Air cargo transportation in BRICS: pros, cons and cost

Every second customer who calls for the first time utters this phrase. I need it as soon as possible. Everyone wants a plane. And then they hear the price, and the conversation smoothly turns to shipping. This is an eternal story in our work. BRICS air transportation is such a beautiful, shiny showcase that hides a very specific, very expensive and very capricious tool.

You need to be able to use them. Otherwise, it's not logistics, but just a beautiful way to spend money. Let's figure out when this game is worth the candle.

When an airplane is not a luxury, but the only way out

Let's be honest. When does it really make sense to export by air? There are only a few scenarios where this is justified.

1. When time is literally money.
   Speed is the main, only and indisputable trump card. Take, for example, the route from Xiamen in China to Sao Paulo in Brazil. Your container will travel by sea for 30 or even all 50 days. Delivery by plane will take 2-5 days. The difference is huge. Imagine: you have a batch of fresh flowers, expensive vaccines with a short shelf life, or samples of a new collection that should have been shown at the exhibition yesterday. If they do not arrive on time, the losses will be many times greater than the cost of transportation. Or another example: in Brazil, a machine broke down at a factory. The necessary spare part is only available in a warehouse in the Russian Federation. Every hour of downtime means thousands of dollars in losses. Will someone be waiting for the ship for a month and a half? The question is rhetorical.
2. When the cargo is too valuable to risk.
   Safety is the second point. The longer the cargo is in transit, the more trouble it can cause. There are storms at sea, eternal congestion and queues at ports. And, let's be honest, the risk of theft. Everything is stricter at the airport. There are fewer overloads, fewer people have access to cargo, and control is an order of magnitude higher. Therefore, when it comes to chips, expensive electronics, jewelry, everyone prefers to pay more, but sleep well. Saving on transportation can easily turn into a complete loss of goods.
3. When you need to reach the other side of the world.
   The major airports of the BRICS countries are powerful international hubs. Shanghai Pudong in China is not an airport at all, but a cargo handling city, it is connected to 250 locations around the world. Guarulhos in Brazil is the gateway to the whole of South America. O.R. Tambo in South Africa is to Africa. The same Brazil-India air delivery, despite all its complexity, is made possible precisely thanks to these hubs. They allow you to connect things that cannot be connected by land.

 About money and other issues

That's where the whole beautiful theory ends, and the harsh practice begins. If everything is so good, why doesn't everyone fly?

1. Price. It is expensive. Very, very expensive.
   Let's talk about the current prices of air transportation. These are not abstract numbers.

• Take the popular China-Brazil route. The standard tariff is from 6.5 to 8.5 dollars per kilogram. Do you want an express? Cook for $9-12.
• The global average tariffs have been fixed in the range of $3-7 per kilo since the pandemic. Before it was 2.5-5. The increase in fuel prices, the shortage of pilots and staff on the ground, all this is included in your bill.

Let's do the math. A small shipment weighing 100 kg en route to Brazil will cost you 650-850 dollars. And that's just the freight. Add here airport fees, fuel surcharges, security costs, and ground transportation. The amount is easily doubled. Now imagine a pallet weighing half a ton. The entire economy of your project can go down the drain at once.

2. Limitations. Everything won't fit on the plane.
   This is not a container ship. The load capacity and volume of cargo compartments are limited. Even a large cargo Boeing B777F takes on board a little more than 100 tons. And thousands of containers can be placed on one container ship, weighing tens of thousands of tons. The scale is simply incomparable. Therefore, if you want to send a shipment of fertilizers, coal or grain, you don't even have to call the air broker. They just won't understand you. It is a transport for individual, light and expensive goods.
3. Customs is not going anywhere.
   Yes, your cargo arrived in two days. And then he can be stuck at customs for a week. Because Brazil, for example, has its own import duties, which can reach up to 35% of the cost. And there are complex registration rules in the Siscomex system (Brazil's integrated foreign trade system that manages import and export processes). If you have at least one digit in the invoice that doesn't match, or the HS code is disputed, that's it, we're here. Your urgent cargo will be stored in a temporary storage warehouse, and the storage meter will be ticking. The plane did its job, but the bureaucracy didn't.

What's going on in the market right now?

Despite all the disadvantages, volumes are growing. Especially in Asia.

• China is ahead of the rest of the planet here. Almost 20 million tons of air cargo per year. Their entire giant e-commerce market is kept up to speed.
• India is also catching up. They currently have just over 3 million tons, but growth forecasts are up to 9.5 million by 2033. They are actively building infrastructure.
• Brazil transports about 1.4 million tons, and most of it is international cargo.

But in Russia andThings are more difficult for South Africa. There is almost no fresh and complete data. It is clear that the sanctions have hit Russia's international routes hard, forcing it to refocus on domestic flights and its closest neighbors.

Of course, they are trying to do something together. For example, the launch of a cargo flight within the framework of BRICS air transportation: Xiamen (China) – Addis Ababa (Ethiopia) – Sao Paulo (Brazil). Ethiopian Airlines flies. Twice a week. But let's be realistic: two flights a week is a drop in the bucket. This is a niche, boutique service for selected cargoes. This does not make weather for the market as a whole, but it shows that they are at least looking for ways.

So what's the conclusion?

Air delivery is always a compromise. You are exchanging money for time. And before making a decision, you just need to sit down with a calculator and calculate honestly. Which is more expensive for you: a week of equipment downtime or several thousand dollars on top for transportation?

If this calculation converges in favor of the aircraft, great, this is your tool. If not, then welcome to the world of shipping, with its slow pace and challenges.

In order not to make mistakes in these calculations, you need to know the current rates and understand all the risks, which we will discuss in other articles.