Air freight transportation utilization is expected to fall by as much as 15% within the next five years, according to the Supply Chain Consortium’s International Transportation Report: Navigating Air and Water.
The report notes that transportation methods are in flux. There will be fewer air freight options available, and more companies will be consolidating their shipments.
“The smartest shippers are on top of this growing trend,” says Chris Ferrell, Associate Director of the Supply Chain Consortium and author of the report. “To make sure shipments arrive at their destinations on time, plans need to be made now to accommodate for the upcoming upheaval in the transportation industry.”
While the decline is bad news for the air carrier industry, the report also notes that other transportation modes – rail or intermodal, ocean, truckload, less-than-truckload (LTL) and parcel –will benefit.
The report notes that transportation methods are in flux. There will be fewer air freight options available, and more companies will be consolidating their shipments.
“The smartest shippers are on top of this growing trend,” says Chris Ferrell, Associate Director of the Supply Chain Consortium and author of the report. “To make sure shipments arrive at their destinations on time, plans need to be made now to accommodate for the upcoming upheaval in the transportation industry.”
While the decline is bad news for the air carrier industry, the report also notes that other transportation modes – rail or intermodal, ocean, truckload, less-than-truckload (LTL) and parcel –will benefit.
To withstand these times of economic stress, the report notes five opportunities for freight shippers to implement:
1. Take advantage of excess steamship capacity in the form of increased sailings and expanded service offerings for destination ports to optimize inland distribution networks.
2. Use more consistent steamship performance to further reduce air freight utilization.
3. Outsource newer, smaller, complex, or dynamic components of the international supply chain to experienced, well-qualified logistics service providers (LSPs).
4. Review the financial health of existing air service providers and develop a contingency plan that may include new relationships with alternative carriers.
5. Ensure that performance expectations are clearly defined and being met by existing air carriers, as some airlines have allowed service levels to drop in response to a difficult and volatile globally economy.
The report provides an overview of the data collected from the 2008 International Transportation survey of top retail and manufacturing companies. In addition to analysis of ocean and air modes, the report covers sourcing best practices, order control, third-party services, and cargo security.
Release also available online at: http://www.tompkinsinc.com/news/PR_2009/pr_021209.asp
The Supply Chain Consortium is the premier source for supply chain benchmarking and best practices knowledge. With 200 participating retail, manufacturing and wholesale/distribution companies, the Consortium sponsors a comprehensive repository of 17,000-plus benchmarks complemented by search capabilities, online analysis tools, topic forums and peer networking for supply chain executives and practitioners. The Consortium is led by the needs of its membership and an Advisory Board that includes executives from Campbell Soup Company, Hallmark Cards, Hewlett Packard, Ingram Micro, Kraft Foods, Miller-Coors, The Coca-Cola Company, Target, and True Value Hardware. To learn more about how your company can become a member of the Supply Chain Consortium, contact John Foley, 919-855-5461 or visit www.supplychainconsortium.com.
1. Take advantage of excess steamship capacity in the form of increased sailings and expanded service offerings for destination ports to optimize inland distribution networks.
2. Use more consistent steamship performance to further reduce air freight utilization.
3. Outsource newer, smaller, complex, or dynamic components of the international supply chain to experienced, well-qualified logistics service providers (LSPs).
4. Review the financial health of existing air service providers and develop a contingency plan that may include new relationships with alternative carriers.
5. Ensure that performance expectations are clearly defined and being met by existing air carriers, as some airlines have allowed service levels to drop in response to a difficult and volatile globally economy.
The report provides an overview of the data collected from the 2008 International Transportation survey of top retail and manufacturing companies. In addition to analysis of ocean and air modes, the report covers sourcing best practices, order control, third-party services, and cargo security.
Release also available online at: http://www.tompkinsinc.com/news/PR_2009/pr_021209.asp
The Supply Chain Consortium is the premier source for supply chain benchmarking and best practices knowledge. With 200 participating retail, manufacturing and wholesale/distribution companies, the Consortium sponsors a comprehensive repository of 17,000-plus benchmarks complemented by search capabilities, online analysis tools, topic forums and peer networking for supply chain executives and practitioners. The Consortium is led by the needs of its membership and an Advisory Board that includes executives from Campbell Soup Company, Hallmark Cards, Hewlett Packard, Ingram Micro, Kraft Foods, Miller-Coors, The Coca-Cola Company, Target, and True Value Hardware. To learn more about how your company can become a member of the Supply Chain Consortium, contact John Foley, 919-855-5461 or visit www.supplychainconsortium.com.
