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   Vol. 17 No. 42
Monday July 16, 2018

Tariff Dustup Could Be
Cargo Windfall

     Everyone I talk with in air cargo is concerned about the effect of President Trump’s stance on tariffs, and to tell the truth so was I until I remembered one thing:
     Donald Trump is a master negotiator rather than a politician.
     For the past 60+ years the United States has been giving trade concessions in return for geopolitical concessions like military bases and alliances.
     So Trump is right in saying our trade deals are outdated and need to be changed.
     But it is difficult to change anything unless you create an environment where the other party with which you are negotiating feels you will truly enact draconian changes.
     So do I believe that what Trump is asking for is what he really wants?

No Tariff Cargo Windfall?

     The Trump Administration may even be looking for no tariffs between some of our major trading partners.
     If that were to happen air cargo will see the biggest growth in history.
     On the other hand, if Trump is successful in moving countries to lower their tariffs on U.S. goods, and the United States backs off the draconian measures Trump is voicing, that will also be beneficial to air cargo, because it will even out the flow and increase the round trip yield.


China: A Horse of a Different Color

     Now, China is another story, because it involves more than trade.
     The big issue with China includes protection of our patents and intellectual property.
     There is also the matter of China continuing to trade and support North Korea.
     This one can go either way and is the one to watch very carefully as the negotiations will be much more complex.
     President Trump understands the importance of trade to the U.S. as well as to the global economy that he does not want to collapse.
     He will make a deal with our trading partners but may give in a little more to China in the negotiations in return for supporting his position on North Korea.
     My advice to air cargo is to stop worrying.
     Look at the landscape.
     Business is booming and President Donald Trump is a business professional and not a politician in the traditional sense, and he simply wants a better deal for the United States.

Bill Boesch
Cargo Logistics Solutions


Only Time Will Tell
     Imposing Tariffs is one way of protecting local economies.
     Of course on a cross country basis this could lead to retaliation from the opposite country, which in the case of the U.S., it certainly has with both China and India doing a tit for tat.
     It is a bit of a wonder as to why the U.S. has been more prone to protectionism as compared to other advanced economies, but I guess they have their reasons.
     Cross country trade development involves years and years of diplomatic/political efforts.
     Tariffs lead to turmoil not only in the imposing market place but also in other related global economies.


No Immediate Impact

     Shipping will not get impacted on an immediate basis but shipping trade lanes could see a change.
     Our customers are exploring options, but shipping “via” is never an easy one; trade cannot be the same, as logistics costs mount up and in today’s thin yield environment, this could be difficult. High-value products will probably seek alternative ways, yes, but sparingly.
     China is one of the largest suppliers to the United States, and so is India, and both are looking at tariff barriers.
     India preaches the virtues of free trade but finds it difficult to practice the same due to the nature of the country’s trade deficits.
     U.S. auto giants have already written to the Indian Finance Minister to reconsider some of the tariffs imposed as these tariffs will have serious consequences for their business in India, where they have made significant investments.
     I am not a politician nor an economist, so I am not sure how this will pan out, but such trade restrictions have an effect in the long run; good or bad, time will tell.
     It is one thing to protect local U.S.-based manufacturers and quite another when the company is operating overseas– for e.g. China is one of the biggest markets for General Motors.
     As a result of China imposing tariffs on U.S. manufacturing companies, GM is looking at a huge reduction in manpower due to loss of business! The result is loss of jobs.
     The U.S. Soya bean sector is facing the same situation. China is striking back!

Life Will Go On
     Manufacturing constitutes only 15% of the GDP of the U.S. economy. The U.S. became a service economy long, long ago; so at first glance it is difficult to comprehend what is going on but as I said, I’m no economist and only time will tell.
     One can do without a pair of branded shoes or handbags, but daily needs are necessities of life.
     Therefore, nothing stops and life will go on, and hopefully wisdom will prevail soon.
Keshav R. Tanna
Managing Director, Links Cargo Agencies Pvt Ltd.
Chairperson, Air Freight Institute, FIATA


The vote in British Parliament favoring London Heathrow Airport expansion late last month drew response from the boots on the ground at LHR.
     Robert (Peachy) Keen, Director General of the British International Freight Association (BIFA) and stalwart member of the FIATA Board said:
     “Whilst BIFA welcomes the positive news from Parliament, media coverage of the obstacles that the project still faces leave me with a certain sense of foreboding whether the spades will ever hit the ground.
     “Detailed plans will still need to be drawn up, and will again have to go out for public consultation.
     “There is talk of several local authorities around Heathrow mounting a legal challenge, as well as a judicial review. “Separate reviews of flight paths and airspace are also required.
     “Each new hurdle that appears will only increase delays further and the chance of another political volte-face is ever present.

30 Years Of Procrastination

     “On behalf of BIFA member companies, which are desperate for the greater number of flights and accompanying airfreight capacity that would result from the new runway, I can only hope that the recent vote does not just open another protracted chapter in the 30-year story of procrastination over Heathrow in particular and UK aviation capacity in general.

Action Plan & Momentum Needed

     “The recent decision has been years in the making and needs to be accompanied by the expedited planning procedure, which has been mentioned previously, with no reopening of high level arguments, and robust handling of any legal challenges.
     “I hope all concerned move quickly to maintain the momentum now that this crucial hurdle has been cleared.”

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      Rolf Habben Jansen, CEO of Hapag-Lloyd AG said, “Our fast and successful merger with the United Arab Shipping Company (UASC) has significantly strengthened our competitive position.
      “We achieved good results for the last financial year and have made a solid start to the first quarter of 2018.
      “Our shareholders have kept their faith in us and supported us during the difficult times as well.
      “So I am delighted that we can pay a dividend for the last financial year,” as Hapag, a perennial money loser, said it would pay a dividend of EUR .57 a share for financial 2017.

      Hapag’s merger with UASC last year created the world’s 5th largest shipping company in a rapidly consolidating industry.
      Eventually the USAC name will disappear altogether.
      From Hapag headquarters in Germany, Jansen added:
      “Hapag-Lloyd has long-term and extensive know-how when it comes to acquisitions. “By merging with the Canadian shipping company CP Ships in 2005 and, more recently, with CSAV in 2014, and UASC in 2017 we have demonstrated the ability to combine businesses and integrate them quickly, efficiently and profitably.”

Even More Soccer
  Whether you call it soccer or football, after all the global dawn-to-dusk coverage and viewing of the FIFA World Cup, maybe some additional appreciation of the great sport is in order?
  Well, here comes The Atlanta Air Cargo Association (AACA), all geared up to “spend a late afternoon into evening ‘Family Day’ on July 21st with a match between Atlanta United & DC United,” reports AACA Vice President Lori Solomon.
  Event kicks off at 3:30pm at the Mercedes-Benz Stadium.
  Cost is $50 per ticket for members/$55 non-members.
  For more information contact: Lori Solomon AACA Vice President. https://www.atlantaaircargo.org/
Lufthansa On The Spot 

  Lufthansa Cargo enables forwarders to digital book global air freight capacity via live spot rate partnership with cargo.one,
an independent digital platform.
  Forwarders can book td.Flash and td.Pr
  "We are offering our customers the opportunity to exchange prices and capacities even faster and to book services even easier," says Peter Gerber, chairman of the board of Lufthansa Cargo.
  "This is the next logical step in the digitization of our industry," Mr. Gerber said.


  Sleepypod Air In Cabin Dog & Cat Carrier available in bright vivid red is that onboard pet solution that meets all TSA and airline requirements you may have been looking for this summer, while providing your best friend a safe personal space in the office, in the car, in the air, everywhere!
  Sleepypod Air’s design meets all airline size restrictions and their strict safety standards ensures that your pup (up to 15 lbs and cats up to 18 lbs ) will be safe no matter what the method of travel.
  Available at www.chewy.com

If You Missed Any Of The Previous 3 Issues Of FlyingTypers
Access complete issue by clicking on issue icon or
Access specific articles by clicking on article title
Vol. 17 No. 39
Tariff Watch As Deadline Looms
Chuckle for June 28, 2018

Planning For The U.S.-China Dance
Vol. 17 No. 40
Effervescence Of Jean-Claude
Chuckles for July 3, 2018
Update On The East
Dancing As Fast As I Can
Unfolding India Cargo Plan

Vol. 17 No. 41
Wings & Wheels & Trump Tariff
Inventive Enough To Solve Any Problem
Chuckles for July 9, 2018
No Takers For Air India
KPI Gets It On American

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