What does FAS (Free Alongside Ship) mean in shipping? Learn how the FAS incoterm works, who pays for what, how it differs from FOB and FCA, and when to use it.
What Is the FAS Incoterm?
If you ship bulk, heavy or oversized cargo by sea, you may come across FAS on a quotation or contract. FAS stands for Free Alongside Ship, and it is one of the 11 Incoterms® 2020 rules published by the International Chamber of Commerce (ICC). In simple words: under FAS, the seller delivers the goods when they are placed alongside the vessel nominated by the buyer, at the named port of shipment. This could be on the quay or on a barge next to the ship. The seller also clears the goods for export. From that point, the buyer takes over: loading onto the ship, main freight, insurance, import clearance and onward delivery. FAS is a sea and inland waterway term only. It cannot be used for air, road, rail or multimodal transport.
How Does FAS Work? Step-by-Step Example
Imagine a buyer in Rotterdam purchasing steel coils from an exporter in Mumbai on FAS Mumbai Port terms: 1. The buyer books the vessel and tells the seller the ship's name, the loading point and the delivery time. 2. The seller prepares the goods and completes export clearance. 3. The seller delivers the goods to the quay, right alongside the nominated vessel. 4. The seller notifies the buyer that the goods have been delivered alongside. 5. The buyer arranges loading onto the vessel, pays the freight and insurance, and handles import clearance in the Netherlands. Risk passes to the buyer the moment the goods are placed alongside the ship, before they are loaded.
FAS Responsibilities: Who Does What?
What the seller does: • Packs and marks the goods • Delivers the goods alongside the vessel at the named port • Handles export clearance and pays export duties and taxes, if any • Provides the commercial invoice and proof of delivery • Notifies the buyer that the goods have been delivered • Bears all costs and risk until the goods are alongside the vessel What the buyer does: • Nominates the vessel and gives the seller proper notice of the ship's name, loading point and delivery time • Pays for loading the goods onto the vessel • Pays the main sea freight • Arranges cargo insurance (neither party is obliged to, but the buyer should) • Handles import clearance, duties and taxes • Bears all risk from the moment the goods are alongside the vessel
Advantages of FAS
For sellers: • Responsibility ends at the quayside, with no cost or risk for loading or freight • Simple, competitive pricing, since the seller does not need to quote for sea transport • Seller controls export clearance in their own country For buyers: • Full control of the vessel, freight rates and routing • Suitable for specialised ships and project cargo where the buyer has the expertise • Ability to use negotiated shipping rates to lower the total landed cost
Risks and Disadvantages of FAS
While FAS is advantageous for heavy and bulk shipments, key risks must be planned for: • Risk transfers before loading: The buyer carries the risk while the cargo sits on the quay waiting to be loaded, so cargo insurance is a must. • Not suitable for containers: In container trade, goods are normally handed to the carrier at a terminal or depot, not placed alongside the ship. FAS does not fit that practice. • Vessel timing issues: If the buyer's ship is late or misses the delivery window, the seller may face storage costs and delays, so schedules and responsibility should be agreed. • Terminal charges can be unclear: Port and terminal handling charges at origin can be a grey area, and without clear written terms both sides may end up paying twice. • Limited to sea and waterways: FAS cannot be used for other transport modes.
FAS vs FOB vs FCA: What Is the Difference?
Understanding how FAS compares to FOB and FCA helps determine the right rule for maritime and container movements:
| Feature | FAS | FOB | FCA |
|---|---|---|---|
| Delivery point | Alongside the vessel at the port of shipment | On board the vessel at the port of shipment | Named place (seller's premises, terminal or depot) |
| Export clearance | Seller | Seller | Seller |
| Loading onto the vessel | Buyer | Seller | Not applicable (carrier handles it) |
| Transport modes | Sea and inland waterway only | Sea and inland waterway only | Any |
| Risk transfers | When goods are alongside the vessel | When goods are on board the vessel | At the named place of delivery |
| Best for | Bulk, break-bulk and heavy-lift cargo | Non-containerised sea cargo | Containers and multimodal shipments |
Rule of thumb: FAS and FOB are close cousins. The only real difference is who loads the cargo onto the ship and when risk transfers. Choose FAS when the buyer wants to manage loading, and FOB when the seller should handle it.
When Should You Use FAS?
FAS is a strong choice when: • You ship bulk cargo such as grain, coal, ore or fertiliser • You ship break-bulk or heavy-lift cargo such as steel, machinery or project equipment • The buyer controls the vessel and has experience with port loading • The seller wants to stop at the quayside and avoid loading costs and risks • Both parties are shipping through a port where cargo is placed alongside the vessel as a standard practice Avoid FAS for containerised cargo, for air freight, or when the seller is expected to arrange and supervise loading. In those cases, consider FCA or FOB instead.
Best Practices When Using FAS
• Name the exact port and loading point: Write "FAS [port, country] Incoterms 2020", and specify the berth or quay if possible. • Agree on vessel notice: Set a deadline for the buyer to tell the seller the ship's name, loading point and delivery window. • Clarify terminal handling charges in writing: Ensure origin port charges are allocated clearly so no one pays twice. • Plan for delays: Agree in advance who pays for storage and demurrage if the vessel is delayed. • Insure the cargo: Importers must ensure all-risk cargo coverage from the moment goods arrive alongside the ship. • Keep proof of delivery: The seller should hold mate's receipts or port dock receipts showing when and where delivery occurred. • Specify the Incoterms version: Include "(Incoterms 2020)" in every commercial invoice, contract, and letter of credit.
Frequently Asked Questions About FAS
Here are answers to the most common questions importers and exporters ask about the FAS Incoterm:
QWhat does FAS stand for?
FAS stands for Free Alongside Ship. The seller delivers the goods, cleared for export, alongside the buyer's vessel at the named port of shipment.
QWho pays for loading under FAS?
The buyer pays for loading the goods onto the vessel.
QWho handles export clearance under FAS?
The seller handles and pays for export clearance.
QWhen does risk transfer under FAS?
Risk passes from the seller to the buyer when the goods are placed alongside the vessel, before loading.
QCan FAS be used for container shipments?
It is not recommended. Containers are usually handed over at a terminal before they reach the ship, so FCA is a better fit.
QIs FAS the same as FOB?
No. Under FAS, delivery happens when the goods are alongside the ship. Under FOB, the seller also loads the goods on board, and risk transfers at that point.
QIs FAS included in Incoterms 2020?
Yes. FAS is one of the 11 rules in Incoterms 2020, which are effective from 1 January 2020.
Final Thoughts
The FAS incoterm is a practical choice for bulk, break-bulk and heavy cargo, giving the buyer control of the vessel and the seller a clean, low-risk handover at the quayside. Used correctly, it keeps costs transparent and responsibilities clear. Used carelessly, it can lead to storage disputes, double terminal charges and uninsured losses. Not sure whether FAS, FOB or FCA is right for your next shipment? A good logistics partner can map out the costs, risks and documentation for your trade lane before you sign the contract.
Ready to move your freight with confidence?
Need help with international shipping and freight? Contact our team today for a free consultation.
Contact CGTT Today