FAS vs CIF – who pays for what?
FAS is Free Alongside Ship and CIF is Cost, Insurance and Freight. We compare who pays for transport, customs clearance and duty, and where risk passes to the buyer.
Key differences
Under CIF, the seller also covers loading for main carriage, the main freight and insurance. Under FAS, the buyer pays for this instead – except for insurance, which is not compulsory under FAS. The two rules also differ in the point at which risk passes to the buyer.
- Loading for main carriage
- FASBuyerCIFSeller
- Main carriage (freight)
- FASBuyerCIFSeller
- Insurance
- FASNo obligationCIFSeller
- Risk passes
- FASAlongside the ship at the port of loadingCIFOn board the vessel at the port of loading
Full cost breakdown
| Cost | FAS | CIF |
|---|---|---|
| Export clearance | Seller | Seller |
| Transport to the port or terminal | Seller | Seller |
| Loading for main carriage | Buyer | Seller |
| Main carriage (freight) | Buyer | Seller |
| Insurance | No obligation | Seller |
| Unloading at destination | Buyer | Buyer |
| Import clearance | Buyer | Buyer |
| Import duty and VAT | Buyer | Buyer |
| Risk passes | At the port of loading, when the goods are placed alongside the ship (e.g. on the quay). | At the port of loading, when the goods are on board the vessel – even though the seller pays for freight and insurance. |
| Mode of transport | Sea and inland waterway transport only | Sea and inland waterway transport only |
Notes
- CFR and CIF – the main freight ends at the port of destination. Transport from the port to the warehouse is paid by the buyer, while under the D rules (DAP, DPU, DDP) this leg is the seller’s responsibility if the place of delivery is a warehouse.
- Unloading at destination: if unloading costs are included in the contract of carriage concluded by the seller, the seller pays them and cannot charge them to the buyer afterwards.
- Insurance: only the seller is obliged to insure, and only under CIF (at least Institute Cargo Clauses (C), 110% of the value) and CIP (Institute Cargo Clauses (A), 110% of the value). Under the other rules, nobody has to insure the goods – but once risk has passed, any loss is borne by the buyer.
What to watch for when importing from China
FAS Free Alongside Ship
FAS is hardly ever used for containers, because a container is handed over at the terminal several days before loading. It makes sense for bulk and oversized cargo – for containers, FCA is the better choice.
CIF Cost, Insurance and Freight
CIF works like CFR, but the supplier also insures the goods – though only with minimum cover (Institute Cargo Clauses (C), 110% of the value of the goods), unless you agree on broader cover. The policy is usually issued by a Chinese insurer, so you would have to pursue any claim abroad. Check the scope of the policy or insure the goods in Poland.
More about CIF →When to use FAS and when to use CIF?
- FAS – for bulk and oversized cargo in sea freight, when the buyer arranges loading on board.
- CIF – for sea freight, when the supplier arranges freight and insurance, and the policy’s minimum cover is enough for you – or you will arrange broader cover.
Buying on FAS terms? You choose the forwarder
We organise transport from China – by rail, sea or air – together with customs clearance in Poland and cargo insurance. Send us your cargo details and we will prepare a quote tailored to your shipment.
Request a quoteFAQ
What is the main difference between FAS and CIF?
Under CIF, the seller also covers loading for main carriage, the main freight and insurance. Under FAS, the buyer pays for this instead – except for insurance, which is not compulsory under FAS. The two rules also differ in the point at which risk passes to the buyer.
Where does risk pass to the buyer under FAS?
At the port of loading, when the goods are placed alongside the ship (e.g. on the quay).
Where does risk pass to the buyer under CIF?
At the port of loading, when the goods are on board the vessel – even though the seller pays for freight and insurance.
Can FAS and CIF be used for rail freight from China?
No. FAS and CIF apply only to sea and inland waterway transport. For rail or air freight from China, the rules for any mode of transport are used instead – e.g. FCA, CPT or CIP.
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Incoterms® is a registered trademark of the International Chamber of Commerce (ICC). This page is an independent, simplified summary of how costs and risks are divided – it is not affiliated with or approved by the ICC. When drafting contracts, use the official text of the Incoterms® 2020 rules published by the ICC.