20


Issue 7 2013 Freight Business Journal


///IRELAND


The Emerald Isle regains its lustre


Slowly but surely, Ireland is groping its way out of the economic gloom that has engulfed it for the past five years. It may take a while longer, but there are signs of recovery. Martin Roebuck reports.


Medicine starts to cure Ireland’s economic woes


Ireland’s economy appears to have bottomed out and is forecast to grow by 1% this year. Despite continuing nervousness in global markets, there still appears to be an appetite for Irish exports, and especially for goods shipped by air. Shipments of pharmaceuticals, medical devices,


IT hardware,


foodstuffs and capital equipment led Irish air freight exports 4% higher in the year to August. Nine of the world’s top 10 pharmaceutical companies now have a presence in Ireland, and seven of the top 10 global drugs are manufactured there. Revised EU guidelines on Good Distribution Practice (GDP) for medical products for human consumption,


implemented


in September, are set to have “a positive impact” on Ireland’s other GDP - its gross domestic product - reports Ian McCool of International Airline Marketing.


“Temperature-controlled air


cargo options are being investigated by shippers who may not have considered this mode of transport before,” McCool says. “We’ve seen a noticeable increase in requests for both active and passive shipments over the last six months, with some shippers using temperature- controlled


ULDs while others


prefer specialised packaging. Many carriers are continuing in invest in their temperature-specific offerings to the market.” IAM, Ireland’s largest GSA, was


affected by tremendous passenger- driven overcapacity on the transatlantic sector, which brought a downturn in yields during cargo’s traditionally slower summer period. A lot of seasonal routes are being


withdrawn, frequencies reduced or smaller aircraſt deployed this winter, with direct capacity


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between Ireland and Chicago - the number two destination over the last year (see table) - falling by more than 50%. “The overall reduction of capacity should see the summer spot market increase substantially during the winter period,” McCool says.


pulls


IAM client American Airlines its


Dublin-Chicago route


for the winter, for example, but retains a Dublin-New York JFK service using a B757. Capacity via Heathrow will be greater this winter than before as AA has introduced larger B777-300s on certain key routes.


Irish exporters can tap


into direct service from Heathrow to New York, Dallas-Fort Worth, Raleigh-Durham, Miami, Chicago and Los Angeles. Likewise, Air Canada is pulling


off the Dublin-Toronto route but will introduce a year-round service next summer. McCool says: “Our


winter [Canada] capacity will remain strong with up to nine flights per day from Heathrow, and we can service the Irish market effectively through our


there.” Substantial overcapacity on


some Asian and Australian routes means there is “no immediate sign of yields increasing”, he adds. “The divide between freighter and lower deck operators’ costs and yield is vast and may remain this way until capacity from both segments starts to reduce. “The introduction of new B787s


and A380s in place of larger- capacity B777s on some services will only go a small way to closing the supply-demand imbalance. The Gulf carriers continue to battle it out on certain routes as they are under pressure to fill their vast capacity out of the region.”


self-handling hub


Airfreight: No chips, but shellfish are in demand


Luſthansa operated three freighters per week to Shannon at the peak of Ireland’s technology boom, when companies such as Dell were equipping their production lines with new plant from Japan and the US. Those days are long gone, but main deck export freight from Ireland can be trucked to Manchester, from where three weekly freighters still operate to the carrier’s main Frankfurt hub. Joe Reid, district sales manager


Ireland, says: “We also truck to London, where we can plug into the Luſthansa and Austrian Airlines networks, and direct to Frankfurt. We run ad hoc freighters as well, so for example when we need to transport horses to North America for competition or breeding, the Frankfurt-JFK freighter will just add a stop here,” Reid says. For regular cargo, Luſthansa can


offer five or six positions on its three daily passenger services from


Air freight destinations from Ireland, Sept 2012-August 2013 Rank 1


2 3 4 5 6 7 8 9


10 Source: IATA


Destination Boston Chicago


Hong Kong Atlanta


Singapore New York Shanghai Sao Paulo Sydney Tokyo


+19


+ 52% + 20% - 10% + 36% + 31% + 8%


+ 23% + 25% - 3%


Dublin to Frankfurt, operated with A320s or A321s, and there are also three Dublin-Munich services per week using A319s and A320s. Perishable shipments have more


than doubled this year following a massive increase in demand for Irish seafood from China. Actively refrigerated Envirotainers would have to travel by freighter, but most of these products travel via Luſthansa’s Cool/td passive temperature-controlled system. The shipments are kept cool in the Dublin warehouse prior to loading and the entire hold of the Airbus aircraſt can be maintained at 5°C on route to Frankfurt, where the products - chiefly oysters, clams and razorfish - transfer to Far East freighters. “We’ve targeted this market


Tonnes % Change 4,100 3,400 2,800 2,200 1,900 1,700 1,500 1,300 1,300 1,100


because we feel we have a USP offering an integrated cool chain product into China,” Reid says. “Fishing fleets operating out of Donegal and Galway land early in the morning, pack the shellfish and deliver to us by 10am to meet our 12:10 departure to Frankfurt. We ensure a short transit time there, with next-day delivery into Hong Kong, Shanghai or Beijing.” Luſthansa’s pharmaceutical


traffic out of Ireland is also up year- on-year, with customers in a wide variety of destinations in Latin America and Asia benefiting from fast transit times, similarly to the seafood importers. However, rates are an issue


for Luſthansa, as for all Europe’s airlines, in the


face of fierce


competition from the Gulf carriers. Reid reports a small decrease in yields in the year to date.


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