05/11/2020 5 Best Practices in Air Freight Logistics - Invensis Technologies

5 Best Practices in Air Freight Logistics

By Gopinadh Gulipalli, Operations Manager – DPA, Logistics and Payment Solutions, Invensis Technologies - April 13, 2016

5 Best Practices in Air Freight Logistics

In the current business landscape, a large number of business enterprises are

increasingly implementing global sourcing especially from low-cost countries. This
sourcing strategy has helped many enterprises across a plethora of industries to achieve
cost savings. But these bene ts are usually offset by the numerous complexities
associated with the management of global logistics.  The effect of rise in transportation
charges due to rising fuel prices, imbalances in transportation capacity and
fundamental costs involved in long distance ow of goods can be mitigated through
smart planning.

According to IATA, close to 9% of airlines revenue is generated by air cargo and is double
the revenue obtained from rst class segment. The global movement of goods involves
multiple handoffs including numerous customs and port authorities, carriers and
consolidators which drastically increase the probability of unexpected events. Severe
port and customs congestion across North America and Europe are caused due to
growing import volumes, especially from Asia, as well as security concerns. An ef cient
air freight logistics can help business enterprises save money through lesser factory
processing times, faster client deliveries and exceptional inventory management.
Business enterprises can drastically improve operational performance by following the
best practices in air freight logistics.

Here are the Best Practices in Air Freight Logistics:

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05/11/2020 5 Best Practices in Air Freight Logistics - Invensis Technologies

1. Partner with the Most Reliable Carriers: 

Table of Contents [hide]

1 Partner with the Most Reliable Carriers: 

2 Manage Air Freight Costs: 
3 Use Document Digitization and Technology to Improve Performance: 
4 Improving Inventory Accuracy: 
5 Regulatory Compliance: 

A large percentage of air cargo around the world is managed through freight
intermediaries. Therefore a robust relationship between business enterprises and air
cargo providers is extremely important. The high importance given to timely delivery
of goods around the world means that air freight providers are nancially secure and
have a stable workforce. An airline’s brand and operational capabilities can be
severely damaged by unhappy employees. A service failure is unacceptable as goods
that are transported might have perishable cargo.

Sending goods from one international destination to another involves a multitude of

carriers, legalities and requirements and therefore business enterprises must partner
up with freight intermediaries only after making a check-list which makes sure that
they meet the enterprise’s speci c needs. The air freight provider must protect the
enterprise’s brand as well. When launching a new product or while entering a new
market, enterprises must choose a freight provider who can ensure proper
management of licenses. Slow response to custom of cials and badly calculated
taxes are some of the pitfalls of air freight providers but addressing these concerns
can add signi cant value to their services.

2. Manage Air Freight Costs: 

The various cost factors involved in air freight are surcharges and fees, movement
rates and fuel and security charges. Only few of the charges involved in most
shipments are controllable. The ever increasing fuel price, due to both demand and
geopolitical factors, is the number one issue faced by air cargo industry. Years ago,
fuel formed only a small part of air cargo provider’s direct operating costs but today,
with bigger planes a larger catalogue of goods being transported, fuel represents a
bigger percentage of overall operating costs.

Research conducted by the International Air Transport Association (IATA) has

revealed that container air cargo volume has decreased from 3.1% in 2000 to 1.7% in
2013. Costs can be managed effectively by using a network based approach to
sourcing goods. In addition, implementation of better and streamlined processes can
also provide a way to control costs. This would include outsourcing of non-core tasks.
For sourcing global airfreight capacity successfully, commitment, participation,
alignment and willingness to take sound decisions for the betterment of the
enterprise from all the stakeholders are a must. In a market where cost of providing
service is quite expensive, air freight spending has to be managed effectively.

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3. Use Document Digitization and Technology to Improve

Performance: 
Business enterprises need to effectively manage logistics operations to ensure
business success. This can be achieved by enabling measures which enable
enhanced document processing ef ciency. Digitization of documents so as to enable
them to be stored, retrieved and transferred safely and securely is a major way to
boost logistics operational ef ciency. Incorporation of technology would enable
business enterprises to avail information in real time and effortlessly coordinate
activities to manage the timely delivery of the goods.

Integrating technology with various operations can provide a competitive advantage

to the business enterprise by reducing cycle time and the implementation of cross-
functional processes. Implementation of data quality management approaches
would boost the accuracy and enhance business performance. Increased low cost
sourcing and rising sales to customers situated in different countries have pushed
enterprises to come up with innovative methods to manage costs, uncertainties and
complexities of moving products across borders. Operational performance and
customer service can be improved by nding the best possible combination of
carriers, routes and modes.

4. Improving Inventory Accuracy: 

Inventory is one of business enterprise’s largest physical assets. Not tracking
inventory can spell disaster for the enterprise’s nances. Not tracking inventory
properly can result in bad consequences such as shortages and surpluses, employee
theft and poor customer service. The challenge faced by various business enterprises
is achieving inventory accuracy. Out-of-stock items cause huge losses to the pro t
but the bottom line is also impacted by inventory storage and transportation costs.

Business enterprise can adopt inventory quality programs such as ISO, Six Sigma,
lean manufacturing and Total Quality Management in addition to making sure that
everyone in the enterprise supports and uses the program. A ‘perfect order’ metric
must be created and measured from the exact point of origin to its nal destination.
This allows the business enterprise to track the performance of the inventory across
the entire network so that the accuracy can be improved throughout. These
successes must be duplicated and the improvement strategies must be shared so
that all areas of the enterprise can bene t.

5. Regulatory Compliance: 
A de facto part of international logistics is the need to declare the goods with the
respective governments of the country for safety, security and commercial reasons.
Regulatory compliance must be electronically integrated with logistics operations,
failing which can lead to costly nes and slower performance. As different countries
have different rules and methods of paper work related to goods as well as
transportation modes and types such as export, import, customs declaration and in-
transit, an in-depth understanding of local requirements is extremely necessary.

The rising challenge of countering global terrorism has heightened the security
consciousness of countries across their various entry points which have presented
business enterprises with myriad challenges when it comes to clearing goods at their
international borders or at the customs inspection at the airports. Failing to comply
with customs and security requirements can cost business enterprises serious time
and money.

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When it comes to logistics, time is of the essence. Customers want the products that
they order as soon as possible irrespective of which part of the world they stay in. Air
freight logistics has made this easier but business enterprises still face many challenges
which can be overcome by following few best practices. Business enterprises can
achieve process ef ciency by outsourcing to an expert Air Freight Logistics service
provider. People all around the world have become accustomed to receiving goods just
with the click of a button without having a clear understanding of the myriad processes
that lies beneath. In domestic markets, logistics ef ciency is easy to achieve but it is the
complete opposite when it comes to international logistics.

Read Also Related Articles:

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3 Business Process Outsourcing – More a Friend Than a Foe

For More Information On How Invensis Technologies Can Accelerate Your Logistics
Business Through Our Air Freight Logistics BPO Outsourcing Services, Please
Contact Our Team On US +1-302-261-9036; UK +44-203-411-0183; AUS +61-3-8820-
5183; IND +91-80-4115-5233; Or Write To Us At Sales {At} Invensis {Dot} Net.

Last Updated on July 9, 2020

Gopinadh Gulipalli, Operations Manager – DPA, Logistics and Payment Solutions, Invensis
Technologies
https://www.invensis.net

Gopinadh brings 10+ years of experience in the outsourcing/off-shoring domain, and has effectively handled data
capture, document management, exception management, payment processing, contract management, and audit
and analysis for companies in various verticals. He is also pro cient in the ef cient delivery of insurance BPO services
for clients in the sector. For more information on how Invensis’ services can add value to your business, please
contact -- sales {at} Invensis {dot} net today.

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