Everything You Need to Know about “Free Alongside Ship” Incoterm Agreement
FAS or Free Alongside Ship is an Incoterm definition that dates back to the days of sail shipping. In an FAS agreement, the seller is responsible for leaving goods alongside the ship, at which time the buyer assumes all ongoing costs, risks and logistics. FAS is rarely used these days, only used for sea freight and inland waterway shipments.
On January 1st, 2020, the International Commerce Center published what is currently the most up to date International Commercial Trade Terms, Incoterms 2020. Commentary from the individuals responsible for writing these terms considered removing FAS from the list of 11 Incoterms; however, they ended up keeping it as this Incoterm is viable for very specific forms of trade.
In most instances, FAS is still used when purchasing large pieces of machinery, which would be loaded onto a barge and shipped further along a canal in order for the cargo to be placed alongside another vessel, where the buyer’s take over the shipping process.
One of the requirements in a FAS agreement is that the seller must place the cargo alongside the buyer’s ship and cannot leave the shipment at a port, waiting for the vessel to arrive. This can be considered a benefit to the buyer, especially when the cargo they are purchasing under FAS is often heavy and cumbersome; it ensures that the seller and the appointed vessel are present when transferred.
FAS requires buyers to handle all freight charges, including loading and unloading. Because of this, they are strongly advised to find a China 3rd party logistics company or China freight forwarder capable of assisting with their shipment.
The following responsibilities are placed on the seller when trading under FAS Incoterms.
Once the seller has fulfilled their above responsibilities, the buyer must fulfill the following requirements to conclude their part of the sale: