FIOS Meaning: Free In, Out and Stowed Explained

FIOS stands for Free In, Out and Stowed. It is an ocean freight term, and what it really tells you is what the quoted rate leaves out: the sea carriage is priced, while loading the cargo, discharging it and stowing it on board stay with the charterer or the shipper.

So a FIOS figure is a carriage rate, not a door to door price. When you are lining up quotations, that is the line that decides whether the number in front of you is the whole cost or only the opening of it.

What each part of FIOS covers

The abbreviation is three separate exclusions stacked into one term.

• Free In. The shipowner does not carry the cost of loading the cargo onto the vessel. Whoever books the space carries it.
• Free Out. The shipowner does not carry the cost of discharging the cargo at the destination port either.
• Stowed. Placing and securing the cargo in the hold is excluded as well, so the work of arranging it properly sits on the cargo side.

Read the word free from the shipowner side of the table. It means the owner is free of that cost, not that the work comes to anyone for nothing.

Why bulk and charter trades use it

FIOS turns up where the cargo, rather than a scheduled liner service, sets the handling. In bulk shipping and in charter work the loading method depends on the commodity and on the terminal, and the party with the cargo usually holds the relationship with the stevedores and the shore equipment.

Splitting it that way suits both sides. The shipowner quotes a clean voyage rate and takes the handling bill out of its own scope. The charterer arranges the loading, the stowage and the discharge itself, and pays for the handling it chooses.

The legs a FIOS rate leaves out

A FIOS rate stops at the ship. Bringing the cargo to the load port and taking it away from the discharge port is a road freight or rail job, quoted separately and often handled by a different party altogether.

That is where a good sea rate quietly loses its margin. Pre-carriage to the quay, waiting time at the terminal gate and the motorway toll on the inland run all land on the same shipment file as the ocean freight, and nobody quoted them for you in the same breath.

FIOS next to the terms it gets confused with

Liner terms sit at the other end of the range. There the carrier takes loading and discharge into its own scope and builds them into the freight it quotes, so the rate looks higher and covers more. Neither arrangement is cheaper by nature. They simply put the handling bill in different places, and you only see which is better for you once both are priced the same way.

Close relatives appear on the same quotations. FIO, Free In and Out, leaves loading and discharge with the cargo side without naming stowage as a separate item. FIOST adds trimming, the levelling of a bulk cargo once it is in the hold. The letters overlap enough that the wording in the charter party or the quotation is what you should read, not the acronym on its own.

FIOS is also not an Incoterm. Incoterms such as DAP divide cost and risk between seller and buyer in a sales contract. FIOS divides handling cost between the shipowner and the party booking the ship. Both can sit on one shipment, describing two different relationships.

How to read a FIOS quotation

Treat the handling as its own budget line rather than a rounding error. Stevedoring at each end, lashing and dunnage and any equipment hired at the quay are yours to arrange and to pay for under these terms. How long the vessel may stay alongside before extra money becomes payable is a separate question, settled elsewhere in the charter party rather than by FIOS.

Then compare quotations on the same footing. A FIOS rate against a liner terms rate is not a like for like comparison until you have added the handling back onto the FIOS side.

The cargo paperwork carries on describing its own facts regardless of who pays for the crane. The bill of lading records the goods received and evidences the terms of carriage, and it is the document you go to when you need to establish who contracted to move them. Who settles the stevedore invoice is a separate question from who answers for the cargo, and keeping the two apart is what stops a FIOS shipment turning into an argument at the quayside.