The US is more important than ever for IAG Cargo after its acquisition of Irish carrier Aer Lingus.
IAG Cargo’s vice president for commercial in North America, Joe LeBeau (pictured below) says the takeover of the Irish carrier has given cargo a boost in a “hugely important market” and it is now moving more shipments than ever before.
“The Aer Lingus acquisition has been phenomenal as it has a strong presence on Transatlantic routes. That will grow on the British Airways (BA) side and we are moving a lot of Dublin business that we can then transition. It has been an important addition to IAG,” he says.
The strength of the US dollar is having an impact and LeBeau says the strong performance of the dollar is affecting a lot of markets, especially high value cargo sectors.
He notes shipments of smaller consignments are doing well in the US, but some markets have taken a hit because of the dollar’s strength, notably machinery.
LeBeau says the Cargo Connector service it started three years ago has made a big difference in the US market for IAG Cargo, where it has 10 vehicles that move express shipments between various gateways.
In 2016, IAG announced network enhancements for 2017 into the US including new BA routes from Gatwick Airport to Fort Lauderdale and Oakland, and to New Orleans from Heathrow Airport.
LeBeau says: “We have added a chunk of capacity and made investments in infrastructure. New Orleans on the import side is an untapped market into the region to Louisiana and Alabama, states likes this. It will give us access into these areas and we can also feed with the Texas market and can feed into Atlanta.”
He says Fort Lauderdale will also boost its perishables volumes as it is close to Miami – the main entry point for fresh goods into the US from Central and South America.
Overall, LeBeau says it has been a challenging year with weak global trade and the strong US dollar, but he believes IAG’s focus on premium products and network expansion has shielded it to a certain extent and he is optimistic 2017 will be even better.
He explains: “The market use to move in 12 month increments, then it was moving in six month increments, but now it moves quarterly.
“The supply and demand divide is leveling out. The forwarders are putting a lot of pressure on us to serve them better and to be as efficient for both. That can play a big part in the next 12 months.
“We have to modernise and that is going to be an ongoing opportunity for us. We expect the market to be as challenging in 2017 as in 2016, but we are now more adjusted.”
