What is Free Carrier (FCA)?

Free carrier is a trade term that states that the seller is responsible for shipping the goods to the carrier designated by the buyer, who will choose a mode of transportation on the part of the carrier to transport the goods to the destination.

Example

For example, Jack Seller ships goods to Mike Buyer under an FCA shipping term.   Mike opts to use his freight forwarder with whom he used to use before. Jack agrees, and it’s his responsibility to deliver the goods to the forwarder. At this point, all liability passes to Mike.

What is the Benefit of FCA?

For buyers, FCA provides flexibility in choosing the most cost-effective and suitable transportation method and carrier for their needs. This means that they can arrange for transportation from the seller’s premises to the final destination, which can save time and money. Moreover, since the buyer chooses the carrier, they have greater control over the transportation process and can ensure that the carrier meets their specific requirements and standards.

For sellers, FCA provides a clear transfer point of responsibility for the goods, reducing the risk of disputes or misunderstandings. This means that once the goods have been delivered to the named carrier at the specified location, the seller is no longer responsible for them. Additionally, since the buyer is responsible for arranging transportation, the seller does not need to handle the complex logistics and documentation required for transportation.

What is the Difference Between FCA and FOB?

Mode of Transport: FOB is primarily used for sea freight, sellers are required to provide a traditional ocean bill of lading(BOL). While FCA is suitable for any mode of transport, in order to adapt to the multi-modal transport form of trade.

Delivery Point: FOB typically delivers at the port of shipment, while FCA requires delivery at a specified point as designated in the contract. Risk Allocation: Under FOB, the risk is allocated at the ship’s rail in the port of shipment, whereas under FCA, risk allocation occurs at the point of delivery.

What is the Difference Between FCA and DDP?

With DDP shipping, shipper has to pay for the costs of transportation. Shipper assumes all responsibilities and risks until the goods are delivered to the specified destination. With FCA shipping are usually paid by the buyer, buyer will specify who will transport the goods.