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Issue 2 2018 - FBJ


Fast footwork keeps EFL ahead of the game


The nature of freight is changing. For years it was overwhelmingly a business to business market, but the internet and plunging margins in traditional business sectors have necessitated a rethink, says Chris Radley, director of Dublin forwarder EFL.


In fact, the company has


evolved continuously since it was founded in 1983, he says. It began life as Euro-France Ltd, abbreviated to EFL as it expanded to other countries of Europe and also developed worldwide air and sea forwarding, especially aſter it became the Irish agent for Hong Kong based U-Freight Group in 1990. The latter is now heavily focused on e-commerce, which has prompted EFL to start identifying Irish start-


up companies that might be interested in selling their products in China or other overseas markets. Meanwhile, the European


road freight market continues to be important for EFL, though Radley points out that this too


has been transformed


from being a purely road- based offering to one that also uses short-sea and rail as customers started to demand greener forms of transport. For example, the company’s main Continental hub in Tilburg in the Netherlands pulls in trucked freight from all over Europe and Turkey where it is consolidated into containers which are then put on the frequent short-sea container services that operate from Rotterdam to Ireland. Journey times are only a


little longer than for the road- throughout option. Similarly, it also uses the new train services that operate from China to Europe through its agent in Hamburg, offering transit times of 28 days through to Ireland compared with 40 days by sea. EFL’s main remaining


road-only services are from Switzerland, mainly because that trade is dominated by pharmaceuticals which demand the fastest transit times. France also tends to be a mix of road trailer and container service. It is possible that, if operating


through the UK becomes too sticky aſter Brexit, that some of the remaining UK-landbridged services will also switch to the direct Continent/Ireland ferries, but that remains to be seen.


Airfreight space in short supply


The Irish airfreight market is currently up by around 4% in volume terms, but 28% by value, according to the latest IATA statistics. While some of the latter figure is due surcharges rather than airfreight rates per se, it does point to a very healthy market situation, with rising yields. Ian McCool, managing director of Dublin


airfreight


general sales agent IAM confirms this, saying: “Up to the start of the summer schedules, there was very little free space in Ireland, and every transatlantic flight was full.” And while the situation did once


ease the airlines had


started the extra flights to cater for the summer holiday trade, he confidently expects that transatlantic space will become very tight again once schedules are reduced for winter again from around October. Ideally, cargo people would


like to see more year-round flights to the US, and indeed the trend is in this direction, McCool believes. American Airlines serves Philadelphia – with its


state-of-the-art cold centre – year round with widebody capacity and he is hopeful that there will soon be a year-round Chicago flight. The situation on Ireland/


Middle East/Far East routes is slightly different. Qatar, Cathay Pacific and Hainan have all started direct services out of Dublin, while long established operators Emirates and Etihad have maintain or indeed increased their capacity. “However, the market does seem to be taking the extra capacity,” says McCool. “Supply and demand is in balance.” Irish exports to the Middle


and Far East have been growing strongly, particularly milk powder (in such demand in China that it is often airfreighted) and fresh fish. The question of whether the Irish market could support more freighters is frequently debated. The integrators operate all- cargo aircraft and there is still a weekly Air France freighter that comes in from Chicago and flies on to Paris, but otherwise there is little maindeck capacity. A


few years ago there were many more including Cargolux and Singapore Airlines but these all ceased as the recession bit and Ireland’s once booming IT assembly industry faded. Turkish Airlines tried inserting a Shannon commercial stop on its Chicago/Istanbul freighter schedule three years ago but has since cancelled it, although it still makes a tech stop there. “There could be scope to


put freighters into Ireland, as there Middle East carriers have done for the pharma market in Switzerland, and everyone is looking to see what they can do so I’d imagine that it comes onto the agenda from time to time,” says McCool. “However, the market here is very competitive and spot driven so it could be difficult.” A freighter operator may put an aircraft into the market


promised traffic, only to find itself undercut by a bellyhold carrier with a sudden need to fill space.


IAM is based in Dublin city


centre but it also now has a strong presence in Ulster


Other traffic handled by


EFL include IT equipment and aerospace parts. While Ireland is no longer a main assembly location for the personal computer manufacturers, the country still makes specialised storage devices for banks and similar. There is also a good trade in aerospace parts, Ireland being home to several aircraſt maintenance operations. Partner U-Fright has also started a specialist AOG (aircraſt on ground) service, although in fact it’s an area that EFL has been involved in for many years, Radley points out. But EFL has moved into,


arguably, even more specific niches. One is the Pets on Board service, developed over the past five years which, as its name suggests, sends animals to


where Northern Ireland manager Paula O’Reilly is doing an excellent job selling to forwarders there, says IAM director of marketing and business development, Karl Louwrens. (IAM now estimates that it has around 65% of the Northern Ireland market.) The business base there is slightly different from southern Ireland with engineering products making up a large part of the export traffic. Aerospace is


particularly important;


the Bombardier plant, once threatened by trade sanctions, has come back from the brink and there


is also ancillary


business such as aircraft seat manufacture. Aero engines move around quite a bit to and from specialist repairers, of which there are a number in Ireland. Other airfreight business


is more sporadic and less predictable. The Puerto Rico hurricane


a year ago had on the strength of


ripples in Ireland as it took out factories producing soft drinks and pharmaceuticals. Irish producers stepped into the breach, supplying goods for places thousands of miles away which then often had to be airfreighted. Small niche markets served by the ‘offline’ carriers that IAM represents (that is, carriers that fly from


///IRELAND


and from all parts of the world by air. EFL is a member of the International Pet and Animal Transportation Association (IPATA) and business is growing, says Radley. “We do get ‘repeat movers’ who transport their pets four or five times a year, and there are also some people who bring in anything up to 17 animals into Ireland at a time.” Most of the business is pets, though he hopes that in time EFL can also service customers such as zoos. EFL’s advantage over its


competitors, he continues, is its mobile veterinary service which avoids the need for animals to be transported to the state veterinary service at Swords; the vet can visit and perform any checks while the animals are still at customs. Ireland does not currently have a Border Inspection Post (BIP) for animals, although there are hopes that one of the carriers will set one up fairly soon. Radley adds that EFL is very


careful in the choice of carrier it works with for its Pets on


airports outside Ireland) often pop up whenever there is a catastrophe or building programme after war and unrest.


Specialist beverages are


another commodity that can be airfreighted out of Ireland from time to time. A large number of gin and whiskey distillers have sprung up recently, building on Ireland’s long heritage in the business.


(Before prohibition,


Ireland was the biggest supplier of whiskey to the US, but the Scottish producers nipped in quickly when it was lifted, before the Irish could respond.) Louwrens adds: “We’re seeing


a lot more non-traditional freight than before, things like motorbikes for example, and in fact we’re putting resources into trying to identify some of these trends, because they can often be quite short-lived and sporadic. But if you can identify them, they are often good, high- margin business.” As well as its general sales


agency business, IAM has a number of other arms. One of these is its Translogic training division, which is now the largest provider of IATA dangerous goods certification in Ireland. It carries out training for other companies though it can also train IAM staff, as it did recently when it put four people


Board service. While some like Luſthansa and Emirates have high quality ‘animal hotels’, others are liable to leave pets on the tarmac in baking hot sunshine. Animal lovers are clearly very


concerned that their furred and feathered friends arrive in good shape, but there are mechanical ‘pets’ as well – motorcycles. EFL has set up another specialist service to get machines to sunny places such as Greece or Italy, while the riders themselves travel on a low-cost flight without having to brave the European motorway system in the pouring rain. The bikes – and any associated gear and luggage - travel on specialised cradles on the groupage trailers. “We get some interesting clientele,” says Radley. “And like the pets on Board customers, they’re extremely protective.” Both the two niche markets


are aimed at consumers rather than businesses, and as such can offer rather higher margins, Radley argues. The same could also be true of e-commerce.


through the course. There is also the ITC


trucking division, which arranges road transport to alternative gateways like the UK, Amsterdam or Ostend, and Translogic Cool Chain Solutions, which supplies thermal covers used to keep pharmaceuticals, fruit and veg, cosmetics and other sensitive cargo cool (or warm) in transit. While obviously not providing quite the level of temperature control as temperature- controlled airfreight containers – which IAM can also provide for


its customers if required


– the covers do significantly slow heat transfer and are more than adequate for all but the most sensitive cargoes, without the expense and complicated logistics of specialised containers. Like all Irish freight firms, IAM


has considered the implications of Brexit. The main issue, in McCool’s view, is whether bonds would be necessary for cargo transiting the UK and whether UK customs would have a system in place to deal with them efficiently. If not, there is the option of using one of the direct ferries from Ireland to a continental gateway. “However, I suspect that, in the event, things won’t be so complex,” he adds.


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