FAS Incoterm® (Free alongside Ship)

ICC Incoterms®, like the FAS Incoterm, are standardised international rules for delivery terms agreed between buyer and seller. These rules set out worldwide how agreements on transport, costs and possible damage during transport are made. The International Chamber of Commerce (ICC) updates Incoterms® every 10 years. The latest version, the ICC Incoterms® 2020, came into force on 1 January 2020. For a detailed overview of all incoterms, please visit our blog on Incoterms.

What is FAS Incoterm®?

The Free Alongside Ship (FAS) Incoterm is an international trade agreement used for waterborne transport. In a FAS arrangement, the seller is responsible for delivering the goods at an agreed port, placing them alongside the ship. The transfer of risk and cost takes place when the goods are alongside the vessel and ready for export.

Advantages FAS Incoterm®

• Clear transfer of risk: FAS provides a clear and defined point at which risk and costs are transferred from the seller to the buyer - when the goods are alongside the vessel. This clarity helps avoid disputes and ensures a clear division of responsibilities.
• Control of logistics for buyers: Once the goods are placed alongside the ship, the buyer takes control of the transport and logistics from then on. This allows buyers to choose carriers according to and potentially negotiate better rates.
• Global applicability: FAS is a versatile Incoterm is that can be applied to different sea trade scenarios.

Drawbacks FAS Incoterm®

• Seller's limited responsibility: Sellers have limited responsibility after the goods are placed alongside the ship. Cost and responsibility of problems such as damage or delays are for the buyer.
• Risk transfer point: The risk transfer point is when the goods are alongside the vessel. In case of damage or loss before this point, the seller is responsible. However, the risk is transferred to the buyer relatively early in the transportation process.
• Likelihood of disputes: Disputes can arise due to ambiguities about the loading process or if problems arise during maritime transport. Clear communication and good agreements on responsibilities are needed to mitigate these risks.

Summary Free alongside Ship

In summary, FAS offers a clear transfer of risk and is suitable for buyers who want control over transport logistics. However, sellers have limited responsibility after the goods are placed alongside the vessel. Careful communication and a good contract are important for a smooth FAS transaction. Do you often have sea freight, either as seller or buyer? If you would like to discuss which Incoterms® and transport solution best suits your situation, please take contact us.