Air Freight Forwarding Procedures – A Complete Guide
We have three major transportation modes: sea, land, and air. Therefore, when it comes to importation and exportation, cargo can be transported in these three ways.
Global trade is majorly made possible by sea freight. Land transportation predominately covers last-mile and cross-border transportation. Airfreight, on the other hand, is a lot more exciting, and fast-paced! If you are new to it all, you would need to have a synopsis of the procedures, not just so you know what to expect, but also so you do not get confused about everything going on.
Therefore, in this article, we will be discussing the step-by-step procedures of air freight forwarding. Let’s begin…
Air Cargo Procedures at Export/Origin
The following are the step-by-step procedures that are done when cargo is being exported by air freight:
Step 1: Planning/Shipment Gets Prepared for Export
The first step in this whole business is to get the cargo ready for shipment. This preparation is often done by the cargo owners.
Cargo owners have to refer to 2 key areas during this process:
- IATA Cargo Handling Manual: this manual outlines the packing requirements of cargo to ensure they arrive at their destinations securely and safely. You may visit https://www.bifa.org/news/articles/2017/mar/iata-cargo-handling-manual-will-help-promote-standardization-of-cargo-handling-globally to learn more about this manual’s launch and purpose.
- Unit Load Device Dimensions: This is how the shipper decides whether or not the cargo can be stowage in the airplane.
Step 2: The Cargo’s Chargeable Weight Will Be Calculated
There is a difference between gross, net, and chargeable weight. While net weight refers to the item being exported actual weight, gross weight refers to the shipment’s weight in total, including its packaging, containers, and pallets.
Chargeable weight, on the other hand, depends on a volumetric calculation; gross weight and volumetric weight are taken into account to see which is more.
Step 3: Bookings is Arranged With the Freight Forwarder
During the period booking is made, documents like Packing List and Commercial Invoice are taken care of. The name of the document may vary based on what air carrier is used. For instance, the booking instructions’ names may differ. However, regardless of what it is called, the reason for the instruction remains constant.
Step 4: Airway Bill Preparation
An airway bill will be drafted. This would contain details of the cargo, flight schedule, destination, and shipper. This is often drafted and then confirmed by the shipper and freight forwarder.
Airway bills come in various forms, and these various forms usually have different arrangements. Some airway bills examples include:
Step 5: Shipment Will Be Transported to Warehouse Terminal
Once all the procedures above are completed, the cargo will be moved to a Warehouse Terminal. These terminals are often appointed by freight forwarders or airlines. A freight certificate or warehouse receipt will then be issued for the shipment.
The forwarding agent would be the one to give the receipt of the shipment that was consolidated by them. The receipt is referred to as the forwarder’s receipt in this case.
Step 6 – Clearance by Custom
At this stage, custom officers would inspect the cargo. Other agencies also involved with exportation would also carry out inspections. Anomalies in cargo’s weight, measurements, and description will be checked for in this stage.
Step 7: Stowing
Once clearance is done, the shipment will be loaded then stowed in the airplane’s fuselage. After the cargo is stowed, an Airway Bill will then be issued by the Carrier as proof of the contract.
Air Cargo Procedures at Import/Destination
The following are the step-by-step procedures that are done when cargo is being imported by air freight:
Step 1: Unloading
Once the cargos land, Unit Load Device Operators will be the ones to unload them. After unloading, the cargos are taken to the warehouse terminal where break bulking will be done.
Step 2: Break Bulking
The next step involved in freight forwarding by air importation is break bulking. This simply means that the cargos will be unloaded off the Unit Load Device by the warehouse operated and then stored. This is where the items will remain till further instructions are given.
Step 3: Clearance by Custom
Just like exportation, custom clearance is also needed with importation. At this point, documents like Airway Bill, Packing List, Invoice, and so on would be inspected and verified by the customs officers.
Some products may get import tax; this is often based on their HS Code or tariff codes.
Step 4: Dispatch or Delivery
Once all the procedure for clearance is fulfilled, the cargo will be transported (by road) to the consignee.
Now that we have covered the procedure involved in this mode of exportation and importation, we will like to briefly consider some of its pros and cons.
Air Freight Forwarding Pros
The following are some of the major air freight forwarding pros:
IATA and other airliners organizations have worked hard to ensure that security is top-notch in this industry. In 2010, a cargo airplane going from Yemen to America was blown up. This and other incidents made it obvious that security was lacking and greatly needed in the industry.
This was a wake-up call and strict procedures were put in place. Now, freight forwarding by air can only be done with a Master Air Way Bill, and this rule isn’t negotiable. It ensures security since the consignee for the shipment is identified before the shipment even gets accepted.
Airfreight is faster than sea freight about 25 times. The transit time is so much faster is part of the reasons air freight forwarding is sometimes chosen over land or sea transportation.
3. Insurance Cost is lower
As already discussed, security follows strict and serious procedures when it comes to air freight forwarding. Since the cargos are often secure and safe, insurance underwriters do not necessarily need to take too much risk when they insure air freights.
Another thing that contributes to the insurance cost being low includes the fast nature of the transportation. Since the transit time is shorter, the chances of the items getting damaged are highly reduced.
4. Reach and Frequency
There are more airports listed than there are seaports. This means that air freight has more connectivity than sea transportation.
Furthermore, the frequency of air freight is also more than that of sea forwarding. Some routes in high demand may even have as many as 2 allocations in one day.
Air Freight Forwarding – Cons
The following are some of the major air freight forwarding cons:
1. Timeliness of Documentation
Some documents such as Import Permit and so on are needed when the airplane gets to its destination. Applying for an Import Permit could take a while. Once the shipment is air-bound, it will get to its destination at least within a day.
If the necessary documents aren’t ready at the time of arrival, it may cause certain delays. This is unlike sea transportation where transit takes longer; therefore, there is enough time to get all the necessary documents.
2. Size Limitation
Freight ships are way bigger than airplanes. Read this article to learn about the world’s biggest container ship Ever Ace, which can carry about 24,000 containers.
An airplane will have to make several trips if it is to carry the same quantity of cargo a standard carrier ship carries.
In this article, we discussed the entire procedure involved in the exportation and importation via air freight forwarding. With the information discussed in this article, anyone new to this business can know what to expect if they get involved in it.
We did not just stop there, we went ahead to discuss some pros and cons of air freight forwarding. We believe knowing these will help you decide whether or not this mode of importation and exportation best suits your needs.