How Air Freight Works: The Complete Process Explained [With Flowchart]
October 28, 2022 Air Freight
Air freight involves moving cargo from Point A to Point B via aircraft. Using air freight, cargo is transported quickly across the world, however, whilst it may seem simple, the process can get quite complicated.
You need to think about whether air freight services right for you, understand all that’s involved, have the right documentation so your shipment isn’t delayed, and engage a professional freight forwarder to ensure your transaction flows smoothly.
Below, we’ve explained the complete process of how air freight works. You can also see a visual workflow showing how the process works step-by-step.
Step #1: Request quotes and order your product
Once you’ve decided that air freight is right for you, you need to talk and negotiate with your overseas suppliers to ensure they can comply with air transport requirements. Air freight is a two-way transaction, so you’ll need to get your supplier onboard if air freight is your transport of choice.
The homework you’ll need to do is:
- Source the right supplier – do your market research to find the best supplier out there for your business. Our guide on choosing the right international suppliers can help you do this.
- Decide on Incoterms – the “incoterms” are the international commercial terms governing the allocation of risk throughout your shipment. You’ll need to choose the term that best suits your interests, whilst also striking the right balance with your supplier. Read our Beginner’s Guide to Incoterms for more information.
- Engage a freight forwarder – your freight forwarder can liaise directly with your suppliers. We here at ICE have dedicated overseas partners who can speak to your suppliers on your behalf and represent your commercial interests.
- Provide commercial documents – yes, unfortunately in shipping, there is a lot of documentation. Air freight is no exception. Your freight forwarder can handle all the documentation with your suppliers to ensure your transaction doesn’t run into any unexpected costs and delays.
However, if you are determined that air freight is the right option for your business you will want to ensure it is providing your business with the maximum possible benefits. As an alternative, there are two main options to consider: ocean freight and air-sea solutions (the latter being a mixture between air freight and sea freight).
Air freight is much quicker than sea freight, but it’s typically more expensive. By contrast, ocean freight may be cheaper but there is a greater risk of delay.
To understand the differences, see our blog on the advantages of using air freight versus sea freight.
Step #2: Understand the impact of airfreight
Before you sign any documentation with your supplier, make sure you understand how air freight works and the impact of using air freight to transport your cargo.
This includes doing some research into:
- How volumetric ratios work. When shipping cargo via aircraft, you don’t just pay for the kilograms of your airfreight shipment if your cargo takes up a large area of the aircraft. We have a handy calculator to work out your chargeable weight which you can download from our volumetric ratios blog.
- Air freight containers. Cargo can be shipped in a unit load device (ULD), as a palletised shipment or as loose cargo when shipping via air freight. There are a range of restrictions based on the height, length and width of your cargo. You can refer to our airfreight container guide at the bottom of this page for more information.
Examples of air freight containers – unit load device (ULD)
- Airfreight security regulations define that your cargo needs to be examined prior to export (which is mandatory). This can be at a Piece-level examination – this means each individual box, carton or other item; Consolidated form – homogeneous cargo packed on pallets, boxes stacked and wrapped in plastic or in unit load devices (ULDs); or as an approved Known Consignor – air cargo originating from these companies does not require further examination prior to uplift onto an aircraft.As a general example, if your cargo is palletised, it will need to fit within the following dimensions to go through an x-ray machine: 1.20m x 1.20m x 1.53m LWH, max 1000kg CW per pallet. It is critical that cargo screening through a metal detector is on plastic or cardboard pallets, as wooden pallets will likely have nails. If pallets need to be repacked, exporters will bear this cost. You can read more about air cargo examinations here.
Step #3: Pack your cargo and book your freight
The next step is to pack your cargo and book your freight. Ensure that when you do this, you:
- Speak to your forwarder about any restrictions applicable to the aircraft. Your cargo will obviously need to fit in the aircraft and be available for X-ray!
- Compare different services. There are many available options and routes for airfreight around the world. This was significantly impacted by the COVID-19 pandemic, which forced many businesses to adapt and think of new ways to transport goods across the world as air freight options became limited.
- Choose the right route. Usually, you can choose between different airlines offering different routing and transit times. Think of it as booking a flight for yourself. After all, 80% of air cargo in Australia arrives on passenger aircraft. You’ll need to make sure the route is correct for you and offers you the best price versus transit time.
Step #4: Freight forwarder arranges shipment
Once your cargo is packed and your freight is booked, it’s time for your freight forwarder to arrange your shipment. If you are importing into Australia, your supplier will need to prepare the following documents:
- Commercial Invoice – one the most important documents in shipping. The commercial invoice outlines the items being purchased and from whom, and the terms and conditions between buyer and seller.
- Packing list – shows the details of the cargo, including how it is packed.
- Certificate of origin – if your import is from a “free trade” country (i.e., a country with which Australia has a free trade agreement), this certificate will need to be prepared to avoid paying unnecessary duty charges.
- Import permits or Manufacturers Declarations as required for the product type.
- Dangerous goods forms – if a supplier is shipping dangerous goods as classified by the International Air Transport Association (IATA) or the International Maritime Organisation (IMO), they will be required to fill out and include relevant dangerous goods forms.
Once your flight is booked, an airway bill will be produced to outline the service and contract of carriage. The goods will then travel on designated services and can usually be tracked online through your freight forwarder.
Step #5: Goods processed through export customs clearance and placed in transit:
On arrival, your cargo will move through many stages.
During transit, we here at ICE will commence customs clearance so your goods can arrive in Australia with all duties and GST paid.
Following this, when the cargo lands, your goods will be moved to a CTO or cargo terminal operator. CTOs have obligations under customs legislation to ensure the security of the cargo terminal and goods subject to customs control. The CTO will segregate the cargo ready for collection.
If arranged on a Master Airway Bill
A “Master Airway Bill” (or a MAWB) refers to an airway bill that is issued for all goods covered by one or more “house” airway bills (or a HAWB, which simply means an airway bill issued by a freight handler acting as carrier).
If you’ve arranged your shipment through a MAWB, the goods will probably be consolidated (i.e. different shipments grouped together). On arrival, the cargo will then be moved to a Customs Bond facility for deconsolidation. Deconsolidation means that the aircraft cargo will be taken apart and each consignment will be separated according to the final destination.
At the bonded facility, customs are informed that the cargo has arrived by issuing an outturn report, which outlines the details of air cargo that has arrived in Australia and has been discharged from an aircraft. Each consignment received must be outturned.
You can read more about the obligations around outturn reporting from the Australian Border Force’s website.
If arranged on a direct airway bill
A direct airway bill (or a DAWB) is a bill of lading issued where freight is transported on the airline without a HAWB.
Direct shipments are generally used when freight and service needs are immediate. Freight will not be consolidated with other cargo. The goods can then be collected directly from the CTO and do not require deconsolidation.
Step #7: Goods are transported from the airport to the buyer
Once goods are customs cleared and outturned, a transport operator will collect the cargo and deliver it to your final destination.
It’s important to know in advance if the final delivery point will unload the cargo themselves, or if they need a tail lift truck for delivery.
A tail lift is a mechanical device permanently installed on the rear of a work truck, van, or lorry, and is designed to facilitate the handling of goods from ground level or a loading dock to the level of the vehicle bed, or vice versa.
It’s also useful to know the delivery point’s opening hours to ensure cargo can be delivered within your timeframe.
Your freight forwarder will work with you to identify this key information.
If you’ve got any questions about how air freight works, please don’t hesitate to contact one of our expert freight forwarding specialists for some tailored advice.
We have decades of combined experience managing air freight shipments for clients in a range of different industries. Call us today or request a quote below.Request A Quote
or call us on 1300 227 461
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