Spoiler alert: Coming air cargo attractions for 2016

BrandonFriedFTAside from a few decent actors and directors, the most deserving recipients of film industry awards should be the people making those alluring movie trailers. These brilliant-but-brief glimpses of movies coming to theaters near us use the funniest and most exciting parts of films to bait audiences for what is sure to be the next Academy Award winner. In many cases, the movie fails to meet the trailer’s expectations, and we leave the theater disappointed.

When reviewing last year’s industry performance, U.S.-based forwarders will probably say that, except for bright highlights, 2015 just did not meet our initially optimistic expectations. IATA’s latest cargo industry assessment reveals that air cargo performance in 2015 shrank from levels seen at the end of 2014. While a modest gain is expected, year-over-year, these small increases are mostly attributable to the surge in activity last spring, caused by the U.S. West Coast port backlog and recalls for Japanese air bags in automobiles.

Looking ahead to the sequel, 2016 may be exciting. However, it has all the earmarks of being a challenging year. Stop me if you’ve seen this plot before, but adverse economic headwinds and a slowdown in China will most likely continue to hamper 2016. These factors, however, will accompany a cast of other factors that are liable to affect the performance:

Security: General unease created by terrorist-related global events has forwarders concerned about what to expect when TSA unveils its long-awaited security program change. Industry and the TSA worked diligently to identify requirements that no longer provide significant security value, but a last-minute review before release threatens to hamper progress.

Preloading advanced data initiatives: As U.S. Customs and Border Protection continues its Air Cargo Advanced Screening (ACAS) voluntary pilot program, and begins another focused on the export manifest, forwarders are bracing for possible new import and export requirements that could cost them time and money.

IATA: The organization representing world airlines is joining forwarders in an initiative that will fundamentally change the carrier/forwarder relationship from an agency to customer basis. An official agreement is expected to be signed in Berlin in March, with two negotiating sessions planned to address unresolved issues. Further, the group’s ongoing push to encourage electronic submission of air waybills forces forwarders to develop a roadmap in embracing technology, which will also affect their IT planning or purchasing decisions.

Lithium batteries: This category of batteries is an ever growing necessity in our daily lives. They power our personal communications devices, our automobiles and, now, even our home power storage. These cells are more useful than ever, and despite their ubiquitous presence in our lives, solutions for safe transport must be found. Banning them from air travel entirely, though, is not the answer.

Trucking: Now that the Highway Bill has passed, compliance safety and accountability (CSA) scores from the Federal Motor Carrier Safety Administration (FMCSA) are out of public view. Also, there are now stiff penalties for coercing a truck driver to break safety regulations, as well as the start of electronic driver logging. What more can we expect from the FMCSA this year?

U.S. elections: As the Obama administration draws to a close, any candidate promising an optimistic vision for better days ahead will likely fly into the White House. That said, forwarders are looking for a candidate who understands the value of free trade and its impact on commerce, freight flows and economic growth. The new president must also focus on reducing the tangled web of regulations our industry currently faces.

Amazon: The Seattle-based e-commerce juggernaut has gone to great lengths to ensure all of its packages get delivered on time. Regardless of whose fault it is, when its shipments experience delays, Amazon looks bad. Sound familiar? Delivery performance could be why Amazon may be creating its leased air network of 767s to control costs and increase reliability. While the company faces definite hurdles to overcome before the plan gets off the ground, this move could be a warning to integrated carriers and even freight forwarders that, to defray costs, Amazon could start delivering for other companies. Its success in the data-storage industry, now responsible for most of its profits, shows that Amazon can leverage assets to disrupt seemingly unrelated markets. Perhaps forwarders should open discussions with Amazon to secure space on future Amazon flights. A deal could address the loss of domestic heavyweight cargo lift available to U.S. forwarders.

The sneak previews for this year have much in store for everyone, including several unanswered questions as to how forwarders and their transportation partners will falter or prosper. We’ve now seen the trailers and the feature has begun. Pass the popcorn.

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Brandon Fried

Brandon Fried was appointed to serve as the Executive Director of the Airforwarders Association in November 2005. Brandon has more than 38 years of experience in the air freight industry. He started his career as a sales representative in Los Angeles. He then moved to Washington, D.C. where he began, owned and operated the Washington office of a global freight forwarder specializing in time definite air cargo transportation. He also writes a monthly column, the Forwarder's Forum for Air Cargo World Magazine.