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DHL Global Forwarding considers boosting dedicated freighters to its network

DHL Global Forwarding is looking at adding routes operated by dedicated freighters to offer steady and predictable cargo uplift on trunk routes where capacity is limited but demand is strong

DHL Global Forwarding considers boosting dedicated freighters to its network
19 June 2018 - 19:06

DHL Global Forwarding is looking at adding routes operated by dedicated freighters to offer steady and predictable cargo uplift on trunk routes where capacity is limited but demand is strong.

Chief executive David Goldberg of DHL Global Forwarding in the US said that the global economy looks set to continue on its growth path, which started in 2017, and which requires a combination of commercial uplift in bellyholds and chartered maindeck capacity, London's Air Cargo News reported.



'If you reference the DHL trade barometer, we forecast that markets like the US will continue to increase, and as the market-leading air freight forwarder we just can't live on commercial capacity.'



He continued: 'The industry saw rates going up drastically last year, especially Asia inbound in the fourth quarter and also on US outbound. Airline capacity was cancelled at certain points of the year, which caused immense problems.



'And with the types of volumes we have, if you cancel just one rotation, it is already a significant issue for us and our customers. So we deploy our own capacity on those lanes where we are sure we have the capacity to fill the flights.'



Mr Goldberg added: 'We just cannot live with a service where rotations are cancelled, where there is no place to put the demand and the cargo is delayed. Predictability is a major concern of shippers.'



At present the company has Boeing 747 freighters, operated on its behalf by Atlas Air, flying between Shanghai and Cincinnati airports, but the world's largest air freight forwarder is also considering flights to Los Angeles and Incheon.



The demand is primarily China-driven said Mr Goldberg, adding: 'We also need different ways to connect the rest of Asia or some of the outbound flights which then go on to Europe.'



Mr Goldberg said that e-commerce is 'changing the landscape of air freight,' and that after the 2008 financial crisis many supply chains were reorganised to ocean freight.



'We looked at what would be the next driver of demand in air freight because previously it was based on technology or pharmaceuticals, but the real driver of demand now is e-commerce.



'E-commerce is not one stand-alone sector because it ranges across all different industry segments, with all different models of shipping. If you look at different markets around the world, taking Hong Kong for example, up to 60 per cent of its total freight is now e-commerce related.'



The company will still rely on bellyhold capacity in passenger aircraft as a key component of its air freight logistics, said Mr Goldberg.



'Commercial uplift and bellyhold will remain a huge and significant portion of our total tonnage, so there is no shift away from bellyhold capacity.



'But on those trunk routes, where the capacity is constrained and we have the demand, then we have to be able to provide a competitive, predictable service throughout the year to our customers.'



E-commerce volumes are challenging every aspect of the air cargo supply chain at airports, especially in the US, where airlines have outsourced ground handling to agents.



Mr Goldberg added: 'As a general statement, ground handling in the US is not to the levels it needs to be. The cargo recovery times from the airlines are, in my opinion, far too long and we need to find solutions to be able to do it more quickly.



'We have seen, throughout the year, recovery times of six, seven or eight hours which is almost a whole shift for one person, and that is just far too long.



'We have taken some actions on our side, to try to improve to recover cargo more quickly, but there is a lot of work to be done to improve the speed in the US generally.'

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