Air Transport cost drivers and factors

The relationship of supply and demand is the biggest influencing factor in air cargo cost structure. This effect exceeds even transport distance effect. Delivery speed is formed, in practice, of a route choice and based on routing formation of costs, is determined in such a way that the so-called direct flights (no stopovers) represent higher cost level than routings and speeds, which require more time for delivery. Content of the shipment may require special conditions or handling, which has a cost impact. Freight payer’s and selected freight forwarder’s purchasing power or transport volume have significance in costs.

Air cargo general cost factors are many. Freight cost is determined by gross or volume weight per kg payments of a shipment. Air cargo volume weight differs from other forms of transport as global standard is 1 m3 = 167 kg. If shipment’s volume weight exceeds gross weight, freight cost is determined in accordance with volume weight. Air cargo pricing criterion is generally kg-based, where kg price decreases while weight class increases. Corporate and individual exceptions certainly occur. Industry’s traditional standard with example prices is (prices per kg) below.


Terminal handling fee is applied to loading or unloading goods from the aircraft and is also kg -based. Security procedure or security check fees are charged for air shipment security procedures (only in exports). Hazardous substances check fees are charged in accordance with handling and checks of packaging, documentation and labeling.

Air cargo’s general freight cost addition is considered to be fuel surcharge, which is bound to selected and declared changing index by an airline. In addition, risk surcharge is charged, kind of insurance premium, which originally formed as the correction movement after 9/11 terrorist events following sudden and fierce increase of insurance necessity for airlines and costs increase. The growing threat of terrorism and crime to aviation and to transport in general maintains the grounds for a risk surcharge existence.