What is the Difference Between FCA and FOB?
When it comes to international shipping, FCA (Free Carrier) and FOB (Free On Board) are two commonly used Incoterms issued by the International Chamber of Commerce (ICC). These terms help define the responsibilities, risks, and costs between buyers and sellers during the transportation of goods. Understanding the differences between FCA and FOB is crucial for importers and exporters to determine the most suitable term for their shipment.
In this guide, we’ll explore the differences, similarities, and key factors to consider when choosing between FCA vs FOB for your shipping needs.

What is FCA?
FCA (Free Carrier) refers to an Incoterm where the seller’s responsibility ends once the goods are delivered to the buyer’s designated location (e.g., the factory, warehouse, or another agreed-upon site). Here are the key points about FCA:
- The seller arranges transportation to the designated location and handles customs clearance for export.
- The buyer assumes responsibility for unloading the goods, transportation to the final destination, and all subsequent costs.
- FCA is suitable for all modes of transportation, including air freight, sea freight, and road freight.
Key Responsibilities Under FCA:
- Seller: Delivers goods to the buyer’s carrier at the designated location and clears them for export.
- Buyer: Takes control from the named location, covering all subsequent transport charges and risks.
What is FOB?
FOB (Free On Board) is an Incoterm that applies specifically to sea freight or inland waterway transport. Under FOB, the seller’s responsibility ends once the goods are loaded onto the buyer’s chosen vessel at the port of origin.
Key Responsibilities Under FOB:
- Seller: Handles the transportation of goods to the port, pays customs clearance fees, and ensures the goods are loaded onto the buyer’s vessel.
- Buyer: Takes responsibility from the moment the goods are loaded onto the ship, bearing all risks and transportation costs to the final destination.
FCA vs FOB: Key Differences
1. Mode of Transportation
- FCA: Suitable for all modes of transport, including air, road, rail, and sea.
- FOB: Limited to sea freight or inland waterway transport.
2. Risk Transfer
- FCA: Risk transfers to the buyer once the goods are delivered to the designated location (e.g., the buyer’s carrier or warehouse).
- FOB: Risk transfers to the buyer once the goods are loaded onto the ship.
3. Delivery Location
- FCA: Delivery occurs at the buyer’s designated location, such as the seller’s factory or a warehouse.
- FOB: Delivery occurs when the goods are loaded onto the buyer’s ship at the port of origin.
4. Payment Responsibilities
- FCA:
- Seller: Covers costs for transportation to the designated location and export customs clearance.
- Buyer: Pays for freight, unloading at the destination port, and transportation to the final destination.
- FOB:
- Seller: Covers costs for export customs clearance and loading the goods onto the ship.
- Buyer: Pays for shipping, insurance, and delivery from the vessel to the final destination.
5. Insurance
- FCA: The buyer is responsible for purchasing insurance from the point of delivery.
- FOB: Insurance can be arranged by either party, but the buyer assumes responsibility once the goods are loaded onto the vessel.
FCA vs FOB: Similarities
Despite their differences, FCA and FOB share some commonalities:
- Customs Clearance: In both terms, the seller is responsible for customs clearance and associated fees in the country of origin.
- Documentation: The seller must provide proper documentation, such as commercial invoices and certificates of origin, to facilitate smooth customs clearance.
- Risk Assessment: Both terms outline a clear division of risks and responsibilities between the buyer and seller.
FCA vs FOB: Which Should You Choose?
The choice between FCA and FOB depends on several factors, including the mode of transport, the buyer-seller agreement, and the type of goods being shipped.
When to Use FCA
- Ideal for shipments involving multiple modes of transport (e.g., air, road, or sea).
- Suitable for buyers who prefer control over the main leg of the shipment.
- Works best when the buyer has established relationships with carriers and freight forwarders.
When to Use FOB
- Recommended for sea freight shipments.
- Suitable for buyers who want the seller to handle port logistics and loading onto the ship.
- Works well when the buyer’s freight forwarder takes over from the port of origin.
Related reading: SOC vs. COC Containers
Comparison Table: FCA vs FOB
Aspect | FCA | FOB |
---|---|---|
Mode of Transport | All modes (air, sea, road, rail) | Sea freight or inland waterways only |
Risk Transfer | At the designated location | Once goods are loaded onto the ship |
Delivery Location | Buyer’s designated location | Buyer’s designated ship |
Seller’s Costs | Transportation to the agreed location | Transportation to the port and loading fees |
Buyer’s Costs | From the delivery location to the final site | From the port of origin to the final site |
Insurance | Buyer arranged | Shared; buyer takes over at loading |
FAQs About FCA vs FOB
1. Is FCA the Same as FOB?
No, FCA and FOB differ in terms of risk transfer, delivery location, and applicable modes of transportation. FCA is more flexible, covering all transport types, while FOB is specific to sea freight.
2. When Does Responsibility Transfer in FCA?
In FCA, responsibility transfers to the buyer when the goods are delivered to the designated location.
3. What Are the Insurance Differences Between FCA and FOB?
Under FCA, the buyer is responsible for insurance after delivery. In FOB, the buyer assumes insurance responsibility once the goods are loaded onto the vessel.
Conclusion
Understanding the difference between FCA and FOB is essential for ensuring smooth international shipping operations. While FCA provides flexibility and applies to all transport modes, FOB is limited to sea freight and transfers risk later in the process. Choosing the right term depends on your shipping requirements, type of goods, and preferred level of responsibility.
For expert assistance in navigating Incoterms and optimizing your logistics, consult with a trusted freight forwarder. They can help you make the right choice and ensure a seamless shipping experience.