Air Freight Guide: Essential Info for Exporters & Importers

In international trade, 90% of cargo by volume is transported by sea and only 0.5% by air. But this minuscule volume of air cargo translates to 35% of world trade by value or $6 trillion, according to the International Air Transport Association (IATA). Given that air carriers pride themselves on swift delivery and short transit time, the general rule in shipping is to move urgent, time-sensitive cargo by air.

When we talk about shipping by air, we come across two widely-used terms: air freight and air cargo. They are, erroneously, used interchangeably. But, according to the Business Dictionary, air freight is “carriage paid for goods transported in an aircraft” while air cargo is “goods transported by aircraft”.             

In this guide to air shipping and everything it entails, we will touch upon the following sub-heads:

• Types of air cargo services and planes 
• Advantages and disadvantages of shipping by air
• Cost and additional charges
• Documents required
• Types of air cargo
• Air cargo pallets and containers
• How to palletise and pack cargo correctly 
• Covid-19 impact on air cargo

Shipping by Air

Shipping by air is more complicated than it sounds. First off, you can send your shipment in two ways – as air cargo or as air courier. For air cargo, you can choose from a range of services:

• Express: This is the fastest and most expensive way to ship air cargo. Carriers guarantee expedited service, such as overnight delivery, for a premium price. India’s express air cargo segment makes up just 2% of the global market but it is one of the fastest growing, according to the National Air Cargo Policy released in 2019.
• Standard: This is the most common service. The shipment might make a stop at one or two airports, where it might be transferred to another aircraft or where another shipment might be loaded or off-loaded.
• Deferred: This service allows shippers to defer shipments that are not high priority till space becomes available on an aircraft. It provides the best cost savings because of a longer transit time and, probably, multiple stops.
• Charter: If you need to move a substantial quantity of cargo urgently, you can charter a plane. This is a quick but expensive way to ship by air.

Then, there is the option of using the services of an air courier:

• Air Courier: Think DHL, UPS, FedEx – couriers that pick up your package from your doorstep, ship it by air and deliver it at its final destination. If your shipment is relatively small – less than one cubic meter and 45 kg – it might be best shipped by courier. Air courier is more expensive than air cargo. Because of its swift delivery, air courier service is also called express air service.    

Additionally, air cargo moves on different types of aircraft:  

1. All-cargo carriers: Exclusive cargo planes or freighters, they come with embedded floor rollers to help slide cargo into place and hook locks to secure the cargo. Some have winches to lift or lower cargo. Freighters come in different sizes: 

• Wide-body freighter: It has a main deck and lower deck, both of which can accommodate containerised and palletised cargo. It requires a long runway. The bulk of air cargo is transported in widebodies, which in 2015 accounted for 1,100 of 1,700 cargo air­craft in service, according to this report. Examples: Boeing 747-8F, Airbus A330-200F, Antonov An-225 Mriya (the world’s largest cargo plane, which can carry 80 vehicles, military tanks and even a train at a time). 

The Ukrainian-made Antonov An-225 Mriya is the world’s largest cargo plane. Image credit: Kārlis Dambrāns / Wikimedia Commons CC BY 2.0 

• Narrow-body freighter: It can carry containerised and palletised cargo only on its main (upper) deck. It also requires a long runway. Examples: Boeing 737-800.    
• Feeder aircraft: These are smaller turboprop or piston aircraft that take off and land on short runways. They are primarily used to ferry cargo to and from cargo hubs.

2. Passenger planes: Most carry cargo in their belly holds. Unlike freighters, they have weight and space limitations but are popular because of their high flight frequency. It’s no wonder passenger planes account for 45%-50% of all air cargo.

3. Combination carriers: These are for both passengers and cargo. Emirates and Lufthansa are examples of popular combination carriers.

Advantages of shipping by air

• Speed: If you need to move cargo fast, ship by air. A rough estimate of transit time is 1-3 days by express air service or air courier, 5-10 days by any other air service, and 20-45 days by container ship. Customs clearance and cargo examination at airports also take a shorter time than at sea ports.           
• Reliability: Airlines operate on strict schedules, which means cargo arrival and departure times are highly reliable.       
• Security: Airlines and airports exercise strict control over cargo, significantly lowering the risk of theft and damage.
• Coverage: Airlines provide wide coverage with flights to and from most destinations in the world. Additionally, air cargo might be the only available option for shipments to and from landlocked countries.     

Disadvantages of shipping by air

• Cost: Shipping by air costs more than transporting by sea or road. According to a World Bank study, air freight costs 12-16 times more than ocean freight. Also, air freight is charged on the basis of cargo volume and weight. It is not cost-effective for heavy shipments.
• Environment: Air cargo has a significantly larger carbon footprint than ocean cargo. A UK government study says a container ship carrying 2 tonnes of cargo across 5,000 km creates 150 kg of CO2e (a measure of relative global warming potential) while the same cargo if shipped by air for the same distance creates 6,605 kg of CO2e. Emissions caused by take-off, landing and during flight add to air pollution and global warming. Air cargo also contributes to noise pollution and congestion in and around airports.

Note: Sometimes, it makes more sense to ship by sea than by air. This blog guides shippers on deciding between the two modes. If you have decided on shipping by sea, check out our guides to FCL shipping here and LCL shipping here.

Air freight: Cost and calculation 

Both cargo weight and volume are key to calculating air freight. Air freight is charged per kilogram on the basis of gross (actual) weight or volumetric (dimensional) weight, whichever is higher.

• Gross weight: Total weight of cargo, including packaging and pallets. 
• Volumetric weight: Volume of cargo converted into its weight equivalent. The formula to calculate volumetric weight is

(Length x Width x Height) in cm / 6000

Note: If volume is in cubic meters, divide by 0.006. For FedEx, divide by 5000

• Chargeable weight: Between volumetric and gross weight, whichever is more and is used as the basis on which freight is charged is called “chargeable weight”. It is called an “equilibrium point” where the gross weight and volumetric weight balance out. Take, for instance, a shipment of cotton wool that is very large but weighs very little. Here, air carriers are better off charging freight based on volume rather than weight.

Calculating chargeable weight:

Gross weight = 500 kg

Cargo (box) dimensions = 100 cm x 70 cm x 110 cm

Cargo (box) pieces = 4

Total cargo volume = 770000 x 4 = 3080000 cubic cm

Total volumetric weight = 3080000 / 6000 = 513 kg

In this case, chargeable weight is thus volumetric weight (513 kg), which is greater than gross weight (500 kg). 

Note: When submitting a quote request, remember to keep these cargo dimensions – weight, L x W x H, number of pieces of cargo – in mind to receive an accurate quote. Correct dimensions also give a fair idea of the kind of aircraft (passenger plane or freighter) your cargo needs.

Additional charges

Apart from freight, shipping by air usually involves these expenses:

• Fuel surcharge, which cushions air carriers against fuel price volatility  
• Security surcharges for security measures at airports, usually during screening and handling   
• Warehousing charge for when cargo is temporarily stored at such a facility before leaving or entering a country    
• Terminal handling fees at both the origin and destination    
• Airport transfer fee for when cargo is transferred from one airline to another
• Documentation fees, which carriers charge for preparing airway bills or providing invoice copies   
• Customs brokerage, which is paid to customs authorities for clearance. If cargo requires examination, this means an additional expense  
• Dangerous goods charges
• Cargo insurance
• Pick-up and delivery, which are essentially trucking charges for inland cargo movement  
• Accessorial charges, of which there are many, including advanced notification fee for when the consignee must be notified prior to delivery, or limited access fee for difficult to access pick-up or delivery locations such as schools
• Demurrage fee, which is a per-day fee shippers pay for use of storage equipment, facilities and space at air cargo terminals beyond the stipulated free storage period. This free period is called demurrage free time.

Documents required

• Airway Bill (AWB): This is a bill carrying details of the cargo that is issued on completion of the export customs process. The AWB is issued in a set of five and accompanies the cargo. It is meant for the carrier, shipper (exporter) and consignee (importer). There are two types of airway bills – a) Master Airway Bill (MAWB), issued by the air carrier to the freight forwarder on receipt of the goods as an agreement to deliver them; and b) House Airway Bill (HAWB), issued by the freight forwarder to the shipper.    
• Commercial Invoice: A contract of sale provided by the exporter to the importer, it has details of the shipment, including value and quantity, as well as both their contact details. The importer needs this to clear the shipment at his end.
• Shipper’s Letter of Instruction (SLI): It is a legal agreement between the shipper and freight forwarder containing particulars such as cargo description; details of the shipper, consignee and carrier, departure and destination, specifics of freight payment, and so on. 
• Terminal Charge Challan (TC): This is a receipt issued by the terminal acknowledging that cargo can be sent to the terminal after the airline has issued the carting order. The airline issues the carting order after cargo is booked on its flight.      
• Delivery Order (DO): It is an order issued by the carrier to the consignee to take delivery of the imported goods. 
• Gate Pass: Cargo terminals are restricted areas, access to which requires a gate pass issued by the airport’s security department. A gate pass is also called a visitor’s pass or airport entry permit.   

Note: More documents might be required based on the nature of the cargo and country of export/import. Consult your freight forwarder on this. The customs clearance process also comes with its own documentation requirements. Since these are similar for air and ocean cargo, refer to our blog here on paperwork for customs clearance.

Types of air cargo

Air cargo is typically classified as general or special. But these can have sub-categories:

1. General cargo: This usually comprises electronics, jewellery, clothing, textiles, pharmaceuticals, hardware, machinery and other retail and consumer goods.     

2. Special cargo: Goods that must be transported under special conditions, such as temperature control and protective packaging. Examples: fresh farm produce, hazardous material, live animals, human remains and organs, tissue samples, art work. Special cargo can be further broken down into:

• Over dimensional cargo: These are large or heavy cargo that don’t fit in the cargo areas of standard-body freighters or passenger planes, or exceed the dimensions (length, breadth and height) of common containers and pallets used by air carriers. Over dimension cargo goes by other names such as oversized cargo, out of gauge cargo and over height cargo. Examples: boats, vehicles, heavy machinery, generators, plant assemblies.      
• Project cargo: This broadly comprises large, high-value or complex pieces of equipment associated with large projects such as plants or refineries. The logistics of project cargo enable the completion of such projects on time and within budget. Industries that rely on project cargo include oil and gas, mining, engineering, wind energy and construction. In India, project cargo has been involved in the setting up of nuclear plants. Project cargo can be transported either as a single shipment or as multiple shipments. A shipment can comprise several pieces of equipment or just one. These can be sourced from one location or several. Sometimes, over dimensional cargo can be classified as project cargo.                     

Cargo Aircraft Only (CAO): Then there are certain goods designated as Cargo Aircraft Only that carry a prominent orange and black CAO label. This means they can only be shipped on dedicated freighters and not in the belly holds of passenger aircraft as they might endanger the plane and its occupants. Under the IATA Dangerous Goods Regulations, certain cargo – such as radioactive lithium batteries – require the CAO label.

Restricted, prohibited items

Shippers must be aware that there are more cargo restrictions for air carriers than for ocean liners. These might differ as per national laws and airline regulations. But some of the most common items are:

• Explosives – fireworks, detonating fuses
• Gases – dry ice, aerosol, gas lighters and cylinders
• Flammable liquids – paint, alcohol, paint thinner, insect sprays
• Toxic items – pesticides
• Corrosives – batteries
• Infectious items – medical waste

Pick the right pallet and container

Air cargo requires specially designed pallets and containers, collectively called unit load devices (ULDs).

ULD pallets: These are flat sheets of aluminium that hold stacked goods. A net covers the stacked goods and prevents them from falling. You can choose from different types of ULD pallets, which are designed to fit specific aircraft types. The most common ULD pallets are:

In addition, there are PKC (60.4 in), PLW (60.4 in with side extensions), PZA (16 ft), VZA (car rack) and PGX (transport platform for cars on PGE) ULD pallets.  

• ULD containers: These are closed units, usually made of aluminium or a mixture of aluminium and Lexan polycarbonate. They can come equipped with a refrigeration system for perishable cargo. ULD containers can be lower deck containers or box-type containers, designed to fit freighter spaces. Similar to ULD pallets, a ULD container can accommodate a load of 6,804 kg. Examples: LD-1 contoured container, LD-29 Reefer, LD-4 rectangular container. 

A ULD container is loaded into a cargo aircraft at Hong Kong International Airport. Image credit: Jamesshliu / Wikimedia Commons CC BY 3.0

Tips for palletised cargo

• When stacking a pallet, place the heavier items on the bottom and the lighter ones on top, preferably in interlocking layers
• Use banding and strapping for added security
• Avoid overhang, which is when cargo spills over the pallet’s boundaries
• Make sure your cargo is within the pallet’s rated capacity

Packaging tips

• When packing perishables in styrofoam boxes, overwrap the boxes. Make sure the cargo can withstand at least 24 hours of travel without spoiling
• Use wooden crates instead of cardboard boxes. When using cardboard boxes, go for the double-skinned type
• Fill extra space in boxes with packing material to ensure cargo doesn’t move around too much.

Air cargo and Covid-19 

Like any industry, the air cargo business has not escaped the coronavirus effect. As the world went under lockdown, demand dropped by 27.7% year-on-year in April – the sharpest fall reported, according to IATA. Simultaneously, global air cargo capacity fell, by as much as 29% year-on-year in the July 26, 2020-August 1, 2020 period, according to an Accenture report. Additionally, passenger traffic fell 95% compared to 2019, dealing a harsh blow to cargo operations. With cargo left stranded at airports and terminals for days on end, shippers faced huge financial losses.

Here are some notable measures taken by industry and governments to tide over the Covid-19 crisis:

• Moving medical supplies: Air carriers played a vital role in moving critically-needed medical supplies and equipment (masks, gloves, protective gear, medicines and ventilators)  
• Pallets over people: Most passenger planes resumed flights carrying cargo instead of people. Many also retrofitted their aircraft to turn into freighters. In March-end, coinciding with the start of a nationwide lockdown, India permitted all airlines to ferry cargo in passenger planes
• Waivers and relief: In response to congestion at airports and terminals on account of stranded cargo, India’s Civil Aviation Ministry in April waived off 50% of demurrage charges for the lockdown period
• E-gate pass: In July, the Delhi airport became the first in the country to introduce e-gate passes at its cargo terminal to encourage social distancing and minimise human contact and paperwork   
• Record freight rates: Reduced freighter frequency, space crunch and overall volatility sent freight rates soaring. According to this report, rates in India went up three to five times after April
• Cogoport webinar: On May 8, Cogoport hosted a webinar, “An Outlook of Air Freight and Air Transport Post Covid-19”, with Steven Polmans, director, cargo and logistics, Brussels Airport Company. 

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