Are carriers effectively adopting a strategy of “slow-steaming” to combat the downturn in traffic and to keep their depleted freighter fleets in business?
Ironically, the shift by shippers from air to seafreight is probably exacerbating the apparent phenomenon.
It was the major container shipping lines, particularly on routes from Asia to Europe, which first introduced the concept of slow-steaming as a means of saving on fuel costs. At the same time, they recognized that many shippers did not require fast transit times, but preferred instead, albeit slower, consistent and reliable service.
Freighter schedules appear to reflect a similar trend in the airfreight market. Direct point-to-point, high-frequency service is being replaced by extended,
often circuitous routings involving multiple stops. It can now be several days before a freighter finally returns to its home hub.
Take for example Cargolux. It has a Sunday evening departure from its Luxembourg hub to New York. After New York, the aircraft departs to Mexico City before returning by way of Houston back to New York. Then, a direct return back to Luxembourg? No, the aircraft heads over the North Atlantic to Lagos, Nigeria before continuing on to neighboring Accra, Ghana from where it continues on to Nairobi on the other side of the African continent. It then makes its wayward way back to Europe, with a final stopover in Maastricht, Holland before returning to Luxembourg on Wednesday morning, having used four different flight numbers along the way.
The Luxembourg carrier now operates a growing number of B747-8F, offering a higher payload and greater fuel economy. But was this with the intent of it becoming a tramp steamer of the skies?
More recently, Cargolux added Dallas/Fort Worth to its network. A further addition to its North Atlantic portfolio? Well again, no. This new twice-weekly flight actually heads out from Luxembourg with its first port of call being Baku, Azerbaijan before continuing on to Hong Kong. It finally makes it to Dallas by way of a Trans-Pacific crossing, with the second weekly flight stopping off first at Mexico City. Dallas shippers can at least take some comfort from the fact that the aircraft then heads directly back to Luxembourg, apparently a throwback to a bygone era of what was known as non-stop service.
Obviously, as clearly demonstrated by Cargolux, freighter operators have to move away previously fast-moving trade lanes. Instead, they are being forced to knit together networks on a sector-by-sector basis requiring their freighters to set-out on often lengthy voyages.
Other carriers are following suit. Finnair Cargo recently extended freighter service to Chicago to add to its New York flights. But this belies the fact that the airline, with just a single MD-11 freighter, flies an extended figure of eight rotations between Hong Kong and Mumbai via its two European hubs of Helsinki and Brussels to New York and Chicago. Frequency no longer appears to be the name of the game; instead, connectivity is the new watchword.
Similarly, IAG Cargo has become very adept at working its three leased B747-8Fs to maximum benefit, but a glance at its freighter schedule will show it too no longer relies on point-to-point traffic. Book your shipment on an IAG cargo freighter from London Stansted to Johannesburg and along the way it will enjoy stopovers at Cologne and Madrid.
In the case of global forwarder Panalpina, it proudly boasts of its own controlled airfreight network with two Atlas-Air-leased B747-8Fs at its direct disposal. But the truth of the matter is that, in order to earn their keep, the aircraft are locked into an extended shuttle between Hong Kong, Dubai, Luxembourg, Huntsville, Ala., in the U.S. and Sao Paulo.
But even logistics giants FedEx and UPS admit the tide is beginning to turn against premium airfreight service. FedEx is pulling Asia freighter capacity and UPS reports that more and more shippers opt for deferred (make that cheaper) delivery options.
This comes at a time when UPS, in particular, is busy promoting its expedited oceanfreight service with the recent inclusion of Western Europe.
“The expansion of our expedited oceanfreight service comes at a time when many companies are considering other modes of transportation for their freight movements,” Keith Andrey, vice president of UPS oceanfreight services, says. “In the two years that we’ve offered this service in Asia, we have seen a great deal of customer interest in an expedited oceanfreight product.”
A latent integrator talking up oceanfreight…now that really is a sea change.