WHEN TO CONSIDER CHARTERING YOUR OWN AIR CARGO CARRIER
If you find yourself in the business center of an American city, you might want to get around using public transit. Then again, you might sometimes want to hail a cab or order an Uber. It all depends on where you’re going and when you need to get there.
The same considerations apply to transporting freight via air charters. If you have the kind of cargo that is amenable to sharing space on an aircraft and the air cargo carriers go where you need and deliver the cargo when it needs to get there, then there’s no reason to consider an air charter. But if your freight needs to be expedited, if it’s an oversize or overweight piece that’s not going to fit on a regularly scheduled flight, or if it’s going to some remote location not serviced by regular cargo flights, then looking into an air charter makes sense.
Air charters have delivered huge industrial components to the middle of nowhere and oil-rig and assembly-line parts needed to rescue an operation costing untold millions every day it was down. Charters have also been used by smartphone and apparel manufacturers to get their latest wares to market expeditiously. There’s even the case of a large U.S. fast food chain that ran low on ketchup in one of its regions and delivered replenishments on a chartered aircraft.
“The urgency of the situation or the dimensions of the cargo dictate the need for an air charter, even when you have a single piece siting in the middle of a huge airplane,” says Georgy Sokolov, regional sales manager at Volga-Dnepr Airlines. “It’s going [via air charter] because it’s very heavy or urgent or it’s going where no one else goes.”
Air charter cargoes are often cost sensitive, notes Richard Thompson, executive vice president of ACS Inc. “There may be fines or penalties associated with nonperformance,” he says, “or it may be costing a company millions to have an oil rig out of commission. Chartering an aircraft might cost half or even a quarter of that cost and so it outweighs the fine or the losses of not producing.”
When West Coast ports were shut down during labor disputes last year, ACS arranged more than 40 large charter flights on aircraft, mainly on Boeing 747 freighters, carrying almost 5,000 tons of automotive parts, perishables and other urgent cargo. “Twenty-nine of the ports on the West Coast were affected and accounted for 70 percent of all exports and imports to and from Asia,” says Thompson. “Our account managers were busy booking aircraft charters for our clients from Japan and China to the U.S. and Canada. We flew into California as well as farther east to the Midwest and Toronto. A lot of charters went the other way—to Japan from the Midwest and Australia from LAX.”
If an air charter appears to be in your future, connecting with an air forwarder or broker is probably the best first move. “They know the airlines and the aircraft that are required,” says Sokolov. “The airlines need to know the origin, destination, nature and dimensions of the cargo in order to generate a quote.”
In theory, an air charter can be put together in a day or even hours. In practice, several days or weeks may be required depending upon circumstances.
“We can order a charter today and fly today within Europe or to Russia because we are a Russian operator,” says Sokolov. “But if it is for military cargo it can take months to get all the permits.”
“The time to arrange an air charter is typically one week,” says Robert Boetzer, head of Corporate Charter & Emergency Services at Panalpina. “We can do it in three days, or even within 24 hours, depending on the urgency and the nature of the cargo as well as origin and destination of the transport. There have also been cases where we have to design and build a special frame for a special piece of machinery and that process can take six months.”
Panalpina has nine people in the Corporate Charter & Emergency Services department, located in Russia, Hong Kong, Luxembourg and Atlanta, and operating 24/7/365, Boetzer adds. “When the day ends in one time zone we hand over open items to the next shift on another continent,” he says.
Logistics Plus once arranged a charter from Chicago to Cairo of 100 tons of equipment for a locomotive factory. “There was urgency getting the freight there because the production line was down,” says Abi Lopez Kuzma, manager of the company’s International Division. “We signed the contract on August 27 and the cargo departed August 29.”
That kind of timeline will not be possible for every shipment because of the regulatory requirements of destination countries. Japan has a requirement of a 10-day lead time while China requires seven to 10 days and Korea, seven days. Argentina requires the filing of a voluminous set of documents, all of which must be translated into Spanish.
But even the most difficult country will expedite an air charter request when it includes the code AOG, or “aircraft on ground,” meaning that a flight, along with its planeload of ornery tourists, can’t depart until a new engine or other component arrives. “We can get a spare engine in Europe and deliver it to the Bahamas the next day so the tourists can get home,” says Sokolov.
Needless to say, air chartering is much more expensive than shipping by scheduled air cargo services. As the shipper, you’ll be paying for the use of the entire aircraft (unless you’ve arranged a highly unusual partial charter) versus paying a kilometer rate for a portion of the space on a flight.
“Other modes of transportation can take four or five times longer,” says Kuzma. “It all depends on the urgency of the cargo and where it is going. The economics of the charter come in when there is a stoppage of a production line or if you’re going to pay liquidated damages for failing to perform on a contract and you needed to deliver the cargo yesterday.”
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