American Airlines Cargo says it reduced long-term plastic waste by more than 150,000 lbs, the equivalent of 8.6 million water bottles, in 2023. This is a result of a continued relationship with M&G Packaging and its BioNatur line of biodegradable plastic products for air cargo.
The carrier began transitioning to BioNatur Plastics products at major US hubs in early 2022, reducing long-term plastic waste by the equivalent of 6.4 million water bottles in the first year. In 2023, American expanded its use of the biodegradable products to include regional domestic stations, such as Detroit Metropolitan Airport, Honolulu International and Minneapolis-Saint Paul, as well as Carrasco International Airport and Santiago International in Latin America.
American plans to continue replacing traditional plastic used for stretch wrap and pallet covers with BioNatur products, which contains an organic, food-safe additive that allows anaerobic bacteria to digest the plastic in a landfill. Outside of a landfill, the plastic has an indefinite shelf life and performs exactly like traditional plastic.
Regular plastic can take up to 1,000 years to biodegrade in a landfill. BioNatur plastics will biodegrade under landfill conditions in only 8 to 12 years. The end products are fully recyclable in normal waste collection streams, and with added strength, can be used more thinly, minimizing plastic use.
Air France-KLM and CMA CGM are to end their strategic air cargo partnership, signed in April 2023, blaming “the tight regulatory environment in certain important markets” which had “prevented the cooperation from working in an optimal way”.
At the time that the deal was signed, the partners said that approval had been gained in all markets except except US, Canada, Mexico, Russia, Turkey and Mauritius. An Air France KLM spokesman said that that was still the case and that approval had still not been obtained in those countries.
The carrier and forwarder will withdraw from their existing agreements from 31 March. However, they have begun discussions on new terms and conditions of a commercial relation to operate independently from that date.
Both groups remain committed to work collaboratively, to ensure cargo customers can continue to benefit from their respective networks.
CMA CGM remains a core shareholder in Air France-KLM but have agreed that CMA CGM will step down from the Air France-KLM board of directors on 31 March.
CMA CGM and Air France-KLM signed what they described as a “long-term strategic air cargo partnership” announced in May 2022 with an initial duration of 10 years. The two carriers would combine their cargo networks, full freighter capacity and other services, using the airline’s hubs at Paris-Charles de Gaulle and Amsterdam
The two operators’ combined capacity consisted of up to 12 full-freighter aircraft, six operated by CMA CGM Air Cargo, initially based at Paris-Charles de Gaulle airport and six from Air France-KLM based at Paris.
The partnership also covered Air France-KLM’s belly aircraft capacity, including over 160 long-haul aircraft.
Ocean and air freight rate benchmarking and intelligence platform Xeneta has appointed Tonia Luykx as chief revenue officer.
She has worked for businesses including Sift, Google, Dropbox and Amazon, and says: “In terms of the potential to transform how ocean and air freight is bought and sold and how supply chain procurement divisions operate, we have only scratched the surface.”
Luykx added: “There isn’t one other organisation that has the global data network of benchmarks and market insights anywhere else in the world, so it is market-leading with huge potential to grow. We have not even started to quantify the level of automation and operational efficiencies we can bring.”
Singapore Airlines (SIA) has gained IATA CEIV recertification for perishable at its Changi hub, valid for three years from 1 February 2024. Eight other stations – Amsterdam, Barcelona, Brussels, Frankfurt, Ho Chi Minh City, Hong Kong SAR, Hyderabad and Zurich – are currently certified under the quality corridor network. SIA became the first airline in South East Asia to receive the CEIV Perishable certification in 2021 and remains the only airline in the region to hold it.
It offers a Thrusfresh dedicated cold chain service including priority uplift and handling, quick ramp transfers cold room facilities and dry ice top-up.
HNA Cargo, one of China’s largest air logistics groups and agent to China’s fourth largest airline, HNA Aviation Group, is to partner with the cargo.one digital booking platform. It said it would shortly offer freight forwarders in 107 access to HNA Cargo capacity including routes into China and across Asia Pacific
HNA Cargo manages air cargo subsidiaries with a combined fleet of 600 aircraft spanning 11 airlines including Hainan Airlines, Suparna Airlines, Tianjin Air Cargo and Hong Kong Air Cargo, operating 2,000 international and domestic routes, including connections between China and the US, Europe, Australia, Middle East and across Asia.
Vice president of HNA Cargo, Qiushi Zheng, commented: “This digital partnership helps ensure that we benefit fully from our transportation capacity and can achieve optimal distribution. As our first global digital sales channel, cargo.one adds value with its high quality booking solutions and delivers us unique access to thousands of freight forwarders of all sizes through its impressive footprint. During our collaboration, cargo.one has impressed our teams with its technical proficiency and strength of purpose to accelerate and optimize our digital sales gains.”
Cargo.one founder and co-chief executive, Moritz Claussen, added: “With currently more than 50 digitally connected airlines, no other platform can deliver forwarders access to such superior differentiated supply, whether through our web-based application or API suite. As the go-to partner for digital distribution, cargo.one will ensure that HNA Cargo offers are always front of mind in every relevant market.”
More than 600 delegates have signed up for early bird registration for the Airforwarders Association (AfA)’s ‘Mix it up’ AirCargo Conference 2024 on February 11-13.
While the exhibition hall has officially sold out with over 80 exhibitors confirmed, AfA has increased the space reserved at the Omni Louisville Hotel in Kentucky.
AfA executive director, Brandon Fried, said: “Thanks to an all-time-high number of early registrations, this year’s AirCargo Conference is firmly on track to be our largest ever, even exceeding last year’s show of over 1,000 attendees and 85 exhibitors.
“Those attending will benefit from insights from air cargo’s most sought-after leaders who will be debating solutions to navigate today’s most complex global transportation challenges, as well as sharing proven growth strategies and innovations.”
The show was established in 1997 and brings together airlines, airport authorities, freight forwarders, truckers, and expediting companies, along with the vendors who support them.
The conference offers delegates a chance to network and collaborate with industry colleagues as well as opportunities to learn from more than 50 air cargo thought leaders, who will be discussing a wide range of trends, challenges, innovations, and the future of the sector.
Nippon Express has formally completed its purchase of Austrian-based Cargo-partner, paving the way for the Japanese forwarder to become a major international logistics company.
NX Holdings chairman, Mitsuru Saito, said that the merger, first announced in May 2023 would help propel Nippon Express from its current number eight ranking in the league table of global logistics companies to a place among the leading world players, rubbing shoulders with the likes of Kuehne + Nagel or DHL.
Cargo-partner founder Stefan Krauter, who started the business 40 years ago with five employees at Vienna Airport, said that the two companies were highly complementary. Cargo-partner is especially strong in central and Eastern Europe, while Nippon Express is a dominant force on intra-Asian trade lanes and also among Japanese companies trading overseas. Nippon Express will also bring substantial business in the US, where it has 4,000 partners compared with just 100 for Cargo-partner.
Cargo-partner could potentially increase Nippon Express’s European coverage 2½ times, he said.
The Austrian company has grown almost entirely organically in its four decades of existence, said Krauter but 21st Century economics increasingly favoured giant firms. For example, a company with just 4,000 employees now needed to make a similar level of investment in IT systems as one with 70,000, so clearly the economics of scale favoured mega-corporations.
The merger also dovetails with Nippon Express’s ambition to focus on non-Japanese corporate business and it would also allow it to offer more attractive rates and services on many cross-trades.
The two partners said that they did not expect that there would be any “sudden changes” to existing operations and that the Cargo-partner management and brand name would remain in place. However, with the merger now given the formal green light, the two companies were now in a position to hold discussions on important matters such as IT and processes or carbon emissions.
New Cargo-partner chief executive Luca Ferrara, said that the two companies hoped to finalise their plans over the next 100 days.
Acquisition of Cargo-partner will not mark the end of Nippon Express’s ambitions. Mitsuru Saito said that the company was holding discussions with 5-10 other potential acquisition targets, particularly in Africa and India although these would necessarily all come to fruition.
German independent handler Frankfurt Cargo Services (FCS) has appointed Federico Mosqueira as its new director of operations. He succeeds Christoph Cyranek, who took over the position from Markus Schneefuss on an interim basis in August 2023.
Mosqueira brings more than 20 years of experience including working for LATAM Airlines in Mexico, Central America and the US and as Manager Cargo Network Operation for Qatar Airways, based in Doha.
Most recently, he worked for Amazon where he helped launch Amazon AIR in Europe. Mosqueira was born in Mexico and has lived in Germany for 13 years and speaks fluent Spanish, English and German.
Kenya-based all cargo carrier Astral Aviation has signed sales partnership agreements with Euro Cargo Aviation in Europe, US and UAE and Take Off Aviation in South Africa.The two partners will market the airline’s cargo capacity to clients, including freight forwarders in their respective regions.
Astral Aviation chief executive Sanjeev Gadhia (pictured), said: “We look forward to our partnership with Euro Cargo Aviation who will act as an extension of our esteemed company, representing its cargo services, driving sales, ensuring operational efficiency, and maintaining customer satisfaction for its scheduled and charter network from Europe, USA & UAE, which will be directed towards Astral’s strategic hubs in Dubai and Nairobi while Take Off Aviation will promote Astral in South Africa.”
The start of 2024 may herald the start of a new economic growth cycle for air cargo after last year ended with a +9% year-on-year rise in demand and the highest general spot rate in nine months, suggests the latest weekly market data analysis by Xeneta.
While geopolitics and cost of living pressures continue to present significant hurdles to global trade, the predictability of air cargo means the industry stands to benefit from escalating international disruption, albeit producing only modest gains in volumes, says Niall van de Wouw, Xeneta’s chief airfreight officer.
He said: “To say 2024 is a ‘new dawn’ is perhaps a little too optimistic, but I certainly think it’s the start of a new cycle for airlines and forwarders – and shippers are likely to also appreciate the stability returning to the market so they can more accurately predict the transportation costs for the products they are selling.”
Weekly market data for December shows the global average air cargo spot rate peaking at US$2.60 per kg, up +6% on its November level, boosted by a +9% annual growth in demand. The general air cargo spot rate, however, continued to record a double-digit year-on-year fall of -18%. This compares to a growth ratio of -25% in November compared to the previous year.
“December 2023 data shows the market was slightly busier than anticipated, but we shouldn’t be tempted to draw too many conclusions from what happens in the final month of the year because the Christmas and New Year holidays make it an odd month.
“We also need to factor in that December 2022 provided a low comparison base given the very muted demand seen 12 months ago. This latest data appears to reflect stronger but temporary local market performance on key lanes as opposed to signaling a global economy that is doing much better. Our market outlook forecast for 2024 remains unchanged with an anticipated +1-2% growth in demand, and a +2-4% rise in supply,” he said.
As the heightened cost of living permeates advanced economies, consumers opted for more discounted e-commerce shopping to fulfill their Christmas shopping lists, adding to export volumes especially from Asia. However, it is worth noting that general retail sales outside of e-commerce remained subdued, especially when adjusted for inflation.
Looking at market supply, December global air cargo capacity remained similar to previous months, climbing +6% year-over-year versus the global supply still under recovery in 2022.
The global dynamic load factor, Xeneta’s market performance indicator which measures air cargo capacity utilization by considering both cargo volume and weight perspectives of cargo flown and capacity available, dropped to 59% in December. This was 1 percentage point down from November, but 3 percentage points higher than in December 2022 as year-on-year demand growth outperformed the increase in cargo capacity.
Prime regional lanes performed strongly in the final month of 2023.
The general air cargo spot rate from Europe to the US stood at $2.42 per kg in December, up +21% month-over-month. The reduction in capacity helped to push up rates on this lane. Similarly, corresponding spot rates from China and Southeast Asia to Europe both rose +9% to $4.49 per kg and $2.91 per kg respectively.
The the Suez Canal shipping crisis has yet to influence air cargo rates as the surge of air cargo demand for the holiday season was close to its end by the start of these events.
Triggered by strong e-commerce demand, the China to the US air spot rate rose another +6% in December to $5.12 per kg. In line with this, the airfreight spot rate ex Southeast Asia to the US climbed +14% to $4.50 per kg as outbound Southeast Asia shipments tend to transit via other Asian countries before heading into the US.
The China to the US corridor was the only lane among those referenced to see its December air cargo spot rate climb above its December 2022 level, up +13%. But similar to these other corridors, the air cargo spot rate on this corridor mostly peaked in early December. By the week ending 31 December, the China to US spot rate fell by a considerable 20% to $4.54 per kg from its peak three weeks earlier.
With rising expectations of market normalization, more shippers preferred to commit to longer-term, fixed rate contracts in the last quarter of 2023. Over-six-month contracts accounted for 45% of the total contracts signed, up 5 percentage points from the previous quarter. Six-month contracts amounted to another 28% of the total market. This was in stark contrast to the pandemic era when most shippers had to manage rates valid for up-to-one-month only. By the fourth quarter, the share of up-to-one-month rates was only 14%.
Niall van de Wouw added: “There’s still a lot of friction in the global supply chain market and that means there will be opportunities for some sectors. If big ocean carriers are not going through the Red Sea, it might delay a million or more containers, with all the knock-on effects. And the fact that you don’t know how long this situation will continue means some shippers will pay for the predictability of air cargo to lessen the impact of the current ocean freight disruption.
“In contrast, air cargo seems to be in a more ‘steady state’. It is important for airlines and forwarders to focus on the elements they can control, such as cost and reliability, and to be ready for when the opportunities arrive.”
Van de Wouw also questioned whether ocean carriers will continue to invest their profits from the pandemic to get a stronger foothold in the air freight market?
“The overall outlook for supply chains in 2024 remains very difficult to forecast amidst all this market uncertainty. This is generally not good for investments and shippers/consumers alike, but it might be good for airfreight’s share of global trade,” Van de Wouw continued.
“At Xeneta, we’re trying to help our customers avoid gambling on what the market rates will do. We are supporting them with spending less time on trying to predict what rates will do, and more time on working with a pricing mechanism that can deal fairly with these market fluctuations.”
