Don’t use sea terms for air shipments

• CIF (Cost, Insurance, and Freight) and FOB (Free On Board) are strictly for sea and inland waterway transport.

• Under CIF/FOB, risk transfers “on board” a vessel—an event that doesn’t exist in air cargo.

  Using them for air can cause customs complications, insurance mismatches, and contractual confusion.

The correct Incoterms for air freight

For gold (almost always flown for security and speed), use terms valid for any mode of transport. Incoterms® 2020 options include: EXW, FCA, CPT, CIP, DAP, DPU, and DDP. The most relevant:

• FCA (Free Carrier): Seller clears export and delivers to the buyer’s nominated carrier at a named place (e.g., your vault, a secure logistics site, or the airport cargo terminal). Risk transfers there. Flexible and often ideal for air.

• CPT (Carriage Paid To): Seller pays freight to the named destination, but risk transfers when the goods are handed to the first carrier at origin.

• CIP (Carriage and Insurance Paid To): Like CPT, plus the seller must provide cargo insurance (typically broader cover) for the main carriage. Risk still transfers at handover to the first carrier.

• DAP (Delivered at Place): Seller bears risk to the named destination, ready for unloading. Buyer handles import clearance, duties, and taxes.

• DPU (Delivered at Place Unloaded): Seller delivers and unloads at destination. Buyer handles import clearance and duties. This is the only rule requiring seller unloading.

• DDP (Delivered Duty Paid): Seller takes on maximum responsibility—delivery cleared for import, duties/taxes paid. Buyer just unloads.

Quick picks for gold shipments

• Want a clean risk handover at the airport? Choose FCA (named airport cargo terminal).

• Want the seller to arrange freight (and insurance)? Choose CIP.

• Want door-to-door without import clearance? Choose DAP. With import clearance and duties too? Choose DDP.

Why precise language matters

• Clarity: Everyone knows who handles packaging, loading, export clearance, freight, insurance, and customs.

• Risk: The exact handover point is defined, reducing disputes.

• Cost: You’ll know who pays for what—no surprises.

In high‑value gold exports, precision isn’t just good practice—it’s essential for smooth, secure, and compliant transactions. Avoid sea‑only terms like CIF/FOB for air freight, select the appropriate Incoterm for your deal, and always state the version—e.g., “Incoterms® 2020”—in your contracts.

If you want specific advice on drafting your contract that will protect your interests, EasyGold is here to help.

Navigating Gold Exports: Choosing the Right Incoterms for Air Freight

At Easygold we know clarity in your Sales Purchase Agreements (SPAs) is as valuable as the metal itself. A common pitfall we see in SPAs is the use of sea-shipping terms for air freight, especially CIF. Even more concerning is that many shipping agents and lawyers, use incorrect terminology. Because these terms don not fit air transport, they can trigger misunderstandings, delays, and surprise costs.