Speaking at a press conference, Lufthansa Cargo chief executive Dorothea von Boxberg said this is because of restrictions for global fleets. Russian carriers are restricted by airspace sanctions by the European Union, UK and US, European carriers are not able to fly over Russia and Ukraine, while, Japanese carriers are flying around the Russian airspace and Middle Eastern airlines have seen no changes.

Two high profile airlines to be affected are Volga-Dnepr Group airlines, which are not able to operate flights to Europe and North America, and Narita-hubbed Nippon Cargo Airlines that has temporarily suspended flights to Europe.

Lufthansa Cargo also calculated a 10% capacity reduction for its freighter operations from Asia Pacific to the European Union.

She confirmed that the closure of Ukraine airspace and Russia’s decision to close airspace to airlines from 36 countries has impacted operations.

“That affects some of our most important routes into China, Japan and South Korea.”

These routes would usually cross Russian space, but now a route south of Russia and Ukraine is being taken that means flights take 1.5 to 2.5 hours longer than normal. However, as the average door-to-door time of a shipment is five to six days, this extra time won’t make much difference to shippers.

“It is more a question of the capacity that is missing than the time of getting it transported.”

Payload restrictions are also an issue.

“We’ve got the 777 which is a great aircraft, I think the only one that would do these distances and payloads without intermediate stops. But then it cannot carry the 100 tons anymore. That’s why altogether it means something like a 10% reduction in our available freight capacity.

“The capacity of course is still there but in terms of tonnage we can transport, it will about that less (-10%).

Source: www.aircargonews.net

Image:

The post Lufthansa Cargo: Ukraine crisis will cause 10% global capacity drop appeared first on Cargo News Today.

The forwarding sector said the airspace restrictions imposed by Russia, European states, Canada, the UK and in North America were forcing airlines to cancel and adjust services.

“Adjustments to flight schedules are unavoidable and increased transit times must be expected. As a result, we also expect a financial impact on airfreight rates,” warned Copenhagen-headquartered forwarder DSV. “We are not able to provide an exact estimate of the impact at this stage.”

It added: “Due to ongoing developments in the Russia-Ukraine conflict, several air carriers have stopped using Russian airspace. This will have a direct effect on air freight services in the coming period.

“DSV is in close dialogue with our carriers to find alternative routings to ensure we provide the best possible service for our customers.”

Kuehne+Nagel warned: “Due to the closure of the air corridors over Russia and Ukraine and the mentioned sanctions, we foresee capacity restrictions and, as a consequence, longer lead times.”

Scan Global Logistics (SGL) said that fuel prices will contribute to higher rates.

The forwarder pointed out that one of the most affected airlines will be Russian carrier AirBridgeCargo, which is blocked from European and North American airspace, two of its biggest markets.

“Overall we expect the current situation will trigger an immediate capacity constraint across transport modes, as well as pressure on freight rate levels, including oil price increases.”

SGL said that many airlines have already initiated to suspend a number of flights and design alternative routes, leading to extended flight time and increased fuel cost.

“Russian freighter carriers Airbridge and Volga are significantly impacted. They have cancelled the majority of flights to/from Asia, with this having a significant overall capacity impact. Asian airlines are not banned from Russian airspace, however, note, we also see Asian-based carriers cancelling flights.”

Singapore Airlines, Swiss, Japan Airlines, FedEx, and UPS have suspended direct flights to/from Russia, SGL said.

Flexport said its research showed that average flight times on six key trade routes from Asia to Northern Europe have increased by 3.4% (range 0.6% to 6.9%) in the five days to February 28 compared to the December 1 through February 22 period.

“The most significant impact is the need for rerouting around the conflict zone, extending transit times, and increased carbon emissions,” Flexport said.

“Some flights between Asia and Northern Europe will need to be rerouted via new southerly routings over Saudi Arabia, amid restrictions linked to Iran, Syria, and Yemen.”

The company added: “It is worth noting that many flights from China and the northern part of Southeast Asia as well as South Korea and Japan typically travel north of the affected region.”

The forwarder pointed out that Antonov’s fleet of freighters – mainly used for heavylift operations – are also affected.

It said that all but five of its freighters were in Ukraine in the days before the start of the conflict.

The remaining five, all AN-124 class with 150 tons capacity each, landed in Europe or the US in the days before.

The forwarder added that several lease firms have reportedly confirmed they will end their contracts with Russian airlines.

The 43 jets of the Volga-Dnepr Group, which includes AirBridgeCargo, features 27 Boeing and 11 Antonov jets. For Aeroflot, 82% of its fleet are Airbus or Boeing planes.

Sanctions could also hit the provision of aircraft parts making maintenance operations difficult.

Despite this, AirBridgeCargo has continued flying since the start of March with more than 15 flights completed, according to FlightRadar24. Destinations include Shanghai, Beijing, Hong Kong, Dubai, Shenzhen, Seoul and Bahrain.

However, Flexport said the loss of Russian cargo capacity will have less of an impact on the overall market than the extended transit times.

“The impact on global airfreight may be minimal given both airlines each represented less than 0.5% of global airfreight carried in 2019,” Flexport said.

Source: www.aircargo.com

Image: www.aircargo.com

The post Supply chain costs to rise as Ukraine crisis bites appeared first on Cargo News Today.

James Gagne, president and chief executive of Seko Logistics, outlined a challenging market for freight forwarders in 2022.

He highlighted ongoing issues in ocean shipping, labour shortages due to Covid hitting port/airport operations, ongoing consumer spending for at least the first six to nine months despite inflation, elevated freight rates, rising e-commerce demand, semi conducter demand/shortages and driver shortages as just some of the challenges facing supply chains this year.

For airfreight, belly capacity also appears unlikely to recover to pre-Covid levels this year.

As a result, 2022 will be “the year for air charters”, he said.

“The focus is on doing more on the charter part and we see the need for charter capacity only growing to service our clients,” he said.

Last year the company used 397 charter flights compared with around 72 flights in 2020. This year Seko expects this figure to grow further by around 20-30%.

Other forwarders have also been busy expanding their charter operations in the opening months of the year.

Geodis will expand its AirDirect cargo network in Asia Pacific as it looks to meet “surging demand” in the region.

AirAsia X (AAX) has formed a new air logistics partnership with Geodis to provide the additional cargo capacity.

As part of the partnership, the airline will provide Geodis with “dedicated scheduled cargo flights” on a new weekly rotation from Kuala Lumpur (KUL) to Shanghai (PVG) and Sydney (SYD) and will also add a second weekly rotation to its existing KUL – Hong Kong (HKG) – Chennai (MAA) – KUL service.

This agreement is set to run for an initial period of six months commencing from January 20 with further extensions to be considered.

All the flight schedules are serviced by aircraft chartered on a long-term basis and will add an extra 320 tonnes of capacity to its charter network each week, Geodis said.

Meanwhile, in mid-January, DB Schenker added charter capacity out of India as it looks to meet capacity constraints.

The forwarder offers charter capacity on a weekly flight operating on the route: Bengaluru-Doha-Munich-Chicago. The new route is being operated by Qatar Airways Cargo utilising one of its B777 freighters.

The flight is in addition to its existing charter operation covering Mumbai, Frankfurt and Atlanta.

Both flights connect three continents as part of the forwarder’s Global Flight Operations Network.

The company told Air Cargo News that the new route would cover a wide range of verticals such as automotive, consumer and retail, electronics, industrial and chemicals, healthcare and aerospace.

Also, DSV has responded to Covid restrictions and lockdowns in Asia by adding extra freighter capacity from Hong Kong and Singapore.

The freight forwarder is adding two extra weekly flights – offering 100 tonnes of capacity each – to its Hong Kong-Liege-Hong Kong loop, bringing its weekly flights on the route to three.

Meanwhile, the company has also introduced a new weekly route from Singapore to Los Angeles.

DSV vice president and head of the DSV Air Charter Network, Mads Ravn, said: “Right now, the market is greatly underserved – especially out of Asia where the situation is being impacted these days by increased Covid incidents and by new restrictions. We are monitoring the situation closely, so we can continue to do what we can to keep our customers supply chains flowing.

“We are also introducing a new DSV Air Charter route from Singapore to Los Angeles (LAX), which can further relieve the pressure on some of the other hubs in the region and also bring a little more flexibility to our customers on our airfreight offerings out of Asia.”

The announcement from DSV came shortly after Cathay Pacific made “substantial reductions” in its long-haul freighter network for the first quarter, with no flights operating to Europe and just seven per week to the Americas.

www.aircargonews.com

www.pixibay.com

The post 2022 set to be the year of charter operations for freight forwarders appeared first on Cargo News Today.

The Omicron virus may be less deadly than prior variants of the virus, but it is taking a heavy toll on businesses and their supply chains.

The air cargo sector is being hit particularly hard. Schedules are in disarray as flight crews are unavailable because of infection, a patchwork of national policies shuts down routes at short notice, and infections and quarantine measures are decimating ramp and warehouse crews, affecting the flow of cargo.

In probably the starkest example of the impact of Omicron, Cathay Pacific stopped longhaul freighter flights for seven days altogether.

It has since resumed all-cargo service to the Americas at a much reduced level, but management does not expect to be running freighters to Europe through March.

For forwarders, these developments have made finding and booking flights a time-consuming slalom through quicksand.

Like airlines, they have been stretched to the limits since the pandemic started and have little leeway to absorb further complications and hurdles.

In the face of the pandemic this industry has shown remarkable flexibility and an ability to re-think the business, coming up with new solutions that often involved collaboration with other parties, including competitors.

Operators have shared resources and facilities with their rivals to keep cargo flowing.

A second crucial part of the struggle has been the effort to streamline processes and automate repetitive, routine functions.

Most firms are understaffed and can ill afford to waste their precious human resource on activities that a computer can perform. And in the current chaos of schedules and pricing, they do not have the time for this either.

Start with bookings. Before Covid it made sense for forwarders to send out blast e-mails to multiple airlines requesting quotes for a shipment.

How many carriers have the time to respond to this today? There is no reason why pricing queries, and indeed the full booking process, should not be performed online.

Of course, this can only happen if the airlines do their part to make this avenue viable. Posting last month’s rates on their website is not adequate.

They must offer fully functioning booking capability with the latest schedule and price information – ideally through multiple channels, but at least on their websites.

Source: www.aircargonews.com

Image: www.pixibay.com

The post Putzger perspective: The challenge of finding cargo capacity appeared first on Cargo News Today.

The heavy lift sector is looking forward to getting back to normal post-pandemic, although there is a debate about what that future will look like.

On the positive side is Volga-Dnepr Airlines, which talks of recovery and revival as the world restarts following the upheavals of the past two years.

“It is expected that our ‘traditional’ contributing sectors will keep on their growth trajectory, with aerospace and heavy machinery going over 6% up in 2022 tonnage-wise; high technology (which covers a lot of oversized and out-of-gauge pieces) over 8%; automotive over 5%; capital equipment over 1%, to name a few (as per figures from Seabury Consulting),” says Ekaterina Andreeva, commercial director at Volga-Dnepr. “We look positively into 2022.”

Others are also positive about the coming 12 months.

“We believe that the share of super heavy and oversized cargoes will keep growing in our air shipments, which are the main specialisations for Antonov Airlines,” says Andriy Blagovisniy, Antonov’s commercial director.

Blagovisniy’s evidence is anecdotal rather than statistical: Antonov has seen an increase in the number of flights with project cargo but points out these are still very low compared to pre-pandemic levels.

Presently, project cargo accounts for 5.7% of the total amount of its flights with industrial cargo.

“We hope that global economy bounces back soon to a normal pace and the quantities of heavy lift projects resume,” Blagovisniy adds.

More muted is the view of charterer firm Chapman Freeborn, which reports the heavy lift charter market as being pretty much “business as usual”.

Nor does it see “any major changes in the short- to medium-term regarding outsized projects and usage of the aircraft”, says chairman, Russi Batliwala.

Oil and gas uptake

For Volga-Dnepr just short of a third of its charter operations are on behalf of energy and heavy machinery customers, around 15% for aerospace and 8% for oil and gas.

Emirates SkyCargo is looking to expand in the heavy lift sector, believing the market to be favourable for both oil and gas and aircraft engines.

“We see an uptick in heavy lift related to oil and gas,” Hiran Gregory Perera, senior vice president, cargo planning and freighters at Emirates SkyCargo tells Air Cargo News in an interview at the Dubai Air Show. “We hope to grow oil and gas and aircraft engines,” he adds.

For the aerospace sector the major contributing regions were China, Middle East, North America; for energy & heavy machinery – Europe, India and Far East, Russia and CIS; and for oil & gas – India and Far East, Europe, Volga-Dnepr says.

“Altogether for 10 months of 2021 we have delivered over 21,000 tonnes of project loads to various countries across the globe,” Andreeva adds.

Some of the details of this hint at what the market is likely to look like in future and some of it might be close to home in the aerospace sector.

Alongside aerospace growth, Volga-Dnepr is also noticing delivery of plane parts for freighter conversion programmes “in great demand” and AOG services as passenger planes return to service.

High tech is playing a part too, with more requests for transportation of capital equipment for semiconductor manufacturing from the leading tech companies.

“With construction of plants for semiconductor production in North America there are charter programmes from Asia which will last at least till the end of this year and might be extended beyond,” Andreeva says.

Supplementing this is the extra business the Covid-19 pandemic has generated, although that same pandemic has become one of the biggest challenges the sector has to deal with.

The view going forward is there will be more of the same while the pandemic lasts.

“The pandemic will continue to be an added revenue stream for non-heavy lift cargo loads,” says Batliwala. Chapman Freeborn has (and is still presently) booking multiple AN-124’s and AN-225 flights with PPE cargo.

On top of this other health fields have opened up.  Volga-Dnepr notes “emerging demand”, for vaccine production equipment and Antonov likewise reported high demand for the transportation of medical equipment alongside PPE.

Pandemic pressure

What is causing some disquiet though is the amount of extra work the pandemic is causing.

Andreeva says: “One thing I would like to highlight that it has been and still (is) challenging for our crew and technical personnel to operate overseas, due to constantly changing Covid-19 restrictions.

“We implement all the necessary measures to guarantee the health and safety of the crew and keep the global supply chains moving but sometimes Covid-19 still affects our operations.”

This is part of a broader problem, as flagged by Antonov, which says the issues are not just about crews but also facilities and sometimes entire countries.

On the issue of testing, Antonov is candid about the burden it imposes. “Covid-19 undoubtedly created serious changes to the usual routines of our crews,” Blagovisniy says.

Additional planning was needed to compensate for a lack of ground personnel in major Chinese airports, and there were further complications when changing crews and relying on passenger airlines to ferry them around.

To combat these issues, procedures have been introduced for mandatory testing of crew members before each mission, special passenger charters on the AN-74T and AN-26 aircraft operated by Antonov Airlines ensures changing crews on time independently on regular flights, and most importantly, most of the airline’s flight and technical crews have already been vaccinated.

There are then further restrictions on the work of the personnel of the handling companies inside the aircraft, which complicates the loading/unloading of the aircraft, says Blagovisniy.

“We expect these restrictions to continue for the next six months,” he adds.

There is also, as Volga-Dnepr’s Andreeva notes, an impact on any carrier’s home base.

Internally, 70% of Volga-Dnepr staff are still working from home. While very efficient, the carrier, like so many others, misses office and real-time communications “sometimes”.

It is taking all the necessary steps to mitigate the health risks with a massive vaccination programmes (both from flu and Covid-19), regular PCR-testing and medical checks – among other things.

Sustainability “threat”

Another challenge the sector faces is highlighted by Chapman Freeborn: the pressure they are under not just to look and sound green but to be green.

Much of the industry does want this but until Sustainable Aviation Fuels are widespread and as cheap as jet fuel it’s going to be a long time coming.

The aircraft used for heavy lift projects tend to be older and less efficient than the jets used for general cargo and e-commerce flights.

“The ongoing modernisation of these ‘niche’ aircraft is most definitely a challenge, as is the global focus on sustainability. These aircraft are not the most environmentally friendly and as a result, in my opinion, could affect their use by industries in the future,” says Batliwala.

“I personally see the big focus on sustainability as a threat for airfreight in general after the present and ongoing peak times.”

The energy sector – one of the biggest users of heavy lift services – faces its own challenge as the world looks to transition away from fossil fuels to renewable energy.

‘Make it local’ and ‘buy it local’ slogans are already seen daily, he went on to say, arguing that makes it difficult to talk about growth.

Batliwala says the pressure to go green will see a shift to less polluting fuels and more modern aircraft and this will renew or at least change the industry.

“Going forward it is difficult to predict but I feel that what was once considered ‘normal’ for the cargo charter market will never be again,” he says.

Source: www.aircargo.com

Image: www.pexels.com

The post Heavy lift looks to recovery from pandemic pressures appeared first on Cargo News Today.

The post Swissport awarded Lufthansa handling contract appeared first on Cargo News Today.