The peak season got under way late this year, but it did produce backlogs at major Chinese gateways, leaving forwarders scrambling for freighter lift. Their predicament was exacerbated by the Chinese authorities’ decision to clamp down on charters out of key airports like Shanghai Pudong.
Inevitably the capacity shortages raised questions about available freighter capacity. In response to falling yields, many airlines have pared down their freighter fleets. The reduction has been slowed down by the slump in oil prices, which gave older 747 and MD-11 freighters a new lease of life, but they are headed for the exit once kerosene prices start to rise again.
In the meantime, the disparity between passenger and cargo growth is unleashing an armada of bellyhold capacity rising at a faster rate than demand for freight lift. On sectors between Asia and Europe and within Asia, the bellyhold growth poses a strong challenge to freighter operations, particularly in light of the usually higher frequency of passenger flights.
Citing lack of demand, EVA scrapped its freighter service to Frankfurt in November, which brought down the curtain on the Taiwanese carrier’s freighter flights to Europe. EVA is in the process of overhauling its fleet, phasing out its MD-11Fs and 747Fs and replacing them with 777 freighters, which will shrink its freighter fleet from 15 to 10 or fewer units.
Even carriers which have not cut back their freighter fleets are going slow with their all-cargo activities in both regional and long-haul markets. Cathay Pacific has steadily ramped up trans-Pacific freighter flights to North America, but has held the line to Europe, even for the peak season.
“All our passenger flights to Europe are with 777s, which gives us a lot of capacity,” said Mark Sutch, Cathay’s general manager of cargo sales and marketing.
As more new widebody aircraft join Cathay’s fleet in 2016 to be deployed on intra-Asian sectors, this will free up some 747-400 freighters currently used in these markets. They may be shifted to the Pacific, or management may come to the conclusion that it has too many cargo planes on its hands, Sutch said.
According to some observers, as much as 90% of the global air cargo volume could be carried in bellies of passenger aircraft, a far cry from the current balance between freighters and belly capacity in terms of market share, where the former are slightly ahead.
Shawn McWhorter, president for the Americas at Nippon Cargo Airlines, dismissed such claims as academic. The math there is skewed; it does not take constraints like payload restrictions on long sectors into account, nor does it acknowledge the limitations of narrowbody planes, he argued.
Moreover, the straightforward math does not allow for imbalances on sectors. “If you have a route with strong demand one-way but no cargo in the opposite direction, this is regarded as 50% utilization, but this is misleading,” he added.
“We still see a lot of need for maindeck capacity,” remarked Rich Zablocki, vice president, global product development, North America at CEVA Logistics. For one thing, hazardous materials often can only be carried on freighters, he pointed out, adding that the ongoing debate about carrying lithium batteries could possibly lead to a blanket ban on carrying them on passenger planes.
The prospect of 747 freighters disappearing from the scene raises one additional question. 747 production freighters are the only widebody cargo aircraft that have nose-loading capability. In most cases this is of little relevance, but it does come into play when large pieces are to be carried that do not fit through the cargo side door.
“In some cases you need nose loading, especially in the aviation industry and the energy industry, but it is not a high demand situation,” said Zablocki.
“There are very few markets other than oil and gas and mining that require nose-loading,” said Ron Buschman, managing director of cargo GSA and broker Aerodyne Cargo Services.
Stan Wraight, senior executive director of Strategic Aviation Solutions International, noted that the nose-loading capability, while useful, has limitations. “Nose doors are only good for ultra-long cargo as the height is limited to 96 inches, with the cockpit above the door.”
When this need arises, the number of freighter operators that have 747-8s, such as AirBridgeCargo, Nippon Cargo or Cargolux, gives sufficient options in this respect, he added.
If the origin airport is not served with 747 flights, there are ways around this, Buschman noted. “You can always do diversions. And you can truck. We have 747 freighters here in Calgary, but we can also truck the cargo to Chicago to catch a freighter from there,” he said. “Or you can charter an Antonov [124]. You can always find a solution.”
By Ian Putzger
Air Freight Correspondent | Toronto
