Air Cargo - How It Works

Shipping

The airfreight shipping process further explained

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Exporting of flowers and plants by Florca

The door-to-door air cargo supply chain process starts with the shipping of goods by the Shipper.

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Who is the Shipper?

A Shipper is the person or company that is physically and administratively responsible for shipping the goods; nothing more and nothing less.

Although in a lot of cases the shipper is also the Customer of the Forwarder, this is not necessarily so. The Customer can just as well be the Consignee, or a third party that has ordered the goods stored at the Shipper’s location to be shipped from A to B. For this same reason, the shipper also does not need to be the owner of the goods. This all depends on the delivery terms (or: Incoterms) that are agreed between the parties involved, e.g. the owner of the goods, a buyer, a seller, a maintenance company, a distributor, a transport company, a forwarder, etc.

For security reasons, the shipper must be a Known Shipper for the Forwarder and thus also for the next steps in the process.

About air freight costs and quotes

Before taking any further steps, in order to avoid surprises afterward, it is important for the shipper to be aware of the different cost elements of air freight.

· When it comes to air freight shipping, weight and volume are the basis for pricing. Air carriers will charge by either volumetric weight (also known as dimensional weight) or actual weight, depending on which is more expensive. For a good explanation, find out more here at Freightos.com.

· In relation to this, another important consideration for the shipper to be discussed with the forwarder, is whether or not to send your shipment in a consolidation or as an individual shipment. In a consolidation the forwarder assembles shipments from several shippers into a consolidation as one shipment. In most cases consolidation of goods is cheaper but also slower. In case of emergency freight, if speed is required, shipping the goods as individual shipments can be an advantage, because it is more easily traced and expedited during the process, but it will probably be more expensive as well, because the costs cannot be spread over a bigger volume. Below is a short summary, for more detailed information look here at Supath.net or here at Dimerco.com.

· Air Freight Consolidation (“Consol”)

· What it is:

· Multiple smaller shipments from different shippers are merged into one single Master Air Waybill (MAWB), while each individual shipment keeps its own House Air Waybill (HAWB).

· When it’s used:

· Ideal when shipments are not urgent, but you want to save costs by sharing space with others. Consolidations are typically booked on weekends or midweek, depending on volume and destination.

· How it works:

· Forwarder collects small shipments.

· Packages are sorted, palletized or loaded into ULDs (Unit Load Devices) for main leg as a consolidated load.

· Shipped under MAWB; individual HAWBs for each box/pallet.

· At destination, shipment is deconsolidated in bonded facility.

· Benefits:

· Cost savings: often 30–50 % cheaper compared to individual bookings.

· Consistent delivery time: all parts of the consignment arrive together via one flight batch.

· Reduced risk for damage during handling: fewer touchpoints and tighter packing.

· Eco‑friendlier: better utilization of aircraft space reduces emissions.

· Downsides:

· Longer transit or wait times: consolidation and deconsolidation steps take more time.

· Less flexibility and tracking control: delays can occur if any component shipment is late.

· Not suitable for urgent or fragile goods: more handling and time in transit.

· Direct or Individual Shipment

· What it is:

· Your shipment travels alone on its own direct Air Waybill (AWB) - sometimes even on a chartered plane or with an onboard-courier for the highest urgency.

· When to use:

· Urgent deliveries (e.g., emergency production materials, short shelf‑life products, production delays).

· High‑value or fragile cargo requiring minimal handling.

· Complete control over routing and timing.

· Benefits:

· Fastest transit: no waiting for consolidation batches or deconsolidation.

· Better tracking & reliability.

· Lower risk of damage or customs complications because fewer handoffs.

· Downsides:

· More expensive: because you bear full cost of space, handling, customs, insurance.

· Less efficient for small volumes unless you need speed.

· Other influencing factors for air freight prizing are (check eShipper.com here):

· Distance and Destination:

· A longer distance generally implies higher air transport costs, but following ‘demand and supply’ mechanisms, shipping to major hubs with high cargo traffic is cheaper than sending goods to remote airports.

· Type of Goods:

· Fragile, perishable, valuable or hazardous items often require special handling, leading to higher air freight charges. Some items may require temperature-controlled or safe storage, adding to costs.

· Service Type:

· Express air freight services cost more due to priority handling, while economy or ‘general cargo’ options offer lower rates but longer transit times.

· Aside from the weight- and volume-based prizing and other influencing factors, surcharges may apply. In air cargo logistics, costs are incurred at various stages along the supply chain. These cost elements vary depending on the shipment type (e.g., general cargo, express, perishable), but the overall structure remains similar. On average, surcharges can account for 30–60% of the total air freight cost, depending on route, cargo type, fuel prices, and the airline's pricing model. For integrators (e.g., DHL, FedEx), the split may be less transparent, as they bundle fees into all-in pricing. Some airlines are also moving toward "all-in" pricing models, but many still list base freight + surcharges separately. Here's a breakdown by step, with the associated cost elements and the parties that typically charge them:

· Pre-Carriage (Pickup to Airport Terminal)

· Pickup/Collection Fees

· Charged by: Freight forwarder or trucking company

· Description: Transportation from shipper's location to the airport.

· Inland Fuel Surcharge (IFS)

· Charged by: Trucking company

· Description: Fuel cost variability for domestic/inland transport.

· Export Customs Clearance

· Charged by: Customs broker or freight forwarder

· Description: Document processing and declarations to authorities.

· Documentation Fees

· Charged by: Freight forwarder

· Description: Preparation of air waybills, manifests, etc.

· Airport of Departure (Origin Airport)

· Terminal Handling Charges (THC)

· Charged by: Ground handling agent or freight terminal operator

· Description: Includes acceptance, security screening, storage, and build-up of cargo pallets/ULDs.

· Security Screening Fees

· Charged by: Ground handler or freight forwarder

· Description: Mandatory cargo screening under aviation security regulations. Security charges can make out 3–10% of the total air freight charges.

· Airline Handling Charges

· Charged by: Airline

· Description: Charges for managing cargo on behalf of the airline.

· Airport Fees

· Charged by: Airport authority

· Description: Charges for using airport infrastructure (sometimes passed on by airlines).

· Air Transport

· Air Freight Charges

· Charged by: Airline

· Description: Core transportation fee, based on chargeable weight (volume or actual weight).

· Fuel Surcharge (FSC)

· Charged by: Airline

· Description: Offset volatility in aviation fuel prices. Fuel Surcharge is the most volatile and significant; it closely tracks aviation fuel prices and can make out 15-35 % of the total air freight invoice.

· Security Surcharge (SSC)

· Charged by: Airline

· Description: Covers airline security and compliance measures.

· War Risk / Insurance Surcharge

· Charged by: Airline

· Description: Additional fee for flying through conflict zones or high-risk areas.

· Airport of Arrival (Destination Airport)

· Terminal Handling Charges (THC)

· Charged by: Ground handler or terminal operator

· Description: Offloading, breakdown of pallets/ULDs, storage at arrival terminal.

· Storage Charges

· Charged by: Terminal operator

· Description: If cargo is not picked up within a free time window.

· Import Customs Clearance Fees

· Charged by: Customs broker or freight forwarder

· Description: Filing and compliance for customs import processes.

· Duties and Taxes

· Charged by: Customs authority

· Description: Based on cargo classification, value, and country of import.

· On-Carriage (Final Delivery)

· Delivery Charges (Trucking)

· Charged by: Freight forwarder or trucking company

· Description: Final mile transport from airport to consignee.

· Delivery Order (DO) Fees

· Charged by: Freight forwarder or consolidator

· Description: Administrative cost to release cargo to consignee.

The next step for the customer will generally be to request a freight quote at one or more forwarders, and then select the forwarder that will become responsible for the shipment(s). When this is done on a per shipment basis for incidental shipments or for emergency reasons, it’s called transactional shipping. When procurement is done for larger regular volumes and there is a steady relationship and a pre-arranged financial / credit agreement between a customer and one or more forwarders, it’s called strategic shipping. Read more about this here on thelogisticsoflogistics.com.

Based on the agreement with the forwarder, the real shipping process can now start.

Shipping: the step-by-step process

“P00” - Shipping international air freight

Note: The whole door-to-door air cargo process in these pages are set up following the numbered process steps of the Cargo iQ Master Operating Plan (MOP). This MOP is the industry standard for air cargo and starts with process step P01 “Book & Plan Shipments” by the Forwarder. But of course, the Forwarder always acts based on an order from the end-customer or Shipper. Because the Shipper’s process steps are not described in the MOP, I describe them here under this unofficial process step “P00”.

Assemble shipment
(0.1) The shipper (end-customer) receives a trigger to start the shipping process, e.g. a customer order or a branch replenishment order.

(0.2) The goods are picked and prepared to be shipped to the consignee.

(0.3) The packing list and packing materials are prepared.

Make goods Ready for Transport (RFT)

(0.4) The shipper packs the goods. The shipper is responsible for safe and correct packing of the goods to avoid damage to the goods, but also people, vehicles and aircraft during the air cargo transport process.

(0.5) The packages are preferably labelled with a unique identifier / barcode number for logistics track & trace.

(0.6) The packages are also labeled with the right handling instruction labels to ensure correct handling during the transport process.

(0.7) The Commercial or Pro-Forma Invoice documents are printed or prepared for customs declaration purposes.

(0.8) Documents for handling and security declarations are prepared.

(0.9) Transport documents are prepared.

(0.10) The goods are assembled and palletized if needed and the documents are attached to the goods. The shipper is responsible for efficient assembly of the shipment in terms of volume, weight and packaging to get the best price / volume utilization of the aircraft pallet or container and avoid damage to goods, people, vehicles and aircraft.

Order transport

(0.11) When the goods are Ready for Transport (RFT) = correctly packed, labelled and with the right documents for forwarding as well as road transport as the next steps, the shipper orders transport of the goods to the Forwarder branch facility. Depending on the transport agreement with the Forwarder, this road transport can be organized by either the forwarder or the shipper.

(0.12) The goods are picked up at the shipper’s warehouse for delivery by road transport at the warehouse of the forwarder who organizes the further air cargo process. Depending on the internal organization of the forwarder’s or shipper’s processes, the road transport can be executed either with in-house operated trucks, vans or personnel or by a third party. The transport company (or the forwarder) will give the shipper a Proof of Acceptance (POA) with a timestamp for collection.

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