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Published byDenis Garry Booker Modified over 9 years ago
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The Air Cargo outlook: trends, opportunities and threats
Michael Vorwerk – President CNS April 2011 Health and Personal Care Logistics Conference / Spring 2011
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IATA Introduction Founded in 1945, the International Air Transport Association (IATA) is the industry’s global trade association With 225 members in more than 130 countries, IATA represents 93% of international scheduled traffic IATA’s mission is to represent, lead and serve the air transport industry IATA delivers standards and solutions to ensure successful air transportation
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Introduction Cargo Network Services Corp.
Established in 1985 to support the Air Cargo Industry in the USA Located in Miami Key Services CASS USA & e-billing Agent Endorsement Program Global Cargo Agenda Implementation Industry Statistics Information & Distribution services Partnership Conference
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Introduction continued
A m N ot A n E conomist
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I’d rather talk about ….Did you know?
Every fifth drug is temperature-sensitive 20% of the world’s best selling pharmaceuticals are temperature sensitive $ 130 billion of the total pharmaceutical market ( about $ 650 billion ) is represented by temperature sensitive products The share of temperature-sensitive products will rise the next years Biological’s % Chemical based + 10% Nearly 100 % of all vaccines and 68 % of all products sold by biotech companies need to be stored and transported between 2 to 8 ºC 43 % of all diagnostics and about 11 % of all products from large pharmaceutical companies have to be handled with the same precautions There is a correlation between product price and temperature-sensitivity and that some biological’s, vaccines and hormones can reach a package price of up to $ or you can fill a LD3 Container with up to $ 20 million of product value.
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Industry Overview “Prediction is very difficult, especially about the future” Niels Bohr
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Squeeze on cargo profits started late 2010
Source: US BTS
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Heads of cargo confidence losing altitude
Source: IATA
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Travel markets strong trend but cargo?
Source: IATA
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Coincident indicators have slowed sharply
Source: IATA, SIA
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Boost from business restocking is over
Source: IATA, Haver
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World trade rising rapidly once more
Source: IATA, Netherlands CPB
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Business is spending on capital goods
Source: Haver
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Mixed picture for the consumer
Source: Haver
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Leading indicators very positive
Source: IATA, JP Morgan/Markit
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Business travel market remains strong
Source: IATA
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Europe’s economic situation remains grim
Source: Haver
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But optimism over ‘emerging’ markets
Source: EIU
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Rising oil price is the major threat this year
Source: Platts, Bloomberg
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Fuel prices will squeeze airline profitability
Source: IATA
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Despite Economic Development Airfreight always has a future
Ongoing Airfreight Drivers Current Airfreight Suppressors Wage Disparity: Low value work moving to low cost production areas Maturing Markets: As emerging economies mature consumers demand more imported goods Special Products: Live Animals, Perishables, Pharmaceuticals, & Valuables = Airfreight Emergency Shipments: Rapid recovery from breakdown or crisis situations Speed to Market: Protecting innovation from competitors Capital Costs: Reducing inventory costs in the supply chain through faster delivery Just In Time: Reducing inventory volumes & costs by destocking the supply chain Diversion to other modes: Shift of lower value items to sea / road / rail freight Demand for low cost products: Consumer demand shifting to low cost products to preserve purchasing power Further structural change: Only likely to occur if economical and/or regulatory environment will considerably
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Source: Adapted from The Economist
This sums it up REGULATORY CONSTRAINTS Source: Adapted from The Economist
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Thank-you Any Questions?
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