Air freight can be expensive – most shippers already know this. But business owners who want to keep a lean inventory with the intention of reducing costs depend on air freight (instead of ocean) to move their products in a timely, more predictable manner. In fact, 41% of World Trade 100 readers cited the above reason when asked why they switched to airfreight from seafreight. So how can business owners optimize air freight cost?
Although airfreight is generally considered to be an expensive mode of transportation, combining airfreight with a strategic supply chain can result in overall cost reductions. However, air transportation itself can also be optimized to contribute to achieving cost reduction goals.
Several methods to minimize costs can be applied to both airfreight and sea freight. In our previous article, “6 ways to optimize ocean freight cost,” we provide advice about optimizing sea freight cost. Many of these will work with air cargo: consolidating several shipments into a single one, shipping in bulk, providing correct data, and auditing invoices. For more detail on these methods, check out the article itself.
Besides the above, there are several other ways to optimize your air freight cost:
Request all possible delivery times
You may find that freight forwarders provide a quote with only 1 or 2 options for air freight with the fastest delivery times. Request all the possible options: 3-5 days, 5-7 days, etc. This way, you will be able to choose the one that best suits your budget and your timing requirements. Remember to use the fastest services only when you really need the speed. Business owners usually make the mistake of choosing the fastest options when it’s not really necessary.
Ship as much volume as possible
The higher the volume, the lower the rates per kilogram. Rates improve on every level, above 100kg, above 300kg, above 500kg, and so on. Make sure to compare rates with LCL services, because, depending on the origins and destinations, the total cost might be cheaper with LCL once the volume reaches higher levels beyond 500kg.
Use your credit card rewards
Any credit card that offers rewards as miles or cash could be a great payment option. The more you pay with your card, the more rewards you will accumulate to use for future payments.
Combine air and sea freight
Do not stick only to one of the transport modes. Depending on the day your goods need to be delivered, it may be possible to use airfreight for one portion of the journey, and then consolidate the goods in a container for the rest. If done correctly, it’ll be less expensive than solely using airfreight, but much quicker than solely using ocean freight.
Check the trucking costs to your warehouse
Your distribution center’s location will affect the cost of trucking your cargo from the airport. Check the delivery rates and make decisions on transportation efficiency. If a low-cost warehouse adds too many delivery costs, evaluate your warehouse options.
Revise your freight classification
Are you still shipping your goods with a freight class assigned several years ago? If your products or packaging have experienced significant changes, it is possible that the freight class needs to be updated. Freight class have an important influence in shipping rates. Do your research and find out if you can apply for a less expensive product class.