I have known Sal san Filippo for fifteen years. Prior to joining Air NZ in Los Angeles, Sal was a respected executive of BAX Global, America’s most successful airfreight forwarder. Sal’s life’s story is true to form as an example of living the American dream. Bought up in a tough Catholic area of Boston, Sal was mowing lawns and doing odd jobs from an early age initially to supplement his family’s income but later on to pay his way through college. His dad was a product of the depression and typical of that generation Sal was brought up in the tradition that family values, hard work and integrity went hand in hand. Sal behavior to this day has never wavered from the belief his life has been blessed with so much opportunity. He wears his humility and heart as a good and decent human being on his broad shoulders only as the son of a proud immigrant to America can do.

Sal has been an outstanding executive for Air NZ. He treats his staff as he does good customers with fairness and understanding and never wavers from looking after his company’s best interests. He is as honest as the day is long. I have always been amazed at how he balances his business life with his personal one. For many years, Sal has popped by my office on a Friday afternoon about once a month. Once the business end of the conversation is concluded we revert to chatting about family and subjects of mutual interest. For the best part of ten years, I have listened to wonderful, sometimes heart rendering, stories about Sal’s personal experiences. He is a devoted family man, he loves his work and the people around him. He is loyal to a fault when it comes to Air NZ, his colleagues and old friends. In fact Sal is his father’s son. His “Italian joie de vivre” is omnipresent.

I am nothing but utterly disgusted that the court system in NZ is an extension of their Commerce Department, just like the Supreme Court in the USA is a servant of the Department of Justice. If convicted, Sal faces fines and even possibly a jail sentence for becoming ensnared into something outside of his realm and that he has had nothing to do with; decisions that were made by executives higher up with Sal being forced to execute, just because he was the senior manager in the field. Sal has busted his chops since he was that little bloke beaten up by the street bully, to stand up and always do the right thing, even if it meant defending himself against all odds. When he is called upon the witness stand to give evidence in the N.Z. court, the judge and jury will quickly realize this man is no criminal; he is an outstanding citizen, who can hold his head up high in any company. It is so cruel that for the last two to three years this nonsense has occupied his mind every morning he awakes and doesn’t leave him until he falls asleep each night. Sal, if you need a character witness in court, I will put the bastards straight. Very few men possess the same ethics as you. It is the Sal san Filippo’s of this world, who inspire and drive me to try and emulate them as best I can.

That prognosis is basically how one of the bell weather companies FedEx, sees it too. Fred Smith, the eternal optimist, conceded the weak economy will continue to hurt FedEx’s results for some time to come. He did try to suggest there were glimmers of hope though. Inventories, he claimed were getting low. That is not how I view where FedEx is heading. When things do start to pick up, just as has been happening over the past five years 2nd day delivery and road will continue to bite into the highly profitable overnight business. Just like the email/scanner has replaced the fax, only if the package/envelope is a “must deliver by 10.00AM the following day”, second day and time definite trucking service will become the FedEx’s mainstay of domestic business. I believe USPS with their one price up 70lbs “New Priority Mail Box” is a winner and will further erode FedEx’s and UPS’ market share of the domestic express business.

FedEx has already become the best trucking company in America and with Yellow on the brink of bankruptcy they can step in and over the next two years swallow up the lion’s share of both the LTL and FTL business. Fred can start parking up all those gas guzzling DC 10′s and cancel his Boeing orders and put investment into thousands more Freightliner trucks and tens of thousands of 53 foot trailers. If I were him, I would strike a deal with DHL to get out of the international business altogether. As for UPS, they probably need another five years of management meetings to decide what engineering needs to take place to meet the changed business environment. That is why FedEx will pass them by.

With regards to the international operations, Fred Smith will rue the day someone sold him the bill of goods on China. International heavyweight express is history. Excess capacity has seen to that. Every airline in the world, especially the combination carriers are now offering overnight at their standard deferred rates tariffs. Who in the heck is going to listen to a FedEx/UPS/DHL salesman telling the customer he must continue to pay a premium to move his high priority goods? Of course the question is if he has any in the newly evolving economy! Fred, your best bet is to become closer with USPS, cut a deal with them for home delivery and continue to be their line haul operator. Your future is domestic and with many large American corporations bringing their factories back to America, Fred your company has a huge future.

Apart from these low cost airlines that compete with the Greyhound buses, there is not one carrier operating in the black. Never in aviation history have so many modern generation aircraft been parked up, most with little chance of flying another passenger or kilogram of freight ever again. Air N.Z. sent its first 747-400 to the Arizona desert to be broken up for parts! Less than five years ago a 400 series Boeing was considered as high tech as the day the world witnessed its maiden flight in the late eighties. British Airways is down to asking its staff to turn up for work with no pay! Others are moving to four day working weeks. Freight volume to many major destinations is down 40% and rates have never been lower. Some carriers are even dealing on the fuel surcharge in an effort to persuade a forwarder to tender the shipment to them. The airline industry is downsizing because all indications are present passenger travel and airfreight levels may remain with us for years to come, not months.