Airfreight moves important cargo around the world quickly, but for a price. Aviation is a complex industry, and airfreight is no exception, meaning that the cost to ship something via air changes based on the originating airport. Dubai’s DXB airport offers some of the cheapest air freight options in the world.
Why is air freight cheaper when it is shipped from Dubai? Dubai’s airport (DXB) is a major international hub—serviced by many airlines—which drives competition and keeps freight transportation costs low. This, in combination with DXB’s geographical location and it’s access to a seaport, is what really makes it the premier hub for airfreight.
While Dubai may offer competitive air freight prices, understanding the air freight industry is not as simple as knowing the cheapest origin airport. Prices for cargo shipping and air freight are determined by a number of factors that are always in flux. To make informed business decisions, you have to understand a little more about the aviation and shipping industries as a whole.
The Dubai Advantage
As mentioned above, air freight is cheaper when it originates in Dubai because it’s major airport boasts a few advantages. It offers direct flights from over 70 different air carriers to hundreds of different destinations. This means the competition between airlines for air freight contracts is fierce and ultimately drives costs down. You can explore a cool interactive map of the routes and carrier options offered from Dubai (DXB) airport here.
But, while competition is an important factor in how airfreight prices are determined, there is a little more going on in Dubai.
Location, Location, Location
Right off the bat, the geographical location of the United Arab Emirates (UAE), and thus, Dubai, plays a role in its airport’s competitive airfreight prices. Globally speaking, Dubai is centrally located between Asia, Europe, Africa, and (at least) the eastern coastlines of the Americas.
Jet fuel is a major expense when transporting airfreight, so the shorter distances it is transported, the cheaper it will be. This makes it cheaper to fly airfreight from the UAE to Germany than from China to Germany, for example.
Though its proximity to the rest of the world plays a part in keeping prices low, Dubai’s core geographical advantage is its access to a seaport, which plays a crucial role in keeping air freight costs low.
The Air and Sea Approach
Just because air freight is leaving Dubai on an airplane does not mean it arrived on a jet. Dubai has three seaports allowing them to import a massive amount of goods that can then be shipped out via air to other parts of the world.
Comparatively, sea-shipping is less expensive than air freight, so the ability to transport freight by ship, into Dubai, before putting it on an airplane, becomes a major money-saver.
This is because air freight costs are calculated by the airport-to-airport price of shipping cargo, which is determined by a number of factors. The bottom line is, the fewer airports freight travels through, the cheaper the airfreight contract will be.
For these reasons, the combination of a seaport and major international airport becomes a dynamic duo and why DXB has such a competitive advantage. It offers a diverse range of non-stop flights to destinations around the globe from a number of carriers at a fraction of the cost of airfreighting something directly from its origin.
In the aviation industry, the route between two airports is called a “market.” As previously mentioned, the air freight costs are determined by the airport-to-airport itinerary of the contract, or the contracts’ market. The same is true for passenger ticket prices, and there are a few reasons for this.
As we know, the origin airport plays a big role in the price of airfreight, and DXB is currently able to offer very low prices for air freight and cargo due to its geographical location and status as a major international airport. The same can be said for the destination airport. Destination airports influence the cost of an airfreight contract in two ways: airport charges and market popularity.
Airport Charges and Hidden Fees
Each airport charges airlines a certain set of fees per landing. These fees differ from airport to airport, meaning it may be cheaper to land at one airport instead of another. These fees also increase depending on the overall weight of the aircraft. So, the heavier an aircraft is, the more expensive it will be for it to land.
These costs are usually passed on to the customers, passengers, and cargo alike, which can make one market more expensive than another even if they are otherwise similar. If you want to find out what the airport charges are for a specific airport, this website is really useful.
Market popularity also determines the cost of shipping something. Quite logically, popular destinations receive more air-traffic, which has a two-fold effect on airfreight costs.
First, as mentioned above, the big international airports, like DXB, are often serviced by several major airlines, whereas unpopular destinations may only be serviced by a single airline. This means that competition plays a role, not only in the origin airport’s economy, but also in the destination airport.
For example, if you ship from Dubai (DXB) directly to Glasgow, Scotland, the only airline that could ship the airfreight would be Emirates Airlines. They have a monopoly on that particular market and can charge what they please, but if you ship from DXB to London you end up with more options. Not only do you now have the choice between Emirates and British Airways, who will have to compete with one another, you can also pick between three airports and go for whichever one has the lowest landing fees.
Second, destination popularity increases the number of flights an airline will operate from one airport to another. Going back to our hypothetical example to illustrate this, if you ship directly from Dubai to Glasgow, chances are, Emirates Airlines offers just one daily operation to that destination. This forces the airline to fly heavy, fully-loaded planes to that destination, causing them to incur higher landing fees.
On the other hand, if you ship from Dubai to London with Emirates, there are likely multiple flights operated each day. This allows the airline to spread the cargo out over several flights and ultimately keep their landing fees low.
Airline Price Fluctuation
Finally, let us explore how airline prices fluctuate throughout the year and why that impacts airfreight. Monitoring and understanding fluctuations in air freight rates can help you save money.
Market Rate Fluctuation
Rate fluctuations are based upon demand for a certain market. There are some markets that remain steady year-round. Dubai to London and Dubai to Frankfurt, for example, are likely to maintain a high level of demand year-round, which means the air freight rates for that market will be relatively stable.
On the other hand, markets like Dubai to Orlando, Florida, are likely to fluctuate. Demand for direct flights from DXB to Orlando International Airport (MCO) revolves around Disney. During Disney’s off-season, flights between DXB and MCO will be cheaper, making it the right time of year to draft airfreight contracts for that market.
It is also important to note that some airline markets are seasonal. For example, it may be possible to airfreight something directly from Dubai to Cape Town, South Africa, between November and May, but it may not be possible during the rest of the year. This could cause air freight routes to change and possibly result in an increased charge, or the need for logistical adjustments.
Other economic factors will cause fluctuations in air freight prices, including changes in the price of jet fuel and the general status of the global economy. These two points are relatively self-explanatory, but it does bear mentioning that keeping tabs on these factors can help to time cargo shipments and save money on air freight contracts in the long-term.
Knowing that Dubai has the cheapest origin-airport cargo rates and having more information about how the airfreight and airline industries operate, should equip you to be able to make informed business decisions regarding international airfreight.