Prepared for Arnon Z. | Delivered August 8, 2019
Air Freight Costs
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To understand the cost structure of air freight and the operational cost-per-kg in current services such as DHL, UPS, USPS.
According to a
World Bank report
, the average unit cost per ton kilometer for air freight depends on the type of operation, the load factor, and the route.
Type of Operation
All cargo carriers include
capital and direct
operational expenses in the calculation for cost per unit.
include rental fees for leased aircraft and depreciation and ammortization for owned aircraft.
Direct operating costs
include fuel, maintenance, crew, insurance.
included in costs are airport and navigation fees, ground handling charges, and airline administration.
Costs can vary depending on whether the flight is
chartered or scheduled.
Due to the time spent loading and unloading air freighters, most can only perform two flights per day. This limits the aircraft to about
or less for shorter, domestic operations and
or less for longer intercontinental routes.
This results in a variation of
unit costs per freight ton-km
associated with the crew and capital expenses.
The route also affects the cost of fuel per kilometer "because of the
fuel consumed per trip
for taxiing, climbing, descending and waiting in holding patterns."
of an aircraft is important in determining price per unit because fuel cosumption is impacted by the weight of the plane.
The load factor is the ratio of an aircraft's lift to its weight. The average load factor for cargo planes is about
42% as of 2018
Average Operational Cost per Aircraft
average operational cost
per aircraft is calculated by dividing the capital costs plus direct operational costs by the number of hours of aircraft operation (called block hours).
The most recent publicly available data reports that the average operational cost per aircraft in the air cargo industry is about
$25,800 per block hour
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