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Fundamentals of Air Cargo Service

Question:

Discuss about the Case Study of Air Cargo.

The purpose of the report is to prepare a case study on the Air cargo in the United Kingdom. The discussion elaborates around the fundamental reasons for success the success of this service. There is a comparison with another successful and an unsuccessful company. The strategies for how the company can maintain its competitive advantage is thoroughly explained. The report concludes with the notion whether this service is suitable for other companies. The notion of sustainability and its relevance to the company is also discussed in the following case study. The Air Cargo plays a significant role in the modern day supply chains. A major amount of the cargo is carried in the belly hold of the aircraft that is located underneath the passenger cabin (Schramm 2012). The Airports provide for a critical link between the air and the surface modes. In the United Kingdom airport, network approximately 2.5 million tons of freight and mail handled in the year 2014. The cargos carry goods of high value density. A few factors affect the development of the airfreight volumes in an airport. They are the location, the airport quality, airport marketing, freight forwarders, environmental restrictions and government legislation.

The discussion elaborates on the Fundamental reasons for success, Comparison to another successful and an unsuccessful company, strategies to maintain its competitive advantage, whether this service is suitable for other companies and the notion of sustainability and its relevance to the company.

The company that is responsible for Air cargo in the United Kingdom is the ‘Air and Cargo Services Ltd.’ This Company is a British privately owned international freight forwarder that was established in 1972. The company at present has eight branches respectively and is located in the United Kingdom. It has around 75 staff members. The Company receives the basis of their global reach due to the quality networks as the G.L.N; Global Logistics Network helps to specialize in the logistics industry that includes the freight forwarders. The A.O.P, the Air &Ocean Partners is also a freight-forwarding network with the principle of networking. These two-quality networks provide services to the Air and Cargo Services Ltd., which is the main cause for the success of the Company (www.aircargo.co.uk, 2017). The Company strives to expand and preserve planned alliances with the finest in-class partners. Each of the trading partners of this Company is dedicated to the provision of flexible, multi-modal and vigorous services at the market competitive rates. The reasons for success is because of the services that are cost valuable, straight or consolidated import and export services on the first flight available or deferred basis (Tang, Atkinson and Zou, 2012). They provide for local service solutions that are either generic or modified that suits the specific transportation needs of the customer.

Comparison with Other Service Providers

The Air and Cargo Services Ltd. has a wide-ranging portfolio of vigorous and reliable airfreight services that are specifically proposed to suit the every need from airport to airport through door to door. The Air and Cargo Services Ltd. is compared to the Universal Air Express Ltd (UAE), which is also a global freight forwarder, and logistics provider that offers their clients single source contact and control (Universalairexpress.co.uk, 2017). The difference lies in the factor of their capabilities for their passion for the personalized service striving to improve the supply chain solutions for their clients. This Company combines air, ocean, ground transportation and customer brokerage with a focus on the attention to detail and speed of action. The Universal Air Express Ltd. ensures that the perishable cargo arrives on time. The company guarantees that their prices cannot be beaten. They offer the cheapest prices to all the destinations across the globe. The Company is a specialist in the airfreight industry and is able to negotiate rates that the other freight forwarders are not able to do. The Company is effective to send the goods by air regardless of the weight or size. The charges for the airfreight are based on per kg rather than cu ft., which make it more advantageous in nature.

The Silverjet airways have suspended services due to shortage of funds. The passengers take a two-way journey but the air cargo is carried in only one direction ranging from production to distribution or consumption centers. This leads to an imbalance between the incoming and the outgoing cargo flows. These imbalances results in large variations in the air cargo rates according to the direction of the air traffic (Akhavan, Jafari and Fathian, 2012). The intervention from the government and the environmental impact is also an issue for the failure of this Company.

While when an aircraft is grounded the Air and Cargo Services Ltd. to expedite a return to the air has a specialized and dedicated team that is based at the Heathrow facility, which is on call twenty-four hours per day, seven days per week.  From the small, localized picking and packing services to full supply chain solutions, they provide generic local service solutions to meet the logistics needs of their clients.

To maintain the competitive advantage of the company a basic financial planning is necessary. There is display of the powerful business strategies but they are seldom formalized. There has to a knowledge about their own cost formation so that they can estimate the impact of the services or the marketing change (Hitt, Ireland and Hoskisson, 2012). The management should confront the long-term implications of decisions and give attention to the potential business impact of the discernible existing trends before the effects are visible in the current income standards. The resource allocation should be both dynamic and creative. There should be new ways to define and satisfy customer needs. There should be strategic business units or organizational entities that can exercise effective control over the factors affecting their business. This concept of Strategic Business unit recognizes two distinct strategic levels that are the corporate decisions, which affect the shape and direction of the enterprise as a whole, and the various business unit decisions that affect the individual Strategic Business unit operating in its own environment. The strategic management is also necessary to maintain the competitive advantage. This comprises of a planning framework, which cuts across the boundaries of the organization and aids strategic decision making about the customer groups and the resources. The planning process is also required to stimulate entrepreneurial thinking (Hill, Jones and Schilling, 2014). Lastly, a corporate system is necessary to reinforce managers for the commitment to the strategy of the company. The product market planning, business unit planning, shared resource planning, shared concern planning and the corporate level planning are the important steps to be followed to maintain the competitive advantage (Armstrong et al., 2015). There has to be a stress on the competitiveness by focusing on the theme. . The value of  the teamwork that leads to the task-oriented organizational flexibility then the entrepreneurial drive, the commitment to make things take place, open communication and not preservation of confidentiality. There should be a shared belief that this enterprise can create a future of its own without being affected by the environmental change. Being customer centric is also a strategy that may be followed to keep up the competitive advantage. The awareness is how the customer feels at each stage in the process. The company should offer services to more clients. The large number of customers can help to prevent a competitor from gaining access to the market as the customers are already using the service (Huang and Sarigöllü, 2014). The Company should try to benefit from the overall market growth and grow a share in the respective market. The factor of insurance is also an important reason to maintain the competitive advantage of the Air and Cargo Services Ltd.  The insured cargo does not require a deposit before the release at the destination. All the carriers that operate in the supply chain are under the limited liability. This helps to keep the customers interested and keep on using the services of this Company.

Strategic Planning for Competitive Advantage

Just like many other companies, the air cargo companies also need to follow several methods for their smooth functioning (Wada, Delgado and Pagnoncelli, 2017). A very good example can be the Air and Cargo service ltd. UK. Just as all other companies, the air cargo company also is concerned about the customer satisfaction issue. In this present scenario, the customers have not only increased their demands but also diversified them. They are always in search of easy and faster services. Customers nowadays prefer supply chain visibility. This, in turn, is directly related to customer satisfaction. Therefore, there was the adoption of the visibility mode in each line possible like SMS tracking, the internet etc.  Providing due importance on this aspect of customer satisfaction is of utmost importance for attaining success. Apart from this, maintaining the cost side visibility is also of immense importance. This cargo company tries its level best to keep the race of all the expenditures taking place, of a day sales outstanding metric optimization system so that there is negligible or no chance of any mistakes (Baxter, Kourousis and Wild, 2014). It is also very much important for the company to scale up quickly. Freight Forwarding or FF is a business that is largely dependent on its scale up business (Piecyk and Björklund, 2015). As it is an air cargo company, it is very much obvious that there will be some sort of pollutions or harmful emissions due to the various production purposes. Hence, it is very much important for the company to make proper arrangements to deal with such emissions and reduce it by adopting the necessary preventive measures. Methods that are used by this company are green metrics and carbon emission tracker. The company considers making investments in the infrastructure in order to keep it pollution free. Similarly, if other cargo companies like Universal Air Express Ltd., also adopts this measure of investing in the infrastructure then it will be very beneficial for them. This is because they will also be able to control pollution and this will obviously be an added advantage in their attempt of not only keeping the environment clean but also in maintaining the customer satisfaction level (Sharma et al., 2016).

 Another important factor towards success is that of introspection that is the initial stage of self-judgment and analysis, the company must be able to analyze itself that is examining the status at present in the market. In other words, the company must be able to find out its own position in the present market scenario (May et al., 2014). It is only then when they will be able to understand their strategies that they must be adopted in the near future (Lakew, 2014). Other companies also must apply this initial stage of introspection in order to analyze their own status in the present market scenario. The next step towards success is focusing on the strengths that the company can utilize in order to work over and improve their weakness and threats. Client understanding are also one key area that Air and Cargo Service Ltd. has taken very seriously, they make sure to understand the needs of their clients and cater to them accordingly because they know that every client is different and naturally their demands also will be varying in nature (Lam and Lai, 2015). This method indeed will be very beneficial for any other cargo companies as well because developing and maintaining a good client relationship is of utmost importance. Moreover, the success of a company is largely dependent on its customer base. Hence, the companies must thrive towards fulfilling all the needs and demands of their customers.

Sustainability Initiatives

The next important step towards the success of this company is servicing and marketing, if a cargo company can provide best rates and service along with rates, then no can stop that company from success. Lastly, this company over the years has also developed a good marketing team. This has made the company very popular on a global basis. Any other cargo company must also adopt these methods in order to attain success and recognition in the end, since marketing and advertising is a very crucial part in the success story of any business organization.

Sustainability in its real sense means the techniques or the tactics that a company uses for its survival in the end (Ziegler, 2015). It also takes into account the different policies undertaken by an organization for the maintenance the proper environmental balance. Each company in today's scenario must be aware of the different environmental problems that might occur due to any harmful chemicals that might be released during any of their activities.  Sustainability is also one of the main priorities of the cargo companies on a global basis.

The company must check the emission of any harmful chemicals into the atmosphere; it must also check the usage of carbon and nitrogen oxides and must start adopting eco-friendly fuels and diesel.

Conclusion

Thereby, this report is elaborated on the case study of the Air Cargo in the United Kingdom. The discussion elaborates around the fundamental reasons for success the success of this service. There is a comparison with another successful and an unsuccessful company. The strategies for how the company can maintain its competitive advantage is thoroughly explained. The report concludes with the notion whether this service is suitable for other companies. The notion of sustainability and its relevance to the company is also discussed in the following case study. The Air Cargo plays a significant role in the modern day supply chains. 

References

Akhavan, P., Jafari, M. and Fathian, M., 2012. Exploring the failure factors of implementing knowledge management system in the organizations.

Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction. Pearson Education.

Baxter, G., Kourousis, K. and Wild, G., 2014. Fire Resistant Aircraft Unit Load Devices and Fire Containment Covers: A New Development in the Global Air Cargo Industry. Journal of Aerospace Technology and Management, 6(2), pp.202-209.

Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.

Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2012. Strategic management cases: competitiveness and globalization. Cengage Learning.

Huang, R. and Sarigöllü, E., 2014. How brand awareness relates to market outcome, brand equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp. 113-132). Springer New York.

Lakew, P.A., 2014. Economies of traffic density and scale in the integrated air cargo industry: The cost structures of FedEx Express and UPS Airlines. Journal of Air Transport Management, 35, pp.29-38.

Lam, J.S.L. and Lai, K.H., 2015. Developing environmental sustainability by ANP-QFD approach: the case of shipping operations. Journal of cleaner production, 105, pp.275-284.

Lam, J.S.L. and Lai, K.H., 2015. Developing environmental sustainability by ANP-QFD approach: the case of shipping operations. Journal of cleaner production, 105, pp.275-284.

May, A., Anslow, A., Wu, Y., Ojiako, U., Chipulu, M. and Marshall, A., 2014. Prioritisation of performance indicators in air cargo demand management: an insight from industry. Supply Chain Management: An International Journal, 19(1), pp.108-113.

May, A., Anslow, A., Wu, Y., Ojiako, U., Chipulu, M. and Marshall, A., 2014. Prioritisation of performance indicators in air cargo demand management: an insight from industry. Supply Chain Management: An International Journal, 19(1), pp.108-113.

Piecyk, M.I. and Björklund, M., 2015. Logistics service providers and corporate social responsibility: sustainability reporting in the logistics industry. International Journal of Physical Distribution & Logistics Management, 45(5), pp.459-485.

Schramm, H.J., 2012. Introduction. In Freight Forwarder's Intermediary Role in Multimodal Transport Chains (pp. 1-12). Physica-Verlag HD.

Sharma, S., Malik, J., Wilson, S., Sehgal, M., Kumar, S., Zia, H., Mohan, I. and Kumar, A., 2016. Measures to Control Air Pollution in Urban Centres of India. TERI Policy Brief, pp.1-20.

Tang, L.C., Atkinson, B. and Zou, R.R., 2012. An entropy-based SWOT evaluation process of critical success factors for international market entry: A case study of a medium-sized consulting company. Construction Management and Economics, 30(10), pp.821-834.

Universalairexpress.co.uk (2017). Universal Air Express | Fast Cargo around the world. [online] Universalairexpress.co.uk. Available at: https://www.universalairexpress.co.uk/controller.php?action=Page_Home [Accessed 19 Aug. 2017].

Wada, M., Delgado, F. and Pagnoncelli, B.K., 2017. A risk averse approach to the capacity allocation problem in the airline cargo industry. Journal of the Operational Research Society, 68(6), pp.643-651. Ziegler, T., 2015. Reducing Diesel Emissions, Improving Air Quality, and Promoting Environmental Justice in Southwest Detroit.

www.aircargo.co.uk (2017). Air & Cargo Services Ltd.. [online] Aircargo.co.uk. Available at: https://www.aircargo.co.uk/ [Accessed 19 Aug. 2017].

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