There's a real quandary in the air cargo industry at the moment. Growth rates are among the worst in three decades; security concerns are a pressing issue and will likely force price hikes; and customers are demanding even faster delivery times.

According to Robert Dahl, project director for Seattle-based Air Cargo Management Group, and aviation consulting firm, "Traffic was down on a global basis 5 to 7 percent through August during last year," Dahl says. "Then, following Sept. 11, there were steep declines in September and October before things rebounded a bit toward the end of the year." The statistics are significant, considering there were only two years during the past 30-year period that posted declines: "And, they were only modest declines of 2 per cent or less," Dahl says.

Naturally, security concerns remain at the top of everyone's list, whether it has to do with passengers or cargo. For instance, loading unsecured material onto a passenger flight threatens the passengers' safety. However, the same unsecured material, such as an explosive device, could be loaded onto a cargo plane and detonated over a populated area, says Eric J. Williams, vice president of international sales for Pilot Air Freight.

Providing adequate security within the U.S. is a daunting task. Trying to secure cargo and pilots that originate from outside the U.S. almost seems impossible, especially when it changes hands multiple times and small or lesser-known companies are involved.

Although the air cargo industry acknowledges the vulnerability in the system, particularly for freight that is being flown into the U.S., there's not yet a formal and concerted effort underway to implement changes. "Right now, these concerns are all in the discussion phase," Williams says.

According to Williams, "The consequences for implementing more stringent security measures will likely be a slowdown on handling freight. Some reports suggest that moving freight out of Latin America is now taking three days, instead of the usual one or two days, because of tighter security."

Higher costs are also associated with increased security. "Obviously, it's going to require technical support, such as X-ray machines, to inspect cargo," Williams says. "The problem is the expense, which could elevate the cost of cargo above an acceptable level and drive air cargo business to other modes of transportation."

Carriers are being squeezed in other directions, says Richard Denhart of American Airlines Cargo. "The domestic mail business is still restricted for passenger airlines. American Airlines is carrying 30 percent less mail than it did last year due to a combination of continued security restrictions on mail more than 16 ounces and the U.S. Postal Service's use of FedEx, which started in August, 2001."

In the meantime, the industry is waiting for the TSA to announce changes to cargo security rules, which will happen in the fall. "Changes could have anywhere from a minimal to significant impact on shippers, forwarders, and carriers alike," Denhart says.

SIDEBAR: Mark Your Calendar

TIACA's 21st International Air Cargo Forum & Exposition (ACF 2002), is scheduled for Sept. 17-22 at the Hong Kong Convention and Exibhition Centre, Hong Kong. For registration or attendee information, contact TIACA at (305) 443-9696. FAX: (305) 443-9698. E-mail: secgen@tiaca.org. (www.tiaca.com).