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Archives, Foreign Trade Zones, Global Trade Daily, International Trade, News

The Next Big Disruption of the Supply Chain Network

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Turkey and Greece Clash Over Oil and Gas in the Eastern Mediterranean: 14 Actions to Take to Keep Your Cargo Moving and Your Supply Chain Agile and Resilient.

While the Mediterranean Sea as a whole has been the center of oil and gas explorations, it is in the Eastern Mediterranean Sea that massive gas fields exist. “According to a 2010 study by the US Geological Survey, the Eastern Mediterranean could hold as much as 122 trillion cubic feet of natural gas in total, equivalent to the reserves of Iraq.” However, the discovery of oil and natural gas in the region has reignited territorial conflicts between Turkey and Greece, both of whom are members of NATO.

Turkey has always felt that the Treaties of Sèvres and Lausanne were not only humiliating but that they stripped the country of valuable territory which is now very promising financially, economically, and logistically. In addition to Turkey and Greece, the discovery of gas affects Cyprus, Lebanon, Israel, Syria, Jordan, Egypt, and Libya. But for Turkey especially, it could be a means to leverage itself into a much stronger regional power.

In addition, Turkey felt that excluding it from the regional energy development talks in the Eastern Mediterranean, was a slap in the face. As a result, both Turkey and Greece are boosting their military presence in the Eastern Mediterranean Sea. There is no doubt that 2 events emboldened Turkey’s actions; the world is busy fighting the coronavirus and the strides made in technological advancement which made manufacturing and acquiring weapons a lot cheaper than what it used to be.

BCOs (Beneficial Cargo Owners) operating in this geopolitical climate should consider these long- term strategies:

-Rethink your supply chains by examining the geographical locations, financial and logistical strengths, weaknesses, agility, and resiliency of your suppliers.

-Add 2 to 3 weeks to your transit times. This will protect you from unexpected weather delays, blank sailings, removal of ships from service, or even the cancellation of sailings altogether if the conflict escalates and waterways and bridges are closed.

-Increase your lead time and inventory level, which may seem expensive at first, but will actually be less expensive in the long run, when you will be forced to resort to shipping by air in order to maintain high service levels and promises to customers.

-Review and revise your forecasts weekly.

-Increase your buffer stock and inventory when necessary; doing so won’t necessarily reduce your cash flow if you negotiate good credit terms with your suppliers.

-Build-in your budget increases in spend on ocean freight rates, BAF, and WRS.

-Assume the worst-case scenario and have alternative procurement sources should sanctions be imposed or should war break out.

-Account for the increases in duty should the alternative suppliers be located in countries subject to higher duty rates.

-Make sure that your cargo carries additional insurance coverage to mitigate war risk.

-Avoid the carriers whose ships carry the flag of the conflicting countries.

-Monitor the financial stability of all links in the value chain frequently, especially the stability of ocean carriers given the consolidations and reorganizations that have been taking place lately.

-Make sure that the air freight cost is accounted for and that your customer will accept the additional charges should you have to resort to airlift any cargo. Having these contingency plans negotiated and agreed upon in advance will eliminate delays, surprises, and even possible plant closures due to last-minute disagreements.

-Communicate, plan, and execute with internal and external stakeholders frequently. Constant communication cannot be emphasized enough. So is the frequent evaluation of all suppliers and service providers for products, services, and contract revisions if necessary due to the volatility and complexity of today’s supply chains.

-Stay abreast of events in the whole Middle East region given the daily geopolitical developments some of which may affect the movement of cargo between that region and the world.

This is a conflict that, at first sight, seems to be between Turkey and Greece but, in reality, it’s much more complicated than that because now the USA and the EU are involved. As a matter of fact, the EU is considering sanctions against Turkey.

The best course of action would be for the clashing countries to renegotiate the treaties that caused their grievances including but not limited to their territorial waters and the Law of the Sea.

Lastly, the latest military escalation was not the result of the discovery of gas only as it carries within its centuries of territorial and religious conflicts. Most importantly, this is happening between Turkey and Greece who at one time were glorious empires and who are intent on bringing that glory back.

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Omar Kazzaz specializes in business strategy, BPI (Business Process Improvement) as well as supply chain design, planning and execution. He has 28 years of experience in international business, global logistics and supply chain.   

Mr. Kazzaz is a long-standing member of the Global Thinkers Roundtable. In addition, he has been involved in numerous panel discussions on global trade and global logistics. His comments and articles on international trade agreements, global manufacturing and supply chain have been quoted in many publications. 

Mr. Kazzaz holds an MBA in International Management from Thunderbird, The American Graduate School of International Management in Glendale, AZ, and a BA in German and Economics from The University of North Carolina at Charlotte. Besides his native Arabic language, Mr. Kazzaz speaks French and German. 

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Archives, Global Trade Daily, Top Cities

20 FOR 2020: THE TOP 20 CITIES FOR FREIGHT FORWARDERS

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Even domestic shipping can be complicated. That’s why freight forwarders exist—they handle much of the complex paperwork and hassle needed to move cargo across borders. For freight forwarders, some cities are definitely better than others.

To find out the best cities for freight forwarders, we asked Carlo De Atouguia, the chief operating officer of Western Overseas Corporation. For more than four decades, Western Overseas has provided freight forwarding, customs brokerage, warehousing, distribution, cargo insurance, and e-commerce services to small and large companies across the globe.

Atouguia zeroed in on a common theme to come up with the top 20 cities for freight forwarders. “These cities are key because they are integral gateway cities for both ocean and air,” he explains. “I believe it is an advantage having representation in these cities because it allows you to develop a personal business relationship with the major players in all facets of the freight forwarding supply chain in that city. These business relationships are key when negotiating spot rates, late cut-offs, drayage and expedited handling on cargo arrival.

“The other key factor is the sheer number of carriers and cargo flights available in a particular city,” he continues. “The more options you have, the better you’re able to service your customers’ freight forwarding needs.”

ATLANTA, GEORGIA

Air cargo and mail moving through Hartsfield-Jackson Atlanta International Airport has been steadily climbing for the past few years, from more than 624,000 metric tons in 2015 to a little over 704,000 metric tons in 2018, according to Statista. Which is why it wasn’t a shock that Georgia’s $40.6 billion worth of exports in 2018 was the highest in that state’s history. In fact, exports in Georgia have grown by 71 percent over the last decade, according to U.S. Census data. It’s no wonder there are more than 20 freight forwarders in the Atlanta area.

BALTIMORE, MARYLAND

In the Helen Delich Bentley Port of Baltimore, 15 ship-to-shore gantry cranes move about 900,000 twenty-foot equivalent units (TEUs) every year, according to 2018 figures from the U.S. Department of Transportation. It’s also one of the most diverse ports in the U.S., with the six public marine terminals handling autos, roll-on/roll-off, containers, forest products and project cargo. The 11 million tons of cargo that moved through the port this past year was a new record, and the nearly 2.9 million tons of cargo the port handled in between April and June of 2019 also set a new second quarter record.

CHARLESTON, SOUTH CAROLINA

The Port of Charleston is ranked ninth in the U.S. in terms of cargo value, according to the South Carolina Ports Authority. That translated into $72.7 billion worth of imports and exports in 2018. The port’s cranes handled 2.2 million TEUs that year. Thirteen of the world’s biggest container companies tie up there. While the port can already accommodate most post-Panamax vessels, efforts are under way to deepen the harbor from 45 to 52 feet. That’s why it wasn’t surprising when the port authority revealed in November 2019 that Charleston had doubled its cargo volume over the last decade.

CHARLOTTE, NORTH CAROLINA

Charlotte Douglas International Airport (CLT) is ranked sixth in the nation and seventh in the world in terms of the number of passengers and volume of cargo handled, according to the North Carolina Department of Transportation. More than 60 freight forwarders, customs brokers and international service providers use CLT’s Air Cargo Center, which has 570,000 square feet of available space and 2.2 million square feet of aircraft ramp space. The CLT also links to the Norfolk Southern and CSX rail lines. It processed 128,000 tons of cargo in 2015.

CHICAGO, ILLINOIS

Since the 19th century, Chicago has been a railway and ocean hub for commerce. Even today, a quarter of all rail freight in the U.S. passes through the Chicago rail yards. (It’s also the only gateway in the U.S. where six of the seven major railroads can interchange traffic.) An amazing 30 percent of all consumers in North America live within a one-day truck ride from Chicago. But in terms of cargo value, the Windy City is the top international air gateway in the U.S., with about 2 million metric tons of cargo moving through O’Hare International Airport every year, all worth more than $200 billion, according to Chicago’s Department of Aviation.

CINCINNATI, OHIO

Cincinnati/Northern Kentucky International Airport (CVG), which provides non-stop service to 38 of the top 40 U.S. markets, moved 1.2 million tons of cargo in 2018 and is the eighth largest cargo airport in the U.S., according to the CVG airport authority. For the past three years, it’s been the fastest-growing cargo airport in the U.S. It’s also the location for one of DHL’s three “global super hubs,” from which it serves 220 nations. Amazon also has plans to build a $1.5 billion hub at CVG, which will support more than 100 Prime Air freighters.

DALLAS, TEXAS

Because many of the warehouses and distribution centers that stand between international suppliers of goods like China and retail outlets are located in Texas, Dallas is perfectly located to serve as a freight hub for the rest of the nation, according to a 2018 FreightWaves e-newsletter article. Indeed, Dallas-Fort Worth International Airport considers itself “the nexus of Latin America-Asia transit freight.” More than 900,000 tons of cargo moved through the airport in fiscal year 2018. According to the DFW Airport Authority, 55 percent of it was domestic and 45 percent was international.

HOUSTON, TEXAS

The Port of Houston is one of the most heavily used water gateways in the country. According to the port authority, in 2017 it ranked first in the nation in terms of foreign waterborne tonnage (173 million short tons), second in total foreign and domestic waterborne tonnage (260 million short tons) and third in overall value of foreign cargo. It’s also the largest Gulf Coast container port, handling nearly 70 percent of all container traffic in that region. A little more than a million containers (imports and exports) moved through the port in 2001; today, that number stands at nearly 2.5 million.

LONG BEACH, CALIFORNIA

Long Beach has one of the busiest seaports in the world. The Port of Long Beach says its 68 Post-Panamax gantry cranes move around 7.5 million TEUs every year, all valued at close to $200 billion. That translates into 82.3 million metric tons of cargo moved in/out on more than 2,000 vessel calls. It’s the second busiest port in the U.S., and the 21st busiest container cargo port in the world. All told, the port accounts for a third of loaded containers moving through all California ports. About 90 percent of the shipments moving through the port are part of trade with East Asia.

LOS ANGELES, CALIFORNIA

Let’s start with the fact that the Port of Los Angeles has been the top container port in the U.S. since 2000. In 2018, its 83 gantry cranes handled 9.5 million TEUs—the highest number ever moved by a port in the western hemisphere—making it one of the busiest ports in the world. Then there’s Los Angeles International Airport, the world’s fourth busiest, which handled nearly 2.5 million tons of cargo in 2018. According to Los Angeles World Airports, FedEx is the dominant airfreight carrier at LAX, carrying nearly 16 percent of the freight that moves through the airport.

LOUISVILLE, KENTUCKY

Situated on the Ohio River, Louisville is well placed to handle all sorts of cargo traffic. In fact, Jefferson Riverport is one of the few inland ports in the U.S. that connects to three railroads: CSX, Norfolk Southern and Paducah & Louisville. The city is also, as the State of Kentucky Cabinet for Economic Development is fond of pointing out, about a day’s truck drive away from 65 percent of the U.S. population. What’s more, Louisville International Airport is home to the UPS shipping hub—the world’s largest fully automated package-handling facility. One hundred thirty aircraft move through it each day, and it processes a remarkable 1.5 million packages daily.

MIAMI, FLORIDA

In 2018, Miami International Airport ranked fourth in the nation in terms of both total cargo and total freight, and No. 1 in international freight, according to the Miami-Dade Aviation Department. That year, 2.31 million tons of freight moved through the airport, nearly three percent higher than the previous year. At the same time, a thousand cargo ships docked at the Port of Miami—the East Coast’s closest deepwater container port to the Panama Canal—carrying 1.1 million TEUs worth around $27 billion. Nearly half the TEU imports to Miami came from Asia, while 70 percent of the exports went to Latin America, according to the Miami Port Authority.

MEMPHIS, TENNESSEE

Primarily due to FedEx, Memphis International Airport is the top international gateway in the U.S. by weight and the No. 2 cargo airport in the world. In 2016, 11.9 million short tons of cargo moved through the airport, according to the U.S. Department of Transportation. FedEx accounts for a reported 99 percent of the cargo moving through Memphis International Airport, which carries out 450 combined arrivals and departures every day. Memphis is also home to the fifth largest inland port in the U.S., which is very close to the airport and lies at the juncture of major north-south and east-west interstate highways, as well as that of five major railroads.

NEW ORLEANS, LOUISIANA

The only container port in Louisiana, the Port of New Orleans (Port NOLA) has six gantry cranes that can handle 840,000 TEUs a year. Containers make up about 60 percent of the cargo handled at the port, according to the Port NOLA authority. The port also ties into the New Orleans Public Belt Railroad, offering daily intermodal service to Memphis, Chicago, Toronto and Montreal. Regular container-on-barge service also connects the port to Memphis and Baton Rouge.

NEW YORK, NEW YORK

The Port of New York and New Jersey handled 41.3 million metric tons of general cargo worth more than $188 billion in 2018, according to the Port Authority of New York and New Jersey. Put another way, the port handled 52 percent of all the unloaded and loaded TEUs on the North Atlantic. Add this to the 1.4 million tons of cargo that moved through JFK International Airport in 2018, and you can see why New York City holds such importance in the world of freight.

NORFOLK, VIRGINIA

Situated two and a half hours from the open sea, the Port of Norfolk’s 22 Suez-class cranes moved 2.7 million TEUs in 2017, according to the port authority. It’s also so rail-friendly, with two class 1 railroads operating on-dock, that 37 percent of all cargo moving in and out of the port comes by rail—the largest percentage of any East Coast port. Norfolk International Airport also operates one of the most efficient cargo operations in Virginia, moving 30,000 tons of air cargo every year. FedEx, Mountain Air and UPS all use Norfolk International extensively.

PHILADELPHIA, PENNSYLVANIA

For Philadelphia, location is everything. The city is about a day’s drive from nearly half the nation’s population, as well as six of the eight largest U.S. markets. There are also 400 distribution centers located within Philadelphia’s immediate vicinity. PhilaPort can handle cargo carriers holding 12,200 TEUs. The CSX and Norfolk Southern railroads both serve the port. In 2016, Philadelphia International Airport handled about 427,000 tons of cargo, and is home to nearly 40 freight forwarders. The airport sits next to I-95, which runs from Maine to Florida, and is close to both the Pennsylvania Turnpike and the New Jersey Turnpike.

PORTLAND, OREGON

The Port of Portland, the largest in Oregon, handles about 11 million tons of cargo every year, according to the port authority. The port can move containers, autos, breakbulk and drybulk. There are on-dock rail connections throughout the port, and BNSF Railway ties the container terminal directly to Seattle/Tacoma. Portland International Airport, located 12 miles from downtown Portland, is centered in the Columbia River Industrial Corridor. Eight cargo carriers use PDX, including UPS, FedEx and DHL. There are 47 freight forwarders serving the Portland area.

SAN FRANCISCO, CALIFORNIA

About 488,000 tons of cargo moved through San Francisco International Airport in 2018. Nine cargo carriers operate out of the airport, serving destinations all over the world. Additionally, the Port of San Francisco’s five deepwater berths can accommodate a wide variety of container and bulk carriers. In all, 1.4 million tons of cargo moved through the port in 2017, according to the San Francisco Port Authority.

SAVANNAH, GEORGIA

The Port of Savannah bills itself as the largest single container terminal in North America, and it is the second-largest container exporter in the U.S. (13.3 million tons). Two class 1 railroads serve its nine deepwater berths, which operate 27 container cranes. In 2018, the port handled 4.4 million TEUs, a new record for the port. Its major satellite facilities include warehouses and distribution centers for Target, IKEA and Heineken USA. Savannah Hilton Head International Airport handled a further 8,600 tons of cargo during 2018.

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Archives, Global Shippers 101, Global Trade Daily

Airfreight vs. Sea Freight – Which Works Better?

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Airfreight vs. sea freight has become a burning dilemma for all those in need of this type of services. While both solutions come with a set of advantages and disadvantages, the final choice one makes will depend on a variety of factors. We are willing to share our knowledge and findings with you so that you can make the best possible decision regarding your shipment in the given circumstances. 

Airfreight vs sea freight – the costs can be a decisive factor

Undeniably, the amount of financial means necessary to afford airfreight services is considerably higher than that of sea freight. Moreover, the appearance of the largest cargo aircraft in the world announces great changes and improvements in this field. The Antonov An-225 could cause a further rise of the airfreight costs, but it will also guarantee higher quality. On the other hand, sea freight is much more affordable and, consequently, the number one choice of a vast majority of clients. Opting for sea freight provides clients with acceptable service but at a significantly lower price.

Time matters greatly!

Most often, clients want their shipment delivered as soon as possible, which can cause problems for those offering sea freight services. Not seldom do customs issues or hold-ups at ports cause serious delays. However, we must admit that a giant step forward is evident in this field. Firstly, high-quality, modern ships are much faster now than it was the case in the past. Secondly, there are some canal upgrades that can eliminate tedious and tiring delays on some routes. Finally, sea freight forwarders can guarantee delivery times, which is vital for business owners when it comes to organization.

The type of cargo affects the final choice on airfreight vs. sea freight dilemma

The type of cargo is one of the most important factors influencing the choice in the airfreight vs. sea fright dilemma. In this case, we must admit that sea fright seems like a much better solution since it has no limitations you have to be aware of. One of the crucial pros of the maritime shipping is that you can ship even the bulkiest and extremely heavy goods. Conversely, airfreight is limited in this discipline. Before you opt for this type of goods transportation, it is advisable to make sure that the type of your cargo is acceptable. In addition, there is a very long list of the items which are prohibited and those listed as hazardous materials. Depending on your final destination, the rules and laws may differ. Yet, getting sufficient information on the subject must still be the first step in the process.

Safety of your cargo is the top priority

Understandably, the safety of cargo is always the top priority. It is important to emphasize that air cargo has to be dealt with the utmost attention and in accordance with the regulations which are very strict and clear. All the crucial elements, including handling and securing your cargo as well as the proper storage, are defined by airport regulations. This is a great benefit and a guarantee that the safety of your goods will be at the maximal level. On the other hand, we cannot say that sea freight is a bad alternative either. In this case, the goods are transported in containers, but the human factor is crucial. Proper packing strategies are essential in order to decrease any chances of potential damage during transport. If this is not conducted appropriately, the chances are some of your goods might get seriously damaged or even cause further problems on the ship.

Do not forget about the accessibility of your goods

If we analyze the accessibility of your goods as one of the criteria, airfreight is a more favorable option by all means. The procedures are clear, cargo is in smaller volumes and there are no unnecessary waitings to receive your goods. Using sea freight for your cargo often results in additional costs due to heavy congestions in seaports. If your goods are not delivered at the arranged time, you are required to pay for detention and demurrage costs, which may be a heavy burden on your budget. However, we must not forget to mention an advantage sea freight offers comparing to airfreight. The accessibility to markets is much higher in case of sea freight. The reason is very simple. When unloaded from ships, containers can move further inland by using the services of intermodal shippers. 

Eco-friendly practices 

Finally, let us not forget about the environment when choosing between airfreight vs sea freight. Applying eco-friendly practices is becoming increasingly important, so it does not surprise this is one of the factors shippers base their decision on. According to this particular criterion, sea freight is a more reasonable option since it has a significantly better carbon footprint. Quite the opposite, airplanes are serious polluters and require special attention and measures to reduce their carbon footprint to minimal values.

Final words on airfreight vs sea freight dilemma

The decisions and choices you make concerning airfreight vs sea freight dilemma will depend on miscellaneous factors. It is of key importance to weigh the pros and cons of each of these options and then make your decision final.  A serious effort is required to negotiate the best shipping terms and only then can you expect to ship your goods completely fuss-free.

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Susan Daniels is a passionate copywriter who loves exploring home improvement ideas and real estate market. Lately, she has gained considerable knowledge in the types of moving services and the qualities of respectable moving companies such as DA Moving NYC, for example. She enjoys giving advice on the best places to live and exciting places to visit. Traveling makes her happy as well as reading good books.

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Archives, Global Trade Daily, News

Kuehne + Nagel Finalize Worldwide Perishable Canada Co. Acquisition

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Adding to its current presence throughout Canada, Kuehne + Nagel announced the completed acquisition of Worldwide Perishable Canada Co. (WWP) – known as a leader in tuna exports in addition to being one of the largest freight forwarders in Canada. This acquisition represents forward movement for the company to expand its position as a key provider in perishable cargo.

“We are looking forward to joining the Kuehne + Nagel Group. Combining the strengths of both companies, we will add outstanding value in the regional and international perishables business. For both, our customers and our employees this will generate growing perspectives and services,” said Doug McRae, Chief Operating Officer Worldwide Perishables Canada Co.

WWP was originally launched as a designated forwarder with a focus on local demand. The Halifax-based company brings more than seafood logistics expertise to the table, however. Information released by K+N confirmed more than 17,000 tons of perishable air exports per annum out of Canada will be represented through combining company volumes.

“Perishables logistics is one of our strongest growth drivers at Kuehne + Nagel, thus, we have been continuously investing in the expansion of our dedicated network: through selected acquisitions and by connecting key production countries to major markets,” says Greg Martin, Regional Airfreight Manager Kuehne + Nagel North America. “Setting up global certified standards which are reflected in our KN FreshChain solution, has further strengthened our perishables network worldwide, making it the largest in the industry.”

“Acquiring a specialized player in seafood logistics, Kuehne + Nagel consolidates its leading position in the market,” said Jamie Wood, National Manager Kuehne + Nagel Canada. “Using the network and experience of both companies, our customers can benefit from an enhanced offering and the best possible solution to their needs.”

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Archives, Global Trade Daily, News

GEODIS Launches Airside Gateway at Schiphol

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In response to substantial growth volumes recently experienced by global logistics specialist GEODIS Netherlands, the company announced the launch of its Airside Gateway – an innovative airfreight handling system located at Amsterdam’s Schiphol Airport hub, right next to the runway.

The Gateway offers 2500 m2 of warehouse and office space and serves as another step towards the company’s goal of streamlining efficiencies using innovation for the customer’s benefit.

“We estimate that Gateway will bring a significant decrease in airfreight handling times, ensuring quicker delivery of cargo and a better service to our customers,” Ellis de Jong, Operations Director Freight Forwarding said in the announcement. “Export wise, with Gateway we gain more efficiencies on the consolidation side.”

This effort not only supports meeting the increase in demand, but paves a way for a jump start in efficient delivery of goods while enhancing security measures. The announcement confirms the company is following the growth strategy set in place involving innovation and the Amsterdam Gateway.

“The opening of the Amsterdam Gateway is the next important step in both our regional planning and in our global growth ambitions. It will substantially increase our competitiveness and reinforce the crucial hubbing function of our airfreight operation in the region,” concluded Thomas Kraus, President & CEO North, East and Central Europe.

Air Cargo, Archives, Global Trade Daily

Uncertainty in Today’s Air Market: What it Means for You

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Reoccurring annual events, like the holiday season, typically bring predictability to air shipping. But lately, out of the ordinary events have disrupted the seasonality we typically expect. The best way to deal with the ever-changing peaks and valleys in air capacity throughout the year is to know both the historical patterns and potential air market disruptors.

The cyclical nature of air freight

Air freight service predictably follows the law of supply and demand. When shipping volumes spike, space on airlines becomes harder to secure and prices go up. And the opposite is true, too. If shipping volumes diminish, space on airlines becomes readily available and the prices go down.

As you might expect, the holiday peak season is one of the busiest shipping periods of the year around the world—including for air. But there are other seasonal surges to be aware of as well. The graphic below visually represents the seasonality of the air market in years’ past.

New disruptors to the air freight market

We’re just over halfway through 2019, and already it’s quite a different market than we’ve seen in the past. Several disruptors are causing a great deal of uncertainty.

Tariffs on Chinese goods

The ongoing trade war is one of the biggest disruptors to air shipping this year. Earlier tariff changes did not make a huge impact on air shipping. But demand for air freight shifted significantly when enough shippers preemptively repositioned inventory prior to the June 1, 2019, deadline. On May 31, 2019, the United States Trade Representative (USTR) announced the deadline would be extended to June 15, 2019.

Ecommerce and high-tech goods

With the growth of ecommerce and high-tech products flooding our markets, air freight is quickly becoming the go-to mode of transportation for many shippers—any time of year. Combined with the promise of two-day shipping, it’s often the only way to meet customer demands.

Adjust your air freight strategy based on the market

With air freight volumes lower than we’ve seen since the 2008 recession, now may be the ideal time to update your air freight shipping strategy.

Choosing air freight can be a strategic way to lower inventory levels in the United States. Finding a balance between inventory costs without sacrificing customer delivery expectations often requires expertise. The air experts at C.H. Robinson are available in offices around the globe to help manage your air freight and ensure any problems are resolved in real-time.

You may even consider that if air freight rates dip low enough, you could make up the difference (at least in part) of the added tariffs on Chinese goods.

The air freight market is a complex ecosystem that will likely remain uncertain for some time. While this uncertainty lasts, you may want to switch to a quarterly planning strategy to avoid a long-term commitment when you don’t know what’s coming.

What’s going to happen?

While inventories in the United States remain high, it’s likely that air shipping volumes will remain low. The best way to insulate your company and your relationships from today’s air market is to stay flexible. Adapt quickly to ensure you can take advantage of soft markets while still buying appropriately during peak seasons.

Archives, Global Trade Daily, News

American Airlines Cargo Celebrates Record Volume and Revenue

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American Airlines Cargo released an announcement confirming record-breaking numbers for 2018 across multiple initiatives including performance, revenue, and Flown As Booked (FAB) numbers. Records were made for six out of the last seven months in 2018.

The airline attributes the more than $1 billion in revenue to successfully implemented routes and strategic capacity planning. Additionally, the airline confirmed volumes for freight and mail were at record levels for 2018, with an impressive 2 billion pounds.

“Our Operations team set all-time performance records, while moving record volumes of freight and mail across our system this year, reaching our typical peak fall volumes month after month,” said David Vance, VP, Operations, American Airlines Cargo. “It’s impressive to say the least and makes me very proud to lead Cargo Operations.”

“We’ve had an incredible year,” said Rick Elieson, President, American Airlines Cargo. “We set out to break records and did just that. We achieved a major revenue milestone, but more importantly, our teams handled record volume and still delivered the best operational performance in the history of our company. Thanks to the daily effort of every single team member in this organization, 2018 was definitely a historic year.”

Source: AA Cargo

Airports, Archives, Global Trade Daily

Year-On-Year Air Cargo Growth Reported for Budapest Airport

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Budapest Airport reported record-breaking cargo numbers exceeding its substantial 2017 record numbers and confirming consistent double-digit growth for the last three years, according to a release this week.

“These latest figures are exciting as they represent three years of uninterrupted double-digit growth at the airport,” said René Droese, Director Property and Cargo of Budapest Airport. “We are focusing all our efforts to make good use of the ideal conditions in Budapest and turn Liszt Ferenc International Airport into a major cargo logistics hub for the Central-Eastern European region.”

She added:

“For this, we are establishing appropriate technical, security, and traffic conditions – the relevant projects entered the phase of implementation last year, and we can successfully complete them this year. As a first step we handed over a 16,000 m2 new cargo warehouse and office capacity for our integrator partners in 2017; their traffic has been constantly developing for years.”

Budapest Airport will continue to leverage its cargo success through implementing simultaneous operations of two Boeing B-747-8F freighters.

“The combined value of this development effort in 2019 reaches EUR46 million, and is financed by Budapest Airport itself,” said Droese. “Our goal is to deliver, by the end of this year, an ideal cargo infrastructure for all segments of our well-balanced customer portfolio, for full freighters, belly cargo, integrators and roader feeder trucking too. Rising demand is illustrated by the fact that last year a number of wide body and jumbo freighters were being loaded at the airport each day, including Boeing B-747s operated by Cargolux, AirBridgeCargo, and Silk Way West, and Airbus A300s, A310s, A330s, used by Turkish Cargo and Qatar Airways Cargo.”

 

Source: Meantime Communications

Air Cargo, Archives, Global Trade Daily

Air Cargo Exports Process Expedited with New Technology in Perth

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Air cargo exports are now being processed faster and more efficiently following the investment of new screening technology for Tigers Australia Perth facility. This technology enables the company to perform export screenings internally, making the location the only one in Australia with internal screening capabilities. Tigers is a global organization that specializes in technology enabled supply chain solutions. Based in Hong Kong, the company has international locations including Perth, Adelaide, Melbourne, and Sydney.

The Perth location will continue staying one step ahead through Regulated Air Cargo Agent accreditation before the March 1 national date for the introduction of new policies for conducting air cargo inspections.

“Tigers Australia has purchased the equipment to support our customer base with the new legal requirements, which will impact all air cargo export commodities,” said Jason Radford, General Manager, Tigers Perth. “At the Perth facility, we operate 24 hours a day, seven days a week, so we will also offer the service to the entire Perth airfreight market.

“This will allow export cargo screening to be completed after-hours, therefore reducing the need for customers to deliver directly to the Cargo Terminal Operator (CTO) where wait times can be in excess of six hours. The investment in this equipment will ensure that Tigers Perth remains efficient and will be fully compliant with the Australian government’s air cargo security legislation in time for the implementation date.”

Additional features of the new technology include state-of-the-art X-ray equipment, two explosive trace detection units, and an electro-magnetic detection (EMD) machine.

Source: Tigers

Archives, Global Trade Daily, News

AMAZON AIR ENCROACHING ON UPS & FDX AIR SPACE

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“We think the market is missing the risk Amazon Air poses to UPS/FDX growth,” say researchers at Morgan Stanley. “Our work with AlphaWise shapes our analysis of AMZN Air’s impact to date and plots a potential expansion course. Lowering PTs for UPS and FDX and quantifying AMZN savings.”

Morgan Stanley notes that, for now, investors are focusing on Amazon’s last-mile efforts, but the Manhattan-based multinational bank and financial services concern believes the Amazon Air challenge is just as relevant.

“We’ve written extensively on Amazon’s build-out of its internal logistics network, but given Amazon’s plans to take delivery of 40 planes and build an air hub that could potentially handle 100 planes, we’ve taken a closer look at the impact of Amazon Air (its in-house Express Air network) on UPS/FedEx Air volumes,” state the researchers, who point to their own interactive online map.

Learn more at morganstanley.com.