Has the US shot itself in the foot?

TO SAY that the US government shutdown couldn’t have come at a worse time has to be among the biggest understatements of the year.

The impasse between the Democrats and the Republicans left international political and economic commentators incredulous that such a crisis situation was allowed to escalate unabated well into the eleventh hour, before a mini-deal was struck.

The debacle has done the nation’s already mercurial air cargo market no favours.

“Overall, we are experiencing difficult market conditions both ex-North Atlantic as well as South Atlantic,” reveals Achim Martinka, vice-president of the Americas at Lufthansa Cargo. “Despite this, the business confidence index is showing some improvement and therefore bringing some cautious optimism – at least ex-USA.

“But economic and political uncertainty regarding the debt ceiling debate may tamper with US exports growth,” he adds.

South America has been a mixed bag. “Brazil and Columbia are shrinking [export tonnage], whilst Chile and Peru are growing and [we are] offering Lima as a new destination, starting with our winter schedule.”

Apart from some government contract business slowing down during the shutdown, IAG Cargo’s US operations emerged relatively unscathed but the same cannot be said of the sluggish demand and market volatility Martinka refers to. 

Joe Lebeau, IAG Cargo’s regional commercial manager for North America, admits the freight arm of British Airways and Iberia has had a bumpy ride too (along with other operators) but suggests it has come to pass.
There has been some firming in the market over the last six weeks – (Lebeau is hoping the six-week uptick will continue to the Christmas season).

“Leading up to that, it has been a very difficult summer for all, particularly on the market shrinkage from North America into our key points in Europe, those being Brussels, Amsterdam, Frankfurt, Milan and Spain,” he explains. 

Read Thelma Etim’s full feature on the US market in Air Cargo News 4 November 2013 – Issue 764