Moving Away From the Old Merry Ways

Posted June 6, 2011 on Centerlines Blog by Nelson Lam

We once lived in the golden days of cargo aviation where “If you build it, they will come.” However, is that applicable to our current economy? 

At the 2011 ACI-NA Air Cargo Conference, ACI-NA was fortunate enough to have Paul J. Martins, Senior Vice President for Sales and Marketing of Towne Air Freight, and John Boyd, Associate Editor of Journal of Commerce, express their thoughts concerning the changing dynamic of alternative transportation modes.

The advancement in technology and supply chain processes has decreased the need for air cargo services.  Luxury items that once drove the air cargo industry have become commodities that are mass produced and no longer require expedited delivery service.  Technological innovation has drastically slowed, resulting in no quantifiable substitute that continues to stimulate the domestic air cargo.

As businesses continue to stress minimizing cost, various alternatives to air cargo transport are being considered.   Advancement in maritime technology continues to improve time-definite services at lower costs, lessening air cargo attractiveness.  Perishable goods that were once considered forbidden territory for maritime shipping have been made permissible due to refrigerated containers.  

The growing number of vehicles on highways has made air cargo more enticing. With freeways becoming more congested, packages spend additional time on the ground than in the air.   Infrastructure improvements at local and federal levels are required; however, with the Highway Reauthorization Bill still being discussed by Congress, funding and actions for such improvements continues to be unresolved.    

High speed rail was equally a hot topic during the discussion.  Can the United States implement a high speed rail regionally to support intra-northern America freight travel similar to that of Europe?  Both Paul and John agreed that while high speed rail is an attractive idea, the lack of infrastructure funding, lack of progressive development in rail network, and the privatization of the United States railway system simply does not permit the rapid development of such transportation mode.

In an economy where businesses focus more on cash reserve and cutting research and development budgets, we now ask the question, “If you build it, will they come?”  While air cargo will never disappear, it will be challenged by alternate transportation modes as manufacturers adapt to slower delivery modes.