Incoterms FAS — Key Delivery Principles

Choosing delivery terms is like choosing a strategy in chess. Even the smallest mistake leads to delays, losses, or damaged cargo. Today we’ll talk about one of the least universal but useful Incoterms — FAS (Free Alongside Ship).

Don't confuse it with FOB, as the difference is critical: under FAS, the seller delivers the goods alongside the ship but does not load them, whereas under FOB, the seller is responsible for loading. Though FAS is rarely used, in specific cases it’s the perfect choice.

FAS Delivery Terms: Seller’s and Buyer’s Responsibilities

This Incoterm is applicable only to sea and inland waterway transport and only when the cargo can be placed alongside the ship at the port. The risk transfers to the buyer once the goods are delivered to the quay.

For example, a French company sells ore to a Chinese client. The seller delivers the bulk cargo to the docks at the port next to the buyer’s ship, and their responsibility ends there. Loading, document handling, and sea freight are taken over by the buyer.

What does “alongside the ship” mean: the cargo is delivered at the quay, pontoon, or dock. Sometimes special equipment is used for loading, or the ship only accepts specific types of cargo from the quay.

FAS delivery terms are specific, typically used for:

• bulk cargo (ore, grain, coal);
• oversized or heavy items (construction equipment, industrial machinery);
• packaging and pallets that do not require containerization.

Incoterms also cover cases where the ship cannot dock at a standard terminal but can reach the quay. Another important point — who receives the bill of lading? The buyer or their shipping agent/forwarder who arranges the freight.

Seller’s (supplier or shipper’s) Responsibilities

• Packing and marking the goods (if applicable).
• Delivery of goods to the port of shipment.
• Unloading at the quay alongside the ship.
• Export customs clearance.
• Notification of the buyer about the delivery.
• Ensuring access to the cargo at the ship’s side.

Buyer’s (consignee’s) Responsibilities

• Appointing the ship and notifying the seller of its arrival time and location (so they can deliver the goods).
• Payment for loading onto the ship.
• Insurance (if required) and freight payment.
• Import customs clearance and duty payment.
• Unloading and delivery to the warehouse or end user.

Thus, under FAS Incoterms, the seller’s responsibility is minimal, while the buyer handles transportation, insurance, and related procedures.

Pros and Cons of FAS Incoterms

Both suppliers and buyers can benefit from this term. Key advantages:

• Minimal responsibility for the seller. Responsibility ends once the goods are placed on the quay or dock.
• Full buyer control over sea transport. The buyer charters the vessel, manages routes, schedules, and expenses. This is especially beneficial when they have direct contracts with carriers.
• Ideal for bulk and unpackaged cargo. FAS is perfect for shipping loose, liquid, oversized, and bulk items where container use is impractical.
• Simplified export customs clearance. The seller only handles export without dealing with the import regulations of another country.

Drawbacks include:

• Not suitable for container shipments.
• Loading is out of the seller’s control. They cannot ensure proper or actual loading, making FAS vulnerable in disputes.
• No bill of lading for the seller (as they are not involved in loading). This may complicate letters of credit or situations requiring full shipping documentation.
• Risks of delays and additional charges. If the buyer fails to ensure the vessel’s arrival, the seller incurs storage costs or demurrage fees.
• Limited to sea or inland waterway transport.

FAS is useful in specific scenarios (such as exporting ore, coal, or machinery), but requires precise coordination and a clear understanding of the risks.

FAS Incoterms 2000, 2010, and 2020 Conditions

The term has undergone minor changes in the latest editions. Incoterms 2000 and 2010 are nearly identical, but the 2010 version adds clarity in the transfer of responsibility (specifically identifying the quay alongside the ship).

The 2020 edition clarified aspects regarding electronic documents. It states that if it’s physically impossible to place the cargo alongside the ship, FAS is not applicable — it’s better to use FCA. Although the differences are minimal, always refer to the specific edition when signing a contract.

Who Benefits and Who Doesn’t

FAS is beneficial for:

• Exporters who are not interested in handling ocean logistics.
• Buyers wishing to control ocean transportation (e.g., on their own vessel).
• Sellers with access to seaports but without the ability (or desire) to organize loading.

When the term is not advantageous:

• Receivers with no experience in maritime logistics — it’s better to use FOB or CFR.
• When containerized transport is used. FAS is not suitable because containers are received at terminals.
• When there is no precise control over the point of delivery — FAS can lead to legal disputes.

Possible Issues When Using FAS

Common problems associated with FAS delivery terms:

• Misunderstandings about the point of delivery

If the location is not specified in the contract, disputes may arise about whether delivery was completed.

Solution: Always specify the exact quay or section of the port.

• Buyer fails to arrange vessel on time

If the vessel does not arrive, the seller incurs additional costs.

Solution: Notification deadlines should be included in the contract, along with penalty clauses.

• Risk of cargo damage before loading

While the goods are alongside the ship, they are exposed to weather or theft, even though responsibility has already shifted to the buyer.

Solution: The buyer should independently arrange security, loading, and insurance.

DiFFreight has been providing international logistics services for many years. Therefore, we do not recommend FAS unless you are familiar with the intricacies of ocean transportation and have reliable partners and shipping lines.

How Choosing the Right Incoterms Reduces Risk

The correct Incoterm is not just a formality — it’s a tool for managing logistical, legal, and financial risks. An incorrect choice may:

• cause uncertainty over liability for damage or loss;
• lead to extra storage costs, penalties, or double payments;
• complicate customs clearance.

The choice of the Incoterm model largely depends on the importer’s experience, ability to organize loading and unloading, and their budget, as different Incoterms have different cost implications.

DiFFreight is a multi-service company offering not only logistics solutions. We will become your reliable partner, ensuring transparent cooperation with suppliers, fast delivery, customs brokerage services, and much more. We look forward to consulting with you!