FAS Incoterms: Free Alongside Ship Explained

What Does FAS Mean in Shipping?

FAS (Free Alongside Ship) is one of the 11 Incoterms 2020 rules published by the International Chamber of Commerce (ICC). Under FAS, the seller delivers the goods alongside the nominated vessel at the named port of shipment. 'Alongside' means on the quay (wharf) or on a barge next to the ship — close enough for the vessel's loading equipment to reach.

FAS is an F-group Incoterm, alongside FOB and FCA. The key difference from FOB is that FAS does NOT include loading onto the vessel. Under FOB, the seller loads the goods on board. Under FAS, the seller places goods next to the ship, and the buyer is responsible for loading. Risk transfers when the goods are placed alongside the vessel.

FAS is a specialized term used primarily for bulk commodities (grain, coal, ore, timber), break-bulk cargo, and oversized project cargo that requires specialized loading equipment. For containerized freight, FAS is rarely used — FOB or FCA are the standard choices.

FAS Seller and Buyer Obligations

FAS creates an early handoff: the seller gets goods to the port and places them alongside the vessel. Everything from that point — loading, freight, insurance, import — is the buyer's responsibility.

FAS Cost Example: Brazil Grain Export

Here is a cost breakdown for an FAS shipment of 5,000 metric tons of soybeans from Santos, Brazil to the Port of Shanghai, China. FAS Santos means the seller delivers the grain alongside the bulk vessel at Santos port.

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FAS vs FOB: What Is the Difference?

FAS and FOB are both sea-only F-group Incoterms where the buyer arranges freight. The single difference is loading responsibility. Under FAS, the seller places goods alongside the vessel — the buyer loads. Under FOB, the seller loads goods on board the vessel.

This distinction matters for heavy, oversized, or bulk cargo where loading is a significant cost and operation. For a bulk grain shipment, loading with port conveyors or cranes can cost $10,000-20,000 and take hours. Under FAS, this cost is the buyer's; under FOB, the seller pays.

For containerized cargo, the distinction is largely irrelevant — containers are loaded by port gantry cranes as part of the terminal handling process. This is why FAS is rarely used for containers. FOB or FCA are the standard choices for container shipping.

When to Use FAS: Best Scenarios

FAS is a specialized Incoterm for specific cargo types and trade routes. Here are the scenarios where FAS is appropriate.

• Bulk commodity exports (grain, coal, ore, timber): FAS is the traditional term for agricultural and mineral exports shipped in bulk vessels. The seller delivers to the port silo or yard, and the buyer's chartered vessel loads the cargo using port equipment or ship's gear.
• Break-bulk and project cargo: Oversized equipment, heavy machinery, steel coils, and other break-bulk cargo often uses FAS when the buyer has chartered a vessel with specialized loading equipment. The seller delivers to the quay; the vessel's crane loads the cargo.
• Buyer has chartered a vessel: When the buyer owns or has chartered the vessel (common in commodity trading), FAS is the natural choice. The buyer controls the vessel and its loading operations — they do not need the seller to manage this process.
• Port-specific loading requirements: Some ports have restrictions on who can operate loading equipment or access certain berths. FAS allows the buyer (who controls the vessel) to manage port-specific loading requirements through their stevedoring agents.
• Commodity exchange contracts: Certain commodity exchanges and trade associations (like GAFTA for grain) use FAS as the standard pricing basis for specific commodities and trade routes.

Common FAS Mistakes to Avoid

FAS is straightforward but has unique pitfalls related to the alongside delivery concept.

• Mistake: Using FAS for containerized cargo. FAS is designed for cargo that is loaded by port or vessel equipment at the quayside. Containers are handled through terminal stacking yards and gantry cranes — FAS does not fit this process. Use FOB or FCA for containers.
• Mistake: Not defining 'alongside' precisely. 'Alongside' can mean on the quay next to the vessel, on a barge floating next to the vessel, or at a specific berth or anchorage. Specify the exact delivery point to avoid disputes about where the seller's obligation ends.
• Mistake: Seller not coordinating with vessel arrival. Under FAS, the seller must deliver goods alongside the vessel on time. If the goods arrive before the vessel, storage costs at the port accumulate. If the goods arrive after the vessel, the buyer may face dead freight (penalty for not loading). Coordinate delivery timing with the buyer's vessel schedule.
• Mistake: Forgetting that FAS includes export clearance. Since Incoterms 2000, FAS requires the seller to handle export customs clearance (this changed from the 1990 version where the buyer handled it). Some older contracts or traders still assume FAS = buyer clears export. Always verify using Incoterms 2020.
• Mistake: Not purchasing insurance early enough. Under FAS, the buyer's risk begins when goods are placed alongside the vessel — before loading. If cargo is damaged on the quay (by weather, forklift, etc.) before loading, the buyer bears the loss. Purchase insurance that covers from 'alongside' onward.

How to Write FAS in a Contract

The correct format is: <strong>FAS [Named Port of Shipment] Incoterms 2020</strong>. The named place must be a port where the vessel will berth or anchor.

Examples: 'FAS Port of Santos, Brazil Incoterms 2020' for grain exports, 'FAS Port of Newcastle, Australia Incoterms 2020' for coal, 'FAS Berth 7, Port of Houston, TX, USA Incoterms 2020' for project cargo with specific berth requirements.

For greater precision on bulk shipments, some contracts specify the delivery method: 'FAS [Port], delivery by conveyor to vessel's reach' or 'FAS [Port], delivery by barge alongside.'

Frequently Asked Questions: FAS Incoterms

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