Hamstrung by a ceiling on aircraft movements, which is hurting its freighter traffic, Amsterdam Airport Schiphol (AMS) is not chasing small parcels to boost its cargo traffic.

The Dutch gateway is interested in high-value B2B e-commerce – for instance in pharmaceuticals – but it sees limited promise in the B2C variety, according to Bart Pouwels, head of cargo.

The rapid growth of B2C e-commerce has translated into a steep rise in demand for air cargo, but the sheer amount of this traffic is a challenge. In addition, the volumetric nature of this cargo and how it is shipped can be problematic for handling agents. Edwin Wenink, programme manager of the Smart Cargo Mainport Program (SCMP) at Schiphol, noted that many handlers have not set up their operations to process large numbers of small parcels, consolidated and all mixed up on a pallet. He reckons that standardization of packaging would help.

A senior executive of a multinational handling agent confirmed that e-commerce poses challenges. “In many locations, we are space-constrained,” he said.

For AMS, an additional aspect is the airport’s capacity to host more freighter flights. The authorities have set a ceiling of 500,000 movements a year for the airport, which AMS reached in 2017 – much sooner than had been anticipated. The ensuing constraints have hit freighter traffic. In 2018 full freighter movements at the airport dropped 10.4%, while throughput declined 2.5%. Last year freighter movements fell by another 9%.

To alleviate the situation, a rule was introduced that allocates 25% of all unused slots that airlines return to all-cargo flights. However, few slots have been given up, so gains through this channel have been paltry so far.

There are plans to open an airport on reclaimed land 65 kilometres from Amsterdam, which could take some of the traffic of AMS, but these plans are meeting stiff resistance, so it is still undecided if this will go through.

AMS is looking to boost its capacity through efforts to optimize flows both internally and to and from the airport. A major plank in this is the SCMP, a community project which is supported by the Dutch government. Alongside the airport authority, KLM Cargo, Dutch customs, cargo IT solutions provider Cargonaut and Air Cargo Netherlands, which represents the different stakeholders across the air cargo community, are involved in this.

Meanwhile, operators that focus on B2C e-commerce are building up rising European gateways. VIA Europe, an e-commerce fulfillment company which is based at AMS, opened a second e-hub in Liege last year. Cainiao is set to lease a 220,000 sq m parcel of land at the airport to set up a hub due to open in 2021. This is part parent Alibaba’s agreement with the Belgian government to establish a trade platform to develop and support cross-border electronic trade.

Budapest is another up-and-coming European gateway that is gunning for e-commerce. Last summer it hosted workshops to boost e-commerce in Hong Kong and Shanghai in partnership with AirBridgeCargo Airlines.

Some established international gateways are also going after a piece of the e-commerce pie. Miami is trying to establish itself as the premier hub for parcel flows to Latin America.

It has an agreement with the Brazilian authorities to clear B2C parcels headed to the South American country for quicker distribution in Brazil. There are talks about similar schemes to serve other countries in the region, according to Emir Pineda, manager, aviation trade and logistics, in the marketing division of the Miami-Dade Aviation Department.

In Asia, Hong Kong International Airport made headlines in December 2018 when signed an agreement with Alibaba to jointly develop a smart logistics network with global reach. This will be based on a US$1.5 billion facility at the airport, which is scheduled to go live in 2023.

Airlines have also adopted a more proactive stance to chase e-commerce and funnel these flows through their hubs. Lufthansa and Emirates unveiled products that specifically target e-commerce last year.

Even some low-cost passenger airlines are joining the game. Teleport, the freight and logistics arm of AirAsia, is investing in EasyParcel, a web-based parcel consolidator and provider of e-commerce shipping solutions covering Malaysia, Singapore, Thailand and Indonesia.

In Latin America, Brazilian LCC Azul added two Boeing 737 freighters to its fleet and signed a commercial agreement with Mercado Libre, Latin America’s largest e-commerce firm. This makes Azul the sole air shipping partner within Brazil for purchases from Mercado Libre’s platform.

It would be somewhat ironic if a European LCC were to plan an e-commerce operation with a significant role for AMS. The rapid growth of their passenger traffic has been fingered as a major reason for the airport’s shortage of slots.

By Ian Putzger

Air Freight Correspondent | Toronto