And Liège gives cargo a home, as shown by the unprecedented tonnage growth reported by the Walloon airport since many quarters. LGG has introduced a fast lane cargo connector to further improve ground services and speed up the flow of goods. More cargo connectors will be added in order to optimize the cargo flow, and connect seamlessly to second line or beyond, Steven Verhasselt, VP Commercial Liège Airport announces in this exclusive interview with CargoForwarder Global.
CFG: Frankfurt just reported record cargo figures for Q1 (“best quarter ever”). How did LGG perform during the same period?
SV: The demand in the air freight market was very strong in Q1. In LGG, the first 3 months of 2021 were in line with the last 6 months of 2020. Since 2020 finished very strongly, we are very happy about ongoing growth in 2021. In comparison with the first Q1 of 2020 (+40%), or with 2019 (+50%), to mention two “normal” years, the increase in volumes has been exceptionally high. In Q1 2021, we processed 100,000 tons more than in Q1 of 2020. We sure hope we can keep performing on this remarkable level. To facilitate this, we are continuing to invest strongly in infrastructure, material, and human resources to keep capacity offerings in line with growing demand.
CFG: Maastricht (MST) Airport is not granted the full use of its 2,750 m runway nor the lift of its night flight curfew. Amsterdam (AMS) is curbing its cargo traffic. Do these restrictions two of your direct Benelux competitors are facing benefit LGG (and if so – how)?
SV: No. I don’t believe airlines choose LGG because of traffic limitations they face at other airports. I know how hard my colleagues in MST are working to develop the airport, and I hope the imposed restrictions will be lifted. For AMS, as for other airports focusing on passenger business first, I think that policy has now been reversed, and cargo will get a lot more attention in the future. Being the cargo guy that I am, I can only support that.
As for LGG, I believe that we attract cargo carriers through our #freightersfirst strategy as a recognizable sign of our cargo DNA. We are focusing on becoming a Multimodal Logistics Platform, driven by global freighter connections, rail connections with China, and pan-European road connections. The masterplan that is being presented to our key partners as we speak, offers more capacity on first line positions for air and rail, and on second and third lines to accommodate freight forwarders followed by providers processing and handling e-commerce. The masterplan is based on our strategic vision, and not on models tabled by other European airports.
CFG: Some forwarding agents voiced complaints concerning the handling situation at LGG. Too slow, frequent delays, shipments that were rejected in several cases, etc. Is this so,
what are the causes, and what is management doing to overcome these hiccups?
SV: Liège Airport is very well aware that in view of the strong growth, particularly in peak times, the quality at the airport has not always met requirements or expectations. We have put a team in place, Air and Ground Services, to follow up, understand, and pro-actively design better solutions to overcome future bottlenecks. This team is led by Eric Gysen, who knows every facet of the air freight business and has an excellent understanding of the flows and potential hiccups of our business.
I like to add to this that we are heavily investing in digitization. The LGG Cloud, and the applications that are being developed inhouse or with partners, will substantially help us to tackle part of the problem. The combination of digitization and capacity increase should solve issues that resulted from the unprecedented growth. We can assure our customers that LGG keeps working extremely hard to serve our partners as best as we can.
CFG: LGG offers cargo customers fast lane services. What’s behind the approach, does this service cost extra money, and shouldn’t all shipments be processed as fast as possible?
SV: Fast lane services, or cargo connectors as we call them, are an answer to the changes in our industry. We used to have B747-400s with 100 tons on board and shipments booked on 15 different air waybills. Today, a B747-400 flies in, with the same amount of cargo, but allocated to 15,000 different air waybills. Sorting the goods out on airwaybill level in first line is not always possible, as it simply takes too much floorspace, a scarce resource in a busy first line.
The cargo connectors are there to connect the first line to the second line. A BUP for a single customer, or for customers using the same service provider for last mile delivery, does not need to be transferred to a ground handler’s warehouse, since breaking down this kind of shipment is pointless. Thanks to the cargo connector, it can go straight to the second line where it is sorted out on piece level required for e-commerce. We developed this quick transfer solution many years ago to speed up the throughput of flowers arriving in LGG that needed to be transferred as BUP to specialized warehouses in Aalsmeer, Holland. Following the flower pattern and thanks to the introduction of our fast lane, products like perishables, pharmaceuticals, temp critical goods, or e-commerce shipments are meanwhile brought straight to the sorting facilities on airport after landing. This saves time, secures the integrity of products, and speeds up the flow of goods. In addition, warehouse space is not blocked, and the ground handlers can allocate their resources more efficiently and concentrate on more demanding tasks like building mixed pallets or processing transshipments. This results in faster flows of cargo, which is our ultimate goal as is the reduction of warehouse storage.
Let me add to this that we are in talks with our partners in Bangkok to implement a Premium Perishable Lane. Provided all stakeholders agree, it will offer a tailored solution to meet the requirements of this sensitive and time critical commodity, hence adding to LGG’s attractiveness.
CFG: FedEx announced that it will shift a substantial number of freighter flights from LGG to CDG. What can the airport management do to mitigate the impact of the announced partial exodus of one of LGG's core customers?
SV: We cannot comment on individual customers. We have been correctly informed, and we are convinced that Fedex is following all the procedures, all over Europe, to make sure the restructuring plan does not hamper the rights of its employees and the interests of its customers. In the case of LGG, Fedex has been, and remains one of the most important customers, as far as tonnage, aircraft movements, and revenues are concerned. We are assisting in finding ways to make LGG even more attractive to Fedex. We are convinced that there is ample room for Fedex to grow in LGG, despite its CDG announcement. We have seen similar developments happening at other express hubs in the past. Concerning job issues: We believe that additional jobs will be created on and off the airport, provided we can keep up our growth trend as in recent times. Our LGG Academy is organizing job days in close cooperation with our partners, and the LGG Community Website will include a job page for all those interested in vocational opportunities at the airport. We are also announcing a second edition of We Cargo, where we will focus on innovation and sustainability, aimed at attracting young talents to the LGG Cargo Community.
CFG: What (a) tonnage throughput and (b) revenue does LGG estimate for 2021?
SV: Our budget for 2021 was actually based on our budget for 2020, and on our performance of 2019. 2020 was an exceptional year, and we all hope that the world will come back to normal, including aviation and airports. Meanwhile we have been thrown back into reality, and we believe that the budget of 2021 should be based on Q3 and Q4 of 2020, i.e. normal periods, so to speak.
Currently, 3 Belgian Airlines are based in LGG: ASL, Air Belgium, and Challenge. All of them operate widebody freighters. That said, we have just signed agreements with long term partners Ethiopian Airlines and Qatar Cargo, who will keep using LGG as an important European cargo hub. Icelandair Cargo, another long-term partner, announced exciting additions to their freighter fleet as well. We are also looking forward to having the Challenge Group soon operating under a dedicated roof in the northern part of the airport (Liège North). On top of that, phase one of the Cainiao hub is nearing completion and will be operational in the second half of 2021.
In a nutshell: demand for freighter capacity and also rail freight transports is huge since the belly capacity of passenger airlines is not even close to where everyone hoped it would be. Airlines are very inventive in adding freighter capacity to the market when badly needed. That not only benefits LGG but other airports as well. We estimate ending up with a cargo throughput of around 1,2 million tons on 31DEC21. However, the precondition for this is that our entire workforce will have to work very hard to keep meeting the requirements of our customers.
Interview: Heiner Siegmund
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