Airfreight expert Brandon Fried talks about how the air cargo industry is adapting to world changes and turmoil.
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Karen Walker:
Hello everyone and thank you for joining us for Window Seat, our Aviation Week air transport podcast. I'm ATW and Aviation Week Network air transport editor-in-chief Karen Walker, and I'm delighted to welcome you on board. So, for this week, all the talk about on again, off again tariffs, trade wars, and also of course, conflicts old and new around the world, are causing uncertainty and anxiety among individuals, companies, industries, and economists. The airline industry as a whole is certainly monitoring all of this very carefully. And in particular the air cargo industry—be it the freighter specialists, or those airlines that offer passenger and cargo services—is very susceptible to the whims of geopolitics. An upcoming article in Air Transport World magazine and written by senior editor Aaron Karp, examines the current state of the global air cargo market. And among the people he spoke to for that article is Brandon Fried, who is the executive director at the US-based Airforwarders Association. So, I am absolutely delighted that he has also joined Window Seat this week to discuss this topic in further detail. Brandon, welcome. Great to have you on board here.
Brandon Fried:
It's great to be here, Karen. Thanks for having me today.
Karen Walker:
Thank you. Now Brandon joined the Airforwarders Association in 2000 and was elected as chair in 2001, ultimately being appointed executive director in November 2005. So, he has a wealth of experience in this sector in particular, but I would also say across the industry. So, Brandon, may I start by asking you to explain first of all what airforwarders do? What's involved in there? Typically how many people are employed in that sector? Also, give us some insight into your work and that of the Airforwarders Association.
Brandon Fried:
Sure. Well, I'll start off by saying that we're the architects of supply chains, global supply chains. I used to say we were travel agents, but I think travel agents are becoming somewhat uncommon now, so people understand what an architect is, but we're the guys who, we don't own airplanes, but we manage the logistics process to get products to market quickly and efficiently and for businesses of all sizes and all types of niches. We have a member, as an example, that ships equipment for rock bands and we have another one that ships pharmaceuticals and then machine supplies, all across the whole spectrum there. And the freight forwarding sector here in the United States is a major employer. We've got registered with the Transportation Security Administration now almost 4,000 indirect air carriers, freight forwarders that ship on passenger planes, and they employ well over 100,000 employees and freight agents.
Karen Walker:
Wow. So, it's a big sector then, a big sector. And it's also, as you say, it's the thing that people don't really see. It's behind the scenes, but it's vital and it's a vital part of everybody's economy.
Brandon Fried:
Yeah, I've been successfully stopping cocktail party conversation for the last 40 some-odd years. People really don't know what a freight forwarder is, but yeah, we're out there. We're working behind the scenes. And I'll tell you Karen, where we really came into the spotlight was during the pandemic with—we managed many shipments of personal protection equipment and needed supplies, especially coming in from Asia. It said that freight forwarders manage about 80% of the traffic that you see in the bellies of passenger planes and on freighters as well. And so here at the Airforwarders Association, we become the voice of the freight forwarding industry here in Washington. And our job is to be an advocate not only for our members, but a secure and efficient supply chain. And we fight for smart regulations and investment in our industry. That's our main job is we're here at the table. We don't want to be on the table. We want to be at the table in Washington, and that's our function.
Karen Walker:
So, you're advocating for this very important sector. Now, as I mentioned in my introduction, we've got tariffs, we've got talk of tariffs, wars, uncertainty in so many ways. What impact is that having on the global air cargo market? Is demand dropping or shifting? What's happening?
Brandon Fried:
Yeah, so I think the big picture is the story isn't as much a drop in demand—it's a shift in demand. But it's a volatile market right now, short term we're seeing, because of the tariffs, we're seeing spikes in demand as companies are rushing to beat the tariff deadlines that have been extended. They're using ocean transport, but a lot of them don't want to trust it. They won't be able to get here on time. You've got some big retail seasons coming up. So, we've seen a spike in air cargo demand, both in the bellies of passenger planes, but also in the use of all-cargo freighters. And so, I think from a long-term perspective, in response to these tariffs, businesses are diversifying their manufacturing and sourcing away from the traditional locations such as China, and they go into places like Southeast Asia and India and Mexico and other places as well.
Karen Walker:
So that is having an effect on where the air cargo markets are looking, is that correct? I mean, you've just mentioned China, obviously we know what's going on with the China-US market, but does that mean that there's sort of the people that are involved in air cargo are now also looking at markets, say in other parts of Asia?
Brandon Fried:
So, we are agile, we thrive on uncertainty. And so, we've been called in. A lot of our members are there to answer questions with customers about what happens if that customer shifts away from the traditional manufacturing lane that they've enjoyed in the past. We're there to give advice, obviously. And so that's one of our primary jobs. But we're also working—it's not just tariffs, I mean, we've got a very volatile geopolitical issue going on right now. And our job is also to steer our customers away from potential bottlenecks. So as an example, the Ukraine situation, we've had to change routes. The Red Sea situation, obviously, we're watching what's going on over the Middle East very carefully because of the Strait of Hormuz and others that could possibly lead to disruptions in ocean freight. So, I would say our key takeaway at this point is that our agility is the industry's greatest asset and we have to be there for rapid change at all times.
Karen Walker:
Are there any other, it's sort of easy to say being agile, it's very hard to do. Are there other things that the industry can do to be able to adapt very quickly to changing circumstances?
Brandon Fried:
There are a number of key ways that the industry is adapting. I'll give one in particular, is digitalization automation. For a long time, this was an industry that was kind of in the stone age. We operated off of Selectric typewriters, and that's really changing rapidly. We're adopting automation for booking tracking, customs clearance, and that's providing not only efficiencies for our members' offices, but for their customers. And customers are demanding end-to-end visibility. They want information. Information is key, and it's probably as important as whether the shipment's getting there or not because they have their own planning to do as well.
The other thing—we're called the Airforwarders Association, it's probably a misnomer. We really should be called something else because our members don't just focus on air cargo. We're multimodal. That's air and ocean and ground and rail, you name it. So, it's important that we are ready at all times to change routings onto different modes based on budget, based on geopolitical situation, tariffs, you name it. And then of course, freight forwarders are an interesting bunch, Karen. They are not only multimodal and they're adopting technology, and I mentioned this earlier, is that they're specializing in niche markets. So, it's not uncommon to find a forwarder that might not handle all traffic but might let's say have expertise, deep expertise in things like pharmaceuticals and high tech and even e-commerce. Each one of these requires knowledge about special handling and security that we provide to our members.
And I think the other thing is that there's been a focus on sustainability. What's added? The new workers come into our industry, and they say, “What are you doing about our future? What are you doing? How are you going to make our future environmentally sustainable?” So, we're working along with the airlines and they're adopting sustainable aviation fuels and more efficient operations, even internally, even though we don't necessarily own assets, some of our members do. Some of 'em have their own planes, but not a lot of them. Our warehouse operations are becoming leaner, more efficient. Instead of using gas in our forklifts, we are going electric and changing environmental control systems and lighting. And what's interesting in that regard is it's not just us. It's our customers that are coming to us and saying, “Hey, what are you all doing before we give you this contract to haul our cargo? What are you doing to remain environmentally responsible?” So, it's a challenge for us.
Karen Walker:
Yeah, it's a very changing industry in the right way. As you say, for the longest time it was mountains and mountains of paperwork. And really, it's a whole logistics organization and industry, isn't it? It's the whole thing. Whatever it is that you're transferring doesn't just put itself on a plane. It's got to get to the plane and then all through the paperwork, the documentation, and then get off there and get to somewhere.
Brandon Fried:
And in addition to that, Karen, if I may, is we don't want to use paper. We're trying to wean ourselves off of paper. But what keeps us in the paper business, believe it or not, it's government regulation. A lot of governments require paper to move along with shipments, and that just kind of throws a bottleneck into things and hampers automation progress. But that's changing, and we think that over time we're going to see more change in that area.
Karen Walker:
Can you talk a little bit about airport investment in cargo infrastructure? There's a lot of focus right now on the growing passenger numbers, but cargo as you say, very important. Is this sufficient investment being done in the infrastructure for the cargo side at the major airports?
Brandon Fried:
Well, there's a significant gap in airport investment when it comes to cargo. It's always been an afterthought to the passenger side of the business. And I would tell you that 50% of the cargo flying flies in the belly of passenger planes. But unfortunately, while we're building new passenger facilities and we need to obviously, paying for shiny handrails and chrome and that type of thing, and monorail systems, we've got this gap where we're not throwing any money over at the airport cargo areas. And a lot of these cargo areas have not seen significant investment for 50 or 60 years. So, let's go back. I might go back a bit there, no one else is, but 53-foot tractor trailers, now commonplace in the United States, did not exist 50 or 60 years ago, but yet the road systems are built to accommodate 40-foot tractor trailers. The facilities are outdated.
And so that's hampering speed, especially when it comes to e-commerce shipments. Even though we're seeing a shifting in the e-commerce market, the reality is that the loads that we're seeing are unsurpassed and we're not leveraging automation.
So, they now have these appointment-setting platforms where truckers can interact with the airport ground handlers that have your cargo to determine whether the cargo is in fact available, and it can make an appointment to pick the cargo up and queue the trucks. So, what do you have as a result? You've got some trucker with a 53-foot tractor trailer pulling up in front of a cargo handler blocking all the space, backing trucks up, just to find out whether he can pick up his freight or not. So that's the big area. And of course, now this is shifting. I was just at an opening for Southwest Airlines, [they] just opened up a brand-new cargo facility in Denver.
And within that facility, they've three refrigerators, big ones like you can drive a forklift into them. And so Southwest sees the focus on where the ball is going to be. And we need more of that than a growing demand for temperature control facilities like pharmaceuticals isn't quite being met yet. So, there's work to be done. And of course there's always the labor component, training. And I got to tell you, Karen, I think that we need to treat airports as engines of commerce, not just for people. They actually support the city. It's once been said that every freight shipment probably supports 35 jobs in that metropolitan area, if not more. And so, one of the things that we've done is, at the Airforwarders Association, is we went to Congress and sat down with them and said, “You need to pay some attention to this. You probably don't know what we're talking about.”
And we were able to convince several members of Congress and the Senate to insert a piece of legislation in the recently passed FAA reauthorization bill that mandates a government accountability office study on the issue of congestion, truck congestion at these airports. And that study right now is underway. And the last interaction I had with the Government Accountability Office, they have over 40 people focused on this traveling to airports throughout the United States. And once they complete the study, we are confident that the issue will be validated and then we'll go to Congress to ask for money for these airports for just cargo infrastructure investment so that we can remain competitive.
Karen Walker:
That's very interesting. You're right. I don't think people really get to understand, they see passengers, people and they say, “Oh yes, we know they're bringing wealth into our city and they're spending when at the airport,” and that's all good and it's correct. But they tend to not understand just how much value the cargo part of this is, and that they can, as you say, they become uncompetitive if they don't stay on top of the infrastructure of that outside of the business.
Brandon Fried:
And another thing is that it's easy to say, “Well just take the cargo out of that airport, move it to a distant location.” And that does work to a certain extent. But when you're dependent upon passenger airlines, they're not going to go to offbeat airports like San Bernardino or Lehigh Valley or Lakeland, Florida. That's best done for the Amazons of the world, and they're getting utilization of those airports. Particularly we're seeing places like Rickenbacker over in Columbus, Ohio, as an example, that took an enormous amount of traffic for freighters that we had managed, chartered during the pandemic; also Rockford outside Chicago. So that's an exciting area, but it doesn't address the core issue of passenger belly cargo.
Karen Walker:
Absolutely. I was at the beginning of this year, I got a tour of the Cathay Cargo facility in Hong Kong, and of course Cathay has been in the—I think Cathay started in cargo, that was its heritage. They have invested enormously into their facilities there. And that's when you see, okay, this is what you need to be and do to stay competitive in this field.
Brandon Fried:
And we're proud of Cathay Pacific. They're an outstanding member of the Airforwarders Association, and we're very happy with their commitment to our membership in the freight forwarding business.
Karen Walker:
Yep. It is a spectacular operation. So, given everything that's going on, Brandon, can you just sum up for us what are your biggest concerns for this industry this year? But you also sound optimistic. I have to say that things are changing, so maybe it's a little bit of both. What's your biggest concerns and where are the best opportunities?
Brandon Fried:
Well, I got to tell you, I am optimistic because I've been around this business for a long time and I've learned a couple things. The first thing I've learned is it's not a merry-go-round, it’s a rollercoaster. Things go up and down, political regimes change. But I think right now for the rest of 2025, trade and geopolitical uncertainty is the biggest concern and the lack of predictability, the potential for new tariffs and trade disputes, it makes it hard on businesses. Businesses want certainty and they want to be able to know if they're going to invest in a factory or they're going to invest in a new product line, they want to make sure that in 15 minutes the administration is not going to change its mind. So, I think that's a big concern. And we very closely watch economic indicators. I'm very concerned about a slowdown in consumer spending and manufacturing impacting cargo volumes.
I think that it all goes back to the consumer. If the consumer won't put his hands in his or her pocket, we have problems going forward. So, we're very cognizant of that. I guess that the pace of change we need to accelerate the adoption of new automation technologies to stay competitive and then training and development to attract and retain a skilled workforce needed for the future of our industry. Logistics and air cargo is attractive, and there are a lot of younger workers coming out into the workforce saying, especially after the pandemic, Karen, they want to come out and they're like, “I want to get involved in this,” and we want them involved, but they won't be happy unless we're adopting automation at a suitable pace.
Karen Walker:
Yeah, not the same, but similar sorts of to the air traffic controller situation again, where they're trying to bring in the new people, bring in young people, a very important job, but they need a workplace that feels modern and digitized and automated.
Brandon Fried:
And I'm glad you mentioned the air traffic control situation. The United States has one of the most outstanding air traffic control programs. It's very safe here. But the reality is that doesn't mean we're not operating on antiquated technology. So, I hope this administration, we make the necessary changes and the investment to ensure that it not only safe, but that the system is reliable because cargo, it moves on predictability and dependability. And you can only do that by having an up-to-date air traffic control system.
Karen Walker:
Correct. Cargo needs air traffic control just as much as the passenger side of the business, doesn't it?
Brandon Fried:
Absolutely.
Karen Walker:
Brandon, thank you so much for joining me today. You really are truly an expert in this sector, and it's a very important sector. Just thinking about, as you said, referenced the pandemic, the COVID pandemic, and when you think just how incredibly valuable what this industry does in terms of getting vital medicines, et cetera, but it's everything, isn't it? Everything in people's lives is being brought back and forth, getting it to where it needs to be.
Brandon Fried:
Yeah, absolutely. And we're proud of our industry. A matter of fact, I saw the movie F1 last night and I saw—it's about race cars in the Formula One—and I was amazed how many freight forwarders have their names on race cars nowadays, which is really fascinating because one of our members actually moves those F1 cars around the world. So, it's exciting. We've gotten street cred and it's an exciting business to be in.
Karen Walker:
That's so funny. You should mention that. I saw—I love Formula One—and I saw that movie at the weekend, and it was a fantastic movie, by the way.
Brandon Fried:
Yeah, fantastic.
Karen Walker:
But you're right about the branding, and it's funny because that's something else that Cathay brought up that included in the specialist cargo is very, very luxurious cars and race cars, et cetera. It's everything.
Brandon Fried:
You'd be surprised what's in the belly of those passenger planes.
Karen Walker:
Brandon, delightful to talk with you. Thank you so much. I hope you'll join us again. Listeners do check out Aaron Karp's feature on this subject in ATW magazine that will be posted in July on our website, aviationweek.com/atw. Thank you also to our producer Cory Hitt, and of course, a huge thank you to our listeners. Make sure you don't miss us each week by subscribing to Window Seat on Apple Podcasts or wherever you like to listen. This is Karen Walker disembarking from Window Seat.
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