North America seizes on growth

North America seizes on growth

In early August, Flexport ramped up its dedicated capacity in the transpacific arena with an agreement for one more weekly freighter.

Business has been buoyant, both from existing customers and start-ups, said Neel Shah, Senior Vice-President Airfreight.

North American carriers have been firing on all cylinders. “We had a really good first half, with record results year to date,” reported Roger Samways, Vice-President Cargo Sales of American Airlines.

“We had 9% volume growth in the network and double-digit yield improvement.

”North American airlines topped IATA international FtK growth chart in June with an increase of 5.9%, while capacity rose 3.7%.

It was one of only two regions where traffic outpaced capacity during that month.

Alaska Air boosted its lift considerably this summer when it started marketing the belly capacity of Virgin America, which has brought significant growth on prime cargo lanes, said Jason Berry, managing director of Alaska Air Cargo.

He added that the expansion has been broad based in terms of commodities.

“In North America a couple of years ago there were always some good spots, some weaker spots. I do not see that many weak spots anymore. We are pretty steady in all areas,” noted Jan Krems, President, United Cargo.

Likewise, Air Canada Cargo is up year-on-year in every region, including the domestic arena.

“You can tell business is good when every player in Canada wants to talk to you about capacity,” said Tim Strauss, Vice-President Cargo.

He admitted that the windfall in demand has brought its challenges. “We are up 45% over the last two years in total revenues. It is stressing USA bit,” he said.

Krems agreed that the pace of growth has stretched resources, which led to a strategic decision to focus on certain segments that produce higher yields.

One sector where he expects continuing grow this is  pharmaceuticals. United is setting up dedicated pharma teams to deal with this vertical.

In anticipation of continuing growth, airlines are building up their capabilities, investing in infrastructure and technology.

According to Samways, the effort appears to be paying off.

“We have been able to get ahead of volume growth. our flown-as-booked performance is substantially above our ten-year average,” he said.

American is in the process of replacing its legacy It set-up, a patchwork of over 90 different components, with a new, cloud-based platform, which should be fully in place by the end of next year.

This will dramatically improve connectivity with customers and open up new possibilities, Samways said.

Air Canada Cargo is also honing its It capabilities in areas like predictive analytics.

“We are getting some traction there. Our network planning and optimisation are much more advanced,” Strauss remarked.

Read the rest of the article in TIACA Times, out now, by clicking here

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