Case study 1: The Lions fan in China [30] Ted is a huge rugby fan and his favourite team is the Golden Lions. He tries to go to every match, knows all the players and has every Lions team jersey from the past 15 years. Ted was recently offered an incredible job opportunity in Hong Kong. Although he loves South Africa, he decided to take the job and experience life on the other side of the world for a while. Ted is really sad because he can no longer attend Lions matches, but he gets to watch most of them on TV. With the new Super Rugby season starting, the team has brand new kit. Ted is desperate to own the new jersey but cannot find it in any of the stores in Hong Kong. He phones his sister in Johannesburg and asks her to buy one and send it to him via courier. Teds sister, Susan, buys the team jersey from Total Sports and heads to her local Post It branch. Here, Susan fills in a house waybill with all her personal details, Teds home address (to which she wants the jersey delivered) and Teds personal details. Post It packs the jersey into a branded plastic courier bag and attaches the waybill. It charges Susan a minimum charge of R50 plus R120 based on the weight and size of the parcel. The package is ready for transport (RFT). Susan pays Post It and goes home. She calls Ted and tells him that his parcel will be delivered within seven days. The next day all the parcels to be sent to Hong Kong are collected from the Post It branch and transported by truck to the Post It warehouse. Henry, who has worked at Post It for close to six years, receives the home waybills and the packages. Henry makes sure that the outgoing and exports handling is organised, and calls his customs clearing agent to make sure that the contents of the packages are legally authorised to enter Hong Kong, and whether they will be liable for any customs duties. He is told that Susans package is authorised for transport and that no customs duties apply. Henry completes an air waybill (AWB) for each package. Like the other AWBs, the one for Teds package contains all the information regarding the package and its contents. In this case, these details include Susans personal details, Teds personal details and Teds delivery address. Henry then calls the logistics manager who organises for the packages to be collected that afternoon and transported by truck to the OR Tambo International cargo warehouse. At the airport warehouse, Khanyi Aviation Services, the ground-handling agent, checks all the packages and AWBs and makes sure that all the cargo is accounted for. The staff then pack all the parcels and packages from Post It and other courier companies into larger containers and make sure that they are secure and protected from damage. The package is ready for carriage (RFC). The staff at Khanyi Aviation Services load the containers onto the aircraft which will leave for Hong Kong the next morning. Rose, an employee of Khanyi Aviation Services, notices that the aircraft is not full. She phones Henry to let him know. Henry phones all the Post It branches and informs them of the excess capacity. The Randburg branch calls back to say that it has three additional parcels that it needs to get onto the aircraft before it leaves. All the customers have paid an increased special rate to get them delivered quickly. These parcels are delivered to the Post It warehouse, where Henry completes all the checks and fills in the AWB. The parcels are delivered to Khanyi Aviation Services which performs all the required tasks and loads the parcels onto the aircraft. The aircraft takes off on time and lands in Hong Kong 13 hours later. Upon arrival at the Hong Kong International Airport, Peak Operations offloads the cargo and transports it to the Peak Operations warehouse at the airport. Peak Operations is the ground-handling agent that Khanyi Aviation Services always deals with. They have worked together for many years and know each others systems and processes well. Upon arrival of the cargo at the warehouse, Khanyi Aviation Services is notified, and a truck arrives from its Hong Kong branch to collect its packages. The packages are taken to the Khanyi warehouse in Kowloon. Once the packages are there, the local courier company affiliated with Post It, JLA Couriers, arrives to collect all the parcels. John from JLA Couriers checks the parcels against their AWBs and plans his trips for the day. Around midday he drives to Teds address, knocks on the door and hands Ted his parcel. Ted opens it right away and is thrilled. Ted is very impressed with the service from Post It and will recommend it to all of his friends in South Africa. And the Lions won their game that weekend! Adapted from TRL3703 study guide

Question 1 [30]

1.1 With regard to the waybill, quote directly from the case study and advise on the following:

a. The information contained in the waybill. (2)

b. Advise on the importance of a waybill in general and in relation to this transaction. (5)

c. Advise on the characteristics of the rugby jersey that makes it suitable for air cargo. (3)

1.2 Discuss the concept of optimal capacity. Following that, quote directly from the case study and explain the economics behind the reason why the last-minute customers that Rose added to the shipment would have paid a higher rate than Susan. (10)

1.3 Do you think the aircraft would have been fuller on the way to Hong Kong or on the way back? Explain why, by quoting directly from the case study.