There\u2019s an old adage in the airfreight business that says if you have to ship something by air, you\u2019ve probably made some kind of mistake. Why else would shippers pay exorbitant air cargo rates instead of putting it in a truck or on the water?
\nThis is especially true in the ad hoc air charter business, which is founded on the inability of shippers to prepare for every contingency. Early last year, for example, when the \u201cperfect storm\u201d of a labor crisis on the U.S. West Coast occurred just before the ramp up to the Chinese New Year and in the middle one of the largest airbag recalls in automotive history, the air charter business had a field day, as shippers scrambled for every available cubic meter of charter capacity, sometimes paying double the normal rate to get their goods to end users on time.
\nThis year, however, the roller-coaster of the charter industry declined at an alarming rate. The charter business has been so dead in 2016 that one ad hoc charter company attending the Air Cargo 2016 conference in Phoenix in June said he hadn\u2019t flown his largest aircraft, a DC-9, a single time in the first five months of the year, due to a lack of business.
\n\u201cIt\u2019s definitely nothing like the year before,\u201d said Mike Joseph, director of sales and marketing, at Michigan-based Kalitta Charters, which counts ad hoc charter as 65 to 70 percent of its business. \u201cWe\u2019re way, way, way down \u2013 easily 40 to 50 percent down this year over last year.\u201d In the previous three years, he said, charters were at \u201cfull throttle\u201d until the market took a nosedive in 2016.
\nNo real consensus has arisen about the cause for the current nosedive, but some charter providers say it\u2019s a combination of better planning on the part of shippers, a lack of major natural disasters that would have caused supply chain disruptions, and the continued cratering of the oil-and-gas industry \u2013 the bread-and-butter market for charters.
\n\u201cBuyers became a little bit savvier, and have been able to manager their flows,\u201d said Mark Simone, general manager of AirNet II, an Ohio charter carrier affiliated with Kalitta. \u201cThings are a little bit more strategic on the buyer\u2019s end of the equation. The events they need to solve require more of an X-Acto knife than a samurai sword.\u201d
\nThose companies that took a seat on the charter bandwagon are starting to feel the pinch now. \u201cEverybody jumped in and was going to be ad hoc, because it was easy,\u201d said Joseph of the boom years from 2013 to 2015. \u201cBut now, when you\u2019ve got to get real cutthroat and competitive on your prices, it\u2019s a different ballgame.\u201d
\nSource: aircargoworld<\/p>\n","protected":false},"excerpt":{"rendered":"
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