Air Freight's Top Global Operators
Air freight is on an upward trajectory following a turbulent few months in the industry. Firstly, the economic crisis impacted significantly upon this...
Air freight is on an upward trajectory following a turbulent few months in the industry. Firstly, the economic crisis impacted significantly upon this part of the supply chain. Then, earlier in the year, the disruption caused by the Icelandic volcano eruption almost devastated the sector.
With the closure of airspace and the grounding of planes over that airspace, the supply chain came to a complete standstill. However, if anything positive came out of that incident it was the recognition of the vital part that air freight plays in the entire supply chain.
In June, results published by the Association of Asia Pacific Airlines (AAPA), which represents 23 carriers in the Asia-Pacific region, showed that the Asia-Pacific air freight industry had seen demand soar 39 percent in May. International air freight demand increased to 5.7 billion freight ton kilometers in the same month, from 4.1 billion in May 2009.
The world’s largest air freight carrier, Korean Air, has seen similar success this year. It reported cargo revenue growth of more than 50 percent in the first quarter of this year — its highest ever first quarter operating profit. First quarter cargo revenue generated from Korea surged 134 percent. With that in mind, SupplyChain Digital has profiled some of the biggest names in air freight: UPS Air Cargo, Lufthansa Cargo, FedEx Express and DHL Air Freight. Their vital statistics prove just why they rule the skies.
UPS Air Cargo
Revenue: $42.6 billion (2008)
President: Robert L. Lekites
Air Fleet: 292 chartered aircraft, 264 UPS jet aircraft
Service Area: More than 200 countries and territories
Average Daily Volume: 2.1 million packages and documents
Airports Served: 400 domestic, 435 international
Revenue: $21.6 billion (includes FedEx Trade Networks)
CEO & President: David J. Bronczek
Air Fleet: 664 aircraft
Service Area: More than 220 countries and territories
Average Daily Volume: 3.5 million packages, 11 million pounds of freight
Airports Served: More than 375
DHL Air Freight
Revenue: 10.3 billion Euros
CEO: Ken Allen
Air Fleet: Unknown
Service Area: More than 220 countries and territories
Average Daily Volume: 2,000 tonnes per night (European Air Transport Leipzig)
Airports Served: 50 domestic, 500 international
Revenue: 1.95 billion euros
Chairman: Carsten Spohr
Air Fleet: 19 of own MD-11F aircraft
Service Area: Over 300 destinations worldwide
Average Yearly Volume: 1.52 million tons of freight and mail (2009)
Airports Served: Unknown
Cainiao Network Launches Customer-Centric Logistics
As the logistics division of the Alibaba Group, Cainiao Smart Logistics Network has decided to provide its Southeast Asian customers with unsurpassed service during its annual shopping festival. Based on customer feedback surveys, the company will expand its real-time customer service support and speed up delivery times. ‘By expanding and deepening our services, we aim to provide a stronger logistics infrastructure that can bolster the booming eCommerce sector, support merchants’ expansion into new markets and diversify retail options for consumers’, said Chris Fan, Head of Cross-Border, Singapore, Cainiao Network.
Who Is Cainiao?
According to TIME Magazine, Cainiao ‘is far from a typical logistics firm’. The company controls an open platform that allows it to collaborate with 3,000 logistics partners and 3 million couriers. This means that merchants can choose the least expensive and most efficient shipping options, based on Cainiao’s real-time logistics analytics. The company’s goal is to ship packages anywhere in the world in under 72 hours—and for less than US$3.00.
For countless small business owners around the world, from coffee-growers to textile-weavers, this could change everything. Usually, it costs about US$100 to ship a DHL envelope from Shanghai to London in five days. Cainiao aims to change that. Said its CEO Wan Lin: ‘The biggest barrier to globalisation is logistics’.
What’s Part of the Upgrade?
Throughout the Tmall festival, Cainiao’s logistics upgrade will be divided into four critical segments:
- Real-time customer service support. Cainiao has launched a direct WhatsApp channel for customers to receive logistics updates and ask questions.
- Expansion of air freight parcel size and weight limits. Packages can now be up to 30 kilograms or 1-metre x 1.6 meters to help ship large items such as furniture.
- Daily air and sea freight connections. Shipping frequency will almost double to seven times weekly to maintain resilience and efficiency.
- Compensation for lost or damaged packages. Customers will be reimbursed up to RMB 2,000 (US$311).
Where is the Company Headed?
From June 1st to June 20th, the finale of Tmall, Cainiao will ensure that its customers feel confident in the company’s ability to deliver their packages. Despite global shipping delays due to COVID, the show will go on. Said Fan: ‘This series of customer-centric logistics upgrades reaffirms our goal of pursuing value-added services to enhance customers’ shopping experience while mitigating challenges posed by external factors’.
Furthermore, Cainiao has recently expanded its Southeast Asian operations, achieving revenue growth of 68% year-over-year. In Malaysia, the logistics operation has partnered with BEST Inc. and Yunda; in Singapore, the company has partnered with Roadbull, Park & Parcel, and the Singapore Post. And if its recent measures help retain and grow its customer base, the company will be well-poised to lead the industry in resilient and customer-centric global logistics. ‘COVID-19 made everyone realise how important the logistics infrastructure backbone is’, said Wan. ‘And it gave us a peek at what Cainiao should look like in three years’.