A big year

posted on 25th April 2018

Finnair Cargo’s new Helsinki hub facility went into full operation in January and is already bringing benefits. But its new IT environment requires high data quality, an area where many in the sector need to up their game, head of global sales Fredrik Wildtgrube tells Justin Burns

2018 is a big year for Finnair Cargo as it is the first full year of operations at the carrier’s €80 million cargo terminal, which went into full production on 8 January. The state-of-the-art COOL Nordic Cargo Hub at Helsinki Airport is the cornerstone of the carrier’s future growth ambitions.
Last year was a strong one that saw cargo revenue grow, year on year (YOY), by 13.5% to €197.4 million, while revenue cargo tonne kilometres rose 11%, and volumes were up 8.6% to 157,028 tonnes. Head of global sales Fredrik Wildtgrube is optimistic 2018 will be just as good, although he believes it is difficult to say how the air cargo market will develop in Scandinavia this year.
“Cleary, the Norwegian seafood market is expected to continue growing strongly, and last year was an incredibly successful year for Norwegian seafood exports, which obviously impacted us favourably,” he says. “It will be interesting to see how Scandinavia will follow; and we will be very active in the market, utilising the very best our new COOL terminal can provide.”
Transition to the new terminal in January was phased to ensure a smooth switch, with some bookings initially restricted in the carrier’s network, mainly for narrow-body flights and special cargo. Wildtgrube says looking at how it has been performing in the past few months, the investment is already paying off. But he adds: “It goes without saying this is not a short-term investment; like our previous terminal it will be continually developed and there is space for even greater capacity. However, now we need to focus on sustainability and make sure we ‘light all the boilers’ and get the most out of the design, infrastructure and processes so we can demonstrate what’s really possible and how much we can improve.”
Wildtgrube believes the COOL terminal is a great platform to keep improving the customer experience, with the introduction of new technologies linking supply chain stakeholders in a new way to make air cargo faster; it was not just a construction project, it is all about “digitalization in air cargo”.


The terminal has capacity to handle high volumes of temperature-sensitive cargo and pharmaceuticals and perishables are important growth verticals, but e-commerce is also a key focus. “We see expedited air freight and e-commerce growing globally; it’s very interesting and we need to look at that as well,” Wildtgrube stresses. “We are happy with our service portfolio, but we need to continuously challenge ourselves and see how the market is changing.”
The terminal is built with capacity to meet growth future growth targets and fleet expansion up to when the final Airbus A350 aircraft is delivered in 2022. From 2018-2022, Finnair will receive a further eight A350s − one in the last quarter of 2018, two in 2019, two in 2020, two in 2021 and one in 2022.
In 2017, Asia made up three quarters of Finnair’s revenue at €147.1 million and remains the principle focus; and a new belly route is being added from Helsinki this year with a seventh to China in the shape of a three-weekly service to Nanjing from 13 May. Wildtgrube is quick to emphasise all trade lanes are important, but Asia being Finnair’s biggest market is of paramount importance − the short Northern route giving it cost and speed advantages for moving high-value luxury items like Norwegian seafood to Japan and other key markets.
“The area generates great impact and thereby requires our focus,” he says. “You only need to look at the Asia market share in terms of our revenue to see Asia is incredibly important for us. That said, our commitment to customers is the same across our network.”
Finnair will also start daily flights to Stuttgart from 24 April, a four-weekly service to Lisbon from 1 June and a twice-weekly route to Minsk from June, while frequencies are also being upped to Bangkok, Chicago, Talinn, Gdansk, Krakow, Moscow, Madrid, Barcelona, Budapest and Geneva.
Despite all the positivity, there are still challenges. Like all carriers, Wildtgrube says Finnair Cargo has been struggling with data accuracy and he urges the industry to up its digital game. “Our new IT environment requires 100% data quality and this is something the industry doesn’t do so well yet. We have launched a new initiative to correct and improve the data, so even when we receive the wrong data we can fix it,” he says.
“All stakeholders need to pull together to ensure the whole supply-chain benefits. This is aptly demonstrated in the e-AWB global penetration rate of 51%. In our industry we need to pick up the pace.”

 

Spiritual qualities

Better use of technology to make handling faster and more reliable is the principle focus for Spirit Air Cargo Handling. But Scandinavian cargo handlers are not immune from the competitive pressure from those that prioritise pricing over quality, reports Justin Burns

Seafood and pharmaceutical volumes have been growing across Spirit Air Cargo Handling’s cargo terminals in Denmark, Norway and Sweden. SAS Ground Handling’s cargo handling brand operates stations at Stockholm Arlanda Airport, Copenhagen Airport and Oslo Airport and others in the region. The Scandinavian market as a whole posted strong growth in 2017, driven by Norwegian seafood demand and the pharma market, but the cargo handler only expects to see relatively modest growth in the market in 2018.
New handling trends are emerging across the region, but the principle focus moving forward for Spirit is how it can better use technology to make handling faster and more reliable for its customers. The biggest operating challenges are pressure from competitors and agents that it says prefer low pricing over quality, leading to cargo being transported further down the continent. For example, cargo originating close to Oslo and Stockholm may be trucked to Copenhagen; or cargo from around Billund may be shipped via Frankfurt.
Station performance and challenges do vary, and Copenhagen is still seeing much more transfer tonnage than Oslo and Stockholm, while Spirit has seen a fall in the amount of freighters flying into both Copenhagen and Stockholm, whereas more and more are flying to and from Oslo as the seafood market drives network expansion.
Last month, the cargo handler became the first in Scandinavia to gain the International Air Transport Association’s CEIV Pharma certificate and has now achieved it at its Copenhagen, Stockholm and Oslo stations. As part of gaining CEIV, Spirit has implemented specific processes and procedures for handling time- and temperature-sensitive shipments across all three airports, along with internal training programmes.
The region is seeing a strong demand and need for better cool chain facilities to handle perishables and pharma cargo, but Spirit notes that price still seems to be the key element for all parts of the supply chain − shippers, freight forwarders and airlines.

Investment priorities
Further facility investment across the handler’s network will continue, but substantial investments have already been made over the last few years in infrastructure, with handheld PCs and ETV systems introduced at all terminals. And more recently to gain CEIV, money has been spent on new storage facilities for handling specific temperatures.
As for where the future focus will be in terms of investments to achieve growth, Spirit says it will focus its energy on any new trends and demands from customers, wherever it sees potential growth.
Vice president for ground handling Kjetil Håbjørg says: “We are very proud on having achieved the CEIV Pharma certificate at our three main locations. Besides focusing on new trends and demands, safety and security are key elements in the way we handle cargo. It is important for us to have quality in our handling.”