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Report: U.S. air freight market to recover in 2005

Report: U.S. air freight market to recover in 2005

The $32-billion-a-year U.S. air freight industry will see mostly positive results in 2005, thanks to a rebounding U.S. economy, a pick-up in inventory replenishment and improving international trade, particularly with China, The Colography Group Inc. predicted in a report.

   U.S. air exports are projected to increase 4 percent to 87.8 million shipments in 2005.

   The consultant’s annual “Expedited Cargo Market Projections” report also predicts the U.S. expedited cargo market — comprising domestic air, air exports, ground parcel and less-than-truckload — will transport 6.76 billion shipments next year, surpassing the 2000 total of 6.7 billion.

   Of this total, the ground parcel segment will control 61 percent of the shipment share, adding 175 million shipments over 2004 levels, according to the report.

   The report considers the air or ground transportation segments of the U.S. expedited cargo industry, also known as time-definite transportation industry, including the business of the integrators FedEx, UPS and DHL.

   “The improving outlook for domestic air freight is encouraging after four years of poor results,” said Ted Scherck, president of The Colography Group. “As shippers and consignees grapple with driver shortages, tightening truck capacity, and higher rates for LTL and ground parcel services, air freight may become an attractive alternative, particularly on medium-length hauls.”

   But he warned the renewed optimism should not signal the industry is “returning to its glory days of the 1990s.”

   According to the report, total expedited revenue in the United States will reach $87.6 billion in 2005, a 4-percent increase from 2004 levels. The increase would be due to higher weight for deferred air shipments and the impact of fuel surcharge pass-throughs, which should remain in effect through 2005.

The FREIGHTWAVES TOP 500 For-Hire Carriers list includes FedEx (No. 1) and UPS (No. 2).