Air cargo shippers facing many new challenges: Part II

Chuck Clowdis, managing director of consulting firm Trans-Logistics Group, Inc., was one of the major voices in LM’s 2018 Rate Outlook: Economic Expansion, Pushing Rates Skyward feature earlier this year. Here, he shares more views on the air cargo sector in the second part of our interview.

He believes, for example that barriers to entry for new players are not as high as they have been in the past…but are still daunting.

“Lift is scarce unless you have the planes,” he says, “and ground handling is likewise scarce at major airports. This causes congestion and delays. Gate Slots, tarmac and cargo handling space is at a premium and diversion to other airports can be challenging and less than ideal.”

Still, he sees that select lanes are “doable,” and he expects to see major- market-to-major-market players arise to and from secondary markets, with some more adjacent to major existing locations than others. 

Major airlines and consolidators must be pleased with the current limited available capacity, he adds, but constant vigilance of market change is key here.

“Thinking that by ignoring innovation, things will remain status quo is foolish,” he says.

Meanwhile, Clowdis says security will only get more intense, though scanning of cargo will evolve and become easier and more refined. 

Similar to trucking, the pilot shortage seems to be another area of concern. Some say one cause is the FAA requirement for commercial U.S. pilots to hold 1,500 training hours, compared to only 250 hours in most other countries.

Clowdis feels that lowering the standards in not the solution.

“But we should make training hours easier to acquire…air cargo providers must invest in these training hours and develop the pilots they will so sorely need,” he says.

Finally, President Trump’s second year in office marks his pledge to improve American infrastructure, including airports. He has also vowed to work on cyber security, effecting “free flight” that will reduce flight time and airline costs. What impact will this have on large hub and spoke carriers to add an additional bank of flights? 

For Clowdis, it is only a matter of time until “mini-hubs” will evolve.

“And it is high time, in my opinion, to stop subsidizing small airports,” he concludes. “Taxpayer dollars would be better spent developing regional hubs than flying in and out of cities heavily subsidizing low capacity flights.”