mirrodie
Posts: 6789
Joined: Wed Apr 19, 2000 3:33 am

ShippingCargo On Airliners- How Is The $$ Divided?

Fri Dec 31, 2004 9:29 am

I hope to learn from you knowledgeable folks out there.

OK, I just had something shipped to me door-to door from England to NY.

For the money that I spent on shipping, how is it divided? Here is what occurred:

The package was picked up by a shipping company in England and put on a truck and taken to Air France Cargo to be shipped over the next day. Since the AF people are incompetent, they could not SCAN the freight so then, some days passed and it was taken to Virgin Atlantic for the transatlantic run.

Once it arrived in the US, about $75 was paid for a bond and customs.

Then a different shipping company picked it up in the US, after 10 days of Virgin Atlantic losing it in their warehouses(more incompetence), and then the second shipping company now got a trucking company to deliver it to my doorstep.

So. let's say I paid the round whole number of $1000 to have it shipped.

How exactly is that money divided amongst the players here.

Lets say the cargo was 53Kgs or 110 pounds. What is the avg cost /pound for shipping? And who gets what money?
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m404
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RE: ShippingCargo On Airliners- How Is The $$ Divided?

Fri Dec 31, 2004 9:54 am


I have no idea about the divisions but I would be putting in for a total refund after arriving what sounds like at least 12-14 days late.
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padcrasher
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RE: ShippingCargo On Airliners- How Is The $$ Divided?

Fri Dec 31, 2004 10:10 am

This can really vary depending on what functions your freight forwarder handled themselves but I'll take a educated guess.

If you paid $1000 for 53KG your forwarder made a nice profit. A pick up could be anywhere from $20 to $100. An airline might charge $200 with taxes and fuel surcharge. $75 sounds like a good figure for customs brokerage and another $20 to $200 for pick up.

54Kg is a small shipment so if they shipped that stand alone they might have paid $2. per KG. Sometimes they might consolidate freight with other shipments and could pay as low as 50cents per KG for the airline charges.
 
Go3Team
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RE: ShippingCargo On Airliners- How Is The $$ Divided?

Fri Dec 31, 2004 10:33 am

Here it is from my perspective:
Yesterday I picked up a load from a freight forwarder in Atlanta. It was a load of clothes from what I assume is South Africa, as it came in on SAA209 on Dec. 23. We got the load from a broker who is contracted with the freight forwarder. On our end, we accepted the freight rate given by the broker. The rate is probably around $500. The amount paid to the broker is more, due to the fact, he has to make money too. The broker probably ended up making an extra $150-200 off the load. There were 3 loads shipped yesterday, (I don't have a clue on how they fit all that on one plane - must have been multiple flights) so the broker probably bid $2k for the job.

I don't have any idea how the industry in South Africa is, but I am sure it operates pretty similar, but the rates may be a little lower. Add another $1.5k to the total.

For the plane ride, I imagine it was a pretty big bill. On each truck, there were 1144 cartons. Each carton was approx 3" tall, 20" wide, and 20" deep. Each carton maybe weighed 2-3 lbs. each.

Then there is the customs fees, warehouse fees etc.
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mirrodie
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RE: ShippingCargo On Airliners- How Is The $$ Divided?

Sat Jan 01, 2005 7:19 am

Does anyone else work in cargo that might be able to comment?

I doubt refunds for anything are applicable, especially around the holidays.
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padcrasher
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RE: ShippingCargo On Airliners- How Is The $$ Divided?

Sat Jan 01, 2005 7:53 am

Airlines refund 50% for service failures. Most forwarders offer partial refunds for service failures. It depends on what level of service you purchased. ie highest priority , 2 day, 3 day, etc.
 
DYK
Posts: 353
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RE: ShippingCargo On Airliners- How Is The $$ Divided?

Sat Jan 01, 2005 8:14 am

Cargo which is interlined, the rate is prorated based on mileage flown by each airline. IATA has a published manual which has the distances between city pairs. For example if you are sending 100 kgs of widget from YVR to DXB via LHR.
-The IATA TACT rate between Vancouver and Dubai is 13.07/kg cad. Regardless of what routing you use.
-The Distance between YVR-DXB is 15000 km which is broken down to based on the routing: (This is an example only distance are hypothetical)
-YVR to LHR on AC: 9000 km or 60 % of the total distance
-LHR to DXB on EK: 6000 km or 40 % of the total distance

therefore AIr Canada will get 7.84/kg (YVR-LHR 60% of 13.07/kg cad)
Emirates will get 5.23/kg (LHR-DXB 40% of 13.07/kg cad)

This calculation is used for the airfreight only. local destination fees benefit the last carrier involved.

Hope this explains how freight charges are divided between interlining carriers.
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mirrodie
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RE: ShippingCargo On Airliners- How Is The $$ Divided?

Tue Jan 04, 2005 2:10 am

I do plan on seeking some restitution, a partial refund is going to be requested.

Thanks for the figures guys.
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twa@fra
Posts: 150
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RE: ShippingCargo On Airliners- How Is The $$ Divided?

Tue Jan 04, 2005 5:28 am

airfreightrates vary a lot, e.g.two years ago I worked at a bigger airfreight forwarder at frankfurt airport and a normal rate from FRA to BKK was at 1.10 EUR / KG if you shipped a few 1000 kg a month. Today it`s down to 0,20 EUR / KG. and that’s only due to competition, but all rates are + fuel & security which is an additional to compensate the up`s and down for the fuel cost (approx. 0.10 to 0.30 eur) – I don`t know how much the airliners charges for security today, but should be around 0,10 EUR

the official IATA Tact Rates mentioned earlier are normally no longer in use, only for special freight, e.g. live animals or personal effects.

the big rate difference are similar in the most markets, e.g. on the north atlantic freight rates to the US are much higher than as the rates to europe.

the profit split does not vary a much for the airfreight forwarders as they mostly add simple something between 0,5 up to 0,30 eur as profit to their buying rates (depends on the vol. from the shipper). the profit for the carrier vary a lot, as mentioned in above FRABKK example.

but one thing where airlines and airfreight forwarders can make some nice profits, it`s to consolidate shipments and to cut the volume, as the airfreight rates include a weight/ volume ratio -> 1 cbm max. weight is 166 kg, so if your shipment have a huge volume you have to pay the volume weight e.g.

a) one shipment 1000 kg with 10 cbm you have to pay freight for 1660 kg
b) one shipment 1000 kg with only 2 cbm you have to pay freight for 1000 kg
if can consolidate it and hand it over to a carrier together under one airwaybill you only have to pay for 2000 kg to the airline, but charge to the both shippers for 2660 kg.


but the really high rate you paid for your shipment should be because cargo from private person are not allowed to consolidate with standard freight and IATA rates are applied to, so in your case the airlines made some nice bigger profit, but that`s do not happened often.

IATA rate London – NYC = N= 4,03 GBP / KG, so approx. 200,00GBP

Re. your claim, you do not have a good chance to get any refund as the airlines have no real deadline till they have to fly your shipment, only after approx. 30 days they can declare your shipments as lost. Some airlines offer a “must fly as booked service” e.g. LH Flash, but that`s not possible for personal effects. And even if you know that they simple couldn`t find your shipment in their warehouse and they find it only days later and you have not got that written from the airline ( and you surly do not have it) -> no chance
Also if you send personal effects normally the most airlines do not even give you a confirmed flight, the called it “due to security” standby only