8 Proven Ways to Save Costs On Your Next Air Cargo Shipment
Cost Efficiency and Safety in Air Freight Forwarding
You want to save money on air cargo shipments, and you want to prevent financial losses down the line?
Our Freight Forwarding Experts put their heads together and came up with 8 excellent suggestions. Of course, this should be an ongoing discussion with your freight forwarder and our article provides a great place to start this conversation.
1. Forecasting
A valuable lesson learned through the Covid-19 pandemic was the importance of effective forecasting. When you work closely with your freight forwarder, sharing manufacturing production volumes and likely schedules, everyone can efficiently plan ahead for future air cargo shipments. It’s vital to identify in advance any special cargo – oversized, non-stackable, perishable – and to consider the impact of future fluctuation in market demand.
This enables your freight forwarder to establish longer-term contracts with the airlines which not only ensure available capacity but also reduce your overall shipping costs.
2. Contracts
If your shipments are of considerable size in terms of volume, you may prefer to enter a long-term contract with your freight forwarder. This can provide better air freight rates and other value-added benefits.
In a dynamic market, however, spot rates may also be highly attractive so it’s important that you keep your ear to the ground and be ready to adjust conventional strategy at any given moment.
To be fair to both parties, and especially in fast-moving markets, you should expect your freight forwarder to refresh freight rates every three months during a 5-year contract.
3. Consolidation
Consolidation is a highly effective way to pay less for air freight shipping. This starts with you, the shipper, aiming to combine several smaller shipments into one larger shipment. And then your freight forwarder, on behalf of the carrier, aims to consolidate multiple shipments into one full container. This process works in your favor by reducing your costs and works in the carrier’s favor by enabling volume optimization on every journey.
4. Multimodal Shipment
If you take a look at your current air freight shipments, you may realize some goods are arriving faster than needed. Allowing a longer lead time by using slower modes of transportation, you may achieve substantial cost and carbon emissions reductions. For example, imagine your 20-ton shipment travels 9,000 km (5,590 miles) by air in just 7 days. But if your goods can tolerate a longer journey and/or your inventory strategy can be adjusted, perhaps you should consider a modal shift?
The same shipment could instead arrive in 24 days by ocean while also delivering awesome benefits such as an 84% cut in transportation costs and a 95% reduction in CO2e emissions.
5. Proper Packaging
Not all items of air cargo are equal. Some goods can be securely palletized while others must be shrink wrapped or bubble wrapped. Proper packaging is essential to protect your items from damage in transit, which in itself is a cost to your business. If everything is correctly packaged, you’ll avoid shipment delays – a lot of money is wasted if you miss a shipment schedule. And of course by fitting more items into less space you pay less overall for shipping.
6. Pickup & Delivery
Freight forwarders offer service flexibility and this can provide you with valuable savings. For example, some shippers find it’s more cost effective to pick up their own goods and deliver them to the airport rather than assigning this task to the forwarder. Your business relationship with your freight forwarder should be collaborative and consultative, allowing you opportunities this like to control your overall costs.
7. Insurance
There’s a strong financial argument for securing a good air cargo insurance policy rather than relying on international freight conventions for compensation. For one shipper, insurance provided a $70,000 payout instead of just $7,890. Learn why shippers need cargo insurance.
Alongside headline-making disasters and crimes in the air, at sea, and on land, there are a multitude of small and sometimes quite mundane loss events.
While steps should always be taken to protect cargo, the chance of in-transit freight damage or loss is much higher than the chance of, say, a house fire.
If a container or some item of cargo is dropped, this can cause physical freight damage. Another risk is wet damage, typically caused by moisture, condensation, rain, and water ingress. In addition, cargo can be damaged by contamination and infestation, and may suffer temperature related damage if the goods are perishable. And opportunistic theft is a constant danger.
8. Customs Brokerage
You should always work with certified customs brokers. Not all freight forwarders offer a certified customs broker service, so check with your preferred forwarder if you intend to export or import goods across borders.
A good broker will ensure your correctly declared goods move smoothly through customs, as swiftly and economically as possible. This is especially important for perishable goods and for mission-critical delivery schedules.
Compliance also protects you from incurring hefty additional expenses and risking severe fines – penalties can be in the millions of dollars if shippers attempt to work around the rules.
