Incoterm FAS (Free Alongside Ship): delivery alongside the vessel
The FAS Incoterm (Free Alongside Ship) is a rule exclusive to sea and inland waterway transport. Under this term, the seller fulfils their delivery obligation when the goods are placed alongside the vessel at the agreed port of loading.
From that moment on, the buyer assumes all costs and risks of the cargo.
How FAS works: the turning point on the quayside
With the FAS Incoterm, the seller is responsible for bringing the goods to the quay and placing them alongside the vessel. It is crucial that the cargo is accessible to be lifted on board. The moment the cargo is alongside the vessel, the transfer of risk occurs.
Practical example:
You buy a batch of large steel pipes from a supplier in China under Incoterm FAS (Port of Shanghai).
The Chinese supplier organises and pays for the transport of the pipes from their factory to the Port of Shanghai.
Transfer of Risk: The pipes arrive at the quayside and are placed alongside the vessel. At that instant, the risk of any damage or loss (e.g., if a pipe falls into the sea before being loaded) passes from the supplier to you, the buyer.
Your responsibility: From that moment on, you handle everything: hiring the crane to load the pipes onto the vessel, paying the sea freight, managing export customs, insurance, and all costs up to your final warehouse.
Responsibilities under Incoterm FAS
Seller's Responsibility:
- Packing the goods appropriately.
- Delivering the goods alongside the vessel at the port of loading's quayside.
- Providing the necessary documentation.
- Assuming risk until the goods are alongside the vessel.
Your Responsibility as a buyer:
- Assuming the risk from the moment the goods are alongside the vessel.
- Arranging and paying for the loading of the goods onto the vessel.
- Arranging and paying for export customs clearance.
- Arranging and paying for the main carriage (sea freight).
- Arranging and paying for insurance.
- Arranging and paying for import customs clearance.
- Paying for transport at the destination.
FAS vs. FOB: a crucial difference in loading
The difference between FAS and FOB is subtle but very important and often causes confusion, so knowing this difference is vital before deciding which one to use:
FAS (Free Alongside Ship)
Delivery is made alongside the vessel. The buyer is responsible for loading the goods onto the vessel.
FOB (Free On Board)
Delivery is made on board the vessel. The seller is responsible for loading the goods on board.
If the buyer has no experience in managing cranes and port loading, FOB is generally a safer option to avoid problems with the handling and stowage of the goods.
Other Incoterms
Ex Works
The least responsibility for the seller. The goods are delivered at their warehouse or factory. The buyer assumes all costs and risks from that point.
Free Carrier
The seller delivers the goods to the carrier designated by the buyer.
Carriage Paid To
The seller pays for transport to the agreed destination.
Carriage and Insurance Paid To
The seller pays for transport and insurance to the agreed destination.
Delivered at Place Unloaded
The seller assumes all costs and risks until the goods are delivered and unloaded at the agreed destination (e.g., a terminal or warehouse).
Delivered At Place
The seller delivers when the goods are made available at the agreed place.
Delivered Duty Paid
The seller assumes all costs and risks until final delivery.
Free On Board
The seller delivers when the goods pass the ship's rail.
Cost and Freight
The seller pays the cost and freight to the destination port.
Cost, Insurance and Freight
The seller pays the cost, insurance and freight to the destination port.