The head of the Cargo Airline Association sometimes zigs when official Washington zags. But few in town can match Steve Alterman's grasp of aviation, regulation, and the law.
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
Washington, D.C., is not for non-conformists. "Go along to get along" is the city's unofficial mantra, and those marching to a different drummer often find themselves getting drummed out of town.
So how does one explain the staying power of Steve Alterman?
Alterman, the long-time president of the Cargo Airline Association, which represents the nation's all-cargo air carriers, isn't a typical Beltway power broker. For one thing, if he could, he would avoid Washington altogether in favor of working from the Outer Banks of North Carolina, where he's had a home for decades.
For another, Alterman doesn't hesitate to speak his mind. He's been known to ruffle the feathers of government officials, such as the time he suggested the Transportation Security Administration (TSA) consider using pigs instead of dogs to sniff out explosives. "Pigs have a better sense of smell, they can work longer hours than dogs, and if they don't work out, you have bacon for breakfast," he said.
But beneath the iconoclastic exterior lies a professional with nonpareil skill in steering his association through the highly complex pathways of aviation, regulation, and the law. With 42 years in D.C.'s trenches—35 of those running the same association—Alterman knows his business inside and out. His knowledge of rules and processes has made him worth his weight in gold to his members. As one executive remarked in the 1990s when Alterman's "association" was just himself: "We get more mileage from one person than from an army of lawyers and lobbyists."
Earlier this year, Alterman spoke with Senior Editor Mark B. Solomon about his outlook for air freight and aviation, and the challenges confronting his group's members.
Q: How did you find your way into the aviation world? A: I had two choices coming out of law school. I was offered a job in the enforcement division of the Civil Aeronautics Board, and a job at a law firm in Boston. I decided I didn't want to sit in the back room of a law firm writing briefs for partners for seven years, working until 10 o'clock every night. I was always interested in aviation, even though I never worked in it. So I came here.
Q: Do you know anyone who's been doing this longer? A: I don't know anyone who's been doing the same job as long as I have. I left the government in 1975 to basically do this. When I started, we were the Air Freight Forwarders Association. After Congress deregulated the air-cargo portion of the airline industry in 1977, we decided our future lay more with those flying the planes. So we began letting airlines into the association, and we eventually morphed into an airline group.
Q: By the time this interview is published, the industry will be required to screen or inspect all cargo moving in the bellies of passenger planes on both domestic and outbound international flights. Do you think the industry will meet the deadline without disruptions? A: Not internationally, and I don't know about domestically. Our members are all-cargo carriers and not affected by the mandate. However, we do use passenger airlines for lift when necessary, so we are interested in the issue.
From an observer's perspective, the TSA has come up with a good idea in theory. But not enough shippers have signed up for the Certified Cargo Screening Program [a voluntary government initiative that authorizes various supply chain participants to screen cargo], so it will put a lot of pressure on freight forwarders to handle the screening if shippers simply turn over the shipments and tell them to do it.
Q: Do you think the screening mandate is overkill, given that for nearly a decade, there has been a risk-based security program in place that has seemed to work effectively? A: I wouldn't phrase it as overkill. But I'm not sure if 100-percent inspection of all freight is necessary. I would say that it would help if there were provisions allowing for [more] K-9s to serve as screeners and take some of the burden off of the individuals. The problem is there aren't enough "government dogs" available and the mandate doesn't call for [private-sector dogs] to be used.
I am very concerned that at some point shippers, who are already paying a premium to ship by air, will look at the compliance edicts and say it's not worth using air freight. And what about the shipment that's booked to fly at 10 p.m. that night but can't be flown out until the next morning because the carrier didn't have enough time to screen it? It defeats the purpose of using air freight, which is speed and reliability. That's more of a danger than the cost of compliance.
Q: You've worked in D.C. since 1968 and have seen administrations come and go. How does this one compare with regard to transportation? A: If you define transportation very broadly, they seem very interested in it. But I don't think that interest has translated into any benefits for air freight or the airlines. In the [2009] stimulus package, airlines got zero money. Meanwhile, the airports got $1.1 billion. You have to wonder what priority the airlines are for the administration.
Q: For decades, you have argued that air freight is a separate and distinct business from air passenger travel and should be treated as such. Do you still feel the need to make that argument? A: Yes, but we need to press it differently. It used to be that air freight was viewed as a byproduct of the passenger airline business. No one really talked about us. Now, air freight has become a major player. The industry is not ignored as it was when I first got into it. But it is still a different business from passenger aviation. We both fly aircraft but in many ways, that's where the similarities end.
For example, there has been an ongoing debate over flight duty time and how many hours pilots can operate. Our pilots have different work schedules and requirements. We operate in a totally different manner than do the passenger airlines, and the rules may need to be different for our segment of the industry.
It extends into security. There are people who have questioned why passenger airlines have to perform 100-percent screening of their freight while all-cargo carriers do not. What they don't take into consideration is that we already screen 100 percent of our packages to protect against the possibility of stowaways, which is the major threat to our industry.
Q: Stowaways? A: Absolutely. The major threat to all-cargo carriers is a 9/11 scenario where someone takes over a plane and uses it as a weapon of mass destruction. We're also sensitive to the threat of explosives, but to us it's a secondary threat.
Q: Other than security, is there one issue that's front burner for your members? A: Fuel costs, and I don't know what to do about it. The margins for our carriers are not great, and the break-even price for oil is about $70 a barrel. Our model is not designed to handle oil prices at $170 a barrel.
Beyond the economics, the reason fuel prices are such a concern is that we can't do anything about them. The issues that worry me the most are the ones we don't have control over.
The number of container ships waiting outside U.S. East and Gulf Coast ports has swelled from just three vessels on Sunday to 54 on Thursday as a dockworker strike has swiftly halted bustling container traffic at some of the nation’s business facilities, according to analysis by Everstream Analytics.
As of Thursday morning, the two ports with the biggest traffic jams are Savannah (15 ships) and New York (14), followed by single-digit numbers at Mobile, Charleston, Houston, Philadelphia, Norfolk, Baltimore, and Miami, Everstream said.
The impact of that clogged flow of goods will depend on how long the strike lasts, analysts with Moody’s said. The firm’s Moody’s Analytics division estimates the strike will cause a daily hit to the U.S. economy of at least $500 million in the coming days. But that impact will jump to $2 billion per day if the strike persists for several weeks.
The immediate cost of the strike can be seen in rising surcharges and rerouting delays, which can be absorbed by most enterprise-scale companies but hit small and medium-sized businesses particularly hard, a report from Container xChange says.
“The timing of this strike is especially challenging as we are in our traditional peak season. While many pulled forward shipments earlier this year to mitigate risks, stockpiled inventories will only cushion businesses for so long. If the strike continues for an extended period, we could see significant strain on container availability and shipping schedules,” Christian Roeloffs, cofounder and CEO of Container xChange, said in a release.
“For small and medium-sized container traders, this could result in skyrocketing logistics costs and delays, making it harder to secure containers. The longer the disruption lasts, the more difficult it will be for these businesses to keep pace with market demands,” Roeloffs said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.