Cargo’s Future
 

I saw that the VP of Cargo Sales had a talk today at the ORD CPO. Anyone here attend? Curious what that person had to say.
Based on what PC previously wrote, this is the last month of numerous flts and that in June we’d see a slow down.
Rumors out there include UA subbing out the cargo flying to Atlas. I’ll believe that when I see all the “cargo” aircraft assigned other flying.
That’s a lot of flying. Five WBs on ramp at NRT this morning.
Thanks 😎

Theres no money in cargo...

At normal prices, you’re right. The ACMI companies will kill us on cost. For a passenger flight already heading somewhere, cargo is a great additional source of revenue.

You missed the 20+ year old joke...

Nearly $500 Million in annual cargo revenue would disprove that theory. I know it was a joke. I remember hearing that when UAL got rid of the DC10 Anchorage cargo operation.

Heard directly from COO's mouth in a class I attended. We will eventually be back to all pax no cargo. I think it's crazy. But what the hell do I know?

Because there’s NO MONEY in cargo...

Humans are basically mobile banana stands

Kids.................:rolleyes:

UPS just reported their highest revenue in company history, a measly 23 Billion in 3 months! Obv that’s not all from their airline but still to think the pie isn’t big enough for us too is ridiculous. Let’s buy 20x Airbus a320/321 freighters and dip our toes in the water with domestic cargo!

https://www.elbeflugzeugwerke.com/en.../a320a321-p2f/

My understanding is the reason cargo is making some money right now is because flights are so scaled back, especially internationally. The rubber dog poo still has to move, and since qantas is not flying to the us there is a drastically reduced cargo lift available to Australia. Ual is stepping in to take advantage of that. Evaair has far fewer flights to tpe, ual is stepping in to take advantage of that, and can charge higher rates. Once flights start coming back the lift will be more available and rates will go back down.

Simple supply and demand.

I for one appreciated the Arrested Development reference there, clever 😁

My question is how much high dollar foreign manufacturing will now be moved to domestic facilities after we all found out how easily the supply chain can be disrupted. I'm thinking of products valuable enough to justify the higher cost of air transport over surface. I certainly don't have the answer.

Don’t you worry with the upcoming taxes and penalties we can expect to see corporations fleeing this country in droves.

Expect?

Sort of a historical fact at this point. Started in the 80s under Reagan, continued during the 90s under Bush/Clinton (NAFTA). And of course Obama had the TPP. Ain't nothing new happening. We ARE the new Mexico.

https://leaderpost.com/transportatio...me-work-to-u-s

UPS had been posting $1B+ quarterly profits (pre Covid, now off the charts) very consistently, with steady 5% yearly revenue gains. Kalitta has done fairly well since it’s rebirth, Atlas doing pretty good, as is Fedex.

Now, if you mean no money in cargo for passenger carriers, who’s primary revenue comes from pax? I cannot comment as I have no idea of pax airline economics.

Just spoke with a friend of mine at K4. He said company is doing great but also treating crews very badly up to and post contract signing.

UPS is a global shipping company that uses aircraft simply to feed the trucks delivering the freight to the customers and is a completely different model than what we could do. Amazon started an impressive shipping company, however their model is to farm the flying out to the lowest bidder. Prime Air is basically the global freight version of the regionals. If we were to try to fly dedicated freighters and go up against Kalitta or Atlas, they would crush us on cost and more flexible work rules. What United does very well is to maximize cargo revenue on existing flights to increase revenue dollars per trip. When the freight prices soared during COVID making freight only trips possible, we were also very quick to capture a large part of that market as well. As supply returns to the market and prices drop, flying freight only trips won’t work for us, and we will move back to the way things were before. I sure wish that it would work. I’d love to bid 777 freighters and never fly a passenger again.

There’s always money in the banana stand.

I’ll give you credit in that you are probably unaware of the 20+ year old joke about UAL and cargo.

RTFT

In 2020, United Airlines cargo revenue increased by $500M year over year, from 1.1B to 1.6B.
In 2020, United Airlines passenger revenue decreased by almost $28B year over year, from 39.6B to 11.8B

So the 2020 increase in cargo revenue was able to make up 1.8% of the revenue deficit from passengers. WOW. We should definitely get into the cargo bidness. :rolleyes:

It is perspective...there is a happy medium🤷🏼‍♂️. Cargo vs Pax is just like politics, too many extremes. There is benefits in cargo, while doing passenger...anyone who says different...too extreme on either end. Now, wear a mask...or don’t...I don’t care, I want United profitable.

Freight dog here. I don't know this joke. Care to explain? Or at least point me to where I can RTFT?

It has been said a few times over the years by different UAL CEO's. I think the first was Dick Ferris, shortly after the strike in '85. UAL had several convertible cargo 737's. A fairly large fleet of DC-8 cargo planes.

They sold the freighters, and Ferris said, "There's no money in cargo."

Then UAL sold almost our entire fleet of 727's to FedEx, at the time, Greenwald(??) was in charge. The question was asked, why aren't we keeping the planes and doing this ourselves, and the answer was, "There is no money in cargo."

Next was the DC-10 freighter operation based in ANC. UAL was looking at buying more 777's to replace the DC-10's. Several were converted to cargo, on the cheap--which didn't work very well. We flew the freighter operation out of ANC for a while, the planes broke often, and wasn't reliable. They didn't adequately maintain the planes. UAL, again, chose to do this on the cheap and it bit them in the ass, thus proving that...."There is no money in Cargo." Instead of converting more of the DC-10's to cargo, and the MD-10 program, UAL, again, sold most of the fleet to FED-EX.

Fast forward to about 6 years ago. UAL sold a bunch of 757's to, you guessed it, FedEx. When Tilton was asked about cargo, then Smizek, they both said,...…"There is no money in cargo."

Thus,long history, snarky old joke.....And.....there is still no money in 777 cargo!!

Ha. Thanks.

I know very little about UAL ops to be honest. But man, I always thought pound for pound, boxes pay more than pax and don't need lounges and stuff.

Plus, you can stack boxes to the ceiling unlike pax. Anyway, what do I know? I just drive where they tell me.

The difference is that you have people who can deliver them to every home in the lower 48 and most countries ($$$value$$$) We can only drop the boxes off at the airport. There are about ~200 121 cargo ops who can get from LAX to wherever without crashing, so the revenue from pure freight ops isn't too good.. Just my understanding of it.

boxes also don’t care where they connect and typically only go one way. That makes it a lot more competitive and depresses yields.

UAL is geared to fly point to point with the 787 and caters to premium cabin stuff. Not exactly suited for cargo in the long term. Could one build a cargo operation? Maybe but every & you spend on that cannot be spent on other stuff

Cargo’s Future
 

Not disagreeing but just adding, returns are a huge revenue (and yield) gain for a month after Christmas. So a few (million) boxes do go round trip. ;)

Sounds cargo flights are starting up again due to traffic decline.

https://www.freightwaves.com/news/un...ly-flights/amp

I saw a UAL 777 land in HKG today, assuming cargo only. I’m guessing y’all still aren’t laying over, so are crews just doing a quick turn?

It’s coming from GUM. Crew flies HNL-GUM, then HKG turn the next day, and GUM-HNL the following day.

Correct. Still no China layovers, that includes Hong Kong. Out and back to Guam. No pax either. Sometimes goes through NRT.

We are currently servicing Shanghai, but with a fuel and crew change in Incheon. Pax and cargo.