After several years of stagnating growth caused by the global economic downturn and weak trade growth, the air cargo business is expanding and the immediate outlook is decidedly positive.
Global air cargo traffic started showing signs of improvement in the second quarter of 2013, according to Boeing’s latest World Air Cargo Forecast. By July 2014, traffic had grown 4.4 percent compared to the first seven months of 2013. For 2015 and 2016, the WACF predicts sustained air cargo growth as global economic conditions and trade levels improve further.
The air cargo sector is under increasing competition from ocean carriers for certain cargoes, however, especially perishables. Consider that in 1980, ocean carriers’ share of refrigerated shipments moving via container stood at 33 percent. By 1990, that figure rose to 47 percent, then grew to 68 percent in 2000. And in 2014, ocean containers transported 75 percent of refrigerated cargoes.
The WACF report acknowledges this shift and its repercussions. “Competition with other modes of transportation could present a challenge for air cargo. Changes in the container ship industry have enticed shippers to move their freight away from air cargo when schedules and time commitments to customers permit,” it states.
While shipping by ocean container is typically 10 times less expensive per unit weight than air cargo, it comes with longer and less reliable transit times, the report notes. In addition, “The goods that are shipped by air are high-value, time-sensitive, and perishable, and require speedy and reliable transport. To continue to compete effectively with container ships, the air cargo industry must ensure that the service benefits of air transportation are not eroded. For example, track-and-trace tools, once the sole provenance of the air express industry, are now commonplace at surface transport providers.”
Indeed, more sophisticated software and technology tools are helping drive the migration from ocean to air. “Better information and improved supply chain visibility allow shippers to plan and manage their supply chains with a higher degree of confidence, encroaching on one of the primary advantages of air cargo.
Air cargo has traditionally offered shippers a unique means to recover from unforeseen events and emergencies. Anecdotal evidence suggests that improved supply chain visibility has reduced the occurrence of situations that demand the speed and reliability of air transport.”
Changes in the floriculture trade reflect the dynamics of the broader market. Rabobank’s World Floriculture Map 2015 calls the transport of cut flowers by sea container “a major and unstoppable development and has already become fairly substantial in a number of trade flows.” For example, “About 15 percent of total cut flower exports from Colombia are already shipped by sea. In 2013, Colombia shipped about 700 containers of mainly chrysanthemums to the United Kingdom. One 40-foot container can be loaded with about 150,000 chrysanthemum stems. Other large container flows are from Vietnam to Japan and from Israel to Europe.”
It’s no wonder the air cargo industry is doubling down on key components of its business, including perishables.
Raymond Segat, director of cargo and business development for Canada’s Vancouver International Airport, said the airport is a connecting hub that is part of a global supply chain. The airport works closely with industry to capitalize on the benefits of Vancouver’s location within Canada’s Asia-Pacific Gateway.
Vancouver International has seen impressive cargo growth in recent years. In 2014, the airport handled 256,935 metric tons of cargo, up 12.5 percent from 2013. Approximately 25 percent of the airport’s cargo trade is with the Asia-Pacific region — the top destination for British Columbia’s exports by air, accounting for more than C$600 million in 2013. British Columbia agricultural exports by air totaled C$264 million in 2013. Seventy-one percent of these exports included dungeness crab, geoduck clams, sea urchins, salmon and cherries.
In the meantime, the airport is pursuing several major initiatives aimed at improving services and facilities for industry. The airport recently signed a partnership agreement with Shanghai Airport Authority to study the cold supply chain between the two markets. At the same time, the Vancouver airport is looking at the services and facilities employed in the movement of perishables, and is working with Canadian Customs to meet growing industry needs.
Belgium’s Liege Airport is somewhat unique in that it concentrates primarily on cargo, including perishables. In 2012, it handled 576,664 tons of cargo, making it the top cargo airport in Belgium and the eighth-largest in Europe. Liege Airport — more recently referred to as The Flexport — specializes in the transportation of live animals and fresh products. It also delivers on meeting the strict service requirements of perishable shippers and offers 24/7 customs services as well as veterinary and phytosanitary services; fast and high quality inspections; e-freight communication services; and ample, flexible cold storage facilities for shippers.
Brussels Airport, about an hour’s drive from Liege, is another key hub for perishables, particularly pharmaceuticals. In November, the airport was the first in the world to receive the International Air Transport Association’s CEIV Pharma certificate, which guarantees pharmaceutical manufacturers that their products are transported in accordance with best practices. Eleven companies at Brussels Airport are participating in the program.
On the carrier side, United Cargo’s TempControl service manages the transportation of perishables and other temperature-sensitive products, using temperature-controlled storage facilities on the ground and specially trained staff throughout the network to oversee cargo as it moves along the cold chain.
Recently, United Cargo expanded its TempControl service to Dallas-Fort Worth International Airport and Scotland’s Glasgow International Airport, raising the total of certified TempControl locations worldwide to 50.
As for American Airlines Cargo, its “Cool Perishables” service in Miami provides pre-cooling, confirmed cooler space and expedited Agriculture Department and U.S. Customs clearances for fresh shipments on-site.
Variation Fresh is the temperature-controlled service offered by Air France-KLM-Martinair Cargo. It features three different temperature solutions designed for specific perishable cargoes, including flowers, vegetables, fruits, seafood and meat. Special handling and monitoring is also part of the service.