Air forwarding: consolidator, agent and accredited intermediary

Buying a unit, selling shipments

The intermediary contracts with the airline for capacity and appears on the airline's own transport document as the shipper of the consolidated unit. Each underlying customer receives a house document naming it as shipper and its buyer as consignee. That structure allows many unrelated consignments to travel under one airline booking while each customer retains a document it can present to its bank or its buyer. It also means the forwarder has taken a carriage obligation towards every one of those customers, backed by a contract with the airline whose liability limits are not the same as the ones it has sold.

The basis of charge is where the arbitrage lives

Air capacity is sold against whichever is greater, the actual weight or a figure derived from the volume the cargo occupies. A unit built from a mix of dense and light consignments is charged by the airline on the aggregate, while each customer is charged on its own consignment. A well-built consolidation therefore earns more than the sum of its parts, and a badly built one earns less. This is why consolidators care intensely about the density profile of what they accept, and why light bulky cargo is either priced hard or refused when there is nothing dense to pair it with.

Accreditation and who may tender cargo

Handing cargo to an airline is not open to anyone. Intermediaries generally need recognised agency status to hold stock of airline documentation and settle with carriers, and cargo security frameworks distinguish between parties whose consignments may travel without further examination and those whose may not. Both the accreditation and the security regime differ by country and are set by the relevant civil aviation authority and industry body, so the applicable requirements should be confirmed with them rather than assumed from another market. Operationally these statuses have commercial value. Losing or lacking one adds screening cost and time to every consignment, which shows up directly in the price offered to customers.

Speed compresses the paperwork window

On a short sector the cargo can be at destination before the documents are, which is the opposite of the sea problem. The pre-alert to the destination correspondent therefore has to leave with, or ahead of, the aircraft, complete enough for the receiving office to arrange clearance and delivery on arrival. When the pre-alert is late or incomplete, the entire premium the customer paid for is spent waiting on the ground. Recovering that time is rarely possible, which makes document discipline the least glamorous and most valuable habit on an air desk.

Frequently asked questions

Why does a shipper receive a document from the forwarder rather than the airline?

Because the consignment is travelling inside a consolidated unit tendered to the airline by the forwarder. The airline document covers the whole unit, so each underlying customer is given a house document evidencing its own contract with the consolidator.

Can light, bulky cargo be made cheaper to fly?

Sometimes, by reducing the space it occupies rather than its weight. Better packing, denser palletisation and removing void space change the basis on which the charge is calculated, which is usually more effective than negotiating the rate.