Germany: the air cargo frontier for Europe

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Despite the slowdown in the economy, Germany is poised for a stronger growth this year with continued investments and additional capacity. Namrata More
One country that is hard to miss on the air cargo map is Germany. It is has been at the forefront of the logistics and transport sector, housing Frankfurt as Europe’s busiest hub. In the first quarter of 2015, airport operator Fraport AG recorded noticeable growth in group revenue, rising by 10.8 percent to €575.9 million. Though cargo (airfreight + airmail) tonnage dropped by 2.4 percent year-on-year to around 500,000 metric tonnes, cargo traffic at the group’s airports outside Frankfurt also largely improved. “We believe that we are the most important hub in Europe simply because Germany is the strongest market. So logistics-wise it makes sense to use Frankfurt as an import hub for perishables and other consumer goods,” said Andreas Helfer, managing director, Fraport Cargo Services (FCS). Explaining further on Germany’s importance as an industrialised economy, he added: “Germany traditionally is an economy that sells real things. We are building cars and machinery and all factories are within an area of 200 km from Frankfurt. This is our strength and we are capitalising on it.” Helfer also observed that traditional European carriers that are reducing their capacity might help in diverting the traffic from their hub to Frankfurt. Frankfurt as a hub is seeing increasing focus from international carriers. Early this year, FCS took over cargo handling operations for the Chinese airline China Southern Cargo and expects to handle an annual volume of 70,000 metric tonnes for them in the future. “We took over cargo handling operations for China Southern Cargo in February this year. And the relationship is developing very well. They are among our biggest customers.” Fraport handles five weekly freighter turnarounds flying between the airline’s home airport in Guangzhou and Frankfurt. The airline also serves the Shanghai-Frankfurt route six times a week. Home carrier Lufthansa Cargo is also confident about Germany’s strong market positioning for a long-term basis. Lufthansa Cargo achieved an operating profit of €100 million last year, representing a significant increase for the cargo airline when compared with the previous year. Looking into the future, at the annual press meet, Chairman of the Executive Board and CEO Peter Gerber added: “Air freight is and will continue to be a growth market”. Despite growth rates being slightly lower than in the past, he was confident that air freight will always be the only viable transport option for certain goods. Major exporting regions like Germany are an excellent long-term basis for the air freight sector. “Frankfurt is the epicenter of Europe’s industrial sector. Geographically, it’s much better positioned than London or Paris. The metropolis is the main European hub for our customers, the major international freight forwarders. They have their main consolidation centres here. It’s an ideal location for us to continue investing,” said Gerber. Echoing Gerber’s views, Dr. Alexis von Hoensbroech, board member product and sales said, “It (Frankfurt) continues to be the main European hub for our customers. And we will continue to invest in improving the facilities here, even though the planned investment for a new cargo centre at Frankfurt Airport is delayed by at least two years. For the air cargo industry, Germany is certainly an excellent region for long-term basis. We will do everything what we can to harness the opportunities provided by our geographic location and expand on our market position in Europe.” The strategic eCargo project, which involves the digitalisation of all of the company’s main processes, is also picking up pace. It will help optimise processes and improve quality and speed even further. Among other developments, the “Air Cargo Community Frankfurt” was established with other partners at Frankfurt Airport to promote industry-wide issues and make the location more attractive as an air freight hub. The airline is also strongly focused on its Cargo 2020 programme to address strategic challenges of the future the industry faces. “It contains many components and each one of them helps us equip ourselves to achieve our goal. We are investing to increase our fleet size. Lufthansa Cargo has bought five new Boeing 777 freighters. The 777f is the best aircraft in its class, with low fuel consumption, outstanding range and superb reliability. Current challenges do not hinder us in implementing the Cargo 2020 strategy,” added von Hoensbroech. As for the other hubs in Germany, Cologne Bonn Airport not only offers the infrastructure, but also all logistical services required between runway and warehouse. Their product portfolio makes them quite unique as a cargo hub, enabling them to not only provide the back-up for cargo development, but also to actively advance it. Cologne Bonn Cargo Center, offers a direct connection to the motorway network – North-South and East-West – as well as a direct access to the apron. Cologne Bonn Airport is not only situated in Germany’s largest state North Rhine-Westphalia (NRW) – the backbone and driving force of the German economy – it lies also right in the middle of Europe’s largest import and export region for air cargo. 40 percent of all central European air cargo imports and exports are generated within a radius of 250 km of Cologne Bonn. Because of its geographical location, Cologne Bonn Airport offers the shortest trucking distances to all important cargo destinations in Germany and the adjacent Benelux countries. This ensures that all major production plants and distribution centres can be reached by road very quickly. At Munich airport, around 291,000 tonnes of cargo were handled in 2014. Together with air mail, the volume of cargo flown added up to 309,000 tonnes, representing an increase of 7.5 percent compared to the previous year. With this, the air cargo tonnage handled at Munich Airport has almost quadrupled since 1992. New long haul connections and increased frequencies to the US, the UAE and to China have led to growth in belly-hold cargo. Munich Airport is continuously expanding its cargo infrastructure and capacities in order to be able to meet growing demand in the future. Germany is a very important market for other international carriers like IAG Cargo. “The country has made fairly solid economic progress over the past year thanks to the weaker Euro and remains an important market in terms of goods shipped into, out of and around Europe,” said Chris Nielen, regional commercial manager, Europe at IAG Cargo. To make the most of the opportunities on offer, the carrier has strengthened relationships with local freight forwarders and placed an additional 18 percent capacity on routes to Germany’s major cities using narrow-body aircraft to support the market’s growth. “These moves will help us to best support customers as Germany’s economy gets back to growth. Germany was also the first place in continental Europe to benefit from our pioneering Cargo Connector small freight collection service, which we launched in Frankfurt.” The additional capacity perfectly complements Euro Connector service that boosts connectivity from Germany to other key European markets and beyond. “Pharmaceuticals and medicines, automobile parts and electronics have all been standout commodities for us, not to mention machinery. The pharmaceutical market is a significant growth area for the air cargo industry and our specialist pharmaceuticals product, Constant Climate, is increasing in popularity with customers as our relationships with forwarders continue to grow. We also see a number of ship spare parts out of Hamburg which are transported using our express product, Prioritise,” added Nielen.
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