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Because a plane is constrained by both volume and weight – thus air cargo service providers need to charge for their services as a function of both volume and weight or they will quickly go out of business. The airfreight industry's answer to this challenge is Chargeable Weight. Chargeable Weight is the greater of: the Actual Weight of a shipment, or the shipment's cubic volume converted into Volumetric Weight (based on a predetermined cube-to-weight conversion factor called a DIM factor). Charging for their services based on Chargeable Weight allows air cargo service providers to express their rates in terms of a single unit of measure such as cost per pound or cost per kilo – which is good because it’s simple. The rub is that it isn’t applied per actual pound or kilo – but by Chargeable pound or kilo. There are several key phases in the process of Calculating Chargeable Weight that impact how and what you are charged for a shipment:
Calculating Volume The air cargo industry has its own prescribed method of calculating a shipment's cubic volume, which includes rounding each dimension of a unit/carton (as described on the shipping documents) to the nearest integer BEFORE calculating the cubic volume of the unit/carton -and then summing the cubic volume for the shipment as a whole. This is neither good nor bad – as long as you understand the rules of the game and how they impact you. Calculating Volumetric Weight The Volumetric Weight for a shipment is its cubic volume divided by the predetermined cube -to-weight conversion factor called a (DIM) factor. There is no single DIM factor being utilized. The DIM factor utilized for a shipment can vary by Forwarder, locations, and even by unique customer/Forwarder relationship. Some Forwarders offer Volumetric Discounts. Despite the standard rhetoric to the contrary, DIM factors are in fact, negotiable. Calculating Chargeable Weight Chargeable Weight for a shipment is the greater of the Actual Weight and the Volumetric Weight. It is proper and customary for the figure to be rounded UP to the next integer pound or .5 integer kilo. Rates and Fees Rates can be quoted per Pound, Kilo, Piece, Pallet, or Container. Tiered rates change based on weight breaks – so the same quote can have a different rate based on the size of the shipment. Rates naturally rise and fall through the year as the seasonal peaks and valleys in the demand/capacity balance run their course. Accessorial Charges can apply by Chargeable Weight, Actual Weight, Piece, Carton, 100wgt, Shipment, or Percentage. Some have their own minimums and can be tiered as well. Individual Rates and Accessorial Charges layer in together based on different parameters, to create a complete quote for a shipment. Some are linked to combinations of specific locations, countries, or even IATA zones. “Unusual opportunities for profits arise when sellers know more than buyers”- Unknown |
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