While revenues still trended higher for the month on stronger yields, rising fuel costs cut into profits. The e-commerce boom continues to drive demand for trans-Pacific air cargo capacity, but member airlines are feeling the burn from higher fuel prices.

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Following the announcement of record online sales, a reporter asked Alibaba founder Jack Ma why he didn't seem happy. Mr. Ma's response was to effect that while sales volume was excellent, the logistics industry was not capable of delivering the purchased goods in a timely way, and could not support the rapid growth in demand for package delivery driven by the e-commerce boom.

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The challenge, is how to improve service levels and increase capacity to keep up with the rapidly rising demand.

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A second challenge/opportunity is the impact of so-called disruptive technologies on the air freight industry. There are many examples – Uber-style competition, 100-tonne airships, drone delivery… but one that has been pointed to as truly disruptive is 3-D printing. If you can print something at home or in the factory, you don’t need to ship it. But, as Mr. Hughes points out, the things most amenable to 3-D printing are generally the kind of low-value items that do not ship by air. And, in any case, if 3-D printing becomes common, well, 3-D printers and their sub-assemblies are exactly the kind of high-value goods that do ship by air.

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Air Cargo challenges.

1. Rising Fuel Costs
2. Pilot Shortages
3. Ground handling scarce at Airports
4. Airports near Capacity

The slump caused by the global economic downturn largely put a halt to cargo facility development in recent years, which led to consolidation and some exodus on the developer scene. However, the challenge goes beyond putting up additional square footage to accommodate larger volumes. Much of the existing air cargo infrastructure is inadequate to process the types of traffic that have risen to prominence lately, notably temperature-sensitive shipments and e-commerce.

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