As trade tensions show no signs of easing, demand is proving weak, Beau Paine, regional vice president cargo – Australia at Menzies Aviation tells Air Cargo Week.
He says shipment numbers with air waybill numbers are consistent but tonnage is down on average 6.5% compared to last year.
Exports are proving resilient, down 3% and the Enhanced Air Cargo Security programme implemented on 1 March is not affecting bookings. Imports though are suffering, down 12% on last year.
The seasonal peak period is approaching but Paine anticipates soft demand due to the trade tensions impacting Asian airlines.
He says: “The majority of our customer base are Asian airlines and as higher tariffs continue to disrupt global supply chains we expect the weakness in air cargo markets to extend into the coming months.”
Menzies works with 35 airlines across Australia and New Zealand, with the length of partnerships varying from port to port.
Paine says: “In 2019 we successfully renewed our partnership with Cathay Pacific and Thai Airways for a further five years across all ports in the region demonstrating the strong relationship we have with premium airlines.”
Cover all main areas
The cargo handler has operations at 10 airports in Australia and three in New Zealand, with a presence in all major cities, providing services to international and domestic partner airlines.
Menzies has not long started operations in Canberra and signed a memorandum of understanding with Western Sydney Airport to assist with the freight strategy design ahead of its planned opening in 2026.
Paine says: “Western Sydney Airport will be Sydney’s second airport and we are excited for the future opportunities that may be afforded.”
Facilities were opened in Cairns and Melbourne Avalon at the start of the year, and Paine is happy with the performance of the stations.
He says: “Cairns offers a best in class perishable handling facility to suit the humid climate of the far north of Australia. Since opening the facility, we have been awarded the domestic business for both Virgin Australia and Alliance Airlines.”
Melbourne Avalon is served twice-daily with AirAsia X services to Kuala Lumpur.
Paine says: “Given the Avalon location is approximately one hour from Melbourne Tullamarine, we offer a trucking solution to the Melbourne freight forwarder community which are primarily based at Tullamarine.”
He comments: “Both stations are operating well and demonstrate our commitment to satisfying our customers’ needs via flexible and bespoke handling options.”
Handling services offered by Menzies can cater for not just general warehousing and storage of general cargo, but also perishables, express cargo, valuables, live animals, dangerous goods and pharmaceuticals.
Describing Menzies as leaders in cargo security, Paine says: “We are able to offer our customers a complete range of security screening options with state-of-the-art X-Ray machines, metal detectors and explosive trace detecting units.”
He adds: “We pride ourselves on offering bespoke services to our customers and tailored solutions to accommodate regional and geographic constraints in our region.”
Work with the authorities
Menzies plans to grow by listening to market needs. Pharmaceuticals are a focus area, with investments in infrastructure, redevelopment of processes and training for staff. Extending existing services is another consideration.
Paine says: “We have taken great interest in working with Airport authorities in both Sydney and Auckland, to expand our presence in Sydney’s second airport which is in development, and the new cargo precinct which is also under development in Auckland which will allow us to grow the size of our facility, upgrade our equipment and grow our customer base.”
Paine is predicting that after years of significant growth in volumes, imports and exports are likely to remain stable.
He says: “External factors will always influence the logistics industry and any changes may have a dramatic impact on the industry. The product mix will continue to see some significant change with e-commerce becoming a commodity that is rapidly growing across the region and also the globe.”
There are issues that face Australia and New Zealand, mainly the low unemployment rates making it hard to attract staff, and the take-up of technology, which is more of an issue in New Zealand.
Paine says: “With this being said it creates great opportunities for the New Zealand businesses to improve their operating models and service offering which will be beneficial towards business growth.”
Working together provides great opportunities in the region, with Paine commenting: “A great opportunity for both countries going forward is the ability to synergise and integrate systems, processes and even personnel considering the close distance between Australia and New Zealand.”