As the United States approaches the upcoming presidential election in November, air cargo players in Latin America have a keen interest in the possible outcome at the ballot box.

Its outcome may shape economic policies, including trade, environmental regulations and US labour laws, key factors that directly impact air cargo operations between the United States and Latin America.

Although airfreight may not be at the forefront of political discourse, our industry may experience ripple effects from future laws enacted under the next administration, whichever party it may win. Each candidate has a different approach and vision for international trade, sustainability and infrastructure, which will determine how shipping companies adapt, thrive and face challenges in years to come.

International trade and tariffs

Over the past few years, the US has witnessed a volatile trade landscape, with shifting alliances, tariffs and trade agreements significantly impacting air cargo volumes. The next administration’s stance on trade with major partners like China, the European Union and other emerging markets could either stimulate or suppress demand for air shipping.

If the next president of the United States enacts policies favouring protectionism and higher tariffs, shipping companies will likely face rising costs and reduced demand for imports and exports. According to IATA, if the Republicans were to win, the global political and economic landscape repercussions could be profound. The current wars in Europe and the Middle East could expand and insecurity in Asia would likely rise. Impediments to trade, already increasing, could multiply and oil-price volatility would likely be exacerbated.

On the other hand, a Democratic victory would mean reduced tariffs and an emphasis on trade agreements. One such pact, the US-Mexico-Canada Agreement (USMCA), could lead to significant gains for the air cargo industry as vital goods would be able to move across borders more freely with less hassle. Airfreight companies must be aware of any changes in these policies, as they directly affect the volume of goods transported via air, which are usually high-value and time-sensitive.

Environmental regulations and sustainability

Neither party sees eye-to-eye when it comes to the threat of climate change. As it is an increasingly pressing issue, a repeat Democratic administration may continue pushing for greener policies, including within the aviation sector. The next president’s approach to climate change may significantly impact airfreight carriers through tighter emissions standards, potential carbon taxes, and greater investment in green technologies. If these technologies prove successful, the widespread availability of environmentally friendly energy could usher in a new period of economic growth, potentially surpassing the economic benefits generated by the fossil fuel industry.

The Biden administration has already introduced stringent regulations to reduce carbon emissions and a future Harris administration would likely follow suit with these efforts. This could force airfreight companies to invest heavily in sustainable fuels, electric aircraft and other green technologies. Additionally, pressure from customers to demonstrate environmental responsibility may increase, making sustainability a competitive advantage – or a significant hurdle – for airfreight operators.

Airlines that successfully reduce their carbon emissions may see increased business from companies aiming to reduce their carbon footprint. The challenge for airfreight operators will be a high-wire balancing act of complying with evolving regulations while remaining competitive in a cost-sensitive market.

Labour laws and workforce regulations

The labour market is another area where the next administration’s policies could influence airfreight operations. Air cargo is a vast workforce that includes pilots, ground handlers, warehouse workers, and drivers. Changes in labour laws, such as increased wages, adjustments to overtime regulations or new safety standards, can greatly affect the cost and logistics of airfreight operations.

The recent rise of labour unions and workers demanding better pay could lead to stricter regulations impacting shipping companies and airlines. For example, if future laws increase wages or mandate more benefits for workers, airfreight companies could face higher operating costs, which would likely land on consumers through increased shipping rates.

Additionally, a potential shift in immigration policies could also affect the availability of labour, especially in sectors reliant on foreign workers. Heightened restrictions on immigration may lead to labour shortages, which could strain airfreight operations at airports and distribution centres.

Aviation infrastructure investment

The aviation sector relies heavily on airport capacity, runway efficiency and technology to ensure cargo flows smoothly. The next administration’s commitment to improving the nation’s infrastructure will majorly determine how well airfreight companies can adapt to increasing demand.

The Biden/Harris administration passed the Infrastructure Investment and Jobs Act, which allocates significant funding for airport improvements, among other projects. Continued or increased investment under future administrations could provide a significant boost to airfreight operations. Upgraded airport facilities, better cargo handling technologies and more efficient transportation networks would reduce bottlenecks and delays, improving the overall efficiency of air cargo operations nationwide.

Conclusion

While airfreight may not be the centre of attention in the political arena, the next presidential administration will majorly influence the industry’s future through laws and regulations related to trade, the environment, labour, infrastructure and innovation. Latin American airfreight companies should remain vigilant, anticipating possible changes in policy and adapting to new challenges and/or opportunities. By staying ahead of regulatory trends and investing in sustainable, innovative solutions, airfreight operators can position themselves for success, regardless of the political landscape.

This political moment presents both risks and opportunities for airfreight. The key to thriving during these times lies in being proactive and adapting to the evolving legislative environment and political climate in the months to come.