The Role of Air Cargo in Global Supply Chains
Air cargo plays a crucial role in global supply chains, providing a swift and efficient means of transporting goods across borders. The integration of air freight services has become indispensable for businesses aiming to meet the demands of a globalized marketplace.
At the moment, air travel is among the most crucial components of the global economic infrastructure. This type of transportation is among the quickest, priciest, and most efficient available. It is crucial to the functioning of supply chains because it maintains chain coherence, essential flexibility, and the capacity to quickly adjust to environmental changes. At specific points in the supply chain, air transportation contributes to value creation while providing value for the consumer. Because air travel appears as both a factor and an optimization tool of the previously specified circumstances, it offers a chance to continue and expand in an efficient manner.
The dynamics of global trade and the need for transportation services have been increasing annually. Their expansion can be attributed to factors such as the average distance travelled for transports and the number of commodities carried. These factors encourage the expansion of global supply chains and logistics, which in turn encourage more options for the movement of commodities and serve as a kind of foundation for a new global economic order.
A few fundamental rules that help to reduce conflict among supply network players are the foundation for the effective operation of supply chains:
• Openness and confidence are essential when informing market participants about demand, careful projections, manufacturing plans, or purchases;
• Strategic cooperation entails coordinating the supply chain strategy's planning and execution as well as deciding where and how its chains will be used;
• Leadership: selecting a central coordinator to oversee the flow, someone who is the primary initiator of actions and in charge of their execution;
• Mutuality is the agreement on values pertaining to potential rewards from a joint endeavour as well as risk sharing.
Importance of air transport in the supply chain:
• The transportation industry faces increasing problems in the twenty-first century due to increased output and the need for critical competencies that foster industrial cooperation and a rise in specialization. The country's economic growth is significantly impacted by the development of transportation. When we think of transportation as a sector of the national economy, we must incorporate policies and practices that are directly linked to the movement of goods and services. But from a logistical perspective, transportation is an activity that is directly in charge of the flow of commodities along the supply chain. Delivering stores to the production or completed goods to the destination is the primary transport task when it comes to moving goods.
• The movement of raw materials, intermediate goods, and completed goods between disparately placed businesses is the major function of transportation in the supply chain. Delivering requested goods to buyers and removing inequalities about time and location are essential to the operation of the supply chains stated above.
• Transport is a fundamental component of the supply chains' efficient operation. It is believed that about 80% of all logistical functions are related to transport concerns. There are transportation needs at every stage of the supply chain.
Key aspects highlighting the role of air cargo in global supply chains:
1. Speed and Efficiency:
• Rapid Transportation: Air cargo is known for its speed, making it the preferred choice for transporting time-sensitive and high-value goods. Aircraft can cover long distances in a matter of hours, ensuring quick delivery.
2. Connectivity and Global Reach:
• Access to Remote Locations: Air cargo facilitates transportation to and from locations that may be challenging to reach by other modes of transportation, especially in remote or underserved regions.
• Global Network: Airlines and air cargo carriers operate extensive global networks, connecting major trade hubs and facilitating international trade.
3. Just-in-Time Inventory Management:
• Reduced Inventory Holding Costs: Air cargo supports just-in-time inventory practices, allowing businesses to reduce holding costs by receiving goods precisely when needed. This agility is crucial for industries such as manufacturing and retail.
4. High-Value and Perishable Goods:
• Ideal for High-Value Items: Air cargo is preferred for transporting high-value items such as electronics, pharmaceuticals, and precious metals due to its security measures and rapid delivery.
• Perishable Goods: Perishable goods like fresh produce and pharmaceuticals benefit from air transport's quick transit times, minimizing the risk of spoilage.
5. Emergency Response and Humanitarian Aid:
• Disaster Relief: Air cargo plays a pivotal role in delivering emergency supplies and humanitarian aid during natural disasters or crises, providing a rapid response when time is of the essence.
• Medical Supplies: The transport of medical supplies, including vaccines and life-saving medications, is often done via air cargo to ensure timely delivery.
6. Supply Chain Resilience:
• Mitigating Disruptions: Air cargo contributes to supply chain resilience by providing an alternative mode of transportation. It helps mitigate disruptions caused by natural disasters, geopolitical events, or other unforeseen circumstances.
7. Global Trade and Economic Growth:
• Facilitating Trade: Air cargo facilitates international trade by reducing transit times, enabling businesses to reach global markets efficiently.
• Boosting Economic Growth: The speed and reliability of air cargo contribute to economic growth by supporting businesses in expanding their global reach and fostering international collaborations.
8. E-commerce and Cross-Border Trade:
• E-commerce Logistics: The rise of e-commerce has increased the demand for air cargo services, particularly for cross-border shipments. Consumers expect fast delivery times, and air cargo meets this expectation.
• Global Supply Chain Integration: Air cargo is integral to the seamless integration of global supply chains in the e-commerce era, where products are sourced and delivered from various locations worldwide.
9. Security and Tracking:
• Security Measures: Air cargo undergoes stringent security measures, reducing the risk of theft, damage, or tampering during transit.
• Real-time Tracking: Advanced tracking technologies provide real-time visibility into the location and status of air cargo shipments, enhancing transparency and supply chain visibility.
In summary, air cargo serves as a vital component of global supply chains, offering speed, efficiency, and connectivity that are crucial for businesses operating in today's interconnected and fast-paced global marketplace. It complements other modes of transportation to create a comprehensive and resilient logistics network that supports the movement of goods on a global scale.
Because of its roles in the production and exchange processes, air travel plays a part in the supply chain. Following their connection during the production process, goods, materials, and semi-finished goods can be supplied thanks to transportation. Additionally, it is required at the exchange step, which involves delivering produced finished goods to sales coverage before final clients. It serves as a link between every link in the supply chain, influencing how well each one operates.
Rahul Bharadwaj
Aviation Research Intern
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www.linkedin.com/in/rahul-bharadwaj-018202263
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Asiatic International Corp
AirCrews Aviation pvt ltd.
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