Air Cargo and Logistics: Supply Chain and Global Operations

This report provides a comprehensive analysis of air cargo and logistics, exploring its business case, characteristics, and global operations. It delves into the advantages of air cargo, such as speed, security, and punctuality, while also addressing its limitations. The report examines the role of air cargo in supply chain management, including the preparation and handling of cargo shipments. Furthermore, it discusses the specialization of air cargo, particularly for perishable goods, and the benefits and drawbacks associated with it. The report references various academic sources to support its findings, offering valuable insights into the air cargo industry and its impact on global trade and business development.

Air Cargo and Logistics 1
Supply Chain
By (Name)
Course Name
Name of the Professor
Student’s Name
Date

Air Cargo and Logistics 2
Air Cargo and logistics
Introduction
Air cargo management involves training that helps professionals to offer best services while
competing as the air transport industry is wide thus needs creativity and innovation in aspect of
supply chain, strategic planning and development to ensure maximum utilization of resources
and high returns.
15.1 The business case for air cargo
Air cargo is any property that is carried in an aircraft and includes air freight, air express, and
airmail. Shippers should consider this an investment cost on stagnant goods in transit and the
perishability of a product. This shows the length of time that a product takes before it is
destroyed (Graham and Halpern, 2018).
Most distributors value the time preference of money hence will come up with measures to
ensure that retailers are able to get their products on time and satisfy their demand to avoid them
moving to other places or finding other options. They come up with centers for distribution in
which it is the shortest and effective for retailers to receive their goods.
Therefore this centralized distribution helps the company to operate with minimal inventory and
low warehouse costs, which enables various groups of retailers to save capital and other
expenses (Halttunen, 2017). Also, it allows time-saving while shipping new fashions of a
product. The major disadvantage of the decentralized system is although it could be the fastest in
delivering goods when there is a change of products, the goods may still be on shipping.

Air Cargo and Logistics 3
Reducing the variation in delivery time is critical since it leads to saving time as well as costs on
inventory (Barz and Gartner, 2016). For example, an individual would most prefer to use air
transport and not sea due to the time taken in order to receive the goods than waiting for so long
thus maintaining customers, increasing ones market and creating customer confidence.
Security is a significant concern for any business person. Due to globalization, products are
being transported to various destinations with increased distances; hence, they can be
mishandled, lost, or dropped when transported by sea. Transport via air is costly, but goods are
safe, remain in good quality, and cannot be misplaced or stolen as in the case of piracy in the sea
(Olariaga, 2018).
15.2 Characteristics of air cargo
Since airline travel is common majorly for long distance traveling for both passenger and freight
travel and reasonable when time is put into consideration. It has various characteristics, first is
high speed (Brandt and Nickel, 2018). Air transport does not face any traffic jam as it follows a
specific time table and route as a set. Goods are quickly delivered as it takes a short period to
arrive, and an individual can pick.
Moreover, air cargo has high security since goods are carried under specific conditions ad
containers, thus reducing the chances of risk of damage to the products. Because of its safety,
being accurate and insurance costs tend to be lower.
Also, high punctuality of air transport. Due to the fixed schedule and traveling table of
movement, goods can arrive on time, and customers can pick within a shorter period. The
transaction is well enhanced with the help of well-formulated schedule; thus customer
satisfaction fulfilled when they get the goods within a short time.

Air Cargo and Logistics 4
Air transport can sale internationally hence encouraging importing of goods globally and
exporting from one country to various destination, therefore, enhancing global trade and
partnerships as even the perishable goods and reach the required destination on time.
Accessibility is a crucial factor so long as there are ports available.
Besides, uncertain demand can well be served by air transport in that in those industries where
spare parts and regularly needed due to wear and tear, air transport ensures that they are quickly
delivered and available within a short period even if the cost might be higher (Otte et al. 2018).
Also, special preparations are required for air cargo to function effectively and efficiently. These
preparations include meteorological stations, floodlights, searchlights, and wheelers links.
Air transport has various advantages, and they include rapidity that is the highest speed,
comfortable and quick services, no physical barriers, easy access, offers emergency services and
does not require investment in the construction of tracks (Hüschelrath et al. 2013). However, it
has shortcomings such as small carrying capacity and being uncertain and unreliable.
15.4 Global Air Cargo Operations
Air cargo operation is the preparation of cargo shipment, the loading and offloading of the
aircraft, and the transfer of cargo between the storage facilities and land transport. For the
outbound cargo, it includes amalgamation, building up of cargo pallets and containers, inspection
and documentation (Baxter, Srisaeng, and Wild, 2018). While for inbound freight the operations
involved are customary and regulatory procedures as well as breaking down single shipments of
cargo into several smaller and processing them for final delivery.
There are various reasons for global air cargo operations such as flight representation whereby an
individual gets assistance on the ground to ensure the cargo charter functions well. Also, access

Air Cargo and Logistics 5
to more imports in that through being able to connect to various locations even those under-
serviced, the cargo can reach to a closer place near to the required destination.
Further, more experienced workers are available whom are well trained and can understand all
the requirements to manage a charter flight from start to finish and ensure that the cargo is safe
and in good conditions with full details (Budd and Ison, 2016).
Global coverage is another essential feature as international networking of offices provide
knowledge of both the local region and other places in different places of the continent and world
at large. Therefore this ensures cost efficiency as prices are well set for the cargo as the charter
offers a solution for the buying power.
Moreover, choice of aircraft is essential in global air cargo operations in that different goods are
carried under various conditions thus a particularly preferred plane is required to ensure the safe
delivery of the products and no risk of damage during transportation as each will have the
containers and handling facilities.
Air cargo traffic is different from air passenger traffic in some ways such as, air passenger travel
from one location to the other and may bypass another city before final destination and same way
back due to traffic, unlike cargo which is moved to the final destination. In addition, passengers
would prefer to reach their destination without stopping somewhere while cargo customers are
satisfied as long as shipping time is minimized. The revenue management for cargo is more
complicated than that of a passenger due to essential cargo attributes.
15.5 Specialized air cargo
Specialization in a specific type of cargo is essential as the general market has been flooded due
to excess supply with demand being very low. Perishable products offer a lucrative deal, for

Air Cargo and Logistics 6
example, pharmaceutical, flowers, fresh products, live food from the sea, and hazardous goods
such as batteries made of lithium (Baxter, 2019).
Dealing in shipping a particular product through the air has several advantages as follows: high-
level security and reduced risk of damage and theft, which could lead to high losses. The
management at the airport is very strict on safety and thus have stringent rules and regulations.
Also, speed and reliability, which is essential is offered by cargo as perishable goods can be
received by customers without any damage or loss at a convenient time without having to wait
for ages.
In addition, the cost of packaging is reduced as they have special containers for transportation of
the products with better handling facilities that ensure goods are shipped in good conditions
without theft, loss, damage or misplacement. Therefore on specialization, a company will not be
forced to acquire various airplane for different products but will have those suitable for the
product they are dealing with.
Lastly, specialized air cargo offers tracking, which helps an individual to monitor the time of
one's cargo from the departure time to when it arrives. This helps one to prepare adequately for
receiving the products (Feng and Shen, 2015). It also ensures that an individual will be able to
pay any clearing charges before getting the products. It has various disadvantages such as being
very costly, small carrying capacity, more significant risk in case of an accident, requires a large
investment to be effective and efficient and specialized skills (Baxter and Srisaeng, 2018).
In conclusion, air cargo transport is best for shipping products especially those that are highly
perishable as they will be delivered on time considering high speed of aircrafts and also the
safety of goods is assured as they have special facilities for various products. Therefore air cargo

Air Cargo and Logistics 7
transport especially under a certain line of specialization enables high returns to a company as
they will invest and concentrate on shipping of the good to its best.

Air Cargo and Logistics 8
References
Barz, C. and Gartner, D., 2016. Air cargo network revenue management. Transportation
Science, 50(4), pp.1206-1222.
Baxter, G. and Srisaeng, P., 2018. Cooperating to compete in the global air cargo industry: The
case of the DHL express and lufthansa cargo ag joint venture airline
‘AeroLogic’. Infrastructures, 3(1), p.7.Baxter, G., 2019. Capturing and Delivering Value in the
Trans-Atlantic Air Travel Market: The Case of the Air France-KLM, Delta Air Lines, and Virgin
Atlantic Airways Strategic Joint Venture. MAD-Magazine of Aviation Development, 7(1), pp.17-
37.
Baxter, G., Srisaeng, P. and Wild, G., 2018. The role of freighter aircraft in a full-service
network airline air freight services: The case of Qantas Freight. MAD-Magazine of Aviation
Development, 6(4), pp.28-51.
Brandt, F. and Nickel, S., 2018. The air cargo load planning problem-a consolidated problem
definition and literature review on related problems. European Journal of Operational Research.
Budd, L. and Ison, S. eds., 2016. Air transport management: an international perspective. Taylor
& Francis.
Feng, B., Li, Y. and Shen, H., 2015. Tying mechanism for airlines’ air cargo capacity
allocation. European Journal of Operational Research, 244(1), pp.322-330.
Graham, A. and Halpern, N., 2018. Introduction to The Routledge Companion to Air Transport
Management. In The Routledge Companion to Air Transport Management (pp. 29-36).
Routledge.

Air Cargo and Logistics 9
Halttunen, S., 2017. Airport marketing trends: the impact on customer experience at Helsinki-
Vantaa Airport.
Hüschelrath, K., Niemeier, H.M., Wolf, H., Gillen, D. and Forsyth, P. eds., 2013. Liberalization
in aviation: competition, cooperation and public policy. Ashgate Publishing, Ltd..
Olariaga, O.D., 2018. Airport competition, general framework of analysis. Dimensión
Empresarial, 17(1), pp.77-89.
Otte, T., Metzner, N., Lipp, J., Schwienhorst, M.S., Solvay, A.F. and Meisen, T., 2018,
September. User-centered Integration of Automated Air Mobility into Urban Transportation
Networks. In 2018 IEEE/AIAA 37th Digital Avionics Systems Conference (DASC) (pp. 1-10).
IEEE.