What are Incoterms?
Before explaining each individual Incoterm, we first need to get to grips with what Incoterms actually are. Simply put, ‘Incoterms’ are International Commercial Terms, 11 rules for the purpose of making who is responsible for what during an international transaction crystal clear. Accepted globally and becoming a requirement in international trade, they take out the risk of a “lost in translation” misunderstanding and in 3 simple letters (bar the odd caveat) it pinpoints exactly where the burden of responsibility lies and transfers from buyer to seller regarding the costs, jobs and risks involved. It leaves little to no room for confusion and every party involved knows exactly where they stand.
Today we look at FAS…
FAS – Free Alongside Ship (named port of shipment)
FAS obliges the seller to make sure the goods are placed alongside the chosen vessel at the named port of shipment, with the seller required to cover the export customs clearance, risk, liabilities and costs up to that point. Everything after this point is up to the buyer.
Transfer of risk
When the goods have been placed alongside the Vessel.