FCA vs FOB: which Incoterm should you use?
FCA (Free Carrier) versus FOB (Free On Board) — who pays freight, where risk transfers, and what each choice does to your landed cost. Last reviewed 16 July 2026.
FCA works for any transport mode and passes risk when goods are handed to the carrier; FOB is sea-only and passes risk once goods are on board the vessel.
FCA vs FOB at a glance
| Factor | FCA — Free Carrier | FOB — Free On Board |
|---|---|---|
| Group | F — Main carriage unpaid | F — Main carriage unpaid |
| Transport mode | Any mode | Sea & inland waterway |
| Who pays main freight | Buyer | Buyer |
| Insurance obligation | No obligation on either party | No obligation on either party |
| Risk transfers | When goods are handed to the carrier named by the buyer at the agreed place | When goods are loaded on board the vessel at the named port of shipment |
| Export clearance | Seller | Seller |
| Import clearance | Buyer | Buyer |
| Best for | Containerised or multimodal cargo where the seller handles export clearance | Traditional sea freight where the buyer arranges and controls the main carriage |
Based on the Incoterms 2020 rules (ICC). Always confirm the exact obligations in your sales contract — as of 16 July 2026.
When to choose FCA
Choose FCA for containerised, air or multimodal cargo. Risk transfers when you hand the goods to the buyer's nominated carrier — at your dock or a terminal — which reflects how modern container shipping actually works. The ICC specifically recommends FCA over FOB for containers, because your responsibility ends before the goods sit at a port terminal you no longer control.
When to choose FOB
Choose FOB only for genuine bulk or break-bulk sea freight where goods are loaded directly onto a named vessel. FOB is deeply familiar and still the market default for full-container sea shipments in practice, but for containers it leaves a risk gap at the terminal — the goods are yours until they are on board the vessel even though you released them days earlier.
What it does to your landed cost
The terms cost much the same, but the risk-transfer point decides who is liable if cargo is damaged in the terminal before loading — a real exposure with containers under FOB. Neither changes your duty and import VAT directly, since freight and insurance are added back to reach the customs value regardless. The saving from FCA is in avoided disputes and correctly placed insurance. Use the calculator to confirm the landed cost is the same and choose FCA on the risk merits for containers.
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