International Air Cargo Transportation Rates are a critical factor impacting a business’s operational costs. To accurately calculate international air freight costs, carriers will base rates on the pricing formula established by the International Air Transport Association (IATA), as well as other applicable surcharges. Additionally, selecting a reliable service provider is crucial to ensuring cargo is transported safely and on time to its destination. Join SSR Logistics as we explore the details of international air cargo transportation rates in this article.
Air Cargo Rate Calculation Formula
The international air cargo transportation rate is determined based on the formula issued by the International Air Transport Association (IATA), which includes two main factors: the weight of the cargo and the dimensions of the cargo.
Basic Rate Calculation Formula:
Rate = (Cargo Weight x Weight Factor) + (Cargo Dimensions x Dimension Factor) + Surcharges
- Cargo Weight: measured in kg.
- Weight Factor: a factor determined by IATA for each type of cargo.
- Cargo Dimensions: calculated by the formula: Length x Width x Height / 6000 (result in cm).
- Dimension Factor: a factor determined by IATA for each dimension group of cargo.
- Surcharges: include other fees such as THC, D/O fee, storage fee, customs inspection fee, etc.
Example:
Suppose you want to ship a 100kg shipment with dimensions of 50cm x 40cm x 30cm. Looking up the IATA rate factor table, we have:
The weight Factor for your type of cargo is 1.2.
The dimension Factor for your cargo dimensions is 1.3.
Rate = (100kg x 1.2) + (50cm x 40cm x 30cm / 6000 x 1.3) + Surcharges
So Rate = 120 + 13 + Surcharges
Types of Air Cargo Rates
In international air cargo transportation, there are various types of rates applied depending on the nature and characteristics of the goods. The main types of rates include:
- Normal Rates
- Minimum Rate (MR): This is the minimum rate that airlines apply for cargo transportation. Typically, the actual freight rate will be higher than this minimum.
- General Cargo Rate (GCR): The general cargo rate is the basic rate, excluding any discounts from the carrier. This is the rate applied to goods without specific commodity rates.
- Class Cargo Rate: The class cargo rate is a specific rate for each particular type of commodity. For example: high-value goods (gold, silver, etc.) may have a 200% rate compared to GCR, live animals 150% of GCR, etc.
- Priority Rate: The priority rate applies to goods that need to be transported urgently. This rate is usually 30-40% higher than the normal rate and is the most expensive in international air transportation.
- Container Rate: The container rate is a rate specifically for goods packed in air cargo containers (different from maritime containers).
Air Cargo Surcharges
In international air cargo transportation, various types of rates are applied depending on the nature and characteristics of the goods. The main types of rates include:
- Delivery Order (D/O) Fee: This fee is paid when the cargo arrives at the destination airport to receive the delivery order from the airline. Based on this order, the consignee can present it to customs and retrieve the cargo.
- Terminal Handling Charge (THC): The THC covers the loading/unloading of cargo between the warehouse and aircraft at the origin and destination.
- Air Waybill (AWB) Fee: This fee arises when issuing the air waybill for the shipment. The air waybill is evidence of the transportation contract but not proof of cargo ownership.
- Automatic Manifest System (AMS) Fee: The AMS fee is paid for transmitting cargo data to the automated customs systems of certain countries like the US, Canada, China, etc.
- Security Charge (SCC): The SCC is a fee for security screening of cargo at the airport, usually at a low rate.
- Forwarding Bill (FWB/FHL) Fee: This covers data transmission of the master and house air waybill to the national single window system.
- Bill Split Fee: This applies when destination freight handlers need to split house bills from the consolidated master bill.
- Handling Fee: This fee covers loading/unloading, arranging, and managing the cargo at the warehouse before loading on the aircraft or after unloading.
Depending on the nature of the goods, customer requirements, and specific conditions, other surcharges may arise during international air cargo transportation.
Air Cargo Surcharges
6 Factors Affecting Air Cargo Rates
The rates for international air cargo transportation are influenced by various factors. The main factors include:
Cargo Characteristics
- Type of Cargo: High-value, perishable, or goods requiring special packaging and handling will have higher rates.
- Weight and Dimensions: Heavier and larger cargo will be charged higher rates due to occupying more space and requiring more handling.
Transportation Mode
- Speed of Transport: Expedited (priority) cargo services will have higher rates than regular services.
- Type of Aircraft: Using larger aircraft or chartering will incur higher costs.
Transportation Conditions
- Distance: Rates tend to increase with longer transportation distances.
- Origin and Destination: Major, expensive, or geographically distinct airports will increase rates.
Timing of Transport
- Peak vs. Off-Peak Seasons: Rates may rise during peak seasons due to high demand.
- Urgent Timeframes: Transporting cargo within short timeframes will have higher rates.
Airline
- Rate Policy of Each Airline: Airlines may apply different rates for the same cargo and conditions.
- Reputation and Service Quality: Reputable, high-quality airlines tend to have higher rates.
Freight Forwarder
- Competition Among Forwarders: More competition on a route leads to more competitive rates.
- Scale and Reputation of Forwarder: Larger, reputable forwarders can negotiate better rates with airlines.
6 Factors Affecting Air Cargo Rates
Therefore, to determine accurate rates, it is necessary to consider all of these factors along with the specific needs of the customer. Consulting and negotiating directly with reputable airlines or freight forwarders is essential.
SSR Logistics Air Cargo Services
SSR Logistics is one of the leading international air cargo carriers. As a member of the International Air Transport Association (IATA) and a partner with numerous domestic and international airlines, SSR Logistics has an extensive transportation network with the ability to access airports worldwide.
Diverse Shipping Services
SSR Logistics provides shipping services for a wide range of cargo types, from general goods to specialized cargo such as fragile items, high-value goods, oversized cargo, perishables, etc. Our experienced team of experts will consult and design appropriate shipping solutions tailored to each type of cargo, ensuring safety and efficiency for every shipment.
Commitment to Top-quality Services
To deliver the best service experience to customers, SSR Logistics is committed to providing outstanding service quality through a team of knowledgeable and professional support staff. Customers will receive dedicated support and consultation throughout the shipping process to ensure the safety and smooth transit of their cargo.
Competitive Rates, Cost Savings
SSR Logistics applies competitive and reasonable rates to help customers maximize profits and save on shipping costs. Additionally, our fast and efficient transportation services contribute to reducing cargo transit times, allowing customers to save time and costs.
With our professional capabilities and shipping expertise, SSR Logistics is the premier choice for businesses requiring international air cargo transportation services. Contact us to receive personalized consultation and detailed quotes for air freight services tailored to your needs.
Our services include:
- Free consultation on import/export procedures and processes
- HS code lookup
- Monitoring and handling customs clearance procedures, including document checks, cargo inspections, and duty payments
- Electronic customs declaration for import shipments
- Food safety certification as per Ministry of Health regulations
- Warehousing and cargo storage services
- Ocean and air freight transportation
- Expedited domestic live animal transportation
With this article, SSR Logistics hopes that our valued customers now have an overview of 6 factors affecting air cargo rates. For more articles, please visit our Logistics Knowledge section.
SSR looks forward to becoming your reliable logistics partner, providing optimal solutions for your importing and exporting business. Should you have any question regarding our services, please feel free to contact us for specific advice.
With our experienced team, extensive network and flexible shipping & customs solutions, SSR Logistics is confident to deliver excellent services to our clients.
Businesses that need customs and import-export consulting, please contact SSR Logistics via Hotline (+84) 911 988 484 or leave your information here for specific advice.
With a modern warehouse system and experienced transportation staff, SSR Logistics provides a variety of additional services such as: customs clearance, warehouse leasing, domestic transportation, international transportation by sea and air, and international express delivery.
