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12/14/2015 - 2015: An Overview and the Outlook For 2016

2015: An Overview and the Outlook For 2016

We have seen significant challenges as well as some very positive highlights during the past year. Let’s take a look at the road we have travelled together as well as our strategic goals for the upcoming year.

No question that the failure to achieve our long sought revisions of IACSSP compliance rules in 2015 was a setback. What was particularly disappointing was the fact that TSA was finally ready to issue “Change 6” for industry comment. It was only a week or two away when the Russian plane fell in Egypt as a result of a terrorist bombing plot. There is no debate that the cargo security protocols in place were lacking. Nevertheless, federal agencies across the board were put on high alert. The terrorist massacre in Paris added additional governmental scrutiny to all aspects of our nation’s efforts to protect US citizens. The result was that within this environment, TSA had to step back from issuing these revisions. This is understandable given how Washington works when in a crisis mode.

However, in 2016 XLA will again push hard for compliance reforms which will not affect cargo security in any way while creating improved time and cost management for our members. At each governmental security meeting where XLA participates, we make sure that we make clear the following:

  • Cargo security is the number one priority for each XLA member. We and our families all fly. Our express cargo business model is predicated on safety for all the shipments for which we are entrusted.
  • The express cargo industry is highly regulated by the federal government. Each shipment and those who handle them along the logistics chain must be compliant with a myriad of security protocols. And of course, each shipment must be properly screened before loaded onto a PAX flight.
  • Our industry’s safety track record on the millions of shipments handled over the past decade– unlike unfortunately the all-cargo industry – has been exemplary in terms of achieving cargo security.

We are confident that we will be able to achieve our immediate goal of cargo compliance reforms in 2016 when the high tension atmosphere dissipates.

There have been many areas that produced positives this year for XLA members. The global numbers for the express cargo industry are up almost across the board in terms of volumes and revenues. Yes there was a slight downturn in the China market when their economic growth slowed but it has rebounded a bit as the year ends.

And again, the sector of our industry which leads the growth parade is express global ecommerce fulfillment. As with the past four years, there is double digit growth for online-originated shipments particularly for outbound US express products. Recognizing this growth opportunity, XLA formed the Cross Border Ecommerce Committee, which is focused on tackling issues that would inhibit the continued expansion of ecommerce logistics. XLA also recognized its members who had particular expertise in ecommerce fulfillment with our Ecommerce Certificate of Excellence. Those qualifying members also receive the Ecommerce Seal which can be used for all online communications to customers and prospects. This has proven to be very popular and we have received many inquiries about the Certificate from non-members. Our answer is that only XLA members are eligible for this recognition, but they are more than welcome to apply for XLA membership.

2016 will prove –we believe - to be a pivotal year for our industry. There are good economic reasons to expect continued express cargo growth. XLA will ‘get the ball over the goal line’ on cargo compliance reforms. And CBP’s ACAS program for global inbound US shipments has shown marked improvements during its pilot phase as we have seen the elimination of some of the more onerous provisions along the way. We are hopeful in 2016, as airline customers and revenue contributors, that carriers will revisit their fuel surcharge standards with oil prices reaching new lows. Certainly, that could only help overall volumes which benefit airlines, IACs and customers alike. We will continue to engage our Airline Members on this issue.

The XLA now has more members than ever before. Our revenues have continued to go up even though the Association has not raised its dues levels for the past six years. And, importantly, XLA is now a very visible brand in Washington and can count on its solid relationships in Congress, regulatory agencies and among other Associations such as the US Chamber of Commerce.

We wish every XLA member a very happy holiday season. It is our honor to work for you. And please know that the XLA is responsive to each individual member on any issue your company may encounter. Thank you as always for your participation and membership in our Association.

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