ONTARIO

International Transport and logistics

Section 5: Air part

WHAT IS AN AIRPORT ?

IT IS A COSTLY OPERATION:

• Locations where aircrafts take off and land.• Traffic controlled by control towers.• Terminals needed to receive passengers and cargo.• Hangars to stored or maintained aircrafts.• Larger airports have facilities like docks and ramps, customs

offices also in place.• Facilities are licensed by the relevant government organization,

for example the FAA in USA and by Transport Canada in Canada.

WHAT IS AN AIRPORT ?

IT IS A COSTLY OPERATION:

• Most of the airports are local, regional airports. We will focus on international airports.

• Some airports are designated for cargo and/or military (air base) use only.

Major Air Freight Flows Between Regions, 2003 (in billions of ton-km)

Copyright © 1998-2009, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic) and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.

22.41.3

9.1

0.1

0.1

0.1

9.911.6

2.7

4.6

24.224.2 North America

Latin America

Africa

Europe

Middle East Asia / Pacific

12.3

2.72.2

1.72.5

3.31.9 12.4

13.813.8

WHY USING AIR CARGO?

AIR FREIGHT brings continents and markets closer.

For many commodities of high unit value or low weight and volume, international air freight as become an important method of shipping.

• TIME is the important factor.

• Fast approaching deadlines and the inability of surface carriers (road / sea) to meet a need have opened the international business to air freight.

• Faster TRANSIT TIME.

• Depending on origin, destination, value, weight and size of the air freight, air transportation can cost two to five times more than surface transportation.

WHY USE AIR CARGO ?

ADVANTAGES:

FASTER TRANSIT TIME even if it cost more, for long distance.

FREQUENT FLIGHTS: Availability. High and low seasons.

LARGE VARIETY OF AIRPLANES TYPES AVAILABLE

REACH CUSTOMERS QUICKLY: Airports in or near major cities, even inland.

• DOMESTIC AIR FREIGHT: Can move from origin to destination in the same day.

• INTERNATIONAL AIR FREIGHT: Usually can connect any origin and destination in 1 to 3 days.

Over 72 millions tons by the top 10 companies....

2004 total scheduled freight tonne-kilometers flown:

• FedEx Express 14.579 million• Korean Air 8.264 million• Lufthansa Cargo 8.040 million• United Parcel Service 7.353 million• Singapore Airlines Cargo 7.143 million• Cathay Pacific 5.876 million• China Airlines 5.642 million• Eva Airways 5.477 million• Air France 5.388 million• Japan Airlines 4.924 million

AIR CARGO CANADA 2008

TRANSPORT AÉRIEN

L’avion tout-cargo “freighter” avec des positions sur l’entier des deux ponts

L’avion “combi” avec des positions au pont inférieur et quelques positions à l’arrière au pont supérieur

L’avion passager ne contient que certaines positions au pont inférieur et au vrac de l’appareil.

AIRPLANES: Example of a 747

Example of a Boeing 747 with 3 configurations:

• Freighter: Capacity of 95000kg or 550m3.

• Combi: Passengers + 26500kg or 260m3.

• Passengers: Passengers + 5000kg in lower deck.

Advantages of using Freighters and Combi for cargo:

A) Maximise $

B) Can accept cargo up to 96 inches high.

AIR CARGO

When shipping air, you have to consider the availability of equipment and the limitations imposed by the aircraft type (dimensions, weight), the container (pallet, LD, bulk, etc), the season, as well as origin and destination terminals infrastuctures.

B747-400F FEDEX DC-10 Antonov An-124

AIRPORT CODES

• An IATA airport code is a three-letter (3) code designating many airports around the world.

• Use for airlines timetables, reservations, passengers, baggage and freight handling.

• Governed by IATA Resolution 763, and the codes are published biannually in the IATA Airline Coding Directory.

http://en.wikipedia.org/wiki/List_of_airports_by_IATA_code:_A

• Most countries use ICAO four-letter (4) code in their official aeronautical publications. The ICAO codes are used by air traffic control and airline operators mainly for flight planning.

• Example: Travellers who use London’s Heathrow Airport are familiar with LHR, not EGLL the ICAO code.

• ICAO codes are also used to identify weather stations, International flight service stations (FSS) or Area control centers, whether or not they are located at airports.

AIRPORT CODES

IATA AIRPORT CODES

• Started in the USA in the 1930’s. At the time, they were adding a ‘x’ at the end of the weather stations. This is why Los Angeles airport is LAX, Portland is PDX, etc.

• The airport in Kitty Hawk where the Wright brothers flew for the first time as the code FFA (First Flight Airport).

• It can be the city name BOS for Boston, SYD for Sydney. Sometimes PAP for Port au Prince, sometimes the name of the airport like Charles de Gaulle (CDG) in Paris. At some point, had to be creative: EWR in NEWARK

• In Canada, air transportation is managed by Transport Canada. It was a choice to use the Y in front to quickly identify the country like in YYZ (Toronto), YUL (Montréal), etc.

IATA AIRPORT CODES

CATEGORIZATION OF AIR FREIGHT

• Many ways of categorizing the goods requiring movement by air whether by weight, value or defined period of time.

• For simplicity, let’s use general air freight and express air freight.

• General air freight will tend to be carried by forwarders and airlines. Economy, matter of days (Time definite

• Express air freight by the couriers, express operators and especially the integrators. More expensive, matter of hours, mainly overnight (Time critical).

• In the last years, lot of crossovers with the players wanting to expand their services.

CATEGORIZATION OF AIR FREIGHT

AIRLINES

• AIRLINES: Owners of airplanes. Cargo and passengers. Air Canada, Lufthansa, British Airways, Cathay Pacific, etc. Also know as commercial lines.

• Members of IATA

• In general, passengers will use upper deck and cargo on the lower deck or the ‘belly’. Since the space is minimum, commercial airlines are not accepting cargo higher than 60 inches high.

• For long distance, we know see ‘combi’ airplanes used more and more.

AIR CANADA CARGO

INTEGRATERS

INTEGRATORS: Owners of airplanes. Cargo only. UPS, FEDEX, DHL, etc.

• Members of IATA

• Transport mainly envelopes, boxes and cargo. No passengers.

• Using upper and lower deck for freight.

Two groups:

• Couriers: UPS, FEDEX, DHL, etc.

• Volume cargo, overdimensions, oversize, etc. (BAX).

The integrators are interested in filling their aircraft. The get the customers themselves and will take forwarders traffic

where they are able.

UPS Main hub, Louisville, KY

INTEGRATORS

• The integrator will receive the freight as a consignment into its system and, depending on the final destination, truck it to an origin sub-station, fly it to a hub (Memphis for Fedex, Louisville for UPS, Frankfurt for DHL), fly it back to a destination sub-station and perform final delivery.

ADVANTAGES: One stop shop. They collect the goods and deliver them to the final destination, providing all the links in the transport chain, controlling the change of mode etc.

+ offering a comprehensive information flow along with the physical transport of the goods. Sophisticated information systems are in place for tracking.

INTEGRATORS

Integrators / Hub or spoke system

Operation

hub

Terminal

Terminal

Terminal

Terminal

Terminal

TerminalCamion

Chicago

Airplane

MontréalCamion

Airplane

Integrators

Advantages• Fast• Guarantee• Secure

Disadvantages• High cost

Exemple: Federal Express

North American HUB: Memphis, Tennessee.1 shipment from Montreal to Chicago25 lbs x 2,50 $/lb. = 62,50 $

Maximum Poids maximum: 150 lb.

Operation

hub

Terminal

Terminal

Terminal

Terminal

Terminal

TerminalCamion

Chicago

Airplane

MontréalCamion

Airplane

UPS: Welcome page

I SHIP AND SAVE

CHARTERS / FORWARDERS / BROKERS

• CHARTERS: Owners of airplanes and/or renting them as operators.

• Members of IATA

Airplane types: Airliners, helicopters, executive jets, turboprops, twin pistons, cargo aircrafts.

• FORWARDERS and BROKERS: No airplanes. Negociate space and rates. Axxess, Panalpina, Delmar, etc.

• Members of CIFFA

• Will coordinate your movements.

Advantages: Forwarders can take care of your air shipments but also your ocean, truck, rail. It is an all included.

CHARTERS / FORWARDERS / BROKERS

CARGO AIRCRAFTS

Aircraft in the Cargo segment are a wide range of aircraft suitable for all kinds of cargo flights, short-, medium- and long-haul.

Aircraft with capacities to carry any type of cargo. Ranging from smaller aircraft performing short notice flights carrying vital spare parts up to large cargo aircraft able to transport any volumnious goods.

Considerations for cargo: Dimension of cargo, weight of cargo, distance to travel, airport closeby, customs clearance, dimension of loading doors, etc.

Examples:

http://www.aircraft-charter-world.com/

CARGO AIRCRAFTS

www.911aircargo.com

TACT

COMMERCIAL LINES:

IATA TACT (The Air Cargo Tariff) contains comprehensive information regarding air cargo rules, regulations, rates and charges.The TACT solution• More than 100 airlines contribute to TACT, making it the most reliable

and comprehensive source on the market • The definitive source for general industry rules and regulations --

including country and carrier regulations

Some 70,000 professionals from the cargo industry consult it on a regular basis • TACT has the world’s best coverage, with more than 2.3 million rates

and charges

EXAMPLE - TACT

EXAMPLE - Airfreight rates are based on the chargeable weight of a shipment:

Mins 80.00$ Minimum fee

N 4.45$ / kg less than 45 kg

Q45 3.84$ / kg 45 kg +

Q100 2.70$ / kg 100 kg +

Q300 2.24$ / kg 300 kg +

Q500 1.89$ / kg 500 kg +

Q1,000 1.43$ / kg 1,000 kg +

*This is an example only. Rates will vary from companies and by corridors.

** This is an example of published TACT rates, without forwarders rebates.

AIR TRANSPORT

Sometimes, Airfreight can be cheaper than sea freight

Example:

1 package @ 45 kg, 0.25 cbm = $ 175.00 (air)

1 package @ 45 kg, 0.25 cbm = $ 220.00 (ocean)

• The forwarder can also offer rebates based on volume, consolidations, etc.

• Certain conditions can limit these rebates: Haz Mat or Dangerous goods, perishables, over dimensions, etc.

DIMENSIONAL WEIGHT

COMMERCIAL LINES OR INTEGRATORS:

DIMENSIONAL WEIGHT:

• Also referred as ‘Volume weight’, ‘Cubic weight’ or ‘Dim weight’.

• Measure Length (L) x Width (W) x Height (H).

The dimensional weight formula is used to determine if a shipment will be rated by it’s actual weight or by it’s volume. The transportation rate will be based on the GREATER of the two, like in ocean transportation.

To determine the dimensional weight of both domestic and international shipments, 3 potential formulas can be used:

DIMENSIONAL WEIGHT

COMMERCIAL LINES and INTEGRATORS

DIMENSIONAL WEIGHT:The formula for calculating the dimensional weight for all commodities is:

STEP1: Measure Length (L) x Width (W) x Height (H)(see Air Canada Cargo sheet)

STEP 2: For the appropriate measure (inches or centimetres), DIVIDE by:

• 166 cubic inches per pound (lbs) or• 6000 cubic centimeters per kilogram (kg) or

• 366 cubic inches per kilogram (kg)

AIR TRANSPORT

Ratio weight/volume:

In METRIC:

1 kg = 6000 cm cube

Ex: 1 pallet @ 150 x 90 x 90 cm: 100kg.

Formula for dimensional weight: 150 x 90 x 90 / 6000 = 203 kg

In IMPERIAL:

1 kg = 166 po cube

Ex: 1 pallet @ 48 x 40 x 35 in: 186 lbs

Formula for dimensional weight: 48 x 40 x 35 / 366 = 405 lbs

AIR TRANSPORT

Sometimes, Airfreight can be cheaper than sea freight

Example:

1 package @ 45 kg, 0.25 cbm = $ 175.00 (air)

1 package @ 45 kg, 0.25 cbm = $ 220.00 (ocean)

• The forwarder can also offer rebates based on volume, consolidations, etc.

• Certain conditions can limit these rebates: Haz Mat or Dangerous goods, perishables, over dimensions, etc.

AIR CARGO

Watch out for BUMPED cargo with the airlines since they have to prioritise these items prior to any other cargo:

PRIORITIES ARE:

•Passengers lugages

•Perishable items

•High value merchandize

•Priority post

•General cargo

•Haz Mat

INTEGRATORS and AIRLINES

ADDITIONNAL FEES:

ORIGIN: DESTINATION:

Pick-up Terminal

Handling Handling

Terminal Duties

Security Customs

Oversize Taxes

Fuel Delivery

Nav Canada

Insurance

DIMENSIONAL WEIGHT

INTEGRATORS

They do not use the TACT sheet, they use internal rating by zones.

North America is usually divided in many zones in 3 sectors:

East

Midwest

West

INTEGRATORS RATINGEXAMPLE 1 to 99 lbs

Zone

1 2 3 4 5 6 7 8 9 10 11 12

1 lb 10,06$

10,58

11,12

11,89

12,54

12,98

13,22

14,06

14,78

15,65

16,27

18,86

2 lbs

3 lbs

4 lbs

5 lbs

6 lbs

7 lbs

8 lbs

9 lbs

10 lbs