Ihab Salloum[ad_1]
Yo, listen up. Every importer out there has been in this situation, man. I’m talking about the decision of whether or not to consolidate. And a lot of people make that decision without even thinking about what consolidation is and how it works.
The economy moves fast, my friend. And every company has to keep up with the speed. Technology is growing, demands are growing. And in the manufacturing game, you gotta have everything you need, whether it’s machinery, parts, packaging, or tools, and you need it ASAP.
Now, there are some companies that don’t even bother with a warehouse. They think having goods in the warehouse is just a waste of money. They want their orders delivered “just in time,” straight to the production line. And I get it, it’s all about managing those figures. But man, there are so many factors that you can’t predict. There are hidden risks that can really mess things up.
Sea freight is cheap, bro. But the problem is, it takes a long time. Yeah, it’s better for the environment, but a lot of companies can’t afford to wait. So now you got economy and ecology clashing with each other, my friend.
Now let’s talk air freight price, my man.
It ain’t just about the weight, my dude. The volume of the shipment is taken into account too. You’re paying for the space that freight takes up. If the volume is bigger than the weight, then that’s what they’re gonna use to calculate the price. They use cubic meters to measure volume, and you find that by multiplying the length, width, and height of the goods.
For example, let’s say you got a shipment that weighs 75 kg and measures 1.2 x 0.8 x 0.8 meters. The volume would be 0.768 cubic meters. Multiply that by 166.6666 (and don’t round it off, trust me), and you get 127.99. According to IATA rules, you round that up to the next 500 gm, which is 128. So that’s the volume weight of your shipment. If the gross weight is higher than the volume weight, they’ll use that to calculate the price. So let’s say the gross weight is 130 kg, then they’ll base the price on that.
Now, let’s talk about direct consignments, my dude.
A direct consignment is when the shipment is sent straight to the consignee and the freight forwarder ain’t involved with the consignee. The company you bought the product from is the consignor, and you’re the consignee on the air way bill. The freight is handed over to the airline right after customs clearance. The air way bill that goes with the shipment is called an IATA air way bill. The freight forwarder is the one responsible for flying the cargo. Once they hand it over to the airline, their job is done. It’s up to the consignee to find a broker to deal with the airline and get the freight cleared.
Now, let’s get into consolidation, my man.
When shipments are going to the same destination from different shippers, they’re all booked under one master air way bill. Each shipper gets a house air way bill. The freight forwarder can negotiate a better rate this way, which benefits each shipper or the consignee. It helps keep the price down, man. The cost is spread out over multiple shipments. Consolidations usually leave on the weekends, depending on the amount of business. Some forwarders might set up bookings for midweek, too.
Now, here comes the deconsolidation, bro.
The master air way bill goes to a freight forwarder at the destination airport. It’s their job to split up the consolidated cargo into individual units. This is done in a bonded warehouse at the arrival airport. By doing this, the handling charges at the airport get spread out over a bunch of shipments, which lowers the individual prices. But keep in mind, deconsolidation takes time, man. It ain’t good for emergency shipments.
So, should you consolidate or not?
Based on everything I just laid out, man, if your shipment ain’t super urgent, then yeah, consolidation is the way to go. It’ll save you a ton of money. But remember, not every forwarder flies a consolidation to the specific airport you got in mind. So keep that in mind, my friend.
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