International exporters and importers use air cargos to transport goods. Many opt for air freight instead of ocean freight because shipping takes a lot shorter. It is also more reliable, as well as flexible. Since the shipment takes a faster transporting time, businesses are able to react to the change in tastes and preferences of consumers quickly.
However, given the limited space on airline cargo holds, weight and volume are crucial factors. Depending on whichever is more expensive, air freight carriers will charge either volumetric weight (or dimensional weight) or actual weight (or gross weight).
How is the cost calculated?
Volumetric weight: The shipment’s volume is measured (height x width x length), then multiplied by 167.
If the volumetric weight exceeds the actual weight of the items, then the air freight carriers will charge according to the volumetric weight.
Here is the standard calculation for checking air freight rate for your cargo. This is standard for courier companies in Hong Kong and gives you a good guideline for other markets as well. Pay the higher amount out of the 2:
- Actual Weight OR
- Package length*Width*height/5000 See below example
Example – shipment of dimensions 30*30*30 will have a chargeable weight of 30*30*30/5000 = 5.4 Kgs.
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What is freight?
Freight refers to the process of transferring or transporting bulk of goods via water, air or land.
How do I reduce freight costs?
1. Ship in bulk. Frequent shipping requires extra time. Extra time means extra resources
2. Minimize weight and dead space in products’ packaging.
3. Ship during off-peak periods. When freight is in low demand, cost tends to decrease.
What affects freight costs?
There are several main factors that might affect the freight cost.
1. Weight of the cargo
2. Density of the cargo
3. Distance between the cargo’s origin and destination
4. Freight Classification
5. Mode of delivery i.e. air, land or water
6. Fuel Cost
7. Taxes and Negotiated Rates