20


Issue 6 2020 - Freight Business Journal


HMM’s latest 24,000teu vessel, the HMM Hamburg, made her maiden call at her namesake port on 3 September. Among the largest container ships in the world, she is one of 12 similar vessels being put into service by the South Korean line since April and operates on THE Alliance’s FE-3 service between Asia and Europe.


///GERMANY


Shrugging off the virus


Germany is being held up as a model country during the Covid outbreak. Medically, it has weathered the storm better than almost any other developed nation - and its economy is fi ghting fi t too.


helped its economic performance. Looking ahead, German


A shrinking of the German economy of over 2% in the fi rst quarter of 2020 would normally be seen as a near-catastrophe rather than good news but these are no ordinary times. The eff ects of the corona crisis and subsequent shut- down of Europe’s economies was already beginning to have an eff ect in the fi rst few weeks of 2020, and it is likely that the second quarter of


the year will show an even sharper fall, probably at least comparable with the 4-5% quarterly contractions seen at the height of the banking crisis in 2009/10. Germany, it has to be said, was


already suff ering from the fall-out of US President Trump’s trade war with China, and in fact the decline in the economy seen in the fi rst quarter of 2020 owes more to that


than the corona crisis, which only started to bite in the last two weeks or so.


Still, it appears to be doing


much better than its Eurozone neighbours such as France and Italy, whose economies sagged by close on 6% during the same quarter, although that was partly due to the slightly earlier onset of the pandemic. Germany was


How Frankfurt airport coped with the crisis


The year began quietly enough for Frankfurt airport. A slight decline in volumes due to general economic weakness followed by the totally expected impact of Chinese New Year, but nothing to be overly concerned about. Then the corona crisis struck


and, with the cessation of most passenger fl ights – with their bellyhold cargo space – the airport lost nearly half of its cargo capacity almost overnight. This however was quickly compensated for by an increase in freighter fl ights and, slightly later, the use of passenger planes as ‘temporary freighters’ with cargo carried not only in the bellyhold but in the former


passenger accommodation. In fact, with the sudden infl ux of PPE, the airport was soon handling near-normal levels of traffi c in tonnage terms, although its format and the manner in which it arrived was radically diff erent. Frankfurt’s normal emphasis on exports was also reversed in favour of imports. “It was a very dynamic


situation,” recall head of cargo at


airport operating company


Fraport, Max Philipp Conrady, and executive director of Air Cargo Community Frankfurt, Joachim von Winning. “We became one of the largest


PPE hubs in Europe, with almost 3.5 billion masks imported,” they


say. “We were handling a similar tonnage, but the number of individual packages was vastly increased.” Oſt en, individual boxes of PPE


were hand-loaded into passenger aircraſt cabins, stuff ed not only into the overhead luggage bins or on the seats but even in the galley area. “Trying to fi nd it all and make sure we’d unloaded the plane completely was like an Easter Egg hunt,” say the Frankfurt duo. The airport also had to face an


unprecedented challenge while many key managers were having to observe social distancing rules. Regular conference calls were set up to keep everyone up to speed


also able to keep a lot more of its manufacturing industry going during the outbreak, although whether there will be overseas customers available to buy its products is another matter. The fact that Germany appears


to have been less aff ected directly by the virus, both in terms of the numbers of infections and the death rate, have doubtless also


and all operations on track. However, Frankfurt was at least


able to draw on past experience and lessons learned, particularly from the “perfect


storm” that


it faced in late 2017. Then, a combination of strong demand, a major strike at one airline and another at a freight forwarder, compounded by severe winter weather, led to trucks backing up outside the cargo area. In contrast, from an airport


operating point of view, the PPE import rush has in fact passed off without any serious glitches. This was despite the huge volumes of freight involved and the fact that the airport and handlers oſt en only got a few hours’ notice that yet another aircraſt loaded with thousands of boxes of PPE was on its way. Although Germany has been less aff ected by the Covid


broadcaster DW, quoting research by Munich-based think tank the Institute for Economic Research (Ifo), suggested that the German economy would shrink by 6.6% in 2020, rather worse than the 5.7% fall seen in 2009 at the height of the banking crisis. However, it could then stage a strong recovery in 2021, with annual growth topping 10%. Meanwhile, though, there will be more pain to come. Ifo chief


outbreak from a medical point of view than most other countries, handling crews were not immune to the virus and precautions had to be taken. That meant not only social distancing measures but also special rostering to ensure that should one person come down with the virus, it didn’t mean the loss of an entire team. Rival handlers also agreed to loan team members to each other where necessary. Fraport’s sick absence rate did


increase during the early stages of the outbreak, but it came down again aſt er just a month. Naturally, medically vulnerable people were not expected to come in to work and offi ce staff worked from home where possible. None of this is to downplay the


eff ect that the pandemic has had on Fraport’s fi nances or that of the aviation industry in general.


economic researcher Timo Wollmershäuser predicts that growth will fall by 12.4% in the second quarter of 2020. Full recovery from the corona crisis could take anywhere between fi ve and 16 months, says Wollmershäuser. Still, by the standards of the more


affl icted European economies, these are decent fi gures. In fact, the biggest impediment to Germany’s recovery could be the slower pace of improvement among its global trading partners.


At the time of writing, passenger numbers were down by 83% and there is no hope of the normal 200,000-plus a day fi gure being reached again at any time in the next few months. Despite the relatively healthy cargo fi gures, this will have an eff ect on revenue and Frankfurt is likely to be a somewhat smaller operation for many months aſt er the crisis has passed. Realistically, passengers are not


going to be fl ying in the numbers that they used to for some time to come. Many long haul destination countries, especially those in the developing world, currently have no scheduled fl ights with only freighters maintaining a link for vital cargo. Fraport expects about 30-40% of last year’s passenger volume by the end of 2020. Cargo, though,


is doing relatively 22 >>


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