44 American Journal of Transportation American Journal of Transportation ajot.com cheapest product is drifting to ocean. If anything, the forwarder matters more in this environment, not less, because somebody has to make the compliance work.” Iranian conflict has strongly affected the industry, especially pharma and healthcare cargo. When asked about the specific problems, Brandon Fried said, “So much tem- perature-controlled product, the generic drugs and active ingredi- ents coming out of India, the cancer therapies that need tight cold-chain handling, moves through the Gulf hubs at Dubai, Doha and Abu Dhabi. When those airports and the big Gulf carriers got disrupted, that traffic had nowhere easy to go and rates spiked hard. Perishables took a sim- ilar hit. The knock-on effect landed on Asia-Europe shippers gener- ally, since Gulf freighter capacity is really the backbone of those lanes, and losing it pushed everyone onto longer, more expensive reroutes.” This is clearly a huge problem. Since these products are not only desper- ately needed, but require extremely specific time frames, the damages could be immense. Rerouting is a solution, but the reroutes must be on a strict schedule, to prevent expira- tion or similar issues. Congestion is also a problem for air cargo, and one that is difficult to solve. While some parts of it are being handled, new issues constantly arise. For instance, Brandon Fried said, “The gateway gridlock people wor- ried about has eased in a lot of places, partly because the de minimis changes pulled a big chunk of e-commerce parcels out of the system. What hasn’t gone away is the capacity constraint underneath it. There simply aren’t enough freighters, the order backlog at the manufacturers runs into the thousands, and IATA doesn’t expect that to normalize until early next decade. So instead of one big conges- tion story, you get periodic hotspots. In the United States, our members still report delays at major airports, so we are continuing to pursue funding for improvements in those cargo areas.” The AirForwarders Association is at the forefront of pushing for air cargo congestion solutions, but pushing only goes so far. Funding is necessary to solve the issues that periodically continue to arise. Hope for the Future The current stability is a good sign, but it is only a sign. It is entirely possible for the industry to crash once again. It is not yet time to relax. It is still very important to come up with alternative routes to avoid dangerous zones, to create new practices, and to be prepared to replace any solution that is no longer working. As long as everyone is prepared, the air cargo industry can weather the changing times. Even in the case that the slump returns, and more sharp declines occur, it should be possible to get through it all. the Middle East market was showing signs of stabilization, but recovery remained uneven across the region. It went on to note that Emirates, Etihad, and Qatar Airways are main- taining substantially more normal oper- ations, providing improved access to the region, and restoring some of the capac- ity lost during the initial disruption. “The recovery is even more impressive given it has continued despite continued flashpoints in the conflict. So, unless there is a major deterioration in the security situation, I believe the worst is behind us in terms of the impact on the air freight market. Rates spiked sharply but they are coming down gradually as we anticipated, so it’s a step-by-step path back to business as usual.” (HAVOC – continued from page 42) (TRENDS – continued from page 42) Niall van de Wouw, Xeneta However, freighter capacity remains below pre-US-Iran conflict levels. The resumption of Cathay Pacific’s freighter service to Riyadh, in Saudi Arabia, con- tinues to be under review. Cargolux’s planned return to Dubai/DWC, and other Middle East destinations also remains on hold, and the Luxembourg-based cargo airline has maintained Muscat, in Oman, as its back-up hub in the region. Such caution also extends to pas- senger services which under normal circumstances offer a non-negligi- ble amount of belly space for cargo. Cathay Pacific has deferred the return of its daily passenger flights to Dubai and four-times-weekly flights to Riyadh until late October. The pax aircraft of Lufthansa, Air France-KLM and Singapore Airlines will not be returning to the Gulf region before the end of October either and in the case of United Airlines and Air Canada flights will not resume ‘until further notice’. Doubts Over Usual Q4 Demand Surge In its latest air freight over- view, issued in the second half of August, US-based AIT World- wide Logistics, noted that “demand growth is decelerating, signaling a market that’s beginning to cool rather than tightening. Rate premiums are unwinding, with spot rates falling and year-over-year growth slowing for a third straight month. The absence of “charter conver- sations” suggests airlines won’t add meaningful peak-season capacity, which could provide a modest floor for rates if demand climbs, it said. “Historically, this is an indication that forwarders and airlines aren’t expecting the usual Q4 demand surge.” Market to Weaken Further, Rates to Ease Demand growth will likely stay in the low single digits (2 -5% YoY) and capacity additions should keep pace with or slightly exceed demand, nudg- ing load factors flat to slightly lower. AIT went on to underline that full- year forecasts were “backward-look- ing,” in assuming that a further increase in demand was likely given the strong H1 performance, rather than being based on hard evidence which pointed to improved expecta- tions for the second half of the year. Shippers should therefore expect a modest, uneventful Q4 rather than the typical seasonal rate spike. “Analysts expect the market to weaken further, and some observers are explicitly forecasting that rates will continue to ease in the final months of the year, reinforcing a cau- tious atmosphere heading into 2027,” it added. ‘AI and Semicons Carrying the Market’ As for specific trade lanes, the Transpacific remains the strongest, with a fifth consecutive month of growth, driven by AI and semiconductor cargo – which were “carrying the market,” — moving on urgent timelines. Volumes on the Asia-Europe e-commerce trade, the vast majority of goods shipped being of Chinese origin, have recorded sharp falls, fol- lowing the EU’s new parcel tax on imports valued at less than €150. Hong Kong–Europe was down 19% over the summer (24% YoY) and China–Europe declined 3%, with spot rates dropping in tandem. Europe-Asia, up 7.1% YoY, is “the most durable trend” among major corridors. Middle East-linked lanes continue to be the weak spot with improve- ments in hub transfer traffic not yet translating into a broad recovery across all connected routes. Leaders from Boeing, Gulfstream and West Star Aviation gather at Global Aerospace Summit Leaders from Boeing, Gulfstream Aerospace Corp., and West Star Avi- ation recently highlighted significant investments in facilities, technology and workforce development initia- tives that are expanding the St. Louis region’s role as a major center for aerospace manufacturing and aircraft maintenance. The discussion, titled “Building and Sustaining the Fleet: OEM, MRO and Defense Perspec- tives,” was part of the 2026 Global Aerospace Summit August 19 and 20 in O’Fallon, Ill., that showcased the region’s aerospace momentum. The panel featured Chad Nicklaus, Director of St. Louis Site Integration and manufacturing leader for Boeing’s St. Louis operations; Tony Ray, Vice Pres- ident and General Manager St. Louis Completions for Gulfstream Aerospace Corp; and Brian Bauwens, Director of Bombardier Business Development for West Star Aviation. The discussion was moderated by Mary Lamie, Executive Vice President of Multimodal Enter- prises for Bi-State Development and head of its St. Louis Regional Freight- way enterprise. The panelists offered perspectives spanning military aircraft production, business-aircraft comple- tions and support, and maintenance, repair and overhaul, commonly known as MRO. Their comments illustrated the breadth of the bi-state St. Louis region’s aerospace sector that designs and manu- factures new aircraft, equips and deliv- ers business jets, and maintains aircraft throughout their operational lives. Boeing Expands Capacity For Defense Programs Nicklaus said Boeing’s St. Louis operations are today known as Boeing Fighter Land USA, bringing together manufacturing, engineering, supply chain, and supplier teams to design and build aerospace defense projects for domestic and international cus- tomers. Boeing has 18,000 employees and about $2 billion of active payroll in the region. Products and capabil- ities discussed during the session included the F-15EX, F/A-18 Super Hornet, T-7A Red Hawk, MQ-25 Stingray and ground-based flight-test simulators and weapon systems. Demand for the F-15EX is prompt- ing Boeing to invest $1.8 billion to expand its operations by St. Louis Lambert International Airport and increase its production rate, he said. “We’re answering that call by actually investing in our capacity, hiring and expanding our operations, going from one aircraft a month to two aircraft a month,” Nicklaus said. “That’s 12 to 24. We want to be ready to answer the customers’ needs, stand up operations, ramp up, and be ready to go when things hit.” He said Boeing also has invested $200 million in the new MQ-25 pro- duction facility at MidAmerica St. Louis Airport in Mascoutah, Ill., and is making broader investments in buildings, tools and the workforce needed to support future programs. “There’s a great future for the MQ-25 in that facility,” Nicklaus said. “We’re super excited to get that product to the fleet as soon as possible.” Nicklaus said the investment and activity surrounding Boeing’s pro- grams point to additional opportuni- ties throughout the regional aerospace economy. He also touched on Boeing’s corporate citizenship, noting that the company spent $1.6 million in 2025 across numerous non-profit organiza- tions and that employees volunteered 12,000 hours in the community, with a heavy focus on STEM education. (GATHER – continued on page 46) (L to R) Mary Lamie – Bi-State Development, Chad Nicklaus – Boeing, Brian Bauwens – West Star Aviation, Tony Ray – Gulfstream Aerospace Corp
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