Incoterms® 2020 for air freight
The seven any-mode rules in Incoterms® 2020 suit air freight: EXW, FCA, CPT, CIP, DAP, DPU and DDP. FAS, FOB, CFR and CIF are exclusively for sea and inland waterway transport and must not be used as suitable ICC rules for air freight.
The seven suitable rules for air freight
The party paying for transport does not always carry the transport risk. These practical summaries do not replace the ICC rules; specify the exact place and the 2020 edition in your agreement.
EXW
The buyer arranges transport. Risk passes when the goods are available at the agreed place, before loading onto the collecting vehicle. The buyer also handles export clearance. Transport insurance is not required by the rule; the buyer should check cover from this early handover point.
Source: ICC Digital Library — Incoterms® 2020, any-mode rules (A2–A5, A7, A9)
FCA
The buyer arranges the main carriage. At the seller’s premises, risk passes after loading onto the collecting vehicle; elsewhere, goods arrive on the seller’s vehicle ready for unloading and handover. The seller handles export clearance. Insurance is not required; the buyer should check cover from delivery.
Source: ICC Digital Library — Incoterms® 2020, any-mode rules (A2–A5, A7, A9)
CPT
The seller arranges and pays for transport to the named destination. Risk passes earlier, on delivery to the carrier — normally the first carrier in a chain unless another delivery point is agreed. The seller need not arrange transport insurance; the buyer should check cover from the risk-transfer point.
Source: ICC Digital Library — Incoterms® 2020, any-mode rules (A2–A5, A7, A9)
CIP
As with CPT, the seller pays for transport to the named destination, but risk passes on delivery to the carrier. The seller also obtains insurance for the buyer’s risk, generally under Institute Cargo Clauses (A) or equivalent unless otherwise agreed. Check exclusions and suitability for the goods.
Source: ICC Digital Library — Incoterms® 2020, any-mode rules (A2–A5, A7, A9)
DAP
The seller arranges transport and carries risk until the goods reach the named destination on the arriving vehicle, ready for unloading. The buyer unloads and handles import clearance. Transport insurance is not required; the seller should check cover through to delivery.
Source: ICC Digital Library — Incoterms® 2020, any-mode rules (A2–A5, A7, A9)
DPU
The seller arranges transport and unloading at the agreed destination. Risk passes to the buyer after unloading; import clearance remains with the buyer. Insurance is not required. The seller should consider unloading risk when checking cover.
Source: ICC Digital Library — Incoterms® 2020, any-mode rules (A2–A5, A7, A9)
DDP
The seller arranges transport and import clearance and bears the applicable import duties and taxes. Risk passes at the named destination when the goods are ready for unloading on the arriving vehicle. The buyer unloads. Insurance is not required; the seller should check cover through to delivery.
Source: ICC Digital Library — Incoterms® 2020, any-mode rules (A2–A5, A7, A9)
Why FOB, CIF, CFR and FAS do not fit air freight
FOB, CFR and CIF tie delivery and risk transfer to loading on board a ship. FAS instead uses delivery alongside a ship. Neither describes an air cargo handover, even if an order informally says “FOB airport”.
Use an any-mode rule and a precise handover point instead. Unsuitable wording can create disputes over who carried the risk and whose insurance should respond to damage. This is a practical caution, not a prediction of any particular insurer’s decision.
Source: ICC Digital Library — Incoterms® 2020, sea and inland waterway rules
FCA is often the appropriate air freight choice
Where the buyer is to procure the main carriage, FCA fits delivery to their nominated carrier or another nominated person. The agreed place could be a forwarder’s facility or an airport terminal. The precise place and handover condition matter more than the abbreviation alone.
Our recommendation: consider FCA when you want to arrange air transport yourself. CPT or CIP are alternatives when the seller is to pay for carriage. No single rule is right for every shipment; customs responsibilities, unloading and insurance must also fit the transaction.
Source: ICC Digital Library — Incoterms® 2020, any-mode rules (A2–A5, A7, A9)
What changes with a full charter
A full charter procures an aircraft for the agreed operation rather than space on a scheduled flight. Under CPT or CIP, the main carriage paid by the seller may therefore encompass the agreed charter capacity. That does not automatically move the early risk-transfer point to the destination airport.
CCN planning recommendation: expressly document positioning flights, waiting time and handling at both ends in the scope and price. The ICC rule allocates costs between seller and buyer; it does not replace a specific charter agreement. Whether these services are included must follow from the agreed transport scope.
Source: ICC Digital Library — Incoterms® 2020, any-mode rules (A2–A5, A7, A9)
Source: ICC — Incoterms® rules and the contract of carriage
CCN brokers the capacity — the carrier transports the goods
CCN is an independent broker, not the operating carrier. Keep the sale agreement, charter agreement and cargo insurance distinct: risk allocation between seller and buyer is not the same as the operating company’s liability. CCN’s brokerage terms establish our role; the ICC is not a source for CCN’s corporate role.
Air freight Incoterms questions
Which incoterm should I use for air freight?
EXW, FCA, CPT, CIP, DAP, DPU and DDP suit any mode, including air freight. Consider FCA when the buyer arranges main carriage, or CPT or CIP when the seller pays for it. Specify the precise delivery point.
Does FOB apply to air freight?
No. FOB is a sea and inland waterway rule with delivery on board a ship. For handover to an air freight forwarder, consider FCA with a precisely named place.
CPT vs CIP: what is the difference?
Both require the seller to pay carriage to the named destination, while risk passes earlier on delivery to the carrier. CIP additionally requires the seller to obtain insurance for the buyer’s risk; CPT does not.
Who pays customs duties under DDP?
The seller handles import clearance and import duties and taxes under DDP. Before agreeing it, check that the seller can fulfil the destination country’s formalities. The buyer unloads the goods at destination.
Who arranges insurance under CIP?
The seller obtains transport insurance for the buyer’s risk, generally under Institute Cargo Clauses (A) or equivalent unless otherwise agreed. Check the policy and exclusions; insurance does not mean every loss is covered.
Source: ICC Digital Library — Incoterms® 2020, any-mode rules (A2–A5, A7, A9)
Source: ICC Digital Library — Incoterms® 2020, sea and inland waterway rules
Customs, insurance and air freight terminology
Request charter capacity with clear responsibilities
Tell us the route, cargo, intended rule and handover place. CCN brokers suitable capacity; agree contractual responsibilities with your trading partners.