In this guide, we will try to provide a clear overview of the issue of air freight. It will cover the basics, advantages, and disadvantages of this method, costs breakdown, as well as specifics. We have also covered an optimized solution for Amazon Sellers. Hopefully, it will inform you about all the options at your disposal.
What is international air freight?
International air freight implies shipping various goods by air carrier. It is used by global importers and exporters when they need to get goods somewhere rapidly and reliably. It is provided by numerous cargo airlines, many of whom are affiliated with the major commercial passenger airlines.
Whereas air freight accounts for just 5% of global shipping (with regard to volume), in terms of value it covers up to 30% of the market.
This shows that global business logistics heavily rely on air freight, which is particularly booming in emerging and growing economies. According to an analysis by the International Air Transport Association (IATA), global air freight, measured by Freight Tonne Kilometres (FTKs), grew by 14% in March of 2017, compared to the previous year.
There is a difference between international air freight and express freight. The first category implies involvement by more than one carrier and larger shipments. Express (big players, such as DHL, FedEx, UPS), on the other hand, entails smaller cargos and the usage of one company for the entire shipment process.
Advantages and disadvantages of air freight
Why ship by air?
In today’s accelerated global market, quick supply is a prerequisite for a successful business. Speedy delivery provided by air freight is, of course, unmatched by any other means of transportation. For example, a shipment from China will make it to the US in less than 3 business days.
Speed of delivery also brings more reliability and decreases risks of damage. Generally speaking, the less time your cargo spends in the shipment process, the less risk for something to go wrong.
In matters of some urgency – meeting a strict deadline or sending perishable goods – air cargo may be the only option. It also provides you with a better overview in terms of shipment tracking. We will also elaborate further on this issue below.
Why not ship by air?
Of course, air shipping is much quicker, but you have to keep its cost in mind. The World Bank estimates air freight as up to 16 times pricier compared to sea transport.
If you plan on shipping your cargo via air, keep in mind the size factor. An airplane offers limited space which could prove to be insufficient for large quantities of a product line, or particularly massive items.
Last but not least, for the environmentally-minded businesses, it goes without saying that air freight shipments will not exactly help reduce your carbon footprint.
What kind of products are suitable for air shipping?
As a general rule, the most cost-effective scenario would be to use air freight shipping for items that are larger in weight but lesser in volume. A good example is high-priced electronic equipment. Other goods that make viable choices for air shipping include relatively small-sized units such as medical products, documents, samples, and clothing items and accessories.
What is not allowed to be shipped by air?
On the other hand, there are a number of goods that cannot be shipped via air, or are subject to limitations stipulated by local legislation or a company’s rules of procedure. The list of prohibited or restricted goods potentially includes lithium batteries, perishable goods, animals, fine art, precious metals, etc. Having said that, it does not automatically mean that you will not be able to ship any such items. But you will have to consult local authorities and, if needed, go through the inspection and clearance procedure beforehand.
Thus, it is advisable to become well-acquainted with national regulations before planning any cargo delivery. It might be necessary, for example, for competent authority to conduct an examination on whether the cargo is eligible for air freight. Apart from that, we point out the IATA Dangerous Goods Regulations as a reference point for the preparation of shipments that may contain the aforementioned goods.
How to calculate air freight costs
Which factors determine the air freight cost? The main factor for the pricing is, naturally, weight. However, this does not mean that sending a light but voluminous shipment will automatically alleviate the costs. In that case, the volume will determine the price. When you opt for shipping your cargo by air, you should start by cross-referencing its weight, volume, and value.
Volumetric weight / Dimensional weight
Namely, in practice, the shipping costs depend on the cargo’s volumetric weight, also called dimensional weight. It is a pricing system that estimates weight according to the item’s dimensions. This or the actual weight will apply in calculating the shipping rate – whichever is larger, will determine the price.
There are two ways to calculate volumetric weight:
- Volumetric Weight = Volume (cbm) * 167
- Volumetric Weight = Length (cm) * Width (cm) * Height (cm) / 6000 * Carton Quantity
Tips to reduce air freight cost
- Be well-prepared and cover all the bases before the shipment is underway. Since in most cases laser scanners will determine the volumetric weight, having economically-packed items is crucial. If not, you may run into unforeseen costs due to some faulty packaging. Optimizing space while packing may reduce costs in the long run.
- Putting in the extra effort to design a product package that will be most cost-efficient is very much worth the effort. Make sure you communicate your needs, in terms of packaging, with your designer.
- Plan in advance, as much as possible. Booking last-minute shipments will likely increase the fees.
- Know your national regulations. Especially if shipping special cargo that can be subject to restrictions and/or additional fees.
- Make it a point to be aware of all additional costs before shipping. The overall air freight cost, depending on the provider, may also include airport, security, storage or fuel fees.
- In the case of express freight (door-to-door), additional costs to keep in mind include insurance and customs rates. Be sure to read all the fine print.
Air cargo tracking
The first step is obtaining a proper Air Waybill (AWB). This is a document accompanying goods transported internationally. It includes information about the shipper, the cargo and its destination. It is the shipment’s ID, of sorts, and a tool for tracking it along the way. With the AWB number, the shipper is able to track his/her transport online. The AWB is issued by the shipment carrier (airline or forwarder), in several copies. That way, each participant can account for handling it. In addition, IATA has introduced the e-AWB with the aim to simplify the shipment procedure.
Numerous air freight carriers offer various tracking options, such as email alerts. In terms of the procedure, pretty much every airline website features a cargo tracking section, where you can check the status of your shipment at any given moment.
The decision on which one to use eventually boils down to their respective reputation and track record.
Air freight / Air + Express for Amazon sellers
When shipping their products, the Amazon seller has several options to choose from. The traditional process of air freights usually implies large cargoes transported from the origin port to the destination port. This would be the cheaper option. However, add to this possible storage, handling and customs costs. Also, the fact that you will have to use a third party to pick up the goods from the airport of arrival.
This is also where the phrase “Air + Express” is introduced. It is a simpler and quicker solution specifically optimized for Amazon sellers. The cargo travels by air (phase one). After its arrival in the destination country and customs clearance, Express (FedEx, UPS, DHL) handles further ground transport to its final destination (phase two). This means direct, door-to-door delivery. You will be spared of having to handle customs clearances, as well as additional (land) transportation.
For example, in case of an Amazon seller, the cargo will travel from your point of pickup directly to the Amazon FBA warehouse. This way, the client is provided with a simpler and quicker solution, but one with a heftier price tag from your freighter.
Wrap-up & conclusion
As you have seen, there is a multitude of options at hand with regard to international shipping and air freight. Choosing air freight might be the best solution in certain cases – transporting lesser-sized shipments and, especially if it is a matter of some urgency.
A general piece of advice would be to test the water before committing to long-term operations involving air cargo shipment, especially in its quicker (but costlier) forms. This particularly relates to businesses just getting started.