What does 'Free Alongside - FAS' mean

Free alongside (FAS) is a trade term requiring the seller to deliver goods to a named port alongside a vessel designated by the buyer.

BREAKING DOWN 'Free Alongside - FAS'

Free alongside (FAS) is one type of international trade contract. Contracts involving international transportation often contain abbreviated trade terms that describe matters. It includes details like the time and place of delivery, payment, when the risk of loss shifts from the seller to the buyer, and who pays the costs of freight and insurance.

Free Alongside and Incoterms 

The most commonly known trade terms are Incoterms, which is short for "international commercial terms". They are published by the International Chamber of Commerce (ICC), an organization aiming to foster trade and commerce internationally, and promote and protect open markets for goods and services. Incoterms are often identical in form to domestic terms (such as the American Uniform Commercial Code), but have different meanings. As a result, parties to a contract must expressly indicate the governing law of their terms.

Free Alongside, Step by Step

When used in trade terms, the word "free" means the seller has an obligation to deliver goods to a named place for transfer to a carrier. "Alongside" means that the goods are within reach of a ship's lifting tackle. So, in this case, the seller has an obligation to deliver goods to right next to, or alongside a vessel specified by the buyer. The seller is responsible for ensuring the goods are cleared for export, too. The buyer, in this case, is responsible for the costs of loading, ocean transportation and insurance. 

Free Alongside, Delivered Ex Ship, Delivered Ex Quay, and Ex Works

Free Alongside is a trade term that differs from Delivered Ex Ship (DES) Delivered Ex Quay (DEQ) and Ex Works (EXW). FAS stipulates only that the seller must bring the goods to alongside the ship. Delivered Ex Ship stipulates that the seller has a legal obligation to deliver the goods to port, and to insure the goods' arrival there, but not to a wharf. Delivered Ex Quay specifies that the seller must deliver the goods to the wharf at the destination port. Delivered Ex Quay can be noted as having duty paid or unpaid, too. If it is paid, then the seller is obligated to cover costs, like duties, and is responsible for delivering the goods. If unpaid, those obligations and responsibilities shift to the buyer. In Ex Works, the seller must make the goods available for pickup at their place of business. From there, all costs and risks of transportation are taken on by the buyer.

It's important to realize that because this is a legal term, its exact definition is much more complicated and differs by country. It is suggested that you contact an international trade lawyer before using any trade term.

 

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