ABSTRACT
The air cargo industry includes the movement of freight, express packages, mail and courier bags by air. The term ‘air cargo’ is often used for the combination of freight and mail, but the emergence of the express package sector and the decline of courier bags has led to a blurring of types of traffic carried. The demand for air cargo is for a door-to-door product, whether from manufacturer to final user, or between the various intermediaries in the supply chain. This will involve trucking and flights and possible a part of the trip by rail. Integrated carriers such as FedEx and DHL offer a door-to-door service while airlines generally only offer an airport to airport service, with other parties providing delivery to the airport and collection at the destination airport. Air cargo is a key ingredient of the trade in goods, whether internationally or between different regions of the same country, although the latter tends to be carried by truck or rail. Air cargo accounts for 34.6 per cent of the value of non-land international trade in goods, but only six per cent of the weight (Kararda, 2006). The average value to weight ratio of air shipped goods is 31 times as that of vessel shipped goods. This enables such items to bear the higher cost of shipment by air. Air cargo can thus be described as a derived industrial product. Some countries such as India have been very successful in developing services industries which are much less dependent on air transport. China on the other hand has a substantial manufacturing base and generates substantial air cargo flows both to North America and Europe. Air cargo rates tend to be significantly higher than those for surface transport. Thus high value-to-weight ratio products tend to be better able to support such rates. Companies do not want high value inventory in transit and take advantage of air cargo’s shorter transit times.
