Risk Management in the Air Cargo Industry

This paper discusses risk management approaches in the air cargo industry. It gives a concise overview of developments, business practices and complexities of the air cargo industry and draws cross-references to comparable industries. It introduces supply contracts for capacity and the inherent risks in the shipping process. Based on that, approaches to mitigate risk are studied. The work elaborates on the historically grown research field of revenue management and puts emphasis on the discipline of overbooking in the air cargo sector. Capacity options and financial intermediation are presented as more innovative approaches for capacity risk management. The application of these various risk management methods is evaluated in an expert study among air cargo industry professionals from different market perspectives. With that, obstacles to the successful implementation are identified and potential solutions are named.

Auteur

Paul Hertwig, born in 1987 in Zwickau, Germany, studied business administration and holds a Bachelor of Science degree of WHU - Otto Beisheim School of Management, Vallendar, Germany. During his exchange semester at Washington University at St.Louis he was rewarded with the Honor Student Recognition for excellent academic achievement. In course of his studies he especially focused on the topics of finance and supply chain management and gained practical insides during several internships in the consulting business. As the topic of risk management in the air cargo industry is situated in the overlap of finance and supply chain management, this field of research looked appealing to him.