Regional Pulse: Canada builds on cargo boom

Government invests $200M in supply chain efficiency

YYZ sees record freighter activity ahead of vaccine shipments

YYZ expects to see its first COVID-19 vaccine shipments by the end of the year. Photo/Toronto Pearson Airport

Canada saw a cargo boom in 2021 and has spent much of 2022 trying to keep that momentum going. 

Canada’s airfreight market moved 2.7 billion freight tonne-kilometers and reached $1.52 billion in revenue in 2021, a compound annual growth rate of 2.7% since 2016, according to MarketLine reports. This year, government agencies and airfreight stakeholders have invested in infrastructure to accommodate and grow Canada’s airfreight market, as Air Canada Cargo readies to add capacity with widebody flights this winter.  

Air Canada Cargo 777F. Photo/Air Canada Cargo

Market outlook  

The busy summer travel season strained the infrastructure of Canada’s major airports, including Toronto Pearson (YYZ) and Vancouver (YVR), Flexport shared in an Aug. 30 market report. Cargo operations were negatively affected by the influx and added longer-than-normal dwell times on imports and exports, according to Flexport.  

Rates ex-Canada to Europe and Asia held stable in August with an upturn in capacity, according to an Aug. 15 Dimerco market report. Ocean capacity remains strained from Canada to Asia due to port congestion and strikes. 

Canada’s export market sees high levels of seasonal perishables, like lobster. The country is also the ninth-largest global e-commerce market, following India and France, according to Air Cargo World sister publication Cargo Facts Consulting’s air express market outlook. E-commerce made up 67% of Canada Post’s parcel business, Cargo Facts Consulting reported.  

Air Canada bolsters flights  

Air Canada has bolstered its cargo flights, utilizing 767Fs out of Halifax (YHZ) and Toronto (YYZ) to service Lima (LIM), Quito (UIO), Miami (MIA), Guadalajara (GDL), Mexico City (MEX), San Juan (SJU), Madrid (MAD) and Frankfurt (FRA), according to its website. Air Canada Cargo also flies 777-300ERs for thrice-weekly flights to Shanghai (PVG).  

The airline has plans to boost flights “out of all major gateways,” reported Flexport, which predicts Air Canada will add freighter as well as passenger flights.  

The flag-bearer reported CA $1 billion ($759 million) in revenue from cargo operations in 2021, breaking its own record for cargo earnings. For the first half of 2022, Air Canada Cargo reported $543 million in cargo revenue, a 9% year-over-year jump.  

Air Canada has also expanded its widebody cargo fleet, with two 777Fs on order for 2024.  

Reinforcing airport infrastructure 

Canadian airports have allocated millions of dollars to improving cargo operations and air traffic so far this year.  

The Canadian government and NAV Canada will invest $200 million in supply chain efficiency for air traffic across three projects in the country. One project targets infrastructure at Canada’s four major airports — Montreal-Trudeau (YUL), Calgary (YYC), YYZ and YVR —to streamline traffic demand and cargo movement. They will also invest $64.87 million to update air traffic management technology and create drone traffic management services.  

Edmonton Airport (YEG) will expand its cargo and logistics handling operations, creating a 2,000-acre facility with $77.6 million in funding from the Canadian government. Earlier this year, YEG and Drone Delivery Canada began a partnership for off-airport deliveries 

Meanwhile, YYC will invest $87 million in rehabilitating its west runway, with construction beginning in 2023, according to an August release by airport authorities.  

“A project of this scale and cost is a critical part of YYC’s future as one of Canada’s busiest travel and cargo hubs,” Chris Miles, vice president of operations and infrastructure at YYC, said in the release. 

Also, Halifax Stanfield (YHZ) opened a 25-acre air cargo logistics park in August for cold storage and cargo-processing facilities, in addition to five new cargo aprons.  

On the west coast, YVR will implement a cargo community system (CCS) with Kale Logistics to further develop its cargo processing, which the airport can leverage to increase market share and develop key trade lanes, Kale CEO Amar More told Air Cargo World.  

Despite the government’s investments, the CEOs of YYZ, YUL and YYC published a statement in August calling for more support in advancing airport infrastructure in Canada.  

Staking a claim in the boom 

As Canada bolsters its infrastructure, airfreight stakeholders are expanding their own, opening additional facilities to accommodate cargo movement.  

Maersk, for one, will open a 568,000-square-foot distribution center near YYZ in November, meeting growing e-commerce demand and providing faster fulfillment. And GTA Group opened a perishables warehouse for WestJet Cargo at YVR in August.  

Join Air Cargo World for our next webinar, “Forward Thinking: Best practices for freight forwarder success,” on Tuesday, Sept. 13, at 11 a.m. ET. Click here for more information and to register.

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