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   Vol. 13 No. 90  
Friday October 31, 2014

A Gap In The Agenda

For the air cargo industry, October was the month of the mega conference.

     TIACA in Incheon and FIATA in Istanbul clearly represent two of our most prestigious forums. They bring together carriers, shippers, forwarders, truckers, handlers, and government officials: they explore the nuances of shipping and security, more efficient handling, the need for greener operations, and cutting edge technologies to expedite goods movement and posit options for partnerships. However, the partnership options very seldom involve the airport.
     One of the things I have noted over the past 40 years is how concerned most airports are with learning how the industry really works at the ground level.
     Airport managers want to understand what carriers need, how forwarders and customs brokers operate, and how to enable the elements of government involved in facilitation and interdiction to work efficiently and effectively.
     When budgets allow, airport staff attend industry conferences to learn what they can and, in many instances, to market their facilities. What I don’t see in the midst of the partnership discussions and multiple conferences is an effort by the private sector to understand the challenges facing airports.
     I have heard the comparison of an airport to a landlord who should not interfere in a leasee’s operation—and that makes sense. However, on the flip side of that analogy is the question of how the leasee’s planning capability is limited without knowing the constraints of the landlord and the property, and the larger political and economic environment.
     The latest forecasts are pretty optimistic, with volumes forecast to double in the next twenty years.
     At the macro level that sounds pretty good, but at the airport level there are challenges that need to be met.
     At forecast growth levels, capacity could become a concern for many airports.
     For new facility development, the business model is evolving.
     Most carriers are no longer interested in building and operating their own cargo facility. Instead they are turning to private developers and handling companies to help meet the demand.
     This creates a different and more nuanced financial environment that carriers need to understand.
     Additionally, as airports look to become more creative with their land, opportunities are materializing for forwarders and brokers, as well as trucking companies to move on airport.
     In the past, this was an expensive proposition, but a number of airports are taking a much more entrepreneurial perspective and exploring ways to make this happen.
     Airports are also faced with a planning paradox with regard to cargo infrastructure. Airbus and Boeing Forecasts include optimistic growth in the freighter fleet, yet the percentage of cargo moving in freighters in most markets is declining, as carriers rely on wide-body passenger fleets to carry increasing tonnage.
     An ongoing and open dialogue will help airports better understand where their planning efforts and investment dollars need to go.
     I have had many colleagues shift employment from an airline to an airport. Invariably the reaction is “wow! I didn’t really understand this side of it!”
     It seems that in the various topics covered in the many conferences, there would be some value in helping to explore and develop that understanding.
Daniel B. Muscatello

Dan Muscatello

Editor's Note: Dan is Managing Director, Cargo & Logistics, Landrum & Brown based in Cincinnati, Ohio.
     We have known Dan from his days as manager of air cargo for the Port Authority of New York & New Jersey.
     Today he has gone way beyond just New York, in a stellar 30-year career that has included projects all over the world.
     Dan has been a development strategist for both the business and physical facility planning of air cargo complexes, and the integration of ancillary and supporting logistics services that make them operationally and financially feasible.
     We look forward to hearing from Dan often with special commentaries and welcome our readers comments as well.


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