4 The Journal of Commerce
|
April 1 2019 www.joc.com
Mark Szakonyi
ROCKETING E-COMMERCE GROWTH
is pushing major US air cargo hubs to
their limits, and it's going to take more
than terminal investments to better
handle a seismic shift in shipping.
It's going to take technology-enabled
collaboration among transportation
providers and a higher degree of
sensitivity among ground handlers to
pressures cargo owners face in getting
goods to destination.
Just five years ago, there was
plenty of hand-wringing on air cargo's
future growth as some cost-conscious
shippers shifted more cargo from
freighters and the bellies of passenger
jets to ocean shipping. Unreliable
ocean shipping and, more impor-
tantly, speed to markets for trendy
items — for everything from the hot
toy fidget spinner to the month's
fast-fashion must-have — sent
lower-value goods once relegated to
ocean shipping to the air. And air cargo
has a part to play even when shippers
reduce inventory to attempt "just-in-
time delivery" with ocean shipping.
Because of "lower safety invento-
ry and the higher risk for line downs
in cases of unexpected interrup-
tions, I see a significant growth of
emergency transport solutions such
as onboard couriers and air charters,"
Johannes Barthels, director of Euro-
pean ocean freight for TOC Logistics
International, told The Journal of
Commerce. "My feeling is that the
amount of customers who need this
type of service has doubled within
the last two to three years."
Air cargo volumes through North
American hubs rose 6.9 percent
year over year in 2018, compared
with global growth of 3.5 percent,
according to the International Air
Transport Association (IATA). And
while the association has warned
hundreds of global airports will
reach capacity within the next 10
years, it's unreasonable to think
that cargo hubs can simply expand
to meet demand, considering capital
restraints and community pushback
that can delay approvals.
Better slot coordination handled
via a third party helps, and the ap-
proach used by Amsterdam Schiphol
is better than the slot auction or
peak/off-peak pricing models that
favored incumbents and increased
rates, IATA argues.
Technology provides a way to
make the most of existing capaci-
ty. The uniting of on-airport cargo
service providers that physically —
or digitally — touch freight under
a data-sharing program has been
credited for reducing congestion at
Brussels Airport.
Electronic driver check-in kiosks
in airport cargo terminals that record
arrival and wait times provide the
visibility needed to make better
operational decisions. The system,
known as CargoSprint, also allows
freight forwarders and drivers to
make appointments online with
ground handlers, reducing trucker
frustration and long delays in picking
up cargo.
"We realize nothing happens in
the airport quickly. It takes years, if
not decades, to accomplish changes
that affect the infrastructure," said
Scott Case, a former forwarder and
customs broker who now heads the
Chicago Air Cargo Association. "But
we also know we can find near-term
improvements through technology
and better processes. We need to
make our needs known and secure
our place at the table. Otherwise, if
there are even short-term problems
in our city that are not resolved,
business will go away."
Technology can't solve some
airports' inattention to the chal-
lenges. Whether warranted or not,
many in the air cargo industry feel
second tier to passenger operations.
The steady drumbeat of forwarder
advocacy does, however, appear to
be spurring action, as JOC corre-
spondent Chris Barnett writes in
this issue's cover story.
Acknowledging congestion
challenges at John F. Kennedy Inter-
national Airport, the Port Authority
of New York and New Jersey said it's
improving roadways within and con-
necting to the airport. A long-dis-
cussed passenger rail link connect-
ing to midtown would remove up to
1.5 million vehicles annually, easing
freight transport serving the hub.
The port authority said it's work-
ing with stakeholders to address
concerns about not just congestion
and flight delays, but also freight and
truck dock availability.
"Additionally, the port authority
continually monitors truck activity
and [has] developed mitigation plans
that include creating a temporary
truck staging lot. The Airport Plazas
Truck Convenience Center, a first of
its kind at North American airports,
offers multiple truck services, includ-
ing 44- to 53-foot spaces for truck
parking," said Mike Bednarz, manager
of air cargo business development.
Those efforts, hopefully, will find
traction before a $13 billion project
to build two new international
terminals brings additional capac-
ity online as soon as 2023; project
completion is scheduled for 2025.
In the meantime, air cargo handlers
will grapple with aging facilities
— two-thirds of which don't meet
industry standards, according to the
port authority.
Encouragingly, the port author-
ity said some ground handlers are
using technology to better manage
slots for truck docks. It expects
future terminals to have similar
capabilities.
JOC
email:
mark.szakonyi@ihsmarkit.com
twitter: @markszakonyi
New reality, new solutions
The Journal of Commerce (USPS 279 – 060), ISSN 1530-7557, April 1, 2019, Volume 20, Issue No. 7. The Journal of Commerce is published bi-weekly except the last week in December (printed 25 times per year) by JOC Group
Inc., 450 West 33rd St., 5th Floor, New York, N.Y. 10001. Subscription price: $595 a year. Periodicals postage paid at New York, N.Y., and additional mailing offices. © All rights reserved. No portion of this publication may be copied
or reprinted without written permission from the publisher. POSTMASTER: Please send address changes to The Journal of Commerce, Subscription Services Department, 450 West 33rd St., 5th Floor, New York, N.Y. 10001.
Letter From the Editor
Technology provides a way to make
the most of existing capacity.
