Estimates for air freight growth range in this year range from 2% to 5%, but the continuing influx of passenger wide-body capacity, especially in the Asia-Pacific region, is likely to put pressure on load factors and rates. Outbound lanes from Hong Kong and Shanghai to Europe were the biggest gainers.
CT Bureau
After a dip in the start of this year, rates have climbed the past three weeks ahead of Chinese New Year. The price to ship goods by air is down 23% y/y compared to down 29% a month ago.
The pace of decline has slowed from 38 per cent in January 2023. Outbound lanes from Hong Kong and Shanghai to Europe were the biggest gainers, a likely effect of the Red Sea disruption to ocean traffic, with rates nearly caught up to last year’s level.
The amount of space filled on airliners fell by about three points this January to 56 per cent, Xeneta stated. According to latest report of IATA, international acargo capacity was 11.3 per cent higher at the end of 2023 than a year earlier.
Passenger belly space increased 36 per cent for the full year, while the cargo capacity from all-cargo aircraft decreased marginally.
Top of the list of efficiency improvements for the air cargo industry are cargo-friendly airports. By enabling all the parties involved in transporting cargo, such as freight forwarders, ground handlers, airlines, and customs, to communicate with each other, an ACCS can help improve cargo movement, reduce overall logistic costs, improve supply chain planning, and reduce duplicated work.
Accurately tracking the real-time movements of Unit Load Devices (ULDs) is one of the solutions to efficient air cargo logistics. But what about the ULDs themselves? The basic design of the industry’s hidden heroes has remained largely unchanged for decades. Surely there are efficiency opportunities here.
Economically Feasible
Leonard Rodrigues: Making belly capacity efficient involves leveraging advantages inherent in passenger flight ops. Firstly, the scheduling of passenger flights ensures cargo can be transported by air with greater frequency. This is beneficial as it allows cargo to be moved swiftly between connecting flights.
Use of standardised cargo units, such as lower deck pallets and containers across various aircraft types, streamlines the loading and unloading process. Secondly, the economic viability for cargo becomes evident in destinations with high demand, such as Bali and the Maldives, due to handling, trucking, among others.
In these cases, the opportunity cost of transporting incremental cargo on passenger aircraft is low thus making it economically feasible despite additional costs. This approach offers a sustainable alternative to deploying dedicated freighters, which may not be economically justified in these markets due to the mismatch between cargo demand and costs.
Role in reducing shipping costs
Jessica Panigani: Optimising belly capacity requires advanced cargo loading techniques, such as space-efficient packaging, and real-time tracking systems, among others. These techniques ensure maximum space utilisation and efficiency in the logistics operations.
Belly capacity plays a significant role in reducing shipping costs, improving supply chain flexibility, expediting delivery times, and accommodating a wider range of goods, ultimately enhancing overall logistics efficiency.
The airlines such as Lufthansa had responded to the dreaded pandemic by converting passenger aircraft into cargo-only flights, thereby effectively increasing the passenger flight’s belly capacity. Similarly, Air Canada and United Airlines had also adapted passenger cabins to carry more air cargo thus assisting in the transport of essential goods such as medical and pharmaceutical supplies and e-commerce.
Belly Capacity Operations
Simona Bakaya: With a diverse geography and large population, it is crucial that the available belly capacity is used effectively in a bid to enhance trade. This is certainly the situation today with cargo benefiting from and supporting extensive passenger operations. Belly capacity alone will not provide the full capacity needed to achieve economic growth targets. With 1 to 1.5 tonnes being the norm.
Mid-sized passenger aircraft such as the B757 may offer between 2 and 8 tonnes of cargo capacity on the lower deck, depending on aircraft version, flight route, PLF and cargo. Wide-bodied aircraft such as the A330, A350, B777, B787 also vary depending on PLF, wind direction, route, flight duration and type of cargo carried. A B787 could offer around 14 tonnes and a B777 between 20 and 25 tonnes, depending, of course, on the type of aircraft.
Vital to transport time-sensitive cargo
Santosh Soni: The space available in passenger aircraft for cargo, requires a multifaceted approach for efficiency. Utilising advanced loading techniques such as optimised palletisation, maximises space. Efficient scheduling and route planning ensure belly capacity is fully utilised.
This cargo capacity is crucial for time-sensitive goods, perishables, and e-commerce shipments, meeting consumer demands for fast delivery. Efficient belly capacity reduces costs and increases revenue for airlines. Belly capacity significantly impacts the shipment of goods by offering quicker and often more cost-effective transportation than cargo aircraft.
This capacity provides additional space for transporting goods, allowing for more cargo to be carried on each flight. During Hajj and festive seasons, there is an increase in belly capacity due to higher passenger demand. The airlines often operate additional flights or use bigger aircraft to accommodate this demand, which can result in more space available for cargo. However, this increase in capacity can result in lower yields due to the higher competition for passengers and cargo space, leading to potentially lower prices to attract customers.
Cargo can be shipped faster
Siang Tang Tan: The passenger aircraft’s belly capacity efficiency is an important aspect of air cargo operations. By increasing belly capacity, the companies can ensure that products are shipped faster and in bigger quantities. It is becoming more imperative for the air cargo operators to invest in greater belly capacity in today’s fast paced shipment scenario.
We have noticed this not only in Sultanate of Oman, but in the rest of the GCC as well. The air cargo capacity, measured by available cargo tonne-kilometers (ACTKs), has increased by 13.1 per cent year-on-year in October 2023, owing to the continued strong return of international passenger belly capacity. So, freighter networks are crucial for connecting to international high volume cargo hubs as well as to provide much needed cargo capacity on developing passenger routes.
More flights to to meet demand
Shakir Kantawala: The airlines tailor their planning based on the type of aircraft. For narrowbody aircraft, the focus would be on carrying dense cargo due to their limited capacity. In contrast, wide-body aircraft require a balanced approach to loading, prioritising an optimal mix of volumetric and dense loads in ULDs.
This manages the aircraft’s center of gravity and maximises space and payload and enhances its revenue earning capability. Due to space limitation, the narrowbodies handle smaller shipments sizes. Many airlines cap the maximum weight per piece at 150 kg to accommodate manual loading and unloading. During the peak travel seasons, there is a likelihood of cargo offloads because of excess passenger baggage.
The wide-body aircraft can carry larger shipments on unit load devices (ULDs) and pallets, although dimensions may vary, depending on the aircraft type. Cargo is ferried in the belly of passenger flights. With the increase in passenger travel over the years, airlines have invested more in aircraft and launched new routes.
Reduces costs, delivers fast
Pongsathorn Sangasang: Maximising belly capacity in passenger aircraft involves factors such as effective cargo loading, advanced booking systems, standard container usage, and the integration of Artificial Intelligence and Machine Learning. Coordination between the airlines, forwarders, and handlers, among others, is also crucial. Selecting aircraft with optimal cargo capacity for specific routes also enhances efficiency.
Belly capacity impacts shipments by offering more transportation options, reducing costs, providing faster delivery. It also helps in reducing environmental impact by optimising fuel usage per kg of air cargo. Recently, Emirates SkyCargo utilised larger aircraft to enhance cargo space, and Delta Air Lines had converted pax aircraft to cargo-only flights during the pandemic. Similarly, Qatar Airways upgraded its fleet in order to offer more belly capacity.
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