Last month, word of Amazon’s next
pursuit came down from the Seattle Times, and the report was
that the online retailer is finally dreaming big. OK, maybe this is
simply a continuation of the company’s lofty goals, some of which
will pan out, while others fall flat. The Prime Air drone program is
still gaining steam, but that’s so 2013. This year, Amazon will
focus on creating its own parcel service.
Amazon will soon step into this
competitive landscape, going head-to-head with parcel providers by
purchasing a French package company. This deal will reportedly occur
in the first quarter and is something Amazon’s been planning for
quite some time. In 2014, it bought a quarter stake
in the company in question, Colis
Privé, and now it’s taking a full leap into the business.
This is a huge deal, but isn’t
monumental in of itself. The possibility that this acquisition leads
to the purchase of other parcel delivery providers around the world
by Amazon is the real development worth following.
But there’s more. Amazon is also
reportedly talking to Boeing about leasing some 767 jets, and
representatives have apparently been chatting with leasing companies,
as well. Currently, Amazon is undertaking a trial-run cargo operation
in Ohio, operated by Air Transport Services Group. Analysts say the
online retail giant is tired of seeing shipping inefficiencies from
the main parcel carriers, so it will try to go out on its own.
Will Amazon’s wishes dominate air
cargo talk this year? Likely not. Air cargo’s overall health will
be the driving focus, as it was in 2015 and countless years before
that. According to the latest data from the International Air
Transport Association, the air cargo market may have stopped its
decline, but the state of cargo is still not anything to celebrate.
The fact that these results are no
longer as terrible as they once were could be reason for optimism, or
they could signal a bit of false hope. This most recent IATA data is
only from November, but it shows total cargo volumes were higher than
the month before. The numbers also point to a steady increase from
the low-cargo point in August.
In a statement, Tony Tyler, outgoing
IATA director general and chief executive officer, said a lot is
still up in the air for the industry. “The current volatility of
stock markets shows how much the health of the global economy—upon
which air cargo depends—remains on a knife-edge,” he said.
In 2016, a change at IATA might
provide some disruption to the air freight market, as it strives to
regain its luster. Tyler’s departure in June after five years at
the top airline agency could signal another issue for the cargo
world. During his tenure, Tyler has championed cargo, by all reports
paying more attention to the value of air freight than his
predecessor. Tyler oversees all of IATA, and it’s important to have
that voice for the cargo industry at the top, but the organization’s
real cargo boss is Glynn Hughes, who has been doing a stellar job in
his role as the agency’s global head of cargo. There was an easy
transition to Hughes after the departure of the well-liked and
experienced Des Vertannes in 2014, and the cargo arm of IATA hasn’t
experienced any growing pains or lack of focus under Hughes’
direction. One can hope Tyler’s replacement continues to keep cargo
on the minds of IATA’s leadership.
Tyler’s replacement might also
help boost gender diversity in the industry; reports from the IATA
Media Day in December said Tyler briefly ruminated on the likelihood
that his replacement would be female. A woman as the head of top
aviation organization would certainly help generate momentum toward
bringing more women to senior aviation roles. In May 2014, the news
site Skift found that fewer than 5 percent of airline CEOs are
women.
During the Media Day in Geneva, IATA
related some good news: oil prices are expected to be lower for
longer, leaving open the possibility that shippers who switched from
air freight to surface modes when prices rose may return to the
airlines for their shipping needs. Freight load factors are still on
a downward trend, though, and poor international trading volumes
aren’t helping matters.
IATA also continues to hammer away
at its e-freight initiatives, which are slowly gathering adopters. It
didn’t quite reach its goals in 2015, but there’s hope that this
year will bring a new groundswell of support.
In a survey of cargo bosses at the
airlines, IATA found they overwhelmingly see cargo yields and volumes
on the decline and are not optimistic about 2016. In this way, it
seems like 2016 will be another down year for the industry. As has
been reported extensively, there’s no port congestion on the West
Coast to bail out the airlines, so it’s up to the economic rebound,
increasing consumer confidence and a dedication by shippers to send
goods by air to realize air cargo’s success in 2016.
Ross, a former American Shipper
editor, writes about air transport and freight issues. He can be
reached by email at jonhross@gmail.com.
