Heathrow Cargo

Why is Air Cargo seeing an increase since COVID-19?

According to CLIVE data services, air cargo volume saw a 12% increase in the last week of June compared to the last week of May. Niall van de Wouw, managing director of CLIVE, explains this increase was initially due to the urgent requirement of personal protective equipment (PPE) needed by governments in an attempt to contain COVID-19. Despite the international demand for PPE now beginning to diminish, Van de Wouw is confident that air cargo volume will continue to rise month on month.

“Our June analyses seems to suggest the first steps towards a structural market recovery. Despite the decreasing demand for PPE in June, we still see that the volumes increased over May. We are starting to see a more recognisable airfreight market following more logical economic principles and more logical rates.”

There is no denying that aviation has been one of the industries hit hardest by the COVID-19 pandemic. Government restrictions have prohibited entry for travellers causing ticket sales to plummet, reduced schedules and redundancies for airline staff. An increase in air cargo volume is a glimmer of hope in what has been a dark time.

How has COVID-19 impacted Air Cargo Volumes?

A number of sources have submitted their findings on how the global pandemic has affected air freight including; Veritas Global, Seabury and The International Air Cargo Association (TIACA). Alongside this, the International Civil Aviation Organisation (ICAO) have also done their own studies, which are updated and shared on a weekly basis. Despite the sheer number of agencies looking into this there continues to be a lack of reliable data but what does stand out is the following:

• Global air cargo capacity is down 35% from 2019
• 20% of belly cargo continues to fly
• Freighters capacity is showing signs of stabilising

Due to the current restrictions of passenger travel, airports are seeing a sharp decrease in their revenue forcing many to close. Despite full closures to passenger traffic, a share of airport and airside infrastructure must remain open to support air cargo which comes at a cost to a weakening cash supply.

How is TIACA Supporting the Industry?

TIACA believes that it is their permanent role to promote the air cargo industry. During the outbreak of the coronavirus, they have focused their efforts in reminding governments how important the role of the air cargo industry is to the global economy, international trade and in battling the devastating effects of COVID-19. The value of air cargo has been highlighted during the pandemic as without it the transportation of valuable medical, PPE and food supplies would not have been possible. As COVID-19 looks set to continue its impact on the world, so will the demand for medical supplies. It is vital that delivery services are able to keep up with this demand.

How have Cargo Operations Changed Due to Coronavirus?

Changes to cargo operations to mitigate the impact of coronavirus include:

• The use of passenger aircraft
• Expanded use of charter flights
• Changes in flexibility to certain regulations
• Introduction of new standard operating procedures
• Increased protection for staff

The implementation of these new operations and assessment of how effective they are is a time-consuming process and is changing everyday as we learn more about the novel virus. TIACA and other aviation organisations are pushing an initiative where a working document is created for a post COVID-19 recovery path. The main focus of this document is to suggest short, mid and long-term solutions to the issues caused by the pandemic so that the industry as a whole can recover.

What can the Industry do to Prevent this Impact from another Pandemic?

When industries such as aviation rely on governments from all over the world to collaborate and work cohesively, there needs to be a concerted effort to make things consistent. A standard that extends from one end of the world to the other.

It is clear that the implementation of new procedures to prepare ourselves for a future crisis are required; particularly, relating to health and safety in the workplace. Emergency plans will need to be drawn up and implemented to ensure that if another pandemic were to occur that industries would have systems in place to mitigate the effects that were able to destroy everything so quickly and in such a short space of time. This will involve analysis, risk assessments, training sessions and re-writing standard operating procedure. For aviation in particular, more consideration needs to be given to air cargo and how we can keep operations going in the face of a crisis. The air cargo industry has proved invaluable during the COVID-19 pandemic; however, more support needs to be given to be able to provide that invaluable service in the future.

sea freight china

A Guide to Sea Freight Shipping from China

Sea freight is the largest method of shipping for international import and export business. Competitive prices and multiple options make sea freight the first choice for global trade. When it comes to shipping from China, businesses need experienced freight forwarders like our team at Supreme Freight who are familiar with transporting for companies of differing sizes as well as to a wealth of countries. As a China freight agent, we hope that you are able to gain something from the knowledge and experience shared in this article.

Trade Terms

Get accustomed to all the codes and terminology with our simple breakdown:

Incoterms – A term given to one of the common terms of trade. When applied to buying goods from China, there are four incoterms. Each of the incoterms are assigned a code relating to how far the suppliers transport the shipment to. The codes of these incoterms are as follows:

EXW – Transport as far as the factory/manufacturer

FOB – Transport as far as a nearby port in China

CIF – Transport to a nearby port in your country

DAP/DDU – Transfer to your place of business

The codes can be split into two further categories:

  • EXW/FOB Category – The buyer can utilise your own freight agent and liaise with them directly regarding payment.
  • The Other Category – The buyer uses their own freight company and your company subsidises that.

When looking for a freight forwarder, it is important that you understand these terms and codes to enable them to know your requirements when shipping your goods to China.

Container Types

It is important to know the following commonly used container types:

  • 20’GP – Allows for 20ft of storage. 20’GP is designed to carry more weight than voluminous cargo. E.g. Minerals, metal and machinery
  • 40’GP – Allows for 40ft of storage. 40’GP is designed to carry more voluminous cargo than heavy cargo. E.g. Furniture, tyres, and toys
  • 40’HC – Allows for 40ft of storage for shipments of a great height.

Although the volume of the 40’ containers are double the volume of the 20’, they are still bound to the same weight restriction that China applies to its exports which is no more than 27-28 tons. The ocean rates for a 40’ container shipped from China are less than two 20’ containers and it is no extra cost from a 40’ container for a 40’HC.

Freight forwarders are also knowledgeable of these commonly used container types. Knowing this information upfront will allow the freight forwarder to help and advise you with the right service.

Shipment Type

Shipment types come in the following two categories:

  • Full Container Load (FCL) – In which a company fills a whole container with their own goods. Containers can be from 20 – 45 feet long.
  • Less than Container Load (LCL) – Where different companies share the same container and load their shipments into it. This would then get split once it reaches port.

In order to ascertain what shipment type is best for your business you need to consider the packaging that your shipment requires whilst being transported, if you select an LCL, would it be better for your shipment to use a courier or decide whether it is possible to use an FCL.

Major Ports

Each port has a different charge for FCL and LCL containers. The breakdown of the Chinese ports are as follows:

  • Shanghai – This major city enjoys the most economically developed of everything. From where it is located, it serves interior provinces via river ports along the waterway that extends from it.
  • Shenzen – This port is accessible to Hong Kong and the Pearl River Delta making it another key port for the South of China.
  • Ningbo-Zhousan – This port serves both Ningbo, which has good connections with Central and Western China and Zhejiang, a wealthy region with a manufacturing industry.
  • Hong Kong – Fastly expanding into the ‘international shipping service hub of the Far East,’ Hong Kong provides 340 container liner services per week, connecting to around 470 destinations worldwide.
  • Guangzhou – Historically, a key centre of trade in China, the port is striving to be the international shipment hub for the Maritime Silk Road component. It is a port that provides options for importers, exporters, third party logistic companies and ocean carriers with its reduced port and berthing fees.
  • Qingdao – The most important port of Northern China. It is located next to the Bohai Bay region of which it serves.
  • Tianjin – This port is second only to Qingdao port in capacity in Northern China. The port’s container handling business are developing additional domestic and international routes.
  • Xiamen – The port is located at the mouth of the Jiulongjiang River and has over 68 shipping routes to over 50 countries including Kaohsiung in Taiwan.
  • Dalian – This port is located at the most northern ice-free port of China and is the largest port in North East China serving seaports in East Asia, North Asia, and the Pacific Rim.

Researching into the port that best serves where your shipment will be transported to, will enable your freight forwarder to connect you with our most suitable partners.

For a consultation and advice on your shipment, get in touch with us and we will do our best to help.

 

emissions

The UK should include aviation and shipping in net zero emission goal

The aviation and shipping sectors should formally be included in Britain’s target to cut its greenhouse gas emissions to net zero by 2050, the government’s climate advisers said on Tuesday.

Britain earlier this year became the first G7 country to set a net zero emission target although the shipping and aviation sectors were not explicitly included in the goal.

Combined the two sectors account for around 5% of global greenhouse emissions but if left unchecked this is expected to grow significantly, particularly as passenger flying numbers increase.

“Now is the time to bring the UK’s international aviation and shipping emissions formally within the UK’s net-zero target. These are real emissions, requiring a credible plan to manage them to net-zero by 2050,” Chris Stark, chief executive of the Committee on Climate Change (CCC), said in an email.

The CCC said, in a letter to Britain’s transport minister, Grant Shapps on Tuesday, emissions from aviation could be reduced by around a fifth by 2050 by using sustainable biofuels, improving fuel efficiency and limiting demand growth to at most 25% above current levels.

It said zero-carbon aviation is unlikely to be feasible by 2050 and that greenhouse gas removal methods would be needed to offset remaining emissions.

The CCC said the government said could establish a market for scalable greenhouse gas removal solutions, such as bioenergy carbon capture and storage, which sees emissions from lower carbon biofuels captured and stored to prevent them going into the atmosphere.

In the shipping sector zero carbon or near zero carbon could be feasible by 2050 the CCC said, if there is a widespread adoption of cleaner and as yet mostly so far untried fuels such as hydrogen or ammonia.

The CCC advice came as several ports, banks, oil and shipping companies on Monday launched an initiative which aims to have ships and marine fuels with zero carbon emissions on the high seas by 2030.

The International Civil Aviation Organization has committed to a target of halving net emissions by 2050, compared to 2005 levels and is working on a Carbon Offsetting and Reduction Scheme for (CORSIA) which requires most airlines to limit emissions or offset them by buying credits from environmental projects.

The CCC, which is independent of the government, is chaired by former British environment secretary John Gummer and includes business and academic experts.

Source: Reuters.com

air freight

Air cargo carriers develop online distribution

After years of criticism that cargo airlines were failing to develop new distribution channels – the increase in digitisation and online sales means online distribution is on the increase. 

Air France-KLM Cargo has signed up to Freightos’s air freight WebCargo platform, which claims to be the world’s largest. It allows AF-KLM customers to view live rates, assess capacity availability and secure bookings on specific flights in real-time, following a pilot conducted with the carrier and Panalpina. While the platform is proving successful they are also researching others. 

Manel Galindo, chief executive of WebCargo, said the platform was used by more than 1,400 forwarders, with market pricing from more than 300 airlines. It also can provide airlines with API capability, which some other platform do not offer. It also offers an internal platform that can be used to manage offline rates, manage quoting and more. Freightos added that “real-time e-bookings would be launched in a number of countries and gradually expanded”. 

A spokesperson for cargo.one said it was an open platform for every cargo airline globally”, with a 12-week integration period. She added: “Because cargo.one is free of charge to any size freight forwarder, we have become a significant distribution channel for our partner airlines. We also offer a variety of integration methods and have successfully integrated with multiple established infrastructures. All our integration methods, whether based on legacy infrastructures or APIs, are designed to deliver the same outstanding digital user experience. 

Meanwhile, Etihad Cargo looks as if it could be next to launch a new distribution channel, following the success of its digitisation programme. 

It said it was “successfully completing trials for another major distribution channel, using automated Freight Forwarder Messaging to instantly allow bookings to be made and confirmed. These pilots were with DHL Express and DB Schenker, completed successfully in March and are in the process of being progressively rolled out across their global operations as well as to other key forwarder customers. 

Etihad last year completed its migration to IBS iCargo’s system, and launched its own online booking portal. It claims to make more sales through this channel than any other cargo airline: 16.4% of its monthly bookings coming through the platform in March. It said it had more than 6,000 registered users making online bookings every month, and volumes sold on the channel are increasing steadily. 

The new distribution channel, using API and web services, will launch by the end of the second quarter. 

“Within such a short period of time we have gone from being a very conventional air cargo operator to being the most digitised air cargo carrier of our size globally,” said Rory Fidler, head of technology and innovation. “As we move forward, we will continue to invest in technology and seek to put ourselves at the forefront of the industry’s drive for digitalisation”. 

Source: The Loadstar

air freight

Air Freight Demand Ends Year Up 3.5%

The International Air Transport Association (IATA) released full-year 2018 data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs) grew by 3.5% compared to 2017.

This was significantly lower than the extraordinary 9.7% growth recorded in 2017. 

Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 5.4% in 2018, outpacing annual growth in demand. This exerted downward pressure on the load factor but yields proved resilient.

Air cargo’s performance in 2018 was sealed by a softening in demand in December. Year-on-year, December demand decreased by 0.5%. This was the worst performance since March 2016. Freight capacity, however, grew by 3.8%. This was the tenth month in a row that year-on-year capacity growth outstripped demand growth.

International e-commerce grew in 2018 which was a positive factor for the year. Yet, there was a softening of several key demand drivers:

  • The restocking cycle, during which businesses rapidly built up inventories to meet demand, ended in early 2018;
  • Global economic activity weakened;
  • The export order books of all major exporting nations, with the exception of the US, contracted in the second half of 2018;
  • Consumer confidence weakened compared to very high levels at the beginning of 2018.

“Air cargo demand lost momentum towards the end of 2018 in the face of weakening global trade, sagging consumer confidence and geopolitical headwinds. Still, demand grew by 3.5% compared to 2017. We are cautiously optimistic that demand will grow in the region of 3.7% in 2019. But with the persistence of trade tensions and protectionist actions by some governments there is significant downside risk. Keeping borders open to people and to trade is critical,” said Alexandre de Juniac, IATA’s Director General and CEO.

“To attract demand in new market segments, the air cargo industry must improve its value proposition. Enabling modern processes with digitalization will help build a stronger foothold in e-commerce and the transport of time- and temperature-sensitive goods such as pharmaceuticals and perishables,” said de Juniac.

DECEMBER 2018 (% YEAR-ON-YEAR) WORLD SHARE1 FTK ASTK FLF (%-PT)​2 FLF (LEVEL)​3
Total Market 100.0% -0.5% 3.8% -2.1​% 48.8%
Africa 1.7% -2.2% 4.9% ​-2.8% 38.1%
Asia Pacific 35.4% -4.5% 2.6% ​4.1% ​54.0%
Europe 23.3​% 1.9% 3.7% ​-1.0% 56.7%
Latin America 2.6% ​-0.1% 6.0% ​-1.8% ​29.1%
Middle East ​​13.3% 0.1% 4.5% ​-2.1% ​48.8%
North America 23.7% 2.9% 4.5% ​-0.6% 41.4%

Regional Performance

Airlines in all regions with the exception of Africa reported an annual increase in demand in 2018.

Asia-Pacific carriers posted the weakest growth of any region in December 2018 with a decrease in demand of 4.5% compared to the same period a year earlier. Capacity increased by 2.6%. The weaker performance in December contributed to growth in freight demand of only 1.7% in 2018 compared to 2017. Annual capacity increased 5.0%. The weaker performance of Asia-Pacific carriers in 2018 largely reflects a slowing in demand for exports from the region’s major exporters (China, Japan and Korea). Signs of a moderation in economic activity in China and an escalation of trade tensions continue to pose a downside risk to air cargo in Asia-Pacific.

North American airlines posted the fastest growth of any region for the seventh consecutive month in December 2018 with an increase in demand of 2.9% compared to the same period a year earlier. Capacity increased by 4.5%. This contributed to an annual growth in demand in 2018 of 6.8%, matching the rate of capacity increase. The strength of the US economy and consumer spending have helped support the demand for air cargo over the past year, benefiting US carriers.

European airlines posted a 1.9% year-on-year increase in freight demand in December 2018 and a capacity rise of 3.7%. The improved performance in December contributed to an annual growth in demand for air cargo of 3.2% in 2018. Capacity increased by 4.3% in the same year. Weaker manufacturing conditions for exporters, particularly in Germany, one of Europe’s key export markets, along with mixed economic indicators impacted demand in 2018.

Middle Eastern carriers’ freight volumes increased 0.1% year-on-year in December and capacity increased 4.5%. This contributed to an annual increase in demand of 3.9% in 2018 – the third fastest growth rate of all the regions. Annual capacity increased 6.2%. The region continues to be affected by geopolitical issues.

Latin American airlines experienced a decrease in year-on-year demand of 0.1% in December after three months of positive growth. Capacity increased by 6.0%. Despite a decrease in demand, it’s worth noting that the within South America market continues to perform strongly, with international demand up almost 20% year-on-year. Annual growth in freight demand among Latin America carriers in 2018 increased by 5.8% – the second fastest of all regions. Annual capacity increased 3.4% in 2018.

African carriers’ saw freight demand decrease by 2.2%, in December 2018, compared to the same month in 2017. This was significantly less than the 9.4% decrease the previous month. Capacity increased by 4.9% year-on-year. It’s worth noting that seasonally-adjusted international freight volumes, despite being 7.7% lower than their peak in mid-2017, are still 50% higher than their most recent trough in late-2015. Annual growth in freight demand among Africa carriers in 2018 decreased by 1.3% and capacity grew by 1%.

Source: IATA.org
heathrow

Christmas drone chaos shows an over reliance on southern airports and shaky infrastructure

The chaos at Gatwick last month emphasised the UK air freight sector’s over-reliance on the south-east region.

When Heathrow and Gatwick are working at full tilt – which is almost all the time – they can claim to be the most efficient airports in the world.

Between 19 and 21 December, thousands of flights were grounded and cancelled after drone sightings sparked safety concerns at Gatwick.

Although few cargo flights were affected then, the sighting at Heathrow caused major industry concern.

Last month, the government launched a 16-week consultation on its aviation strategy, outlined in the publication of Aviation 2050: The Future of UK Aviation.

Throughout the document, the government refers to supporting continued growth of the air freight sector by making best use of existing capacity at airports.

Head of cargo at Manchester Airport Group (MAG) Conan Busby, speaking to The Loadstar said “MAG has the third- and fourth-largest airports and the UK’s largest dedicated cargo aircraft operation, at East Midlands (EMA). All are perfectly positioned to continue to facilitate global trade for UK businesses and consumers.”

Mr Busby added there was “significant” transformation under way at EMA with its cargo operation, DHL having doubled its capacity while UPS is building its new UK air hub there.

“Also, beyond our boundary there is the East Midlands Gateway Rail Freight development under construction, which will further support UK logistics.”

Mr Busby said MAG was “not interested in a speculative approach to growth”, but some in the forwarding community believe this may be the best way forward.

Namely, if regional airports were serious about challenging Heathrow, they would “need to be less risk averse and use any options to attract more carriers providing cargo services”.

However, Mr Busby expected EMA to lead MAG’s cargo growth in the years to come, with both Manchester and Stansted in support. He added the group would be “pushing” to make best use of the runway capacity at both airports.

He added: “All three airports will play a key role in facilitating UK global trade especially as attention turns to understanding what trade deals might look like post-Brexit.”

Both airports are now reported to be investing in anti drone technology and have invested several million pounds in providing ourselves with the equipment and the technology that the armed forces deployed over Christmas,”

Source: The Loadstar / Independent.co.uk / Fin24.com

air freight

Happy new year as air freight marks a decade ‘in the black’

IATA claims global aviation is on course for a “decade in the black”.

However, the annual pace of growth in cargo is well below last year’s “exceptional” performance.

Despite the slowdown, the association remains relatively positive about future growth, albeit it at a slower pace.

“The expected 3.7% annual increase in cargo tonnage next year to 65.9m tonnes (up from 63.7m in 2018) would be the slowest pace since 2016,” it said.

“This reflects a weak world trade environment impacted by increasing protectionism. Cargo yields are expected to grow by 2%.”

Pointing to lower oil prices, alongside “solid, albeit slower” economic growth as drivers of profitability, it said next year would be the 10thconsecutive year of profit.

Not only that, but 2019 would also mark the fifth consecutive year in which airlines had delivered a return on investment, with IATA chief executive Alexandre de Juniac sounding “cautiously” optimistic.

“We had expected that rising costs would weaken profitability in 2019, but the sharp fall in oil prices and solid GDP growth projections have provided a buffer,” he said.

“So we are cautiously optimistic the run of solid value creation for investors will continue for at least another year; but there are downside risks as economic and political environments remain volatile.”

Regionally, North America is entering 2019 on the front foot, reporting the fastest rate of growth globally, with demand up 6.6% year on year for October.

And while all regions reported growth in October, Latin America only just got in on the positivity with a mere 0.3% upturn in demand.

“Cargo is a tough business, but we can be cautiously optimistic as we approach the end of 2018 – slow but steady growth continues despite trade tensions,” added Mr de Juniac.

“The growth of e-commerce is more than making up for sluggishness in more traditional markets, and yields are strengthening in the traditionally busy fourth quarter.

“We must be conscious of the economic headwinds, but the industry looks set to bring the year to a close on a positive note.”

Source: The Loadstar

air freight

Peak season is upon air freight

Peak season is quickly coming upon the air freight industry. 

Forwarders are reporting limited capacity on Asia-US, with rates from Hong Kong into New York now hitting HK$36 per kg (US$4.58) on major carriers such as Cathay, Cargolux and Asiana. Los Angeles rates are marginally lower, hovering at between HK$30 and HK$35++.

“The air freight market is very busy in China and Asia,” said one Asia-based forwarder. “The rate is increasing every week. But space is still extremely tight, even with high rates.”

He said capacity ex-Hong Kong was particularly in demand, and bulky, loose or dense cargoes were struggling to find space – “It’s very busy.”

Forwarders have a three-day wait to fly cargo out of key hubs in Asia, he added.

Emirates is thought to be full already for the rest of the week, ex-Hong Kong.

Shanghai is also seeing strong demand, and there has been a rise in charter flights to the US, with charter rates increasing apace, and some destinations now not available.

Crucially, November 11, singles day, is coming up and forwarders are predicting higher demand from then through to the end of November.

One EU air freight forwarder said: “The market is going north quickly on air freight inbound flows from Asia. It’s the usual seasonal trend, but the market is tightening up.”

But, he added, he didn’t see the peak being as strong as last year.

“Last year was pretty special. But I reckon there will be some mega peaks and spikes in November,” he said.

“The transpacific market got really busy a week or so back and it is usually two weeks ahead of Europe. European carriers will go for the high dollar rates into the US – and then Europe rates will increase to win back the space. It’s market dynamics.”

Europe too is already seeing movement, but rates are said to be more unsettled, although rising, with some key tradelanes out of Shanghai already busy, with a four-day wait on ad hoc cargo.

Fuel prices are also on the rise, with many carriers raising surcharges, and all carriers out of Hong Kong will raise surcharges from Thursday.

The real question will be if airlines manage to profit significantly – and keep rates high by restricting capacity and selling as much ad hoc space as possible during the peak.

“As airlines went into blocked space agreement discussions this year, their view was that there was too much capacity contracted in 2017, and they didn’t get the results they wanted,” said Neel Jones Shah, head of air freight for Flexport. “So they kept it back this year.”

Another forwarder added: “There are a lot more capacity protection agreements this year that have been signed with the carriers. My gut feeling out of China is that it’s 50%  blocked space agreements and 50% the floating market – we are starting to get two market mechanisms, like you have in shipping.”

The other question is how e-commerce will affect the peak – and for how long.

Speaking at a CIFFA event two weeks ago, Jamie Porteous, chief commercial officer for Canada’s CargoJet, noted: “The peak is explosive, it takes off after Thursday and lasts to the end of January.

“It’s dominated by e-commerce. We have seen a real transition from single digit growth – we’ve now had double digit growth for ten quarters.”

Another UK forwarder added: “The cycle on e-commerce stops much later, people are ordering right up to Christmas. And there is a really early Chinese new year this year, so there will probably be a lot of air freight in January as the Chinese factories won’t have that long.”

Source: The Loadstar

Heathrow Cargo

Heathrow cargo spend set to increase

Heathrow has been given the green light to spend £43m on its cargo activities – but input from carriers could stretch the budget further.

Head of Heathrow Cargo Nick Platts has long campaigned for a freight budget, and now has a five-point plan for the cash.

But one item on his wish list – a “forecasting and insights workstream”, which would give the airport better information on its cargo activities – is actually data the airlines already have.

“It would give us a macro level forecast with forward projections. Then we can identify high-risk days for congestion, and that can be built into the planning model. It’s really about better resource planning,” he explained.

“Leicester University has developed a flight level tool – it looks at aircraft type, destination and tonnage forecast and could help us to establish demand at the control posts. You then look at the landside vehicle movements.

“We need better insight into what’s moving, when and how. All we find out is what has departed or arrived, with no visibility on trucks or transfer traffic. We estimate that about 45% of volumes are transfer traffic – but we don’t know. So we don’t know what facilities to provide.

“We know the US is a big tradelane – but what’s moving on that lane? Do we need special handling facilities? Should we change the terminal design? Should it be biased towards traffic to the US, or Asia?

“All the master planning designs are informed by passenger flows – we need to do that for cargo.”

The carriers already have the data, but Mr Platts said they did not want to share it with the airport.

“We don’t know our trade flows, and we need to know. If the airlines won’t work with me, we will have to spend money – their money in fact – on finding information they already have.”

Another item on his list is an airside transfer facility for aircraft-to-aircraft movements, with a Border Force station.

“Border Force has indicated that it would look favourably at a transfer facility,” said Mr Platts. “And we had one airline agree, and helped choose a spot for it. Then we got caught up in governance and the airline ended up changing its mind.

“However, another airline is interested and we will have more discussions about the building and what facilities are needed.

“It will be fairly basic for now, but as part of the expansion programme we have set aside additional land for screening and will work with airlines on that.”

The initial facility will cost about £1m, said Mr Platts.

Next on the shopping list is a truck park near Terminal 4.

“There will only be space for about 75 vehicles, but it’s a start,” said Mr Platts. “We will have to relocate the existing users, add toilets and showers for the hauliers and we are talking to landlord Segro as to how we link it to the cargo area.”

The park is one of the more expensive items on the list – at about £14m – as the site needs to be cleared.

Next up is a single examination area for Border Force, Customs and a new animal reception centre.

“It will be a more efficient use of inspection spaces and will reduce traffic,” said Mr Platts. “And it will be a much more efficient operational set up. The animal centre needs more capacity; we have identified a site and we have the broad requirements.

“It’s not just a new building, it’s about using new technology and introducing new ways of working.”

The new centre comes with a price tag of £23m.

Heathrow also plans to build a new stillage facility, with racking for empty ULDs.

“At the moment containers are stored on the ground, and we have found that they blow loose – and have even blown towards the runway.”

The rack will hold about 870 ULDS and was once all set to be developed, until the supplier tasked with building it went bust. Heathrow is now looking for a new supplier for the facility, which will cost about £3m.

Heathrow announced last week that volumes were up 1.5% in the first nine months of the year, reaching 1.3m tonnes, which it said was due in part to five new services to China.

Source: The Loadstar

 

Heathrow Cargo

Air Cargo figures start the year strong according to IATA

The International Air Transport Association (IATA) released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), rose 8.0% in January 2018 compared to the year-earlier period. This was up from the 5.8% annual growth recorded in December 2017. 

Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 4.2% year-on-year in January 2018.

The continued positive momentum in freight growth into 2018 reflects the fact that demand drivers for air cargo remain supportive. Global demand for manufacturing exports is buoyant and meeting this strong demand is leading to longer supply chain delivery times. Demand for air cargo may strengthen as a result, with companies seeking faster delivery times to make up for longer production times.

“With 8% growth in January, it’s been a solid start to 2018 for air cargo. That follows an exceptional year in which demand grew by 9%. We expect demand for air cargo to taper to a more normal 4.5% growth rate for 2018. But there are potential headwinds. If President Trump follows through on his promise to impose sanctions on aluminium and steel imports, there is a very real risk of a trade war. Nobody wins when protectionist measures escalate,” said Alexandre de Juniac, IATA’s Director General and CEO.

All regions reported an increase in demand in January 2018.

Asia-Pacific airlines saw demand in freight volumes grow 7.7% in January 2018 and capacity increase by 2.2%, compared to the same period in 2017. The increase largely reflects the ongoing strong demand experienced by the region’s major exporters, China and Japan which has been driven in part by a pick-up in economic activity in Europe. However, the upward-trend in seasonally-adjusted volumes has paused.

North American airlines’ freight volumes expanded 7.5% in January 2018 year-on-year, as capacity increased 4.2%. The strength of the US economy and the US dollar have improved the inbound freight market in recent years. However, this may be offset by the weakening in the dollar although the recently-agreed US tax reform bill may help to support freight volumes in the period ahead. Seasonally-adjusted volumes are broadly trending sideways.

European airlines posted a 10.5% increase in freight volumes in January 2018. Capacity increased 5.3%. The strong European performance corresponds with a very healthy demand for new export orders among the region’s manufacturers. Seasonally-adjusted volumes jumped 3% in month-on-month terms in January – the largest increase since March 2017.

Middle Eastern carriers’ freight volumes increased 4.4% year-on-year in January 2018, the slowest growth of all regions. Capacity increased 6.3%. Seasonally adjusted freight volumes continued to trend upwards during the first month of the year, however, the region’s carriers remain affected by the ongoing challenging political environment in the Middle East.

Latin American airlines experienced a growth in demand of 8.0% in January. Capacity increased 5.4%. The pick-up in demand comes alongside signs of economic recovery in the region’s largest economy, Brazil. Seasonally-adjusted international freight volumes are now back to the levels seen at the end of 2014.

African carriers’ saw freight demand increase by 12.9% in January 2018 compared to the same month last year. The increase was helped by very strong growth on the trade lanes to and from Asia. Freight demand jumped by 59% between Africa and Asia in 2017 following an increase in the number of direct flights between the continents, driven by ongoing foreign investment flows into Africa.

Source: IATA