The Free Alongside Ship Incoterm, known as FAS, is a sea and inland waterway trade rule under which the seller delivers the goods by placing them next to the buyer’s nominated vessel at the named port of shipment, with export clearance completed; from that moment the buyer carries all cost and risk, including loading, ocean freight, and import clearance.1ICC Academy. Incoterms 2020 FAS or FOB It is one of 11 Incoterms published by the International Chamber of Commerce and is written for bulk or oversized cargo loaded directly at a berth, not for containers.
What “Alongside the Ship” Actually Means
Delivery under FAS happens when the cargo is positioned on the quay, wharf, or loading dock right next to the vessel the buyer has nominated. Where direct dock access isn’t available, delivery can also happen from a barge brought to the vessel’s side.1ICC Academy. Incoterms 2020 FAS or FOB
The vessel has to actually be at the berth. Dropping cargo on the quay days before the ship arrives does not count as delivery. Goods must be placed alongside on the agreed date or within the agreed period the buyer communicated to the seller. Timing failures here are where a lot of FAS deals start to unravel.
FAS is not designed for containerized cargo. Containers typically go to a container terminal and may sit there for days before being moved to a vessel, so the goods are never truly “alongside the ship” in the sense the rule contemplates. For containers, the Free Carrier (FCA) rule is the better fit.1ICC Academy. Incoterms 2020 FAS or FOB
What the Seller Must Do
The seller’s job runs from the factory to the ship’s side at the named port. That covers packaging, marking, quality checks, inland transport to the port, and any terminal handling charges needed to position the cargo alongside the vessel.2Trade.gov. Know Your Incoterms
Export clearance falls entirely on the seller under Incoterms 2020. Export licenses, export duties or taxes, and any security or regulatory formalities in the country of origin are the seller’s cost and risk. A denied or delayed export license is the seller’s problem, not the buyer’s.1ICC Academy. Incoterms 2020 FAS or FOB
The seller must give the buyer proof that the goods have been delivered alongside the vessel. Because loading is the buyer’s responsibility under FAS, the seller isn’t the party obtaining the on-board bill of lading. Proof of delivery usually takes the form of a dock receipt or similar port documentation confirming the cargo’s position at the ship’s side. The seller must also assist the buyer in obtaining any documents needed for import, but at the buyer’s expense and risk.
What the Buyer Must Do
The buyer’s obligations begin the moment the cargo reaches the ship’s side.1ICC Academy. Incoterms 2020 FAS or FOB From that point, the buyer owns the logistics and the bills:
- Loading costs, including crane or stevedore fees, unless the sales contract says otherwise.
- Contracting and paying for the ocean freight from the port of shipment to the destination port.
- All import formalities at destination, including duties, taxes, and any transit-country fees.
- Unloading charges and terminal fees at the arrival port.
- Onward transport from the destination port to the final delivery address.
The buyer also has a notification duty. The buyer must tell the seller the vessel’s name, the specific berth or loading point within the port, and the delivery timeframe. Missing that notification shifts additional cost and risk onto the buyer even before the goods reach the port.1ICC Academy. Incoterms 2020 FAS or FOB
When Risk Transfers
Risk of loss or damage passes to the buyer when the goods are placed alongside the nominated vessel at the named port.1ICC Academy. Incoterms 2020 FAS or FOB This is the pivot point of the whole rule.
Damage to cargo during inland transport to the port, or while being moved across the terminal to reach the berth, sits with the seller. Once the goods are properly positioned next to the ship, the math flips. If a storm damages cargo on the quay after it’s been placed alongside, the buyer absorbs the loss even though the goods haven’t yet been loaded. That gap between “alongside” and “on board” is where a lot of money changes hands in disputes.
Risk can also transfer early if the buyer defaults on their side. If the buyer fails to nominate a vessel on time, fails to communicate the loading point, or the nominated vessel simply doesn’t arrive, risk passes to the buyer from the agreed delivery date.1ICC Academy. Incoterms 2020 FAS or FOB The seller isn’t left holding the bag because the buyer’s logistics fell apart.
Insurance Is Optional, but Watch the Quay
Neither party is required to buy cargo insurance under FAS. It is left contractually optional, unlike CIF and CIP. In practice, the buyer should arrange marine cargo insurance to cover the goods from the moment they’re alongside the vessel, since that’s when the buyer starts bearing the risk.
Sellers commonly insure the inland leg, but those policies typically don’t extend past the delivery point. The exposed window is when goods are on the quay alongside the ship but not yet loaded. Neither the seller’s transit policy nor the vessel’s hull insurance is likely to cover cargo sitting there. That period can last hours or days, in the weather and among port traffic.
FAS Compared to FOB and FCA
FAS, FOB, and FCA all involve the seller handing the goods to the buyer’s carrier, but the delivery point and the loading cost split differ in ways that matter.
Under FOB (Free on Board), the seller must load the goods onto the vessel, not just deliver them alongside it. The seller pays for loading, and risk transfers only once the cargo is on board.1ICC Academy. Incoterms 2020 FAS or FOB Confusing FAS with FOB is a common and expensive mistake, because the difference is exactly who pays if cargo is damaged by a crane during loading.
FCA (Free Carrier) delivers goods to a carrier at a named place, which can be an inland warehouse, rail terminal, or container yard. It is the standard choice for containerized cargo, because containers rarely sit “alongside a ship” in any real sense.1ICC Academy. Incoterms 2020 FAS or FOB
The practical choice usually tracks the cargo. Bulk commodities like coal, grain, minerals, or timber that get loaded by specialized port equipment or the ship’s own cranes are natural candidates for FAS or FOB. Containerized manufactured goods almost always call for FCA. FAS particularly suits sellers who want a clean handoff at the port and don’t want liability for damage caused by a crane operator or stevedore they didn’t hire, and buyers who want control over the vessel nomination and loading, often because they’re consolidating cargo from several sellers or have negotiated their own freight rates.2Trade.gov. Know Your Incoterms
How to Write FAS Into the Contract
Most FAS disputes are drafting problems, and they’re avoidable. Three points do most of the work.
Name the exact place, not just the city. A major port has dozens of berths, terminals, and staging areas. A contract that says only “FAS Port of Houston” invites the seller to deliver to one terminal while the buyer’s vessel is berthed at another, followed by an argument over who pays to reposition the cargo. Specify the berth, gate, or terminal.
State the Incoterms edition. Write the term the way the ICC does, with the full port name and the year, for example “FAS Port of Rotterdam Incoterms 2020.”3International Chamber of Commerce. Incoterms 2020
Align the documentation. Because the FAS seller doesn’t load the goods, a standard on-board bill of lading isn’t available at the point of delivery; proof of delivery normally comes via a dock receipt or similar port document. If the transaction runs through a letter of credit, the credit has to accept the documents the seller can actually produce, rather than demanding a bill of lading the seller isn’t in a position to obtain. Sellers who need a copy of the bill of lading later, for VAT or export verification, should negotiate that into the contract upfront.