Air Archives | Page 27 of 32

Air freight’s troubles continue

Aug 16, 2023 | Air

July saw global air cargo demand fall by 3.4% and capacity grow +7% compared to a year ago, as airlines’ summer schedules stepped up to meet the holiday season’s heightened passenger traffic.

Last month’s global average dynamic load factor, which measures the volume and weight perspectives of cargo flown and capacity available, was at 55%, which was on par with the previous month, but was -3% down on the level of a year ago.

Despite the greater capacity availability another month of falling demand saw volumes drop -2% on June, with the general global airfreight spot rate index falling for the fourth consecutive month.

July rarely provides any performance surprises in the global air cargo market, but carriers will be concerned by the month-on-month declines in average rates, and the accelerating pace of these falls since the start of the year.

The global air cargo spot rate bottomed out in the second week of July, while in the final week, it ticked up 3%, possibly reflecting an easing decline in cargo volumes and slower paced growth in capacity versus previous months.

The recent rise in jet fuel prices might also have contributed to the increase, having already been seen in some rate revisions, but it is likely it will not provide any meaningful impact on freight rates, as demand and supply dynamics for the general air freight market remain unchanged.

Northeast Asia (including China) trade lanes registered the biggest rate declines compared to last year. Both China to the US and US to China airfreight spot rates fell 60+% from a year ago with China to Europe and Europe to China falling significantly, but not by the same levels.

South America to the US and Europe to the Middle East and Central Asia registered the smallest rate declines of 19% and 27% respectively, compared to a year ago.

High yield cargo and commodities are contributing higher margins to carriers, despite a drop in volumes, which is compensating for the high competition in the general cargo market, where high competition means the spot rate (valid for up to one month) has fallen below the seasonal rate (valid for over one month) since May last year.

Cargo requiring special handling continues to produce higher yields, with the spot rate above the seasonal rate since the onset of the pandemic.

For the remainder of this summer, the expectation is that airfreight volumes will remain muted.

The latest manufacturing Purchasing Manager Index (PMI) from China ticked up to 49.3 in July from 49.0 in June, which indicates a slowdown in manufacturing for a fourth consecutive month, while its subindex for new export orders, a bellwether for air cargo demand, also dropped in July.

Going into the usually critical autumn and winter period, we will be looking to secure longer carrier commitments and rates which reflect the reality of today’s market amid expectations that the current environment could continue for the foreseeable future into 2024.

For valuable, special and time-sensitive cargoes there has never been a better time to use air freight, with extremely competitive rates and really interesting service and route combinations.

We have solutions for every critical shipment, please EMAIL Elliot Carlile for insights and advice.

More carriers select our Birmingham hub airport

Jul 19, 2023 | Air

We are pleased to see key carrier partners, Emirates, Qatar and Saudia commit more flights, with air freight capability, directly to our Birmingham Airport hub, from key Middle East and Asia origins.

Birmingham International Airport (BHX), has underlined again its critical importance as our air cargo hub and the global gateway of the Midlands, with three major Middle Eastern airlines forging new partnerships and enhancing the airport’s connectivity to the region.

On the 1st July, Emirates (EK) reintroduced its iconic A380 ‘superjumbo’ to Birmingham, bolstering capacity on its popular twice-daily Dubai service.

The next day, Saudia (SV), the flag carrier of Saudi Arabia, commenced thrice-weekly flights to and from Jeddah, with Qatar Airways (QR) returning to Birmingham Airport after a three-year absence on the 6th July, launching daily services to Doha.

Andy Street, the Mayor of the West Midlands, hailed the return of Qatar Airways, along with Emirates and Saudia’s expanded services, as a substantial economic boost for the region, which has the strongest foreign direct investment and job creation performance outside London and the Southeast.

Birmingham Airport plays a pivotal role in the economy of the West Midlands. In 2022, its economic contribution, measured by gross value added (GVA), stood at £1.5 billion, supporting 30,900 jobs directly and indirectly.

BHX forecasts annual customer numbers to reach 18 million by 2033, with a projected GVA of £2.1 billion and supporting 34,400 jobs.

The continued support of Qatar Airways, Emirates, and Saudia demonstrate the confidence of these global airlines in the region’s potential, the Birmingham gateway and the cargoes they carry for UK importers and exporters.

The scale and efficiency of the airport and cargo handling operations at Birmingham, together with with our long-standing strategic partnerships with these operators, enables us to process and collect cargo very quickly after aircraft arrival, avoiding the delays and congestion experienced in peak periods at other UK hubs.

Selecting Birmingham International, the UK’s fastest-growing airport, as our central air freight hub, was the natural choice for four key reasons: proximity to major clients and manufacturing regions; speed of first/final mile logistics; access to key carrier partners and growing services; and proximity 90% of the UK population within a few hours drive.

For further information on our air freight and BHX gateway solutions please EMAIL Elliot Carlile.

The shipper’s new normal

Jul 4, 2023 | Air, Sea, Supply Chain

The rapidity of the collapse in air and sea freight rates has given carriers the same level of trauma and shock experienced by shippers when freight rates exploded in 2021 and while the turnabout in the market was anticipated, its intensity and extent is far greater than expected, with shippers very much back in the driver’s seat.

The pandemic triggered supply chain disruptions of the last few years were particularly profound and far outside anything we might expect and while we should not expect new challenges or disruptions to have anything like that impact again, there will always be competitive pressure in the market, that will create capacity issues and rate fluctuations.

Many commentators describe the return of ocean freight rates to pre-pandemic levels as a ‘return to normal’ but 2019, which is often taken as a reference year, was a bad year for shipping company results on East-West routes and carriers’ operating costs have increased by about 30%.

A real ‘return to normal’ would require a return to schedule reliability, normal sailing speeds and freight rates at sustainable levels, to support long-term planning.

None of these three conditions currently applies on the major trade lanes and therefore, it is, incorrect to talk about a return to normal, in these terms.

And it is important to keep in mind that a normal freight market is not the same as a global shipping market with no changes or disruptions.

There will always be challenges and operational disruptions.

In the United States, we may have avoided strike action on the US West Coast (subject to ratification), but labour negotiations in Vancouver have failed to avert an ILWU Canada strike, which began on the 1st July, with no end date announced and a drought on the Panama Canal has been impacting container vessels transiting to the US East Coast.

Just as operational disruption will manifest anywhere, at any time, there is always a point in global supply chains that is being impacted by adverse weather conditions, such as storms or fog.

It may not feel like it, but all things considered, the markets are much more normal and maybe this will be as good as it gets for the short-term.

It is because businesses need to thrive against this backdrop of a complex supply chain environment that our MVT platform provides end-to-end visibility, with purchase order management and transparency of inventory throughout the supply chain.

Synchronising inventory across all transport modes and locations, with accurate real-time dashboards and reports, MVT provides supply chain executives with the data they need to assess and react to operational challenges.

Please EMAIL our Chief Commercial Officer, Andy Smith, for ‘normal’ insights and intelligence.

Metro support successful sustainable flight challenge

Jun 7, 2023 | Air, Environment

Having joined the Air France KLM Martinair Cargo Sustainable Aviation Fuel (SAF) programme in December, we are extremely pleased to support their second sustainable flight challenge, which will generate new insights in accelerating the transition to a more sustainable airline industry.

On the 17th May KLM operated a Boeing 787-10 Dreamliner flight from Amsterdam to Los Angeles and on the 23rd May Air France embarked an Airbus A350-900 from Paris to Atlanta, with both flights carrying Metro client cargo in the most sustainable manner possible.

The Sustainable Flight Challenge seeks new ways to make flying more sustainable, under the SkyTeam alliance umbrella, to encourage member airlines and partners to take part.

The first Sustainable Flight Challenge was organised in 2022, with 17 of the 19 affiliated SkyTeam airlines operate the most sustainable flight possible.

This year’s sustainable flight challenge will see 24 affiliated and non-affiliated partner airlines joining the Challenge to conduct flights in the most sustainable manner possible.

All of the knowledge and insight acquired will be shared with the stakeholders, fostering cooperation and enabling the entire industry to work together towards creating a more sustainable future.

In addition to using Sustainable Aviation Fuel, the KLM and Air France flights implemented a variety of initiatives to boost sustainability, which is of critical importance to our participating, automotive brand customers.

Optimise cargo load
The position of the centre of load gravity has a direct impact on fuel consumption, which means that effective cargo load planning reduces overall aircraft weight, because less fuel is carried, which further reduces emissions.

HVO Trucks
Hydro-treated Vegetable Oil (HVO) fuel reduces carbon footprint.

Sustainable cargo operations
Paperless handling (eAWB), with electric transport in the warehouse and electric tractors to transport cargo to the aircraft.

Weight reduction
Cargo operations use lightweight nets, cardboard board cases, cardboard beams, lightweight unit load devices (ULD), and re-usable covers for cargo pallets.

Eco paperboard pallets
Using cardboard pallets instead of wooden ones generates weight savings of 5 to 8 kilograms per pallet. The pallets are made from recycled paper (94%) and are easy to recycle.

Running the individual elements through the MVT ECO module shows that Flight One to Los Angeles achieved a 37.2% reduction in CO2, while Flight Two to Atlanta achieved a 37.5% reduction in CO2.

Metro is achieving CO2 neutrality by measuring, reporting and offsetting our CO2 emissions and the same ECO technology we use is available ‘free of charge’ to our customers.

The ‘free of charge’ ECO module, that sits in our MVT supply chain platform, monitors the energy emissions, emission costs and CO2 equivalent emissions, of every Metro consignment, by every mode, globally.

To request a demo or discuss your requirements, please EMAIL Simon George, who can outline our proven carbon reduction strategies and the availability of offset projects.