AIR FREIGHT TRANSPORT MANAGEMENT

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AIR FREIGHT TRANSPORT MANAGEMENT

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Title: AIR FREIGHT TRANSPORT MANAGEMENT

1
AIR FREIGHT TRANSPORT MANAGEMENTFresh produce
Arab Academy for Science Technology Maritime
Transport Institute Of International Transport
Logistics
By Adel Abou Heneidy
2
Overview

TACT
IATA traffic conference areas
Coding
Acceptance of cargo
Methods of paying FRT charges
Advanced arrangements
Cargo loading priorities
Airlines timetable
Parcels dimensions
Types of rates
AWB (Airway Bill)
Shipping instructions
Calculation of air freight charges
Breakeven points
ULD (Unit Load Device)
Tracking
Dangerous goods fresh produce
Shipping fresh produce by air
Cold Supply Chain

Grading Policy - Interaction assignments
20 - Mid-term exam..30 - Case
study.10 - Final exam.30
TOTAL 100
3
TACT The Air Cargo Tariff
RULES
Updated every 4 months
Rates worldwide (except north America)
Updated every 2 months
Rates North America
Updated every 2 months
tact.indp_at_iata.org
International Air Transport Association
4
IATA traffic conference areas
IATA area 1 All of the north south
American continent and the adjacent islands.
IATA area 2 All Europe ( including the
European part of the Russian Federation) , and
the adjacent islands. Africa middle East.
IATA area 3 All of Asia and the adjacent
islands except the portion included in IATA
area 2 ( from middle east).
5
(No Transcript)
6
AIRPORTS CODES Cairo CAI
London LHR Dubai DXB NEW YORK
JFK Sanaa SAH MILANO MIL
CODING
Countries codes Egypt . EG Italy. IT
USA US YemenYE
IATA AIRPORTS CODING.doc
AIRLINES CODING Prefix number
Egyptair MS - 077 Lufthansa LH -
020 Emirates EK - 176 British BA
- 125
Currencies codes Egyptian Pound... EGP US
. USD Yemeni RialYER
7

Write down the 3-letters IATA codes for the
following airports
Abu Simbel, Egypt
Baltimore, MD, USA
Berlin, Germany Schoenefeld
Berlin, Germany Tegel
Berlin, Germany Tempelhof

ABS BWI SXF TXL THF
IATA AIRPORTS CODING.doc
8

Complete
1) India is located in IATA area
2) Egypt is located in IATA area ..
Germany in IATA area ..
3) Both are located in IATA area
1.
4) We can find the published air freight
rate between CAI / JFK in the
.. TACT book.
5) We can find the published air freight
rate between AMS / FRA in the
.. TACT book.
6) We can find the published air freight
rate between DXB / ORD in the
.. TACT book.
7) IATA stands for
8) The code of the currency of KSA
is

9
Acceptance of goods
P
Packing Cargo must be in very good condition
Marking Full style of both shipper
consignee. Number of
package ( 1/10 , 2/10 , .).
Labels ( this side up, fragile , urgent..).

Payment Prepaid PP OR Collect
CC
The Collect charges are not accepted in the
following cases 1) Human remains.
2) Live animals. 3) Perishables.
4) Used personal effects which can not
be sold. 5) Resale of goods is less than the
charges to be collected. 6) Country
regulations which do not permit Collect .
10
Advanced arrangements
The following commodities need advanced
arrangements Valuable cargo / Live animals /
Human remains ashes / Perishables / Dangerous
goods / shipment of unusual shape size.
Advance arrangements are made by 1st carrier.

Cargo loading priorities
1) Aircraft on ground AOG 2)
Diplomatic pouches DIP
Valuable cargo VAL 4) Live
animals AVI
5) Perishables PER 6)
Human remains HUM
Restricted items RRA
News materials ,which any delay will cause loss
of its value.

11
Information by countries
It is in section 7 in TACT RULES book
Section 7-2 Charges collect
For example EGYPT (EG)
Charges collect
accepted Yes
Charge collect fees 5
Minimum
charge EGP 35
Section 7-3 Import / Transit / Export
regulations
12

How much you are going to pay for the airline to
receive documents of your shipment arrived to CAI
on CC basis with FRT charges of EUR 550 ?

Solution Collection charges EUR 550 x 5
EUR 27.50 Total to be paid 550 27.50 EUR
577.50

How much you are going to pay for the airline to
receive documents of your shipment arrived to CAI
on CC basis with FRT charges of USD 50 ?

Solution Collection charges USD 50 x 5
2.5 (which is less than EGP 35) Total to be paid
50 EGP 35

How much you are going to pay for the airline to
receive documents of your shipment arrived to CAI
on PP basis with FRT charges of EUR 4200 ?

Solution Total to be paid 0
13
Airline
Timetable
RFS Road Feeder surface
14
Aircraft Dimensions
Boeing 737
W
W
114
86 144
76 88 101 106
25 254 254 254 254
35 254 254 254 243
45 254 254 254 243
55 254 254 254 243
66 254 243 243 243
76 254 243 241 218
86 254 50 50 50
Forward Hold
H
Examples L xW x H 235 x 70 x 80 cm
220 X 102 x 75 cm X
H
P
Rear Hold
15
Airbus A300F
16
Min N ( - 45 kgs ).. 45.
100.. 250
TYPES OF AF RATES
General cargo rate (GCR)
Specific commodity rate (SCR)
Special rates for some commodities

Valuable cargo S
Newspapers,books, periodicals. R
Live animals S
Human remains S
Baggage shipped as cargo R
R . Reduction rate
S .. Surcharge rate

Class rates (CCR)
Rates differs from origin to origin
for destination to another.
17
General Cargo Rate (GCR)

General cargo rates apply to the carriage of
commodities that have not been allocated a
specific commodity rate or commodity
classification rate. General cargo rates consist
of minimum rate (M), normal rate (N), and lower
charge in higher weight (Q).

N. - 45 Kg 45 45 Kg 100.. 100 Kg 300..
300 Kg 500.. 500 Kg
How many KGs are covered by M ? M value / N value
CAI / FRA EGP / KG M 143 N. 10.10 45...
7.60 100. 7.10 250. 6.60
CAI / NYC EGP / KG M 170 N. 11.10 45...
10.50 100. 9.70 300. 8.50 500. 8.00
18
Example GCR Specific commodity rates
From CAIRO EG CAI
Egyptian Pound EGP KGS To
FRANKFURT DE M 143

N 10.10
45 7.60

100.. 7.10
250.. 6.60
0006
100.. 4.80
0006 500.. 4.30
MS 0007 250..
4.00 MS 0007
500.. 3.50
2199 500.. 5.50
2199
1000.. 5.00
Specific commodity
0006Food stuffs. 0007Fruits
vegetables. 2199Yarn ,textiles.
MSEgypt Air
19

Using rates shown in the previous slide,
calculate the FRT charges for the following air
shipments from CAI / FRA
1) 200 Kg of strawberry on LH.
2) 200 Kg of strawberry on MS.
3) 350 Kg of strawberry on MS.
4) 200Kg of tomato paste on KL.

Solutions
200 x 7.10 EGP 1420
200 x 7.10 EGP 1420
350 x 4.00 EGP 1400
200 x 4.80 EGP 960

20
Break even point
Rate of higher weight
Break even point Higher weight x Example if
chargeable weight is 420 kgs and
300 EGP 6 500
EGP 5 Then break even point 500
x As 420 gt upgrade the chargeable
weight to be 500 kgs and apply rate of 500
Like that, the shipper will pay 500 x 5
EGP 2500 Instead
of 420 x 6 EGP 2520
Rate of lower weight
5
416

KGs
6
416
21
Solved example 1

Calculate the FRT charges for following shipment

Chargeable weight is 320 kgs 250 EGP
6.70 500 EGP 6.50
Air freight calculations.xls
22
Specific Commodity Rate (SCR)

Specific commodity rates are usually lower than
general cargo rates and are published for
particular commodities from a specified point of
origin to a specified destination point.
They are subject to a minimum weight
restriction.
When the class rate or the general cargo rate
applicable to the consignment is lower than the
Specific Commodity Rate, this lower rate can be
applied.

23
Commodity Classification Rate (CCR or Class Rate)

Commodity classification rates, also known as
class rates, are published for particular
commodities from a specified point of origin to a
specified destination point and are usually shown
in Surcharged (S) or Reduced (R). Class Rates
take precedence over General Cargo Rates
regardless of comparisons.

24
Published materials (R)

Newspapers, Magazines, Periodicals, Books,
Catalogues, Braille-Type Equipment and Talking
Books for the Blind , 50 of normal GCR shall
apply to the above commodities and the minimum
charge will be either the minimum charge for the
specified sector or the amount you get by
multiplying such discounted rate per kg by the
minimum chargeable weight, whichever is higher.

Class rates are not applicable to the carriage of
calendars, price tags and posters.
25
Baggage Shipped as Cargo (R)

For carriage of baggage shipped as cargo
(excluding machinery, jewelry, cameras,
merchandise and salesman samples), 50 of normal
GCR will apply, and such baggage is subject to a
minimum charge for 10 kg.
The baggage must be delivered to the carrier no
later than the passenger's departure date, and
the passenger or his agent is responsible for
customs clearance.
Airport of destination, must be as shown in
passengers ticket.

26
IATA AREAS Class Rates

Example of IATA AREAS Class Rate.doc

27
Example Class rate from CAI to FRA
Both CAI FRA are within IATA area 2 Live
animals Rate will be 175 of normal GCR
N. EGP 10.10 / kg
N175EGP 17.68 / kg ( Rounded to
17.70 ) Valuable cargo Rate will be 200 of
normal GCR N.
EGP 10.10 / kg
N200EGP 20.20 / kg . Newspapers Rate will be
50 of normal GCR N.
EGP 10.10 / kg N50 EGP
5.05 / kg ( Rounded to 5.10 )
S
S
R
28

Calculate the FRT charges for a horse of weight
of 160 Kg
needed to be shipped by air from CAI / FRA.

SOLUTION Live animal within IATA area 2150
N N.. EGP 10.10 per Kg. 150 N 10.10 x 150
15.15 15.20 per Kg FRT charges 15.20 x 160
EGP 2432
29

Calculate the FRT charges for a small domestic
dog of weight of 8.5 Kg needed to be shipped by
air from CAI / JED.

SOLUTION not allowed ! According the RULES
section 7.3.2, the only types of dogs allowed
to be imported into KSA are Watch (Guard)
dogs Hunting dogs Guide dogs for the blind
29
30

Calculate the FRT charges for a shipment of
spare parts of weight of 150 Kg needed to be
shipped by air from CAI / DAM on MS on collect
basis.

SOLUTION not accepted ! According the RULES
section 7.2.2, collect shipment to DAM is not
allowed on MS. You can use RJ via Amman.
30
31
The Basic Facts about Calculation of air cargo

Air cargo shipments are subject to the rates
applying on the day of issue of the airwaybill.
Rates generally apply from the departure airport
to the destination airport and not vice versa.
Rates therefore are not direction-bound and their
amount is subject to the law of demand and
supply.
The cargo is established pursuant to the
international air cargo tariff ( The Air Cargo
Tariff TACT ) and includes the following tariff
group
Minimum cargo charges (so-called minimum charges
which must be charged)
General cargo rates (so-called General Cargo
Rates)N-Rates (normal rates)
up to 45.00 kg Q-rates (Quantity Rates) as from
45.00 kg

32
The Basic Facts about Calculation of air cargo
Continued

Minimum cargo charges (so-called minimum charges
which must be charged)
General cargo rates (so-called General Cargo
Rates)
N-Rates (normal rates) up to 45.00 kg
Q-rates (Quantity Rates) as from 45.00 kg
Special rates (specific rates or. SCR S pecific
C ommodity R ates
are exceptional rates applying to specific
goods on certain routes
Goods class rates ( C lass R ates CR ) for
specific goods
(live animals, valuable shipments S ,
newspapers R).

33
Establishing the cargo weight

For air cargo the weight is rounded up to the
next full half and full kilo. e.g 33,20 33,50
/ 33,60 34.00 / 525,50
525,50 If one consignment consists of several
packing units (colli), the weight is first added
up and then rounded!
Bulkiness in air cargo is 1 6 ( 1 m³ stands
for a cargo volume of 167.00 kg )
Volume (bulk) weight is calculated according to
the formula
Volume weight length x width x height (cm)
x number of colli
6000
As a final step the actual and the calculated
weights are compared and the higher weight is
used to calculate the cargo.

34
Calculation of chargeable weight(Solved example
2 a )

Calculate the chargeable weight for the following
air shipment
a) Automotive spare parts packed as follows
1 carton of 25 Kg, and 75 x 60 x 40
cm, plus
10 cartons of 10 Kg, and 50 x 30 x 25
cm each, plus
5 cartons of 15 Kg, and 50 x 30 x 30
cm each.

Air freight calculations.xls
35
Calculation of chargeable weight(Solved example
2 b )

Calculate the chargeable weight for the following
air shipment
b)
Air condition parts 10 cartons of 10 Kg,
and 50 x 30 x 25 cm each. plus,
Chemicals 5 cartons of 15 Kg, and 50 x 30 x
30 cm each.
plus,
Handy crafts 17 cartons of 13 Kg, and 86 x
45 x 33 cm each.

Air freight calculations.xls
36
Rate construction

So far only published direct rates have been
mentioned "Airport of Departure to Airport of
Destination
However, rates to all airports worldwide are not
published at every departure airport. Therefore
such rates must either be combined with "ADD-ON"
amounts or to be constructed with "unpublished
rates" !
The idea of an ADD-On amount-construction is to
"add on" a domestic rate to the point of
destination to a published rate into the country
of destination. The ADD-ON amount can, however,
also be "added" in the country of departure.

37
Conversion of rates(Section 5.8)

Example 1
Construct a rate in CZK from A to C via B,
where
Sector rate from A to B..CZK 31.00
Sector rate from B to C..EUR 4.10 (a)
USD / CZK 20.44810 (b)
USD / EUR 0.72506 (c)
Rounding off unit for CZK is 0.10
__________________________________________________
Solution
rate from A to B..CZK 31.00
rate from B to C in CZK __________ CZK
115.628
Total rate from A to C CZK 146.628
CZK 146.60

a
b
X
c
38
Conversion of rates(Section 5.8)

Example 2
Construct a rate in CZK from A to E via B, C,
D where
Sector rate from A to B..CZK 31.00
Sector rate from B to C..EUR 4.10 (a)
Sector rate from C to D..CHF 16.70 (a)
Sector rate from D to E..EUR 5.99 (a)
USD / CZK 20.44810 (b)
USD / CHF 1.20569 (c)
USD / EUR 0.72506 (c)
Rounding off unit for CZK is 0.10
__________________________________________________
Solution
rate from A to B..CZK 31.00
rate from B to C in CZK CZK 115.628
rate from C to D in CZK CZK 283.226
rate from D to E in CZK CZK 168.929
Total rate from A to E CZK 598.782

39
Disbursement Fees (DBC)

Disbursements are amounts collected at the
destination for the provision of services that
are incurred at the origin which are incidental
to the air carriage of the consignment, including
surface transportation, storage and customs
clearance charges.

40
Valuation Charge

When the shipper's "declared value for carriage"
on the Air Waybill is more than USD 20.00 (or its
equivalent) per kilogram , a valuation charge of
0.5 of the shipper's declared value for carriage
EXCEEDING USD 20.00 per kilogram (Gross Weight)
will be charged.

Valuation charge ( Declared value 20 x
Gross weight ) x 0.005
41
Valuation Charge (examples)

Calculate the valuation charge for each of the
following air shipments

G.Weight (Kg) Volume weight (Kg) Chargeable weight (Kg) D.V.C
100 90 100 USD20,000
900 1260 1260 USD10,000
1000 400 1000 EGP 200,000

a) 20000 20 x 100 x 0.005 USD 90
10000 20 x 900 x 0.005 - USD 40 ???
(200000 / 5.70) 20 x 1000 x 0.005 USD
75.44 USD 75.45

It is not negotiable document
are always consigned to a particular company
or person
In case of FOB terms it will
on collect basis (payable at destination)
In case of CF or CIF basis it will prepaid

43
AWB vs B/L
AWB B/L
Not negotiable Negotiable
AWB shall be issued after the complete consignment has been received B/L shall be issued after the complete consignment has been boarded onto vessel
The shipper is responsible for issuing AWB The vessel company is responsible for issuing B/L
Payable to a specified person Payable to bearer
44
AWB - Check Digit Number

Check Digit Number A single digit of the air
waybill number used to ensure that the air
waybill number is correctly entered into a
computer system.
Example
AWB 020 2114 1643
2114 1643

7
0 0 2 3
Pls, check the following AWBs 077 3208
9901 077 3203 080?
077 3203 0806
45
Rate Class in AWB

One or more of the following codes shall be
inserted as appropriate M - Minimum Charge
N - Normal under 45 kg
Q - Quantity over 45 kg rate
C - Specific Commodity Rate
R - Class Rate (Reduction)
S - Class Rate (Surcharge)
U - Pivot Weight And Applicable Pivot Weight
Charge
E - Weight in excess of pivot weight and
applicable rate
X - Unit Load Device (as an additional line
entry with one of the above)

The significance of AWB
Contract of carriage / Proof of receipt of cargo
/ Freight bill / Guide to carriers staff
in handling , dispatching,
Certificate of insurance ( if requested by
shipper)
If the shipper does not declare the value for
carriage in case of loss of cargo
the maximum compensation to be paid by carrier
is 20 / kg.
But, if he declares the value for carriage ,
he will pay extra charges called
valuation charge. In case of loss of cargo ,
the carrier will pay the total declared
value.The valuation charge is calculated as
follows
Valuation charge ( Declared value
20 x Gross weight ) x 0.005

47
Example
Shipper ABC company 15 Ahmed
Orabi st. Mohandeseen Cairo Egypt
Tel 3448782 Consignee XYZ company
15 street 46 DUS-Germany
Tel 5864875 Commodity Air condition
spare parts. Number of parcels 15
Dimensions of parcel 90 x 80 x 70 cm Gross
weight per parcel 60 kgs Freight charges
Prepaid Declared value for carriage USD 75000
in case of non declaration NVD
Declared value for customs NCV
no customs value Handling
information Notify Mr. John Roger Tel 5864879
upon arrival
48
Calculations Gross weight 60 kgs x 15
parcel 900 kgs Volume weight 90 x 80 x 70 cm
x 15 parcels Chargeable weight 1260 kgs Rate
CAI / DUS EGP 6.60 / kg Total freight charges
6.60 x 1260 EGP 8316 Valuation charge (
Declared value 20 x Gross weight ) X
0.005 ( 75000
20 x 900 ) X
0.005 285
equal to EGP 1322 Due carrier EGP 71 Total
prepaid 8316 1322 71 EGP 9709
1260 kgs
6000
49
Solved example 3

A shipment consists of
40 parcels of 4 Kg , and 30 X 20 X 10 cm
each
90 parcels of 3 Kg , and 0.5 X 0.4 X 0.2 m
each
60 parcels of 15 Kg , and 75 X 50 X 24 cm
each
1) Calculate the total air freight charges if
the shipment will be
dispatched from CAI / FRA with rate of
EGP 6.60 / kg ( 250)
2) Calculate valuation charge if the declared
value is 50000.

Solution
Calculate the gross volume weights for each
type of parcels.
Determine the chargeable weight for each type.
Calculate total chargeable weight.
Calculate total freight charges.
Calculate valuation charge

Air freight calculations.xls
50
AIRWAY Bill (AWB)(Summary)

Air Waybill.doc

AWB is issued usually in set of 12 copies.
Copy 1 original for carrier
Copy 2 original for consignee
Copy 3 original for shipper

If the AWB indicates that transhipment will take
place, transhipment is allowed even if L/C
prohibits transhipment, provided that the entire
carriage is covered by one same AWB.

Date of shipment in AWB (discuss)
Split shipment (discuss)
MAWB HAWB
Clean versus foul AWB

51
This example shows A minimum charge. A
declared value for customs. Chargeable weight
equals to gross weight.
52
This example shows Q rate. Chargeable
weight greater than gross weight.
53
This example shows A class rate S
based on M200. A declared value for carriage,
and valuation charge. Chargeable weight
equals to gross weight ( rounded). TRC
transit charge.
54
This example shows A mixed shipment rating.
C commodity rate. Q quantity rate.
R class rate (reduction 33 ) AWA AWB
charges ( Agent) SUA transportation
(agent) DBC disbursement fees resulting
from the two other charges
(Carrier).
55
Example

Calculate the total charges for the following
AWB
( you are allowed to make necessary changes
if any)

CAI / NYC EGP / KG M 170 N. 11.10 45...
10.50 100. 9.70 300. 8.50 500. 8.00
AWB 077 3203 0808 Terms of sale FOB
CAI-EG Airport of destination JFK New York
US AWB charges Prepaid (PP) Number of parcels
60 of 15 Kg , and 75 X 50 X 24 cm each. Declared
value for carriage EGP 114,000 Other charges
EGP 71 USD 1 EGP 5.70
56
Solution

The given AWB is wrong. The correct one is 077
3203 0806
As the terms of sale is FCA origin, the Freight
charges must be collect
Gross weight 60 x 15 Kg 900 Kg
Volume weight (75 X 50 X 24 x 60)

900 Kg
6000

Chargeable weight 900
Freight charges 900 x EGP 8 EGP 7200
Valuation charges (114000 / 5.70) ( 20 X
900) x 0.005 10
10 x 5.7
EGP 57
Total charges 7200 57 71 EGP 7328

57
Terms of sale

Pricing your product is a matter of
What the product is
How much ( or how many)
How far the product is being moved at your
expense
Damaged or lost who is responsible?

EXW - Ex Works
Title and risk pass to buyer including payment
of all transportation and insurance cost from the
seller's door. Used for any mode of
transportation.
Works means Factory, Mill, Warehouse,
A term of sale in which for the quoted
price, the seller merely makes the goods
available to the buyer at the seller's "named
place" of business. This trade term places the
greatest responsibility on the buyer and minimum
obligations on the seller. The Ex Works term is
often used when making an initial quotation for
the sale of goods without any costs included.
FCA - Free Carrier
Title and risk pass to buyer including
transportation and insurance cost when the seller
delivers goods cleared for export to the
carrier.Seller is obligated to load the goods on
the Buyer's collecting vehicle it is the Buyer's
obligation to receive the Seller's arriving
vehicle unloaded.

FAS - Free Alongside Ship
Title and risk pass to buyer including payment
of all transportation and insurance cost once
delivered alongside ship by the seller. Used for
sea or inland waterway transportation.
The export clearance obligation rests with
the seller.
FOB - Free On Board
Title and risk pass to buyer including payment
of all transportation and insurance cost once
delivered on board the ship by the seller. Used
for sea or inland waterway transportation.

CFR - Cost and Freight
Title, risk and insurance cost pass to buyer
when delivered on board the ship by seller who
pays the transportation cost to the destination
port. Used for sea or inland waterway
transportation.
CIF - Cost, Insurance and Freight
Title and risk pass to buyer when delivered on
board the ship by seller who pays transportation
and insurance cost to destination port. Used for
sea or inland waterway transportation.

CPT - Carriage Paid To
Title, risk and insurance cost pass to buyer
when delivered to carrier by seller who pays
transportation cost to destination. Used for any
mode of transportation.
CIP - Carriage and Insurance Paid To
Title and risk pass to buyer when delivered to
carrier by seller who pays transportation and
insurance cost to destination. Used for any mode
of transportation.

DAF - Delivered at Frontier
Title, risk and responsibility for import
clearance pass to buyer when delivered to named
border point by seller. Used for any mode of
transportation.
DES - Delivered Ex Ship
Title, risk, responsibility for vessel
discharge and import clearance pass to buyer when
seller delivers goods on board the ship to
destination port. Used for sea or inland waterway
transportation.

DEQ - Delivered Ex Quay (Duty Paid)
Title and risk pass to buyer when delivered on
board the ship at the destination point by the
seller who delivers goods on dock at destination
point cleared for import. Used for sea or inland
waterway transportation. DDU - Delivered Duty
Unpaid -- Title, risk and responsibility of
import clearance pass to buyer when seller
delivers goods to named destination point. Used
for any mode of transportation. Buyer is
obligated for import clearance.
DDU - Delivered Duty Unpaid
Seller fulfills his obligation when goods have
been made available at the named place in the
country of importation

DDP - Delivered Duty Paid
Title and risk pass to buyer when seller
delivers goods to named destination point cleared
for import. Used for any mode of transportation.
INCOTERMS
2000.pdf

65
Solved example

Choose the correct FRT payment method for each of
the following term of sale

Answers EX- Work..CC 2- CIF.PP 3-
DDU...PP 4- FCA..CC
1- EX- Work 2- CIF 3- DDU 4- FCA
a- PP b- CC
66
TRACK TRACE
www.redberry.com
AWB 67259790 CAI JFK Pieces 15 Weight 900
kgs FLT MS 778 Arrived 2230 h Date 20/07/02
AIR TRACK
077

67259790
67
Shipping terms
You have to differentiate between terms of sale,
terms of payment, and shipping terms

FLT Full Liner Terms
LIFO Liner In Free Out
FILO Free In Liner Out
FIFO Free In Free Out FIOS

Packaging
Requires simple lightweight packing
Unlike sea freight, no need for solid packing to
protect against weather, careless handling and
salt water
All packages must be labeled with
Airline name
Flight number
Air waybill number
Destination code
Total number of piecesin the shipment

69
Ratios to be considered upon packing

You have to maximize the following ratios
1) Net weight Gross weight
2) Gross weight Chargeable weight
3) Net weight Chargeable weight

70
Unit Load Device (ULD)

Unit Load Devices, or ULDs, are pallets and
containers used to load luggage, freight, and
mail on wide-body aircraft and specific
narrow-body aircraft.
They allow large quantities of cargo to be
bundled into large units. Since this leads to
fewer units to load, it saves ground crews time
and effort, and helps prevent delayed flights.
Each ULD is manifested separately so that its
contents can be tracked.

http//en.wikipedia.org/wiki/Unit_Load_Device
71
ULD
Unit Load Device
TYPE 10 FT CONTAINER CODE AQ6 , AMA, AQA ,
AMG BASE DIMENSIONS 318 X 244 CM HEIGHT 244
CM VOLUME 17 CBM INTERNAL DIMESIONS 300 X 228 X
238 CM LOADABLE IN B747-200 COMBI
B747- 400 COMBI
B747- 200 SF
B747- 200 F
72
ULD
Unit Load Device
TYPE 20-FT PALLET CODE P7E , PGE BASE
DIMENSIONS 606 X 244 CM INTERNAL DIMESIONS 592
X 230 CM LOADABLE IN B747-200 COMBI
B747- 400 COMBI
B747- 200 SF
B747- 200 F
73
ULD
TYPE A320 / A321 CONTAINER CODE AKH BASE
DIMENSIONS 156 X 153 CM HEIGHT 114 CM VOLUME
3.5 CBM LOADABLE IN A320 200
A321 - 100

74
LD 3

Iatacode AKH AKH
Also known as AVB AVB
Top length 2438mm 96.0"
Bottom length 1562mm 61.5"
Width 1534mm 60.4"
Height 1143mm 45.0"
Internal volume 3.6 m3

MGW 1588 KG
75
Pallet Volume Cubic Meter Dimensions L x W (cm) Remarks
LD 8 6.9 153 x 244 cm FQA
LD 11 7.2 153 x 318 cm FLA / PLA
LD 7 10.6 11.6 224 x 318 cm244 x 318 cm PAG / P1P PMC

If you have a fresh produce packed in cartons of
60 x 40 x 20 cm
palletized on Euro pallet (120 x 100 x 16 cm)
needed to be dispatched by air
using PMC- ULD. How many cartons could be fit
on this ULD ?
Disregard the weight.

76
Solution

Maximum height Volume / (LxW)
11.6 / (
2.44 x 3.18) 1.495 m 150 cm

318
1
PMC- ULD
244
2
100
100
100
3
120
120
77
Solution (Continued)

Number of cartons per layer on the Euro pallet
5
Number of layers per each Euro pallet
( 150 16) / (20) 6.7

6 Layers only
So, maximum number of cartons could be loaded on
PMC 6 Euro pallets x 6 layers x 5 cartons
180 cartons
78
Bulk Unitization charge (BUC)

BUC is the rate charged by carrier to shipper or
freight forwarder on the basis of ULD.
The charge for the consignment shall consist of
a flat minimum (pivot U) charge for a specified
pivot weight above which an additional charge
(over-pivot rate) per kilo or pound will apply.
The chargeable weight of the consignments in ULD
will be charged at the actual gross weight
excluding the tare weight of the ULD.
Restricted Items for BUC Use Dangerous goods,
live animals, human remains, and valuables

79
This example shows A consolidated shipment
inside a ULD. L lb USA. U pivot
rate of ULD. The chargeable weight of ULD
is greater than gross weight of cargo .
ULD tare weight no charge.
80
Solved example

If you have a fresh produce packed in 540 cartons
of
60 x 40 x 20 cm each, palletized on Euro
pallet (120 x 100 x 16 cm) needed to be
dispatched by air using PMC- ULDs.
Calculate the freight charges if
- Net weight per carton 4.75 Kg
- Gross weight per carton 5 Kg
- Pivot weight of ULD 2200 Kg
- Tare weight of ULD 210 Kg.
- Freight rate EGP 4.10 per Kg.
Also, calculate the three packing ratios, and
discuss.

81
Solution

From previous example, we can dispatch 180
cartons on each ULD
No. of ULDs 540 / 180 3 ULDs
Total chargeable weight (Pivot) 2200 x 3
6600 Kg
Total gross weight of the shipment 540 x 5
2700 Kg
Since the Pivot weight is greater than gross
weight
Therefore, you will be charged as per pivot
weight.
Fright charges 6600 x 4.10 EGP 27060
Packing ratios
Net Gross 4.75 / 5 95
Gross Chargeable 2700 / 6600 40.9
Net chargeable (540 x 4.75) / 6600 38.9
DISCUSS !

82

Dangerous Goods
83
Hazardous Substance

Any material with one or more of the following
intrinsic hazardous properties
explosiveness, flammability, oxidizing
capacity, corrosiveness, toxicity and poses a
threat to human health and/or the environment.

Dangerous goods

Dangerous goods are substances which pose risk
to health,
safety, property or the environment during
operation and/or
transportation.
All of these substances are divided in classes
in accordance
to the specific chemical characteristics
resulting in a degree
of danger.

84
UN classification of dangerous goods
Class 1 Explosives
Class 2 Gases
Class 3 Flammable Liquid Class 4 Flammable Solid
Class 5 Oxidizing substances and Organic
Peroxides
Such as DRY ICE
Class 6 Poisonous (toxic) and infectious
substances
Class 7 Radioactive material Class 8
Corrosives Class 9 Miscellaneous dangerous goods
85
Identification of Dangerous Goods by PSN and UN
Number

Within each of the 9 hazard classes dangerous
goods are uniquely identified by two pieces of
information
A 4 - digit number known as the UN Number which
is preceded by the letters
UN and
The corresponding Proper Shipping Name (PSN).
For example, kerosene is identified in the IMDG
Code by its PSN Kerosene and the corresponding UN
Number UN 1223.
Together the UN Number and PSN uniquely
Identify dangerous goods from each other
Enable rapid and precise identification during
transport ensuring the correct handling, stowage,
segregation, etc and
In the event of an emergency, ensure the correct
measures are taken.

Using UN Numbers
Using a four-digit number to identify dangerous
goods enhances safety by
Overcoming language barriers - the four-digit
number is easily
understood in all languages
Avoiding confusing similar names - e.g. TITANIUM
POWDER,
WETTED UN 1352 which is a flammable solid in
class 4.1 and has very
different transport requirements to TITANIUM
POWDER, DRY UN 2546
which is spontaneously combustible in class
4.2.
Using Proper Shipping Name (PSN)
The PSN is the accepted name which must be used
for transport purposes on
documentation / labelling, etc.
No alternatives or variations are permitted
unless specifically stated
The PSN is that part of the name, which appears
in the Dangerous Goods List or the
Alphabetical Index in boldl letters only
Any text in lower case is only descriptive and
is not part of the PSN

87
Material Safety Data Sheet (MSDS )

It is a compilation of information provided by
the manufacturer - required under the OSHA
Communication Standard on the identity of
hazardous chemicals, health, and physical
hazards, exposure limits, and precautions.
OSHA requires manufacturers and importers of
hazardous chemicals to distribute Material Safety
Data Sheets with information concerning
reasonably foreseeable health and toxicity
concerns arising from their use.
Users of these chemicals are required to ensure
that these MSDSs are received with chemicals they
purchase, and that they are used and available in
the workplace.
A Material Safety Data Sheet must be provided
with the initial shipment of a hazardous
chemical, and with the first shipment after a
Material Safety Data Sheet is updated.

88
CONTENT OF A MATERIAL SAFETY DATA SHEET

The identity (product name) used on the label,
and chemical and common name(s) of ingredients
which have been determined to be health hazards,
and which comprise 1 or greater of the
composition, except carcinogens shall be listed
if the concentrations are 0.1 or greater and,
The chemical and common name(s) of all
ingredients which have been determined to present
a physical hazard when present in the mixture
Relevant physical and chemical characteristics of
the hazardous chemical (such as vapor pressure,
flash point)
Relevant physical hazards, including the
potential for fire, explosion, and reactivity
Relevant health hazards, including signs and
symptoms of exposure, and any medical conditions
generally recognized as being aggravated by
exposure to the chemical
The primary route(s) of entry into the body
The OSHA permissible exposure limit and ACGIH
Threshold Limit Value. Additional applicable
exposure limits may be listed

89
CONTENT OF A MATERIAL SAFETY DATA SHEET

Whether the hazardous chemical is listed in the
National Toxicology Program (NTP) Annual Report
on Carcinogens (latest edition) or has been found
to be a potential carcinogen in the International
Agency for Research on Cancer (IARC) Monographs
(latest editions), or by OSHA
Precautions for safe handling and use, including
appropriate hygienic practices, protective
measures during repair and maintenance of
contaminated equipment, and procedures for
clean-up of spills and leaks
Appropriate control measures, such as engineering
controls, work practices, or personal protective
equipment
Emergency and first aid procedures
The date of preparation of the Material Safety
Data Sheet or the last change to it and,
The name, address and telephone number of the
chemical manufacturer, importer, employer or
other responsible party preparing or distributing
the Material Safety Data Sheet, who can provide
additional information on the hazardous chemical
and appropriate emergency procedures, if
necessary.

90
Segregation of dangerous goods

Segregation means keeping incompatible goods
apart from one another in a room, using a barrier
or intervening space.
Chemicals must be segregated when either
stored or shipped to ensure they do not mix in
case of spillage.

NA Separation or segregation is not applicable
to the two Classes, and they may be stored in
the same area. SG The two Classes of chemicals
must be segregated (i.e., kept apart) from each
other by a distance of at least three metres.
FS The two Classes must be fire separated.
PR The two Classes are prohibited in the same
are storage area. As well, they must not be
stored in adjoining areas which are attached to
each other. The two Classes must be stored in
separate areas at least ten metres apart.
91
PACKING GROUPS

Packing is the essential component in the safe
transport of dangerous goods.
According to the degree of hazard of the
dangerous goods we have three packing groups

Group I .great danger Group
II.medium danger Group IIIminor danger
92
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93
Labeling of dangerous goods

Labeling is of great importance
for safe handling and transport
of dangerous goods.

Hazard Labels
1) Primary hazards labels
2) Secondary hazards labels
Handling Labels

94
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95
Primary hazard labels have class
number Secondary hazard labels do NOT have
class number
96
Handling labels
97
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98
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99
Shipping with Dry Ice

Dry ice (Carbon Dioxide, Solid) is used as a
refrigerant and is considered a dangerous good.
However, a Shipper's Declaration of Dangerous
Goods is not required when dry ice is used to
cool a non-dangerous good.
Following are guidelines that apply to shipments
of dry ice however, it is the shipper's
responsibility to comply with all IATA Dangerous
Goods Regulations when shipping dry ice or any
other dangerous good.

100

Packaging
Dry ice must be in packaging designed and
constructed to permit the release of carbon
dioxide gas and to prevent a build up of pressure
that could rupture the packaging. The outside
packaging must be marked with the following
information
Name of the shipper and consignee
The name of the contents being cooled
The words "Dry Ice" or "Carbon Dioxide Solid"
The UN number for Carbon Dioxide Solid (UN1845)
The net weight of the dry ice within the pieces
A Class 9 Miscellaneous Dangerous Goods Label
affixed on the same surface of the package near
the proper shipping name and adjacent to the
shipper's or consignee's address appearing on the
package.

101

Air Waybill Documentation
For shipments of dry ice cooling a non-dangerous
good, you must include specific information on
the air waybill in the "Nature and Quantity of
Goods" or "Content" section and in the following
order
The name of the contents being cooled
The proper shipping name (Dry Ice or Carbon
Dioxide, Solid)
The class ( 9 )
The UN number (UN1845)
The number of pieces
The net weight of dry ice per piece
Example Diagnostic Specimens, Dry Ice, 9,
UN1845, 1 piece at 2 Kg
For shipments of dry ice cooling a dangerous
good, the shipper must comply with all IATA
Dangerous Goods Regulations listed for both the
dry ice and the dangerous good.

102
Dry ice in baggage

Passengers may bring dry ice in quantities not
exceeding 2.5 kg per person, when used to pack
perishables that are themselves not dangerous
goods articles or substances, provided the
package permits the release of carbon dioxide
gas.
The dry ice may be in carry-on baggage, or with
the approval of the operator, in checked baggage.
When carried in checked baggage, each package
must be marked DRY ICE or Carbon Dioxide
Solid and with the net weight of dry ice or an
indication that the net weight is 2.5 kg or less.

103
Letter of Credit particulars

L/C is a binding document that a buyer can
request from his bank in order to guarantee that
the payment for goods will be transferred to the
seller.
Basically, a letter of credit gives the seller
reassurance that he will receive the payment for
the goods.
In order for the payment to occur, the seller has
to present the bank with the necessary shipping
documents confirming the delivery of goods within
a given time frame.
It is often used in international trade to
eliminate risks such as unfamiliarity with the
foreign country, customs, or political
instability.

In summary, an L/C is
- A formal document of payment
- Opened by a party wishing to import
- Communicated through banking channels
Paid by the opening bank within a specified
timeframe upon presentation of stipulated
documentation

104

Sight Draft
That is payable as soon as the required
documents have been presented.
A time Draft
Is not payable until the lapse of a
particular time period stated on the draft.

105

Confirmed Letter of Credit
A letter of credit, issued by a foreign bank,
which has been verified and guaranteed by a
domestic bank in the event of default by the
foreign bank or buyer.
Commercial Letter of Credit
A commercial letter of credit assures the
seller that the bank will provide payment for any
goods or merchandise shipped to the bank's
customer, assuming the seller provides any
required documentation of the transaction and its
shipment of the purchased goods.
Typically the documents requested in a Letter
of Credit are the following
Commercial invoice
Transport document such as a Bill of lading or
Airway bill,
Insurance document
Inspection Certificate
Certificate of OriginBut there could be others
too.

106

Irrevocable Letter of Credit
An irrevocable letter of credit includes a
guarantee by the issuing bank that if all of the
terms and conditions set forth in the letter are
satisfied by the beneficiary, the letter of
credit will be honored.
Revocable Letter of Credit
An revocable letter of credit may be
cancelled or modified after its date of issue, by
the issuing bank.
Standby Letter of Credit
In the event that the bank's customer
defaults on a payment to the beneficiary, and the
beneficiary documents proof of its loss
consistent with any terms set forth in the
letter, a standby letter of credit may be used by
the beneficiary to secure payment from the
issuing bank.

107

Transferable Letter of Credit
In transferable L/C, the first beneficiary
(exporter) may request
paying the whole or part of the credit to
one or more beneficiaries.
This L/C is expressly designated
Transferable by the issuing bank
on instructions of the applicant.
If the words, transmissible ,
assignable , divisible ,
or fractionable are used, L/C is not
transferable.
Non - Transferable Letter of Credit
In which, the beneficiary can not transfer
the credit to other beneficiary.

108
Back-to-Back Credit

It is a new credit opened on the basis of an
already existing,
non transferable credit.
It is used by traders to make payment to the
ultimate supplier.
A trader receives a documentary credit from the
buyer and then
opens another documentary credit in favour of
the ultimate
supplier.
The first documentary credit is used as
collateral for the
second credit. The second credit makes price
adjustments from
which comes the trader's profit.

1st L /C of 50000
2nd L /C of 45000
Supplier
Buyer
Trader
109
Red Clause Credit
A red clause credit has a special clause (red
clause) that authorizes the confirming bank to
make advances to the beneficiary (seller) prior
to the presentation of the shipping documents.
In this credit the buyer, in essence, extends
financing to the seller and incurs ultimate risk
for all sums advanced under the credit.
110

Latest Negotiation date
Is the last day of the period of time allowed
by L / C for the presentation of documents to the
bank.
In case the L/C does not stipulate the
latest negotiation date, it is
within 21 days after date of issuance
the transport documents, but
on or before L/C expiry date.
B/L (AWB) which is presented to the bank later
than the agreed time limit or 21 days later than
the date of issuance of B/L is called Stale B/L
(AWB)
Expiry date
Is the last day of validity of the L/C for
payment.
In case the validity of a L/C is stated in a
period of time, for example (this L/C is valid
for three months) without specifying the date
from which the time is to run, its validity
starts from issuance date of L/C.

111

Latest date of shipment
Is the last day of the period of time
allowed by L/C for shipment, or
dispatching.
Remark
In case the expiry date and/or latest
negotiation date falls
on a day on which the bank is closed for
reason not beyond
the banks control these two dates ( if any)
are extended
to the succeeding first day on which the bank
is opened.
Such extension, whoever, does not extend the
latest date
of shipment.

112
Sample L/C
113
3 Most Common Reasonswhy Letters of Credit Fail

1) Time Lines
The letter of credit should have an expiration
date that gives sufficient time to the seller to
get all the tasks specified and the documents
required in the LC. If the letter of credit
expires, the seller is left with no protection.
Most LC s fail because Sellers/Exporters/Bene
ficiaries were unable to perform within the
specified time frame in the LC.
Three dates are of importance in an LCa)
The date by when shipment should have occurred.
The date on B/L.b) The date by when documents
have to be presented to the Bank.c) The expiry
date of the LC itself.
A good source to give you an idea of the
timelines would be your freight forwarding agent.
As a seller check with your freight forwarding
agent to see if you would be in a position to
comply.

114
3 Most Common Reasonswhy Letters of Credit Fail

2) Discrepancy within the Letter of Credit
Letters of credit could also have
discrepancies. Even a discrepancy as small as a
missing period or comma can render the document
invalid. Thus, the earlier in the process the
letter of credit is examined, the more time is
available to identify and fix the problem. This
is another common reason why LCs fail.
3) Compliance with the Documents and Conditions
within the Letter of Credit
Letters of credit are about documents and
not facts the inability to produce a given
document at the right time will nullify the
letter of credit. As a Seller/Exporter/Beneficiary
you should try and run the compliance issues
with the various department or individuals
involved within your organization to see if
compliance would be a problem. And if so, have
the LC amended before shipping the goods.

115
Mid-Term Revision

1) Complete
a) TACT stands for..
b) The main types of Air Freight rates are
- General Cargo rate (GCR)
- Specific commodity rate (SCR)
- Class cargo rates (CCR) S R
c) FRA is located in IATA area .
d) For AWB 020 3203 0806, 020 is
...
e) For perishables, MAWB (for liners) must
shows the FRT charges
..

The Air Cargo Tariff
2
prefix number of Egypt Air
prepaid
116

2) How much you are going to pay for the
airline to receive documents of your shipment
arrived to CAI on CC basis with FRT charges of
USD 50 ?
3) Complete
a) The check digit of AWB 077- 3266240
b) The sales term DDU stands for,
but the shipping term LIFO stands
for..
c) The dry ice is considered as a dangerous
good with class
d) ULD stands for, and the pivot
weight of a ULD
is
e) If the AWB shows NCV it means
f) In case of CIF shipment, FRT charges
must be

Solution Collection charges USD 50 x 5
2.5 (which is less than EGP 35) Total to be paid
50 EGP 35
5
delivered duty unpaid
liner in-free out
9
unit load device
the minimum weight to be charged for an ULD
No customs value
prepaid
117

4) Using rates shown
a) calculate the FRT charges for an air
shipment from
CAI / FRA 350 Kg
of strawberry on
Egypt Air.
b) Calculate the FRT charges for a horse of
weight of 160 Kg needed to be
shipped by air from
CAI / FRA.

From CAIRO EG CAI
Egyptian Pound EGP KGS To
FRANKFURT DE M 143

N 10.10
45 7.60

100.. 7.10
250.. 6.60
0006
100.. 4.80
0006 500.. 4.30
MS 0007 250..
4.00 MS 0007
500.. 3.50
2199 500.. 5.50
2199
1000.. 5.00