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aviainform | Rate Index Development |
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| The aviainform Rate Index Development program has been designed in close cooperation with major airfreight shippers. From the various projects we understood the necessity of such companies to reduce significant costs from administration of contracts. At the same time they’ve been seeking for new ways to find out whether their contract framework was benchmarked “best in class” or whether a contract must be renewed. |
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Putting out a new Request for Quotation (RFQ) can be a major undertaking within a globally operating manufacturer of goods and it will take some time for the logistics service provider to fully understand their operational requirements. From a major computer manufacturer we have learned over the years that some of their airfreight is less time-sensitive than other components, which “must ride” at almost any price. However, shipping several ten thousand tons of air cargo mainly from Asia to Europe or North America is a multi-million business where pricing and even the slightest changes has a huge impact to budgets. But not only costs rather than access to capacity can become an issue: the relocation of a factory from the Chinese coast to an inland city may significantly reduce labour costs. It may also significantly reduce your access to capacity and competitive pricing. For this purpose, we have jointly developed a periodical analysis and reporting to better manage the logistical challenges.
Similar issues but a different industry: a major carmaker frequently moves goods between Latin America and Europe. For them it is most important to understand seasonality, as capacity on full freighters has been always an issue in the past. For this purpose we have jointly developed an outlook, involving all three parties: capacity providers, forwarder and the manufacturer.
Our customers typically use our Rate Index Development program for the purpose to sign long-term contract with their (forwarding) suppliers for periods of 2 or even more years. Because of a more stable volume projection the forwarder can then sign a better deal with the selected air carrier(s) and all parties will benefit from a higher reliability and more attractive pricing. |
Requirements - Shipper / Manufacturer
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Benefits - Forwarder / Cargo Agent |
Benefits - Air Carrier / Capacity Provider |
| Requires regular market rates update |
Benefit from increased transparency; may adjust rates within a market corridor |
Air carrier will benefit from split publication of net sales rates and surcharges. |
| Wishes to avoid annual audits |
Significant costs savings; higher customer loyalty; higher margins possible |
Improved volume flow planning; better utilization of flilghts |
| Wishes to sign long-term contracts |
Increased procurement power with air carriers and capacity providers |
Significant network planning improvement; higher volume balance; better costs structure. |
| Wishes automatically adjust buying rates |
Yes (within a target corridor); can be done by individual Origin & Destination |
Yes (within a target corridor); can be done by individual Origin & Destination |
| Requires flexible and steady capacity access |
Increases own know-how from additional information provided by aviainform |
Can fully depend on forwarder's agreement as shipper guarantees minimum volumes. |
| Requires dependable planning advice |
Can deliver highly reliable market data plus own network capabilities for this excercise |
Better network planning because of improved demand know-how. |
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Like the above?
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For further references you may also want to see what’s inside the Semi-Annual Market Report. This periodical contains relevant information for air cargo decision makers with manufacturers of goods or frequent airfreight shippers. It provides a comprehensive picture of airport constraints, capacity providers operating on relevant O&D’s and general industry topics of interest. The S emi-Annual Market Report appears after the end of an air schedule period two times per year.
We have prepared an example for you to download. Please register with us first to obtain a full copy. And for further questions, please don’t hesitate to get in touch with us at any time. |
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