In 2013 $18.95 trillion dollars’ worth of exports were shipped around the world1. When it comes to shipping products internationally, businesses must choose the best modes of transportation to ensure their products reach consumers when they are needed. Internationally, ocean provides the best economic value however it takes much longer than the airfreight alternative. On the other hand, while air is significantly faster than ocean it is estimated that air freight can cost up to 15 times more for the same volume shipped2. So given the expense, why would companies opt to ship their goods via air?
Simply put, airfreight provides companies with a quick response option where speed to market factors outweighs the cost of freight. Following are five scenarios in which air may be the best option to ship goods.
There are a lot of potential problems that may occur in the production process and your supply chain should be prepared to adjust for these instances. For example, factories may run late on order production so your supply chain must adapt accordingly to ensure that the products still reach their customers at the planned time. Note that it does not have to be an all or nothing scenario. Airfreight can be substituted for ocean only in the amount needed to ensure that critical products reach the customers in a shorter amount of time and then ship the rest via ocean.
New Product Introduction
There are times when companies plan ahead to have goods shipped via air. For instance, if companies are introducing a new product to market then they may have a scheduled release date or want to beat the competition to market. If demand for a new product is expected to be high it is critical to have inventory readily available to anticipate that surge. As the products grow to be more mature and the demand begins to decrease they can begin shifting over the ocean to replenish the surge.
Sales demand can also lead companies to determine that shipping their goods by air is the best solution. For instance, there are times when the demand for products is so high that the items can’t get to their destinations quick enough. When this happens companies can have a number of their products shipped by air to meet that demand quicker. High sales demand could even lead to manufacturer’s inability to fill orders fast enough. In these situations the companies may not wait for the manufacturers to fill an ocean container. Instead they’ll opt to ship what they can by air to meet what demand they can in a shorter amount of time.
Samples are transported by air when a buyer is planning to place a big order. Prior to placing the order they will have a sample of the products shipped for inspection to ensure that the products meet expectations. The samples are critical for the final approval process so shipping them in an expedited manner is essential to avoid delays in the order being placed.
There are tighter restrictions on what can be sent on airplanes with even more restrictions on what can be shipped on passenger aircrafts. For instance, batteries cannot be shipped on planes that are also carrying passengers. Therefore, companies may plan to ship goods that are considered dangerous on a freighter to decrease the amount of risk associated with shipping these products. You can find out what items are restricted on passenger airplanes by visiting the FAA website.
Having the option to use air to ship goods can help optimize a products supply chain. Companies can leverage both ocean and air to respond to the demand of their products. Using different modes of transportation in unison can diminish inventory shortages and find a solution to coincide with supply and demand.