Airlines resume operating IAI-converted freighters following safety alert – FreightWaves

Operators of B737 aircraft converted by Israel Aerospace Industry have begun flying the planes with loading restrictions after a safety notice two weeks ago from the Israeli government led to a halt in flights.

Alaska Airlines, Australian flag carrier Qantas and Indian low-cost carrier SpiceJet say they have returned the planes to service after a temporary grounding.

Alaska Airlines pulled its three 737-300 freighters from service for two days in mid-December and substituted for the lost capacity by utilizing B737-800 and 737-900 passenger planes as dedicated freighters, “combined with utilizing our larger passenger planes when possible for extra freight,” a spokesperson said. The airline also temporarily stopped accepting new shipments on routes used to supply Alaskan towns from the Pacific Northwest.

The converted freighters are operating again after an internal assessment, but Alaska Air is limiting the loads for the time being, the official said. 

Each aircraft has a 42,000-pound maximum capacity.

In a Dec. 12 airworthiness directive, the Israeli Transport Ministry said 47 aircraft (300, 400 and 700-series) had a defect in the rigid barrier wall that protects the cockpit from shifting loads during sudden deceleration. The defect was discovered during an internal examination of IAI’s facilities.

IAI Communications Manager Lital Ben Ari, downplayed the situation, saying the aircraft can fly normally with only a slight reduction in weight. “IAI was very conservative regarding the apparent damage. All experiments done by now show no problem at all in the rigid barrier. But we’re not done checking. In any case, no rigid barriers were replaced or are expected to be replaced in the future. Any damage that is discovered will require a minimal fix,” he told FreightWaves.

Ben Ari stressed that there has never been an accident involving the 9G barrier and that no additional oversight of IAI operations has been mandated. “All manufacturing, production and assembly process are completely open to the Israeli authority and checked on a regular basis by IAI and the authorities,” she added.

Alaska Public Media reported that Alaska Air was retrofitting the barrier wall in the three freighters.

Qantas Airways is operating its four B-737-400 freighters converted by IAI with some restrictions, in line with the airworthiness directive, a spokesperson confirmed.  

In a regulatory filing, SpiceJet, which operates three B737-700 aircraft that were grounded on Dec. 13, said it returned those aircraft to service on Dec. 23.

Spanish shipbuilder Navantia digitalizes supply chain with SAP Ariba – FreightWaves

Software technology company SAP Ariba has helped modernize the supply chain of Spanish shipbuilding company Navantia by digitalizing the purchasing and procurement sections of its logistics. In its statement, SAP Ariba claimed that technological intervention had led Navantia to increase the efficiency of its purchasing processes by 52% while reducing its supply cycle time by 25%. 

FreightWaves spoke with Pat McCarthy, senior vice president and general manager of SAP Ariba, to discuss the impact his company has had on improving Navantia’s operations. 

McCarthy initiated the discussion by explaining that the fundamental problem traditional companies struggled with was the absence of digitalization, forcing them to work with paper documents and occasional email reports, making them hugely inefficient in the process. 

“There is no efficiency or effectiveness at scale as information is constantly learned or relearned due to communication channels being incredibly fragmented,” said McCarthy. “All of those communications within Navantia were one-to-one, which made them look at how they can collaborate more effectively with their suppliers and stay competitive in the market.”

SAP Ariba set about digitalizing Navantia’s supplier interactions and its internal infrastructure, which helped settle business processes at the point where they started. McCarthy explained that pushing forward the idea that everything that is done within the company will be reportable and accountable to the public was equally critical to the digitalization process, as Navantia is owned and run by the Spanish government. 

This helps with the brand image of Navantia, as the company maintains critical international business relations with countries like the U.S., India, Norway, Turkey, Brazil, Australia and Saudi Arabia. Digitalization bridged the gap Navantia had with transparency and traceability in its procurement processes, helping the company to march toward its transformative solution named Shipyard 4.0.

By automating communications with suppliers, Navantia can now confirm orders online, increase transparency in the bidding process and trace the volume of tenders and the number of suppliers involved in the process. The company also can continuously monitor its weekly progress, which can shed light on the areas of improvement and help increase efficiency. 

Still, the path to digitalization was not without its share of complexities. “I think change is hard. When you introduce technology, it has to be consumable by the persona. So if that’s someone in sourcing, the technology has to be built and applicable to a sourcing professional,” said McCarthy. “That was our goal with Navantia, to see if we were really addressing the persona — be it the sourcing professional, procurement professional or the supplier.”

The partnership with SAP Ariba has yielded great results for Navantia, with the shipbuilder planning to continue its association to gain ground in innovation across its supply chain. McCarthy maintained that the relationship SAP Ariba has forged with Navantia will keep appreciating over time and that there was “no end in sight.” 

Navantia understands that the future of its supply chain lies in sustainable procurement as it continues to focus on accounting for every dollar it spends. “Sustainable procurement is a huge topic for companies around the globe, particularly where public money is being spent,” said McCarthy. “Companies have always wanted to do good by procuring sustainably. But it is only now that the math, logic and financials have added up to make sure doing good is also good business.”

Future proofing is critical to the longevity of trucking businesses – FreightWaves

Among the different modes of freight transport, the trucking industry is possibly the only segment that remains localized and bound to specific regions, unlike the air or maritime sectors that are fundamentally more global. 

However nucleated the trucking ecosystems might come across, they share certain traits and woes that are strikingly similar across geographies – like excessive fragmentation, lack of visibility and transparency, and general indifference to technology. 

Fragmentation creates an environment in which the adoption of common standards or practices is extremely arduous, furthering the issue of digitalization percolation as it requires stakeholders across the horizon to come together and adopt technology en masse. 

“Another primary issue with fragmentation is that it leads to massive amounts of siloed data,” said Lyall Cresswell, the CEO of Transport Exchange Group, a U.K. & European-based freight tech platform providing real-time decision-making solutions for businesses. “This is where we come in, democratizing that data and putting it across in a commonly accepted standard format for businesses to consume.”

Cresswell spoke of how small- and mid-sized companies in the trucking landscape are often caught in a “deer in the headlights” situation, where they struggle to adopt technology that could help them future-proof their businesses from disruption – both from an operational and financial perspective. 

“With digitalization initiatives getting more mature over the last couple of years, it is important for businesses to not hold back and look at making decisions. They aren’t necessarily making long-term decisions, as the technology might change. But it is critical to move in the direction towards change, as if they remain stagnant, the industry is just going to pass them by,” said Cresswell. 

In the context of price points on adopting technology into their operations, Cresswell contended that a majority of the solutions are available at a cost that isn’t unreasonable. This is due to the technology maturing over the years and in part due to the proliferation of startups that lower prices to gain market share in the space. 

“Technology is low-cost now as it’s all cloud-based today. We do see some high-end systems that companies might need help in setting up, but most of the time, cloud-based technology is something that you can plug and play instantly,” said Cresswell. That said, the trucking industry is chock full of traditional family-owned businesses that oftentimes do not grasp the relevance of technology, making it vital for developers to educate them on technology’s scope in improving their operations. 

Technology aside, it is hard for any company to accurately identify industry trends and future- proof their operations to address potential challenges. For instance, the Amazon effect that has virtually revolutionized the way logistics work today, was not a trend that was anticipated to scale this quickly until it actually arrived at the scene. In the same vein, technological disruption in the delivery sector via drones, last-mile delivery robots, and autonomous driving technology could alter the future of the transport landscape – all in quick time. 

Though these are trends that businesses have no control over, it serves them well to look at leveraging things under their control – like data streams, which can be used to create operational insights like predictive maintenance, dynamic pricing and capacity availability. 

“These are the kind of things that, as a small business owner, you’d have them in your head. But if you are a fleet with over 1,000 trucks, you will have to look at using that data, because without that, the information just partially resides in somebody’s head,” said Cresswell. “Future-proofing is about taking that data beyond traditional reporting and making use of that in an intelligent way to improve operations.”

Commentary: Air cargo looks for lift in 2020 – FreightWaves

Air cargo industry forecasts for 2020 are now out and company revenue budgets are locked in. Air cargo is cautiously looking for a mild 2% turnaround on volumes in 2020, according to the International Air Transport Association (IATA), after its worst year since 2009. A rebound would be welcome news for air cargo stakeholders – airlines, air cargo handlers, airports, freight forwarders, trucking and expedited delivery companies. Some recent developments would appear positive for air cargo – a long-awaited U.S.-China “Phase One” agreement is taking firmer shape, more clarity on the U.K. political situation and Brexit, and continued strength in the U.S. economy. At the same time, other developments, such as Boeing halting production on its 737 MAX aircraft, may actually have negative traffic impacts on supply chains.  

Nighttime loading of the main deck of a freighter aircraft.
(Photo credit: Shutterstock)

The broader trends hold some surprises

Where will the new growth come from? For a leading global economy like the U.S. that both consumes and produces products of all kinds that are shipped by air in large quantities, there are long-running structural trends that challenge growth. Air cargo industry data specialist WorldACD points to the large year-over-year global shrinkage in general cargo traffic moved by air for most of 2019, most recently down 8.2% in October, while many but not all of the specialty cargo products – pharmaceuticals, vulnerable/high tech and perishables – continue to show growth. As a group, specialty products grew 2.7% in the latest report. The general cargo numbers are much larger globally, roughly 66% of the tonnage total. To achieve overall growth, those big numbers would need to do a quick “about-face.”  

SONAR Tickers: AIRRTM.USA, AIRRTM.APAC, AIRRTM.EMEA, AIRRTM.LATAM.
U.S. airline volumes show marginally positive domestic growth this year, led here by UPS and FedEx, but Amazon’s larger year-over-year domestic volume growth by air is not shown

Domestic air cargo in the U.S. continues to be a relatively bright growth area moving in line with a stronger U.S. economy, but the largest domestic volumes – well over 85% – are flown by FedEx, UPS and Amazon, while U.S. airlines and niche operators service the rest of the U.S. E-commerce growth has been and will continue to be a key driver for North America, with that growth skewed to just a few players so far.

Looking at international air cargo, our analysis of U.S. trade data by mode since 2010, after the Great Recession ended in the U.S., has some eye-opening findings: 

  • The value of U.S. trade by air has increased, with imports growing 50% in that period while exports have grown only 26% (based on a full-year 2019 forecast). 
    • In contrast, containerized ocean import value is up slightly less, at 45%, but ocean export value has risen 36%, 10 points more than air.  
    • Containerized ocean traffic is the closest surface mode competitor to air cargo.
  • The gross weight of U.S. trade by air shows very different results. Import tonnage has grown 17% in the nine-year period, but export tonnage is actually down 4%. 
    • For containerized ocean traffic, volumes are up much more – 40% higher for imports and 34% more for exports.
    • U.S. export tonnage by air has barely grown since 2010, with positive y/y growth in only two of the nine years. 
Source: U.S. Census Bureau, USA Trade Online

Underlying these figures is the dramatic change in how shippers are using air cargo – increasingly for more valuable cargo. 

  • In 2010, air imports averaged $110.63/kilogram (kg) in value and air exports averaged $114.48/kg in value. 
  • Nine years later in 2019, air imports are up to $142.11/kg, a 28% increase, and air exports average $150.78/kg, a 32% rise. 

That suggests shippers are managing their spend tighter and being more selective about their use of air cargo.

Air and ocean growth and share shift

Air cargo is considered a premium transport mode. Depending on the market, it can range from five to 20 times more expensive, kilo for kilo, than surface transportation. Air cargo’s challenge is to overcome that initial large cost difference in competing with sea freight or trucking to make its value case by better meeting the overall needs of the end customer or project at a competitive total cost of ownership.

While some products will always use air 100% of the time due to sensitivity, extreme perishability or tight transit time requirements, much of what moves by air cargo is vulnerable to potential downgrading to surface or expedited surface modes under the right conditions.

Tokyo’s fish market and the tuna trade support a robust global air cargo industry, including from the U.S., for tuna to Japan.
(Photo credit: Shutterstock)

The evolution of transport modes can work in a number of ways. New and/or highly desirable consumer products air freighted for product launches or while sales are hot ultimately see supply chain rationalization to surface modes to reduce costs and improve supplier margins as the product’s life cycle matures and competitors enter and create more price competition. Improvements in packaging, security, storage and shipping technologies for perishable, vulnerable and pharmaceutical products lengthen product shelf lives and enable less sensitive or shorter distance segments of that product to be safely diverted to surface modes. Company budget pressures and the need to achieve financial goals make use of air freight an easy target during recessionary and leaner times, forcing shippers or buyers to develop savings initiatives around surface transportation solutions.

Our review showed several examples within the U.S. trade data of a shift from air cargo to the containerized ocean mode: 

  • Packaged retail medicines that moved 46% by air to the U.S. in 2010 are now moving 24% by air in 2019 (year-to-date).
  • Fresh asparagus imports that moved 79% by air in 2010 are now moving 46% by air.
  • Even vulnerable products like cell phones, with volumes air-freighted at 98% in 2010, have slipped to just under 94% this year.
  • Electrical machinery, which moved 10.8% of its 2010 imports by air, is now at 7.7% in 2019.
  • U.S. pharmaceutical exports were shipped 46.3% by air in 2010, but now stand at 38.4%, an eight-point share drop
  • Overall, 14 of the top 20 two-digit air export HS codes saw shrinking shares for air in 2019 compared with 2010, indicating a shift in favor of containerized sea freight.  
  • Similarly, 14 of the top 20 two-digit air import HS codes also saw modal share shift away from air in 2019 compared with 2010.
Preparing shipments at the Aalsmeer Flower Auction in the Netherlands. Over 95% of global fresh flower shipments to the U.S. are flown by air cargo, but surface modes are slowly making inroads in some areas of supply.
(Photo credit: Shutterstock)

Growing and re-growing the business

So in a sense, air cargo is reselling and replacing lost kilos on a continuous basis. Its growth depends on both the organic growth of the underlying products being shipped but also the ability to continually upsell those products to air. It has to keep proving its value proposition to win kilos from surface modes. Once shippers learn how to safely manage their supply chains using surface modes to satisfy their buyers’ overall needs, it can be difficult to fully reverse that in favor of air unless those chains are broken. 

That means air cargo also depends on new products of all kinds entering in early stages of their life cycles and maintaining growth in the air cargo mode as long as possible before stabilizing at some level. New pharmaceuticals, perishables and high tech consumer and other technology products often lead the charge in this area. Project cargo, which can involve substantial tonnages for energy or construction shipped over defined periods, also can help drive growth, but has its own ups and downs. It also must compete against sea transport and ultimately by definition come to an end.

While air cargo has been down in nearly all regions of the globe this year (other than Africa), faster air cargo growth can be expected from less developed countries, often for perishables or lower value manufactured goods such as textiles.

E-commerce continues to be a hot topic for the industry, which can clearly see the promise of consistent and steadily increasing demand whose time element fits perfectly into air cargo’s value proposition. As noted earlier, Amazon, UPS, FedEx and DHL Express set the pace here for North America, along with others in Europe and Asia. Other logistics providers and airlines are looking to develop this area, but many are trying to figure out the best way to play. There are numerous complexities to overcome to achieve speedy and seamless processes across multiple vendors and stakeholders, so progress in this area to this point is generally uneven. Whether enough airlines and freight forwarders can break through and ultimately carve out large enough niches in e-commerce remains to be seen. 

SONAR Tickers: ISM.PMI, ISM.MEXP, ISM.MIMP
Primary indicators used to forecast air cargo activity are all below the 50 benchmark, indicating contraction, but with trends still mixed.

So turning the corner on 2019 and moving into a growth mode for air cargo in 2020 requires airlines and forwarders to arrest the general cargo decline and keep up the growth in specialty areas. That said, tonnage growth doesn’t drive everything. Yields matter a great deal as well. Faster growth of higher value products that have specialized requirements and handling needs can, if managed well, mean flatter volumes but still higher and more profitable revenue. But overall sustained higher volumes for general cargo normally comes with more economies around the world doing well and without too many tariff burdens that suppress trade. We will need to see much quicker progress in that direction than we saw in 2019.

Outlook for North America

For a mature economy like the U.S., what are the implications for air cargo of continuing along the current path? We see several outcomes:

  • Despite various individual company efforts, e-commerce growth in the end leaves only a few clear winners among airlines and forwarders.
  • Lack of significant U.S. export growth means continuing strong price competition as airlines and forwarders fight for whatever tonnage is available.
  • Pricing pressures may grow over time as air cargo belly capacity continues to expand with more airlines flying newer and higher cargo capacity passenger aircraft like the Boeing 787-9, 787-10 and 777X, along with Airbus A350-900 and A350-1000 on more U.S. routes.
  • Export shippers will benefit from the price competition, but airline cargo revenues will strain to grow.
  • Airlines will need to work hard to differentiate service offerings to maximize revenue where they can from specialty products and value-added services supporting them.
  • Even more pressure will fall upon freighter carriers to stay agile, moving routes and schedules around to hot cargo markets to keep flying profitable.
  • Assuming tariff issues can be managed, import growth should continue to outpace export growth and help fill new capacity, but any new trade wars with Europe or elsewhere can put major tonnage at risk, and overall growth as well.
  • U.S. trucking companies doing airport work will continue to see more traffic opportunities from airports to interior points and similar or only slightly greater traffic from interior points back to airports. 

The new decade and year 2020 are only a few days away. Time’s a wastin’ to get a start on growing back air cargo in the new year.

New trade war threat to trans-Atlantic box trade – FreightWaves

A slowdown in U.S. new car sales and the threat of trade war between the European Union (EU) and the U.S. are casting long shadows over the trans-Atlantic container trade. Even so, another year of 3%+ growth is expected by Drewry Maritime Research.

After expanding 5.4% in the first half of 2019, westbound trans-Atlantic container shipments increased by just 0.5% in the third quarter – the lowest quarterly growth since the last three months of 2016.

However, a pickup in demand at the start of the fourth quarter saw the trade enjoy record year-to-date growth of 3.7% through October, with U.S., Canada and Mexico imports up 4.4%, 1.5% and 2.8%, respectively, compared to 2018.

Source: SONAR

Declining U.S. car sales

One reason for the slowdown during the second half of the year was a drop-off in shipments of motor vehicle components to U.S. plants, with American new car sales still in retreat from the 2015 record of 17.5 million purchases.

“Despite a strong economy, falling unemployment and rising consumer confidence, there has been a gradual decline in numbers sold and this year the figure is likely to total 16.9 million,” noted Drewry.

“One explanation for this trend is that after many years of strong sales, many American consumers are now driving vehicles that do not need to be replaced so often. Newer vehicles tend to be more durable and hold up longer than cars made even a decade or two earlier.”

WTO escalation threatens trade

The demand outlook on the trans-Atlantic headhaul trade is also being muddied by the threat of an escalating trade war. At the beginning of October, the World Trade Organization (WTO) authorized the U.S. to apply new tariffs of 25% on $7.5 billion of EU imports following a 15-year dispute over illegal aircraft subsidies granted to Airbus, the European aerospace company.

“The new tariffs went into effect on Oct. 18 and thus between the WTO’s decision and application date there was precious little time to fast-forward any shipments, unless it was by air freight,” said Drewry.

The analyst believes tit-for-tat tariffs could continue in 2020. It notes that the U.S. had originally sought permission to apply the tariffs to $11 billion of goods, which would have affected items ranging from “wine, cheese, yoghurts and olive oil to fine wool suits, jumpers, bed linen and even women’s nightwear.”

Moreover, the EU has threatened to retaliate against U.S. goods. “The WTO is expected to decide sometime next year on what tariffs can be imposed against the U.S. for its subsidies to Boeing,” noted the analyst.

Resin exports boost backhauls

Backhaul volumes from the U.S. to Europe between January and October rose by 2.9%, which translates into an additional 50,000 twenty-foot equivalent containers (TEUs) during the course of 10 months. “Almost two-fifths of those extra boxes were loaded with resin shipped out of the Gulf Coast, where gains to date have registered over 17%,” said Drewry.

“New resin plants have been established along the Gulf Coast, fueled by access to low-cost shale gas produced in the region. More capacity to produce resin is on its way and that should ensure that overall eastbound volumes should continue to grow in 2020.”

With so many unknowns on the headhaul trade, Drewry admits that making 2020 trans-Atlantic forecasts is tricky.

“When tariff wars come into the mix, forecasting future demand becomes a difficult science as one cannot be sure how consumers will react,” said the analyst.

“Given, though, the current strength of the American economy and high levels of consumer confidence, Drewry believes the headhaul trade will continue to grow next year by around 3%.”
More FreightWaves and American Shipper articles by Mike

Spanish shipbuilder Navantia digitalizes supply chain with SAP Ariba – FreightWaves

Software technology company SAP Ariba has helped modernize the supply chain of Spanish shipbuilding company Navantia by digitalizing the purchasing and procurement sections of its logistics. In its statement, SAP Ariba claimed that technological intervention had led Navantia to increase the efficiency of its purchasing processes by 52% while reducing its supply cycle time by 25%. 

FreightWaves spoke with Pat McCarthy, senior vice president and general manager of SAP Ariba, to discuss the impact his company has had on improving Navantia’s operations. 

McCarthy initiated the discussion by explaining that the fundamental problem traditional companies struggled with was the absence of digitalization, forcing them to work with paper documents and occasional email reports, making them hugely inefficient in the process. 

“There is no efficiency or effectiveness at scale as information is constantly learned or relearned due to communication channels being incredibly fragmented,” said McCarthy. “All of those communications within Navantia were one-to-one, which made them look at how they can collaborate more effectively with their suppliers and stay competitive in the market.”

SAP Ariba set about digitalizing Navantia’s supplier interactions and its internal infrastructure, which helped settle business processes at the point where they started. McCarthy explained that pushing forward the idea that everything that is done within the company will be reportable and accountable to the public was equally critical to the digitalization process, as Navantia is owned and run by the Spanish government. 

This helps with the brand image of Navantia, as the company maintains critical international business relations with countries like the U.S., India, Norway, Turkey, Brazil, Australia and Saudi Arabia. Digitalization bridged the gap Navantia had with transparency and traceability in its procurement processes, helping the company to march toward its transformative solution named Shipyard 4.0.

By automating communications with suppliers, Navantia can now confirm orders online, increase transparency in the bidding process and trace the volume of tenders and the number of suppliers involved in the process. The company also can continuously monitor its weekly progress, which can shed light on the areas of improvement and help increase efficiency. 

Still, the path to digitalization was not without its share of complexities. “I think change is hard. When you introduce technology, it has to be consumable by the persona. So if that’s someone in sourcing, the technology has to be built and applicable to a sourcing professional,” said McCarthy. “That was our goal with Navantia, to see if we were really addressing the persona — be it the sourcing professional, procurement professional or the supplier.”

The partnership with SAP Ariba has yielded great results for Navantia, with the shipbuilder planning to continue its association to gain ground in innovation across its supply chain. McCarthy maintained that the relationship SAP Ariba has forged with Navantia will keep appreciating over time and that there was “no end in sight.” 

Navantia understands that the future of its supply chain lies in sustainable procurement as it continues to focus on accounting for every dollar it spends. “Sustainable procurement is a huge topic for companies around the globe, particularly where public money is being spent,” said McCarthy. “Companies have always wanted to do good by procuring sustainably. But it is only now that the math, logic and financials have added up to make sure doing good is also good business.”

Future proofing is critical to the longevity of trucking businesses – FreightWaves

Among the different modes of freight transport, the trucking industry is possibly the only segment that remains localized and bound to specific regions, unlike the air or maritime sectors that are fundamentally more global. 

However nucleated the trucking ecosystems might come across, they share certain traits and woes that are strikingly similar across geographies – like excessive fragmentation, lack of visibility and transparency, and general indifference to technology. 

Fragmentation creates an environment in which the adoption of common standards or practices is extremely arduous, furthering the issue of digitalization percolation as it requires stakeholders across the horizon to come together and adopt technology en masse. 

“Another primary issue with fragmentation is that it leads to massive amounts of siloed data,” said Lyall Cresswell, the CEO of Transport Exchange Group, a U.K. & European-based freight tech platform providing real-time decision-making solutions for businesses. “This is where we come in, democratizing that data and putting it across in a commonly accepted standard format for businesses to consume.”

Cresswell spoke of how small- and mid-sized companies in the trucking landscape are often caught in a “deer in the headlights” situation, where they struggle to adopt technology that could help them future-proof their businesses from disruption – both from an operational and financial perspective. 

“With digitalization initiatives getting more mature over the last couple of years, it is important for businesses to not hold back and look at making decisions. They aren’t necessarily making long-term decisions, as the technology might change. But it is critical to move in the direction towards change, as if they remain stagnant, the industry is just going to pass them by,” said Cresswell. 

In the context of price points on adopting technology into their operations, Cresswell contended that a majority of the solutions are available at a cost that isn’t unreasonable. This is due to the technology maturing over the years and in part due to the proliferation of startups that lower prices to gain market share in the space. 

“Technology is low-cost now as it’s all cloud-based today. We do see some high-end systems that companies might need help in setting up, but most of the time, cloud-based technology is something that you can plug and play instantly,” said Cresswell. That said, the trucking industry is chock full of traditional family-owned businesses that oftentimes do not grasp the relevance of technology, making it vital for developers to educate them on technology’s scope in improving their operations. 

Technology aside, it is hard for any company to accurately identify industry trends and future- proof their operations to address potential challenges. For instance, the Amazon effect that has virtually revolutionized the way logistics work today, was not a trend that was anticipated to scale this quickly until it actually arrived at the scene. In the same vein, technological disruption in the delivery sector via drones, last-mile delivery robots, and autonomous driving technology could alter the future of the transport landscape – all in quick time. 

Though these are trends that businesses have no control over, it serves them well to look at leveraging things under their control – like data streams, which can be used to create operational insights like predictive maintenance, dynamic pricing and capacity availability. 

“These are the kind of things that, as a small business owner, you’d have them in your head. But if you are a fleet with over 1,000 trucks, you will have to look at using that data, because without that, the information just partially resides in somebody’s head,” said Cresswell. “Future-proofing is about taking that data beyond traditional reporting and making use of that in an intelligent way to improve operations.”

To IAG’s relief, Heathrow expansion to be delayed – FreightWaves

The U.K.’s Civil Aviation Authority (CAA) has put a damper on the timing of expansion at London Heathrow, the country’s busiest airport. The CAA expects a third runway to open between early 2028 and late 2029, subject to planning permission, rather than the original target of 2026, saying a longer planning and construction period is needed to reduce upfront costs.

Following announcement of the delay, Zoe McLernan, policy manager at the U.K.-based Freight Transport Association, said, “While today’s announcement from the CAA will cause a delay to the new runway becoming operational, FTA is confident that, for the sake of UK trade, this will be only a short pause to allow stakeholders time to reflect and find a solution on charging and costs that works for everyone.”

The CAA decision is a Christmas gift, of sorts, to Willie Walsh, chief executive officer of International Airlines Group (IAG), parent of British Airways, the dominant carrier at Heathrow, with a major presence in the air cargo market.

Walsh had previously called on the newly minted government of U.K. Prime Minister Boris Johnson to commission an independent assessment of London Heathrow’s expansion costs. He has repeatedly railed against pre-construction costs that had been allocated prior to approval of the expansion.

But the CAA also gave the green light to spend up to  £2 billion on early construction costs before any planning permission is granted or the project’s final costs are known. The CAA’s decision was made before the election and without independent scrutiny, opponents charged, as the regulator based its decision on estimates provided by Heathrow Airport. IAG asserts the estimates have increased by more than 250% in the last two years.

Heathrow officials welcomed the decision to proceed, minimizing the delay. “It increases certainty for our local communities and for job creation, increased trade and lower airfares that expansion delivers. We will now review the detail to ensure it will unlock the initial £1.5 billion ($1.95 billion) to £2 billion of private investment over the next two years at no cost to the taxpayer,” the airport authority said in a statement. 

Heathrow officials have continuously lobbied to get the expansion as quickly as possible.  

The third runway is the main driver of expansion costs at Heathrow. Higher project costs would affect all airlines because Heathrow likely will try to recoup most of the money by raising landing charges, which airlines could pass on to shippers. 

The International Air Transport Association, which represents IAG and other carriers, favors a third runway, but is concerned the price is inflated and would make the U.K. a less attractive destination for people and goods. Airlines already complain that Heathrow is one of the most expensive airports in the world to operate at.

IAG-controlled airlines have a significant presence at Heathrow. British Airways cargo operations are dominant at Heathrow. Airport officials maintain that IAG’s objection to expansion stems from its aim to maintain that dominance.

A Sept. 12 report prepared by WPI Economics, an  economics and public policy consultancy, and commissioned by Virgin Atlantic, charges that IAG fills 55% of takeoff and landing slots at Heathrow. The next largest airline is Germany’s Lufthansa with 8% and the Virgin Atlantic/Delta alliance with 7% The report notes that the proportion of routes out of Heathrow on which IAG faced no competition has increased from 18% in 2005 to 39% in 2019.

Walsh has repeatedly charged that, while Heathrow continues to quote a figure of £14 billion for the required investment, he estimates the true cost at almost double that amount.

“We need a fresh look at the environmental viability and total cost of expanding Heathrow. The airport has a history of spending recklessly to gold-plate projects and paying guaranteed dividends to shareholders while minimizing the environmental significance of expansion,” said Walsh.

“Boris Johnson wants to make Britain more competitive. Allowing an expanded airport that is considerably more expensive than our European neighbors would be an own goal as we need to compete on the world stage,” Walsh said, referring  to soccer players who accidentally score for the opposing team.

IAG notes that Heathrow’s proposed early construction costs have risen from £650 million in April 2018, to £1.6 billion in later that year and £2.8 billion currently. Proposed planning costs alone have nearly doubled from £265 million in 2017 to around £500 million.  

Lufthansa Cargo offers dynamic spot pricing – FreightWaves

Lufthansa Cargo is expanding its digital sales channels with dynamic spot prices that can be booked immediately. These are now automatically generated in real-time via the Rapid Rate Response (RRR) mechanism and are displayed as directly bookable offers.

The carrier said the innovation will expedite and simplify the booking process.

Lufthansa Cargo uses RRR on all of its own booking channels. That means customers get real-time pricing and capacity information, rather than static quotes that require phone or email follow-up. 

The new upgrade expands Lufthansa Cargo’s fast-pricing ability beyond contract rates to spot rates.

Starting this month, the system will generate spot price offers for all customers based in Thailand, Vietnam, north and northeast India, the Middle East, Iran, Turkey, 16 U.S. states, Mexico, Spain and Portugal, as well as Cologne and Stuttgart in Germany and Beijing, China. Lufthansa Cargo will gradually extend the system and deploy it worldwide by the end of 2020.

RRR is connected to the existing online sales channels and is also available to sales employees for personal or telephone support. As previously reported here, Lufthansa Cargo is offering freight forwarders and external sales platforms the option of directly connecting their back-end transportation management systems to Lufthansa’s reservation system to increase speed and transparency, in addition to the normal e-booking channel. Cargo.one is the first platform with which Lufthansa Cargo has already gone live.

Airlines resume operating IAI-converted freighters following safety alert – FreightWaves

Operators of B737 aircraft converted by Israel Aerospace Industry have begun flying the planes with loading restrictions after a safety notice two weeks ago from the Israeli government led to a halt in flights.

Alaska Airlines, Australian flag carrier Qantas and Indian low-cost carrier SpiceJet say they have returned the planes to service after a temporary grounding.

Alaska Airlines pulled its three 737-300 freighters from service for two days in mid-December and substituted for the lost capacity by utilizing B737-800 and 737-900 passenger planes as dedicated freighters, “combined with utilizing our larger passenger planes when possible for extra freight,” a spokesperson said. The airline also temporarily stopped accepting new shipments on routes used to supply Alaskan towns from the Pacific Northwest.

The converted freighters are operating again after an internal assessment, but Alaska Air is limiting the loads for the time being, the official said. 

Each aircraft has a 42,000-pound maximum capacity.

In a Dec. 12 airworthiness directive, the Israeli Transport Ministry said 47 aircraft (300, 400 and 700-series) had a defect in the rigid barrier wall that protects the cockpit from shifting loads during sudden deceleration. The defect was discovered during an internal examination of IAI’s facilities.

IAI Communications Manager Lital Ben Ari, downplayed the situation, saying the aircraft can fly normally with only a slight reduction in weight. “IAI was very conservative regarding the apparent damage. All experiments done by now show no problem at all in the rigid barrier. But we’re not done checking. In any case, no rigid barriers were replaced or are expected to be replaced in the future. Any damage that is discovered will require a minimal fix,” he told FreightWaves.

Ben Ari stressed that there has never been an accident involving the 9G barrier and that no additional oversight of IAI operations has been mandated. “All manufacturing, production and assembly process are completely open to the Israeli authority and checked on a regular basis by IAI and the authorities,” she added.

Alaska Public Media reported that Alaska Air was retrofitting the barrier wall in the three freighters.

Qantas Airways is operating its four B-737-400 freighters converted by IAI with some restrictions, in line with the airworthiness directive, a spokesperson confirmed.  

In a regulatory filing, SpiceJet, which operates three B737-700 aircraft that were grounded on Dec. 13, said it returned those aircraft to service on Dec. 23.