Air cargo hubs of the future

posted on 3rd April 2018

Greater collaboration and closer integration of IT with physical handling systems will be key, along with meeting growing demands from e-commerce and security, writes Phil Hastings

Republished courtesy of The International Air Cargo Association (TIACA)

Greater collaboration between all the parties involved and closer integration of information technology and physical handling systems will be key to further improving the efficiency of air cargo hubs. And alongside those developments, future air cargo hubs will also need to manage the implementation of additional security requirements, respond to the particular demands of e-commerce, and cater for increasing volumes of bellyhold cargo.

These were some of the main factors highlighted by senior executives from various sectors of the worldwide air cargo industry when asked to identify the likely most significant innovations required to enhance the future performance of hubs.

Markus Muecke, global head of air freight procurement and product management for global forwarder Panalpina, suggests that the ‘air cargo hub of the future’, as at present, is likely to comprise two distinct types of airport operation. The first would be the established major international airports around the world, such as Amsterdam, Frankfurt, and Paris in Europe; Chicago, Atlanta and Dallas in the US; Shanghai and Hong Kong in Asia; and leading Middle East gateways, which would continue to handle both ever-growing volumes of passenger aircraft bellyhold cargo and freighter traffic.

The second would be secondary and specialised airports focusing on handling freighters, for example Brussels and Leipzig in Europe; Memphis and Louisville in the US; and Zhengzhou in China. As current examples, he points to Panalpina’s established use of Luxembourg in Europe and Huntsville in the US as hubs for its own regular intercontinental scheduled chartered freighter operations.

One of the most important factors when it came to improving the efficiency of both types of airport cargo hub, agree other industry sources, is increased collaboration between all the parties involved and improved integration of processes, particularly in relation to the sharing of information. Nanne Onland, CEO of Cargonaut, the cargo community information platform at Amsterdam Airport Schiphol in the Netherlands, says the air cargo industry should expect to see increased collaboration between the information systems at different airports.

“More airport communities are developing community information platforms and at the IATA (International Air Transport Association) World Cargo Symposium in Berlin last March, those various platforms expressed their willingness to cooperate,” he notes. “In principle, for instance, outbound shipment, customs and security information at one community information platform could be used by another platform for inbound processing.”

Jim Butler, president of US carrier American Airlines Cargo, says moves to enhance the efficiency of air cargo hubs through greater collaboration on the information technology front would be accompanied by further developments on the physical handling side. “The two aspects go hand in hand,” he says.

“If you look at some of the moves in the air cargo industry to implement new technology which have failed, often the main reason for that has been a failure to take into account the change management that goes with the full process change. You cannot just install new technology and not re-envision the physical layout and the way the physical handling works,” he argues.

“To give you a very simple example: if you had no technology in a terminal, it would be laid out in a way which made it most efficient to manually find a shipment. Once you have technology that enables better visibility of cargo location and timing, you would look at a much different, more-efficient way of laying out the physical assets.”

Similar points are made by Sanjiv Edward, head of cargo business at Delhi’s Indira Gandhi International (IGI) Airport – and also chairman of The International Air Cargo Association (TIACA). “In India, the focus of leading airports is on establishing integrated data-sharing platforms, for example CCS (Cargo Community System) at IGI Airport, and single-window clearances for faster clearances in co-ordination with regulatory bodies. Many airports are also introducing various innovative means for faster physical handling of consignments such as battery-operated forklifts,” he reports.

However, Uwe Beck, managing director of BeCon Projects, a German international air cargo industry consultancy, claims that in many parts of the world, efforts to date to improve the efficiency of hubs have been held back by a lack of co-ordinated information technology development within those facilities. “The classic information technology structure in an air cargo hub handles airline functions such as cargo booking, invoicing, revenue management, etc, and that is now generally done quite well,” he says. “However, when it comes to hub control matters, the actual physical movement of the shipment, there is a distinct lack of supervision and tracking. It is still all done by manual handling and interaction.”

On the subject of enhancing the physical handling in air cargo hubs, there has recently been growing talk in some sectors of the air cargo industry about the potential to make greater use of ‘robotics’, although opinion on the viability of such systems appears split. Beck, for example, is sceptical, suggesting that while such systems might work for an express carrier handling shipments of up to 20 kilos, “they would not work in general air cargo hubs because the nature of the shipments handled is so varied in terms of size and the nature of the commodities”.

American Airlines Cargo’s Butler, though, put a more positive spin on that subject, suggesting that many modern handling systems could in fact already be considered a form of robotics. “I think it is likely there will be more opportunities for the advancement of robotics in cargo hubs, although it may take us a while to get there,” he adds.

Another major challenge for air cargo hubs in recent years has involved the need to respond to international demands for tighter security, particularly in relation to the screening of shipments, and that pressure appears set to continue. “If there is another terrorist incident involving commercial cargo on an aircraft, the industry could see the Americans demanding that every shipment in transit has to be rescreened – in fact, that is already happening in some parts of the world,” comments BeCon’s Beck. “If that requirement becomes more widespread, then a completely different handling scheme will be needed in the hubs concerned. Those screening systems will have to become an integrated and automated part of the whole hub handling process.”

Similar views are expressed by Cargonaut’s Onland, who agrees that when it comes to tighter air cargo industry security, “there is certainly more to come”. He also suggests, though, that while hubs would have to respond to those developments, there could be resulting efficiency benefits. “Security regulations trigger process changes and for those to happen, systems and facilities need to be adapted,” he notes. “However, much tighter security requirements may help the industry to share already-available information for its own purpose.”

Onland also highlights another more general development which, he says, will be an increasingly significant factor in future air cargo hub operations. “E-commerce has taught end consumers a new experience of logistics service, with faster delivery, higher predictability and more information about the status of a shipment,” he observes. “That experience is also expected in the B2B (business to business) market for air cargo.”

IGI Airport’s Edward makes a similar point about the likely impact of e-commerce on air cargo hub operations. “Consumers are now willing to pay a premium to get their online purchases as soon as possible. Certain high-end products such as designer fashions and accessories are well suited to air transport and will make up an increasing percentage of air cargo. However, forwarders will need to provide a custom solution to ensure that those time-sensitive items arrive on time and undamaged.”

Current trends suggest an increasing percentage of that e-commerce traffic and other air cargo will be carried in the bellyholds of passenger aircraft rather than on freighters, with resulting implications for some airport hub operations. “This is definitely a subject which aspiring airport hubs will have to contend with and those who have the adaptability to deal with the situation will succeed in the long-term,” agrees Edward.

“Take Delhi’s IGI Airport as an example. Ten years back when doing the masterplan for future development, the assumption was that about 50% of cargo would be belly cargo and 50% freighter traffic, so the original plan was to dedicate a large area in a remote location for a cargo terminal and freighter bay expansion,” he says. “However, currently 80-85% of cargo is belly cargo and that trend will continue. So changes were made to the masterplan to ensure the cargo terminal expansion was planned closer to the passenger terminals, reducing the connection time and keeping the air cargo product attractive.”

Edward adds that in some cases, more-stringent norms are required for cargo travelling in passenger aircraft bellies “and hubs need to ensure the equipment, infrastructure and processes are aligned to support that”.

But overall, the industry as a whole still needs to substantially improve its planning processes when it comes to designing and developing the air cargo hubs of the future, though, warns BeCon’s Beck.

“Even with some of the large new air cargo hubs being built in the Middle East, for example, there is not sufficient planning going into them in terms of what is actually required,” he claims. “They are not correctly targeting what they need to be doing in the future; they are just repeating the format and structure of existing hubs.”

This article was originally published within the TIACA Times and is republished courtesy of The International Air Cargo Association (TIACA). It provides a ‘taster’ preview for one of the 15 conference sessions taking place during the 2016 TIACA Air Cargo Forum in Paris from 26-28 October.

The hour-long conference session entitled ‘The Cargo Hub of the Future’ is scheduled to take place on Thursday 27 October at 15.30 and will address questions including: What role will the next-generation air cargo hub play in supporting the industry as it rises to the challenge of a changing e-business landscape? Which new technologies will we need to adopt and how can we work together to make sure our facilities are smart hubs?

Led by TIACA chairman Sanjiv Edward, Head of Cargo Business at Delhi International Airport, the panel discussion is scheduled to include input from: Uwe Beck, Managing Director, BeCon Projects • Franck Goldnadel, Executive Director, Chief Airport Operations Officer, Aéroports de Paris and Paris-Charles de Gaulle Airport Managing Director • Jean-Yves Chaumet, Senior Vice President Operations, Air France-KLM • Ramesh Marmidala, CEO, Celebi Delhi Cargo Terminal Management India • John Batten, Interim Europe CEO, Worldwide Flight Services