Cargo Hubs- Future of Logistics & Distribution

Posted in Operations & IT Articles, Total Reads: 372 , Published on 17 June 2017
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Businesses all over the world are growing. The purchasing power of people is increasing which is driving the growth in demand for goods. Also, apart from the old school brick and mortar business, the last decade has seen a huge boom in ecommerce or online business. People sitting at home want goods, accessories, products etc to be delivered right at their doorstep. The growth of businesses, and especially ecommerce is driving the growth of logistics. Companies use rail and road as efficient & cheap ways to transport goods. But airline logistics is set to be an important aspect of businesses, which would lead to creation of cargo hubs.

Cargo hubs in aviation are basically centrally located airports which cater to cargo planes. They act as a hub in a hub and spoke model. Cargo hubs are primarily identified on the basis of its geography and close proximity of as many business relevant locations as possible. The cargo hub provides warehouses for storage, areas of loading - unloading, ample parking for trucks and good connectivity to all nearby places.


Image: pixabay

 

The current market scenario demands speed to market when it comes to delivery of products and goods. The faster the supply chain in an organization, more is the speed of business delivery and more is the customer satisfaction. Cargo airlines provides the quickest way to deliver goods from one part of the country or world to another. However, the overall process of supply chain management can be refined and fine tuned with the presence of cargo hubs at centrally located areas.

 

Some of the basic essential requirements of a having a good cargo hub are enlisted below:

1.Strong infrastructure-

Areas which can provide robust infrastructure are preferred for a cargo hub. It should cater to heavy air traffic, should have sufficient storages/ warehouses, provide space for offices etc

2.Air connectivity-

Centrally located places having good and simple air connectivity is important. Places having good airports, skilled airport staff etc can boost the business at a cargo hub compared to a small airport

3.Proximity to manufacturers-

Any cargo hub which is closer to a factory or producer would save time, reduce cost and enhance efficiency. Hence, geographic presence of cargo hubs becomes critical

4.Multiple connectivity through routes-

A centrally located cargo hub would ensure that there are rail and road routes in all directions. This would ease out congestion as trucks and trains would travel in all directions rather than being forced on a single route

5.Easy terrain-

Areas which are prone to heavy rainfall, mountain areas, dry areas etc can be a cause of concern as they would disrupt ground processes and affect the overall supply chain management. Hence, for a cargo hub to be successful, a plain area with accessibility to water and electricity becomes critical.

 

All these factors become important while identifying a centrally located cargo hub. Such a place can be boon for manufacturers and traders as reduction in cost and time would directly increase revenue and profits. Apart from that, cargo hubs would ensure prosperity of the location where it gets set up. It would lead to creation of logistical hubs, warehouses etc which would generate employment and skilled workforce. All this would lead to creation of wealth, which would eventually percolate down to the local businesses and people.

 

There are several benefits of having a wonderfully located air cargo hub-

1.Reduction of inventory costs

2.Quick turn around time

3.Simplification of supply chain and order processes

4.Eradication of intermediary costs

All these put together help to increase business efficiency, increase margins and there by generates more profit for companies.

 

Industries which prefer airport transfer are mostly pharmaceuticals, fmcg providing perishable food items, gems & jewellery, frozen food items etc. Since these goods are precious or have a small shelf life, it becomes important that they reach the customers well on time. Also, with the expectation of people on having quick deliveries for online shopping, the opportunity in the field of airline logistics is tremendous.

 

The world of logistics and distribution is changing rapidly. The quicker the supply chain, the faster the business processes and the happier the customer is. Airlines are the fastest way to transport goods from source to destination. But all these can be greatly influenced by the presence of goods cargo hubs, which ultimately would become the future of logistics and distribution in supply chain management.


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