Detailed explanation of declared value surcharge and freight in international air freight

In the field of international air transportation, in order to ensure that the goods reach their destination safely, the carrier must bear liability for any losses incurred during the custody of the goods. However, by default, FedEx’s liability for shipment loss, damage, or delay is capped at $20 per kilogram or $100 per piece. This limit may vary from country to country and currency exchange rate fluctuations. In order to better protect the interests of the cargo owner, if the cargo owner wants FedEx to bear higher liability for compensation, he can declare the actual value of the shipment on the air waybill and pay the corresponding “declared value surcharge”.

Air freight calculation

Air freight refers to the cost of transporting goods from the origin airport to the destination airport. The calculation is based on the freight rate applicable to the goods and the billable weight of the goods. Freight rates only cover transport costs between airports and vary depending on the type of cargo and the transport area. The billable weight needs to consider both the volumetric weight and the actual gross weight of the goods.

For high-density goods (less than 6,000 cubic centimeters per kilogram), the actual gross weight is usually used as the billing weight; while for low-density goods (more than 6,000 cubic centimeters per kilogram), the volumetric weight will be considered. Additionally, in some cases, if a lower rate using a higher weight cutoff calculates a lower charge, then the starting weight at this higher weight cutoff will be used as the billing weight.

Analysis of declared value surcharge

In international air transportation, if the cargo owner wants to increase the carrier’s compensation limit, he can choose to pay a declared value surcharge. The calculation method is: subtract the declared value of the goods (actual gross weight multiplied by the maximum compensation amount per kilogram) and then multiply by 0.5%. It should be noted that the carrier’s liability is calculated based on the gross weight of the cargo and has nothing to do with dimensional weight or billable weight.

Through the above measures, cargo owners can protect the safety and value of their goods to a certain extent. Especially when facing high-value or fragile items, reasonable declared value surcharge payment can significantly reduce transportation risks. However, regardless of the declared value, it is not a substitute for insurance.

In summary, understanding and correctly applying the relevant regulations on air freight and declared value surcharges is crucial for international cargo transportation. It can not only help cargo owners reasonably control costs, but also effectively ensure the safety of cargo.