FBJ 4 FREIGHT BUSINESS JOURNAL


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Issue 3 2014 Freight Business Journal FROM THE EDITOR


Airfreight is rather unfashionable these days. Lambasted by the Greenshirts as unecological and avoided by many shipping managers because of its high cost relative to ocean or surface transport, growth has been hard to come by these past few years. According to a new IATA- commissioned study by the Seabury Group, the recent shiſt to ocean freight has certainly blunted the sector’s growth prospects, with a wide range of commodities now sent by sea including some of air’s traditional staples like fashion and high-tech. But we must not lose sight of the fact that the UK is still one of the world’s major aviation countries. Not only do a huge number of jobs depend directly on the sector itself, but many, many more rely on airfreight to get their products to customers. With regular and frequent air services from Heathrow and other regional airports, our biotech and electronic industries would have serious trouble competing with their Continental rivals. Yet another study, by the Freight Transport Association, points out that the value of air freight to the UK economy has oſten been overlooked, and accounts for nearly 40% of UK imports and exports by value. And despite its tarnished environmental image, for many high-value and high-end goods it is oſten the only sensible option. No one is going to subject a human genome or the latest computer chip to being humped across continents and oceans by truck and ship. As well as being the swiſtest mode of transport, air is also usually the gentlest, which means that there is less need for expensive and energy-consuming packaging.


By Chris Lewis


Perhaps one indicator of the degree to which airfreight has fallen out of favour is the fact that one of the country’s major cargo airports was, as FBJ went to press, on the point of closure. The circumstances surrounding Manston airport are, it is true, rather unusual, but then Manston is a rather unusual airport. Years ago, it carved a niche for itself as a convenient hub for all-cargo operators and it also handled a certain amount of general aviation. While always a fairly low-key sort of place, it actually had one of the longest runways in the UK and was even a designated emergency landing-strip for the Space Shuttle. Manston’s troubles seemed to have begun when new owners tried to develop its scheduled passenger business, building a new terminal and trying to attract various low-cost carriers. While freighter operators can tolerate a couple of hours’ extra road journey, this was always going to be a tough sell in a relatively remote corner of the country and without any really large cities to provide a local passenger base. At the same time, the freighter business started to ebb away due to the general weakness in the full freighter market. So the outcome was, perhaps, inevitable and it could be argued that the iron law of the market has decided Manston’s future. But markets can recover and it would be a pity if the opportunity was lost forever for Manston to play a part in UK aviation in future. If the airport is to close, steps should be taken to ensure that it can be returned to operational use without undue difficulty. Manston wouldn’t be the only airport to have shut – there is also the sorry tale of Plymouth, which handled its last flight in 2011, and there are question-marks over the future of one or two others. Maybe some lessons should be learned from the Beeching rail closures of the 1960s. Many of these are now regretted, and there are plans all over the country to reopen strategic routes for freight or passengers but unfortunately in the intervening half-century many routes have been obliterated by ill-considered redevelopment, adding enormously to the cost and difficulty of such schemes.


Europe – it’s a great idea in principle – it’s just that the practice is so lousy. No one could disagree with the idea of a united Europe acting with one voice on the international stage, putting the continent an equal footing with the US, China or Russia. But individual European countries are still wedded to the idea of doing their own thing. A pan-European defence force remains an elusive dream, despite the manifest inefficiency and ineffectiveness of most European armies, navies and airforces. Running the railways is still largely a national prerogative; here, technical difficulties are cited as insuperable barriers to interoperability, but one wonders whether the real barrier is actually political. And we still have largely national airlines, other than alliances such as Air France-KLM and IAG Cargo. Will we ever change – or are language and culture just too strong? Perhaps not – but there are one or two pan-European success stories, notably the Airbus consortium, very much giving US giant Boeing a run for its money.


Whatever the other merits of the European Union, swiſt and decisive decision-making isn’t one of them. MEPs have punted two important votes, on cross-border operation of so-called gigaliners and on the liberalisation of port services, back to the European Commission.


///OPINION


FBJ is the only UK and one of the few pan-European Multimodal newspapers. The comments we have received prove there is still room for a hard copy publication with the freighting industry. You don’t have to look at a screen all day!


FBJ boasts the most informative and authoritative source of information with unrivalled in-depth knowledge of the rapidly changing freight business environment.


As the definitive publication within the sea, air, road and rail freight sectors, each issue includes regular news and analysis, in-depth coverage discovering the business decisions behind the news stories, shipper and exporter reports, opinion, geographical features, political and environmental issues.


If you have any stories or letters which should be of interest or any feedback on FBJ, please contact our editor Chris Lewis - +44 (0)208 6450666 chris.lewis@fj-online.com


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For the former, the Parliament is now asking the European Commission to produce a report and present a legislative proposal if necessary, but not until 2016. The question at stake is whether, if countries like Sweden and Finland each allow 60-tonne, 25.5 metre-long trucks to operate domestically on their own roads – as they are perfectly entitled to do – can they then allow such vehicles to operate across their mutual border or does it now become a single market matter for the European Union? And a few days later, the European parliament’s Transport (TRAN) committee put off a plenary session vote that had been scheduled in April on whether to end monopolies on services like pilotage, towing, refuelling, though not stevedoring (that had already been dropped as far too controversial). If Brussels cannot come to decisions on relatively mundane matters like these, one sometimes wonders what it is all for.


Those who have followed the painfully slow progress of efforts to electronicise airfreight will sympathise with Lufthansa Cargo’s vice-president for global handling management, Thilo Schafer. As he told the Lufthansa Cargo Security Conference in Frankfurt on 1 April, there has been a marked lack of progress in the airfreight industry in promoting the electronic consignment security declaration (eCSD); as with all the other electronic documents such as the electronic airwaybill, airfreight was being held back by its fragmentation and complexity. Lufthansa Cargo has though launched a digitisation programme to try and hack away at the thicket of paperwork and achieve the goal of 100% eFreight by 2020. Herr Schafer encapsulated the problem neatly. This is an industry of low margins, and everyone in the air cargo chain – forwarder, airline, handler and so on – tends to ask, understandably: ‘What’s in it for me?’ They tend to ignore anything that doesn’t give an immediate financial return – so everybody waits for everyone else to move. The result is, predictably, stasis, often for years on end. This is a pity, because the eCSD could bring massive benefits in providing electronic proof that cargo had been properly screened at every stage of the air freight chain but uptake has so far been “difficult”, even though IATA has now produced a standard format. Lufthansa Cargo has also carried out a proof of concept in partnership with forwarder Kuehne & Nagel which proves that the concept can work, though not necessarily for millions of documents. Further effort is urgently needed. On the bright side, eight airlines will now accept the eCSD and more carriers and countries are expected to follow over the next couple of years or so and, by 2016, it should be capable of being used for 80% of international cargo flows. The precedents in other parts of the airfreight industry aren’t particularly encouraging, Schafer admits. Those with a long pedigree in airfreight might remember computer punch cards – which carried the same data that IATA is trying to include in the eAWB today – and that was almost 50 years ago.


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