Q2 Z2,(Q2) Z2(Q2) - Institute for Water Resources - U.S. Army

Why high value goods should be carried by air or are
considered "air candidates" can be better appreciated when
the theoretical section on transport costs and transport-
associated costs and the theory of the firm are viewed. Here
we cite empirical evidence by Brewer [26] that more than
sixty percent of the 'commodities now being transported by air
have values in excess of three dollars per pound. It is
argued by the proponents of the high value thesis that high
rates can be "absorbed" better by high value goods. 6
That low density (pounds per cubic foot) prevails can
be witnessed in air managerial statements that planes "bulk"
out before they "weight" out. That is, the weight capability
of the planes is seldom met because all the volume is filled.
Shipments also tend to be small. More than seventy
percent are less than one hundred pounds. 7
Initial analysis shows that pick-up and delivery
service is basically limited to areas within a twenty-five
mile radius of the airports. Of course, within this area
(and out of it also), the shipper can take the good to the
terminal himself, hire a common carrier to do so, or give
his business to a freight forwarder.
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It should be • pointed out that if rates are •• stated in ton-
mile terms, air may not be at as great a disadvantage as
first appears. For if the shipper is traditionally a surface
shipper, he will neglect the fact that great circle distances
are shorter than surface point-to-point distances. Since he
thinks of distance between i and j in terms of surface miles,
air cost will always be overstated. See Stanley Brewer,
Vision of Air Cargo, (Seattle, Bureau of Business Research,
University of Washington, 1957), p. 27.
7 Stanley Brewer, John Thompson, and William Boore, The Aircraft
Industry - A Study of the Possibilities for Use of
Air. Freight, (Seattle, University of Washington, 1960)..
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