Hard Block Capacity Agreement

Procurement refers to any capacity a carrier has to carry air cargo. Capacity is provided by the airlines we call carriers. Freight forwarders sell capacity to freight forwarders, and freight forwarders try to fill that capacity with freight. The capacity can be on passenger flights or on special cargo ships. Flexport purchases capacity through three main channels: 1) long-term contracts called allocations, 2) the spot market and 3) partnership agreements. Recently, companies such as Cargo.one and WebCargoNet have started offering services to standardize this ad hoc booking process. They aim to reduce phone calls and emails in favor of online tools that provide better insight into operator capacity and pricing through direct integration with operators. 3.3 The Client may, subject to CV`s consent and capacity availability, purchase additional capacity from CV under the conditions set out in the Contract. Finally, Flexport always has the option of using a local partner to move the shipment to its place of origin. By partnering with local co-loaders and partners, Flexport can significantly expand its geographic service area and quickly find capacity for all shipments. When we move a shipment with a partner, the partner decides how to ship it using their own combination of capabilities. A common assignment type is the Block Space Agreement (BSA), and BSAs are further divided into “soft” and “hard”.

In a flexible BSA, the carrier can cancel its allowance on a particular flight without penalty if it informs the airline in advance. In a hard BSA, the carrier is responsible for paying the full cost of the allowance on each flight, even if it does not offer shipments on a particular flight. The amount paid by the futures contract is determined by a special term called pivot weight. 1.5 The route(s) is subject to the granting of the traffic rights corresponding to CV. If such rights are not granted, revoked or terminated for a particular route, the rights and obligations of the parties with respect to the relevant route shall be suspended either (i) until the relevant traffic rights are granted or (ii) terminated automatically if the corresponding traffic rights are not granted within three (3) months of the date of the relevant purchase contract; including, but not limited to, the Flexible Blocked Space Agreement, the Hard Blocked Space Agreement or the Capacity Agreement (the “Agreement”) or the loss of such rights. Now that we have briefly described what supply and demand are, how can we reconcile them? In other words, given a particular air shipment, how does Flexport decide to use it on its own 747, on an allocation like a hard BSA, on the spot market or with a partner? But Flexport, like other major carriers, has many allowances with many airlines and provides daily cargo capacity on flights around the world. The spreadsheet method may be able to assign a specific shipment *to* flight, but does this assignment provide the optimal consolidation? There is simply too much data and too many constraints for even the smartest table to be managed, as moving a single shipment can make it impossible to map other shipments. 3.2 CV may, with the consent of the customer, buy back capacities of the blocked room. Traditionally, the formation of these groupings – in other words, the assignment of shipments to ULDs – is the job of an air planner, and this is done by hand with spreadsheets.

These tables track things like delivery times, remaining capacity, pivot weight usage, and balancing. The flight planner assigns each shipment to a flight so that no flight is overloaded and each shipment arrives at its destination on time. To understand the pivotal weight, let`s look at an example of a hard BSA contract between Flexport and Happy Airlines.10.2 Entire agreementThe agreement signed between the parties applies exclusively to the carriage of the customer`s cargo in the sectors described in the agreement and replaces all other communications, existing contracts and agreements that may exist with the customer in the same sectors (i.e. the interline agreement, Distribution of areas). Notwithstanding the foregoing, the Contract does not affect the applicability of the Conditions of Carriage of CV available on www.cargolux.com and each air waybill or consignment carried by CV is subject to the Conditions of Carriage (available at www.cargolux.com). Allowances are the backbone of a freight forwarder`s capacity, but they only exist on a contractual basis agreed between predetermined airports. What happens if a carrier has to move cargo between two airports where it has no assignment? Then he has two options: he can turn to the spot market, or he can move the shipment with a local partner (usually a co-shipper or other carrier). (a) delay the departure of the aircraft, change equipment or cancel the flight due to force majeure, weather conditions or technical reasons; There is no central, liquid on-demand market for air cargo, but an informal network of directly communicating air planners and carrier representatives. For example, the spot market for air cargo from Hong Kong consists of a flood of phone calls and WhatsApp messages between carriers and carriers asking if the necessary space is available and at what price per kilogram. If Flexport needs to move a 1000 kilogram shipment with six pallets from Hong Kong to Atlanta, where there is no BSA, a Hong Kong-based flight planner will contact all airlines with flights between Hong Kong and Atlanta, provide shipping details, and ask for fare conditions. 1.4 The cancellation of a flight for reasons other than those referred to in Article 1.3 is subject to the mutual consent of the parties. With copy toAttn: Legal DepartmentFax: +352 4211 3969E-Mail: legal@cargolux.com 10.1 AssignmentThe other party assigns all rights or interests under the Contract without the prior written consent of the other party.

In the event of a breach of this obligation by one party, the other party has the right to terminate the contract with immediate effect. [3] www.boeing.com/commercial/777/#/design-highlights/freighter/freighter-capabilities/cargo-arrangements/ With the new SAS Cargo booking portal, you can request, book and manage your allocation agreements. .