The $30 billion domestic U.S. air freight market almost failed to get off the ground this past year, showing a minimal gain of only 0.7%, according to a study by The Colography Group (www. colography.com). Weak returns from the U.S. Postal Service's (USPS) air expedited products and the shift to ground over air services were two major factors contributing to the industry's very slight growth.
Priority Mail and Expedited Mail — two USPS products — showed the largest decline, according to the study. "The decline in Priority Mail's market share is a byproduct of the secular shift from air to surface transport in the U.S.," says Ted Scherck, president of Colography Group. "With two-to-three day transit times, Priority Mail traffic is particularly vulnerable to diversion to surface providers, especially in a market where the typical shipment travels 700 miles or less and is easily reachable by ground within that time frame."
For calendar year 2003, there was an increase in weight of an average air freight shipment, which produced a 2 cents increase in yield to $1.84 per pound. The number of shipments declined by 3.5% to almost 2.5 billion. Overall, it was a $30.9 billion market in 2003.
In terms of market share, the USPS handled 37.4% of the market, while FedEx Express at 28.3% and UPS Air at 21.4% rounded out the field of major carriers.
For 2003, UPS and DHL Express were the only two of seven companies studied that indicated gains in shipments over their 2002 figures.For the year, UPS had the largest gain, with air shipments up by 25 million to 530 million total, which represented growth of 4.8%.