Keeling finds a worrisome trend in the decline of airfreight volume during the past two years at the two largest west coast gateways; Los Angeles International Airport (LAX) and San Francisco International Airport (SFO). While the declines are small, less than 5 per cent at each airport, it flies in the face of all the glowing reports of a healthy and growing air cargo industry.
"Airport officials at both airports are scratching their heads trying to figure out why volume is down while over-all trade is growing with Asia, particularly China, and to South Pacific nations like Australia," stated Keeling.
Keeling believes the answer lies in the enormous growth of ocean shipping between west coast ports to destinations west of the International Dateline.
"The ports of Long Beach, Wilmington and San Pedro; making up the southern California seaport complex, have literally exploded with cargo volume during the past few years," said Keeling. "This contrasts sharply with the declines in volume at LAX and SFO at the same time."
The CII chief noted that his customers, primarily air freight forwarders, are moving less of their shipments through LAX because of traffic choked highways leading the airport, a freeze on new cargo construction at LAX and often inconvenient airline schedules for freight. "However, SFO with less congestion, also is witnessing a lessening of cargo traffic," he noted.
Keeling believes the international transportation business is changing, and not to the benefit of air. "While a number of shippers is switching from expensive air to less costly sea, the reverse rarely happens. We almost never hear of a large, or even small company announcing a switch from sea to air."
Adding to the pressures affecting airfreight is a substantial increase in new container ships entering service in 2007. "With all this new tonnage, ocean container rates inevitably will drop," remarked the CII chief executive. "Traffic managers may well be thinking, 'air is the ideal transport mode to meet our just-in-time production demands, but sea is so much cheaper, let's save some real money and go with ocean."
Keeling believes forwarders should not waste their time in futile attempts to persuade the airlines to lower their fuel surcharges but try and find new ways to attract new customers to air.
