Air Cargo Terms

(INCOTERMS at the bottom of the page)

Air Carrier
Airline, which carries or undertakes to carry the cargo under the air waybill or to perform any other services related to such air carriage including the airline issuing the Air Waybill.

Airline Code Numbers

The carrier’s three-digit IATA airline code number

Air Waybill
The document made out by or on behalf of the shipper, which evidences the contract between the shipper and carrier(s) for carriage of goods over routes of the carrier(s).

Air Waybill Identification Label

An identification slip attached to packages.

A person or organization authorized to act on behalf of a carrier.

Parking area of an aircraft.


Undelivered cargo or mail, held back because of weather or embargoes or flight cancellations.

Bank Shipment

A shipment where the consignee is identified as bank and the actual consignee is listed under ” Also notify”.
(It is the carrier’s responsibility to withhold delivery until the bank has authorized a release in writing or by fax).

The space below the main deck of an aircraft used for carrying baggage, mail or cargo.

Block Time

A period of actual time between departure and arrival.

Bonded Area
Space authorized by customs officials as suitable for storing consignments that have not been cleared by customs.

A request for cargo space on an aircraft.

Break Bulk Agent
An agent who breaks consolidations into their individual part.

Bulk Cargo

Loose cargo not loaded on a pallet or in a container.

Any property carried or to be carried in an aircraft other than mail or other property carried under the terms of an international postal convention, baggage or property of the carrier; provided that baggage moving under an Air Waybill is cargo.

Cargo Charges Correction Advice (CCA)
A document used for the notification of changes to charges and/or method of payment inserted on an AWB.

Cargo Community System (CCS)

A means of electronically transmitting messages between airline and cargo agents member.

Cargo Ground Handling Agent
An authorized agent acting on behalf of carrier on manipulating freight.

Certificate of Origin

Document to prove the place of growth, production or manufacture of goods specified thereon.

An amount to be paid for carriage of goods based on the applicable rate for such carriage, or an amount to be paid for a special or incidental service in connection with the carriage of goods.

Charges Collect (CC)
The charges entered on the Air Waybill or shipment record for collection from the consignee against delivery of the shipment.

Charges Prepaid (PP)
The charges entered on the Air Waybill for payment by the shipper.

An aircraft or flight operating under a charter contract.

Charter Contract
An agreement where a carrier places the entire capacity of an aircraft at a shipper’s disposal.

A request for refunds or compensation (by shippers or their agents) for loss or damage to cargo due to reasons within the control of the carrier.

A listing of articles in classes for rating purposes.

Commercial Invoice
Written record of transaction between seller and buyer, listing agreed prices and other charges; outlines goods sold, weights and terms of sale, shipping marks, etc.

A percentage of weight charge shown on the Air Waybill, paid by airline to its agent for services performed.

Cargo contents, e.g. leathers etc.

A space designated within a hold.

Conditions of Carriage
The terms and conditions established by a carrier in respect to its carriage.

Conditions of Contract
The terms and conditions shown on the reverse of the Air Waybill.

The person or firm whose name appears on the Air Waybill as the party to whom the goods are to be delivered by the carrier.

See Shipment

Different consignments grouped together and covered by one Air Waybill (Master Air Waybill) with separate House Air Waybill issued by the forwarder for each individual consignment.

A person or organization performing a consolidation.

Consular Invoice
A prescribed form of invoice required by a transit or destination country. Usually legalized by the consulate of that country concerned for a fee.

A certified container that interfaces directly with an aircraft restraint system and meets all restraint requirements without the use of supplementary equipment.

A description of goods as declared by the shipper in the “nature and quantity of goods” box of the Air Waybill.

A shaped unit load device closely fitted to suit the aircraft envelope and to utilize the maximum space available.

Customs Broker

An agent designated to perform inbound customs clearance for the consignee.

Customs Clearance

Customs formalities to be completed at origin, in transit and at destination.

Harm done to goods during transportation that impairs their value or usefulness.

Damage Report
A form to be completed when goods are damaged.

Dangerous Goods
Special Cargo

Dangerous Goods Regulations (DGR)
Regulations listing all dangerous goods and giving detailed instructions regarding packing and handling of these materials.

Declared Value for Carriage
The value of goods declared to the carrier by the shipper for determining charges or of establishing the limit of the carrier’s liability for loss, damage or delay. It is also the basis for possible applicable valuation charges.

Delivery Receipt
A receipt signed by the consignee as proof that the goods have been delivered to him.

The relationship of weight to volume in a unit i.e. lb. per ft3 or kg per m3.

The ultimate stopping place of the goods according to the contract of carriage.

Dimension (DIMS) 
Length, width and height of items measured in centimeters or inches used to determine applicable rates and for general information.

Diplomatic Bag/Pouch
Diplomatic Bag or Pouch contains official correspondence that moves between a government and its accredited representatives abroad, or between the mentioned representatives, supported by a Declaration of Diplomatic Immunity covered by the IATA air waybill.

A change to the planned destination during the flight.

A towed vehicle with a roller platform for hauling ULDs between the cargo terminal and the airplane.

EDI For Administration, Commerce and Transport (EDIFACT)
Electronic exchange of pre-defined messages, structured according to agreed standards between computer systems, with no manual intervention.

Electronic Data Interchange (EDI) 
Electronic messages between two or more parties.

Refusal by a carrier to accept goods for transportation, usually applies over a limited period.

Flight number
The designation of a flight.

An agent or company who performs services (such as receiving, trans-shipping or delivering) designed to assure and facilitate the passage of goods.

Free port 

A defined area where goods are received, stored and shipped free of customs duty.

(see cargo)

An aircraft designed solely for cargo carriage.

General Cargo
Any consignment other than special cargo.

Greenwich Mean Time (GMT)

The meridian from which all time zones are calculated (Greenwich England) for instance; local time Bangkok is 7 hours ahead of GMT (GMT+7).

Gross Weight
The weight of a shipment involving all packing.

Handling (Cargo)
Manipulating freight.

A vehicle with elevated platform capable of loading/unloading freight to/from aircraft.

House Air Waybill
A document issued by a consolidator for instructions to the break bulk agent. Always attached to Master Air Waybill.

Abbreviation for International Air Transport Association with issues rules and regulations pertaining to the air industry.

IATA Cargo Agent 
An agent approved by IATA and registered in the IATA Cargo Agency List. This enables the agent, upon authorization of the IATA carrier, to receive shipments, execute air waybills and collect charges.

Abbreviation for International Civil Aviation Organization with responsible for implementing security rules for civil aviation.

Interline Carriage
Transportation of goods from origin to destination by two or more carriers.

Last Carrier
The participating carrier over whose air routes the last section of carriage under the air waybill is undertaken or performed; or for the purposes of determining the responsibility for collecting charges collect and disbursement amounts, means the airline which delivers the consignment to the consignee regardless if that airline has participated in the carriage or not.

Letter of Credit (L/C) 
A letter from one bank to another bank, by which a third party, usually a customer can obtain money.

Liability Limitation
Liability for loss, delay, or damage to cargo is limited unless a higher value is declared in advance and additional charges are paid. The liability limit is USD20/gross kilogram or equivalent.

Live Animal Regulations (LAR)
IATA publication with regulations governing the transportation of live animals.
Special Cargo Live Animal

Loose cargo
– see Bulk cargo

Official list of cargo onboard a flight.

Master Air Waybill 
An Air Waybill covering a consolidated shipment, showing the consolidator as shipper, with House Air Waybills attached.

Narrow-bodied Aircraft
A single aisle aircraft capable of carrying bulk cargo only.

Net weight
The weight of goods excluding all packing.

No Customs Value (NCV) 
Goods with no value declared on the Air Waybill for Customs purposes.

No Show Cargo 
Reserved cargo space that is not used and not cancelled.

No Value Declared for Carriage (NVD)
Goods with no value declared on the Air Waybill for the purpose of determining charges or of establishing the limit of the carrier’s liability for loss, damage or delay.

The starting place i.e. place of manufacturer or beginning point of carriage according to the contract of carriage.


Pallet Net

A special designed net used to secure goods on a pallet.

Part Shipment

A shipment with is not transported in total but in two or more parts.


Any party mentioned on the Air Waybill, includes the shipper, agent and carrier.

Proforma Invoice
An invoice that is sent in advance of goods supplied.

Division of joint rates or charges or revenue on an agreed basis between the carriers concerned.

Parking area for aircraft where loading, unloading, refueling, parking and maintenance can be carried out.

The amount charged by a carrier for carriage of a unit of weight or volume or nature of goods.

Ready for Carriage

The condition in which a shipment must be delivered by an IATA Cargo Agent to an IATA carrier. The shipment and accompanying documents must be ready for immediate transportation.


The route altered from the originally specified on the Air Waybill.

See Booking

Restricted Articles

Special Cargo Dangerous Goods

Road Feeder Service (RFS)

Truck operating as scheduled or non-scheduled flights.


The route of the air transportation as specified on the Air Waybill.

Scheduled Time of Arrival/Departure (STA/STD) 
The departure/arrival times as published in official program.

Service Cargo
The cargo of the airline company or airline employee, which is transported free of charge or under discount on their route-net.

One or more pieces of goods accepted by the carrier from one shipper at one time and at one address, receipted for in one lot and moving on one air waybill to one consignee at one destination address.


The person or organization whose name appears on the Air Waybill as the party contracting with the carriers for carriage of goods.

Shipping Documents

Documents other than transportation receipts or transportation contracts, required to enable shipment to be forwarded or received.


Cargo included in a flight manifest but not loaded onto the aircraft.


A loss or reduction i.e. a loss in weight compared with the weight originally stated on the air waybill or loss of part of a consignment upon delivery at destination.

Slim body Aircraft (S/B)

See Narrow-body Aircraft


The allotted take-off and landing time.
The timing of landing and take-off allocation.

Special Cargo
A consignment that contains cargo which requires special handling according to a nature of goods.

Additional or extra charges.

Tare Weight
Weight of the empty ULDs (pallet or container)

The published rates, charges and/or related conditions or carriage of a carrier.

Either end of a carrier line, e.g. airports are often referred to as terminals.

The Air Cargo Tariff (TACT)
An official publication published by IATA. The publication consists of 3 volumes:

TACT Rules Book (Orange): General rules, standards information
TACT Rates Book
(Green): Rates for worldwide except North America
TACT Rates Book
(Red): Rates for North America

To try locate freight or an Air Waybill missing on arrival.

Transference of cargo between one (on) flight to another flight of the same or connecting carrier.

Transfer Cargo
Cargo arriving at a point by one carrier and continuing by another carrier.

Transferring Carrier 

The carrier who transfers a consignment to another carrier at a transfer point.

Transfer of cargo from one aircraft to another.

Goods arriving at a point and continuing on the same flight.

UN Number 
The four-digit number assigned by the United Nations committee, identifying dangerous goods.

Unaccompanied Baggage
Baggage carried as cargo.

Unit Load Device (ULD)
A pallet or container Fleet/ULD

Consolidation of multiple packages into a registered.

ULD Universal Time Co-ordinate (UTC)

Valuable Cargo (VAL)


Space as measured in cubic meters or feet (Length x Width X Height)

Weight Charge

A charge based on the weight of the goods being carried.

Wide-bodied Aircraft

A double aisle aircraft capable of carrying ULDs and loose/bulk mail/cargo.


Each INCOTERM, refers to a type of agreement for the purchase and shipping of goods internationally. There are 11 different terms, each of which helps users deal with different situations involving the movement of goods. For example, the term FCA is often used with shipments involving Ro/Ro (Roll on Roll Off) or container transport.

INCOTERMS, also deal with the documentation required for global trade, specifying which parties are responsible for which documents. Determining the paperwork required to move a shipment is an important job, since requirements vary so much between countries. Two items, however, are standard: the commercial invoice and the packing list.

INCOTERMS, were created primarily for people inside the world of global trade. Outsiders frequently find them difficult to understand. Seemingly common words such as “responsibility” and “delivery” have different meanings in global trade than they do in other situations.

In global trade, “delivery” refers to the seller fulfilling the obligation of the terms of sale or to completing a contractual obligation. “Delivery” can occur while the merchandise is on a vessel on the high seas and the parties involved are thousands of miles from the goods. In the end, however, the terms wind up boiling down to a few basic specifics:

Overview to Liability: It is essential for shippers to know the exact status of their shipments in terms of ownership and responsibility. It is also vital for sellers & buyers to arrange insurance on their goods while the goods are in their “legal” possession. Lack of insurance can result in wasted time, lawsuits, and broken relationships.

INCOTERMS, can thus have a direct financial impact on a company’s business. What is important is not the acronyms, but the business results. Often companies like to be in control of their freight. That being the case, sellers of goods might choose to sell CIF, which gives them a good grasp of shipments moving out of their country, and buyers may prefer to purchase FOB, which gives them a tighter hold on goods moving into their country.

In this glossary, we’ll tell you what terms such as CIF and FOB mean and their impact on the trade process. In addition, since we realize that most international buyers and sellers do not handle goods themselves, but work through customs brokers and freight Forwarders, we’ll discuss how both fit into the terms under discussion.

INCOTERMS, are most frequently listed by category. Terms beginning with F refer to shipments where the primary cost of shipping is not paid for by the seller. Terms beginning with C deal with shipments where the seller pays for shipping. E-terms occur when a seller’s responsibilities are fulfilled when goods are ready to depart from their facilities. D terms cover shipments where the shipper/seller’s responsibility ends when the goods arrive at some specific point. Because shipments are moving into a country, D terms usually involve the services of a customs broker and a freight forwarder. In addition, D terms also deal with the pier or docking charges found at virtually all ports and determining who is responsible for each charge.

Recently the ICC changed basic aspects of the definitions of a number of INCOTERMS, buyers and sellers should be aware of this. Terms that have changed have a star alongside them.

EXW (EX-Works)
One of the simplest and most basic shipment arrangements places the minimum responsibility on the seller with greater responsibility on the buyer. In an EX-Works transaction, goods are basically made available for pickup at the shipper/seller’s factory or 
warehouse and “delivery” is accomplished when the merchandise is released to the consignee’s freight forwarder. The buyer is responsible for making arrangements with their forwarder for insurance, export clearance and handling all other paperwork.

FOB (Free On Board)
One of the most commonly used-and misused-terms, FOB means that the shipper/seller uses his freight forwarder to move the merchandise to the port or designated point of origin. Though frequently used to describe inland movement of cargo, FOB specifically refers to ocean or inland waterway transportation of goods. “Delivery” is accomplished when the shipper/seller releases the goods to the buyer’s forwarder. The buyer’s responsibility for insurance and transportation begins at the same moment.

FCA (Free Carrier)
In this type of transaction, the seller is responsible for arranging transportation, but he is acting at the risk and the expense of the buyer. Where in FOB the freight forwarder or carrier is the choice of the buyer, in FCA the seller chooses and works with the freight forwarder or the carrier. “Delivery” is accomplished at a predetermined port or destination point and the buyer is responsible for Insurance.

FAS (Free Alongside Ship) *
Buyer bears all the transportation costs and the risk of loss of goods. FAS requires the shipper/seller to clear goods for export, which is a reversal from past practices. Companies selling on these terms will ordinarily use their freight forwarder to clear the goods for export. “Delivery” is accomplished when the goods are turned over to the Buyers Forwarder for insurance and transportation.

CFR (Cost and Freight)
This term formerly known as CNF (C&F) defines two distinct and separate responsibilities-one is dealing with the actual cost of merchandise “C” and the other “F” refers to the freight charges to a predetermined destination point. It is the shipper/seller’s responsibility to get goods from their door to the port of destination. “Delivery” is accomplished at this time. It is the buyer’s responsibility to cover insurance from the port of origin or port of shipment to buyer’s door. Given that the shipper is responsible for transportation, the shipper also chooses the forwarder.

CIF (Cost, Insurance and Freight)
This arrangement similar to CFR, but instead of the buyer insuring the goods for the maritime phase of the voyage, the shipper/seller will insure the merchandise. In this arrangement, the seller usually chooses the forwarder. “Delivery” as above, is accomplished at the port of destination.

CPT (Carriage Paid To)
In CPT transactions the shipper/seller has the same obligations found with CIF, with the addition that the seller has to buy cargo insurance, naming the buyer as the insured while the goods are in transit.

CIP (Carriage and Insurance Paid To)
This term is primarily used for multimodal transport. Because it relies on the carrier’s insurance, the shipper/seller is only required to purchase minimum coverage. When this particular agreement is in force, Freight Forwarders often act in effect, as carriers. The buyer’s insurance is effective when the goods are turned over to the Forwarder.

DAT (Delivered At Terminal)
This term is used for any type of shipments. The shipper/seller pays for carriage to the terminal, except for costs related to import clearance, and assumes all  risk up to the point that the goods are unloaded at the terminal.

DAP (Delivered At Place)
DAP term is used for any type of shipments. The shipper/seller pays for carriage to the named place, except for costs related to import clearance, and assumes all risks prior to the point that the goods are ready for unloading by the buyer.

DDP (Delivered Duty Paid)
DDP term tend to be used in intermodal or courier-type shipments. Whereby, the shipper/seller is responsible for dealing with all the tasks involved in moving goods from the manufacturing plant to the buyer/consignee’s door. It is the shipper/seller’s responsibility to insure the goods and absorb all costs and risks including the payment of duty and fees.