Shift designs for freight handling personnel at air cargo terminals

This paper presents an integrated mixed integer linear programming (MILP) model for determining manpower requirements and related personnel shift designs for the build-up and break-down of the unit load devices (ULDs) at the air cargo terminal to minimize manpower costs. To utilize the manpower resources efficiently, we implement a new mechanism for demand leveling. In addition, we consider the qualification hierarchy between build-up and break-down workers. A case study based on the real-life data shows that the model is useful for manpower planning at air cargo terminals and the integrated approach is far superior to a traditional two-stage approach.     

Evaluating competitiveness of air cargo express services

This paper explores the relative importance of factors that influence the adoption of air express delivery service, and evaluates the competitiveness of air cargo express carriers in the Korean market. Our AHP analysis shows that accuracy and promptness are the two most influential factors to competitiveness, and that DHL is most competitive in the Korean market, followed by FedEx, TNT, EMS, and UPS. We further examine both the factor importance and carriers’ competitiveness from the perspective of service users. While accuracy and promptness remain as important factors, price becomes the most important factor. Finally, an importance–performance analysis for each carrier is conduced, and managerial implications are drawn.     

An approximate algorithm for the two-dimensional air cargo revenue management problem

For the air cargo revenue management problem, this study developed a solution algorithm based on approximating the expected revenue function in the dynamic programming (DP) model while taking into account the stochastic volume and weight of shipments. In order to alleviate the computational load, the approximation was achieved by computing only a limited number of points in the DP state space. In the simulation experiment, the developed algorithm was compared with a recent heuristic algorithm based on de-coupling the relationship between weight and volume. It was found that the approach of this study can generate higher revenue than the de-coupling control for most of the cases.     

Responses of air cargo carriers to industrial changes

This study examines how product characteristics, values, inventory cost, shipping charges, shipping distance, and time affect an international firm's choice of air carrier. An individual choice model is constructed by assuming that the shipper in a specific industry chooses the optimal air cargo carrier with the minimal logistics cost. The study further aggregates air cargo demands on different routes for the carriers by considering the spatial distribution of the origin-destination pattern and any temporal changes in the industrial structure. A case study is used to illustrate the application of the proposed model using data from Taiwan Taoyuan International Airport and the industrial economics database in Taiwan. The results show that shippers with high product value and short delivery distance focus on the shipping charge and prefer choosing the air cargo carrier that offers more flights. Further a carrier may achieve a larger market share if its supply attributes match the industrial structure and the product characteristics of the market on the route. Finally, because dynamic changes in the industrial structure and product value have been captured, the results are more accurate than that from the Grey model.     

An airline maintenance manpower planning model with flexible strategies

An effective maintenance manpower supply plan not only reduces operating costs but ensures greater aviation safety and punctuality. A variety of flexible management strategies have been widely applied in other industries; however, little research has stressed flexible management strategies for airline crew scheduling problems. Here, we introduce a model that includes various flexible strategies so that an airline can effectively manage its maintenance manpower supply. The model is formulated as a mixed integer program that is solved using a commercial software package, CPLEX. In order to evaluate the model performance, we use the operating data from a leading Taiwan airline.     

Optimal cargo container loading plans under stochastic demands for air express carriers

In this research, we develop a stochastic-demand cargo container loading plan model with the objective of minimizing the total operating cost, subject to the related operating constraints. The model is formulated as a nonlinear mixed integer program that is characterized as NP-hard. We employ a problem linearization technique, coupled with a mathematical programming solver, to develop a solution method. To preliminarily evaluate the model and the solution method, we perform a case study using data from an international air express carrier. The results show that the model and the solution method could be useful for air express carriers.     

Recovering from demand disruptions on an air cargo network

In this work we introduce the Air Cargo Schedule Recovery Problem (ACSRP). In this problem, a carrier airline has to reschedule flights and requests to adapt to last-minute demand changes. We consider three different possible crew management policies that translate into three different way to evaluate the costs of deviating from the original schedule. We formulated the ACSRP as a mixed integer linear programming problem, and tested our implementation on 24 original schedules with up to 30 orders and 8 airports, and 4 different disruption scenarios for each one. Our results show that, against a benchmark recovery policy where only cargo is re-routed, recovery can yield savings of roughly 10%.     

The underlying drivers and future development of air cargo

Air cargo plays a crucial role in the air transport chain and in the globalized economy. As for other modes of transport, the demand for air cargo is a derived demand. Previous studies showed that the main determinants of air cargo demand are merchandise trade and the share of manufactures in merchandise trade. This paper aims to fill a gap in the existing literature by additionally taking the influence of air freight yields and oil prices into account when modelling the global air cargo development. Furthermore, it provides an insight into the future development of air cargo. Forecasts until 2023 are made based on a number of scenarios for the main determinants of air cargo demand. Moreover, an insight is provided into the current air cargo market, including traffic levels and different types of actors and traffic flows. The results are useful not only for academics but also for industry stakeholders for which air cargo is an important contributor to profit and/or cash levels.     

Dynamic routing of time-sensitive air cargo using real-time information

The route planning of time-sensitive air-cargo is becoming more important with the growing air-network congestion and delays. We consider a freight forwarder’s routing of a time-sensitive air-cargo in the presence of real-time and historical information regarding flight availability, departure delays and travel times. A departure delay estimation model is developed to account for real-time information inaccuracy. A novel Markov decision model is formulated and solved with online backward induction. Through synthetic experiments and case studies, we demonstrate that dynamic routing with real-time information can improve delivery reliability and reduce expected cost.     

Assessing the air cargo business models of combination airlines

Notwithstanding the fact that the air cargo business is generally a secondary one to the passenger business for combination airlines, it can have an important role to play in their profitability. However, growing challenges are threatening the market positions of the combination airlines. Improving their market positioning depends, amongst other factors, on appropriate business models. Yet, the literature on the air cargo business models of combination airlines is scarce. This paper aims to contribute to closing this gap.The research presented herein aimed to identify the representative business models of the combination airlines' cargo strategies. Three strategies have been considered. The research method included a series of structured interviews with key informants from combination airlines, namely: TAP Cargo, Brussels Airlines Cargo, SATA Cargo, Turkish Cargo, SWISS WorldCargo, Finnair Cargo, AF-KLM Cargo, Emirates SkyCargo, Lufthansa Cargo and IAG Cargo.The ten air cargo business models and the representative business models of each strategy are described. The results suggest an overlap between the business models of different strategies. In addition, the results show that an evolution in strategy does not necessarily require a redesign of the business model, but tailored changes in specific components.     

Towards a taxonomy-based preferred-customer model for suppliers in air cargo express service markets

Drawing on social exchange and push–pull–mooring theories, this paper develops a taxonomy-based preferred-customer model for B2B air express markets. Our model extends the conventional bilateral customer-supplier relationship perspective of customer portfolio management to include competition effects for more comprehensive (trilateral) strategic decision making. Based on this unified framework, our a survey of 180 customers of air cargo express carriers identifies three distinctive groups of preferred customers. In addition to the effect of competitors on air express carriers’ prioritization of customers, which is further complicated by a satisfaction paradox and spurious loyalty, we further establish classification indicators for differentiating preferred from non-preferred customers. Notably, although commonly used in practice, we find sales volumes to be ineffective for that purpose.     

Location of cargo terminals in metropolitan areas of developing countries: the Brazilian case

This article presents a procedure for establishing and ranking the areas that are candidates for building truck cargo terminals, based on the analytic hierarchy process (AHP) and considering location factors, with focus on accessibility considerations, expressed by indicators derived from graph theory. Accessibility is thus defined objectively for each area, contemplating its needs regarding production or consumption of cargo or promotion of intermodal transport of products. The proposed approach determines the most suitable area for locating the terminal according to the perception of each actor participating in the process as well as the set of actors, seeking to conjugate conflicting interests and facilitate convergence and the establishment of negotiated solutions. With this, it provides a more transparent and participative decision-making process and supplies basic elements for government bodies to formulate their socioeconomic development policies. The application of this procedure in the greater Rio de Janeiro metropolitan region demonstrated its feasibility in developing countries and in contexts with restricted data, funding and planning.     

Issues on liberalization of air cargo services in international aviation

This paper provides a general discussion of various issues related to the liberalization of air cargo services in international aviation. It shows that all-cargo carriers may have different routing needs than passenger carriers and thus require different sets of air traffic rights from those needed by passenger carriers. On the other hand, separation of air cargo and passenger rights will be fraught with difficulty in Asia because of distinctive characteristics of its air cargo market, where most passenger carriers have substantial cargo business and operate “combi” fleets. Customs and inter-modal transportation are also discussed in the context of cargo liberalization.     

Comparison of solution approaches for the train load planning problem in seaport terminals

In this paper the train load planning problem arising in a seaport container terminal is considered. This problem consists in determining the optimal assignment of containers to wagon slots in order to maximize the train utilization and, at the same time, to minimize unproductive operations in the terminal. Different solution approaches based on a mathematical programming model are compared. The best solution procedure, satisfactory both in terms of quality of the obtained solutions and for the computational times, is identified through extensive experimental tests. This procedure could be included in a planning tool to be used in real seaport terminals.     

Bioethanol supply chain system planning under supply and demand uncertainties

A mixed integer stochastic programming model is established to support strategic planning of bioenergy supply chain systems and optimal feedstock resource allocation in an uncertain decision environment. The two-stage stochastic programming model, together with a Lagrange relaxation based decomposition solution algorithm, was implemented in a real-world case study in California to explore the potential of waste-based bioethanol production. The model results show that biowaste-based ethanol can be a viable part of sustainable energy solution for the future.     

The application of inventory transshipment modeling to air cargo revenue management

This paper applies an inventory transshipment modeling approach to investigate the air cargo revenue management problem for an airline operating in a two-segment network. Building upon an extension of the classic two-location inventory transshipment model, we develop a framework to optimize an airline’s cargo overbooking decisions in a two-segment network setting. We find consistent evidence indicating that network-based global optimization always leads to greater expected profits than does local (i.e., market by market) optimization. Further, the magnitude of profit improvement is found to be most significant when local shipments have a relatively higher freight yield compared to flow-through shipments. Finally, our results indicate that global optimization contributes to greater profit improvement as offloading penalty costs become higher.     

Keeping cargo security costs down: A risk-based approach to air cargo airport security in small and medium airports

European Union regulations are not sensible to the proportionality of measures and provide fixed orientations and standards irrespective from the dimension of the airports. Additional security measures have been added over the years resulting in increasing security-related costs. The cost structure of security exhibits the existence of a relevant fixed component, concerning staff, equipment, or certification. Notable, smaller, and medium airports support higher costs of security than larger airports, due to the low volumes of cargo and passenger movements. Alternative approaches, notably risk based, have been advocated to support the definition of security procedures at airport level. Although studies have been conducted, none was found concerning these types of airports.This paper presents a research aimed to analyse the appropriateness of a risk based approach in the context of small to medium airports. The research focused in understanding whether such approach could provide tailored security requirements and, ideally, lower costs.A case study considering six airports - Horta, Lisbon, and Ponta Delgada (Portugal), and Adana Şakirpaşa, Erkilet International and Istanbul (Turkey) - of different sizes and located in different regions was conducted. The results make evident the advantages of a risk based approach to define appropriate security procedures, although it is not evident that a risk based approach will lower costs.     

Intermodal alliance and rivalry of transport chains: The air cargo market

This paper examines the effect of multimodal integration on the rivalry between two transport chains – a forwarder–airline alliance and an integrator – under the economies of traffic density. An improvement in multimodal integration by a forwarder–airline alliance would increase the alliance’s output, while reducing the integrator’s output, not only in the multimodal market but also in other markets of the cargo network. It would further increase the alliance’s profit, provided the intermodal improvement is not too costly, while reducing the integrator’s profit, and would likely improve both consumer surplus and total surplus. We also find that an alliance in general leads to greater market shares for the firms involved than outsourcing.     

Making or breaking - Key success factors in the air cargo market

This introductory paper considers a number of major evolutions in the air freight market. In the first instance, it describes the heterogeneous environment in which air cargo services are performed. Subsequently, it looks at some of the most notable developments in air freight. Lastly, it deals with the market structure and with possible future strategies.     

The logistics of air cargo co-mingling at Ted Stevens Anchorage International Airport

This paper discusses the current efforts to bring further deregulation to international air cargo operations. This is done in the context of a special set of operations, known as co-mingling, which is allowed at Ted Stevens Anchorage International Airport. Co-mingling involves air cargo being transferred to another airplane that may or may not be in the initiating carrier's fleet. After the transfer is completed the cargo proceeds based on the second plane's pre-determined routing. This paper sets co-mingling in context with co-terminalization and cabotage operations by outlining the limitations of what the United States Department of Transportation actually mandated. While the operations are unique to the State of Alaska they do set a precedent for unilateral reform of international air cargo operations on the part of the US government. An economic appraisal of co-mingling operations is provided and is shown to be a source of efficiency gains for the US air cargo market.