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. Philipp Rau, born in 1986 in Stühlingen, Germany, studied business administration and holds a Bachelor of Science degree of WHU - Otto Beisheim School of Management, Vallendar, Germany. In his Bachelor Studies, he focused on finance and accounting and gained important industry insights in banking internships. Philipp Rau currently pursues a Master"s degree at WHU - Otto Beisheim School of Management, Vallendar, Germany, with a focus on finance and production management. He engaged in the risk management topic as there is a large overlap with finance and he planned to focus more on risk and operations management.