Airlines that are members of the International Air Transport Association (IATA) are bound by their membership to comply with tariffs issued by IATA. However since 11th September 2002, airfreight rates are negotiable. Airfreight rates cover transportation from the airport of loading to the airport of discharge.
These rates do not include the following,
- Collection of air cargo from the consignor’s/exporters premises
- Delivery of cargo from the airport of destination to the consignee’s premises
- Storage of cargo before or after loading
- Customs clearance in the country of destination
- Any duties and taxes that may have to be paid
- Insurance
Airline freight rates are based on a “chargeable weight”, because the volume or weight that can be loaded into an aircraft is limited. Chargeable Weight is the greater of: the Actual Weight of a shipment, or the shipment’s cubic volume converted into Volumetric Weight (based on a predetermined cube-to-weight conversion factor called a DIM factor). The chargeable weight is calculated as follows: 1 metric ton = 6 cubic metres. In order to establish if the cargo will be a weight or volumetric based shipment.
Basic Principle
The dimensions of the cargo need to be accurately measured in centimetres to the most extreme points of the piece to be carried. This calculation establishes the volume of the cargo and is based on: length × width × height = cargo volume
It is important to note that any cylindrical (or any unusually shaped item) will be calculated in volume terms based not on the actual volume of the cylinder but on the basis of the volume of a box that the cylinder would fi t inside exactly. Therefore all calculations are cubic and based on rectilinear shapes not actual shapes. Another point to note is that if there is a part of the cargo that extends outwards from the piece, such as a pipe or aerial, then the entire additional cubic area that this extension consumes will be charged, however small the pipe or aerial may be in terms of volume itself.
The pricing of air freight is based on a weight or measure system. This means that the airline will charge air cargo at the higher of the two calculations of the weight or the volume. If the weight is higher than the volume then this will be the basis of the price and if the volume figure is higher than this will be used. The airline industry calculates the relationship between weight and volume in the following way: 1 metric tonne = 6 cubic metres or 6,000 centimetres cubed (cm 3 ) = 1 kilogramme.
Volume Calculation
The Volumetric Weight for a shipment is its cubic volume divided by the predetermined cube -to-weight conversion factor called a (DIM) factor. There is no single DIM factor being utilized. The DIM factor utilized for a shipment can vary by Forwarder, locations, and even by unique customer/Forwarder relationship. Some Forwarders offer Volumetric Discounts.
The steps involved are as under,
- Step 1: Measure the parcel/cargo along the greatest length, width and height of that parcel. For example; 100 cm (L) X 100 cm (W) X 100 cm (H) = 1,000,000 cm3. Next, weigh the parcel; assume it weighs 150kg.
- Step 2: Divide the 1,000,000 cm3 by 6 000 = 166, 66 kg. (1 metric ton = 6 cubic meters).
- Step 3: Compare the weight to the volume. If the weight is 150 kg then the airline would base the freight on the higher amount being: 166, 66 kg.
