Quest for Quality -FREIGHT FORWARDERS: Foreign policy titans

-- Logistics Management, 8/1/2008

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Southwest Airlines Cargo

When you dig into the numbers over the past year it would be tough to find a group under more pressure from rising fuel costs than the world’s air carriers. As LM’s Karen Thuermer reported last month in our 2008 Annual Report, the high cost of fuel is affecting the financial health of nearly every air carrier in the global market.

As a matter of fact, Thuermer did a terrific job of putting it into perspective—and some of the startling numbers bare repeating. James May, CEO of the Air Transport Association of America, told her that U.S. airlines are projected to spend nearly $60 billion on fuel in 2008, that’s $18 billion more than in 2007. The increase in fuel is the equivalent of employing 244,000 airline workers or purchasing 261 narrow-body jets.

2008 Quest for Quality Awards:

25th Annual Quest for Quality Awards: Delivering on the promise

THIRD-PARTY LOGISTICS:
Shifting in the polls

FREIGHT FORWARDERS:
Foreign policy titans

AIR CARRIERS:
Delivering under pressure

OCEAN CARRIERS:
Steadfast incumbents

RAIL/INTERMODAL:
Popularity rising in the polls

TRUCKLOAD:
Influential long-haulers

REGIONAL LTL:
Perennial local front runners

NATIONAL LTL:
Canvassing the nation

Order Online

Well, the good news for the most viable air carriers is that shippers who use their services are telling us that performance in the category has actually improved over our 2007 survey in Value, Information Technology, Customer Service, and Equipment & Operations—even in light of soaring rates.

This year 14 air carriers scored better than the overall weighted average of 32.57, a slightly better overall average for the category over 2007. For the third year in a row Southwest Airlines is first to hit the runway, putting up a very impressive 39.86 weighted score. Southwest beat their 2007 score by nearly 4 full points, taking first place in On-time Performance (12.51), Value (10.03), Customer Service (7.97), and Equipment & Operations (4.30). It’s interesting to note that Singapore Airlines posed the highest score in the Information Technology category, posting a 5.22.

Pulling up to gate right behind Southwest is Emirates SkyCargo with a 35.53 weighted score. While Emirates did not take first place in any of the attribute categories, they’re a very good example of a carrier that scored consistently high marks across the board, scoring a second-place 11.78 in the all-important On-time Performance category.

As we find year after year, shippers are fairly loyal to their Air Cargo carriers and tend to give high marks to a consistent group of players. Beside Southwest, Emirates, and Singapore Airlines, we find eight other repeat winners from 2007. Carriers taking the podium again this year include Virgin Atlantic (35.28), Lufthansa (34.38), Japan Airlines (34.29), Nippon Cargo Airlines (34.14), KLM (34.02), Cathay Pacific (33.76), Korean Air (33.46), and Alaska Airlines (32.57).

In the always heated battle for supremacy in the Air Express Carriers category, FedEx has once again just squeaked by UPS with an inspiring 37.58 weighted average.

Air Cargo Carriers
	On-time Performance	Value	Information Technology	Customer Service	Equipment & Operations	Weighted Score
Southwest Airlines	12.51	10.03	5.05	7.97	4.30	39.86
Emirates SkyCargo	11.78	8.40	4.82	6.86	3.68	35.53
Virgin Atlantic	10.95	9.00	4.52	7.05	3.76	35.28
Continental Airlines	11.16	8.29	4.88	6.93	3.78	35.05
Singapore Airlines (SIA)	11.22	7.47	5.22	6.97	3.84	34.72
Lufthansa	11.44	7.20	5.13	6.74	3.87	34.38
Japan Airlines	11.17	7.75	5.04	6.60	3.73	34.29
EVA Cargo	10.30	8.67	4.80	6.68	3.71	34.17
Nippon Cargo Airlines	11.23	8.10	4.47	6.68	3.66	34.14
KLM	10.82	8.03	4.80	6.69	3.69	34.02
Cathay Pacific	11.14	8.04	4.67	6.16	3.75	33.76
Swiss WorldCargo	10.64	7.92	4.95	6.55	3.60	33.65
Korean Air	10.91	8.25	4.45	6.28	3.56	33.46
Alaska Airlines	10.30	7.77	4.52	6.17	3.82	32.57
AVERAGE	10.28	7.77	4.64	6.28	3.59	32.57
Logistics Management - 2008 Quest for Quality - Air Cargo Carriers - Reed Business Information - June 2008

	On-time Performance	Value	Information Technology	Customer Service	Equipment & Operations	Weighted Score
FedEx Express	12.20	8.11	5.80	7.32	4.15	37.58
UPS Freight	11.16	7.96	5.56	6.64	4.03	35.36
AVERAGE	10.65	7.91	5.10	6.46	3.79	33.91
All scores are weighted. Weighted scores are determined by multiplying the average raw scores by the average importance of each attribute (1= least important; 5= most important). To find the attributed weights for this category, see the introduction to the Quest for Quality report. Logistics Management - 2008 Quest for Quality - Air Express Carriers - Reed Business Information - June 2008