PRICING 101: AIR FREIGHT

A key tenet of our mission is to bring a new level of transparency to fine art shipping, particularly as it relates to pricing. In this installment in our blog series on pricing, we share some key factors that contribute to how air freight rates are calculated.
 
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air freight facts

Air Freight is a huge part of the global economy – it makes up 35% of global trade by value.

Roughly 100,000 planes take off every day from airports around the world, and they're not just transporting passengers. They’re carrying cargo. 140 tonnes of cargo on a daily basis! There’s nearly $18 billion worth of goods traveling by air every day. Commodities of all kinds travel by air, for example: pharmaceuticals, race cars, electronics, medical equipment, and artwork.

 

base rate: Actual Weight and volumetric Weight

Every aircraft has its limits. There's only so much space on board and it can only carry so much weight.

An aircraft loaded with extremely heavy cargo could still have empty space on board, and yet its weight limit has been reached. On the other hand, with cargo that's really light, it's possible to fill all of the space on the aircraft, but not hit the weight limit.

So why does this matter? And how does it affect air freight pricing?

When airlines calculate the cost of your shipment, they always factor in both the actual weight and what's known as the volumetric weight or dimensional weight of the cargo, derived from the length, width, and height of your item. They then charge a base rate (known as the chargeable weight) per kilo based on whichever is greater – the actual weight or the volumetric weight.

additional costs

Your shipment will change hands a number of times while it's on its journey. Every shipment requires time, preparation, and paperwork.

In addition to the base rate charge for the air freight, airlines also charge other fees including fuel surcharges, security surcharges, and airline terminal handling fees.

  • Fuel surcharges can fluctuate just like they do at the gas pump and typically are charged depending on the volume of your shipment.
  • All airlines tack on additional security surcharges. These reflect the cost of the security requirements of all airports, specifically that all shipments must be screened at their origin and destination in accordance with Airline Security Regulations.  
  • Terminal handling fees are charges related to the handling of shipments at both origin and destination.

Standard Air Freight vs. Must Fly

Air freight is usually quoted based on standard air freight rates. "Must Fly" is an additional service that’s available upon request, but comes at an additional cost.

Booking Must Fly air freight is kind of like buying a first class plane ticket – the freight gets to get on the plane first, ahead of other cargo. Must Fly is a good option when there is a fast approaching, hard deadline that needs to be met. That said, mechanical issues, storms, or other acts of god can cause delays in a flight’s schedule. Even if you buy a first class ticket, there’s no guarantee that the flight will arrive at its destination on time. That’s why, if you do have a deadline, it’s also better to ship sooner rather than later!

Standard air freight, on the other hand, is always cheaper than Must Fly. If you book a standard air freight shipment, your cargo gets loaded onto the aircraft after the other Must Fly cargo. In the event that there’s no more room on the plane, it’s possible that your cargo could be bumped to another flight, delaying its arrival at its destination.

the easiest way to keep costs down?

Always plan ahead! Whether it’s standard air freight or even Must Fly, it’s always best to book shipments well in advance, especially if you know you have a deadline. As mentioned, there are instances in which planes get delayed or shipments get bumped, so planning ahead is the best way to keep your costs low and receive goods at a desired date.

Read our first post in this series to learn about the factors that contribute to fine art shuttle pricing, as well as how ARTA is able to secure the lowest rates.