FCA vs FOB: who pays what

FCA is Free Carrier. FOB is Free On Board. Incoterms 2020.

The difference that matters

The cost split is identical. What separates them is where risk passes — see below.

Full cost split

Cost blockFCAFOB
Export clearanceSellerSeller
Carriage to port / terminalSellerSeller
Loading onto main carriageSellerSeller
Main carriage (freight)BuyerBuyer
InsuranceNeither obligedNeither obliged
Unloading at destinationBuyerBuyer
Import clearanceBuyerBuyer
Duties and import taxesBuyerBuyer
Risk passesWhen the goods are handed to the buyer’s carrier at the named place.When the goods are loaded on board the ship.
Transport modeAny modeSea / inland waterway

What people get wrong

FCA

The named place decides who loads. FCA at the seller’s premises means the seller loads; FCA at a terminal means they do not.

FOB

Routinely misused for containers. A container is handed over at a terminal days before loading, so the seller keeps risk they think they have shed.

Questions

What is the main difference between FCA and FOB?
The cost split is identical. They differ in where risk passes: FCA — When the goods are handed to the buyer’s carrier at the named place. FOB — When the goods are loaded on board the ship.
Where does risk pass under FCA?
When the goods are handed to the buyer’s carrier at the named place.
Where does risk pass under FOB?
When the goods are loaded on board the ship.
Can FCA and FOB both be used for container shipments?
FCA works for any mode of transport. FOB is written for sea and inland waterway transport only.

Whichever term you agree, the paperwork has to say so

The Incoterm and named place belong on the commercial invoice, the packing list and the shipper's instructions — spelled the same way on each. ovrseas generates the set from one entry so they cannot disagree with each other.

Commercial invoice template

Compare other pairs

CFR vs FCACFR vs FOBCIF vs FCACIF vs FOBCIP vs FCACIP vs FOBCPT vs FCACPT vs FOB

Incoterms® is a registered trademark of the International Chamber of Commerce. This page is an independent summary of how costs and risk are allocated and is not affiliated with or endorsed by ICC. For contract drafting, use the official Incoterms® 2020 rules published by ICC.