16886-Feb3,2004 Commercial drivers Globalization trends Longer distances between producers and consumers Emerging markets, e.g. China, South America, Africa Lean manufacturing Focus on to eliminate waste, e.g. JIT Faster response to market demands Air freight operators looking for new markets Most transoceanic freight shipped by surface Gap in capability-"middle market Ship is inexpensive but takes 18-30 days Air is expensive but takes only 3-6 days Operating economics drive Increased capacity per air freighter Reduced crew and fuel costs16.886 - Feb 3, 2004 Commercial Drivers • Globalization trends – Longer distances between producers and consumers – Emerging markets, e.g. China, South America, Africa • Lean manufacturing – Focus on “flow” to eliminate waste, e.g. JIT – Faster response to market demands • Air freight operators looking for new markets – Most transoceanic freight shipped by surface – Gap in capability- “middle market” • Ship is inexpensive but takes 18-30 days • Air is expensive but takes only 3-6 days • Operating economics drive – Increased capacity per air freighter – Reduced crew and fuel costs