Management of Air Cargo

SUBMITTED TO: Ma’am Shaza Hashar

/28/21
Table of Contents

1. INTRODUCTION.............................................................................................................................3
2. TYPES OF AIR CARGO..................................................................................................................4
GENERAL CARGO................................................................................................................................4
SPECIAL CARGO..................................................................................................................................4
2.1. IMPORTANCE OF AIR CARGO.......................................................................................................4
2.2. BENEFITS OF AIR FREIGHT...........................................................................................................5
1. Air freight is the fastest transport alternative.......................................................................................5
2. Air freight shipments are highly reliable.............................................................................................5
3. Ship your goods almost anywhere with air freight...............................................................................5
4. Air freight shipments are very secure..................................................................................................5
5. Reduced costs for packaging, warehousing, and insurance..................................................................5
6. Air freight shipments are easy to track................................................................................................5
3. IMPACT OF AIR CARGO SERVICE ON ECONOMIC DEVELOPMENT..............................6
3.1. ECONOMICS BENEFITS OF AIR CARGO..............................................................................6
3.2. THE REGULATORY FRAMEWORK.......................................................................................7
4. HOW DOES AIR CARGO TRANSPORTATION AFFECT THE ECONOMY?.......................9
4.1. ROLE OF AIRCARGO TRANSPORTATION IN PAKISTAN’S GDP...........................................10
4.2. TOP FIVE BUSIEST AIR CARGO ROUTES..................................................................................11
4.3. FORECASTS OF THE INDUSTRY’S GDP AND JOBS CONTRIBUTION OVER THE NEXT 20
YEARS......................................................................................................................................................11
5. CARGO LIFTING STATISTICS OF PAKISTAN INTERNATIONAL AIRLINES (PIA)......12
5.1. Domestic stations.......................................................................................................................12
5.2. International Stations.................................................................................................................13
5.3. MAJOR TRAFFIC FLOWS BY AIRPORTS of PAKISTAN DURING THE YEAR..............14
6. CONCLUSION................................................................................................................................15

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AIR CARGO TRANSPORTATION IMPACT ON GDP OF
A COUNTRY AND ALSO CARGO LIFTING STATISTICS
OF PAKISTANI AIRLINES
ACKNOWLEDGEMENT

This project is assigned by Ma’am Shaza Hashar for the course of MANAGEMENT OF
AIR CARGO in this research we have examined air cargo transportation impact on GDP
of a country and also cargo lifting statistics of Pakistani airlines. There are 4 members in
our group
1. MANAHIL
2. RABAB
3. MAAZ BIN ABDUL MOID (9812)
4. NAFEES UR REHMAN

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1. INTRODUCTION

Air cargo means: fast shipping, reliable arrival and departure times, shipments can be sent almost
anywhere, secure and with low risk, less packaging and less need for warehousing, and cargo
possibility of being tracked. Air cargo has played an important role in the global economy, and
has carved out a niche in terms of transporting high-value, lightweight commodities. It only
represents roughly 1 percent of the overall freight movements by weight, and the demand for air
cargo is primarily constrained by the costs, as air cargo services can be up to five times the
cost of transporting the goods by road, and up to 16 times the cost of sea transport. The aviation
sector only contributes 2 percent of all anthropogenic emissions, but is projected to be 70
percent higher than 2005 levels by 2020, even if fuel efficiency improves by 2 percent per year.
The air transport industry if we talk about globally, including airlines and its supply chain, are
estimated to support US $2 billion of GDP in Pakistan. Spending by foreign tourists supports a
further US $1.3 billion of the country's GDP, totaling US $3.3 billion. Air transport in Pakistan is
forecast to grow by 184% in the next 20 years under the “current trends” scenario. This would
result in an additional 22.8 million passenger departures by 2038. If met, this increased demand
would support approximately US $9.3 billion of GDP and around 786,300 jobs.
Air Freight means moving goods which have to be transported via a plane and can refer to huge
and bulky air cargo and even air mail. Air Freight proves highly beneficial if you need to get
your goods or property transported quickly from one place to another. The main reason that
people choose this particular service is that it offers you speedy delivery and several other
benefits.
PIA Cargo is a reliable name in the shipment of commercial cargo. The name is well established.
PIA commenced cargo operations in 1974, with flights to USA, Europe, and Hong Kong on the
B-707 aircraft. PIA Cargo even has the unique distinction of introducing Pakistan's fruits to
international markets and also pioneered the exports of fresh fruits and vegetables to global
destinations, including popularizing the king of fruit Mango in markets abroad.
Operating as the air freight division of Pakistan's national carrier, PIA Cargo has achieved rapid
growth and reaches out to destinations spanning the globe through its passenger scheduled flights
& varied SPA partners.
PIA Cargo earns valuable revenue for Pakistan International Airlines and provides a massive
boost to Pakistan's wide spectrum of exports. The aggressive growth of PIA Cargo coupled with
PIA's rapidly expanding passenger operations empowers customers with a range of cutting-edge
cargo services.
In addition to offering cargo services, PIA Cargo also arranges (on demand) charter flights to lift
meat, livestock and relief goods within and outside Pakistan.

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2. TYPES OF AIR CARGO
There are two types of air cargo – general and special cargo.
GENERAL CARGO
It includes high-value goods, such as electronics, jewelry, and pharmaceuticals. Air shipping is
more expensive than shipping by sea, but due to the high margins and the fact that many
electronic goods are fragile, air freight is the most appropriate form of transport.
SPECIAL CARGO
It requires special conditions for transporting goods, such as temperature control, certain air
conditions, or protected casing (e.g., if the goods are hazardous or livestock).

2.1. IMPORTANCE OF AIR CARGO

Air cargo is a trade facilitator that contributes to global economic development and creates
millions of jobs. The global economy depends on the ability to deliver high-quality products at
competitive prices to consumers worldwide. Air cargo transports over US $6 trillion worth of
goods, accounting for approximately 35% of world trade by value.
Air cargo contributes by carrying important shipments all over the world and facilitates the
supply chain of, foodstuff, mail, automotive parts, electronics, flowers, vaccines, medical
supplies, high-value shipments like jewelry, livestock, horses, airplane parts, and many other
important shipments that support businesses and keep jobs around the globe.
The air cargo industry is highly sensitive to fuel prices and to world trade growth, and is highly
affected by economic disturbances such as the economic crisis in the late 2000s. The rises in fuel
expenses as well as the costs of meeting security requirements are also important challenges. The
industry is also limited by constrained resources such as the limited number of aircrafts and
pilots. Trade imbalances make it difficult for operators to fill available cargo space (e.g., demand
for cargo capacity from China to the United States will exceed the demand for cargo capacity
from the United States to China). The industry is also highly dependent on activities on the
ground such as cargo and warehouse handling, which will ultimately impact the demand for air
cargo services.

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 2.2. BENEFITS OF AIR FREIGHT
Air freight is key in supporting the global trade system. Each year, trillions of EUR worth of
goods are transported by air. Air freight is known to be the best transport alternative for high-
value and low-volume shipments. But are there any other reasons for using air freight? Sure,
there are. In this blog post, I share the top 6 benefits of air freight.
1. Air freight is the fastest transport alternative
Air freight is, without doubt, the fastest transport alternative compared to ocean, road, or rail
transport. Because of its speed, air freight is especially effective for shipping goods over longer
distances. Cargo aero planes generally cruise at speeds of approximately 900 kilometers per
hour. Shipping your goods by air from one continent to another often takes just a few hours.
2. Air freight shipments are highly reliable
Air freight shipments are highly reliable as airlines tend to be on top of their schedules with
dependable arrival and departure times. Even a missed flight wouldn’t cause much delay as most
air freight services run on daily schedules, often with hourly departures.
3. Ship your goods almost anywhere with air freight
The routes for sea, road, and rail freight usually involve major transportation networks, leaving
the smaller countries of the world out. Many airlines, however, have a large network of
destinations covering nearly the entire world. This means, with air freight you can ship your
goods almost anywhere.
4. Air freight shipments are very secure
As air freight is often used for high-value shipments, safety is important. However, goods
shipped by air undergo minimal handling, which makes air freight one of the safest shipping
alternatives. At the airport, safety controls over cargo are tightly managed and most goods are
cleared within a matter of hours. This reduces the risk of both damage and theft.
5. Reduced costs for packaging, warehousing, and insurance
Air shipments usually require less heavy packing compared to other shipping alternatives. Also,
the quicker transit times of air freight reduce the need for local warehousing and insurance
premiums are lower. This means you can save some money on additional packaging services and
warehousing as well as insurance costs.
6. Air freight shipments are easy to track
Tracking your air freight shipments is easy as there is always a flight number and information
about when the flight takes off and when it lands. Also, many freight forwarders provide web
applications for tracking your goods. This means you can monitor the status of your cargo from
departure to arrival to stay constantly updated.

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3. IMPACT OF AIR CARGO SERVICE ON ECONOMIC DEVELOPMENT
Air transport plays a pivotal role for small Island Developing States (SIDS), Landlocked
developing countries (LLDCs) and least developed countries (LDCs), allowing them to
overcome infrequent boat service or poor infrastructure for ground -transportation. Air cargo
service routes are regarded as regional lifelines for these areas.
3.1. ECONOMICS BENEFITS OF AIR CARGO
Air cargo transport enables nations, regardless of their geographic locations, to efficiently
connect to distant markets and globally supply chains in a speedy and reliable manner. This is
vital for implementing international business practices, including just-in-time inventory
management and build-to-order protection.
Air cargo services are a tremendous enabler for economic progress in developing countries, since
they connect markets across continents. High value electrical components and perishable
products such as foods and flowers are transported all over the world, providing steady
employment and sustainable growth to regions that benefit from such trade.
Aviation’s speed and reliability are also a key factor in the delivery of urgently needed assistance
during emergencies caused by natural disasters, famines and wars. Air drops are among the first
responses of aid agencies to stem humanitarian crises. Air cargo also plays a vital role in the
rapid delivery of medical supplies and organs of transplantation worldwide.
According to Air Transport Action Group (ATAG), the largest economic benefits of increased
air cargo connectivity lie in its impact on the long- term performance of the wider economy
through enhancement of the overall level of productivity. It opens up new market, boosts exports
and the same time increases competition and choice in the home market from foreign- based
producers.

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 3.2. THE REGULATORY FRAMEWORK
Air transport connectivity is the movement of passengers, mail and cargo involving the minimum
of transit points, which makes the trips as short as possible, with optimal users (shipper,
consignee or passenger) satisfaction, at the minimum price possible.

CONNECTIVITY
Market Airline Inter Facilitation
access Activities Modality

Optimal Optimal Optimal

use of use of use of
Airport Aircraft ANS
system

In order to optimize connectivity, a strong supporting framework is needed. This includes,

among other, market access and liberalization, optimal use of air navigation services, aircraft and
airport systems, as well as enhanced facilitation and security procedures. For the full benefits of
air connectivity to materialize and efficient airline operations are essential.
GUIDANCE

Market
PO
Fair Access Taxes
LI
compet
ition CI
ES
Supporting
Regulating Charge
MC99,
CTC Framework
s
2001

Facilitati Air
ASBU carrier
on and
s ownershi
security p and

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ICAO actively contributes to improving connectivity in several areas by fostering various
initiatives within that framework. This includes the development by ICAO also provides support
to states to implement multilateral arrangements, such as the Montreal convection 1999 (MC99)
which facilitates the use by airlines of electronics records, including electronics air waybills (e-
WAB) and the Cape Town Convection 2001 (CTC 2001), enabling the acquisition of more
modern aircraft.
Improved air connectivity is a key element to economic growth and development through air
cargo transport.

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4. HOW DOES AIR CARGO TRANSPORTATION AFFECT THE ECONOMY?

“Aviation  contributed 5.2 percent of GDP, the value- added measure of overall
U.S.  economic  activity. Considering only the direct sectors,  aviation  contributed 2.3 percent of
GDP, $850 billion in  economic  activity, and over 4 million jobs. and services used in
production, plus value added by the industry itself”
“Aviation  accounts for more than 5% of our  Gross Domestic Product, contributes $1.6 trillion
in total economic activity and supports nearly 11 million jobs.”

Air transport generates benefits to consumers and the wider economy by providing speedy
connections between cities. These virtual bridges in the air enable the economic flows of goods,
investments, people and ideas that are the fundamental drivers of economic growth.

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 4.1. ROLE OF AIRCARGO TRANSPORTATION IN PAKISTAN’S GDP

There are different ways of measuring air transport’s impact on an economy. We look at three:
the jobs and spending generated by airlines and their supply chain, the flows of trade, tourism
and investment resulting from users of all airlines serving the country, and the city pair
connections that make these flows possible. All provide a different but illuminating perspective
on the importance of air transport

Airlines, airport operators, airport on-site enterprises (restaurants and retail), aircraft
manufacturers, and air navigation service providers employ 56,000 people in Pakistan. In
addition, by buying goods and services from local suppliers the sector supported another 121,000
jobs. On top of this, the sector is estimated to support a further 70,000 jobs through the wages it
pays its employees, some or all of which are subsequently spent on consumer goods and
services. Foreign tourists arriving by air to Pakistan, who spend their money in the local
economy, are estimated to support an additional 253 thousand jobs. In total 500 thousand jobs
are supported by air transport and tourists arriving by air. US $2 billion of GDP in Pakistan.
Spending by foreign tourists supports a further US $1.3 billion of the country’s GDP, totaling
US $3.3 billion. In total, 1 percent of the country’s GDP is supported by inputs to the air
transport sector and foreign tourists arriving by air.

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 4.2. TOP FIVE BUSIEST AIR CARGO ROUTES
1. United Arab Emirates
2. Qatar
3. Saudi Arabia
4. Turkey
5. Thailand

4.3. FORECASTS OF THE INDUSTRY’S GDP AND JOBS CONTRIBUTION OVER

THE NEXT 20 YEARS
Air transport in Pakistan is forecast to grow by 184% in the next 20 years under the “current
trends” scenario. This would result in an additional 22.8 million passenger departures by 2038. If
met, this increased demand would support approximately US $9.3 billion of GDP and around
786,300 jobs.

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 5. CARGO LIFTING STATISTICS OF PAKISTAN INTERNATIONAL AIRLINES
(PIA)

PIA Cargo transports a range of commodities across Pakistan as well to a number of global
destinations
The commodities that PIA Cargo ships range from edibles such as meat, seafood, seasonal fruits,
vegetables, to textiles, paper products, laboratory/surgical equipment, cars, aircraft parts, heavy
machinery and human remains.
PIA CARGO Network
PIA's Cargo's offerings cover multiple domestic and international destinations. We operate fleet
of B777s and A320s to carry freight to different destinations:
5.1. Domestic stations
PIA currently offers cargo/freight carriage to the following domestic cities in Pakistan

Cities City code

Kadanwari KCF
Mohenjo Daro MJD
Sawan RZF
Karachi KHI
DOMESTIC DESTINATIONS

Islamabad  ISB
Lahore LHE
Peshawar PEW
Quetta UET
Faisalabad LYP
Multan MUX
Bahawalpur  BHV
Dera Ghazi Khan  DEA
Gilgit GIL
Skardu KDU
Turbat TUK
Gwadar GWD

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 5.2. International Stations
PIA currently offers cargo/freight carriage to the list of International Stations for Cargo. New &
exciting destinations are being added from time to time to offer more choices and convenience to
their partners.
Cities City codes
UK London LHR
Birmingham BHX
Manchester MAN
EUROPE Barcelona BCN
Milan MXP
Paris CDG
Oslo OSL
Copenhagen CPH
CANADA Toronto YYZ
UAE / GULF Dubai DXB
Abu Dhabi AUH
Sharjah SHJ
Najaf NJF
Doha DOH
Muscat MCT
MEDINA Jeddah JED
Dammam DMM
Riyadh RUH
Medina MED
Kabul KBL
SOUTH EAST ASIA/ FAR- Dhaka DAC
EAST Delhi DEL
Tokyo - Narita NRT
China - Beijing PEK
Kuala Lumpur KUL
Bangkok BKK

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 5.3. MAJOR TRAFFIC FLOWS BY AIRPORTS of PAKISTAN DURING THE YEAR

From July 2018 to June 2019

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6. CONCLUSION:

Freight Capacity for the 21st Century recommends development of a national policy to promote
better management and investment decisions in order to maintain and improve the capacity of
the nation's freight system. Keeping up with growth in freight transportation requires better
use of current facilities and the funding of projects with the biggest payoffs. To ensure
adequate freight capacity, Congress and federal agencies must coordinate the activities of
dozens of separately administered programs that affect the system.
This report recommends four principles to guide decisions about using, enlarging, funding, or
regulating the freight transportation system:
1. Capital improvements, such as new roads - as well as operating practices for public
facilities - should aim for the greatest usefulness considering all costs;
2. Local, state, or federal governments should be involved only when they can do the job
better than any other entity;
3. Whenever the primary benefits of a project are lower costs for the facility's users, user
fees - not government subsidies - should pay for the capital and operating costs; and
4. Appropriate choices about financing arrangements should be made at the start of a
project.

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