European airports and their stakeholders have been battling with significant short-term congestion challenges, in part due to Covid-related capacity and demand volatility and workforce limitations. But they are also working on solutions to longer-term, structural issues linked to technology and personnel, reports Stuart Todd
Almost two years since the start of the Covid-19 pandemic, European airports and their airlines, cargo handlers and other stakeholders are continuing to struggle with the ‘new normal’ in air cargo – or what may turn out to be a ‘current normal’, until passenger air services return to something approaching their pre-Covid patterns.
This current normal in air cargo, characterised by increased piece numbers and a drop in average weights per piece – triggered by Covid-19 and furthered by rapid e-commerce growth – combined with reduced bellyhold capacity and the more-volatile freighter and preighter charter and scheduled services that have replaced them, have led to cargo ground handling emerging as a bottleneck in the overall air logistics supply chain, slowing transit times and causing major congestion and delays at many airports.
Handling agents, airport authorities, as well as forwarding and trucking sources, have told CAAS they expect the current operating challenges to persist for some time yet, despite their efforts to manage these altered flows.
Menzies Aviation’s executive vice president for cargo, Robert Fordree, acknowledges that the volumes of cargo the company is experiencing currently “are stretching our resources to the maximum, and we expect this to continue for the foreseeable future and at least throughout 2022”.
He continues: “There is no doubt that we have seen a dramatic and significant rise in cargo volumes, exacerbated by high piece counts and the acceleration of e-commerce. For our industry this (surge in business) is extremely welcome and part of the reason we have given cargo such a significant focus in our overall global growth strategy.”
But he says “many traditional cargo gateways throughout the world are experiencing capacity challenges at present. This is due to the rapid increase in freighter activity and the associated cargo volumes. It is difficult to forecast this and even more difficult to ensure that the warehouse and logistics infrastructure is fully in place with such short notice,” Fordree notes.
“Our teams and those of our competitors continue to work hard on solutions that speed up cargo handling processes and enable us all to manage the throughput being experienced today. We have seen non-traditional gateway airports express a desire to provide cargo logistics solutions and we are actively engaged with a number of airports on cargo development initiatives.”
Frankfurt Airport, Europe’s biggest hub for cargo, has been particularly severely affected by congestion since the start of this year’s fourth-quarter peak season, although volumes have consistently exceeded previous record highs since the end of 2020. For example, in the first three quarters of 2021, the German gateway posted its highest cargo volume to date. But cargo throughput continued to grow noticeably in October too, increasing by 10% year-on-year to more than 200,000 metric tonnes – a rise of 11.7% compared to October 2019.
“However, this strong growth, characterised by a high number of loose and light pieces, challenges the handling processes,” explains Max Conrady, VP for cargo development at airport operator Fraport. “Also, the pattern of traffic has clearly changed since the rebound in passenger volume. Passenger and freight airlines often schedule flights at very short notice. On occasion, this leads to isolated but sharp peaks in volume during the course of any given day and at weekends. Even though we are only at around half 2019 passenger traffic levels in total, these peaks come close to the volumes experienced pre-crisis.”
Conrady continues: “This requires the support of a great number of staff. At the same time, the strong, sustained growth in air cargo, especially with cabin load on preighters, again ties up a large number of personnel. As a result, cargo processes may also be delayed.”
He stresses that the continuous collection of imported goods “is also essential to smooth cargo handling processes”, but says that “for various reasons, it happens more often that goods remain longer in the warehouses on-site and thus take up space for newly arriving goods”.
The airport set up an air cargo community task force “to adapt to the new normal” in air cargo, with weekly meetings to “ensure transparent exchange and mutual support”, and where airport operator Fraport plays a moderator role.
“On top of this, all local partners have implemented numerous measures to relieve the situation,” Conrady says. “Fraport has, for example, all available employees in the cargo area on duty – no short-time working.
“In addition, if necessary, we check whether we can provide additional space for storage. We are also in constant contact with the cargo handling agents when it comes to transport equipment – dollies, metal sheets, containers – in order to ensure efficient use.”
The crisis has seen a higher-than-normal level of operational cooperation between the various parties, including among competitors, in order to optimise the airport cargo community’s overall resources.
“Originally driven by customs, we have also made great efforts together with site partners to further develop our cargo data exchange platform – especially for imports, so that all parties involved get more transparency about the flow of goods,” Conrady says. “This will help to organise processes in a more robust way and at the same time strengthen the co-operation between partners.”
Despite such measures, the reality is ‘bottlenecks’ have formed since late September at Frankfurt and some other European air cargo hubs, in some cases because carriers and forwarders have decided to switch some traffic from FRA to other airports.
For example, in early-November US forwarder Flexport launched a weekly air charter service from Hong Kong to Paris-CDG airport in response to congestion at Frankfurt and also at Amsterdam Schiphol. Flexport noted that new customs regulations in Germany were adding to the challenges facing ground handling agents’ (GHA) processes at a time they were already under severe stress, with loose cargo particularly taking more time to clear.
In early November, Stephan Haltmayer, CEO of Germany-based forwarder, Quick Cargo Services, described ground handling service quality at Frankfurt as “terrible”, which he attributed to a lack of additional manpower that was needed to offload belly cargo from passenger mode aircraft and also to handle charter flight arrivals.
“The GHAs are not flexible enough to react to market needs,” he noted, with some carriers, meanwhile, avoiding flying to Frankfurt and instead favouring other airports.
“Truck companies are no longer accepting the long waiting hours because they cannot plan the allowed driving time for their drivers,” he added. “Therefore, they refrain from pickups at Frankfurt. This ‘disaster’ is costing forwarders a lot of money. Customers are not willing to accept the extra storage and truck waiting times. Whether it’s ‘peak’ (season) or not, it makes no difference. Service levels are in a bad way – lost shipments in crowded warehouses, cargo out in the rain on the tarmac, damage, part shipments and more. All this has increased.”
Jason Breakwell, commercial director at pan-European road feeder services operator Wallenborn Transports, highlights that there had been “significant disruption at Frankfurt since the start of October – notably at the largest handling facility operated by FCS” – problems that had continued into November.
“Whilst higher cargo volumes are a factor, other causes, including more freighters, more mixed ULDs, cabin cargo, lack of staff and the employment of inexperienced personnel, have also contributed,” he explained. “The ‘final straw’ at Frankfurt seems to have been the implementation of UCC (customs) requirements which, with hindsight, should not have been attempted during peak season.
“Overflow warehouses at Frankfurt have also become saturated and trucks have been waiting up to three days to be unloaded. The diversion of flights from Frankfurt initially eased some pressure, but ultimately led to logjams at other airports because cargo could not be dispatched (from there) to Frankfurt.”
Breakwell says that some forwarders at Frankfurt and other airports had stopped accepting deliveries, and this had added to the volumes piling up at on-airport handling facilities and on the ramp.
He went on to note that “rolling congestion” has been affecting road feeder services at other European airports in recent months, with Amsterdam Schiphol especially bad during October.
“We’ve not seen delays elsewhere on the same scale as Frankfurt and Amsterdam,” he noted. “Dwell times across Europe have been excessive, but all-cargo airports such as Leipzig, Liège, Luxembourg, Ostend and Vatry are mainly transit airports with fewer forwarders.
“I expect this volatility to be a challenge for months to come and am concerned that ‘skimpflation’ is creeping into supply chains – whereby prices go up, service levels go down, and end users start to ask why they’re paying a premium for air cargo. The industry as a whole needs to address this if it is to maintain the positive momentum achieved during the pandemic period.”
At a company level, Breakwell explained that Wallenborn has increased capacity to address lower productivity caused by congestion and has deployed more capacity to hubs that are receiving more charter and diverted flights to ensure supply chains remain intact.
Assessing the broader picture, Steven Verhasselt, VP commercial at Belgium’s Liège Airport, noted that a combination of “unprecedented” volumes of air cargo and a diminution in the average size of shipments have resulted in slowing transit times at airports.
“The bottleneck is ‘the airport’ and it is unfair to single out any of the parties involved – be it the airport operating company, airlines, handlers, customs, customs agents, truckers and consignees, who all deal with the cargo,” he notes. “It is a shared responsibility.
“The air freight logistics chain is indeed a chain and ‘solutions’ can only work if all the links in it are ready to play their part. Moving cargo through an airport is a combination of physical and digital processes. Making sure the correct information is available to the person who needs to deal with it is just as important as having the space to break down a pallet or having a truck dock available for loading.”
Commenting on how Liège has adapted to the ‘new normal’ in air cargo, Verhasselt says: “The investment programme was already in place; the addition of aircraft parking and first line handling capacity has continued and been completed on schedule.
“Over the last two years, we’ve doubled handling capacity and aircraft capacity in the airport’s Northside zone. At the same time, we invested heavily in the digitisation of processes at airport community level – and also in human resources, bringing talent to the airport. We launched WeCargo for innovators and start-ups, the Liege Airport academy for training programmes for airport jobs, and ‘job day’ events on-site at the airport with public and private partners.”
Back at Frankfurt Airport, Nina Strippel, COO and branch manager at German air cargo ground handler LUG, reveals that over the course of the pandemic, the company – like other handlers – has experienced a huge increase in the number of pieces while the average weight per piece went down – initially because it was handling ‘mountains’ of masks, gloves and other equipment for protection against Covid-19. That surge in PPE shipments has now passed, but the ‘new normal’ type of air cargo it spawned continues to thrive, driven largely by the boom in cross-border e-commerce.
Focusing on what this means for cargo handling agents, she notes: “Small and loose shipments require a lot more manpower compared to freight that can be moved by forklifts. Hiring staff has become extremely difficult, and to talk of a recruitment crisis is no exaggeration.
“The upshot is that the cargo handling agent can become a ‘bottleneck’ in the overall supply chain. This has been the case since the beginning of the pandemic and remains so today.”
Menzies Aviation’s Fordree agrees that higher piece counts needs increased labour resources if these shipments need to be broken down. “However, there are competing industries seeking the same people that have traditionally gravitated towards aviation and cargo,” he notes.
“We believe that there is a current period of settlement required for remuneration in a number of sectors and we are all working on creative solutions to retain existing talent and identify the next generation of employees. They will have a much greater focus on technology solutions, and we are therefore investing in this field with a number of projects underway in trial locations.”
Sharing of shipment data
In order to reduce the ‘bottleneck’ in cargo handling as much as possible, the different parties in the sector need to work together, particularly in the sharing of shipment data, LUG’s Strippel argues.
“This is something all players could do; but in most cases, we have no information about the shipment’s tonnage, the number of pieces, the weights or anything else before a flight takes off at origin. This means that in the best case of a long-haul flight, we can only finalise our shift planning 11 hours in advance, which is no time at all even if you have a lot of flexibility built-in to your operation. The data is, of course, available at a much earlier stage, and sharing it would help all parties involved to speed up the process, much to the benefit of everyone.”
Resistance to data sharing
Strippel underlines that there was often resistance to data sharing between the various stakeholders in the air cargo industry “out of fear of being too transparent, giving too much information away to the possible detriment of the individual success of the company”.
She continues: “The serious obstacles to co-operation in the industry are illustrated in the following example: We asked some freight forwarders if they could share with us the data ‘capture’ they had for a particular shipment, the aim being to work together on the basis of having exactly the same information at our disposal.
“The response we received from one forwarder was that the company was paying its employees to enter the data into their system and that if they shared it with us this would amount to them incurring all the cost while we’d be ‘saving money’. I was shocked by this reply; but it showed how difficult it is for our industry to work on common goals.”
Fordree says that Menzies Aviation is in the process of building “a business intelligence-driven control tower that will enhance our data sharing capabilities with airline customers. There is every intention to increase the functionality on this platform to allow us to integrate and exchange a single source of the truth with all of the stakeholders in the chain, including forwarders.”
As to the lessons ground handlers have learned during the pandemic and the challenges that lie ahead, Fordree remarks: “The most obvious lesson is that a flexible and motivated workforce is essential to remaining competitive and responsive to our customers’ ever-changing needs. The volatility of flight schedules and peak demand has resulted in unprecedented pressure on our teams, and whilst we are focused on recruiting the next generation of cargo employees, we need to retain and nurture the talent that we have today.”
He continues: “The main challenge will continue to be appropriate infrastructure that supports the cargo volumes of today; but as our business is historically cyclical, we could be storing up challenges for the future. As global logistics starts to balance out once more, we need to avoid being left with extensive warehouse capacity that we cannot fill.”
According to Liège Airport’s Verhasselt, the pandemic “has definitely changed the dynamics of the chain. Previously, an airport attracted an airline. The airline chose a handler for the build-up and loading of shipments and for unloading and breakdown. A GSA was appointed for sales to freight forwarders and a trucking company for final mile to a distribution centre of a sizeable consignee.
“In the new model, a lot of the airline capacity is in-sourced by consignees. The job of the handler might be limited to loading and unloading or expanded to sorting out ‘second line’ and last-mile distribution.”
He continues: “The shift has also seen airlines move into dedicated warehouses to control the chain, airplanes being chartered by freight forwarders, and e-commerce platforms in-sourcing all the services they need. The flexibility of all companies involved and their staff can only be admired – as the chain is still ‘delivering’, despite all these changes.”
The pandemic has also prompted “significant engagement” between airports and logistics property developers, who are both now working closely with ground handlers, Fordree adds.
“We are in discussion with a number of parties, and these remain confidential for now; but it is a very positive sign for the development of purpose-built, state-of-the-art and environmentally friendly cargo solutions,” he concludes.