Queensland is unique in Australia in that we have three international airports, Brisbane, Cairns and Gold Coast. Currently approximately 50,000 tonnes valued at nearly $900M of Queensland products are exported annually by air.

Craig Templeman
Executive Officer


Introduction

Air Freight provides a unique transport system to Queensland Exporters and potential exporters. The distinguishing feature of air freight is obviously SPEED, which offers exporters significant benefits by providing improved customer service for time sensitive products or where market demands vary.

Today's global trade demands fast, efficient and reliable distribution. Freight costs are just one component of the "total distribution costs" which include:-

• Warehousing
• Packaging
• Inventory Carrying Costs
• Cost of Funds
• Insurance

Just to mention a few.

One of the "keys" to air freight is he "value to weight" ratio of the product to be exported, obviously the higher the VtoW ratio the more likely the product can be successfully exported by air - conversly, products with a very low VtoW ratio may be unable to absorb the cost of air freight. As a guide many companies accept a freight cost of 10-15% of F.O.B. value as acceptable - but there are of course many variables.

Air Freight Council of Queensland Ltd
PO Box 606 - Albion - Qld - 4010
Telephone: +61 7 3860 5244 - Facsimile: +61 7 3860 5249
Email: afcqeo@westnet.com.au

Capacity
The vast majority of freight is carried in the bellies of passenger aircraft; aircraft capacity varies with aircraft type, passenger load and sector length, etc. Generally however, a B747 operating from Brisbane or Cairns to Asia can carry approximately 20 tonnes (with full passenger load). A B767 carries approximately 16 tonnes under the same conditions.

Most aircraft operating international services are containerized. Containers may vary with aircraft type, however, there are several "common" types. The more popular being:

• Code
• Internal Volume
• Max Wt
• LDI/3 (AV)
• 4.5 cm
• 1450 kg
• LD8 (DQF)
• 7.5 cm
• 2200 kg
• LD 7/9 (pallet)
• 10.5 cm
• 4400 kg

Like most industries there are peak demand periods for capacity to key markets, when capacity may become limited particularly on certain days. It is therefore important for exporters to plan and be flexible in terms of which day to ship. Obviously airlines allocate capacity during these periods to regular, reliable shippers.

Freight Forwarders (Cargo Agents)
All international airlines carry freight and generally have a policy of conducting their business through freight forwarders. The forwarder therefore plays an integral part in the air freight process.

Forwarders provide a range of services to the exporter, including;-

• Rate Quotes
• Recommended Carrier / routing
• Space Bookings
• Packing Advice
• Airline Container Loading
• Coolchain facilities
• Pickup and delivery
• Documentation / Customs, etc
• AQIS inspection facilities and advice
• Destination import services

Selecting a forwarder is perhaps the most important decision for an exporter. Many companies offer international forwarding services. A limited number however may be capable of providing specialist services.

Before making a selection research and seek comments from current exporters. The Qld Department of State Development publish the "Qld Freight Forwarder Directory", available from AFCQ or direct from Research and Evaluation Branch Industry Development at Queensland State Development.

Secondly, request information from the forwarder to establish their strengths and extent of overseas offices or affiliates - visit several forwarders premises to inspect their facilities, meet their staff and discuss your specific requirements where perishable products are involved (some forwarders specialise in perishables). Check coolroom facilities, distance from airport, trucking services - particularly the ability of the provider to maintain coolchain integrity (if required); days/hours of operation and staff skills/knowledge.
Finally, do not make a selection on price alone. Be prepared to pay a reasonable price for the service/facilities you require.

Surface Transport
Due to Queensland's geographic area and the fact that many areas of primary/horticultural production are often located a considerable distance from the international airport, road/rail transport plays a key role in air export. This is no different to what happens in Europe, U.S.A., and elsewhere.

Successful transport of temperature sensitive products depends on the maintenance of the "Coolchain" - that is the temperature from production, preparation, packing, storage, handling and transport to ensure temperature integrity throughout the whole process.
Advice regarding correct product temperature for transport is available from Department of Primary Industries (DPI); specialist road transport operators and your freight forwarder.

Several important points to remember:

- The importance of correct product temperature at the point of production / packing

- The use of insulation material in the airline container (or insulated packaging)

- The aircraft container (your product) will be exposed to ambient temperatures for no less than one hour during the aircraft loading and unloading process - you must pack with this in mind

- Once the product leaves yoru control the "Coolchain" is designed to maintain temperature only

Airport Facilities
Brisbane has excellent (world standard) facilities for the handling of temperature sensitive products.

There are currently two freight forwarders with large coolroom facilities located within approximately 10 minutes of the airport.

It is strongly recommended that in order to maintain the "Coolchain" and minimise handling exporter/producers use refridgerated trucking services direct to these facilities for container build up. Airline cargo terminals (CTO's) have limited coolroom/freezer facilities. These facilities are for interim storage only.

At Cairns there are several forwarders with coolroom facilities within approximately 10 minutes - again, it is recommended that exporters/producers truck direct to these facilities for airline container build up. Generally, in both Brisbane and Cairns freight forwarders deliver containers to the CTO's as close to aircraft departure as possible (usually 2 hours) to minimise exposure to ambient temperature.

Government Agencies
The Australian Quarantine and Inspection Service (AQIS) provide inspection and documentation services for most types of perishable products. This is to comply with Australian Trade obligations to meet mandatory requirements of the importing country.

NOTE - Many freight forwarders have AQIS registered facilities for the handling/loading of products which are subject to AQIS control.

Advice requiring AQIS requirements may be obtained direct from AQIS or your freight forwarder - if you are not already exporting, check first.

The Australian Customs Service (ACS) is responsible for ensuring compliance with local laws prior to export. Again, advice may be obtained from ACS or your freight forwarder. Usually the reporting to customs and other formalities are provided by your freight forwarder via electronic means.

Freight Rates
Like many industries, significant competition exists between airlines and between freight forwarders. Rates can be a little complex however, there is the published tariff "TACT" best described as the "recommended retail price". There are then "market rates". These rates are provided by airlines to freight forwarders for on-selling to exporters. These rates may vary from airline to airline, destination to destination, commodity to commodity, and from time to time. They also (but not always) reflect the quality of the service e.g. frequency of service and routing etc. Generally "Commodity" container rates are available for larger consignments which provide the lowest rate.

Again, you should discuss this with your freight forwarder during the selection process.

Volume charges may apply to "light" products e.g. flowers etc. To determine whether volume charges apply, determine the volume in cubic cm and divide by 6000,
e.g. 40cm x 40cm x 160cm
=256000 cubic cm ÷ 6000
= volumetric wt 42.6kgs

Then apply whichever is the greatest volume or actual weight - again your freight forwarder can assist.

Packaging
Packaging depends on the commodity, although the final design, shape and size may be dictated to some extent by the requirements of the purchaser. Other influencing factors include fragility, perishability, handling, storage and compatibility with airline containers. When considering packaging for export, check to see if there are existing design, trialed and proven by other exporters, that would suit your commodity. Check with your industry association. In most cases it will be able to supply details of packaging designs and suppliers. Alternately, approach specialist packaging manufacturers or your freight forwarder.

For air freight, correct design design improves the security, protection and freshness of the product. The choice of single or combination packaging normally depends on product type - in either case the packaging should be designed to maximise the various aircraft containers.
For instance, a centimetre or two in height may mean an extra row in the container, or a particular width may increase the number of cartons per row. Planning these details from the outset may provide real economies in freight costs and space utilisation, as airlines often charge a rate per container rather than per kilogram. In these circumstances, the more cartons per container, the less cost per kilogram shipped.

There are many excellent examples of package design that make the best use of space and reduce airfreight costs. Many fruit, vegetable, fish and flower cartons are designed to maximise uplift per container.

These are important factors to be considered as part of export planning.

Service Charges
The actual air freight rate/charge is only one component of the total costs in exporting - you should ask your freight forwarder during the initial evaluation process for details of all ancillary charges which may include:

Cartage Warehouse / Airport - Customs and Quarantine Fees
Not all these charges apply to every shipment - some fees are fixed, others may be negotiated. However, it is important to know the total costs of the various service fees before exporting.