Free Alongside Ship (FAS)

What is Free Alongside Ship (FAS)?

Free Alongside Ship (FAS)

Free Alongside Ship (FAS) is a shipping contract term that is commonly used in international trade to define the responsibilities and liabilities of the seller and the buyer in the transportation of goods. This term specifically applies to maritime transport only.

In an FAS agreement, the seller is obligated to deliver the goods alongside the ship at the named port. This means that the seller is responsible for ensuring that the goods are brought to the port and placed next to the ship, ready for loading. The seller must also bear all the costs and risks associated with the goods until they are placed alongside the ship.

One important aspect of the FAS term is that the seller must clear the goods for export. This means that the seller is responsible for obtaining all the necessary documentation and permits required for the goods to leave the country of origin. Clearing the goods for export ensures that all legal and regulatory requirements are met, allowing for a smooth and efficient transportation process.

It is worth noting that the definition of FAS underwent a change in the 2000 version of the Incoterms, which are a set of internationally recognized rules for interpreting the most commonly used trade terms. Prior to this change, FAS required the seller to deliver the goods onto the vessel, whereas the current definition only requires the goods to be placed alongside the ship. This modification clarified the responsibilities of the seller and aligned the term with industry practices.

For buyers, FAS offers several advantages. Firstly, it allows them to have greater control over the transportation process, as they can choose the shipping line and negotiate the freight rates directly. Additionally, FAS can be a cost-effective option for buyers, as they are not responsible for the costs and risks associated with loading the goods onto the vessel.

However, it is important for buyers to be aware of their responsibilities and liabilities when entering into an FAS agreement. Once the goods are placed alongside the ship, the buyer assumes all the costs and risks associated with the goods, including transportation, insurance, and any potential damage or loss that may occur during loading.

In conclusion, Free Alongside Ship (FAS) is a shipping contract term that defines the obligations of the seller and the buyer in maritime transport. The seller is responsible for delivering the goods alongside the ship at the named port and clearing them for export, while the buyer assumes the costs and risks once the goods are placed alongside the ship. Understanding the intricacies of FAS is crucial for beginners in logistics to ensure smooth and efficient international trade operations.