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Point A to Point B by Air

As a company or individually, you may need to deliver your goods from one place to another place. The most important thing is selecting the suited shipment mode for your logistics. Following are the major modes of shipments. 

1. Ground
Land or "ground" shipping can be done by train or truck.In order to take air and sea shipments,   ground transportion is required to take the cargo from its place of origin to the airport or seaport .it is not always possible to establish a production facility near ports due to limited coastlines of countries.

2. Air
Cargo is transported by air in specialized cargo aircraft or in the luggage compartments of     passenger aircraft

3. Ship
Shipping is done by commercial ships. Merchant shipping is the lifeblood of the world economy,   carrying 90% of international trade with 102,194 commercial ships worldwide

4. Intermodal
Intermodal freight transport refers to shipments that involve more than one mode. 

Each of these modes have different pros and cons. We need to select best suited mode based on our requirement, because shipping cost can be directly affected to the business.However I will only discuss about the Air transport mode in this post.
                            If we consider in the cost wise definitely Air transport mode is not cost effective but it has some advantage which most of the modern business need. I have listed below few of those.

1. The fastest shipping method
When your goods need to be moved quickly, air freight is the best solution compared to sea freight   or ground transport.

2. Highly reliable arrival and departure times
The arrival and departure times of flights are highly reliable, as airlines tend to be very on top of     their schedules. Even missing a flight wouldn’t cause much delay as there are usually flights departing every hour.

3. Send your cargo almost anywhere
Many airlines have a large network of destinations that cover almost the entire world. This means   that you can send the shipment to nearly every destination.

4. Low insurance premium means large savings
As the transportation time for air cargo is comparatively short, the insurance premium is much   lower. Even if air freight can be expensive, this brings about savings in terms of lower insurance costs.

5. High level of security and reduced risk of theft and damage
As the transportation time for air cargo is comparatively short, the insurance premium is much   lower. Even if air freight can be expensive, this brings about savings in terms of lower insurance costs.

6. Less need of warehousing and fewer items in stock
With the quicker transit times of air freight, local warehouse requirement is much lesser  because stock  aren't needed to keep for longer. Customs clearance, cargo inspection and cargo handlers are more efficient, as most of cargos are cleared within a matter of hours.

7. Less packaging required
Normally, air shipments require less heavy packing than for ocean shipments. So it saves both time   and money to spend for additional packing.

8. Follow the status of cargo
Many companies offer the opportunity to track cargo using web applications, which means arrival and departure of cargos can be closely monitored by staying at any where in the world.

Let’s think some company or individual selected Air cargo as the transportation mode for shipments, there are several parties who involved within the process. Airways are the major party who own the carriers. We can find three major type of carriers in the Air cargo arena.

  • Passenger aircraft use  spare volume in the airplane's baggage hold (the "belly") that is not being used for passenger luggage - a common practice used by passenger airlines, who additionally transport cargo on scheduled passenger flights. - this practice is known as Belly Cargo. Cargo can also be transported in the passenger cabin as hand-carry by an “on-board courier”.
  • Cargo aircraft are dedicated for the job - they carry freight on the main deck and in the belly by means of nose-loading or side loading.
  • Combi aircraft carries cargo on the main deck behind the passengers’ area with side loading and in the belly.

Passenger aircrafts are the famous transport medium for the Air cargo because we cannot find Cargo aircrafts commonly for the each and every destinations. However main business of the Passenger airways is not the cargo handling because their main focus is the passenger handling. So Cargo is considered as the secondary business. One of the main reason for this is, marketing is easier with  passenger transportation. As examples, marketing on the passenger seats can be done based on the facilities like business class , economy class , free wifi and meals but this cannot be done for cargo.
                                                                 Passenger Airlines are not putting their full effort on the cargo business since this is secondary business for them. Hence most of the services are outsourced to the several parties. 
Following diagram explains few of them briefly.

According to the above diagram you can see merchants are not directly dealing with the Airways. There are two main parties in between merchant and the airway. Each and every party has separate responsibilities.

Merchants are the clients in the cargo industry. As an example we can get the Seagate(Hard disk manufacturer) and 3M(provides cutting edge health and safety products). They are producing products in their Singapore factories and need to ship products to different destinations(eg:- Sri lanka) based on the requirements via Air cargo. As I explained earlier since this is secondary business for the Airways, they are not putting enough staff members for this service. So most of the required things such as documentation is done by third parties. So merchants are directly dealing with the logistic providers(Forwarders) for these purposes. 

Normally 3PLs work in this scenario is deliver the goods to the required destinations but other than that they are providing various of services in the logistic context like warehousing, local distributing. 
Most of the largest 3PLs are multinational companies and they are based in many countries, if not they have some partner 3PLs. Common practice is Merchant send the request to the 3PL for sending their goods to the single or multiple destinations.  Most of the large scale merchants are using multiple 3PLs for delivering their goods. Most of the time 3PLs are responsible for preparing the required documents for the goods, because most of the times different parties need different documents to proceed freight. Other than this, they are doing re packaging if required. Next step is handover the goods to the ground handling agents.
According to the diagram, Forwarders are playing two different roles in two(Origin and destination) sides. In destination side their responsibility is delivering the goods to the consumers . Consumers could be the company or shopping mall or individual

Ground handling agents
First Of All let see why we need ground handling agents. 
Passenger airlines has several destinations(Singapore Airlines has 63 international destinations) So maintaining different cargo office in each and every destination is not a possible task. Since this is common issue for the each and every Airways, every airport has ground handling agents. Most of the time those are owned by the national carrier of the country. So their responsibility is handling cargo behalf of the Airways. SATS is the main ground handling agent in the Changi airport and it is owned by Singapore airline. It is providing cargo handling to the Singapore airline as well as the other airlines. There can be multiple ground handling agent in big airports.


Unknown said…
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