23.08.2011 16:39

Shrinking global logistics

Product lifecycles are short these days, and people expect to get what they want instantly. The world is as big as it's always been, but, thanks to various new offerings by logistics service providers, it has shrunk logistically. Companies involved in international business make use of different modes of transportation – via ocean, road, rail and air.

A continuing need for logistics

Crises come and go, but there is always a need for effective logistics solutions. We at Finnair believe that air cargo is an integral part of an efficient logistic chain, and could be used even more to achieve better results.

Air cargo is often part of the supply chain of dynamic, highly price-competitive industries such as consumer electronics, fashion and fresh produce. Based on our experience and discussions with our partners, companies faced with low margins, short product life cycles and unpredictable product demand need to track the various components of their inventory-driven costs. This includes companies selling perishable or seasonal products.

Without appropriate performance metrics that help visualise the magnitude of their supply chain problems and prompt them to take action, these firms will simply not know if they are wasting hefty sums of money. According to our experience and industry specialists, air cargo fits perfectly into the order-driven business model, which is sometimes time-consuming to build if not readily available. When core processes are streamlined according to customers’ needs and air cargo is used as a primary mode of transport, customers receive their regular orders anywhere in the world within one week.

How shippers benefit from air cargo

As a result of our close collaboration with forwarding agents, Finnair has had a chance to be part of a re-engineered value chain for their customers. We thus encourage companies to develop supply chains according to customer needs and, at the same time, invest less in logistics costs. Air cargo can achieve this goal when it is used to support logistics needs. Re-engineering knowledge and expertise in logistics should be included on company agendas more often.