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The potential of air freight in relation to British Columbia economy and trade Tapiero, Michel

Abstract

Transportation of commodities by air during the past decade has experienced the fastest growth of all modes of transport. Although a slowdown had been predicted by shippers and carriers alike, the economic recession of 1969 has had only mild effects on the air freight industry. In this study, the potential for air freight has been examined in terms of the concept of total distribution cost. The study has focused on the potential for air freight within B.C. but more particularly on B.C. external trade with Japan and on the means whereby this potential may best be realized. Cost analysis for specific commodities by air transport as compared to sea container transport illustrates the application of the Total Distribution Cost Concept. Brief mention is made of the back-haul freight problems faced by B.C.- based air carriers. Potential for air freight in the containerized commodity market is examined in the light of present and future aircraft capacity and performance, together with possible air/ surface transport coordination. The conclusions of the study are as follows : the convenience and cost savings derived from the use of air transport do not appear, as yet, to compensate for the present air transportation charges ; air-freight rate reductions may not necessarily result in increased freight volume unless the present potential is more fully exploited and coupled with at least a 30% rate reduction it is unlikely that demand for air freight services within B.C. and on trans-Pacific routes will increase dramatically in the near term. This is particularly true for eastbound traffic, both from Japan and from B.C.; however, advanced technology, lower operating costs through use of larger aircraft, widespread containerization and improved understanding of the implications of an efficient use of air freight in a given distribution system would all appear to augur well for the future of air freight.

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