As we contemplate what 2015 may bring to air cargo, there is a refreshing change in perspective from recent years: Nearly all of the industry’s economic indicators are positive. If year-to-date trends continue, 2014 will be the first year since 2010 in which freight volumes will grow at a greater rate than capacity. There are regional differences, but those who prefer to see the glass half full can find reasons for “cautious optimism.” Even yields are reported to be stabilizing — halting, if not yet reversing, their long-term steady erosion.
Of course, one year when demand grows a percentage point or two more than supply won’t fix the industry’s chronic overcapacity issues. We can hardly celebrate worldwide freight load factors inching above 45 percent when passenger load factors are north of 80 percent. Still, it’s worth considering how our industry might react to a substantial recovery.
The challenging business environment of recent years has served as a convenient (if understandable) excuse for not addressing many of the air cargo industry’s long-term problems. While e-AWB has finally gained some traction, there are myriad other issues that demand concentrated and cooperative attention: the causes of and cure for modal shift, the future of security, environmental sustainability, how to best utilize advances in technology, etc. If profits improve, will the resolve to expend time and resources attacking these issues follow?
Something else that will be interesting to watch: When the first hint of cargo demand exceeding supply appears, will that route or region be flooded with capacity, or will the elusive “industry discipline” finally emerge?
Intriguing questions, and obviously an unforeseen global crisis or security incident could render them irrelevant. Still, wondering how the industry may react to better times is preferable to all those years when the only logical question was “How bad can it get?”
Jan Krems, President, United Cargo