What Determines Air Freight Costs?

For both domestic and international shippers, air freight is usually the fastest method of transporting goods. Under certain circumstances, it can also be the most cost-effective option.

Air freight costs can vary, but they aren’t unpredictable. We’ll guide you through what you need to know as you look for a carrier.

For both domestic and international shippers, air freight is usually the fastest method of transporting goods. Contrary to popular belief, under certain circumstances, it can actually be a more cost-effective option than shipping by sea or ground.

Depending on the type of cargo and the destination, air freight can maximize your company’s operational efficiency, offering a degree of flexibility, reliability, and speed that other modes of transportation simply can’t match. If you’re looking to squeeze the maximum amount of value out of your air freight program, however, you’ll need to understand some of the factors underlying its component costs. Here are a few that you should be aware of.

Economic Conditions

Like every industry, air freight is affected by current economic conditions. Rising demand for air freight could result in higher prices, while greater competition could yield lower rates. Carriers might also raise prices in response to new laws and regulations. As companies adapt to economic downturns, air freight providers search for more cost-effective practices to ensure that their planes are completely loaded, from reducing the number of flights to applying surcharges to partial loads. A solid understanding of the current business climate and some knowledge of how carriers adjust to economic changes can help you find affordable rates and avoid additional costs.

Local Conditions

Where you’re shipping your cargo can often matter just as much as what it is that you’re shipping. While most domestic shippers will only contend with weather, international shippers should have some understanding of social, economic, and political conditions of foreign countries before shipping goods there. Since every country has unique duties, tariffs, and fees, shipping via air freight to some countries might prove too expensive to justify. Other countries might be experiencing work stoppages, natural disasters, political instability or war, forcing carriers to significantly raise their rates so as to ensure their safety. Knowing the destination of your goods as well as their point of origin is vital when it comes to making smart, cost-conscious shipping decisions.

Operating Costs

Every air provider has at least some built-in operating costs. Fuel, labor, equipment, infrastructure, and maintenance are the most important expenses, but landing fees and surcharges, research and development, and environmental regulations can contribute as well. While some of these costs will be higher or lower depending on the route, the equipment involved in the shipment, and local regulations regarding shipping, the final rate will always reflect a combination of each. Doing some research into providers can help you get a better sense of how their operating costs inform your final rate.

Cargo Type

Some pieces of cargo have certain handling requirements. Most shipments don’t need to be transported immediately, but some goods need to arrive at their destination by the next business day. Oversized, fragile, and refrigerated cargo require extra precautions that may result in additional fees. Most carriers have fixed rates for the types of cargo they’ll handle, making it a good idea to check a prospective partner’s rates for whatever goods you most commonly ship. An established and experienced carrier will tell you up front about any additional costs for transporting certain items.

Premium Services

In recent years, air freight providers have started offering premium shipping services in exchange for higher rates. Options like packing and door-to-door service fall under this umbrella, but today, even a simple direct route can qualify as such. As air freight providers continue to combine routes, opting for economy shipping might mean your goods will travel to several different locations before reaching their final destination. But this isn’t necessarily a bad thing — if you can make some minor adjustments to your supply chain and extend your timelines, you can save big by allowing for an extra day or two of transit time.

Weight and Volume

An airplane is a fixed space, and as such, it has a finite cargo and weight capacity. Costs are always determined by a piece of cargo’s physical weight, or by what’s known as its “chargeable weight” — a set formula that takes both an item’s weight and volume into account. The formula for determining chargeable weight is:

(Length x Width x Height) ÷ 366

So, for example, if a box weighs 10 lbs, but the dimensions of that box are 3’ x 3’ x 6’, the chargeable weight will be more than a 10-lb box that’s only 1’ x 1’ x 1’.

The Primary Freight Difference

Whether you’re shipping cosmetics from Sydney to Los Angeles or office equipment from Seattle to Houston, Primary Freight has the requisite experience and dedication to guide you through the complex world of air freight shipping and logistics. With nearly two decades of success under our belt, we’re committed to providing industry-leading customer service and bespoke, outside-the-box solutions to ensure your goods always get from Point A to B as quickly and cost-effectively as possible.

If you want to learn how you can get even more value out of your air freight shipping program, give one of our dedicated experts a call at (800) 635-0013. We’re looking forward to hearing from you!