Regional Pulse: Forwarders shift volumes away from London

Some forwarders are moving volumes away from London in favor of less-congested airports in England, like Manchester (MAN). “Additional capacity is coming back [and] we’re diverting some of our flows away from London, which we consider [is] amongst the more congested airports, flying over to MAN, for example, and using other alternative airports as well,” Scan Global Logistics Global Head of Airfreight David Wystrach told Air Cargo World . Indeed, London Heathrow Airport (LHR) has been facing elevated volumes due to a surge in summer passenger travel and recently implemented a capacity cap to provide some relief as the airport faces labor challenges, including among ground handlers. British Airways alone canceled around 10,000 passenger flights due to the capacity cap. [caption id="attachment_57066025" align="alignright" width="485"] Aerial view of aircraft on taxiway. Photo/LHR[/caption] A particular post-pandemic issue is recruitment and the challenge of finding and retaining staff , Lilly White, vice president of air freight product UK and IE at Scan Global Logistics UK, told Air Cargo World . And the market is not showing any signs of improvement. Although recruiters have record levels of vacancies, they are unable to provide the required candidates across the industry, White said. “We try to mitigate some of the struggles around labor or other kind of shortages in London,” Wystrach said. He further noted that flying to MAN, for example, is easier now as airlines add new routes and additional capacities. In fact, in February Lufthansa announced its intention to launch two- to three-times-weekly A321F operations from Frankfurt (FRA) to MAN . Combination carriers with operations to and from MAN include KLM, Qatar Airways, Emirates and British Airways, among others, according to flight tracking software. UK cargo growth Customers are now moving shipments comparative to 2019 levels, White said. “PPE [and] ‘work from home’ equipment will be interesting to be monitored going forward, [and] obviously e-commerce got a big boost and even if [it is] slowing slightly down these days, [e-commerce] is expected to outperform general cargo from a growth perspective,” White said. Health care and pharma shipments continue to increase as usual, with automotive and retail supply chains being “stronger than they have been,” she noted. The U.K.’s top three cross-border countries for e-commerce shipments include China, the U.S. and Germany, according to Cargo Facts Consulting’s e-commerce dashboard . Cargo stakeholders continue to eye growth in the U.K. through various cargo expansions. Freight forwarder Rhenus Logistics is expanding operations in the country through subsidiary Rhenus Air & Ocean U.K. The company in June launched a life sciences and health care department in Ashford, Middlesex, 4 miles from LHR. The facility includes a 25,000-square-foot warehouse with temperature-controlled storage to handle health care shipments. Rhenus’ facility will be used for fulfilment solutions, re-dressing, and passive and active packaging solutions, as well as imports and exports, hospital logistics and storage, Marie-Louise Watkins, head of life sciences and health care for Northwest Europe, told Air Cargo World . Aside from the LHR facility, Rhenus operates life sciences and health care departments in Schiphol (AMS), Brussels Airport (BRU), Copenhagen Airport (CPH) and Dublin Airport (DUB). The company’s growth at LHR is motivated in part by growing markets on other continents, Watkins noted. “We are importing and exporting to and from a number of continents, including Africa as a major growth market,” Watkins said. “This is supported by our direct services from Heathrow to Johannesburg. Of course, China continues to be of significant importance to the U.K. economy, but we are also seeing developments for Southeast Asia and North and South America.” Rhenus is also seeing growth in products like luxury vehicles, handled by its vehicle logistics division, and chemicals and consumer goods, Watkins added. Further expansions, connectivity challenges Meanwhile, in May Bournemouth Airport (BOH) announced plans to build additional cargo infrastructure to strengthen its Cargo First cargo-handling service and accommodate growing volumes. A multi-million-pound investment will go toward apron space for cargo handling and transit sheds for facilitating cargo from landside to airside. The airport is also in the early stages of building a 40,000-square-foot unit, with 1 million square feet of logistics space set aside for the further expansion of logistics organizations. Other cargo projects include FedEx’s new facility at Newcastle International Airport (NCL) and dnata’s new 10,500-square-meter warehouse at LHR . Despite the Russia-Ukraine war and Shanghai lockdowns stunting growth, especially on the Asia-Europe trade lane , there has been an improvement in connectivity and capacity compared with 2021, Scan Global’s White said. “Although the market and industry is far from being back to where it was in 2019, many markets are opening up and we believe will continue to improve through to yearend barring any significant re-emergence of COVID,” she said. “We see the market in general somewhat easier to navigate that is has been for some time, and we hope to see continued progress through 2022 into 2023.” Scan Global’s Wystrach further noted that there is roughly 15% less capacity going into Europe and the U.K currently due to the Ukraine-Russia war and other capacity challenges. LHR ranked No. 23 on Air Cargo World ’s most recent Top 50 Cargo Airports ranking, based on 2020 tonnage.

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