Definition of the FAS Incoterm (Free Alongside Ship)
The FAS Incoterm is used exclusively for maritime or inland waterway transport. It means that the seller must deliver the goods alongside the ship at the agreed port of shipment.
Under Incoterms 2020, the seller assumes all costs and risks until the goods are placed alongside the vessel, but not on board.
The seller is also responsible for export clearance, a significant change from Incoterms 2000, where this responsibility was on the buyer.
Seller's Obligations (FAS)
- Prepare the goods: packaging, labeling, and inspection
- Transport and deliver the goods alongside the ship at the dock or terminal
- Handle export customs clearance and related costs
- Provide contractual documentation and notify the buyer of delivery
Buyer’s Obligations (FAS)
- Pay for the goods according to the contract
- Assume costs and risks once the goods are placed alongside the ship
- Arrange international ocean freight
- Cover departure port charges (if not paid by the seller)
- Handle import customs clearance, including duties, taxes, and VAT
- Organize inland transport to the final destination in the destination country
Worked Example: Oversize Project Cargo under FAS
Scenario. A Spanish wind-turbine manufacturer sells a $120,000 wind-turbine blade (single oversized breakbulk piece, 60 m long) FAS Bilbao Quay 5 to a US wind farm developer; ocean to Galveston. FAS = Free Alongside Ship; seller delivers cargo to the dock next to the named vessel; buyer takes over for loading + ocean + everything after.
Cost line Pays Range (USD)
Cargo (FAS invoice) Buyer $120,000
Origin inland transport Bilbao plant → Quay 5 Seller $2,400-3,800 (oversize permit + escort)
Quay handling fees Bilbao Seller $650-980 [Source: Port of Bilbao tariff 2026]
Loading onto vessel (oversize crane lift) Buyer $3,500-5,500 [Source: heavy-lift specialist quote, H1 2026]
Ocean freight Bilbao → Galveston (breakbulk, oversize) Buyer $28,000-42,000 [Source: BBC Chartering / Spliethoff project rate band, H1 2026]
Cargo insurance (NOT in FAS — buyer must arrange) Buyer $960-1,800 (~0.8-1.5% of cargo, project insurance)
Destination handling Galveston + oversize permit transport Buyer $4,500-7,200
Seller's stack (FAS) — $3,050-4,780
Buyer's stack (post-quay) — $36,960-56,500
FAS use case: bulk cargo or oversize project cargo where loading onto the vessel is itself a major operation that the buyer's project team controls. Containerized cargo should use FCA, not FAS.
Footnote: Wind-turbine blade transport is a niche heavy-lift / project-cargo market; quoted oversize ocean rates are project-specific spot quotes, not index-driven. The figures above are 2025-2026 market bands for similar lengths/routes from BBC Chartering, Spliethoff, AAL Shipping spot quotes — refresh per project.
Insurance under FAS Terms
- Insurance is not mandatory for either party
- It is recommended that each party insure their part of the journey
- Alternatively, one party can arrange comprehensive insurance for the entire route
- In all cases, insurance terms should be clearly stated in the international sales contract
Why is FAS not suitable for containerized cargo?
- FAS requires goods to be physically delivered next to the vessel, not to a terminal or in a container
- In container shipping, containers are usually delivered to logistics terminals days before loading
- Therefore, FAS is intended for breakbulk, bulk, liquid, or heavy cargo that can be delivered directly to the dock
- For container shipments, the FCA Incoterm is more appropriate, as it allows for delivery at terminals or other pre-shipment points, and defines the risk transfer point more clearly
FAS vs FOB - Sea-only Incoterms with Different Risk Transfer Points
FAS and FOB are the two "F-group" Incoterms restricted to sea and inland waterway transport. The difference is the moment of risk transfer: alongside the ship (FAS) versus loaded on board the vessel (FOB).
| Attribute | FAS (highlighted current term) | FOB |
|---|---|---|
| Mode of transport | Sea / inland waterway only | Sea / inland waterway only |
| Risk transfer point | When goods are placed alongside the vessel at named port | When goods are loaded on board the vessel at named port |
| Loading on board | Buyer's responsibility | Seller's responsibility |
| Best fit | Bulk, breakbulk, heavy lift, project cargo where the buyer's stevedores load the vessel | Bulk and breakbulk where the seller can load on board; not recommended for containerized cargo |
Sources and References
- ICC – International Chamber of Commerce: Incoterms 2020 Rules Official source for the Incoterms® 2020, explaining the rules, including FAS and its scope of application.
- International Trade Administration (U.S.): Know Your Incoterms A U.S. government guide describing each Incoterm, including FAS, and its role in international trade agreements.
- Trade Finance Global: Incoterms® 2020 Guide Comprehensive commercial guide that breaks down each Incoterm, including suitability for cargo types like containers and breakbulk.
- IncoDocs: Incoterms 2020 Explained – The Complete Guide Visual and practical guide explaining the purpose, use cases, and limitations of FAS and other Incoterms.
- ICC Academy: Incoterms® 2020 and Risk Management Educational article exploring how risk transfers under terms like FAS, and why containerized cargo may not align well with it.
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