Top 3 takeaways: Critical points for airports’ cargo infrastructure development

PARIS -- Despite this year’s challenging market environment, air cargo stakeholders continue to prepare for future demand and needs. At the Air Cargo Handling and Logistics Conference in Paris this week, ground handling and airport panelists spoke on issues critical to ensuring airports’ successful cargo infrastructure. Smart strategies are increasingly important as airports step into the spotlight of the industry and are tested to determine their role as hosts and partners to stakeholders across the air cargo supply chain Click on for three takeaway points from the panel, next. #3: Bringing everyone to the table First and foremost, when considering what infrastructure developments to make, all panelists agreed that airports need to bring stakeholders to the table to learn about the actual needs of stakeholders’ customers and how best to meet those needs. In the past, airports may have acted as a straight through for cargo moving in and out of airports. However, now as more airports seek to grow their cargo business through infrastructure development it is important to understand exactly what stakeholders’ customers need. This can range from perishable facilities to space for automated e-commerce sorting or room for live animal operations. “Air cargo is one of the most liberal and free industries in the world, so you need to create an environment where cargo flows to you and not other airports or leaks to another transport mode, like shipping,” said Budapest Airport’s (BUD’s) head of cargo József Kossuth. “Therefore it is very important to adopt all the opinions [of your stakeholders] into your development strategy And the industry needs to focus much more on real collaboration and action.” While BUD may have been a “cargo desert” in the past, it has since become one of the top airports rising in the industry through its strategy to attract carriers, ground handlers and freight forwarders with its new CargoCity. Read more on BUD’s cargo strategy here. #2: Smart processes and planning In line with considering the needs of all stakeholders, when planning infrastructure and operations airports need to streamline processes. While implementing flashy, new technology and building new facilities can be worthwhile, airports may sometimes find they can have just as nice a business running operations out of an older terminal if they approach and execute processes intelligently. This becomes an especially useful tool, given that airports often plan for major infrastructure investments at least 15 to 20 years out, during which time situations may change. It can also be useful for airports with constrictions on space. Hong Kong Air Cargo Terminals Limited (HACTL) said it receives great support from both the Hong Kong and Chinese governments for investment in its facilities, but even so, it was built in 1998 to last with twenty years’ foresight and is now working to deal with space constraints. To deal with these restrictions, as well as shifts in external markets, HACTL is transitioning to increase its catchment zone in its greater bay area over the next decade through partnerships with other airports and operators. “We are now looking to develop hub-to-hub cooperation with other airports nearby and abroad to keep cargo in Hong Kong,” said HACTL executive director Vivien Lau. Read more on HACTL’s recent developments here. #1: Competition from below Indirectly related to airports’ development of strategic planning is the need for airport authorities to pay attention not only to competition from other airports, but also that presented by other forms of transportation, like freight trains and ships. “It really comes back to – do you speak enough to your customers to know their requirements?” said Liège Airport (LGG) VP Commercial Steven Verhasselt. “Jack Ma announced the 72-hour shipping promise to customers, but he never said that has to all go through air.” Airports in general may sometimes be too focused on what it can do within the airfreight industry, but it is critical to expand the view to that of the customers. Airports need to understand how it can meet the needs of customers from a logistical solutions approach, which is not necessarily all about airfreight. In some situations, like in LGG’s work with Alibaba’s logistics arm Cainiao, a mix of goods the e-commerce giant knows customers will buy according to its algorithms will be brought in from train and stored in warehouses before being sent to the airport to fly out. In this situation, the airport is only a facet of the customer’s logistics supply chain network. LGG, for example, said it is currently working to buy the cargo train terminal located next to the airport as it believes trains are a critical part of its future growth. This move will be useful, given that Russian and Chinese state railways are moving to completely implement e-freight initiatives that will transit goods from those regions to Europe in seven to eight days at a much lower cost than airfreight. LGG said that it also maintains cooperation with Rotterdam Port, to strengthen its access to multimodal logistics providers. Read more on Chinese freight trains to Liège here.

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