Page 192 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

Unit 8: International Transport System

low value commodities because of low cost per tonne per kilometre, which is of greater importance Notes
than speed of delivery. Basic bulk commodities and raw materials such as iron ore, coal, chemicals,
petroleum products, cement etc are extensively transported by this mode.
8.3.4 Air Transport

When goods are transported by air, the mode of transport is called airways. This mode of
transport is the newest and least preferred mode, especially for domestic purposes. One of the
significant advantages of the air transportation lies in the speed. It needs only a few hours for a
shipment from one place to reach another, in contrast to the days required with any other
modes. That is why; it is a most preferred mode of transport for perishable goods like flowers or
for emergency services like supply of a spare part during the breakdown of a machine. In the
present day’s considerable international trade and growing awareness about logistical services,
the growth of this mode is gradually increasing.
A coast-to-coast shipment via air requires only a few hours contrasted to days with other modes
of transportation. One prohibitive aspect of air transport is the high cost. However, this can be
traded off for high speed, which allows other elements of logistical design, such as warehousing
or inventory, to be reduced or eliminated.
Air transport still remains more of a potential opportunity than a reality. Although the mileage
is almost unlimited, airfreight accounts for significantly less than 1 percent of all intercity ton-
miles. Air transport capability is limited by lift capacity (i.e., load size constraints) and aircraft
availability. Traditionally, most intercity airfreight utilized scheduled passenger flights. While
this practice was economical, it resulted in a reduction of both capacity and flexibility. The high
cost of jet aircraft, coupled with the erratic nature of freight demand, has limited the assignment
of dedicated planes to all-freight operations.
However, premium air carriers such as Federal Express and United Parcel Service Overnight
provide dedicated global freight operation. While this premium service was originally targeted
at documents. It has expanded to include larger parcels. For example, both United Parcel and
Federal Express have extended their air freight service to include overnight delivery from a
centralized distribution centre located at their air hub. This is an ideal service for firms with a
large number of high-value products and time-sensitive service requirements.
The fixed cost of air transport is low compared to rail, water, and pipeline. In fact, air transport
ranks second only to highways with respect to low fixed cost. Airways and airports are generally
developed and maintained with public funds. Likewise, terminals are normally maintained by
local communities. The fixed costs of airfreight are associated with aircraft purchase and the
requirement for specialized handling systems and cargo containers. On the other hand, air
freight variable cost is extremely high as a result of fuel, maintenance, and the labour intensity
of both in-flight and ground crews.
Air routes are practically unlimited. Air transport constraints are multidimensional and include
the site (Runway for landing and take off), the climate, etc. Air freight is used whenever the
benefits of fast delivery are more than the increased transportation cost.

8.4 Intermodal Transportation

Intermodal transport (or intermodal transportation) involves the use of more than one mode of
transport for a journey. Intermodal transport can be of two types:

1. Intermodal passenger transport
2. Intermodal freight transport

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