Mr. Sterling: I cover air freight and logistics, and maritime companies. The companies include freight forwarders Expeditors International and UTi Worldwide, and intermodal marketing companies Hub Group, Inc. and Pacer International. Other air freight and logistics companies include Atlas Air Worldwide Holdings, Forward Air Corp., Quality Distribution and Ryder System, Inc.. I also cover the integrators FedEx Corporation and United Parcel Service. In the maritime space, I cover a dry-bulk shipper, Diana Shipping, Inc., Jones Act barge companies Kirby Corporation and American Commercial Lines, and an international marine fuel logistics company, Aegean Marine Petroleum Network, Inc.. I cover a variety of transportation companies that specialize in the movement of freight.
TWST: Has the economy impacted the air freight and logistics, and maritime industries?
Mr. Sterling: The economy has impacted the air freight and logistics, and maritime industries. As freight volumes dropped and with the decline in demand, pricing fell. However, the economy and freight volumes are looking pretty good right now. We are seeing a pickup in demand, particularly in air freight. If you look at air freight, especially trends coming out of Asia, and look at some of the air freight statistics for the first three months of the year, we're above 2008 and 2007 levels. And that is quite impressive and very encouraging. And that tells me there is some real demand. There is no surprise that we're above 2009 levels because 2009 was so bad, particularly the first half of the year.
UPS and FedEx have been reporting strong earnings, driven by their international air volumes. And while it is an element of inventory restocking, there is some incremental demand as well, particularly tech and retail. A lot of tech moves by air freight. For instance, every time you have Apple coming out with a new product, generally that is coming by plane from Asia. And while it is good for the integrators, it is also good for Atlas Air. Atlas essentially leases planes to freight forwarders and other airlines. The demand that we are seeing is good for the freight forwarders as well, Expeditors and UTi Worldwide, because they're managing freight traffic for their customers, i.e., a freight forwarder is a travel agent for freight. Some of the trends we're seeing are very, very impressive right now, and that is just for the first three months of the year. I think it's interesting that UPS significantly raised their guidance for the rest of the year. That tells me they feel pretty good about 2010. The trends we're seeing continue to get better each month, and it is night and day compared to a year ago.
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