Useful Information - Incoterms

Incoterms - FAS

FAS (Free Alongside Ship) is Monomodal in that it may only be used for transaction where the main carriage is by seafreight. Note that the entire journey need not be by sea, but the moment of 'export' must be.

Under this term, which has a considerably long tradition, risk and responsibility pass from the seller to the buyer when the goods are placed alongside a named ship (or a ship operated by a named service) at a named area within a named port. FAS requires the seller to arrange export customs clearing.

The essential aspect of the term is that the vessel is in port prior to the seller delivering the cargo into the port area.

However, in many markets, the seller is not allowed into the harbour area. Even if the seller can enter the port area, most operations involve the placing of cargo into a berth where the vessel in question is intended to arrive, as opposed to it having physically docked prior to the arrival of the cargo. Thus the vessel comes to the cargo rather then the cargo coming to the vessel.

There are significant risks associated with the older seafreight terms (such as FAS, FOB, CFR/CIF etc.) specifically with regard to the transport documents issued. Careful consideration should be given to the appropriate section of the official INCOTERMS 2000 text dealing with 'proof of delivery'. In many cases, the modern documents issued by lines may present risk-management complications to the seller when using such an old term as FAS.

The use of this term in the charter and bulk markets is attractive as an alternative to many of the traditional chartering terms that are often subject to unique definitions from country to country - or even between ports within one country.


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