Air Cargo Tariff: Everything You Need to Know

Air cargo tariff is the lifeblood of the air freight industry. They establish the financial framework for transporting goods by air, which is a vital component of international trade. 

According to the International Air Transport Association (IATA), air cargo is responsible for transporting roughly 35% of global trade by value, even though it accounts for only 1% of global trade by volume, which highlights the importance and efficiency of air cargo transportation for high-value, time-sensitive goods. 

What is TACT?

TACT stands for The Airline Tariff Publishing Company. 

It’s not a single entity, but rather a framework established by airlines to ensure standardized communication of air cargo rates and rules. 

This framework helps maintain transparency and consistency in the air cargo industry. Individual airlines publish their specific air cargo tariff and rules within the TACT framework, outlining their pricing structures and regulations for various routes and cargo types. 

Components of Air Cargo Tariff

An air tariff typically comprises several key components: 

Transportation Charges: This refers to the core cost of transporting your cargo from origin to destination airport, typically based on weight or volume (whichever is higher). 

Fuel Surcharge: Airlines often add a fuel surcharge to account for fluctuations in fuel prices. 

Security Surcharge: This surcharge covers the costs associated with security measures implemented for air cargo transportation. 

Terminal Handling Charge: This fee covers the costs of handling your cargo at the airport terminal, including loading and unloading. 

Depending on your shipment’s specific characteristics, there might be additional charges for things like customs clearance, special handling for oversized or fragile items, and cold chain requirements for perishable goods. 

How to Calculate Air CargoTariff?

Calculating air cargo tariffs can involve several factors, but the two main ones are weight and volume. 

Airlines typically use a concept called “chargeable weight” to determine the cost. This can be either the actual weight of your cargo or its volumetric weight, whichever is higher. 

Volumetric weight is calculated by multiplying the length, width, and height of your shipment and applying a specific conversion factor set by the airline. 

This ensures that bulky but lightweight items contribute their fair share to the transportation cost. 

Here’s a simplified formula for calculating chargeable weight: 

Chargeable Weight = Max (Actual Weight, Volumetric Weight)

Once you have the chargeable weight, you can refer to the air cargo tariff published by your chosen airline for the route you’re interested in. 

This tariff will outline the rates based on weight brackets or zones. You can then add any applicable surcharges and other accessorial charges to arrive at the total estimated cost for your shipment. 

Air Freight Charge Calculation Using Volumetric and Actual Weight

The concept of chargeable weight is important because it ensures that airlines are compensated fairly for transporting cargo. 

Volumetric weight takes into account the space occupied by the shipment, even if the cargo itself is lightweight. 

This prevents shippers from exploiting pricing structures by using large boxes for small, dense items. 

Factors Influencing Air Cargo Prices

Several factors can influence air cargo prices beyond just weight and volume: 

Costs can vary depending on the origin, destination, and distance of your shipment. Longer routes typically command higher prices. 

Perishable goods, hazardous materials, or live animals often have specific handling requirements and may incur additional surcharges. 

Air cargo prices can fluctuate based on peak shipping seasons and overall cargo demand on specific routes. 

As mentioned earlier, field surcharges can significantly impact the final cost. 

How to Optimize Air Cargo Tariff?

Understanding how air cargo tariffs are calculated is only half the battle. 

By implementing some strategic planning and optimizing your shipment preparation, you can significantly reduce your overall air freight rates. 

Negotiate Rates

Building a strong relationship with a specific airline or freight forwarder such as Forceget can be beneficial in the long run. Consistent business with the same carrier can give you leverage to negotiate more favorable rates, especially if you ship frequently on specific routes. 

If you are a high-volume shipper, emphasize your business potential to the airline. Airlines are often willing to offer volume discounts to secure consistent cargo for their flights. 

Optimize Packaging

Avoid using excessively large boxes for your goods. Invest in proper packaging materials that are lightweight but strong enough to protect your cargo during transport. This will help minimize your chargeable weight and potentially reduce costs. 

Consolidate Shipments

If you have multiple small shipments going to the same destination within a specific timeframe, consider consolidating them into a single larger shipment. This can significantly reduce your overall transportation costs by taking advantage of economies of scale. 

Airlines typically offer lower rates for air cargo prices per kilo for heavier shipments. 

If your business operates from multiple locations, consider establishing a central shipping hub for consolidating smaller shipments before sending them to the final destination. 

Plan and Book Ahead

Air cargo freight rates can fluctuate significantly based on demand. Whenever possible, try to schedule your shipments during off-peak seasons to potentially secure lower rates. Research historical trends to identify the most cost-effective shipping periods. 

If your shipment is time-sensitive and coincides with a peak shipping season, book your cargo well in advance. This can help you secure space on flights and avoid last-minute price hikes. 

Compare Rates and Use Technology

Don’t limit yourself to a single carrier. Use online freight marketplaces or freight forwarders who can compare air cargo rates from multiple airlines on your desired route. 

This allows you to choose the most-effective option for your specific needs. 

Several online platforms and software tools can help you compare air cargo tariffs, optimize packaging and routing, and track your shipments in real-time. 

These tools can be valuable assets for streamlining your airfreight logistics and potentially reducing your costs. 

Key Considerations for Airfreight Shipment Preparation

Proper preparation of your airfreight shipment goes beyond simply packing your goods in a box. 

Ensure you provide accurate weight and dimension information for your shipment on the air waybill. Discrepancies can lead to additional charges at the airport. 

Clearly label your packages with complete and accurate information, including the consignee (receiver) details, origin and destination airports, and proper handling instructions if necessary. Ensure all required documentation, such as commercial invoices and customs forms, are complete and readily available to avoid delays and potential fines. 

If your shipment contains any hazardous materials, ensure proper classification, packaging, labeling, and documentation according to international air transport regulations (IATA Dangerous Goods Regulations). Failure to comply can result in significant delays, fines, or even shipment confiscation. 

Secure your shipment properly to prevent damage or pilferage during transport. Use high-quality packing tape, strapping, and appropriate void fill materials to ensure your goods arrive safely.