[CHAPTER 8] PORTS AND FACILITIES

PORTS AND FACILITIES

A port is defined as the intersection of different modes of transport

REASONS FOR DISTINGUISHING BETWEEN PORTS AND FACILITIES

v  At a port there are parties other than a shipper or consignee handling the cargo.

v  Different modes of transportation come together at a port.

v  As an intersection, there are different directions in which the cargo can go.

OCEAN PORTS

An ocean port is any place where geography allowed a ship near land where it could safely load cargo.

AIRPORTS

v  It can be said that almost all major airports are run by a public agency usually a local government.

v  The groundside which is what the passengers see, including airline arrival and departure areas such as public parking, the restaurants and more.

v  While the airside is often bigger which is where the airlines operate, the baggage is handled and the cargo moved.

HOW AIRPORT EARN MONEY?

1)   Concessions

2)   Carrier fees which is landing fees

WAREHOUSING

There are two functions in a warehouse which is movement and storage of the cargo.

VALUE-ADDED SERVICES OF A WAREHOUSE

Ø  Dispatch

Ø  Freight unloading

Ø  Forklift service

Ø  Local delivery

Ø  Documentation handling

Ø  After market sales support

FREE TRADE ZONES

Free trade zone which is (FTZ) are not a port and not a warehouse.

PURPOSE OF FREE TRADE ZONE

Ø  Encourage international trade by giving some flexibility in the import rules.

Ø  Allows someone to bring something into the country and as long as it remains in the FTZ, it is not officially imported.

Ø  Some of those things are intended to assist the importer to get the cargo ready for legal import which this help the importer to do his job.

Ø  A way to create local jobs.

ADVANTAGES OF FREE TRADE ZONE

Ø  Government provides the carriers and shippers flexibility. This means without an FTZ any mistake would mean that the cargo be sent out of the country.

Ø  A good way for unstable countries to get some free and fair enterprise  which is mean a foreign companies are often shy of entering an unstable country but an FTZ is usually much safer.

REASONS OF USING FREE TRADE ZONE

1)   Delay tariffs

2)   Avoid tariffs before on shipment

3)   Processing

4)   Correct mistakes

5)   Sell

[Notes] Chapter 7 : Air Transportation

AIR TRANSPORTATION

Air transportation has been the single most significant development in logistics of this century. While other modes of transport are seeing growth resulting from increased international trade, the air cargo is experiencing exceptionally high growth. 

PRIMARY REASONS FOR THE GROWTH IN AIR CARGO:

• -      Deregulation and liberalization of the air cargo industry.
• -      Global interdependence helped by world trade agreements.
• -      International production and sales of goods and services.
• -      New inventory management concepts such as “JIT” and “ZERO” stocks.
• -      New air-eligible commodities.
• -      The vast development of high value and limited time-consumable commodities

 AIRPLANES AND AVIATION EQUIPMENT  

BELLYSPACE

§  This is the space in the belly of a passenger plane, normally used for luggage. About 60% of air cargo moves in luggage compartment. Cargo, unlike luggage, is not accompanied by the sender, more handlers, different and more documentation.

     FLEXBELLY

§  Some planes are basically passenger planes, but the interior can be adjusted to include more or less space for cargo or passengers.

      FREIGHTER

§  This is a plane used just for cargo. Often a passenger plane towards the end of its useful life is converted into a freighter. Freighter planes built just for this purpose normally would not include windows, since there is no need for windows along the body of the plane. 

      TRUCK

§  What many do not realize is that a lot of ‘air cargo’ actually goes by truck. Major airlines have been replacing their large planes with smaller planes for shorter flights. This reduces cargo space available, and thus means air cargo companies need to find a quick alternative. 

MARKETS IN AIR CARGO

  Mail – monopoly market of the official postal service in a given country 

  Express transportation – the speed of the delivery is crucial. The package is promised to be delivered at certain time.

Courier – advance and 10 times more expensive than express service and there is no need to develop tracking services.

 Freight – moves larger package that would be too expensive to be sent through air express.   

FACTORS OF AIR CARGO RATES

  Volume of traffic. – The higher the traffic volume, the cheaper it is to provide service, and thus the service is cheaper.

  Direction of traffic. – While passenger normally travels round trip, cargo does not. Many trade lanes have more traffic going one way than the reverse. 

  Value of the service. – This is determined not just by the airlines, but the needs of the customers.

  Competition. – Carriers cannot avoid the influence of other carriers in determining their rates.