Air Freight & Courier from China – Basics, Strategies & Issues
Courier & Air freight are two popular modes of importing goods from China. New importers often do not understand the difference between“couriers” & “air freight”so this post goes into the differences as well as looks at when it is a good idea to send your goods by air as opposed to sea, which air channel to use, key issues to avoid when shipping cargo by air & some strategies to reduce costs when using courier or air freight. Before we get into the nitty-gritty of choosing between air & Sea as well as between courier & air freight, it is important we look at the difference between “courier” & “air freight”. How is air courier different from air freight? Courier, also known as “express” is basically a “door to door” service, where the courier company will get your goods from Point A (normally your suppliers or consolidators address in origin country) to Point B (Your delivery address in destination country). They will manage all the processes required in getting the goods from A to B, i.e. local pick-up & delivery, customs clearing at origin & destination port, payment of taxes & duties (They will bill you for this bit separately), etc. Popular courier companies are DHL, Fedex, UPS & TNT.Air freight on the hand is essentially am “Airport to Airport” service, as opposed to a “door to door” service. This means, the carrier is responsible for taking the goods after they have cleared customs at the origin airport & delivering them to the destination airport.A customs clearing/forwarding agent is required at each end to clear the goods & arrange further delivery to your door. Air freight is often, also referred to as “air cargo”.Your trade terms with the supplier will dictate who arranges for & pays for the forwarding agent at origin & destination. For e.g. if you are buying FOB, your supplier will clear the goods at origin port, while your nominated forwarding agent will do so at the destination port & arrange for the goods to be sent to you from the airport. “Air freight” services are provided by many of the large express courier companies like DHL & Fedex as well as passenger airlines. Most passenger airlines have space to accommodate commercial cargo and this roughly accounts for 10% of their revenues. The decision on whether to send your goods from China using an air cargo service or via sea shipping is a function of three key factors, i.e. the volume of goods, weight of goods & the value of your merchandise. Using air freight is normally a good idea in the following cases:
- For sending samples.
- For high value – low volume goods (that are not extremely heavy), e.g. Tablets, Watches, etc.
- When your goods are time-sensitive or there is an urgent requirement.
- When you want to keep your cash-conversion-cycle (CCC) short as compared to sea, air shipments tend to take much less time.
- Haulage/domestic courier from factory to the airport
- Customs clearance costs & forwarder costs both in China & USA
- Haulage/domestic courier from the airport in US to your door
1. Damage in Transit:When sending goods by air, it is important to ensure that you avoid damage in transit by being specific in your instructions to the supplier about your packing requirements. This should look at both the packaging used to protect the product as well as the quality of cartons. I have seen a lot of cases where goods that were perfectly OK when they left the factory ended up with all kinds of damage by the time they hit the importers warehouse.Why does this happen?
- People handling these cartons are not always too kind to the packages and often throw them around & when you are importing from China, those large “Fragile” stickers often don’t work either.
- Packaging, especially the quality of cartons is an area where suppliers do like to cut corners when possible to cut costs.