Third runway at Heathrow essential to clear export limiting bottleneck

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Heathrow Airport is full and freight cannot be transported directly on a number of services to destinations including China, head of cargo, Nick Platts tells Air Cargo Week (ACW).

Heathrow Airport handled just under 1.5 million tonnes of cargo in 2015, a 0.2 per cent dip from 2014, though Platts says the results were skewed by 2014 being particularly strong. Without runway expansion, Platts says Heathrow is forecasted to handle 2.1 million tonnes of cargo by 2040, though with more capacity, it could process 3.1 million tonnes.

Platts says 39 connections are constrained meaning not all freight for these destinations can go direct. “Heathrow’s full and over the past decade we’ve seen several of our freight routes fill up too – there is no more freight capacity from Heathrow on routes to China, for example. This results in a bottleneck that limits export potential and increases our freight costs.”

Heathrow has just two runways, in comparison Paris Charles de Gaulle Airport and Frankfurt Airport both have four runways and Amsterdam Airport Schiphol has five. Platts says: “Britain is handling export growth to European competitors – France, Germany and the Netherlands. By 2030, we estimate that without a third runway at Heathrow 57 routes will be freight-constrained. This represents around one third of all routes.”

The majority of the UK’s trade is in the European Union but in 20 years emerging markets could represent a greater share, making extra capacity more urgent.

Platts says: “Transport links to distant markets, including airfreight, will play an increasing role for UK exporters and importers. With unconstrained capacity at Heathrow, the value of exports to China would overtake the USA as the biggest export destination from Heathrow within two years.”

The USA remains Heathrow’s biggest export market, worth £14 billion ($20 billion) with China in second at £7.6 billion. Platts comments: “Exports to China now represent 15 per cent of the total goods exported via Heathrow but with the airport now at capacity and several freight routes full, businesses access to China is being constrained.”

He says forecasters at HSBC predict that emerging economies, particularly China, will see the strongest import and export growth. “Releasing freight capacity constraints on these trade lanes with the expansion of Heathrow could facilitate the delivery of this success for export and import firms in the UK.”

Heathrow is hoping to get government approval for a third runway this year. In the meantime, it is investing £180 million in improving cargo facilities to process it more efficiently. The plan, announced in November 2015 includes a specialist pharmaceutical storage area, a valuable business segment for Heathrow worth £2.8 billion in exports.

Platts says Heathrow handles 91 per cent of the UK’s pharmaceutical exports to India, 70 per cent to Hong Kong and 34 per cent to China by value. For time sensitive exports as a whole, Platts tells ACW: “Airfreight is critical for time sensitive industries such as pharmaceuticals, biotech and food. Exports to medicines have risen by 97 per cent and 87 per cent over the past two years due to world health crises.”

Fresh salmon, primarily from Scotland, is another temperature sensitive product Heathrow handles a lot of. Platts says it is the largest export by weight and second biggest food export. “With the majority of salmon coming from Scotland, producers rely on Heathrow as a hub airport to get the product to market as quickly as possible.”

It also wants to improve infrastructure to reduce congestion and halving process time to four hours. The project should be delivered by the end of 2017.

Platts tells ACW: “In 2016 we will develop detailed plans to deliver a call forward facility for HGVs, an airside transhipment facility, fast-track access for cargo to airside areas and an improved security process. Additionally we’re revising plans to install stillage for the cargo operators.”

“Our blueprint plan is an opportunity for us to invest in improving our existing freight operation to make it more streamline and quicker for businesses.”

“With expansion, we can offer exporters more direct connections and more frequent flights on existing routes to and from Heathrow, whilst also increasing freight capacity to allow more freight to fly direct.”

“This would reduce time and cost barriers for businesses looking to export abroad, making the UK more globally competitive and driving trade, helping Britain to meet its export targets.”