2014: A good year despite strong currency USA REPORT


halves, the second half was slightly better year- on-year, US exports have been a flat market. We have been cycling off of a difficult three year period.” IATA says that along with improvements in the US economy, strong trade growth in Asia Pacific has been the major driver of airfreight volumes in the third quarter of 2014. This is something LeBeau has been noticing: “Exports into Asia rather than into Europe and other areas will be


T


the underlying growth in exports from the US.” Dallas Fort Worth International Airport


he International Air Transport Association (IATA) says the improve-


ments in airfreight volumes seen throughout the second half of 2014 are because of improving economic


conditions in the US. In the third quarter of 2014, North American IATA sample airlines in its financial monitor for


October made a net post tax profit of $3 billion, the strongest region, up from $2.8 billion in the same period of 2013. IATA also says the drop in crude oil prices are because of a strong US dollar


as well as increasing supply from the US. IAG Cargo vice president for North America, Joe LeBeau, says 2014 has been an interesting year. “It [2014] is an interesting tale of two


(see picture) is using its location as a convi- enient transit point for cargo between Latin America and emerging Asian markets. The air- port says: “Dallas Fort Worth is seeing great growth as it plays a central role as the midpoint for cargo travelling between Latin America and Asia.”


Dallas Fort Worth has a free trade zone allow-


ing foreign firms to do business at the airport without facing additional taxes. The airports says: “For instance, Chilean firms can send per- ishables through Dallas Fort Worth and onto Asia as though they never entered the US, thus avoiding US taxation of the shipped goods.”


Route expansion


Up to 31 October this year, Dallas Fort Worth has seen cargo volumes rise by 5.5 per cent, of which, 7.9 per cent is international trade and 3.2 per cent from the domestic market. Perishable


cargo is on the rise at Dallas Fort Worth, Supply Chain Logistics has built a 5,000 square foot (464 square metre) refrigerated facility, with a 14,000 square foot expansion planned for 2015. With this, it can take advantage of increasing volumes of agricultural products from countries


such as Mexico. Miami International Airport deals with cargo from Latin America and the Caribbean.


Business with Colombia is growing strongly. Miami-Dade Aviation Authority aviation director, Emilio Gonzalez, says: “Freight to and from Latin America and the Caribbean com- bined totalled more than 960,000 tonnes of


cargo valued at more than $48 billion in 2013.” Qatar Airways restarted its Doha to Miami


route in June, as part of the route from India and the sub-continent, to Qatar, Miami and on to Latin America. In December Finnair started fly- ing to Miami from Helsinki, and Lufthansa also added services to Munich. Gonzalez is expecting Miami will handle


around 2.1 million tonnes of cargo in 2014. But if the airport handles 192,000 tonnes in both November and December, it could achieve 2.2


million tonnes, four per cent more than 2013. United Airlines says US-Europe and US-Asia


remain its main trade routes. In June it started flying to Chengdu (China) using a Boeing 787. The airline describes Chengdu as, “The most


exciting market to emerge this year.” Among the new routes United has launched in 2014, it has high hopes for its Houston (US) to Santiago route, which started operating on 7 December. “Santiago is a robust commercial market with a strong demand for various products and com- modities, including consumer electronics and equipment for the mining, oil field, geophysical and high-tech industries.” Throughout 2014 the US dollar has been


strong, which is good for US imports but makes exports more expensive. LeBeau says: “The dol- lar is extremely strong. That is not necessarily a great thing for US exports but helps imports.” LeBeau says the strength of the US dollar seems to have a limited affect on the rise of e-commerce. “E-commerce is providing organic air cargo growth, it seems to be less exposed to


the US dollar.” UPS, which handles the vast majority of cargo


at Louisville International Airport, are antic- ipating large increases driven by e-commerce. It says: “UPS is focused on our busy holiday season. We anticipate 11 per cent growth over 2013.” It is promoting a trans-Atlantic partner- ship free trade agreement (FTA) between the US and the European Union. It says if trade bar- riers are removed, trans-Atlantic e-commerce trade could increase by up to 50 per cent. UPS is promoting a trans-Pacific partnership


to expand in emerging Asian economies. It says: “By reducing barriers to trade, these FTAs have great potential for improving the world’s econ- omy, creating jobs and improving standards of living all over the planet.” Despite the optimism of improving economic conditions in the US, North American airlines are suffering from continuing overcapacity. In the IATA October financial monitor, North American airlines had a load factor of 37.6 per cent for October. The average for all regions was 47 per cent.


The US economy may well be driving the


increase in cargo volumes, but it still faces challenges. The strength of the US dollar is not necessarily an advantage, as it makes US goods more expensive, suppressing the demand growth that would otherwise have been seen and at the same time airlines continue to strug- gle with overcapacity.


LEBEAU


Te dollar is extremely strong. Tat is not neces- sarily a great thing for US exports


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ACW 15 DECEMBER 2014


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