AIR FREIGHT

Why & How There Can Be More IN the high-flying air world, one fledgling that has yet to find its wings is the air-freight business. Of 120 new lines that hopefully started up at the end of World War II, more than 50% went bust. Last year U.S. air freighters flew only 284 million ton-miles of cargo, a 3% gain over 1953, but barely one-tenth of 1% of the total cargo business.

In theory, air cargo is tailor-made for the U.S. economy. It permits companies to transport goods faster, thus cut down on expensive inventories and release valuable working capital for other uses. Warehousing and packaging costs can be cut; pilferage and damage are less of a problem, cutting insurance costs. By flying, a St. Louis shoe manufacturer has reduced inventories 50% for its store chain across the U.S., finds that savings are 3 1/2 times the increased transportation costs. But most companies use air freight only for emergency orders or occasional shipments of highly perishable or specialized items (from ladybugs to engine parts) where time is a big factor.

The high price of air transport makes it uneconomical for many companies to ship by plane. Current average rates are 20-c- a ton-mile, v. 1.4-c- a ton-mile for railroads, about 6-c- for trucks. The airlines cannot reduce the rates because their own costs are so high. American Airlines, Pan American and T.W.A. are all expanding air-cargo services; United Airlines jumped its business from 4,500,000 ton-miles in 1946 to 34 million, showed a 23% gain last year alone. Yet so far, not one company has reported a sizable profit from its cargo fleets.

The high cost is due partly to the fact that ground handling of cargo is done with expensive, old-fashioned methods. According to a University of Tennessee survey, "an estimated 80% of total in-transit time for air freight is consumed by slow and inefficient ground handling." Only a small number of the major U.S. airports have separate air-freight terminals; most lines process their freight through passenger terminals or makeshift sheds. Furthermore, most cargo planes flying today are not suited to the job, are hard to load and unload, often have high maintenance costs.

To solve its own transport problems, the U.S. Air Force is now experimenting with a plan that may provide the best answer yet for the air-cargo industry. The plan is to start a complete airfreight system from the ground up and run it as carefully as the best air-passenger operation. To test its ideas. the Air Force has been flying small-scale experiments in Europe since 1953 with C-119 Flying Boxcars, which have huge, low-slung cargo bays for easy loading and carrying of goods. Called the Air Logistics Service, the Air Force cargo line carries up to 4,000 tons of high-priority freight each month on a regular schedule between bases in twelve nations. By planning everything well in advance, putting all cargo on prepacked loading pallets, which can be lifted into planes in a single piece to cut loading time, the Air Force has managed to increase its combat-ready strength in Europe by the dollar equivalent of $345 million. At the same time, it has chopped spare-parts inventories by 50%. In the U.S., the Air Force flies cargo schedules between 15 "traffic generation centers" with 18 chartered civilian planes and crews. Costs for the operation: about 15-c- ton-mile, v. 50-c- normally figured for military air freight.

The idea has been so successful that the Air Force will soon start up its first fulltime, full-scale transatlantic air-cargo service. Studies show that 60% of the dollar cost of the current supply line is composed of items weighing only 10% of the total freight tonnage.

By flying such lightweight, high-cost items instead of sending them by ship, the Air Force hopes to save both time and money. At first, five types of jet engines will be flown from overseas bases to the U.S. for overhaul, then back again. Ordinarily, the overhaul cycle takes 270 days. By airlift, the Air Force hopes to cut the process to 100 days, thus cut the number of engines (costing up to $78,000 apiece) in the pipeline by 25%. Cargo will be specially packed, loaded by new methods; all papers will be processed by new electronic computers that can do a week's paper work in a matter of minutes. Civilian air-freight lines will do most of the actual flying, and as new transport planes are developed, they may be put into the airlift to give civilian freighters their first experience with planes specifically designed for swift, economical cargo flying. Douglas is developing a huge four-engined transport called the C-132 that can carry 80 tons of cargo at more than 350 m.p.h. Lockheed already has a prototype flying of its C-130 which has four turboprop engines, a 2,000-mile range and cargo capacity of 40,000 lbs. The new plane will cruise close to 350 m.p.h., bring costs down as low as 4-c- a ton-mile, and make flying freight as cheap as or cheaper than hauling it along the highway.

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