Chapter 5: Aircargo Transport Flashcards
What have the world’s largest passenger and freight airlines in common (2013)?
Both sectors are dominated by American Airlines:
- Federal Express and United Parcel Service in cargo transport
- American Airlines and Delta Airlines in passenger transport
What are major, worldwide air cargo routes?
- The major air cargo routes are those centered on North America, Europe, and Asia.
- The major flows are east-west or west-east between and within these areas.
- The major flows are between Asia and North America and Asia and Europe.
- In recent years, air cargo flows between China and the Middle East, Africa and Latin America have been growing quickly.
What is the average growth rate for world air cargo traffic (prognosis by Boeing World Air Cargo Forecast)?
The growth rate over the next 20 years for the market of world air cargo traffic is +4.2% p.a.
What are changes in the structure of the airplane fleets used for air cargo transportation in the next 20 years?
- About 1,300 of the 2,650 projected freighter deliveries will replace retiring airplanes, with the remainder expanding the fleet to meet the requirements of projected traffic growth.
63% of the deliveries (1669) will be freighter conversions, 70% (1.1.68) of which will be from standard-body passenger airplanes. - Another trend is the focus on building middle-sized planes and the reduction of too large plane sizes (same problem like in maritime transport!)
What are the typical goods transported by air?
Characterize them briefly!
- Most airfreight volume today is ‘general’ freight. This includes goods ranging from plant and equipment to cosmetics.
- International express comprises about a tenth of overall air cargo.
- There is also a specialist airfreight charter sector catering for special needs and regular shipments.
- Within each of these sectors, there are many specialisms such as heavy lift capability, refrigerated transport, cut-flower transits, etc.
- The largest volumes of commodities moved in the rank of importance are:
- capital equipment
- intermediate materials (that is, electrical components)
- computers
- express parcels
- refrigerated goods
- consumer products
- fashion goods.
What are the largest freight airports worldwide?
The three largest freight airports worldwide are:
- Memphis
- Hong Kong
- Shanghai
How is the Air Cargo Chain organized?
- The exporter will typically book the shipment with a freight forwarder which then manages the remainder of the process.
- Some freight forwarders have assets and facilities for carrying out some of the processes in-house, but many out-source all services.
- The forwarder would typically use an agent at the destination to make the arrangements for customs clearance and delivery to the recipient.
- The integrator deals with the sender of the consignment, uses its own resource to provide all the various steps in the cargo chain and delivers the consignment to the recipient
- The process can be quite complicated involving multiple parties and with limited visibility.
For what stands the abbreviation IATA?
What are the functions of the IATA?
IATA is the International Air Transport Association and was founded in Havana, Cuba, in April 1945. The modern IATA is the successor to the International Air Traffic Association founded in the Hague in 1919
Main functions of the IATA are
- Representation of the airlines (“lobbying”) against stakeholders in politics and public
- Leading for simplifying and improving the processes and security of the airlines (e.g. IATA’s Operational Safety Audit)
- Serving as a “communication hub” and integrator against the customer
What are the functions of the ICAO?
The International Civil Aviation Organization ICAO was established in 1944 by 52 nations in Chicago
The ICAO should secure international co-operation at the highest possible degree of uniformity in regulations and (technical-) standards, procedures and organization regarding civil aviation matters
The main function of ICAO is to rule the international rights of air traffic according to the five “freedoms of the air” (regulation of cabotage transports).
What are the “Freedoms of the Air”?
Please explain their functions using some examples!
The freedoms of the air are a set of commercial aviation rights granting a country’s airlines the privilege to enter and land in another country’s airspace, formulated as a result of disagreements over the extent of aviation liberalization in the Convention on International Civil Aviation of 1944, known as the Chicago Convention.
The first five “freedoms of the air” are:
- First Freedom - The right to fly and carry traffic over the territory of another partner to the agreement without landing.
- Second Freedom - The right to land in those countries for technical reasons such as refueling.
- Third Freedom - The right of an airline from one country to land in a different country and deplane passengers coming from the airline’s own country.
- Fourth Freedom - The right of an airline from one country to land in a different country and board passengers traveling to the airline’s own country.
- Fifth Freedom - The right of an airline from one country to land in a second country, to then pick up passengers and fly on to a third country where the passengers then deplane. An example would be a flight by LH from the US to England that is going on to France. Traffic could be picked up in England and taken to France.
What are the so-called ACMI-Providers in air cargo transportation?
What is their business model? Do you know an ACMI-company?
ACMI-Providers are air cargo service providers, which offer a leasing model for aircraft, crew, maintenance, and insurance.
The most important clients of ACMI-Providers are the common air cargo airlines, which use this market offer for balancing peak times and general cost reduction.
A company example would be AeroLogic.
What are the functions of a “Known Consignor” and a “Regulated Agent” in the air cargo chain?
A recognized/known consignor [Bekannter Versender] is the first identifiable person to introduce an airfreight consignment to the transport supply chain. This refers to the person or entity where the airfreight consignments are selected or originate. Only freight from a recognized consignor can be transported by a regulated agent as secure airfreight in passenger planes.
Regulated agents [Reglementierter Beauftragter] are companies which carry out security controls and/or cargo screening on airfreight consignments. The status of a regulated agent allows you to deal with secure airfreight and transport or store goods without the consignment losing its secure status. In the event of „insecure“ consignments, the regulated agent, employing appropriately trained personnel and the required control techniques, can carry out screenings and alter the status from „insecure“ to „secure“.
What are the key problems and most sensitive constraints in the air supply chain - regarding air security?
Give examples!
The biggest problems and most sensitive “constraints” in the air supply chain are:
- Organization of inbound control in freight terminals
- Missing safety awareness of personnel – despite training efforts
- Uncontrolled stops during truck transports (driving times) with missing protections of load
- Not all kinds of freight are controlled (coffins, urns etc.)
What are the main functions of the “INCOterms” in a global buyer-seller-contract?
- Incoterms have not the character of laws – until they are explicitly integrated into the contract
- Basically, they are standardized trade terms to reduce the risks of transport, package, documentary and customs responsibilities
- The main functions of INCOTerms® 2010 are:
- Sharing of transport costs between the buyer and seller
- Sharing of responsibilities (documents, insurance, communication and passing of relevant information)
- Claiming the transfer of risk [Gefahrenübergang]
What are important factors in choosing the appropriate INCOTerms for a specific transportation task?
Important factors in choosing the appropriate INCOterms are:
- The kind of freight an transport mode - some of the terms are for transport with trucks, rail or plane; others only for transports with the ship
- The need for taking over of specific risks and costs, because in some cases (e.g. USA) the rights for exports is limited for non-citizens.
- The need for risk avoidance - for example, to transfer the risk of insurance from seller to buyer.
- How the INCOTerms should be used for marketing and the pricing policy
- How the INCOTerms should be used for quality management - because there are terms which give the buyer or the seller more control over the quality of the transport - e.g. by choosing the right LSP.
