'Parcelisation' the next big thing as B2B e-commerce sparks change in air cargo
‘Parcelisation’ is one of the key trends which will impact air cargo as business-to-business e-commerce ...
Air Canada (AC) is jumping into the e-commerce market with a dedicated domestic service – and, at the same time, it is boosting capacity for international cargo.
The headwinds to its passenger business have prompted the airline to ramp up its cargo flights with widebody passenger aircraft and passenger freighters, and is reactivating two parked 787s for cargo missions and removing seats from five more widebodies to boost its cargo capacity.
“We continue to see extremely high demand, but we are full,” said Jason Berry, vice-president cargo. “We got approval to take two 787s out of the desert next month, and we will take out the seats from three 777s and two A330s.”
AC was the first airline to remove seats to increase payload capacity. It has been using four 777s and three A330s in this configuration, as well as many other widebody passenger aircraft.
The announcement of the cargo capacity expansion comes just three weeks after management revealed it intended to have seven converted 767-300ER freighters in operation towards the end of next year. Those are AC passenger planes taken out of service.
The first two will be converted by ATSG under a sale-leaseback agreement, but the other five will remain in the airline’s possession, Mr Berry said. The first is due to head out for conversion this week, ready for service in August, with the second expected to re-join the fleet by October.
Demand has been robust across the board, Mr Berry reported. AC is currently flying more than 220 cargo missions a week with passenger aircraft – significantly more than during the peak season, when it was running about 150 cargo flights a week.
“By May, we’ll be doing 250-260 a week,” said Mr Berry,“we know the forwarding community continues to need more lift.”
AC Cargo has been doing cargo charters with passenger planes, but primarily aims to run a steady network that offers consistent flights to the market, he stressed.
He expects demand to remain strong, citing low inventory levels that should warrant prolonged restocking. Moreover, problems in the ocean cargo sector are reinforcing the need for airfreight capacity, he added.
The capacity expansion comes as the company ushers in its new e-commerce service. After recent pilot trials, the commercial launch came in the past week, albeit without much fanfare, but initial reactions have been positive and indicate strong interest in the market, according to Mr Berry.
The fledgling offering uses a platform developed in close collaboration with SmartKargo, which built a similar platform for Brazilian airline Azul. The platform ties into the websites of merchants that use the service which show up alongside other shipping choices (such as Canada Post, couriers and fulfilment providers) during the check-out process when consumers get to select their preferred delivery option.
The service leverages AC’s domestic network, which enables the airline to offer faster transit times than the competition, Mr Berry said. The carrier has lined up ground service partners for the first and final mile segments.