As President Trump enters his second year, it’s time to reflect on the impact of his policies on the air cargo industry.
       No one can disagree that it has been a good year for all segments of the air cargo industry despite the typical Washington gridlock and opposition obstructionism.
       The U.S. economy is strong—U.S. GDP may increase by as much as 4 percent in 2018, fueled by high job growth, low unemployment, and raising salaries, allowing consumers to increase their spending.

Value Added America

      Because of the financial environment and some advantageous policy changes (most notably sizeable tax cuts in 2018), businesses—both foreign and domestic—are saying they see the U.S. as a good place for manufacturing. Now overseas money is flooding back into the U.S. economy and there appears to be a bump in domestic investment.
       Taken together with a more assertive trade policy, the U.S. has returned as a value-added manufacturer, and not just an exporter of raw resources and services.
       This has meant a boom for air cargo; one, I think, that is likely to continue so long as the U.S. dollar doesn’t appreciate against the Euro or other major currencies. 

Call For Scheduled All Cargo

      But despite all this good news, the U.S. is still missing a scheduled all-cargo international airline able to take on the non-U.S. scheduled freighters. Long gone are Seaboard World Airlines, Flying Tigers, and North West Orient freighters, and no U.S. passenger carrier is flying freighters like many of the foreign airlines do.
       But in this environment, it may only be a matter of time before U.S. scheduled cargo airlines return and take to the skies.
       The timing seems right with the growth in the commercial market and the DOD’s desire to preserve its military organic freighter life span.

Looking Into CRAF

Pilots In Short Supply

      The pilot shortage has exacerbated much of this. One cause of the pilot shortage is the FAA requirement for commercial U.S. pilots to hold 1,500 training hours, compared to only 250 hours in most other countries. U.S. carries are busy adjusting the effect of this policy, including large pay increases to its pilots, but a total durable solution will take time without policy changes, putting U.S. carries at a severe disadvantage compared to their foreign airlines competition. This requirement was put into effect for safety reasons, but comparing safety records across countries—as well as U.S. ridership on foreign carriers—it might not make sense to insist on requirements so far out of line with international standards, especially since many believe the policy change was a reaction to an incident that had little or nothing to do with pilot training hours.

The Trump Effect On Cargo 2018

      What can I predict for the air cargo industry for President Trump’s 2nd year in office? His pledge to improve American infrastructure, including airports, will surely help the airlines. He has also vowed to work on cyber security, effecting “free flight” that will reduce flight time and airline costs, which may potentially enable the large passenger hub and spoke carriers to add an additional bank of flights. Increased disposable income brought about through tax cuts, low unemployment, and salary increases will help more Americans afford vacations and increase consumer spending, boosting passenger volume and increasing demand for door-to-door parcel delivery and inventory management. Increase in domestic manufacturing will also spur demand for schedule airport-to-airport air freight, which will either move in passenger aircraft bellies or on non-U.S. freighters.

Air Cargo Step Up & Raise Your Voice

      The Trump effect has helped air cargo grow to record levels, but the industry cannot afford to be complacent. Airlines need to take an active part in developing the sector and support and encourage the U.S. Government to help solve problems. Carriers—individually and through industry groups—need to align their tactical plans to achieve the strategic plan for industry growth. These are the times when the airlines need to speak with one voice.
Bil Boesch

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