Matthew Ware, chief executive of CFL and Chairman of Aviation Services UK, puts the case for a more strategic and integrated national plan for air cargo
In every industry, things work better when there is collaboration and high-level agreement on how the sector should operate, taking account of national needs and (for cargo) global demands.
We are a nation of, inevitably, overseas traders, so our very livelihoods depend on trading efficiently.
That means, in today’s highly interconnected world, delivering quickly, safely and cost-effectively. Air cargo facilitates all of these.
London’s Heathrow Airport processes almost three quarters of all UK air cargo, with an annual value of well over £200 billion.
Over 80% of that cargo travels in the holds of passenger aircraft, the rest goes in cargo-only flights.
So, Heathrow is an enormously important part of the UK’s global trading network and a key part of the national infrastructure.
With a new government in place it is important that proper consideration is given to the development of a coherent national strategy for cargo.
This should include ensuring that access to key airports is available for cargo – and reflect the need to balance the competing demands of passengers and cargo.
Especially given there is growing evidence that cargo access provides significantly more financial benefit to UK PLC than adding a few more holiday destinations.
A comprehensive UK-wide airport cargo strategy would support economic growth, enhance global competitiveness, ensure supply chain resilience, promote environmental sustainability, and leverage technology advancements.
This is critical to creating the right environment for cargo handlers and logistics businesses to plan with confidence for the future, which creates the right environment to drive investment.
The lack of this wider UK strategy has created problems at Heathrow; for example, there are very few cargo-only slots and no ad hoc slots are being provided for cargo operators, which means they’re having to move cargo shipments to other UK airports.
These airports can have ground handing agents with limited experience of dealing with cargo-only aircraft, creating difficulties and introducing unnecessary costs.
This issue is compounded by the predominance of wide body flights at Heathrow, compared to other UK airports.
These aircraft are critical for moving cargo on passenger flights, due to their larger hold capacity.
The People versus Packages
The challenge for an airport like Heathrow is that cargo makes up only a fraction of its revenue.
This means that developing a long-term strategy for cargo can be difficult when passenger flights can be so much more profitable.
Heathrow also has an ageing cargo infrastructure and plans for redevelopment have been delayed, which has created significant uncertainty, especially for express operators.
So, there are multiple challenges, but that also means significant opportunity – to work together to create a profitable, sustainable and thriving airport cargo ecosystem that delivers a better and more cost-effective service for the country.
Balancing the needs of passenger services with those of cargo operations is a complex challenge that requires integrated planning, dedicated facilities, and collaborative efforts.
Airports such as Dallas (DFW) and Brussels (BRU) have done a great job building cargo terminals/cities.
They have dedicated facilities not just for airlines and handlers, but also the logistics companies (e.g. forwarders).
At DFW the cargo facility is built in a way that makes it very easy to scale, by adding on new modules to their existing infrastructure.
Having the logistics companies built into the cargo areas at airports is hugely advantageous for those forwarders, especially when shipping and handling products that are time and/or temperature sensitive.
Playing slots
Mandating a minimum number of cargo slots would give cargo handlers certainty over capacity and delivery times, so they could better plan, but this is likely to be fiercely contested by the passenger carriers and airports as these are generally much more profitable.
Which is why it is critical that an overall strategy considers the wider benefits to the whole economy.
Various relevant UK bodies, including AICES (the UK trade body for the express sector) and Aviation Services UK (which represents ground handlers) have been agitating for mandated minimum cargo slots, largely because it allows express couriers and cargo handlers to plan with confidence. The current situation makes that much harder to achieve.
At Schiphol, the cargo lobby is trying to get 2.5% of flights to be cargo-only; this figure is based on the percentage of flights of this kind today.
Spreading the load
As noted, Heathrow is an enormously important part of the UK’s global trading network but given the interdependencies with other airports and the need for a flexible approach to cargo handling across the country, it seems entirely appropriate that we talk about the UK’s airports, taken together, as national infrastructure.
To look at it from a different perspective, there are government initiatives underway to expand the number of UK SMEs exporting globally.
It’s been estimated that there are around 70,000 that don’t today but could, and if even a fraction of those started it would place a significant burden on our national cargo capacity.
So, I see cargo strategy as a government-level issue, and the facilities that support it as national infrastructure.
A greater number of overseas facilities like those at Heathrow could create a network whereby exporters would have wider choice and greater certainty over service consistency.
Expansion of capacity and cargo flight slots will help meet the surge in demand, as previously mentioned, as will the expansion of express courier facilities around the world.
Some of our European counterparts have in recent years taken a more strategic approach and are now reaping the benefits.
In Brussels and Amsterdam, the effects of a long-term strategy have meant that, today, cargo operations are more streamlined and integrated into the overall airport planning process.
For example, Brussels Airport’s BRUcloud platform is used by almost all participants in the cargo handling and processing network.
And at Schiphol there is now a data-sharing platform for all internal cargo stakeholders and external authorities, such as customs.
In addition, a slot booking system is being developed that will help reduce incidents of truck queues at peak times.
With an integrated strategy in place, traditionally difficult issues – such as the availability of cargo slots – are more easily resolved, though even at Schiphol, where an airport-wide strategy exists, these are still hotly debated.
