Air Cargo-Guest Commentary by David Hendershott



Traditionally a lot of air cargo planes were

older passenger planes converted to cargo planes.

Conversions are still done, but the supply of

older planes has dried up for now, and the need

for fuel efficiency is making conversions a lot

less attractive than it used to be. Because of

the urgent need for freighters, even the

inefficient older planes are converted as fast as

they become available. Boeing entered the

conversion business last year. Even with the high

fuel costs, airfreight is far more efficient than

maritime shipping for the timely delivery of high

value, low weight or perishable items such as

electronics, food and apparel directly to their

destinations. The biggest market for new aircraft

is in the long haul segment.

In reality it's not just the air cargo system

that is straining it's capacity. The maritime

shipping industry doesn't have enough ships. The

ports are operating at nearly full capacity, or

more in some cases. The rail systems are proving

inadequate even in the U.S. There was an article

in the WSJ on Wednesday detailing some of the

infrastructure needs in the U.S., concluding that

we need to spend $1.3 trillion by 2010 just on

maintenance and repair, and that won't help the

capacity issue.

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