Why can't you provide costing for small shipments by Air?

Cost estimation of small shipments transported by air is one of the most difficult parameters in international logistics, which is the reason Hula Global doesn't give fixed or guaranteed air freight costs for small shipments.

We reimburse time and resources by using a one-of-a-kind automated system that provides provisional estimates; however, these provisional estimates can be significantly different from the actual cost of shipment. This is not due to carelessness or lack of attention, but it is due to the extreme volatility in international air freight.

Since 2020, international logistics have been greatly affected by a series of global disruptions. Global events, pandemics, wars, which have been coupled with geopolitical tensions, oil price increases, and a lack of transport capacity, are all contributors to the way the air freight system works. The unpredictability and surges of these phenomena have created spike and drop intervals in the price of air transportation.

Consequently, estimates made even a short time in advance have been changed, and are completely different from the price of transportation when the goods are finally ready to be dispatched.

Air freight consists of dynamic pricing, similar to the pricing structures of airlines for passenger travel. Just like how travel between two cities has ticket prices that change based on the demand, number of available seats, fuel prices, and season, so do air freight services.

To put prices in the air freight industry into perspective, one must take into account the following: the volume of cargo for particular routes at a given point in time, the available seats on the airline, the urgency of the shipment to be freighted, peak seasons, and shifts in global trade.

Due to the factors above, air freight pricing still cannot be determined until all the shipment details have been finalized: the shipment must be fully prepared, packed, weighed, and finalized for dispatch.

This pricing volatility affects smaller shipments. In contrast to large-volume shipments that have the potential to negotiate or contract their rates, smaller shipments with air consignments are simply subject to rates that are based on spot rates.

These rates change based on short-term market fluctuations, which can occur daily or hourly. Weight, size, and routing variations can impact the overall costs of smaller air shipments. Because of this, estimates for smaller air shipments are often unreliable at the very beginning of the pricing stage.

Another factor to consider is that air freight costs are calculated using chargeable weight, which is derived from the comparison of actual weight and volumetric weight. For small shipments, the dimensions of the packaging can disproportionately impact the final price.

Packing the goods is the only way to find out the chargeable weight, which creates a problem. That means that if an estimate is given before dispatch readiness, it is bound to be provisional, and the amount can differ from the actual chargeable weight by a huge amount.

Another factor that affects air freight pricing uncertainties is global capacity constraints. The belly holds of passenger jets are a critical part of the world’s air cargo system. Consequently, when passenger flight schedules are disrupted or cut back, the available cargo capacity shrinks, and prices increase.

Since 2020, travel bans, route cuts, and shifting priorities among airlines have resulted in capacity disruptions. These issues are especially problematic for small shipments, which are more likely to be bumped or repriced at the last minute, depending on availability.

Also, surcharges such as fuel/X-ray/security, congestion, handling, etc., are external cost factors that can fluctuate. These are usually added by either an airline, an airport, or a governing body, meaning there is no way for a manufacturer or sourcing partner to control or mitigate them.

Even with a preliminary cost estimate, these added factors can change, particularly as the shipment date approaches, causing a greater distance between predicted costs and actual costs.

At Hula Global, transparency and accuracy take precedence over false certainty. While our automated system, for instance, can provide indicative air freight estimates to assist with preliminary planning, we are reluctant to fixed costing for minor air shipments.

Committing to fixed costs creates expectations that may not be met. Providing a fixed price without proper planning can result in a terribly inaccurate final cost, leading to buyer confusion and increasing the likelihood of buyer dissatisfaction.

One more thing to consider is that, in addition to our core purpose of apparel manufacturing and product sourcing, we consider logistics to be a secondary service.

Air freight is an international service that is complete in itself, having its own services, and therefore its own complexities, pricing, and risks. While we help buyers with the logistics, we guide them to understand that the final air freight costs are completely driven by the market conditions at the time of shipment.

Buyers are encouraged to use air freight estimates as benchmarks instead of final commitments. These benchmarks are useful for option comparisons, budget planning, and timeline assessments, but should not be viewed as firm costs.

Final air freight costs can only be determined once the goods have been finished, measured, and space has been secured with the carrier.

For buyers who need greater certainty of costs, alternative shipping methods or consolidated shipments may be possible. Customers need to contact Hula Global directly for detailed guidance, updated estimates, and logistics planning support. This addresses the need for current and practical shipping condition information to support decision-making.

Wanna get in touch with us? You can also book a 1-on-1 Call Session BOOK NOW