FAS – Free alongside ship (Named Place) Incoterms® 2020
Article 5 in our series of Incoterms® 2020 – In each article we will identify the responsibilities of the seller in the transaction at different points in the shipping journey. Our fourth Incoterms® Rule is FAS – Free alongside ship (Named Place).
FAS should only be used for sea and inland waterway transport. Under the Incoterms® 2020 rules, FAS means the seller has fulfilled its obligation when the goods are placed alongside the ship. However, it is not recommended to use this rule if the buyer is not able to pay the costs related to the export of the goods.
The FAS Incoterms rule considers a delivery complete when the seller delivers the goods by placing them alongside the ship indicated by the buyer or at the point of loading/port (if any) or when purchasing already delivered goods.
In the case of FAS Incoterms, it is recommended to determine as clearly as possible the loading point at the named port of shipment where the goods are to be transferred from the quay or barge to the ship. This is because handling charges and the transport of goods from the quay or barge may vary depending on the port’s practice.
The risk or liability for the goods transfers from the seller to the buyer when the seller delivers the goods by placing them alongside the ship indicated by the buyer.
What are the seller’s obligations?
- Carrying out all the duties under the terms of delivery specified in the contract. This means delivery of the goods along with a commercial invoice in conformity with the contract of sale and other related documents.
- Delivering goods by placing them alongside the ship within the prior specified period and at the named port indicated by the buyer.
- Informing the buyer in advance of the delivery of the goods.
- Providing at his own expense a document confirming delivery of the goods to the buyer. If such proof is a transport document, the seller must assist the buyer, at his request, risk, and cost, in obtaining it.
- At the buyer request, risk and cost in obtaining any documents necessary for transit and import clearance formalities.
- Packaging and marking the goods.
- Operating according to all transport-related security requirements until delivery of the goods to the buyer.
What are the buyer’s obligations?
- Concluding the contract of carriage from the named port of shipment, except where the contract of carriage is made by the seller (at the buyer’s expense and risk).
- Assisting the seller, at his request, risk, and cost, in obtaining any documents necessary for the export clearance formalities.
- The buyer must notify the seller in advance of any safety requirements related to transport, ship name, loading point and the delivery date within the period agreed in the contract.
Incoterms 2020 FAS rules are used only and exclusively in maritime transport or inland waterway transport. The use of FAS is not recommended for container transport.
What are Incoterms® used for?
Incoterms® are primarily used for determining how the sale of equipment for delivery across international boundaries will be handled and who will pay for what in the transaction. They will not address the consequences of a breach of contract or exemptions of liability. Incoterms® relate to the terms between the exporter and importer.
Incoterms® cover the following broad points:
- Delivery – Incoterms® 2020 specify when seller delivers to buyer:
- Risk – Incoterms® 2020 specify when risk transfers from seller to buyer. Risk passes from seller to buyer when seller has fulfilled his obligation to deliver the goods
- Costs – Responsibility of costs passes from seller to buyer at a point up to which the seller is obliged to pay transport (and insurance) cost
If you missed our previous Incoterms® 2020 articles, you can catch on them here: