Challenges in Air Cargo Industry

This article discusses the challenges that prevent the development of the air cargo industry. It explores factors such as capital requirements, dependency on airports, and shifts in logistic options. The United Kingdom's air cargo industry is used as a case study to highlight these challenges.

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Introduction
The United Kingdom is one of the globally recognised nations when it comes to air cargo
business. Like other cargo businesses in other nations, cargo business in the United Kingdom is
also going through challenges that limit its development. The cargo business depends on airports,
the capital is huge, and getting a suitable location of an airport might be a challenge at times.
Investing in the cargo business is a challenge because of the high costs of investments. An
industry grows when many business persons choose to invest in the industry. However, when
there are reasons that restrict them from investing, the industry is not likely to grow.
1. Analyse the main factors helping or restricting air cargo development in the United
Kingdom
a. Location
Location is one of the main factors that restrict air cargo development in the United
Kingdom. The shareholders in the air cargo industry depend on the infrastructure that has already
been developed by the government or other private entities. The location of an airport is essential
to an airline that deals with cargos (Oster and Strong, 2017). The reason behind it is because this
is an airline that is delivering goods to customers; therefore, the location must be strategic. When
the establishment of airports takes place in locations that are not suitable for the market that is
targeted, an airline that deals with cargo is not likely to utilise the airport and that restricts the
business of the airline (Tao, Chew, Lee, and Wang, 2017). In this case, it is evident that the
location will be restricting the investors to do business. For an industry to develop, the investors
should be promoted to invest more in the location. When there are more investors in an industry,
the circulation of money increases and that promotes the growth of the industry. However, when

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there are restrictions in the industry, the investors are discouraged, and their withdrawal from the
industry delays or stops the growth of the industry.
b. Delays
The time that a cargo takes to reach customers is essential. Most of the customers who
choose air cargo do so because they need their goods to be delivered without delays. When an
airport has delays, the goods of the customers take long before getting to the customers (Su,
Meng, Pickett, Seto, Ritz, and Jerrett, 2016). In some airports, there are delays that affect all
aeroplanes that use specific airports. Due to the sensitivity of some of the products that are
transported using aeroplanes, customers might be frustrated when their goods do not reach to
them at the time that they expected. Such frustrations lead to customers looking for an alternative
method of transport, and that affects the development of the Air Cargo industry. Delivery of
quality services is vital, and this is why it is more likely for an airline to avoid airports that have
slow processes of clearing goods.
c. Infrastructure
Infrastructure is also another factor that affects the development of air cargo in the United
Kingdom. Airports are central destinations of cargos. It, therefore, means that after the cargo has
been delivered at an airport, it is expected to be transported to different destinations.
Infrastructure, in this case, is essential from the perspective of the customers and the airlines
(Vardi and Ghorbanian, 2018). Customers who ship products that are delicate are likely to be
considerate of the infrastructure (lo Storto, 2017). Infrastructure affects the time that a cargo
takes to reach the customer. If the infrastructure is good, the time that a cargo takes to reach a
customer is short. However, when the infrastructure is not good, it might take longer to transport

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the cargo from the airport to the customer’s stipulated destination. At the same time, the cargo
companies are restricted because the demand for airlifting the cargo of the customers to the
specific location reduces significantly, thus limiting the operations of the airline that is involved.
d. Environment
Environmental factors also affect the development of air cargo. In air travel, the weather is
taken seriously because it might affect the handling and controlling of an aeroplane. When the
weather is not favourable for air travel, cargo aeroplanes are forced to delay their flight, and that
affects the delivery of services (Wu, Chen, and Tsau, 2017). Due to the fact that the weather
affects the operations of air cargo, it becomes a challenge to grow and to develop.
e. Government legislation
Government legislation affects development in terms of operating hours. Airports have rules
and regulations that come from governments, and each of the rules has to be followed to the
letter. Some of the rules restrict operating hours, and that means that an aeroplane cannot make
delivery as it wishes (Kupfer, Meersman, Onghena, and Van de Voorde, 2017). When an airline
is restricted from operating as it wishes, it cannot develop, and this is because its working hours
are limited.
2. Compare and contrast the factors that have affected air cargo growth in the United
Kingdom and other major air cargo hubs (e.g., Hong Kong, Anchorage, or Dubai)
Location is a factor that affects the growth of air cargo hubs in the United Kingdom and other
major air hubs. Location is prominent in any care hub, and this is because of the factors that
location brings to the picture. When an airport is closer to the market, more air cargo companies

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are likely to use the airport as their destination. The reason for doing so is because there is a high
demand for transporting goods to the respective market. At the same time, the inhabitation of a
human being to a specific area might not be only affected by the location but by other factors as
well. The same case does not apply to cargo business.
In the cargo business, goods are moved from one location to another, and most of them are
business goods. Therefore, it is evident that the goods must be reaching a destination that is
suitable. The market is vital in the business of selling goods. When an airport is a few kilometres
away from cities or markets of the goods, growth is promoted in the specific airport (Xu, 2016).
The reason behind it is because the demand for goods increases, and that means that the airline
that deals with cargo is given an opportunity to continue transporting goods to the specific
location. The same effects that location has on the growth of the United Kingdom cargo sector
are the same effects that location has on other airports.
The second factor is the airport quality. It is essential to note that cargo companies do not
have their airports and therefore these are organisations that rely on the airports that have been
put in place by the government or other private organisations in the market (Ha and Nananukul,
2017). The problem affects the United Kingdom cargo services, and at the same time, it affects
all other cargo hubs. Operations have great impacts on the success of a company. When
operations are smooth, good business is promoted, and when the operations are not smooth,
delivering services becomes an issue (Reis and Silva, 2016). The quality of services that are
provided by an air cargo company affects the growth of air cargo companies in two different
ways (Feng and Shen, 2015). The first way is the time that it takes to serve customers. A
company that serves its customers within a few minutes is likely to promote customer
satisfaction as opposed to a company that takes an hour to attend to a customer. When the quality

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of an airport is not pleasing, an air cargo company might have a challenge in serving customers,
and that leads to customers choosing for alternative means to have their products delivered to
them. When customers start looking for alternatives, the business in the air cargo industry
worsens, and that limits the growth of the air cargo company.
The second way is associated with the cost of doing business. the infrastructure of an airport
affects the cost of doing business, and in this case, it increases the costs (Hu, Lee, Chuang, and
Chiu, 2018). The growth of an industry is promoted or restricted by the cost of doing business.
When the cost of doing business is high, an organisation or organisations in the specific industry
use their finances on some things that could be avoided. For example, a poor quality airport
might increase repairs on cargo planes (Budd and Ison, 2016). Therefore, instead of investing in
increasing business, the organisations in the industry might live to meet the costs of repair
instead of saving for expansions. The problem has affected the cargo industry in the United
Kingdom, and at the same time, the problem has been affecting other cargo hubs that are globally
recognised.
In the United Kingdom, there is the problem of government interference with the operations
of an airport. Most of the airports are owned and managed by the government. The interference
of the government comes when the government starts restricting operations. In some airports, the
hours that an airport is supposed to be open and operational are limited. While compared to other
cargo hubs, the interference of the government is more promoted in the United Kingdom than on
other cargo hubs (Birtchnell and Urry, 2015). In other regions, the airports are allowed to work
twenty-four hours, and that means there is no time that the airports will ever shut down. It is
easier for an industry that is free to grow than an industry that is regulated. Time is of the essence

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to any business. When one business is allocated more operational hours than the other, it is likely
to perform better.
3. Discuss the challenges that prevent developing the air cargo industry
Air cargo industry is affected by many challenges when it comes to its development. The first
challenge is associated with the capital that is needed in the industry. The planes that deal with
cargo are different than the planes that are used for passenger transport. The first difference is
seen in capacity (Coetzee and Swanepoel, 2017). High capacity and engine power planes are
used for cargo business. The aeroplanes are expensive and expensive to maintain. Therefore, to
establish an air cargo business becomes a challenge (Zhang, Hui, Leung, and Cheung, 2017).
The second difference is associated with the fuel consumption rate and maintenance. The cost of
maintenance has an effect on the growth of an industry or organization. When the costs are too
high, an organization is concentrated more on meeting the costs than initiating growth plans
(Boonekamp and Burghouwt, 2017). A new entry in the industry is affected because it becomes a
challenge for the new interested parties to afford the capital of investing in the industry. When an
industry does not have more investors investing in it, it does not grow because growth is only
promoted when there are increased organisations.
The second challenge is associated with the dependency rate of air cargo on airports. Air
cargo industry depends on the transport industry. Lack of control over all operations is likely to
affect a business (Feng and Shen, 2015). In the case of the air cargo business, the situation gets
worse, and this is because an aeroplane must be permitted to land in a specific airport. Therefore,
the industry relies on the operations of another industry, and that limits its growth and
development. The growth would have been promoted if the organisations in the air cargo

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industry had control over the airports. It would have been easier for companies in the industry to
promote their own growth.
The shift in logistic options and choices are also factors that limit the growth of the air cargo
industry. One of the main reasons why some clients choose to use air cargo is because of the
time that it takes to move cargo from one point to another. In this case, there are two factors that
might be motivating the customers. The first factor is associated with the perishability of the
goods that are transported (Baxter and Srisaeng, 2018). When the shelf life of a good is short, it
becomes better to opt for a fast method of transport. The second factor is associated with the
nature of the market. Considering that some may not have a huge capital, they opt for air
transport because it is faster (Azadian, Murat, and Chinnam, 2015). The reason for using it is to
make sure that they do not run out of stock. When they become financially stable, they might
choose to ship because it is cheaper. The reason behind it is because they have enough capital to
stock for several months or weeks before the arriving of the new shipment. The shifts come to
limit the development because at times the business is good and at times, it is not.
Conclusion
Air transport is termed as the fastest way to move goods from one point to another. The
United Kingdom is one of the nations that are well known when it comes to air cargo business,
and this is because of the tons of goods that go through the industry of air cargo. However, there
are challenges that face air cargo development. The air cargo industry depends on the ministry of
transport, and that limits the air cargo ministry from making decisions that are associated with
the infrastructure. Regulations and high costs of doing business in some areas are also factors
that affect the growth of the industry by a significant percentage.

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