Networks is the strategy

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Network growth remains a key strategy for many cargo handling operators as carriers increasingly emphasise the importance of network capabilities and a preference for well established handlers providing services from multiple stations.

With cargo handling agents becoming more closely integrated partners in the supply chain, the scope of services is also evolving, according to Worldwide Flight Services (WFS) group chief operating officer, Barry Nassberg: “Major carriers, determined to maintain self-handling at their hubs or home base, are finally noting the efficiency gains possible from working with a handling partner, marking another fundamental change in how services can be provided,” he tells Air Cargo Week (ACW).

Nassberg’s WFS is on target to open is own cargo facility at Milan Malpensa Airport in early 2016, which it says is a first by an international operator in Italy. “Our European network is already fairly dense, but still offers opportunities in a number of countries and our recent award of full ground handling rights in Madrid and four other Spanish airports will complement our existing cargo handling operation.”

Cathay Pacific Services (CPSL) chief executive officer, Kelvin Ko, says it has ramped up its efforts to explore business opportunities with airlines operating at Hong Kong International Airport and has grown its customer base to eight airlines. They are, AirAsia, AirAsia Zest, Air Hong Kong, Cathay Pacific Airways, Dragonair, Eva Air, Royal Brunei Airlines and Thai AirAsia, since starting in 2013. “Meanwhile, launch of a CPSL mobile application has taken shipment tracking functionality to the next level,” says Ko. Frankfurt-based Fraport Cargo Services (FCS) also expanded its range of electronic services at the beginning of the year. Customers and forwarding agents can now use a modern track and trace system to check the consignment status of their dispatched import freight.

With ambitions to become a European central hub, Liege Air Cargo Handling Services, located inside Liege Airport and owned by CAL Cargo Airlines, offers specialist services for complex and non-standard cargo. CAL Cargo vice-chairman, and chairman of LACHS executive committee Muli Ravina, says: “While we are facing competition, mainly from the sea, we have also seen tremendous growth in cargo handling services. We recently doubled our intake of goods like perishables, pharma, dangerous goods, live animals, oversize/overweight and valuables, such as artwork.”
LACHS managing director Yossi Shoukroun, tells ACW: “Last year ANA Airline Management transferred its business from Ostend Airport to Liege where it uses LACHS services for airfreight and ground handling. In 2015, we expect new airlines to come onboard with a focus on Asia Pacific and South America. Since CAL Airlines expects to open new routes to the Far East and to North America, LACHS will continue to represent the hub for additional route, as well as supporting CAL’s unique charter services.

LACHS handled some 80,976 tonnes of cargo during 2013 which grew by 30 per cent last year to 105,704 tonnes. For January to May 2015 it handled 50,740 tonnes and expects an increase of 15 per cent by the year end compared to 2014. Last month, Swissport International and Swiss WorldCargo extended their strategic handling partnership five years until 2020. Swissport Cargo Services operates at more than 109 airports worldwide and handles in excess of 4.1 million tonnes annually. The cooperation with Swiss WorldCargo includes 35 stations across the globe and the annual handling of some 130,000 tonnes of cargo and mail.

Korean Air Cargo extended its cooperation with LUG air cargo handling at Frankfurt International Airport in 2014 for a further five years to 2019. LUG has handled freight on behalf of Korean Air for 18 years.
After signing a new 10 year extension of its handling franchise with the Hong Kong Airport Authority, running from July 2018 when the existing franchise expires, Hong Kong Air Cargo Terminals (HACTL) chief executive, Mark Whitehead, says: “I don’t believe we can send a clearer signal about our total commitment both to the airport and to the future of our business. HACTL is here to stay.”

But, with future expressions of confidence based on the opening of Hong Kong’s third runway at the earliest possible opportunity, he warns that standing still is not an option. “[The airport] must expand to accommodate the needs of the logistics industry, which is such an important pillar of the Hong Kong economy.”
During its first full year of operations in 2014, Hong Kong-based CPSL handled some 1.4 million tonnes of cargo and expects to see a substantial increase in volumes for the first half of 2015.

Ko describes the air cargo market as being in a constant state of evolution. “Consumers now increasingly shop online from retailers based across the world and this offers the aviation logistics industry an incredible opportunity,” he says. The booming e-commerce market in China continues to generate more traffic and express shipments. “It grew by 31.4 per cent last year, reaching a total market value of more than 13.4 trillion renminbi ($2.1 trillion) in 2014,” explains Ko. “To facilitate the handling of such shipments we have set up an express handling centre in the Cathay Pacific Cargo Terminal (CPCT), both to improve our efficiency and meet the needs of this growing market.” Whatever the ups and downs of the market, global networks for a growing world economy are clearly key.