Transportation Research Part E 45 (2009) 321–334
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Transportation Research Part E
journal homepage: www.elsevier.com/locate/tre
Evaluating competitiveness of air cargo express services
Yonghwa Park a,*, Jung Kyu Choi b, Anming Zhang c
Asia Paciﬁc School of Logistics, Inha University, Incheon 402-751, Republic of Korea Department of Aviation, The University of New South Wales, Sydney, Australia Sauder School of Business, University of British Columbia, Canada
a r t i c l e
i n f o
Air cargo express services
Analytic Hierarchy Process (AHP)
a b s t r a c t
This paper explores the relative importance of factors that inﬂuence the adoption of air express delivery service, and evaluates the competitiveness of air cargo express carriers in the Korean market. Our AHP analysis shows that accuracy and promptness are the two most inﬂuential factors to competitiveness, and that DHL is most competitive in the Korean market, followed by FedEx, TNT, EMS, and UPS. We further examine both the factor importance and carriers’ competitiveness from the perspective of service users. While accuracy and promptness remain as important factors, price becomes the most important factor. Finally, an importance–performance analysis for each carrier is conduced, and managerial implications are drawn. Ó 2008 Elsevier Ltd. All rights reserved.
In the contemporary globalizing economy where the small quantity production of various components and products and the associated frequent delivery are typical, economy of time has assumed immense importance for business. It is no exaggeration to say that saving time in a company’s supply chain is a key to its success in the market place. Furthermore, a growing community of e-commerce retailers have begun to rely on strategically located ‘‘fulﬁllment centers” to enable speedy and economical delivery of goods bought ‘‘on line”. In addition to delivery times, reliability (e.g., accuracy, punctuality, dependability, and safety) is required in this and other supply chain operations.1 Taken together, the speed and reliability requirements in the contemporary supply chain management has made airfreight in general, and air cargo express in particular, the fastest-growth area in the dynamic cargo sector. As the demand for ‘‘door-to-door” service rather than just ‘‘airport to airport” service as in the early years of airfreight transportation increases, the integrators – i.e., air express carriers that provide an inclusive door-to-door service – have developed and expanded quickly over the last two decades. They have taken an increasing share of the smaller cargo shipments by responding to the shippers’ need for guaranteed service with late pick-up and early delivery, and with seamless door-to-door service all over the world to support the concept of just-in-time manufacturing logistics and supply chain management. For example, they have dealt with all export and import formalities – whilst the customers would normally have to claim conventional freight from customs – and have introduced new levels of service standards via extensive use of information * Corresponding author. Tel.: +81 32 860 8231.
E-mail address: firstname.lastname@example.org (Y. Park).
To illustrate, consider various types of inventory. In-transit (or, pipeline stock) inventory is a function of transit time, so speedy delivery yields lower pipeline stock (and hence lower inventory cost). At the destination, the two primary types of inventory are cycle stock and safety stock. Cycle stock is a function of incoming shipment size. Thus, more frequent delivery of smaller shipments allows for a lower level of cycle stock. Finally, safety stock falls, other things equal, as lead time and lead time variability fall. In addition to the inventory consideration, the prompt delivery is critical...
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