Aircargopedia Newsblast: April 2022!
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19th April 2022  
 


Dear Air Cargo Professional:

The war in Ukraine and COVID lockdowns in China caused the air cargo market to contract in March - by Pat from SUNTEC.

Read more about Upskilling Managers to meet the Supply Chain Challenge in this article by Peter Canellis, Professor of Management, Vaughn College.

In more World Air Cargo news, Maersk creates Maersk Air Cargo.

Emirates SkyCargo surpasses a historic landmark for COVID-19 vaccine transportations. Join transport logistic Americas & air cargo forum Miami on November 08-10, 2022 in Miami
  DJ Ghosh

D.J. Ghosh
President & Publisher
AIRCARGOPEDIA
WWW.AIRCARGOPEDIA.COM
”The Complete Encyclopedia for the Air Cargo Professional & Investor”


______________________________________________________________________________

Air cargo slumps in March as war in Ukraine continues and China lockdowns take toll

The war in Ukraine, sanctions on Russia and stepped-up COVID lockdowns in China caused the air cargo market to contract in March and macroeconomic clouds could further dampen a sector that has performed well during a chaotic pandemic, according to new analyses.

The impact is being felt in freight rates, which are quickly climbing as capacity disappears faster than demand.

According to sources shipment volumes declined 6.5% last month compared to the pre-COVID level in 2019 and were 4.5% lower than a year ago. Meanwhile, available cargo space on aircraft shrank 4% year-over-year and is now 14% less than before the pandemic.

Cargo capacity contracted after Western sanctions forced Russian cargo airlines AirBridgeCargo and Sky Gates Airlines to shut down, Russia closed its airspace, a Ukrainian carrier focused on humanitarian airlift and airlines canceled flights due to omicron quarantines in China.

A 20% drop in Europe-to-Northeast Asia capacity during the first few weeks following the Russian invasion. Lufthansa Cargo officials estimate a 10% reduction in air cargo capacity because airlines must fly extra hours around Russia, carry more fuel that displaces cargo or make a fuel stop. The International Air Transport Association measured a 17% fall in the number of dedicated cargo flights between Asia and Europe during late March versus the same period a year ago.

And logistics companies in China say the citywide lockdowns of Shanghai, Kunshan and other areas have made it nearly impossible for the air logistics system to function. Shanghai Pudong International Airport is technically open, but few special licenses are being issued for truckers to enter airport property and no shipments can be released or delivered. Factory production has plummeted. Passenger and cargo airlines have canceled thousands of flights, with Delta Air Lines suspending cargo handling there through April 18.

The city of Shenzhen was under isolation protocols for more than a week in March. China’s restrictions on trucks crossing to the mainland from Hong Kong and local quarantine requirements for Cathay Pacific pilots have crippled cargo activity at the city’s air cargo hub. Cargo holds on average are two-thirds full, the same level as three years ago but 6 points lower than in March 2021.

More airlines are selling spare capacity in the short-term spot market, especially in high-demand regions such as Asia. Spot rates and spot market share versus space sold at contract rates, for example, continued to rise on the Europe-Japan trade lane. Spot rates from Japan climbed in the last week of March to about $5.47 per kilogram, nearly 50% higher than in the weeks preceding the Ukraine war. And the amount of capacity being sold at spot rates increased to nearly 60% or 20 points higher than the spot share in early February.

The North Atlantic market is showing considerable strength. The load factor, or percentage of occupied cargo space, in March was 83%, only 5 points lower than the record in March 2021. The modest decrease in the load factor despite a 40% increase in year-over-year capacity reflects a 25% increase in volumes from Europe to North America.

Air cargo volumes have been boosted for more than a year by businesses converting ocean shipments to air because of systemic inefficiencies and backlogs precipitated by the pandemic. Much of the diversion has been on the main trade lanes of Asia to the U.S. and Europe, but the same trend appears to be happening in the trans-Atlantic. U.S. East Coast ports are experiencing extremely low vessel reliability and mounting congestion as companies try to avoid bigger logjams on the U.S. West Coast. Vessels are arriving an average of 9.5 days late, according to sources.

Demand for air freight in Europe is increasing as companies look to air transport to ensure adequate inventory stocks for the summer and fall. The freighter deficit means shippers have to wait 10 to 14 days from the time of booking until cargo gets on a flight, especially on popular trade lanes. Cheaper options are available to secondary European hubs where airlines have regular passenger flights.

Pat Praveen
SUTEC LLC.
suntecrm.com

For any questions, please contact Pat at pat@suntecrm.com
For more info please visit www.suntecrm.com


CNS 2022

Full Court Press: Upskilling Managers to Meet the Supply Chain Challenge

A lot of ink has been spilled recently about the myriad challenges facing the world’s supply chain managers. No doubt this will continue as we live through these “Interesting Times” that the Chinese proverb warns us about.

Last month, an excellent article published by McKinsey’s Operations Practice group described the initiatives being taken by companies in various manufacturing and process industrie to address these challenges1. The article surveyed the respective companies’ “digital talents” and their “supply chain capabilities” via surveys of self-assessments provided by the companies’ management. Since all “capabilities” – i.e., “processes” – are continually supported by more information technology, it makes sense to do this.

The digital skill levels for “In-House Talent” were divided into the following categories:

• None – Happily, few reported to be in this category. Also, it’s worth noting that the number reporting in this category was reduced in 2021 when compared with 2020.
• Little – Many companies placed themselves in this category with more doing so in 2021.
• Some – Most of the respondents placed themselves here, again with an increase in 2021.
• Sufficient – Only one company put itself in this category in 2021, declining from ten in 2020.

How might we interpret the above results? Based on the sample described in the article, it appears that most companies are beefing up their capabilities but not as quickly as required to close the gap that would allow them to consider themselves as having “sufficient” in-house talent.

Trying to satisfy the need for more talent, the companies participating in the survey indicated that they are attempting to close the gap using some combination of actions as follows:

Actions Taken Percentage (%) of Respondents
Reskill current workforce 55%
Hire new talent 52%
Redeploy existing labor force 30%
Hire external talent temporarily 21%

This relatively balanced approach to talent acquisition and development indicates that most companies are willing to consider any course of action that would help to fill the talent pipeline.

On the “capabilities” side of the survey, some industries supply chain capabilities increased from 2017, while others have fallen. Across all industries, there was a minor decrease since 2017. This is another indication that the need for talent acquisition and development outstripped supply.

It’s interesting to note that Pharmaceuticals was rated highest among the industry categories in 2017 and also improved the most when reassessed in 2021. Those industries that fell behind may have done so because the need for talent increased faster than the talent supplied, resources where diverted from supply chain activities, or a combination of both.

Another area of study was the extent to which supply chain employees had a mastery of end-to-end supply chain processes. The survey results indicated that more employees are developing skills in more than one area of supply chain expertise, but those with true end-to-end knowledge remain few.

Companies are responding to the need for upskilling and reskilling by identifying specific gaps in supply chain knowledge and closing them with a wide range of learning methods sourced either externally from education providers or internally from in-house training staff. For those companies willing to do it, these initiatives and their required investments, combined with commitments to continual improvement, will prepare them well for our continuing journey through these “Interesting Times”

Yours in Supply Chain,
Peter Canellis

Peter Canellis

Regards,
Peter Canellis
Professor of Management
Vaughn College of Aeronautics and Technology


Air Canada Cargo

Maersk Creates Maersk Air Cargo

Copenhagen - Earlier this month, Danish shipping giant Maersk announced the creation of Maersk Air Cargo as the company’s main air freight offering to better serve the needs of its clients with integrated logistics. Billund, Denmark’s second largest airport, will serve as the air freight hub for Maersk Air Cargo.

The new air freight company “is designed to make supply chain journeys more resilient and intuitive.” Aymeric Chandavoine, Global Head of Logistics and Services, A.P. Moller - Maersk, stated in a press release that, “Air freight is a crucial enabler of flexibility and agility in global supply chains as it allows our customers to tackle time-critical supply chain challenges and provides transport mode options for high value cargo. We strongly believe in working closely with our customers. Therefore, it is key for Maersk to also increase our presence in the global air cargo industry by introducing Maersk Air Cargo to cater even better for the needs of our customers.”

Moreover, Torben Bengtsson, Global Head of Air & Less than Container Load, A.P. Moller - Maersk, noted that, “Maersk Air Cargo is an important step of the Maersk Air Freight strategy, as it will allow us to offer customers a truly unique combination of air freight integrated with other transport modes. We see an increased and continued demand for air cargo both today and going forward as well as a growing demand for end-to-end logistics, why it is important for us to strengthen our own-controlled capacity and advance further on our air freight strategy.”

The CEO of Billund Airport, Jan Hessellund, added, “We have had growth, defied the corona and set a new record year in cargo in 2021. It does not happen without good partners, and we do what we can to make our partners good. Now Maersk Air Cargo enters the stage at Billund Airport and raises it a notch. We are incredibly proud that we are being chosen as Maersk's European hub for air freight, and we look forward to developing the collaboration to even new heights.”

Maersk last operated from Billund in 2005. Maersk Air Cargo will progressively deploy and operate a controlled capacity of five aircraft – two new B777F and three leased B767-300 cargo aircraft. In addition, three new B767-300 freighters will be added to the US-China operation, which will be initially handled by a third-party operator. The new aircraft are expected to be operational from second half 2022 and onwards up to 2024, and Maersk Air Cargo is expected to be fully operational as of the second half of this year.

Peter Canellis
Kevin Pflug


Airbridge banner

1 billion vaccine doses: Emirates SkyCargo surpasses a historic landmark for COVID-19 vaccine transportation

Dubai, UAE 4 April 2022

Emirates SkyCargo has transported more than 1 billion doses of COVID-19 vaccines on its aircraft. The air cargo carrier has achieved this historic milestone within a span of 18 months from the first shipment of COVID-19 vaccines trialled in October 2020. More than 4,200 tonnes of COVID-19 vaccines, equivalent to over 1 billion doses, have been moved to over 80 destinations on over 2,000 Emirates flights. Close to two-thirds of the 1 billion doses were transported to developing countries.

Nabil Sultan, Emirates Divisional Senior Vice President, Cargo, said: "From the start of the COVID-19 pandemic, Emirates SkyCargo has been focused on supporting global communities in their recovery from the devastating effects of the virus and we have prioritised assistance to developing countries. The strategic location of our Dubai hub combined with the strengths of our modern fleet of widebody aircraft, our purpose built facilities and capabilities in moving temperature sensitive pharmaceuticals allowed us to transport COVID-19 vaccines securely, reliably and rapidly from one corner of the globe to another. Ahead of World Health Day, we’re incredibly proud of our global Emirates SkyCargo team who have pulled out all stops during the pandemic to keep supply chains for essential goods like vaccines up and running. " .

Emirates

As early as August 2020, Emirates SkyCargo was one of the first global air cargo carriers to begin mapping out the global logistics for the movement of potential vaccines for COVID-19 transport. In October 2020, Emirates announced that it would be setting aside a dedicated GDP certified airside hub for transport of COVID-19 vaccines. During the same month, working with its logistics partners, the cargo division of Emirates transported trial shipments of COVID-19 vaccines through Dubai.

In January 2021, Emirates SkyCargo teamed up with leading Dubai-based companies to form the Dubai Vaccine Logistics Alliance to speed up distribution of vaccines through Dubai to developing countries. In February 2021, the carrier signed an MoU with UNICEF to prioritise transport and delivery of COVID-19 vaccines in support of the COVAX initiative. By early April 2021, Emirates SkyCargo had already transported more than 50 million doses of vaccines.

In June 2021, Emirates SkyCargo expanded its pharma cool chain infrastructure at Dubai International Airport, allowing it to store an additional estimated 60-90 million doses of COVID-19 vaccines at any one point of time. With the global scaling up of vaccine distribution and administration, Emirates SkyCargo facilitated transport of larger volumes of COVID-19 vaccines from manufacturing origins to destinations, reaching 250 million doses by September 2021 and 600 million doses by December 2021.

Emirates SkyCargo is one of the leading global air cargo carriers for the transport of temperature sensitive pharmaceutical cargo. In addition to COVID-19 vaccines, the carrier transports other critical life-saving medicines and treatments on its flights to more than 140 destinations across six continents. An estimated 200 tonnes of pharmaceutical cargo are flown every day on Emirates’ aircraft.


Turkish Cargo

Join transport logistic Americas & air cargo forum Miami on November 08-10, 2022 in Miami

Miami will become the international meeting hub for the air cargo, transportation & logistics industry from November 8 to 10, 2022.

The high rate of international participations confirms the multimodal concept of Messe München’s transport logistic Americas in combination with the air cargo forum of TIACA and Florida as a future-oriented logistics location.

Premium spaces are becoming scarce on the 9,000 m² of exhibition space planned to date.

Reserve your spot today and exhibit among international airlines such as Astral Aviation, Air Canada, Avianca, Etihad, LATAM Cargo and United Airlines and airports from Brussels, Budapest, Chicago, Greenville-Spartenburg, Halifax, Liege, Miami, Singapore, St. Louis, Winnipeg and service providers including ACL airshop, Champ Cargosystems, dnata, ECS Group, Jettainer, Kale Logistics Solutions, paycargo, Rhenus Logistik, Strike Aviation and World Flight Group.

Reserve your spot today


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