Air Cargo II:Market Characteristics

Dr Narudh Cheramakara

MAY 2016

Volume v. Value (IATA 2015)

• What do you thinks are the products transported by air?

Cargo Categories (2007)

• Hi-tech products 27%• Capital equipments 19%• Apperel, textiles and footwear 17%• Intermediate products 12%• Refrigerated foods 5%

Asia to Europe Cargoes

Europe to Asia CargoesWhy the differences?

Directional Imbalance

• Generally, developing world heading to the developed world

• The imbalance is vast (i.e. Asia-EU is 75% more than the EU-Asia)

• Generally Asia to US/EU: Apparels, Telecommunication• US/EU to Asia: Machinery, Documents• Latin America – US: Agricultural Products, similar case to

Africa – EU (Particularly Kenya flowers industry)

• Exercise: How to address the imbalance?

• Special handling items?

• What are they?

Special Handling Items

Special Handling Items: Perishables• Large markets on the Latin America – US and

Africa – Europe• Flowers export is a significant segment:

Kenya / South Africa/ Ecuador/ Also Thailand (Mostly orchids)

• Fruits/Vegs

Special Handling Items: Animal Transports

• Racehorses (Middle East)• Farm animals (For

Bleedings purposes)• Zoo animals (Pandas,

Tigers, ETC.)

• Trans borders transportation of animals require complicated paper works; permits, vet certificates, quaranteen etc.

Humanitarian Aids

• UN (World Food Programme) / UNHAS (UN Humanitarian Air Services)

• Chartered from various operators• Humanitarian crises (e.g. Africa)• Natural Disasters (Bring in supplies take ppl

out)

Defence Support• Civil Air Reserve Fleet (US) FEB 2016• International Segment - Long Range• · ABX Air• · Air Transport International• · American Airlines• · Atlas Air• · Delta Air Lines• · Federal Express Airlines• · Hawaiian Airlines• · Kalitta Air Cargo• · National Air Cargo Group dba National Airlines• · Omni Air International• · Polar Air Cargo• · United Air Lines• · United Parcel Service

Modal Choice

• Costs• Delivery Time (Longer the distance, faster by

air. Short-range shipments are often faster shipped by trucks)

• Frequencies (Higher the better)• Security: sea-pirates v. airport heist (2013 50

million USD diamond heist at BRU)• Quality of Service

BRU diamond heist

• https://www.iata.org/whatwedo/cargo/Documents/cargo-strategy.pdf

• IATA Cargo Strategy