Shipping by air is not a one-size-fits-all option. Most shippers do not prefer to ship their cargo by air, the primary reason being high logistics cost. It is a well-known fact air freight is often more expensive than any other mode of transportation. But its main advantage, quick service, is something that all shippers desire. So here lies the question: How can reduce logistics costs and promote efficiency while using air logistics?
First, one needs to understand that the freight cost is only one component of the equation when it comes to shifting from other modes of transportation to air. Benefits like lower inventory carrying costs within the supply chain may reduce the possibility of high freight costs. That is why it is absolutely necessary to incorporate the right air shipping strategy into a multi-modal supply chain.
For this purpose, we can look at the three primary air shipping options – next flight out, consolidated, and deferred. For a business, any one of these or a mix of all may work. Besides these, there is air charter, which can secure the capacity you require and allows you to utilise an exclusive aircraft to meet any other unique requirements. Anyways, let’s look at the three primary options a bit more in detail:
Next Flight Out: This is the fastest air cargo shipping option, but is also the costliest one. Here, your freight will be shipped as soon as a flight is available. The challenge is to have a provider with the resources who can locate capacity at the last minute to ensure your timelines are met.
Consolidated: Basically, various logistics partners combine your freight with the load of other different shippers earlier. The great quality of consolidated air shipments is how it moves on a set schedule. By shipping a set times and with larger shipments, logistics providers are often able to give better rates. The challenge that lies here is a small provider may not work with enough companies to have regular shipments of consolidate air freight, which could lead to delays.
Deferred: Often this kind of air shipment still works on a normal timetable. With this sort of administration, shippers basically defer their air cargo to the third, fourth or fifth business day. Simply put, logistics providers postpone the shipments of lower priority cargo until there is space available on aircraft. It offers the greatest cost savings because of the potential for longer transit times.
Also, it is wise to remember what happens in the background as well. Services such as customs clearance and distribution/delivery sourcing may not be top of mind when considering freight options, however they are key to evaluate the cost-benefit with respect to the delivery time and the speed of freight. An experience logistics provider always keeps these in mind when advising the best choices for a business, making a difference in optimising supply chain into lower overall logistics cost.
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