FAS Incoterms: Free Alongside Ship Explained
Summary: FAS (Free Alongside Ship) is an Incoterm rule where the seller delivers goods alongside the vessel, at the named port of shipment — on the quay or barge. The buyer must handle loading onto the vessel, ocean freight, insurance, and all import tasks. FAS is a niche Incoterm, used mostly for bulk commodities and break-bulk cargo. This guide explains when FAS makes sense, how it differs from FOB, and the full breakdown of who does what.
What Does FAS Mean in Shipping?
FAS (Free Alongside Ship) is one of the 11 Incoterms 2020 rules. The International Chamber of Commerce (ICC) publishes these rules. Under FAS, the seller delivers the goods alongside the named vessel at the named port of shipment. 'Alongside' means on the quay (wharf), or on a barge next to the ship. It must sit close enough for the vessel's loading gear to reach.
FAS sits in the F-group of Incoterms, along with FOB and FCA. The key gap from FOB: 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 must load them. Risk passes once the goods sit alongside the vessel.
FAS is a special term used mostly for bulk commodities (grain, coal, ore, timber), break-bulk cargo, and oversized project cargo that needs special loading gear. For container freight, sellers rarely use FAS — FOB or FCA are the standard picks.
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 on — loading, freight, insurance, import — falls to the buyer.
| Obligation | Seller (FAS) | Buyer (FAS) |
|---|---|---|
| Packaging and labeling | ✓ Seller arranges and pays | |
| Inland transport to port | ✓ Seller arranges and pays | |
| Export customs clearance | ✓ Seller arranges and pays | |
| Delivery alongside vessel | ✓ Seller places goods on quay/barge | |
| Loading onto vessel | ✓ Buyer arranges and pays | |
| Ocean freight | ✓ Buyer contracts and pays | |
| Cargo insurance | ✓ Buyer's decision and cost | |
| Destination port charges | ✓ Buyer pays | |
| Import customs clearance | ✓ Buyer arranges and pays | |
| Import duties and taxes | ✓ Buyer pays | |
| Risk transfer point | When goods are placed alongside the vessel | From alongside vessel onward |
FAS Cost Example: Brazil Grain Export
Here's 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.
| Cost Component | Paid By | Estimated Cost |
|---|---|---|
| Farm-to-port trucking (Mato Grosso → Santos) | Seller | $75,000–120,000 |
| Export customs clearance (Brazil) | Seller | $200–400 |
| Port reception + silo storage | Seller | $15,000–25,000 |
| Delivery alongside vessel (conveyor to quay) | Seller | $5,000–10,000 |
| Vessel loading (ship's crane/port crane) | Buyer | $10,000–20,000 |
| Ocean freight (Santos → Shanghai, bulk vessel) | Buyer | $125,000–200,000 |
| Cargo insurance | Buyer | $8,000–15,000 |
| Destination port charges + unloading | Buyer | $15,000–25,000 |
| Import customs clearance (China) | Buyer | $500–1,000 |
| Import duties and taxes | Buyer | Varies by commodity |
FAS vs FOB: What Is the Difference?
FAS and FOB are both sea-only F-group Incoterms, where the buyer sets up freight. The one gap is who loads. Under FAS, the seller places goods alongside the vessel — the buyer loads. Under FOB, the seller loads goods on board the vessel.
This gap matters for heavy, oversized, or bulk cargo, where loading costs real money and takes real work. For a bulk grain shipment, loading with port conveyors or cranes can cost $10,000-20,000, and take hours. Under FAS, this cost falls on the buyer; under FOB, the seller pays.
For container cargo, this gap barely matters — port gantry cranes load containers as part of the terminal handling process anyway. This is why sellers rarely use FAS for containers. FOB or FCA are the standard picks for container shipping.
| Feature | FAS | FOB |
|---|---|---|
| Seller delivers | Alongside vessel (quay/barge) | On board vessel |
| Loading onto vessel | Buyer | Seller |
| Risk transfer | Alongside vessel | On board vessel |
| Common cargo types | Bulk commodities, break-bulk, project cargo | Containers, general cargo, all sea freight |
| Market usage | Niche (bulk/break-bulk) | Dominant (global sea freight) |
When to Use FAS: Best Scenarios
FAS is a special Incoterm for specific cargo types and trade routes. Here are the cases where FAS fits well.
- Bulk commodity exports (grain, coal, ore, timber): FAS is the traditional term for farm 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 gear or the ship's own gear.
- Break-bulk and project cargo: Oversized equipment, heavy machinery, steel coils, and other break-bulk cargo often ship under FAS, when the buyer has chartered a vessel with special loading gear. The seller delivers to the quay. The vessel's own 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 pick. The buyer controls the vessel and its loading work — they don't need the seller to manage this step.
- Port-specific loading rules: Some ports limit who can run loading gear or reach certain berths. FAS lets the buyer (who controls the vessel) handle these port-specific loading rules through their own stevedoring agents.
- Commodity exchange contracts: Some commodity exchanges and trade groups, like GAFTA for grain, use FAS as the standard pricing base. This holds true for specific goods and trade routes.
Common FAS Mistakes to Avoid
FAS is simple, but it has its own pitfalls tied to the alongside delivery idea.
- Mistake: Using FAS for container cargo. FAS is built for cargo loaded by port or vessel gear at the quayside. Containers move through terminal stacking yards and gantry cranes instead — FAS does not fit this flow. Use FOB or FCA for containers.
- Mistake: Not defining 'alongside' precisely. 'Alongside' can mean the quay next to the vessel, a barge floating next to the vessel, or a specific berth or anchorage. State the exact delivery point in writing. This avoids disputes about where the seller's job ends.
- Mistake: Seller not tracking vessel arrival. Under FAS, the seller must deliver goods alongside the vessel on time. If the goods show up before the vessel, storage costs at the port pile up. If the goods show up after the vessel, the buyer may face dead freight (a penalty for not loading). Match delivery timing to 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 rule, where the buyer handled it). Some older contracts or traders still assume FAS means the buyer clears export. Always check against Incoterms 2020.
- Mistake: Buying insurance too late. Under FAS, the buyer's risk starts once goods sit alongside the vessel — before loading even begins. If cargo gets damaged on the quay (by weather, a forklift, etc.) before loading, the buyer bears the loss. Buy insurance that covers you from 'alongside' onward.
How to Write FAS in a Contract
The right format is: FAS [Named Port of Shipment] Incoterms 2020. The named place must be a port where the vessel will berth or anchor.
A few examples help. 'FAS Port of Santos, Brazil Incoterms 2020' works for grain exports. 'FAS Port of Newcastle, Australia Incoterms 2020' works for coal. 'FAS Berth 7, Port of Houston, TX, USA Incoterms 2020' works for project cargo with specific berth needs.
For more precision on bulk shipments, some contracts state the delivery method. For example: 'FAS [Port], delivery by conveyor to vessel's reach' or 'FAS [Port], delivery by barge alongside.'