In this article, you will learn the basic air cargo skills related to calculating air cargo rates, minimum charges for small packages. If this is your first visit to our website, and you are interested in learning basic air cargo skills, you should read my previous articles which form the base knowledge to understand IATA cargo rating principles.
For general readers, they can continue reading. Now, I will list you my previous articles read it if you didn't understand the air waybill, air cargo rate classification and calculating chargeable weight / volumetric weight.
Calculating Freight Costs- Minimum charges
We are going to send small shipment from Montreal to us by Air Canada Cargo. Therefore, we must have the air Canada cargo " per kg air freight rates", here you will find the list of air cargo rates from Canada to US by Air Canada Cargo. But before we start it is necessary to give you a short explanation of the term rates and charges which help you understand the IATA TACT Rules " The Air Cargo Tariff " regarding air cargo minimum charges.
Air Cargo Rate / charges
Rates : Are the price quoted in local currency ( or USD) reflecting the cost of air cargo transportation per kg. or pound between airport of origin and the airport of destination.
Charges : Are quoted in local currency ( or USD ) , reflect the transportation costs for the entire shipment from one airport to another.
Air Cargo Principles
-The heavier a shipment, the lower the rate per kg.
- Cargo rate s are one-direction. they must be applied from origin to destination.
- The calculation of the rates does not depend on the actual routing of a shipment.
IATA TACT Rules Regarding Air Freight Minimum Charges
TACT Rule
The level of the minimum charge depends on the IATA Area with in or between which transportation takes place and is indicated on the rate line, immediately after the name of the destination city, with designator M (minimum) in the min. weight column. See this image, to send small shipment from Delhi to Bahrain the minimum charges are 900 USD. While the normal air cargo rate "less than 100 kg" is 77.30 USD per kg.
How many total kgs you have! If we divided the minimum charge by the normal air cargo rate per kg " 77.30 USD" the result is " 11.6 kg", this mean if your shipment is less than 11.6 kgs, you are going to pay the airline total "900 USD ". This amount of money is the cost of transporting your cargo by kgcharges.
There are additional other charges such as airwaybill preparation and handling charge, security charge. The other charge depends on the state export policies.
If The minimum charges to destinations not shown in the rates pages are indicated in TACT rules, there section. For example, shipping from Afghanistan rest of world is
Calculating air freight Minimum Charge – example
Here is the Air Canada published air cargo rate from Canada to US, if our shipment is classified as general cargo and its weight (chargeable weight) is 7 kgs (Toys) from Montréal " YUL" to Washington " IAD "
From the Air Canadapublished freight rate, we read this:
Minimum charge is : 60.00 CAD
Freight Rate per one kg is : 2.47 CAD
Freight Rate per kg for total of 45 kg or above is : 2.12 CAD
Now, we will calculate the shipping costs per kg:
Total freight charges = 7 kgs multiplied by 2.47 CAD " kg rate" = 17.29 CAD .
Do you remember the IATA TACT Rule which says " Air freight rates " weight charge" of any shipment may never be lower than the published minimum charge from the point of origin to the point of destination of the shipment".
Yes, Air Canada will charge you = 60.00 CAD minimum publish charges from Montréal " YUL" to Washington " IAD ".
But if your shipment was 30 kgs! you will pay Air Canada
Total freight charges = 30 kgs multiplied by 2.47 CAD " kg rate" = 74.1 CAD .
Normal rate per kilo and more than published minimum rate.
You got my point!
Completing Air Waybill - Minimum Charge – example
Summary
Air Canada pay operational costs for carriage each shipment. Also, when the shipment is light in weight or small, it needs to be handled like other big shipments. For these reasons, Air Canada publish air cargo minimum charge to cover its operational costs, and for
Note : General air cargo rate will be covered in separate article in the future.