Air Freight

Air Freight Air Freight Rates and the Chargeable Weight Trap TermChargeable weight in air freight RiskRisk transfer is governed by the chosen Incoterm, not by chargeable weight; chargeable weight affects only the freight charge calculation. CostThe party responsible for paying air freight under the Incoterm (often the buyer under FCA, CPT, or DAP; the seller under DDP) bears the chargeable-weight cost; duty is typically the importer's responsibility unless DDP applies. ModeAir (including air express and consolidated air freight) Air freight pricing rarely follows the number on the bathroom scale.

Air Freight When to Insure a Shipment and Who Holds the Policy TermCargo insurance under Incoterms 2020 (risk transfer vs. insurance obligation) RiskRisk passes from seller to buyer at the point named in the chosen Incoterm (e.g., on board the vessel for FOB/CFR/CIF, at the carrier's terminal for FCA, or at the named destination for DAP/DDP). CostThe buyer pays the main freight and insurance costs under FCA, FOB, and CFR; the seller pays them under CIF and CIP. Duty is paid by the buyer under DAP and by the seller under DDP. ModeAny mode (air, sea, inland), though CIF and FOB apply only to sea and inland waterway; CIP, FCA, DAP, and DDP apply to any mode. Cargo insurance is not a single obligation that travels automatically with a shipment.

Air Freight Air Cargo Security Screening and the Paperwork It Adds TermAir cargo security screening (regulated agent and known consignor regimes) RiskRisk of loss or damage passes according to the underlying Incoterms rule or contract of sale, not at the security screening point; screening itself does not transfer risk. CostThe party that contracts the air freight (usually the seller under CIF/CIP or the buyer under FCA/FOB/ex works) pays screening and security charges; the consignor or shipper typically bears the cost of making the goods screening-ready, and the buyer pays duty and import charges unless the Incoterms rule states otherwise. ModeAir Air cargo security screening is the set of checks applied to goods before they are loaded onto an aircraft.

Air Freight Export Licenses and the Goods That Need Them TermExport license RiskRisk of loss or damage to goods passes according to the Incoterms rule chosen by the parties; the export license itself does not transfer risk but must be obtained before shipment. CostThe exporter (seller) typically bears the cost of obtaining the export license, while freight, insurance, and import duties are allocated according to the Incoterms rule and the sales contract. ModeAny (sea, air, inland, rail, multimodal) An export license is an official authorization that a government requires before certain goods can be shipped out of its territory.

Air Freight Letters of Credit: Splitting Risk Between Buyer and Seller TermLetter of Credit (L/C) RiskRisk of non-payment shifts from seller to issuing bank once compliant documents are presented; risk of non-delivery remains with buyer unless the L/C requires a transport document that evidences shipment. CostBuyer pays issuing bank fees and freight/insurance/duty as per sales contract; seller pays advising/negotiation bank fees and any discrepancy charges. ModeAny mode (sea, air, inland, multimodal), but air freight L/Cs often require an air waybill and may specify airport-to-airport or door-to-door delivery. A letter of credit is a bank's written promise to pay a seller a specified amount, provided the seller presents documents that strictly comply with the L/C terms.

Air Freight How the Harmonized System Turns Goods Into Six Digits TermHarmonized System (HS) — the international nomenclature for classifying traded goods, administered nationally through customs tariff schedules RiskClassification itself does not transfer risk; risk passes under the sales contract's chosen Incoterm, while the HS code determines duty, tax, and control treatment at the border CostThe importer of record normally bears duty, taxes, and clearance costs, though the sales contract may shift freight and insurance costs to either party Modeany Every shipment that crosses a border has to be named.

Air Freight Why Two Similar Products Get Different HS Codes TermHS classification (Harmonized System customs code) RiskRisk transfer is not governed by HS codes; it is set by the sales contract and Incoterms. The HS code determines duty and regulatory treatment, not the point at which risk passes. CostThe importer or exporter named in the customs declaration bears duty and tax costs; freight and insurance costs are allocated by the Incoterms rule in the sales contract. ModeAny (air, sea, inland, rail, multimodal) Two products can look nearly identical on a shelf but end up with different Harmonized System codes because the HS is not a visual catalogue.

Other modes