Page 14 - STAT November 2022 for Magzter

countryreport

GROWING PAINS ABOUND FOR THE

AMERICAN AIR CARGO SECTOR

A sudden ‘slump in demand’ and deceleration owing to inflation, lower consumer confidence,
business activity, and other geopolitical reasons has put the cargo markets under pressure. With a
busy holiday season looming, amidst weakened demand and with the US government and private
sector pulling out all the stops, will air cargo fortunes stay the course?
Lakshmi Ajay

Air cargo had a chequered year full (AfA) and the National Customs Brokers announced a ‘Warehouse and Logistics
of ups and downs in the US as it and Forwarders Association of America Worker initiative’ designed to ensure that
charted a recovery post-pandemic (NCBFAA) had called for a State or Federal warehouse and logistics workers' wages
Lbut is now faced with headwinds backed ‘Air Cargo Support Fund’ that can in- and workplace rights are protected.
from a weakened demand globally and ject up to $5 billion to tackle the infrastruc- While these moves underlined the
flattish growth. ture crisis faced by the US air cargo industry. growing pressure on the air cargo industry
As per the latest figures shared by Inter- The recommendations to Washington form working with existing facilities that were
national Air Transport Association (IATA), part of a whitepaper, following a major ill-suited to the needs of modern cargo
North American carriers posted a 3.4% national survey of 400 air cargo stakehold- traffic, it also signalled that airports were
decrease in cargo volumes in August 2022 ers in private and public sectors to identify overwhelmed, faced with labour crunch
compared to the same month in 2021. This challenges for the sector. and discontent and that airlines were
was an improvement over the 5.7% decline “With airports and airlines experienc- staring at revenue shortfalls even as they
in July. The lifting of restrictions in China ing substantial revenue shortfalls over the limped back to pre-pandemic levels.
improved demand and a further boost is past two years, the situation is becoming
expected in the coming months. Capacity critical with potentially severe impacts on Airlines show appetite for cargo
was up 5.7% compared to August 2021. the economy and jobs throughout the Despite limited capacity, traffic congestion,
country. Because of the lagging financials, Covid-led trade restrictions in China, and a
A chequered year for air cargo airports will be allocating the monies of the severe labour crunch, US carriers showed
Several important developments marked Infrastructure Act to passengers, security, an appetite for air cargo and also touched
this year for air cargo what with the and safety, leaving insufficient funds to pre-pandemic levels of volumes this year.
growth of e-commerce, embracing sustain air cargo operations. Additional As more capacity has opened up, many
sustainability, talent retention, and funding, specifically dedicated to air cargo, carriers have opted for fleet modernization,
digitalisation became the meg- is urgently needed,” said Brandon Fried, while several airlines have added more
atrends for the sector. Executive Director, AfA. freight routes as well.
In October, the Airfor- In February this year, the US Depart- A sudden ‘slump in demand’ and decel-
warders Association ment of Labor’s Wage and Hour Division eration owing to inflation, lower consumer

12 | NOVEMBER 2022 www.stattimes.com