The 5 ‘C’s of Air Freight Negotiation
Negotiating air fright is an art and science also. Although the art of negotiating is not often taught in schools, it is a valuable skill that can save a person or a business hundreds, even thousands of dollars over time. This article will help you understand air freight negotiation better and reduce your logistics cost.
Lot of factors are taken into consideration in air freight charge calculation like weight, volume, destination, cargo type, packaging etc. Airlines will charge for actual weight or volumetric weight, whichever is higher. Do your homework and understand the basic terminology before you negotiate and reach to a conclusion.
2. Cost & Speed
If a shipment needs to be delivered faster or JIT (just in time) then it makes sense to go for air cargo carrier instead of ocean cargo carrier wherein the rates might be less but ETA(Estimated Time of Arrival) will be quite long. Use express air delivery only when really needed. A common mistake is to ship an entire order in-bound or out-bound by next day air delivery when actually only a small percentage of the shipment is required to be sent on a urgent basis. Try and avoid peak seasons when rates go high. Plan and schedule your shipments wisely.
3. Consolidate & Cut Cost
This may be the single largest opportunity for shippers to reduce their freight costs. Just as larger packages offer a better value in the grocery store, in shipping, the larger the weight of the shipment, the lower the cost per pound. If there is any way to group packages together, there is probably a way to reduce costs. From putting multiple orders in the same box to banding boxes together, palletizing shipments or using a full truck, there are many methods shippers can utilize to consolidate their shipments.
4. Compare & Change if required
No single carrier is the most cost effective in all categories. Every carrier has its niche. Unless you are comparing carrier service options directly, you are paying too much. Reports suggest that shippers who switched services diligently got better pricing. Plus Multicarrier shipping systems can give you the ability to rate shop automatically for the lowest rate.
If you are dealing in volumes then it will be a good idea to ask you carrier to customize the contract depending upon the destination, size of shipment, delivery timings etc. You can switch to single rate contract if your shipments are sent within a particular state or country otherwise for global shipments multiple rate contracts are best bets.