any exporting, according to the U.S. Commerce Department, and when they do,
almost 60 percent ship to only one country.
Commerce has reportedly partnered with
UPS to try to stimulate exports by SMBs. It’s
a bitter irony then that the air cargo market
is in such a state that in February UPS
announced that it would lay off at least 300
pilots in another cost-cutting move.
If the latest numbers are not merely a blip
but in fact reflect a sustainable recovery in
cargo volumes, then the question has to do
with how to match capacity with demand.
There’s a parallel between airfreight and
ocean transportation in one sense. With too
many planes and boats, each sector resorted
to laying up assets. That led to jokes about
“parking lots” outside Singapore and in the
desert in the American Southwest, jokes that
weren’t terribly funny inside the industry. If
airfreight demand is on the upswing, can
some of landlocked air freighters be returned
to service?
The bigger question is whether the
recent bump in volumes is real at all or just a
holiday surge. It’s well known that cargo
stacked up in Asia when retailers realized
late in the game that there was more
demand this past holiday season that many
had planned for. All of a sudden, they
needed replenishing.
As in ocean transportation, those air cargo
providers who are best positioned for the
recovery are the ones who have pared costs
but are ready to provide a full palate of services. Perhaps there’s a lesson in what air-freight forwarders have done for years:
diversify.
When many shippers view air cargo as a
premium, it becomes a big opportunity to
drive down costs by simply cutting it out.
For them, airfreight is an exception, not
something that’s planned. Those clients
look for the best overall value in service and
cost tradeoffs, while maintaining their own
level of customer service.
The forwarders’ response: they have
moved into other modes in order to
provider the service and price points that
meet customer demand. In addition, they
have onboarded such value-adds as kitting,
pick/pack, poll distribution, transloading,
you name it. These develop additional rev-
enue streams and benefit the client base.
To access this article online, visit The Digital
Edition at www.SupplyChainBrain.com.
Westbound Transpacific Stabilization
Agreement, www.wtsacarriers.org
Agriculture Transportation Coalition,
www.agtrans.org
National Industrial Transportation
League, www.nitl.org
Alphaliner, www.alphaliner.com
South Carolina State Ports Authority,
www.scspa.com
Port of Portland, www.portofportland.com
International Air Cargo Association,
www.tiaca.org
Boeing Company, www.boeing.com
Association of Asia Pacific Airlines,
www.aapairlines.org
International Air Transport Association,
www.iata.org
Resource Links
