Budapest: Aiming for Eastern Europe e-Commerce Top Position?

The e-commerce train picked up considerable speed during 2017 and growth in this sector is expected to be even higher during 2018. On the one side, additional revenues generated by airlines during 2017 were very welcome. On the other hand - keeping control of the e-commerce supply chain has proven to be a headache for many, especially for European airports, many of which are still far away from being geared up for the influx of shipments. This was regretfully the case during the traditional year-end rush which became an avalanche during the last weeks of 2017.

Budapest Airport is getting ready to becoming a hub for e-commerce  -  courtesy: BUD
Budapest Airport is getting ready to becoming a hub for e-commerce - courtesy: BUD

Will e-commerce have to rely on secondary airports?
The above could well be the case, at least for the coming decade.
The majority of cargo which is allocated to the e-commerce trade originates in China and shippers there have been worrying for some time whether traditional European airports can ever be considered as ideal locations for speedy handling, customs and transit to end consumers. This becomes apparent at locations such as London, Frankfurt, Paris and even in Amsterdam - all of which have large well operating cargo terminals - but which are seen by many as not being “flexible enough” for future e-commerce needs and demands.
Other airports in Europe, mainly so called secondary airports, have woken up to the fact that they may well be suitable candidates for setting up speedy throughput of shipments in the future. On top of this - Chinese freighter airlines are springing up like mushrooms and many have ambitions to operate long-haul based on e-commerce shipments. It will be hard for them to get landing rights or slots at traditional airports and they are already ‘casing’ out other areas.

Source: IATA Monthly eAWB Report R17
Source: IATA Monthly eAWB Report R17

Budapest has invested heavily in cargo
Although Hungary has no national airline anymore, the country’s capital Budapest, is starting to make a name for itself as an air cargo hub after many years of having to put up with out-of-date cargo handling facilities.
Joint ventures have been formed with other airports and an exchange of ideas and planning has been initiated. It is no secret that the Chinese government has given the green light to Chinese carriers and exporters to look at and work closer with Central and East European countries. This is all part of the so called One Belt, One Road strategy introduced earlier. Budapest is expected to have handled around 140,000 tonnes of air cargo by the end of 2017. Quite a leap for an airport which was for a long time considered as being dead as far as cargo is concerned. Increased long haul passenger capacity has added to the BUD cargo improvements.


Now time for e-commerce?
Why not!
The interesting development is that China’s STO Express, one of the country’s largest logistics companies, has opted for Budapest as their future East European cargo hub. The plan is to operate regular and direct cargo flights between China and Budapest and speedily distribute cargo throughout Europe from there. STO presently uses a B747F from Baku-based Silk Way West Airlines daughter company, SW Italia on flights from Hong Kong to Prague. These were seen as being test flights for a more regular European service.
It seems that Chinese eyes are pointing towards BUD as far as cargo expansion is concerned and Prague for passenger development.
Cargo facilities in Budapest are now mainly state-of-the-art and road distribution services (RFS) are said to have improved considerably. On top of this, Hungarian customs are said to be most cooperative - a factor which is of utmost importance for the successful transit and delivery of speedy shipments.
Hahn Airport is trying for the same by using Suparna Airlines as the main carrier and Hanover Airport has been selected by China Post
Will we experience a secondary airport e-commerce boom in the coming years?

John Mc Donagh

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