Many freight forwarders provide air freight quotes that are not complete, comprehensive and clear. Receiving an invoice after your air freight shipment with extra charges that you did not know about is frustrating.
It is important as a Freight Forwarding or Logistics Manager to understand what your air freight shipment will cost so you can plan. Basic information such as freight rate, transit time and static charges are usually included. But some freight forwarding companies leave out additional charges that might be incurred either because they are not aware of them or sometimes on purpose.
Reasons to hide these additional potential charges could be either to reduce the risk perception or increase profit for the air freight forwarder.
These untold facts, if not dealt with proactively, have an impact on your air freight shipment and can be the core reason for cargo delays. In order to deliver your cargo on time and under the projected landed cost, it is important to have knowledge about these facts. Many times, a lack of awareness or over-trust makes business owners and logistics managers forget to ask about these facts. It is important to be informed and seek clarification from your freight forwarder to avoid surprises with your shipment.
Read on to learn 5 facts that can assist you to make a better air freight decision.
1) Air freight routing and stoppages
Air freighter routing, including the location and number of stops, can have a huge impact on transit time. Boarding the cargo within the cut off is not the only task and should also reach the final destination before the delivery cut off time.
To serve multiple destinations in a single trip and increase profit share, airlines tend to group multiple locations in a single route resulting in an increased transit time.
If an air freight quote does not include your cargo routing and the number of stops between the origin and destination, ask your freight forwarder for these details. This will help you to meet your deadlines and increase order fulfilment.
2) Legal compliance and rules
Due to the heavy use of passenger aircraft for the movement of commercial cargo into Sydney, Melbourne, Brisbane and Perth, every risk associated with cargo movements must be completely mitigated. There are strict compliance requirement specified by IATA and individual countries to ensure these risks are mitigated.
Compliance requirements are changed and amended regularly based on risk perception. Importers, exporters and their freight forwarders must comply with all regulations without fail before the cargo is loaded. Some goods are completely prohibited from being moved via air freight, whereas some are declared hazardous and require special permissions and certificates for on boarding.
Many times, a general air freight quote does not include all these requirements and can later be the reason for delay and detention.
3) Calculation of chargeable weight
All per kilogram charges mentioned in an air freight quote are charged on chargeable weight. Chargeable weight refers to the higher of the actual weight of the goods and the volumetric weight of the goods. Many managers or new importers/exporters do not understand the concept and even if they do understand the concept, they do not know how to calculate the chargeable weight.
Read this blog to learn how to calculate the chargable weight for you air freight shipment. The calculation of volumetric weight is different for courier and cargo modes and it’s not usually mentioned in an air freight quote.
In addition, airlines always charge a minimum of 45 kgs even if your chargeable weight is lower. Make sure that you know these facts and insist on this clarity in your air freight quote before moving ahead.
4) Dimensional restrictions and packaging instructions
There are clear packaging instructions and dimensional restrictions for air freight movements. A ULD (unit load device) provides a clear idea on the maximum height and permissible volume that can be stuffed. Packaging instructions inform special packaging needs for specific commodities.
Airlines use different types of passenger aircraft as well which may have different dimensional and packaging requirements.
If an air freight quote does not specify these facts, ask your air freight forwarder to provide you with the details so you can avoid delays.
5) Taxation and statutory charges
The calculation of the landed cost for your cargo can be tricky for supply chain managers, freight forwarders or even experienced importers. Apart from air freight and some static charges, there are taxes and other statutory charges applicable which change from country to country. Sometimes, an air freight quote might not mention these charges but they eventually appear on the invoice. This creates confusion in pre-determining the landed cost and hence creates a challenge in defining the selling price of a product.
To get rid of this challenge, IATA accredited air freight forwarders, such as BCR, keep track of these charges. Australian shipping and logistics solutions managers should always confirm the detail on taxes and statutory charges in advance so that landed costs can be calculated precisely.
Many times, an air freight quote provided by an airline or freight forwarding company will only provide limited information and can hide critical facts. The omission of these facts might be the reason for additional freight costs and delay your cargo for days.
The above-mentioned points should be checked prior to the booking of cargo for hassle-free delivery and predictable costs. High quality freight forwarders are more transparent with air freight and sea freight quotes and will work to provide a complete and comprehensive quote. Outsourcing your freight operation to a well-established freight forwarder increases your chances of getting a complete air freight quote. This is likely to save you the stress of delays and hidden costs. Established freight forwarding providers intimately understand all the requirements in advance and will provide a complete air freight quote.
For more than a century, BCR has continued to help small, medium and large businesses achieve an optimum logistics solution with warehousing and transportation, including air freight and sea freight services to and from the major ports including Brisbane, Sydney, Melbourne, Adelaide and Fremantle (Perth).