Nina Chantrasmi

Worldwide Freight Carriers

Shipping lines, airlines, all-cargo air couriers, trucking firms, and railroads provide services that link shippers, ports, and consignees. Managing product supply chains and transporting goods globally involves considerable interaction across the carrier industry. During the past decade, businesses expanded sourcing of raw materials and finished goods from multiple locations around the world, and the air and ocean freight carrier industries that provide overseas services adapted their freight operations in response.

Globally, the leading all-cargo air carriers include FedEx, UPS, DHL, and TNT. Leading airlines that provide cargo services include Lufthansa, Korean Air Lines, Singapore Airlines, British Airways, and Air France (IATA 2009b). The air-freight carrier industry continued its heavy reliance on hub-and-spoke operations⁶ that allow carriers to connect several origins with multiple destinations without having all the points connected directly.

Expanded use of hub networks allowed the airlines to control fleet size and capacity while serving many markets. It also allowed them to cut operating costs and offer improved integrated cargo delivery services. Airlines that carry commercial freight in aircraft cargo holds during passenger flights continued to expand their cargo services beyond their immediate networks by forming alliances. Examples of industry alliances among the leading airlines include United- Lufthansa, Northwest-KLM, Delta-China Airlines, and American Airlines-Mexicana Airlines.

Worldwide, the leading ocean container carriers include APM-Maersk Line, Mediterranean Shipping Company, CMA CGM, Evergreen Line, and American President Lines (APL) (AXSAlphaliner 2009b). During the past decade, the ocean-shipping industry continued consolidations begun in the 1990s. Carriers engaged in vessel-sharing arrangements⁷ that allowed them to serve multiple ports by connecting to larger hub seaports. These hub ports provide feeder vessel services to smaller ports and often use intermodal rail and truck carriers for deliveries to final destinations. Some of the major inter-carrier alliances, mergers, and acquisitions include Maersk and Sea-Land, Neptune Orient Line and APL, and Maersk and P&O Nedlloyd.

In April 2008, the world's three largest container lines-Danish carrier Maersk Line, Swiss carrier Mediterranean Shipping Company, and French-based CMA-CGM-started a significant vessel-sharing agreement in the Asia-North America trade lane that enables them to replace their own individual services with joint services (Maersk Line 2008). In September 2009, Maersk Line and CMA CGM merged services between the east coast of South America, Central America, and the Caribbean (Maersk Line 2009).

⁶ Hub-and-spoke operations describe a route structure in which airlines arrange flights like a wheel with all traffic moving along spokes to and from a central location-the hub. In the 1980s, most airlines changed their operations from a linear point-to-point network to a hub-and-spoke network (USDOT RITA BTS 1996).

⁷ An agreement between two or more carriers in which a number of container positions equal in space are reserved on particular vessels for each of the participant carriers. Such cooperation creates operational efficiencies that allow carriers to offer improved services.