The Players in the Air Cargo Industry
Air cargo shipments begin with the shipper. This can be an individual or a major manufacturer with an item to ship. Shippers have the option of taking a product directly to a carrier or alternatively using a third-party logistics provider (usually a freight forwarder) to find the best shipping options and to ensure that all the arrangements are made.
There are several shipping channels. Air cargo carriers provide differing service based on customer demands. The primary distribution channels for air freight and mail include:
- INTEGRATED EXPRESS CARRIERS: These carriers include FedEx, UPS, and DHL, which operate with a very tight shipping window to their Midwest distribution hub (FedEx in Memphis, UPS in Louisville, and DHL in Cincinnati). They operate a large fleet of scheduled aircraft, trucks, and couriers for door-to-door service. Typically, integrated express companies provide next-day and deferred time-definite delivery of documents and small packages (two to 70 pounds).
- ALL-CARGO FREIGHTER AIRLINES: A carrier that generally operates scheduled wide-body and/or containerized cargo aircraft from one major airport to another. All-cargo carriers include Atlas Air Cargo, Kalitta, Evergreen, Cargolux, and Polar Air Cargo.
- COMMERCIAL PASSENGER AIRLINES: Scheduled passenger airlines use space in the belly of aircraft to move cargo from airport to airport. The air cargo services provided by passenger carriers can vary in terms of scope and size depending on the airline and the aircraft available. Carriers that offer air cargo service in the belly of passenger aircraft include Delta, United, American, and Southwest.
- FREIGHT FORWARDERS: An intermediary that arranges the best means of transport for goods, typically by accepting small packages from shippers and consolidating them into container loads. These loads are then transferred to the non-integrated carrier or passenger airlines to deliver to an agent or subsidiary at the destination airport. Forwarders include Panalpina and Expeditors. Integrated express carrier DHL is also a major forwarder and UPS and FedEx have been strengthening their freight forwarding divisions in recent years and including more and more shipments of heavy freight and bulk shipments.
- REGIONAL AIR CARGO CARRIERS: These carriers operate between market stations and smaller or more remote cargo markets, typically in support of a larger integrated express cargo operator such as FedEx, UPS, or DHL. South Aero and Mountain Air Cargo are examples of contracted ‘feeder’ airlines to both UPS and FedEx. Feeder flights often transport cargo from a smaller market and feed cargo to an awaiting cargo jet bound for the carrier’s hub. Regional feeder aircraft may also fly directly to a hub. Ameriflight is a regional cargo carrier not affiliated with any larger airline, providing custom and time-critical charter flights moving air freight from point to point.
- CONSOLIDATORS: A company that combines shipments to a common destination. By combining the shipments, the cost per pound can be reduced, and a savings can be passed along to everyone in the shipping chain. Domestic shipments are typically off-loaded at the destination airport and are picked up by, or delivered to the consignee by truck.
For international shipments, there are several unique players:
- CUSTOMS OFFICIALS: Federal officials who inspect shipments in the destination country.
- CUSTOMS BROKER (or IMPORTER): A company that works with government agencies to clear the goods for entry into the country. Because international shipping can be a detailed and cumbersome process, the shippers and forwarders typically work with a customs broker.
- CONSIGNEE: The buyer that receives the shipment after it is cleared to enter the country. On occasion, the shipment may be moved to a container freight station for basic handling and customs inspection. Subsequently the shipments are broken down for individual consignees and delivered by truck.