Procurement Glossary
Incoterms FAS: Definition, application and risk management in maritime trade
November 19, 2025
Incoterms FAS (Free Alongside Ship) is an important trade term for international maritime trade that regulates the distribution of costs and risks between buyer and seller. This clause defines that the seller makes the goods available alongside the ship at the named port of shipment and fulfills his obligations there. Find out below what Incoterms FAS means, what obligations arise and how you can use this clause strategically in Procurement .
Key Facts
- FAS applies exclusively to maritime and inland shipping
- Risk is transferred when goods are placed next to the ship
- Buyer bears all costs from the port of shipment
- Seller assumes export formalities and costs
- Particularly suitable for bulk goods and raw materials
Contents
What is Incoterms FAS? Meaning, obligations and use
FAS defines a specific delivery clause for maritime trade in which precise responsibilities are defined between trading partners.
Basic definition and demarcation
Free Alongside Ship means that the seller places the goods at the quay next to the named ship in the port of shipment. The transfer of risk takes place at the moment the goods are properly placed alongside the ship. In contrast to FOB, the goods do not have to be loaded on board.
FAS versus other Incoterms
Whereas with EXW the buyer bears all risks ex works, with FAS the seller assumes the transportation to the port. Compared to CFR or CIF, however, the seller's obligation ends earlier, as no sea freight is assumed.
Importance of FAS in Procurement
FAS is particularly suitable for experienced importers who have their own logistics capacities and want to control freight costs. The clause offers flexibility in the choice of shipping companies and enables better cost transparency in procurement.
Implementation, obligations and evidence
The proper application of FAS requires clear processes and documented evidence for both contracting parties.
Seller obligations and documentation
The seller must transport the goods to the agreed port and make them available alongside the named ship. This includes export handling, export licenses and notification of the buyer that the goods are ready. A packing list and corresponding delivery documents are required.
Buyer obligations and coordination
The buyer shall organize the loading, sea freight and all further transport steps. He must inform the seller in good time of the name of the ship, loading place and delivery date. The transport insurance is his responsibility.
Practical implementation steps
Successful FAS processing requires close communication between all parties involved. Clear scheduling, timely submission of documents and coordination with port authorities are essential for smooth processes.
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Compliance KPIs & proof of Incoterms FAS
Measurable key figures and evidence ensure the proper processing of FAS transactions.
Delivery date compliance
The punctual delivery of goods alongside the ship is a critical KPI. The deviation between the agreed and actual delivery date is measured. The target value is over 95% on-time deliveries to avoid delay costs.
Document completeness
Complete and correct export documentation is essential for FAS business. KPIs include the rate of error-free commercial invoices, export licenses and certificates of origin. Target value: 98% correct first submission of all documents.
Cost variances and transparency
Monitoring of cost variances between calculated and actual FAS costs. Important parameters are port charges, transportation costs to the port and unforeseen additional costs. Deviations should remain below 3% of total costs.
Risks, dependencies and countermeasures
FAS transactions entail specific risks that can be minimized by taking appropriate measures.
Coordination risks in the port
Insufficient coordination between seller and buyer can lead to delays or additional demurrage charges. Clear communication protocols and timely notification of vessel arrivals are essential to minimize risk.
Port-specific dependencies
Strikes, weather conditions or port congestion can affect FAS deliveries. Diversification of shipping ports and flexible scheduling agreements reduce these dependencies. Alternative transport routes should be evaluated in advance.
Insurance and liability risks
As the transfer of risk takes place next to the ship, the buyer bears the transportation risk at an early stage. Comprehensive insurance cover and clear liability provisions in the contracts are essential. Regular review of the insurance conditions protects against unexpected costs.
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Practical example
A German steel trader purchases crude steel from Brazil under FAS conditions at the port of Santos. The Brazilian supplier transports the steel coils to the port and places them alongside the agreed ship. The German buyer organizes the loading by a local stevedore and books the sea freight to Hamburg. The FAS agreement allows the buyer to choose the shipping company and optimize freight costs, while the seller is only responsible up to the port.
- Cost savings of 8% through own freight rate negotiation
- More flexible scheduling through direct communication with the shipping company
- Better quality control possible before loading
Current developments and effects
Digitalization and changing trade structures influence the application of FAS clauses in modern maritime trade.
Digital document processing
Electronic bills of lading and digital freight documents simplify FAS processing considerably. Blockchain-based solutions increase transparency and reduce processing times when transferring documents between seller and buyer.
AI-supported logistics optimization
Artificial intelligence is revolutionizing port logistics and influencing FAS business through more precise arrival forecasts and optimized berth planning. Predictive analytics enable better coordination between suppliers and buyers in scheduling.
Sustainability requirements
Environmental requirements in ports and CO2 reporting obligations are changing FAS agreements. Buyers are increasingly demanding transparency about emissions and prefer suppliers with sustainable transport solutions, which is influencing the way contracts are drawn up.
Conclusion
Incoterms FAS offers experienced importers strategic advantages through cost control and flexibility in freight organization. However, the clause requires in-depth logistics knowledge and careful risk assessment, as responsibility and liability are transferred to the buyer at an early stage. When used professionally, FAS enables optimized procurement costs and better control over the supply chain in international maritime trade.
FAQ
What exactly does FAS mean in Incoterms?
FAS stands for "Free Alongside Ship" and means that the seller places the goods alongside the named ship at the port of shipment. From this moment on, all risks and costs are transferred to the buyer, who is responsible for loading and onward transportation.
When is FAS the right choice?
FAS is suitable for buyers with their own logistics expertise who want to control freight costs. FAS offers advantages over other Incoterms such as CFR or CIF, especially for bulk goods, raw materials or when special shipping companies are preferred.
What risks does FAS entail for the buyer?
The buyer bears the risk from the time of delivery alongside the ship, including loading damage, port strikes or weather delays. In addition, he must calculate and organize all sea freight and insurance costs, which means planning effort and cost risks.
How does FAS differ from FOB?
With FAS, the seller's obligation ends next to the ship, with FOB only after loading on board. FOB offers the buyer more security, as the seller ensures proper loading, whereas with FAS the buyer must organize the loading himself.
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