How Air Freight Rates are Calculated – The More You Have the Cheaper the Rate

Air Freight Rates

The way airlines calculate air freight rates, the more you have the cheaper the rate, usually, there are exceptions, but these are rare. Airlines offer air freight rates to the market at various break points usually, Minimum (A flat price) and then a per Kg price based on under 45Kgs, plus 45Kgs, plus 100Kgs, plus 300Kgs, plus 500Kgs and plus 1000Kgs. Sometimes it is cheaper to round up to the next breakpoint, but the freight agent should do this automatically.

Consolidated Air Freight Service

A way of benefitting from the higher breakpoints is to use a consolidated air freight service. Consolidations are where shipments from 2 or more shippers are grouped together to get lower freight rates from the airlines. Freight agents that advertise cheap air freight rates often use consolidators, these are companies that have negotiated deals with airlines and pass the discounted rates to other freight companies. A company that only uses consolidators usually doesn’t have sufficient buying power with the airlines.

The downside of using a consolidated air freight service is the destination charges, because there is more than one consignee, the consolidation is sent to an agent at the destination airport, they will break down the consolidation into the individual consignments and charge a handling charge to the importer. Destination handling charges billed by agents can be higher than the airline charges.

Volumetric Air Freight – Chargeable Weight

With dense cargo the actual weight and the chargeable weight are the same, this changes when goods are bulky. Airlines calculate the chargeable weight of cargo by dividing the length x width x height (In cms) by 6000. When the figure you get is higher than the actual weight, the cargo is volumetric air freight and the air freight rates will be based on the higher figure.

Dense Cargo Rates – Density Tariff

Airlines like dense cargo and many offer a density tariff. Usually dense cargo rates are based on cargo that is under 3000cc per Kg and over 100Kgs. Calculate density by multiplying the length x width x height in cms and divide by the weight, if the figure is under 3000 you have dense cargo and could get some very low air freight rates

Fuel and War Surcharges

Fuel and War surcharges can be confusing to shippers, because:

War surcharges are charged to destinations where there are no wars.
Fuel surcharges increase quickly as fuel prices increase, but fall slowly when fuel prices fall.
Some airlines charge Fuel and War surcharges on the actual weight, some charge on the chargeable weight.
Some airlines charge a minimum on War surcharges.
Some airlines charge the same Fuel surcharge to Europe as they do to Australia, others charge different amounts to different regions.
And finally some airlines include the Fuel and War surcharges in the air freight rates.

Confused? Don’t worry. We will give you prices taking all the above into consideration.