Can I use FOB under Air shipment?


FOB delivery rules under Air shipment


The term FOB is one of the delivery terms defined by ICC to use as Marine restricted mode.  So FOB is meant for the movement of goods by Sea and Inland waterways.  

The question is here, whether FOB can be used for Air shipment?  Before answering this question, let us discuss the functions of FOB under Inco terms 2020.  FOB means Free On Board followed by a named place.  The named place could be a load port of Feeder Vessel, the port of Mother vessel or any carrier under inland waterways.  Under FOB terms, the seller’s obligation on risks and costs transfers to buyer immediately upon when the goods gone on board the said water carrier. 

Let us come back on the question; can FOB be used under Air shipment?  So under air shipments, the exporter or his agent completes export customs formalities and hands over the goods the carrier or his agent for further movement to load in to Aircraft.     Due to security reasons, the exporter or his agent may not be allowed to move the goods to an Aircraft. 

However, the term FOB may be used for the movement of goods as the Inco terms are rules and not a regulatory laws.  Since the definitions of Inco terms designed by ICC about FOB does not match with the functions when using FOB for air shipments,   the exporters and importers may preferably use FOB terms for Sea and Inland waterways movement only.

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