Aircargopedia Newsblast: November 2021!
Logo headerimg
16th November 2021  
 


Dear Air Cargo Professional:

COVID-19 Impact and Global Analysis by Pat from SUNTEC.

Read more about supply chain crisis in this article by Peter Canellis, Professor of Management, Vaughn College.

In more World Air Cargo news, dnata promotes Guillaume Crozier to Senior Vice President, UAE Cargo.

Vaughn College honors Stephen A. Alterman at Annual Gala. Emirates expands cargo capacity with AED 3.6 billion.
  DJ Ghosh

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


______________________________________________________________________________

Air Cargo Market Forecast - COVID-19 Impact and Global Analysis

Air cargo is a transportation mode of delivering fast speed shipments through aircraft for longer distances, generally. Air cargo contributes to development of economy worldwide as the global economy relies on the capability to transport valuable and superior quality products rapidly to consumers across the world. The air cargo industry has changed considerably over the past few decades. Further, innovative logistics and supply chain concepts established on low-fuel costs as well as labour costs emerged together with trends in just in-time production and end-point manufacturing assembly destination. Moreover, a surge in demand for expeditious shipping, as well as transparency has been noticed.

With the rapid development of connected technologies, mobile devices consumers’ lives have changed in many aspects, which includes their purchasing process. In the present scenario, consumers are turning to e-commerce, resulting in increased cross-border sales. This, in turn, is boosting the growth of the air cargo market, as the manufacturers or sellers aim to reach the customer as quickly and economically as possible. In addition, the provision of air cargo including faster delivery speed and high investments by the government in favour of air cargo also fuel the growth of the global air cargo market.

The air cargo industry generally competes with the other transportation modes including rail, road, and maritime. Mode mix optimization as well as modal shift from air to low-priced or more eco-friendly maritime or rail transport has been observed for some years. Freight forwarders provide more air/sea, air/rail, or air/road products that integrate to form price and total freight time flexibility. Currently, the new railway as well as road-based “Silk Road” network, which connects China with Europe is snatching business from air and sea cargo. In the coming years, Hyperloop One may capture the air cargo market, which is at present being considered for application in the Gulf region. However, in the current market scenario, air cargo has become ever more competitive against other transportation modes.

The air cargo market is segmented based on type, service, end user, and geography. Based on type, the market is further segmented into air mail and air freight. In 2021, the air freight segment accounted for a significant share in the global air cargo market. In terms of service, the market is categorized into express and regular. In 2021, the regular segment accounted for a significant share in the global air cargo market. Based on end user, the market is further segmented into retail, pharmaceutical & healthcare, food & beverage, consumer electronics, automotive, and others. In 2021, the pharmaceutical & healthcare segment accounted for a significant share in the global air cargo market. Geographically, the market is broadly segmented into North America, Europe, Asia Pacific (APAC), Middle East & Africa (MEA), and South America (SAM). In 2021, Asia Pacific accounted for a significant share in the global air cargo market.

Impact of COVID-19 Pandemic on North America Air Cargo Market
North America is engaging in development and adoption of new technologies due to favorable government policies to boost innovation and strengthen the infrastructure capabilities. The Canadian government is anticipated to aid the sector, including financial support to airlines. In addition, the US Government has vastly supported its airlines during the crisis, and there are still hopes for a second support package. According to the statistics by the International Air Transport Association (IATA), the industry-wide cargo ton-kilometres (CTKs), the month-on-month CTKs showed the fastest growth since May, at 3.7% in 2020. The rebound of the industry rebound is largely driven by North American airlines. North American airlines also performed strongly in September 2020. This can be attributed to the increasing Asia-North America trade lanes due to strong demand for goods manufactured in Asia from domestic markets in the US. Moreover, the domestic market in North America has been significantly outperforming the region’s international routes due to the rising popularity of e-commerce since Q2 of 2020 when the country went into strict lockdown. Hence, the air cargo market in the region has been positively influenced by the pandemic.

Key Findings of the Study:
The global air cargo market has been segmented into five major regions - North America, Europe, Asia Pacific (APAC), Middle East & Africa (MEA), and South America (SAM). APAC led the global air cargo market with a revenue share of ~34.84 in 2020. The dominance of APAC market is attributed to the growth of e-commerce in countries such as China and India. Another important factor is the presence of technologically advanced industries in countries such as China and Japan. The increased adoption of Industry 4.0, together with rising advancements in manufacturing and machinery tools, is propelling the air cargo market growth. Furthermore, the willingness to invest in advanced components by the manufacturing industries in these countries is adding to the growth of the market. Such factors are expected to propel the growth of air cargo market in the region.

On the other hand, in 2020, North America held the second position with a revenue share of 23.9% and Europe held the third position with a revenue share of around 22.11%. The demand in Europe and North America is propelling with rising need for automated systems across manufacturing industries and increasing adoption and implementation of novel technologies, along with rising support by the government organizations.

The MEA and SAM regions are also contributing a significant amount of revenue to the air cargo market. As the regions are experiencing urbanization and growth in foreign direct investments (FDI), the regional governments and several private manufacturers are spending substantial percentages of budgets toward the adoption of advanced materials for the manufacturing processes in industries. The increasing benefits of air cargo in industries are also showcasing the growth of the air cargo market in these two regions.

Pat Praveen
SUTEC LLC.
suntecrm.com

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


Transport Logistics

Who Says “There’s No Substitute for Experience”?

Relatively wealthy consumers were progressively shifting their spending from goods to experiences. Then came COVID.

It seems that people are spilling ink and wagging their tongues all over the place about the “supply chain crisis”. As a minor but no less culpable coconspirator, I’ll continue to add my two cents to the commentary about this worldwide mess.

The best summary that I’ve found of WHAT is going on and, as importantly WHY, is provided in a podcast from McKinsey 1 . You’ll get the essence of at least most of the situation with a ten-minute listen, and I highly recommend it.

If you don’t have the ten minutes to spare (and again, I suggest that you try and find it) here is the net of it.

Forty-foot standard containers from China to LA / Long Beach are going for $12,000 a trip, up from the 2019 price of $2,000. Why the six-fold increase, one might ask (and many people are!). It’s certainly true that, as always, “it’s a matter of supply and demand”. Okay, but every high school 10 th grader knows that. Maybe a bit more detail would be in order here.

Demand
When the lockdown took effect, consumers cut back on services and “experiences” (i.e., travel and entertainment) and redirected their spending to goods. This was happening in many parts of Europe and North America where households tend to be wealthier.

The wealthier households also typically were comprised of workers who could continue to generate income during the lockdown. With income still being generated and the “experiences” market effectively shut down, these households started to accumulate more savings. With the expectation that more time was going to be spent at home for work and leisure activities in what, for the most part, were relatively larger homes, increased savings were redirected to major home improvements and expansions. Specifically (from the McKinsey source cited above), the percentage changes in the USA for personal expenditures from the First Quarter of 2019 to the First Quarter of 2021 were as follows:

• Recreation: -25%
• Food and Beverages, Hotels: -11%
• Clothing, Footwear: +5%
• Furnishings, Household Equipment: +28%

Supply

The report focuses on supply-side problems purely from a logistics perspective. In other words, the major culprit is identified as port congestion caused by worker shortages due to COVID superimposed on the increased quantity of goods driven by the demand spike discussed above.

What the report does not address, however, is the relatively low productivity of container throughput operations in the ports of LA / Long Beach which handle the majority of Asian trade with the United States

Where is all this going?
• When will port congestion be cleared?
• Will freight rates stabilize? If so, when?
• How will parts and subassembly input shortages caused by the supply chain sclerosis affect production of finished goods?
• Will there be economic and geopolitical forces that result in reconfigured supply networks?
• Will the traditional relationships between ocean and air cargo rates change and, if so, how?

We can look forward to a lot more ink spilling and tongues wagging as the adventure continues. How will it turn out? Well, as they say, “There’s no substitute for experience”

Peter Canellis

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


Air Canada Cargo

dnata promotes Guillaume Crozier to Senior Vice President, UAE Cargo

Dubai, UAE, 4 November 2021

dnata, a leading global air and travel services provider, announced the appointment of Guillaume Crozier as Senior Vice President, UAE Cargo.

In his new role, Guillaume will oversee dnata's cargo business in the UAE covering Dubai International (DXB) and Dubai World Central (DWC) airports. Guillaume will be based in Dubai and report to David Barker, dnata's Divisional Senior Vice President for Airport Operations. Guillaume's appointment is effective 19 December 2021.

Guillaume has been with dnata since 2011. Most recently he has been responsible for operational performance management as well as innovation and product development across dnata's global network for both ground and cargo handling products. Previously Guillaume was Chief Operating Officer of dnata Switzerland. Before joining dnata, he fulfilled various managerial roles across the supply chain in several markets.

Guillaume will replace Bernd Struck in his new role. As Senior Vice President, Bernd has been leading dnata's UAE cargo operations and DWC airline services since 2014 and will retire from his role at the end of the year.

David Barker said: "l'm delighted to announce the promotion of Guillaume to Senior Vice President, UAE Cargo. A customer-oriented leader with an innovative mindset, Guillaume has an outstanding ability to deliver world-class service, quality and safety with his teams. I'd also like to thank Bernd for his substantial contribution to dnata's success and wish him a happy retirement."

A trusted partner of over 300 airline customers, dnata provides quality and safe ground handling, cargo, catering and travel services in 35 countries. In the financial year 2020-21 dnata's customer-oriented teams handled 290,000 aircraft, moved 2.7 million tons of cargo, and uplifted some 17 million meals.

Airbridge banner

Vaughn College Honors Stephen A. Alterman at Annual Gala

12 November 2021

Vaughn College hosted its seventh annual gala on Thursday, November 4 in the William R.!DeCota!Hangar on the College’s main campus. The honoree for this year’s event was Stephen A. Alterman, president of Cargo Airline Association and chairman of the Transportation Security Administration Aviation Security Advisory Committee.

Alterman also currently serves as the chairman of the Transportation Security Administration Aviation Security Advisory Committee and chaired the Federal Aviation Administration (FAA) Management Advisory Council from 2017 to 2020. He formerly chaired, and still serves on, the Environment and Energy Subcommittee of the FAA Research, Engineering and Development Advisory Committee. Alterman began his aviation career with the Civil Aeronautics Board, becoming the Chief of the Legal Division of the Bureau of Enforcement before entering private law practice in 1975. He has been the president of the Cargo Airline Association (or its predecessors) since 1982.

Mr. Alterman was familiar with Vaughn College having visited the campus in the past where he met with students to discuss career avenues available with a Vaughn degree. During his gala address, he expressed thanks at being honored and noted. “The future of the aviation industry is vitally dependent on educational institutions like Vaughn College. Tomorrow’s leaders are at Vaughn today, and everyone at Vaughn should be proud of your contributions that enable both passenger and cargo airlines to fill their job openings with a talented and diverse group of young hires,” said Alterman. “This leadership is especially important today, as the aviation industry struggles with labor shortage and new entrants and new technologies flood the marketplace.

“Stephen is a proud supporter of Vaughn and its outstanding students and has recognized the talent of Vaughn graduates,” expressed Vaughn President Dr. Sharon B. DeVivo. “Stephen epitomizes the best example of a leader, one who ultimately enriches the lives of others and builds a world that serves the needs of the customers and the communities and in this case of Vaughn, our students and our graduates.”

The origins of the Cargo Airlines Association can be traced back to 1948 when the Air Freight Forwarders Association was formed to protect the members of the air freight forwarding industry from over-regulation by the Civil Aeronautics Board, and to some extent, from the practices of the airline industry. This form of representation ended in 1977 when the air cargo industry was deregulated, and air freight forwarders became free to operate their own aircraft. Soon after the overnight express business exploded in popularity. The Air Freight Forwarders Association amended its By-laws to permit membership by direct air carriers and changed its name to Air Freight Association. After Federal Express and UPS became members, the association changed to its now current name of the Cargo Airline Association.

Located in Washington D.C., Cargo Airlines Association is responsible for representing the industry before federal and state regulatory bodies, the United States Congress and, when necessary, in the federal and state courts. It serves as the nationwide voice for members of the all-cargo industry and its associate members. In addition to legal matters, the Association acts as a resource tool for its members, publishes periodic newsletters and acts as the educational voice of the industry. Cargo Airlines Association keeps the supply chain moving by representing its members.


Turkish Cargo

Emirates expands cargo capacity with AED 3.6 billion (US$ 1 billion) investment in new freighter aircraft and aircraft conversions

Dubai, UAE, 15 November 2021

Emirates SkyCargo, a leader in the global airfreight industry, today announced that it will induct two new Boeing 777Fs into its fleet in 2022 and also convert four of the airline’s Boeing 777-300ER passenger aircraft into freighters between 2023 and 2024.

His Highness (HH) Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group said: "The last two years have put the spotlight on the importance of supply chain connectivity and the availability of air cargo capacity to global communities and economies.

"Emirates plays a key role in making essential goods available to customers and consumers globally through the capacity available on our wide-body fleet, the reach of our global network, and the advanced infrastructure at our Dubai hub. Today, we are delighted to announce an investment of AED 3.6 billion (US$ 1 billion) to further expand our freighter capacity. This underscores our commitment to supporting our customers’ requirements, and reflects our confidence in our future growth and status as one of the largest airline cargo carriers in the world."

Emiraes

New Boeing 777-Fs
Emirates SkyCargo has signed a purchase agreement with Boeing for two new Boeing 777-F aircraft, which will be delivered in April and June 2022 respectively. Emirates SkyCargo was the launch customer for the Boeing 777-F and the aircraft has been at the heart of the carrier’s operations since 2009. The addition of two new freighter aircraft will strengthen Emirates SkyCargo’s customer offering allowing for increased agility and flexibility in its operations.

Over the years, the Boeing 777 freighter has been a critical pillar of Emirates SkyCargo operations, with the aircraft operating scheduled and charter flights to destinations across six continents. The Boeing 777-F also played an important part of the carrier’s pandemic response, helping deliver vital commodities across the globe. The aircraft’s remarkable range and payload capabilities allow for time and temperature sensitive shipments to be transported rapidly and efficiently from origin to destination.

"We are honored that Emirates has once again placed its confidence in the 777 Freighter as the backbone of its global network," said Ihssane Mounir, Boeing senior vice president of Commercial Sales and Marketing. "As the largest operator of 777 passenger and freighter models worldwide, Emirates’ success is a testament to the 777’s market-leading efficiency, improved sustainability and incredible range."

Boeing 777-300ER conversions
Emirates SkyCargo has signed an agreement with Israel Aerospace Industries (IAI) for the conversion of four Boeing 777-300ER passenger aircraft into full freighters. The agreement also includes an option for further Boeing 777-300ER conversions at a later stage. The conversion programme for the four aircraft will commence in early 2023 and is expected to conclude in 2024 with each aircraft taking up to an estimated five months for the process.

The converted freighters will provide up to 10 additional pallet positions over the Boeing 777-F production freighter allowing for transport of more low density cargo including e-commerce goods. They will boost the maindeck cargo capacity that Emirates SkyCargo can deploy on its global routes, with a particular focus on trade lanes where volumetric cargo loads tend to be high. The converted aircraft’s payload capabilities are very close to those of the Boeing 777-F production freighters and the twin-engine aircraft will be more efficient per tonne of cargo carried than the industry standard freighters.

"IAI is proud to partner with the brightest minds in the region to create solutions to the global demand for cargo aircraft," said IAI CEO & President, Boaz Levy. "IAI’s Aviation Group, the world’s leader in cargo conversions, is currently converting the first B777-300ER aircraft, together with GECAS, in order to provide the most optimal solution for the rise in e-commerce. Emirates’ decision to select IAI for the conversion of its passenger aircraft to cargo configuration is a testament to IAI's professional capabilities and IAI’s longstanding international recognition in the field."

In addition to its freighter aircraft, Emirates offers cargo capacity in the bellyhold of its passenger aircraft. During the COVID-19 pandemic, responding to the surging demand from the industry for the transportation of vital goods such as PPE, medical supplies and food in light of the overall reduction in global cargo capacity due to reduced passenger flight operations, Emirates SkyCargo introduced new measures including operating cargo-only flights on its passenger aircraft (passenger freighters) and modifying Boeing 777-300ER aircraft by removing seats from Economy Class to make additional room for cargo (mini-freighters). Emirates SkyCargo currently has a fleet of 16 mini-freighters.

Emirates SkyCargo operated more than 27,800 flights on its passenger freighters and mini-freighters in the one year period from March 2020, transporting more than 100,000 tonnes of essential cargo including medical supplies and food on these flights. With demand for air cargo capacity remaining high, Emirates SkyCargo continues to provide customers the option of transporting cargo on passenger freighters and/ or mini freighters.


South African Airways
visit aircargopedia

new vendor banner
Subscribe banner
publications img white papers img
Contributors img showcase products
PRIVACY POLICY :
Our Privacy Policy can be found here. If you wish to opt out of these emails, please click the "Safeunsubscribe" link at the bottom of this newsletter.
  WWW.AIRCARGOPEDIA.COM
 “The Complete Encyclopedia for the Air Cargo Professional & Investor”
CONNECT WITH US    WIDGETS   
Google+ Facebook Twitter
 

Google+ Facebook Twitter


Google+ Facebook Twitter