CARRIAGE OF GOODS BY AIR

• Learning objectives:
• This chapter will help you understand all
aspects of cargo movement by Air and its
competitive freight strength.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• 1.1 AIR TRANSPORTATION

• Air transportation represents the fastest way to
ship most types of cargo over long distances.
• Passengers and cargo can be transported by air
either over regularly scheduled routes or on
charters, which are routes specifically designed
for a group of travellers or a particular cargo.
• All Air Shipments are carried by either a Combi
Aircraft or a Cargo Aircraft.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• International cargo traffic is expected to continue to

increase with the economy and growing world trade. It
also should be simulated by the development of global
electronic commerce and manufacturing trends such as
just-in-time delivery, which requires materials to be
shipped rapidly.
• Growth of domestic air cargo is not expected to
increase as much as international cargo, primarily
because of the decreased use of mail, increased
security screening of cargo shipped on passenger
planes and the rise of time-definite trucking.
• Cargo airlines and derivatives of these names are
airlines dedicated to the transport of cargo.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• Types of Cargo Aircraft:

• FedEx Express DC-10
• European Air Transport Airbus A300B4F
• An-225 large cargo aircraft
• Singapore Airlines Cargo Boeing 747

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• Allowable Chain Load:

• All the Aircrafts have a maximum payload
capacity that can be carried on an airplane on a
specific route segment under a specific set of
operation conditions. This is known as Allowable
Chain Load of the airplane.
• There are also limitations on shipment size
occasionally used by an airplane.
• Sometimes the Airlines also use a Road Feeder
Service to provide freight services using motor
trucks, generally in conjunction with an air
movement.
Chapter 14 Import Export Management
 CARRIAGE OF GOODS BY AIR
• Unit Load Device (ULD)
• A number of pieces of freight or cargo in a single box or container,
or on a pallet held in place by a net, strapping, or similar device to
make them suitable for transporting, stacking or storage as a unit is
termed as a Unit Load for the purpose of Air Freight.
• Airlines have standard containers known as Unit Load Devices.
These can also be in the form of Pallets and Pallet nets which are
platforms of standard dimensions on which goods are assembled
and secured by nets.
• The purpose of ULD is to enable individual pieces of cargo to be
assembled into standardizing units to ease the rapid loading and
unloading of airplanes and to facilitate the transfer of cargo
between airplanes that have compatible handling and restraint
systems.
• Non aircraft ULDs do not interface with the aircraft restraint system.
They must be registered with the IATA and conform to IATA
standard specifications.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• Logistics:
• Air transportation 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 market place.
• It is difficult or nearly impossible to accomplish
any international trading, global export/import
processes, international repositioning of raw
materials/products and manufacturing without a
professional logistical support.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• Cargo terminal facilities :

• International airports need areas where export
cargo has to be stored after customs clearance
and prior to loading on the aircraft.
• Similarly import cargo that is offloaded needs to
be in bond before the consignee decides to take
delivery.
• Areas have to be kept aside for examination of
export and import cargo by airport authorities.
• Every cargo terminal has a land side and an air
side.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• AIR FREIGHT STATIONS:

• The Air Cargo industry in India is surviving at its
own production and consumption and is unable
to use airport as real gateways.
• The air cargo infrastructure in India is under
tremendous pressure, especially at major metro
airports.
• The airports face trouble during peak time in fast
clearance of shipments. The only solution is to
develop Air Freight Stations closer to production
and consumption areas.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• 1.2 AIR FREIGHT RATES:

• The Airlines freight rates have an arrangement
going back to 1944, International fare prices have
been set through bilateral government
agreements rather than though market
mechanisms.
• Airlines had been granted a special exemption by
each of the main regulatory authorities in the
world to consult prices with each other through
The International Air Transport Association (IATA).
One of the core functions of IATA was to act as a
price setting body for International Airfares.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• The International Cargo Air Freight Rates have

been published by IATA in the Air Cargo Tariff
Book in three volumes since quite a long time.
This is a publication that lists worldwide rates
for air shipping.
• These rates are the highest rates that a
shipper would be charged. Airlines generally
discount off these rates.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• For fare calculations IATA has divided the

world into three regions:
• 1. South, Central and North America
• 2.Europe, Middle East and Africa
• 3. Asia, Australia, New Zealand and the islands
of the Pacific Ocean.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• 1.3 THE AIRWAYBILL

• An Airwaybill or Air Consignment Note is the
document for carriage of goods by air.
• The Airwaybill has eleven digits code. With these
digits Airlines across the world would be able to
decipher and find out the whereabouts of the
cargo pertaining to that carriage document.
• Primarily, Airwaybill refers to a receipt issued by
an airline for goods and an evidence of the
contract of carriage, but it is not a document of
title to the goods and is not negotiable.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• There are international agreements governing

the liability of the carrier called conventions.
• There are enactments governing the carriage
and the Indian Carriage by Air Act, 1972 and
amended by Air(Amendment) Bill, 2008
applies to international carriage of goods.
• The basic provisions of the Act are that the Air
consignment note is prima facie evidence of
conclusion of contract, of the receipt of goods
and of the conditions of carriage.
Chapter 14 Import Export Management
 CARRIAGE OF GOODS BY AIR

• A MASTER AIR WAY BILL (MAWB) is issued by an

actual carrier and is different from a HOUSE AIR WAY
BILL (HAWB) which is issued by a forwarder.
• This is done to gain profit by consolidation, putting
together cargoes from different shippers under one
MAWB to earn a more favourable bulk quantity freight
rate and charges the shippers a higher freight rate
whilst it does not provide the aircraft for carriage.
• A MAWB is then credited to avoid the risk that the
forwarder will not take responsibility for the goods
during transit.
• An MAWB is subject to IATA Rules, the international air
conventions.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• Air Way Bill Specifications and Conditions of

Contract – IATA
• The air way bill is a document which shall be
either an air way bill referred to as an “airline
air waybill”, with preprinted issuing carrier
identification, or an air way bill referred to as
a “neutral airwaybill” without preprinted
identification of the issuing carrier in any form
and used by other than an air carrier.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• Description of the face of the airline air way bill:

• In addition to the information of the Cargo as
illustrated by the Shipper or his Agent, the airway
bill number shall be placed in the upper left
corner, the upper right corner and in the lower
right corner of all copies of the airline air way bill.
• The air way bill number shall consist of the
issuing carriers three digit IATA airline code
number and a serial number of eight digits
including a check digit placed in the extreme right
hand position.
Chapter 14 Import Export Management
 CARRIAGE OF GOODS BY AIR

• Description of the reverse side of the airway bill:

• The currently effective IATA conditions of
Contract shall be printed on three original copies
of airline and neutral air way bills as a minimum
requirement.
• They may also be printed on other copies of the
airway bill.
• Domestic conditions of contract , separate from
the currently effective IATA conditions of contract
may additionally be printed on the airline airway
bill at carriers option.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• 1.4 DANGEROUS GOODS:

• These are the United Nation’s official term for
Hazardous Materials. Articles or substances
which are capable of posing a significant risk to
the health or safety of the general public when
transported by air and which are classified
according to the most current editions of the
ICAO Technical Instructions for the Safe Transport
of Dangerous Goods by Air and the IATA
Dangerous Goods Regulations. However the US
Government’s official term is Hazardous materials
for Dangerous goods.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• Items of freight that are inherently harmful and

classified under Title 49, Code of Federal
Regulations, Hazardous Materials/Dangerous
Goods are Classified by the United Nations under
UN Class 1 to 9. They may only be transported
under certain conditions relative to packaging,
quantity carried, appropriate labels/markings
denoting the UN Class and the handling codes,
airplane type, location on board the airplane etc.
and in conformance with applicable rules.
• Handling codes should appropriately be
mentioned in the Air waybills.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• 1.5 IATA DANGEROUS GOODS REGULATIONS (DGR):

The IATA DGR is the trusted source to help you prepare
and document dangerous shipments. Recognized by
the world’s airlines for over 50 years, the DGR is the
most complete, up-to-date, and user-friendly reference
in the industry.
• Definition : Dangerous Goods are articles or substances
which are capable of posing a risk to health, safety,
property or the environment and which are shown in
the list of Dangerous Goods or which are classified
according to these Regulations.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• The IATA Dangerous Goods Regulations are

applicable to :
• All Airlines which are members or Associate
Members of IATA
• All Airlines which are party to the IATA
Multilateral Interline Traffic Agreement-Cargo
• All shippers and agents who offer
consignments of dangerous goods to these
operators.
Chapter 14 Import Export Management
 CARRIAGE OF GOODS BY AIR

• 1.6 OTHER CURRENT INITIATIVES OF IATA:

• E-Freight
• The e-Freight project aims to take the paper out of air
cargo. Facilitated by IATA, the project is an industry-
wide initiative involving carriers, freight forwarders,
ground handlers, shippers and customs authorities.
• E-Freight is about building a paper free air cargo supply
chain. It includes a set of business processes and
standards that allow to remove a set of document s
from the process of shipping air cargo from origin to
destination. Documents are replaced with the
exchange of electronic data.
Chapter 14 Import Export Management
 CARRIAGE OF GOODS BY AIR

• The e-freight project sets the locations where

these electronic standards can be used based
on :
Local regulations
E-customs programs in place
Support from relevant authorities and from
industry stake holders

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• 1.7 COURIER – A DOOR – TO- DOOR CONCEPT

• A courier is a person or a company who delivers messages,
packages and mail. Air transportation is the main lifeline of
different courier services which operates on all scales from
within specific towns or cities to regional, national and
global services.
• The worlds largest courier companies DHL, FedEx, TNT, UPS,
Aramax offer services worldwide typically via a hub and
spoke model.
• There are many specialist couriers usually for the
transportation of items such as freight/palettes, sensitive
documents and liquids.
• Many companies who operate under a Just-In-Time
inventory method often utilise on-board couriers.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• Just-In-Time(JIT) is a production strategy that

strives to improve a business return on
investment by reducing in-process inventory
and associated carrying costs. JIT focuses on
continuous improvement and can improve a
manufacturing organizations return on
investment, quality and efficiency.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• On-Board Couriers are individuals who can

travel at a moment’s notice anywhere in the
world, usually via commercial airlines.
• While this type of service is second costliest-
general aviation charters are far more
expensive-companies analyze the cost of
service to engage an on-board courier versus
the “cost” the company will realize should the
product not arrive by a specified time.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• AUTHORISED COURIERS
• In India the Courier Services are regulated by
The Courier Imports and Exports ( Electronic
Declaration and Processing) Regulations, 2010
of The Customs Act 1962.
• Imports and exports through courier mode
have registered a healthy rate of growth in
recent years since they are cleared through a
fast track mode.
Chapter 14 Import Export Management
 CARRIAGE OF GOODS BY AIR

• 1.8 FOREIGN POST PARCELS

• INDIA POST
• EMS SPEED POST
• AIR PARCEL SERVICES
• SURFACE AIR LIFTED(SAL) MAILS
• FLAT RATE BOXES
• WORLDNET EXPRESS

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• FOREIGN POST PARCELS –CUSTOMS CLEARANCE:

• In the case of goods imported or exported by
post, any label or declaration accompanying the
goods, which contain the description, quantity
and value thereof, shall be declared to be an
entry for import or export as the case may be, for
the purpose of this Act.
• All goods imported by posts are classifiable under
a single heading and levied to duty accordingly.
Such goods will be governed by the EXIM policy
as far as import/export is concerned.
Chapter 14 Import Export Management
 CARRIAGE OF GOODS BY AIR

• 1.9 SUMMARY AND CONCLUSIONS

• All Aircrafts do carry Cargo because Air is the fastest mode
of movement of Cargo.
• We may feel that moving goods by Air is very costly but we
also have Precious Cargo for Import-Export and these are
safe in Air carriage due to short transporting time span. But
the greatest factor for Airfreight of the goods is the fast
turnover of Foreign Trade Transactions. This gives a big
advantage to Importers-Exporters due to the speed in
which the transactions are completed.
• The high freight cost virtually offsets the interest factor of
money turn-around especially in cases of high-value Cargo.
The classic examples are of International Couriers and
Foreign Post.

Chapter 14 Import Export Management

 CARRIAGE OF GOODS BY AIR

• We have completed Chapter 14

• Next we move to Chapter 15
• MULTIMODAL TRANSPORTATION

Chapter 14 Import Export Management