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(1) This note examines the role that air cargo plays in economic development and factors that condition its impact. After presenting basic empirical relationships between air cargo and both trade and gross domestic product per capita, we discuss three factors that can enhance air cargo's positive impact: air service liberalization, improving customs quality, and reducing corruption. We then model and assess the effects of these three factors on per capita net inward foreign investment and gross domestic product per capita in 63 countries around the world.

(2) E-commerce has brought new challenges as well as opportunities to the air cargo industry. With careful planning and cooperation among industry agents and with e-commerce as an enabler the air cargo industry can be transformed into one that can provide customized services to individual shippers at the cost level of mass production. The key component is in the setting up of a third-party e-commerce community network. In this paper, we present a frame work for such a network, which extends the traditional business-to-business e-commerce to e-commerce at the industry level. The proposed infrastructure differs from traditional portals in that it features the online integration of business transactions. It provides a virtual market for agents of the air cargo industry, enabling them to develop and engage in logistics integration. It also facilitates tracking and tracing, and minimizes unnecessary travel and inventory costs, thus achieving supply chain management at the industry level. We provide an implementation scenario for the air cargo industry in Hong Kong