Julian Keeling predicts "little or no Christmas 'rush' for air freight as the 2010 Holiday season approaches. The chief executive of Consolidators International, Inc. (CII), says "with U.S. unemployment hovering around the 10 per cent mark, housing sharply lower, an anemic stock market and manufacturers just marking time, air cargo will show little growth for the remainder of the year. Retailers are taking their cue from shoppers' reluctance to open their pocketbooks and have become very miserly in continuing to build up inventory."

"Air freight has enjoyed a sharp increase in volume during the past number of months, but much of that growth, in hindsight, can be credited to restocking of inventory and not for sales to the ultimate consumer," said Keeling. "The supply chain seems to have snapped at the retailer's warehouse."

The CII executive noted that airlines "are becoming cautious about the next few months as their rates are remaining flat. Carriers seem content to be keeping their fuel charges in effect rather than raising rates," he said.

Cargo volume also will be handicapped by the slowdown in U.S. exports, believes Keeling. "Chinese expansion is moderating as are other Asian nations' economies," commented the forwarder. "Surprisingly, Europe which had been given up for dead as a trading partner, is showing unexpected liveliness. Germany, in particular, has become one of the most powerful export nations in the world with an actual shortage of workers. Air freight is participating in this Teutonic growth, particularly to the Middle East and Asia."

One development, however, should benefit air freight, particularly for last minute ordering of goods. It is the decision by many of the ocean lines to continue "slow steaming" taking longer times between ports. "Maersk Lines recently announced it will continue slow steaming indefinitely. Since most other shipping lines follow Maersk's lead in lockstep, air freight will be needed in many instances to move merchandise in time for Christmas selling," stated Keeling.

The CII head does not see a particularly bright future for the independent forwarder in international trade. "The integrators, particularly FedEx and UPS, continue to gain market share as shippers reduce the number of their suppliers. The two integrators have built up their infrastructures in Asia at enormous cost, but this expenditure seems to be paying off. They are providing excellent service and shippers seem to be willing to pay their higher rates in return for this service."

Keeling expects a dwindling number of independent forwarders to participate in global trade in the months and years ahead. "There now are only seven independent, multi-national forwarders of any significance," commented the Los Angeles-based wholesaler. "They include DHL, Schenker, Panalpina, Kuehne & Nagel, Expeditors, UTI and Ceva. Smaller forwarders will have to be content to get crumbs from their tables," he averred.

The CII executive noted that FedEx and UPS, as their market share continues to grow, have become increasingly stingy in selling space on their aircraft to outside forwarders. Some twenty years ago, FedEx sold $700 million worth of space to independent forwarders. Today, that figure has shrunk to $50 million," he observed.

Despite a gloomy economic outlook, Consolidators International continues to expand. Keeling expects a 40 per cent jump in CII volume for all of 2010 with a corresponding increase in profitability. "We are sticking to our knitting as we have for the past sixteen years, concentrating on the South Pacific, particularly Australia and New Zealand, which are strong markets for both air and ocean trade," concluded Julian Keeling.