Lifted by e-commerce demand, cargo-only flights emerged as a lifeline for carriers during the pandemic when commercial traffic slumped. Half of air cargo normally travels in the belly of passenger jets.
While North American airlines are reducing all-cargo flights as passenger traffic rebounds, that shift is more gradual in Canada due to a slower easing of travel restrictions.
Cargo remains important for Canada‘s largest carrier, accounting for 43% of second-quarter revenue, even as it restores passenger flights, a company executive told Reuters.
“We (cargo) were a single-digit piece of the business before COVID. We hope to be a bigger part of that in the future,” Jason Berry, Air Canada‘s vice president for cargo, said in an interview, without providing a target.
Air Canada‘s ambition comes as international air cargo volume hit its strongest first-half growth since 2017, airline trade group IATA said. But staffing shortages and space constraints have exacerbated congestion at hubs like Chicago’s O’Hare International Airport and at some U.S. ports.
U.S. railroad operator Union Pacific Corp recently warned that bottlenecks at West Coast ports have spread East, impacting some inland terminals, including Chicago.
Air Canada, which trucks cargo arriving at Toronto Pearson International Airport to its facilities in Chicago and New York, could appeal to freight forwarders seeking alternatives like secondary U.S. airports to bypass the congestion, said Brandon Fried, executive director of the Airforwarders Association.
“Many of the airports in the U.S. in particular have ramped up quickly, and with that rapid growth there has been operational challenges. We’re seeing congestion, massive lines and wait times to recover product at major gateways,” Air Canada‘s Berry said.
“We have our own facility in Chicago with our own employees, while a lot of our competitors are suffering because the U.S. has seen such a quick rebound that there is a lot of struggle for manpower down there,” he said.
“With our own facilities we can control our own destiny and effectively bypass much of the disruption. We believe we have a strategic advantage in our Toronto hub, actually all of our hubs: Vancouver, Toronto and Montreal.”
Keeping employees to handle cargo, as opposed to contracting out such tasks, helps airlines have more control over service and workforce when there is a labor shortage, said Stan Wraight, president of Montreal-based Strategic Aviation Solutions International (SASI).
Air Canada‘s services could be competitive on time against carriers that fly indirectly to O’Hare, said Wraight, of SASI, which advises airlines, airports and financial organizations on air cargo logistics.
However, the Canadian carrier would lose advantages in efficiency against airlines that offer non-stop direct service to Chicago, he said.
“Competitors of Air Canada with direct flights are on the ground and unloading cargo a day earlier,” said Wraight, whose company has previously done work for the carrier.
Shawn Richard, vice president for global air freight at SEKO Logistics, said the company has increased its volumes with Air Canada, which he said can save two to three days’ time.
SEKO, a U.S.-based global logistics and freight forwarding specialist that also uses certain U.S. carriers, would increase business with Air Canada if the “situation deteriorates,” Richard said.
O’Hare has processed nearly 1.3 million metric tonnes of cargo through the first half of 2021, a near 50% surge from a year ago, according to the Chicago Department of Aviation (CDA).
Soaring shipments “challenge O’Hare’s cargo ramps, both airside and landside,” but the CDA is taking steps to alleviate congestion and expand cargo facilities, a spokeswoman said by email.
Berry said Air Canada‘s introduction of new converted Boeing 767 freighters this year will help its business even as it draws down cargo-only flights on widebody passenger jets from roughly 285 a week during the second quarter to around 125 flights a week later this year.
Freighters, equipped with pallets and a main deck cargo door, are easier to unload than “loose-loaded” passenger planes that moved cargo onto the main deck during the pandemic, Wraight said.
Berry said the return of fully vaccinated American travelers to Canada this month will also help cargo.
“We know that means more airplanes flying into the U.S. and that opens trade lanes for the globe to feed into and out of the U.S. on our network.”
(Reporting By Allison Lampert in Montreal and Sanjana Shivdas in Bengaluru; Editing by Denny Thomas and Dan Grebler)
DoorDash laying off 1,250 people, about 6% of its workforce – CBC News
DoorDash Inc. said on Wednesday it was cutting about 1,250 jobs, or six per cent of its total workforce, as the food-delivery company looks to keep a lid on costs to cope with a slowdown in demand.
DoorDash went on a hiring spree to cater to a flood of orders from people stuck at home during the height of the pandemic, but a sudden drop in demand from inflation-wary customers has left the company grappling with ballooning costs.
“We were not as rigorous as we should have been in managing our team growth … That’s on me. As a result, operating expenses grew quickly,” chief executive Tony Xu said in a memo to employees that was posted on the company’s website.
“Given how quickly we hired, our operating expenses — if left unabated — would continue to outgrow our revenue.”
DoorDash has about 20,000 employees worldwide, and “some of the affected employees are based in Canada,” the company told CBC News in a statement, without elaborating.
The company joins a growing list of technology firms, including Amazon, Facebook-owner Meta, Twitter, Shopify and others that have laid off thousands of employees in recent weeks as they brace for a potential economic downturn.
British food delivery company Deliveroo said in late October that sales growth would be at the lower end of its previous forecast. In September, Winnipeg-based food delivery app SkipTheDishes laid off 350 workers.
Earlier this month, DoorDash reported a bigger-than-expected quarterly net loss of $295 million US, raising questions about the growth prospect of delivery firms as economies reopen. The company’s shares have lost two thirds of their value this year.
“Greater emphasis on its cost structure is a welcoming sign, especially given the potential for consumer spending to deteriorate faster than expected,” said Angelo Zino, analyst at CFRA Research.
'I didn't ever try to commit fraud on anyone,' FTX founder Sam Bankman-Fried says – CBC News
The man at the centre of collapsed cryptocurrency exchange FTX made his first public appearance since the saga began, telling a New York audience on Wednesday that it was never his intention to commit fraud.
Sam Bankman-Fried, the 30-year-old founder of FTX, appeared at the New York Times’ Dealbook Summit on Wednesday, for an interview with journalist Andrew Ross Sorkin about what happened to cause his cryptocurrency firm to collapse into bankruptcy earlier this month.
The firm, once worth more than $32 billion US, entered bankruptcy protection on Nov. 11 after a whirlwind series of days that saw it go from trying to solve a liquidity crunch by merging with a rival, to having that deal fall apart and succumbing to a run on the bank as traders pulled out $6 billion in funds within three days.
Filings show the company owes almost $10 billion to various creditors, and at least $1 billion worth of customer deposits are missing.
Among numerous allegations, customer deposits at FTX appear to have been used as capital and collateral for loans for an investment firm called Alameda affiliated with him — an allegation that amounts to fraud, and one that he pushed back against strongly.
“I didn’t ever try to commit fraud on anyone,” he told Sorkin, “I didn’t knowingly co-mingle funds.”
While he acknowledged mistakes were made, Bankman-Fried rejected repeated attempts to characterize what happened at his cryptocurrency firm as being in any way malicious or illegal.
“I am deeply sorry about what happened,” he said. “I was excited about the prospects of FTX a month ago, I saw it as a thriving, growing business.”
Bankman-Fried has seen his personal net worth evaporate in the debacle, from more than $26 billion a year ago to “close to nothing” today — and he insisted that he doesn’t have any of the money that has vanished.
“I don’t have any hidden funds here. Everything I have, I am disclosing,” he said.
“I’m down to one working credit card … [and] hundreds of dollars or something like that, in a bank account.”
He says, to his knowledge, there are enough funds at FTX to give users their money. But his hands are tied since he no longer has a formal role at the company since it entered bankruptcy proceedings.
“I believe that withdrawals could be opened up today and everyone could be made whole,” he said.
John Jay Ray III, the restructuring expert who has been handling FTX’s bankruptcy proceedings has said in legal filings that Bankman-Fried appears to have treated the company as his “personal fiefdom” and has called the fiasco a “complete failure of corporate controls.”
Bankman-Fried has been active on Twitter since the debacle first started, but his appearance on Wednesday marks his first public appearance since the saga began.
There was speculation he was going to appear in person, but ultimately he appeared via video link from the Bahamas, where he lives.
Sorkin asked Bankman-Fried if he did not appear in person because he is worried about being within the reach of U.S. agencies including the Department of Justice and the Securities and Exchange Commission, both of which are probing what happened at FTX.
Bankman-Fried appeared to side-step that question, remarking instead that, to his knowledge, he can still legally enter the U.S.
“I’ve seen a lot of the hearings that have been happening [and] would not be surprised if some time I am out there talking about what happened,” he said, adding that he “does not personally think” he has any criminal liability to worry about.
That being said, he said his legal team is “very much not” supportive of his decision to appear at the summit and speak publicly about what happened at FTX. His lawyers advice was “to recede into a hole,” he joked.
Investors focus on Powell's comments which put gold back into rally mode – Kitco NEWS
Today gold futures are trading solidly higher as market participants react to Chairman Jerome Powell’s speech at the Hutchings Center on Fiscal and Monetary Policy, held at the Brookings Institution in Washington. Market participants focused intently on his remarks which alluded to a dynamic change in the Federal Reserve’s monetary policy.
“Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down … The time for moderating the pace of rate increases may come as soon as the December meeting.”
However, it must be noted that the reaction by investors at large seems to focus on what they had hoped to hear which is the Fed will begin to raise rates at a slower pace rather than his nuanced message that the time required for the Federal Reserve to achieve their goal will take much longer.
“It is likely that restoring price stability will require holding policy at a restrictive level for some time … History cautions strongly against prematurely loosening policy. We will stay the course until the job is done.”
As of 6:16 PM EST gold futures basis of the most active February, 2023 Comex contract is fixed at $1784.60 After factoring in today’s double-digit advance comprised of dollar weakness, buyers in the market along with the rollover from the December to February contract month.
Chairman Powell’s speech today diminished the concern of investors as they reacted to other members of the Federal Reserve who have been extremely vocal about upcoming interest rate hikes. Specifically, recent remarks by James Bullard underscored the hawkish intent of the Federal Reserve. Last week he commented on the need for the Federal Reserve’s benchmark rate to go as high as 7% to deal with inflation. This week he said that “the Federal Reserve will likely need to keep its benchmark policy rate north of 5% for most of 2023 and into 2024 to succeed in taming inflation.”
Chairman Powell’s statements were not in conflict in any way with those made earlier by James Bullard and other members of the Federal Reserve in his prepared speech. However, the chairman was able to deliver this message in a much softer tone. Chairman Powell in essence cemented a 50-basis point rate hike at the December FOMC meeting. However, he stressed that slowing the pace of rate hikes would require that the Fed maintains a restrictive monetary policy for a longer period.
Gold’s recent rally from $1621 to just shy of $1800 is a reflection of a major change in the market sentiment of investors. It suggests that investors are focusing intently on inflation and that lowering inflation to restore price stability will be a multi-year process.
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Wishing you as always good trading,
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