Tag Archives: Growth

Cargo News, Ignazio Coraci

How VR technology could revolutionise air cargo

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The air freight industry is a dynamic and often complex business to work in, with many roles requiring extensive practical training in order to get the skills required to work safely and efficiently. But the way in which that training is delivered can be sometimes be far removed from the realities of day-to-day life in the industry. Training is often classroom-based, while the crucial hands-on experience of real life aircraft cargo handling can be limited.

So how is the industry addressing this issue, and how can technology help? One example from Hong Kong offers a possible new approach to training, that gives trainees the experience of ramp handling – while they are still in the classroom. Hong Kong Air Cargo Terminals Ltd. (Hactl) have introduced a new virtual reality training program, called COSAC-VR, that is radically changing the way new recruits experience the role they are training for.

A safer way to train

The VR solution is particularly well-suited to training in the air cargo industry, not least because it is a great way to simulate what working in a fast-paced environment is like, without the associated risks of putting trainees in a ‘live’ operational setting.

“In the past, newly-recruited ground service staff had to undergo extensive classroom training before experiencing the real-life aircraft cargo handling environment,” says Simon Yap, Hactl’s senior manager for learning and development. “COSAC-VR has reduced the reliance on real aircraft availability and suitable weather conditions for training, and trainees meanwhile can undergo work simulations in a totally safe environment.”

Massive potential

Ignazio Coraci comments: “I believe that the example from Hactl – while only on a small scale – is a development that shows the huge potential for transformation driven by this kind of technology. These are exciting times – new technology can really help to transform our sector – and examples like this are an encouraging sign that the industry is heading in the right direction.”

Cargo News, Ignazio Coraci

Demand still rising for US carriers

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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.”

Cargo News, Ignazio Coraci

The rise and rise of e-airway bills (e-AWB)

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We’ve talked before in this blog about the importance of our industry embracing digitisation. As a sector, air cargo has lagged behind when it comes to technological innovation – and in a business that is so dependent on complex processes this is a reluctance that is threatening to hold us back. A single shipment can produce over 30 different pieces of paper – clogging the system, wasting resources and creating a huge opportunity for human error to creep in.

 

An ambitious goal

IATA’s 100 per cent e-freight vision has been a real focal point for those of us in the industry who are keen to increase the amount of digitisation in our systems and processes. The e-freight vision is to eliminate paper from a wide range of points in the shipment journey, and the introduction of e-airway bills (e-AWB) has got off to an impressive start. Usage finally broke the 50% mark back in June – but it still remains a long way off IATA’s 62% target for this year.

 

Benefits for all

A recent session, hosted by IATA’s Cargo Network Services (CNS) in Seattle, was an encouraging development however. The event featured a number of speakers who talked about the benefits of switching to e-AWB, even for smaller and medium-sized operators – the big message was that the benefits of better customer experience, improved data and less costs associated with couriering paper documents mean that e-AWB makes sense for most.

 

The event also came on the back of news that both Seattle and San Francisco airports will be adopting e-AWB as their preferred method of shipping air cargo in the near future.

 

The right course

Ignazio Coraci comments: “It’s a really encouraging sign to see how the industry is embracing the e-AWB. We’re still a long way away from the tough targets set by IATA, but the events in Seattle show that we’re heading in the right direction. It’s vital now that as an industry we continue to move towards a more digitised future together, and all the advantages that it will bring.”

Cargo News, Ignazio Coraci

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

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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.”

Cargo News, Ignazio Coraci

How a ‘visionary’ new development will increase cargo volumes at Heathrow

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In a step forward for a cargo warehousing project near to Heathrow Airport, the local authority has approved the plans.

The project’s backer, Formal Investments, describes the project as ‘visionary’. It will see an underground warehouse, with a public park constructed above ground. This park represents the largest new park area in West London for more than a century, and will be constructed using the minerals extracted from beneath the land, which is currently not in use.

Major link to Heathrow

Situated alongside the A4 (Bath Road), which is also a major road link to Heathrow Airport, the site (known as Rectory Farm) will house up to 177,500 square metres of subterranean warehousing space.

After work begins in 2019, the first area of the park should open sometime in 2020, and the warehouse space will be available for use from 2022. In total, there will be a 15-year period of mineral extraction, construction and landscaping to complete the project in its entirety.

Cargo operation expansion

Ignazio Coraci explains: “It’s extremely likely that Heathrow Airport will utilise a fair amount of the warehousing space in order to expand its cargo operation. If the third runway goes ahead then Heathrow will be able to expand much further with resources like Rectory Farm available.

“There is a lack of industrial storage space near the airport, and this development is a pioneering project that will provide a much-needed urban logistics resource.”

Football pitches, parkland and public space will be constructed above the warehouse, to maximise the use of the land. Adds the director of Formal Investments, Nicholas King: “It is hugely exciting to know these ambitious and visionary plans, overwhelmingly supported by local residents, have taken a massive step towards going ahead.

“With increasing worldwide demand for warehousing space close to and within cities, we believe Rectory Farm’s creative solution of putting such infrastructure underground whilst enhancing the surface environment could inspire similar approaches elsewhere.”

Innovative use of space

The innovative underground approach of Rectory Farm’s warehousing is a pioneering design that aims to fully utilise the urban environment. It’s a model that is in use in other parts of the world and will be the largest development of its kind within the M25.

Alongside the news of the approval of this storage space, there has been an alternative development submitted to construct a third runway at Heathrow Airport. The plan has been put forward by the hotel group Arora, which state that it is projected to save up to £6.7 billion on the current proposal. The existing proposal is now under public consultation after being approved by the government in 2016.

Whether or not the third runway does go ahead, the development of Rectory Farm will provide Heathrow Airport with more scope to expand cargo air freight over the next decade.

Cargo News, Ignazio Coraci

Cargo demand reaches 2017 high

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Airports have seen cargo demand increase throughout May 2017 to a high for this year so far. Statistics released by Airports Council International (ACI) show the high level of growth for cargo demand at an increase of 11.1% for May.

The ACI equates this stabilisation and growth of the cargo industry with the relatively calm economy following a prolonged period of uncertainty due to trade policy from the US and the risks of the UK’s vote to leave the European Union. They have said that: “… global commerce is no longer sidelined.”

Highest growth found in Europe

Europe is the region with the fastest growth rate, with an increase of 12%. Coming up close behind with a growth rate of 11.9% is North America. However, there were also improvements in double figures from airports located in the Asia Pacific region, as well as Latin American Caribbean. This latter region has suffered in recent years due to the weak Brazilian economy, but have had an upturn with these results.

Ignazio Coraci says: “It appears that confidence has returned to the global business market, which is illustrated with the recovery in air freight figures. The fact that all regions demonstrated high levels of growth year on year in May 2017, seems to show that recovery is worldwide.”

North America figures due to large freight hubs

According to the ACI, North America posted such a high growth in May due to the traffic at their biggest freight hubs. An impressive 80% of the top five airports in North America (by volume of cargo), posted growth in double digits.

Louisville, Los Angeles, Anchorage and Miami all showed increases in cargo of between 11 and 13%, while the largest hub in the region posted an increase of 1.3%. It also appears that these increases are at least partly down to a surge in domestic freight, which is up 9.1% in May after a lengthy period of slow growth (at just 1.7% year to date).

European recovery underway

Istanbul Airport led the European results, posting a huge 21.1% increase in freight traffic (total). Others, including Amsterdam (12.3%), Heathrow (10.6%) and Leipzig (9.1%) also posted high growth results.

International traffic has contributed to these improved numbers when it comes to cargo freight transport. This was up 13% when compared to May 2016, with domestic cargo trailing behind but still registering an increase at 6.3%.

Overall, the figures show that the demand for cargo has increased by 8.3% overall during the first five months of 2017, when compared with the same time period of 2016.

Cargo News, Ignazio Coraci

How global warming could impact air cargo flights

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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.”

Cargo News, Ignazio Coraci

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

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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.”

Cargo News, Ignazio Coraci

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

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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.”

Cargo News, Ignazio Coraci

Hong Kong sees a surge in growth for first half of 2017

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It has been a truly impressive start to the year for Hong Kong International Airport (HKIA), with growth in traffic right across the board. In terms of air cargo business, HKIA has handled an impressive 2.3 million tonnes of cargo already this year in the first six months to June – that’s up a remarkable 11.3% on the same period last year.

Booming exports

So what has been behind HKIA’s great start to the year – and more importantly, do the experts think it will be sustained? Well, in the latest figures from June, 410,000 tonnes of cargo passed through the airport, up 11.4% on 2016 – and there are indications that a 17% year-on-year increase in June exports from the airport led to the high growth in cargo tonnage for that period. That bump in export figures has certainly contributed then to the airport’s positive performance in the first half of 2017, but HKIA has also benefited from an improved global outlook. And with the Asian markets leading the way in air cargo growth, HKIA is in prime position to take advantage of a global economic performance that is looking positive in terms of consumer and business confidence.

Investing for the future

HKIA isn’t standing still, with work starting last August on a third runway to help accommodate future growth. The airport is also making further investments to ensure it meets the needs of customers.

“On the cargo front, HKIA continues to develop its ability to serve fast-growing segments of the high-value cargo business, such as fresh produce and temperature-sensitive pharmaceuticals that require specialised handling,” says an airport spokesperson. “The airport authority and local industry stakeholders are working closely together to pursue the IATA Centre of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma) accreditation on airport community basis and HKIA is expected to be recognised as an IATA CEIV Pharma Partner Airport by the third quarter in 2017.”

A sustainable future

Ignazio Coraci comments: “Clearly Hong Kong is an important site for both our ASC Cargo and SW Italia businesses, and so the news that air freight handling is continuing to grow there is great to hear. I’m also really encouraged by the investment in infrastructure that is being made at HKIA – it will go a long way towards making sure that the performance we’ve seen so far this year is sustained.”