Consultant’s Insight: Port strike could mean congestion at US airports

E-commerce and the Red Sea crisis have benefited the air cargo market since last year, but a new wrinkle is unfolding: the International Longshoremen's Association strike, which could result in more shippers searching for air cargo capacity. Air cargo capacity is tight, and shippers impacted by the International Longshoremen's Association (ILA) strike looking to utilize air transport will be hard-pressed to find space on a plane. [caption id="attachment_57145889" align="aligncenter" width="1224"] The strike started on Oct. 1. (Courtesy/International Longshoremen’s Association)[/caption] In an August webinar, freight forwarder Dimerco said air charters from Asia to the United States were nearly fully booked for the fourth quarter because of demand from Asian e-commerce providers. Also, the Red Sea Crisis has caused a shift from ocean freight to airfreight — or a combination of the two. Express operators could benefit However, in a note from investment firm Stifel , Bruce Chan wrote, “We think the most direct beneficiary of a strike situation would likely be international airfreight capacity providers like FedEx and UPS , which have significant operating leverage to express operations.” Chan is an analyst for global logistics and future mobility. Even if there is air capacity, the impact on U.S. airports and the domestic network may be delays and higher costs beyond air cargo rates. Airport infrastructure lacks funding “If the ILA strike continues for two weeks or more, we could see congestion build at U.S. airports,” Brandon Fried, executive director of the Airforwarders Association , said at the Journal of Commerce’s Inland Distribution Conference on Oct. 2. Fried commented on the need for airport infrastructure investment to improve truck flow and cargo handling. Indeed, most major U.S. airports, such as those in Chicago, Los Angeles, Miami and New York, have not received substantial cargo-area infrastructure investment in more than forty years. As an example, Brian Bourke , global chief commercial officer of SEKO Logistics , highlighted his company’s inability to get customers’ freight from airport facilities during the pandemic because of congestion. Seko has since established a process to help, but it still expects delays at airports. The Airforwarders Association has been instrumental in securing an important airport infrastructure provision in the FAA Authorization Act. Under the provision, the federal General Accounting Office (GAO) must conduct a study on the extent of congestion and its effects on trade, providing a data-driven foundation for funding and infrastructure improvements. The GAO has already made progress on the study, which must be completed within the next nine months, Fried said. Technology implications While infrastructure investments are desperately needed, airport congestion can be mitigated with the right technology, Donna Mullins , vice president of Kale Logistics Solutions , said. Kale Logistics is a software-as-a-service provider that brings together air cargo stakeholders — including airports, cargo ground handlers, transportation providers, forwarders, customs brokers, airlines, importers/exporters and customs personnel — on a common cloud-based IT platform. Such a platform can reduce truck driver turn times from up to six hours to under an hour, allowing for more efficient flows, she said. A busy Q4 is expected at airports with traditional peak holiday shipments in addition to possible added traffic related to the ILA strike. Regular communication among key stakeholders will be vital to mitigate potential congestion at U.S. airports. The 30th Cargo Facts Symposium will take place Oct. 14-16 at the Omni Hotel in San Diego. Gain valuable insights, success strategies and networking opportunities at this special anniversary event. Learn more and register today .

Consultant’s Insight: Port strike could mean congestion at US airports

A321 freighter STCs gain ANAC approval

Fly Pro begins A300-600F ops

Related Posts

June cargo traffic data shows growth in every region but Africa

Capacity index growth levels off in June, July

Trans-Pacific AI-related cargo demand to remain robust through yearend

Fly Pro begins A300-600F ops

Cargo Facts Free Newsletters

Cargo Facts Connect Podcast

Follow Us

Welcome Back!

Retrieve your password