Tag Archives: USA

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.”

Cargo demand reaches 2017 high

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.

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.”

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

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.”

A positive outlook for the US

While this year has been a politically volatile one for the US – with a new president and jittery markets – the North American air cargo industry has got off to an encouraging start in 2017. There are some caveats to the good news, with indications that cargo demand rates haven’t improved as rapidly as last year and that revenues per cargo tonne have taken a hit – but overall the picture is encouraging.

Top performers

Take the performance of the three major US carriers, United, American and Delta. A snapshot of their numbers shows that they’ve seen rapid increases in cargo demand in April. with the largest of the three – United – showing an impressive 19.5% year-on-year increase in demand during April with 265m cargo ton miles (CTM).

The global picture

The positive start has been matched by global growth overall in the industry, hailed recently by Alexandre de Juniac, the International Air Transport Association (IATA)’s Director General and CEO.

“It’s been a good start to the year for air cargo. Demand growth accelerated in January, bolstered by strengthening export orders. And that outpaced the capacity growth which should be positive for yields. And, longer-term, the entry into force of the Trade Facilitation Agreement (TFA) will cut red tape at the borders for faster, cheaper and easier trade. The onus is now on the industry to seize the opportunity to accelerate the modernization of processes to make air cargo an even more compelling option for shippers.”

A platform for growth

SW Italia’s Ignazio Coraci comments: Clearly, the US market is one that is very important to our business. It’s encouraging to see that the numbers bear out what we’ve experienced so far this year – a positive increase in cargo and a great base to build on for the rest of the year.

IATA Chief Implores Air Cargo to go Paperless

Industry body the International Air Travel Association (IATA) recently held its 11th World Cargo Symposium in Dallas, Texas. At the event, the sector’s best gathered to discuss on air freight’s most pressing issues, and during the Symposium, the IATA’s chief implored carriers to go paperless.

Airport at dusk
There was a sense of cautious optimism.

Cautious optimism

During his speech, IATA CEO Alexandre de Juniac admitted that the global air cargo industry can be characterised by a feeling of “cautious optimism.” In January 2017, we saw air freight levels expand at a faster pace than they did the same month the year before. January is traditionally bad time for air cargo, due to slackening demand, so this illustrates the buoyancy of the sector as it currently stands.

Juniac explained that this optimism has been spurred by a rise in exports, along with double-digit e-commerce expansion. The World Trade Organisation’s recent global trade agreement, which IATA backed and should reduce trade costs by 14.3% on average, could make exports even more profitable for air cargo. He added that the sector’s prospects have been further lifted by the worldwide pharma market, with which it regularly conducts business, and is expected to be worth US$1.2 trillion by 2022.

Meeting demands

But, Juniac argued, it “has never been more important,” for air cargo to listen to customers, even in this current climate of potential and profitability. Yes, he conceded, air cargo volumes are growing, but shippers now expect more from the services they’re paying for. Going on, he said: “Innovations like Amazon, Baidu and Rakuten cut across modern society—with the exception of the air cargo world. Our customers are disappointed in the bureaucracy of our complicated processes.”

It’s also critical to note that consumers are placing an increasing emphasis on sustainability in the supply chain. A study from the University of Tennessee found that consumers care about where their products come from, and about the impact said goods have on the environment. This leads to the conclusion that sustainability could be beneficial to air cargo bureaucracy as well, allowing carriers another opportunity to display their green credentials to consumers and secure more business.

Convoluted practises

Speaking at the Symposium, Juniac was quoted by Freight Week, a sector publication, saying that consumers are “increasingly frustrated with complicated and convoluted paper-based processes that belong in the 16th century.” Expanding, he said “a single cargo shipment can require up to 30 pieces of paper. That’s a ridiculous and unnecessary waste of resources in our Internet-connected world.”

He said that his body has rolled out various e-cargo initiatives, to reduce paper and promote sustainability. But they are having had a limited effect, due to lacklustre interest. Continuing, he noted: “Shippers today want responsive services based on intelligent systems able to self-monitor, send real-time alerts and respond to deviation. Technologically speaking, this is totally possible… The key to this and other innovations is using data efficiently and effectively. Finding solutions to unfulfilled expectations creates value for customers. And that propels a business forward.”

Embracing the future

Commenting, Ignazio Coraci said: “Alexandre de Juniac made a valid point at the 11th World Cargo Symposium. It’s becoming clear that with the rise of e-admin tech and the climbing awareness of the environmental impact of paper, the industry cannot rely on paper for much longer. As the IATA continues to push e-cargo initiatives, it could change the ways carriers operate, providing a more cost effective, sustainable service for customers and potentially allowing firms to see higher returns.