Airport Operation and Global Supply Chain

Transcription

1 Airport Operation and Global Supply Chain By WANG, Xiaodong U of Int l Busness &Economics Beijing, China 1-1

2 Air cargo and Global SC Airfreight is growing as world commodity trade increases Why transport by air? Airport operation efficiency and Quick response strategy Case study Aerotropolis

3 Airfreight vs World Commodity Trade 3

4 Air transport High speed Low damage Good control over the operation High freight rate Affected by bad weathers Limited carrying capacity Passenger aircrafts are widely used in air freight market 4 (freighter or belly hold)

5 Why transport by air? 5 Air transport is shrinking transit time Air freight is more dependable than ocean freight in the sense that there was less variability in days early or late on either end high frequency helps to make quick response To lengthen useful market life To prevent down time To be flexible to customized, ever changing demand To match lean strategy and JIT operation process Air freight permits the seller to keep fewer inventory locations by responding relatively quickly to market demand from central repositories of stock or even from the production line itself Support wider markets with a fixed facility To cut inventory and storage costs where the market is untested and demand undermined Lower inventory cost while keeping availability level unchanged To take advantage of superior conditions of carriage Where higher insurance cost applied in other transport; where premium handling, difficult co-ordination or documentation prevails in other transport

6 Air cargo High value-weight ratio Small volume Goods for emergencies Perishable goods Physically Economically: highly innovative, short product life time, seasonal demand Live animals Others that are time sensitive 6

7 Operation process HAWB Customs Customs MAWB Airports Shippers Consolidators Freight forwarders Airlines Carriers Consolidators Consignees Freight forwarders Integrated Service Providers / Integrators 7

8 Factors affecting transit time Door to door service Not only speed, but also variability matters Consists of 8 Flying time (Decided by distance traveled) Surface transport time (Truck-airline service) Terminal handling time (Airport operation) Waiting time (Frequency may matter) Truck flight

9 Key Performance Indicators Speed: door to door Reliability: Ability to deliver on time without damage Frequency: Quantity of scheduled movements (schedule; hub or non-hub airport; alliance airlines; openness of the market, 5 th flying right) Accessibility / availability: ability to service any given pair of locations Capability: Ability to handle transport requirements, such as load, size or special materials Total Cost 9 Surcharges, Broker fees Cost of extra inventory, warehousing, buffer stock Managerial time Time is the key to successful air freight service

10 Outbound operations Count, label the cargo with shipping marks Weighing & security checking Palletizing / packing (Unit Load Devices, ULD) Custom clearance / pre-shipment inspection Load on board the aircraft (Special handling operations: oversized cargo, dangerous goods ) 10

11 Inbound operations Unloading the aircraft Unpack ULD Check & report any loss and damage Customs clearance (Apply for inspection) Release (sometimes on-site inspection is needed) Pay import duty Shipment delivery / collection 11

12 12 Case: Beijing Capital Airport

13 Airport Logistics Park

14 Airport logistics park The international logistics center started operation in Sep, Airport City Development Co., Ltd (ACL) is responsible for the project Being multi-functional with one-stop customs clearance center. Easy access to ground transport network Companies may carry out port operations, entrepot trade, international sourcing, international transfers, bonded logistics, warehousing management, dealing and distribution, consignment and maintenance, display and exhibition, R&D, and other business Preferential policies for import tax exemption, export tax refund, customs inspection, foreign currency exchange applied Efficient information system helps to accelerate operations 14

15 Jin Guan Project Project initiated by government back to 1993 Consists of two systems Management system within Customs Platform for supervising international trade (customs, ministry of finance, ministry of commerce, foreign exchange administration bureau, port authority, banks, transport companies, import & export companies ) 15

16 Aerotropolis Attract more attention in China as air transport market developed Hub airports or gateways gain advantage in attracting investment from high tech industry. Clustered industry calls for more efficient airport management. Local authority wish airport cluster may stimulate local economy, upgrade economic structure Debate on airport management (Concerns about monopoly power) Who invest in airport facility? 16 How logistics companies get access to the facility?

17 To conclude Air freight serves an important role in international logistics It is much more costly than the sea transport---- time is critical to its success Regulations affect freight movement Government intervention in airport infrastructure investment & management influence its performance 17

18 18

19 Order cycle time / Lead time / Response time Order Entry Order processing = Order Entry Time (through forecasts/direct order from the customer) + Order Planning Time (design + communication + schedule) + Order Sourcing, Assembly and Follow up Time + Finished Goods Delivery Time CUSTOMER Retail outlet Customer order transmittal Order preparation WAREHOUSE Order processing and assembly Order delivery Order shipment Transmittal of backorder items Express order delivery FACTORY Order processing, assembly from stock, or production if no stock

20 ULD Used by International Airlines 20

21 Customs Free Trade Zone / Duty free area From domestic markets Duty free zone Products from abroad Manufacturing and/or storage 21 To domestic markets Duties paid Products to foreign markets No duties paid