Free Alongside Ship (FAS): Definition, Obligations & Practical Examples

FAS is generally unsuitable for containerized shipments at modern terminals. Container terminals require unified handling from gate to vessel, making the "alongside ship" delivery point impractical. FAS works best for break-bulk cargo, heavy machinery, or bulk commodities loaded directly from quayside. For containers, FOB or FCA terms are more appropriate.

Terminal handling charges (THC) fall to the buyer under FAS terms. Since the seller's obligation ends when goods are positioned alongside the vessel, all subsequent costs including stevedoring, loading equipment, lashing, and terminal fees become the buyer's responsibility. This can create unexpected costs if not clearly communicated during contract negotiation.

Yes, the seller must provide sufficient notice that goods have been delivered alongside the nominated vessel. This notification allows the buyer to arrange loading operations, contract stevedores, and coordinate with shipping lines. Timely communication prevents demurrage charges and ensures smooth cargo transfer at the port.

Once the seller positions goods alongside the vessel at the agreed time, delivery is complete regardless of vessel arrival. If the ship is delayed, the buyer bears storage costs and risks at the port. The seller has no obligation to maintain custody after proper delivery. This makes FAS risky for buyers when vessel schedules are uncertain.

Absolutely. The seller must complete all export customs formalities including obtaining licenses, filing export declarations, and paying export duties or taxes. This represents a fundamental seller obligation under FAS that cannot be transferred to the buyer, even by contractual agreement contradicting the Incoterm.

No. FAS applies exclusively to sea and inland waterway transport. For air shipments, use FCA (Free Carrier). For rail or multimodal transport, FCA is also the appropriate Incoterm. Using FAS for non-maritime transport creates legal ambiguity and potential disputes over delivery obligations.

Neither party has a mandatory insurance obligation under FAS, unlike CIF or CIP terms. However, the buyer should arrange marine cargo insurance covering risks from the moment goods are placed alongside the vessel through final delivery. Many buyers extend coverage backward to factory origin for comprehensive protection.

The seller must provide proof of delivery (typically a dock receipt or warehouse receipt confirming goods were positioned alongside the vessel), commercial invoice, packing list, and export customs documentation. The seller is not responsible for obtaining the bill of lading, which is issued after loading—a buyer responsibility under FAS.

FAS creates unique payment timing challenges. Since seller obligations complete before loading, payment terms often trigger upon presentation of the dock receipt rather than the bill of lading. Buyers should structure letters of credit carefully to ensure documents match actual FAS delivery requirements rather than standard maritime documentation.

Frequent disputes include disagreements over the precise "alongside" location, responsibility for goods damaged while awaiting loading, demurrage charges when buyers delay loading operations, and allocation of port security or documentation fees. Clear contract specification of the exact delivery point and timeline expectations minimizes these conflicts.

The shift toward containerization, integrated terminal operations, and just-in-time logistics has reduced FAS practicality. Modern ports prefer single-party responsibility from gate to vessel. Additionally, the complexity of coordinating separate seller delivery and buyer loading creates operational inefficiencies that FOB or FCA terms avoid, making them preferred choices for contemporary supply chains.