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06 Jul

Express Air Shipping Still Innovating

Posted in Uncategorized on 06.07.15

When you have no time to waste – when a package or shipment has to get there today, where can you turn?

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Most of us automatically call one of the door-to-door services like United Parcel Service, Federal Express, RPS, and their competitors. These “integrated carriers,” which own and/or operate their own vehicles and aircraft, often are the right ones for the job. But there are other types of expedited services that sometimes are more suitable and more economical.

One option is to use door-to-door courier services. These companies may be local, regional, national, or even international in scope. They operate the local ground portion of a move and contract out with scheduled airlines or other carriers for the long haul. This is a very popular service, and continues to grow, says Launchscore.com, a small business opportunity data tracking website. Expedited trucking services, meanwhile, often are the right choice for large shipments. A number of overnight options are available, and some carriers even offer same-day delivery within a certain geographic range.

A third option – and the one on which this article will focus – is to use the scheduled airlines. All of the major U.S. and Canadian airlines offer some kind of expedited package and cargo services. These services “piggyback” on the scheduled passenger flights, using available belly space to move shipments quickly and cost-effectively. Some provide same-day service, while others are “next-flight” services that may deliver the shipment or package that same day or the following day.

Pick Your Flight

usaThe scheduled airlines play a dual role when it comes to offering domestic and cross-border transportation services, functioning both as retailer and wholesaler. They “wholesale” their space to air-freight forwarders, which in turn sell that space to individual shippers. But they also “retail” directly to shippers for certain types of products.

Same-day/next-flight service is one such retail offering. Although they may differ in the details, most same-day services share some common characteristics. They are airport-to-airport services, so shippers and consignees are responsible for delivering the shipment to the airline and picking it up at destination. (Most airlines also offer door-to-door pickup and delivery with advance notice and at an extra charge.) Some airlines have separate offices or counters for their expedited services, while others handle them at their ticket counters or aircargo facilities.

Same-day and next-flight services usually are flight-specific, and most airlines will refund all or part of the freight charges if a shipment does not move on the flight selected. They offer short cut-ofttimes at the point of origin – sometimes as little as 30 minutes before a flight departs – providing an option for last-minute or emergency shipments.

Shipments also are quickly available for pickup at destination. It’s important to note that for international services, the airlines may only deliver import documents to the consignee within the specified time limit. Although the cargo itself may physically be available at the same time, the airlines may not release the freight until the consignee clears the shipment through customs.

Because these services are so time-sensitive, the airlines must place some restrictions on the products being shipped. Many, for example, will not accept individual packages weighing more than 70 pounds or measuring more than 90 inches (length x width x height). Depending on the airline, the aircraft, and the facilities at origin and destination, there also may be restrictions on carrying hazardous cargo, perishable products, and live animals.

Same-day services are appropriate for a wide variety of products. Among the airlines’ regular customers for expedited services are publishers and printers (which ship proof plates and time-sensitive newspapers and magazines); medical-supply distributors (drugs and specialized medications); medical testing facilities (perishable samples and specimens); television and movie producers (film); hospitals and blood banks (organ transplants, blood); the legal profession (depositions, evidence); and banks (canceled checks).

Many of these and other products move via same-day services because of their short shelf life. Companies that depend on Just-in-Time manufacturing processes also are heavy users of expedited airline services, says Richard L. Denhart, director of priority products for American Airlines. The auto makers, for example, all depend on suppliers to deliver exactly one day’s worth of parts each day. If parts aren’t delivered on time or if they come in but prove to be faulty, the manufacturer must receive replacements that same day, he explains. “If they don’t have them, that will result in a shutdown…and that can cost $120,000 an hour or more.”

Weighing the Costs

There are many factors shippers should consider when deciding whether to use an airline or a competing expedited service. Cost is one component, of course. Because the express products “piggyback” on passenger flights, the airlines’ costs are fairly low. As a result, pricing can be quite reasonable. Many airlines charge a flat rate for packages of a certain weight. US Airways, for example, charges $62 for packages up to 50 pounds, $83 for packages weighing between 51 and 70 pounds, and $115 for shipments that weight from 71 to 100 pounds.

For shipments that include more than one package, though, it will be less expensive to use a service that is priced on a per-pound or per-kilo basis than one with per-package rates, advises Zodie Cristakos, manager of cargo marketing for Southwest Airlines. Southwest Airlines and Air Canada, for example, both charge on an aggregate weight basis.

Although “walk-in” prices are reasonable, airlines will negotiate rates for regular customers, says Denhart. Companies such as printers that regularly move large volumes often can work out better pricing, he notes.

Because many times shippers are comparing the airlines’ services to door-to-door services offered by couriers and integrated carriers, it’s important to examine total cost, including local pickup and delivery and time spent on managing the move. “You have to decide how involved you want to get in this process,” Denhart says. “If you already have internal infrastructure like a private fleet or messengers, then it can be better to go directly to the airline.” Shippers that don’t have those kinds of resources, however, may find it more economical to work with a freight forwarder, courier, or integrated carrier, he says.

One of the airlines’ strongest selling points for express service is flight frequency, says Tony LeFebvre, express product manager for US Airways. US Airways, for example, has flights leaving every hour between Washington, D.C., and Boston or New York. Southwest Air, meanwhile, offers 38 flights per day between Dallas and Houston, and American Airlines flies more than 20 times daily between Dallas and Chicago. “[The integrators] can’t match our frequency,” he notes.

With the airlines, shippers also know the exact arrival time (barring weather or air-traffic delays, of course). For critical parts or perishable products, that’s of vital importance. “[Our customers] don’t want to know that it will be there sometime tonight. They need to know that it’s on a specific flight and that it will arrive at a specific time,” says Dave Hinderland, national accounts manager for Southwest Airlines.

With emergency or time-sensitive shipments, control also can be an important issue, says Jim Fisher, Air Canada’s manager, customer service-cargo for the United States. Air Canada, for example, has dedicated personnel meet flights and run documents and packages to express offices or counters. Although the integrated carriers conveniently include customs clearance in their price, there are times when it’s better to do it yourself, Fisher believes. “If shippers use their own customs brokers, they have more influence over how things are handled. The brokers are right at the airport and they can run documents over to customs immediately,” he adds.

What’s Right for You?

Though the airlines’ services offer many benefits, choosing the best option for same-day, next-flight, and other expedited services isn’t easy. Couriers, freight forwarders, and integrated carriers all offer competing services that may be more appropriate for some shippers.

In fact, those companies also rely on the scheduled carriers, putting airlines in the uncomfortable position of competing with their own customers. The airline executives interviewed for this story all emphasized that they considered those companies to be their partners and that each group was trying to meet different needs. “Because we fly during daylight hours, the airlines will always control [the same-day] market,” says Denhart of American Airlines. “But the forwarders, couriers, and integrators are our customers, too, and we will never change that relationship.”

What choice the shipper makes depends on time constraints, the level of service needed, and the total cost. Shippers also must consider the cost of not using an expedited service, as in the case of the auto maker faced with a plant shutdown when parts don’t arrive on time. Finally, the carriers say, shippers that regularly require same-day and next-flight service should look at how best to take advantage of what can be a tough situation. Says Denhart: “The creative companies can take it from being an emergency situation to being an enhancement of their product.”

One comment »

2 comments on this topic

  1. Harold P says:

    Really interesting article. This is all interesting stuff, especially when you look at the retail dominance of Amazon and others. Shippers have to get smarter, or someone’s going to eat their lunch!