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Compton: Carriers are well positioned to invest in cargo

By John W. McCurry on May 6, 2014

Jim Compton, vice chairman of United Airlines, told attendees Monday at the CNS Partnership Conference in San Antonio, Texas, that despite air cargo’s myriad challenges, he is more optimistic than at any time during his nearly 30 years in aviation. Compton, who also holds the title of United’s chief revenue officer, said that as airlines have returned to profitability, they can invest in other aspects of the business, including infrastructure to support the cargo side.

“We can now invest in new technology, better facilities and improved customer service training,” Compton said. “The industry is changing. Airlines have made tremendous strides towards behaving like a real business. This is not the industry of yesterday. As we have worked our way through more than a decade of challenges, we have shaped ourselves by thinking outside the box and adapting to the changing world economy.”

The airline industry has always been vulnerable to exogenous shocks, such as fuel crises, wars, pandemics, security issues and natural disaster, so it constantly has to deal with challenges, Compton said. It also must navigate assorted sets of government regulations around the globe. He also noted that U.S. carriers, unlike those in the Middle East, have to deal with regulations that are sometimes detrimental to business.

“Even in the best of times, our business is tremendously complex. We are impacted by many things outside of our controls. In addition, our industry is ferociously competitive.”

Compton noted that United is investing heavily in cargo infrastructure improvement such as the “United Cargo warehouse of the future” which opened two years ago at its hub in Chicago. United has also upgraded its temperature-sensitive cargo facilities in several cities, including hubs at major gateways. The carrier has also increased its fleet of safe transportation vehicles for pets, the largest fleet in the industry, according to Compton.

“Temperature control is an important focus for United in 2014,” Compton said. “We have to invest a great deal in training and preparation before we certify a station to handle this product. We have increased our number of stations to 45 with 10 more coming online this year. We recently launched a new control tower for the planning and control of all phases of the shipment cycle.”

Compton noted that United has “a great order book” that will add 100 fuel-efficient wide-body jets to its fleet in the coming year. He said that while freighters will always have their place for certain routes and products, there is a decided shift to bellies.

“Wide-bodies can carry cargo at a lower cost than existing freighters,” Compton said. “The industry must recognize the need for capacity discipline.”

Compton said that United now has the technology in place to move forward with implementation of e-freight. He says United is moving toward its goal of a 22 percent implementation rate by the end of the year.

“Taking the paper out has been a long-time goal. The process has been slow, but we are excited about the recent progress.


CNS initiatives

In his welcome address, CNS President Warren Jones urged attendees to keep the momentum going for the e-AWB and other industry issues.

“Every one of you has an impact on air cargo and therefore I need your help. Help us to drive the e-AWB and to drive transit times down, to ensure the safe and proper shipping of lithium batteries and to drive ACAS.”

Noting the proximity of the conference site to the Alamo, Jones said that like Alamo commander Col. William Travis, he was drawing a line in the sand.

“I am not William Travis, but I am drawing a line to challenge carriers to set up a mandate of 100 percent adoption of the e-AWB.  For forwarders, reach out to your transportation providers and make this happen. We owe it to the future generations to keep the air cargo industry modally competitive.”

CNS took a step toward ensuring a supply of talented individuals coming into the industry with the awarding of its first scholarships. Three students with career goals of entering the air cargo sector were awarded a total of $10,000 in scholarships.