Tag Archives: air

Demand still rising for US carriers

In previous posts, we’ve already talked about the positive 2017 that the air cargo industry has experienced so far. This has been driven by a number of factors – not least a global economic landscape that is looking increasingly positive in terms of consumer and business confidence. Asian markets in particular have shown strong growth in air cargo business. However recent figures from US markets suggest that the Far East is not the only region to be experiencing an upturn.

American, Delta and United all saw double-digit growth in July, with United in particular enjoying a big increase. They saw demand increase by 17.1% year on year, hitting an impressive 279m cargo ton miles (CTM). The growth in demand is part of a clear trend upwards, but remains below the level for the year to date which stands at 20.5%.

The big picture

The US figures are part of an encouraging global picture, with air freight traffic around the world increasing by 10.4% in the first half of 2017. That’s the strongest half-year performance we’ve seen for the global air freight market in seven years.

“While the US dollar has fallen back since the start of the year, broader strength in the currency is continuing to support US inbound air freight,” says IATA senior economist David Oxley. “On the other hand, the strong dollar is also keeping outbound flows under pressure.”

Seize the opportunity

It’s an encouraging outlook, but one that the industry needs to take advantage of. “Air cargo is flying high on the back of the stronger global economy,” says IATA Director General and CEO Alexandre de Juniac. “Demand is growing at a faster pace than at any time since the global financial crisis. That’s great news after many years of stagnation. Even more importantly, the industry is taking advantage of this momentum to accelerate much-need process modernisation and improve the value it provides to its many customers.”

Ignazio Coraci comments: “The US is obviously an important market for us, and so these figures are hugely encouraging. We must make sure now that we use this positive period of growth to build for the future.”

The implications of the IATA-FIATA Air Cargo Programme (IFACP)

It’s a structure that has long been in need of updating. For the last fifty years or so, forwarders have been defined as agents for carriers under the old Cargo Agency Programme. It’s an old model that no longer reflects the reality of the way that the two entities work together, and so the introduction of the new IATA-FIATA Air Cargo Programme (IFACP) is a welcome development.


Five year journey

The new framework agreement has taken five long years to develop – including a pilot phase in Canada – but it’s been worth the wait. Juan Antonio Rodriguez, IATA director FDS operations explains.


“Given that more than 80% of transactions are performed by freight forwarders acting as principals, IFACP better clarifies and validates the business through a buyer-seller relationship,” said Juan Antonio Rodriguez, IATA director FDS operations. “Simplifying the governance structure reduces the administrative requirement to manage the programme.”


Popular support

The new framework has the buy in of most of the major players in the industry – including forwarders from Canada, Hong Kong, South Africa and India, executives from Panalpina and Kuehne + Nagel and airlines represented by teams from Lufthansa, Emirates, American Airlines, FedEx, Cathay Pacific and EgyptAir.


The team behind the new framework hope that it will be rolled out globally in January next year, and they claim that the transition will be seamless, with no noticeable impact on day-to-day operations such as the air waybill.


Building for the future

Ignazio Coraci comments: “The old Cargo Agency Programme was out dated and the time had certainly come for it to be changed. There’s been a lot of hard work put into creating the new IATA-FIATA Air Cargo Programme (IFACP) – I see this a framework that not only redefines the relationship between forwarders and airlines, but also opens the door to more innovation in the future.”

How global warming could impact air cargo flights

We’re all too aware of the many disastrous implications of global climate change – from the impact on coastal communities of rising sea levels through to the dangers of increasingly unpredictable seasons on agricultural cycles. But what about our own industry? A recent report in Climatic Change suggests that the implications could be serious for air transportation, and are well worth considering as the effects of climate change become more evident.


Serious impact

The report points to the way in which steadily rising temperatures will have an effect on the density of the air in the atmosphere. This has a direct impact on the amount of lift that our planes can generate – with serious consequences in terms of the amount of cargo that the aircraft would be able to carry. In extreme situations it could lead to aircraft being grounded during the hottest periods – with the experts suggesting that up to a third of flights might be prevented from taking off.  If true, the impact of increasing air temperatures would be particularly serious for air cargo operators – especially those who use larger aircraft such as the 777-300. The answer for the air cargo industry could lie in weight restrictions below their maximum take off weight – but the costs could be substantial.


A worrying pattern of evidence

“As air temperatures rise at constant pressure, air density declines, resulting in less lift generation by an aircraft wing at a given airspeed and potentially imposing a weight restriction on departing aircraft,” says the report by Coffel, Thompson and Horton. “Our results suggest that weight restriction may impose a non-trivial cost on airlines and impact aviation operations around the world.”


Ignazio Coraci comments: “This is troubling news for the industry, because it builds on previous research from 2015 – a compelling pattern is emerging that suggests that climate change could have very serious implications for our industry – not just in terms of cost but also in the quality of the service that we can offer our customers. As an industry we must do everything we can to make sure that the impact of climate change on our industry and the customers we serve is kept to a minimum.”

What the industry can learn from BRUcloud, the open community technology platform used at Brussels airport

Could a new app be a taste of the way our industry uses technology in the future?


Brussels airport has already had a great deal of success with its BRUcloud open community platform in recent years – and it seems that freight forwarders at the airport are now embracing the cutting edge data-sharing technology to develop new solutions to old problems.


Industry backing

The Customs Export Application was strongly supported by Air Cargo Belgium (ACB) – who represent the country’s air cargo community – and with the advantages it delivers it’s clear to see why the technology has been given the industry body’s backing. The app matches collected manifest data (both from the freight forwarders themselves and existing data that is available within the BRUcloud system) and then automatically reports complete and accurate information to customs. The new technology saves time on all sides – particularly in terms of the amount of time processing air waybills. Customs have also agreed to clear shipments handled via the app first, providing yet another opportunity to speed up processes for all stakeholders.


A shared approach

A real key to the success of the app has been the collaborative approach taken by all parties – both in terms of the development of the Customs Export Application and its subsequent roll out.


“This collaboratively created app results in a lower administrative burden for all the parties,” says Bart Vleugels, who is advisory general at the Federal Public Service of Finance, Customs and Excise Duties. “Digitization within BRUcargo will further lower the chances of errors and will help to drastically decrease lead times.”


Freight forwarders have certainly bought in to the new technology, with 90 per cent of the air freight passing through BRUcargo now using the app.


Industry best practice

Ignazio Coraci comments: “The industry can learn a huge amount from the great work done at BRUcargo, not just in terms of the technology itself and its application, but also in the collaborative approach taken to its development by everyone involved. This kind of open cooperation between stakeholders is a model for similar projects.”

What can the industry learn from KLM’s new air cargo e-commerce strategy?

The pace at which we all respond to the demands of our customers is critical – and recent investments made by some of the world’s leading air cargo operators suggest that the industry is finally getting the message about e-commerce.

Prime position

The sector is booming within the air cargo industry and KLM Cargo have now invested in a combination-carrier-operated sorting system at its Amsterdam Schiphol airport site that is able to handle package-level air freight. It’s been designed specifically to handle post, express and pharmaceutical cargo.

That means that KLM Cargo should now have the systems in place to fully take advantage of the growth in e-commerce traffic. Marcel de Nooijer, executive vice president of KLM Cargo explains: “E-commerce is a fast-growing branch in the cargo industry. This innovative system allows us to keep pace with the rapid increase in post and express consignments. The system is faster and smarter, allowing us to offer better service to our customers.”

Same-day revolution

KLM Cargo have described the new facility as a world first, and it’s clear that it should now allow the business to make more use of its air freight capacity. KLM Cargo have teamed up with Netherlands-based Parcel International to run 12Send, a new same-day delivery service for Europe. They’ve already piloted the service on routes between Amsterdam and Barcelona, and have held successful trials in London, Madrid and Stockholm.

A lesson for the sector

Ignazio Coraci comments: “This is a sign of things to come. No industry can afford to ignore their customers. The investment made at Amsterdam Schiphol is an indication that businesses are slowly beginning to listen to changing customer needs, and I feel that we are starting to move in the right direction. This kind of investment is essential if carriers want to survive as new markets develop.”

Poor weather and volcanic ash are affecting flights

Bogoslof Island might be small, but the impact it’s having on transpacific air freight operations has been significant in recent months.

A major impact

The volcano is located in Alaska and is a part of the Aleutian island chain that arcs between the Asian and American landmasses. It first erupted back in May, and has remained active ever since – with serious implications for the many transpacific routes whose flight paths cross the region. Eruptions in late June sent a huge amount of ash and steam into the atmosphere to a height of around 36,000ft – right into the path of many crucial air freight routes.

Experts say that the disruption could continue for a while yet.

“The volcano remains at a heightened state of unrest and in an unpredictable condition,” says the Alaska Volcano Observatory “Additional explosions producing high-altitude volcanic clouds could occur at any time.”

Major disruption

The volcanic activity at Bogoslof has led many air freight operators in the region to adjust their schedules, with a number of flights being cancelled as a result of the ash cloud. It’s a situation that puts increased pressure on a region already suffering as a result of poor weather in Shanghai and Hong Kong. It means that space is tight and that capacity is down for some companies.

Bad weather in China has also affected flights to the EU, once again seriously impacting the amount of space available. “Airlines are increasing rates to the EU, and bad weather meant about 20 flights in and out of Hong Kong have been cancelled,” one forwarder told The Loadstar, “So space to the EU is really affected.”

Hard to predict

Ignazio Coraci comments: “Natural events are hard – if not impossible – to see coming. However I believe that we can all try to build the capacity into our business models to ensure that the impact of these events is lessened in the future. Unfortunately the pressure that these situations put on our industry mean that it’s likely to have an impact not just on capacity, but prices as well.”

A more agile future?

With proposals for new regulations on the use of small drones for commercial use in the pipeline, Ignazio Coraci gives his thoughts on the implications of this technology for the future of the air cargo business

The future may very well be unmanned. Whether drones will ever replace the full scale aircraft used by air cargo operators like ASC Cargo and SW Italia is doubtful, but the development of drone technology is already having an interesting implications for our industry.

Big business

One early sign of the growing importance of drone technology has been the recent deal between DHL and Chines consumer electronics exporter, Shenzhen Youkeshu Technologies. DHL’s Global Forwarding air and ocean freight specialist business has agreed to manage shipments of the Chinese company’s drones and unmanned vehicles to over 100 countries – and while DHL won’t be using drones to make their own deliveries just yet, the quantities of the products being transported are a sign of the rapid growth of this area of technology.

The shape of things to come?

Take another recent development – the release of pictures of a prototype unmanned vehicle that could soon be running up to 315 kilos of cargo between Los Angeles and Hawaii. It’s early days of course, but the start up business – called Natilus – is interesting, because the vehicle they’ve created would be able to integrate into the kind of infrastructure that already exists in the industry. The prototype would be able to dock at a traditional maritime port slip – and the team behind it plan to have it up and flying by 2020.

New rules

Finally, the recent legislative proposals by European Aviation Safety Agency (EASA) aim to address the safety issues around the operation of small drones, as well as privacy, security and data protection concerns.

A changing landscape

Ignazio comments: “The legislation shows just how significant this kind of technology is becoming. Whatever the ultimate implications are for the air cargo industry, it’s clear that drones and unmanned vehicles will almost certainly become an important part of the transport infrastructure – and as customers continue to demand delivery systems that are more rapid, more agile and more flexible, everyone in the industry needs to adapt to this changing landscape.”

Heathrow Sees Further Air Cargo Growth in March 2017

Fresh figures indicate that British-based air hubs are seeing their air freight rates climb right now, with Heathrow leading the charge. Ignazio Coraci comments on Heathrow’s continued growth.

Prosperous airport

Heathrow is the main gateway into the thriving London economy, and as this is one of the most prosperous cities on earth, it is a major hub for global air-cargo carriers. Companies such as ASC Cargo, which is based in Heathrow, transport goods all over the world, from the US to Hong Kong, from the hub and with e-commerce driving air cargo volumes, the airport is seeing strong freight growth.

The airport’s air freight volumes reached new heights in 2016, with its cargo shipments growing at a faster pace than its passenger expansion. This growth continued during the first few months of 2017, as figures indicate Heathrow’s air cargo volumes expanded by a further 4% during February this year, ensuring that the London-based airport got off to a “flying start” across the opening period of 2017.

Continued growth

ignazio coraci heathrowAccording to Air Cargo News, an industry portal, Heathrow registered more impressive growth in March 2017. The airport has released figures showing that it racked up its most impressive monthly expansion rate ever in March 2017, with its air cargo volume growing by 13%, to hit 148,000 tonnes. The main driver of this growth was long-haul markets such as Mexico (+28%) and Brazil (+13%).

Other key long-haul destinations for Heathrow in March included India (+9%) and China (+5%), while it also saw “impressive growth” for air cargo volumes in the Indonesian market. Expanding, a Heathrow spokesperson said that some lucrative new routes will be launched from the London-based airport this year, suggesting that Heathrow will see continued growth throughout the rest of 2017.

Prime air hub

In terms of total volumes, Heathrow is still the biggest air freight hub in the UK by a long way. However, Manchester airport saw a slightly larger rate of monthly growth in March, with its air cargo volumes expanding by 14.9% to reach just under 10,000 tonnes, due mainly to the hub’s increased long-haul capacity. No other British airport came close to recording this kind of growth in March 2017, however.

Statistics indicate that across March 2017, Heathrow’s rival Stanstead – another airport based in London, saw its air freight volumes climb by 10.2%, reaching 24,250 tonnes. Meanwhile the East Midlands airport’s air cargo volumes picked up by 5.5%, coming in at 30,300 tonnes shipped, in March 2017, proving that Heathrow is the most important air freight hub throughout the whole UK.

Expert commentary

Speaking out on this news, Ignazio Coraci noted: “It is clear that Heathrow is set to see a successful 2017, as it has posted impressive air cargo growth figures for the first three months of this year now. Cementing its status as the primary air freight hub in the UK, Heathrow should provide carriers with amazing new growth opportunities in 2017, strengthening the sector so it expands in future.”