DDP and FAS, a differentiating study

DDP and FAS under Inco terms 2020

Difference between DDP and FAS

Delivered Duty Paid to a named place (DDP) and  Free Along Side  at named place FAS are the two of eleven delivery rules for movement of goods under Incoterms 2020.

Let us discuss here the difference between both DDP and FAS delivery terms under Inco terms

First of all, FAS rule is meant for movement of goods on waterways, as it is known as Marine restricted mode of transport whereas DDP rule may be used for movement of goods by Air, Sea or Land.

Secondly, the named place under DDP is in buyer’s side whereas under FAS, the named place is in Seller’s country.

Another difference between DDP and FAS is; compared to FAS terms, higher risks and costs are involved for a seller under DDP terms, as he is responsible for pre carriage, main carriage, on carriage and import customs clearance and duties. 

Under FAS rules, the seller discharges his obligation on costs and risks under movement of goods when goods are placed near ship at seller’s side.  However under DDP rules, the seller is responsible for movement of goods till the named place mentioned at buyer’s side.

The seller is responsible for Import clearance at buyer’s country under DDP. But under FAS terms the liability to undertake import clearance is on buyer’s shoulder.

Duties and taxes involved if any under  destination import customs clearance is under the risk and cost of seller in DDP whereas  import customs clearance taxes and duties to be paid by the buyer if delivery terms are on FAS basis.

Under a contract of carriage DDP, since the control over main carriage is with the seller, the buyer depends up on the seller to get export movement data.  However, under FAS rules, the buyer pays ocean freight and he holds the control over main carriage in turn can obtain vessel movement data from shipping carriers or his agent easily.

Under FAS terms, since the buyer controls over the ocean freight, seller does not have responsibility to release Bill of Lading.  However, the buyer and seller mutually agree and buyer arranges to instruct carrier of goods or his agent to allow seller to release BL and in turn he sends to buyer through his bank, if original BL required by the buyer.

 You may read about FAS and DDP separately in this website, you may click below to read:

FAS  Free Alongside Ship

DDP  Delivered Duty Paid

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