What Does Free Alongside Ship (FAS) Mean? Incoterms Explained

Free Alongside Ship (FAS) is one of the 11 Incoterms importers and exporters use in international trade to clarify the responsibilities of buyers and sellers.

This Incoterm applies only to maritime transport and means sellers are only responsible for transporting goods next to the ship at the port of departure.

In this article, we’ll explain what Free Alongside Ship means to you, the advantages and disadvantages of this Incoterm, and when you should consider using it.

What is free alongside ship (FAS)?

Free Alongside Ship is a maritime-specific Incoterm. Under FAS, the seller is responsible for delivering goods to the port of shipment. Sellers must transport goods to the dock and place them next to the ship, ready for loading.

From that point on, all responsibilities and risks transfer to the buyer. They must load the goods onto the ship, arrange and pay for transportation, organise insurance and cover all further costs until the cargo reaches its final destination.

From the buyer’s perspective, the service is free until the goods are alongside the ship. Hence the name Free Alongside Ship.

FAS is common when transporting non-containerised bulk cargo like raw materials for agricultural goods. It is not commonly used for containerised goods.

What are the responsibilities of each party under FAS?

Incoterms like FAS denote the obligations and responsibilities of buyers and sellers during the shipping process.

Here is a breakdown of the responsibilities of each party under FAS:

The seller is responsible for:

1. Packaging goods: Sellers must package the goods ready for transport. This usually isn’t necessary when shipping bulk goods under FAS, however.

1. Transport to the port: The seller must transport goods to the port and cover any costs involved in this leg of the journey.
2. Clearing customs: Sellers must handle customs clearance for export. This includes submitting documents, paying export duties and ensuring that goods meet regulations in the country of origin.
3. Delivery alongside the ship: Sellers must deliver the goods to the designated port and place them alongside the buyer’s vessel.

The buyer is responsible for:

1. Payment for goods: Buyers must pay the agreed-upon price for the goods per the sales contract.
2. Loading goods onto the vessel: Buyers must handle loading once the goods are alongside the ship. This includes paying fees for cranes or labour.
3. Transportation costs: Buyers must arrange and pay for ocean freight and any additional transportation costs required to move the goods from the port of shipment to the final destination.
4. Clearing customs at the destination: Buyers must handle customs clearance upon arrival at the destination port. This includes paying import duties and completing documentation.
5. Insurance: FAS does not explicitly require insurance, but buyers may choose to obtain it.

An example of shipping under FAS

Let’s consider a scenario where a UK company is shipping grain from a Chinese supplier. Under FAS, the Chinese supplier is responsible for transporting the grain to the Port of Guangzhou and placing it next to the buyer’s vessel.

Once the grain is alongside the ship, the UK buyer takes over. They arrange to load goods onto the vessel, cover the ocean freight charges to Felixstowe and handle import duties and customs clearance upon arrival in the UK.

The seller’s risks and costs end once the goods arrive at the port in China. All remaining risk, including damage or theft, lands on the buyer’s lap.

What are the advantages of FAS?

FAS offers benefits to both buyers and sellers:

• A clear division of responsibilities: FAS gives buyers and sellers very clear responsibilities, which can reduce disputes.

• Limited risk for sellers: The seller’s risk ends once the goods are placed alongside the ship, making FAS an attractive option for suppliers who want to limit their liability.

• Great for bulk or specialised goods: FAS is particularly well-suited for large, non-containerized cargo such as bulk raw materials, agricultural goods, or liquids that can be loaded directly onto a ship.

• Reduced costs for sellers: Transferring responsibility to the buyer once the goods are at the port minimises costs for the seller.

What are the drawbacks of FAS?

FAS isn’t perfect, however, especially if you’re the buyer:

• Not suitable for containerised goods: FAS tends not to work for containerised goods which aren’t typically delivered next to vessels.

• Buyers take on a lot of risk: Buyers assume all the risk once the seller delivers goods alongside the vessel.

• Insurance gaps: FAS doesn’t require insurance, so there can be an insurance gap if neither party chooses to insure the shipment.

When to use FAS

FAS is best used in specific circumstances, particularly the maritime shipment of bulk goods.

It is ideal for goods that don’t require containers and situations where buyers prefer control over the shipping process.

For example, companies dealing in bulk commodities like grains, minerals, or chemicals might use FAS since these items can be efficiently loaded onto a ship without the need for containers.

How does FAS compare to other Incoterms?

Here’s how FAS compares to other popular Incoterms:

• FOB (Free on Board): FOB is also used for maritime shipping. Under FOB, the seller is responsible for loading the goods onto the ship instead of the buyer.

• CIF (Cost, Insurance, and Freight): With CIF, the seller takes on more responsibilities, including paying for transportation to the destination port and providing insurance.

• FCA (Free Carrier): Unlike FAS, which applies only to maritime shipments, FCA can be used for any mode of transport. The seller delivers the goods to a carrier or a terminal, making FCA more versatile for different shipping methods.

Get a FAS quote from the Far East with Pro Carrier

If you want to ship using FAS from the Far East to the UK, consider Pro Carrier as your partner of choice. Our combination of cutting-edge technology, dedicated services and customer service excellence means we deliver an exceptional freight forwarding experience.

Our team of experts can help you navigate the complexities of FAS, from coordinating transportation and arranging ocean freight to clearing customs.

Contact us today to start the conversation.