9. greg andrews

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9. greg andrews

  1. 1. Session III The View From The Top Shippers perspective of the air cargo services available in BRI C
  2. 3. Corporate Statistics <ul><ul><li>FY2005 Revenue: $513 Million </li></ul></ul><ul><ul><li>FY2005 Net Income: $101 Million </li></ul></ul><ul><ul><ul><li>18 Years of profitable growth </li></ul></ul></ul><ul><ul><li>Employees: 1,600 total </li></ul></ul><ul><ul><li>Headquarters: Cummings Research Park, Huntsville, Alabama </li></ul></ul>
  3. 4. “ Negative Influences” Impacting a shippers choice to use Air Cargo <ul><li>Capacity Constraints </li></ul><ul><li>Increasing rates </li></ul><ul><li>Impact of the trade imbalance </li></ul><ul><li>Fuel surcharges </li></ul><ul><li>Security Regulations Caused by Terrorist Threats </li></ul>
  4. 5. <ul><li>Capacity Constraints </li></ul><ul><ul><li>100% of Fortune 500 building/Sourcing in China </li></ul></ul><ul><ul><li>Retailer Hogs-battling seasonality-quickest to shelf, causing spikes in demand that hurt 52 week shippers </li></ul></ul><ul><li>Peak Season </li></ul><ul><ul><li>Previous (August—October) </li></ul></ul><ul><ul><li>Now (July-November, if demand high extend through December ) </li></ul></ul><ul><ul><li>Isn’t it “year round” now due to offshore manufacturing? </li></ul></ul><ul><ul><li>China New Year Holiday peak (get out before plants close) </li></ul></ul><ul><ul><li>If no Peak then “Artificially Create” peak, by parking planes </li></ul></ul>Negative Influences Impacting Air Cargo
  5. 6. <ul><li>Roller Coaster “Rate Ride” by the carriers </li></ul><ul><ul><li>Short sided revenue management for 52/week shippers </li></ul></ul><ul><ul><li>Wild-Wild-West, get whatever the market will bear </li></ul></ul><ul><ul><li>Carriers to far removed from the shipper </li></ul></ul><ul><ul><li>No sense of Partnership or “win-win” </li></ul></ul><ul><li>One way positive East bound traffic lane </li></ul><ul><ul><li>Backhaul return is a disaster </li></ul></ul><ul><ul><li>Carrier inability to run the right product mix </li></ul></ul><ul><ul><li>East bound subsidizing West bound lane </li></ul></ul>Negative Influences Impacting Air Cargo
  6. 7. <ul><li>Fuel surcharges that defy logic or reason </li></ul><ul><ul><li>Being used to “pad revenue”? </li></ul></ul><ul><ul><li>Why are half our Air Cargo Service Providers under scrutiny and investigation for price fixing? </li></ul></ul><ul><ul><li>Need a “formal regulatory branch to administer FSC in the air cargo world, who nominated Lufthansa </li></ul></ul><ul><li>Security regulations -terrorist threats </li></ul><ul><ul><li>Legislation that is not practical, and is counter productive to air cargo and global supply chains </li></ul></ul><ul><ul><li>100% screening of air cargo </li></ul></ul><ul><ul><li>Cost to implement all of these programs is being borne by the shipper, is that fair? </li></ul></ul>Negative Influences Impacting Air Cargo
  7. 8. 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 plane loaded with belly freight, and the explosive device was found to have originated 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

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