2016: The near-future of European cargo?

December 12, 2015

After a long and winding 2015, which was generally a downbeat time for the European airfreight community, many logistics professionals are looking ahead for signs to offer hope for a brighter inbound year. At the moment, the planned FedEx purchase of TNT seems to be the deal that has the most people in the industry talking about better times ahead, but there are other positive signs on the horizon, as well. Here’s a crystal ball look at a few of the topics the industry is likely to be talking about in 2016 and beyond.

 

 

Once of the first items likely to be signed off soon after the calendar turns to 2016 will be the FedEx/TNT purchase. There may be a few more bureaucratic caveats put up by the European Commission, but for the most part the regulators appear to be staying out of the way of this marriage.

 

The only imminent cloud on the horizon for the new combo is where exactly FedEx/TNT will call home. The Netherlands will be the corporate headquarters in Europe, but then comes the trickier task of identifying where the main operational hub for the newlyweds will be located. TNT would obviously favor its current Belgian nerve center in Liège. According to Liège Airport, after TNT doubled the size of its operations there in 2007, it has become a major cargo presence accounting for more than half of the 400,000 tonnes that passed through the air hub between January and August of this year and employing 2,000 of the airport’s 3,500 jobs.

 

FedEx said Liège would continue to be a “significant operation” once the deal goes through, but the integrator also has substantial operations in Cologne and Paris Charles de Gaulle. In 2009, FedEx had renovated the Paris-CDG facility with a US$158 million expansion, so it is not likely to leave that location anytime soon. But questions remain about how long the combined companies can continue to operate two hubs that are just 275 kilometers apart.

 

Over in Germany, the mood is a bit darker. Lufthansa Cargo continues to swallow its pride after not being allowed to build its planned mega-hub  for cargo, the LCCneo, at Frankfurt Airport, due to budgetary restraints at the mother airline. Farther east, news comes that the opening date for the much-delayed new Berlin airport has been pushed back – again. Next year is shaping up to be a race against time between LH Cargo and Berlin to see which facility will not open first.

 

It will no doubt be another tough year for DHL Global Forwarding as it seeks to extract itself from its largely self-inflicted wounds, most of which emanated from attempts to install an overly ambitious new IT system. The forwarder promises a new beginning and says it will not be dragged further down with its new upgraded system.

 

The subject of drones will undoubtedly be high on the agenda through much of the year, although there will likely be more talk than action on the subject. Drones will come into the cargo arena, for sure, but for the moment they are still on the same level as the revival of airships in terms of cranky water-cooler talk. One of the more recent UAV proponents, Swiss WorldCargo, continues in its quest to harness the concept via the Matternet One vehicles. This may be ironic to some observers, given that the Swiss already have some of the strictest environmental constraints in the world. Truck movements, for example, are banned on its roads at night and on high days and holidays. It’s unclear how much more of an environmental difference these whirlybirds can make buzzing around the cantons of Switzerland.

 

Another trade media darling, pharmaceuticals, will no doubt be held up as the prodigal savior of air cargo, with at least two conferences a month on the subject. In the meantime, the shipping lines will quietly be filtering away more and more of this premium business. In a similar way, the impact of the trans-Siberia rail link between Asia and Europe will continue to be debated and continue to be dismissed as a genuine alternative to airfreight – this despite the fact that several major European airfreight forwarders continue to develop and invest in a service concept which apparently holds no threat to the industry.

 

Cargolux will continue to write its own headlines again, as it adds further chapters to its ever-evolving narrative. There is the challenge of starting a new joint venture carrier in China, trying even harder not to give the impression that Cargolux Italia is a lowcost breakaway, and ongoing efforts to appease its unions back at base in Luxembourg.

 

IAG Cargo will most likely continue to cement its relationship with Qatar Airways Cargo, further extending the purchase of block space on the Gulf carrier’s freighters and belly holds. Also, given the recent statements from CEO Akbar Al Baker regarding the Doha-based carrier’s recent interest in the e-commerce business, Qatar may focus more next year on serving some of the highly populated areas in the U.K., such as London, Manchester and Edinburgh, that are already in the carrier’s network.

 

Russia’s AirBridgeCargo will likely continue to confound the industry. It is obviously in an expansionist mood, and all eyes will be on its U.K.-based startup surrogate, which, for some  Then, of course, there is the small matter of those twenty 747-8Fs ordered on behalf of ABC. One wonders if, through the course of the year, the make-up and actual content of that contract with Boeing will become any clearer. But remember that this is Russia, so don’t hold your breath.

 

Finally, TIACA has decided that “innovation” is going to be the watchword of the biennial Air Cargo Forum to being held in Paris in October, the site of so many strike actions by Air France workers over austerity cuts imposed by the French carrier. Let’s hope the industry comes together to find innovative ways to help European carriers solve labor problems such as these and puts the industry on a more profitable path for 2016.

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