MD-900 EXPLORER UTILITY
HELICOPTER (NOTAR)
.CARGO DELIVERY
TO OIL RIGS, REMOTE
DRILLING SITES
. CORPORATE DELIVERY
OF HIGH PRIORITY
DATA, PACKAGES,
PARTS
. SMALL PACKAGE
DELIVERY WAS A
DESIGN CONSIDER-
ATION
MD-900 CARGO CAPACITY
FEDEX LD-3s AWAITING
LOADING
FEDEX PARETO ANALYSIS
OF “DELIVERY FAILURES”
? PERCENT OF PACKAGES NOT BEING
DELIVERED BY “10 AM NEXT DAY” WAS
ANALYZED (e.g. 1 1/2% )
? EACH FACTOR ANALYZED ( WRONG
? ZIPCODE, ROUTING MISTAKES, LOST
PACKAGES, ETC.
? A FEDEX V.P. WAS ASSIGNED TO
ELIMINATE EACH FAILURE CAUSE
?THE “SEE THROUGH” CONTAINER WAS
THE SOLUTION TO SMALL PACKAGES
“LOST” IN THE BOTTOM OF CONTAINERS!!
“SEE-THROUGH”
CONTAINERS
FEDEX “VIRTUAL
INVENTORY SYSTEM”
?PIONEERED SOFTWARETO PROVIDE
“SEAMLESS” INTERFACE FROM:
? PRODUCT DESIGN
? ORDER PLACEMENT
? RAW MATERIAL P/U & DELIVERY
? FINISHED PRODUCT PICK-UP &
? DELIVERY TO END CUSTOMER
FEDEX PROVIDES ALL PICK-UPS AND
DELIVERIES WORLD-WIDE
COMPANY CAN OPERATE WITH ZERO INVENTORY!!!
.
FEDEX: SUPPLY CHAIN
SOLUTIONS
? PROVIDE WAREHOUSING AT
MEMPHIS FOR CUSTOMERS
WANTING TO OFFER 1 or 2 DAY
DELIVERY OF CRITICAL ITEMS
WORLD-WIDE (CATERPILLER TRACTOR)
? OFFER CUSTOMS BROKERAGE,
INTERNATIONAL OCEAN FREIGHT
FORWARDING, TRADE FACILITATION
WHERE IS THE MARKET
FOR AIR CARGO
EXPECTED TO GO?
AVERAGE FREIGHT
REVENUE PER TON MILE
0
10
20
30
40
50
60
70
80
90
BARGE
RAIL
TRUCK
AIR CARGO
(DOMESTIC)
OIL PIPELINE
CENTS
PER
TON-MILE
SOURCE: U.S. DEPARTMENT OF TRANSPORTATION, BUREAU OF TRANSPORTATION STATISTICS, 1985-1999; “TRANSPORTATION IN AMERICA,2000”-2001
U.S.TON-MILES OF FREIGHT
0
200
400
600
800
1000
1200
1400
1600
AIR CARGO
TRUCK
RAIL
WATER
(COASTAL)
WATER
(LAKE/RIVER
OIL PIPELINE
BILLIONS
OF
TON-MILES
SOURCE: NATIONAL TRANSPORTATION STATISTICS, U.S. GOVERNMENT, BUREAU OF TRANSPORTATION STATISTICS, 2002
AVERAGE LENGTH OF HAUL
DOMESTIC FREIGHT
0
200
400
600
800
1000
1200
1400
AIR CARGO
TRUCK
RAIL
WATER
(COASTAL)
WATER(
LAKE/RIVER)
OIL PIPELINE
STATUTE
MILES
SOURCE: “TRANSPORTATION IN AMERICA-2000”, 2001
TOTAL U.S. FREIGHT
EXPENDITURES
0
5
10
15
20
25
30
35
40
AIR CARGO
RAIL
BARGE
OIL PIPELINE
DOLLARS
(BILLIONS)
NOTES: 1.INCLUDES INFRASTRUCTURE COSTS, TAXES, SUBSIDIES, AMTRAK
SOURCE: “TRANSPORTATIN IN AMERICA-2000”, 2001
IATA INTERNATIONAL AIR
FREIGHT FORECASTS
INTERNATIONAL AIR
CARGO FORECAST
IATA DATA 2001
ICAO AIR CARGO FORECAST
FOR THE YEAR 2010
WORLDWIDE
ACTUAL ACTUAL FORECAST AVERAGE
GROWTH
RATE
1989 1999 2010 1989-
1999
1999-
2010
FREIGHT
TONNE –
KM -
MILLIONS
57,215 108,043 202,650 6.6% 6.0%
NOTE: EXCLUDES CIS
SOURCE:
ICAO FORECAST
(2002)
ICAO REGIONAL FORECAST OF AIR
CARGO FOR 2010
(FREIGHT TONNE –KILOMETRES IN MILLIONS)
1989 1999
FORECAST
2010
RATE 0F
GROWTH
1989-1999
RATE OF
GROWTH
1999-2010
AFRICA
1,176 19,693 3440 5.3% 5.0%
ASIA-
PACIFIC
15,634 37,564 83,000 9.2% 7.5%
EUROPE
19,246 31,193 52,120 4.9% 4.5%
LATIN
AMERICA
2626 4221 6950 4.9% 4.5%
NORTH
AMERICA
SOURCE:
ICAO 2010 FORECAST
15,962 29,028 51,000 6.2% 5.0%
OUTLOOK FOR AIR CARGO
? WORLD AIRLINE PAX TRAFFIC FORECAST TO
GROW 1999-2010 @ 4.5%
? WORLD AIR FREIGHT GROWTH 1999-2010
FORECAST @ 6.0%
. ASIA-PACIFIC REGION EXPECTED TO DOMINATE
AIR FREIGHT GROWTH MARKET
. UNIT COSTS ( OPERATING COST PER AVAILABLE
TONNE-KILOMETERS) (ATK) DECLINED AT AN
AVERAGE ANNUAL RATE OF 3.0% FOR PERIOD
1960-1999)
LARGER, MORE EFFICIENT FREIGHTERS ARE
MAKING AIR FREIGHT MORE COMPETITIVE!
CONCLUSIONS
? AIR CARGO MARKET IS TIED TO WORLD
GDP; ALMOST A LEADING ECONOMIC
INDICATOR
?USEDPAX AIRCRAFT CONVERTED TO
FREIGHTERS ARE COST-EFFECTIVE!
? CORPORATE FOCUS ON “LEAN” HAS
DRIVEN INTERNATIONAL AIR CARGO
GROWTH
. AIR CARGO IS RAPIDLY GROWING NICHE IN
TOTAL CARGO MARKET!!!