Incoterms: Free Alongside ShipPosted in Incoterms - 5 Mar 2018, 8:54 AM
Although the name is free alongside ship or FAS, it is not as free as it sounds. In fact, using FAS means that it is restricted to goods which are transported by sea or river or inland waterway.
According to International Chamber of Commerce, the term free alongside ship means the seller is obligated to hand over the goods by the ship at the departure port. The export formalities of the goods should already be handled before the seller releases them. By then, the handover of the goods must be done when the departure ship is already at the dock. The critical moving point is the risk of giving the goods to the delivery team which has been selected by the buyer.
To make this clear, the word ‘alongside’ means that the ship’s lifting tackle has reached the goods before they deliver them. In this case, the word ‘free’ means that the seller must deliver the goods to an agreed or named the place before they are transferred to an actual carrier.
The seller has three obligations to fulfill regarding free alongside the ship, which includes:
- Providing goods and commercial invoice based on the agreed contract between parties involved.
- Providing all export permits/clearances (including government’s authority issues) and all costs are also on the seller.
- Handing over the goods to the delivery team which is chosen by the buyer. The seller is responsible for the cost while the goods are delivered by an inland transport. After that, while the goods are still in the process at the terminal before being packed into the next carrier.
The buyer has four obligations to fulfill regarding free alongside the ship, which includes:
- Paying an amount of cost mentioned in the agreed contract. It means the buyer pays their share.
- Finishing all import permits/clearances. The risks and the costs regarding this part are on the buyer.
- Making a contract with the main lifting tackle with the carrier. Again, the risks and the costs regarding this matter are also on the buyer.
- Bearing all the responsibilities regarding the lifting tackle from the critical point to the carrier chosen by the buyer themselves by the ship.
In free alongside the ship, it is even better if the seller has direct access to the transport or vessel that is used for loading. The goods loaded for delivery may consist of bulk cargos or goods without containers.
The process of the free alongside ship is longer than EX Works and free carrier. It is like starting from point A (the beginning) to point B (the lifting tackle) before it is delivered to point C (carrier). After that, the goods are delivered to the last point, which is D alias the destination.
Anything can happen in the middle, but if the chosen loading or delivery team are all trusted and with a good reputation, then it should not be a problem.