Summary of International Air Freight Knowledge – Save for Learning

Eight Key Factors for Air Freight Inquiry

1. Commodity name (whether it is dangerous goods)

2. Weight (related to charges) and volume (dimensions and whether it is "bulky cargo")

3. Packaging (whether it uses wooden cases and whether pallets are included)

4. Destination airport (whether it is a basic hub airport)

5. Required time (direct flight or connecting flight)

6. Required flight (differences in service and price among different flights)

7. Bill of lading type (master air waybill or house air waybill)

8. Required transportation services (customs declaration method, document agency, whether customs clearance and delivery are included, etc.)

Air Freight Classification: Dense Cargo & Bulky Cargo

Composition of Air Freight Costs – Do You Know?

Components of Air Freight Rates:

1. Airfreight: Basic freight (charged by the airline)

2. Fuel surcharge: Varies by airport and destination. Currently, it is generally around HKD 4/kg in Hong Kong (previously HKD 3.6/kg, with a peak of HKD 4.8/kg last year). This rate is adjusted by the airport; for Asia-bound shipments, it is usually HKD 2/kg.

3. Security inspection fee: A fixed fee of HKD 1/kg in Hong Kong.

4. Airport handling fee: HKD 283 per shipment in Hong Kong (covers services such as transporting goods onto the aircraft).

5. Terminal fee: HKD 1.72/kg. When goods are handed over to a freight forwarder, the forwarder is responsible for palletizing, and the fee is ultimately collected by the airport.

6. Master air waybill fee: HKD 15 per bill – a fee for issuing the bill of lading (a document of title to the goods).

Common Air Freight Terms

• ATA/ATD (Actual Time of Arrival / Actual Time of Departure): Abbreviation for actual arrival/departure time.

• Air Waybill (AWB): A document issued by or on behalf of the shipper, serving as proof of the cargo transportation contract between the shipper and the carrier.

• Baggage, Unaccompanied: Checked baggage not carried by the passenger in person, transported as checked goods.

• Bonded Warehouse: A warehouse where goods can be stored indefinitely without paying import duties.

• Bulk Cargo: Loose cargo not loaded on pallets or in containers.

• CAO (Cargo for Freighter Only): Abbreviation for "cargo that can only be carried by cargo aircraft".

• Charges Collect: Fees listed on the AWB to be collected from the consignee.

• Charges Prepaid: Fees listed on the AWB that have been paid by the shipper.

• Chargeable Weight: The weight used to calculate air freight, which can be volumetric weight or the total loaded weight minus the weight of the container (if goods are loaded in a container).

• CIF (Cost, Insurance and Freightage): Refers to "Cost, Insurance, and Freight" – C&F plus insurance purchased by the seller to cover loss or damage to the goods. The seller must sign a contract with an insurer and pay the premium.

• Consignee: The person whose name is listed on the AWB to receive the goods transported by the carrier.

• Consignment: One or more pieces of cargo received by the carrier from the shipper at a specific time and location, transported to a single destination under one AWB.

• Consignor: Synonymous with the shipper.

• Consolidated Consignment: A batch of cargo combined from two or more shippers, where each shipper signs an air freight contract with the consolidator.

• Consolidator: A person or organization that combines cargo into consolidated consignments.

• COSAC (Community Systems for Air Cargo): Abbreviation for the "Cargo Operations System And Communications" – a computer system for information and central logistics management of Hong Kong Air Cargo Terminals Limited (HACTL).

• Customs: A government agency responsible for collecting import/export duties, cracking down on smuggling and narcotic trade/abuse (called Hong Kong Customs and Excise Department in Hong Kong).

• Customs Code: A code assigned to a batch of goods by Hong Kong Customs and Excise Department (C&ED) to indicate customs clearance results or required actions by the terminal operator/consignee.

• Customs Clearance: Customs procedures required for cargo transportation or pickup at the place of origin, in transit, and at the destination.

• Dangerous Goods: Goods or substances that may pose a significant threat to health, safety, or property during air transportation.

• Declared Value for Carriage: The value of the goods declared by the shipper to the carrier, used to determine freight or set the carrier’s liability limit for loss, damage, or delay.

• Declared Value for Customs: The value of the goods declared to customs to calculate customs duties.

• Disbursements: Fees paid by the carrier to agents or other carriers, then collected from the consignee by the final carrier. These fees usually cover freight and miscellaneous expenses incurred by the agent or other carriers for transporting the goods.

• EDIFACT (Electronic Data Interchange for Administration, Commerce and Transportation): Abbreviation for "Electronic Data Interchange for Administration, Commerce, and Transportation" – an international standard for message syntax in electronic data interchange.

• Embargo: A period during which a carrier refuses to transport any goods, any type, or grade of goods on any route (or part of a route) or to/from any region/location.

• ETA/ETD (Estimated Time of Arrival / Estimated Time of Departure): Abbreviation for estimated arrival/departure time.

• Export License: A government-issued document allowing the holder (shipper) to export specified goods to a specific destination.

• FIATA (Federation Internationale des Associations de Transitaires et Assimilées): FIATA Licensee – a member authorized to issue FIATA documents in Hong Kong [FIATA Bill of Lading (FBL) "as Carrier" and Forwarders Certificate of Receipt (FCR)], covered by freight forwarder liability insurance (minimum liability limit: US$250,000).

• FOB (Free on Board): Under "FOB" terms, the seller loads the goods onto the vessel specified in the sales contract at the port of shipment. The risk of loss or damage to the goods passes to the buyer when the goods cross the ship’s rail (i.e., leave the dock and are placed on the vessel), and the seller pays the loading fees.

• FOB Airport: Similar to the general FOB term. The risk of loss passes from the seller to the buyer when the seller hands over the goods to the air carrier at the departure airport.

• Forwarder: An agent or company that provides services (e.g., cargo receipt, transshipment, or delivery) to ensure and assist in cargo transportation.

• Gross Weight: The total weight of the shipped goods, including the weight of containers and packaging materials.

• HAFFA (Hong Kong Air Freight Forwarding Association): Abbreviation for Hong Kong Air Freight Forwarding Association Limited, founded in 1966 – a non-profit organization promoting, protecting, and developing Hong Kong’s cargo transportation industry.

• HAWB (House Air Waybill): A document covering individual pieces of cargo in a consolidated shipment, issued by the consolidator and including instructions for the deconsolidation agent.

• IATA (International Air Transport Association): Abbreviation for the International Air Transport Association – an organization in the air transport industry that provides services to airlines, passengers, shippers, travel agents, and governments. It aims to promote air transport safety and standardization (baggage inspection, tickets, weight manifests) and assist in determining international air freight rates. Its headquarters is in Geneva, Switzerland.

• Import Licence: A government-issued document allowing the holder (consignee) to import specified goods.

• Marks: Symbols on cargo packaging used to identify the goods or indicate information about the shipper.

• Master Air Waybill: An AWB covering a consolidated shipment, listing the consolidator as the shipper.

• Neutral Air Waybill: A standard AWB without a specified carrier.

• Perishable Cargo: Goods that are prone to spoilage within a specific period or under adverse temperature, humidity, or other environmental conditions.

• Prepacked Cargo: Goods packed in containers by the shipper before being handed over to the terminal operator.

• Reception Checklist List: A document issued by the terminal operator when receiving goods from the shipper.

• Regulated Agent Regime: A government system for conducting security checks on all air freight agents.

• Shipment Release Form: A document issued by the carrier to the consignee for picking up goods from the terminal operator.

• Shipper: The person or company specified in the cargo transportation contract to send goods to the consignee.

• Shipper's Certificate for Live Animals/Dangerous Goods: A declaration by the shipper stating that the goods are properly packed, accurately described, and suitable for air transportation in accordance with the latest IATA rules, all carrier rules, and government regulations.

• Shipper's Letter of Instruction: A document containing instructions from the shipper or the shipper’s agent regarding document preparation and cargo shipment.

• STA/STD (Schedule Time of Arrival / Schedule Time of Departure): Abbreviation for scheduled arrival/departure time.

• TACT (The Air Cargo Tariff): Abbreviation for "The Air Cargo Tariff", published by International Air Press (IAP) in cooperation with IATA.

• Tariff: The charging prices, fees, and/or relevant terms for cargo transportation by the carrier. Tariffs vary by country, cargo weight, and/or carrier.

• Unit Load Device: Any type of container or pallet used for transporting goods.

• Valuable Cargo: Goods with a declared value (gross weight average) of USD 1,000 or more per kilogram, such as gold and diamonds.

• Valuation Charge: A cargo transportation fee based on the declared value of the goods at the time of shipment.

• Vulnerable Cargo: Goods that do not have a declared value but clearly require careful handling, or goods particularly prone to theft.