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Jason A. Franks • Founded Fashion Forward Worldwide in 1999 • President & CEO • We are Global Logistics Service Providers • IAC approved by the TSA
What is an IAC, when/why would you need one? • Indirect Air Carrier • We are not a manufacturer • We are not the exporter • We do not own/operate the airplanes • Approved by the TSA Fashion Forward applied in 2003; was approved in Feb. 2004 • A USA exporter can utilize the services of a TSA approved IAC to facilitate the transporting of goods on a PAX Air Carrier (Continued on next page)
(…..continued from previous page) • Known/Unknown Shipper Due to the strict nature of maintaining sensitive security information under TSA guidelines, I am not at liberty to release the requirements to establish a shipper as a known shipper…but I can state that ONLY a known shipper’s goods are allowed to be transported on PAX service.
The Implementing Requirements of the 9/11 Commission Act of 2007 Mandates • 100% screening of all cargo for outbound PAX service is to be screened at the piece level as of 8/2010. • The 9/11 Act requirement to screen, also applies to international inbound air cargo. • Assistant Administrator for Transportation Sector Network Management, John Sammon, was quoted stating this would take place no later then 8/2013. • (above information referenced from Webcast on 9/14 by Douglas Brittin, Air Cargo Manager US TSA.) • (cont. )
(…continued) • As per Keith May, Manager of Cargo Regulatory Compliance at AA Cargo; AA has implemented a policy of 100% screening at the pieces level at all origins for PAX • NOTE: All China/Hong Kong cargo is X-ray screened before domestic and international flights, no matter if they are PAX or freighter service. • In England, since the Lockerbie Bombing in 1988, all PAX cargo is screened before being loaded onboard.
Air Cargo Challenges of 2009 • Global recession • less freight in the market • major losses by carriers in both air/ocean services • All above leads to a reduction in capacity • has lead to parking planes in the deserts of CA/AZ • Laws of supply/demand dictate that DEMAND = COST • Major backlogs • (continued on next page…)
(…continuation from previous page) • Typical peak/slack seasons --- Traditionally peak begins in August and runs till the end of Chinese New Year (late Jan/Feb); leaving slack (off-peak) to be after the Chinese New Year until the end of July. • End of 2009 --- because of lower capacity, has lead to a big expansion of the charter market, airlines have actually chartered airplanes as alternatives to bringing grounded planes back into service…which leads to an increase in cost. • Street Fight --- Solution stay ahead of the curve by relying on the production schedules of our clients.
State of Air Cargo in 2010 • Started off with much of the same as the end of 2009 • Remember, it is still peak season until after the Chinese New Year, this year started February 14th. • Rise in capacity as of 2nd quarter (Q2) • majority of aircraft coming of a storage had re-entered service • Rise in freight volume • higher than pre-recession levels year over year • (continued on next page…)
(…continued from previous page) • Asia – USA market – freight volumes are expected to soften after Thanksgiving • Asia – European market – is currently soft where as now it is traditionally peak season for the routing
Handouts • Q3 Cargo eChartbook • Premium Air Travel Traffic Monitor
State of Air Cargo 2011 • Optimistic, according to my regular communication with our global partners • According to IATA (International Air Transport Association) key indicators for air freight demands are currently pointing to slower growth. • According to the IATA Q3 2010 report, airlines are expecting a rise in volume but are concerned about a decrease in profits due to an increase of expected capacity to enter the global market • My feelings are upbeat in general. Airlines and freight forwarders will have plenty of opportunities in the market place and in 2011 to ensure that 2011 will be a better year for importers/exporters than 2009 and 2010