What Are FOB and FAS in International Trade?

01 What is FOB?

Conditions

• FOB applies only to sea or inland waterway transport.

Key Features

• Under FOB, the seller delivers when the goods are placed on board the vessel nominated by the buyer at the named port of shipment.

• Risk transfers from seller to buyer once the goods are on board the vessel.

• The seller is responsible for export customs clearance.

• The buyer arranges and pays for main carriage, freight, and insurance.

• FOB is widely used, especially in trade with Europe and the US.

Obligations of Buyer & Seller

• Seller: bears all risks and costs until the goods are on board the vessel; handles export customs clearance.

• Buyer: bears all risks and costs once the goods are on board; arranges shipping and insurance.

Common Misunderstandings

• FOB does NOT include ocean freight or insurance.

• FOB only covers the cost of goods delivered on board the vessel at the port of shipment.

02 What is FAS?

Conditions

• FAS applies only to sea or inland waterway transport.

Key Features

• The seller fulfills delivery when the goods are placed alongside the vessel (on the quay or barge) nominated by the buyer.

• Risk and cost transfer at the ship’s rail (alongside the vessel).

• The seller handles export customs clearance.

• The buyer is responsible for loading the goods onto the vessel and all subsequent costs and risks.

Obligations of Buyer & Seller

• Seller: delivers goods alongside the vessel; handles export customs clearance.

• Buyer: bears all costs and risks once the goods are alongside the ship; arranges loading, carriage, and insurance.

Common Misunderstandings

• FAS = delivery alongside the vessel

• FCA = delivery to a carrier (not necessarily at a port or alongside a ship)

  Do not confuse these two terms.