The Important Role Air Cargo Plays in the Global Supply Chain
For over a century now, air cargo has played a crucial role in getting time-sensitive and high-value shipments from one point to another as quickly as possible. The world’s first cargo flight was in 1910. Since then, air cargo and private cargo shipping have played a crucial role in transporting time-sensitive and high-value goods internationally and domestically.
Over the years, air transport has also proven to be a key “connector” between the manufacturers and the consumers. In the midst of the COVID-19 pandemic, shipments that took too long to get from one point to another were quickly transported via air.
According to the International Air Transport Association (IATA), air cargo has played a pivotal role in delivering much-needed medical equipment (including repair components and spare parts) and medicines.
Air cargo has also kept the global supply chains functioning for time-sensitive materials. This was carried out by utilizing cargo capacity in passenger aircraft, dedicated cargo freighter operations, and relief flights to affected areas.
IATA added that airfreight had been used to transport a staggering $6 trillion worth of goods annually. This represents at least 35 percent of all global trade by value. However, it is less than 1% of the trade when measured by volume.
The imbalance between value and volume can be attributed to the fact that most of the products that are shipped via air have a high value. Within a given 24-hour period, air cargo providers around the world have:
-Utilized over 100,000 airplanes
-Transported over 20 million parcels
-Shipped a whopping $18.6 billion worth of cargo
Economic Benefits of Air Transport
The air transport industry has a massive and significant impact on other industries and is also considered a growth facilitator. It also affects the global economy’s performance by enhancing the efficiency of other industries across the entire spectrum of economic activity. This is also referred to as “spin-off” or catalytic benefits.
Air transport helps facilitate world trade.
Air transport has allowed countries to participate in the global market by giving them access to primary markets and allowing globalization. Air transport also helps countries to specialize in activities where they have comparative advantage. It also helps facilitate trade with countries that provide other goods and services.
Air transport has been indispensable in the tourism industry.
Air cargo is especially useful for tourism on the island and remote destinations. Tourism directly supports employment in airports and airlines. Spending of tourists and visitors that arrive by air also creates a significant number of jobs in the tourism space.
Air transport boosts global productivity.
Improved air transport links have been pivotal in helping global markets expand. As a result, companies can exploit economies of scale better. This reduces cost dramatically and, as mentioned earlier, allows companies to specialize in areas of comparative advantage.
As more markets open up, air services can introduce companies to more competition and encourage them to become more efficient in the process.
Air transport improves supply chain efficiency.
Countless industries utilize air transport to reduce delivery times as part of the “just-in-time” delivery systems. This will reduce costs and enable companies to deliver products to customers reliably and quickly.
Air transport encourages effective collaboration and networking.
Air transport has been helping promote collaboration and networking among companies from different parts of the world. An excellent transport infrastructure also encourages companies to spend more on development and research.
As the world continues to deal with the unprecedented impact of the COVID-19 pandemic, air transport will continue to play an increasingly vital role in keeping the world’s supply chains running smoothly.
Melissa Hull is the Content Marketing Strategist for Aviation Charters, a West Trenton, New Jersey-based private aviation company that provides on-demand aircraft charter, aircraft management, and aircraft acquisition services. Aside from her passion for writing, she loves to travel and read espionage books.
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