CF AirFreight Executive Addresses Changes in Air Cargo Industry; Focus Groups Help Customers Adapt to New Regulations and Security Procedures.

Business Editors & Transportation Writers

MINNEAPOLIS--(BUSINESS WIRE)--Nov. 27, 2001

The unprecedented events of the past two months have dramatically altered the air transportation business. While the tightening of passenger air travel policies and procedures has been well publicized, the impact on the airfreight industry has been no less significant. As the U.S. and other countries attempt to safeguard the public from further physical and biological attacks, air cargo shippers face increased scrutiny. The impact is even greater for international cargo operations.

Understandably, customers who depend on airfreight are concerned. To help them understand the regulatory changes and how they will affect their businesses, the President of CF AirFreight, Richard McCrady Sr., has scheduled a series of focus groups in key U.S. and European markets. During the next six weeks, he will be meeting with groups of customers who rely on air cargo to get their products to market.

"With all the uncertainty surrounding new FAA and airline regulations, it's important that our customers understand how to adapt to a shipping environment characterized by heightened security and regulatory oversight," notes McCrady. "The new regulations will affect both the shipping community and those that ship with us. Our goal is to work on our customers' behalf to expedite their shipments as quickly and smoothly as possible."

McCrady, a 37-year veteran of the air cargo business, has identified several trends that will affect the airfreight business, including:

-- Reduction of capacity and staff by airlines in North America and Europe

-- Curtailment of routes

-- Greater security which increases cycle times

-- Increased security including requirements for X-ray or decompression

-- Deep and widespread profit warnings among carriers

-- Accelerated retirement of aircraft

-- Uncertainties about liability issues and insurance costs

Increased security measures are being implemented by two major sources: the FAA (Federal Aviation Administration) and the airlines themselves. The airlines and airports have adopted or proposed new security measures including:

-- Visual verification against manifest

-- Verification through screening procedures

-- Verifying and recording of cartage and personnel

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Compliance with these and other regulations will place additional demands on the shipper and customer alike. "CF AirFreight will be requesting additional credit and business histories on all current and prospective customers," according to McCrady. "Customers will have to provide more detail about their products when shipping freight. There may be additional security surcharges and insurance charges. As the economy becomes stronger, we may find that the recently reduced lift capacity for ocean and airfreight is no longer adequate. The situation is still evolving. But whatever measures are imposed on us, we will do everything possible to mitigate any negative impact on our customers."

The fall schedule for McCrady's focus groups will include the following cities: Chicago, St. Louis, Dallas, Los Angeles, London, Amsterdam, and an additional East Coast location to be determined.

CF AirFreight (CFAF) is a global logistics provider specializing in domestic and international air, ocean and surface transportation supply chain solutions. The company provides an expedited transportation platform that serves over 20,000 communities in North America and 800 markets in 180 countries. Through its sophisticated technology, expanding global presence and experienced leadership, CFAF offers value-added capabilities and personalized, customer-centric freight delivery and logistics programs. CF AirFreight is a unit of Consolidated Freightways Corporation, a global $2.3 billion transportation and logistics provider with 70 years of experience.