EXW vs FCA vs FOB
All three hand over near the seller. The differences that matter are who clears the goods for export, who does the loading, and whether the rule even applies to your mode of transport.
The Comparison
| EXW | FCA | FOB | |
|---|---|---|---|
| Handover point | Seller's premises | Named place — anywhere the parties name | On board the vessel at the named port |
| Transport modes | Any | Any | Sea and inland waterway only |
| Who loads the vehicle | Buyer | Seller, if the named place is the seller's premises — otherwise buyer unloads | Seller, on board |
| Who clears for export | Buyer | Seller | Seller |
| Risk transfers | Goods placed at the buyer's disposal, not loaded | When the goods reach the carrier at the named place | When the goods are on board |
| Seller's price covers | The goods, on the seller's floor | EXW + loading + haulage to the named place + export clearance | FCA-level costs + port handling + loading on board |
The One Line That Matters Most
Under EXW the buyer clears the goods for export. It is the only one of the three where that is true, and it is the reason EXW is the most misused rule in international trade. Export clearance is normally done by a party established in the country of export, and a foreign buyer usually is not. Many customs authorities expect the exporter of record to have a local presence, and the buyer's forwarder often ends up handling the declaration anyway — at which point the shipment is really operating on FCA terms while the contract still says EXW.
If you are the seller and you chose EXW believing it ends your involvement at your own door, check that assumption. You are still the party who knows the goods, the HS code, and the export-control position, and you may still be asked for information you no longer have a contractual duty to provide.
FCA in Practice: The Named Place Is the Whole Rule
FCA is flexible in a way that trips people up, because its obligations change depending on the place you name:
- "FCA Shenzhen, our factory" — the seller loads the goods onto the vehicle the buyer sends, and risk passes once they are loaded.
- "FCA Shenzhen Yantian terminal" — the seller delivers the goods on the arriving vehicle, ready for unloading. The buyer unloads. Risk passes when the goods arrive there.
Naming the place precisely is not a formality — it decides who unloads and when risk moves. "FCA China" tells the parties nothing. Incoterms 2020 also added an option under FCA for the parties to agree that the buyer instructs the carrier to issue an on-board bill of lading to the seller, which resolves the long-standing problem of using FCA with a letter of credit that demands an on-board B/L.
Choosing Between Them
Use FCA when
The goods move by container, road, rail or air. It is the correct term for a container that reaches the port by truck, and it puts export clearance with the party best placed to do it — you. For most modern international sales this is the sensible default.
Use FOB when
The shipment genuinely loads onto a vessel, the port is the natural handover point, and the buyer has their own freight contract. It is the right term for bulk and breakbulk cargo, and the familiar one in many commodity trades.
Use EXW when
The buyer is genuinely set up to handle everything from your door — typically a trader with a local presence and their own customs arrangements. If that description does not fit your buyer, FCA does the same job with fewer loose ends.
Do not use FOB when
The goods fly, or move entirely by road or rail. FOB's delivery point is a vessel; if there is no vessel, the rule does not describe your transaction. Use FCA.
What It Does to the Price
Moving along EXW → FCA → FOB adds cost blocks and raises the seller's price by the amount of each block. Between EXW and FOB on a small order the difference can exceed the value of the goods themselves, because three of the four origin cost blocks are fixed per shipment. The EXW-to-FOB uplift tables show how far that can go, and the FOB cost builder works it out for your own figures.
Moving the other direction — quoting FOB while your buyer asked for CIF — is a matter of adding freight and insurance, which the CIF calculator does. The full set of terms and how they stack is on Incoterms 2020 explained.
Frequently Asked Questions
Is FCA better than FOB?
Neither is better in the abstract. FCA suits containerised, air, road and rail shipments and any transaction where the seller should handle export clearance. FOB suits goods that actually load onto a vessel. Choosing FOB for air freight is a genuine error; choosing FCA instead is usually safe.
Can the seller use EXW to avoid export obligations?
It shifts the contractual duty to clear for export onto the buyer, but it does not make the seller's practical knowledge or local presence disappear. Export-control and security rules are imposed by law, not by the Incoterms rule.
Who pays for loading under EXW?
The buyer. EXW requires the seller only to place the goods at the buyer's disposal, not loaded onto the collecting vehicle.
Does FCA include export customs clearance?
Yes. Under FCA the seller carries out and pays for the export clearance formalities. That is the main practical difference from EXW.
Is FOB more expensive than FCA?
The FOB price is normally higher, because it adds port and terminal handling and loading on board to the FCA-level costs. Whether the buyer pays more in total depends on what they would have paid to arrange those services themselves.