Flexport
Sign In
US

Help Center

Why Should You Ship Under FCA Incoterms?

FCA will offer the best cost and risk allocation for a containerized shipment, and requires that the seller export the goods for clearance.

Flexport

If you are a buyer purchasing goods from a foreign manufacturer and shipping them internationally, FCA (Free Carrier) will likely be the most appropriate incoterm for your shipment.

Commonly used incoterms (per Incoterms 2010) for international shipments are FCA (Free Carrier) , FOB (Free on Board) , and EXW (Ex Works), but FCA is the best option for the importer:

Why is FCA preferred over FOB?

FOB is not suitable for containerized shipments. FOB terms state that the seller must deliver the goods onboard the ocean vessel, but most cargo is shipped in containers that must be dropped off at a CY or stuffed at a CFS before a carrier can load them onto the vessel. Unless the seller owns the port of origin, they can’t deliver the cargo straight to the vessel.

If cargo delivering to a CY or CFS under FOB terms is damaged in transit, the question of buyer/seller responsibility may be disputed at the buyer’s expense and time.

The ICC (International Chamber of Commerce), per the 2010 revision, designed the incoterm FCA to accommodate the containerization of modern shipping. Under FCA terms, the seller and the buyer may agree to have the buyer pick up the goods at the seller’s premises, or another named location (e.g. CFS or CY).

Why is FCA preferred over EXW?

FCA terms dictate that export clearance and the loading of the goods (if the buyer is picking up at the seller’s premises) are the seller’s responsibility.

Under EXW terms, the buyer has to clear their own goods for export, which can be costly, time-consuming, and difficult if the buyer is unfamiliar with the country’s export regulations. The seller also isn’t responsible for loading the goods onto the transport provided by the buyer, because EXW only requires that the seller makes the goods available for pickup. The seller may be in a better position to load the goods, but the buyer is still responsible for the cost and risk.

*It is ultimately up to the buyer and the seller to agree on each party's responsibility of cost and risk before the shipment begins. *

Share the Article

More From Flexport

arrowImage

Ready to Get Started?

Sign up for a Flexport account or ask to see our platform in action.

Sign Up for Freight Market Updates

Get weekly insights into all things freight, delivered right to your inbox.

I agree to the storing and processing of my personal data by Flexport as described in the Terms of Service and Privacy Policy.