FAS Meaning: Free Alongside Ship Explained

What does FAS mean for a buyer?

FAS means the seller completes delivery by placing the goods alongside the buyer’s nominated ship at the named shipment port, or by procuring goods already so delivered. Delivery can be on a quay or barge; the goods do not have to be aboard.

This is a sea and inland waterway rule, suited to goods that can be delivered alongside a vessel, such as bulk cargo and break-bulk steel. A shipment travelling by sea does not automatically make FAS suitable.

Who pays and who carries the risk?

The table shows the normal allocation under FAS, subject to the rule’s exceptions for buyer notification failures and vessel problems described below. Risk means the allocation between seller and buyer of loss of or damage to the goods; it does not determine every customs issue or remedy for breach of contract.

Port charges should be itemised against the actual alongside delivery point. A charge labelled handling does not explain whether it arises before or after delivery.

Where exactly does risk transfer?

The normal transfer point is alongside the buyer’s nominated vessel at the named shipment port, before vessel loading. Factory dispatch or arrival at a general port warehouse does not by itself establish FAS delivery.

Specify the port, precise loading point and delivery window. The seller must provide the usual proof of delivery at its own cost and give sufficient notice of delivery or the vessel’s failure to take the goods. Agree how notices will be sent.

Risk can pass before alongside delivery if the buyer fails to give the required notice, or the nominated vessel fails to arrive on time, fails to take the goods or closes for cargo earlier than notified. Under FAS B3, risk then passes from the agreed delivery date; if none, from the date selected by the buyer; if neither exists, from the end of the agreed delivery period. The goods must be clearly identified to the contract. These failures can also make the buyer responsible for additional costs under B9.

Who handles export and import clearance?

For a shipment exported from China, FAS assigns applicable export formalities and their costs to the seller. The buyer handles applicable transit and import formalities and their costs, including duties and taxes. This is the allocation between the sale parties under FAS.

Ask the factory to identify who will handle export declarations and provide the necessary documents. Separately confirm the destination requirements with your customs agent. FAS does not establish a tariff classification or tax rate.

When should you use FAS, and when should you avoid it?

Consider FAS when goods can genuinely be delivered alongside a vessel and you can arrange loading and main carriage. Confirm that the factory, port operator and your transport provider understand the same handover.

FAS is unsuitable when containers are handed to a carrier at a terminal before they are alongside the vessel. Consider FCA for that arrangement. FAS also does not suit air, road-only or rail-only delivery.

For a small consignment, first establish the real transport and handover arrangement. Choose the term by the agreed delivery point and responsibilities, rather than order size alone.

China example: buying break-bulk steel

Illustrative scenario: an overseas buyer orders bundled steel from a Chinese factory. The contract specifies FAS Qingdao, the agreed alongside loading point, Incoterms 2020, with vessel details and delivery timing confirmed separately.

Under the normal FAS allocation, the factory pays for preparation, export clearance and delivery alongside the nominated vessel. The buyer pays for lifting aboard, sea freight, destination unloading and import formalities.

If a bundle is damaged during vessel loading after valid alongside delivery, the buyer bears the cargo risk between the sale parties. FAS alone does not determine any claim under a separate carriage or insurance contract.

Before accepting the quote, obtain separate loading, freight, insurance and destination charges. See the Incoterms price converter, and confirm actual charges with providers.

Which neighbouring terms should you compare?

Compare FOB if the intended seller handover is aboard the vessel, and FCA if it is to the buyer’s nominated carrier or another nominated person at an agreed place, such as a terminal.

If the seller will arrange and pay for main freight, explore CFR and CIF. For a wider comparison, use the Incoterms chart and Incoterms explained.

Sources

The ICC rule text is the primary source for the obligations and exceptions described here. The ICC Academy article, ICC checklist and carrier materials provide supporting explanations and comparisons. The China shipment is an illustrative scenario, not a reported transaction.