International Logistics II

Selection of the shipping line

➢ Local Representative / reliability /
ranking.
➢ Frequency and rapid transit times.
➢ Service coverage worldwide.
➢ Operational capacity: types of ships,
availability and variety of equipment
(containers).
➢ Type of service: Direct / Transhipment.
➢ Competitive rates: Freight /
surcharges. Charges on arrival.
➢ Conditions on arrival: demurrage-free
days. Store that works. Washing
containers.
➢ Payment facilities.
➢ Information online.
➢ Long-term relationship.

Logística Internacional II
Selection of Freight Agent

➢ Global / local ranking.

➢ If it is local, regional or forwarder global.
➢ International / local certifications (BASC, ISO).
➢ With its own foreign representation.
➢ Specialization.
➢ Financial solvency.
➢ Negotiating with warehouses, shipping and / or other transport modes (Service
Contracts).
➢ Complementary services include freight consolidation, pick up / delivery, tracking,
consulting, customs, security, etc.
➢ Freights (handling, etc.).
➢ Quality of service.
➢ Payment facilities.

Logística Internacional II
Selection of Terminal Storage, Authorized deposit or
Simple store

➢ Location.
➢ Complementary services (warrants, storage, repackaging, drawn off, cold,
billing order, stock control, preparation of orders, etc.).
➢ Security.
➢ Rates (weight, volume), days free.
➢ On the arrival of the ship / at the end of the unload.
➢ Overtime.
➢ Exclusive negotiations with shipping companies.
➢ Level of congestion.
➢ Operating capacity 24 hours.
➢ Efficiency.

Logística Internacional II
The Freight Agent
FREIGHT FORWARDER

FORWARDER

INTERNATIONAL CARGO AGENT

 The Freight Agent

The international freight forwarder is the person who can:

✓ Make and receive shipments.
✓ Consolidate and deconsolidate the goods.
✓ Act as a multimodal transport operator subjecting to the laws
of matter.
✓ Issue own documents of its business such as bills of lading, air
waybill, land transport document, receiving certificates and
similar.
 The Freight Agent

➢ It is not a carrier; it is a specialized transport operator in

international logistics trade. Its main customers are the
exporters and importers.
➢ Manages and coordinates all stages of shipments from EXW to
DDP with different actors in the supply chain.
➢ It is responsible for performing consolidation, ex. consolidating
goods belonging to one or several consignees to be transported
from one airport to another, as long as they are covered by a
single transport document (AWB).
 The Freight Agent
Stages in an air cargo operation:
1. Planning, route selection and airline.
2. Obtaining a particular flight reservation.
3. Collection of goods and documents (exporter). Verification.
4. Issuing transport documents (MAWB, HAWB, labels).
5. Customs clearance. Customs procedures in origin.
6. Preparation of the goods "ready for transport" and delivered to
the airline departure airport. Airport handling.
7. Flight to the destination airport.
8. Handling in destination airport.
9. Import customs procedures in the destination country.
10. Delivery to the importer.
 The Freight Agent
Outlook of air cargo:

5 principal markets of Air Cargo

In 2005 In 2025
Domestic – USA China – North America

China – North America China – Europe

Europe – North America Domestic – USA

Rest of Asia – North America Domestic – China

North America – Europe Rest of Asia – North America

Fuente: Airbus
 The Freight Agent

They are responsible for:

✓ Documentation.
✓ Carriage.
✓ Storage.
✓ Packaging of goods.
✓ Prepare a cargo manifest for the airline indicating the
different parts of the consolidated shipment.
✓ Prepare the document of consolidated air waybill
covering the whole shipment.
 The Freight Agent
International cargo agents require to have authorization
issued by the:

✓ General Direction of Civil Aviation (Ministry of

Transport and Communications) MTC -DGAC.
✓ The National Administration of Customs-Technical.
✓ National Superintendence of Tax Administration -
SUNAT and must comply with the technical standards
established by the International Air Transport
Association (IATA).
 The Freight Agent
IATA (International Air Transport Association) has
encouraged the creation of freight forwarders
establishing rigorous requirements for both professional
staff and investment of capital needed for its assembly.
Those agents that meet these requirements are known
as "IATA Freight Forwarders".
 The Freight Agent
➢IATA cargo agent is a freight forwarder registered by
IATA to act as an agent on behalf of all IATA member
airlines.
➢Airlines and cargo agents (IATA members) are
considered as partners in the transportation of air
cargo parts.
The Air Way Bill - AWB

Used for:
➢ Contract between the exporter and the
airline.
➢ Acceptance of receipt.
➢ Evidence of cargo.
➢ Accounting document.
➢ Document for customs.
➢ Acceptance of delivery.
➢ Insurance document.
➢ Document for claim.
➢ Document for statistics.
➢ Freight bill and other charges.
➢ Non-negotiable document
The Air Way
Bill - AWB
The Air Way Bill - AWB

What is the Air Way Bill?

✓ Shipper or exporter.
✓ Consignee´s name.
✓ Flight number and destination.
✓ Airport departure and arrival.
✓ Details of the load: weight, volume, quantity, price and
description.
✓ Indicating whether freight is payable at origin or destination.
✓ Amount of freight.
✓ Air waybill number.
✓ Date of issue.
The Air Way Bill - AWB
➢ An AWB (IATA airline) have an ID number with 11 digits. The first three numbers
indicate the issuing carrier and the other 8 digits represent the particular shipment.

➢ Considering the last eight digits at the extreme right (eighth digit) is a number in
base 7, is the control digit and goes from 0 to 6. The consecutive serial number of
the airline identifies the shipment (rest 7 digits).

➢ Ex. 125-0053 9442

➢ 125 - three-digit prefix identifying the airline, British Airways in this case.
➢ 0053 9442 – 8th digit number identifying the shipment, number 2 in this case is the
control digit in base 7.

➢ This number must be in the top two corners of AWB and in the lower right corner.
http://www.airlineupdate.com/content_public/codes/prefix/prefix_1.htm
Types of Air Waybills
 Air Waybills - House Airway Bill
1

1. House air way bill number 2

2. Shipper & Consignee details
3. Origin & destination service 4
codes responsible 3
4. Paying customer
5. Shipment details
5
 Air Waybills - Master Airway Bill
1

1. Master air way bill number2

2. Shipper & Consignee
details
3. Airport of origin &
destination 3 4
4. Flight number & Date
5. master air way bills 5
shipment details
 Types of AWB

➢The Master Air Waybill is

issued by the airline and
delivered to the freight
forwarder or consolidator.
➢The House Air Waybill is the
document that certifies each
individual shipment of a
consolidated merchandise. It is
issued by the consolidator and /
or freight forwarder.
 Shipper’s letter of instruction
➢ Is a document issued by the shipper giving guidelines to the freight forwarder or the
airline that issued the air waybill, so that the shipment is transported in accordance
with its instructions and that the AWB is completed in accordance with the
information provided in this letter of instructions.

➢ Generally an instruction letter contains information about:

➢ Shipper and address ➢Number of packages

➢Consignee and address ➢Marks on packages
➢Departure airport ➢Payment Method
➢Destination airport ➢Declared value for carriage
➢Number of flight ➢Declared customs value
➢Description of goods ➢Insurance
➢Gross weight ➢Information handling
➢Dimensions ➢Any other information that the
shipper needs.

https://www.lima-airport.com/esp/para-pasajeros/vuelos-y-aerolineas/directorio-de-aerolineas
B. Services provided in the airfreight

1. Land transport of cargo

Known as the "internal freight" because it is a transfer from the
place of the exporter to the terminal or from this location to the
local of the load consignee. The rate is quoted per route and type
of transport vehicle, depends on the volume and weight of the load
(usually established ranges weight / volume).
B. Services provided in the airfreight

2. Stowage
It involves the movement of the load from the transport vehicle to
its location in the terminal and then exported; and mobilization of
cargo from the terminal to the transport vehicle, in the case of
import.

The rate applies per gross kilo freight (usually established levels
weight ranges with a minimum fee). It is charged directly by the
terminal designated by the airline to the user, only in the case of
import.
B. Services provided in the airfreight

3. Storage
It is the concept of charging for the use of terminal installations for
processing cargo, including the safekeeping of the load that is
abandoned, immobilized, in confiscation and any other figure
ordered by the government authorities.
The terminal charged for this service directly to the user, when the
cargo is delivered and performed after nationalization procedures in
the case of an import. The rate applies according to the weight of the
load and the number of days spent in the terminal (usually are
established weight and days ranges or levels).
B. Services provided in the airfreight

4. Control and Load Handling

Is the payment which is made by processing the load, includes the management of
the Unit Load Device(ULD), load classification according to type of guide, type of
cargo, depending on destination and condition, distribution of lots to scales,
weighing and marking the load and the verification of packages (Tarja) for the
issuance of documents and electronic transmission to the Customs system.
It includes transportation of the Unit Load Device (ULD) from the terminal to the
load transfer zone ("black area") at the airport, in the case of export; and vice versa
in the case of import.
The rate applies per gross kilo freight and the airline charges to the user in the case
of export; and charged directly by the airline to the designated terminal and then
to the user, in the case of import.
B. Services provided in the airfreight

5. Desconsolidation
Is named to the split of load and breakdown of the HAWB covered by
a MAWB, in the case of import guide.
Its charge is applied in kilo gross freight and is charged directly by the
terminal designated by the airline to the user, in the case of import.
B. Services provided in the airfreight

6. Handling or Download
Is the concept of charging for the use of airport installations charged by the airport operator
moving the load alongside the aircraft, in the case of export; or vice versa in the case of
import.

The user does not directly pays the fee to the airport, it pays through the airline or airport
operator specialized companies.

The rate is known as UA (Using airport). It applies to every kilo of gross cargo entering or
leaving the airport and varies depending on whether is the Jorge Chavez International
Airport or a regional airport, and whether is a national or international cargo load.
B. Services provided in the airfreight

7. AWB Fee

Is a payment performed to fill the data in the AWB, and the preparation of relevant
documents to the shipment (cargo manifest), control of the documentation to be
attached to the air waybill and transmission shipment details to Customs from
origin and the country of destination, in the case of export. The charge applies for
each Carta Porte, declared independently in weight; and the carrier, and the freight
forwarder.
B. Services provided in the airfreight

8. Handling

Is the payment that is made to cover the administrative costs of notification of

arrival, review and endorsement of the air waybills for delivery to the user or his
representative and collect freight in cases of shipments arriving at the billing
("collect "), in the case of import.
The charge is applied by airway bill, independent the declared weight; and the
airline charges for air waybill endorsed to the user or his representative.
In the case of consolidated shipments, the freight forwarder charges for each guide
to the endorsed user.
C. Transit Times
To determine a transit time should consider several aspects:

➢ The airline itineraries are published in local departure times and

arrival of the respective cities.
➢ Some shipments require planning in hours and minutes.
➢ Transfer times at transit points.
➢ Clearly understand that exists an universal time GMT.
C. Transit Times
➢ The GMT time is the Greenwich Meridian Time. Parallels indicate
latitude, either north or south. And the Meridians indicate the
longitude, either east or west.

➢ Greenwich Meridian marks 0 °. From the Meridian 0 °, 15 ° east, each

longitude give 1 hour more of difference with respect to Greenwich
and starting westward every 15 ° will give 1 hour less than GMT.

➢ 360°/24hrs= 15°
Greenwich Meridian Time
 Exercise 1

An air shipment departure from Lima-Peru on

Tuesday at 09:30, with a final destination in Hong
Kong airport, and is estimated to arrive on Thursday
at 16:45hrs (local).

What is the real transit time of this shipment in hours

and minutes?

Lima –> GMT (-)5hrs

GMT <– Hong Kong (+)8hrs
 Solution - exercise 1

➢ Departure Lima 09:30 (2) → 14:30 GMT (2) 1–M

➢ Arrival Hong Kong 16:45 (4) → 08:45 GMT (4) 2–T
3–W
4–T
5–F
6–S
Lima –> GMT 5 hrs (+) 24:00 (3) 7–D
GMT <– HK 8 hrs (-) 09:30 (4)
08:45
(2) al (3) – 24:00 hrs
42:15
(3) Al (4) – 09:30 hrs
- 08:45 hrs TOTAL
TRANSIT TIME
 Exercise 2

An air shipment departure from San Jose-Costa Rica

on a Tuesday at 09:45, with the final destination Hong
Kong and is estimated to arrive on Thursday at
16:35hrs.

What is the real transit time of this shipment in hours

and minutes?
Sn José –>GMT (-)6 hrs
GMT <– HK (+) 8 hrs
 Solution - exercise 2
➢ Departure from San José 09:45 (2) → 15:45 GMT (2) 1–M
➢ Arrival to Hong Kong 16:35 (4) → 08:35 GMT (4) 2–T
3–W
4–T
5–F
6–S
Sn José –>GMT 6 hrs (+) 24:00 (3) 7–D
GMT <– HK 8 hrs (-) 08:15 (4)
08:35
(2) al (3) – 24:00 hrs 40:50
(3) Al (4) – 08:15 hrs TOTAL
- 08:35 hrs TRANSIT TIME

San Jose is in the time zone (-6), corresponding to 90 ° longitude west of

Greenwich.
 Exercise 3

Lincoln, Nebraska is at longitude 96.7° W. Calculate

the time (hour and minutes) in Lincoln if in
Greenwich is 18hrs.
96.7°/15°=6 hours with a residual of 6.7° .
6.7°*4=26.8 minutes

Lincoln is 6 hours away from Greenwich Time, so:

18:00 – 06:00 = 12 hrs noon
12:00 – 27 minutes = 11:33hrs
D. Acceptance of the cargo
➢ Airlines accept packages and documents from their clients. The
fact of receiving a package means the physical acceptance of
the shipment with the relevant documents, other necessary
documents or a letter with instructions from the consignor are
received.

A client can be:

➢ a shipper (invoices, exporter)
➢ an agent
➢ another airline
D. Physical acceptance of the load
You should revised as follows:

1. Number of pieces in order to verify that the shipment is complete to avoid claims.

2. The weight must be correct as has noted on the AWB for several reasons; transport safety,
resistance of the floor of the aircraft, equipment required for download, calculating freight,
airline liability.

3. The dimensions must be accurate in order to calculate the weight volume of the goods and
to coordinate each piece fits perfectly in the door compartment when it will be loaded.

4. The content must be detailed by the shipper and must be confirmed by the airline in order
to see the regulations of the destination country, in order to apply specific fees, in addition
to comply with regulations established for unusual shipments .
D. Physical acceptance of the load
5. The packaging should be carefully checked for safety, not accepting
packages in bad conditions, with cracks, leaks or damage; taking care that
any symbol could endanger the operation or that may cause a claim in the
final destination. The packaging of special cargo as dangerous goods and
live animals should be reviewed and be consistent with the corresponding
manual.

6. Brand and label packages must be safe and durable prints in order to
identify in a proper way the goods and in order to manipulate them in the
right way.
D. Acceptance of documents
The following aspects should be checked on receipt documents:

1. All the details shown on the AWB or the letter of instruction of the consignor must be
identical and correspond to the shipment being presented for transport.

2. All documents listed as attachments must be there.

3. All necessary documents for the shipment must be available.

4. The AWB must be correctly filled with the correct information.

5. If additional documents for certain types of special cargo are required, they must be
attached to the AWB at the time of accepting the shipment for transportation.
D. Special Loads
A shipment can be considered as "special cargo" if by their nature must take special precautions to
protect: the aircraft, personnel and other charges and the same shipment.

Or that because of its urgency require priority handling.

Codes:
HEG = Fertile eggs
AOG = Aircraft on ground HUM = Human rests in coffins
AVI = Live animals LHO = Living organs or fresh human blood
DIP = Diplomatic mail or cargo PER = Perishables
EAT = Food products for humans or animals PRS = Press material
FIL = Rolls of unexposed film VAL = Valuable cargo
HEA = Heavy loads

HUM
E. Freight rates in air transport
Why Ship Cargo by Air?

➢ Speed – Airplanes are about 30 times faster than ocean liners. In general
numbers, air freight is usually 5X the price of trucking and 16X the price of
ocean freight, according to the World Bank.
➢ Reliability – provides better air freight tracking and the knowledge that
your goods will get to the right place at the right time.
➢ Protection – While ocean piracy is on the decline, goods are more likely to
be damaged in ocean freight shipping than air shipping.
E. Freight rates in air transport
Why Not to Ship Cargo by Air?

➢ Cost – Comparing air and ocean freight, a medium size 2000 lbs box from
Shenzhen, China to New York, USA, can cost $1,200 by ocean but $4,000
by air.

➢ Heavy Shipments – Ever since the 1960s, freight shipping has revolved
around shipping containers, which are great for shipping large, heavy
items. Air freight is priced based on both size and weight, which can scale
price very quickly.
E. Freight rates in air transport
Since air cargo is prohibitively expensive, it’s usually limited to
smaller, high-value goods or time sensitive items, such as:

✓ Electronics.
✓ Apparel. Seasonal trends in clothing can shift fast.
✓ Pharmaceuticals. Given their small size and value, medical
goods are frequently shipped by air.
✓ Documents and Samples.
✓ Seasonal shipments.
E. Freight rates in air transport
International Air Freight Charges: What are the costs?

✓ When it comes to air freight, weight and volume are key factors. Air
carriers will charge by either volumetric weight (also known as
dimensional weight) or actual weight, depending on which is more
expensive.

✓ The global rule to calculate the volumetric weight is multiplying the

length, width and height of each package or group of packages that are
going to be transported and divide it by 6,000 cmᶟ or 366.142 inchᶟ to
obtain the amount of kilograms.

✓ For example if the package is W: 40cm, H: 40cm L:40cm, you would

have a volumetric weight of 10.67 kg.

✓ If the volumetric weight exceeds the actual weight of the product, the
volumetric weight becomes the chargeable weight.
Exercise 4

➢ Freight rate quoted: $ 4.00 x Kg

➢ Gross weight: 100 Kg. per package
➢ Measures per package: 0.5 x 1 x 1 m
➢ Quantity of packages : 10

Find the total air freight.

Solution – exercise 4
➢ Gross weight: 100 Kg. per 10 boxes = 1000 Kg.

➢ Calculation of volumetric weight:

50cm x 100cm x 100cm = 500,000 cm³ - box
500,000 cm³ / 6,000 = 83.33 Kg – box
Total 833 Kg.

➢ Inthis case the gross weight is applied (the highest

one)

➢ Total freight:
1000 Kg. x $4.00 = $4,000
Exercise 5

➢ Freight rate quoted: $ 4.00 Kg

➢ Goods = cosmetics and toilet articles
➢ Measures per package= 40cm x 30cm x 40cm
➢ Quantity of packages = 10
➢ Gross weight= 400 Kg. per package

Find the total air freight.

Solution – exercise 5

➢ Gross weight= 400 Kg. per package

➢ Calculation of volumetric weight:

40cm x 30cm x 40cm = 48,000 cm³ per package
48,000 cm³ / 6,000 = 8.0 Kg per package

➢ Inthis case the gross weight is applied (the highest

one)

➢ Total freight:
400 x 10 x 4.00 = $16,000
Exercise 6

➢ Freight rate quoted: $ 6.00 x Kg

➢ Goods = displays
➢ Measures per package= 140cm x 80cm x 70cm
➢ Quantity of packages = 1 unit
➢ Gross weight = 100 Kg. per package

Find the total air freight.

Solution – exercise 6
➢ Gross weight = 100 Kg. per package

➢ Calculation of volumetric weight:

140 x 80 x 70 = 784,000 cm³ per package
784,000 cm³ / 6,000 = 130.67 Kg. (1 unit)

➢ In this case the volumetric weight is applied (the

highest one)

➢ Total freight:
130.67 x 1 x 6.00 = $784.02
E. Freight rates in air transport
Beyond the air freight, the total price will also include:

✓ Fuel surcharges
✓ Security surcharges
✓ Container Freight Station / Terminal Handling charges
✓ Airport transfers

In addition, for door-to-door costs, the price will also include:

✓ Customs brokerage
✓ Pickup and delivery
✓ Insurance
✓ Accessorial charges
E. Freight rates in air transport
Top Five Air Freight Forwarders:

1. DHL Global Forwarding. In 2015, air freight revenue

reached $5.4 billion dollars. In 2015, it moved 2.1 million
tonnes of air freight, over 60% more than the next
forwarder in line.
2. DB Schenker. Headquartered in Germany, the freight
giant employees nearly 100,000 employees around the
world. In 2015, it saw $3.8 billion in air freight revenue.
3. Kuehne + Nagel. Between ocean and air freight
shipping, this company holds close to 10% of the freight
market. In 2015, air freight revenue reached $3.3 billion.
4. Panalpina. Founded in 1936, the Swiss forwarder saw
$2.5 billion in air freight revenue in 2015. It also has one
Boeing 747, leased from Atlas Air Cargo, which it called
“Spirit of Panalpina”.
5. Expeditors. A relative newcomer, founded in 1979 in
Seattle, Washington, this US forwarder had $2.51 billion
in air freight revenue in 2015.
 Exercise 7
➢ Route: MIA / LIM
➢ Airline: KLM
➢ Freight + 100 kg. = USD 0.60/Kg
➢ AWB Fee = USD 25.00
➢ Fuel Surcharge = USD 0.30/Kg; min. USD 25.00
➢ Security Surcharge = USD 0.15/Kg; min. USD 15.00
➢ Handling = USD 54.00
➢ Quantity of packages = 1
➢ Measures = 80’’ x 45’’ x 70’’
➢ Gross weight = 1,650 lb.
Find the total air freight.
Solution – exercise 7
 Exercise 8
FREIGHT Min. ………………$ 80.00
+45 kg ……………. $ 11.45
+100 kg …………... $ 8.87
+300 kg …………… $ 6.72
+500 kg …………… $ 5.82

Fuel Surcharge = 0.15 $ / kg

Security Surcharge = 0.08 $/ kg
Collect Fee = 5% over freight + charges
AWB Fee = $ 50.00

What is the minimum total freight to pay for a shipment of 286 kg?.
Solution – exercise 8
E. General Rates(GCR)
➢ Rates for general cargo, applied to cargo types that do not have specific rates
or classified rates. They are normally structured as follows:

Minimum..………$80.00
+45kg .…………..$11.45
+100kg …...………$ 8.87
+300kg ...…………$ 6.72
+500kg …...………$ 5.82

➢ In this structure the price per kilo is lower as increases the amount of kilos, is
for that reason we talk about quantity discounts.

➢ The amounts in kilos represents the minimum chargeable weight required to

apply this tariff.
E. Application of a lower rate for a higher weight

➢ The tariffs have what is called a break point, this occurs when is more
profitable for the customer if he hold as chargeable weight, a higher weight
so it can apply a lower rate to it.

Ex.: a shipment of 286 Kg. (exercise No. 8)

Usually a tariff should be applied for more than 100 Kg.
286 x 8.87 = $2,536.82

However, if we apply the rate for +300 kg - $ 6.72 per Kg:

300 x 6.72 = $2,016.00

➢ Be careful because the airline will charge other fees based on chargeable
weight.
E. Specific rates (SCR)
➢ Also called commodities. They are fees charged by airlines in order to capture
large amounts of cargo on certain routes, among other reasons.

➢ These rates are generally lower than general cargo rates.

➢ Customers or users of these tariffs must comply to a minimum weight fixed in

advance guaranteeing that will use a good space inside the aircraft and will
generate a successful revenue for the airline.

➢ This minimum weight is generally the minimum chargeable weight to apply

the rate in question.
Type rates or classified (CR)

➢ These are fees that are normally set in percentages of the general freight
rates, either increase or decrease.
Ex .: 200% of the normal rate (N) (increasing)
67% of the normal rate (N) (in reduction)

➢ Rates are qualified for the following types of cargo: live animals; valuable
cargo; human rest; newspapers, magazines and books for blind people
(Braille); baggage shipped as cargo, dangerous goods; corneas human organs;
and in some countries perishables are included.
Valuation Charges
➢ Every shipper must declare a value for carriage on the AWB.

➢ The liability of the airline, according to the established in the transport

contract is up to 17.00 SDR (Special Drawing Rights) per kilogram of gross
weight; however, the shipper may declare a higher amount of the SDR 17.00
(USD 23.00 approx.) and pay an additional charge on the declared excess
value. That charge is called Valuation Charge.

➢ The declared value for carriage can not be modified or inserted into the AWB
after the shipment has been released from the departure airport.
Valuation Charges
➢ Example:
A shipment of 300 kilos has a declared value for carriage of USD 20,000.00

Right with no surcharge is 300kg x USD 23.00 = USD 6,900.00

Declared value = USD 20,000.00
Declared value (excess) = USD 13,100.00

On this declared value (excess) a fee is charged (0.75%). However it is

recommended to consult with the airline.

For the previous case, the Valuation Charge would be:

USD13,100 x 0.75% = USD 98.25

Please note that the Valuation Charge is subject to a minimum charge that is
usually USD 10.00.
Collect charges
➢ When a shipment is sent under the mode of collect charges (collect on
arrival), a fee is billed for this service.

➢ The collection is generalized in 5% on the amount of freight and valuation

charge; however, some shippers are charging 5% of total freight plus all
additional charges (valuation charge, fuel charges, airport security, use of air
terminal, ground handling, etc.). Therefore it is recommended to consult the
airline and check their policies.
Charges for documentation
➢ These charges vary according to the airline or IATA cargo agent, are optional
and normally a fixed amount is not charged.

Insurance charges
➢ Insurance is available in most IATA airlines, at the request of the shipper.

➢ There are different types of insurances that are offered for different types of
cargo.

➢ The amount of paying premiums for insurance is not given as a standard

amount, it can vary according to the type of cargo, route, airline. For this
reason you should consult with the airline involved.
ULD rates (containers or pallets)
➢ The cargo can be delivered to the airline in bulk or in containers, either
by the shipper or his agent.

➢ Cargo containers are units that fit the fixing system of the aircraft and
its structure. It is for this reason that in most cases, the weight of the
container or pallet will not be charged to the consignor.
Exercise ….
A shipment departures from Hong Kong on Tuesday,
May 15th, 2017 at 11:00 local time, to Lima (13 hours
difference with Hong Kong), and is calculated that the
flight lasts 42 hours and 15 minutes.

Indicate the local date and time of arrival in Lima.

 Exercise solution…

HK Local Lima Local

(-) 13 hrs
Departure Hong Kong Tue 11:00 Mon 22:00 difference

Arrive Lima Wed 16:15

Monday 2:00
Flight transit 42:15
hrs
Tuesday 24:00
Wednesday 16:15