Air Freight: An Examination of Actual Costs
First let me state that all shipments are different, and there are a huge number of variables which can affect the costs involved. Prices vary with the seasons and even day to day based on demand. My purpose in sharing this information is not for you to compare prices, but to demonstrate some of the actual costs and fees you can expect when having a product delivered by air freight so you can make an educated decisions with your import shipments.
If you ever import products to the United States from another country such as China, inevitably you will be faced with a decision of how to have those products shipped.
There are a few different choices:
Air express, which may also be referred to as “a courier.” This service is typically provided by a companies such as UPS, FedEx, DHL and some others. It is a door to door service, and may only take a few days to be delivered. The quoted rate for this service will usually be the most expensive.
Air freight or air cargo, will be flown on a passenger airline such as China Air. If you are having the shipment delivered from China to DFW airport in Dallas, TX as in the example below, your shipment may be flown to Los Angeles, and then driven by truck to Dallas. An air freight shipment is slightly slower than air express, and may take a week or so to be delivered depending on the final destination. Air freight is not a door to door service, and you will need to arrange to pickup the product from the terminal, or use a freight forwarder to complete the delivery. The quoted price for air freight will generally be lower the air express.
Sea freight is not much different from air freight aside from being shipped by sea rather than air, which can take a considerable amount of time. This will have the lowest quote rate for freight.
However, the rate quoted for freight is not the end of the story.
An air express shipment will often be quoted at a door to door price. There may be some additional fees involved, but not to the extent seen with other types of freight. A $50 customs bond fee would be a common example.
So what fees should we expect to pay with other types of shipments? Below is an example of an air freight shipment for a product of mine. It was shipped in July of 2016 from Shenzhen, China to DFW airport in Dallas, TX, USA.
Let’s take a look at what all of those numbers mean.
The first column is how much the cargo actually weighed in kilograms.
Next to that is a very important figure, which is often misunderstood or overlooked when dealing with shipments, volumetric or dimensional weight. What does that mean? Because the amount of space on a place or ship is limited, logistics and shipping companies charge based upon either actual weight, or volumetric weight. Volumetric weight is essentially how much your shipment would weigh based upon how much space it is taking up.
In other words, unless you are shipping very heavy and dense products, you are very likely to be charged based on the size of your shipping cartons rather than how much they actually weigh.
To calculate volumetric weight, the shipping company multiplies the dimensions of your packages and divides that by a certain number. Each shipping company calculates this number differently. Basically, a box full of pillows can have the same dimensional weight of a box of sand.
Looking at the table above, you can see the dimensional weight of my shipment was nearly double the actual weight — this was because of the amount of empty space in each carton due to packaging. I was shipping a very light weight product which had a lot of wasted space in the carton.
The air freight column is the amount I was charged by the airline for my cargo. Calculated by the volumetric weight and the quoted price per kg or 149kg(there is a slight discrepancy due to using different formulas for dim weight) times $2.7 = $402
The next few columns are a variety of fees charged for different reasons. Some fees were charged for using a credit card to pay the fee. Fees on top of fees!
While my freight charge was only $402, the total paid by the time I had the product loaded into my car at the terminal was $711. The additional fees had nearly doubled the quoted price!
As you can see in the final column, despite being quoted a rate of $2.7 per kilogram, the amount I actual paid was $7.81 per kg. This was ultimately very close in cost, if not more expensive than it would have been to have this shipment made by air express.
Air express would also have saved me time, and the cost of picking up the product at the airport by having it delivered directly to my door.
Had I shipped twice as much product as I had, or about 300 kg, then air cargo would likely have been less expensive than air express.
Some additional considerations: I did not hire a customs broker or freight forwarder, both of which would have been an additional expense had I not been able to clear the shipment through customs and pick it up myself. Also since the value of my product was under $2500, it was eligible for informal entry, and I was not required to obtain a customs bond.
I hope this illustrates that when obtaining freight quotes that it is important to look deeper than just comparing the quoted price per kg. Make sure that the price you are quoted is inclusive of any other fees. If it is not then estimate those fees and add them to the cost to get a more accurate comparison.
