Dutch Air Cargo Experts Predict Schiphol Demotion As Air Cargo Main Port - PART 1

In Amsterdam emotions are still running high on the slot scarcity which has already led to the move of cargo carriers like SIA Cargo, Air-BridgeCargo and (partially) Emirates SkyCargo. CargoForwarder has approached four local experts in the industry about their views.

Ivo Aris - Chairman Air Cargo Netherlands - courtesy ACN
Ivo Aris - Chairman Air Cargo Netherlands - courtesy ACN

B777 offers good capacity
One of them, Rob Spaans, Managing Director of logistics company ITG Netherlands preferred to share the letter he sent to the new Dutch government. He writes: “Over the last few years the Boeing 777 has gained a large share of both the interconti-nental passenger and cargo market.”
“A full passenger B777 can still take 15 to 20 tonnes of belly cargo. A full B777 can take almost as much as a B747 at a lower cost. This trend will go on for many years given the order pipeline of the B777’s. At this moment 427 orders are still open for delivery over the years to come and there are already 1,367 B777’s in operation, 130 of which are freighters.”

Cost savings threatened
“The B777 has created the best logistical solution to combine belly freight on pas-senger aircraft and cargo flights leading to the best possible network with a high level of departure/arrival frequencies for any airport at which passengers and freight can be combined. One of Schiphol’s great advantages at the moment is that the car-riers can use it as a hub for cargo and passengers in the best possible way.”

The cost savings that some airlines are able to realize (e.g. the B777 of China Southern) by exchanging crews between cargo and passenger aircraft are threat-ened by splitting up cargo and passenger operations. Just talking about a reduction of cargo flights at Schiphol leads –as I notice when speaking with colleagues in places like Frankfurt- to uncertainty in the market … and a smile at the competing airports. This is a very bad development, more specifically towards the future when precisely the combination of belly cargo and freighters will bring the carriers the best efficiency. Think before you act.”

The voice of the industry
The following three experts answered to questions sent by CargoForwarder. They are Ivo Aris, Vice President of Europe Global Forwarding Division at CH Robinson Worldwide  and chairman of Air Cargo Netherlands (ACN), Paul Parramore, a retired businessman and former ACN chairman, Sjoerd van Loon, senior advisor and board director at transport and logistics industry related organizations and former C.E.O. of GEFCO Forwarding (as executive partner and global CEO of IJS Global).

Q - Will this situation bring a demotion of Schiphol as an air cargo main port?

Ivo Aris: “Yes. Over and over again the air cargo community at Schiphol has proved to be very competitive both in quality and efficiency. As a community we have failed to notice that the present slot allocation mechanism would gradually lead to the dis-placement of cargo at Schiphol. A demotion of Schiphol as an air cargo main port will automatically lead to economic damage for ‘The Netherlands Inc.’

Paul Parramore: “Absolutely. In the 1980s and -90s air cargo forwarders, airlines such as Martinair and KLM and Schiphol Airport intensively travelled the world flog-ging the geographical location, the Dutch infrastructure, the customs legislation etc. This was a very successful operation!

Rob Spaans - M.D. ITG Netherlands - courtesy R. Spaans
Rob Spaans - M.D. ITG Netherlands - courtesy R. Spaans

ATAN (the former organization of air cargo agents) and ACN are the direct conse-quence from this joint approach as air cargo logistics companies. The success is well known.

In the cargo world it takes a long time to be successful and to book results, but you can lose it just as quickly due to the nature of the industry. You are as good as your last shipment! Everything can work very well for years, but one blunder can blow the whole thing up. With the downsizing of cargo flights the reliable Netherlands, in-cluding the authorities and Schiphol Airport, are now regarded as unreliable.

Over 40 years of investment in buildings and facilities will vaporize quickly. Blood runs thicker than water and cargo carriers will fly to airports where they can operate consistently for a long time. Once gone is –for the time being- gone and there are no signs that the authorities are likely to change this situation. Passenger flights ap-parently generate more money, but not the employment that cargo operations bring. The political world does not understand this at all and, as it does not bring any politi-cal gain, is not interested at all.”

Sjoerd van Loon: “Most certainly. The history goes back to the 1980s when repre-sentatives of Schiphol Airport, KLM, Customs, accountancy offices, the Port of Rot-terdam and ACN (or its predecessor) travelled around the world, esp. Asia and the US,  to promote the Netherlands as a gateway through Schiphol Airport and the Port of Rotterdam.

Many multinationals such as Canon, Sony, Samsung, Yamaha, Intel, Seagate and a lot of others have made their choice for setting up their European headquarters and distribution centres partly dependent on the frequency of cargo and passenger flights to Schiphol to enable a swift reception of their bulk stock in their dc’s.

Both KLM and Schiphol Airport were the pioneers of a strong cargo product took the lead for the organisation of the cargo community (among which ACN) so that all  parties could act as a collective. It has been claimed (specifically by KLM) that the belly capacity of the passenger aircraft should be sufficient to replace the regular services of the cargo planes.

This is a wrong way of thinking, fed by the lack of the necessary knowledge within the cargo organisation of several airlines. People like Leo van Wijk, Pieter Bouwens, Jacques Ancher (all former senior KLM executives) came from the cargo world and were able to give substance to KLM’s cargo policy.”

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Q -What consequences will this exodus of cargo operators have for AMS?

Ivo Aris “ A gradual further downsizing of air cargo capacity at AMS will lead to eco-nomic damage for shippers, cargo carriers, handlers, forwarders, truckers and other air cargo related service providers.

Quite a number of air cargo related companies rent facilities (warehouses and offic-es) at the airport. Given a weaker cargo position, they will downsize activities. This has already led to the announcement of a reduction of employment.
Cargo (economic value, employment) is leaking away to foreign airports. This will lead to a smaller and less diversified offer at AMS. It will also lead to a decrease of competitive intensity and to higher cargo rates.”

Paul Parramore: “Jobs will be made redundant not only in the handling, but also at the forwarders and the transport companies. I would like to stress the word UNRE-LIABLE. This sort of action will linger in the minds of international logistic compa-nies for a long time, not only with the airlines, but in the industry as a whole. I in-clude multinationals like Apple, Philips etc, who also demand a reliable and con-sistent supply of goods”.

Sjoerd van Loon: “In two ways. On the one side, there is the defection of some air-lines to surrounding airports, so that cargo from and to the Netherlands will be re-duced to road haulage. Apart from this the remaining cargo carriers still calling at Schiphol will adjust their long-term planning as a result of their uncertain position at Schiphol.”

Follow Part 2 in today’s issue of CFG

Marcel Schoeters in Brussels