IDEAS home Printed from https://ideas.repec.org/a/eee/jaitra/v109y2023ics0969699723000248.html
   My bibliography  Save this article

The value of time and the impact on the air freight product portfolio - A study of the South Korean market 2017–2021

Author

Listed:
  • Choi, Jong Hae

Abstract

Traditionally, time was a crucial factor in determining competitiveness in the air cargo market. This study demonstrates that products whose value changes drastically over time could increase the air transport demand. This study represents that the shipper having products with enormous time sensitivity is more willing to endure the higher fare, indicating the possibility that time-sensitive products will drive the air cargo market's growth. This study also provides empirical evidence for the influence of time factors by showing that time-sensitive products are being transferred from sea to air transport based on ICN and South Korean data. The analysis results are as follows. First, an emerging type of cargo, not a traditional type of cargo, has a significant effect on increasing air transport share. The emerging type of items appeared before Covid-19, and Covid-19 has accelerated their growth. Second, even if airfares increase relatively, the proportion of air transportation does not decrease. It seems to be the result that an emerging type of cargo with higher time sensitivity significantly affects the recent increase in air freight volume. Demand increases in an emerging type of cargo, more sensitive to time, can affect the rise in the air transport share, restricting the negative effect from a relative increase in air freight rates. Last, Covid-19 significantly affects the increase in air transport share. In this regard, this study provides practical implications for the recent growth drivers of the air cargo market. Especially in addition to variables traditionally considered to impact air freight volumes, such as income and price, this study suggests changes in transport items as a growth driver for the recent air cargo market.

Suggested Citation

  • Choi, Jong Hae, 2023. "The value of time and the impact on the air freight product portfolio - A study of the South Korean market 2017–2021," Journal of Air Transport Management, Elsevier, vol. 109(C).
    • Handle: RePEc:eee:jaitra:v:109:y:2023:i:c:s0969699723000248
    DOI: 10.1016/j.jairtraman.2023.102381
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969699723000248
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jairtraman.2023.102381?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Justin J. P. Jansen & Frans A. J. Van Den Bosch & Henk W. Volberda, 2006. "Exploratory Innovation, Exploitative Innovation, and Performance: Effects of Organizational Antecedents and Environmental Moderators," Management Science, INFORMS, vol. 52(11), pages 1661-1674, November.
    2. Tang, Ching-Hui & Yan, Shangyao & Chen, Yu-Hsuan, 2008. "An integrated model and solution algorithms for passenger, cargo, and combi flight scheduling," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 44(6), pages 1004-1024, November.
    3. Amaruchkul, Kannapha & Lorchirachoonkul, Vichit, 2011. "Air-cargo capacity allocation for multiple freight forwarders," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(1), pages 30-40, January.
    4. Jo Thori Lind & Halvor Mehlum, 2010. "With or Without U? The Appropriate Test for a U‐Shaped Relationship," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(1), pages 109-118, February.
    5. Zhang, Anming, 2003. "Analysis of an international air-cargo hub: the case of Hong Kong," Journal of Air Transport Management, Elsevier, vol. 9(2), pages 123-138.
    6. Hummels, David L. & Schaur, Georg, 2010. "Hedging price volatility using fast transport," Journal of International Economics, Elsevier, vol. 82(1), pages 15-25, September.
    7. Yan, Shangyao & Chen, Shin-Chin & Chen, Chia-Hung, 2006. "Air cargo fleet routing and timetable setting with multiple on-time demands," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 42(5), pages 409-430, September.
    8. Lange, Anne, 2019. "Does cargo matter? The impact of air cargo operations on departure on-time performance for combination carriers," Transportation Research Part A: Policy and Practice, Elsevier, vol. 119(C), pages 214-223.
    9. Park, Yonghwa & Choi, Jung Kyu & Zhang, Anming, 2009. "Evaluating competitiveness of air cargo express services," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 45(2), pages 321-334, March.
    10. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    11. Li, Tao, 2020. "A SWOT analysis of China's air cargo sector in the context of COVID-19 pandemic," Journal of Air Transport Management, Elsevier, vol. 88(C).
    12. Li, Yanzhi & Tao, Yi & Wang, Fan, 2009. "A compromised large-scale neighborhood search heuristic for capacitated air cargo loading planning," European Journal of Operational Research, Elsevier, vol. 199(2), pages 553-560, December.
    13. Azadian, Farshid & Murat, Alper E. & Chinnam, Ratna Babu, 2012. "Dynamic routing of time-sensitive air cargo using real-time information," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(1), pages 355-372.
    14. Hong, Seock-Jin & Randall, Wesley & Han, Keunsoo & Malhan, Amit Sundeep, 2018. "Estimation viability of dedicated freighter aircraft of combination carriers: A data envelopment and principal component analysis," International Journal of Production Economics, Elsevier, vol. 202(C), pages 12-20.
    15. Boonekamp, Thijs & Burghouwt, Guillaume, 2017. "Measuring connectivity in the air freight industry," Journal of Air Transport Management, Elsevier, vol. 61(C), pages 81-94.
    16. Demir, Emrah & Huang, Yuan & Scholts, Sebastiaan & Van Woensel, Tom, 2015. "A selected review on the negative externalities of the freight transportation: Modeling and pricing," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 77(C), pages 95-114.
    17. Jong Hae Choi & Yong Hwa Park, 2020. "Investigating Paradigm Shift from Price to Value in the Air Cargo Market," Sustainability, MDPI, vol. 12(23), pages 1-15, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jong Hae Choi & Yong Hwa Park, 2020. "Investigating Paradigm Shift from Price to Value in the Air Cargo Market," Sustainability, MDPI, vol. 12(23), pages 1-15, December.
    2. Van Asch, Thomas & Dewulf, Wouter & Kupfer, Franziska & Cárdenas, Ivan & Van de Voorde, Eddy, 2020. "Cross-border e-commerce logistics – Strategic success factors for airports," Research in Transportation Economics, Elsevier, vol. 79(C).
    3. Wang, Fan & Zhuo, Xiaopo & Niu, Baozhuang, 2017. "Strategic entry to regional air cargo market under joint competition of demand and promised delivery time," Transportation Research Part B: Methodological, Elsevier, vol. 104(C), pages 317-336.
    4. Moussawi-Haidar, Lama, 2014. "Optimal solution for a cargo revenue management problem with allotment and spot arrivals," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 72(C), pages 173-191.
    5. Hee Kyung Kim & Chang Won Lee, 2019. "Development of a Cost Forecasting Model for Air Cargo Service Delay Due to Low Visibility," Sustainability, MDPI, vol. 11(16), pages 1-14, August.
    6. Chao, Ching-Cheng & Yu, Po-Cheng, 2013. "Quantitative evaluation model of air cargo competitiveness and comparative analysis of major Asia-Pacific airports," Transport Policy, Elsevier, vol. 30(C), pages 318-326.
    7. Carman K.M. Lee & Shuzhu Zhang & Kam K.H. Ng, 2019. "Design of An Integration Model for Air Cargo Transportation Network Design and Flight Route Selection," Sustainability, MDPI, vol. 11(19), pages 1-12, September.
    8. Xiao, Fan & Guo, Siqi & Huang, Lin & Huang, Lei & Liang, Zhe, 2022. "Integrated aircraft tail assignment and cargo routing problem with through cargo consideration," Transportation Research Part B: Methodological, Elsevier, vol. 162(C), pages 328-351.
    9. Moussawi-Haidar, Lama & Nasr, Walid & Jalloul, Maya, 2021. "Standardized cargo network revenue management with dual channels under stochastic and time-dependent demand," European Journal of Operational Research, Elsevier, vol. 295(1), pages 275-291.
    10. Babagolzadeh, Mahla & Zhang, Yahua & Abbasi, Babak & Shrestha, Anup & Zhang, Anming, 2022. "Promoting Australian regional airports with subsidy schemes: Optimised downstream logistics using vehicle routing problem," Transport Policy, Elsevier, vol. 128(C), pages 38-51.
    11. Shangyao Yan & Chun-Ying Chen & Chuan-Che Wu, 2012. "Solution methods for the taxi pooling problem," Transportation, Springer, vol. 39(3), pages 723-748, May.
    12. Xiaotian Yang, 2022. "Coopetition for innovation in R&D consortia: Moderating roles of size disparity and formal interaction," Asia Pacific Journal of Management, Springer, vol. 39(1), pages 79-102, March.
    13. Choi, Jong Hae, 2021. "Changes in airport operating procedures and implications for airport strategies post-COVID-19," Journal of Air Transport Management, Elsevier, vol. 94(C).
    14. Nanthakumar LOGANATHAN & Suraya ISMAIL & Dalia STREIMIKIENE & Asan Ali Golam HASSAN & Edmundas Kazimieras ZAVADSKAS & Abbas MARDANI, 2017. "Tax Reform, Inflation, Financial Development And Economic Growth In Malaysia," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 152-165, December.
    15. Lee, Eun Su & Liu, Wei & Yang, Jing Yu, 2023. "Neither developed nor emerging: Dual paths for outward FDI and home country innovation in emerged market MNCs," International Business Review, Elsevier, vol. 32(2).
    16. Francesco Chirico & Giuseppe Criaco & Massimo Baù & Lucia Naldi & Luis R. Gomez-Mejia & Josip Kotlar, 2020. "To patent or not to patent: That is the question. Intellectual property protection in family firms," Entrepreneurship Theory and Practice, , vol. 44(2), pages 339-367, March.
    17. Annapoornima M. Subramanian & Moren Lévesque & Vareska van de Vrande, 2020. "“Pulling the Plug:” Time Allocation between Drug Discovery and Development Projects," Production and Operations Management, Production and Operations Management Society, vol. 29(12), pages 2851-2876, December.
    18. Azadian, Farshid & Murat, Alper E. & Chinnam, Ratna Babu, 2012. "Dynamic routing of time-sensitive air cargo using real-time information," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(1), pages 355-372.
    19. Yuen, Andrew & Zhang, Anming & Hui, Yer Van & Leung, Lawrence C. & Fung, Michael, 2017. "Is developing air cargo airports in the hinterland the way of the future?," Journal of Air Transport Management, Elsevier, vol. 61(C), pages 15-25.
    20. Sarooghi, Hessamoddin & Libaers, Dirk & Burkemper, Andrew, 2015. "Examining the relationship between creativity and innovation: A meta-analysis of organizational, cultural, and environmental factors," Journal of Business Venturing, Elsevier, vol. 30(5), pages 714-731.

    More about this item

    Keywords

    Air freight market; A traditional type of cargo; An emerging type of cargo; Changes in transport items; Time sensitivity;
    All these keywords.

    JEL classification:

    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jaitra:v:109:y:2023:i:c:s0969699723000248. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/journal-of-air-transport-management/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.