Shipment Planning, Capacity Contracting, and Revenue Management in the Air Cargo Industry: A Literature Review

A wide variety of goods nowadays is transported by air, especially those of high value-to-weight ratio such as electronics and luxury goods and those perishable such as cut flowers and fish. The contemporary logistics practices that require shipping more frequently with smaller quantities also favor air transport. However, decision-making in air cargo business is challenging. Air cargo demand is highly unstable and sensitive to global economic conditions. The shipping process typically involves many parties, such as carriers, forwarders, trucking companies, and terminals; poor coordination between them might cause considerable delay. Furthermore, the special characteristics such as demand imbalance and capacity 2-dimensinality also raise issues in both strategic and operational decisionmaking. Due to such challenges, practitioners and academic researcher have begun to apply operations research/management science (OR/MS) to the air cargo industry in recent years. In this paper, we review academic papers in three categories, namely, shipment planning, capacity contracting/booking, and revenue management. Other related literature and some possible future research directions are also discussed.