Free Along Side Vs. Carriage and Insurance Paid

CIP and FAS under Inco terms 2020

Difference between FAS and CIP

Under Free Along Side (named place), the seller places goods near a Vessel or Barge (water carrier) nominated by the buyer where the carrier berths.   Under, CIP delivery rules seller pays the cost of carriage to the named place and discharges his risks after loading goods  to the  Carrier. 

Seller is responsible to undertake minimum insurance cover against movement of goods under CIP terms of delivery whereas under FAS delivery rule,  both seller and buyer is not responsible to undertake insurance according to Incoterms 2020 rules.  Insurance under FAS may be contracted separately out of Incoterms 2020 rules.

CIP delivery terms can be used for all modes of transport; by Sea, by Air or by Land.  However,  FAS is defined  by ICC under Incoterms 2020 rules to use only  for the movement of goods by Sea and Inland waterways, as FAS is known as one of the Marine restricted modes of transport.

The cost of Main carriage under CIP is undertaken by the Seller, where as the costs and risk of Main Carriage is under the responsibility of buyer under FAS delivery rules.

Under CIP terms, the contract of carriage ends when goods reached destination named place at buyer’s side where as under FAS, the contract of carriage ends when placing goods near the Barge/Ship at Seller’s side.

The risks involved under FAS for a Seller ends  before the goods are under onboard the vessel where in CIP terms, the risks under movement of goods transfers  from seller to buyer after loading of cargo to Carrier.

Two detailed posts about CIP and FAS are written separately in this website for easy understanding.  You may click below to read:

FAS  Free Alongside Ship

CIP  Carriage and Insurance Paid To

The details above elaborated the difference between FAS and CIP.  Share below your suggestions  about CIP vs FAS below:

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