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Airline group Lufthansa is now seeking the intervention of the German government after Russia prohibited its cargo flights from operating in Russian airspace on the 28^th October. According to a spokesman from the carrier, the order seemed to have its origins in opposing opinions over the cost of carrying out flights over Russia. This, he added, had been followed by “intensive discussions� over the past few weeks.

The Russian ban has effectively forced Lufthansa into rerouting flights to Asia, with delays resulting from the need to now refuel in Kazakhstan.

“We understand that the German and Russian transport ministries are now discussing the matter,� the spokesman stated, adding: “We hope that a solution will be found very quickly.�

Germany Retaliates – Russian Cargo Flights Banned from Frankfurt

In a move that appeared to be retaliatory, on the 29^th October, the German transport ministry placed its own ban on the cargo fleet operated by the Russian Aeroflot airline, under which terms its aircraft were not permitted to use Frankfurt’s Hahn Airport. This, however, was dropped the following day.

News of this decision reversal came from a Hahn Airport spokeswoman, who, referring to the reroutes, said of the consequent delays: “If…(they) continue for much longer, Lufthansa Cargo will see an economic impact.â€?

The aviation body in Germany delegated with allocating the rights to land has not yet commented on the situation, instead, suggesting relevant enquiries are posed to the German government.

Freight International will continue to provide unrivalled coverage of the German/Russian disagreement and its impact on the air cargo sector as we get the facts.

Source – Freight International’s European Correspondent

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In a move to try and seize market share from ferry operators, Freight International has learnt that Eurotunnel is to slash the costs it levies on freight using the Channel Tunnel. The current charge is, on average, £6,000 per train of freight, but, with effect from January 2008, this will reduce to £3,000.

Eurotunnel stated that the freight division of its business had seen a steady declines over the past few years. In 1997, three million tonnes were carried, but, ten years down the line, this has plummeted to a little over one million. Today’s announcement is but part of a wider effort through which Eurotunnel is aiming to transform its fortunes.

Eurotunnel attributes the drop in volume of freight carried in the past decade to an ever-widening gap in respect of how its prices compare to those offered by ferry firms. Steeper security charges, it said, were one contributory factor to this chasm.

With the new reductions, said the company, it believed “considerable potential� now existed for it to get back in the frame.

In the most recently available data, Eurotunnel’s net losses for the period January-June 2007 were quoted at 32 million Euros. In the same six month period a year earlier, the loss figure was 105 million Euros.

Earlier in 2006, Eurotunnel was able to reduce its debt by half, after a lengthy fight with creditors.

Groupe Eurotunnel SA’s Chairman and Chief Executive Jacques Gounon described the revised freight charge terms as a “…voluntary and pragmatic strategyâ€?. He added “..backed by our existing railway partners and by the British government, (the strategy) shows that Eurotunnel is strongly committed to the re-launch of cross-Channel rail-freightâ€?.

Source – Freight International’s Assistant Editor

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A warning has gone out to lorry and van drivers in anticipation of a freight crime increase in the weeks leading up to Christmas. According to the Freight Transport Association, a number of factors could threaten companies not "on their guard", including extra staff, additional vehicles and seasonal rosters/routes.

The FTA alert coincides with the heightened number of goods being shifted across the UK in line with demand, pre-Christmas.

A spokesman from the group emphasised: "Drivers are reminded of the golden rule to only accept changes in their delivery or collection instructions from those they know in their own traffic offices." He added: "And traffic office staff are also frequently targeted by would-be thieves."

The association drew attention to several recent thefts to illustrate the variety of methods employed by criminals targeting the freight industry. One involved the theft of a trailer containing a full load of alcohol, and took place at a delivery site located in London. It was achieved after one of the criminals persuaded the vehicle’s driver to transfer the wine and spirits on board to another, stolen vehicle - parked near to the security gate.

Also highlighted were instances where criminals turned up with counterfeit paperwork supporting their claims that they were there to collect items due to be returned to source.

A handful of traditional vehicle-jacking incidents were also included. In one, a lorry and attached trailer were broken into while on an overnight motorway services stop. However, the criminals also set the vehicle ablaze - turning it into a shell.

The FTA emphasised the scarcity of these kinds of events, but stressed the need for drivers to remain vigilant.

Source - Freight International’s Assistant Editor

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Confirmation was provided on the 10^th October by the European Commission that it had carried out raids on a handful of freight firms. The move was a component of a wider probe into the area of cartel activity being carried out within the international freight forwarding sector.

The companies under scrutiny include Panalpina Welttransport Holding AG, Kuehne + Nagel and a strand of the German Deutsche Bahn AG.

It has come to light that the raids were undertaken after a Swiss freight firm - the details of which are not yet known - alerted authorities there. Its claim of the possible existence of cartels is understood to have been supported by documentary evidence.

Although it emphasised that the unannounced visits did not indicate the companies in question were considered guilty of carrying out anti-competitive activities, the EC highlighted how it had sufficient evidence to link them to a breach of the EU’s antitrust regulations, which ban restrictive practices within the corporate arena

Both Panalpina and Kuehne + Nagel asserted that no breach of these antitrust rules had occurred. They added that full cooperation between them and the authorities was taking place.

According to the European Commission, no official deadline exists by which time cartel investigations require completion. The length of time taken can be affected by factors including the complexity of individual cases, and the level of cooperation provided by the firms under surveillance.

Freight forwarding is essentially the management of items bound for transportation, together with linked activities including warehousing, services on the ground, document processing and customs clearance. If a comparison is made with the travel industry, then freight forwarders can be likened to travel agents.

The European Union’s competition law unreservedly bans cartels and practices associable with them.

Source - Freight International’s European Correspondent

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The latest data published by the Department of Transport highlights an increase in several regards in respect of the UK Freight Industry. The ‘Road Freight Statistics 2006’ report was issued at the end of September, and depicts an industry where more freight is being transported on larger vehicles, and to destinations further away than before.

Specifically, articulated vehicles in the over-33 tonne class are now responsible for 72 per cent of all cargo transported – nearly a one per cent/year increase since 1996. In terms of the journey, 27 years ago, it averaged 68 kilometres. Today, 86 kilometres is the comparable figure, although the report emphasises that this has changed little over the past decade.

Haulage growth is moving at a far slower pace than GDP (Gross Domestic Product). In the last ten years, the total cargo moved has increased by six per cent, while, in the same period, GDP has gone up 32 per cent. In the period 2005-2006, cargo carried by vehicles registered for use and driven in the UK increased by two per cent to stand at 155.8 billion tonne kilometres.

On the international scale, in total, 2.86 million freight vehicles journeyed to mainland Europe last year – a three per cent increase over 2005, and a 74 per cent increase than a decade earlier.

In terms of these 2.86 million vehicles’ origins, 525,000 were registered to the UK – a one per cent rise on the previous year. Additionally, 367,000 were French, 258,000 Dutch and 187,000 German.

From less-well established countries within Freight, 73,000 vehicles were Polish registered, and 45,000 each came from Hungary and the Czech Republic.

As of December 2006, 446,000 goods vehicle weighing over 3.5 tonnes were registered in this country, of which 73 per cent were rigids.

In the period 1996 to 2006, a 39 per cent drop in fatal accidents, or those causing serious injury, was observed.

Source – Freight International’s Assistant Editor

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A report was recently issued in the US which highlights the need for an investment of $135 billion in order to augment the largest existing freight railroads over the coming three decades. The study – which was undertaken on behalf of the American Association of Railroads – added that 25 per cent (or more) of this would have to be provided by the US government.

The American Association of Railroads (AAR) supports a legislation, on which basis tax incentives would emanate from investing in freight railroad infrastructures, resulting in an increased capacity to transport cargo by rail. In the absence of such investment, it highlights the danger of this cargo having to be transported by road instead. According to Edward R. Hamberger - the association’s President: “This stuff will move – it will just move by truck.�

The study was carried out by Cambridge Systematics Inc. Its basis is the level of rail demand currently predicted at a federal level. Specifically, according to the Department of Transportation, on a weight basis, rail cargo demand will be 88 per cent higher in 2035 than at present.

Consequently, said Cambridge, by that time, $148 billion in funding will be required. Within this figure, $13 billion would be directed at regional rail freight, with the balance reserved for the so-called Class 1 railroads – the seven largest. Combined, these Class 1s are confident of being able to cover $96 billion, “through increased earnings from revenue growth, higher volumes, and productivity improvements.�

The remainder is therefore $39 billion – which would need to be generated by external sources – tax incentives being one example. According to Mr Hamberger, investment tax credit would assist with this, but he expressed some uncertainty as to whether it could solely be used here.

Freight International will continue to provide the most up to date coverage of the rail freight industry industry in America.

Source – Freight International’s US Correspondent

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Confirmation was provided on the 20^th September 2007 of Deutsche Post World Net AG and Lufthansa AG’s intention to create a new dedicated freight carrier, which would be jointly owned. The venture would aim to develop on both airlines’ attempts to gain a larger share of the air cargo market. Specifically, Lufthansa Cargo would work alongside DHL – the express/logistics strand of Deutsche Post, in a partnership that Freight International previewed several weeks ago.

No name has yet been given to the new creation. However, it will operate from Leipzig in Germany – starting in 2009. Annual sales figures are currently predicted at around the 500 million euro mark.

A collaborative venture between DHL and Lufthansa is a logical move for both firms, following recent co-operations at freight hubs in Brussels and Cologne. Additionally, DHL is the largest customer of Lufthansa.

The new airline, and its potential, was described by Klaus Zumwinkel – the Chief Executive of Deutsche Post. "This is an ongoing development consistent with our intercontinental joint venture which we began in 2004", he said.

"DHL will notably accelerate for customers the exchange of goods between Asia and Europe through market-leading transit times. That will also substantially strengthen Germany’s position as a logistics base and additionally spur the economic upturn in our country."

According to Lufthansa, the new airline will have a fleet of 11 Boeing 777s, with deliveries due to commence from February 2009. Among its destinations will be Thailand, Singapore, India, the United Arab Emirates, China, Italy, South Korea and Britain. Less frequently, the carrier will fly to the USA.

Freight International will continue to provide unrivalled coverage of the very latest developments of the new Lufthansa/DHL cargo airline as we get the facts.

Source – Freight International’s European Correspondent

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Fuelled by a 10 per cent annual growth rate, China’s flourishing air cargo industry is set to spark fierce rivalry between cargo aircraft manufacturers over the coming 20 years. As described on the 19^th September by China Aviation Industry Corporation I (AVIC I), the current rate of expansion will lead to the need for 568 freight aircraft to be in service by 2026. This represents a more-than-ten-fold increase over the present air cargo fleet level.  

According to AVIC I – among the foremost aircraft manufacturing firms in China - at the end of 2006, Cargo airlines there operated a total of 46 freight aircraft. For the future, said Liao Quanwang: “China’s air cargo market will maintain an annual growth rate of 10.5 percent in the next two decades, which is slightly higher than the growth rate of the passenger transport market." He added that China’s buoyant international trade was driving this expansion.

Mr Liao also highlighted how the focus placed by China on modernising its overseas trade procedures – with additional emphasis on the export of modern technology – would also affect the air cargo sector in a positive way.

Mr Liao is the Aviation Industry Development Research Center of China’s Vice President. This group is an affiliate of AVIC I.

Based on the potential offered by the future of air cargo in China, the world’s most prominent aircraft manufacturers are keen to promote their products. Airbus – dominating the civil aviation headlines at the moment with the imminent entry into service of the A-380 “superjumbo� – is offering a freighter version of its A-330. At the recent Aviation Expo/China 2007 exhibition, the group brought along a scale model of the projected A-330-200F. With deliveries of the new aircraft set to commence in two years time, by August 2007, the order book stood at 66 examples.

According to the US manufacturer Boeing, the air cargo sector in China will maintain its place amongst the world’s elite over the next 20 years. It projects, by 2026, a four-times increase in the number of cargo aircraft operated.

Source – Freight International Far East Correspondent

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