INTERNATIONAL SHIPPING BY AIR AND 5 MUST-KNOW SECRETS – HOW TO DISTINGUISH AIR CARGO, AIR EXPRESS

International shipping by air is a service that is not too strange for most businesses in Vietnam, especially today when the demand for international trade is increasing. However, not many people know specifically and exactly how and regulations of this service. Want to learn more about international shipping by air?

How about terms and shipping costs calculation? Stay tuned for this article!

1. What is international shipping by air? Distinguish Air cargo and Air express

International shipping by air could be understood simply as using an aircraft to transport goods abroad and vice versa. Goods will be packed and transported via dedicated cargo planes or the cargo hold of passenger aircraft. Along with the growing demand for international trade, high safety, and flexible time, international transportation by air is one of the dominant logistics services in Vietnam today.

Depending on your specific needs, there will be 03 international air freight services for you to choose from Domestic air freight, international air freight, and air express delivery.

When you hear about international shipping by air, you will likely come across terms like air cargo and air express, so what is the difference between these two terms?

1.1. Distinguish Air cargo and Air express in international air freight

Air Cargo and Air Express are both forms of international shipping by air. However, these are two different shipping services, specifically:

1.2. Stakeholders in international shipping by air

In international shipping by air, customers will have to come in contact quite often with bills of lading. To help you read the bill of lading more effectively, we will go through the basic terms that you will need to know very well below:

• The shipper is often understood as the exporter or the carrier undertaking the delivery of goods to the buyer under the agreement on time, ship schedule, and airline. A shipper is also sometimes understood as a Forwarder, a legal entity that signs a contract of carriage. If the business supplies the goods and is responsible for shipping the goods, the shipper will also be the seller.
• The Consignee/Cnee is an individual or company who receives and handles the goods when delivered to the point of receipt and returned to the buyer. Cnee is also the buyer in many cases if that unit directly proceeds with the import procedures, not through a third party.
• Notify Party is an individual or company that receives notification when the goods arrive at the airport. Notify party will receive a notice of arrival, then send this information to the consignee to receive the goods. Depending on the order requirements, the Notify party can be the consignee (Cnee) or not the consignee. Details of the Notify party will be mentioned in the “Arrival notice” section of the bill of lading.
• Airlines and the aircraft operating companies (Air Operators) will be the unit to transport cargo according to the flight schedule and route according to the flight operation regulations.

In addition, on the bill of lading, you should pay attention to many other terms. In this case, don't hesitate to contact a logistics unit for assistance if you need more detailed information.

2. Advantages and disadvantages when transporting goods via international air freight

According to statistics, air freight has a tiny proportion of the international shipping market share (less than 0.5%), but the value brought about 30%. What are the pros and cons of this service?

First, the advantages of this service must be mentioned:

• Firstly, this is the fastest form of international transport today: Compared to ships (23-46km/h), trains (only about 60-80km/h in Vietnam), or trucks (60-80km/h), cargo or passenger planes have an average speed of about 800-1000km/h, which is very high compared to other modes of transport. The reason is that there are not too many obstacles on the way.
• Secondly, transport by plane also has the highest safety because it is bound by many regulations to ensure safety in international transportation by air.
• Thirdly, the transportation insurance fee is lower due to less risk than other methods. At the same time, the storage time is relatively short because the delivery procedure is quite flexible, thereby reducing the storage fee usually to a minimum.

Next, when it comes to the disadvantage of international shipping by air, it has the fastest speed but has the highest freight rate. Rates are in VND/kg. It is also a big problem for businesses when choosing a suitable international shipping method.

In addition, the complicated regulations and limitations on the actual size and weight of the aircraft are also a drawback that makes this service unsuitable for transporting bulky goods, goods of large volume, or unknown-source goods.

3. Regulations on calculating the international air freight rates

3.1. Basic rates

Currently, the world is applying 06 classifications of international air freight rates as follows:

The Normal rate: For general mailers

The minimum Rate (MR): is the lowest fee payable to the carrier

General Cargo rate (GCR)): Is the basic freight rate calculated for the shipment that is not entitled to any preferential or reduced freight rates from the carrier.

Class Cargo rate:  Applicable to goods that have been classified into specific groups, such as valuables (gold, silver, etc. with freight = 200% of the general freight), live animals (= 150% compared to departmental charges), books, newspapers, luggage... (= 50% compared to departmental charges)

Priority rate: goods are prioritized for faster delivery, so the freight is usually 30-40% higher, among the most expensive air freight types.

Container rate: apply lower rates for goods packed in air containers (different from sea containers)

Besides the above fees, businesses will also need to pay attention to some additional fees as follows:

+ Delivery order fee (D/O fee) for the airline issuing the delivery order (present to customs)

+ Loading and unloading fee (THC fee)

+ Billing fee

+ Data transmission fee for Automated Manifest System (AMS) into countries such as the US, CANADA, and CHINA; One-stop information for Master Bill of Lading vs. House Bill of Lading

+ Supply Chain Check at the airport (SCC)

+ Bill split fee

+ Loading and unloading fees at the port, etc.

3.2. Regulations on the rate calculation in international shipping by air

In international shipping, Air-freight rate will be calculated based on the International Air Transport Association (IATA) tariff.

Specific formula:

Air-freight rate = Unit cost x volume of goods.

In there:

Freight weight (CW) = Cargo volume : 6000

Express delivery weight = Cargo volume : 5000

Item volume (cubic meter) = Length x Width x Height (Note: Length, Width, Height are in Meters)

International air freight rates are usually fixed per kilogram of goods, and there are different rates broken down into weight ranges. For example, general freight is divided into different rates: under 45 kg, +45kgs, +100kgs, +300 kgs, +500kgs, +1000kgs..., in which, there are some notes you should know.

• Weight is the actual weight of the order (AW).
• Mass is order weight converted to volume (DW).
• If weight > mass: Fees are calculated according to the KGS price list.
• If weight < volume: freight will be calculated according to the CBM price list.

Due to such high costs, air freight is generally not suitable for low-value goods transportation. The selection of service providers also needs careful consideration.

4. The reputable international air freight company in Vietnam

In international shipping, if your business is not specialized in import and export jobs, you should refer to a package service to limit problems due to a lack of experience. (door-to-door) of forwarder companies.

4.1. What is a forwarder?

A forwarder in international shipping is an individual or company that organizes, receives, and rotates goods according to demand from the seller to the buyer. You can also understand that a forwarder is a logistics company.

For example, a textile enterprise in Hanoi wants to export a shipment of ready-to-wear clothing to Canada. The forwarder/logistics company will arrange to sign a transport contract to receive and transfer this shipment with the other company. After that, the forwarder will find a suitable airline (for example, Vietnam Airline Cargo) to hire to transport this shipment to the notified destination.

4.2. Reasons why businesses should choose a Forwarder company when having international shipping needs

There are several reasons for you to choose a Forwarder company for international shipping:

• Firstly, as updated above, the forwarder will be responsible for the shipping procedures and options to help reduce the shipping costs and burden for the business (if the company does not have the expertise and experience in international shipping).
• Two, utilizing forwarders will help reduce costs, as they will be able to find the best shipping route and the most optimal price. In addition, it is not easy for small customers to approach and bargain directly with the carrier/shipping line, while forwarders can do this.
• Third, in Vietnam today, the logistics transportation market is still subject to "manipulation" from "hidden parties." Getting through the freight is quite tricky if there is no information or experience.

So, if you are a business looking for a reputable and quality international air freight service at an affordable price, where to look???

You don't need to worry, because we have: ASC Logistics!

5. ASC Logistics – a cheap and effective international shipping solution for businesses

Instead of spending a lot of time researching complicated regulations on international transportation to ensure flight safety and security, with experience and a dedicated professional team, forwarder companies can provide international shipping service packages in the fastest and most optimal way. And ASC Logistics is one of those companies.

With many years of experience in the international shipping service industry, with a vast network of relationships and cooperation with stakeholders, ASC Logistics always ensures that customers' goods will be transported quickly and safely, door-to-door, at the most reasonable cost.

On the criterion of "Bringing true value to every customer ", ASC Logistics team is always ready to accompany, advise and support customers to access effective transportation options and simple procedures and optimize costs.  In addition, they also provide accompanying services such as customs clearance or overseas cargo services.

If you still have questions and need to discuss further, do not hesitate to contact the hotline: 0973.266.672 (Mr.Thang) for the most detailed support.