Avalanche-like shipment volumes, overstressed ground handling agents, and frustrated customers who are the victims of air freight congestions. This has been the situation at most of the major cargo airports in Europe for weeks, including big Rhine-Main. Short-term measures can only remedy temporary shortcomings, but fundamental reforms are required to improve the overall system mid-term, Max Conrady (MC) urges. That includes more investments in digitalization, sustainability, and short-term working conditions, FRA’s Vice President Cargo Development stresses in this exclusive interview with CargoForwarder Global (CFG).
CFG: Mr. Conrady, importers and exporters complain of sluggish air freight processes in Frankfurt. They criticize delays, handling chaos, and lack of transparency. What is going wrong -
MC: As Europe’s busiest air cargo hub, Frankfurt Airport is also not immune to the sometimes difficult capacity situation affecting the movement of goods worldwide. The transport and logistics chain - including air cargo - is facing challenges throughout Europe and worldwide. The character of freight transport has changed, with persistently high volumes becoming the new normal for both scheduled and charter traffic. In addition, there has been a huge increase in the volumes of small consignments, which require high numbers of personnel, and are time intensive. The dynamics of aviation have been shifting rapidly since the pandemic hit.
With the restart of air services, the overall traffic structure has changed everywhere, including, of course, Frankfurt. Flights are not evenly distributed throughout the day but converge in extreme peaks. At Frankfurt Airport, traffic peaks have become highly concentrated, particularly for passenger flights, and this can also affect cargo carried on passenger planes. These traffic peaks lead to concentrated deployment of ground handling staff, which affects staff availability and can thus also impact the handling of freighters and cargo transport on the apron.
CFG: The ground processes are tightly timed. There are hardly any buffers. Is air freight in Frankfurt a victim of its own success?
MC: Air freight is crucial in a dynamic, globally connected economy – nowadays more than ever. It makes an essential contribution to business and society, as it meets people’s personal needs. With the start of the pandemic, air freight has experienced unprecedented volumes. The public attention to the cargo industry has never been higher. But the current situation challenges all partners along the supply chain. The system works close to the limit, hence small hiccups like temporary IT failures can have severe consequences. This once more underlines the need of the whole branch to invest more in the topics of attractive working conditions, sustainability, and digitalization. Freight rates were on very low levels before the crisis, so cargo companies kept investments to a limit. Now, we see that there is still a lot of work to do.
CFG: We hear that ground handlers are having to cancel entire shifts. Is that just a consequence of the COVID-19 pandemic leading to soaring sickness rates, or are there other causes for this personnel shortage?
MC: The pandemic still determines our everyday life – not only the private, but also the work environment. Rising Covid cases and – going along with that – strict quarantine regulations greatly influence the availability of staff, sometimes leading to higher rates of sick leave. But having enough trained employees available is a big topic in general. The entire logistics industry and other service sectors as a whole are looking for more staff – not just the airport operators. The off-airport movement of cargo is compounded by a shortage of thousands of truck drivers in Germany and other European countries. A main reason for this is the low attractiveness of this job. Our industry – characterized by low margins – has limited options to adjust this by e.g., raising wages. All the more reason why air freight companies should pursue a committed personnel policy and demonstrate the advantages of working in this area. Growth only succeeds if many hands are involved.
CFG: Repeated bottlenecks leading to delayed provision of goods are annoying producers, importers, and exporters alike, and damaging FRA’s reputation as an efficient and fast cargo hub. Has Fraport failed to invest enough money in the air freight sector in recent years to make the processes more transparent, more agile, and less prone to disruptions? And if so, what follows from that finding?
MC: Frankfurt Airport is a major hub for air cargo – even despite the current challenges, where we have seen a 10% increase, by the way, (compared to 2019 levels). Its central location at the heart of Europe with direct connections to the A3 and A5 motorways, makes it easily accessible for logistics partners. It offers the ideal infrastructure for both standard and specialty air cargo services, as local freight handlers and forwarders are located directly on airport grounds. Of course, slots are limited, and due to the night flight restrictions, we sometimes have a decisive disadvantage, especially for freight. However, we have a know-how that many others do not have. We are creative and can adapt flexibly to new framework conditions. We have the experts on site, and we use the transparent contact to constantly work on new ways that make processes more efficient. The latest example for a new digital approach, is FRA-OS Import: a data-exchange platform that includes a variety of made-to-measure solutions for enhanced process transparency and speed. By creating a digitally supported import process, we offer our customers the basis for compliance with the latest customs requirements.
CFG: There is no longer any buffer in cargo handling because of the high freight volumes. All hands are badly needed. In addition, the cost pressure for the companies is enormous. Cooperation between individual handlers could provide relief - to the benefit of all parties concerned. What about cross-company agreements ensuring mutual support when needed, and are such pacts legally permitted?
MC: The current challenges have resulted in even closer cooperation and a transparent exchange among our cargo partners at FRA. Fraport is taking on a coordinating, moderating role here. Regular calls are the basis for transparent collaboration, and we are happy to see that all partners support each other. For example, we are reported regular subcontracts between different handling companies or forwarders in order to take out pressure from one single company. This load balancing keeps the system running and unlocks efficiency-potential. It is a very positive sign that companies, which are actual competitors, could also work hand in hand when it is urgently needed to keep the goods flowing. Of course, there are strict limits, such as legal requirements and safety regulations we all have to follow. This applies, for example, to temporary employment. But there are many small examples, such as sharing special handling equipment among others, that underline the strong and close cooperation in the Air Cargo Community at Frankfurt Airport.
CFG: The digital import platform FRA-OS was launched last summer. What is the interim result and when will there be an equivalent for exports?
MC: With FRA-OS / Import, Frankfurt Airport is one of the first major European cargo hubs to offer a comprehensive, customs-compliant solution for importing consolidated shipments. As the customs authorities received access to the platform in a first step, the system is now fully operational. The first important players in the supply chain have been successfully integrated. They include cargo handling agents and freight forwarders. Almost all the important cargo handlers and forwarders will be getting ready to integrate FRA-OS/Import in their processes by the end of the year.
In a next step, we plan to develop the platform further, regarding the inbound processes, e.g., adding solutions for special goods such as perishables.
An extension to the outbound processes would be the next logical step. However, we will continue the successful cooperation within the cargo community and follow the needs of the cargo stakeholders, to ensure that the further development of the platform will benefit our customers the best possible way.
CFG: A new Import Control System (ICS 2) will become EU standard in March 2023. What changes will this imply, and what are the benefits for the market?
MC: This more elaborated European standard applies to all shipments entering the common market of the European Union. Right now, airlines, for example, only have to send relevant data of their shipments to the customs authorities at the destination airport 4 hours prior to landing. With the new regulations coming into effect in March 2023, this data has to be presented to customs before take-off at the departure airport. Also, more details on the shipments have to be delivered. Customs authorities hence have more time to decide, if they want to have a closer look at special shipments. This will challenge us as an industry to work together on better data quality and increased availability of data.
CFG: When will Frankfurt get out of the current alert mode in air cargo?
MC: The future development of the cargo business also depends on the further course of Covid-19 – and no one can predict this. But with the experiences of the last almost two years, I expect the current volumes and the structure of the shipments to continue at least until mid-2022. Hence, the next months will also be very intense as there are no regular downs in volumes – neither in Frankfurt nor in the worldwide supply chain.
CFG: Max Conrady, thank you for this interview.
Logistics company cargo partner has rerouted its weekly B747-400F flight from Zhengzhou to Cologne instead of Frankfurt. "You may be aware that Frankfurt Airport has been facing congestion issues in regard to ground handling of import shipments," cargo partner reasons.
This initially only applies to the current month of November.
Whether Frankfurt will be serviced after again, is left open in the announcement.
Landing in Cologne instead of Frankfurt "allows us to avoid unnecessary waiting times and storage charges and offer our customers
consistently fast lead times and highly efficient transport solutions," reads cargo partner's release.
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