Air Logistics Tariff System – Vol. 1

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Air Logistics Tariff System – Vol. 1

Hello everyone. We have finally ushered in a new lecture. We have to go to work yesterday and tomorrow, so let’s take advantage of the break to recharge our batteries. After Visual China closed, I had to offer my own picture for the cover, specifically to explain that this picture was taken by me.


I believe many small partners will be very interested in the topic of this issue, because we are going to talk about the freight rate system in this issue. The freight rate is also a big topic, and there is a lot of knowledge in it. In the airfreight industry, freight rates are an important element that everyone must consider. So, we will split this topic into several issues.


Getting started with air freight is actually not difficult, but it takes time to use it flexibly. But having said that, throughout the entire airlift industry, the threshold for entry is very low. There is an old saying that it is easy to learn but difficult to master. Air freight takes a lot of time to accumulate – experience and connections. During this period, I will see new things almost every day. It is indeed a good choice for friends who like challenges and don’t like immutability.


As mentioned earlier, getting started with air freight is very simple. What a simple way? There is only one formula for the freight calculation of all goods: unit price x weight = freight. Finished. Is not it simple? Hahahaha… The formula is indeed very simple, but how is the unit price formulated? How is the weight calculated? How is the shipping calculated? The formula doesn’t say anything. So, just wait for me to come along.


The unit price is more complicated, let’s put it down first and start with the weight. The weight in air freight generally has two units, one is kg (kilogram) and the other is ton (ton). Friends, don’t you know the conversion between kg and ton: 1000kg=1Ton. And volume, there is only one unit, which is cbm (cubic meter).


The concept of weight has many different names, such as gross weight, net weight, tare weight, volume weight, and chargeable weight. Did you get dazzled? Don’t worry, take your time, and defeat them one by one!


Gross weight: This is easy to understand, it is the weight of the goods with the box. Note that everyone has to learn to draw inferences from others. The “box” mentioned here refers to a “container containing goods”, not necessarily just a box. If the goods are packed in a box, the gross weight is the weight of the goods with the box. Everyone, don’t die reading, reading dead books, reading to die…

The picture comes from the Internet

The picture comes from the Internet

Net weight: This is not difficult, that is, the weight of the goods without the box. It’s simply the weight of the cargo. Similarly, the “box” here also refers to the container for the goods.


Tare weight: The first two concepts are all about goods. Now, why do we need to give a little face to the container of goods. This tare weight refers to the weight of the outer packaging. If the package is a corrugated box, the tare weight refers to the weight of the corrugated box.

The picture comes from the Internet

The picture comes from the Internet

The weights above are well understood, and here comes the key point (knocking on the blackboard).


Volume weight: This term is a professional term in air transportation. Volumetric weight means the corresponding weight of the position that the cargo occupies. Simply put, it is the weight corresponding to the volume of the goods. We all know that the volume of a ton of cotton is not the same as the volume of a ton of iron nails. Although the weight of the two is the same, the cotton is much larger, which means that it occupies more space. The location on the plane is simply an inch of land, so if you occupy more space, the fee will naturally be more expensive. Therefore, the airlift industry has the concept of volume weight. Generally speaking, the basis for the final charge is to compare the gross weight and the volume weight, and whichever is larger will be charged according to the weight.


So how is the weight calculated? Many experienced friends may have been impatient to tell me a number: 167! Yes, using the constant 167 can help us determine whether a ticket is a bubble. For example, the gross weight of a shipment is 1000kg and the volume is 8cbm. So is this ticket a heavy goods or a bubble goods? At this time, we divide the gross weight by 167 to get the result, and compare it with the actual volume of the goods. If the result is large, it is heavy goods, and if the actual volume is large, it is bubble goods. In this example, dividing 1000 by 167 gives 5.98. This ticket is actually 8cbm, 8cbm>5.98cbm. So this ticket is a bubble.


Isn’t it simple? In fact, simplicity is relative, as long as you understand the truth, many things can be very simple. When we encounter a problem, don’t be afraid, we must face it bravely, ask more questions, and ask others for advice. As the saying goes, there are always more solutions than problems, right? But here comes the problem. Why 167? How did you get 167? For those who have this question, I believe that no matter what you do, you will not do too badly, because you are curious and have the mentality to explore the truth of the problem.


Let us now discuss the constant 167. As we said just now, a single shipment can be heavy or soaked, but is there a product that is neither heavy nor soaked? The answer is yes. We call this kind of goods 1:1 goods. Since it is 1:1, how did the ratio come out? It turns out that in the airlift industry, we call 1000kg/6cbm cargo as 1:1 cargo. So what do we see when we try to divide 1000 by 6? Eh~ Coincidentally, the result is 166.66666, which is approximately equal to 167. Now the friends should know how the number 167 came from.


Chargeable weight: This is also a concept only for air freight. Bubble weight is also the charge weight. The chargeable weight is the gross weight and the volume weight after the comparison, and the larger value is the chargeable weight. The chargeable weight is the weight that the final shipping fee needs to be multiplied by.


Well, having said so much, I believe that everyone has a clear understanding of weight. Now let’s talk about the price.


Every airline, every time period, and every destination has different prices. Although the market is very transparent now, it cannot be completely the same. Some friends are very smart, they know how to do brand marketing, they won’t go to bargain prices, and they won’t hurt people with their own intentions. And some friends want to cut leeks, just want to earn one vote is one vote. Then, the latter behavior can easily disrupt the normal price in the market, and is also very short-sighted. Of course, this is another topic. We will open a separate topic in the future. For each position, we will talk about their work content, work nature, and the work attitude and professional ethics they should have. It is very important for everyone to abide by the industry code, otherwise the market order will be completely messed up.


Now let’s talk about the tariff system first. Air freight prices can be divided into several categories. The most common price applies to all general cargo shipments, and it is composed of different kilogram classes. The higher the kilogram level, the lower the unit price. Different weight classes, we do Weight Break. For example the following picture:

tariff table example

tariff table example


It must be noted that the unit price of the above price list is only an example, and does not represent or imply the price of any destination.


In the above table, the “+” sign in front of each number is also written as “Q”. And the 300kg level is also written as 250kg by the airline company. Let me explain the meaning one by one. Min means minimum, which represents the minimum fee charged for this shipment. For example, if a shipment is 1kg, the N price should be used normally, but 1×100 is still equal to 100. If the minimum charge is not met, then the Min level price of 150 should be applied to this shipment. N means suitable for goods under 45kg, +45 means suitable for 45-99kg, +100 means suitable for 100-249kg, +500 means suitable for 500-999kg, +1000 means suitable for goods above 1000kg.


Now, many airlines will use this method to quote, but if it is a contract agent, there will be another price system. We call it Flat Rate. Flat Rate means that no matter what the kilogram is, all use the same price. In addition, there is another price system, that is, for goods of 45-999kg, one price is adopted, and for goods of 1000kg or more, another price is adopted. The advantage of Flat Rate is that it is easy to remember, and it is easier to attract more goods. The downside is that it can’t open the profit level of different kilogram levels.


It is worth mentioning that in the airfreight industry, the currency of the general price is the currency of the origin, which is stipulated in IATA. Of course, there are also people who specially write such as USD, or HKD or other currencies, which are specially used to represent the currency used in the price list.


Since the services provided by general cargo transportation are Airport to Airport (Airport to Airport), the air freight fee is only charged for the process of using the aircraft to transport, and cannot include other expenses. The so-called other charges, we can collectively call them Local Charges – local charges. It is the cost incurred locally (origin or destination). So the little friends have to figure out, don’t think that the air freight is enough, there are many other local fees. Common examples are: customs declaration fee, customs declaration document fee, trailer fee, bill of lading fee, packaging fee (if any), board fee, warehousing fee and a series of fees, and even some small partners in the supply chain will also provide purpose. If the service is delivered locally, the cost involved here is even more. These fees will have a general standard even in different places, but not everyone is the same. So if you don’t understand, remember to ask the master or other small partners to quote, otherwise the goods will lose money.


Regarding freight, we will talk about it here for the time being in this issue, and there are also freight rates for some special goods, which we will discuss in the next issue. Before that, everyone must understand the content of this issue, otherwise the next issue will not be able to keep up. Of course, you can also click on my official account in the upper left corner and choose to follow, then not only can you see past lectures, but every time there is a new lecture, you can receive it as soon as possible.


Although I have to go to work tomorrow, I still want to wish everyone a happy weekend.


NB: Karron is the owner of the “NatureCalls” Wechat Official Account.

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