I. Case overview
1. Market Conditions
1) Air cargo transport by region
With regards to air cargo transport volume in 2007, the Asia-Pacific region
accounted for 39.7%, Europe 29.7% and North America 17.9% of the market.
2) Air cargo transport in Korea
Air cargo transport volume by international airlines is generally growing in
Korea. As of late 2007, of the total outbound shipments from Korea, 28.3%
shipments were transported to America, 24.9% shipments to Southeast Asia
and 17.2% to Europe.
In the meantime, during the same period, the biggest share of inbound
shipments to Korea was from Southeast Asia (28.2%) followed by China
(21.1%), America (16.7%), Japan (16.2%) and Europe (15.4%).
3) Parties to air freight service transactions
The Main parties in an air freight service transaction are the shippers,
forwarders and carriers. Generally, carriers render airfreight business
indirectly by entering into a transport contract with forwarders rather than a
direct contract with shippers. Shippers may commission air cargo carriers
directly to transport their shipments, but they prefer going through forwarders,
because airfreight-related work requires specialized know-how and experience
but takes up a negligible share of their work.
4) Types of air cargo rates
) Base rates ⅰ and other charges
Air cargo rates are the payments air cargo carriers collect for their service to
transport cargo shipments for shippers by using flights.