How Is Air Freight Calculated | Minimum Charges? - Aviation Professional

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Thursday, October 21, 2021

How Is Air Freight Calculated | Minimum Charges?

 

Air Freight rate



In this article, you will learn the basic air cargo skills related to calculating air freight Minimum charges for small packages. If this is your first visit to our website, and you are interested in learning basic air cargo skills, you should read my previous articles which form the base knowledge to understand IATA cargo rating principles

For general readers, they can continue reading. Now, I will list you my previous articles read it if you didn't understand the air waybill, air cargo rate classification and calculating chargeable weight / volumetric weight.

List of air cargo articles;

1)     Air FreightChargeable Weight | Step by Step Calculating

2)     Air FreightConsolidator | Offers Cheaper Air Freight Rates Per Kilo

3)     Air Waybill(AWB) | Basic Information You Need

4)     Completing aPaper Air Waybill | Step by Step

5)     Air CargoAbbreviations

6)     Air FreightRates

Calculating Freight Costs- Minimum charges

We are going to send small shipment from Montreal to us by Air Canada Cargo. Therefore, we must have the air Canada cargo " per kg air freight rates", here you will find the list of air freight rates from Canada to US by Air Canada Cargo. But before we start it is necessary to give you a short explanation of the term rates and charges which help you understand the IATA TACT Rules " The Air Cargo Tariff " regarding air freight minimum charges. 

air freight cost


Air freight Rate / charges

Rates : Are the price quoted in local currency ( or USD) reflecting the cost of air cargo transportation per kg. or pound between airport of origin and the airport of destination.

 

Charges : Are quoted in local currency ( or USD ) , reflect the transportation costs for the entire shipment from one airport to another .

air freight costs per kg


Air Freight Principles

 -The heavier a shipment, the lower the rate per kg.

- Cargo rate s are one-direction. they must be applied from origin to destination.

- The calculation of the rates does not depend on the actual routing of a shipment.

air freight rate


IATA TACT Rules Regarding Air Freight Minimum Charges

TACT Rule

air freight rate

The level of the minimum charge depends on the IATA Area with in or between which transportation takes place and is indicated on the rate line, immediately after the name of the destination city, with designator M (minimum) in the min. weight column. See this image, to send small shipment from Delhi to Bahrain the minimum charges are 900 USD. While the normal air cargo rate "less than 100 kg" is 77.30 USD per kg.

 how many total kgs you have! If we divided the minimum charge by the normal air cargo rate per kg " 77.30 USD " the result is " 11.6 kg", this mean if your shipment is less than 11.6 kgs, you are going to pay the airline total "900 USD ". This amount of money is the cost of transporting your cargo by kg charges.

 

 There are additional other charges such as air waybill preparation and handling charge, security charge. The other charge depends on the state export policies. 

air freight rate


If The minimum charges to destinations not shown in the rates pages are indicated in TACT rules, there section. For example, shipping from Afghanistan rest of world is

 

Calculating air freight Minimum Charge – example

Here is the Air Canada published air freight rate from Canada to US, if our shipment is classified as general cargo and its weight (chargeable weight) is 7 kgs (Toys) from Montréal " YUL" to Washington " IAD "

From the Air Canada published freight rate,  we read this:

Minimum charge is : 60.00 CAD

Freight Rate per one kg  is : 2.47 CAD

Freight Rate per kg  for total of 45 kg or above is : 2.12 CAD

 

air freight rate

Now, we will calculate the shipping costs per kg:

Total freight charges = 7 kgs multiplied by 2.47 CAD " kg rate" = 17.29 CAD .

 

Do you remember the IATA TACT Rule which says " Air freight rates " weight charge" of any shipment may never be lower than the published minimum charge from the point of origin to the point of destination of the shipment".

Yes, Air Canada will charge you = 60.00 CAD minimum publish charges from Montréal " YUL" to Washington " IAD ".

 

But if your shipment was 30 kgs! you will pay Air Canada

Total freight charges = 30 kgs multiplied by 2.47 CAD " kg rate" = 74.1 CAD .

Normal rate per kilo and more than published minimum rate.

You got my point!

 

Completing Air Waybill - Minimum Charge – example

 

 

air freight rate

 

Summary

 

Air Canada pay operational costs for carriage each shipment. Also, when the shipment is light in weight or small, it needs to be handled like other big shipments. For these reasons, Air Canada   publish air freight minimum charge to cover its operational costs, and for

 

Note :   General freight rate will be covered in separate article in the future.

 

2 comments:

  1. شكر اً جزيلا علي المعلومات الرائعة والله يرعاك يا استاذ ماجد

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