A forwarder does not own aircraft, so every kilo it moves by air is bought from an airline or from another party that holds space. There are three common ways to buy it. Spot (ad hoc) booking means you book a shipment at the airline's current rate with no commitment. An allotment reserves a weight and volume on named flights for an agreed period at an agreed rate. A block space agreement (BSA) is the same idea, often framed as a harder commercial commitment between forwarder and carrier. The key takeaway: an allotment or BSA buys you certainty of space and price, and in exchange you take on the risk of paying for space you cannot fill. Terms differ by airline and contract, so everything below marked as convention is a typical pattern, not a rule. For where the capacity itself comes from, see our guide to belly cargo and freighter capacity.
Spot, allotment and BSA: what is the difference?
Terminology is loose in the trade and airlines use the words differently, so always read the contract, not the label. As a working guide:
| Option | What you get | What you risk |
|---|---|---|
| Spot booking | Space on a specific flight at the current rate, booked shipment by shipment | No guarantee of space in a tight market; the rate floats |
| Allotment | A reserved weight and volume on chosen flights and weekdays for a set period | Depends on the type of block (see below); can range from nothing to the full allotment |
| BSA | Reserved space under a negotiated agreement, usually for a route and season | Often the heaviest commitment, if the block is hard |
SAS Cargo, for example, describes its allotment product as suiting "recurrent and predictable traffic, at a fixed rate for a pre-defined period of time", set by weight and volume, period, origin and destination, and the flights and weekdays selected. Ethiopian Airlines Cargo describes a BSA as the purchase of an agreed capacity or space on an airline's flights. In practice the two terms overlap, which is why the hard-versus-soft question matters more than the name.
Hard block vs soft block: who pays for empty space?
This is the single most important term in the contract. The two airline pages we checked in October 2026 describe it the same way:
- Hard block. The forwarder is financially responsible for the allocated space whether it is used or not (Ethiopian Airlines Cargo). SAS Cargo states that charges apply to the whole allotment "irrespective of degree of utilization", and that the difference between the full allotment and what was tendered is invoiced through CASS (the IATA billing and settlement system; see how CASS settlement works).
- Soft block. The forwarder can cancel without a financial penalty (Ethiopian). At SAS, charges apply only to the shipment actually tendered plus applicable fuel, security and miscellaneous charges, and SAS reserves the right to amend the allotment size depending on actual utilisation.
A common misconception: "soft" does not mean "guaranteed and free". A soft block protects you from paying for empty space, but the airline can shrink it if you do not fill it, and by convention it gives weaker assurance that your cargo flies when the aircraft is full. Ethiopian's page claims a departure guarantee of "almost 100%" for prioritised freight on a BSA; that is a carrier's marketing statement, so ask for the actual offload terms in writing.
What happens if you do not use the space?
Three mechanisms recur in airline terms and in the systems airlines use to run allotments. The figures below are examples of settings, not industry standards.
- Release time. The airline releases held space if no booking has been made against it by a set time before departure. Documentation for the SmartKargo cargo revenue system suggests a release window of about 6 to 24 hours for mostly short-haul carriers and about 36 to 48 hours for long-haul pre-bookings. That is vendor software guidance, and each airline sets its own. Once space is released, it goes back into general sale and you may not get it back.
- Underutilisation or no-show billing. Under a hard block, the unused remainder is billed after the flight departs. The same SmartKargo documentation describes billing "against the unused remaining capacity of the blocked-space", not against an air waybill, plus a threshold below which no no-show charge is raised. Your contract should say what that threshold is.
- Shrinkage or removal. Under a soft block the airline may reduce your allotment if utilisation is poor, as SAS states, or decline to renew it for the next season.
Academic work on allotment contracts treats a minimum utilisation requirement and a refund rate on unused space as the main contract terms a carrier sets (Amaruchkul, "Game-theoretic Analysis of Air-cargo Allotment Contract", ICORES 2018). Expect those two levers in any real negotiation, whatever the contract calls them.
How long do allotments last, and what is charter or sub-charter?
By convention, allotments and BSAs are agreed before a season starts and run for that season, which can be a few weeks to a year. Many are aligned with the IATA summer and winter schedule periods, but this varies. Airlines also sign BSAs with each other: in June 2024 Air France KLM Martinair Cargo and China Cargo Airlines announced a hard block space agreement under which China Cargo Airlines uses Air France belly capacity from Paris Charles de Gaulle to Sao Paulo Guarulhos, effective 1 July 2024 (Air Cargo Week, 28 June 2024). That shows the model is not only forwarder-to-airline.
A charter is the whole aircraft (or a defined part of it) hired for a flight or series of flights. A sub-charter means buying space from someone who already holds the charter or a large block. The risk is larger because the commitment covers a whole flight, and the use case is different. See air charter vs scheduled air freight for when a charter makes sense.
Some allotments are also tied to unit load devices, so you commit to build and tender whole pallets or containers rather than loose kilos. How those units are sized and loaded is covered in our guide to ULD types, and your house and master air waybills still apply to every shipment booked against the block (see air waybill basics).
How are allotment rates set?
An allotment rate is normally quoted per kilo, with weight breaks and a minimum charge, the same structure as a spot rate (explained in our air freight pricing guide). What you are negotiating is a lower or steadier base rate in return for volume and commitment. Two points matter for margin:
- Surcharges typically float. SAS lists fuel, security and miscellaneous charges on top of the soft block rate. Unless your contract fixes them, assume the base rate is fixed and the surcharges move with the airline's published levels.
- Chargeable weight rules still apply. You are paying on chargeable weight (the greater of actual and volumetric), so a light, bulky load can use up your block faster than the scale weight suggests.
Illustrative example only, with made-up numbers: suppose a hard block of 1,000 kg per week at a flat 3.00 per kg. If you fill 600 kg, you still pay for 1,000 kg, which is 3,000 in total, an effective 5.00 per kg on the 600 kg you shipped. A spot rate of 4.00 would have cost 2,400 for the same cargo. The block only wins in weeks when you fill most of it, which is why forecasting your load is the real task.
The revenue risk: building a load you can actually fill
A block turns a variable cost into a fixed one, so your skill shifts from buying to selling. Ways forwarders reduce the risk:
- Base the block on your steady customers, not on your best-ever week.
- Sell the surplus to other forwarders or agents on the same lane. The same logic as ocean consolidation applies; see LCL co-loading and consolidator relationships.
- Start with a soft block, or a smaller hard block, and grow it as the pattern proves out.
- Know your cut-offs. Cargo that misses the acceptance deadline still counts as unused if you cannot rebook it.
- Keep spot capacity as a backup for peaks above the block.
What happens when the flight is full?
Airlines control which shipments fly. By convention, confirmed bookings, allotment cargo, special handling and high-yield freight are generally treated differently from last-minute general cargo, but the ranking is each airline's own policy, set out in its conditions of carriage or cargo handling terms. We could not find a single published industry order, so do not assume one. Ask the airline in writing how a block shipment is ranked against other bookings if the aircraft is overbooked, how late a change can be made without a fee, and what compensation or rebooking you get after an offload. Capacity differs by aircraft type as well: belly space on passenger flights fluctuates with passenger baggage and schedule changes in a way freighter space does not, as covered in our belly versus freighter guide.
Negotiation levers
- Block size and type. A smaller hard block or a soft block with a clear shrinkage rule is cheaper to be wrong about.
- Release time. A later release gives you more time to fill the space.
- Utilisation threshold. Ask for a minimum utilisation below which no penalty applies, and for a refund rate on unused space.
- Flight and weekday mix. Pick the flights your customers actually use; a flexible swap clause is valuable.
- Surcharge treatment. Ask whether fuel and security are fixed, capped or pass-through. See also rate negotiation with carriers.
- Offload and priority terms. Get the ranking and compensation rules in the contract, not in an email.
What to do next
- Pull 12 months of your own air shipments by lane and weekday and see how much volume is truly steady.
- Ask two or three airlines for hard and soft block terms in writing, including release time, utilisation threshold and surcharge treatment.
- Start with a block sized to your floor volume, not your average, and keep spot as your overflow.
- Review utilisation every month against the contract, and tell the airline early if you need to resize.
More than 29,300 logistics companies are searchable by country and service in the CargoLinked directory, which is one place to find co-loaders and agents to share a block with. The public requests board lists freight that shippers have posted for forwarders to quote on directly, which can help you spot lane demand before you commit to space.
This article is general information, not legal, financial or contractual advice. Allotment and block space terms vary by airline and contract; confirm every term with the airline or a qualified professional before you commit.
