FCA vs FOB (Incoterms 2020)
With FOB, risk passes only when the goods are on board the ship. With containers the seller hands them over at the terminal days earlier and can no longer protect them, so FCA, where risk passes at the handover, fits container shipping better.
Side by side
| FCA · Free Carrier | FOB · Free On Board | |
|---|---|---|
| Transport Different | Any mode | Sea and inland waterway |
| Delivery and risk pass to the buyer Different | Handed to the buyer's carrier at the named place | On board the ship at the port of shipment |
| Main freight paid by | Buyer | Buyer |
| Insurance | Not required | Not required |
| Export clearance | Seller | Seller |
| Import clearance and duties | Buyer | Buyer |
| Unloading at destination | Buyer | Buyer |
Where risk and costs pass from the seller to the buyer
SellerBuyer
Origin → Main carriage → Destination. Simplified diagram: the exact point is the named place written after the rule. The costs line shows who pays the main carriage and, under DDP, the import duties and taxes.
Seller's obligations compared (A1–A10)
| FCA | FOB | |
|---|---|---|
| A1/B1 General obligations | Provide the goods and the commercial invoice as the contract requires, plus any other proof of conformity it asks for. Documents may be paper or electronic if agreed or customary. | Provide the goods and the commercial invoice as the contract requires, plus any other proof of conformity it asks for. Documents may be paper or electronic if agreed or customary. |
| A2/B2 Delivery and taking delivery | Deliver to the carrier or other person nominated by the buyer at the named place: if that is the seller's premises, by loading the goods on the buyer's vehicle; anywhere else, by placing them, on the seller's vehicle and ready for unloading, at the carrier's disposal. | Deliver by placing the goods on board the ship nominated by the buyer, at the loading point indicated by the buyer at the named port of shipment, or procure goods so delivered; if no point is given, the seller may choose one. |
| A3/B3 Transfer of risks | Bears all risk until delivery. | Bears all risk until the goods are on board the ship. |
| A6/B6 Delivery or transport document | Provide, at its cost, the usual proof of delivery and help the buyer obtain a transport document. If the buyer's carrier issued an on-board bill of lading to the seller, pass it on to the buyer, often through the banks under a letter of credit. | Provide, at its cost, the usual proof that the goods are on board, and help the buyer obtain a transport document. |
| A7/B7 Export and import clearance | Carry out and pay for export clearance: export licence, export security clearance, pre-shipment inspection and other official authorisations. Where applicable, help the buyer, at its request, risk and cost, with documents and information for transit and import clearance. | Carry out and pay for export clearance. Where applicable, help the buyer, at its request, risk and cost, with documents and information for transit and import clearance. |
| A9/B9 Allocation of costs | Pay all costs until delivery, the usual proof of delivery and export clearance duties, taxes and charges. | Pay all costs until the goods are on board, including loading, the proof of delivery and export clearance. |
| A10/B10 Notices | Give the buyer sufficient notice that the goods have been delivered, or that the nominated carrier failed to take them in time. | Give the buyer sufficient notice that the goods have been delivered, or that the ship did not take them in time. |
When to use each rule
FCA
FCA works for every mode of transport and is the ICC's recommended rule for container shipments, where goods are handed over at a terminal before loading. It gives the buyer control of the freight while leaving export formalities with the seller, who knows them best.
FOB
FOB is meant for sea and inland waterway transport where goods are loaded directly on board, such as bulk and break-bulk cargo. It is widely used for containers too, but the ICC recommends FCA for container shipments.
Compare other rules
A plain-language summary of Incoterms® 2020 for everyday use. The full rules are published by the International Chamber of Commerce (ICC), and your contract wording decides. Incoterms® is a registered trademark of the ICC.
Guides on this topic
Common questions
Can FCA be used for sea freight?
Yes. FCA can be used for any mode of transport, including sea. It is the rule the ICC recommends for containerised sea freight instead of FOB.
Does FOB include freight?
No. Under FOB the buyer books and pays the sea freight. The seller's price covers the goods delivered on board at the port of shipment.
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