Following up on my post from earlier this week about the trend of shippers opting for slower (and less expensive) delivery, here are some comments on the matter made Thursday by UPS Airlines president Mitch Nichols. He was speaking at the US Chamber of Commerce’s aviation summit in Washington DC.
Nichols said, “What we’re seeing is our customers are getting very smart with their logistics … So we’ll see trade-downs. We’re struggling with revenue per piece because instead of a morning delivery they’ll defer to an afternoon delivery … I don’t think this is going to change. I do think this is a new reality we’re dealing with.”
Regarding the air cargo market in general, both Nichols and Atlas Air Worldwide Holdings president and CEO William Flynn (also speaking at the Chamber of Commerce event) see improvement in 2013 over 2012, the fourth year out of five in which global air cargo traffic dropped on a year-over-year basis.
“I do think the economy is stronger this year than last year,” Nichols said.
Flynn added, “Freight still remains at a relatively high level of demand … The beginning of the first quarter has actually been pretty good. There’s been some capacity discipline and yields have improved … The North-South trade-lanes are great opportunities … I think most of us see a nice ramp up as we go into the second half [of 2013].”