Emergence of Air Freight
Air freight was once reserved for emergencies and critical
Now air cargo is a way to reduce inventory costs and
improve customer service.
Today’s modern aircraft can carry thousands of pounds of
cargo just about anywhere in the world within 24 hours.
Typical air freight commodities include- high value
products, time sensitive shipments, medical supplies and
Inventory carrying costs, which include insurance, risk of
product obsolescence, finance costs, etc can account for as
much as 25% of the value of the goods.
Air transport is a vital component of many
international logistics networks, essential to managing and
controlling the flow of goods, energy, information and
other resources like products, services, and people, from
the source of production to the marketplace.
Using aircrafts and ware housing services for the transport
of goods quickly from point of origin to point of
consumption for satisfying the requirements of customers.
It involves the integration of
information, transportation, inventory, warehousing, mate
rial handling, and packaging.
The operating responsibility of logistics is the geographical
repositioning of raw materials, work in process, and
finished inventories where required at the lowest cost
Larger cargo airlines tend to use new or recently built aircraft to carry
their freight, but many use older aircraft, like the Boeing 707, Boeing
727, Douglas DC-8, DC-10, MD-11, Boeing 747, and the Ilyushin Il-76.
Some of the world largest international scheduled freight tonnekilometers flown are
Korean Air 8.164 million
Lufthansa Cargo 8.028 million
Singapore Airlines Cargo 7.143 million
Cathay Pacific 5.876 million
China Airlines 5.642 million
FedEx Express 5.595 million
Eva Airways 5.477 million
Air France 5.384 million
British Airways 4.771 million
Cargolux 4.670 million
Faster delivery of information
Tighter control over cargo– less chances of
theft, pilferages, and damage.
Perishable goods can be transported to longer
Air-freight insurance premium charges are lesser.
It is relatively more expensive mode of transport.
It is not suitable for transporting heavy and bulky
It is affected by adverse weather conditions.
It is not suitable for short distance travel.
In case of accidents, it results in heavy losses of goods,
property and life.
Airlines do not accept goods mentioned in IATA’s
Dangerous Goods Regulation(DGR) like explosives,
certain chemicals, etc
The International Air Transport Association (IATA) is
an international industry trade group of airlines headquartered
in Montreal, Quebec, Canada
IATA is present in 150 countries and represents some 240
airlines comprising 84% of scheduled international air traffic.
IATA's mission is to represent, lead, and serve the airline
industry To promote safe, regular and economical air transport for the
benefit of the peoples of the world, to foster air commerce, and to
study the problems connected therewith;
To provide means for collaboration among the air transport
enterprises engaged directly or indirectly in international air
To cooperate with the newly created International Civil Aviation
Organization (ICAO - the specialised United Nations agency for
civil aviation) and other international organisations
Unit Load Devices
With the increasing number of wide-bodied aircraft now in
operation, Unit Load Devices (ULDs) have become a key
element of high efficiency in air transport. Having the right
equipment to do the job is a concern in any industry and is no
different when it comes to ULDs in the airline industry.
IATA's ULD Panel develops
specifications, recommendations, and guidelines on the
manufacture, registration, handling, maintenance and control of
ULDs. It includes:
Specifications and other technical material relating to the
construction and maintenance of Unit Load Devices.
Guidelines and Recommended Practices relating to handling of
ULDs and associated equipment.
Specifications and other technical material relating to the
fabrication, use and maintenance of cargo restraint equipment.
Steps involved in air cargo logistics
Source of Cargo
Shipper (or Consignor) – the one who requests service in transporting the
cargo (source node of the supply chain)
Freight forwarder (or forwarder) –the forwarder typically arranges for the
transportation of cargo from the shipper’s warehouse, delivers (or has a
contractor deliver) it to the departing airport, prepares the necessary
paperwork, picks up at the arriving airport, and delivers (or contracts for the
delivery) to the consignee.
Carrier – The firm who provides the air delivery of cargo from the origin
airport to the destination airport. There are primarily two classes of carriers:
cargo carriers that primarily carry cargo and freight (e.g. FedEx, DHL), and
combination carriers that carry both passengers and cargo that is stored in
the bellies of aircraft (e.g. Korean Air, Lufthansa, Delta).
Ground Handler – An agent at an airport that physically handles the freight;
this usually refers to whenever freight is
loaded, unloaded, transferred, stored, retrieved, broken down, or
Consignee – The receiving party that the goods are sent to (sink node of the
Checking of pre-alert documents.
Pre alert documents –
-- issued when the cargo is ready for departure
-- final checking of all shipping documents
-- final chance of correction
Pre-alert for air-freight must include:
Show document list
AWB (international air-freight waybill) filled-in strictly
in accordance with SK-EXPO instructions;
Proforma - invoice signed & stamped;
Pre-alert letter for air-freight.
• Documentation Department
• ICE GATE – under bill of entry (electronic declaration)
regulations 2011 Indian customs electronic data interchange gateway, an ecommerce portal of the central board of excise & customs.
A unique number is assigned to the bill of entry.
Bill of entry – declaration by importer/exporter of ::
Value of goods examines by custom/authority
• CHA- advance noting of bill of entry
• Shipment arrived
• Status updated on web/call by airline
CHA – customer house agent , licensed toact as an agent for
transactions related with entry/departure or import/export of
goods and conveyance at CFS.
IGM generated by custom in EDI
IGM – import general manifest, to be filled correctly by the
carrier of goods i.e. airlines.
Personal inspection by airline handling staff
Cargo forwarding towards import W/H.
Finalized IGM with updated flight number and R number.
R number – Symbolizes the cargo location in W/H and
necessary for custom clearance.
• CHA – passing of documents
- payment of applicable duty
- Physical inspection with original TR6 challan
- payment of AAI charges.
TR6 challan – Document for the payment of service tax.
CHA – prepare N form and applicable octroi payment at
Octroi is local tax collected by state
Application for exemption in respect of articles imported
for immediate export (within 7 days or 168 hours after
issuing N form)
EDI – electronic data interchange between computer
Export consideration –
Documents received from shipper/CHA
Best suitable/preffered carrier option is opted.
MAWB is allotted & forwarded to carrier.
MAWB – Mater air way bill
It is issued by a carrier
Covers transport of cargo from airport to airport
It is an 11 digit number
First 3 digits are airline prefix, next 7 are running numbers
with one number for each consignment
Last digit is check digit
The seven digits running numbers are divided by 7. The
remainder becomes the check digit.
Example: Serial Number 8114074 divided by 7 is 1159153,
remainder 3. Therefore the serial number plus check digit
is Air Waybills are issued in sets of different colors.
-- The first three copies are classified as originals.
-- The first original, blue in color, is the shipper’s copy.
-- The second, colored blue is retained by the issuing carrier.
-- The third, colored orange, is the consignee’s copy.
-- A yellow copy acts as the delivery receipt or proof of delivery.
The other copies are all white.
Carting orders are collected from carriers office located at air
Carting orders – final declaration given by the custom
department to either load or export the cargo after import
At last EGM is allotted with the physical departure of
EGM- export general manifest
- statutory declaration for every shipment leaving indian
air/water territory with the intentions of carrying cargo
is bound to deliver EGM.
Process Flow : An Overview
While shippers may deliver their cargo directly to the airport, the
majority of cargo is handled through a freight forwarder.
Shipper sends cargo details to forwarder and ask for the
quotation and according to that shipper sends the confirmation
of airline and forwarder books the airline.
Generally the forwarder first reserves space, then confirms and
picks up the freight only after receiving confirmation from the
In most instances, the forwarder will pick the freight up from the
shipper or the shipper’s warehouse.
Simultaneously, all the documents received from the shipper will
send to CHA for custom clearance.
Along with the allotted MAWB no. the booking will be
forwarded to the shipper.
The cargo is usually temporarily stored in a warehouse facility
at the airport as it waits to be loaded.
On arrival of the shipment at cargo complex, On the basis of
nature of cargo the CHA arranges for examination of the
shipment. After examination and report is generated the
assessment will be done by the customs.
After assessment is completed and Let Export Order given by
the customs; the shipment along with the destination set/
exporter’s copy of the shipping bill will be handed over to the
selected carriers counter/ person present at cargo complex.
On receipt of the cargo and documents the airline handling
staff arranges to move the cleared shipment to respective
airlines shed / allotted area for cooling of the shipment.
As per planned schedule the shipment will be moved from
shed to ramp for loading the shipment in air craft.
The cargo is then retrieved prior to arrival and loaded
via a unit loading device (or ULD) and secured.
On physical departure of shipment the customs will
allot EGM to particular flight which will be used in
generation of E.P. copies.
Prior to Arrival of the shipment
After checking the pre alert documents received from
overseas forward the documents to documentation
On the basis of pre alert documents and CAN the CHA
can arrange for advance noting of the bill of entry.
On arrival of the shipment
Airline will update the status of arrival of the shipment on web or
over a phone. On the basis of manifestation the IGM will be
generated by Customs in EDI.
On physical arrival of the flight airline’s handling staff will
inspect the flight in person.
After the flight check in is over the cargo will be forwarded to the
Import W/H (called as forwarding).
In mean time IGM will be finalised along with updated flight no.
and the ‘R’ No will be allotted.
In mean time the CHA arranges to pass the documents along
with the assessment.
After assessment is over CHA make the payment of applicable
duty as the case may be.
Along with the original copy TR6 challan the CHA conducts the
physical examination of the shipment which has arrived in the
After examination is over and report is generated the
documents are forwarded for Out of Charge depending upon
the nature/ value of the shipment.
CHA arrange for payment of applicable Stamp Duty and AAI
(W/H) charges against the subject shipment. On receipt of out
of charge and payment of applicable charges the shipment will
be available for delivery.
CHA prepares ‘N” form or make applicable Octroi payment at
the gate of Air cargo complex and the shipment will be moved
From the airport, a forwarder typically will deliver the cargo in
the reversed order from where the forwarder delivered the
cargo to the airport.
The air cargo process is driven by the freight forwarder, the
carrier, and the process flow.
I) Transshipment of cargo from a
gateway airport to an inland airport
Import the cargo
File application and avail for transshipment permit
Transport to transshipment warehouse of the domestic
carrier under the Customs preventive escort.
Acknowledgement of goods by the customs officer
Execution of bond with the domestic carrier
Preparation of EGMs by domestic carrier on receipt of
Copies of EGMs sent to customs at the destination airport
Checking at the destination airport with reference to EGM
ii) Transshipment of cargo received at an
airport in India from an airport abroad to an
Receipt of cargo to be transshipped at an airport
Storage of transshipment cargo under Customs
supervision by the concerned airline
Cargo transfer manifest is required to be presented in
triplicate to the Customs.
Loading of cargo in the aircraft is undertaken under
the Customs supervision
iii) Movement of export cargo from an inland airport to
an airport abroad through an Intermediate airport in
Filing shipping bills
Assessment of goods at the domestic airport
Safety Assurance by furnishing bonds at domestic airport
The domestic carrier is to carry cargo only under E.G.M. duly certified by the
At the gateway airport, transportation of the cargo received to the
The domestic carrier presents the EGM copies to the officer in-charge of
Storage of goods in transshipment warehouse
Filing cargo transfer manifest to the Customs by the domestic carrier
Transportation of goods in closed trucks under Customs supervision to the
warehouse of foreign airlines
Reconciliation of records by officer in-charge on the basis of EGM submitted
Endorsement evidencing receipt of cargo and subsequent export on the
copies of EGM brought by domestic carrier from the originating airport.
Air Freight- Services and Pricing
Deferred (3-5 business days)
Door to Airport
Door to Door