What is FAS (Free Alongside Ship)?

Free alongside ship (FAS) is a contractual term used in the international export business that stipulates that the seller must arrange for goods to be delivered to a designated port and next to a specific vessel for easier transfer. Contracts between a buyer and a seller for international transportation of goods include details like the time and place of delivery, the payment due, and which party pays the costs of freight and insurance. The contract also will indicate the date when the risk of loss shifts from the seller to the buyer. They also typically include abbreviations for accepted commercial terms, such as FAS.

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Key takeaways:

The seller is responsible for carriage to the location of the vessel, clearing goods for export, and delivery of goods next to the vessel.

The buyer is responsible for loading the vessel, main carriage, import duties and documents, and all carriage/fees at destination.

In general, the FAS Incoterms rule is used when containerized shipments are delivered to a terminal.

FAS is popular for bulk cargo where the seller has direct access to the vessel.

FAS is applicable only to ocean or waterway transport.

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Seller's obligations under the FAS Incoterm:

Goods, commercial invoice and documentation

Export packaging and marking

Export licenses and customs formalities

Pre-carriage to terminal

Delivery alongside vessel at port of shipment

Proof of delivery

Cost of pre-shipment inspection

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Buyer's obligations under the FAS Incoterm:

Pay the price of the goods as provided in the sales contract

Loading charges

Main carriage

Discharge and onward carriage

Import formalities and duties

Cost of pre-shipment inspection (for import clearance)

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The differences between FAS (Free alongside ship) and FOB (Free on Board):

The primary difference is in the point where the risk of transportation is transferred from the seller to the buyer. For FAS shipment term, the risk is transferred when the cargo is placed ALONGSIDE the ship of the buyer’s choice, whereas for FOB shipment, the risk is transferred when the cargo is placed ONBOARD of the ship of the buyer’s choice. This ultimately means that for FAS shipments, the seller transfers transportation risks sooner than a FOB shipment, to the benefit of the seller instead of the buyer.

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Notes:

FAS is a term used in overseas shipping that denotes delivery has been made when the goods have been offloaded from the seller's ship and cleared through export customs. Under FAS, the buyer is responsible for the cost of clearing export and unloading.