newsworthy
has air freight bottomed?
After months of unprecedented declines, the worldwide air-freight market may be bottoming. But it could be awhile
before a sustainable upturn takes hold.
Gary Schultheis, senior vice president, airfreight for global forwarder Deutsche Post DHL, says air export activity
from Asia to the United States has picked up somewhat as
summer approaches. South America is hanging in, he says,
and the Middle East continues to be relatively strong.
Europe, however, remains weak.
While the market remains fragile, Schultheis says it is
nowhere near as weak as it was in January, which he says
was the trough of the current downturn for his company’s
global network. Deutsche Post DHL’s volumes began to
pick up in February and March, he says. In April, however,
volumes slipped to February levels, reflecting the typical
Easter holiday slowdown. “But we’re not going back to
where we were in January,” he says.
If air-freight executives believe things are looking up, it
may be because there isn’t much farther to fall.
International air-freight traffic in January plummeted a
whopping 23. 2 percent year over year, followed by a 22.1-
percent decline in February, according to the International
Air Transport Association (IATA). To put the declines in
perspective, in September 2001, the month of the terrorist
attacks on the United States and the subsequent shutdown
of the nation’s commercial air system, global air-freight
traffic fell 13. 9 percent, according to IATA.
In a late April statement, IATA economists said air-freight
volumes may have bottomed because manufacturing activity and sales may no longer be falling faster than inventories
are being liquidated. However, IATA said an upturn is “not
yet in sight,” citing still-elevated inventory levels and excessive consumer debt loads.
IATA said air freight acts as a leading indicator of global
economic activity. Thus, an upturn in the sector, whenever
it occurs, should be followed by an improvement in the
broad global economy four to five months later.
For air shippers and freight forwarders, one bright spot in
the bleak picture is that the capacity shortage that plagued
users as recently as last summer has eased. Schultheis says
freight capacity currently is abundant throughout the
world, though he warns the situation could change on the
trans-Pacific lane once Delta Air Lines grounds its remaining seven Northwest Airlines Boeing 747-200 freighters.
The planes, which operate between Asia and the United
States via Anchorage, Alaska, are scheduled to be withdrawn from service in December. However, Schultheis said
he wouldn’t be surprised if Delta pulled the planes down
sooner if volumes don’t pick up.
ground breakers
Trading down
One consequence of the global economic downturn has
been the trading down of transportation services.
Internationally, this has meant a migration from air to less-expensive modes, or the use of air services that promise
day-definite deliveries instead of the fastest transit times.
One carrier that’s seeking to tap into the latter trend is
TNT, a Netherlands-based express and mail delivery company. TNT is dusting off a three-year-old day-definite product
that offers a combined air and less-than-truckload (LTL)
service for heavy consignments (more than 150 pounds)
moving from Europe to the United States. In early April,
TNT announced that it had replaced its previous partner,
YRC Worldwide, with Con-way Freight.
The service links the United States and Europe through
TNT’s European hub in Liege, Belgium, and New York’s
Kennedy International Airport. European exporters will tender freight to TNT, which will consolidate the shipments in
Liege and load them on a freighter operated by
ABX Air Inc. After the shipments clear customs
at JFK, they will be moved into the Con-way
network for final delivery.
Matt McDonough, president of TNT Express
U.S., says customers should expect door-to-door transit times of three to six days, depending on the final destination. The service will
offer guaranteed space and real-time track-and-trace capabilities. He reports that TNT plans to
price the product below overnight or second-day air deliveries, but above an all-water move.
McDonough says YRC’s widely reported
financial woes had nothing to do with the decision to switch to Con-way, noting that TNT had
been talking to other prospective partners
before YRC’s difficulties became public.
—M.S.
The Port San Antonio in Texas has opened a new 90,000-square-
foot air-cargo facility. The new operation, which is big enough to handle four wide-body aircraft simultaneously, includes an on-site Federal
Inspection Services facility operated by the Bureau of Customs &
Border Protection.
Real estate developer Trammel Crow has broken ground on a new
industrial park near the Pittsburgh International Airport. The PIT
International LogisticsCentre will be situated on a 160-acre site located within the airport’s foreign trade zone. When fully built out, the
industrial park could include as many as 900,000 square feet of Class
A warehouse, distribution, and air-cargo space.
