Lecture 11: AIR FREIGHT vs.

OCEAN FREIGHT (LCL)

AIR RATES ARE BASED ON A DECLINING SCALE OF PRICE PER

KG; CHARGEABLE WEIGHT EQUALS ACTUAL WEIGHT vs.
VOLUME WEIGHT WHICHEVER IS GREATER

OCEAN LCL RATES ARE BASED ON A FIXED AMOUNT (non declining

scale) PER WEIGHT (MT) OR MEASURE (M3); WHICHEVER IS
GREATER/HIGHER COST

BOTH HAVE MINIMUM CHARGES TO COVER ADMINISTRATIVE

COSTS (AIR MINIMUM IS USUALLY LOWER, $100 vs. $200)

AIR IS GENERALLY QUOTED IN CAD

OCEAN IS GENERALLY QUOTED IN USD

AIR IS GENERALLY NOT UNITISED (LOOSE/INDIVIDUAL)

OCEAN IS GENERALLY UNITISED (SECURED TO A PALLET)

AIR IS GENERALLY HIGHER VALUE TO SIZE SHIPMENTS

OCEAN IS GENERALLY LOWER VALUE TO SIZE SHIPMENTS

BOTH LEAVE THE EXPORTERS FACILITIES BY TRUCK TO

CONSOLIDATORS WHO PREPARE THE SHIPMENT
AIR FREIGHT TARIFF OCEAN FREIGHT LCL TARIFF

<45KG $15.00/kg $225.00/ weight or measure (w/m)

45+ $13.75/kg
100+ $12.50/kg Minimum charge: $350.00
300+ $10.75/kg
500+ $8.50/kg

Minimum charge: $200.00

SHIPMENTS:

A. 25 BOXES, 40CM x 45CM x 30CM; 18 KG (TOTAL VALUE: $14,000)

B. 1 CRATE, 100CM x 100CM x 120CM; 11O KG (TOTAL VALUE: $3,000)

C. 40 BOXES, 30 x 30 x 35; 22 LBS (TOTAL VALUE: $6,000)

QUESTIONS:

HOW MUCH WILL EACH SHIPMENT COST TO SHIP BY AIR?

HOW MUCH WILL EACH SHIPMENT COST TO SHIP BY OCEAN?

WHICH METHOD (AIR/OCEAN) SHOULD BE USED FOR EACH

SHIPMENT AND WHY?