Free Alongside Ship (FAS) is among the standardized commercial terms used globally by businesses engaged in exports and imports.
Explore FAS shipping terms and other Incoterms in plain language at Airsupplycn.com to determine which ones best align with your international shipping needs.
Table of Contents:
What is Free Alongside Ship (FAS)?
FAS shipping refers to the seller being responsible for delivering the goods directly next to the buyer’s vessel. It places the succeeding steps – transportation, customs clearance, and delivery to the final destination, firmly in the hands of the buyer.
While FAS can simplify the seller’s responsibilities, it does require the buyer to manage the complexities of international transport and importation adeptly. Otherwise, the potential for challenges and delays exists in the shipping process if not handled well.
Responsibility under the FAS Incoterm
Seller’s obligations
- Provide the goods, along with a commercial invoice and all necessary documentation.
- Ensure proper export packaging and marking to meet international shipping standards.
- Handle export licenses and complete customs formalities.
- Arrange pre-carriage transportation to the terminal and deliver the goods directly alongside the designated vessel at the port of shipment.
- Offer proof of delivery and cover the costs associated with pre-shipment inspections.
Buyer’s obligations
- Pay the agreed price for the goods as stipulated in the sales contract.
- Cover shipping fees, including destination terminal handling fees.
- Load the goods onto the vessel once they are delivered alongside.
- Handle loading charges, main carriage, discharge, and onward carriage to the final destination.
- Manage import formalities, duties, and the cost of any necessary inspections required for import clearance.
Risk Transfer in FAS Shipping
Once the goods are ‘alongside the ship,’ the seller’s responsibility ceases, and the buyer assumes all subsequent risks and costs related to damage or loss during loading, transportation, and further handling.
Difference between FAS and FOB
At the core of the difference between FAS vs. FOB is the point at which risk and responsibility transition from the seller to the buyer.
With FOB (Free On Board) Incoterm, the seller’s responsibility ceases once the goods are loaded onto the shipping vessel.
Conversely, the FAS Incoterm delineates that the seller’s responsibility ends when placing the goods beside the vessel at the designated port.
A practical Free Alongside Ship example
In a recent transaction, we coordinated the shipment of 200 boxes of apparel from China to the UK, tailored to the preferences of Felix, a UK-based retailer.
We arranged for a carrier to pick up the boxes at his supplier’s factory and transport them by truck to the vessel at the named port. Meanwhile, we gathered all necessary shipping documentation from Felix, issued an invoice, and handled the export customs clearance.
Upon completion of these steps, responsibility shifted to Felix. He took over the loading of the goods onto the ship and monitored the subsequent shipping process.
Is FAS shipping your ideal choice?
As a “Free Alongside Ship,” its name offers a clue to its suitability that it is not the optimal choice for containerized cargo. This is because containerized goods typically require delivery to a container yard or terminal before loading onto vessels.
So, if your cargo falls into the category of non-containerized goods, such as oil, soybeans, grains, or coal, FAS could be the perfect fit for your shipping needs.
These goods are conveniently placed directly beside the cargo ships before loading.
Conclusion
If you are considering FAS shipping, it is essential to assess your freight needs and potential risks. As a result, you can determine whether FAS aligns with your business objectives and operational requirements.
With extensive expertise in global trade, we at Airsupply aim to assist you in navigating the complexities of international shipping. Our tailored solutions ensure your shipments flow seamlessly, optimizing efficiency and minimizing risks through suitable Incoterm.
FAQs about FAS shipping term
1. Who is responsible for insuring goods under the FAS delivery term?
Under FAS terms, the responsibility for insuring goods isn’t explicitly defined. However, it’s a common practice for buyers and sellers to obtain insurance coverage for the portions of the cargo’s journey they’re each accountable for.
As the buyer or the seller utilizing the FAS Incoterm, you also have the option to secure cargo insurance for the entire shipping process, from origin to destination. Regardless of your decision, you should indicate insurance terms in your sales contract (if applicable).
2. What are the advantages and disadvantages of FAS?
In contrast to Delivery Duty Paid (DDP), which places the bulk of responsibility on the seller, FAS adopts a more equitable approach.
However, sellers may face additional costs and logistical challenges if confronted with delays or unavailability of the designated vessel. They must seek alternative arrangements as their responsibility only concludes when they position the cargo alongside the ships.
The primary advantage of FAS for buyers is the complete control they gain over their goods once the seller has delivered them next to the vessel.
