The benefits of Air
Freight Consolidation can never be over-emphasized. With our analysis, you
should, by the end of reading this post, have been acquainted enough about the
subject matter. This is expected to benefit you if you are on a low budget; if
you into mini-importation or simply importing goods at small capacity.
What Air Freight Consolidation Shipping
Is.
Simply
put, the word consolidate means ‘to merge’.
Airfreight
Consolidation is, therefore, a system of collecting cargoes and shipments from
various shippers and delivered to different receivers.
Consolidating cargo of numerous consignees into one lot and then prepare them for shipping
is known as consolidation in the freight industry. This includes Air, Sea and
Road freight.
The idea
is, the freight forwarding company merges goods shipped by different shippers
as a single shipment and ships them to a country common to the receivers.
In
Nigeria (and most other countries), air freight consolidation is commonly
referred to as ‘Consol’.
Why Importers In Nigeria Offer Air
Freight Consolidation Services?
In an
early post, we shared with you why air freight shipping is best considered of
the 4 modes available, (i.e. Sea, Air, Land and
Railway). All 4 modes can be used to offer consolidation services one way or
the other.
But,
while the other 3 modes are relatively great for shipping, especially sea shipping, they leave out the
aspect of speedy delivery as air freight shipping guarantees a fast and a more
shipping and delivery process.
Importers
generally consider consolidation services using air freight because it is
relatively cheap (i.e. affordable), fast and reliable method. As a freight
forwarding company, we recommend this method to our client in order to help
save the cost of shipping while enjoying fast and reliable services.
Is Freight Consolidation Same As
Groupage?
As in
our earlier post on Groupage, Groupage was
defined by Global Negotiator as simply meaning
“Combining cargo from more than one shipper or importer and/or to more than one
consignee for shipment together, usually in a single shipping container.
What then
is the difference?
Consolidation is the act or process of consolidating, making
firm, or uniting; the state of being consolidated; solidification; combination
while groupage is the consolidation of several small shipments
into a single container.
In
context, both words are synonymous may be used interchangeably.
However,
groupage is commonly used in sea
freight shipping why consolidation services are rendered mostly
in air freight shipping.
Most of
the time, air freight consolidation may consist of those who venture into small
scale importation business as this method turn out the best bet. This is due to
the fact that your items may be too small for a full container load, there the
need to group with other mini importers.
It is a
great way to start importation business with a tight budget.
Is There Any Form Of Disadvantage?
The most
glary disadvantage may be that most times, the shippers have to wait for the
freight forwarder to gather enough goods from shippers in order to meet up with
the required weight the airlines can lift.
Benefits Of Air Freight Consolidation Shipping In
Nigeria
·
It
reduces the cost of shipping drastically
·
Customs
clearance cost and process time lessen
·
Less
documentation for the shippers
Cheaper Air Freight Cost For Shippers
First of
all, all shippers always look for ways to cut cost especially when the only
option is air freight for shipping their goods. And the reason for this is
because the airlines’ operators charge using either weight of the goods or the
dimension (length, width, height) of goods which refers to volumetric weight.
Moreover,
airlines operators lower the freight rate if the freight forwarding company
declares high volume weight of single shipment. The more the weight in tons the
less the cargo company pays the airline operators. With this system, the
freight rate that shippers will pay be less because they will share the rate on
each shipper which makes each them pay less. It is an advantage for those that
engage in mini importation because they will avoid paying for minimum weight by
the airlines operators.
Less Customs Clearance Cost And Process
Time
This is
one area that importers in Nigeria always have issues with due to the requirements
by Nigeria
customs service and other government agencies. Many importers
enjoy the drastic reduction of customs clearance cost at airport
due to cut-cost on the customs benchmark charges for each shipment. The more
the weight of the goods in tons the less the customs agencies pay for clearing
the goods at the airport.
For
example, assuming an importer buys 20kg of goods from China, the rate he or she
supposes pay for the goods will depends on the HS code import duty of the
goods. And the rate will also depend on value of the goods.
Let’s say
he buys it with the value of 50, 000 USD and the import duty is 20% HS code
Import
duty is 10,000 USD @ 305 NGN = 3, 050, 000 NGN
Port
Surcharge 7% of import duty = 213,500 NGN
CISS 1%
of CIF = 500 USD @ 305 = 152,500 NGN
ETLS 0.5%
of CIF = 500 USD @ 305 = 76,250 NGN
VAT 5% =
2,500 USD @ 305 = 762,500 NGN
Total =
4,254,750 NGN
Other
charges at the port are warehouse charges, airline advice charges, agencies
charges, FAAN charges. With this agencies he or she will still pay additional
cost of 50, 000 NGN
In
contrast, if the importer engages in air freight consolidation shipping, he
will pay less than this. Let’s assume the customs agent charges him at most
1500 NGN per kilogram (kg) will be paying 30, 000 NGN compare to the single
shipment declaration above that result in millions. Even, after examination by
customs officer at tarmac, he later discovers the value of the goods of the
goods. The charges will never resolve to millions as I calculated with it with
standard calculation with customs.
In
addition, you can see the benefit of using consolidation shipping services if
the option is available in the country of origin. It helps in cutting customs
clearance at port of destination for importers to maximize profit on imported
goods.
Less Documentation For The Shippers
Documentation
is very important aspect of shipping. When there is any problems with
shipment’s documentation, it can cause the import spend
more as well as delay of clearance at ports. Customs agencies always advise the
importers to best ways to handle documentations and declarations.
With the
consolidation shipping services in Nigeria, documentation that may pertain to
any consignment in bulk shipping will be overlook. The freight forwarding
company will declare one or two shipments that may cover other goods that can
have high value if they undergo customs clearance as a separate shipment with
airway bill documents.
Some
goods may require special import permit or license as single shipment but with
consolidation shipping it may attract waiver. This is one of the great benefits
of air freight consolidation shipping system in Nigeria.
Moreover,
for normal air shipping to Nigeria, the list of documentations will be required
by customs.
List Of Documents For Customs Clearance
Form M – This document that the importer will
request from Customs service through Central bank of Nigeria and commercial
bank. It will consist of commercial value of the imported goods. It states the
country of origin and country of destination. The information of the importer,
his details and shipper of the goods, his details will be document. The clear
description of the imported goods, its HS code and other important details on
the goods that the importer want to ship to Nigeria
PAAR (Pre-Arrival Assessment Report) – This document contains
the processed customs payable to the federal government of Nigeria. Nigeria
customs service processes this document and issue the correct amount that ought
to be paid to the government as taxes.
Government agencies licenses or permits – these are the documents that
different agencies issue for smooth customs clearance at ports. They are NAFDAC
import permit, SON product certificate, SONCAP certificate, Phytosanitary
certificate and other licenses.
Airway bill – this will be issue by the airline operator.
It contains the information of the shipment on the aircraft: the weight, port
of origin, port of destination, nature of the goods and the tracking code.
In
Conclusion, air freight consolidation shipping is great way for importers to
cut cost. It is not available in all countries in the world. It is available in
China, India, United Kingdom, United states of America, Dubai, Ghana and some
other countries. If you have any question on shipping your goods, we are
available to render you the best shipping services with convenience.
Consolidating cargo of numerous consignees into one lot and then prepare it for shipping is
known as consolidation in the freight industry. This includes Air, Sea and Road
freight.
At Bowagate Global, We pride ourselves on providing superior freight
shipping solutions to our clients at cost effective prices.
Our
freight shipping consolidation service capitalizes on our global network of
transportation providers to safely secure sharply discounted and competitive
freight rate for shipments by Air and Sea
We can
accommodate 1kg and above, less than a container load (LCL), large multi modal
project or full container. We also provide secure warehouse
solution/facilities, coordinate swift precise shipment and deliver your cargo
wherever you want.
