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April 1 2019

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4 The Journal of Commerce | April 1 2019 Mark Szakonyi ROCKETING E-COMMERCE GROWTH is pushing major US air cargo hubs to their limits, and it's going to take more than terminal investments to better handle a seismic shift in shipping. It's going to take technology-enabled collaboration among transportation providers and a higher degree of sensitivity among ground handlers to pressures cargo owners face in getting goods to destination. Just five years ago, there was plenty of hand-wringing on air cargo's future growth as some cost-conscious shippers shifted more cargo from freighters and the bellies of passenger jets to ocean shipping. Unreliable ocean shipping and, more impor- tantly, speed to markets for trendy items — for everything from the hot toy fidget spinner to the month's fast-fashion must-have — sent lower-value goods once relegated to ocean shipping to the air. And air cargo has a part to play even when shippers reduce inventory to attempt "just-in- time delivery" with ocean shipping. Because of "lower safety invento- ry and the higher risk for line downs in cases of unexpected interrup- tions, I see a significant growth of emergency transport solutions such as onboard couriers and air charters," Johannes Barthels, director of Euro- pean ocean freight for TOC Logistics International, told The Journal of Commerce. "My feeling is that the amount of customers who need this type of service has doubled within the last two to three years." Air cargo volumes through North American hubs rose 6.9 percent year over year in 2018, compared with global growth of 3.5 percent, according to the International Air Transport Association (IATA). And while the association has warned hundreds of global airports will reach capacity within the next 10 years, it's unreasonable to think that cargo hubs can simply expand to meet demand, considering capital restraints and community pushback that can delay approvals. Better slot coordination handled via a third party helps, and the ap- proach used by Amsterdam Schiphol is better than the slot auction or peak/off-peak pricing models that favored incumbents and increased rates, IATA argues. Technology provides a way to make the most of existing capaci- ty. The uniting of on-airport cargo service providers that physically — or digitally — touch freight under a data-sharing program has been credited for reducing congestion at Brussels Airport. Electronic driver check-in kiosks in airport cargo terminals that record arrival and wait times provide the visibility needed to make better operational decisions. The system, known as CargoSprint, also allows freight forwarders and drivers to make appointments online with ground handlers, reducing trucker frustration and long delays in picking up cargo. "We realize nothing happens in the airport quickly. It takes years, if not decades, to accomplish changes that affect the infrastructure," said Scott Case, a former forwarder and customs broker who now heads the Chicago Air Cargo Association. "But we also know we can find near-term improvements through technology and better processes. We need to make our needs known and secure our place at the table. Otherwise, if there are even short-term problems in our city that are not resolved, business will go away." Technology can't solve some airports' inattention to the chal- lenges. Whether warranted or not, many in the air cargo industry feel second tier to passenger operations. The steady drumbeat of forwarder advocacy does, however, appear to be spurring action, as JOC corre- spondent Chris Barnett writes in this issue's cover story. Acknowledging congestion challenges at John F. Kennedy Inter- national Airport, the Port Authority of New York and New Jersey said it's improving roadways within and con- necting to the airport. A long-dis- cussed passenger rail link connect- ing to midtown would remove up to 1.5 million vehicles annually, easing freight transport serving the hub. The port authority said it's work- ing with stakeholders to address concerns about not just congestion and flight delays, but also freight and truck dock availability. "Additionally, the port authority continually monitors truck activity and [has] developed mitigation plans that include creating a temporary truck staging lot. The Airport Plazas Truck Convenience Center, a first of its kind at North American airports, offers multiple truck services, includ- ing 44- to 53-foot spaces for truck parking," said Mike Bednarz, manager of air cargo business development. Those efforts, hopefully, will find traction before a $13 billion project to build two new international terminals brings additional capac- ity online as soon as 2023; project completion is scheduled for 2025. In the meantime, air cargo handlers will grapple with aging facilities — two-thirds of which don't meet industry standards, according to the port authority. Encouragingly, the port author- ity said some ground handlers are using technology to better manage slots for truck docks. It expects future terminals to have similar capabilities. JOC email: twitter: @markszakonyi New reality, new solutions The Journal of Commerce (USPS 279 – 060), ISSN 1530-7557, April 1, 2019, Volume 20, Issue No. 7. The Journal of Commerce is published bi-weekly except the last week in December (printed 25 times per year) by JOC Group Inc., 450 West 33rd St., 5th Floor, New York, N.Y. 10001. Subscription price: $595 a year. Periodicals postage paid at New York, N.Y., and additional mailing offices. © All rights reserved. No portion of this publication may be copied or reprinted without written permission from the publisher. POSTMASTER: Please send address changes to The Journal of Commerce, Subscription Services Department, 450 West 33rd St., 5th Floor, New York, N.Y. 10001. Letter From the Editor Technology provides a way to make the most of existing capacity.

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