Air Cargo Ships May Soon Alter Global Supply Chains
Air Cargo Ships May Soon Alter Global Supply Chains
Abstract
Most companies across the world applying sophistication in their supply chain designs are engaging in the use of air cargo as a competitive advantage regardless of the costs incurred. These aspects occur with the reflection that air cargo being perceived expensive in terms of an alternative method for supply chains that rely on ocean transportation. However, the focus on air cargo does not emerge on the basis of the accidents or even crisis situations in the incorporation of logistics strategies to global manufacturers. Research indicates that the focus on air cargo emanates from consideration of transportation costs that aim at shaping decisions regarding where manufacturing should occur as well as where products should be sourced. Nevertheless, the amount of money that may be saved through the utilization of certain tax incentives may outweigh other expenses related to global supply chains such as transportation. These will be the issues addressed throughout the paper with more emphasis on the evaluation of how air cargo may soon alter global supply chains. The evaluation will focus on elements such as the advantages of air cargo over the other methods applied in transportation of products or retrieval of sources and raw materials.
Introduction
Undeniably, globalization has become one of the major things that have made life easy for all people around the globe. The concept of globalization has brought about growth in the way business is conducted across the world with organizations engaging in activities where they source goods and products from one location and move them to another for processing. The engagement in these activities ensures a shift in the supply chains as well as sourcing of products to various locations across the world. Some of the reasons attributed to these shifts entail tax incentives and lower labor costs as well as quotas that bring about sourcing migration around the world. In addition, the focus on air cargo entails the aspect of time. This is mostly considered when it comes to the highly perishable goods that need to be moved from one location to another not only in a specialized way, but also in a faster way to prevent them from going bad, before they reach their final consumer or their intended clients. For such perishable goods, the drive shipping industries highly rely on the air cargo for their fast movement (Yuan et al, 2010). For instance, companies involved in processing and movement of flowers saw an increase in demand for air cargo as the number of growers expanded while at the same time the number of buyers increased especially in the United States. The movement of these flowers to different locations in the United States and external locations became cumbersome as the demand required delivery on time before the flowers perished (Yuan et al, 2010).
Additionally, the movement of food products such as grapes saw a significant increase in the transportation from the United States to the other markets where they are not produced or places where they are grown in low quantities as well as places with high rates of consumption such as Europe. Nevertheless, reliance on air cargo as a design as opposed to in time of crisis facilitated in the development of business. These may be coupled with the push by Chief Finance Officers in most organizations who seek ways of avoiding inventory and thus focus on air freight as a natural selection. According to research, organizations such as Menlo Worldwide that focus on manufacturing, medical products, have diverted their focus to air freight in times of crisis. The diversion brought about the incorporation of air transport in their overall supply chain strategies (Signoret, 2011). Initially, the company that specializes in the manufacture of surgical needles in Ireland, used to move their products by ocean carriers to market destinations such as the United States. However, the emergence of SARS scares saw the manufacturer shift their strategies to the utilization of air transport with the aim of supplying hospitals across the world with their products in a timely and efficient basis. Despite the fact that crisis ended, the manufacturing company continued moving their products by air instead of the ocean, due to the fact that transportation is air has for a long time proved to be efficient and effective (Signoret, 2011).
In other instances, an organization employed a rather sophisticated supply chain mechanism for the manufacturing operations of their clothing products. The sourcing of raw materials occurred in the United Kingdom, where it would later be shipped to the United States for processing through cutting the pieces and finally the pieces would be sent to Mexico for sewing and finishing the garments. However, much the movement was timely and everything was running according to the plan, the efficiency was not well met. The need for effiency and improvement pushed the company to seek for other better transportation methods, which later led it to air transportation. The organization noted andd turned to companies specializing in air transport for assistance in streamlining their air cargo transportation strategies in the supply chain. Similarly, the organization applied the strategies provided by the air transport company in the elimination of the number of distribution centers as well as forwarders involved in the operation. The focus on air transportation involves the application of logistics as well as IT products that offer services such as logistics division (Signoret, 2011). These aspects have brought about the evolution in the transportation industry as well as the supply chain strategies through products and services that include software used in the analysis of landed costs. These elements facilitate the realization of the needs of global manufacturers as well as sophisticated supply chains (Signoret, 2011).
Most importantly, air cargo ships may soon change Global supply chains through saving time, especially for shipping and manufacturing companies facing an increase in pressure in getting products to their desired destination. For instance, consumer electronics and seasonal clothing entail items requiring quick movement, but have limited shelf life (Signoret, 2011). The adoption of air freight provides the only option in ensuring that the products get to the destinations at the right time and in the required state. Additionally, the adoption of air freight serves the purpose of assuring customers advantages such as reliability, security and timeliness. Research in this area indicates that protection against theft entails a point of concern for companies applying shipment through air transport (Signoret, 2011). In the instance where a clothing shipment destined for an event in Milan or Paris gets stolen at the entry point, the outcomes may be catastrophic for the designers. Similar occurrences may emerge for organizations seeking to transport products such as currencies or even gold (Signoret, 2011).
Air cargo in the supply chain strategy requiring bypassing of the distribution center brings about another form of widespread occurrence where the shipment of products directly from the manufacturing facilities to retail store allows saving time as well as operating costs and handling procedures. These elements facilitate the offsetting of extra costs incurred in the movement of products by other means. The short time involved in delivering the products to the market helps most shipping companies in making their products more attractive, especially for shippers seeking for the fastest connection possible with a guaranteed commitment. These and other services have allowed the development in global supply chains through assisting to fuel the air cargo industry. According to Pyza and Golda (2011), the cargo industry in the United States experienced significant growth over the last two decades with an increase in the total amount of freight transported from 19 percent to 45 percent. The increase saw the transportation of 17 billion tons worth of products with a total value of $10.5 trillion. Most importantly, the significant growth in the air cargo industry occurs as a result of increase in customer demand requiring companies to provide extensive geographical reach as well as a robust suite of products and services (Pyza and Golda, 2011).
The answer to this question entails determination of the advantages associated with air cargo over other modes of shipment as well as other factors that will make air cargo seem advantageous. For instance, air cargo will change global supply chains through competing with other cargo carriers in the market place such as jumbo cargo. The competition will take many forms such as an increase in the access to more remote areas directly independent of infrastructure. In addition, the ease of access will allow easier movement of large cargo as well as accommodation of shipping containers (Pyza and Golda, 2011). Some of the innovations employed by air cargo entail aircraft cargo bay measuring at 220’ by 40’by 30’ in terms of the length, width and height respectively on the 66-ton payload aircraft. These dimensions will be much larger than other craft used and will thus help in overcoming challenges related to accommodation that may occur as a result of nose/tail loading of the fixed wing fuselage. Similarly, these innovations will involve less consumption as compared to other freighters on the basis of per ton-mile helium to stay on air, thus enhancing static lifting as well as simplicity in propulsion that fosters forward movement and eradication of aerodynamic drag (Pyza and Golda, 2011).
Besides, the anticipation in air cargo devices entails the empowerment of traditional and alternative energy as well as project engineering and sector, such as mining, agriculture, manufacturing and other global industries. These will occur through the reduction of the challenges in the logistics as well as facilitating the movement of products while at the same time retaining warranty in several cases. These will be followed closely by the reduction of on-site final assembly that brings about increased costs and wastage of time while in other cases it will help in overcoming seasonal limitations such as ice road deliveries. Most importantly, air cargo will enhance the delivery of other project management benefits such as shorter development schedules as well as the reduction of idled equipment and labor (Pyza and Golda, 2011). On the other hand, air cargo will bring about advantages such as the provision of new opportunities and efficiencies for transport regarding particular sub-segments of global commercial cargo as well as traditional air cargos. These may be coupled with the provision of expansion opportunities for military airlift as well as humanitarian or disaster relief efficiency in that they will bring about flexibility in the landing sites and global reach. Furthermore, the achievement of these elements will involve capabilities in the payload as well as faster speed as compared to other ground modes (Pyza and Golda, 2011).
The efficiency in air cargo on the basis of altering and transitioning global supply chain strategies occurs through collaboration with commercial air cargo carriers. The achievement of the collaboration entails the fact that air cargo has bridged the gap between Sealift and airlift in terms of speed and costs incurred. The operators of air cargo focus on vertical take-off as well as landing aeroscraft that possesses the ability of broadening network coverage. For instance, air cargo may facilitate the expansion of service capabilities for perishable goods in terms of access to fields as well as providing power for refrigerated containers. These may be followed closely by movement of hazardous cargo such as LI batteries in a fast and effective manner (Pyza and Golda, 2011). Collectively, these factors will bring about an enhancement of security for sensitive cargo related to current intermodal practices as well as the facilitation of the introduction of multiple delivery services appropriate for certain packages on a daily basis (Pyza and Golda, 2011).
The alteration in global supply chain strategies with the focus on the logistics through air cargo brings about shifts in various types of cargo towards surpassing surface modes as well as point-to-point volume efficiencies. The shifts in these areas will involve the provision of benefits in terms of costs and speed in the distribution of retail for products in the clothing industry. The application of air cargo carriers will facilitate direct delivery of the products to new destinations such as regional distribution centers (Signoret, 2011). It will also allow the provision of new alternative modes of transportation such as air and trucks. Additionally, the adoption of air cargo carriers in the global supply chain strategies will include collaboration with ocean cargo carriers in a sea framework. The essence of the collaboration will involve the ability of facilitating access and operations in both the air and sea harbor environments (Signoret, 2011). The facilitation of these aspects will also ensure access to remote areas that lack the support equipment where air cargo will serve the purpose of moving containers from more remote areas with insufficient roads or rail infrastructure to the main container terminals. These factors will also facilitate similar reverse distribution from the container terminals to remote areas.
In the long-run, air cargo possesses the capability of augmenting the existing main line vessel support that will have the potential of helping operators in expanding their services especially in regions such as the Arctic and Asia-Pacific. Therefore, air cargo would also ensure delivery of their services to logistic providers based in the ocean through speeding up the delivery of their products to countries that lack ocean harbors or rather land locked nations. The challenge in these countries entails that fact that the modes of transport in collaboration with the customs may slow the delivery of the products to the final destination mostly for the higher-value and lowest-density containers (Signoret, 2011). However, there will be variations in the capacity of the containers on the basis of loading where their current capacity of aircrafts may be constrained in terms of volume as opposed to weight. The air cargo carriers will ensure constraints over weight before engaging constraints over volume. Most importantly, air cargo possesses the ability of deploying cargo in a precise manner from areas where landing is not allowed to others where landing may occur on-board. These factors will allow expeditious for cargo movement to and from offshore container vessels in the appropriate time and state (Signoret, 2011).
Some of the other advantages associated with air cargo in enhancing global supply chain strategies entail security in the direct delivery of products from the point of origin to point of need through aircraft enabled in securing internal bay. The enhancement of security in cargo occurs through the way the cargo is handled, stored and transferred. Nevertheless, the countries that are most likely to experience the use of air cargo services entail the emerging nations with less attractive infrastructure (Signoret, 2011). The adoption of air cargo services will ensure the reduction of the need for major infrastructure investments in facilitating economic development projects or even initiatives to the highest level. For instance, air cargo would be used in negating the need for building a special airport for cargo projects as well as the mitigation of terminal construction associated with internal infrastructure for regional development. These may also be coupled with the minimization of environmental effects in prized original places.
Conclusively, the adoption of air cargo in revolutionizing global supply chain strategies entails intelligence, logics and mission oriented professionals familiar with other modes of transport as well as technology. The revolution in the transportation industry seeks to continually improve the delivery of services and products from one end to the other at the most significant prices and reduced costs. However, the achievement of such aspects requires collaboration with the existing modes of transport in the formation of a network that enables access to a wide coverage in terms of network. Air cargo may be applied in the enhancement of the delivery of services, especially in the military where it possesses the ability of significantly bringing an increase in lifting heavy cargo. Additionally, air cargo bears the advantage of facilitating direct delivery in remote regions through the reduction of the logistics structure (Signoret, 2011). These may also be coupled with the reduction of reliance on other means of transport through the minimization of susceptibility on convoys used on land. Furthermore, air cargo brings about a revolution in the global supply chain strategies through reduction of the effectiveness of anti-access strategies employed by other modes of transport. It also occurs through augmentation of the hub and logistic framework to a point to point delivery (Signoret, 2011).
References
Pyza, D., & Golda, P. (2011). Transport Cargo Handling Shipments in Air Transport in the Aspect of Supply Chains. 2011 21st International Conference on Systems Engineering. doi:10.1109/icseng.2011.87
Signoret, J. E. (2011). On Cargo Security Measures and Trade Costs. Global Economy Journal, 11(3). doi:10.2202/1524-5861.1733
Yuan, X., Low, J. M., & Ching Tang, L. (2010). Roles of the airport and logistics services on the economic outcomes of an air cargo supply chain. International Journal of Production Economics, 127(2), 215-225. doi:10.1016/j.ijpe.2009.08.005
