What Your Freight Forwarder Actually Pays

Note: This page assumes you've read the Direct Master AWB page.

Your freight forwarder won’t be too pleased with this article, so let us first make it clear that the information we’re providing here is all publicly available. We’re merely detailing it in a comprehensive and simplified format so that you may make an informed decision when consigning your freight and/or comparing freight forwarders.

That said, let us begin.

Air Freight cargo is shipped via a Unit Loading Device (ULD) that fits snug in the belly of the plane. There’s varying sizes of ULD’s for which the airline cargo agents charge different rates.

Freight forwarders consolidate multiple consignee’s cargo into one ULD, under one MAWB (i.e. Consolidated AWB Cargo). They then allocate multiple sub-bills, known as House Air Waybills (HAWB), under that ULD’s MAWB as illustrated below.

Airline Cargo agents only report the MAWB to customs and charge a reporting fee for that service along with an International Terminal Fee (ITF) depending on the size/weight of the ULD cargo in question.

Airline Cargo Agent Document/Reporting Fees per MAWB:

Qantas: $54.00/AWB (Qantas Terminal Fees)

Dnata: $52.88/AWB (Dnata Terminal Fees)

Menzies: $54.00/AWB (Menzies Terminal Fees)

Airline Cargo Agent International Terminal Fees (ITF)

In addition to the above document/reporting charges, your forwarder will pay the below terminal (i.e. cargo unloading) fees. The three cargo agents in Australia charge differently in these regards, Menzies and Dnata charge per kg rates, whereas Qantas has a flat fee per ULD size.

Dnata ULD Terminal Fees: $0.055/kg - Min $50.45

Menzies ULD Terminal Fees: $0.135/kg - Min $52.50

Qantas ULD Terminal Fees:

Quantifying the Costs

Using an example of a typical clothing consignment of 100kgs, being 4 boxes each 40 x 40 x 60cm, totaling 0.58 m3 or a volumetric weight of 96.86 kgs (1m3 = 167kgs).

Note: We use this example because one of the most common imports is clothing and based on a dozen actual consignments, the weight to volumetric variance for this commodity is just +/- 2%.

Depending on which airline (and therefore destination cargo agent) that your freight forwarder has consigned the cargo with, they would pay one of the below Qantas/Dnata/Menzies terminal fees for the above example consignment.

What Your Freight Forwarder Actually Pays (for a typical 100kg consignment):

Via Qantas: $9.15  (Docs: $54/14 = $3.86; ITF: $75/14 = $5.29)

Via Dnata: $9.28  (Docs: $52.88/14 = $3.78; ITF: $0.055/kg x 100kgs = $5.50)

Via Menzies: $17.36  (Docs: $54/14 = $3.86; ITF: $0.135/kg x 100kgs = $13.50)

Calculation assumptions: That the forwarder has used one of the most common UDL’s (LD6) and only filled it to 90% capacity with comparative consignments. i.e. the ULD contains 14 consignments each being 100kgs @ 0.58m3 = 8.12m3 / 1400kgs total volume.

Conclusions

In most cases your freight forwarder is paying under $10 in airline terminal charges for your consignment, as Qantas and Dnata hold the majority market share.

So why are they charging you $250 - $450? Well they do provide two additional, albeit unnecessary and easily avoidable, services. They move the cargo back to their bond (typically in the same/adjoining suburb) and they report the HAWB to Customs via submission of an electronic Air Cargo Report (ACR).

An ACR contains basic consignment information from the HAWB such as consignor/consignee details, origin/destination ports, weight/pieces and the like. All this information is electronically transferred from the origin forwarder to the AU forwarder, therefore in most cases submitting an ACR is a 2-minute process - they simply click ‘send’ to on-forward the origin data they’ve received to Customs.

For full details, refer Freight Forwarder Invoices, Fees and Services Explained to find out what you're really paying for.

The Good News... There is an Alternative.

The Direct Master AWB

If your feel that you’re being overcharged by your freight forwarder for the services they’re providing you, there is an alternative. You can cut them entirely out of the picture with a single email instructing your supplier/origin forwarder accordingly, for full details refer our article on How to Save up to 75% on Air Freight Port Charges.

Need More Info?

If you’ve got questions about air freight clearances and/or Direct Master AWB procedures, please refer our Air Freight Customs Clearance page. If you don’t find what you’re looking for there, you can peruse the Air Freight FAQs, and if you’ve still got questions, give us a call on 1800 670 978 and speak to a licensed customs broker.

Note: All per kg rates are based on the greater of actual weight or volumetric weight where 1m3 = 167kgs. All prices quoted above are excluding GST, based on general cargo and current as of January 2020.