What Does Free Alongside (FAS) Mean?
Free alongside (FAS) is a term used in international trade contracts that indicates that the seller must arrange for the goods purchased to be delivered next to a particular vessel in a particular port in order to be ready for transfer to a waiting ship.
Free alongside is one of a number of internationally recognized commercial terms used by businesses engaged in trade.
Understanding Free Alongside
Contracts for international transportation of goods typically include details like the time and place of delivery, payment, the exact time when the risk of loss shifts from the seller to the buyer, and who pays the costs of freight and insurance.
- In a contract for international trade, free alongside means the goods will be delivered right next to the buyer's ship, ready for reloading.
- Ex works means that the goods will be picked up by the buyer at the seller's warehouse.
- Both are common incoterms, or international commerce terms, used in contracts by import and export businesses.
They also typically include abbreviated terms such as FAS.
FAS and Other Incoterms
Free alongside is one of the trade terms called Incoterms, or international commercial terms. The incoterms are published by the International Chamber of Commerce (ICC), an industry organization that fosters global trade and commerce.
Incoterms in some cases have different meanings than the same words used in other codes, such as the American Uniform Commercial Code. As a result, trade contracts expressly indicate the code that their terms reference.
When an international trade contract includes the term free alongside or FAS, the word "free" means the seller must deliver the goods to a specific port, while "alongside" means that the goods will be within reach of the designated ship's lifting tackle.
Terms used by the International Chamber of Commerce may have slightly different definitions from the same terms used in the American Uniform Commercial Code.
Generally, the seller is responsible for ensuring that the goods are already cleared for export. The buyer is responsible for the costs of re-loading goods, ocean transportation, and insurance.
Delivered Ex Ship, Delivered Ex Quay, and Ex Works
Free Alongside is one of several contractual terms that are used to describe how goods are required to be delivered by the seller to the buyer.
- Delivered Ex Ship (DES) stipulates that the seller will deliver the goods to a port, but does not specify a wharf.
- Delivered Ex Quay (DEQ) requires that the seller deliver the goods to a wharf at the destination port. This will be noted as duty paid or unpaid. If the duty is paid, the seller is obligated to cover the costs. If it is not paid, the obligation shifts to the buyer.
- Ex Works (EXW) indicates that the seller will make the goods available for pickup at its place of business. All costs and risks of transportation are taken on by the buyer.