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Hold It Right There

Aug 1, 2006
2006 / August 2006

Take a look around the next time you’re at a gate waiting to board a Boeing-777. See that short guy yakking away on his cell phone in the corner? The young couple with three rambunctious kids? The overweight woman with a roller bag and a purse the size of a small nation? If the flight is full, you and your fellow passengers constitute a passenger weight load of 48,000 pounds. That’s based on Continental Airlines’ calculations for 250 passengers at an average weight of 190 pounds per passenger including carry-on luggage.

But that’s only half of the story. There’s probably another 50,000 pounds of cargo loaded into the hold below the passenger cabins. With the exception of Northwest Airlines, U.S. carriers do not fly cargo-specific equipment. That means the flowers that will be in your hotel room tomorrow; the lobster you’ll order at dinner tonight; the young family’s Golden Retriever; the components for the laptop computer the guy sitting next to you ordered the other day; and the earthly remains of another passenger’s great aunt may well arrive at their destination on the same plane as you.

“We carry a wide variety of products that are time-definite,” said Jack Boysen, Continental Airlines vice president of cargo. “It’s flying because it has to get to the destination very quickly in good shape.”

That getting-to-the-destination-quickly part of the equation plays a key role in the decision-making process when it comes to shipping products by air versus sea or land. Boysen said that although the weight of cargo shipped by air accounts for only about 10 percent of total volume worldwide, the value of that cargo amounts to 47 to 50 percent.

“A ship may carry wheat which has a lot of weight, but the value per pound is not that big,” said Boysen. “An airplane carrying a load of 50,000 pounds may include computer chips and computer components. The value is far greater. There may be millions and millions of dollars of value on any given plane.”

In fact, the air shipment of computer chips and components is an example of a burgeoning market trend dubbed JIT for “just in time.”

“Think about the last time you bought a Dell computer,” Boysen said. “You go online to order and hit send. That’s the start of significant logistic activity that includes ordering computer parts from six or seven countries. The parts are delivered to a plant where the computer is manufactured then it’s sent to the customer.”

Boysen said the JIT process eliminates the need for costly warehouse space and reduces taxes paid on warehoused products. It also helps bypass the problem of stockpiling obsolete computer components due to the fast-changing nature of the industry.

Like most U.S. carriers, American Airlines’ core cargo customers are professional logistics providers, also known as freight forwarders. DHL Air & Ocean, BAX Global and Eagle Global Logistics are a few of the firms in this category.

“To really understand our business, you must look at the intense, high-demand world of the customers we serve,” said Jennifer Pemberton, manager of media relations for American Airlines’ cargo division. “To meet the needs of this customer base, American Airlines Cargo is continually making improvements in technology, products and customer service to serve the demands of global commerce.

“Business is conducted with these logistics industry providers that maximize the capacity, schedule and product mix of each flight. In many cases, blocked space agreements are set in place — for example, Caterpillar business out of Chicago — to assure that a shipper has the space confirmed to meet his needs.”

Pemberton agreed that because air transport is generally more expensive than ocean, rail or other modes of transportation, goods shipped by airfreight generally have a high per-piece value or are time-sensitive or perishable in nature. Some examples of commodities moved as airfreight on American Airlines include consumer electronics, haute couture, crit ical machine parts and equipment, Hollywood movies for distribution, perishable foods such as fish, fruits and vegetables, human organs for transplant and other bio-medical products and pharmaceuticals.

While Boeing’s 777 passenger planes do double duty in the cargo realm, the Seattle-based manufacturer has planned since the get-go to include a designated freighter in the “Triple 7” family. Designed in response to demand from cargo operators around the world, the twin-engine 777 freighter will bring previously unparalleled efficiency to the long-haul cargo market. Capable of flying 5,600-plus miles, it will effectively eliminate the need for costly layovers and refueling stops, resulting in lower handling expenses and shorter delivery times. Additionally, the twin-engine design equals quieter performance, so it meets the requirements of even the most noise-sensitive airports.

“We always knew we would grow the 777 into the family of airplanes we have now, including a freighter,” said Chuck Cadena, public relations manager for Boeing’s 777 program, who explained that strategic planning included the development of a design that would complement Boeing’s 747, which currently makes up about half of the world’s freighter capacity.

“We made sure the cargo doors were similar in size, so it could handle and accept the same pallets and freight,” said Cadena. “Cargo operators with both the 747 and 777 in their fleets have the flexibility to mix and match — called interlining — which adds value.”

Air France will be among the first to fly the new digitally designed 777 freighters when they begin rolling off the assembly line in 2008. Appropriately, Air France was also among the first to take delivery of its predecessor, the 747 freighter.

Air France Cargo spokesperson Jean Claude Raynaud recalled that milestone.

“Air France got the first (Boeing 747 freighter) in 1974 and since then has been flying a permanent fleet of 12 making Air France Cargo one of the top 10 cargo operators in the world,” Raynaud said. “We are at the moment entering another era with the jumbo aircraft.”

It’s interesting to note that one of the key selling points for Boeing’s 747 and 777 aircraft is the fact that both “families” include passenger and cargo planes, so to a great degree, parts are interchangeable and mechanics who service one model are qualified to service the other. And although it’s unlikely, pilots certified to fly the passenger model also can fly the cargo planes and vice versa.

Like Air France — and unlike most of its U.S. counterparts — All Nippon Airways’ fleet includes both cargo-specific and dual-purpose planes. Still, cargo arriving from Japan into the United States flies in the bellies of its passenger planes. That will change in October.

“Right now we only have cargo coming into North America in the bellies of our passenger aircraft,” said ANA spokesperson Damion Martin. “That means it comes in once every day on our New York-JFK, Washington Dulles, San Francisco and Los Angeles flights. In October, we’re starting three-times-per-week service on a cargo-specific Chicago to Nagoya route with a stop in Anchorage, Alaska.”

With expectations for a continued healthy domestic cargo business, ANA is looking outside Japan for additional growth opportunity

“Our international cargo operations will grow due to the increase in products made all over the world,” said Martin. “One area that is growing and will continue to do so is China.”

What’s on the horizon?

According to American’s Pemberton, the biggest innovations today are happening in the realm of electronic booking and shipment management.

Continental’s Boysen, who acknowledged a healthy competition between American’s cargo and passenger operations, said e-commerce — the cargo equivalent of passengers’ online booking and e-ticketing — eventually will reduce.


What’s On Board?
Continental Airlines routinely handles all kinds of sensitive cargo, but the most sensitive (at least for the animal lovers among us) may well be its live animal shipments. Although some carriers prefer to steer clear of that realm of the business, Continental has taken the opposite approach, going full tilt with its PetSafe program. According to Jack Boysen, Continental Airlines vice president of cargo, the carrier sometimes must take measures to protect an animal from its well-intentioned owner.

“We do not want an animal drugged in any way,” Boysen said. “That’s really dangerous to the animal. We do a really good job on this. We’ve done our own studies. If an airplane type does not have good ventilation, we do not transport an animal on that airplane.”

In addition, each year Continental ships more than 2 million pounds of flowers, approximately 7,000 human remains and more than 12 million pounds of seafood. Its 100,000 live annual shipments include such delicate cargo as tropical fish traveling in water that has to be re-oxygenated en route.

American Airlines transports some equally interesting airfreight.

“Some of our most unusual cargo includes exotic animals traveling from the wild or from zoo to zoo, and sea urchins which travel almost every day from Chile to Japan where they are a delicacy,” said Jennifer Pemberton, manager of media relations for American Airlines’ cargo division. “Other interesting cargo has included equipment for rock bands on concert tours and once we carried a dome created for a building in Italy.”

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FX Excursions offers the chance for once-in-a-lifetime experiences in destinations around the world.

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