The ongoing pandemic has made the global air cargo industry realise the importance of having effective contingency plans and efficient and reliable motives to combat any crisis which knocks on its doors. Notwithstanding the plethora of challenges, COVID-19 threw on the air cargo sector like shortage in workforce availability, a liquidity crunch and capacity shrinkage resulting in a sharp increase in airfreight rates, the crisis accelerated opportunities in “innovation” and “sustainability” as well. That said, we take a deep dive into what some of the global big airports considered as their go-to-disruption strategies.
Upamanyu Borah
Surprisingly, the entire aviation logistics industry emerged as a winner—from operating cargo-only PAX flight by converting passenger aircraft into ‘preighters’ to continue world trade and supply of pharmaceutical products, medical aid and equipment, and other essential commodities worldwide during the crisis while embracing hundred per cent digitalisation for business operations, increasing capacities and investing in cold chain infrastructure and now, conducting the world’s largest vaccination drive—the air cargo industry has over the time, proved its mettle.
COVID-19 has truly changed the role of airports and airlines in the ‘New Normal’ scenario. The need for building an efficient air cargo strategy, in order to survive has taken the priority. And the industry is truly working towards building it.
According to Glyn Hughes, the newly appointed Director General of The International Air Cargo Association (TIACA), there are opportunities to prepare for the future. “Although, the COVID-19 crisis has brought a spotlight on air cargo despite the global lockdown, the global pandemic has also highlighted the urgent need for air cargo to accelerate its digital and sustainable transformation, to develop collaborative business models and speak with a united voice to emerge from this unprecedented crisis more resiliently.”
From an economic standpoint, experts say that airports and airlines with cargo-diversified revenue streams beyond traditional passenger-related income have largely managed to avoid the worst of the pandemic’s ravages.
“The cargo industry has seen a tremendous shortage of capacity that has led to increased cargo rates. Indicators from freight forwarders are that the prices are beginning to go back to normal due to a combination of more passenger flights taking to the air on the wake of lifting up of lockdowns and dampened aggregate demand,” says Elliott Paige, Director- Air Service Development, Hartsfield-Jackson Atlanta International Airport (ATL).
“Much depends on how countries that are linked through trade, in both goods and services like tourism boost consumer confidence by managing the coronavirus contagion. Countries that have done the right things and come closest to eradicating the virus, with 100 per cent testing of the population, are moving back to dynamic economies. Those that have not managed the pandemic well enough will likely suffer from consumer confidence.”
“The challenge is every country is dealing with this differently. Therefore, we may not see pre-COVID numbers until 2023 for cargo. The driver will be the speed of carrying out total eradication of the virus in as many countries possible, including measures to prevent its resurgence,” Paige adds.
“With the mandatory lockdowns, the aviation industry, since the beginning of 2020, is seeing no or very less commercial passenger aircraft operations and as a result, the industry is witnessing a substantial drop in revenues,” says Ramanathan Rajamani, Director and CEO atAir India SATS Airport Services (AISATS). “However, the cargo business has been the only activity that has helped the airlines and the cargo ecosystem sustain globally. The pandemic has in many ways emphasised the importance of building the right strategies which play a critical role in the global aviation value chain.”
Data from airline regulatory body International Air Transport Association (IATA) indicates that global passenger demand and capacity had fallen 70.3 per cent and 58.6 per cent, respectively over 2020-2021. Now that makes it is easy to understand why air cargo’s fortune remained favourable and now holds a top spot even as the pandemic is half way through the second year.
“Cargo has been a life-saver for many airlines, and is likely to continue as a higher proportion of total airline revenue. That said, aircraft choices of the future are likely to favour types that carry a larger proportion of cargo, or that can be quickly and easily converted to freighters to meet sudden, unexpected demand,” Wilson Kwong, Chief Executive Officer, Hong Kong Air Cargo Terminals Limited (Hactl).
“2021 should see economies emerge from recession, fueling growth in consumer spending on the big-ticket items that make up so much airfreight. E-commerce will continue to grow, but must be supported by IT investment made our industry. Digitalisation is the only way we can deliver the seamless information flows and facilitate the data sharing and visibility that modern consumers demand.”
Meanwhile, IATA’s latest report says that COVID-19 vaccines distribution round the world has buoyed industry practitioners both above and below deck. Cargo carriers with climate-controlled facilities have a business opportunity in the worldwide distribution of billions of doses of vaccines, while passenger airlines believe that the vaccines will help to slow the spread of the virus and ultimately remove the current restraints on travel.
Preparedness and operational resilience
For instance, Hong Kong International Airport (HKIA) continues to enhance its capability to handle temperature-controlled airfreight, including pharmaceuticals, perishables and live animals, at globally assured standards. HKIA is one of the few airports in the world recognised as an IATA CEIV Pharma partner airport and it is also the first airport community in the world to receive IATA’s CEIV Fresh certification in 2019. Additionally, the two cargo terminal operators at HKIA— Cathay Pacific Cargo Terminal (CPCT) and Hong Kong Air Cargo Terminals Limited (Hactl) have become the world’s first ground handling agents to have attained the full suite of IATA CEIV certifications. The third operator— Asia Airfreight Terminal (AAT) is also IATA CEIV Pharma certified.
“All three cargo terminals at HKIA have dedicated cold rooms with a combined area of about 5,000 sq mt to cater to the specific needs of different temperature sensitive cargoes. These cargo terminals are also World Health Organisation (WHO) Good Distribution Practices (GDP) certified for distributing pharmaceutical products,” says Cissy Chan, Executive Director- Commercial, HKIA.
“Besides service standards, the seamless cold-chain facilities at HKIA is also world class, including a fleet of about 30 cool dollies—the largest among all airports in Asia—and two pioneering apron shelters that protect shipments from prolonged exposure to weather elements when transporting on apron.”
“Agility and collaboration amongst airport communities is essential for maintaining efficient and reliable operations during the current challenging environment,” says Chan. “Airport Authority Hong Kong (AAHK) has been working closely with the air cargo community and relevant government departments to add freighter capacity to compensate the reduction of passenger aircraft belly capacity. Airlines have added freighter flights and refitted passenger aircraft into ‘preighters’ to carry cargo to compensate the drop in belly capacity supply. And our cargo terminals have taken stringent measures to ensure the health and safety of cargo staff to continue and sustain efficiency in operations.”
Amid the volatile operating environment, Chan says, there is an increasing need to leverage technology to facilitate more responsive, efficient, transparent and secured cargo flow. “HKIA is developing an industry-wide data platform for Hong Kong’s air cargo stakeholders to drive operations through process digitalisation and community collaboration.”
“In addition, the entire Three-runway System (3RS) expected to be commissioned in 2024 will help maximise HKIA’s operational efficiency and enhance air traffic capacity for future growth,” Chan adds.
Despite the catastrophic cutbacks in bellyhold capacity in 2020, which would have seen Hactl cargo volumes drastically reduced, the resurgence of freighter operations to replace the lost capacity, including the deployment of aircraft as diverse as Boeing’s Dreamlifter and military Hercules C-130s saw the cargo player replacing much of the lost business, and breaking its previous freighter handling records.
“The year presented many challenges—such as unprecedented numbers of freighters all requiring urgent turnarounds with PPE and medical supplies, the removal of hundreds of redundant passenger aircraft cargo ULDs off-airport to free up our facilities—and our admin workforce all working from home. Despite this, not a single customer was let down, and not a single employee was made redundant,” says Kwong. “Our success relies on the total dedication, hard work and determination of our frontline workforce, of whom I am immensely proud.”
Even 23 years after its opening, Hactl’s Super Terminal 1 remains probably the most sophisticated general air cargo terminal in the world. It has an automated container handling system with 3500 storage bays, a loose cargo handling system with 10,000 stillages, and facilities for everything from hazardous cargo through valuables to pharma, fresh produce, aero engines and live animals.
“Hactl was among the first in the world to achieve WHO GDP, and then all three CEIV accreditations: pharma, live animals and fresh. Upgrading of our systems in the process of accreditation included the establishment of a ‘Golden Route’ fast-tracked through our giant facility, designed to preserve constant temperatures and release goods as quickly as possible to waiting customers,” says Kwong.
At AISATS, flexibility and adaptability have always been the key foundational pillars. “We have adopted various strategies and robust risk management policies that have been developed keeping the dynamic nature of our operations at the forefront. This spans across multiple situations and scenarios. However, COVID-19 is unique, and all our planning and risk management processes clearly required an immediate on-ground reassessment,” Rajamani says.
Talking about pandemic readiness of AISATS’ cargo terminal in Bengaluru Airport, Rajamani adds, “We implemented a COVID-19 specific SOP to handle operational risks at the workplace, specifically towards managing employee and visitor entry into the terminal and the monitoring of people movement within the terminal while ensuring physical distance. With the introduction of touchless sanitising units and measuring guns to carefully executed fumigation and sanitisation at regular intervals, our cargo terminals are made secure for operations.”
“As a comprehensive cargo and aviation ground handler, we have also formed a highly competent and well-trained ops task force within the cargo, cargo security and ramp services team to ensure stringent compliances to service delivery for a seamless and unbroken cold chain.”
Briefing on the capacities, Rajamani says, we are ready to be the hub of vaccine transportation for the Southern Region. “Our COOLPORT has 17 dedicated cold rooms with temperature capabilities ranging from -25°C to +8°C, which also includes refrigerated queue lane for storage of built-up ULD units. Recently, we partnered with Envirotainer—the global market leader in secure cold chain solutions for air transport of pharmaceuticals. Envirotainer will potentially play a key role in the transportation of COVID-19 vaccine shipments globally. We’ve also obtained bonded trucking approval from Indian Customs allowing us to eventually offer trucking services in/out of Bangalore to other catchment ports/ICDs. In addition to these, we’re working with key pharma companies/airlines on specific cold chain solutions for last-mile delivery.”
Changi Airport Group (CAG) has also succeeded in responding promptly to the COVID-19 pandemic by stepping up measures to safeguard and protect the health of airport workers, passengers and visitors—all essential for the future of travel. “This includes the use of technology to transform the passenger and cargo journey, with new contactless and cleaning innovations for a safer yet seamless airport experience,” informs Lim ChingKiat, Managing Director- Air Hub Development at CAG.
“Through close collaborations with other governments in the region, the Singaporean government along with CAG and other partners facilitated the continued supply of essential food supplies into Singapore through additional ad-hoc services. For example, as part of strategies, the governments of Singapore and New Zealand launched a trade initiative in 2020 to ensure supply chain connectivity and the removal of blockages to trade in a list of essential products that includes medicines, medical and surgical equipment.”
“In parallel, we worked with our partners to ensure uninterrupted air cargo operations at the airport. Our cargo handling agents— dnata and SATS have been working tirelessly round-the-clock on flexible shifts to manage the extra cargo flights and the shorter lead time for certain charter flights. In coping with the increased workload, dnata was quick to redeploy staff from other departments like customer and ramp services to support air cargo, reinforcing the operational capacity and efficiency. All of these we enabled while maintaining the well-being and health of the air cargo community. Additionally, we have implemented a series of measures to safeguard the community, such as more frequent cleaning of high contact areas, enhanced SOPs to facilitate contactless security access checks and additional safe distancing measures,” Lim continues.
Over the years, pharmaceuticals have been a key driver for Changi’s air cargo hub and the airport has continuously invested in the improvement of its air pharma handling standards and capabilities through various initiatives, including the establishment of the largest CEIV Pharma certified community in Asia Pacific, as well as the Pharma@Changi initiative to jointly pursue the highest standards in pharmaceuticals handling.
Today, the airport’s cargo handlers— dnata and SATS have a combined annual handling capacity of more than 375,000 tonnes of temperature sensitive cargo through their certified and secured temperature-controlled facilities, alongside a comprehensive suite of airside temperature protection equipment and solutions such as cool dollies, supported by a pool of qualified and experienced cool chain specialists.
Earlier this year, CAG introduced a community data-sharing platform—the Changi Air Cargo Community System (ACCS). The Changi ACCS is an open ecosystem of collaborative and community-based applications underpinned by an information-sharing platform that aggregates data from all parties involved in the cargo handling process, to optimise operational efficiencies and enable end-to-end digitisation of the air cargo supply chain. The initiative, Lim says, is aligned with the country’s ambition to develop Singapore as a global leading logistics hub, as well as to create a vibrant, smart and quality air hub, supported by operations excellence and innovation.
Hartsfield-Jackson Atlanta Airport (ATL), in collaboration with the private sector, has already implemented plan of actions for its staff to stay secure and protected and also for clients such as truck drivers to practice safety procedures. Touch points are cleaned between shifts, while times between shifts are delayed ensuring there is minimal interaction between departing and arriving shifts of staff.
Cargo players at the airport are using electro-static cleaning tools, while others have dedicated staff solely for compliance with COVID-19 protection procedures. The aim has been to continue operations as safely as possible, given the absolute necessity that air cargo stays in services as it’s an essential sector for the fight against coronavirus.
“Atlanta Airport needs to stay the course in its long-term plans,” says Paige. “We have always been working on improving space and efficiency in ground operations. We are always examining our internal processes to develop innovative ways to make decisions. Meanwhile, we regularly communicate with all our stakeholders to have a constant feedback mechanism in place—how we are doing and if their needs are met. This ongoing strategy will take us forward to success.”
There are various innovations and initiatives which ATL is currently working on and all are meant to improve efficiency and make it a hub for cargo. Also, new Greenfield cargo warehouse facilities that will be third-party developed are within the airport’s master plan. At present, ATL is planning to add a new cargo facility in its South Cargo Area. ATL has approximately 1.5 million sq ft of space dedicated to air cargo which includes space for cooling and temperature-controlled pharmaceutical shipments. It also has space for expansion of cool facilities and recently bid out 100,000 sq ft of cargo warehouse space with airside access to the world’s largest air cargo handler, Worldwide Flight Services (WFS).
Additionally, Delta Airlines which has its hub at Atlanta operates a 40,000 sq ft cold chain facility at the airport, certified to handle temperature and time-sensitive pharmaceuticals. Meanwhile, DHL Express moved from a smaller space on Toffie Terrace near Hartsfield-Jackson to ATL’s new Cargo Building C, and is adding the needed infrastructure for its operations there to create a ‘gateway to the Southeast’. Located in the airport’s South Cargo Area, the newly-constructed Cargo Building C combines a 100,000 sq ft warehouse and 20,000 sq ft of office space and incorporates freighter ramp handling facilities and a container bypass handling system.
“WFS will open in a few months while DHL will as soon as they build-out their automation system. For our longer-term capacity increase, we have an RFP to attract third-party developers for a modern air cargo facility. We also launched ACS— our cargo community system with Kale Logistics, an Indian company headquartered in Mumbai,” Paige informs.
“All of these efforts, alongside smaller initiatives to improve labour supply and speed up the badging process— are geared towards helping us grow including taking advantage of post-COVID opportunities.”
Frankfurt Airport’s intensive commitment to building up a resilient cargo community has paid off. Joint solutions such as extra parking spaces, more staff, and intercompany and assistance underscored the importance of Frankfurt Airport as a strategic global cargo hub. “All parties involved have communicated more effectively and information has flown more quickly. Experts as well as supply chain partners worked together to be perfectly prepared for any option. Together, we continue to ensure air cargo as vital and indispensable for delivering essential supplies to the people,” says Max Philipp Conrady, Head of Cargo Infrastructure and Development at Fraport AG.
“Innovative platforms play an important role at Frankfurt Airport. They make processes more transparent and are important to allow a certain level of predictability. In fact, the ongoing development of our platforms is part of our daily business.”
“The latest technology we put into practice is the automatic license plate detection at Frankfurt Airport’s CargoCity South. At Gates 31 and 32, an innovative camera system now reads the license plates of arriving visitors and crosschecks them against stored datasets. If they match, the system automatically propels opening the gate. Before arriving, guests need to register online and send notification of their planned visit to CargoCity South, following which it only takes a few seconds for them to get in after arriving on the premises of the site,” Conrady informs.
“On top of that, we will put into practice the innovative data exchange platform “FRA-OS” in summer. This new digital platform will standardise, simplify and speed up customs and import processes,” he continues.
“Scenario planning became even more important with regard to the corona vaccine transport,” says Conrady. “We started preparing for vaccine shipments in spring 2020 itself. There are task forces comprising of pharma experts of different companies based in Frankfurt and beyond. They reviewed the existing infrastructure, equipment and processes and as part of that, we expanded our fleet of temperature-controlled transporters to 20.”
Currently, at Frankfurt Airport, around 14,000 sq mt of temperature-controlled handling capacity are available. These areas meet international and European standards. For instance, Fraport has been meeting the requirements of the CEIV Pharma certificate of the airline association IATA since 2018. In addition, there are several cargo handling agents and forwarders who meet the GDP and CEIV Pharma Certification. This means that more than 75 per cent of the transport routes at the airport are certified.
With the Perishable Center Frankfurt (PCF), the airport also offers a common use special handling service, ensuring product quality with a continuous cold chain and minimising transit times. “It is Europe’s largest air freight center for temperature-controlled products. With the necessary authorities already located at the PCF, it is a perfect point of first entry into the European market,” says Conrady.
