Air Freight & Courier from China – Basics, Strategies & Issues Basics, Smart Strategies for Reducing Costs & Key Issues to Avoid

courier

About 30% of the questions I get about importing from China relate to courier & air freight, so this post has been overdue for a few years.

I have done quite a few posts related to sea shipping from China like here, here, here & here but haven’t addressed sending goods by air yet. To make up for all that delay I will try to make this a meaty post & dive deep into this subject.

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.

You can also Click Here to download an air freight & courier cost calculator & comparison tool that I quickly put together. It allows you to instantly compare whether it is better to choose air freight or courier depending on the dimensions & weight of your cargo.

Difference between Courier & 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? Click To Tweet

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).

courier2

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.

When is sending goods by Air a good idea?

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.

So the most common question that comes up at this point is, at what kind of volume does sending by sea become more feasible than sending by air? This depends on quite a few factors such as the “air freight” rate for the week (Changes weekly) & actual weight of the goods.

However, I have found that once you cross the 1CBM mark you can start looking at LCL sea shipping as an option.

Courier & Air Freight Calculations – Demystified

We find, importers, including experienced importers often get confused about how courier & air cargo costs are calculated. When a courier services company, forwarding agent or supplier quotes you on per kg basis, they are normally referring to the cost per kg of “Chargeable Weight”.

Chargeable weight refers to the higher of actual weight of the goods & the volumetric weight of the goods. Volumetric weight (also known as “dimensional weight”) is calculated by multiplying the dimensions of the carton and dividing it by the “dimensional factor”. 

Importers often ask suppliers for the weight of goods & take a quote from the agent based on the actual weight & end up surprised when they find a large courier bill, due to the fact that they were charged on volumetric weight, as it was higher than the actual weight.

confused

To add to this confusion, the calculation formula for calculating volumetric weight for “courier” shipments is different from “air freight” as the “dimensional factor” for courier is 5000, while that for “air freight” it is 6000.

This is where even experienced importers trip, when they are trying to decide between courier & air freight, as they use the same weight to compare options.

So let’s look at an example.

android tablets

Product: Android Tablets
Qty: 500Pcs
No. of Cartons: 10 Carton
Dimensions (Cm): 80 x 50 x 40
Actual total Weight of 10 Cartons: 200Kg.
Volumetric Weight (Courier): ((80x50x40)/5000)*10 = 320Kg
Volumetric Weight (Air Freight): ((80x50x40)/6000)*10 = 267Kg

As the volumetric weight exceeds the actual weight of the cargo in the above case, the courier charges would be based on 320kg & air freight charges based on 267kg.

You can download this easy excel templatewhich has in-built calculations to help you calculate the cost under various scenarios & allow you to choose the best option.

In-Motion Dimension Scanning

Important: Modern day courier companies use advanced laser scanning machines to calculate the volume of cartons. This means, even a small bulge in your cartons can lead to a significant difference in volume.

Here is a little video that shows how these scanners work.

If your cartons have any sort of bulging, depending on the nature of the goods & packaging, it can also risk the safety of goods in transit & therefore this should be one of the checkpoints on your quality control checklist for the pre-shipment inspection of goods.

Courier Vs. Air Freight – Which one to Choose?

So how do you decide between courier & air-freight? As with sea-freight, there is a fixed cost at each end for customs clearing, forwarder’s fee, and domestic trucking, therefore using courier is normally a no-brainer when it comes to small packages & samples.

Continuing with the above example, let’s say you were importing goods from China to the US & were quoted $5/Kg for courier & $4.5/Kg for air freight, your costs would be:

Door to Door courier: $5 x 320Kg = $1600
Air Freight = $4.5 x 267Kg = $1200

But wait, there is a reason why importers find comparing these quotes confusing. Let’s assume under both cases you have bought your goods on EXW Basis, in this case, using air-freight you would need to pay for:

  • 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

haulage

Let’s assume that as a ballpark figure these come to $300 in China & $450 in US, so a total of $750. So now our options look like this:

Door to Door courier: $5 x 320Kg = $1600
Air Freight = $4.5 x 267Kg = $1200 + $750 = $1950

In the above scenario, courier is clearly the better option. To add to that, another important consideration is that express courier in almost always the faster option unless you have chosen for one of the super-slow courier services which tend to be cheaper and your package goes on a world tour for 7-10 days before reaching its destination.

So, the key question is, at what point does air freight become more economical than courier? From my experience of sending out 1000’s of courier & air freight shipments from China over the years, I find that in most cases, at around 400-500Kg chargeable weight, the “total cost” of air freight starts to become cheaper than using air courier.

In the attached calculator for example, if you change the number of cartons from 10 to 20, you will find now that the total dimensional weight goes to 533Kg and in that case air freight is a cheaper option than courier.

For weight below the 500Kg mark, using air courier is also a simpler option than air freight, as you do not have to worry about dealing with forwarders etc. which means you can use that time to focus on other key areas of your business.

Key Issues to be Aware of when it comes to sending goods by Air

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. Damaged-goods Why does this happen?

  1. 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.
  2. Packaging, especially the quality of cartons is an area where suppliers do like to cut corners when possible to cut costs.

2. Expensive Surprises

For some reason which I am yet to understand, Chinese factories often miscalculate the correct volumetric weight of goods, especially before the goods have been produced. This has been a constant issue for us especially when working with new factories.

surprise

You would believe that a factory making standard products and sending them out regularly would have mastered the volumetric weight calculations, but there is often a big difference in “volumetric weight” informed by the factory to the client and that measured by courier companies. This often leads to an expensive surprise when the importer receives the invoice from the courier services company or forwarder.

3. FOB Quotes Changed to EXW

When getting quotes on B2B websites, suppliers often quote on FOB basis. However, importers often end up getting goods by courier or getting goods from multiple suppliers sent to one consolidation location.

This normally means, this you are essentially now getting the goods on EXW Basis, i.e. the suppliers quote included their expenses for “customs clearing” in China but now they do not need to do this. Many importers, in this case, end up paying more for logistics.

Therefore, it is important that you decide on your logistics plan early. If you are planning to consolidate your goods or use courier an EXW quote is a better idea than an FOB one.

4. Risk of Pilferage

There is always a small risk of pilferage when opting for “air freight” as the goods go through several hands. This is something that applies to LCL shipments too. My experience over the years has been that this risk is quite small in China, however we do see more cases of pilferage in “developing countries” at destination port as opposed to developed countries. This risk can be minimized to some extent by “smart packaging”. pilferage

5. Changes in Courier & Freight Quotes

Many importers ask us to quote for a courier shipment that will be ready after a long period of time. We have to tell them that we can quote them however the quote would only be valid within that week. This is because like “sea freight” rates, courier & freight rates update weekly, primarily due to the “Fuel Surcharge” element which is linked to oil prices.

Therefore, you should always get a fresh quote once your goods are ready. This, when combined with re-confirming the volume of goods will also help avoid expensive surprises and can often result in good news if the rates fall.

Smart Strategies for Reducing Costs when Importing by Air

By making small changes to your goods & packaging you can significantly reduce your air courier costs.

save

1. Fully use the carton space

Leaving empty space in cartons (or containers) is almost a crime when it comes to international trade. When you do this with LCL shipments you can get away with a little impact on your margins but with air cargo & courier this does add up and eats into your margins.

Packaging Tip for China Imports Click To Tweet

To avoid this, you should ensure that you give specific packaging instructions to your suppliers & ensure that no space is wasted.

Other than the cost benefits of doing this, this also helps minimize “damage in transit” as cartons with free space often get damaged as heavier cartons are put on top of them during their journey to your warehouse.

stealing

Smart suppliers will normally do this for you, especially selling on FOB basis however when importing from China, it is normally a good idea to be proactive about these things.

2. Package Design

This is an area where you can get really creative & something that often gets ignored, especially with small & mid-sized importers. A lot of the private label sellers for example like to differentiate themselves by going for “premium-packaging” which is a great idea.

  creative package
However, sometimes the packaging is extremely bulky while the product is tiny, in an attempt to copy the premium package designs of branding stalwarts like Apple. This is a great idea if your product has the same price tag as an iPhone, however, this can really eat into margins when your product sells for anything under $50.

Pro Tip: In the e-commerce/Amazon space, competitive advantage can often be gained by spotting products selling well & coming up with a package design that makes your “logistics costs” half of that of the competition.

3. Product Design Changes

The above concept can also be applied to product design, although this might not always be viable for smaller importers. Being creative with things like the type of charger to use or the size of an accessory can all help reduce package size, which results in logistics $$ saving.

4. Type of Courier Service

When using courier services there are a lot of services that many importers are not aware of that can help cut costs significantly. I am not referring to the choice of companies here although different players like DHL, Fedex, UPS, etc. do have different pricing & routes where they are strong.

Courier companies offer large discounts to forwarders or accounts with large volumes, depending on the volumes you are shipping which is why it is often expensive to go directly to a courier company.

We for e.g. at IMEX Sourcing Services have at least 8 different types of courier services depending on the speed vs. cost preference of clients.

5. Tiered Pricing

The pricing in courier industry is often on tiered basis, therefore if you have been quoted $5/Kg for 200Kg and you do 4 shipments a month & your cash flow allows you to do 1 shipment a month instead, this means, you may be able to get access to a lower price if you were to do a single 800Kg shipment.

I think you will find this theme repeats itself everywhere when it comes to international trade, i.e. increase the volume to reduce your “unit costs”, whether its pricing from suppliers, quality control companies, logistics, lab testing or pretty much anything else.

Final Words

Choosing the right mode of transport in the right situation is something that will come naturally to you once you have done a few shipments, however by making small changes to your product & packaging, planning in advance and understanding the numbers, you could make significant savings in logistics costs which ultimately boost margins.

If you found this post valuable please spread the love by sharing the post using the share buttons on the left. It helps this blog get found & provides me the motivation to keep writing. As always, If you have any questions about shipping from China by air freight or courier please feel free to ask in the comments section below.

Click here to Download the Air Freight & Courier Cost Calculator & Comparison Tool Excel Template

Ashish is the founder of IMEX Sourcing Services, a sourcing & QC company helping people importing from China manage their costs & risks as well as develop new products. Ashish also does consultancy work in the field of International Trade & Import Risk Management & loves to write during his free time.

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  • Hi Sarah,

    Its hard to say if its over-priced or not without knowing the “chargeable weight”, which is the higher of the “actual weight” and “volumetric weight”. Depending on the volumes you do using your own accounts and the courier margin your supplier may be adding, using your account may or may not be cheaper. The best way to know for sure would be take the chargeable weight from the supplier and get a quote.

  • Jasper Whiteside

    Your examples of costing from courier to freight were very helpful. Thank you for doing the math to illustrate the point to me. Any opportunity to save a little money is helpful and having a little more background knowledge helps me as a decision maker. I had assumed that because “courier” sounds more fancy than “freight” that courier would cost more. Turns out that’s not the case!

  • Thanks Divya. Glad you are finding it useful.

  • Great post. Very informative blog u have posted…….

  • Hi Will,

    This sound like a perfect case of what we call “Quality Fade” in China, i.e. the quality of a product going down over a period of time as suppliers like to cut costs to improve margin once the buyer has been around for a time. The best way to deal with is to define the product specs in a lot of detail, including brands/make/model of key components.

    “We will send you replacements on a next order” – This is also a well known strategy factories use to ensure you keep coming (A variation includes, sending less items than you ordered and asking you to adjust on the next order). You could try bluffing and ask the supplier to send you replacements for the 118 units before you place your next order and see how they react. If they really value your business, they should agree.

    Like you said, this could also be a case where they had one faulty batch that they wanted to get rid of you and they passed that over to you.

  • Will

    Hi,

    I’ve been ordering a certain product off of a supplier over Alibaba for over a year now, it sells like hot potatoes here in the UK and I’m doing quite well of it, I order around 300 units at a time, and but my last 2 orders had faulty units as follows.

    Previous order: 12 units faulty out of the 300

    Last order: 118 units faulty out of the 300

    On my previous order, I couldn’t care less about the 12 units as mostly it’s probably because of damage during transit but on my last order I almost had a heart attack so I contacted the supplier and their response was:

    “We’ll send you the replacement with your next order”

    Is this a normal response from China Wholesalers? As i’ve said I’ve been dealing with this supplier for a year and all of my previous orders were excellently wrapped but my guts are telling me to find a new supplier because these guys have faulty stock!

    I’d love some feedback or opinion on this matter.

  • Hi Will,

    This sound like a perfect case of what we call “Quality Fade” in China, i.e. the quality of a product going down over a period of time as suppliers like to cut costs to improve margin once the buyer has been around for a time. The best way to deal with is to define the product specs in a lot of detail, including brands/make/model of key components.

    “We will send you replacements on a next order” – This is also a well known strategy factories use to ensure you keep coming (A variation includes, sending less items than you ordered and asking you to adjust on the next order). You could try bluffing and ask the supplier to send you replacements for the 118 units before you place your next order and see how they react. If they really value your business, they should agree.

    Like you said, this could also be a case where they had one faulty batch that they wanted to get rid of you and they passed that over to you.

  • Hi Amichai,

    This would depend on the volume per country. For countries where you have significant volumes, say 100-200Kg/Shipment, it might be cheaper to send as one shipment and split in the destination country, for smaller parcels, it would be better to send as individual shipments from China. You also have to consider if speed of delivery is a factor, as splitting in destination country may add a couple of extra days to the process. Finally, it depends on whether the cost at destination for someone to split the parcels for you and forward then on is reasonable or not as this could quite expensive in some of the developing countries. If you are picking random service providers at destination to manage this process, is also exposes you to some risk of goods being lost.

  • Hi Himanushu,

    Sorry for the very late reply to this. This depends on a lot of factors like, which country you are importing into, where you are getting the quotes from etc. It will almost always be cheaper to get quotes from agents than going direct to Fedex, DHL, etc. as agents have high-volume accounts with the couriers and hence get much better rates then you would get directly. In terms of whether or not you should trust a random provider on Alibaba, this is the same as trusting any service provider/supplier, you need to carry out your due diligence & make a call. You probably have already shipped this out, but we also have a courier service that you may want to look into for future shipments.

  • Hi Alan,

    Yeah I have heard a lot of stories like that and hence this post :). It can totally kill your margins but I guess that’s part of the steep learning curve of importing from China or from anywhere for that matter,

  • Thanks.

  • Thanks.

  • Will

    Hi,

    I’ve been ordering a certain product off of a supplier over Alibaba for over a year now, it sells like hot potatoes here in the UK and I’m doing quite well of it, I order around 300 units at a time, and but my last 2 orders had faulty units as follows.

    Previous order: 12 units faulty out of the 300
    Last order: 118 units faulty out of the 300

    On my previous order, I couldn’t care less about the 12 units as mostly it’s probably because of damage during transit but on my last order I almost had a heart attack so I contacted the supplier and their response was:
    “We’ll send you the replacement with your next order”

    Is this a normal response from China Wholesalers? As i’ve said I’ve been dealing with this supplier for a year and all of my previous orders were excellently wrapped but my guts are telling me to find a new supplier because these guys have faulty stock!

    I’d love some feedback or opinion on this matter.

  • Amichai Hornstein

    I’m interested if you could advise me, I’m looking to ship from China to a bunch of places around the world (from the port to the customers’ doors). There are over 70 countries to deliver to with the minimum about 15/18 volume kgs (frieght/courier). Some countries there’s only one order in the country. Is it better to send product to the continent/region and disperse it through there? Or should each country get a shipment on it’s own?

  • himanshu

    Hello. I just need to import 20kg from china.
    which service should i use? dhl fedex etc are not feasible to me because they are charging INR1500 approx per kg. So I searched on alibaba for china to india courier and one lady offered me pretty much good rate. So should I trust her? if no, so which is the cheap service to import low weight shipments?

    Please help.

  • Alan

    First time here, great post!

    Brings back memories! When I first used air freight 5 years ago, the bill was 30% higher than I expected due to the difference between actual weight and volumetric weight, they didnt tell us until it arrived though! Which as you can see, really killed the margin!

  • China Sourcing Scientist

    This is a terrific breakdown!

  • Ashish Monga

    Glad you found it useful Steve.

  • Steve Lelew

    This post was extremely helpful.

  • Elizabeth Shi

    Hi Colin,

    Pls ignore the UK bit, that was just for example. The same calculation formula applies, irrespective of the country you are importing into. The costs given are for illustration purposes only and its very hard to estimate these, as these depend on several factors, for e.g. your distance from the airport. “Domestic trucking” is a major element of the cost and depending on the distance can vary significantly. Also “air freight” rates change weekly. Thanks

  • Colin

    Thanks for providing the Calculator excel tool. My question is: I notice the tool says it is for importing to the UK…what adjustments should be made to the estimated costs, if the goods are instead going to the east, or west, coast of the US? Thanks

  • Ashish Monga

    Hi Natalie,

    This could be a whole post in itself, but it comes down to how accessible your forwarder is, their quote for the job and most importantly their “Transparency” in pricing. Hidden costs are a big problem in the forwarding industry therefore having some who is upfront about all costs really helps.

  • Ashish Monga

    EMS is not the most reliable service out there and we have seen shipments take anywhere from 7 days to 35 days and even shipments that never arrive. Their tracking is not very reliable either. It is normally a good idea to stick with the major players like DHL, Fedex, UPS & TNT.

  • Ashish Monga

    Hi Thomas,

    Chinese suppliers would often do this. Legally the importer is responsible for ensuring that the correct value of goods is declared to the customs and supplier has no liability, so if the supplier does this and you “accept” the duty charged, you are technically breaking a law. As the amounts are too small people do this and customs cant be too bothered, so this is more of an ethical decision for you to take.

  • Natalie

    When moving goods via air freight I understand now that I need a forwarder or a clearing agent to help clear my goods. But I think navigating with a whole lot of freight forwarders can be difficult as who to trust, etc. Any tips?

  • Glory

    Shipping from China seems to take like, forever?! I have ordered some products from China via an online seller. The seller confirmed the receipt of payment and shipped my product that night. My products isn’t battery-operated or something illegal. It’s been a week now, and on the EMS website the status of the product hasn’t been really updated yet. Should I be worried?

  • Thomas

    Great blog post this was really informative but I am hoping that I could learn more? Here’s my case: I am about to place an order from my supplier in China (baby products), and in order to lower the costs of tax and duty my supplier advised me to lessen the price that is to be reflected on the invoice. I know that this might be fraud of course but do you think this is a great idea to cut costs? Let me hear your thoughts on this as I prefer to hear the opinion of someone knowledgeable on the matter. Cheers!