Air Cargo in the United Kingdom: Case Study and Analysis

This case study explores the success and sustainability of air cargo in the United Kingdom. It discusses the fundamental reasons for the industry's success, ways to maintain comparative advantage, and the concept of sustainability. The study also includes questions for further analysis.

Air cargo in the United Kingdom 1
Case study: Air Cargo in the United Kingdom
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Contents
Introduction....................................................................................................................................3
The fundamental reasons for success of the company...............................................................4
How can a company maintain its comparative advantage?.......................................................6
Could this be suitable for other companies, and if so explain why, if not explain why?.........8
Discuss the concept of sustainability and its relevance to the company featured in the case
study................................................................................................................................................8
Questions from the study case......................................................................................................9

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Introduction
Lately, people are into importing and exporting cargo. This is stimulated using airplanes which is
one the most effective ways to transport large and heavy goods in the shortest time possible.
Despite that, people have forgone the fact that the charges are too high and still use it as their
major means of transport. This is subject to other means of transport available which include the
trains. Compared these two means, the airplane still stands to be the best way one can reach
individuals easily. One, the train is slow and not connected to the entire world as compared to
planes which have different destinations of the world. On the other hand, it would be convenient
for one to choose the train over the plane as they are able to carry bulky goods at large as
compared to what the plane does (Amaruchkul, Cooper & Gupta 2010, pp.155).
Over the years, the United Kingdom air cargo has played a very crucial role in the
modern-day chain supply. This has also contributed to the improvement of its economy. For
cargo airplanes, they can be either combined with passengers or others could be strictly cargo
planes. On many occasions, cargo is usually carried on the belly of the plane, which is
underneath the passengers’ cabin but for other crafts, it is carried on the deck sharing space with
the passengers while other planes are exclusively for carrying cargo (Aditjandra et al. 2016).
This means that the entire plane is meant for cargo. Also, while some of the cargo services would
prefer door-to-door services, others are cargo equivalent to the passengers. This explains the
difference in having planes that carry only cargo while those that carry both passengers and
cargo. In addition, there are specialist cargo airlines which accommodate aircraft which can carry
oversize cargo. They have huge volumes of cargo holds, and an example is the giant (Navarro,
Cronemy & Huge-Brodin 2014).

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Air surface mode are linked together by airports. In Asia, there are many hubs with different
cargo tonnage that have increased trade around the region in the recent years. For instance,
Memphis and Louisville have really benefited from the United States partnership for the FedEx
and UPS respectively. For the United Kingdom airport network, in 2014, around 2.5 million tons
were handled in terms of mail and freights. However, this was significantly a small amount as
compared to the volume which passed through the United Kingdom’s ports which amounted to
up to 490 million tons (Amaruchkul, Cooper & Gupta 2010, pp.156). Despite that, the freight
was high-value goods with much density thus that accounted for around 40 percent of the exports
and imports. Jewelry, aerospace, pharmaceuticals and other medical equipment are among the
major export flows. This led to an increased number of people getting into the job industry. For
instance, 39000 jobs were created directly while 135300 were indirectly created with their
induced impacts also considered.
United Kingdom airfreight is evenly distributed with an inbound of around 52% and 48
percent outbound movements. This is in comparison to the maritime traders which has a very
deadly imbalance in imports. For long-distance movements, air transport is the most suitable
means of transport (Babić, Kuljanin & Kalić 2015, pp.3). Eighty percent of freight originates
from the European Union while the same has the same percentage of freights being its
destination. This contrasts the main volume, around 50 percent which is used for domestic
markets. For this, it is well illustrated how air transport has a range of uses while also its
challenges cannot be forgotten thus showing how competitive the industry is (Navarro, Cronemy
& Huge-Brodin 2017).

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The fundamental reasons for the success of the company.
The United Kingdom has had its way in the freight industry as very successful.it can only be
compared to its major airlines that is FedEx and UPS This is evident as all its companies are
among the top rated in terms of profits gained, service providence and the number of freight they
have transported. This shows how individuals are eager to work with such companies as he pays
is also suitable, and no complains have been heard about them. Freight air transport has been
solely determined by how well they perform (Crozet 2014, pp.65). For instance, a large extent is
determined by how the downstream demand level for haulage of valuable goods. Despite being
the safest and the fastest, they are the most expensive to use as stated earlier. In the international
trade, airfreight has played a vital role (Edward-Jones et al. 2009, pp.480). This is particularly in
the international division of labor and international economic and cultural connections which
have greatly increased. It is becoming even more substantial with the role it is playing in the
global economy. According to research, a rough estimate of up to one-third of all the worlds
products that are being produced will be incorporated in the trade cycle (Amaruchkul, Cooper &
Gupta 2010, pp.157).
The United Kingdom economy has really developed since the start of this service. However, it
also responsible for increased pollution levels that is noise and air. The availability of this
services has enabled the British state to function internationally as a business center and being
able to manufacture high-value goods. First, we can clearly see how the number of jobless
people has decreased. Thanks to the fight industry which has been able to provide job
opportunities both directly and indirectly (Divall 2016, pp.15). Secondly, most of the business
areas such as pharmaceuticals, financials, and even technology require speedy services. For that
reason, air is the most reliable means they can use. This will ensure customers are well

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responded to and in the required time. Failure of having such services will lead to business
relocating to other countries or places where they can be available. Lastly, through air transport,
companies can improve the competitiveness of a company in all sectors. This includes the
logistics, inventory, management, production and supporting the customers (Turnbull 2014). To
many firms, accessing air services is a great deal as it is a determinant of their location of
operations in the United Kingdom.
Comparing the FedEx and the Mumbai freight company, we see how much successful the
United Kingdom has become. Lately, there has been an issue in other freight airline companies
and this includes the Boeing. This gives United Kingdom freight companies a reason to consider
themselves successful (Babić, Kuljanin & Kalić 2015, pp.5). For example, we have Indian air
cargo found in India. In the previous year, some of its employees were forced to leave the job as
they were not getting paid well. In addition to that, shipment rates became too high for their
customers that they had to relocate to other cargo services. With famous people like the Boeing
and Airbus, the company still failed their clients (Edward-Jones et al. 2009, pp.480). Most of
their aircraft were undergoing maintenance while their crew became limited. This leads to
delayed flights and half offloading of goods. Such companies should emulate and seek advice
from well-maintained companies such as those in the United Kingdom. Hence, proper
management would lead to success in the airlines. Also, tending the clients and employees well
would also increase the reputation and working of a company (Smilowitz 2017, pp. 440)
How can a company maintain its comparative advantage?
As survival is a common feature in the forest, in business, competition is a common phenomenon
in business. For a business to be successful, it needs to maintain a competitive advantage in the
industry (Doganis 2013). This involves countless efforts which are involved in planning, then

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developing and finally leasing their services or products to their clients. If a company finds a
way to this, they become a model in the industry with minor errors experienced. The reason
behind is that other companies will catch up soon by adopting best practices which help them to
keep up the pace of the competition (Smilowitz 2017, pp.441). However, once clients adapt to
such companies, they will find it difficult for them to distinguish between the two companies as
both have same practices. Thus, there is need to show customers how far a company can go over
the other in that competition so that they can gain confidence in working with it.
A successful business has been able to make this distinction obvious to their customers, and
therefore a freight company like FedEx tops the list in their service providence. For new
businesses, it is obvious that it will first need a strategy of making their market aware of what
sort of service they need to render and the specific individuals or groups that intend to be served
(Turnbull 2014).
First, to maintain the comparative advantage, the freight company need to choose on their
priorities (Chao & Li 2017, pp.27). For instance, it should choose whether their service is
performed to numerous customers with few services or whether it will have fewer customers
with a variety of services to provide. Look at FedEx. It specialized in proving little services,
specifically cargo freighting, too many people. Centering this has helped them grow and has also
helped the growth of the European Union (Taniguchi et al. 2014, pp.34)
Secondly, ensuring that the activities and services practiced are related is also an aim. This helps
the company to make a stand for its services to the product or services that they produce. For
instance, in the freight industry, companies should stick to ferrying cargoes to different countries
(Bergqvist & Monios 2017, pp.7). Rather, if they have other activities, they should be related to
what freighting is involved with. This will build an identity helping their clients to be keen on

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that product. It will maintain the comparative edge over others who would combine let us say
freighting with manufacturing of products (Taniguchi et al. 2014, pp.53)
However, just seeing these strategies in the paper would not ensure the growth of the company.
Rather, active actions should be taken to ensure that both business executives and employees
show commitment and understand the comparative advantage concept (Liimatainen 2014,
pp.380). Well formulated strategies would eventually lead to good implementation which is one
sure way of ensuring the comparative advantage is maintained.
Could this be suitable for other companies, and if so explain why, if not explain why?
Comparative knowledge is important to any company doing business. For instance, by
knowing the status of one’s company, it will be easier to know how competitive one is in the
market (Suresh et al. 2017, pp.100). However, being ahead of other competitors is a plus. It will
help in looking for ways of attracting more customers to ensure that the business runs smoothly.
However, there are other companies which cannot specialize in one thing but still are very much
successful. Take an example of the major car producing companies. They work on everything
from scratch in assembling the car parts and then go on selling them themselves. Depending on
how a company takes the comparative advantage theory, they can well utilize it and earn
maximum profits and surpass their competitors (Navarro, Cronemy & Huge-Brodin 2014)
Discuss the concept of sustainability and its relevance to the company featured in the case
study.
The ability to endure and maintain a process or a situation over a period is known as
sustainability. In economics, it is the when a state, company or individual can uphold the
production level of economy indefinitely (Hellerman, Huchzermeier & Spinler 2013, pp.312).
Thus, when progress meets its needs without negotiating with the future generations, this is

Air cargo in the United Kingdom 9
known as sustainable growth. This concept contains two key concepts. First, limitations imposed
by the state of the social organization and the technology department in a state to meet future
standards. Secondly, the concept of needs to which the essential needs the world’s poor,
overrides the priority that it deserves. Sustainability involves six major steps (Smilowitz 2017,
pp.440). First, mapping of the supply chain is required. Then the sustainability plan should
concentrate on the communications expectations. Thirdly, baseline supplier performance should
be keenly checked while developing a good training and capacity building program (Ozceylan et
al. 2016, pp. 43) Eventually, a drive performance improvement by the audit team is
implemented, and lastly, the industry joins collaboration in making things work.
In the freight sector, stakeholder pressure coming from either investors, customers or
shareholders has greatly influenced the increase in this company’s profits (Jaller, Sánchez-Díaz.
and Holguín-Veras 2015, pp.49). By being able to improve and manage the social, economic and
environmental performance, supply chains have been able to conserve their resources and
optimize the processes. Also, product innovation has really been evident with an attempt of
saving cost and increasing productivity to ensure corporate values have been upheld. This is
evident in the United Kingdom freight markets. Its profits and even rankings have greatly
improved showing how sustainability has been able to take the course (Taniguchi et al. 2014,
pp.56).
Questions from the study case.
1. For an airport you are familiar with, what are the main factors helping or restricting cargo
development?
There are many factors which could affect the development of freight. this varies depending
on the country that one is located in. for instance, some countries have very strict policies

Air cargo in the United Kingdom 10
which might restrain the improvement of the freight industry. The United States is one of
them. take an example of the Memphis international airport in Tennessee. It has very strict
rules regarding pollution and aims at conserving their environment. For this, you will find
few freight industries that are striving well as compared to those found in the United
Kingdom. Also, America is an independent state which has very limited inquiries regarding
goods. Instead, you will find them exporting materials which are not in use. For this, they do
not consider freight market as a necessity to their government (Navarro, Cronemy & Huge-
Brodin 2014).
2. Focusing on the major air cargo hubs (such as Hong Kong, Anchorage Dubai), compare
the factors that have affected their growth
With good management, a company would be expected to enormously grow. Such is the
case when it comes to the major cargo hubs (Doganis 2013, pp.45). First, they have been
able to maintain their clients and employees by ensuring that the service delivery is
superb. Also, providing incentives to their workers has enabled them to be fast forward in
ensuring that they provide quality services to their customers. Lastly, they have been able
to uphold a good sustainable economic environment. For this, they are aware of their
competitors and have worked hard so that they are always ahead of them (Tangichu et al.
2014, pp.62).
3. What challenges exist in developing the air cargo industry further?
Challenges that affect the development include first, the location of a firm as physical
location is important to key freight markets. Secondly, the quality of the airport would
really matter a lot. With congestion, delays can be caused which might, in turn, increase
airport charges or delayed flight loading. Also, there are other factors which include

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environment, that is bad weather, governmental restrictions, for instance, reduce
operating hours that make other countries have slugged cargo industry development
(Smilowitz 2017, pp.440)

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