Will looming rates war lead to forwarder smash & grab?
Service the key for indie forwarders
People in my hometown of Madrid are currently lured into shops whose windows promise “discounts of up to 70%”.
But when they enter, they will likely find that the goods they want are only discounted at, perhaps, 25%. The key words in those promises are “up to” and, to a lesser degree, “70%”. The same is often true when airlines report the freight capacity of their new passenger flights.
The airline’s announcement will tell us that the aircraft operating the new route will have, for example, “a cargo capacity of up to 30 tons”. But the chance of actually moving 30 tons of cargo on that flight might be just as small as the Madrilenian shoppers finding their desired item at the maximum discount.
The results from Project Selfie clearly show that the vast majority of freighters and widebody passenger flights max out on volume far faster than they max out on weight – a direct result of the fact that the aircraft’s capacity density on the given routes is higher than the density of the goods flown.
And current trends seem to indicate that this gap will only grow wider in the years to come.
Is it then not odd that a plane’s capacity is primarily reported in weight?
In the ocean freight industry they measure the capacity of the ship primarily in units of volume: the teu, or ‘twenty-foot equivalent’ – essentially, the container (there is also the feu, or forty-foot equivalent) .
Yes, ships also have a limitation on the amount of weight they can move, but just as in the air freight industry, utilisation of teu and ship will, in most cases, max out in volume, not in weight.
Would it not then be logical to introduce similar standards in the air freight industry? For example, the lowerdeck equivalent (leu) and maindeck equivalent (meu)?
The footprint of both units could be the standard PMC pallet of 3.18 by 2.43 metres. The difference would be that the meu would have the contour of what is typically called a ‘Q7’. And then you can relate all other maindeck and lowerdeck ULD types and contours to the base values based on the cubic metre they would hold. For example, a ‘Q6’ position would be 0.8 meu.
Next to calibrating the available capacity based on the contours, one could use the same methodology for the (infrequent) cases that the capacity density of the flight is lower than the density of the cargo on that route. Let’s use the following example: a passenger plane with a structural volume capacity of 6 leu has a weight capacity of ‘just’ 6 tons. In this case, it would better reflect the cargo-carrying capability of that flight to report a capacity of 4 leu (assuming an average cargo density of 1,500kg per leu).
IATA recently stated that it would set up a think-tank to see if it could collectively identify a loadfactor approach/metric “more relevant for today”.
Reporting capacity based on meu and leu seems like a step in the right direction to create a meaningful and uniform way of measuring the availability and utilisation of cargo capacity in our industry.