How to deliver a load of plastic scrap to the port FAS
As we discussed in a prior blog article on Incoterms, there are various ways that plastic scrap suppliers, buyers and sellers can delineate the various responsibilities for managing the details of each deal – such as who loads the truck, who pays the costs, and who is responsible for the risks and obligations at each point of the shipment.
If you’re shipping scrap plastic for export, especially for exports to China, one of the Incoterms you need to become familiar with is FAS (Free Alongside Ship).
Preparing a load of plastic scrap for FAS is a one of the smartest ways to manage material for export because it minimizes the risk and exposure for the export company. With more U.S. plastic recycling companies looking to do business with scrap plastic buyers in China (due to Chinese manufacturers’ ever-expanding demand for raw materials), your company can save time and money by learning the ins and outs of FAS shipping.
With an FAS deal, the buyer provides:
- Booking number for the vessel: With the Booking number comes a cutoff date that the container needs to be delivered to the port. So for example, if our trading firm sells a container of scrap plastic material, our customer is responsible for obtaining a booking number from the shipping line, which essentially is a reservation on the vessel. Just like you can’t get on an airplane without a ticket, you can’t ship a container of scrap plastic without a booking number for your cargo.
- CCIC Application number: Once the scrap plastic buyer has obtained the booking number, they are required to get a scrap plastic pre-shipment inspection from CCIC, which is a third party Chinese inspection company that checks the plastic shipment for quality, weight, shipping volume, and makes sure that the shipment is free of hazardous or prohibited material. The CCIC will coordinate an appointment to visit the facility and inspect the containers for customs items that are disallowed in China.
Under the terms of FAS shipping, while the buyer is responsible for managing the details listed above, the seller is responsible for the following:
- Supplying 40,000 lbs of material (or whatever the agreed-upon quantity might be; 40,000 lbs is a fairly standard amount for a container of scrap plastic)
- Loading Photos (8-10 clear loading photos). As we discussed in our prior blog article on guidelines for scrap plastic loading photos, these should include a variety of shots so the customer can verify the quantity and characteristics of the shipment. Loading photos should include: empty container, 1/4 full, 1/2 full, 3/4 full, 100% full, one seal, half and both doors closed with the container number visible.
- Invoice
- Packing List
- Weight Ticket
- Container #
- Seal #
- Net Weight
- Bale Count
- Date Shipped
It can take 20-30 days for the customer to receive the container, so it’s important to make sure that the buyer has an ample opportunity to conduct due diligence and has a clear understanding (prior to export) of the quality of material being shipped.
The best way to build trust with scrap plastic buyers is to have your customer sign a non-circumvention agreement and visit the facility to see the material firsthand before loading. In case there are no photos or samples available of the actual material that the customer is buying, try to show samples or photos of similar material.
By knowing the details of FAS shipping, you and your customers will have a clearer understanding of all the steps along the way and can manage your side of the process to mitigate any risk.
What other FAS-specific details have you encountered in your scrap plastic trading business?
