Freight forwarders and their associations are increasingly worried about the future fate of air freight at Rhine-Main Airport. They point at statistics evidencing that increasing volumes originating in Germany, Poland, Scandinavia or other nearby European countries are trucked to Amsterdam, Luxembourg or Liege, thus circumventing Frankfurt. Consignments of pharma producer Roche are just one example, as confirmed by the company. Processing shipments at these airports is cheaper, more efficient, and less bureaucratic, critics claim. Unless FRA changes course, they fear that the visible migration of air freight threatens to become an avalanche.
The three leading members of the Forwarding and Logistics Association of Hesse and Rhineland-Palatinate (SLV) are distraught. “We refuse to enter into binding contracts with companies that we
cannot freely choose,” Thorsten Hoelser, Managing Director of the logistics organization, stated.
The testimony is a bitter side blow directed at airport operator Fraport and local handling agent Frankfurt Cargo Services (FCS), due to unclear legal conditions lasting since January 2018. At that time, FCS started demanding discharging fees for all shipments that are delivered loose, i.e. unconsolidated and unpalletized. Forwarders speak of an estimated cost hike of 3.5 eurocents per kilogram payable to FCS and other handling agents if they adapt the scheme introduced by FCS, as Celebi has meanwhile done.
Stalemate might end soon
Since the forwarders, stipulated by their association, rigorously refused to pay a single cent for discharging loose consignments, and threatened to go to court should FCS not give in, the ground handler drew back, renouncing any further claims for the time being. Thus, the negotiations ended in a stalemate. However, given the fact that volumes are going down and ground handlers are suffering revenue losses, there are indications that the discharging topic might be on the table again very soon.
Forwarders are in a sandwich situation
Given that case, forwarders would have to sign contracts with ground handling agents doing business at Rhine-Main, compelling them to pay the fees. A ludicrous situation since the forwarders cannot freely select a ground handling agent to discharge their loads. Instead, they sign transport agreements with individual airlines, who, in turn, commit to a local ground handler of their choice, forcing the forwarders to unload their goods there and not at a neighboring handler doing business next door. “Framework treaties, including prescribed volumes to be annually delivered, put forwarders under enormous pressure,” SLV board member Volker Oesau pointed out. He went on to say: “Airlines refuse to pay the discharging fees, but we as forwarding agents don’t have any choice which ground handler to use or not because of their contract with cargo airlines. The carriers dictate which specific handler at Frankfurt’s CargoCity South we have to deliver our shipments to – period!”
Carriers should solve the issue, says SLV
To end the stalemate and reach a settlement, the SLV officials recommend shifting the entire case into the hands of airlines and their specific handling partners, leaving forwarders out completely. “Because we sign contracts with carriers, not ground handlers,” Hendrik Khezri, head of the specialized group Air Freight within the SLV association, explains. Having said this, the SLV expects to urge the airlines to enter into negotiations with their ground handlers to settle the issue between both parties once and for all. “The best solution would be if the airlines agree to cover the discharging costs, because they benefit most, at the end of the day,” SLV Chief Thorsten Hoelser recommends.
More freight might migrate, forwarders fear
Should this not happen, a significant number of shipments will migrate to other airports such as Amsterdam, Luxembourg or Brussels, manager Oesau foresees. “In comparison, Frankfurt is already a very expensive airport, not paying much attention to the air freight business,” the manager criticizes. In contrast, “our association’s aim is to help develop the airport to become a benchmark in air freight, which fails if the Fraport management doesn’t support this course but keeps on concentrating on passenger issues,” states Mr Hoelser.
Discharging fees payable by forwarders would worsen the situation leading to further migration of freight, he adds.
It seems that stormy times are ahead at FRA, leading to fierce debates before the discharging issue is settled for good.
Based on experience, between 15 to 20 percent of all cargo consignments processed at Rhine-Main are loose shipments, while the majority of goods are packed in built-up units and thus easy to handle.