Air freight may become a larger part of shipping logistics

aircargoAir cargo as a freight option has historically been 12-16 times greater than sea transport and 4-5 times greater than road transport.  Yet according to an article in World Trade T100, air cargo needs serious consideration when contemplating freight transport strategies.

The main advantage of air cargo is speed, and in many cases responsive deliveries in the supply chain can be a huge difference maker.   One example given was the garment industry, sea shipping is used for most shipments of garments, yet there are cases where air cargo can be used to satisfy the supply chain need that overseas shipments cannot.   Sudden changes in demand over a holiday season may require rapid response in order to exploit the change in demand.  Likewise a specific design suddenly becoming “hot” may require fast shipping as long delays in a volatile market can cool fashion trends.

Air shipping can also be advantageous in immerging markets where there is very little logistics infrastructure in place.

Air shipping needs to continue to reduce its costs and there is evidence that more fuel efficient air transport is on the horizon.  But another big disadvantage of Air Shipping is the lack of integration with the other transport options.   Air cargo companies are using outdated logistics software that makes it impossible to interface with other shippers.   So while it may make sense that air shipment be used for one leg of the transport journey, freight forwarders can’t fully optimize or do an adequate analysis for the entire supply chain because the logistics systems of the air shippers can’t communicate with the rest of the supply chain.

It appears that the air shippers are trying to address this logistics issue and are updating or revamping their current system.  One initiative called the Cargo 2000 initiative, originally funded and started by IATA, now consists of at least 80 participating members that range from major airlines and freight forwarders to ground handling agents, trucking companies and IT solutions providers.    One key component of this system is electronic data interchange technology (EDI) EDI allows different systems to exchange data in usable formats.    This allows each system in the supply chain to behave like it is part of the network.   System upgrades like this can reduce the air cargo supply chain costs.

For more information please read the entire article here.