Air freight trade terms (Incoterms) are a set of international trade terms established by the International Chamber of Commerce (ICC) to guide the allocation of responsibilities, risks, and costs between buyers and sellers in international sales contracts. The following are some commonly used air freight trade terms:
1. EXW (Ex Works): The seller delivers the goods to the buyer at their premises, and the buyer bears all costs and risks from that point onward.
2. FCA (Free Carrier): The seller delivers the goods to the carrier nominated by the buyer, without being responsible for transport or export customs clearance.
3. CPT (Carriage Paid To): The seller pays for the transportation of the goods to the designated destination, but the risk transfers to the buyer when the goods are handed over to the first carrier.
4. CIP (Carriage and Insurance Paid To): In addition to paying for transportation, the seller must also purchase insurance to cover the risk of transporting the goods until they reach the destination.
5. DAP (Delivered At Place): The seller prepares the goods for unloading at the destination, but the risk and costs transfer to the buyer when the goods are handed over to the means of transport.
6. DPU (Delivered at Place Unloaded): The seller transports the goods to the specified location and prepares them for unloading, but the buyer bears the costs and risks of unloading.
7. DDP (Delivered Duty Paid): The seller transports the goods to the buyer's specified location and bears all costs and risks, including import duties, taxes, and customs clearance.
8. FAS (Free Alongside Ship): The seller delivers the goods to the buyer at the designated port, and the buyer bears all costs and risks from the ship's side onward.
9. CFR (Cost and Freight): The seller is responsible for transporting the goods to the destination port, while the buyer is responsible for insurance and other costs from the destination port onward.
10. CIF (Cost, Insurance, and Freight): The seller is responsible for transporting the goods to the destination port and purchasing insurance, while the buyer is responsible for other costs from the destination port onward.
It is important to note that although certain trade terms such as CFR and CIF are typically used for maritime transport, they can also be applied to air freight if both parties agree and clearly specify this in the contract. In air freight, CPT and CIP are more commonly used because they better suit the characteristics of air transport. When using these terms, it is essential to clearly specify the applicable mode of transport in the contract to avoid confusion.