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Aviation History
1958
1958 - 0752.PDF
768 FLIGHT THE FUTURE OF AIR FREIGHTING . . . an average value of 60 cents/lb or more. Since these values were com-puted from gross shipping weights they are understated by varying amounts, depending on the amount of packaging. Nearly 85 per cent of the United States inbound in-transit and almost80 per cent of the outbound in-transit that was valued at 50 cents or over per pound was cleared through the New York Customs District. Morethan 55 per cent of this inbound traffic arrived from South and Central America and the Caribbean and 66.70 per cent of the outbound went tothis same area. Europe received 20.28 per cent of the traffic out of New York and contributed 22.3 per cent of the traffic into that Customs Dis-trict. Africa and Asia are responsible for lesser tonnages; but their ton-mile contributions, because of the extreme distance, are substantial. A total of nearly 600 million ton-miles of in-transit traffic valued inexcess of 50 cents/lb passed through New York in 1955. A large part of this traffic can definitely be considered air potential for the future. Small Shipments. There are nearly 2.4 billion ton-miles of traffic thatmove in this category between the United States and various world areas. It is estimated that approximately 50 per cent of this small-shipmenttraffic now can be called air cargo potential and that in the next seven years, this kind of traffic will increase more rapidly than will foreigntrade in general. The potential air cargo traffic to be found in small shipments, as defined by the Bureau of die Census, may reach about1,500 million ton-miles by 1965. Smaller shipments of less than $100 in value were not sampled by the Bureau of the Census for this study. Theair potential in this type of traffic must also be very large. Judging from the amount of tin's traffic tfiat moves domestically, there may be as muchas 250 million ton-miles of traffic moved between the United States and world areas in shipments valued at less than $100. Almost all of thistraffic might be termed air cargo potential in the next few years. A sub- stantial industrial development is going on throughout the world. Thisresults in a substantial growth in the movement of small shipments. Origin and Destination. A great deal of costly research would benecessary to trace overseas shipments of air cargo and potential air cargo to interior origins and destinations; however, this research is necessary todetermine the most likely points at which air cargo can be economically consolidated for future movement. Relationship of Cost and Price. There is greater elasticity of demandfor air freight service in the long haul than for the short haul. Although there is much greater tonnage moved by all means of transportation inthe short haul than in the longer hauls, the greater potential for air freight is in the longer movements. The speed advantage of the airplane in theseloi.ger hauls creates the greatest amount of time utility. It is for this long haul that there is more value to the transportation service of the airplanewhen time is a factor. Therefore, although rates that only consider value of service are justified, greater attention will be given in the future to costof service rates. Current trends in direct operating costs of transport aircraft is such that there may be substantial opportunities to reducerates for longer hauls. The greatest opportunity to exploit the advantages of the airplane inthe movement of freight is in international transportation. The one serious limitation at present is aircraft range at maximum payload. Assoon as an aircraft is produced that can carry a near-maximum payload at a 3,000 mile or more range and at direct operating costs approximatingto four to five cents per ton-mile, a very substantial amount of traffic will be developed. The manner in which indirect costs are allocated to direct costs canmaterially affect die shape of the total cost curve. A percentage alloca- tion will make the total cost curve incline sharply as distance increases,but this is not necessarily a true picture of costs. Allocation of indirect costs as a fixed amount flattens the curve for the greater distances andmay result in just as large a recovery of indirect costs. If the advantages of the airplane and its full potential for air freight movement are to berealized, price must ultimately be tied to cost of service rather than value of service. The problem of allocating indirect costs to direct costs shouldbe attacked in the light of how much business at what ranges the opera- tors hope to attract. Long-haul, high-volume movements are moreprofitable than short-haul, small-volume shipments. The small ship- ments in both the short and long haul are excellent prospects for thecombination aircraft operating on a scheduled basis. The long-haul, high-volume business can only be handled in all-cargo airplanes. Much of the over-ocean freight originates and terminates at interiorpoints. Multiple handling—in movements to ports, in and out of holds of vessels, and away from ports—is very costly. In addition to costs,these operations are time consuming. The airplane is beginning to be more competitive with the steamship for small shipments. As the worldindustrializes, diere will be greater need for emergency shipments of parts to repair machinery. Some of these factors are showing up in thegrowth and development of air freight at die present time. The rate structure of the international carriers is weakening, in spite of risinglevels of transportation costs elsewhere. Undoubtedly, this is a reflection of the intense competition that is developing between airlines and thelevelling of direct operating costs for the longer distances. As a greater volume of freight is attracted to the airlines, allowing them to start addi-tional all-cargo flights with a substantial load factor, international freight rates will come down: I.A.T.A. has been able to keep international ratesunder control up to now, but not all carriers belong to this organization. As aircraft become available to non-member operators who can operateeconomically, rates will be cut in order to increase profits. Because the newer airplanes will have sufficient range and payload, there will beexcellent opportunities to attract profitably substantial amounts of traffic in international transportation at rates well below those presently maintained. Historical Trends. Growth patterns in United States international aircargo movement have followed the same general trends as those for the domestic carriers. There was healthy growth for several years afterWorld War II, but as the Korean War developed growth in air cargo movements dropped. The growth of this air cargo started to pick upagain in 1955 and the pace was accelerated in 1956 and 1957. (A number of foreign carriers have entered the United States market within the pastfew years, and since data are not available on their traffic the statistics for United States flag carriers alone may be misleading.) Air cargo development in the United States international market haslagged somewhat behind diat of the United States domestic market, but there is every reason to believe that aggressive carriers with the right kindof programmes can develop substantial tonnages in the future. The first of the certificated all-cargo carriers on the North Atlantic has increasedfreight traffic in a spectacular fashion in the two years the firm has been operating scheduled services. Although steamship rates on quantity movements are far below attain- •able costs for moving bulk freight by air in the foreseeable future, rates:-, on many small shipments are within competitive range of the air carriers.' Foreign Trade Forecast There is excellent correlation between the'value of United States foreign trade, gross national product and national . income. This correlation of approximately 0.98 is an excellent basis for 'forecasting total value of foreign trade for the future. i Average values per pound fluctuate materially as the character oftonnage movements change in foreign trade. These fluctuations make it more difficult to forecast the total tonnage moved in United States ForeignTrade for the future. Based on the latest and most reliable forecasts, gross national product :will increase between 35.3 and 44.8 per cent from 1956 through 1965. The value of foreign trade will increase between 33.7 and 43.2 per cent •and the weight of United States foreign trade will increase between 25.9 and 34.8 per cent during this same period. Continued high levels of manufacturing activity throughout the Worldshould create disproportionately higher levels of demand for air cargo transportation. ROYAL AERO CLUB COMMITTEES THE constitution of the various Royal Aero Club committees for1958-59 has been announced. Details are given below, together with names of stewards, timekeepers and other competition officialsand F.A.I, representatives. The CommitteePresident.—Lord Brabazon of Tara. Vice-Presidents.—S. Kenneth Davies, Capt. Sir Geoffrey de Havilland,Lord Gorell, Viscount Kemsley of Dropmore, Sir Frederick Handley- Page, Whitney W. Straight, The Duke of Sutherland.Chairman.—Col. C. F. H. Gough. Vice-Chairman.—Maj. J. Stewart. Committee Members.—Capt. K. J. G. Bartlett, F. E. Buckell, J. G.Crammond, E. S. Greenwood, R. E. Hardingham, G/C. G. J. H. Jeffs, R. G. Kent, E. H. W. Lucas, L. A. Morgan, Maj. H. A. Petre,S. Scott-Hall, J. C. C. Taylor, Capt. R. H. Walmsley, A. Cdre. A. H. Wheeler, F. Woodhead. Note: The chairman is an ex'Officio member of all committees. Thechairman of the finance committee is an ex-officio member of the house committee and the aviation committee. Other CommitteesFinance.—Capt. K. J. G. Bartlett, J. G. Crammond, S. Kenneth Davies, E. S. Greenwood, L. A. Morgan, Capt. R. H. Walmsley,A. Cdre. A. H. Wheeler, F. Woodhead. Aviation.—F. E. Buckell, R. E. Hardingham, Maj. H. A. Petre,S. Scott-Hall, J. C. C. Taylor, A. Cdre. A. H. Wheeler, C. M. Colbeck, B. Collins, C. J. de Vere, H. Best-Devereux, J. J. Dykes, A. F. Houlberg,J. M. Houlder, Capt. V. A. M. Hunt, N. H. Jones, H. B. Lindsay, G/C. E. L. Mole, W. I. Scott-Hill, B. J. Snook, J. N. Somers, P. Q. Reiss,P. A. Wills. House.—J. G. Crammond, E. H. W. Lucas, Maj. J. Stewart, Capt. R. H. Walmsley, L. R. E. Castlemaine, G. B. Fellows, J. C. Henry,S/L. C. K. Turner-Hughes, C. S. Watkinson. Records, Racing and Competitions.—F. Buckell, G/C. G. J. H. Jeffs,E. S. Greenwood, S. Scott-Hall, A. Cdre. A. H. Wheeler, E. S. Bowyer, Capt. H. S. Broad, J. Cunningham, W. P. I. Fillingharn, I. A. Forbes,Cdr. A. Goodfellow, D. J. Lyons, P. B. Mayne, R. R. Paine, J. K. Quill, F. Rowarth, J. N. Somers. "Royal Aero Club Gazette."—R. G. Kent, E. H. W. Lucas, G. Dorman, J. J. Dykes. Business Aircraft Users Committee.—E. S. Greenwood, Whitney W.Straight, Capt. R. H. Walmsley, G/C. D. R. S. Bader, J. M. Houlder, H. B. Lindsay, Maj. D. Constable-Maxwell, W. I. Scott-Hill. Stewards of the ClubLord Brabazon of Tara, Lord Gorell, Col. C. F. H. Gough, Maj. H. A. Petre, The Duke of Sutherland, F. Woodhead. Officials for Records, Races and CompetitionsTimekeepers.—P. B. Mayne (chief timekeeper), C. Audrey, Maj. J. W. Barber, Maj. A. L. Ebblewhite, A. J. Gibbons, Maj-Gen. A. H.Loughborough. Handicappers.—F. Rowarth (consultant), D. J. Lyons (chief handi- capper), C. M. Britland, W. J. Charnley, J. Ferguson. F.A.I. Representatives Capt. K. J. G. Bartlett (president of honour), S. Scott-Hall (sporting),P. A. Wills (gliding), Maj. T. W. Willans (parachuting), A. F. Houlberg (models), M. O. Imray (technical), Col. R. L. Preston (touring). Other RepresentativesM. O. Imray (British Gliding Association and Society of Model Aero- nautical Engineers), J. C. C. Taylor (Popular Flying Association andAir League of the British Empire).
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