Incoterms for Air Freight: Which Ones Actually Apply

Incoterms 2020 splits its 11 rules into two groups: 7 usable for any mode of transport (EXW, FCA, CPT, CIP, DAP, DPU, DDP), and 4 restricted to sea and inland waterway transport only (FAS, FOB, CFR, CIF). That restriction isn't a technicality — FOB and CIF define risk transfer at a specific physical point, goods loaded on board a vessel at a named port, that simply doesn't exist in an air shipment's handling chain.

The commonly-used but incorrect substitute is exactly that: applying FOB or CIF terms to an air waybill because they're familiar from sea freight. The ICC's own guidance recommends FCA for containerized cargo generally, and FCA, CPT, CIP, DAP, DPU, or DDP specifically for air and multimodal transport — because these terms define risk transfer at delivery to the first carrier or a named place, not at a vessel's rail.

Getting this wrong doesn't just create ambiguity — it can leave a genuine gap in who's responsible for the goods, and who's insured, at the exact point something goes wrong, since the named Incoterm is what a cargo insurance claim and a liability dispute both get measured against.