Air Cargo Professionals Convene for ACI-NA 2010 Conference

The 2010 ACI-NA Air Cargo Conference, held March 9-11 in Seattle, brought together airport directors, CFOs, cargo managers, cargo airlines, freight forwarders, and air cargo industry experts to examine the current air cargo commercial and policy landscape and to share strategies to enhance air cargo revenue.

The conference kicked off with opening remarks from the Air Cargo Committee’s Chair, Bill Frainey of DFW, and from Mark Reis, the Aviation Director for SEA-TAC, who welcomed attendees to Seattle. The sessions of the first day addressed some of the cargo industry’s pressing legislative issues, as well as a panel discussion on cargo security and the concern over the upcoming 100 percent screening rule and the Certified Cargo Screening Program, and a state of the industry outlook, that emphasized that although the past year was one of the worst for freight, the current trend is moving in the right direction and the end of this year will show significant improvement. The second day of the conference focused on topical issues related to marketing, management, the economic impact of cargo, and financing. The program also offered two concurrent roundtable sessions - strategic land use and cargo handlers.

A major highlight of the conference was the luncheon keynote speaker, Dave Brooks, President of the Cargo Division at American Airlines, who spoke to attendees about state of the industry, the near-term outlook, and his airlines’ long-term strategy. According to Brooks, there is strong potential for a 5 to 7 percent growth in the near future, which follows on the heels of a 20 to 40 percent drop in cargo volume during 2009. To cut costs, cargo carriers have moved their cargo operations to off-airport in a number of locations. Brooks’ advice to airports was that they should ensure visibility: “Don’t just show up at the lease meeting. Engage with various local cargo associations and communicate your priorities.”

Additionally, as carriers and shippers are working to meet the August deadline to have 100 percent air cargo screened, Brooks expects some periodic delays and backups. However, he is confident that the industry’s major players have done enough preparation to meet the mandate, although airports should still allow third-parties to set up screening facilities. Brooks also noted that the approaching deadline can present an opportunity to smaller airports, such as if there are delays and backups at major gateway airports, shippers may divert some cargo business to the smaller airports that are ready to step up to provide the security screening.

In the next few years, American Airlines intends to focus on business re-engineering and process improvement, and attracting market share by focusing on rewards program. The airline recently opened two cargo facilities, one in JFK and one in LAX. Brooks said they firmly believe that these investments will pay off in the next few years, especially as carriers will coordinate their network to compete.

In his final words to the airports, Brooks urged them make sure that their legislators are aware of the value of cargo to the local community and to emphasize the jobs created and maintained by the cargo operations. There is growth down the road for the air cargo business and the new, tighter security rules may give a forward-thinking small airport an opportunity to land new business.

If you have any questions about the 2010 Air Cargo Conference, please contact Nelson Lam at nlam@aci-na.org.