Many different kinds of freight and shipment sizes use air freight. For purposes of this article, we’ll focus on heavier weight air cargo moved as either freighter or belly cargo versus small package express shipments.
Product tariff: The first question is whether there is a special product tariff that applies to what you are shipping. Perishables, pharmaceuticals, live animals, human remains, dangerous goods, and urgent express shipments often have their own special tariffs. Otherwise, a hard freight or dry cargo tariff would apply.
Chargeable weight: Next, what is the chargeable weight for your shipment? That is the higher of the actual gross weight or the dimensional weight, which is the space occupied by your shipment. Simply multiply the shipment’s length times width times height to calculate the cubic inches, centimeters or meters, then calculate as follows. For domestic shipments, many airlines consider every 192 cubic inches as a pound. For international shipments, every 166 cubic inches is a pound, every 367 cubic inches is a kilogram, and every cubic meter is 166.7 kilograms. Which measure of weight is higher after you do the calculation?
Base freight charges: Using the product tariff and the chargeable weight, you can derive the base air freight charges. Most rates are charged either per pound (or hundred pounds) for U.S. domestic and per kilogram for international shipments. Some tariffs contain higher “weight breaks” so that larger shipments that fall into higher weight brackets get a lower weight rate. There is always a minimum charge to cover small shipment sizes.
Fuel surcharges: These are set individually by airlines to recover incremental fuel costs, most often charged per lb or kilo along the very same lines as base rates, using the shipment’s chargeable weight. But some airlines charge based on actual gross weight only, a bargain for shippers with voluminous cargo.
Security surcharge: Another airline fee often charged to help offset the costs of security infrastructure and compliance programs. It is often charged on a per pound or kilo basis just like base freight and can be on the gross weight only or the chargeable weight of the shipment. This surcharge is usually separate from any fees for physical screening or freight inspection, which may be additional.
In some markets, some airlines combine these three separate charges into a single blended rate offer — an “all-inclusive” rate, or “all-in” rate.
There are a few exceptions on how some cargo is charged:
- Airline small packages may be priced per piece within certain weight brackets, i.e. 51-70 lbs.
- Different pet kennel sizes may have different flat charges
- Air coffins for human remains may have a single unit charge unless they exceed a certain weight
- Airline containers tendered loaded and ready-for-carriage may be priced with a flat charge based on specific market and size of the container
- Extra-long or heavy cargo in freighters (and sometimes passenger aircraft too) may be assessed additional “positional” charges for their space and/or weight displacement.
- Full charter loads may be priced for a set price for the entire aircraft, regardless of shipment weight.
- Additional fees often apply for dangerous goods shipments based on how many different dangerous commodities are being shipped on the air waybill.
- In most cases above, fuel and security surcharges may also be charged, though some airlines may include them as “all in”
Airlines will normally have set base freight tariffs for each city pair served. More competitive “contract” rates may be offered to customers for committed regular support in select lanes. In addition, airlines will periodically offer promotional or “sale” rates for a narrower set of lanes they need support on. Airlines may also negotiate spot rates for larger shipments as needed and increasingly use web portals for more electronic shipment- and flight-specific rate offers too.
Miles J. Varghese
Great post! Thank you guys for sharing – succinct, straight to the point, and well laid out.
Side note: we’re building a new freight collaboration tool for independent forwarders and their customers too stay better in sync, and during done is our validation conversations with smaller forwarders, we’ve found that many still use a print binder for those negotiated rates the forwarder has secured with the airliner.
I’d be curious if any one knows if there has been our is a solution focused on this specific aspect of the business/fees you mentioned here.