What is FAS?
Free Alongside Ship (FAS) is an Incoterm where the seller delivers goods by placing them alongside the named vessel at the port of shipment, on the quay or on a barge. Risk transfers to the buyer at that moment. The seller handles export customs clearance; the buyer takes on all costs and risks from that point, including loading, main freight, insurance, and UK import clearance. FAS applies to sea and inland waterway transport only.
If you have just seen “FAS [port name]” on a commodity contract or supplier quote and you are not sure what you have agreed to, this article explains it in plain English.
FAS is one of the less common Incoterms in everyday UK trade. It is used mainly for bulk commodities, heavy lift cargo, and oversized shipments where the buyer needs to control how their goods are loaded onto a vessel. If you are in shipping for the first time and dealing with a commodity buy, understanding exactly when your risk starts, and the fact that it starts before the goods are even loaded, is the most important thing you need to know.
Here is the full sequence of events under an FAS shipment, from start to finish.
1. Contract agreed. The seller and buyer agree FAS terms and name a specific port of shipment: for example, “FAS Port of Rotterdam.” The named port must be specified precisely. A vague reference like “FAS Europe” is not a valid FAS contract.
2. Seller prepares and packs the goods. The seller prepares the goods for export. For bulk commodities, this might mean preparing a cargo parcel at a silo, warehouse, or storage facility near the port. The seller pays all costs to get the goods ready and moved to the port.
3. Seller handles export customs clearance. The seller is responsible for clearing the goods through customs in the country of export. This includes paying any export duties and filing the necessary export documentation. Under Incoterms 2020, export clearance is firmly the seller’s obligation, it was not always this clear in older versions of the rules.
4. Seller delivers goods alongside the vessel. The seller places the goods on the quayside or on a barge, directly alongside the named vessel at the named port. The goods must be positioned so the vessel’s loading equipment can reach them. This is the moment everything changes.
5. Risk transfers to the buyer. The moment the goods are placed alongside the ship, risk passes from seller to buyer. The goods have not been loaded. They are sitting on the quay or barge. But from this point, any loss or damage, fire, flooding, theft, vessel delay, anything, is the buyer’s financial problem.
6. Buyer arranges and pays for loading. Loading the goods onto the vessel is the buyer’s responsibility and cost. The buyer arranges the vessel, coordinates with the terminal, and pays for any crane or stevedore costs involved in getting the goods on board.
7. Buyer arranges main freight, insurance, and transit. The buyer contracts the main sea freight. The buyer also arranges any cargo insurance they want. FAS carries no insurance obligation on the seller.
8. Goods arrive at destination port. Import customs clearance is the buyer’s responsibility. UK buyers must have a UK EORI (Economic Operators Registration and Identification) number, appoint a customs broker, and file an import declaration through the UK Customs Declaration Service (CDS).
9. Buyer arranges onward delivery. Once cleared through UK customs, the buyer pays for haulage from the port to their facility.
| Responsibility | Seller | Buyer |
|---|---|---|
| Packing and preparation | Yes | No |
| Haulage to port of shipment | Yes | No |
| Export customs clearance | Yes | No |
| Export duties and taxes | Yes | No |
| Delivery alongside the vessel | Yes | No |
| Loading onto the vessel | No | Yes |
| Main sea freight | No | Yes |
| Cargo insurance | No obligation | Buyer’s choice |
| Risk of loss or damage | Ends when goods placed alongside vessel | From the moment goods placed alongside vessel |
| Import customs clearance | No | Yes |
| Import duties and import VAT | No | Yes |
| Onward delivery from port | No | Yes |
The single most important line in this table: risk passes before loading. The seller’s job ends on the quayside. If anything happens to the goods before they are lifted onto the ship, the buyer bears that loss.
When a seller quotes a price on FAS terms, here is what that price covers, and what it does not.
What the seller’s FAS price includes:
What the buyer must arrange and pay for separately:
A cost example in practice:
A UK grain merchant imports 5,000 tonnes of wheat from a Ukrainian exporter on FAS Constanta (Romania) terms. The FAS price covers the seller getting the grain to the quayside at Constanta port alongside the vessel. The buyer arranges their own vessel (or charters one), pays for loading the grain into the ship’s hold, and pays the freight to Southampton. The buyer also arranges marine cargo insurance for the bulk grain, files the UK import declaration through CDS, and pays any applicable import duty and VAT on arrival. None of those costs appear in the FAS price.
Under FAS, risk passes from seller to buyer when the goods are placed alongside the named vessel at the port of shipment.
“Alongside” means on the quay, wharf, or on a lighter (a flat-bottomed barge) positioned next to the ship. It does not mean on the ship. The seller does not load the goods.
This is the point that catches many buyers off guard. The goods are at the port. They are physically next to the ship. But they have not been lifted aboard. And risk has already transferred.
What does “risk” mean in plain terms? If the goods are damaged or destroyed after this point, including during the loading operation, it is the buyer’s financial loss. The seller does not replace the goods or refund the buy price because something went wrong after delivery alongside.
Here is a concrete example. A UK construction company buys 200 tonnes of structural steel from a Turkish manufacturer on FAS Port of Izmir terms. The steel is placed on the quayside alongside the chartered vessel. Before loading begins, a sudden storm blows in overnight and salt water floods part of the quay, damaging 30 tonnes of steel. Risk has already passed to the UK buyer. The UK company bears the loss, unless they had arranged their own marine cargo insurance to cover that moment.
This is why arranging cargo insurance from the point of FAS delivery is essential for buyers.
Under FAS, the seller has no obligation to arrange or pay for cargo insurance. None at all. The seller delivers alongside and their involvement ends there.
This means the buyer is fully responsible for arranging insurance cover. Since risk transfers before loading, the buyer needs a policy that covers the goods from the moment they are placed on the quayside, not just from when they are on the ship.
What type of insurance should buyers arrange?
For bulk commodities, which is where FAS is most commonly used, a marine cargo policy at Institute Cargo Clauses B or A level is standard.
When should the policy start?
Your insurance should attach, that is, come into force, from the moment the goods are placed alongside the vessel. Do not assume your cover starts when goods are loaded. Check your policy wording explicitly.
Open cover policies. If you import regularly, ask your insurer about an open cover arrangement. This automatically covers each shipment under agreed terms, which is more efficient than arranging a separate policy for every cargo movement.
Obligations end at the quayside. The seller’s responsibility is done once the goods are delivered alongside. The seller does not arrange loading, does not book the vessel, and has no involvement in the sea transit. This keeps the seller’s obligations clear and contained.
No insurance obligation. Unlike CIP or CIF, the seller under FAS has no obligation to arrange or pay for cargo insurance. This simplifies the seller’s cost structure and removes any dispute about insurance level or policy terms.
Seller controls export clearance. The seller handles export customs in the country of shipment. This is important for sellers who need to manage export documentation, export licensing, or quota compliance for commodity shipments.
Useful for commodity sellers. FAS suits sellers of bulk commodities, grain, coal, metals, minerals, who operate near port facilities and can deliver goods directly to the vessel’s side. It fits naturally into the trading structure of commodity markets.
Simple pricing. The FAS price is easy to calculate: the seller’s costs end at the quayside. There is no freight negotiation or insurance premium to build in. The seller quotes the commodity price plus the cost of getting goods to the port.
Full control over the vessel and loading. The buyer arranges the vessel, controls the loading operation, and chooses the route. For large commodity buyers who charter their own vessels, this is essential. FAS lets the buyer manage the entire sea leg on their own terms.
Freedom to choose carriers and negotiate freight rates. Bulk commodity buyers often have long-term relationships with ship owners or brokers. FAS allows them to use those relationships and use their freight buying power, rather than accepting whatever vessel the seller books.
Control over loading supervision. In bulk commodity trade, how goods are loaded matters. Contamination, moisture content, and weight discrepancy disputes often arise during loading. Buyers who control the loading operation can appoint independent surveyors and inspectors at the point of loading, protecting their position from the start.
Transparency on commodity price vs freight cost. With FAS, the commodity price and the freight cost are entirely separate line items. Buyers can see exactly what they are paying for the goods and what they are paying for freight, useful for comparing suppliers and managing costs.
Choose your own insurer. Because the seller has no insurance obligation, the buyer picks their own insurance provider, policy terms, and level of cover. Buyers with existing open cover policies can extend them to cover FAS shipments without any overlap or duplication.
Risk ends at a potentially awkward point. The seller remains responsible for the goods up to the moment they are placed alongside the vessel. But port environments can be unpredictable, congestion, delays, equipment failures, and damage during port handling are all real risks. The seller bears these up to the point of delivery alongside.
Vessel nomination is the buyer’s job, but the seller has to work around it. Under FAS, the buyer nominates the vessel. If the buyer’s vessel is delayed, the seller may have goods sitting at the port, incurring storage charges and port costs, but the goods are still the seller’s risk until placed alongside. This can create a frustrating situation where the seller is paying to store goods they cannot deliver because the buyer’s ship has not arrived.
Export clearance can be complex. For certain commodities, export from the country of origin requires licences, phytosanitary certificates, quality certificates, or other documentation. This all falls to the seller. Delays in getting documents can hold up delivery and create port congestion charges.
FAS is not suitable for containerised cargo. Most UK sellers exporting goods in containers should not use FAS. The point where containers move, handed to a container terminal operator, does not fit the FAS “alongside” delivery point cleanly. Using FAS for containerised shipments creates ambiguity about where exactly delivery has occurred.
Limited commercial appeal. FAS is relatively uncommon in everyday UK trade. Many buyers, particularly those unfamiliar with commodity shipping, will prefer FOB or FCA terms where risk transfers in a more intuitive place. Sellers may find it harder to quote FAS to buyers who are not commodity specialists.
Risk starts before loading, which many buyers do not realise. The biggest risk for buyers under FAS is forgetting that risk transfers on the quayside, not on the ship. If goods are damaged before they are loaded, and the buyer has not arranged insurance from that point, there is no cover.
The buyer is responsible for the loading operation. Loading bulk cargo, grain into a ship’s hold, steel onto a heavy-lift vessel, is a specialist activity. Buyers who do not have experience managing loading operations, or who have not appointed a competent surveyor, can face costly delays, damage claims, and disputes about how much cargo was actually loaded.
Vessel delays cause problems the buyer must manage. If the buyer’s chartered vessel is delayed, the goods are sitting on the quay at the seller’s risk until they are placed alongside, but that transition can happen quickly, and then the storage costs and risk fall on the buyer if the vessel does not arrive. Port storage fees can be major: at major UK ports such as Felixstowe or Southampton, demurrage and storage charges add up fast.
Full responsibility for UK import clearance. The buyer arranges everything on arrival in the UK. This means a UK EORI number, a customs broker, a CDS declaration, and payment of import duty and VAT. Any errors in classification or valuation can result in delays, penalties, or goods being held by HMRC.
Goods above £135 attract UK import VAT. Any commercial import into the UK with a customs value above £135 is subject to UK import VAT at 20%. For bulk commodity imports, this will always apply. Make sure this is factored into your landed cost calculation from the start.
FAS is the right Incoterm in a fairly specific set of circumstances.
Use FAS when you are buying bulk commodities. FAS was designed for trade in bulk cargo, grain, coal, ore, fertiliser, timber, scrap metal. It suits situations where the buyer is chartering a vessel and needs full control of the loading operation at the port of origin.
Use FAS when you are chartering your own vessel. Large commodity traders and industrial buyers who charter bulk carriers use FAS because it defines the seller’s obligation clearly: get the goods to the ship’s side, and the buyer takes over. This maps cleanly onto the logistics of a chartered voyage.
Use FAS when you need to supervise loading. If you need to place an independent marine surveyor or cargo inspector at the origin port to oversee loading, check quality, and issue a bill of lading on your behalf, FAS gives you that control. The loading is your operation.
Use FAS when buying heavy or oversized cargo that requires specialist vessels. For abnormal loads, large machinery, or heavy-lift items that need specialist stowage, the buyer often needs to control how the cargo is loaded. FAS accommodates this.
Use FAS when your seller has good port access but limited freight knowledge. If your supplier is based near a port and can easily deliver goods to the quayside, but does not have the expertise or relationships to arrange international freight, FAS is a practical split of responsibilities.
Avoid FAS for containerised cargo. FAS does not work well for FCL (full container load) or LCL (less than container load) shipments. The delivery point, alongside the vessel on the quay, does not match how containers actually move through a terminal. Use FCA (Free Carrier) for containerised shipments instead.
Avoid FAS for general cargo or finished goods. FAS is designed for bulk commodity trade. For manufactured goods, electronics, textiles, or any standard cargo that moves in containers, FAS is the wrong tool. FOB or FCA are better suited.
Avoid FAS if the seller does not have direct port access. If the seller cannot easily place goods on the quayside alongside the vessel, the delivery obligation becomes difficult to fulfil. Make sure the port logistics work before agreeing FAS.
Avoid FAS if you do not have the freight expertise to charter a vessel. Chartering a bulk carrier is a specialist activity. If you do not have in-house expertise or a shipping broker, the operational demands of FAS may be more than you can handle.
Avoid FAS if you want the seller to arrange insurance. Under FAS, the seller has no insurance obligation. If you want insurance arranged by the seller, use CIF (Cost, Insurance and Freight) instead, though note that CIF’s minimum cover (Clauses C) is basic.
Avoid FAS if there are export licence complications. In some commodity markets, export licences or phytosanitary certificates are required. If these are uncertain or slow to get in the country of origin, a different Incoterm may be safer for both parties.
Mistake 1: Assuming risk transfers at loading, not at delivery alongside.
This is the most common and costly FAS mistake. Many buyers assume their risk starts when goods are loaded onto the vessel, but under FAS, it starts when goods are placed alongside. Goods can be damaged or go missing on the quayside before a single hoist is made. Always arrange insurance that attaches from the FAS delivery point.
Mistake 2: Using FAS for containerised goods.
FAS does not fit how containerised cargo moves. Containers are handed to a terminal operator, not placed on the quayside alongside a vessel. If you use FAS for container shipments, your contract will have an ambiguous delivery point and could create serious disputes about when risk transferred. Use FCA instead.
Mistake 3: Not naming the port precisely.
“FAS Far East” or “FAS UK seller” is not a valid FAS contract. The Incoterm requires a specific named port. If both parties have different ideas about which terminal or berth within a large port is the delivery point, arguments will follow. Name the port, and ideally the specific terminal, explicitly.
Mistake 4: Failing to nominate the vessel in time.
Under FAS, the buyer must give the seller enough notice of the vessel name, the berth, and the expected loading date. If the buyer fails to nominate the vessel in time, the goods are sitting at the seller’s risk and the seller may incur storage costs, which they will charge back. Build a clear vessel nomination timeline into your contract.
Mistake 5: Not arranging UK import clearance in advance.
FAS places all UK import responsibilities on the buyer. You need a UK EORI number, a customs broker instructed and ready, and your commodity classified under the correct UK tariff code before goods arrive. Forgetting any of these steps causes delays and storage charges at the port. HMRC’s customs valuation guidance, including how Incoterms affect customs value, is at gov.uk/guidance/customs-valuation/incoterms.
Mistake 6: Overlooking UK import VAT.
UK import VAT at 20% applies to commercial imports above the £135 de minimis threshold. For bulk commodity imports, this is always relevant. Factor it into your cost model before you sign the contract, not after the goods arrive.
FAS (Free Alongside Ship) and FOB (Free On Board) are the two sea-only F-group Incoterms most commonly used in commodity and bulk cargo trade. They look similar but differ on one critical point: where risk transfers.
| Key Difference | FAS | FOB |
|---|---|---|
| Transport modes | Sea and inland waterway only | Sea and inland waterway only |
| Risk transfer point | When goods placed alongside the vessel on the quay | When goods are loaded on board the vessel |
| Loading costs | Buyer’s responsibility | Seller’s responsibility |
| Export customs clearance | Seller | Seller |
| Suitable for containerised cargo | No | No (FCA is correct for containers) |
| Common uses | Bulk commodities, heavy lift, charter vessel trades | General sea cargo, bulk commodities |
The practical difference: under FAS, risk transfers before loading; under FOB, risk transfers after loading.
This means that under FOB, if something goes wrong during the loading operation, a sling breaks, a container drops, cargo is contaminated during loading, the seller bears that loss (or rather, the seller’s insurance does). Under FAS, the buyer bears it.
For most UK importers buying bulk commodities, FOB is the more common choice because the seller handles loading. FAS is used when the buyer specifically needs to control the loading: for example, to supervise quality, manage specialist stowage, or use their own stevedores.
Choose FAS if you are chartering a vessel and need to manage loading yourself. Choose FOB if you want the seller to handle loading and you want risk to transfer only once goods are safely on board.
FAS (Free Alongside Ship) and FCA (Free Carrier) are both F-group Incoterms where the seller is responsible for export clearance. But they are very different in practice.
| Key Difference | FAS | FCA |
|---|---|---|
| Transport modes | Sea and inland waterway only | All modes — sea, air, road, rail |
| Delivery point | Alongside the vessel at the named port | Named place — could be seller’s premises, freight terminal, or port |
| Suitable for containerised cargo | No | Yes — the correct Incoterm for containers |
| Risk transfer point | Goods placed alongside vessel | Goods handed to the carrier at the named place |
| Loading obligation | Buyer | Seller (if delivery at seller’s premises) |
| Export customs clearance | Seller | Seller |
FCA is a much more versatile Incoterm. It works for all transport modes, including containerised sea freight, air, road, and rail. FAS is restricted to sea and inland waterway, and only really suits bulk cargo at a port.
If you are importing containerised goods, FCA is almost always the right choice over FAS. FCA’s risk transfer point aligns correctly with how containers move through a modern port.
If you are buying bulk cargo on a chartered vessel, FAS may be the better fit, particularly if you need to control the loading operation.
FAS applies only to sea transport and inland waterway transport. It cannot be used for air freight, road freight, or rail freight.
This restriction exists because the delivery obligation under FAS, placing goods alongside a vessel, only makes sense in a maritime context. There is no equivalent “alongside the aircraft” or “alongside the truck.”
What types of cargo suit FAS?
What FAS is not suitable for:
Containerised cargo (FCL or LCL). For containers, the delivery point under FAS, the quayside alongside the vessel, does not match how containerised trade works. The container is handed to the terminal operator, stuffed, and placed on board by the terminal’s own systems. The correct Incoterm for containerised sea freight is FCA.
If your goods are moving by sea in a container, FAS is the wrong Incoterm. Use FCA if the buyer is controlling the freight, or CIF/CIP if the seller is arranging it.
FAS was carried forward largely unchanged from Incoterms 2010 to Incoterms 2020, but one important point was clarified.
Export customs clearance: confirmed as seller’s obligation.
Under the old Incoterms 2000 rules, there was ambiguity about whether export clearance under FAS was the seller’s or the buyer’s responsibility. This was corrected in Incoterms 2010, and Incoterms 2020 reinforced it: export customs clearance is the seller’s obligation under FAS.
This matters practically. In some countries, export licences, phytosanitary certificates, quality inspection certificates, or commodity-specific export documentation are required before goods can leave. Under FAS 2020, all of that is the seller’s problem, not the buyer’s.
No change to risk transfer point or delivery obligation.
The core mechanics of FAS, goods delivered alongside the vessel, risk transferring at that moment, buyer responsible for loading and main freight, remain exactly the same.
No insurance obligation added.
Unlike CIP, which had its insurance minimum upgraded from Clauses C to Clauses A in 2020, FAS carries no insurance obligation at all for either party. This did not change.
What should your contracts say?
Always specify “FAS [named port], Incoterms 2020” in your contract. If your supplier’s template still references Incoterms 2010 or Incoterms 2000, update it. The export clearance obligation is now clear and unambiguous under 2020, use those rules.
FAS is relatively rare in everyday UK trade, but it does appear, particularly for commodity imports into UK ports. Here is what UK buyers and sellers need to know.
You are the importer of record. Under FAS, the UK buyer handles all UK import customs clearance. This means you must have a UK EORI number. Without one, you cannot import goods commercially into the UK. If you do not yet have an EORI number, register through HMRC, it typically takes 3–5 working days to process.
All import declarations go through CDS. The UK’s Customs Declaration Service (CDS) is the system for filing all UK import declarations. Your customs broker should be filing through CDS. Make sure they are set up and familiar with the commodity codes relevant to your cargo, errors in classification can lead to delays and additional duty charges.
UK import duty applies. The duty rate depends on the commodity code of your goods under the UK Global Tariff. For many agricultural commodities, duty rates can be major. Check the applicable rate before signing the contract, it forms part of your landed cost.
UK import VAT at 20%. Goods imported into the UK with a customs value above £135 are subject to UK import VAT at 20%. For bulk commodity imports, you will always exceed this threshold. UK VAT-registered businesses can use postponed VAT accounting to avoid paying VAT at the border and account for it on their VAT return instead.
HMRC customs valuation guidance. Under FAS, the customs value of your goods for UK import duty purposes is generally the FAS price, the value of the goods at the port of shipment, alongside the vessel. HMRC’s guidance on how Incoterms affect customs valuation is published at gov.uk/guidance/customs-valuation/incoterms.
UK ports. Most bulk commodity imports arrive into specialist UK terminals: for example, grain into ports such as Hull, Bristol, or Tilbury. Felixstowe and Southampton handle more containerised traffic. Know which UK port your cargo is arriving at and ensure your customs broker is active there.
Post-Brexit context. Since the UK left the EU customs union in 2020, all goods moving between the UK and EU member states require full customs formalities. If you are buying commodity cargo on FAS terms from an EU port: for example, grain shipped from Constanta, Romania. UK import clearance is fully your responsibility as buyer. There are no simplified procedures at the UK-EU border for commodity imports.
You handle UK export customs clearance. As the seller under FAS, you are responsible for filing UK export declarations. You need a UK EORI number and must file through HMRC’s export systems (typically NES, the National Export System). Your freight forwarder can do this on your behalf.
Export licences may apply. Some commodities require export licences from the UK government before they can be shipped. If your goods fall into a controlled category, allow time to get the licence, delays will hold up delivery to the vessel and can create port congestion costs.
Your obligations end at the quayside. As a UK exporter under FAS, once your goods are alongside the vessel at the named port, your job is done. You do not load, you do not arrange freight, and you have no insurance obligation. Keep documentation showing that delivery took place, a mate’s receipt, a port receipt, or a delivery note from the terminal operator.
Here is a realistic worked example to make FAS concrete.
The scenario: A UK animal feed manufacturer. Northern Mills Ltd, based in Yorkshire, buys 3,000 tonnes of barley from an Argentinian grain exporter on FAS Buenos Aires (Puerto Nuevo terminal), Incoterms 2020.
Goods value: £540,000 (at £180 per tonne)
What happens:
The Argentinian exporter arranges haulage of the barley from a storage facility outside Buenos Aires to Puerto Nuevo terminal. The exporter handles Argentine export customs clearance, including the grain quality certificate required for agricultural exports from Argentina. The exporter pays port handling costs to get the barley positioned on the quayside alongside the vessel that Northern Mills has chartered.
Once the barley is placed alongside the vessel on the quayside, risk transfers to Northern Mills Ltd.
Northern Mills has appointed an independent marine surveyor at the terminal. The surveyor oversees the loading of the barley into the ship’s holds, checks moisture content and weight as loading progresses, and issues a draft survey report confirming the quantity on board. Northern Mills is paying the loading costs: crane and stevedore charges, which come to around £8,000 for the operation.
Northern Mills has arranged marine cargo insurance from the moment of FAS delivery alongside (Institute Cargo Clauses B, given the nature of bulk grain) covering £594,000, the cargo value of £540,000 plus 10%.
The vessel sails for the UK and arrives at Tilbury Docks around 28 days later. Northern Mills’ customs broker files the UK import declaration through CDS. The barley attracts UK import duty at the applicable agricultural commodity rate. Northern Mills pays UK import VAT using postponed VAT accounting and arranges road haulage from Tilbury to their Yorkshire mill.
The total landed cost for Northern Mills. FAS price (£540,000) + loading costs (£8,000) + sea freight (around £95,000 on current rates) + insurance (around £2,700) + UK customs clearance (around £500) + import duty + haulage to Yorkshire, gives the full picture of what FAS really costs when all elements are included.
The key lesson: FAS gave Northern Mills complete control over the vessel and loading operation, essential for a buyer who needs to verify grain quality and quantity at loading. The trade-off is that Northern Mills carries risk from the quayside, and all the logistical complexity of chartering, loading, and UK clearance falls to them.
FAS stands for Free Alongside Ship. It is one of the 11 Incoterms 2020 rules published by the International Chamber of Commerce (ICC). Under FAS, the seller’s obligation is complete when the goods are placed alongside the named vessel at the port of shipment. The buyer takes risk from that point and is responsible for loading, main freight, insurance, and import clearance.
Both FAS and FOB are sea-only Incoterms and both require the seller to handle export clearance. The difference is the risk transfer point. Under FAS, risk passes when goods are placed alongside the vessel, on the quay, before loading. Under FOB, risk passes when goods are loaded on board the vessel. This means under FOB, the seller pays for and bears the risk of the loading operation; under FAS, the buyer does. FOB is more common in everyday trade; FAS is used when buyers need to control the loading operation.
The buyer. Under FAS, the seller delivers goods alongside the vessel and their obligation ends there. The buyer arranges and pays for all loading costs: crane hire, stevedore charges, and any terminal handling fees associated with getting the goods onto the ship.
The seller. Under Incoterms 2020, export customs clearance is clearly the seller’s responsibility under FAS. This was a point of historical ambiguity under Incoterms 2000, but it has been clear since Incoterms 2010 and is confirmed in 2020. The seller must get any necessary export licences, pay export duties, and file the export declaration.
No. The seller has no obligation to arrange or pay for insurance under FAS. Since risk transfers to the buyer when goods are placed alongside the vessel, the buyer should arrange marine cargo insurance that attaches from that point. Do not assume you have cover just because your goods are still at the port, if you have not arranged insurance, you have no protection.
No. FAS is designed for bulk cargo and breakbulk trade where goods are placed on a quay alongside a vessel. Containerised cargo moves through a terminal and is handed to a terminal operator, not placed alongside a vessel on the quayside. The correct Incoterm for containerised sea freight is FCA (Free Carrier). Using FAS for containers creates ambiguity about where risk transfers and can lead to disputes.
As the UK buyer under FAS, you are responsible for: UK import duty (at the rate for your commodity code under the UK Global Tariff), UK import VAT at 20% on goods with a customs value above £135, and customs clearance costs. You need a UK EORI number and must file your import declaration through the UK Customs Declaration Service (CDS). HMRC’s guidance on Incoterms and customs valuation is at gov.uk/guidance/customs-valuation/incoterms.
Under the original Incoterms 2000 rules, there was genuine ambiguity about whether export clearance under FAS was the seller’s or buyer’s obligation. Incoterms 2010 corrected this, export clearance became the seller’s responsibility. Incoterms 2020 confirmed and reinforced this position. If you are working from any contract template that references Incoterms 2000, it may have this obligation allocated incorrectly, update to Incoterms 2020.
Article: fas-incoterm | ShippingEducation.co.uk | Published June 2026 | Incoterms 2020
Internal links: FOB Incoterm | FCA Incoterm | CIF CIF Incotermained
External: HMRC Customs Valuation. Incoterms
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