18 37 Alliances One trend that is not new but has received a great deal of

18 37 alliances one trend that is not new but has

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as needed without involving other entities.
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18 3.7 Alliances One trend that is not new but has received a great deal of attention lately is air carrier alliances. So far this has had much more impact on the passenger service than on the cargo service but the potential may exist for a business opportunity due to alliances. As air freedom rights and bilateral agreements continue to expand there may be a time when alliances allow for code sharing that meets or exceeds what we see on the passenger side. It should be noted that these alliances may have a very strong impact 3.8 Online verses Brick and Mortar Much has been written in the last ten years about the impact of online shopping on traditional brick and mortar stores. One area where the impact has been seen is in the air cargo industry, instead of shipping large quantities of goods to several stores around the country, now we see individual units being shipped to hundreds of thousands of individual addresses of the end users. This has often meant lighter loads on the aircraft since each unit must be packed for shipment. It has also caused a need for additional sort facilities to prevent unnecessary transporting of each unit. While many had predicted the demise of the traditional store and there has certainly been a negative impact on smaller operations, large retailers such as Wal-Mart have simply gone online themselves and taken advantage of the business opportunity that technology has offered. 3.9 Decisions and control One key aspect of the air cargo supply chain is that while air carriers may provide the transportation, they are often not in charge of the goods being transported. As previously discussed there are many different business models ranging from those of the integrated carriers such and UPS and FedEx to the on- demand charter carriers. Even well-known and established flag carriers may be carrying cargo that they are simply the “truck driver” for. In many current business models, the freight forwarder or master shipper has already purchased the space and is responsible for filling it. He assumes the risk which is beneficial to the carriers but he can also shop around among the carriers since he and his customers may have no significant loyalty to any one carrier. That means he can drive a deal that favors his client in exchange for assuming the risk of filling the aircraft. Some carriers are realizing that the profits often go with the risks and are tentatively looking at expanding their business model to be more like FedEx and UPS, controlling the shipment from door to door or from factory to door. 3.10 Regulatory The regulatory environment is one of the biggest uncertainties facing the air cargo industry. Security, safety and environmental regulations may be changed rather quickly and the economic impact to the supply chain is often not considered.
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