How AAF Thrives Despite Decreased Global Trade
Active Air Freight (or AAF) specializes in air transportation for goods and supplies. That description takes care of the Air and the Freight and a strong economy takes care of the Active. But when the economy slows down and people start buying fewer goods, the ripple effects are felt by many. Goods need to be manufactured, stored and delivered, and that all involves shipping. When companies and retailers not only start to order less goods, but keep less goods on hand, manufacturers and shipping companies feel the pinch. How did AAF continue to provide quality service worldwide despite considerable reductions in our original primary service? As Dean Smith explains, this is in large part due to AAF’s flexible adjustment to providing surface transportation in all its many forms.
To explain the effect of the downturn, Dean Smith noted the effect of the last six years: “Retail good orders are cut nearly in half and many companies are keeping their inventories well below previous averages. Global resources, as measured by the Baltic Dry Index, are at their lowest in decades.” As companies used up inventory and then kept inventories low to reduce warehousing costs, much of the shipping demand dried up, creating considerable competition for transportation companies like Active Air Freight.
Reinventing Active Air Freight “On the Fly”
At the beginning of the recession, Active Air Freight was primarily providing air transport for private and government concerns. During the recession, this strategy required considerable reworking. “At this time, air freight is considered a last minute luxury, and ocean, rail and trucking represent 98% of the transit business. For AAF during the recession, this meant reinventing ourselves from a predominant air export and military logistics provider to a company offering 75% surface transportation, third-party logistics (3PL) and special transportation services to the pharmaceutical industry.” Making the switch was made easier by virtue of Active Air Freight’s broad network of warehouses across North America, providing accessibility to all fifty states.
The Economy in the Short-Term Future
As for the ongoing question of whether the economy is improving, while some signs point to a definite recovery, other indicators lead Dean Smith to conclude that a return to growth is far from certain. “Some high-end retail companies are doing well and increasing inventory. Manufacturers continue to keep cash on hand and inventory low, despite the fact that the cost of consumer goods continues to increase while manufacturers continue to cut costs. Global debt continues to increase and many customers of the shipping industry are waiting for the results from Christmas 2014. Projected costs in 2015 for employee health care, combined with fear of global unrest, are continuing to put pressure on manufacturers, making them cautious.” Despite these limitations in the economy, Dean Smith and Active Air Freight continue to offer quality customer service and the flexibility to provide shipping for any size concern, large or small, via air, rail, ship or trucking.