Under the ICC Incoterms 2020 rules, Free Alongside Ship (FAS) means the seller delivers the goods when they are placed alongside the buyer’s nominated vessel—such as on a quay, wharf, or barge—at the named port of shipment, cleared for export. At that precise moment, the risk of loss and all subsequent costs, including vessel loading and ocean freight, transfer to the buyer. This fas incoterms guide breaks down delivery handoffs, cost allocations, and why FAS applies exclusively to non-containerized maritime and inland waterway transport.
Key takeaways
- FAS (Free Alongside Ship) is restricted exclusively to sea and inland waterway transport and cannot be used for air, road, rail, or multimodal containerized freight.
- Risk of loss or damage transfers from seller to buyer the exact moment cargo is placed physically alongside the nominated vessel on a quay, wharf, or barge.
- Under Incoterms 2020 Clause A7, the seller is legally responsible for export customs clearance and paying export duties, while the buyer manages destination import clearance under Clause B7.
- The buyer contracts and pays for loading the cargo aboard the vessel—including stevedoring and heavy-lift crane lifts—as well as main ocean carriage.
- Neither party is contractually obligated under FAS to provide marine cargo insurance, though buyers typically procure coverage starting from the departure quay.
What Does FAS Incoterms Mean in Maritime Shipping?
In maritime commerce, free alongside ship establishes that a seller completes legal delivery when the goods are placed physically alongside the buyer’s nominated vessel at the agreed port of departure. Published by the International Chamber of Commerce (ICC), this rule is designed strictly for non-containerized cargo such as dry bulk commodities, timber, steel coils, breakbulk, and oversized heavy-lift project cargo.
To execute an FAS transaction properly, both commercial parties must understand four foundational rules:
- Physical delivery alongside the vessel: Delivery occurs under Clause A2/B2 when the seller places the unpackaged bulk or packaged breakbulk cargo on the wharf, quay, or an alongside barge (lighter) directly within reach of the ship’s tackle or shore loading cranes.
- Standard proof of delivery: Under Clause A6, the seller must provide the buyer, at the seller’s expense, with the customary proof of delivery confirming the goods were placed alongside the ship. Depending on the port and commodity, this document is typically a dock receipt, wharfinger receipt, mate’s receipt, or barge delivery note.
- Current edition status: As of 2026, Incoterms 2020 remains the current, active rulebook published by the ICC, with no new revisions issued. Your commercial contract should explicitly cite the active edition alongside the exact point of handoff.
- Precise terminal naming: Modern seaport districts span dozens of kilometres. Specifying only a city—such as “FAS Port of Vancouver”—creates severe operational friction if the seller does not know which terminal the vessel will berth at. Contracts must state the exact pier, berth, or bulk facility, for example: “FAS Berth 4, Bulk Terminal, Port of Vancouver, Incoterms 2020.”
Because FAS sits within a broader framework of eleven international trade rules, reviewing a complete Incoterms reference helps buyers and sellers verify whether an alongside delivery fits their commodity and port infrastructure.
Seller vs. Buyer Obligations Under FAS Incoterms 2020
Under the ICC framework, every trade rule divides operational tasks and financial obligations across ten standardized clauses (A1/B1 through A10/B10). The breakdown below outlines how fas shipping terms split responsibilities between the exporter and the importer:
| Obligation Area (Incoterms 2020 Clause) | Seller Responsibility (Clauses A1–A10) | Buyer Responsibility (Clauses B1–B10) |
|---|---|---|
| General Obligations (A1/B1) | Provide the commercial invoice, export packaging, and goods in conformity with the sales contract. | Pay the price of the goods as stated in the commercial sales contract. |
| Delivery & Risk Transfer (A2/B2 & A3/B3) | Deliver goods alongside the nominated vessel on the quay or barge; bear all cargo risk up to that exact point. | Take delivery alongside the vessel; assume all risk of loss or damage from the moment goods are placed alongside. |
| Carriage (A4/B4) | Arrange and pay for pre-carriage transport to the named port and placement alongside the vessel. No obligation for main carriage. | Contract and pay for main ocean carriage from the named port of shipment to the final destination. |
| Insurance (A5/B5) | No obligation to insure the cargo (must provide information if requested by the buyer to secure coverage). | No contractual obligation to insure the Seller’s risk, though the buyer bears transit risk from the quay onward. |
| Delivery & Transport Documents (A6/B6) | Provide customary proof of alongside delivery (e.g., dock receipt, mate’s receipt) at seller’s expense; assist buyer in obtaining an ocean Bill of Lading. | Accept the seller’s proof of alongside delivery; obtain the onboard Ocean Bill of Lading (B/L) from the carrier. |
| Customs Clearance (A7/B7) | Complete export customs clearance, obtain export licences, and pay export duties or inspections. | Complete transit and import customs clearance, obtain import permits, and pay destination tariffs and taxes. |
| Checking, Packaging & Marking (A8/B8) | Pay for quality checking, measuring, weighing, counting, and protective marking required for alongside delivery. | Pay for any mandatory pre-shipment inspection required by the importing country’s authorities (unless mandated by export authorities). |
| Allocation of Costs (A9/B9) | Pay all inland freight, port entry fees, and quay positioning charges up to the vessel’s side, plus export clearance costs. | Pay vessel loading charges (stevedoring, crane lifts), ocean freight, destination terminal charges, and import duties. |
| Notices (A10/B10) | Give the buyer sufficient notice that the goods have been delivered alongside the nominated vessel. | Give the seller timely notice of the vessel name, exact loading berth, and agreed loading dates. |
The critical rule to remember: Under FAS, the dividing line for both cost and risk is the edge of the quay or the deck of the alongside barge, immediately before the vessel’s lifting gear engages the cargo.
Who Pays for Loading and Ocean Freight Under FAS?
Under FAS rules, the buyer contracts and pays for main ocean carriage as well as all vessel loading operations once the goods reach the side of the ship. The seller pays only the inland transport and port handling costs required to bring the cargo to the agreed berth and place it alongside the vessel.
According to guidance from Export Development Canada (EDC) and the U.S. International Trade Administration, cost allocation at the port of departure requires close attention to terminal tariffs and charterparty agreements:
- Stevedoring and heavy-lift charges: Once the cargo rests alongside the ship, the buyer is financially responsible for stevedoring (port labour), shore-crane or ship’s gear hookup, slinging, lifting the cargo over the ship’s rail, and stowing and lashing the cargo inside the vessel hold.
- Wharfage and quay handling splits: Port tariff structures vary worldwide. In some North American and Asian bulk terminals, basic wharfage (the fee charged by the port authority for moving cargo across the dock) is billed to the shipper delivering the goods, while in others, quay handling is bundled directly into the ocean carrier’s or charterer’s stevedoring package. Because Incoterms cannot override local port tariffs, the commercial sales contract should explicitly state who pays local wharfage and staging fees up to the crane hook.
- Vessel nomination and scheduling notices: Because the buyer charters the vessel or books space for breakbulk, Open Top, or Roll-on/Roll-off (RORO) shipments, Clause B10 requires the buyer to give the seller timely notice of the vessel name, the exact loading berth, and the laycan (loading window) dates.
If the buyer fails to give accurate notice, or if the nominated vessel arrives late, shrinks its loading window, or closes cargo intake early, Clause B3 shifts the risk and cost of quay storage to the buyer from the agreed expiry date—provided the seller has formally appropriated and marked the cargo for that specific contract. When coordinating breakbulk, RORO, or heavy-lift charters, working with an experienced ocean freight forwarder helps align inland drayage schedules with vessel berthing windows so cargo does not sit exposed on the wharf.
Who Handles Customs Clearance Under FAS Terms?
Under Incoterms 2020 Clause A7, the seller must carry out all export customs clearance formalities and pay any associated export duties or administrative fees. Conversely, the buyer is responsible for all transit and import formalities, import permits, and destination taxes under Clause B7.
Customs compliance under FAS involves specific regulatory filings and historical nuances that logistics staff must manage carefully:
- Export declarations and licences: For shipments departing Canada or the United States, the seller (as the exporter of record) must file the mandatory export declarations—such as submitting an export declaration through the Canada Border Services Agency (CBSA) Canadian Export Reporting System (CERS) or filing Electronic Export Information (EEI) through the U.S. Automated Commercial Environment (ACE). If the commodity requires an export permit, phytosanitary certificate, or origin verification, the seller must obtain and pay for it.
- The post-2000 rule reversal: Veteran commodity traders occasionally assume the buyer handles export clearance under FAS. Prior to the Incoterms 2000 revision, FAS did place export clearance on the buyer because the cargo had not yet boarded an international vessel. However, the ICC reversed this rule in 2000 and maintained the change through Incoterms 2010 and Incoterms 2020. Today, the seller is strictly obligated to clear the goods for export before handoff alongside the ship.
- Import clearance and destination duties: Once the vessel departs, the buyer assumes full responsibility for clearing the cargo through customs in any transit countries and at the final port of discharge. This includes filing import entries with authorities such as U.S. Customs and Border Protection (CBP) or CBSA, verifying HS classification, and paying all customs duties, anti-dumping levies, and Goods and Services Tax (GST) or value-added taxes.
- Mutual assistance for documentation: While the seller does not handle import clearance, Clause A7 requires the seller to assist the buyer—at the buyer’s request, risk, and expense—in obtaining any documents or security information issued in the country of export that the buyer needs for import clearance (such as a Certificate of Origin for preferential tariff treatment).
Because customs regulations, export controls, and tariff schedules change frequently, shippers should confirm filing requirements with the relevant customs authority or partner with a licensed customs clearance specialist before moving bulk or breakbulk cargo to the port.
Why Should Shippers Avoid FAS for Containerized Freight?
In this fas incoterms guide, one operational warning stands above all others: FAS is unsuitable for containerized cargo because shipping containers are handed over to carrier terminals or container yards (CY) days before a vessel berths, and are never placed directly alongside the ship by the seller. For all Full Container Load (FCL) and Less than Container Load (LCL) shipments, the ICC expressly recommends using Free Carrier (FCA) instead.
When businesses mistakenly write FAS into a contract for cargo moving in a 20-foot or 40-foot dry van or 40HC container, three severe commercial and legal problems arise:
1. The Operational Handoff Gap
In modern liner shipping, port security and terminal automation prohibit an exporter’s drayage truck from driving onto the apron alongside a container ship. Instead, the trucker checks the container through the terminal gate into a secure container yard, or delivers loose cargo to a Container Freight Station (CFS) for consolidation. Because the seller cannot physically place the container alongside the vessel, the seller cannot fulfil the strict legal definition of delivery under Clause A2 of FAS.
2. Uninsured Risk Inside the Terminal
Under FAS, risk does not transfer to the buyer until the cargo is alongside the ship. If a seller drops a container at the terminal gate on Monday for a vessel scheduled to berth on Friday, the cargo sits in the carrier’s custody for four days while technically remaining at the seller’s risk. If the container is damaged by a terminal stacker, flooded on the pad, or lost in a yard fire before being brought alongside the vessel, contentious legal disputes erupt between the seller, the buyer, and their marine insurers over whether legal delivery occurred.
3. Document Mismatches and Bill of Lading Delays
When a seller delivers breakbulk cargo alongside a charter vessel under FAS, the ship’s officer or terminal wharfinger issues a mate’s receipt or dock receipt confirming the goods are alongside. The buyer then exchanges this receipt for an Onboard Bill of Lading once the cargo is loaded. In containerized trade, carriers issue a Received for Shipment Bill of Lading at the terminal gate and an Onboard Bill of Lading only after the container is loaded onto the ship. If a seller needs an onboard document to satisfy a Letter of Credit, FAS leaves the seller completely dependent on the buyer’s carrier to load the box and release the paperwork.
Comparing Maritime and Multimodal Origin Terms: FAS vs. FOB vs. FCA
To select the right origin rule for your shipment, compare how FAS, Free on Board (FOB), and Free Carrier (FCA) handle transport modes, risk transfer, and terminal loading costs:
| Feature / Criterion | FAS (Free Alongside Ship) | FOB (Free on Board) | FCA (Free Carrier) |
|---|---|---|---|
| Permitted Transport Mode | Sea and inland waterway only. | Sea and inland waterway only. | Any mode or multimodal transport (sea, air, rail, road). |
| Ideal Cargo Type | Non-containerized bulk commodities, breakbulk, timber, heavy-lift project cargo. | Non-containerized bulk and breakbulk cargo loaded directly into the ship’s hold. | Containerized ocean freight (FCL/LCL), air cargo, cross-border trucking. |
| Exact Delivery & Risk Transfer Point | Alongside the vessel on the quay, wharf, or barge at the named port of departure. | On board the vessel nominated by the buyer at the named port of departure. | At the seller’s premises (loaded on buyer’s truck) OR at a named terminal/CY (unloaded from seller’s truck). |
| Who Pays Origin Terminal & Vessel Loading Charges? | Buyer pays for vessel loading (stevedoring/crane lift). Quay wharfage split depends on port tariff and contract. | Seller pays all port handling, wharfage, and stevedoring costs to load the cargo on board the vessel. | Buyer pays terminal handling charges (THC) and vessel loading if delivered at a carrier terminal/CY. |
| Export Customs Clearance | Seller’s responsibility and cost. | Seller’s responsibility and cost. | Seller’s responsibility and cost. |
| Letter of Credit & Onboard B/L Compatibility | Low for seller (seller receives only a dock/mate’s receipt unless buyer assists). | High (seller loads the vessel and obtains the Onboard B/L directly). | High under Incoterms 2020 Clause A6/B6 (buyer can instruct carrier to issue an Onboard B/L to the seller). |
If you are shipping containerized goods from Asia to North America, or exporting containerized agricultural or manufactured products from Canada or the USA, replacing FAS with FCA (naming the departure container terminal) aligns your legal risk transfer with the physical reality of the terminal gate.
Frequently asked questions
What is the primary operational difference between FAS and FOB?
Under FAS, the seller’s cost and risk end when the goods are placed on the quay or barge alongside the ship, leaving the physical loading operation and stevedoring fees to the buyer. Under FOB (Free on Board), the seller bears all costs and risks until the cargo is lifted over the ship’s rail and safely loaded on board the vessel. Consequently, sellers who do not want the liability of hiring port stevedores or managing heavy-lift crane operations prefer FAS over FOB.
What happens if the buyer’s ship is delayed under FAS?
Under Incoterms 2020 Clauses A3 and B3, if the buyer’s nominated vessel fails to arrive on schedule, cannot take the goods, or closes for cargo earlier than the notified time, risk of loss or damage passes to the buyer from the agreed delivery expiry date. The buyer also becomes liable for any resulting quay storage, demurrage, or cargo deterioration costs. However, this shift only takes effect if the seller has clearly identified and segregated the goods as the contract goods.
Is cargo insurance mandatory under FAS shipping agreements?
Neither the seller nor the buyer is legally required to purchase marine cargo insurance under Incoterms 2020 Clauses A5 and B5. However, because transit risk transfers on the departure quay before the high-risk crane lift onto the vessel, buyers routinely purchase a marine cargo insurance policy covering loading, ocean transit, and destination delivery. Sellers also frequently maintain domestic inland transit coverage to protect the cargo from their facility up to the port wharf.
Can a seller delivers goods on a barge under FAS rules?
Yes. In shallow ports or harbours where large bulk carriers must anchor offshore rather than berth directly at a concrete wharf, it is customary to bring cargo out to the ship on a flat-bottomed barge (known as a lighter). Under FAS, the seller fulfills delivery by hiring the barge and bringing the goods physically alongside the anchored vessel, at which point the buyer takes over to lift the cargo from the barge into the ship’s hold.
Using this fas incoterms guide to structure your breakbulk, bulk, or project cargo contracts helps prevent port billing disputes and clarifies exactly when liability shifts at the waterline. Soleil Transportation supports businesses across Canada, the USA, and Asia with global ocean freight (including FCL, LCL, RORO, break bulk, and open top equipment), customs brokerage, cargo insurance, and specialized logistics. As an FMC-registered NVOCC (FMC Org. No. 031607), we help you coordinate port handoffs, customs filings, and international carriage—though because trade rules and port tariffs change, you should always confirm specific regulatory requirements with our team or the relevant authority. Contact our head office at +1 888-998-5199, email info@soleiltransportation.com (Mon–Fri 8:30am–4:30pm Eastern), or reach out through our contact page to request a quote for your next shipment.