Airfreight – Know When It Pays to Ship Air Cargo
Should air freight be a part of your routine shipment options? At one time air freight was considered a last (and most expensive) resort when products had to be delivered quickly. Today, that may not always be the case.
There are advantages and disadvantages in utilizing air cargo freight. Transportation managers and business executives should look closely at their particular business models and supply chains, and then compare to the options available from air cargo freight planning.
Below are the pros and cons of utilizing air cargo freight planning for many businesses:
Pro – when it comes to speed of delivery for shipments, air freight is arguably your best choice. Products can be shipped literally around the world in a matter of hours.
Con – expenses relating to air freight can still be substantial when compared to ocean freight. Businesses should carefully consider initiating a transportation agreement with key air freight providers in order to negotiate the best rates.
Pro – The air freight industry is investing in technology and infrastructure in order to compete with other transportation modes. This has brought greatly improved document management capabilities and reduced dependency on paper.
Con – According to an American Shipper procurement study, poor utilization loads have caused the air freight market to struggle because they are not able to achieve the volume needed for more competitive rates and services.
Pro – The American Shipper study also notes that 3PL’s are more apt to utilize air freight carriers. This is likely due to the speed of service when shipments must be expedited which helps the 3PL to meet service level guarantees. It should be noted, however, that the 3PL could be passing any additional expenses to their customers.
Con – If using a broker or forwarder for air freight, the services that are offered can sometimes be misinterpreted. Pick up or drop off locations, guarantees and any miscellaneous fees could be overlooked or misunderstood.
Pro – Air freight is one of the least risky forms of transport for products. This is mainly due to the very strict air transport rules and security at major airports. Shipments can be traced in almost real-time with very predictable flight schedules and routes. Product damages are not as likely as ocean transport modes and perishable items are not as likely to expire.
During Apple’s iPhone 5 launch, air freight costs from China to western countries jumped by as much as 7% according to the Drewry freight research firm. Customers were willing to pay the additional expenses to get shipments sooner. The iPad launch had seen spikes in air freight fees by as much as 20%. Knowing how product demand can impact freight expenses is an important factor when determining if air cargo is right for your company.
While air cargo freight may not be the best option for most of your shipping, it is still important to choose an air transport provider and reach an agreement for services in advance. By doing this your company will be in a better position to take advantage of lower fees and having an actual partner with an air freight provider. To make sure you have optimized all of your supply chain shipping options including air cargo freight planning, consult with the experts at TMG for a transportation assessment. Don’t for get to download the whitepaper- “Air Cargo – Serious Problem or Significant Opportunity. It provides executives with strategic solutions working in the Air Cargo market.
What has been your experience with Airfreight? Is the added cost worth it?