Air freight facilities are a headache, especially as the air cargo industry is bracing for ongoing strong demand. Operators are hoping that the headwinds that have propelled their fortunes to lofty heights over the past two years will continue, but the upbeat mood usually darkens when the conversation shifts to bottlenecks on the ground, especially air cargo terminals. Already facing delays on account of rampant demand chasing too little available lift, shippers and forwarders frequently suffered further slowdowns during the peak season as facilities at many airports were struggling to cope with the surge in volumes.
Handlers have warned that many airports are near capacity, if not already beyond levels of traffic that their facilities can process.
It has been widely acknowledged that airport planners underestimated the potential for growth in air cargo. The downturn in the global air freight market not only prompted airlines to hold back on getting freighter aircraft, it also induced airports to shelve plans for cargo facility development.
In North America, hardly any new cargo development project has been started in recent years, noted Ray Brimble, CEI of aviation facility developer Lynxs. His company has shifted increasingly to other aviation infrastructure development, such as aircraft hangars and maintenance facilities.
The surge in traffic as the 2017 peak season got into gear caught airports unprepared for the volumes coming through. As volumes did not decline after the peak season, concerns began to rise that continuing growth could overburden the system in the coming autumn.
Brimble reported that many airport authorities have signalled that they are operating at capacity. Some have issued requests for proposals for cargo infrastructure development, he added.
Not much new capacity will be in place this autumn. It does not help that warehouse infrastructure overall is tight. In mid-April industrial real estate provider CBRE reported that availability has declined for 21 consecutive quarters. The firm identified e-commerce as the primary driver of this development.
CBRE’s analysts also noted that many existing warehouses are not well suited to handle e-commerce. By the same token, many air cargo terminals are hopelessly outdated and cannot properly deal with e-commerce flows, according to Jens Tubbesing, CEO of GSA Airline Network Services, which represents a number of international carriers across the US and Canada.
“The biggest problem at the moment is infrastructure. It’s a disaster everywhere,” he commented.
Buildings are still designed for the requirements of yesteryear, Tubbesing remarked.
“You have a building with eight truck doors. You may make some changes inside, but you don’t change the four walls. Now you get 100 trucks coming to your facility, and you still have eight truck doors,” he said.
Like airport authorities, handling agents have come in for some criticism about lack of preparedness and insufficient investment in capacity upgrades. For their part, many have pointed to airlines’ ongoing stance of treating handling as a cost reduction target rather than an element of their service that requires investment. Their margins do not allow them to make significant investments in facility upgrades, they have argued.
Tubbesing has reservations about the validity of this argument. He finds that some handling firms are taking a wrong approach to the issue.
“The only answer many handlers have is: ‘We are throwing more people at it,’” he complained. “There is no engineering done to optimize flows through the building. No manufacturing company would let a flow-through facility be managed like that.”
No air cargo operator employs an industrial engineer or a process engineer to work on the design of cargo facilities, he added.
Brimble remarked that e-commerce changes the requirements for cargo facilities. The nature of this traffic calls for more special handling and increased individual handling, he pointed out.
Bringing in IT to manage flows better is the right approach, but it is only part of the answer, he reflected. Operators also have to consider how to break down shipments and how best to move them through an airport.
Like Tubbesing, he finds that basic tenets of warehouse development have to be changed. Traditional design calls for large landside docks meant to handle large trailer shipments, but the rise in e-commerce leads to more smaller shipments moved at higher frequency, therefore more smaller vehicles making more calls at cargo terminals, he said.
This affects not only terminal design but also raises questions about access to cargo areas. The higher number of vehicles leads to bottlenecks and traffic jams, Brimble pointed out.
Tubbesing’s take on the situation is grim. “Warehouses are a complete disaster,” he commented. It’s a mess.”
By Ian Putzger
Air Freight Correspondent | Toronto