Held on 7-8 April in Stockholm, the Nordic Air Cargo Symposium was a refreshing insight into airline, handlers and shippers’ views on operations in the Scandinavian countries.
The event which was arranged by Euroavia International and hosted by leading carriers and Scandinavian cargo agencies was attended by more than 180 representatives from the aviation industry,
many of them from the Nordic countries.
Although the weather did not play along, the stage was set on the evening of the 7th with an impressive welcome reception in Stockholm’s City Hall.
The program on 8 April was jammed with key note speeches and round table discussions ranging from “The role of Airfreight in the Supply Chain”,“Global Outlook Market Opportunities,” “Focus on
Nordic Air Carriers” and a presentation by Boeing’s Thomas Hoang as to his company’s freighter outlook up till 2030.
It would take too long to list all that was presented - here is a rundown for our readers in two separate parts.
Nordic - Part 1
Meeting Market Challenges of a Changing World:
Karl Ulrich Garnadt, LH Cargo and Robert Mellin, Ericsson AB both gave their individual views of meeting challenges ahead:
One of Garnadt’s main points was “that there has been a lack of progress on how we (collectively) handle our business.”
He backed up his view with the simple fact that in the 1960’s, LH had promised its clients a maximum of “3 day transit time” for all airfreight shipments.
His presentation showed that the industry as a whole has dropped back to an average of 6 days. This despite a so called better streamlined supply chain!
He finished by saying that “we need to get back to the 1960’s promise and that the industry can only achieve that with “a common effort.” We from CargoForwarder Global think that LH Cargo staff
are going to miss this gentleman when he returns to the passenger sector.
The message he gives to his staff is something along the lines of JFK’s famous statement in the 1960’s - namely “don’t ask what your airline (country) can do for you - but ask yourself what you
can do for your airline (country)!”
Ericsson’s Mellin gave a sobering outlook on his company’s mode of transport, whereby the airfreight only represents 22% of total movements.
The Swedish electronics giant moves more than 270,000 tons per annum and spends 6.2 billion Swedish Crowns on transport.
Airfreight is not the preferred mode of transport and is generally used in either emerging markets, where there’s poor “land/sea access,” when commodities are of high value/weight ratio or when
material shortages occur.
Interesting was his statement that although only 22% moves by air, 62% of transport costs are attributed to this sector.
Ericsson would maybe welcome the introduction of an “e-Shop” in the future as the trend is towards much smaller products. This could be beneficial for air cargo, Mellin added.
The Role of Air Freight in the Nordic Supply Chain:
Automotive:
An interesting round table presentation by Volvo, Marine Trust and Metso managers on Automotive, Mining and Fish transports from the Scandinavian countries.
Volvo has recently gone through a large management shake-up with the aim of streamlining their product offering and value. The new management has decided only to initiate business plans for the
future with a duration of maximum three years.
Total annual transport expenditure amounts to 9.4 billion SEK, whereby only 1.1 billion SEK is allocated to air cargo transport.
Surface and sea transport take up the majority, with airfreight lagging way behind.
Mining Equipment:
Metso, one of the world’s largest mining equipment suppliers steers away from air transport. This was a surprising statement by Claus Schroeder, Metso’s Air & Ocean Manager.
He claims that his company is confused with the lack of information given by the airline community with regards to the flow of information to shippers on airfreight charges in general.
He stated that carriers must “release more relevant data to shippers” in order for them to decide faster on whether to use air transport or not.
Fish:
The export of fish from Norway, as presented by Tom Mikkelsen of Marine Harvest, one of the world’s largest fish farming enterprises, is mind boggling.
Seafood movement from Norway really started back in the 80’s with moderate exports to the USA.
In the meantime Norway exports more than 224,000 tons of fish worldwide whereby the vast majority is salmon. They are by far the world leaders in the export of salmon.
Chile (28T tons), Canada (13T tons), Ireland, Scotland and Faroe Islands (each 5T tons) are small in comparison.
Norwegian airfreight exports of this delicacy in 2013 amounted to a stunning 158,000 tons per annum, which is 70% of the total export. This figure is +30% on 2012 and a further large increase is
budgeted for 2014.
If we break these figures down to a daily amount - then Norwegian salmon exports are 430 tons per day.
Marine Harvest estimates that the annual growth will rise to around five million tons by 2030. This will mainly be due to the tremendous increase in demand from the Far East and other
countries.
Although hundreds of tons are moved every day, its an industry which faces many challenges with regards to proper airfreight transport.
Temperature control has to be monitored constantly and carriers and handlers have to be on top of this all the time.
The environment throughout the supply chain is also a worry for the exporters to ensure that this sensitive commodity arrives in good shape. In this respect, Marine Harvest and other exporters
wish for a closer control themselves of the supply chain.
Volumes are increasing very fast and exporters are worrying about facing a lack of capacity for direct uplift. The main carriers with direct services (freighters and pax) are Qatar Airways,
Emirates, Lufthansa, Korean, SAS and also Norwegian the new start up carrier which will offer longhaul uplift to the USA and Thailand.
Tom closed his presentation by stating that shippers would be willing to pay more if they were to have a better control themselves over the supply chain, firm allotments on carriers for
perishable cargo and were to receive a far better flow of information from the airlines.
John Mc Donagh