https://forto.

com/en/
blog/basics-in-air-
freight/

An Introduction to Air
Freight: All Important
Basics You Need to
Know to Ship Cargo
via Plane
 # Logistics Knowledge
For a long time, air freight was considered as the only option for particularly
high-value freight and urgent, special deliveries. However, this way of thinking
has become outdated and air freight is enjoying increasing popularity, due to its
high reliability and great on-time performance. Especially in the current market
situation is air freight more than ever attractive, while ocean freight is struggling
with huge delays and high freight rates due to the recent blockage of the Suez
Canal or the port congestion in Yantian.

Therefore, it’s not surprising that more and more airlines are converting their
fleet to cargo machines and increase their offerings in this area. For overseas
trade in particular, air freight has become indispensable. The world’s largest
transshipment hubs are in Asia. However, Germany is already among the top ten
global hubs, with Frankfurt, Leipzig/Halle and Cologne/Bonn airports. This
article will provide you with all the information you need to know about air
freight as a mode of transport and underlines what you should consider in order
to take advantage of its many benefits.
Understanding Air
Freight Basics: What is
it About?
In general, air freight can be defined as the transportation of goods by aircraft.
The cargo can be transported either on scheduled or charter flights, depending
on the volume and urgency of the freight as an express or courier shipment. In
addition, a general distinction is made between consolidated air freight and
individual shipments, more commonly referred to as standard air freight. Such
standard air freight is usually loaded below the deck of a passenger aircraft, why
it is also called a belly flight.

Smaller shipments, which are more often the case, are transported on
standardized ULD (Unit Load Device) containers — larger items on ULD
pallets. These are transported via liner, where the entire space of the aircraft is
filled with containers. More than two-thirds of all air cargo is thus transported
on only cargo aircraft and one-third as additional cargo on regular passenger
flights. The share of freight is increasing, especially for distances over 4,000
kilometers. Not only for flights to China, but also for destinations in the Middle
East.

The most important categories of air freight goods include electronics,

machinery, optical medical instruments, and pharmaceutical products. One-way
traffic is particularly characteristic of air cargo. Thus, unlike passengers, air
cargo generally does not return to its point of loading. This creates an imbalance
in traffic volume, which often results in overcapacity in one shipping direction.
Who are Important
Players in the Air
Freight Market?
Like handled in other transport modes, the offer a shipper receives relates to the
available capacity of a carrier. In the case of air freight, the carriers are the
airlines. They sell their capacities to forwarders, who in turn try to fill them with
cargo.

But there is an additional point when it comes to transportation via air freight.
Since several countries might be flown over, encompassing a wide variety of
country-specific agreements, other players are also involved beyond the
contractual setting of the cargo given and cargo handled parties. In order to
create uniformity and equal rights for all participants, the International Air
Transport Association (IATA) was formed, which acts as an umbrella
organization.

Generally, the freight forwarder acts as the middleman between the carrier and
the customer in consolidated freight transport. Additionally, the freight
forwarder acts as an agent of IATA, and thus has an intermediating function.
Forto also holds an IATA license and has access to a broad and reliable network
of partners in order to find the best solutions for its customers. The contractual
proof of the cargo shipment is given by a document called “Air Waybill”
(AWB).
How Can Duration and
Costs be Calculated?
The fastest way to get goods to
their destination
The most impressive advantage of air freight is obvious: the speed. While
courier goods are delivered latest the next day, express goods arrive after a
maximum of three days and standard goods after a maximum of seven days.
This means that air freight, compared to sea or rail freight, is clearly the fastest
mode of getting goods from A to B. This is an enormous competitive advantage,
especially for time-sensitive and very valuable goods, where the customer
expects to be informed about the status of the shipment at all times and is
reluctant to accept long transit times.

Calculating air freight: general

freight rates
The price structure in air freight is based on the cost calculation of consolidated
air freight, according to the IATA calculation scheme, which is published in the
tariff table of The Air Cargo Tariff Manual (TACT), which basically applies to
transport from airport to airport. The price calculated in this way must be
indicated in the Air Waybill together with the calculation method. In practice,
the calculation of air freight rates is extremely complex, since in addition to the
general rates there are other factors, such as commodity class rates and special
rates, which subsequently influence the final price.
The general calculation basis of TACT rates depends on two quantities.
The volume weight, is the space-consuming mass of the cargo, compared to the
cargo’s actual weight. The highest of the two values is then used as the basis
for calculating the price. For air freight, the basic factor 1 m³ = 167 kg is used.
In addition, better prices can be offered on routes that serve a high volume of air
freight compared to lower-volume exotic routes. The total amount of the
ordered shipping volume will clearly decide the price.

There are also separate calculations in TACT for full container loads. On top of
the IATA rates, there are additional charges and costs for the forwarder. In the
end, the final price for an airfreight shipment is made up of many factors. So it’s
hardly surprising that, with traditional forwarding agencies, a price calculation
can take several days, and the final price is not always clearly evident in the
offer.

Organizing Air
Transports
Steps you need to take to get
your goods into the air
Regardless of whether you want to transport a full container load or only a
partial load: after you’ve contracted a forwarding agent, you will need to handle
the necessary formalities. We at Forto are glad to help you to take all these steps
and help to simplify the process. Step one is the determination of the Incoterm
and the specification of the scope of the shipment in the freight contract. The
abbreviation Incoterms stands for International Commercial Terms, i.e.
international trade clauses that traders use when concluding contracts to define
the uniform distribution of costs and obligations as well as the transfer of risk.
The next step is to book the freight space and organize customs clearance. As
already described, air freight is offered either in only cargo aircraft or as
additional cargo in passenger aircraft. Another variant of transportation is also
air freight substitute transport by truck or rail. This alternative is also generally
referred to as road feeder service and is implemented on behalf of the airlines.
Although the transportation obviously takes place on the ground, the cargo
retains the official status of air cargo.

As the upstream and downstream stages in the shipping process, ground

transports stand in addition. These concern the pre-carriage, i.e. the onward
transfer of the goods from the consignor to the airport, and the onward carriage,
i.e. the route from the airport to the consignee. These are organized by air
freight forwarders on behalf of the consignors and consignees.

Advantages at a Glance
Air freight offers you probably the fastest, safest and most efficient way to
transport goods. Its biggest advantage – speed – is obvious. If you want your
goods to reach their destination as quickly as possible, air freight is undoubtedly
the best option. In direct comparison to the popular sea alternative, airplanes are
about 30 times faster en route.

But air freight is also way ahead in terms of reliability. Airlines are better than
ocean freight companies at handling schedule changes, which makes air freight
departure and arrival times significantly more reliable. A missed departure with
a shipping line can mean a delay of a day or more. Airlines, on the other hand,
adhere to a strict schedule, usually with multiple flights per day.

In addition, air freight is a much safer alternative to ocean freight, which is

especially relevant for high-value goods. Anyone stuck in an airport security
queue can relate. That’s because cargo goes through a strict, standardized
process, with multiple security checks at the airport ensuring that the risk of
damage or theft is reduced compared to ocean freight. And even though piracy
on the seas is on the decline, shipments of goods are more likely to be damaged
or go overboard while being transported across global waters. In 2020, more
than 3,000 containers were lost this way in 80 days. A risk that does not exist
with air freight.

Even if air freight seems a lot more expensive at first glance, the short transit
times also mean a significantly higher turnover of goods, which in turn leads to
lower capital commitment costs. This has a positive effect on your cash flow.

Forto’s air freight service provides you with a reliable way to get your goods to
their destination, even in the current situation. Would you like to learn more
about Forto’s air freight solutions? Feel free to contact us by mail with your
request here. Our team of experts will be happy to provide you and your
shipments with the necessary tailwind.