FOB is printed on most export invoices from China and Southeast Asia without much thought. For a container of cartons handed to a shipping line at a terminal, it is also the term that puts the seller's risk in the wrong place. FCA is the alternative, and Incoterms 2020 points to it for exactly this cargo. These are the six questions we are asked most often when a shipper considers the change.
Q1. What actually differs between FCA and FOB?
One step. Under FOB the seller delivers on board the vessel: risk passes when the goods are on the ship. Under FCA the seller delivers when the goods are handed to the carrier the buyer nominated, cleared for export. For a container that is normally the terminal or the carrier's depot, before loading.
Q2. Why does that matter for a container?
Because by the time a container is on board, the seller has usually lost physical control of it. It was gated in at the terminal, and the terminal, the crane and the stowage plan belong to someone else. Under FOB the seller still carries the risk of everything between the gate and the ship: a dropped box, a roll-over, damage in the yard. FCA moves the hand-over to the moment the goods actually leave the seller's hands, which is the last moment the seller can act on them.
Q3. Does the change affect a letter of credit?
It can, and this is where most objections start. Credits are often written as "FOB Shanghai" with a requirement for an on-board bill of lading. Under FCA the carrier issues a receipt at hand-over, and an on-board bill may not exist yet. Two clean answers: ask the buyer to amend the credit to accept a forwarder's receipt or a received-for-shipment bill with an on-board notation, or keep FOB for that particular shipment and price the difference. What does not work is writing FCA on the invoice and presenting an on-board bill that says FOB.
Q4. What changes when the buyer nominates the forwarder?
Under FCA the seller's obligation ends when the goods are handed to that nominee, and the seller is entitled to a receipt proving it. That receipt settles the familiar argument about who held the container when it was damaged in the yard. Under FOB the same argument runs until the ship is loaded, and the seller absorbs a risk on cargo it can no longer see.
Q5. Does export clearance or the VAT refund change?
The declaration is the same: the seller clears export under both terms. What changes is the trade term field on the export declaration and the documents behind the refund. Invoice, contract and transport document have to say the same thing. An invoice marked FCA sitting behind a declaration marked FOB is the mismatch that holds a refund while somebody writes a letter.
Q6. When is FOB still the right term?
When the hand-over really is on board: break-bulk, project cargo, ro-ro, or anything craned directly from the quay into the hold. There the ship's rail is a physical place and FOB describes it accurately. For a containerised shipment from a factory in Vietnam or Guangdong to a terminal, it usually is not.
The two terms side by side
| Point | FOB | FCA |
|---|---|---|
| Hand-over | On board the vessel | To the buyer's nominated carrier, cleared for export |
| Risk sits with the seller | Until loading is complete | Until the terminal or depot takes the container |
| Transport document | On-board bill of lading | Forwarder's receipt or received-for-shipment bill |
| Fits | Break-bulk, project, ro-ro | Containerised cargo, air and road |
| Main objection | Risk on cargo already out of control | Credits written for an on-board bill |
A plain note from the desk: the term on the invoice should describe what actually happens at the terminal, not what the buyer's template says. If the cargo is handed over at a gate, write FCA and fix the credit. If it is craned into the hold, FOB is honest.
Before the next booking, send us the draft invoice, the credit text and the forwarder's booking confirmation on WhatsApp. We will tell you which of the two terms the documents actually support — and where they contradict each other.