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Overview
Air Cargo – any goods (freight, mail or express) carried or to be carried in an aircraft. Air cargo is composed of the addition of Air Freight and Air Express and Air Mail.

Air Cargo in World Economy
Air cargo is connected to international trade whose expansion has been nurtured with the removal of physical restrictions as well as better commercial opportunities through improved communications and international contacts. Freer transfers of funds, stability of exchange rates and easier access to credit helped air cargo industry as well. Reduction and removal of duties has also encouraged the growth in trade, as has the outsourcing of manufacturing to lower cost firms in other countries. (Moving Boxes by Air. The Economics of International Air Cargo, Peter S. Morrell)

Air Cargo is a US$60 billion business that transports 35% of the value of goods traded internationally worth some US$5 trillion. Air Cargo is an important part of the airline business that supports 32 million jobs, and US$3.5 trillion of economic activity. (IATA Cargo web page)

According to Boeing in 2012, cargo-only aircraft or freighters handle about 60 percent of global airfreight shipments, while passenger planes fly the other 40 percent in their bellies. (http://air-cargo-how-it-works.blogspot.de/)

Types of air cargo
Air mail is mail that is transported by aircraft and mail service by aircraft that is branded and sold on the basis of being airborne.

Special cargo is cargo that requires special procedures for acceptance, handling and loading. The main types of special cargo are: Dangerous Goods, Fragile Cargo, Heave/Outsized Cargo, Human Remains, Live Animals, Magnetized Materials, Perishable Cargo, Valuable and Vulnerable Cargo and Wet Cargo.

Dangerous Goods
Dangerous goods are substances that are can pose a significant risk to health, safety or property. They can be carried by air when the risk is reduced to an acceptable level by limiting the quantity per package, and by packing in such a manner that the package will not fail during normal transit. Dangerous goods are classified according to the danger levels. There are nine hazard classes that identify a particular type of danger.

Dangerous goods are not accepted unless the shipper has certified that the shipment complies fully with dangerous goods regulations. All goods must be declared on a form called 'Shipper's Declaration for Dangerous Goods'.

Fragile Cargo
Fragile cargo are items that can easily be damaged, if exposed to jolting, dropping, bumping or rough handling during transportation. Usual fragile commodities are antiques, works of art, chinaware, glassware, earthenware, cast-iron articles, TV and radio tubes, sculptures, etc.

Fragile cargo is accepted only if securely packed in containers made of solid material such as wooden cases. If the container is breakable, i.e. glass, it should be surrounded by enough absorbent material to absorb any liquid in the container, should it brake. Each package needs to be marked with the 'Fragile' and 'This Side Up' labels. If any special handling and/or stowing are required, this must be indicated on the package as well as on the air waybill.

Heavy/Outsized cargo (HEA/BIG)
Heavy Cargo are items of weights and/or dimensions exceeding limits. Outsized cargo are individual cargo items of a size/weight that does not allow it to be loaded in the lower compartments or on one pallet. For heavy and outsized cargo, the 3-letter code "BIG" needs to be printed in the handling information box of the air waybill. Outsized cargo needs special arrangements to be made with regard to ground equipment, loading/unloading procedures and ground stops. Such arrangements depend on the shape and weight of the cargo article. Acceptance of outsized cargo is subject to prior approval. Similarly transportation of heavy cargo often involves special loading arrangements; space for such shipments needs to always be requested in advance.

Human Remains (HUM)
Human remains may only be accepted for carriage if they are accompanied by a Death Certificate issued by the appropriate authorities in the country of death. All laws, ordinances or governmental rules and regulations in the country of departure, transit and destination regarding carriage of human remains must be complied with. As the stated rules are generally complicated and subject to frequent revisions, shippers can obtain all advice from the appropriate authorities involved.

Un-cremated human remains need to be contained in a soldered inner coffin of lead or zinc, inside a wooden one to prevent damage, and covered by canvas so that the nature of contents is not apparent. Cremated human remains must be shipped as funeral urns that are protected against breakage. An additional Cremation Certificate from the crematorium is necessary.

Live Animals (AVI)
The acceptance of live animal cargo is subject to the conditions as described in the IATA's Live Animals Regulations and to TG's Regulations which encompass type of animals, type of aircraft, temperature at origin, en-route and destination, and availability of animal attendant.

Magnetized Material (MAG)
Magnetized material is any material that exerts a magnetic force and attracts or repels other articles, particularly metals. Manufacturers of electronic and magnetic instruments may sometimes quote the "Compass Safe Distance" of their goods on the package.

Perishable Cargo (PER)
Perishable cargo are articles prone to decay, deterioration or decomposition. Typical perishable cargo are chocolate, greens, dairy products, meat, deep frozen products, fish, plants, flower bulbs, serum, vaccine, fruits and vegetables. Perishables are accepted without responsibility for any loss or damage due to changes in climate, temperature, altitude or other ordinary exposures. Shipments of perishables need to be arranged in advance and booked all the way through to final destination. If any special handling and/or stowing were required, it needs to be indicated on the air waybill and a small Attention label should be affixed. Each separate package has to be marked with a Perishable and This Side Up label. The code PER has to be printed in the handling information box of the air waybill.

Valuable Cargo (VAL)
Valuables are shipments having a declared value for carriage (DVC) of USD1000 or more per gross kilogram, or which contains one or more of the following commodities:


 * 1) Pieces of gold or platinum and items made of gold or platinum
 * 2) Legal bank notes, securities, shares, traveler’s cheques, stamps and ready-for-use bank cards and credit cards.
 * 3) Precious stones: diamonds, rubies, emeralds, sapphires, opals and real pearls.
 * 4) Jewelry and watches consisting of any of the articles under 1 and 3.

Valuable shipments are handled with special care and no shipment of valuable goods is permitted unless booking has been confirmed en-route. The carriage of VAL needs to be on a direct flight from departure to destination or at the lowest transfer points. VAL code has to be printed in the "Handling Information" box of the air waybill. The packaging must be sufficiently strong to prevent damage caused by the normal handling. Cardboard cartons are not allowed for packaging. Each package must be sealed or steel-banded before acceptance.

Vulnerable Cargo (VUN)
Vulnerable cargo are items that are liable to be stolen and are readily marketable such as cameras, watches, souvenirs, television sets, radio sets, semi-precious stones. Vulnerable cargo is stored, where possible, in strong rooms, or in an area where the shipment can be kept under constant surveillance.

Wet Cargo (WET)
The following shipments are usually identified as wet cargo:
 * Marine and fresh water products which incorporate salt water, ice and fresh water
 * Shellfish
 * Products which contain water or fluids, such as vegetables, frozen or salted casings/seafood

If the temperature, humidity, pressure or vibration change, wet cargo may spill or leak, which could lead to corrosion or other damage to the aircraft structure, or damage to other loads. To prevent spillage or leakage, the special requirements for shipments containing wet cargo need to be observed. Shipments must be delivered to the cargo acceptance staff packed watertight. The most widely used package is the styrofoam box due to its good quality against changes in temperature and low weight. The special handling code for this cargo is specified as WET. (http://www.thaicargo.com/scargo.asp)

General cargo
General cargo - Cargo without hazardous or dangerous properties and not requiring extra precautions for air transport. (http://www.thefreedictionary.com/general+air+cargo)

Types of aircraft to transport cargo
Goods can be transported in different types of aircraft: passenger aircraft, cargo aircraft and combi aircraft. Passenger aircraft carries items in the cargo area under the passengers, the so-called “belly.” Also goods can be transported in the passenger cabin as hand-carry by an “on-board courier” flying as passenger; sometimes it is called a hand-carry service. Cargo aircraft carries freight on the main deck or in the belly; by means of nose-loading, where the whole nose is opened, or side loading, through the large cargo door. Combi aircraft carries cargo on the main-deck behind the passengers’ area with side loading through a large cargo door, and in the belly.

Airlines business models
Cargo only airlines are airlines dedicated to the transport of cargo only. Most prominent air cargo airlines are: Atlas Air, Cargolux, Bluebird Cargo, Nippon Cargo Airlines and Cargojet Airways.

Low cost airlines, like AirAsia Cargo, maintain efficient costs by keeping a simple aircraft fleet and a route network based on low-cost (secondary) airports, as well as keeping operations simple, shipping general cargo, hiring young crew, retaining from intermediaries and by using web-based systems. Traditional cargo airlines are divisions or subsidiaries of larger passenger airlines, like Aeroflot Cargo, Emirates SkyCargo, Lufthansa Cargo, MASkargo, Delta Cargo or Qatar Airways Cargo.

Integrators: Integrators ship envelopes and parcels of up to 75 kg and generally operate their own aircraft, while some destinations are outsourced to airlines, aircraft operators or air charter companies. The most prominent integrators are DHL Express, FedEx, TNT Express, and UPS. The Air Cargo supply chain

When a demand on one place is supplied from another place with air transport as the main transport mode, an air cargo supply chain is created. Air transport is relatively expensive, but often the fastest mode of transport available to cover medium to long distances.

Typical air cargo consists of items with a high value and/or an operationally or commercially critical delivery time:


 * Airmail, diplomatic mail
 * Live animals, hatching eggs, human organs, human remains, medical supplies
 * Express parcels
 * Perishables
 * Pharmaceuticals
 * Valuables
 * Technical supplies
 * Luxury consumer goods

Air cargo supply chain consists of the following steps:

(http://air-cargo-how-it-works.blogspot.de/)
 * Shipping
 * Forwarding out
 * Air Transport
 * Forwarding in
 * Consignment

Airlines’ partners in the supply chain
Third-party logistics (3PL or TPL) is a firm that provides service to its customers of outsourced logistics for part, or all of their supply chain management functions. Third party logistics providers specialize in integrated operation, warehousing and transportation services that can be scaled and customized to customers' needs based on market conditions and the demands and delivery service requirements for their products and materials. Often, these services go beyond logistics and included value-added services related to the production or procurement of goods, i.e., services that integrate parts of the supply chain. Then the provider is called third-party supply chain management provider (3PSCM) or supply chain management service provider (SCMSP). Agility, Panalpina, Fedex and DHL are examples of 3PL providers. (Wikipedia, www.inboundlogistics.com/cms/top-100-3pls/)

Road Feeder Services (RFS) is a service offered by a scheduled cargo operator to move its cargo to and from the aircraft and/or terminal by road service. It allows a carrier to offer services to a city to which it does not fly aircraft. (http://www.encyclo.co.uk/define/Road%20feeder%20service) Freight Forwarders carry cargo of more than 75 kg and up to anything that fits in an aircraft. Amongst the most eminent forwarders are Kuehne + Nagel, DB Schenker, DHL Global Forwarding, DSV, Geodis and Panalpina.

Customs brokers clear the goods through customs for importers and exporters. This encompasses the preparation of documents and/or electronic submissions, the calculation and payment of taxes, duties and excises. Customs brokers are employed by or affiliated with freight forwarders, independent businesses, or shipping lines, importers, exporters, trade authorities, and customs brokerage firms.

History of air cargo
(http://air-cargo-how-it-works.blogspot.de/p/history-of-air-cargo-and-air-mail.html) The first cargo flight occurred on the 7th November 1910 in the USA, between Dayton and Columbus, Ohio. It was the first “cargo only” flight only for the transport of goods; the first flight commissioned by a client – the first charter and the first example of multimodal air transport, because the pieces of silk were transported by car from Columbus aerodrome to the store. (p. 24 History of Air Cargo)

In the 20s air freight developed fast because multiple companies acknowledged that aircraft could move high value, low volume consignments much more quickly than the railroads and shipping companies.

The first scheduled flight from London to Paris in 1919 had only one passenger and carried leather for a shoe manufacturer and grouse for a restaurant. Cinema films were also a frequent consignment, original news first carried to a central location to make copies and then distributed by air throughout Europe for release in cinemas. (p.16-17) In 1945-1955 Cargo services were growing too and the airlines simplified shipping procedures and formalities in a similar way as passenger travel. IATA (International Air Transport Association) was founded in 1945 and ICAO (International Civil Aviation Organization) was created in 1947. The standard IATA Air Waybill was developed as the basic airline document for the movement of air cargo.

In the first decade following the Second World War there was a complete embargo on the transportation by air of toxic, corrosive or flammable goods but IATA member airlines developed standards to ensure the safe carriage of most of these dangerous goods. (p. 34)

In 1948 Berlin was jointly controlled by the Allies and Russians, although the Russians held the area surrounding the city and thus land access. This access was closed and an airlift was the only option to get urgent deliveries of food, coal and other supplies to what became West Berlin. Over 330 days to 12 May 1949 a total of 2.26m tones of cargo were transported by air to Berlin, an average of 6,800 tones a day, 80% by the US and 20% by the UK. Almost three-quarters of the payload was coal, vital in heating the city especially over the winter period. Only three runways were available and techniques were developed for efficient loading, unloading and air traffic control. (Moving Boxes by Air. The Economics of International Air Cargo, Peter S. Morrell)

Cargo emerged as a solid pillar of the industry in 1990s. For much of the first five post-war decades it has been seen as a secondary activity by most carriers, although there had always been specialist cargo airlines that saw the potential.

The catalysts for the renewed growth in the sector were the express parcel carriers, typified by FedEx, DHL, TNT and UPS, and changes in practices in the manufacturing sector. In 1992 Federal Express sent software on computer disks to thousands of customers, allowing them to track shipments from their own workstations. Manufacturers of finished products were increasingly reporting to “just in time” procurement of components and sub-systems, bringing them in when needed rather than storing them against anticipated demand. In addition, manufacturing was spreading to the developing countries, notably in Asia. The freighter aircraft combined speed and long-distance capability to make “just in time” useful.

During the 1990s, the growth of air traffic outstripped that of passengers. A number of airlines created separate subsidiaries to carry out their cargo activities. New programs, such as the Cargo 2000 quality management system were created to benefit the sector. (IATA Wings for the World since 1945 (2005)) After the September 11 attacks in 2001, President George W. Bush announced the creation of the Office of Homeland Security (OHS) to coordinate "homeland security" efforts, leading a.o. to measures to secure airline and air cargo processes worldwide.

On January 1, 2012, the EU ETS came into effect, placing a cap on airline emissions on flights directed to the European Union. IATA and other industry groups have been pushing back against the new rule, asking for an ICAO-provided solution instead.