INTEGRATED AIR FREIGHT COST STRUCTURE: THE CASE OF FEDERAL EXPRESS

This paper analyzes the economic structure of the integrated air freight industry. The authors evaluated a total cost model for Federal Express, Inc. by analyzing quarterly time-series data from 1986-1992. They find that Federal Express, and arguably all dedicated air freight carriers, exhibit diseconomies of scale and significant economies of density. They show that these two economic concepts can be restrictive, however, and introduce a third aspect of the integrated air freight industry's economic structure that combines the effects of economies of density and economies of scale. They call it economies of size, and show that Federal Express exhibits approximately constant economies of size. The conditions under which these findings hold are discussed.

• Record URL:
  • http://www.uctc.net/papers/400.pdf
• 
• Corporate Authors:

  University of California, Berkeley

  Institute of Transportation Studies Library
  Berkeley, CA  United States  94720
• Authors:
  • Kiesling, M K
  • Hansen, M M
• Publication Date: 1993-11

Language

• English

Media Info

• Features: Appendices; Figures; References; Tables;
• Pagination: 24 p.

Subject/Index Terms

• TRT Terms: Aircraft; Costs; Density; Economies of scale; Freight transportation; Size
• Identifier Terms: FedEx Corporation
• Subject Areas: Aviation; Economics; Finance; Freight Transportation; Vehicles and Equipment;

Filing Info

• Accession Number: 00759837
• Record Type: Publication
• Report/Paper Numbers: UCTC No. 400,, Working Paper
• Files: UTC, TRIS
• Created Date: Feb 15 1999 12:00AM