#04 – Why Air Cargo Demand Cannot Stay “Higher For Longer” with Courtney Miller

Courtney Miller, a wide-ranging expert in commercial aviation, appears on Propel Your Revenue to discuss the present and future of air cargo. He currently holds two positions: managing director of analysis for aviation outlet The Air Current and founder of Visual Approach, a provider of aviation analytics and consulting.

Air cargo volumes have stayed strong in the Western Hemisphere, but capacity is rapidly returning as passenger flights add lower-deck “belly” capacity. In his recent analysis for The Air Current, Courtney found that volumes are increasingly high because air cargo has become a release valve for sea transport. Some shippers and forwarders view air transport as go-to reserve capacity; Courtney explains why this is unsustainable in the long run.

What You Will Learn in This Episode

  • How consumers’ shift from spending on services to goods impacted air cargo
  • Why demand for goods is now trending down
  • How air cargo acts as a relief valve for excess ocean container demand
  • Key macroeconomic drivers for air cargo
  • The nexus between interest rates and air cargo demand
  • The many ways air capacity is priced and sold (weight, volume, pallet positions, etc.)

Money Quotes

[22:26 – 22:43] “One of the big drivers of air cargo demand has been interest rates because the higher interest rates are, the more expensive working capital is. The more working capital you’ve got tied up in inventory, the quicker you want to get that inventory delivered to the buyer so you can get it off your balance sheet.”

[31:17 – 31:32] “There is no single standard even within air cargo for how we think about cubic volume vs. dimensional volume vs. physical weight. It’s an open question that nobody’s really working toward resolving, but it’s something that carriers that are thinking about their commercial strategy have to settle.”