Air Shipment Terms in Import and Export: A Complete Guide

 Air Shipment Terms Used in Importing and Exporting

Air shipment is one of the fastest and most efficient methods of transporting goods across long distances, place to place and country to country. With the global nature of trade, air freight plays an essential role in the import and export process, especially for high-value, time-sensitive, or perishable goods. Unlike sea freight, air shipments often require different types of documentation, terminology, and procedures, which can be confusing for those new to the process.

In this comprehensive guide, we will cover the key air shipment terms associated with import and export, helping businesses and individuals better understand the terminology, processes, and logistics involved. Whether you are an importer, exporter, or freight forwarder, understanding these air freight-related terms is crucial to ensuring smooth and efficient operations.

1. Air Freight Basics: How It Works

Before diving into specific air shipment terms, it is important to understand how air freight operates. Air shipment is typically faster and more expensive than sea freight, but it is ideal for smaller, high-value shipments or goods that need to reach their destination quickly.

Air Freight Process:

Booking: An exporter (or their agent) books a shipment with an air carrier or a freight forwarder. The booking is confirmed, and the shipment details are agreed upon.

Cargo Transport: The cargo is delivered to the airport, where it undergoes security and customs checks before being loaded onto an aircraft.

Customs Clearance: Both the origin and destination customs authorities inspect the shipment to ensure it complies with regulations and is cleared for entry or exit.

Delivery to the Destination: Upon arrival, the cargo is unloaded and goes through further customs procedures, after which it is delivered to the final destination.

2. Key Air Freight Terms

In the world of air freight, there are several key terms that define different aspects of the process. Understanding these terms will help ensure smooth shipments and avoid misunderstandings.

Incoterms for Air Shipments

Much like sea freight, Incoterms (International Commercial Terms) play a vital role in air freight shipments. They outline the responsibilities and costs involved for both the seller and buyer. These terms clarify the obligations regarding shipping, insurance, and customs clearance.

Common Air Freight Incoterms:

1. EXW (Ex Works):

• Under EXW, the seller makes the goods available for pickup at their premises or another agreed-upon location. The buyer assumes responsibility for all shipping costs and risks, including the transport to the airport, freight charges, and insurance.
• Best For: Buyers who have reliable logistics partners or those familiar with the destination country’s regulations.

2. FOB (Free on Board):

• In FOB, the seller is responsible for getting the goods to the airport of export, after which the buyer assumes responsibility for the rest of the journey, including freight and insurance.
• Best For: Buyers who prefer more control over their shipment after it reaches the airport.

3. CFR (Cost and Freight):

• CFR is a term where the seller covers the cost of air transport to the airport of destination, but the buyer is responsible for insurance. The risk is transferred to the buyer once the goods are loaded onto the aircraft.
• Best For: Buyers who prefer to manage their own insurance but want the seller to handle transportation to the destination airport.

4. CIF (Cost, Insurance, and Freight):

• In CIF, the seller pays for the transportation, insurance, and freight charges. This provides the buyer with the added security of knowing that the goods are insured during transit.
• Best For: Buyers seeking extra assurance and avoiding the hassle of insurance and freight costs.

5. DAP (Delivered at Place):

• DAP means the seller is responsible for all shipping costs and risks up to the destination, including delivery to the final destination, except for the import duties and taxes.
• Best For: Buyers who want the seller to handle the entire shipping process and deliver goods to their doorstep.

6. DDP (Delivered Duty Paid):

• DDP is the most seller-friendly term where the seller assumes responsibility for all costs, including freight, insurance, customs duties, and taxes, up to the point where the goods are delivered to the buyer.
• Best For: Buyers seeking a hassle-free experience with the seller handling all logistics and import processes.

3. Air Shipment Documentation Terms

Just like sea freight, air shipments also require various forms of documentation to ensure the smooth flow of goods across borders. Here are the essential documents you will encounter in air shipment:

Key Air Freight Documents:

1. Air Waybill (AWB)

• The Air Waybill (AWB) is the most critical document in air freight. It serves as both a contract between the shipper and the carrier and a receipt for the goods. The AWB provides detailed information about the shipment, including the shipper and consignee details, flight number, and delivery information. It also includes tracking information that allows both parties to monitor the shipment’s progress.
• Electronic Air Waybill (eAWB): With modern technology, most airlines now offer electronic versions of the AWB, which streamline the documentation process and reduce paperwork.

2. Commercial Invoice

• The commercial invoice is a document that lists the goods being shipped, their value, and the terms of sale. It serves as the primary document for customs clearance, helping customs authorities determine the duties and taxes owed on the shipment.

3. Packing List

• The packing list provides a detailed description of the contents of the shipment, including the type and quantity of goods, packaging, and other relevant details. This helps customs authorities inspect the shipment and verify that the commercial invoice matches the goods being shipped.

4. Certificate of Origin

• The certificate of origin is used to confirm where the goods are manufactured or produced. This document is often required for tariff purposes, especially if the shipment is covered by a trade agreement between the exporting and importing countries.

5. Customs Declaration

• The customs declaration provides information about the contents of the shipment and is submitted to customs authorities to ensure compliance with import/export regulations. It includes details about the classification of goods, their value, and the intended use.

6. Insurance Certificate

• For shipments that involve insurance coverage, an insurance certificate will be provided by the insurer to confirm that the goods are covered in case of loss or damage during transit.

4. Common Air Freight Terms

Alongside Incoterms and documentation, there are various air freight-specific terms that are important to understand. These terms help streamline the communication and management of air shipments.

Essential Air Freight Terms:

1. FCL (Full Container Load)

• Though this term is often used in sea freight, it also applies to air freight in some cases. FCL refers to shipments where a single customer fills the entire container or the air cargo hold. This term is generally used when a large quantity of goods is being shipped.

2. LCL (Less than Container Load)

• In LCL, the shipment is combined with other shipments from different customers in the same container. This is more common in sea freight but is sometimes used in air freight when the shipment does not fill an entire container or aircraft hold.

3. TEU (Twenty-Foot Equivalent Unit)

• The TEU is a unit used to measure container sizes. It is used in the shipping industry to quantify cargo capacity, particularly in sea freight, but also occasionally in air freight logistics when measuring large cargo.

4. Freight Forwarder

• A freight forwarder is a third-party logistics provider that arranges the shipment of goods on behalf of the shipper. They help book flights, arrange customs clearance, and ensure the timely delivery of goods. Many importers and exporters rely on freight forwarders to navigate the complexities of air shipment logistics.

5. Carrier

• The carrier is the airline or cargo service responsible for physically transporting goods via air. Airlines like Emirates Sky-Cargo, Singapore Airlines Cargo, and Lufthansa Cargo are examples of air freight carriers.

 

6. Transit Time

• Transit time refers to the time it takes for goods to travel from the point of origin to the point of destination, including all stops, transfers, and customs clearance procedures. This term is essential for businesses that require time-sensitive delivery.

7. Air Cargo Terminal

• The air cargo terminal is a designated area at the airport where cargo is received, processed, and loaded onto aircraft. Air cargo terminals play an essential role in the logistics process, ensuring that goods are safely handled and transported.

8. Customs Clearance

• Customs clearance is the process of getting goods approved by customs authorities for import or export. This involves verifying documentation, checking the contents of the shipment, and ensuring compliance with local regulations and international trade laws.

9. AOG (Aircraft on Ground)

• AOG refers to an emergency or priority shipment, typically for spare parts or urgent supplies needed to get an aircraft back in operation. Air cargo companies prioritize these shipments to minimize downtime for airlines.

10. Dangerous Goods

• Dangerous goods are items that pose a risk to health, safety, or the environment. These goods must comply with special regulations and may require additional documentation or specific handling procedures to be shipped by air.

5. Best Air Freight Providers

When it comes to choosing the right air freight provider, there are several industry leaders that offer reliable services. Below are a few well-known air cargo carriers and freight forwarders:

1. DHL Global Forwarding

Website: www.dhl.com

DHL is one of the leading global logistics providers, offering international air freight services. They provide fast and reliable air cargo services worldwide.

2. FedEx Express

Website: www.fedex.com

FedEx is a well-established name in the logistics industry, known for providing expedited air cargo services with a global network.

3. Emirates SkyCargo

Website: www.skycargo.com

Emirates SkyCargo is the air freight division of Emirates Airlines and offers a comprehensive range of air cargo services.

4. UPS Supply Chain Solutions

Website: www.ups.com

UPS is another global leader in air freight and logistics, offering both air cargo services and freight forwarding.

5. CMA CGM Air Cargo

Website: www.cma-cgm.com

A division of the global shipping giant CMA CGM, they provide air cargo solutions with a strong presence in international shipping and logistics.

Understanding Air Freight Terminology for Successful Shipments. Mastering the terminology associated with air shipment is essential for anyone involved in import and export operations. From Incoterms and AWBs to FCL and LCL, knowing the ins and outs of air cargo will help streamline logistics, minimize risk, and ensure that your shipments arrive on time and in good condition. Whether you are working with freight forwarders, managing customs clearance, or coordinating with airlines, a thorough understanding of air freight terms will ensure that you can navigate the complexities of international shipping with confidence.

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Read more: Sea Shipment Terms used in Import and Export: A Comprehensive Guide