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i am very skeptical that they use air freight. having worked in large scale logistics, its like the very last choice you use when you are going to be guaranteed

by jheriko 12y ago

i am very skeptical that they use air freight. having worked in large scale logistics, its like the very last choice you use when you are going to be guaranteed a lot of money because it is expensive. there are not that many planes, they are tiny and relatively expensive to run. i can imagine that apple plan ahead, and make sure that the long boat journeys are factored into their plans. is there any evidence of what they actually do? i'd put my money on boats. iphones don't magically devalue in transit afaik and the lead time is short enough to be practical... it just makes no sense, from what i understand, to use planes unless its an emergency.

twinspop 12y ago
I know a pilot that has flown iPhone shipments many times for a major carrier. He's not a fan due to the potential (heh) in-flight battery issues.
thedogeye 12y ago
The cost of bulk shipping an iPhone by air from China to the U.S. should be around $0.25-$1.00 and by sea would be about 1/5th that price. Assume they can earn 5% on their cash hoard with smart, conservative investments. If they have a $600 phone (they sell them all for that price) at sea for 1 month they would have earned about $2.50. They sell the phones as fast as they can make them, and if they don't have a phone in stock and someone desperately needs a phone, they may buy an android, so that's revenue they'll never see again. When we're talking about $0.40 savings to have to delay $600+ in guaranteed revenue by a month. That's all I need to see to know do air every time. Of course we also know that Apple manages their entire supply chain with just 5 days of inventory in stock at any give time. Much harder to do that with ocean freight.
- jheriko 11y ago
  this only works if there is a delay. part of organising this sort of thing is doing it upfront to avoid the delays, the deliveries can all still arrive at the same time. the trade off is that you can not react to supply/demand change so quickly... even then surely you would use planes to fill that gap only, not for everything... one thing that probably skews me is time... air freight has probably gotten cheaper continuously over the last 15 years.. given the problems when there is a lack of supply of phones, i'm still dubious that air freight is the standard option... such shortages last longer than a week.

by jheriko 12y ago

twinspop 12y ago

I know a pilot that has flown iPhone shipments many times for a major carrier. He's not a fan due to the potential (heh) in-flight battery issues.

thedogeye 12y ago

The cost of bulk shipping an iPhone by air from China to the U.S. should be around $0.25-$1.00 and by sea would be about 1/5th that price. Assume they can earn 5% on their cash hoard with smart, conservative investments. If they have a $600 phone (they sell them all for that price) at sea for 1 month they would have earned about $2.50. They sell the phones as fast as they can make them, and if they don't have a phone in stock and someone desperately needs a phone, they may buy an android, so that's revenue they'll never see again. When we're talking about $0.40 savings to have to delay $600+ in guaranteed revenue by a month. That's all I need to see to know do air every time. Of course we also know that Apple manages their entire supply chain with just 5 days of inventory in stock at any give time. Much harder to do that with ocean freight.

jheriko 11y ago
this only works if there is a delay. part of organising this sort of thing is doing it upfront to avoid the delays, the deliveries can all still arrive at the same time. the trade off is that you can not react to supply/demand change so quickly... even then surely you would use planes to fill that gap only, not for everything... one thing that probably skews me is time... air freight has probably gotten cheaper continuously over the last 15 years.. given the problems when there is a lack of supply of phones, i'm still dubious that air freight is the standard option... such shortages last longer than a week.