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					Freight & Logistics 4
     Sponsored by




     Freight and Logistics
     By Rosemarie Dawson


     Rosemarie Dawson is executive director of the Customs Brokers and Freight Forwarders Federation of
     New Zealand (CBAFF)—an organisation that seeks to develop a favourable environment for member
     companies and individuals participating in the customs broking and freight forwarding industry.
     admin@cbaff.org.nz

     Logistics is the art (or science) of getting your goods       knowledge of best available routes, carriers and
     from your suppliers into your warehouse or                    rates to find you the best deal available
     manufacturing process, and then transporting them           • Arrangement of onward delivery. Although freight
     to your customer.                                             is often delivered from port to port (or airport to
        There are a many different options you can use,            airport), they will also be able to offer you the
     but the main three are:                                       option of door-to-door delivery
     • Sea freight: especially good for large volumes            • Customs clearance. This includes the completion
       where speed is not important                                of customs documentation and the payment of
     • Air freight: especially good when speed is crucial.         duties and taxes (which will then be billed to you,
       Airfreight is generally more cost effective than a          probably with a customs clearance fee added).
       courier or parcel service if the shipment is over         • All necessary documentation
       70kg in weight                                            • Advice on compliance and all relevant foreign
     • Parcels or courier: especially good when selling            import/export regulations and ensuring all these
       directly to consumers or directly into retail outlets.      are fulfilled and any dues correctly and fully
     In a perfect world, most exporters and importers              lodged and paid
     would like their logistics chain to:                        • Tracking of your goods. Some forwarders have
     • Achieve lowest cost of operation possible                   automated on-line tracking systems that allow
     • Deliver and receive on time and to order                    you to track your goods at all times. Others have
     • Achieve total transparency throughout the entire            manual systems that require you to contact the
       supply chain                                                forwarder for updates.
     • Achieve best utilisation of assets in the supply chain.   Mail and courier companies offer a slightly different
     • Create competitive advantage from a truly integrated      set of services:
       supply chain.                                             • Door-to-door delivery for parcels up to around
                                                                   50kg per box, depending on the company. Some
     The Role of the Freight Forwarder
                                                                   mail and courier companies also offer airfreight
     Most airline and shipping lines are not interested in
                                                                   and sea freight services as well
     dealing directly with importers and exporters unless
                                                                 • Fixed, known price that does not fluctuate from
     you have particularly large volumes. This means you
                                                                   shipment to shipment
     are likely to get a better price and a better service
                                                                 • On-line tracking
     by using a freight forwarding, courier, or mail
                                                                 • Some customs clearance services are generally
     company than you are by going to the airline or
                                                                   available, especially if you are using a courier
     shipping company direct.
                                                                   service
        Freight companies provide a different set of
                                                                 • Import service to collect parcels from your supplier
     services from mail and courier companies. The basic
                                                                   and deliver it to you in New Zealand, or direct to
     services provided by freight forwarders are:
                                                                   your customer.
     • Seafreight and airfreight, although some freight
                                                                 Some freight forwarders, mail companies, and
       forwarders may also offer a parcel or courier
                                                                 courier companies can also offer you a number of
       service as well
                                                                 value added services including:
     • Arranging and booking the movement of goods
                                                                 • Warehousing
       from origin to destination. Like a travel agent, a
                                                                 • Pick ‘n’ pack
       good freight forwarder will have a comprehensive

38   NZ Export & Trade Handbook 2011
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     • Fulfillment of purchase orders down to bar code or     • How important is it for me to be able to track my
       RFID level.                                               goods in real-time?
        If you aren’t, or don’t want to be, an expert in      If importing:
     logistics and supply chain management, outsourcing       • Do I have to arrange the pick-up from my supplier’s
     your warehousing function can create savings and            premises (ex-works)? Will the supplier deliver to the
     free you up to concentrate on other aspects of your         port, but leave me to arrange export clearance,
     business.                                                   insurance, and freight?
                                                              • Are there any import restrictions or import
     Choosing a Freight Forwarder
                                                                 licenses I need?
     Understand your own requirements. Some of the
                                                              If exporting:
     critical questions to understand before seeking
                                                              • Will my customer arrange the pick-up from my
     quotes from forwarders are:
                                                                 premises (ex-works)? Will I have to deliver to the
     • Where are my goods coming from or going to?
                                                                 port, but leave my customer to arrange export
     • What quantities will I be importing or exporting? If
                                                                 clearance, insurance, and freight? Will I have to
       considering sea freight, how many cubic metres? If
                                                                 arrange the delivery right to my customer’s door?
       considering air freight or courier, what weight and
                                                              • Do I have a large number of small customers or a
       what volumetric weight?
                                                                 small number of large customers?
     • How often will I be importing or exporting?
                                                              • Do I want to freight directly from my supplier to
     • Do my goods have special requirements (e.g.
                                                                 my customer without the goods coming through
       temperature requirements, or dangerous goods)?
                                                                 my warehouse at all?
     • How time critical are my goods?
                                                                  With your list of requirements, you should shop
                                                              around and get quotes from more than one provider.
                                                              Different companies have different strengths, so the
                                                              pricing you are offered could vary considerably. If
                                                              your goods are on the borderline between parcels
                                                              and freight, make sure you get quotes from freight,
                                                              mail, and courier companies. In this case, you may
                                                              want to use a company that can offer you all three
                                                              services.

                                                              Size of freight forwarder
                                                              Choose an appropriate size freight forwarder for the
                                                              size of your business. Larger freight forwarders can
                                                              generally get better rates from airlines and shipping
                                                              companies. This is great news if you import or export
                                                              in large volumes, but if you import or export in small

             shiPPing Freight                                 quantities they may not pass these good rates onto
                                                              you, or you may not get the level of personal service

              recruitment
                                                              you need. If you are small, you may find that you are
                                                              better off being a large customer of a small freight

               specialists
                                                              forwarder than a small customer of a large one.

                                                              Strengths of each company
       • Exports • Imports • Sales • Operations               Forwarders tend to specialise in airfreight, sea freight,
              Phone: Neale (09) 489 8099                      or in mail or courier deliveries, and they tend to have
            Email: neale@primerecruit.co.nz                   strengths in different geographic locations. By
                                                              shopping around you will be more likely to find a
               www.primerecruit.co.nz                         forwarder who has strengths in exactly the areas
                                                              you need.
           Prime recruitment consultants ltd

40   NZ Export & Trade Handbook 2011
                                                                                                                                                                                                                                Freight and Logistics




Border clearance expertise
Border clearance includes clearing with both customs




                                                                                         We focus on our customers’ needs & provide the airfreight industry and shippers the




                                                                                                                                                                                                                                    for supply chain & fast moving consumable items
                                                                                                                                                                                                                                    When permanent dedicated capacity is critcal to
and quarantine requirements (e.g. MAF in New




                                                                                                                                                                                                                                    your business, our Go Express is an ideal match




                                                                                                                                                                                                                                                                                       require protected capacity on a regular basis on
                                                                                                                                                                                                                                                                                       Designed for forwarders and their shippers who
                                                                                         specialised knowledge ensure your shipments are handled with the utmost care.
Zealand and AQIS in Australia). If border clearance




                                                                                                                                                                               The fastest most highly specialised airport to
                                                                                                                                                                               airport service which recognises the critical
                                                                                         delivery solutions they require. Our team of friendly cargo professionals with
is not handled properly you can incur unnecessary




                                                                                                                                                                               nature of goods shipped as Go Priority.
delays enforced by customs or quarantine agencies,
additional costs from these delays (such as additional
transport and devanning and storage charges to
allow Customs to examine the goods), as well as




                                                                                                                                                                                                                                    and perishable shipments.
unnecessary duties if your goods are not classified
correctly. A good forwarder will have access to quality




                                                                                                                                                                                                                                                                                       nominated flights.
customs brokers (either their own or via agents) that
will give you accurate advice on tariff concessions
that can save you money on duties as well as
avoiding costly delays from incorrect handling or
documentation. Check what customs expertise is
available to you through the forwarders you are
considering.




                                                                                                                                                                                                                                                                                                                                          www.airnewzealand.co.nz/cargo
New Zealand border clearance expertise
All imports and exports into and out of New Zealand
must be cleared through the New Zealand Customs
Service. Some forwarders have direct EDI links with
New Zealand Customs that speed up this process
and keep costs down.

Quality of other advice
Similar to border clearance expertise, there are other
                                                 12:04 PM




parts of the process that can create unnecessary
delays or costs if not handled correctly. Look for the
best source of information and assistance on import
                                                 6/12/10




and export regulations, security and bio security
protocols and compliance, documentation, shipping
methods, and freight costs. Getting this right at the
                                                 1




beginning can save you a lot of money later on.
                                                 6059_Cargo_Advert_68x195_Landscape.ai




Additional costs
There may be additional charges for things such as
duties and taxes, customs clearance, insurance,
                                                                                                                                      CONNECTING NZ




quarantine fees, and remote area delivery fees. To
                                                                                                                                       & THE WORLD




avoid unexpected costs, ask your forwarder about
additional costs up front.

Tracking
Some companies, particularly mail and courier
companies and the large forwarders, offer real-time
on-line tracking systems that give you complete
visibility of the location of your goods at all times.
Others have more manual systems which mean that
you’ll have to contact your forwarder for regular
updates. Decide how important real-time tracking is


                                                                                                                                                                                                                                             NZ Export & Trade Handbook 2011                                                                                              41
                                                                                                                                                                                                                                                                                      CMY
                                                                                                                                                                                                                                    CM



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                                                                                                                                                                                                                                                                                                               K
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     to you when assessing which company to use.                so demand increases for efficient transfers and feeder
        Exporters are increasingly e-business driven and        services for cargo moving to and from hub ports.
     therefore looking for IT solutions as a faster way
                                                                Rail
     of doing business. If you have the interest and the
                                                                The New Zealand Railways Corporation (NZRC), trading
     capability to integrate IT systems, look for a logistics
                                                                name KiwiRail, is a state owned enterprise that
     company that has a sophisticated IT system.
                                                                manages the rail and ferry businesses owned by the
        Once you have chosen which forwarder to use,
                                                                New Zealand Government.
     keep the quotation and compare it with subsequent
                                                                   Current weight restrictions and tight tunnels mean
     invoices.
                                                                that significant volumes of rail freight is transferred
        Most large providers provide electronic invoicing
                                                                from rail to truck for certain sections of the trip. The
     with fully itemised accounts. You should demand
                                                                goal is for rail to become much more efficient for the
     total transparency.
                                                                movement of containerised goods around New
     Questions to Ask a Potential Provider                      Zealand.
     Depending on the nature of the business you’re                With 40% of cargo moving in and out of the port
     doing, some or all of the following questions will be      by rail, the Port of Tauranga is committed to using
     relevant:                                                  trains as the best way to move goods to and from
     • Are you capable of directly controlling the freight      the port where possible. A state of the art rail head
       throughout the supply chain?                             at Ports of Auckland has remained under-utilised due
     • What are your agreements with transporters? Do           to a lack of rail services and a lack of commitment
       you have capacity allocations?                           by former rail operators. New developments include
     • Are you capable of professionally representing           a new rail siding at the port company’s inland port
       my company when dealing with banks, carriers,            (IP) at Wiri.
       Customs and other agencies?                                 This will enable the replacement of road transfers
     • Can you pre-clear my goods through customs?              between the IP and the seaport with a rail shuttles
     • What advice can you give me on export/import             which is expected to considerably increase utilisation
       regulations, customs classifications, security           of the POAL rail grid and significantly increase the
       requirements, and other documentation I need to          amount of cargo moving in and out of the port by rail.
       get my goods moving efficiently?                            In 2009 KiwiRail commissioned a new track
     • What tailored solutions can you offer?                   maintenance fleet as part of a $25 million project to
     • Are you financially stable with the backing to deliver   improve the efficiency and quality of New Zealand’s
       on your promise?                                         rail track maintenance. KiwiRail have forecasted freight
     • What added value services can you offer?                 volumes to increase by 75% over the next 20 years
     • How easily will your IT systems interface to gain        and is targeting investment to those lines which carry
       maximum benefit? How comprehensive is your               the heaviest freight volumes. The busiest rail freight
       system? Will the system advise my company of the         route is the ‘golden triangle’ between Auckland and
       status and whereabouts of my cargo at any given          Tauranga.
       time?
                                                                Road
     • What is your knowledge of my export markets?
                                                                Some 250 trucking companies deliver and collect
       Where do you have expertise and local presence?
                                                                containers at Ports of Auckland (POAL), New Zealand’s
       e.g. China, India?
                                                                largest port. Operating 24/7, the port has achieved
     • Will my company have a nominated account
                                                                an increasing spread of business throughout the day
       manager?
                                                                and night however, as volumes increased, there
     Getting Your Goods to and from the Port                    remained a concerning ‘disconnect’ between the
     With Government support, rail and coastal shipping         port’s 24/7 operation and the restricted business
     are targeted as a cheaper, greener alternative to          hours of New Zealand shippers (exporters and
     trucking for the movement of New Zealand freight.          importers) all of which contributed to the marked
     As international shipping lines reduce New Zealand         operating pattern of peaks and troughs of truck
     port calls to focus over one or two major hub ports,       movements at POAL.


42   NZ Export & Trade Handbook 2011
                                                                                         Freight and Logistics




   New Zealand has in fact been described as light            major competitive weapon. Called onTap, it underpins
years behind other countries in its restricted opening        Tapper’s entire operation allowing electronic despatch
and operating hours with many warehouses,                     of all the company’s vehicles, GPS tracking of the
distribution and acceptance centres closed between            fleet, the production of realtime web-based reports
5pm and 7am weekdays and all weekend.                         which means that customers can access the Tapper
   A prominent member of the road transport sector,           web site to get cargo tracking information which at
Tapper Transport is New Zealand’s largest container           any time is no more than 2.5 minutes old.
transporter and largest wharf carrier, previously
                                                              Inland Ports
family-owned, the company was acquired by the
                                                              The introduction of Inland Ports (IP) has been
Port of Tauranga in 2010. In Auckland Tapper operates
                                                              advantageous for exporters and importers. The
Australasia’s largest freight station and a highly
                                                              efficient flow of cargo to and from the wharf has
sophisticated IT system. The Tapper’s operation
                                                              become a very important element in the supply chain
includes wharf cartage, unpacking and packing of
                                                              today. The IP is designed to bring the wharf closer
LCL containers, national distribution of cargo and
                                                              to the customer’s doorstep. Generally, the IPs are
containers. In line with overseas trends, Tappers’
                                                              Customs bonded and MAF approved transitional
freight station is a 24/7 operation which enables the
                                                              facilities. Port of Tauranga was the New Zealand
company to decrease day time transfers to and from
                                                              inland port pioneer with its introduction of Metroport
the port while increasing off-peak night moves.
                                                              in the middle of POAL’s industrial Auckland
   When shippers are selecting transporters, fast
                                                              heartland. The Auckland port quickly followed suit
and accurate information exchange must be a priority
                                                              and now has two inland ports in South Auckland.
requirement. Tapper describes its IT system as its
                                                              Some of the advantages of the Inland Port (IP):




                                            fast »
                                             track
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                              The Manukau Institute of Technology Centre for Logistics in conjunction with the
                              New Zealand Maritime School offers full-time, part-time or distance flexible learning
                              programmes.

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                              from one day workshops to night school classes or distance electronic based programmes.



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                                                                                            NZ Export & Trade Handbook 2011         43
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     For exporters:                                             straight off the wharf to the IP to await Customs
     • Container acceptance 24/7 without the need for           and MAF clearance
       the carrier to go all the way to the port              • Using POAL’s Wiri IP as an example, containers are
     • Using POAL’s IP at Wiri as an example, the inland        repositioned from the seaport to the IP ready for
       port accepts containers up to 10 days prior to           immediate release next morning or, they can be
       loading for free storage however, exporters can          held for as long as importers require. Demurrage
       use the Wiri IP to feed export containers in as and      is not in the equation. At Wiri there are six
       when they wish thus freeing up capacity on their         storage-free days after which there is a cheaper
       site                                                     storage rate scale rather than a demurrage scale
     • Export boxes awaiting CEDO numbers can remain          • An important element of the IP service is the
       at the inland port until the CEDO number is issued       repositioning of empty containers. Because of the
       and attached to the container                            nature of New Zealand’s manufactured and dry
     • They enable exporters to clear their own production      goods imports and domination of reefer exports,
       facility and yard reducing land requirement              there is a proliferation of empties awaiting transfer
     • Once containers are delivered to the inland port         out of the country. The IP gives the opportunity
       exporters can forget about them since the inland         for these to be removed from importers’ yards
       port takes responsibility from thereon and delivers      where they take up valuable space, and held at,
       containers to the port one or two days before            for example, Wiri where they await redirection
       vessel arrival.                                          to the seaport as required. In the achievement
     For importers:                                             of perfect efficiency, an empty container could
     • They get a ‘where and when and how do you want           be returned to the IP and exchanged for a full
       to receive your container’ service                       container.
     • Faster delivery of containers because they move




     Air Freight
     By Air New Zealand Cargo

     Air New Zealand Cargo connects New Zealand, Australia and the South Pacific with Asia, Japan, North
     America and Europe. www.airnewzealand.co.nz/international-cargo

      Various seasonal products require air travel due        Zealand market this year. Several small operators
     to their perishable nature including seafood, cut        also offer limited amounts of capacity to various
     flowers, meat, fruit and vegetables, and dairy           destinations.
     products. Throughout the year significant volumes           With their extensive networks, the major airlines
     of dry goods are exported by air, including plastic      are able to offer capacity and frequency to markets
     goods, clothing, machinery parts and electrical goods.   in their network worldwide. Airlines manage their
     Live animals also travel by air.                         network capacity to get the best return from the
                                                              cargo on offer in the various worldwide markets.
     Airlines
                                                                 To extend market reach, airlines have inter-line
     New Zealand remains well served for airline capacity
                                                              arrangements with partner airlines so they can offer
     with a competitive market offering shippers
                                                              destinations they do not serve themselves. Airlines
     alternative options to get their product to market.
                                                              offer this where connectivity with the other airline
        Air New Zealand, Qantas, Singapore Airlines,
                                                              works for the shipper and service can be provided
     Emirates, Cathay Pacific, Royal Brunei, Korean, Thai
                                                              through to destination.
     and Malaysian Airlines supply the bulk of air cargo
     capacity to the New Zealand market. China Airlines       Hubs
     and China Southern are planning to enter the New         Airlines operate hub-based flight schedules. Usually


44   NZ Export & Trade Handbook 2011
                                                                                 Freight and Logistics




the hub is their home base, although some airlines             Several airlines operate cargo-only aircraft into
operate from more than one hub. For example, Air            New Zealand. A 747-400 freighter has approximately
New Zealand operates its main hub in Auckland               110 tonne/740 cubic metres of capacity. Currently
with connecting flights from Asia/Japan or the              Singapore Airlines, Qantas and DHL Express operate
USA feeding cargo onto Tasman or Pacific Island             an assortment of freighters in and out of New
services. Qantas’ main hub is Sydney so cargo sold          Zealand on a regular basis.
in New Zealand destined for Asia/Japan connects                Domestically in New Zealand there is a combination
with services from Sydney to those markets. At these        of bulk or loose loaded aircraft together with
hubs airlines have efficient infrastructures on the         containerised A320s operating to main centres.
ground to ensure timely transfers between flights.          Smaller provincial centres tend to be serviced by
                                                            smaller aircraft. All these aircraft can carry air cargo
Capacity
                                                            although much less than their international
Airlines have air cargo capacity in the belly holds
                                                            counterparts.
of passenger aircraft. As an example, a Boeing
777-200 travelling from Auckland to Sydney                  Freight Forwarders
has approximately 20 tonne/80 cubic metres of               Airlines sell the vast majority of cargo capacity on
capacity for cargo after passenger bags are loaded.         passenger airfreight or cargo-only freighter aircraft
The capacity is reliant on the aircraft type, flight        to freight forwarders. Freight forwarders offer a
duration, as well as the weather. Cargo is loaded           range of services to exporters, importers and the
into purpose-built aircraft containers. In many             general public. For instance they complete export
instances the forwarder will tender containers to the       documentation required by regulatory agencies
airline already built up. This will either be made up       such as Customs and MAF. Major airlines also have
with products from one shipper alone, or through            relationships with the key exporting companies
consolidating multiple shippers in one unit. There is       which require carriage by air.
a small compartment at the rear of the aircraft for            A handful of freight forwarders handle approximately
loose loaded cargo.                                         85% of exports by air from New Zealand. They are


Air Freight Containers
 Designation     Width (in) Height (in) Depth (in)      Base (In)   Max load (lb) Max load (kg)          Shape
     LD-1            92          64          60.4          61.5          3500           ~1588            Type A
     LD-2           61.5         64            47          61.5          2700           ~1225            Type A
     LD-3            79          64          60.4          61.5          3500           ~1588            Type A
     LD-4            96          64          60.4          n/a          5400            ~2449         Rectangular
     LD-5           125          64          60.4          n/a          7000            ~3175         Rectangular
     LD-6           160          64          60.4          125          7000            ~3175            Type B
                                                                                                        Rect. or
     LD-7           125          64           80           n/a          13300           ~6033
                                                                                                       Contoured
     LD-8           125          64          60.4          96           5400            ~2449            Type B
                                                                                                        Rect. or
     LD-9           125          64           80           n/a          133a0           ~6033
                                                                                                       Contoured
    LD-10           125          64          60.4          n/a           7000           ~3175          Contoured
     LD-11          125          64          60.4          n/a           7000           ~3175         Rectangular
    LD-29           186          64           88           125          13300           ~6033            Type B
LD-1, -2, -3, -4, and -8 are those most widely used, together with the rectangular M3 containers.

                                                                                       NZ Export & Trade Handbook 2011   45
     Sponsored by




     Hellmann International, Mainfreight International,       shipments have a higher urgency on acceptance and
     GV International, Kuehne & Nagel, International          delivery at destination. There are also times when
     Cargo Express, DB Schenker, DHL Global Forwarding        charter flights are required. Charges in these cases
     and Toll Global Forwarding. Some forwarders also         will reflect the aircraft size and type required, and
     have specialist perishables divisions and facilities     where the flight originates and terminates.
     servicing the significant proportion of perishable
                                                              Sources of Further Information
     exports from New Zealand.
                                                              Details about airlines or freight forwarders can
        Airlines will generally provide allocated capacity
                                                              be found on either their websites or in the Yellow
     to freight forwarders on certain flights where
                                                              Pages. Websites will give a more comprehensive
     demand exists due to the destination of the flight or
                                                              picture of the services offered, including flight
     the day of the week that the flight operates. Airlines
                                                              schedules. Shippers can also track their shipments
     will provide these allocations based on the best
                                                              status, including flight/delivery details, through the
     return to their business taking into account the year
                                                              major airlines and freight forwarders websites.
     round value of the business from that particular
     freight forwarder/exporter.

     Air Cargo Handling Services
     Air cargo handling service companies accept export
     cargoes from freight forwarders and load the aircraft
     for the airlines that contract them.
        Similarly for imports, cargoes are released to the
     freight forwarders, often under bond. In those cases
     the freight forwarder obtains Customs clearances
     while the goods are in the forwarder’s warehouse.
     Speedy on the ground timeframes are just as
     important for the exporter or importer as the time
     taken for the carriage by air. Smooth transitions
     through the supply chain are the key.
        Two main companies offer air cargo handling              Other Sources of Information
     services to airlines in New Zealand. These are Air          Chambers of Commerce
     New Zealand and Menzies Aviation. Both companies            http://www.newzealandchambers.co.nz/
     have substantial warehouse operations, particularly
                                                                 Chartered Institute of Logistics & Transport NZ
     at Auckland International Airport.
                                                                 www.cilt.co.nz
     Charges
                                                                 Customs Brokers & Freight Forwarders
     Airlines publish their tariffs in the airline industry
                                                                 Federation of NZ (CBAFF)
     publication – the TACT. Generally all airline rates
                                                                 www.cbaff.org.nz
     are negotiable from these published rates. Freight
     forwarders will negotiate rates with the airlines           Export New Zealand
     and then provide their own pricing schedule to the          www.exportnz.org.nz
     shipping public. Based on the supply of capacity
                                                                 New Zealand Shippers Council
     and demand at certain times of the year, airlines will
                                                                 www.shipperscouncil.co.nz
     charge their published TACT tariff for high demand
     destinations. Air cargo rates are generally charged         New Zealand Trade and Enterprise
     on a per kilogram basis. However the density                www.nzte.govt.nz
     (kilograms per cubic metre) is taken into account
     when rates are offered, as space rather than weight
     on an aircraft can be the limiting factor.
        Airlines also offer differentiated services and                              0800 275 868
     pricing for various products. For example, express                              www.tnt.co.nz

46   NZ Export & Trade Handbook 2011

				
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