Commentary & Perspective from the Executive Director
November 30, 2022
As of this morning, the effects of a possible rail strike could impact U.S. supply chains as soon as Dec. 5. If a work stoppage does occur, Airforwarders Association members should expect a surge in activity as shippers seek transportation alternatives to avoid freight bottlenecks and delays. So far, workers in four unions have rejected a tentative contract deal announced in September, while eight have approved it. Unions and railroads have until Dec. 9 to resolve differences. If they disagree, workers could strike, or railroads could lock out employees - unless Congress intervenes. However, we should expect railroads to stop accepting some shipments at least four days ahead of a strike deadline.
Across the Pacific, China’s “zero tolerance” COVID strategy results in civil unrest as the country begins imposing more lockdowns in major cities. Closing factories to mitigate disease spread will likely hurt supply chains as workers will not produce products at normal output levels. The reduction in productivity could result in ocean vessel trip cancellations which could cause a surge in air shipments. Since airline belly capacity from China to the United States has not fully recovered from the pandemic, Airforwarders Association members should prepare for increased demand as customers search for ways to ship last-minute products needed for the holiday rush.
You may know that AfA holds board director elections every two years, and we wish to congratulate the eight candidates who recently won seats earlier this month. Our ambitious agenda requires energetic leaders with creative ideas, and this new group will meet the requirement:
- Kirk McCann, Scan Global
- Jake Fisher, Rock-it Global
- Noel Howard, Radiant Logistics
- Bob Imbriani, Team Worldwide
- Warren Jones, Alliance Ground International
- Richard Garcia, Sterling Transportation & Sterling Brokerage Services
- Sandy Gregory, Parcelcast
- Alan White, National Air Cargo Group
Before the new directors take office in 2023, we wish to thank those members who will leave the board for their past service and dedication:
- Glen Hall, ALG Worldwide
- Chris Connell, Commodity Forwarders Inc.
- Sasha Goodman, Rock-It Global
- Jennifer Frigger-Latham, EMO Trans
- Brendan Akamu, Hawaiian Airlines
Finally, the AirCargo 2023 conference is almost here, and registrations are soaring! The agenda features excellent speakers who promise to provide informative content to help improve your business. We will also have a great exhibit hall with many industry vendors, so catch the early bird discount and register today. Also, booths and sponsorship opportunities are still available, but you need to act soon because they are going fast.
We are looking forward to seeing you in Nashville February 12-14! For more information, go to www.aircargoconference.com.
On the Road Again (May 31, 2022)
I was honored to have been invited to host the 2022 Partnership Conference in sunny Phoenix this month where over 700 forwarder, airline and other industry stakeholder groups gathered to network and tackle current issues affecting our business. Seeing so many Airforwarders Association members in attendance was genuinely inspiring despite being a long since so many had participated in the popular event.
AfA members in Phoenix all seem to enjoy good business volumes despite global uncertainty and supply chain challenges. However, many are concerned about the difficulty in finding suitable labor for operational support. In addition, others expressed frustration about the lingering airport congestion issue that continues to cost forwarders and their trucking partners time and financial resources spent waiting to tender or retrieve cargo at the major airports.
The AfA Airport Congestion Committee is in the final stages of drafting its recommendations paper, which will be used to address the airport congestion challenge. However, it is not too late if you would like to have your perspective included in the document. In that case, please drop me a line as your opinion is essential, especially as we engage airport planners, government officials, and the White House with the paper to identify causes and solutions.
Finally, it's great to be back on the road again, and our next appearance will be at the Los Angeles Air Cargo Association's June 17th luncheon. Please tell your LAX office to register and grab a seat for some lively discussion on the industry's current state and what we can expect in the immediate future. See you in LAX!
Lingering Airport Congestion: Expect More to Come (April 29, 2022)
Pandemic-related shutdowns in Shanghai and other cities in China continue to close factories and limit cargo loading at maritime ports and airports in the region. But as these COVID restrictions subside, we can expect a surge in manufacturing due to pent-up demand from North American buyers and other countries dependent upon China’s factory productivity. This impending outpouring of ordered goods will flow to the oversubscribed ports, already dealing with a backlog of ships waiting for cities to open.
Over the last several weeks, Southern California ports began to reduce the backlog of ships awaiting docks for a few reasons. First, vessels are beginning to seek less congested ports on the U.S. east coast, bypassing those in California. Second, the China city lockdowns are restricting departures from Hong Kong and Shanghai, with some carriers canceling scheduled sailings.
As forwarders, the anticipated shipment surge means that shippers will want to expedite goods to the U.S. This demand will increase the burden on the air cargo sector, which continues to experience unsurpassed levels of freighter activity due to infrequent passenger belly capacity from Asia. In addition, major U.S. airports should expect another pulse of significant volumes from China soon, increasing lines of trucks trying to gain access to ground handling facilities already stressed due to insufficient labor and outdated airport infrastructure.
We still have not solved the airport bottlenecking challenge. Therefore, the Airforwarders Association (AfA) is driving an initiative to help find solutions for five critical issues contributing to airport congestion in the U.S. A group of 35 stakeholders from our association and others is drafting recommendations now, which we will use to approach private, public, and government entities to highlight challenges and suggest solutions for cargo congestion issues at airports. Considering the current situation and what we are forecasting, this ambitious project could not have come at a better time for our industry.