FAR 52.247-43—F.o.b. Designated Air Carrier’s Terminal, Point of Exportation.
Plain-English Summary
FAR 52.247-43 sets the shipping and risk-allocation rules for contracts using the delivery term "f.o.b. designated air carrier’s terminal, point of exportation." It explains what that delivery term means, when title/risk-related delivery is considered complete, and what the contractor must do to get the shipment to the specified air carrier terminal in export-ready condition. The clause covers packing and marking, preparation for air transport when no special specifications exist, delivery to the carrier or carrier custody at the required place and time, payment of transportation charges up to that point, issuance of a clean bill of lading and/or air waybill, responsibility for loss or damage before delivery, and assistance with export documentation when the Government asks and pays for that help. In practice, this clause is important because it tells both sides exactly where the contractor’s transportation responsibility ends and the Government’s begins, which affects pricing, logistics planning, insurance, claims, and schedule compliance. It is especially significant for export shipments because it ties the delivery point to the point of exportation and requires the shipment to be prepared in a way that supports both safe air transport and the lowest applicable transportation charge.
Key Rules
Meaning of FOB terminal
The clause defines "f.o.b. designated air carrier’s terminal, point of exportation" as free of expense to the Government once the goods are loaded aboard the aircraft, or delivered to the carrier’s custody if the carrier performs the loading. Delivery must occur at the specific air carrier terminal named in the contract.
Proper packing and marking
The contractor must pack and mark the shipment to meet contract specifications. If the contract does not specify packing requirements, the contractor must prepare the shipment for air transportation in line with carrier requirements so the goods are protected and the lowest applicable transportation charge is obtained.
Delivery on time and in good order
The contractor must deliver the shipment in good order and condition to the carrier or carrier custody at the contractually required point and within the required date or delivery period. The contractor also bears all applicable charges up to that delivery point.
Clean shipping documents
The contractor must provide a clean bill of lading and/or air waybill. This means the shipping document should not show exceptions or defects that would indicate damage, shortage, or other problems at tender.
Risk before delivery
The contractor is responsible for any loss of or damage to the goods occurring before delivery to the specified point in the contract. The Government does not assume that risk until the contractual FOB delivery point is reached.
Export documentation support
At the Government’s request and expense, the contractor must assist in obtaining documents required for exportation. This is a support obligation, not a blanket duty to absorb export-document costs unless the Government requests the assistance and agrees to pay for it.
Responsibilities
Contracting Officer
Include this clause when the delivery term is f.o.b. designated air carrier’s terminal, point of exportation. Identify the correct carrier terminal and delivery point in the contract, and ensure the solicitation and contract clearly state any packing, marking, or export-document requirements.
Contractor
Pack and mark the shipment properly, prepare it for air transport if no specifications exist, deliver it in good order to the carrier or carrier custody on time, pay charges up to the FOB point, provide a clean bill of lading and/or air waybill, bear loss or damage before delivery, and assist with export documents when requested and paid by the Government.
Government
Accept responsibility only after delivery at the specified FOB point, and request export-document assistance only when needed and with payment for that assistance. The Government should also ensure the contract terms clearly identify the designated terminal and any special shipping requirements.
Air Carrier
Receive the shipment at the designated terminal and, if applicable, perform loading into the aircraft. The carrier’s role affects whether delivery is complete upon loading aboard the aircraft or upon transfer to the carrier’s custody.
Practical Implications
This clause shifts transportation risk to the contractor until the shipment reaches the named air carrier terminal or carrier custody, so contractors should plan for transit delays, handling damage, and export-processing time before the FOB point.
If the contract does not spell out packing and marking requirements, the contractor must still meet carrier standards and optimize for the lowest applicable transportation charge, which can create disputes if the shipment is overpacked, underpacked, or improperly labeled.
A "clean" bill of lading or air waybill matters because exceptions on the document can signal pre-delivery damage or shortages and complicate payment, claims, or acceptance.
The Government’s obligation to pay for export-document assistance only arises when it requests that help, so contractors should track such requests and confirm reimbursement terms before performing extra work.
Because the delivery point is tied to a specific air carrier terminal at the point of exportation, both parties should verify the exact location, cutoff times, and carrier custody procedures to avoid late delivery and unintended risk transfer issues.
Official Regulatory Text
As prescribed in 47.303-15 (c) , insert the following clause in solicitations and contracts when the delivery term is f.o.b. designated air carrier’s terminal, point of exportation: F.o.b. Designated Air Carrier’s Terminal, Point of Exportation (Feb 2006) (a) The term "f.o.b. designated air carrier’s terminal, point of exportation," as used in this clause, means free of expense to the Government loaded aboard the aircraft, or delivered to the custody of the air carrier (if only the air carrier performs the loading), at the air carrier’s terminal specified in the contract. (b) The Contractor shall- (1) (i) Pack and mark the shipment to comply with contract specifications; or (ii) In the absence of specifications, prepare the shipment for air transportation in conformance with carrier requirements to protect the goods and to ensure assessment of the lowest applicable transportation charge; (2) (i) Deliver the shipment in good order and condition into the conveyance of the carrier, or to the custody of the carrier (if only the carrier performs the loading), at the point of delivery and on the date or within the period specified in the contract; and (ii) Pay and bear all applicable charges up to this point; (3) Provide a clean bill of lading and/or air waybill; (4) Be responsible for any loss of and/or damage to the goods occurring before delivery of the goods to the point specified in the contract; and (5) At the Government’s request and expense, assist in obtaining the documents required for the purpose of exportation. (End of clause)