Law of Unintended Consequences May Punish Air Freight We've all read about that nutty person who sealed himself up in a crate and sent himself via air freight from JFK to Dallas. To the nation at large, it was no more than a one or two day amusing story which vanished from the TV news programs soon after. The consequences for the air freight industry, however may be far longer lasting and not so amusing. For the law of unintended consequences is kicking in. It seems that the lady senator from Texas, Kay Bailey Hutchinson, has been one of the sponsors of an "anti-terrorism" bill requiring detailed security information for every air freight shipment. The effect inevitably would be to slow down air cargo traffic. With speed of delivery our single greatest asset, Sen. Hutchinson's bill, now being considered in a joint Senate-House Committee, could hurt seriously our air freight industry. The bill was being deliberated in somewhat leisurely fashion in Committee until Pilot Air Freight accepted the bogus "freight" and Kitty Hawk flew it from JFK to DFW. Then all proverbial hell broke loose. Since the crate landed in Sen. Hutchinson's home state, the junior senator from Texas immediately began appearing on a whole passel of cable TV news programs decrying the "lax security" at airports and insisting her bill would solve the problem. Never mind that our industry could be crippled by too many restrictions in the name of "security." Let's hope that cooler heads will prevail and the bill never sees the light of day. An ironic postscript: The man who shipped himself in a crate paid $550 in freight charges. He would have bought a first class ticket to Dallas for less money.. Back to Top

Are E-Logistics “Solutions” Just Hot Air? Ever since the dot com boom, information technology company sales & marketing hot shots have taken a great deal of creative license to describe their software products. They have spun breathless news stories how they would "revolutionize" the air freight industry which unfortunately many trade press editors swallowed hook, line and sinker. Speaking gibberish which no one could understand instead of clear, simple English, they attempted to describe the bells and whistles of their products. As the dot com boom fizzled and forwarders became more savvy in assessing IT matters, buzz words have evolved and mutated with frightening speed. In the real world, there generally is one or at most a few solutions to a problem. But in the fantasy world of the software companies, every e-firm has a different "solution" to what are basically similar information needs by forwarders. Can they all be right or are they sending up hot air in desperate bids to generate business? Many of these software companies were around five years ago when the dot com business started and trumpeted "solutions" back then. If they have to come up with new "solutions" today, obviously their first editions of software were not "solutions" at all, but were useless to our industry. With software companies doing a major and perhaps even fatal disservice both to themselves and to their customers, I'm reminded of a saying by a wise, old forwarder. He said, "the longer I stay in this business, the more I'm convinced simpler and older are better." Back to Top

Open Skies For Freighters International aviation agreements are traditionally bi-lateral in nature. Access rights are worked out between two countries and usually no distinction is made between passenger and cargo operations. But there is a growing effort to create an "open skies" agreement between many of the industrialized nations for all-freighter aircraft and the cargo they carry. If enacted, this could result in major benefits to our shippers, our industry and Boeing and Airbus who make the freighters. It would permit the massive movement of high value goods around the globe unhindered by passenger restrictions that now exist for cargo as well. Trends in our industry illustrate why the enactment of "open skies" can be so important to our industry. Perhaps without our even realizing it, air cargo has been gravitating toward freighters. About 46 per cent of all air cargo as measured by weight now moves on freighters, up from less than 30 per cent in the 1980s. By 2010, it is expected this percentage to rise to 60 per cent with"belly" freight dropping to only 40 per cent. Today, about 1,200 freighters are in operation; a figure that is expected to jump to 3,000 within the next few decades. CII is fortunate in that our single largest market, Australia, has an open skies agreement for all-freighter aircraft. We should have more of them. All cargo deals are less complex and less politically charged than those involving passenger flights. Happily, diplomats don't seem to care as much about freight as passengers so there is a reasonably good chance open skies agreements between many more countries will occur within the next few years. These agreements could be of great benefit to our industry. Back to Top

Atlas Air, RIP The recent decision by the New York Stock Exchange to suspend trading in Atlas Air and to ask the SEC to delist Atlas, may be the last nail in the coffin for the company. A sad ending to the once high flying leasing company started by Michael Chowdry, working out of a one room office in Denver 13 years ago. Chowdry, who was killed when his rebuilt Czech jet fighter crashed on take-off with the Wall Street Journal's aviation editor aboard, was the consummate salesman. He convinced many airlines it was cheaper to "wet lease" Boeing 747 freighter aircraft from Atlas than to own the aircraft themselves. While the world economy was flourishing in the mid and late nineties, the airlines couldn't get enough of Chowdry's aircraft. Then came 9/11; the world went into recession and you couldn't give away those big Boeings. Will Atlas survive bankruptcy proceedings, which now seem inevitable? And what will happen to subsidiary Polar Air Cargo? Atlas and Polar have a combined fleet of 51 freighters; all 747s. Hardly a small amount of cargo capacity. If Polar is forced to stop flying because of possible liquidation of the company, its aircraft and route structure would be up for grabs. Many forwarders who rely on Polar for low cargo rates, would really have to scramble. Sic Transit Gloria for a company who thought it could rewrite the air cargo play book, but would not admit there was a downside to our industry. Back to Top

Flying Under The Radar Screen; World’s Comeback A.midst the uncertainties and shifting tides of the air freight industry see above the Atlas story), it is refreshing to take note of at least one all-cargo carrier that has emerged from a lengthy period in the aviation shadows and into the operational and financial daylight. That airline is World Airways. With more lives than the proverbial cat, World has been given up for dead any number of times. Yet, it has managed to remain in the air despite a number of setbacks that should have put it down for the count. Started fifty years ago by feisty ex-baggage handler Ed Daly, who had his fifteen minutes of fame knocking off refugees from a moving World 727 in Saigon at the end of the Vietnamese war, World was the world's largest passenger charter airline in the sixties and seventies. When airline deregulation practically knocked the passenger charter business out of the skies, World almost went under. It barely survived in skeletal form. Keeping a tight lid on costs, drastically down sizing its fleet and personnel, keeping a low profile, quietly lobbying its government contacts for military business, World was able to keep its head above financial water while its sister charter airlines became memories. Today, the airline is quietly prospering. It is showing increases both in revenues and profits. While not yet in the Cargolux class, World has managed in its last fiscal quarter to triple net income to $6.2 million and grow volume by 33 per cent to almost $117 million. With all the negative news emanating from our industry, it is encouraging to see one cargo carrier "making it" and refusing to call it quits. Back to Top