Air Freight - What Should Be Taken Into Account to Quote?

The fact of quoting an air freight can end up being a real headache for those in charge of assuming its costs: What should be taken into account? Are the rates always the same for all types of products? How is the final cost calculated? If at any time you have these questions arisen and are considering carrying out transport of air cargo, continue in this article to find the answers.

What is Air Freight?

To quote an air freight, the first thing that must be clearly understood is its definition: it is the price that exporters or importers must assume for the international air transport of the shipped goods, always with an Incoterm agreed between the sender and the receiver.

And what do we mean by Incoterm? To the voluntary standards that the exporter and the importer establish when determining the delivery conditions and the shipping costs of said air cargo.

Who is Paid for Air Freight?

Air freight is paid to the freight forwarder or logistics operator in charge of carrying out all the operational and documentary procedures with the airline, carrying out the space reservation and all the procedures so that the merchandise can be exported.

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The Iata Stowage Factor

To begin shelling the factors that must be taken into account when quoting an air freight, the IATA -Association of the Air Transport International- establishes its stowage rate, through which the total volume of goods is calculated and It is multiplied by 167, obtaining what is known as weight/volume.

How is Weight / Volume Calculated?

As we said before, the weight/volume is a simple relationship in which the result is obtained by multiplying the dimensions of the merchandise in centimeters. length x width x height and dividing it by 1,000,000 to obtain the total cubic meters of the merchandise and finally multiply it in turn by the number 167.

To find out what amount should be invoiced, two figures will be found: the gross weight and the weight/volume. where the highest figure will be the one taken into account when quoting these freights.

For example, suppose we have a box that measures 60cm x 50cm x 45cm and whose gross weight is 30kg. Their calculations would be: 60x50x45 / 1000,000 = 0.135 m3 x 167 (Equivalence factor) = 22.54 W / V (weight / volume). In this case, the merchandise we are talking about has a gross weight of 30 kg, with a quantity greater than that of the weight/volume obtained of 22.54 W / V. P or both, the airline will charge always whichever is greater, in this case, the gross weight of 30kg.

The weight for which the merchandise is finally invoiced is known as a taxable weight.

Basic Charges to Quote an Air Freight

Once it is clear how the weight is calculated to quote an air freight. it is necessary to take into account a series of basic surcharges that apply to this air transport of goods and whose amounts may vary depending on the airline:

Fuel or FSC: surcharge to cover fluctuations in the price of fuel.
IRC: security charge applied at the airport.
Banking Charge: application of 1% on freight and surcharges quoted in currencies other than euros.
Ad valorem: it is applied when the cost of air freight is calculated according to the value of the transported merchandise and not according to its weight.
Dangerous Goods: for the collection or delivery of dangerous cargoes, the invoicing can be increased considerably up to 25% or even more. when quoting air freight, as is the case, for example, in international maritime transport.

Other Local Expenses to Consider

In addition to the basic charges mentioned above, other types of local expenses must be taken into account, which can be applied both in the issuance and in the reception of air cargo transportation. Therefore, if you want to quote an air freight without losing any detail, the following expenses must be taken into Payroll account:

SRC: is the liability insurance that is compulsorily quoted for each receipt or issue.
AWB: expense applied to the issue of each receipt or bill of lading.
GTC: surcharge for aircraft ground assistance, which is charged according to the gross weight of the merchandise.
E2 / G4: rate of transit of goods within the airport, which is calculated according to the gross weight of the transported material.
PNS rate: A concept that is charged to comply with the National Air Cargo Safety Plan, which is applied according to the gross weight of the merchandise and which may vary depending on whether it is unknown or known, having a higher price in the first case.
Air handling: surcharge charged for handling cargo within the air terminal.
Customs clearance: surcharge applied according to different factors such as the type of cargo, tariff items, services performed … etc

Types of Air Freight

After having made clear the concepts that have a determining role in the process of listing air freight, it is time to learn about its different types:

Freight by General Cargo: they apply to all types of cargo and are classified into normal freight – less than 45 kilograms in weight – and discounted freight – more than 45 kilograms in weight.
Freight by Classes of Merchandise: their quantities are expressed in percentages and refer to unaccompanied baggage, live animals, gold, silver and other values, funeral urns, coffins, books, magazines, catalogs and written in Braille.
Freight for Specific Charges: they can be requested when shipments of the same product are available and sent to the same destination on a regular basis. The shipments must have a minimum weight to be able to take advantage of the benefits of this type of freight.
Freight by Transport Units: In this system, a fixed rate is charged depending on the transport unit used at the origin and destination airports, such as containers, pallets, etc.

Air cargo tracking can be done online with the of track-trace website.

Air Freight or Sea Freight?

With all the information on how to quote air freight, there is probably still the question of whether it is the correct way to carry out international cargo transport. since there is another very efficient way. such as sea freight. What advantages and disadvantages does each one have?

Firstly, we will consider the strengths and weaknesses of air freight:

Advantages of Air Freight

Maximum speed.
Greater geographic coverage.
Flexible for almost all types of merchandise.
Minimum accident rate.

Disadvantages of Air Freight

More expensive methods.
It does not accept all kinds of dangerous goods.
More limited cargo space capacity.

And now we will compare them with those of sea freight:

Advantages of Ocean Freight

Ample cargo space.
More suitable for transporting dangerous goods.
Low cost.

Disadvantages of Sea Freight

Slower.
It pollutes more.
More cumbersome delivery process.

Therefore, when comparing the two types of international freight. we can conclude that air transport is more appropriate for shipments that require particularly, security and not too heavy quantities, while maritime transport is more suitable for heavy and dangerous loads.