Air Cargo Activity Relatively Flat

December 8, 2006
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GRAND RAPIDS — Air cargo activity at the Gerald R. Ford International Airport between January and October was up slightly more than 2 percent compared with the same 10-month period the year before, but unless November’s numbers come in strong or there’s a sudden jump in activity this month, that activity will likely turn out relatively flat for 2006.

“Based on the last couple years of history, we do tend to see a spike in the December numbers,” noted Bruce Schedlbauer, the airport’s manager of marketing and communications.

From January to October this year, the total volume of freight and mail carried by the four cargo airlines operating out of Ford International was 72.6 million pounds, versus 71.1 million pounds for the first 10 months of 2005. The four cargo carriers here collectively handle nearly 240,000 pounds freight and mail per day, according to Ford International.

The airport had set a new record for air cargo activity in 2004, with a total volume of 79.5 million pounds of freight and mail carried. It beat that record in 2005, with a total volume of 86.5 million pounds of cargo.

Historically, air cargo activity has moved in synch with gross domestic product, and GDP remains the primary driver of air cargo industry growth, according to the Federal Aviation Administration.

In its aerospace forecast for fiscal 2006 to 2017, the FAA points out that there have been significant changes in the air cargo industry, including:

  • Air cargo security regulation by FAA and TSA
  • Market maturation of the domestic express market
  • Modal shift from air to other modes, especially truck
  • Increases in air fuel surcharges
  • Growth in international trade from open skies agreements
  • Expanded use of all-cargo carriers by the U.S. Postal Service to transport mail
  • Increased use of mail substitutes, such as e-mail.

The FAA forecasts that “total revenue ton miles” — the revenue generated for each ton mile operated — will increase to 5.3 percent in 2007, compared with a 5.4 percent increase in 2006. For the remaining 10 years of the forecast period, the FAA predicts total revenue ton miles will increase at an average annual rate of 5.1 percent, based mainly on economic growth.

Boeing predicts world air cargo traffic will expand at an average annual rate of 6.1 percent for 2006 and 2007. It notes in its 2006-2007 world air cargo forecast that Asia’s air cargo markets will continue to lead the world air cargo industry in average annual growth rates, with domestic China and intra-Asia markets expanding 10.8 percent and 8.6 percent per year, respectively.

“As in the past, the more mature North America and Europe markets reflect slower and thus lower-than-average traffic growth rates, with the exception of those linked to Asia and Southwest Asia,” Boeing reported.

According to the FAA, domestic cargo revenue ton miles are forecast to increase 3.4 percent in 2007 based on strong economic activity. Based on projected U.S. economic growth, the FAA further forecasts that between 2007 and 2017, domestic cargo revenue ton miles will increase at an average annual rate of 3.1 percent.    

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