One of the key elements of import and export is the transport of cargo to its destination. When transporting goods from distant countries, e.g. East Asian ones, you can choose air, sea, or rail freight. In this article, we present airfreight – definitely the fastest, but also the most costly of the above mentioned.
Characteristics of airfreight
Airfreight is the most modern and dynamic branch of transport that enables to carry the cargo in the shortest time possible. Due to the specificity of this type of transport, it is used primarily for the carriage of perishable, valuable, or urgently needed goods.
One feature that distinguishes airfreight from other means of transport is the transit time – cargo transportation from China to Europe can take from 3 up to around 7 days depending on the selected service, with an average of 5 working days. In comparison, sea transport would take around a month in this case. However, the time savings are followed by relatively high costs, which will be discussed further in the article.
Each year several tens of millions of tons of cargo are transported by air. At any moment there are from 8 to 20 thousand passengers and cargo aircraft over the globe (depending on the season and time of the day). To picture the scale of air transport development, you can take a look at the live map of various types of aircraft location by Flightradar24.
Stages of air transportation
In most cases, air transport is entrusted to an independent forwarding company. That being said, it is worth knowing what steps are included in the transportation process:
- delivering cargo from the supplier to the airport;
- customs clearance at the place of dispatch;
- cargo loading and transfer to the destination airport;
- cargo unloading and customs clearance in the destination country – only after the verification of relevant documents and settlement of charges will the cargo be released;
- delivering cargo from the airport to the recipient.
Types of airfreight
There are different types of airfreight depending on the way it is organized:
- consolidated freight – many different shipments placed in one flight. It is the most cost-effective method, however it may extend the transit time by several days (due to waiting for the necessary number of shipments to be collected);
- direct services (back-to-back) – parcels travel in the hold of an aircraft taking a scheduled flight. In this case, size restrictions apply, especially if we opt for the cheapest option, which is placing a standard size ULD (Unit Load Device, approximately 307 x 213 x 193 cm) parcel in the front part of the hold. One advantage of this method is the possibility to choose a direct flight to the destination;
- charter – definitely the most costly and the least popular form among small companies, where an entire plane is chartered to carry a specific cargo and you have to pay for a round trip.
Some other categories refer to the type of cargo:
- general cargo – non-restricted goods, such as clothing, accessories, or certain types of electronics;
- special cargo – restricted goods, which are (depending on the airline) e.g. lithium-ion batteries, works of art, and power banks; restricted items can only be carried under strict supervision and with the consent of the carrier.
Advantages and disadvantages of airfreight
Before you decide to use airfreight, it is good to realize the advantages and disadvantages of this type of transport and then make a decision based on your own situation. The strengths of air transport include:
- high speed,
- easy access (especially important in landlocked countries),
- easy shipment tracking – you can watch the location of your cargo live,
- protecting delicate and valuable cargo from damage (when properly packed).
The disadvantages of airfreight, in turn, include:
- high cost,
- a large number of goods subject to restrictions or prohibited for air transportation,
- environmental harmfulness,
- lower carrying capacity in comparison to other means of transport.
Cost of airfreight
The cost of airfreight is usually calculated based on tariff and cargo weight. One exception is a situation in which the cargo is of non-standard dimensions and the volume-to-weight ratio is high – in such a case the volumetric weight will be taken into account. It can be calculated in different ways by various carriers, as the volume in cubic centimeters divided by 5000 or volume in CBM multiplied by 167. It is therefore usually more profitable to ship more “dense” consignments by air.
Below we present exemplary airfreight rates:
- Istanbul – Johannesburg, 0.25 CBM ≈ 310 USD
- Shenzhen – Warsaw, 45 kg ≈ 637 USD
- Istanbul – Karachi, 0.09 CBM/25 kg ≈ 350 USD
- Mexico City – UK, 50 kg ≈ 440 USD
- Corum (Turkey) – Ahmedabad (India), 0.05 CBM/54 kg ≈ 470 – 800 USD
- Istanbul – Toronto, 2.11 CBM/310 kg ≈ 2750 USD
- Los Angeles – Warsaw, 4.34 CBM/838 kg ≈ 3570 USD
- Arizona – Istanbul, 0.01 CBM/5 kg ≈ 300 USD
- Kuala Lumpur – Istanbul, 2.0 CBM/100 kg ≈ 620 USD
It should be noted that covering the cost of transit is not all. Besides, you still have to pay the customs duty and VAT, which are calculated as a percentage of the sum of the cost of goods + cost of delivery. This means that the tax will be higher in the case of expensive delivery. That is why transporting goods of low monetary value by air may turn out to be uneconomic.
It is also worth verifying what constitutes the price of carriage offered by the forwarder. It often does not include additional costs, such as the fuel surcharge, which you will be obliged to cover.
Key airports and airlines
Only four out of the 20 busiest airports in the world (according to cargo traffic expressed in tons) are European. The Hong Kong International Airport has consistently been ranked on the top of the list for 10 years. Below we present the 5 busiest cargo airports in the world:
- Hong Kong International Airport (4.8 million tons of cargo traffic in 2019) – the airport is located on the Chek Lap Kok island in the Special Administrative Region of China, Hong Kong. It operates both passenger and cargo flights. It is the key hub for Cathay Pacific Cargo, Air Hong Kong, Hong Kong Airlines Cargo, and UPS Airlines.
- Memphis International Airport (4.3 million tons of cargo traffic in 2019) – located near Downtown Memphis in the USA, this airport is the global center for FedEx Express. Before 2009, it was the Memphis International Airport that was the world’s busiest cargo airport. It also handles passenger traffic. The airport is an important hub for such cargo airlines as DHL Aviation, FedEx Express, FedEx Feeder, and UPS Airlines.
- Shanghai Pudong International Airport (3.6 million tons of cargo traffic in 2019) – one of the key airports of East Asia and the main hub for such airlines as Chine Eastern Airlines, Shanghai Airlines, and Air China. Besides, it is a crucial point on the map of Asia for FedEx, UPS, and DHL airlines. Shanghai Pudong International Airport handles the majority of international flight passengers in China.
- Louisville International Airport (2.8 million tons of cargo traffic in 2019) – a civil-military airport located in Louisville, USA. It operates primarily international cargo flights, rather than passenger flights. It is one of the main hubs for UPS Airlines and also operates Air Cargo Carriers, Ameriflight, FedEx Express, and SkyLink Express.
- Incheon International Airport (2.8 million tons of cargo traffic in 2019) – the busiest airport in South Korea, recognized worldwide for its cleanliness and efficient organization. It is the Korean hub for such airlines as Air Incheon, FedEx Express, China Eastern Airlines, and Korean Air.
As many as 5 out of the 20 busiest cargo airports in the world are located in China, Hong Kong, and Taiwan. These are Hong Kong International Airport, Shanghai Pudong International Airport, Taiwan Taoyuan International Airport, Beijing Capital International Airport, and Guangzhou Baiyun International Airport.
Strategic airports located in Europe are:
- Charles de Gaulle Airport (France, 2.1 million tons of cargo traffic in 2019) – located around 20 km away from Paris, this airport is the European leader in air cargo. It is key for, among others, Air France Cargo, FedEx Express, Korean Air Cargo, UPS Airlines, Emirates SkyCargo, and China Cargo Airlines.
- Frankfurt am Main International Airport (Germany, 2.1 million tons of cargo traffic in 2019) – the airport located in Frankfurt am Main often ranked first in Europe in previous years. It is the main hub for Lufthansa Cargo airline and an important transport center for, among others, Air China Cargo, Asiana Cargo, Cathay Pacific Cargo, FedEx Express, Turkish Cargo, and Etihad Cargo.
- London Heathrow International Airport (the United Kingdom, 1.7 million tons of cargo traffic in 2019) – the European leader in passenger traffic and the second busiest airport in the world in terms of international passenger traffic. As regards cargo traffic, it is an important partner for Cathay Pacific Cargo, Emirates SkyCargo, Etihad Cargo, Korean Air Cargo, Qatar Airways Cargo, and Singapore Airlines Cargo.
- Amsterdam Airport Schiphol (the Netherlands, 1.6 million tons of cargo traffic in 2019) – the leading airport in the Netherlands, a hub for KLM Cargo airline. It serves many different cargo carriers, including DHL Aviation, Air China Cargo, FedEx Express, and China Southern Airlines Cargo.
Airfreight and Incoterms
Transport of goods is closely related to Incoterms, i.e. the International Commercial Terms. These define the scope of responsibility, division of costs and obligations between the buyer and the seller. Experienced entrepreneurs sometimes decide on solutions that place most of the responsibility on themselves, but at the same time help reduce costs.
When it comes to airfreight, the following Incoterms may apply:
The buyer bears the most responsibility when EXW or FCA apply, whereas DPU, DAP, and DDP imply the least responsibility on the buyer’s side.
Packing goods for air transport
Proper cargo packaging is essential for its economic and safe delivery. First of all, the elements inside the box must be packed as tightly as possible using various types of void fill, e.g. polystyrene or bubble wrap. This will prevent the elements from bumping against each other, and you will avoid overpaying for carrying empty space.
Air transport cargo can be arranged in the form of single parcels or pallets, however, the latter may incur additional costs.
Goods subject to restrictions in air transportation
The list of goods subject to restrictions in air transportation is quite long due to its specificity. Depending on the choice of airline and type of cargo, those items are either categorically prohibited for carriage or require the carrier’s consent and special safety measures. In case your cargo falls under one of the following categories, you may consider sending it by sea.
The most common restricted items are for example:
- strong magnets,
- toxins and hazardous substances,
- flammable and radioactive items,
- lithium batteries,
- precious metals and works of art.
Customs clearance and airfreight
During the customs clearance (both in the country of origin and destination) specific documents will be necessary. The most important ones are:
- Commercial Invoice,
- Air Waybill (AWB).
Optionally, you may have to provide:
- Packing List (a complete list of goods in the shipment),
- Certificate of Origin,
- other relevant certificates.
All these documents are prepared by the freight forwarder and/or the seller.
The importer is obliged to settle tax and customs duties. As we have already mentioned, both customs duty and VAT are calculated as an adequate percentage of the total value of goods and delivery.
Many importers and exporters decide to choose professional forwarding services, which is a result of the difficulty of overseeing the whole process that takes place thousands of kilometers away. A forwarding company plans and organizes the entire logistic process, including booking space on a given flight and handling the documentation. You can compare the offers of various forwarding companies using Shiphub.co.