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Air freight, or air cargo, refers to an international shipment in which the main leg of transit is conducted via plane. Air freight transportation, arranged by a freight forwarding company or logistics provider, is accomplished via charter or commercial air carrier.
Unlike sea freight, air freight can travel to and from anywhere there are airports, making it a much more dynamic mode of transportation. Additionally, air freight is significantly faster and safer than ocean freight, however, it is more expensive.
While it is more expensive, for some products and situations, the speed, safety, and reliability of air freight may be the best option for your business. However, the key to air freight is strategy. A calculated use of air freight in your supply chain can improve inventory management, customer service, and agility. What is a strategic use of air freight? Let’s take a look at some strategies.
Before we dive too deep into strategizing, we need to make a quick distinction. There are two different types of air cargo services, international air freight and express air freight. With express air freight the shipment is handled by one company (usually DHL, UPS, or FedEx) that moves the package door to door. These are generally one time, smaller shipments and cost more than standard international air freight.
This guide will deal with international air freight, not express.
1. Speed. Airplanes are about 30 times faster than container ships. Goods traveling via air can leave a factory in China and be in a warehouse in the US in around five days as opposed to over six weeks moving over the sea.
2. Visibility. Airplanes are equipped with tracking and most air carriers have web portals through which customers can see where their goods are at all times. The designated flight path and arrival/departure windows also make cargo traveling via air more predictable and delays can be reported on quickly by carriers and freight forwarders.
3. Safety. Not only are planes safer and less vulnerable to attack or theft than ocean liners, the shorter transit time and less handling make for a safer journey for your goods. Likewise, the decreased risks lowers insurance premiums for goods shipped via air.
4. Reliability. As with increased safety, the shorter transit times and less volatile schedules or air carriers allow for greater reliability in service. Air freight runs less risk of delays and delays that do happen are often shorter than ocean freight delays.
While the cost of ocean shipping is based on how much space your shipment occupies (whether a full container or part of a container), air freight rates are based on a combination of weight and volume.
Air carries charge by either the volumetric (or dimensional) weight of the products or the actual weight, based on which is more expensive, the resulting number is known as the chargeable weight.
To find the volumetric weight of your product, multiply the item’s volume in cubic meters by 167kg. For example, if you have a regular rectangular package with the dimensions of W: 20cm, H: 20 cm, and L: 20 cm the volume would be 8,000cm or .008 cubic meters. The volumetric weight would then be .008 x 167 = 1.336kg.
If the volumetric weight is higher than the actual weight of the product, the carrier will charge you per kilogram of volumetric weight. In a standard season, air freight from China to the US ranges from $2.50-$5.00 a kilogram.
Because of how the costs for air freight are calculated it makes more sense to ship some kinds of products via air freight than others. The products that are best shipped by air tend to be smaller, high-value goods or items that are time sensitive. Here are some examples:
Electronics: the high value and time sensitive nature of small electronics makes them a great candidate for air freight
Textiles: products that are light and compact can be shipped via air freight if the profit margins supports the increase in price between air and ocean freight
Apparel: Seasonal items like clothing are often time sensitive and like, making air freight a good choice, especially for product launches or samples
Pharmaceuticals: These products often require temperature regulation and could have a limited shelf life, thus the safer, more reliable, faster route of air freight makes sense
Documents: Sensitive items such as documents require fast, reliable, and safe handling and since they are usually small and lightweight, air freight is probably the best choice
Heavy or bulky items, since the cost of air freight is based on weight, it is best to send heavy items via ocean
Lithium batteries, there are some restricted products that cannot be shipped via air including lithium batteries
Liquid products like fuels or oils
Explosives
Product Launches. Product launches often mean concentrated sales, which means that you want to have a good amount of inventory, and you want it on time. So for SKU’s that make sense, moving your initial batch of product via air freight can be a smart way of making sure you have enough inventory on time for a launch.
Additionally, if you plan well enough in advance to move your initial inventory via ocean, bringing in more inventory quickly by air freight if the product does well is a good strategy to keep freight costs low, not overbuy product, and have inventory if a product sells surprisingly well.
Seasonal Products. With an increasingly global society, seasonality has shifted from four seasons a year to, in some cases, up to 52. This means that you have to have fresh products almost constantly to take advantage of the seasonal customer base. Planning that much different inventory far enough in advance to use ocean freight is not always possible.
So, instead of missing out on sales by not having the products in time, utilize air freight to bring in seasonal products at the optimal moment to capitalize on swiftly changing trends. With items like electronics and apparel, this strategy will allow you to capitalize on seasons by splurging for air freight on time-sensitive products, but save by bringing in more static products via ocean freight.
Small Shipments. Since air freight costs are determined by weight and size of the shipment, small shipments are actually more often economical if they are moved via air freight rather than using a full container or even a consolidated LCL shipment.
Samples. Like with small shipments, samples are a great candidate for air freight because of their size. However, the real advantage is speed. Getting samples quickly allows you to make any necessary modifications without slowing your supply chain down by six weeks waiting for a container to arrive with your sample.
One of the most important things to consider when utilizing air freight for Amazon, which you have seen several times throughout this guideline, is diversifying your supply chain. The old saying: “don’t put all your eggs in one basket” is excellent advice in supply chain management. Air freight performs best, and most cost-effectively, when it is a part of your supply chain strategy, not all of it. Strategically using airfreight in the situations mentioned above will give you an agile supply chain that will give you freedom and protect you from imminent delays.
Need help optimizing your supply chain with air freight? Talk to one of our experts today!
