'Dead cat bounce' – or a sign of hope – for air cargo carriers?
A contraction in global manufacturing in November is expected to keep short-term air freight demand low ...
Severe congestion across major airports appears to be hampering air cargo volumes.
Dynamic week-on-week global load factors fell 1.5%, in the week to 10 November, according to the latest research from Clive Data Services.
The same week saw a 5.5% fall in global capacity, which should indicate higher load factors – but it seems demand fell.
While, anecdotally, forwarders are reporting strong demand for air freight as the peak season takes off, the data suggests congestion on the ground is curbing volumes.
“There is a lot of congestion – in Melbourne, Baku and Chennai, as well as Europe and the US,” said one forwarder. “In fact, it seems to be any city with a large piece of tarmac that a plane lands on.
“And charters are currently being refused as congestion is not allowing them to be discharged.
“But there is definitely higher demand. That is happening. Sea freight disruption and schedule failure are creating distressed ocean freight, and conversion to air freight – whether to get consumer products into stores for Christmas or components for manufacturing – has accelerated.
“Even Fireman Sam couldn’t dampen this crisis. It’s what happens normally at this time of year, but on steroids.”
Clive data shows volumes out of Shanghai – which has been restricted during China’s International Import Expo, with permission for charters denied – fell 16%, while southern China volumes fell 12%. Hong Kong appeared to take up some of the slack, with volumes up 16%.
And volumes out of Europe fell 10%.
Niall van de Wouw, MD of Clive, said: “The congestion, which looks likely to be curbing growth, is the price the industry has to pay for the lack of investment in, and appreciation of, cargo handling.”
Airports across the US and Europe, notably JFK in New York, Heathrow and Frankfurt, are facing severe delays as handlers battle a shortage of labour. But according to Fraport, the operator of Frankfurt Airport, there are other issues preventing the fast processing of shipments.
“The character of freight transport has changed, with persistently high volumes becoming the new normal for both scheduled and charter traffic,” explained a spokesperson. “In addition, there has been a huge increase in the volumes of small consignments, which are personnel- and time-intensive. The dynamics of aviation have been changing rapidly since the pandemic hit.”
He added that scheduling had also been problematic for airports and handlers.
“With the restart of air services, the overall traffic structure has changed. Flights are not evenly distributed throughout the day, but converge in extreme peaks.
“At Frankfurt Airport, traffic peaks have become highly concentrated, particularly for passenger flights. But this can also affect cargo carried on passenger planes. These traffic peaks lead to concentrated deployment of ground handling staff, which can impact their availability at other times, the handling of freighters and cargo transport on the apron.”
The congestion has been compounded by the shortage of drivers and handlers. The spokesman said: “The entire logistics industry and other service sectors are looking for more staff – not only airport operators. The off-airport movement of cargo is compounded by a shortage of thousands of truck drivers in European countries.
“With the restart of traffic in the summer, Fraport began recruiting and training about 400 new ground handling staff (baggage and ramp handling). In addition, we adjusted duty rosters, added additional shifts, ended short-time work for key operational staff and even re-deployed employees from other departments.”
He added that handlers had been obtaining additional warehouse space, while Fraport made extra apron space available for temporary storage to relieve warehouses.
Frankfurt is also creating additional truck space at CargoCity South, and has launched a new digital import platform.
Forwarders, meanwhile, say they are struggling to convince their customers that air freight is currently a slow process – but at high cost.
“Can you highlight how truthfully bad it is?” one forwarder asked The Loadstar. “We’ve never seen this in 25 years. Some industrial customers are refusing to understand and keep bugging us to proceed with ‘seamless logistics’.
“It almost seems as if some ghost lobby is preventing media from highlighting how bad [the situation is] at European airports.”
Meanwhile, the opening of the US to European citizens has seen additional passenger traffic. Frankfurt saw 32 flights depart to the US on the day the market reopened, up from 22 on the same day in 2019.