How to move goods by air
It is perhaps not surprising that airfreight is generally more expensive than other modes of international transport. However, the upside is that door-to-door transit times can be minimised and, where consignment sizes are small, it is frequently more cost-effective than other modes.
Airlines offer different freight rates so, in conjunction with guidance provided by your freight forwarder, you can choose which cost, route, service levels and particular airline options best suit your business needs.
The basic cost of airfreight
Airfreight is charged per kilogram - weight or volume, whichever is the greater - known as the chargeable weight.
Usually, airfreight is carried by scheduled passenger aircraft as well as by cargo-only airlines.
The air cargo market has undergone a lot of deregulation over recent years. As a result, freight rates aren't marketed in a single airline industry tariff. Forwarders tend to negotiate rates with airlines on an individual basis. Unless otherwise requested, rates only apply for movements from the airport of origin to the airport of destination. Pre-departure and post-arrival expenses are additional to the airfreight cost.
Other airfreight expenses
In addition to the freight costs quoted by your freight forwarder, you have to consider other expenses. For export goods, these typically include airline terminal handling fees, fuel and risk surcharges, including obligatory customs data-entry requirements, and physical consignment security screening. For import goods, you need to consider duty and VAT. All of these fees are additional to the forwarder's or broker's service fees.
As with any other transport mode, it's essential to ensure that you receive a written quotation from your forwarder and that you fully understand which services you're paying for and what isn't included in the price.
VAT liability for airfreight transport and related services
Your freight transporter or supplier of related freight services can also advise you if you have any VAT obligation arising from their services. They should be able to determine who is liable for VAT by taking into account their customers' status, the place of supply of their services, and the VAT liability of that supply. You can find VAT information for freight transport and associated services in Notice 744B.