the carrier, the routing and the sailing.
Since Incoterms 2020 the contract can require the buyer to have its carrier issue an on-board bill of lading to the seller, which matters when the seller is being paid by letter of credit.
US customs value under FCA
The FCA price normally carries no international freight, so it is usually the starting point for the US dutiable value.
Check the duty for your product in the Gateway tariff calculator.
Watch out for
- Name the place precisely (the factory address, or a specific container yard or terminal). "FCA China" leaves the handover point, and so the risk point, open to argument.
- If the named place is the seller's premises, the seller loads your truck; if it is anywhere else, the seller delivers on its own truck, ready for unloading, and your carrier unloads.
FCA questions
What is the difference between FCA and FOB?
Under FOB risk passes when the goods are on board the ship; under FCA it passes when the goods are handed to the buyer's carrier, which for a container is usually at the terminal before loading. FCA fits container shipments; FOB was built for cargo loaded straight onto a vessel.
Who pays the ocean freight under FCA?
The buyer. The buyer contracts the main carriage and pays for it.
Can FCA be used for ocean freight?
Yes. FCA works for any mode of transport, including ocean containers, air freight and trucking.
Sources
- International Chamber of Commerce: Incoterms 2020
- International Trade Administration (trade.gov): Know Your Incoterms
- 19 U.S.C. 1401a(b)(4)(A): price actually paid or payable
Incoterms® is a registered trademark of the International Chamber of Commerce. This page explains the rule in our own words; the ICC publication is the authoritative text.