MIT ICAT Drivers of Air Cargo Growth in 1990s Overall economic growth(especially world trade Historically, 2 to 2.5% increase in world trade with each 1%increase in total gDP Air freight trade has been growing even faster due to regional differences in economic growth Since 1993, average 7-10% annual growth in world air freight traffic ·G| obalization Increasingly integrated and interdependent national economies Liberalized(free) trade and reduced protectionism · Lean Inventory Strategies Reduced order-cycle times: just in time "and"make to order Less stock on hand to avoid production shutdowns, retail stockouts Air freight shortens delivery times to customerMIT ICAT MIT ICAT Drivers of Air Cargo Growth in 1990s • Overall economic growth (especially world trade) – Historically, 2 to 2.5% increase in world trade with each 1% increase in total GDP – Air freight trade has been growing even faster, due to regional differences in economic growth – Since 1993, average 7-10% annual growth in world air freight traffic • Globalization – Increasingly integrated and interdependent national economies – Liberalized (free) trade and reduced protectionism • Lean Inventory Strategies – Reduced order-cycle times: “just in time” and “make to order” – Less stock on hand to avoid production shutdowns, retail stockouts – Air freight shortens delivery times to customer