When it comes to speed and reliability, air freight remains the preferred choice. Imagine high-value products like semiconductors or pharmaceuticals reaching their destination in days – that’s the power of air freight.
However, this speed comes at a high cost. Studies by the World Bank indicate that air freight can be 12-16 times more expensive than sea freight. The question then becomes: how can we optimize air freight costs from China to USA to achieve a balance between speed and affordability? This article explores key strategies to achieve this; while also offering a glimpse into some of the in-depth cost saving tactics you’ll find in our eBook, How to Reduce International Air Freight Costs.
Cost-Saving Strategies
Indirect routing
While direct flights offer the fastest route, explore the potential cost savings of indirect routing with layovers. This opens the door to more carriers and potentially lower prices, with estimates suggesting savings of up to 30%. Our air freight savings eBook explores this strategy in detail, guiding you on the optimal balance between speed and cost-effectiveness.
Optimizing pallet builds
Don’t underestimate the power of a well-built pallet. For passenger aircraft shipments, consider building pallets to fit their smaller cargo doors. This unlocks access to potentially lower “belly cargo rates”. Additionally, focusing on minimizing “chargeable weight” by strategically placing goods on the pallet. Chargeable weight is often calculated based on the higher value of the shipment’s actual weight or its dimensional weight (derived from size).
The chargeable weight of your air freight shipment will always be calculated on whichever is greater: the actual weight or volumetric weight.
Optimizing Delivery Time Frames for Air Freight Savings
When it comes to air freight from China to the USA, speed is the major advantage. However, achieving the fastest possible delivery isn’t always the most cost-effective approach. By strategically considering slightly longer transit times, you can discover significant savings on your air freight costs. Here’s how adopting a more flexible approach to transit times can benefit you:
Leveraging Deferred Air Freight for Cost-Effective Delivery: Similar to the difference between a limousine and an airport shuttle, standard and deferred air freight offer varying levels of speed at different price points. Deferred air freight prioritizes cost-effectiveness over speed, typically offering delivery within a few days compared to the 24-48 hours of expedited services.
Consolidation Opportunities: With more flexible delivery schedules, you gain the ability to consolidate multiple smaller shipments into larger ones.
Expanded Routing Options: Strict time targets often limit routing options. By allowing for a bit more flexibility, you open doors to a wider range of carriers and potential routes. This increased competition often leads to more favorable rates
The key lies in striking a balance between speed and cost that aligns with your specific needs. For time-critical shipments, expedited air freight remains essential. However, for products where a few extra days in transit are acceptable, considering more flexible delivery schedules can unlock significant cost savings without compromising your overall delivery goals for air freight from China to USA.
Strategic use of Deferred Air Freight Drives 1.5 Million in Savings
This case study showcases how a leading global semiconductor company significantly reduced their air freight costs by strategically using deferred air freight services.
The Challenge: The company shipped critical equipment (nearly 25,000 shipments annually) from the US to manufacturing facilities across China, Japan, and Southeast Asia. Traditionally, they relied heavily on express and standard air freight options, which accounted for 90% of their shipments.
The Solution: Through a cost-reduction initiative, the company identified specific products with less time critical delivery requirements. These shipments were then shifted to deferred air freight, increasing their utilization from 10% to 15%. This small shift, with a cost difference of just $0.60/kg per shipment, resulted in impressive annual savings exceeding $1.5 million. The additional time provided by deferred air freight also allowed for optimized consolidation, further maximizing their savings.
The Takeaway: By carefully analyzing your air freight needs and leveraging deferred air freight strategically, you can achieve significant cost savings.
The Importance of Deconsolidation for Time-sensitive Shipments
Expedited air freight delivers your products from China to the USA rapidly, but the journey isn’t complete until they reach their final destinations. This is where deconsolidation plays a crucial role.
Imagine a plane carrying hundreds of shipments from various sources in China, all destined for different locations across the US. Deconsolidation involves meticulously separating these individual shipments upon arrival at the US airport. It’s a multi-step process requiring clear communication and precise coordination between airlines, customs brokers, ground transportation providers, and your freight forwarder. Any delays or miscommunications here can significantly impact your time-to-market.
Finding the Right Air Freight Partner
Securing the best value for your air freight budget goes beyond just price. Partnering with a reliable and experienced air freight forwarder is crucial for smooth and efficient shipping that meets your business goals. A strong partner can help you achieve this by:
- Securing competitive rates while also recommending cost-saving strategies like indirect routing or optimized pallet builds.
- Understanding your unique needs and recommending the most cost-effective options based on your route, cargo type, and service level requirements.
- Providing expertise and efficiency to streamline your shipping process, minimize errors, and ensure timely delivery.
- Offering exceptional customer service to keep you informed and address your needs throughout the process.
Optimizing Value on Your China-USA Air Freight Journey
Air freight remains the undisputed leader for speed and reliability on the China-USA route. However, with a strategic approach, you can ensure your air freight strategy delivers exceptional value along with swift delivery.
This article has explored key tactics to optimize costs and highlighted the importance of services like deconsolidation for time-critical shipments. Don’t miss out on even greater savings! Our eBook, dives deeper into these strategies and offers practical guidance for maximizing your return on your air freight investment.
Ready to discover the full potential of your China-USA air freight operations? Contact a Dimerco global air freight specialist today. Our team’s expertise can streamline your processes and ensure your valuable cargo reaches its destination swiftly and cost-effectively.