Air freight proves a cost-effective alternative

WHILE shipping has long been considered the cheapest form of transporting cargo, air freight is proving to be a viable alternative in some cases because costs compare favourably when the ‘total cost’ concept is applied.

Sending goods by air freight generally means packaging and insurance costs are lower due to the careful handling of goods by airlines and less pilferage or damage to goods during transit. 

Less finance is tied up in goods held in store because warehousing requirements are also reduced in both the country of origin and country of destination.

There are four main air cargo classifications.

Specific Commodity Rates

Rates that apply to specific commodities, usually to meet the needs of regular bulk shippers for certain routes.

Class Rates

Rates that are shown as a percentage of General Cargo Rates and applicable to, for example, livestock, newspapers, books and baggage as cargo.

General Cargo Rates

Rates that are applied to cargo not covered by SCR or Class Rates.

Unit Load Device (Container Rates)

Rates that are available when a shipper or freight forwarder buys a container at a set price. 

Excess charges may apply per kilogram over a certain weight, however, competitive rates can apply when a freight forwarder or air cargo agent consolidates cargo – sometimes offering more competitive rates than the airline itself. Incentive rates are also available when using sea freight through certain freight forwarders.

Freight rates and minimum levels of service are set periodically by industry bodies such as the Western Australian Shippers’ Council, in conjunction with stakeholders, to ensure a standard service by its members.

When shipping cargo, general cargo rates apply to a large number of manufactured goods and there are some specific rates for particular commodities. 

Rates are quoted per cubic metre or ton, whichever is greater.

The majority of Australia’s sea-borne exports are carried on specialised bulk carriers that have superseded conventional cargo ships.

Standard sizes of containers are 6.055 metres by 2.435 metres by 2.435 metres and 12.1 metres by 2.435 metres by 2.435 metres.

Booking space on container ships is either by LCL (less than a container load) or by FCL (multiples of full containers).

However, whether using air or sea freight, using reputable logistics professionals to ensure all documentation and export requirements are completed before goods leave the country will help to avoid lengthy and expensive delays when the goods arrive in the country of destination.

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