Aviation Logistics Knowledge Lecture – Premium Rate

Hello everyone, remember when we mentioned the Premium rate last time when we talked about port congestion? Today, let’s talk about the Premium Rate that airlines often talk about. The so-called Premium Rate, literally understood, is the “preferred price”. Why is it preferred? Because usually he is the most expensive.

 

This kind of expensive is deviated from the market price and is not linked to the market rate. Just to give an inappropriate example: the PVG-LAX line, maybe the current market price is 15 yuan, then the price of this premium rate will be 55 yuan. Why is this possible? Mainly because of some characteristics of goods using Premium Rate, that is to say, the nature of this product determines the price.

 

We have been saying before, what kind of service is equipped with what kind of price. The use of Premium Rate products simply brings this spirit to the extreme. And these products, each airline will have a different name. Then let’s first take a look at what the Premium Rates of several airlines are called.

 

LH’s is called td.Flash:

 

QR’s name is QR Gold (called QR Plantinum before the epidemic):

 

EY’s is called FastTrack:

 

EK’s is called Emirates AirFreight Priority:

 

SV’s is called Express (Express Hevy was recently added):

 

TK’s is called TK Plus:

 

These products, without exception, are all sold at very high prices. Why can they be so expensive? It is because there are some special goods that have very high requirements on timeliness and cannot accept standby, but there is no BSA for the airline company, so these products appear. Generally speaking, these products have the following characteristics:

• High price (nonsense)
• Position Guarantee (conditions apply)
• late booking
• late entry
• Priority unloading
• Except for some special goods such as BSA and human organs, the priority of using premium rate goods is the highest

 

Wait. These features are unmatched by ordinary products. So their prices are also higher than other general merchandise prices, and much higher. Let’s take a look at them one by one.

 

Let’s not talk about the high price, let’s take a look directly at how it is a position guarantee under limited conditions. That is, if you do not consider factors such as the late arrival of the plane, the downgrade of the model, the weather delay, the failure of the aircraft parts, etc., the priority of ordering the warehouse of the Premier’s goods is higher than that of other goods. The position here usually refers to the position of free sales, that is, the position outside the contract. This is not difficult to understand, because some agents have signed a death contract with the airline, and this part of the position cannot be moved, otherwise it will not be called a death contract. If the agent fails to complete the contract, a fine will be paid. Similarly, the airline is also obliged to guarantee this part of the position. Not even Premium can move. But among free sales positions, Premium has the highest priority. This means that if there are two shipments now, both of which are vying for free sales positions, then the goods with premium prices will definitely get priority over the goods with ordinary or even adhoc prices. The reason is also very simple, people give more money. Just like my bank savings card, which is an ordinary card, I need to queue up to go to the bank counter. For platinum cards, diamond cards, etc., there is a special window to handle it, so there is no need to queue. Because the annual fee is higher than my annual spending power. (manual dog head)

 

Generally speaking, each flight will reserve a part of the space for premium cargo. If no one subscribes for this position xx days before the flight takes off, these positions will be released for other goods. Or, when a certain flight has goods with premium prices, other low-priced goods in free sales will be pulled down, and the storage space will be placed on premium goods.

 

Late booking, maybe not many friends know about it. Why can the goods with the premium price be booked late? Because of its high price, should I give you more time to think about it? Of course not, the logic is reversed. Usually we know that we need to book a warehouse, usually a week in advance (you guys don’t have to compete, when there is no one drop of goods, of course, you can book anytime you want). But if I have a ticket, it is very urgent, but when I receive the customer’s request, the flight will leave in 24 hours. Usually we will tell customers, you can catch the next shift. But in fact, we can also say that if you can accept the premium price, you can still catch the same day flight. So, this logic is for some really urgent goods. When booking, you really can’t catch the current flight, but you have to leave again, so what should you do? You can try to use the premium price to guarantee the position of the flight on the same day. Of course, the airline has the right to refuse you. For example, my flight was originally all BSA, there is no space or not enough space to give you this ticket, even if it is premium. That doesn’t work either. So, friends, remember to confirm the position with the airline at any time.

 

The late entry into the warehouse is also determined according to the nature of the goods. Taking the example just now, I originally booked the warehouse too late, and the warehousing will definitely be later than other goods, so the premium goods can generally have a shorter lead time than other goods. There are also some goods, such as VAL, which are impossible to pass through customs and board the plane as early as ordinary goods. It must be the last to enter the warehouse, and some VALs are even pulled directly to the bottom of the aircraft and handed over to the captain. Because the value of his goods is very high, it can only be separated from the general goods in large quantities, and the safest and safest way is to deliver them at the latest. That will minimize the risk.

 

As for the quick unloading, it is also very clear, right? Because the goods are in a hurry, the latest order is made, and the latest is to enter the warehouse. Then, the time for this ticket to be pulled out and installed on the bottom of the plane is also the latest, and it is natural to install it at the position closest to the aircraft door. After arriving at the destination, the first thing to unload this ticket is to take priority. Tickets. So it’s a chain link here. Such an operation also satisfies the requirements of urgent goods for timeliness.

 

In general, the existence of premium rate is to allow those urgent goods to enjoy fast and stable air freight services. This is why basically every commercial airline will have this product in existence.

 

Of course, I also have to mention that if all the goods on the entire flight use the premium rate, then I am sorry, in the premium rate goods, there will be a queue. There are so many positions, it is impossible to spit out some additional positions out of thin air. Not to mention, I really know that there are cases where the entire flight except for BSA is the premium rate cargo. This is not surprising at all.

 

Speaking of which, there may be some questions from my friends. Since most airlines have premium rates, when will IATA rate be used? For those of you who have this question, I would like to praise you again for being able to think with extended thinking. First of all, the IATA rate is formulated by IATA. This thing is not mandatory, only for reference. Generally, they cannot match the price of the local market. So each airline will have its own set of price system, this price system, including but not limited to: GCR (General Cargo Rate), Express rate, premium rate and so on. Each price will have the airline’s own pricing logic. Sometimes it’s more expensive than IATA, sometimes it’s cheaper than IATA, and sometimes it’s about the same. Therefore, generally when we discuss the price of general goods, we can let go of the IATA rate and not consider it. After all, it is the airline that quoted you, not IATA. When airlines set prices, they will refer to the prices published by IATA. So IATA rate has nothing to do with us actually. Of course, some specific goods, such as magazines, newspapers, etc. There is no special price set by the airline, so IATA rate can be used directly. Due to the large variety of special products, the pricing department of the airline will not list all the price lists, because the workload is too large, so these special goods will most likely use the IATA price directly. Having said that, many airlines will also formulate a DGR (Dangerous Goods Rate), which is very common. Because there are not many special goods, but DG often has them. Therefore, it is completely understandable to set the price of a DG.