9. greg andrews
Transcript of 9. greg andrews
Session III
The View From The Top
Shippers perspective of the air cargo services available in BRIC
Corporate Statistics
FY2005 Revenue: $513 Million
FY2005 Net Income: $101 Million18 Years of profitable growth
Employees: 1,600 total
Headquarters: Cummings Research Park, Huntsville, Alabama
“Negative Influences” Impacting a shippers choice to use Air Cargo
Capacity Constraints Increasing rates Impact of the trade imbalance Fuel surcharges Security Regulations Caused by Terrorist Threats
• Capacity Constraints– 100% of Fortune 500 building/Sourcing in China– Retailer Hogs-battling seasonality-quickest to shelf, causing spikes in
demand that hurt 52 week shippers
• Peak Season– Previous (August—October)– Now (July-November, if demand high extend through December)– Isn’t it “year round” now due to offshore manufacturing?– China New Year Holiday peak (get out before plants close)– If no Peak then “Artificially Create” peak, by parking planes
Negative Influences Impacting Air Cargo
• Roller Coaster “Rate Ride” by the carriers– Short sided revenue management for 52/week shippers– Wild-Wild-West, get whatever the market will bear– Carriers to far removed from the shipper– No sense of Partnership or “win-win”
• One way positive East bound traffic lane– Backhaul return is a disaster– Carrier inability to run the right product mix– East bound subsidizing West bound lane
Negative Influences Impacting Air Cargo
• Fuel surcharges that defy logic or reason– Being used to “pad revenue”?– Why are half our Air Cargo Service Providers under scrutiny and
investigation for price fixing? – Need a “formal regulatory branch to administer FSC in the air
cargo world, who nominated Lufthansa
• Security regulations -terrorist threats– Legislation that is not practical, and is counter productive to air
cargo and global supply chains– 100% screening of air cargo– Cost to implement all of these programs is being borne by the
shipper, is that fair?
Negative Influences Impacting Air Cargo
A Shippers Challenge to think outside the box
Contingency planning for the What If?What if the terrorist are successful in taking down a passenger planeloaded with belly freight, and the explosive device was found to haveoriginated from a freight package?
Are you prepared for DHS & TSA reactions with a ban on freight-passenger mix
As carriers what proactive measures are you taking now to head this off
Should we not move now to a two-tiered solution where freight and passengers are completely separated
Airports like Huntsville, Rickenbacker, SCLA, and Alliance are examples of airport infrastructures that could easily take on such a system