Cargo movement in international trade by air is a complex commercial work done by air freight forwarder in import and export. The cargo freight movement has a considerable scope for error and abounding risk for small mistakes and large ones.
For example, cargo is misrouted, the documentation is wrong, or cargo is improperly labeled.
The air freight forwarder must avoid making even the smallest error. An error may lead to high costs or the loss of a client. An error in cargo handling can have far-reaching consequences, out of all proportion to the size of the shipment in question, which may include legal proceedings.
The air freight forwarder (or consolidator) is also an IATA-registered agent.
Table of Contents
- What is an IATA and its functions?
- Roles an Air Freight Forwarder in Import and Export plays
- Services an Air Freight Forwarder provides to an Exporter in an Export shipments
- Services an Air Freight Forwarder provides to an Importer in an Import shipments
- Conclusion
What is an IATA and its functions?
The International Air Transport Association (IATA) is the global trade association for the airline industry. IATA member airlines account for over 80% of total air traffic
Functions of International Air Transport Association (IATA):
- To promote safe regular and economical air transport for the benefit of peoples of the world, to foster air commerce and to study the problems connected therewith
- To provide the means of collaboration among air transport enterprises engaged directly or indirectly in international air transport services
- To cooperate with the International Civil Aviation Organization (ICAO) and other international organizations
Roles an Air Freight Forwarder in Import and Export plays
The forwarder specializes in consolidating different shippers’ traffic into one shipment for movement by a carrier to one single destination.
2 very essential roles an airfreight forwarder plays are:
- It is responsible to the shipper as principal in the transportation of the goods moving on a consolidated basis under the forwarder’s own house air waybill (HAWB)
- It acts as a principal in the relationship with the airline for the carriage of the whole consolidation as a single shipment.
An air freight forwarder can provide better freight rates for a shipment to an export or import customer than the air lines.
Services an Air Freight Forwarder provides to an Exporter in an Export shipments
- Monitoring door-to-door movements where the cargo is always under the control of the consolidator
- Offering lower than IATA carrier freight rates for consolidated cargo
- Making extensive use of unit load devices (ULDs), or aircraft containers and pallets
- Offering direct fax or electronic communication with their office at the point of destination
- Offering full export documentation services
- Negotiating air freight rates based on annual tonnage to specific destinations
- Offering various levels of service, such as deferred services for less time-sensitive shipments, that once again reduces the air freight costs
- Tracking and tracing shipments
Services an Air Freight Forwarder provides to an Importer in an Import shipments
For import shipments the air freight forwarder has a network of overseas offices and/or agents who will represent the needs of the importer at destination. List of services for import shipments are:
- Arranging pick-up at the point of origin, using their overseas office and communicating pertinent details electronically or by fax
- Offering consolidated import air freight rates
- Contacting vendors for shipping readiness
- Tracking and tracing
- Giving pre-advice of arrival, so that the importer can be made aware of the shipment before it actually arrives at the point of destination
- Managing purchase orders and vendor compliance
- Cooperating with a customs broker to arrange customs documentation and clearance formalities at the point of entry
- Cooperating with a customs broker to prepare customs forms to allow for temporary importation of goods, i.e., for repair or for exhibitions
- Cooperating with a customs broker to reclaim duties paid on temporary importation when the goods are re-exported
- Cooperating with a customs broker or agent to prepay duty and taxes where required and appropriate
- Offering transport insurance
- Handling cargo claims
Conclusion
It is important to remember that the air freight forwarding responsibility goes beyond turning the goods over to the air carrier at point of origin.
The agent bears full responsibility to fulfill its contractual obligations until the shipment is finally cleared through customs and delivered to the consignee or to the consignee’s customs broker.
