FCA vs CFR – who pays for what?
FCA is Free Carrier and CFR is Cost and Freight. We compare who pays for transport, customs clearance and duty, and where risk passes to the buyer.
Key differences
Under CFR, the seller also covers the main freight. Under FCA, the buyer pays for this instead. The two rules also differ in the point at which risk passes to the buyer and in the mode of transport. CFR applies only to sea and inland waterway transport.
- Main carriage (freight)
- FCABuyerCFRSeller
- Risk passes
- FCAOn handover to the carrier in the country of dispatchCFROn board the vessel at the port of loading
- Mode of transport
- FCAAnyCFRSea only
Full cost breakdown
| Cost | FCA | CFR |
|---|---|---|
| Export clearance | Seller | Seller |
| Transport to the port or terminal | Seller | Seller |
| Loading for main carriage | Seller | Seller |
| Main carriage (freight) | Buyer | Seller |
| Insurance | No obligation | No obligation |
| Unloading at destination | Buyer | Buyer |
| Import clearance | Buyer | Buyer |
| Import duty and VAT | Buyer | Buyer |
| Risk passes | When the seller hands the goods over to the buyer’s carrier: at the seller’s premises – once they are loaded; at another place (e.g. a terminal) – when the goods are on the seller’s means of transport, ready for unloading. | At the port of loading, when the goods are on board the vessel – even though the seller pays the freight to the port of destination. |
| Mode of transport | Any mode of transport (sea, rail, air, road) | Sea and inland waterway transport only |
Notes
- FCA – transport to the port or terminal and loading depend on the place of delivery. If it is the seller’s premises, the seller loads the goods onto the buyer’s vehicle, and transport to the port or terminal is then the buyer’s responsibility. If it is another place (e.g. a terminal), the seller brings the goods there on its own means of transport, and unloading them is the buyer’s responsibility.
- CFR and CIF – the main freight ends at the port of destination. Transport from the port to the warehouse is paid by the buyer, while under the D rules (DAP, DPU, DDP) this leg is the seller’s responsibility if the place of delivery is a warehouse.
- Unloading at destination: if unloading costs are included in the contract of carriage concluded by the seller, the seller pays them and cannot charge them to the buyer afterwards.
What to watch for when importing from China
FCA Free Carrier
FCA has two variants. If the place of delivery is the factory, the supplier loads the goods onto the vehicle you send. If it is a terminal or your forwarder’s warehouse, the supplier only delivers the goods there, and unloading is your responsibility. State the exact place in the contract, e.g. “FCA Ningbo, forwarder’s warehouse”, not just “FCA Ningbo”.
More about FCA →CFR Cost and Freight
The supplier pays the freight, but the risk passes to you as early as the port of loading in China. You usually pay the charges at the port of destination (e.g. for container handling at the terminal and the release of documents), and they are set by the forwarder chosen by the supplier – you do not know them in advance. Before you place the order, ask for a list of these charges.
When to use FCA and when to use CFR?
- FCA – for container shipments and for rail freight from China, when the supplier is to handle export clearance and deliver the goods to the terminal (e.g. Xi’an, Chengdu), and you arrange transport to Poland.
- CFR – for sea freight, when the supplier has a good freight rate to Europe, while you insure the goods yourself and handle customs clearance in Poland.
Buying on FCA terms? You choose the forwarder
We organise transport from China – by rail, sea or air – together with customs clearance in Poland and cargo insurance. Send us your cargo details and we will prepare a quote tailored to your shipment.
Request a quoteFAQ
What is the main difference between FCA and CFR?
Under CFR, the seller also covers the main freight. Under FCA, the buyer pays for this instead. The two rules also differ in the point at which risk passes to the buyer and in the mode of transport. CFR applies only to sea and inland waterway transport.
Where does risk pass to the buyer under FCA?
When the seller hands the goods over to the buyer’s carrier: at the seller’s premises – once they are loaded; at another place (e.g. a terminal) – when the goods are on the seller’s means of transport, ready for unloading.
Where does risk pass to the buyer under CFR?
At the port of loading, when the goods are on board the vessel – even though the seller pays the freight to the port of destination.
Can FCA and CFR be used for rail freight from China?
Only FCA. FCA works with any mode of transport, while CFR applies only to sea and inland waterway transport. That is why CFR is not used for rail freight from China.
Compare other pairs
Incoterms® is a registered trademark of the International Chamber of Commerce (ICC). This page is an independent, simplified summary of how costs and risks are divided – it is not affiliated with or approved by the ICC. When drafting contracts, use the official text of the Incoterms® 2020 rules published by the ICC.