Procurement Glossary
FAS (Free Alongside Ship): Definition and application in international trade
November 19, 2025
FAS (Free Alongside Ship) is an important Incoterm clause in international trade that regulates the terms of delivery and transfer of risk between seller and buyer. With FAS, the seller assumes responsibility for the goods until they are made available alongside the ship at the named port of shipment. This regulation is particularly relevant for sea freight transportation and has a significant influence on cost distribution and logistics planning in procurement.
Key Facts
- FAS applies exclusively to sea and inland waterway transportation
- Risk is transferred when the goods are placed alongside the ship
- Seller bears costs up to provision at the quay, buyer bears loading costs
- Export formalities are the responsibility of the seller
- Buyer must organize main transport and insurance himself
Contents
Definition and meaning of FAS
FAS defines precise responsibilities and cost distribution in maritime transportation between trading partners.
Basic characteristics of FAS
Free Alongside Ship means that the seller fulfills his obligation to deliver as soon as the goods are placed alongside the ship designated by the buyer at the port of shipment. The seller bears all costs and risks up to this point, including transportation to the port and export handling.
FAS vs. other Incoterms
In contrast to FOB, with FAS the buyer already pays the loading costs onto the ship. Unlike EXW, with FAS the seller arranges the entire transportation to the port of shipment and the export formalities.
Importance of FAS in Procurement
FAS gives buyers detailed cost control over main transportation and insurance. The clause is particularly suitable for experienced importers with established logistics partnerships and their own expertise in customs clearance.
Process, control and planning
The successful implementation of FAS transactions requires structured processes and clear communication between all parties involved.
Contract design and agreements
For FAS contracts, the port of shipment, delivery date and ship name must be clearly defined. The buyer informs the seller in good time about ship details and the desired delivery time. In addition, quality standards and packaging instructions should be precisely defined.
Logistical coordination
The seller organizes transport to the port and makes the goods available alongside the ship on time. The buyer coordinates the ship's hold, loading and transport insurance. Close coordination between both parties prevents delays and additional costs.
Document management
The seller prepares all necessary export documents and hands them over to the buyer. These include the commercial invoice, packing list and certificates of origin. The buyer receives the documents for further processing of the main transportation and import formalities.
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Operational KPIs for FAS
Relevant key figures enable the systematic evaluation and optimization of FAS transactions.
Delivery performance key figures
On-time delivery rate measures the punctual delivery of goods alongside the ship. The key figure should be at least 95%. In addition, the lead time from the order to delivery at the port is measured to ensure planning reliability.
Cost efficiency metrics
Total landed cost per unit compares the total costs of different FAS suppliers including all downstream costs. The deviation between planned and actual costs should be less than 5%. Freight audit processes identify optimization potential.
Quality and compliance indicators
Document completeness and correctness for export documents is measured as a percentage of error-free shipments. Compliance rate for origin preferences and customs regulations should reach 100%. Damage rate during transportation to the port of shipment serves as a quality indicator.
Risks, dependencies and countermeasures
FAS transactions entail specific risks that can be minimized by taking appropriate measures.
Coordination risks
Insufficient coordination between seller and buyer can lead to delays and additional costs. Delayed ship arrivals or unclear communication about delivery dates exacerbate this problem. Regular status updates and defined escalation processes significantly reduce these risks.
Port dependencies
Strikes, congestion or technical problems in shipping ports can affect FAS deliveries. Demurrage costs are incurred in the event of delays. Alternative port options and flexible contract clauses offer protection against such disruptions.
Currency and market risks
Exchange rate fluctuations affect the total cost of FAS transactions, as the buyer purchases main transportation and insurance separately. Volatile freight markets can lead to unexpected cost increases. Hedging strategies and long-term framework agreements with 3PL service providers stabilize the cost structure.
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Practical example
A German mechanical engineering company purchases steel components from South Korea under FAS conditions. The Korean supplier transports the goods to the port of Busan and makes them available alongside the ship chartered by the buyer. The German company organizes the sea transport to Hamburg via an established logistics partner and bears the loading costs. Through this division, the buyer retains control over the main transportation costs and can use existing framework agreements with shipping companies.
- Cost savings of 8% through own freight rate negotiation
- Improved delivery transparency through direct contact with the shipping company
- More flexible scheduling thanks to coordinated ship space reservation
Current developments and effects
Modern technologies and changing trading structures have a significant impact on the use of FAS transactions.
Digitization of document processes
Electronic consignment notes and digital bills of lading speed up the processing of FAS transactions. Blockchain-based solutions increase transparency and reduce the risk of fraud. AI-supported systems optimize coordination between seller and buyer through automated notifications.
Sustainability requirements
Environmental regulations influence port logistics and require adapted FAS agreements. Emission reduction and sustainable packaging are increasingly being integrated into contracts. Green shipping initiatives are changing cost structures and planning cycles.
Geopolitical influences
Trade conflicts and sanctions require flexible FAS strategies with alternative shipping ports. Supply chain resilience is becoming more important than pure cost optimization. Diversified supplier structures reduce dependencies on individual trade routes.
Conclusion
FAS offers experienced buyers a balanced distribution of risk with control over key transportation costs. However, the Incoterm clause requires in-depth logistics expertise and established partnerships for successful implementation. When used professionally, FAS enables significant cost savings and increased flexibility in international procurement. Increasing digitalization simplifies operational processing considerably.
FAQ
What exactly does FAS mean?
FAS (Free Alongside Ship) means that the seller makes the goods available alongside the ship at the named port of shipment. From this point, the buyer assumes all costs and risks, including loading, main transportation and insurance.
When is FAS the right choice?
FAS is suitable for experienced importers with their own logistics capacities and established relationships with shipping companies. The clause offers cost control over the main transportation and flexibility in route planning, but requires appropriate expertise.
What documents does the buyer need?
The seller provides all export documents, including commercial invoice, packing list, certificate of origin and export license. The buyer requires these for loading, transportation and subsequent import processing in the country of destination.
How does FAS differ from FOB?
With FAS, the seller's responsibility ends alongside the ship, with FOB only after loading on board. With FAS, the buyer bears the loading costs and the loading risk, whereas with FOB these are still borne by the seller.
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