First Incoterms: A Trade Terms Committee with the assistance of the ICC National Committees developed the first six rules in 1923: FOB, FAS, FOT, FOR, Free Delivered CIF and C&F, which were the precursor of what would later be known as the Incoterms rules.
Before starting to explain the differences between FAS and FOB, let me make the definitions of both trade terms as per current incoterms rules:
Secondly I would like to bring your attention to similarities of these two incoterms article by article as follows:
- The first thing that you should know about Free Alongside Ship (FAS) and Free on Board (FOB) is that both incoterms need to be used with only port to port sea shipments.
- Under both incoterms exporter must clear goods for export custom formalities, but import custom operations must be covered by the importer.
- Exporter delivers goods to the importer in his country. As a result these two incoterms are known as sales on departure incoterm.
- Under both incoterms freight cost must be paid by the importer. The bill of lading, which should be supplied by the exporter expected to contain "freight collect" term.
- Under both incoterms exporter has no responsibility in regards to marine insurance.
Now I can specify the differences between FAS incoterms and FOB incoterms in regards to Incoterms 2010 rules.
Differences between FAS and FOB:
- Under FAS incoterms exporter delivers the goods to the importer once the goods have been placed along side of the vessel.
- Under FOB incoterms exporter delivers the goods to the importer once the goods have been shipped on board a named vessel.