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Revenues for participants in the U.S. domestic airfreight and express industry totaled $25.33bn in 2009, reflecting a steep decline of more than 20 percent from the 2008 figure of $31.88bn, according to a study from the Air Cargo Management Group.
"The decline came from the express segment of the market, based on a combination of declining shipment counts, lower average weights per shipment, and much lower fuel surcharges," said Robert Dahl, managing director of Seattle-based ACMG and the report's primary author. "In fact, the 2009 total was the lowest revenue figure for the industry since 1997."
Full-year traffic volume for the industry was 11.80 billion revenue ton miles (RTMs), down 12.4 percent year over year, and the number of shipments moving through the major express networks in the fourth quarter of 2009 was estimated at 5.33 million per day, down 5.6 percent versus 4Q08.
"After several years of unimpressive results, reflected by the sharp drops in both RTM traffic and the daily express shipment totals, the industry has retreated to levels for these metrics that are no higher than performance achieved in 1994/95," noted Dahl. "In other words, this industry, once characterized by its rapid growth, has gone through roughly 15 years with no net expansion."
Part-year data for 2010 shows modest gains, although the domestic U.S. air cargo market is clearly not experiencing the robust rebound apparent in the air cargo sector in many other parts of the world. Several factors, including competition from improved trucking services, lead ACMG to conclude that future growth in the U.S. domestic air cargo market will be modest even with an improving economy.
ACMG's newly-released US Domestic Air Freight and Express Industry Performance Analysis 2010 (17th edition) provides a detailed assessment of the U.S. air cargo/express industry and the companies that compete in this market. Published annually since 1994, this 180-page study provides a comprehensive quantitative and qualitative independent analysis of the $25.3bn U.S. domestic air cargo industry, including:
• Trends in U.S. expedited cargo services
• Statistical analysis of freight, mail, and express package traffic
• Strategic reviews of the major express companies, all-cargo carriers and combination passenger/cargo airlines
• Analysis of freighter aircraft usage, security initiatives, and volatile fuel costs.
ACMG finds that the U.S. domestic airfreight and express industry continues to be led by the express carriers. As a group these companies, dominated now to an even greater extent by FedEx and UPS after the exit of DHL from this market segment early in 2009, had a combined 64.1-percent market share (in ton-mile terms) in 2009. The revenue share for these two heavyweights was even greater, at more than 85 percent.
However, in recent years the U.S. domestic air express market has become less important to both FedEx and UPS. Revenue in this segment now represents just 18 percent of total corporate revenue at UPS and just 34 percent of corporate revenue at FedEx, as both companies have expanded in other areas, including ground delivery, international operations and logistics.
Passenger carriers play a relatively minor role as suppliers of cargo lift in the domestic U.S. market. As a group the combination passenger/cargo airlines took in roughly $1.0bn in revenue from the carriage of freight in the U.S. domestic market in 2009 (4.0 percent of the industry-wide total as shown in the accompanying table), but that figure was just half of the $2.0bn of revenue they generated from U.S. domestic baggage fees last year.
The ACMG report also provides coverage of two dozen specialist all-cargo airlines based in the U.S., such as Atlas Air, Kalitta Air, Southern Air, Amerijet, ABX Air, National Airlines and Evergreen, which operate transport-sized freighter aircraft. As a group these airlines operate about 225 transport-category freighters (approximately 15 percent of the global freighter fleet), and they generated nearly $5.5bn in system-wide revenues in 2009. Niche operators such as these play an important role in the airfreight business. While their combined revenues dropped nearly 30 percent in 2009, it is worth noting that three out of four members within this group reported to the U.S. DOT that they were profitable for the year.
To obtain more information about the report, visit ACMG's web site at www.acmgreports.com or call 1-206-587-6537 ext 108.
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