The air cargo industry continues to face challenges of sustainability, profitability and customer satisfaction
While speed is the number one selling point of air cargo from the shippers’ point of view, there is an increased focus on greater reliability and predictability. Changes are needed in the industry to address evolving expectations and to capitalize on e-commerce growth: end-to-end track and trace, reliability in delivery time and smooth cross-border operations to mention just a few. Competition is stronger than ever with other transport modes, such as shipping and rail, offering new products and customers looking at intermodal transport options to balance costs and speed.
How should air carriers and shippers respond?
Overall, the air freight industry has been slow to adapt to an increasingly digital world that demands better transparency, speed and efficiency. As major shifts continue to take place in consumer, lifestyle, technology and mobility, the entire transportation industry needs to transform. This is particularly true of air freight where, each day, millions of pieces of paper airway bill are exchanged across the supply chain. This increases the chance of error, reducing the efficiency of the process and causing customers and partners numerous pain points and poor quality of service.
As with other forms of transportation, carriers and shippers need to focus on intermodal transportation solutions. This will require better collaboration across the entire supply chain, between shipper and carrier and also between air, rail, road and maritime carriers.
We can help
Maine Pointe has a wealth of experience helping global shipper and carrier CEOs rapidly optimize distribution networks to release cash, drive out costs and enable growth.
What Maine Pointe Achieves
Driving synergies and improvements across five business units for one of the world's leading home décor companies with products distributed through national retailers and mass merchandisers in the US and Europe.
What we did
- Addressed direct (product) and indirect (air freight) categories
- Identified the total addressable spend of hundreds of millions of dollars and prioritized all cost saving opportunities
- Implemented a formal strategic sourcing approach
- Revised and improved product specifications across all categories
- Delivered on-the-ground training for all strategic sourcing team members
- Delivered an 18% reduction in air freight within eight weeks
- Delivered 6% direct materials cost reduction and identified 6% additional reduction within 12 months
- Identified a new revenue opportunity that will deliver 4-6% improvement in revenue
- Consolidated five functions into one high-performing procurement function
- ROI of 4:1 in year one, leading to 6:1 in year two
Delivering an award-winning aviation cost reduction project for a major integrated energy company.
What we did
- Focused on reducing the number of charters and optimized owned assets
- Worked with business units to develop a flight schedule with optimized load factor and asset utilization
- Created a state-of-the-art operations control center (OCC) for continuous monitoring and management of all aviation-related processes
- Developed an operational dashboard with key metrics and a meaningful, accurate scorecard
- Developed a system for crewing the aircraft more efficiently with better coverage
- Annualized savings of 20%
- 8% improvement on fuel efficiency and an overall fuel use reduction of 28%
- Reduction in carbon emissions equivalent to 2,173 passenger vehicles taken off the road
- Improved load factors from 39% to 55% (despite year-over-year volume being down)
- ROI 7:1
I was skeptical of the savings based on our experienced team and vendor knowledge. However, obtaining the bottom line 2 to 1 fee structure was not a problem and we achieved a number exceeding our internal forecast. When we interviewed the Maine Pointe team they stated, ‘we typically achieve the high end of the mid-point,' and our project was no exception.”
Scott Slater, Chief Executive Officer, NBG Home