Chapter 12 - International Air Transportation

Dry Lease

A lease agreement in which the owner of the aircraft provides only the airplane to the lessee, who is responsible for all other costs.

Wet Lease

A lease agreement in which the owner of the aircraft provides the airplane, insurance, maintenance, fuel and a flight crew. The lessee has to cover all other costs, such as airport fees.

freight tonne kilometer (FTK)

A unit designed to express cargo volume shipped. It is equal to the number of tonnes of cargo shipped multiplied by the number of kilometers they were shipped

Revenue Tonne Kilometer (RTK)

A unit designed to express total airline activity. It is equal to the number of tonnes of cargo, passengers, baggages, and mail shipped multiplied by the number of kilometers they were shipped

Quick-Change aircraft

Aircraft that can be converted form passenger aircraft to cargo aircraft in a few hours

Combi Aircraft

Aircraft that carries both cargo and passengers at the same time Usually split so one half is for cargo and the other is for passengers

Passenger aircraft

Aircraft that holds people and/or cargo (usually loose cargo) Cannot fly hazmat products

Air freighters

Aircraft that is dedicated for cargo. Often features a roller deck, to easily load/unload cargo

Advanced Manifest Rule

All cargo manifests must be sent to CBP at least four hours before the cargo is to arrive in the U.S. Automated targeting system is used to submit forms Some systems are in place to expedite shipping

Certified Cargo Screening Program

All cargo shipped on passenger aircraft must be 100-percent inspected prior to being loaded. Inspections must be conducted by Certified Cargo Screening Facilities. A chain-of-custody security method (maintains security of shipments throughout the supply chain)

International Civil Aviation Organization (ICAO)

An agency of the United Nations, designs and implements standards for international civil aviation practices regarding safety, security, and other operational issues.

Project cargo

Cargo that exceeds volume or weight restrictions of regular aircrafts and need special handling and carriage

Freight cost is bases on weight (actual weight) or volume ("DIM weight"). The higher of the weight or volume is used to calculate the freight cost Shippers may choose to use packaging that limits the tariff they will pay (and risk damaging their product)

Describe the elements of airfreight tariffs?

Customs-Trade Partnership Against Terrorism (C-TPAT)

Enhances existing security practices and reduces the threat of terrorism to international air shipments Air carriers in this group are required to meet minimum-security criteria to achieve certification. They must also conduct an assessment of their security practices using set criteria

Leased airfreight services

Freight can also travel in leased aircraft. Leases are contracts between the owner of the aircraft and the user, and can take multiple forms. Used by carriers to reduce their capital costs, and to satisfy short-term demand fluctuations (end-of-year volume increases).

Uses an automated targeting system that screens U.S. - bound shipments prior to their arrival to determine the level of risk they represent, using an algorithm Mandatory security inspections for all high-risk shipments Partnership with the trade community to strengthen air cargo security by giving shippers and incentive to strengthen their internal security systems

How does the TSA provide security to the air industry?

Express air services

Service that guarantees a pre-determined delivery date; the service is called "time-definite delivery," generally the next day or overnight. Examples include FedEx, UPS, DHL.

Airmail services

Service that is the origin of air freight, and still account for a small percentage (4%) of all shipments.

Scheduled airfreight services

Service where air freight is transported by airlines that operate on a regular schedule between two cities The airline can operate a passenger aircraft, in which case the cargo is placed in the belly of the airplane, or a freighter, in which case the cargo is placed on the main deck of the aircraft. On rare occasions, the freight and the passengers share space on the main deck, in an aircraft called a "combi," or combination aircraft. Regulations restrict the type of cargo that is allowed to be shipped on passenger aircraft. Advantages: Offered on a routine basis, highly reliable, and low-cost

Charter airfreight services

Services that do not operate on a regular schedule and depend on demand. They fulfill emergency shipments of large parts, or operate on seasonal traffic, such as wine, flowers, or fruits. Primarily used for: specialized or bulky cargo, large volumes of cargo during certain times of the year, destinations not on any flight schedule Usually tailored toward individual shippers needs

ACMI Lease

The owner of the aircraft provides the airplane, crew, maintenance, and insurance to the lessee. The lessee has to cover all other costs, such as fuel and airport fees. (About 5% of world cargo)

RTK and FTK

Two metrics used to measure the amount the extent to which air cargo is used

The goods do not fit into a regular freighter because there are too heavy and/or too large. Goods need to be delivered to a location not serviced by regular routes. Goods need to be delivered to an airport where the runway is sub-standard, or the cargo handling facilities are poor.

What are examples of why charter aircrafts may be used?

International aviation operates under the principle that every country has complete and exclusive sovereignty over its airspace. No scheduled international air service may operate over or into the territory of a country without specific authorization. Recent developments, such as open-skies agreements, have relaxed those restrictions. Under open skies agreements, air carriers from one country are allowed to serve any of the other country's airports.

What are some elements of international air regulations?

Passenger Freighters Combi Quick-Change Charter

What are the 5 different types of aircraft?

Airmail Express air Scheduled airfreight Charter airfreight Leased airfreight

What are the 5 different types of services offered by air transportation?

Transporation Safety Administration (TSA) Customs and Border Protection (CBP)

What are the two major agencies that regulate air cargo security in the U.S.

The weight of a shipment The volume weight of the shipment, also called "dimensional weight," that is calculated based upon the dimensions of a shipment.

What are the two ways that airlines will calculate the freight charge? (The higher of the two is used to charge)

Carbon footprint Noise pollution

What are two aspects of environmental issues and the air transportation industry?

Provides a link between shipper and destination - Contract with carriers, consolidate shipments, etc Range from full service to specialization of tasks

What does an airfreight forwarder do?

Hong Kong, China

What is the largest cargo airport in the world

Weight and volume of cargo

What is the tariff on air freight based off of?

FedEx

What is the top cargo airline?

International Air Transport Association (IATA)

Works with governments and airlines to ensure that goods move around the world as easily as if they were traveling domestically.