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Have you ever been stuck at a stop spot because your freight volume couldn’t fit in with the cost of full air cargo load? Are you a company who ships products? Do you spend too much to move your inventory? Or maybe you are searching for cheaper air freight services.
Maybe you already knew, or maybe not!
BowaGate Global can guide you through the entire process of a Cheaper Air Freight Consolidation, and at best, most reliable.
Based on that, having gathered over two decades of experience and expertise, we are in a good position to educate our readers on what Air Freight Consolidation is about.
In our earlier post on Groupage (LCL) freight shipping, it was clear that grouping shipment is a cheaper means of freight shipment. You should take a look at the post here.
While Groupage (LCL) is a ‘grouping service’ that pertains to Sea Freight Shipping, Freight Consolidation is a term particularly used for Air freight. And while Container is used for Sea Shipping, Cargo Console is a term which applies to Air Freight.
What is Air Freight Consolidation?
Air Freight consolidation is an air freight shipping in which a freight forwarder combines several small individual shipments at the place of origin, bundles them into a full busload, a truckload, cargo load, heading the same location and ships them together.
This arrangement allows the goods to be shipped as containerized-cargo that offers greater security at lower shipping rates.
The shipments are registered in a manifest which carries details of everyone who has a consignment in the cargo. with individual consignees details in the collection.
At the destination airport, the shipment is ‘degrouped’, that is, separated back into the original individual consignments for delivery to their consignees. This step is also called ‘deconsolidation’, also regarded as Group Shipment.
Another name for Freight Consolidation is Cargo Consolidation or Consolidation shipping. No matter what is called, it still serves the same concept.
Air Freight Consolidation service can be beneficial both to the customer and to the freight forwarder, in many ways.
4 Reasons Why You Should Consider Air Freight Consolidation
- It lowers freight costs: Combining your freight in a single cargo a cost-effective way of shipping by air. In this, you no longer have to pay for empty cargo space in the aircraft because you’re not shipping you don’t have enough shipment to fill the entire mass. Partnering with other companies offers a cheap way of shipping by air. In this case, you only pay for the space your cargo takes up and nothing more. Air Freight shipping is quite expensive than other modes of shipping, so Air freight consolidation makes it much of a relief. You can split your shipments and fill them up in various cargoes.
- Safety Advantage: Air Freight shipping comes with huge advantage, one of which is Safety and transparency. Since your products are coming in Air Freight, however, consolidated, it accords you the same advantages as a full cargo load. Odd things happen during shipping. But freight consolidation actually reduces the risks. Another factor to note is that items in consolidation don’t have to be moved with too many transfers, as it comes through the Aircraft
- Improve Customer Satisfaction & Improve Customer Relationship: Apart from especially having reliable Shippers and Clearing Agents available, it ordinarily improves satisfaction, reliefs, and balance customer relationship.
- Customs Clearance Cost and Process Time Reduced: Importers in Nigeria always encounter some challenges when it comes to Customs Clearance involvement as well cost of clearing. The requirements by Nigeria customs service and other government agencies could be really problematic.
So, with Air Freight Consolidation, there is an obvious reduction in Customs Clearance Costs due to cut-cost on the customs benchmark charges for each shipment. The more the weight of the goods in tons the less the customs agencies pay for clearing the goods at the airport.
Let’s do some calculations.
Let us assume that an importer buys 50kg of goods from China. the rate he or she supposed to pay for the goods will depend on the Harmonized System (HS) code import duty of the goods. And the rate will also depend on the invoice value of the goods.
Let’s say he buys it with the value of 50, 000 USD and the import duty is 20% HS code
Import duty is 10,000 USD @ N365 NGN = 3, 650, 000 NGN
Port Surcharge 7% of import duty = 255,500 NGN
CISS 1% of CIF = 500 USD @ N365 = 182,500 NGN
ETLS 0.5% of CIF = 500 USD @ N365 = 91,250 NGN
VAT 5% = 2,500 USD @ 365 = 912,500 NGN
Total = N5,091,750
NB: Calculated at exchange rate of N365 per $1 (9th Sept. 2019)
Other charges at the port are warehouse charges, airline advice charges, agencies charges, FAAN charges.