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Issue 6 2014 - Freight Business Journal


///US EAST COAST


Airfreight: Everyone wants a bite of the Big Apple


Crucial to the success of the freight market along the north-eastern seaboard of the US are the big American carriers that hub at New York, the country’s biggest city and largest consumer market. “If I had to sum up the current


air cargo market in and around New York in one word, the word would be ‘challenging’,” says Kevin Romer, senior manager, United Cargo sales - US north region. “Volumes continue to recover from the industry downturn, but the market is over-saturated with capacity. This imbalance leads to a difficult yield environment.” Gary Masucci, cargo sales


manager - eastern division at American Airlines, is more positive. “The market is really picking up at New York JFK,” he claims. “We’ve seen full loads, especially connecting cargo to and from Europe. Our new B777- 300ER has allowed us to carry significantly more cargo than ever before, and it enables us to capture additional market share.” Delta Cargo is also seeing good


business through its JFK hub. According to Andy Kirschner, its director of cargo sales for the Americas, during 2013 the carrier moved 3,200 more shipments through the Big Apple than during 2012. “We’ve been able to grow our North America revenue quite substantially with shipments exiting JFK on new transcontinental widebody flights,” he points out, although Kirschner also admits that the US market as a whole has been down over the past few years, and JFK has been no different. Of course, JFK is not the only cargo gateway to the US north-


east; it’s not even the only one in New York. “While United is the New York area’s largest airline, the majority of our freight volume actually moves through our hub at Newark Liberty,” Romer explains. A lot of the freight that United is bringing into Newark is high-end fashion apparel and New York is the final destination for most of these imports, but the carrier also boasts an extensive trucking network from Newark. Boston, Buffalo, Hartford, Philadelphia and Pittsburgh


are frequent


destinations for shipments flown on widebodies from Asia and Europe into Stewart by United Cargo. For AA, though, it is its JFK


hub that serves as its gateway for connecting traffic between the US and Europe, Latin America and Asia. Some of the commodities


moving from the US East Coast to Europe and South America. Delta’s Kirschner also considers


New York not only a strong origin and destination market, but a great connecting cargo hub. Flights can seamlessly connect to locations across the US and further afield while JFK is also one of Delta Cargo’s more diverse destinations in terms of the types of freight it moves through the city – some of which comprises seafood, pharmaceuticals, fashion, fresh fruit and vegetables. While New York is obviously


key to these carriers’ US East Coast operations – the city enjoys perhaps the world’s largest and most affluent


consumer


market – the amount of freight being handled through the metropolis does complicate the cargo handling processes at


year extension of its lease and a commitment of over US$150 million to improve and develop the hub there. Moreover, Romer continues: “We expect to soon announce a major upgrade in our facilities for temperature- sensitive cargo. This is in response to Newark’s growing prominence as a hub for pharmaceuticals, as well as the importance of our TempControl service to United Cargo’s business.” Of course, investment involves


more than just buildings. United Cargo is also investing in a number of number of new initiatives to improve processes and enhance its customer service through New York. One of these projects recently resulted in a major reduction in wait times for truckers tendering in our Newark Liberty hub, Romer notes.


United takes on-board an L3 container


Atlantic Cargo). There’s no doubt that the


A United Airlines B767-300 aircraft


it is flying through JFK include mail from China moving to Brazil; Boston lobsters moving to Europe, South America and the US West Coast; produce, such as asparagus and corn, moving from the US West Coast to London and the Middle East; auto parts moving to Manchester; and temperature- controlled healthcare shipments


Kennedy, Newark and LaGuardia and puts pressure on the city’s airport infrastructure. The roads connecting the


gateways AA Cargo and Delta Cargo are are


congested, and there’s not a lot of space available to expand terminals’ footprint or construct new surface access. There’s little doubt that the


operator of these airports, the Port Authority of New York and New Jersey (PANYNJ), takes air freight very seriously, and recognises the contribution that air cargo makes to the region’s economy. “However, there is work that must be done to modernise and upgrade the cargo infrastructure, in order to enable the region to retain its pre-eminent position among the world’s air cargo hubs,” Romer says. United marked its 25th


An Envirotainer container, used for shipping temperature- sensitive loads on the AA Cargo network


anniversary at Newark Liberty in May 2013, and the airline celebrated by announcing a 20-


also putting money into their regional operation. “We continue to invest in our infrastructure and products to make sure we’re equipped to meet the needs of our customers,” Masucci explains. “At JFK, we recently built a new controlled room temperature (CRT) facility, which supports our growing ExpediteTC temperature- controlled program. We also expanded our cargo operation at New York LaGuardia to offer customers full cargo service. Today, we now operate at all three of New York’s airports: JFK, LGA and EWR.” Meanwhile, Delta has made


significant investments in its cargo facilities at JFK over the last five years in partnership with PANYNJ, including building a new state-of-the-art freight facility at the gateway’s Building 21 (hosting both Delta Cargo and Virgin


region’s air freight market has been hard-hit by the global recession and the ensuing logistics industry downturn, but there is cause for optimism. “A rise in cargo yields is possible if the economic recovery prompts a strong, sustained rise in consumer demand while the air cargo industry addresses the issue of chronic overcapacity,” Romer says, although he warns: “This situation has been in place for a while, so it would be overly optimistic to predict this will happen soon.” While general


cargo may


be suffering, certain freight types have remained relatively immune to the downturn. Thus, says Romer, “We are very bullish on the market for temperature- sensitive cargo. We believe there is great growth potential for carriers who offer the most


extensive worldwide network for these products – if they flawlessly execute the transport process and provide exemplary customer service.” United Cargo’s TempControl now offers service to 47 certified locations (Lima in Peru and Taipei in Taiwan were added in May), with other stations expected to be added to the network later this year. AA’s Masucci is also positive.


“We’ve started the year very strong, and we’re optimistic this trend will continue throughout the year. It’s difficult to predict the economy, but we will continue to focus on our customers’ needs,” he concludes. So too is Kirschner, who regards JFK as “one of the most popular gateways for business and we see this trend continuing.” Its value as an export consolidation hub will remain particularly critical, he concludes.


AA Cargo is investing in its north-eastern US operations


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