What comes next?

What comes next?

Tim Strauss is a TIACA Board Member and has been Vice President, Cargo at Air Canada since April 2017, with oversight for all aspects of cargo business, including leading, directing, developing, and implementing customer-centric initiatives and solutions, as well as responsibility for commercial business and its profitability.

Nearly four-thousand years ago Joseph accurately interpreted a troubling dream of Pharaoh’s by stating there would be seven years of plenty followed by seven years of famine. Based on Pharaoh believing this to be a true interpretation the Egyptians stockpiled their grain and managed to survive through the famine that followed their years of projected prosperity.

Today we call this dreaming, guessing and projecting of what comes next Economics.

Thankfully, through the wonders of modern agronomy, financial controls and a mostly agreeable citizenship the seven years of famine have been tamed to what is usually a one-year contraction in the global economy. Remarkably, the seven years of plenty is still the standard in the normal eight-year economic cycle of seven up and one down.

As global trade continues to power on in an incredibly strong manner it is natural for all of us to wonder when our own next turn downwards is going to occur. Some economists believe we are overdue for a pull back while others think we should see smooth sailing for another five years.

Whatever timing is correct what will be particularly interesting to observe is the impact of the A-Teams of Alibaba and Amazon on global air cargo. E-commerce along with the voracious demand for perishable foods may well be changing the severity of contractions for the airline industry.

With historic air cargo mostly serving the business to business and the inventory fulfilment elements of trade will the move to a more eclectic and distributed purchasing of goods as represented by individual versus corporate purchasers create a less volatile environment for air cargo?

Is it possible air cargo volatility will more closely align with a Southwest Airlines which has for more than forty years managed to fly without a losing year by depending on the individual versus the corporate traveler? And, are the e-commerce giants immune to normal economic cycles with a nearly undreamed of resilience that will resound to their benefit as well as air cargo’s?

Whether just a fanciful dream or a reality we’ll have the unique opportunity to witness a potentially major change in economic theory over the next few years.

Interesting times indeed.

This article will be published in the forthcoming summer 2018 issue of TIACA Times, out soon.

For advertising opportunities contact Lina at lina@meantime.global and for editorial contact Robert at robert@meantimeglobal.

For more information on the Air Cargo Forum in Toronto, Canada in October this year visit www.aircargoforum.org

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