Great Year with a Solid Year Ahead for Air Freight

The Latest Blog Post from Dan Boaz

With 2014 nearing an end, the air freight business year has had a great turnaround. The industry has had five straight quarters of growth and some believe there is still more to come. The third quarter from this year was the the most interesting

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quarter. They actually saw demand outpace supply which is encouraging to see. Such demand had not been seen like this in some time.

We saw a rise in 5.4% between October 2014 and October 2013′s numbers which is phenomenal growth. These positive numbers are returning to 2010 form. 2010′s numbers were essentially the post recession bounce back numbers. Of course with the West Coast port congestion, air freights numbers have received a significant boost as a result. With no definitive solution in tack, air freight suppliers are in a wait and see mind sight in terms of receiving business from the area.

An important holiday to note is Chinese New Year. Some may think what does the holiday have to do with air freight but it actually has a lot to do with it. As air cargo begins to slow down just a bit, it will actually begin to pick back up during the middle of January due to Chinese New Year. Factories in China will begin to shut down shortly after middle of January so shippers will begin to move their products in and out of China in order to get things where they need to be on time. Chinese New Year will be observed on February 19th, but factories have been known to be shut down for three weeks.

With the growing consumer electronics business comes more opportunity to grow air freight business. It is reported that 72% of sales of consumer electronics is connected with air freight business. For more on this story, check it out here.

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Truckers Get Relief on Rest Rules

images-q=tbn-ANd9GcTjAV-L2KQzsn-U_96P1mAD1BAUZIiDwN9y4jLrShv80RnTrEAfA provision has been added for truck drivers that temporarily suspends rules that took effect last year. The provision is added to help protect truck drivers while a study is conducted on the number of trucks out on congested roads. What led to this drastic change?

There has been a lot of second guessing lately on rules and regulations set up for truck drivers. This is the second attempt by law makers to to delay the rules. The first attempt came in light of the Tracy Morgan accident. Tracy Morgan, a prominent comedian, was riding late at night in the back of a car after a show when the car he was in was struck by a Wal Mart truck driver leaving Morgan and riding along friend Ardie Fuqua in critical condition but also killing James McNair. Many believe the driver of the Wal Mart truck was too tired to be on the road and should not have been. The driver was nearing the end of a 14 hour shift leaving many to think if that is too long and harmful to others on the road.

The provision would allow truckers to work as many as 82 hours per week. Many are up in arms over the provision due to belief that people are swindling deals over this matter behind closed doors. While this is a sensitive matter, it is correct to take time to get this right. I think it is correct to wait this out and conduct the study to better understand what is happening and what can be done about the matter.

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Dan Boaz — Retailers Turn to Air Cargo

The Latest Blog Post from Dan Boaz

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The holiday season is always a busy season for merchandise shipments. With many modes of transportation available, often times retailers will turn to ground or ocean shipping as options to ship due to its economic efficiency. That may not be an as available option this season however.

With clogged US West Coast ports, retailers are making last minute alternative changes to make sure merchandise arrives on time. The mode of transportation they’re choosing: Air Freight. According to Ann Taylor CEO Kay Krill, this mode of transportation has been estimated at the cost of $5 million more than its traditional ocean shipping options. Due to sales negatively impact during the first half of the quarter, Krill took precautionary measure and switched to air freight due to uncertainty of timely delivery via West Coast ports.

New York & Co. CEO Gregory Scott is experiencing the same problems not just at the West Coast ports but at various ports. His companies third quarter performance was also hindered by delays at such ports.

The air cargo industry is doing better as a whole as a result of the news of congestion within the West Coast ports. Air cargo rates are also increasing in order to take full advantage of the increase in demand to have merchandise shipped via air. North American cargo volume benefitted greatly from the port congestion. For the month of September, the International Air Transport Association reports an increase of 5.4 percent year over year. With growth in air freight trending upwards, it’s interesting to see where the growth will take them by middle of next year.

For more on this article, check it out here at joc.com.

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Dan Boaz — Increasing Trailer Size To Drive Rebounding Economy

imgres-9As the American economy continues to rebound, the demand for shipped goods has been growing. That demand has resulted in the trucking industry operating at near capacity according to recent piece from Forbes.

The piece, written by David Congdon, President and CEO of Old Dominion Freight line, states that 2014 thus far has quelled any doubts that have lingered from over the past few years. Congdon anticipates that the next 18 months will see many trucking firms expanding their fleets to meet growing demands for shipped goods.

The U.S. trucking industry moved 69.1 percent of all domestic cargo in 2013. This represents an increase over the 68.5 in 2012. According to Congdon, projects for the industry have that rate increasing to 70.8 by 2024.

While Congdon says that it is true that new government regulations have left some in the industry scrambling to keep in compliance, he sees great potential for Washington to be an ally to trucking. In particular, this could be accomplished by allowing LTL carriers to increase their capacities in a safe and responsible way.

Congdon argues that recent technological advances have made trucking safer, more fuel efficient, and better equipped to in terms of routing and packing systems. The tools are all there for the rapidly growing industry to increase efficiency, but that taking costs and time out of the supply chain will only come when that technology is used to increase capacities and bring more goods to market.

With the new technology available, even a conservative increase in trailer size with no weight-limit increase would improve fuel efficiency, highway safety, and lower maintenance costs. Congdon is recommending an increase to a twin 33 ft. trailer, with no increase to the 80,000 lbs. weight limit. By contrast, Old Dominion uses twin 28 ft. trailers in over the road operations.

Read more about Congdon’s call for increased trailer size at Forbes.

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