Air Freight System,

Documentation, Process
& Global Development
Syed Muhammad Harris MKT-15
Bilal Zubair
MKT-14
Nauman Sidique
MKT-05
Sohail Irshad
MKT-27
Omar Farooqi
MKT-32
Adnan Waheed Khan MKT-18

Air Freight System

Introduction
Movement of Freight By Air

Inland
Overseas

Fast & Timely

Types of Air Freight:

FOB(Free on Board)
C & F(Carriage & Freight)
CIF (Carriage, Insurance & Freight)

Stake Holders
Shipper(Consignor)
Freight Forwarder
Carrier
Ground Handler or Custom Clearing Agent
Consignee

Types of Forwarders
Integrated
Disintegrated

How it Works!

Process Flow
In Case of FOB

From Warehouse to the Airport

In Case of C & F or CIF

Pick up from Warehouse

Booking
Consolidation

Region Wise
Consignor Wise

Departure from Airport

Arrival at Airport

Intermediate
Destination

Delivery

Consolidation
Cargo consolidation service provided

by a freight
forwarder in which several smaller shipments are
assembled and shipped together to avail of
better freight rates and security of cargo. Also
called assembly service,
cargo
consolidation,
or freight consolidation.

Consolidation

Documentation
1.
2.
3.
4.
5.

Commercial documents
Transportation documents
Insurance documents
Financial documents
Official documents

Commercial Documents
Invoice
ii. Performa Invoice
iii. Commercial Invoice
iv. Packing note
v. Weight note
i.

Transportation Documents
B/L (Bill of Lading)
ii. AWB (Airway Bill ) & HAWB
iii. RWB (Railway and Roadway Bill)
iv. CWB (Combined Way Bill)
i.

Insurance Documents
Insurance Certificate
ii. Insurance Policy
i.

Financial Documents
Advance Payment
ii. Letter of Credit
iii. Export Form
i.

Official Documents
Certificate of Origin
ii. Generalize system of preference
iii. Black list certificate
iv. Consular Invoice
i.

Space Calculation

Space Calculation

Space Calculation

Space Calculation
Shipping factors for imperial measurements represent cubic inches per pound (in 3/lb) while metric

factors represent cubic centimeters per kilogram (cm3/kg). These are the inverse of the package
density. Dimensional Weight is applied when the actual product density is less than the minimum
density represented by the chosen factor. Dimensional Weight is representative of the weight of
the package at the minimum density accepted by the freight carrier. Shipping factors are not only
different for imperial and metric measurements, but also for shipment mode and in some cases
between different customers. Shipping factors will be available from your freight carrier. Some
common factors are listed below.
Imperial Shipping Factor examples:
166 in3/lb = 10.4 lb/ft3 - common for IATA shipments
194 in3/lb = 8.9 lb/ft3 - common for domestic shipments
216 in3/lb = 8.0 lb/ft3
225 in3/lb = 7.7 lb/ft3
250 in3/lb = 6.9 lb/ft3
Metric Shipping Factor examples:
5000 cm3/kg = 200 kg/m3
6000 cm3/kg = 166.667 kg/m3
7000 cm3/kg = 142.857 kg/m3

Space Calculation
When calculating the dimensional weight with metric measurements, the

Length, Width, and Height are measured in centimeters (cm) and the result is
stated in a nominal kilogram (kg) dimensional weight band (usually rounded
up).
Some Calculations for Major Courier/Shipping Companies are as follows:
DHL: (L cm x W cm x H cm)/5000[2] or 4000[3] depending on certain
import/country criteria
FedEx: (L cm x W cm x H cm)/6000 (new) or /5000 (old, still used in Asia) for
international shipments, (L cm x W cm x H cm)/7000 for domestic shipments
UPS: (L cm x W cm x H cm)/6000 or /5000 depending on certain
import/country criteria
Canada Post (L cm x W cm x H cm)/6000 or (L in x W in x H in)/166[4]
(See external links for the DHL, FedEx, and UPS dimensional weight
calculators)

Space Calculation
Using dimensional weight calculations, a freight carrier will charge for

lightweight (low density) packages as if they had a greater weight (the

weight of the package at the minimum accepted density).
For example, a box of clothing shipped internationally which weighs 10
pounds, and measures 18 x 18 x 18 inches, would be charged as if it weighed
36 pounds: (18 x 18 x 18)/166 = 35.1 pounds which is then rounded up to 36
pounds. This is the weight the package would theoretically weigh if it had a
density of 166 in3/lb or 10.4 lb/ft3. (18 x 18 x 18) = 3.375 ft3 x 10.4 lb/ft3 =
35.1 lb.
Keep in mind that there are two different calculations for dim weight.
Domestic Ground Shipments: (L x W x H)/194 and International or Air
Shipments: (L x W x H)/166
Several programs are available to calculate dimensional
weight: Measurement Technology DIM Weight Calculator or Dim Weight
Calculator

Global Development
Rapidly Development Sector

Globalization
Offshore Production
Transit Trade

Data Sheet for the Revenue of Few Freight Forwarders of

the World

Freight Company
Net Revenue
DHL
$19816M
KUEHNE+NAGEL
$5727M
DB Schenker
$9120M
PANALPINA
$1423M
UPS
$6022M
Expeditors
$1693M
SDV
$1233M
Agility
$1701M

CARRIERS
As we have discussed previously the main function of carriers, now we will
discuss the types of carriers according to their operations
Types of carriers:
Combination Carriers Normal flights, contains both passengers and cargo,
airport to airport service, e.g. PIA
All Cargo Airlines flights that contains only cargo, airport to airport service
e.g. PIA Cargo
Integrated Carriers they provide cargo services from door to door e.g. DHL,
UPS, Fed ex

Freight-Ton Kilometers (FTKs)

Flown, 2004
Rank

Carrier

MILLIONS FTKs

FedEx

15.58

Korean Air

8.26

Lufthansa Cargo

8.04

UPS

7.35

Singapore Airlines

7.14

Cathay Pacific

5.88

China Airlines

5.64

Eva Airways

5.48

Air France

5.39

10

Japan Airlines

4.92

CARGO REVENUE SHARE OF SOME

COMBINATIONS CARRIERS
% OF CARGO REVENUE IN
TOTAL REVENUE

CARRIER
China Airlines

43.54

Korea Airs

32.28

Singapore Airline

31.49

Cathay Pacific

28.5

Continental Airlines

8.66

United Airlines

4.3

AIRPORTS
Due to the massive expansion in trade throughout the world and the fast pace
of trade airports have gained a great importance in this new world.
challenges face by airports governing authorities:
Very high growth rate
Lack of facilities at airports
Technology
Security

AIRCRAFTS
We all know that there are only two aircrafts manufacturers Boeing and Airbus.
In this freight market Boeing is leading by having over 90% of the total market.
Some of the major aircrafts used by air freight companies are:
Boeing 747-F
Boeing 777-F
Boeing 767-F
Airbus 300-F
Airbus Beluga
Antonov AN-225

PRICING AND COST MANAGEMENT

Pricing:
Pricing in air freight is a complex thing and is dependent on following variables:
Taxes and charges by the government
Volume
Weight
Priority
Destinations
Services
Cost Management:
Cost management is very important as the market is highly competitive and saturated ,
factors affecting the cost are:
Technology
Communication
Integration
demand forecasting and planning

THANK YOU