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January 6 2020

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140 The Journal of Commerce | Januar y 6 2020 www.joc.com Air Cargo | Executive Commentary 2020 ANNUAL REVIEW & OUTLOOK Airforwarders Association Brandon Fried Executive Director www.airforwarders.org Creatively responding to change has always been the foundation of the freight forwarding industry, so we view today's reduced volume chal - lenge as an opportunity. Forwarders provide solutions to complex logistical problems using a variety of transpor - tation modes, and Airforwarders Association members look forward to assisting shippers with transporta- tion solutions adhering to all budgets and requirements. In addition to overnight shipping, many will be offering more economical deferred air cargo to retain tonnage and, in some cases, other options that may not include air freight. Regardless of the current soft - ening seen throughout 2019, a recent survey of Airforwarders members indicates increased positivity for 2020. This optimism comes from the e-commerce megatrend continuing its significant impact on the air cargo industry as the need for faster delivery continues to grow. Also, there is the hope of the United States reaching a trade deal with China and more favorable global economic conditions prevailing during the upcoming year. US forwarders remain concerned about increasing airport truck con - gestion, poor road infrastructure, the impending excessive governmental regulation, the upcoming mari- time low-sulfur fuel requirement, anticipated changes to US export regulations, and lithium batteries (dangerous goods) shipped by compa- nies not adhering to existing laws and manufacturing standards. But despite industry and global economic concerns, freight forwarders are seeing more customer demand for faster order processing and ven- dor flexibility. Both continue to be the primary deliverables within our business. As a result, our members are increasingly investing in significant financial resources in technology development to provide more efficient customer experience and increased information transparency. Our country has seen nine straight years of economic expansion since the Great Recession, and freight forwarders have benefited as a result of this prosperity. Now, as the econ - omy begins to shift, we look forward to thriving on its changes and con- tinuing our industry success. Atlas Air Worldwide John Dietrich President & CEO www.atlasair.com Air freight is at the center of our modern global economy and is a long- term growth industry. Air freight is a catalyst for international trade. It provides efficient access to markets. It is driving increased innovation in supply chains. And it is a powerful con - tributor to global economic and social development. Despite current macroeconomic issues and trade challenges, global air freight traffic is expected to double in size over the next 20 years. As it does, it will drive a continuing increase in connectivity between developed and developing countries, triggering opportunities for economic growth and social transformation in local communities that otherwise would not be in reach. Close to $7 trillion worth of goods is currently moving by air freight, and that number is growing. Looking ahead, the global consuming class will grow to 6 billion people by 2025, and their consumption is expected to sur - pass $30 trillion. To meet existing and future demand, many manufacturers are also shifting production to new localities and establishing related new supply chains, providing additional opportunities for air freight. Today's customers value and expect the convenience, product access, selection, and price trans - parency that e-commerce provides. Together, the fast-growing express and e-commerce markets have led to an increase in demand for dedicated freighter networks providing the reli - able, timely service that businesses and consumers desire and have come to expect. To navigate the current head - winds and to achieve long-term success requires the right air freight platform: One with scale and scope. Driven by a talented team of employ - ees focused on customers. With a strong portfolio of assets and service offerings that drive fleet flexibility, network efficiency, and an expanded market presence. And with diverse fleet types and operational capabili - ties to tailor solutions for customers based on their changing needs. IMS Worldwide Curtis Spencer President (pictured) Steve Schellenberg Vice President, Business Development www.imsw.com Air cargo isn't dead yet … we've got a long runway ahead of us. Looking for- ward to 2020 and beyond, it is challenging to determine how the air cargo industry will adapt to a global slowdown in cargo volumes, while realizing that e-commerce remains a key driver for moving goods between global buyers and sellers. However, it is clear that e-commerce requires a faster process - ing protocol, one with better visibility into the origins, values, descriptions, and seller's details, which remains a challenge today for buyers in the US. Couple these technological and infor- mational challenges with compliance and clearance issues, and immediate e-commerce growth is restricted. If you look abroad at the high- processing, high-throughput centers under development by Cainiao, Aliba- ba's logistics partner, it is evident that more e-commerce air cargo activity is on the horizon. By the way, Alibaba commits to delivery of packages in "It is evident that more e-commerce air cargo activity is on the horizon." ▶ ▶ Curtis Spencer Steve Schellenberg ◀ "Despite industry and global economic concerns, freight forwarders are seeing more customer demand for faster order processing and vendor flexibility. " Brandon Fried "Despite current macroeconomic issues and trade challenges, global air freight traffic is expected to double in size over the next 20 years." ▶ John Dietrich

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