How are air rates determined?

July 23, 2020

Written By: Mitch Kinek

  • Air Expedite shipments are priced by a certain amount per pound based on the level of service selected
  • The rate per pound rises as the service level becomes faster in terms of transit days – Economy Service would be the lowest price per pound and First Flight Out would be the highest price per pound
  • Charter Aircraft is based on spot rates only and based on availability and size of jet needed – these charters can easily cost tens of thousands of dollars
  • As LTL uses freight class to compensate carriers for low density freight, the airlines use a similar tool called Dimensional Weight. Space on an aircraft is very valuable, so the airline cannot price air freight on a strictly “per pound” basis – it must take the cubic volume of the shipment in mind as well
  • Dimensional Weight is determined by multiplying the shipment length (in inches) x the shipment width (in inches) and the shipment height (in inches) and divide by a factor of 194 – the shipment will move as the resultant weight of this formula or the actual weight, whichever is higher
  • For example, suppose we have a shipment that is 48” x 40” x 24” pallet that weighs 232 pounds – 48x40x24 = 46,080 cubic inches – we divide that by the factor of 194 to arrive at a resultant weight of 237 pounds – since the resultant weight is higher than the actual weight of 232 pounds, the shipment would be priced considering a weight of 237 pounds dimensional weight
  • For international shipments, including shipping from and to Puerto Rico, the Dimensional Weight factor is adjusted to 166. In the example above, if this shipment shipped internationally, we would divide the 46,080 cubic inches by 166, which would provide a resultant weight of 278 pounds , which is again higher than the actual weight of 232 pounds

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