Air Cargo: Participants - Processes - Markets - Developments

Preface
Contents
Abbreviations
Part I: Introduction
1: A Brief History of Air Freight
1.1 The Age of the Pioneers Until the End of the Second World War
1.1.1 Flying – Man’s Eternal Dream
1.1.2 Pre-war Years
1.1.3 Years of the First World War
1.1.4 Airmail as the Engine of Aviation in the 1920s
1.1.4.1 Technical Innovations
1.1.4.2 Development in North America
1.1.4.3 Development in Europe
1.1.4.4 The Golden Age of Airships
1.1.5 Progress in the 1930s
1.1.5.1 Evolution of Modern Commercial Aircraft
1.1.5.2 The Second World War as a New Turning Point
1.2 The Boom Years from the End of the Second World War to the Mid-1970s
1.2.1 The Chicago Convention and the Establishment of ICAO
1.2.1.1 Organisation of the ICAO
1.2.1.2 ICAO Standards and Recommended Practices
1.2.2 Freedoms of the Air
1.2.2.1 First and Second Freedoms (Technical Freedoms)
1.2.2.2 Third to Fifth Freedoms (Commercial Freedoms)
1.2.2.3 Sixth to Ninth Freedom
1.2.2.4 ICAO’s Capacity to Develop
1.2.3 International Air Transport Association (IATA)
1.2.4 Developments in the USA
1.2.5 Development in Europe
1.2.6 Technical Innovations
1.2.7 The Advent of Wide-Body Aircraft and the Consequences of the Oil Crisis
1.2.8 Exogenous Crises as an Engine of Growth
1.2.9 Phase of Deregulation
1.2.9.1 The Arduous Path to Open Air Spaces
1.2.9.2 The New Role of IATA in Deregulated Markets
1.3 Maturity Phase Up to the Global Financial Crisis
1.4 Development Since the Financial Crisis – A Phase of Consolidation?
1.4.1 A Standstill in Aviation Liberalisation – And a Decline?
1.4.2 Development of Traffic Volumes
1.4.2.1 Long-Term Correlation Between Transport Volumes and Gross National Product and World Trade
1.4.2.2 Volatility of Quantities Due to External Shocks
1.4.2.3 Volatility During the Year
1.4.3 Employment Impact
2: Characteristics of Air Freight
2.1 Overview of Air Cargoes
2.1.1 Airmail
2.1.2 Express and Courier Consignments
2.1.2.1 Express
2.1.2.2 Courier Consignments
2.1.3 Conventional Air freight
2.1.3.1 Perishable Goods
2.1.3.2 Goods of Value
2.1.3.3 Emergency Assistance and Urgent Replacement Products
2.2 Advantages
2.2.1 Lower Capital Costs During Transport
2.2.2 Lower Inventory Costs Due to Speed and High Reliability
2.2.3 Lower Insurance Costs Due to High Level of Security
2.2.4 Low Packaging Costs
2.2.5 Lower Upstream and Downstream Costs Due to Closely Meshed Infrastructure
2.3 Disadvantages
2.3.1 High Cost of Air Freight
2.3.2 Size and Weight Restrictions
2.3.3 High Environmental Impact
2.3.3.1 Aircraft Noise
2.3.3.2 Pollutant Emissions in the Vicinity of Airports
2.3.4 Greenhouse Gases
3: Parties Involved
3.1 Consignor and Consignee
3.1.1 Rights and Obligations of the Consignor and Consignee
3.1.2 Allocation of Costs for Freight and Charges (Incoterms)
3.1.2.1 Ex Works (EXW)
3.1.2.2 Free Carrier (FCA)
3.1.2.3 Carriage Paid to (CPT)
3.1.2.4 Carriage and Insurance Paid to (CIP)
3.1.2.5 Delivered to Named Place of Destination (DAP)
3.1.2.6 Delivered to Terminal (DAT)
3.1.2.7 Delivered and Duty Paid (DDP)
3.1.2.8 Considerations
3.2 Airlines
3.2.1 Business Models
3.2.1.1 Full Service Network Carrier (FSNC)
3.2.1.2 Integrators
3.2.1.3 Cargo-Only Airlines
3.2.1.4 Low Cost Carrier (LCC)
3.2.2 IATA and ICAO Airline Codes
3.2.3 Success Factors
3.2.4 Possibilities for Optimising Turnover
3.2.4.1 Load Factor
3.2.4.2 Increasing Average Revenue Through Quality Leadership
3.2.4.3 Product and Price Differentiation
3.2.4.4 Conflicting Objectives in Maximising Returns
3.2.5 Revenue Management as an Integrated Approach to Revenue Enhancement
3.2.5.1 Long-Term Network and Capacity Planning
3.2.5.2 Medium-Term Capacity Planning
3.2.5.3 Short-Term Capacity Planning
3.2.6 Airline Costs
3.2.6.1 Leasing Costs
3.2.6.1.1 Operating Leases
3.2.6.1.2 Financial Leasing
3.2.6.1.3 Islamic Financing
3.2.6.1.4 Current Developments
3.2.6.2 Depreciation
3.2.6.3 Other Aircraft Expenses
3.2.6.4 Kerosene
3.2.6.5 Personnel Costs
3.2.6.6 Handling Charges, Landing Charges and Overflight Charges
3.2.6.7 Transports with Other Carriers
3.2.7 Market Overview
3.2.7.1 US Integrators
3.2.7.1.1 Federal Express
3.2.7.1.2 UPS
3.2.7.2 The New Players from the Middle East and Turkey
3.2.7.2.1 Emirates
3.2.7.2.2 Qatar Airways (QR)
3.2.7.3 Established Airlines from Asia and Europe
3.2.7.3.1 Cathay Pacific (CX)
3.2.7.3.2 Korean Air Lines (KE)
3.2.7.3.3 Singapore Airlines (SQ)
3.2.7.3.4 Air China (CA), China Eastern (MU) and China Southern (CZ)
3.2.7.3.5 Lufthansa (LH)
3.2.7.4 Cargo-Only Airlines
3.2.7.4.1 Cargolux
3.2.7.4.2 Nippon Cargo Airlines (KZ)
3.2.7.4.3 Airbridge Cargo (RU)
3.3 Airports
3.3.1 Branding
3.3.1.1 IATA Designations
3.3.1.2 ICAO Designations
3.3.2 Business Models
3.3.2.1 International Hubs with Cargo Activities
3.3.2.2 LCC Airports with Cargo Activities
3.3.2.3 Genuine Cargo Airports
3.3.3 Success Factors
3.3.3.1 Competences
3.3.3.2 Cooperation with Stakeholders
3.3.4 Connectivity
3.3.4.1 Critical Catchment Area
3.3.4.2 Costs
3.3.4.3 Favourable Climate
3.3.5 Overview of the World’s Leading Cargo Airports
3.3.5.1 Hong Kong (HKG)
3.3.5.2 Shanghai (PVG)
3.3.5.3 Inch’ŏn (ICN)
3.3.5.4 Dubai (DXB, DWC)
3.3.5.5 Tokyo, JP (NRT)
3.3.5.6 Taipei, TW (TPE)
3.3.5.7 Singapore (SIN)
3.3.5.8 Frankfurt Am Main (FRA)
3.3.5.9 Anchorage, Alaska
3.3.5.10 Hamad International Airport, Doha (DOH)
3.3.5.11 Paris, FR (CDG)
3.3.5.12 Miami, Florida (MIA)
3.4 Ground-Handling Agents (GHA)
3.4.1 Air Cargo Services
3.4.2 Success Factors
3.5 Freight Forwarding Companies
3.5.1 Activities
3.5.1.1 Organisation of Pre-Carriage and Onward Carriage
3.5.1.2 Organisation of Main Legs as IATA Agents
3.5.1.2.1 Individual Transport (Direct Shipments)
3.5.1.2.2 Carriage of Consolidated Air Cargo Consignments
3.5.1.2.3 Buyer’s Consol
3.5.1.2.4 Back-to-Back Transports
3.5.1.2.5 Charter Traffic
3.5.2 Market Structure
3.5.2.1 DHL Supply Chain and DHL Global Forwarding, Freight
3.5.2.2 Kuehne + Nagel
3.5.2.3 DB Schenker
3.5.2.4 Panalpina
3.5.2.5 Nippon Express
3.5.2.6 Mergers of Forwarders
3.5.3 Success Factors
3.5.3.1 Customer Mix and Sector Specialisation
3.5.3.2 Size of Enterprise
3.5.3.3 IT Skills
3.5.4 Value Added Services
3.5.4.1 Customs Clearance
3.5.4.2 Insurance
3.5.4.3 Organisation of Pre-Carriage and Onward Carriage
3.5.4.4 Multi-Modal Offers
3.5.4.5 Offer of Time-Definite Air Freight Products
3.5.4.6 Securing
3.5.4.7 Packaging
3.5.4.8 Cash-on-Delivery Results
3.5.4.9 Support for Export Financing
4: Institutions and Associations
4.1 International Institutions
4.1.1 International Civil Aviation Organisation (ICAO)
4.1.2 European Civil Aviation Conference (ECAC)
4.1.3 European Aviation Safety Agency (EASA)
4.1.4 Eurocontrol
4.2 Selected Government Bodies in Germany
4.2.1 The German Federal Ministry of Transport
4.2.2 Federal Aviation Authority (LBA)
4.2.3 Federal Supervisory Authority for Air Navigation Services (BAF)
4.2.4 Federal Bureau of Aircraft Accident Investigation (BFU)
4.2.5 German Air Navigation Services (DFS)
4.2.6 Federal Office of Economics and Export Control
4.3 Interest Groups and Associations
4.3.1 International Federations
4.3.1.1 International Air Cargo Association (TIACA)
4.3.1.2 Global Air Cargo Advisory Group (GACAG)
4.3.1.3 Global Shippers’ Forum (GSF)
4.3.1.4 Airports Council International (ACI)
4.3.1.5 International Federation of Freight Forwarders Associations (FIATA)
4.3.2 Associations in Germany and Switzerland
4.3.2.1 Interest Groups
4.3.2.2 Other Interest Groups
Part II: Processes
5: Means of Transport in Air Freight
5.1 Cargo Aircraft
5.1.1 Types of Construction
5.1.1.1 Propulsion
5.1.1.2 Distinctions According to the Shape of the Aircraft Fuselage
5.1.1.3 Passenger, Cargo and Combination Aircraft
5.1.1.4 Distinctions of Capacity
5.1.1.5 Number of Engines
5.1.1.6 Distinctions by Scope
5.1.1.7 Factory Built Aircraft and Conversions
5.1.2 Boeing
5.1.2.1 DC-10
5.1.2.2 MD-11
5.1.2.3 B727
5.1.2.4 B737
5.1.2.5 B747
5.1.2.6 B757
5.1.2.7 B767
5.1.2.8 B777
5.1.3 Airbus
5.1.3.1 A300 and A310
5.1.3.2 A320 Family
5.1.3.3 A330
5.1.3.4 A340
5.1.3.5 A380
5.1.4 Antonov Family
5.1.4.1 Antonov AN124 (Ruslan)
5.1.4.2 Antonov AN225 (Mrija)
5.1.4.3 AN132
5.1.5 Ilyushin
5.1.5.1 IL114
5.1.5.2 IL76
5.1.5.3 IL96
5.1.6 Other Aircraft Types
5.1.6.1 ATR
5.1.6.2 Bombardier CRJ100/200
5.1.6.3 British Aerospace
5.1.6.4 Cessna/Textron Aviation
5.1.6.5 Fokker F50 and F60
5.1.6.6 Saab 340
5.1.6.7 Business Aircraft
5.2 Air Cargo Containers (ULD)
5.2.1 Advantages of Using ULD
5.2.2 History of the Air Cargo Container
5.2.3 Categorisation of Standard ULDs
5.2.3.1 Air Cargo Containers
5.2.3.2 Air Cargo Pallets
5.2.4 Special Air Cargo Containers and Loading Equipment
5.2.4.1 Temperature-Controlled Container
5.2.4.2 Containers for the Transport of Live Animals
5.2.4.3 Car Racks
5.2.5 Preventing Damage to ULD
5.3 Road Feeder
5.3.1 Legal Requirement
5.3.2 Performing Carriers
5.3.3 Importance of Road Feeders for Regional Airports
5.3.4 Importance of Road Feeders for Hubs
5.3.5 No Substitution by Rail Feeders
6: Handling of an Air Freight Shipment
6.1 Organisation of Physical Operations
6.1.1 Capacity Assurance and Flight Planning
6.1.2 Placing of the Forwarding Order
6.1.3 Allocation and Confirmation of Capacity
6.1.4 Collection of the Consignment
6.1.5 Preparation of Export Documents
6.1.6 Transport of the Consignment to the Gateway
6.1.7 Loading of the ULD and Preparation of the Master AAWB
6.1.8 Delivery of the Consignment to the Airline
6.1.9 Loading of the Consignment on the Aircraft and Transport by Air
6.1.10 Unloading of the ULD Until Delivery of the Goods (Import Process)
6.2 Essential Documents
6.2.1 Air Waybill (AWB)
6.2.1.1 Contract of Carriage
6.2.1.2 Shipper’s Right of Disposition
6.2.2 Master and House Waybills
6.2.2.1 Normal Consolidations
6.2.3 Back-to-Back Shipments
6.2.3.1 Direct AWB
6.2.4 Other Documents
6.2.4.1 Loading List (Cargo Manifest)
6.2.4.2 Automated Manifest System (AMS)
6.2.4.3 Load Instruction Report (LIR)
6.2.4.4 Load and Trim Sheet
6.2.4.5 Dangerous Goods Declaration (DGD)
6.3 Calculation of Air Freight Costs
6.3.1 TACT (The Air Cargo Tariff)
6.3.2 Tariff Classes
6.3.2.1 Class Rates of Goods (Class Rate)
6.3.2.2 Special Rates (SCO, Specific Commodity Rates)
6.3.2.3 Bulk or ULD Rates
6.3.2.4 Contract Rates (Contract Rates)
6.3.2.5 Special Rates
6.3.3 Settlement
6.3.4 Surcharges
6.3.5 Payment of Freight Charges
7: Aviation Security
7.1 The Secure Supply Chain as a Safeguard Against Terrorism
7.1.1 Annex 17 to the Chicago Convention
7.1.2 Cornerstones of Secure Supply Chains
7.1.3 Known Consignors (KC)
7.1.3.1 Certification Procedure
7.1.3.2 High Effort
7.1.4 Phase out of the Account Consignor
7.1.5 Regulated Agent
7.1.5.1 Acceptance of Secure Air Cargo from Known Consignors
7.1.5.2 Acceptance of Air Cargo that is Not Deemed Secure
7.1.5.3 Certification Procedure
7.1.6 Union Database
7.1.7 Technical Means of Verification
7.1.7.1 X-ray Equipment (XRY)
7.1.7.2 Explosive Detectors (EDS) and Explosive Trace Detectors (ETD)
7.1.7.3 Explosive Detection Dogs (EDD)
7.1.7.4 Alternatives Not Approved in Germany
7.1.8 Security Requirements for Airlines (ACC3) and Airports
7.1.9 Possible Innovations and Limitations in the Detection of Explosives
7.2 The Special Handling of Dangerous Goods
7.2.1 Classes of Dangerous Goods
7.2.1.1 Class 1: Explosive Substances
7.2.1.2 Class 2: Gases
7.2.1.3 Class 3: Flammable Liquids
7.2.1.4 Class 4: Flammable Solids
7.2.1.5 Class 5: Oxidizing Substances
7.2.1.6 Class 6: Toxic and Infectious Substances
7.2.1.7 Class 7: Radioactive Substances
7.2.1.8 Class 8: Corrosive Substances
7.2.1.9 Class 9: Miscellaneous Dangerous Substances and Articles
7.2.2 Packagings and Packing Groups
7.3 Prevention of Damage and Loss
7.3.1 Damage to Consignments
7.3.2 Theft of Air Cargo Goods
7.4 Liability
7.4.1 Warsaw Convention of 1929 (WA) and Subsequent Agreements
7.4.1.1 Hague Protocol of 1955 (HP)
7.4.1.2 Guadalajara Supplementary Convention of 1961
7.4.1.3 Montreal Additional Protocols No 4 of 1975
7.4.2 Montreal Convention 1999 (MC99)
7.4.2.1 Status of Harmonisation of Liability Regimes
7.5 Special Features of Trade Financing
7.6 Ethical Risk Areas in Air Cargo
7.6.1 Cartel Agreements
7.6.1.1 Agreements by Air Cargo Carriers on Surcharges
7.6.1.2 Agreements Between the Leading Air Freight Forwarders
7.6.2 Bribery of Public Officials
7.6.3 Harassment in the Workplace
7.6.4 Precaution Through Compliance
Part III: Markets
8: Customer Approach
8.1 Segmentation Approaches in the Air Freight Market
8.1.1 Segmentation Criteria
8.1.2 Segmentation Based on Company Size
8.1.2.1 Cargo Airlines
8.1.2.2 Freight Forwarding Companies
8.1.3 Overview of Important Industry Solutions
8.2 Valuable Goods
8.2.1 High-Tech and Consumer Electronics
8.2.2 Mechanical Engineering
8.2.3 Telecommunications
8.2.4 Automotive Industry
8.2.5 Consumer and Retail
8.2.6 Fashion
8.2.7 Aviation Industry
8.2.8 Valuable Cargo
8.3 Perishable Goods
8.3.1 Foodstuffs and Flowers (Perishables)
8.3.2 Live Animals
8.3.3 Pharma and Healthcare
8.4 Emergency Transports
8.4.1 Oil, Gas and Mining
8.4.2 Marine Solutions
8.4.3 Emergency & Relief
9: Regional Markets and Trade Routes
9.1 Regional Markets
9.1.1 Important Domestic Markets
9.1.2 Countries with Significant Air Cargo Volumes
9.2 Major Trade Routes
9.2.1 East Asia – North America
9.2.2 Europe – East Asia
9.2.3 Intra North America
9.2.4 Europe – North America
9.2.5 Intra Asia Pacific
9.2.6 South Asia
9.2.7 Intra-China
9.2.8 Latin America – Europe and North America
9.2.9 Africa – Worldwide
9.3 Segmentation by Transit Times
10: Courier, Express and Parcel Services
10.1 Success Factors
10.1.1 Pricing and Revenue Management
10.1.2 Maximising Productivity with High Quality
10.1.3 Brand
10.2 Players in the Express Mail Market
10.2.1 DHL
10.2.2 FedEx
10.2.2.1 Preparations
10.2.3 The First Decade
10.2.3.1 Failed Expansion into Europe in the 1980s
10.2.3.2 Acquisition of TNT
10.2.4 UPS
10.2.4.1 Expansion in the USA and Abroad
10.2.4.2 Expansion into the Express Segment in the 1980s
10.2.5 Consolidation of the Market
10.3 Handling of International Express Shipments
10.3.1 Procedure for an International Express Shipment
10.3.2 Major Express Hubs
10.3.2.1 Memphis (MEM)
10.3.2.2 Louisville (SDF)
10.3.2.3 Leipzig (LEJ)
10.3.2.4 Cologne/Bonn (CGN)
Part IV: Developments
11: Innovations
11.1 IATA StB Initiative
11.1.1 e-Freight and e-AWB
11.1.2 ONE Record
11.1.3 Interactive Cargo
11.1.4 Smart Facility
11.1.5 Air Cargo Incident Database (ACID)
11.1.6 Cargo Connect
11.1.7 Discussion
11.2 Innovation in Aircraft Construction
12: Attempt at an Outlook
12.1 Growth Forecasts of Aircraft Manufacturers
12.1.1 E-Commerce as a Growth Driver
12.1.2 Logistics Activities of the Leading Online Platforms
12.1.3 Amazon
12.1.3.1 Main Leg
12.1.3.2 Delivery
12.1.3.3 Competition Between Close Logistics Partners
12.1.4 Alibaba
12.1.5 JD.com
12.1.6 Market Distortions in International Online Trade
12.2 The Future of the Air Cargo Industry from an Industrial Economic Perspective
12.2.1 High Power of Suppliers
12.2.2 Purchasing Power of Customers
12.2.3 New Players
12.2.4 Existing Substitute Products
12.2.4.1 Container Shipping
12.2.4.2 Railway
12.2.4.3 Multimodal Offers
12.2.4.4 Truck
12.2.5 Substitute Products Under Development
12.2.5.1 Unmanned Aerial Vehicles (UAV)
12.2.5.2 Tube Capsules and Hyper Loops
12.2.5.3 Cargo Sous Terrain
12.2.5.4 3D Printing
12.2.5.5 Airships
12.2.6 Internal Competition
12.3 Possibilities of Differentiation Through the Development of Core Competences
12.4 The Particular Future Prospects of Cargo-Only Airlines
References