FAS Incoterms | Free Alongside Ship Explained

1. What Does FAS Mean in Incoterms?

FAS (Free Alongside Ship) is a trade term under the International Chamber of Commerce (ICC) Incoterms® rules, applicable exclusively to sea and inland waterway transport. Its core definition states that the seller delivers goods alongside the designated vessel at the port of shipment (e.g., on a quay or barge), at which point risks and costs transfer to the buyer.

Originating in the age of sailing ships, FAS was traditionally used for bulk cargo (e.g., grains, minerals) or heavy machinery, as these goods could be delivered directly at the quayside without containerization. The key distinction between FAS and FOB (Free on Board) lies in loading responsibilities: under FAS, the seller is not required to load goods onto the vessel, whereas FOB obligates the seller to handle loading.

2. What Are the Seller’s Responsibilities?

Under Incoterms® 2020, the seller’s primary obligations include:

Delivery: Transport goods to the designated port of shipment and place them alongside the vessel in a condition ready for loading (e.g., properly packaged and marked per contractual requirements).

Export Clearance: Complete all export formalities, including licenses, inspections, and security filings, and bear associated costs.

Risk Transfer: Risks (e.g., damage, loss during transit) shift to the buyer once goods are placed alongside the vessel.

Documentation: Provide the buyer with commercial invoices, transport documents (e.g., mate’s receipt), and other certificates required by the contract.

Example: If a seller delivers bulk corn to Qingdao Port’s quayside but fails to complete export customs clearance, they breach the contract and bear liability for delays.

3. What Are the Buyer’s Responsibilities?

The buyer assumes the following duties:

Loading and Transport: Arrange for loading goods onto the vessel and organize subsequent transportation to the destination port.

Import Clearance: Handle import formalities, including duties, taxes, and value-added tax (VAT).

Risks and Costs: Bear all risks (e.g., maritime losses, delays) and costs (e.g., loading fees, quay dues) from the moment goods are placed alongside the vessel.

Insurance: Secure cargo insurance to cover risks from loading to arrival at the destination.

Practical Tip: Buyers often engage third-party logistics providers (e.g., freight forwarders) to coordinate loading and transport, reducing operational complexity.

4. When to Use an FAS Agreement?

FAS is suitable for the following scenarios:

Cargo Type: Bulk cargo (e.g., coal, crude oil), heavy machinery, or non-containerized goods that can be delivered directly at the quayside.

Transport Mode: Limited to sea or inland waterway transport; not applicable to air, rail, or multimodal shipments.

Control Needs: Buyers seeking greater control over loading and subsequent transport, or sellers aiming to minimize logistical liabilities (e.g., avoiding loading risks).

Alternatives:Containerized Cargo: Prefer FCA (Free Carrier), as FAS requires delivery alongside the vessel, whereas containers are typically pre-positioned at terminals.

Full-Service Demand: If buyers want sellers to assume more responsibilities, options like DDP (Delivered Duty Paid) or DAP (Delivered at Place) may be preferable.

5. FAS Agreement FAQ’s

Conclusion

FAS clarifies responsibilities for quayside delivery in sea freight transactions, offering sellers a streamlined liability model—particularly for heavy machinery or bulk cargo. However, it demands stronger logistical coordination from buyers. Enterprises should select trade terms based on cargo type, transport mode, and risk tolerance, while supplementing contracts with additional clauses to mitigate disputes.

If you want to know the details of other incoterms, you can visit Incoterms Guide [Updated 2025] With Chart.