According to IATA, the managing agency for airfreight, 18.6 billion dollars of goods are transported through the air DAILY. In fact, global airfreight has become such a hot commodity the demand has increased by 14% in March of this year.
At initial glance, air transportation seems expensive. But, when evaluating the supply chain comprehensively, in the end it can save you tons. From forecast planning to urgent needs, there are several reasons businesses decide on airfreight as their transportation method. Here are a few of those considerations:
Urgent Situation
When the need arises, companies will pay a premium to receive inventory as quickly as possible. For example, if a shipment arrives for a furniture installation one day late or a factory part is missing, paying the additional shipping costs to ensure soonest delivery can prevent a profit loss. Air transportation is often the most efficient way to receive urgently needed inventory and can save you from a substantial loss.
Service oriented industries
Have you shopped online lately? Every online shopper knows that the e-commerce leader Amazon and their shipping service Amazon Prime, for $99 per year, give consumers two-day shipping turnaround. Amazon acknowledges that airfreight is the heart of their operation by investing more efforts in their in-house air transportation, Prime. Planes for Amazon Prime now fly to 10 different airports in the United States to supply nearby warehouses – Charlotte Douglas Airport is one of these 10 according to fortune.com. Click HERE to learn more from fortune.com. In fact, in 2016, the amount of air cargo at Charlotte Douglas rose more than 14% to 154,447 tons loaded and unloaded and that is mostly from the new Amazon-based business. Actually, Charlotte Douglas Airport is the 7th busiest airport in the world now (in total operations).
As a service oriented business, the ability to move inventory fast is the deciding factor for growth and success. Amazon continues to portray a great example of this expedited service.
Industries with forecasting challenges
Demand forecasting is crucial to the success of a business. Some industries experience forecasting challenges. Retail merchants, in particular are at risk, as they carry seasonal items. Too low supply of goods on hand can mean a loss in sales while an overage of goods can drive a liquidation of sales and a loss in profit. Considering shipping costs of the inventory is prudent in forecasting to build the cost of shipping into the sales price. Airfreight can often be the most effective and flexible way to adjust for shipping needs.
Using airfreight can cost more initially but can save you overall revenue, time and dependability in the end. Airfreight allows businesses to meet time sensitive deadlines and specific carrier needs such as temperature control.
To learn how your local logistics company Cargo Logistics Network (CLN Worldwide) can help you to add value to your business contact our Export department at:
Tel: 877-755-5413
export@clnusa.com
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