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Incoterms for Air Freight

Incoterms and Air Freight. Know Who Does What.

Incoterms define who arranges transport, who pays for it and when risk transfers from seller to buyer. For freight forwarders, the selected term determines the scope of work before a quote is built.

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Define commercial scope Clarify cost responsibility Identify risk transfer
Cost
and Risk
The term defines the handoff. Freight cost and risk do not always transfer at the same point.
What Incoterms Define

Responsibility, transport cost and risk transfer.

Incoterms define who is responsible for each stage of an international sale. They establish who arranges transport, who pays for it and who carries the risk at different points in the journey.

For freight forwarders, knowing the selected Incoterm is essential before preparing a quotation. It determines which services belong inside the quote and which obligations remain with the seller or buyer.

Common Incoterms in Air Freight

Six terms freight forwarders should understand.

Each term changes the seller’s responsibility, the buyer’s responsibility and the scope the forwarder must quote.

EXW Buyer-led

Ex Works

The seller makes the goods available at their own premises. The buyer or buyer’s forwarder handles the movement from that point, including export clearance, freight, import duties and final delivery.

Seller Makes the cargo available.
Buyer Handles nearly the entire shipment.
Scope Broad forwarder responsibility for the buyer.
FCA Air cargo standard

Free Carrier

The seller delivers the goods to a named carrier at an agreed location. For air freight, this is usually an airline cargo terminal or freight station.

Seller Delivers to the named carrier.
Risk Transfers at the agreed handoff point.
Use Most common and appropriate for air cargo.
CPT Seller pays freight

Carriage Paid To

The seller pays freight to the named destination, but risk transfers to the buyer once the cargo is handed to the first carrier.

Seller Pays transportation to destination.
Risk Transfers at the first carrier.
Use Seller controls freight cost without retaining risk.
CIP Freight plus insurance

Carriage and Insurance Paid To

CIP works like CPT, but the seller also provides cargo insurance to the named destination.

Seller Pays freight and insurance.
Risk Transfers at the first carrier.
Insurance Seller provides coverage to destination.
DAP Delivered destination

Delivered at Place

The seller is responsible for delivery to the named destination. Import clearance and duties at destination remain with the buyer.

Seller Arranges delivery to the named place.
Buyer Handles import clearance and duties.
Scope Strong seller involvement without import duties.
DDP Maximum seller scope

Delivered Duty Paid

The seller takes responsibility for freight, insurance, import customs clearance and duties. This term is common in e-commerce and direct-to-consumer international shipping.

Seller Handles the complete shipment.
Buyer Receives the cleared delivery.
Risk Maximum seller responsibility.
Responsibility Comparison

Compare the commercial scope at a glance.

The table is a simplified working reference. The agreed named place and the specific sales contract still matter.

Term Export handling Main freight Insurance Import clearance Final delivery
EXW Buyer Buyer Buyer Buyer Buyer
FCA Seller Buyer Buyer Buyer Buyer
CPT Seller Seller Buyer Buyer Named point
CIP Seller Seller Seller Buyer Named point
DAP Seller Seller By agreement Buyer Seller
DDP Seller Seller Seller Seller Seller
Terms That Do Not Apply to Air Freight

FOB, CFR and CIF belong to ocean and waterway freight.

Using these terms in an air freight contract is technically incorrect and can create disputes about where cost and risk transfer.

FCA is generally the correct equivalent for air cargo when the seller delivers the goods to a named carrier.

FOB Free on Board Designed around loading goods on board a vessel. Not for air
CFR Cost and Freight Designed for ocean and inland waterway transport. Not for air
CIF Cost, Insurance and Freight Designed for maritime freight rather than air cargo. Not for air
FCA Free Carrier Appropriate when cargo is handed to the named air carrier. Correct air term
Practical Notes for Forwarders

Confirm the term before building the quote.

The Incoterm should be clear before the forwarder prices the shipment or commits to a commercial scope.

01

Confirm Before Quoting

Always confirm the Incoterm first. It defines which services and charges belong inside the quotation.

02

Use FCA as the Air Default

FCA is clear, widely understood and appropriate for air freight when cargo is delivered to a named carrier.

03

Explain DDP Exposure

DDP requires the seller to understand the full import duty and tax exposure before committing to the shipment.

04

Record the Agreed Term

Note the agreed Incoterm and named place on the commercial invoice and the relevant air cargo documentation.

Quote your next air freight shipment.

Confirm the commercial scope, enter the shipment details and compare available airline rates on airrate.com.

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