Hasn’t shipping gotten a whole lot easier with the evolution of air shipping? Has it not made it easier for you to ship your consignments quickly and securely? However, have you ever wondered how you can avail of air shipping at lower costs? There are several methods to minimise air shipping costs. Freight costs can speedily rise with factors like type of cargo, shipping frequency, distance, and insurance.
The beginning of January 2024 saw a 10% year-over-year increase in air freight volumes, but because of the availability of capacity, this hasn’t translated into increased rates. Due to the impending Lunar New Year break and anecdotal indications of a shift from sea to air due to the Red Sea crisis, air freight rates increased as January progressed. The air cargo industry is hopeful that the market will improve in the upcoming year, with expectations that both volumes and rates will increase in 2024.
This article details different methods to minimise air transport expenses while also detailing the benefits of shipping at a flat rate.
Reduce Your Airfreight Costs: Tried and Tested Methods
Many businesses work under the impression that air freight charges are fixed and cannot be expunged. However, there are several methods for you to adopt to minimise air shipping costs. Some are quite obvious, like offering nighttime freight pick-ups. Here are a bunch of methods to reduce your air freight costs:
- Employing local consolidation programs for freights of smaller sizes:
You might consider using local consolidation programs. These can help you minimise air freight costs by almost 25%. In a consolidation program, the nearby shippers send their consignments to a common location, and by shipping together, you and the other party can benefit largely. It enables you to divide the overall costs incurred and minimise your shipping charge. However, you must note that this depends on the type of cargo being shipped. Perishable goods, medicines, high-risk items, and things that require special handling may not be suited for this. Even big players like Target and Colgate use this method to slash their prices.
- Try adopting the ‘larger shipment lower frequency of orders’ policy:
Try and get your customers to buy your products in bulk. It enables you to save on shipping costs and your consumers to save on purchasing costs. When you ship in bulk, the costs charged will be lower than frequently shipping smaller quantities. This is because when you ship via air, an increase in the frequency of shipping means greater labour costs, fuel costs, and transportation costs. By minimising the number of trips, you can save more.
- Choosing off-peak shipping times:
Finding the optimal time for your shipping can help you reduce air freight charges. Off-peak days have lower demand thus air cargo companies will charge you less making air freight shipping affordable. For most consumer businesses, Fridays are known to be off-peak, and weekdays are rather demanding. By avoiding holidays and festival times to ship your parcels, you can minimise your shipping costs drastically. This is because the charges will be lower due to the lack of demand for air shipping. Hence, you must plan to avoid a surge in charges.
- Choosing odd hours for pickups:
Most of the logistics agents choose to complete their order pickups during the day for their freight. It might be conflicting with other runs. Offering nighttime pickups allows carriers to pick up your consignments on the way to the upcoming destination post-completion of their daytime deliveries. Hence, it allows maximum carrier usage on distant routes by minimising air freight costs.
- Developing good relationships with your freight carriers:
Building strong connections and healthy networks with freight forwarders will all be beneficial. It is no secret that maintaining long-term relationships with your freight carriers can help you foster strategic partnerships. It also helps you gain transportation management benefits and create a network to receive help at any point. Moreover, you can also safeguard your business from the market’s dynamic variations by locking in shipping charges. The logistics services will help you find cost-effective options that minimise your overall costs and yet adhere to your tight schedules.
- Outsourcing your transportation and shipping department functions:
Maintaining a freight management team in-house can be very expensive for smaller and upcoming businesses. It might not be feasible due to added costs and time constraints. Outsourcing this domain to logistics partners can help you take off this burden and delegate it to them. They help you take away the operational costs and even save on air shipping costs.
- Longer delivery lead times:
When you plan your shipping operations, you can notify the carrier of upcoming shipments. This gives them the chance to maximise their assets and warehousing space. Notice to the shippers in advance gives adequate time for planning and also helps you minimise air freight charges due to prior bookings. The more you increase your lead times, the better price you are offered.
- The dimensions of your shipment:
In air shipping, your cargo can be shipped via cargo or a commercial aeroplane. However, it is important to note that the cost per kilogram is different for these two options. Cargo shipping will cost more than commercial plane shipping. By optimising your packing strategies, you will be able to ship your parcels in a more affordable method rather than paying premium charges. Hence, the dimensions of your parcel must be optimal.
Benefits of Flat Rate Shipping
Flat-rate shipping is extremely beneficial as the price shall stay constant. It means that a specific amount is paid to ship a consignment, and this will not be affected by the weight and dimensions of the consignment. Unit Load Device or ULD is a perfect example to show the same for air cargo shipments. A ULD is a simple air freight container that can collect different pieces inside for either one shipment or many shipments to make the handling processes easier. The charges to ship a parcel within a ULD are generally specified in cost per kilogram or flare rate basis, even if the full container is not shipped. Considering that the ULD has a capacity of 5000 kilos and the shipment was loaded for about 3500 kilos, the shipper will pay for the 1500 kilos without shipping them.
Chargeable Weight in Air Freight Cost Calculation
When you consider air freight shipping costs, it is calculated based on the chargeable weight per kilogram. This weight is the greater amount between the actual gross weight and the volumetric weight. Although the rate is calculated per kilogram, it differs from one shipment to another. There are many categories for weight and each of these are distinct. The greater the category, the lower the rate per kilogram. Hence, it is more favourable for the shipper to have as many items as possible in one shipment to save on the shipping cost per kilogram.
Cost-Saving Phases in Freight Process
You can also save on the freight process itself. The cost of packing, labelling, road transportation, documentation, customs processes, etc., can be prone to mistakes that cost significantly. The wrong type of packing might make the dimensions larger than necessary, costing you more for shipping. Even the wrong kind of labelling can cost you extra or even worse, delays. Hence, doing the shipping process correctly can help you greatly.
Consolidated Vs Direct Shipment: Which One to Choose and When?
The air freight charges decrease based on the class of freight chosen. When the shipment’s weight surpasses 100 kilograms, the difference becomes lower and eventually disappears. Thus, the smaller the shipment is, the greater the benefit we get from consolidation. But when the shipment is larger than 1000 kilograms you can send it as a direct shipment and save on the processing time, while keeping the costs of consolidation low. This can be a tricky task if you are a novice. Parenting up with a 3PL partner can help you optimise these charges better.
Conclusion
Shipping has become a whole lot easier with the arrival of air shipping. However, the prices they charge might be a lot more than you can afford. But you can twist a couple of things to bring air shipping into your budget. Simple strategies like increasing lead times, choosing the right type of packing and labelling, joining forces with local consolidation programs, etc., can help you easily avail air freight shipping with your budget. You might also want to consider flat-rate shipping when you are a regular bulk shipper. It allows you to save largely and also freeze costs when necessary. Air freight shipping might not be so expensive after all if you choose the right air cargo service. Shiprocket’s CargoX is a reliable logistics service providing safe, swift, and cost-effective international air cargo shipping to over 100 destinations worldwide.
