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Forecast: Sunny for golf, cloudy for business

By control on May 7, 2013

By John McCurry

The mostly sunny Sunday morning on the Devil’s Claw golf course at the Sheraton Wild Horse Pass Resort & Spa in Chandler, Ariz., gave some 120 golfers from assorted segments of the air cargo sector a few hours of respite from an industry climate that is not as bright.

The annual CNS Partnership Golf Classic was won by the team of Mike Adcock of FedEx, Erin Gruver of Aeroterm, Michael Mangione of Asiana Airlines and Blake Bowlin of Caterpillar.

David Whitaker of the Columbus Regional Airport Authority won the closest to the pin award and the longest drive was registered by Matt Castle of C.H. Robinson.

“The golf tournament was a great event,” Warren Jones, the new head of CNS, says. “The golfers enjoyed it, and it was a beautiful day.”

Air Cargo World spoke with several golfers to get their read on the industry. All seemed to wish they had a crystal ball to forecast the rest of the year.

Wally Devereaux, director of cargo sales and marketing at Southwest Airlines, says 2012 was a good year for the airline cargo-wise and January started off strong, but business has been up and down since.

“We saw a little improvement in April, but it’s hard to figure out what you should expect at this time with the general malaise in the economy,” Devereaux says. “Unemployment is improving a little bit and consumer spending is improving a little bit, but it’s hard to figure out what to expect.”

Devereaux says the acquisition of AirTran Airways will give Southwest cargo growth opportunities going forward with the addition of such destinations as Charlotte, N.C., Rochester, N.Y., Richmond, Va. and San Juan, Puerto Rico.

Jim McKeon, strategic adviser for Southwest, says he is optimistic and believes the pessimism across the industry is overstated.

“We are growing as an airline organically,” McKeon says. “The common denominator is continued growth. People know we are pretty consistent, and it has a positive effect on what we do.”

Mark Spisak, senior vice president, operations for Bellevue, Wash.-based Radiant Global Logistics, agrees that the business environment is unpredictable.

“We see a couple of steps up and we get our hopes up, and then things fall out the next week,” he says. “We are definitely seeing a lot of mode shifts. We are sticking with our customers and offering warehouse, LTL, distribution and fulfillment as well as airfreight and oceanfreight. We think that the closer we can be with our customers on as many levels as we can, will give us hope when the market comes back.”

Spisak cites the overall stagnant global economy for the industry’s unpredictability.

“Many governments are tightening their fiscal reins if you will,” he says. “I believe everyone is looking at costs on many levels, not just labor and fuel, but transportation and the overall cost of dong business.”

Peter Penseel, Amsterdam-based senior vice president and global head of network carrier management at DHL Global Forwarding, finds optimism hard to come by.

“We hoped that business would have picked up again by now,” Penseel says. “We need a crystal ball. It will be difficult in the current air cargo environment. There is too much capacity on the belly side. We will continue to see a lot of pressure on the market.”

Penseel says he would like to be more optimistic, but he doesn’t look for the market to improve in the coming months.

“The best word to describe business conditions now is unsettled,” Robbie Anderson, president of United Cargo, says. “Earlier in the year we had reason for optimism as it seemed a positive trend was developing, but momentum on that has stalled. The U.S. economy is experiencing some effects from the sequester and from the lapse of the two-year payroll tax holiday that ended in January, and the Eurozone cannot seem to find any traction for long-term growth.”

Anderson says on the positive side, United Cargo’s TempControl service for temperature-sensitive cargo continues to expand. Beijing, Shanghai and Seoul were recently added to the list of cities certified to handle TempControl shipments, bringing the total to 40 cities worldwide.

“The temperature-sensitive pharmaceuticals market is one sector of the air cargo business that is growing, so we're focusing on expanding our network while maintaining excellent service,” Anderson says.

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