Chapter 4

9/30/2022
Trường Đại học Tôn Đức Thắng

Khoa: Quản Trị Kinh Doanh
Bộ Môn: QTKD QT
Môn: International Cargo Transportation and Insurance

Mã môn học: 706022
Giảng viên: Hà Ngọc Minh
706022-Chapter 4-Carriage of Goods by Air
CHAPTER 3
CARRIAGE OF GOODS BY AIR
Learning Objectives
LO1: Introduction
LO2: Airfreight Facilities
LO3: Freight in air transportation
LO4: Airfreight procedures
LO5: AWB and Legal framework
LO6: Int’l air transportation organizations
1
9/30/2022
LO 1
Introduction
 Gaining in importance : global trade and

development dimension
 Weight: only around 2%  Value: from 33% to 40%
 High-value and high-tech manufactured goods,
perishables and other time-critical cargo
 Annual growth rates for 2004-2023 of around 6%
globally  improving living standards  developing
and landlocked country
Characteristics
 Rapidness  fastest mode of transport

 20 to 30 times faster than the sea-going
 5 to 10 times faster than the train,
 7 to 15 times faster than the car.
 Mobility  No Physical Barriers  shortest route
 Safety  about 10,000 m height
 International transparency and easy accessibility of
laws and regulation
Advantages vs Disadvantages
 Speed  Cost
 Safety  low  Greater risk
premium  Limitations on size of
 Arrival and departure cargo
times are consistent
 Less reliance on
storage facilities
 Standard procedures
2
9/30/2022
Acceptance of Goods
• Valuable cargo
• Perishable cargo
• Wet cargo
• Live animals
• Human remain
• Personal effects
• Over sized or heavy cargo
• Dangerous cargo
• Other cargo needing special handling
Valuable cargo (VAL)

Gold bullion • Any article having a
declared value of carriage
of USD …………………
Legal bank notes
• In The UK:……………..
Bank cards and/or credit cards
No special marking
Jewellery Valuation charge
applied
Diamonds
Perishable cargo (PER)

All commodities that by their nature are liable to deteriorate
or perish because of:
• Changes in climate, temperature or altitude
• Length of time in transit (including delays)
3
9/30/2022
WET CARGO
•Liquid in watertight containers
•Wet substances not packed in
watertight containers: fresh or frozen
meat, wet hides and skins etc…
•Substances packed in wet ice, such
as fresh, frozen fish and seafood
shipments;
•Live animals from which liquid can
escape (mainly mammals with much
excreta);
•Goods which may produce liquid
due to their nature.
Live animals
• Import license
• Shipper’s Certification for Live Animals
• The Convention on International Trade
of Endangered Species of Wild Fauna
and Flora endangered (CITES), IATA
Live Animal Regulations (LAR)
• Packing  to fit size of live animals and
complied with the current IATA Live
Animals Regulations.
Human remain (HUM)
•Emotional aspect involved in the

shipping process  Delicate & urgent
nature
•Transported as either:
 Cremated (ashes) – funeral urns
protected by a cushion packaging
 Not cremated (corpses in a coffin) –
soldered inner coffin of lead or zinc,
packed in a wooden coffin
 Cannot be consolidated with other 4
goods
9/30/2022
Personal effects
OVERSIZED OR HEAVY CARGO

 “Oversized cargo”  more than 1 aircraft pallet/required
special handling/equipment for loading/unloading
 “Heavy cargo”  exceeds 150 K or vary depending on
the carrier (aircraft type/airport facilities/scheduled ground
time of the aircraft)
Dangerous goods
• Class 1: Explosives
• Class 2: Compressed Gases
• Class 3: Flammable Liquids
• Class 4: Flammable Solids
• Class 5: Oxidizing substances and Organic Peroxides
• Class 6: Toxic and Infectious Substances
• Class 7: Radioactive Materials
• Class 8: Corrosive Materials
• Class 9: Miscellaneous Dangerous Goods
•The shipments are not forbidden to be transported by air.

•The shipments must be properly identified, classified, marked,
labelled and packed in compliance with IATA DGR. 5
9/30/2022
Other cargo needing special handling

• Drugs to Save Life
• Air Mail, Newspaper
• Vulnerable Cargo
LO 2
Airfreight Facilities
• Air freight market

• Aircraft
• Unit Loading Device (ULD)
• Ground handling Facilities
The air freight market
• Passenger airlines (e.g., United Airlines)  the freight

capacity in the belly hold of their all-passenger-aircraft fleet.
• Combination airlines (e.g., Korean Air)  fleets with both
freighters and passenger aircraft
• Dedicated cargo operators (e.g., Cargolux)  a fleet of
cargo-only aircraft and offer regularly scheduled service
• Air freight integrators (e.g., FedEx Express) operate air and
ground freight services
• Specialized operators (e.g., Volga-Dnepr Airlines) fulfilling
niche services that cater to specific cargo requirements (e.g.,
heavy loads)
6
9/30/2022
Aircraft
Narrow or Wide-body aircraft can be further divided into:
• All cargo or freighter aircraft
• Passenger aircraft
• Mixed/Combi aircraft
Narrow-body aircraft or conventional

aircraft 5.1 AIRCRAFT
• Fuselage width of about 3m (10ft) with a single aisle between

passenger seats.
• Cargo hold in the lower deck mostly carry loose (bulk) cargo
only
MAIN DECK
LOWER DECK
7
9/30/2022
WIDE AIRCRAFT
 Internal cabin divided in to 3 axial groups by 2 aisles.

 Fuselage width not less than 4.72m(15ft)
 Lower deck main cargo holds are equipped to carry
palletized & containerized cargo.
 Loose cargo loaded in the bulk cargo hold
MAIN DECK
LOWER DECK
WIDE BODY AIRCRAFT
Hold and compartment
8
9/30/2022
UNIT LOADING DEVICE
A ULD can be either:

 A combination of
components
 Aircraft pallet and net
 Aircraft pallet, net and
non-structural igloo
 Or
 One complete structural
unit container
Aircraft pallet, net, and non-

structural igloo
Aircraft container
9
9/30/2022
Example 1:ULD
Volume Dimensions
Pallet Cubic Meter L x W (cm) Remarks
LD 8 6.9 153 x 244 cm FQA

LD 11 7.2 153 x 318 cm FLA / PLA
LD 7 10.6 224 x 318 cm PAG / P1P
11.6 244 x 318 cm PMC
• If you have a fresh produce packed in cartons of 60 x 40 x 20 cm

palletized on Euro pallet (120 x 100 x 16 cm) needed to be dispatched by air
using PMC- ULD. How many cartons could be fit on this ULD ?
** Disregard the weight.
Ground handling facilities
High loader/ container/pallet Self-propelled conveyor (bulk

loader cargo)
Dolly Self-propelled transporter

Airport
10
9/30/2022
Airport
Airport
LO 3
Air cargo freight and charges
• The Air Cargo Tariff (TACT)

• IATA Areas & Sub-areas
• Chargeable Weight
• Rates & Charges
11
9/30/2022
The Air Cargo Tariff (TACT)

WORLDWIDE
RATES
NORTH
TACT
AMERICA
RULES
GENERAL INFORMATION 1 abridged

ACCEPTANCE FOR CARRIAGE 2 complete
TRANSPORTATION CHARGES 3 complete
SERVICES & RELATED CHARGES 4 complete
PAYMENT OF RATES & CHARGES & CURRENCY 5 abridged
CONVERSION THE AIR WAYBILL 6 abridged
INFORMATION BY COUNTRIES 7 abridged
CARRIERS SPECIAL REGULATIONS 8 abridged
IATA areas and Sub areas
• 3 Traffic Conference Areas TC1,2,3  differing

economic, social and business conditions and
practices
• TC1: Western Hemisphere, TC2, TC3: Eastern
Hemisphere
• TC  divided into sub-areas or regions
IATA areas and Sub areas
12
9/30/2022
Example 2: IATA TC AREA
AIRLINES’ CODING
Prefix number
Coding
Egypt air : MS - 077
Codes are commonly used by Lufthansa : LH - 020

airlines on traffic documents Emirates : EK - 176
and in communications:
 Unify information about Airport British : BA - 125
and city to clearly understand about
 avoiding confusion while
dispatching
2-letter codes  Airline and
countries/states
3-letter codes  same for city
and main airport
13
9/30/2022
Example 3
Example 3
Chargeable Weight (CW)
The basis of charging freight is:

• High density cargo > 1kg per
6000cm3 (366 cu.in.) or 1 lb
per 166 cu.in  CW=GW
• Low density cargo < 1kg per
6000cm3 (366 cu.in.) or 1 lb
per 166 cu.in  CW=VW
 CW = GW or VW  higher
14
9/30/2022
Chargeable weight (C.W)

Step 1: Calculate the actual gross weight (GW) and the
volume (VW) of the air freight shipment
Step 2: Finalize the volumetric weight (ratio 1:6)
Step 3: Compare the gross weight with the volumetric weight
Chargeable weight is the greater value

Step 1-Gross Weight (GW)
Always round up
•0.001 kg to 0.5 kg → 0.5 kg (round up to the next half kg)
•0.501 kg to 1.0 kg → 1.0 kg (round up to the next full kg)
Volume
15
9/30/2022
Example 4: Roundup these actual weight
ACTUAL WT (KG) ROUNDED UP (KG)

33.355 33.5
29.789 30
250.500 250.5
300.000 300
895.690
888.329
3278.9
1.2
0.65
876.000
ROUNDED OFF
DIMENSION VOLUME WEIGHT
DIMENSION DIVIDED BY
81.6 x 56.2 x 36.5 cm 82 x56 x37 cm 6000 28.5 kg
82 x56 x37 in
81.6 x 56.2 x 36.5 in 366 464.5 kg
81.6 x 56.2 x 36.5 in 82 x56 x37 in

166 1024 lb
31.2 x 25.7 x 14.5 in Kg
26.5 x 39.2 x 35.8 in Lb
35.6 x 59.4 x 21.4 cm Kg
20.8 x 16.6 x 38.5 cm kg
33.9 x 23.2 x 21.5 cm kg
19.5 x 22.3 x 18.8 in lb
30 ¾ x 56 ½ x 21 ¾ in lb
65 x78 x41 cm kg
28 x13 x18 in kg
Step 2- VOLUME WEIGHT /

DIMENTIONAL WEIGHT
Volume weight
Greatest (L x W x H )
Factor
cm3 : 6000  Kg
in3 : 366  Kg
in3 : 166  lb
Rounding – up
Every 0.5 kg
Every full lb 16
9/30/2022
Note
Express firms (e.g Fedex, DHL…) normally calculate
volume weight as below:
• Volume weight = Volume (cbm) : 5000
• or in simple way: 1 CBM have volume weght 200
kg
Example 5-Calculate the CW
1. 3 CTNS / Dims: 22x16x45 in / GW: 325 lbs

2. 4 Drums / Diameter: 17 in, Height: 22 in/
G.W:129 lbs
3. 4 Boxes / Dims:54x42x28 cm/ G.W: 38 Kgs
4. 2 Drums / Diameter: 60 cm, Height: 120 cm/
G.W:356 Kgs
3 Crates/ Dims: 162x86x49 cm / G.W: 213.2
Kgs
5 CTNS / Dims: 66x53x49 cm / G.W: 94.7 Kgs
Example 6
Two pkgs shipped as one consignment:

GW Dim
Pkg A: 1 box 30 K 90x50x70cm
Pkg B: 1 box 60 K 50x50x120cm
17
9/30/2022
Example 6
Two pkgs shipped as one consignment:

GW Dim
Shipped as
- Consol shipment
- Two individual consignments
Example 7
Example 8
18
9/30/2022
LO 3
Rates and Charges
• RATE: The amount charged by the carrier for the

carriage of a unit of weight
AF = Rate x CW
• SURCHARGE: The amount to be paid for the
transportation of a consignment or for incidental
service(s) in connection with such transportation
SC = Charge x GW
Surcharge: FSC/ISC
AWB charge/ AMS/…
LO 3
Cargo Rates
NORMAL (N)
GCR
MIN (M)
QUANTITY (Q)
19
9/30/2022
SCR
Precedence of rates and charges:
- SCR > CCR > GCR
- Lower rate applied

Example 9- How to apply SCR

Example 10- How to apply SCR
20
9/30/2022
CLASS RATES OF COMMODITY

CLASSIFICATION RATES (CCR)
Stated as a % increase (Surcharge S) or (Reduction R) in the
normal general cargo rates. Exceptions may apply to some
carriers
SURCHARGE REDUCE
• VAL TACT • NWP TACT
RULES 3.7.6 RULES 3.7.7
• AVI TACT • Baggage
RULES 3.7.2 shipped as
• HUM 3.7.9 cargo TACT
RULES 3.7.8
Example 11
• Routing: PAR to LOS (Lagos, Nigeria) by AF
• Commodity: Live Dog
• G.W: 40 Kgs (dog + kennel) From : PARIS/ FR
• Dims: 1 kennel x 90x50x68 cm To : LAGOS/ NG
EUR/K
M… 85.00
N… 12.80
45… 9.62
100.. 5.95
CR = 150% GCR M/ N
Example 12
21
9/30/2022
Example 13
The CCR for carriage between IATA

area 2 and 3 is 50% of the GCR N
Example 14
SCR 7104
Weight break point/ Break even weight
The weight at which the lower rate at a higher

minimum weight result in a lower weight charge is
call the Weight breakpoint (or weight break/ break
even weight/ break even point)
Rate of higher weight
Break even point = Higher weight x
Rate of lower weight
Example: if chargeable weight is 420 kgs
and + 300 = SGD 6
5
+ 500 = SGD 5
Then break even point = 500 x
= 416 KGs
6
As 420 > 416 upgrade the chargeable weight to be 500 kgs and apply
22
rate of + 500
9/30/2022
Example 15
Valuation charge
• A charge for carriage of goods, based on the value

declared for the carriage of such goods  no liability
limitation
• In general, when the value of the shipment is in excess
of SDR17/K (Warsaw) or SDR22/K (MC99)  0.75%
must be assessed on the amount of excess of the carrier’s
liability limitation (Note: carrier may have their own
specific regulation)
• The shipper must declare a value for carriage on the
AWB
• Based on actual GW, not VW/ CW
Valuation charge
Valuation charge = (Declared value – Carrier’s liability x GW) x 0.75%
23
9/30/2022
Example 16
LO 4
Air cargo procedures
Air waybill Number
Cargo Number of Packages

booking
Weight of the Shipment
Nature of the Goods

Dimensions/Volume/Density of the
Shipment
Airport of Departure & Arrival
Requested Routing
Reference (agent’s name and
phone number)
24
9/30/2022
LO 5
Air waybill (AWB)
• AWB becomes a valid contract only after it has been

signed by both the shipper or a cargo agent on his
behalf and by the carrier
• AWB should be issued immediately upon receipt of
the goods and the letter of instructions from the
shipper.
• The shipper prepares the AWB  responsible for
the accuracy and sufficiency of the details related to
the goods listed.
• AWB  non-negotiable
• AWB  3 orginals + 9-12 copy
Functions
25
9/30/2022
Air waybill (AWB)
COPY NUMBER DISTRIBUTED TO

The 1st Original (green) For Carrier
The 2nd Original (pink) For Consignee

The 3rd Original (blue) For Shipper
Copy (white) For Agent
Copy (yellow) … For destination
AWB Number
738 - 8792 3614
• 1st Part: Identify Airline
• 2nd Part: Identify the individual consignment
Check Digit Number : A single digit of the air waybill number

used to ensure that the air waybill number is correctly entered
into a computer system.
Example:
AWB # 020 – 2114 1643
 Excel: =mod(2114164,7) = 3

AWB Contents
26
9/30/2022
AWB Contents
Under the Warsaw Convention 1929 the air waybill must

contain the following list of seventeen particulars
The Montreal Convention 1999 the air waybill or cargo
receipt must contain namely:
(a) "an indication of the places of departure and destination;
(b) if the places of departure and destination are within the
territory of a single [Contracting State], one or more agreed
stopping places being within the territory of another State, an
indication of at least one such stopping place; and
(c) an indication of the weight of the consignment."
The International Legal Framework
Consignor's right of disposal
A right of disposal of the goods:

+during the carriage by air and
+before the goods are delivered to the consignee
The consignor may:
+withdraw the goods at the airport of departure
or destination
+stop the goods in the course of carriage at any
landing
+ name a person other than the consignee named
in the air waybill
27
9/30/2022
Air carrier's liability for loss, damage

or delay
During the time the cargo is in the charge of the
carrier
The carrier is entitled to rely on specified defences,
which he needs to prove to exonerate himself,
wholly or partly, from liability
The liability is limited to a maximum amount per
kilogram, (also called monetary cap)
Monetary cap
Warsaw 1929: 250 Fr/kg (1Fr Pháp#65.5mg Vàng

90%)
Montreal Protocol 1975: 17 SDR/kg
 The Montreal Convention 1999 (MC99) In 2009
this was increased to 19 SDRs, where it has
remained for the last decade. In November 2019,
ICAO announced the limitation on cargo damage
liability would increase to 22 SDRs/kg effective 28
December 2019.
Monetary cap
Montreal Revised limit Revised limit

Original limit
Convention (SDRs) as of 30 (SDRs) as of 28
(SDRs)
of 1999 December 2009 December 2019
Article 21 100 000 113 100 128 821

Article 22,
4 150 4 694 5 346
paragraph 1
Article 22,
1 000 1 131 1 288
paragraph 2
Article 22,
paragraph 3
17 19 22 28
9/30/2022
Timely notice of complaints

A complaint to the carrier in writing in the case:
 of visible damage to the goods immediately after discovery of the
damage  at the latest within 14 days from receipt of the goods;
of other damage to the goods  within 14 days from the date of
receipt of the goods;
of delay  within twenty-one (21) days of the date the goods are
placed at his disposal; and
of non-delivery of the goods  within 120 days from the date of the
issue of the air waybill
to the carrier whose air waybill was used, or to the first carrier or to
the last carrier or to the carrier who performed the transportation
within a period of two years
LO 6
Industry regulation
The main international organizations dealing with air

cargo transportation:
ICAO
National Aviation Authorities
IATA
FIATA
ICAO - Overview 1.1 ICAO
• The International Civil Aviation Organization

• Founded in 1947, Chicago Convention.
• Under the scope of the United Nations.
• Regional offices : Paris, Dakar, Cairo,
Bangkok ,Lima & Mexico.
• Member states: 191 (Jan 2017) VIET
NAM (1980) 29
9/30/2022
National Aviation Authorities

1.1 ICAO
• National Aircraft Registration

• Registration and licensing of air
carriers (AOC (Aircraft Operator
Certificate))
• Air Worthiness Certification
• Route Development
• Enforcing national and international air
regulations
• Aircraft safety & security
• International Air Transport Association

IATA • Establish In1.1
1945
ICAO
• Head office: Montreal
• 54 offices in 53 countries
• Members: 268 (Jan 2017)
• Missions:
• Representing the airline industry
• Leading the airline industry
• Serving the airline industry
30
9/30/2022
FIATA- Fédération Internationale des

1.1 ICAO
Associations de Transitaires et Assimilés
• International Federation of Freight
Forwarders Associations
• Founded in 1926 ,VIENNA.
• Headquarter: Zurich
• Non-governmental Association
• Covering approximately 40,000 forwarding
and logistics firms
 Unite the freight forwarding industry worldwide
 Represent, promote and protect the interests of the industry
 Familiarise trade and industry and the public at large with the services rendered
by freight forwarders
 Improve the quality of services rendered by freight forwarders
 Assist with vocational training for freight forwarders.
Exe 1: Transportation cost

An airs hipment details asf:
Q’ty: 100 CTNs/ 1,000 PCs/ GW:980 kgs/ dims: 60 x 40
x 40 cm
Surcharge: ISC: Usd 0.05 / K, FSC; Usd 0.10 / K, AWB
fee: Usd 2.00/ AWB
Other Charges:
• Security Screening Fee (SSC): USD 0.015/ K
• TCS Charge (TCS): Usd 0.06 / K
Chương 4-Vận chuyển hàng hóa bẳng đường

92
hàng không
Further reading-Chapter 4
1. TACT
2. WARSAW CONVENTION 1929/ MC 1999
3. CARRIAGE OF GOODS BY AIR: A GUIDE TO THE
INTERNATIONAL LEGAL FRAMEWORK- UNCTAD
2006
4. Luật hàng không VN
31

Chapter 4

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter 4

Uploaded by

Copyright:

Available Formats

9/30/2022

Trường Đại học Tôn Đức Thắng

Môn: International Cargo Transportation and Insurance

706022-Chapter 4-Carriage of Goods by Air

706022-Chapter 4-Carriage of Goods by Air

 Gaining in importance : global trade and

706022-Chapter 4-Carriage of Goods by Air

 Rapidness  fastest mode of transport

706022-Chapter 4-Carriage of Goods by Air

706022-Chapter 4-Carriage of Goods by Air

Valuable cargo (VAL)

706022-Chapter 4-Carriage of Goods by Air

Perishable cargo (PER)

706022-Chapter 4-Carriage of Goods by Air

Human remain (HUM)

•Emotional aspect involved in the

706022-Chapter 4-Carriage of Goods by Air

OVERSIZED OR HEAVY CARGO

706022-Chapter 4-Carriage of Goods by Air

•The shipments are not forbidden to be transported by air.

Other cargo needing special handling

706022-Chapter 4-Carriage of Goods by Air

• Air freight market

706022-Chapter 4-Carriage of Goods by Air

The air freight market

• Passenger airlines (e.g., United Airlines)  the freight

706022-Chapter 4-Carriage of Goods by Air

Narrow-body aircraft or conventional

• Fuselage width of about 3m (10ft) with a single aisle between

706022-Chapter 4-Carriage of Goods by Air

 Internal cabin divided in to 3 axial groups by 2 aisles.

706022-Chapter 4-Carriage of Goods by Air

WIDE BODY AIRCRAFT

706022-Chapter 4-Carriage of Goods by Air

Hold and compartment

UNIT LOADING DEVICE

A ULD can be either:

706022-Chapter 4-Carriage of Goods by Air

Aircraft pallet, net, and non-

706022-Chapter 4-Carriage of Goods by Air

LD 8 6.9 153 x 244 cm FQA

• If you have a fresh produce packed in cartons of 60 x 40 x 20 cm

Ground handling facilities

High loader/ container/pallet Self-propelled conveyor (bulk

Dolly Self-propelled transporter

706022-Chapter 4-Carriage of Goods by Air

706022-Chapter 4-Carriage of Goods by Air

• The Air Cargo Tariff (TACT)

The Air Cargo Tariff (TACT)

GENERAL INFORMATION 1 abridged

IATA areas and Sub areas

• 3 Traffic Conference Areas TC1,2,3  differing

706022-Chapter 4-Carriage of Goods by Air

IATA areas and Sub areas

Example 2: IATA TC AREA

706022-Chapter 4-Carriage of Goods by Air

706022-Chapter 4-Carriage of Goods by Air

Codes are commonly used by Lufthansa : LH - 020

706022-Chapter 4-Carriage of Goods by Air

706022-Chapter 4-Carriage of Goods by Air

Chargeable Weight (CW)

The basis of charging freight is:

Chargeable weight (C.W)