Air Freight: Learning the Basics to Optimize Your Global Supply Chain
What’s probably the number one reason shippers avoid transporting their cargo by air? You guessed it: Cost. Air freight is often more expensive than any other mode of transportation. When considering the cost of a modal shift to air cargo, keep in mind that the freight cost is only one component of the equation.
Other benefits within your supply chain—from lower inventory carrying costs and the opportunity to capture market share—may offset the possibility of higher freight costs. Incorporating the right air shipping strategy into your multi-modal, global supply chain can help reduce costs and promote efficiency. Don’t forget that shipping by air is not a one-size-fits-all option. Therefore, any strategy you implement should be tailored to your needs, not anyone else’s.
The three primary air shipping options are next flight out, consolidated, and deferred. Any one (or all) may work for your business. There are other options to consider as well, like air charter, which can help secure the capacity you need and allows you to use an exclusive aircraft to meet any other unique requirements.
Next Flight Out
Definition: As the name suggests, your freight is shipped as soon as a flight is available.
Characteristics: Sometimes referred to as expedited, this is the fastest air cargo shipping option, but is also often the most costly. Expedited air requires a provider with the resources to locate capacity at the last minute to ensure your timelines are met.
Definition: Providers combine your freight with the cargo of several other shippers prior. Watch this video for an overview of the process.
Characteristics: Consolidated air shipments move on a set schedule. By transporting at set times and with a larger shipment of goods, providers are often able to secure better rates. The key to consolidating air cargo is having enough shipments to merge together. A small provider may not work with enough companies to have regular shipments of consolidated air freight, which could lead to delays.
Definition: Postponing the shipment of your lower priority freight until there is space available on the aircraft.
Characteristics: Often this type of air shipment still operates on a regular schedule. With this type of service, shippers simply defer their air cargo to the third, fourth, or fifth business day. This type of air cargo often offers the greatest cost savings due to the potential for longer transit times.
That just about sums up the basics of air freight, but by no means covers everything you need to know about the importance of incorporating air cargo into your supply chain. For a better understanding of air cargo, read the new white paper, Optimizing Your Supply Chain with Air Cargo, which takes a deeper look at the many facets and benefits of air cargo.