| Summary |
Patty Liao, 2006.06
Department of Transportation Technology and Management
National Chiao Tung University
With the trend of world trade and free competition, many international industries deliver their goods by air transportation so as to improve their competition after considering shipping distance, time and quality. Taiwan took part in the World Trade Organization in 2001 to increase its competition in the world. Moreover, the structure of industries in Taiwan has been changing from labor intensive to technical intensive while many firms have moved their plants to Mainland China recently. World Air Cargo Forecast 2004/2005 by Boeing shows that the demand of air cargo will be increased up to three times in the future 20 years with an average annual growth rate of 6.2%. Many evidences indicate the importance of air freight.
Past studies merely applied the discrete choice model on air carrier choice or directly analyzed the aggregate demand. Little research incorporated the demand-supply interaction into air routes and frequencies programming. This study assumes shippers in specific industry choose air cargo carrier by minimizing the total logistics cost. This study then constructs a demand model to examine how the characters of products, the urgency, shipping fare, inventory cost, shipping time and distance affect international firms?choices on air carriers. Grey model is used to estimate the air freight demand of each industry.
Considering the changes in industrial structure, this study forecasts the air cargo demands on different routes for various firms in different industries. In addition, a supply model is constructed to determinate route frequencies and the unit basic shipping charge for air carriers with demand-supply interaction.
A case study is presented to illustrate the application of the proposed model using data available from C.K.S international airport and industrial economics data base in Taiwan. The results show that shippers with the shorter delivery distance put more emphasis on shipping charge. However, they will prefer choosing the air cargo carrier which offers more frequencies when their product value is high. Since the product value of goods transported from Taipei to Anchorage in US is high, therefore, shippers on this route usually emphasize on the inventory cost and choose high-frequency air cargo firms. The predicted demand using the proposed model is shown to be more accurate than those without considering the changes in industrial structure. Moreover, the proposed model is demonstrated to yield more profit than the model that does not consider demand-supply interactions. Consequently, the results of this study not only indicate that the route frequency programming model for air cargo carriers with demand-supply interaction is practicable, but also provide decision-support tools that forecast the air freight demand and profit as well as determine route frequencies and unit basic shipping charge for air cargo carriers. |
