Episode Transcript
[00:00:00] Speaker A: Hello and welcome to this bonus episode of the Lodestar podcast. I am going to be joined by Lodestar publisher Alex Linane, who has landed fresh from Miami where she attended Tiaka's air cargo forum. We're going to be hearing about key takeaways from the event, the details of a few major management changes within the air cargo industry, and what the industry's main concerns seem to be from the conversations that Alex has had over the last few days.
Alex, welcome back to the Lodestar podcast. A huge thank you for joining me so soon after your trip. You must be absolutely exhausted.
[00:00:42] Speaker B: I am pretty tired actually. It was a really busy one.
[00:00:45] Speaker A: Yeah, I can imagine. But before we get into the more industry news, how was your, how was your trip, what was Miami like? And how did this year's air cargo forum compare to the previous years?
[00:00:56] Speaker B: Well, you remember the previous year's ones. And let's start with the weather, which on previous years has been pretty nice. This year was very wet and very windy and also very Halloweeny. Everything was really dressed up, so it was quite, it's quite an odd atmosphere really in Miami itself. But obviously TEACA has moved on from just offering golf, so there was a yoga and pickleball and golf and they just about managed to get through those things despite the weather. Thankfully it was so windy that the rain only blowed every five minutes and then there'd be a five min gap and then you could wait for the next five minutes of good weather. So, yeah, that's what Miami was like.
Lots of people said it was a bit of a metaphor for the midterms next week. A lot of Americans were predicting some quite febrile environments. Perhaps after the, after the votes take place we will have to see. But yeah, it was. Miami was not as nice as normal, I have to admit, in terms of the acf. So if you remember last time there weren't very many airlines there, which was surprising. This time there were absolutely loads. I mean, Jaka said there was over a hundred represented and there were big airline stands this year as well, which probably says something about the state of the airline market in general at the moment. Apparently there was like 3,000 delegates there. Not sure I counted that many, but you know, who knows, I wasn't counting at all. So maybe there were 3,000.
But yeah, it was, it was busy, it was fun. There was a really good quality of people there, really interesting people. Lots of people were open to meetings, forward as ever, were squirreled away somewhere in their own meeting room. So I never Saw as many of them as I want to, but I never do, unfortunately. They're very hard to pin down face to face. And, yeah, it was. It was good. It was. It was. It was really good. Very busy.
[00:02:44] Speaker A: I'm exhausted just hearing you talk about it. It sounds very busy. And the. The kind of weather side of things has alleviated some of my fomo, because it's been really bad here too. I think it's been bad everywhere, basically over the last few days. So I'm glad that I didn't miss out on any sunshine. This was also quite a significant air cargo forum because it was the current Director General Glyn Hughes event. And there were also quite a few other changes across air cargo management. So what did you kind of get from a vibe from your chat with the new Director General, Maman Tharakan, and what are the other handovers in the industry?
[00:03:15] Speaker B: Yeah, it really felt like a bit of a changing of the guard, to be honest, in air cargo, which is a fairly small industry and quite niche and everyone knows each other and it gets quite emotional when people have been there a long time start leaving Glyn Hughes. He got his own roast, paid for by a company, which was weird, I have to say, but it's more of an American thing, I think. And yeah, Mamarin, he was great. He's going to be a really good replacement. I think he's really affable. He's very easy to talk to, he gets on with people.
But he also says he's very motivated and he wants to see Tiaka proceed. It was nice to see Tiaka just sort of generally more confident, you know, long gone are all those years when no one knew whether they were going to be able to survive financially. They seem on a firmer footing. And you've caused Scott Rosebacker come in as well.
So that felt very good in terms of other people leaving. Yes. Brandon Freed from the Air Forwarders association is gone to be replaced by Steve Smith, who turns out to be, again, a really nice replacement. He seems like the right sort of person for the job and you should all go and meet him at some point. Cause he's fun apart from anything else. And then there was a leaving party for Jan Craig Krems from United Cargo. So, yeah, another. Another layer at the top has disappeared.
But there were also lots of students there. I think there was over 100 students from Florida universities there. There was a student vulcitiak. I was really trying to keep it. Keep it, keep the young entertained, let's say, like that. So it was kind of nice to see that not only the, the older ones going, but there's new generation coming in. So that was, that was really nice to see.
[00:04:54] Speaker A: Aside from the people things and the kind of onto the more operational side of things. Usually at these events there's kind of one major topic that you hear just over and over again over the few days. I mean it's previously been like E commerce and then you hear AI usage sustainability. So what was the kind of major topic that you heard about over the last few days?
[00:05:13] Speaker B: Well, since I've been doing cargo journalism, I have never really heard it as strong as this, but Cassidy was the absolute topic that everyone talked about. The airlines in particular.
I mean over the years there's huge cycles in air cargo and wishing for freighters can be a very risky business. There's been so many people being stung by wishing for a freighter and having it delivered as the market suffers a downturn. But the airlines were saying they can essentially fill any amount of space that they want at the moment. And of course there's production delays, not much coming on stream. And so that is the absolute problem. That's the sort of choke point of the industry at the moment, you could say. And I worry that when they do start to arrive all these freighters, that maybe the AI boom may have gone quieter because at some point the data centers will be built. I mean, luckily there's built in obsolescence. So once they fill them up, they'll start to break and they'll have to fill them again. And the equipment is so expensive. Someone was telling me that one freighter load can be worth like $400 million.
I mean the freight is not worth anything like that much. So there's less chance of it switching mode. I think it's more likely to stick with air freight and obviously they need to be really well looked after and they're sensitive and all the rest of it. So you know, that was another stat was that, you know, schedule reliability in ocean was something like 4% or something. So. And they,
[00:06:37] Speaker A: it's like in the late 20s. But yeah,
[00:06:39] Speaker B: well that was the air cargo look at it then.
But because they get thrown around on ships, it looks like the service are probably here to stay on air freight. And so hopefully when the freighters do arrive there will still be the business to fill them. But yeah, every airline was saying we just want more capacity because we can fill it. And that's particularly true of the Transpac, less true of Asia, Europe. And I think that was another thing to come out was that each trade lane is very, very different at the moment, but Transpac in particular is desperate for capacity. And that was a theme that just kept on coming up.
[00:07:12] Speaker A: Very interesting. And was there any other kind of gossip or anything else that stood out to you that you thought was quite interesting?
[00:07:18] Speaker B: Well, yeah, there's always. There's always gossip at these things. It's so fun to do.
ATI had a union protest outside with its workforce dressed as rats to symbolize the state of their warehouses, which, given that they were the main stand when you came in, was slightly. An awkward juxtaposition,
[00:07:36] Speaker A: I thought. That is very awkward.
[00:07:39] Speaker B: Other things I heard that airlines are slightly kicking back against GSA consolidation. Obviously, you've got two major GSA players and smaller GSAs that are for sale. Airlines do have some sort of contractual power over this and it looks like they might be. Yeah, holding back against any more purchases by the. By the big GSA players. So that's quite interesting. I had coffee with FreightMate. As you may remember, from the Lo Star, they were sued by Flexport over whether they'd used some Flexport material in their offering. That case has now been settled and I had a really nice chat with Brian La Collarde and he was saying that he thinks it's made them a very resilient company because that's a big lawsuit, as you start out, is quite a big thing to start with.
So I think that's interesting to see how it can impact the way a company will grow and mature.
So that was an interesting chat.
There's an awful lot of talk about perishables being in Miami and how the weather and El Nino this year may be changing when things are ripe and how the perishable season is going also because of lack of capacity. Can perishables keep up with the margins? Their margins are so low. Can they afford the fuel prices, that sort of thing? And yeah, people obviously talking about fuel quite a lot, but everyone's saying, don't worry, I'm passing it on to the next person that will end up in all our pockets ultimately. So, yeah, that was. There was quite a bit of chat about that, too.
[00:09:14] Speaker A: So we've got all the movement of these AI servers contributing to climate change, taking all the space from perishables, but it's fine because the perishables can't grow anyway because of climate change.
Kind of a vicious cycle with that one. Alex, thank you so much for joining me. I will let you go and get some rest, recover from some jet lag. And yes, I will speak to you soon. It.
