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FOB vs FAS: The Ultimate Comparison

1. Free On Board (FOB)

Definition:
Seller delivers goods onboard the vessel at named port. Risk transfers when cargo crosses ship¡¯s rail.

? When to Use:

• Buyer controls shipping/logistics

• Common for US/Europe imports from Asia

Cost Breakdown:

? Key Features:

• Risk transfer: At ship¡¯s rail (e.g., Ningbo port)

• Best for: Bulk commodities, factory-direct shipments

Common Mistakes:

• Assuming FOB includes insurance (it doesn¡¯t)

• Using for air freight (FCA is correct)

2. Free Alongside Ship (FAS)

? Definition:
Seller places goods beside vessel (e.g., on dock/barge). Risk transfers at ship¡¯s side.

? When to Use:

• Buyer handles complex loading (e.g., heavy machinery)

• Preferred in raw material trades

Cost Breakdown:

? Key Features:

• Risk transfer: At port-side (e.g., Rotterdam docks)

• Port variability: Costs differ by port infrastructure

• No obligation: Seller doesn¡¯t arrange vessel

Common Mistakes:

• Confusing with FCA (seller delivers to carrier)

• Underestimating dock storage fees

Side-by-Side Summary

Pro Tip:
"Choose FOB for turnkey shipments, FAS if you need control over loading. Always specify the port (e.g., FOB Shanghai) to avoid disputes."
¡ª Logistics Director, DHL Global Forwarding