China is not just the worlds factory but is on its way to becoming the worlds

China is not just the worlds factory but is on its

This preview shows page 11 - 13 out of 20 pages.

become consumption centers. China is not just the world’s factory but is on its way to becoming the world’s consumption center as well. Parts of North America that currently have depresse d economies may once again become centers of production which could impact the air cargo supply chain and the flow of goods internationally. Fortunately this ongoing shift is not an overnight phenomenon and generally provides enough reaction time for all involved. ACMI and other arrangements To meet the changing demand needs without investing excess capital in aircraft and crews, many carriers have turned to the Aircraft, Crew, Maintenance and Insurance (ACMI) or other types of aircraft leases. This allows them to increase or decrease their capacity quickly without idling their own aircraft or crews. This does create some confusion at airports that rely on self-reporting for billing purposes as aircraft with the same markings may be flying for different air carriers at the same time. The aircraft and crew providers can operate at a lower margin since they are not bound to any one carrier’s routes or geographic locations and do not have the infrastructure overhead associated with being a cargo carrier. Instead of (or in addition to) being a charter carrier they augment scheduled or mainline carriers as needed. 3.6 Modal Shifts As previously discussed, cargo may be moved using any of a number of modes each having its own advantages and disadvantages. In t oday’s economy where profit margins are often thin the mode of transportation has become much more than just a time/cost value item. In many cases shipping goods by surface provides for storage during the trip that minimizes the need to build warehouses. Shipping just enough to start the sales by air with the rest to follow takes into account the fact that not all the product must be available on day one. On the other hand if the goods are being shipped by surface but they are delayed in production, some may have to be shipped by air to meet delivery commitments. The decision as to which mode to use is made more complex if profits are to be maximized. Simply deciding that a class of goods is of high or moderate value and therefore should be shipped respectively by air or surface is no longer acceptable. In fact some multimodal shipping companies such as Lynden Air Cargo now offer “pay for the speed you need” services within their own company with the ability to combine modes as needed without involving other entities.
Image of page 11