Schiphol Cargo and Air Cargo Netherlands: Webinar Air freight post COVID-19: a recap

Freighters will continue to be vital for air cargo at Schiphol in the recovery and they helped fill some of the capacity shortage that was brought about by the lack of belly traffic. There is a gradual increase each week in the number of passenger flights being flown so the belly traffic will increase, but at this stage we cannot forecast how many full freighters will be flown in the weeks ahead.

Airport Coordination Netherlands has suspended the Local Rule 2 freighters for the rest of the summer season (read more here) so Schiphol has the flexibility to operate freighters as is needed and within the capacity and what it can operationally cope with.

In the recovery stage, when things slowly return to normal and post-Covid, which we do not know when that will be, there will be a discussion again over freighter slots and capacity. Freighters will continue to be an integral part of Amsterdam Airport Schiphol' s aviation strategy.

In May, the latest reporting figures, the number of cargo-only flights during the month rose by 1,318 (+107.6%) compared to the same month last year, to reach a total of 2,543.

And also the Dutch Government is helping with the extension of the COVID-19 Schengen entry ban until 1 July 2020, it has been decided to also extend the temporary extension of the Policy rule for regular permits and non-scheduled air transport until that date. Initially, the regime therefore applied until June 15, 2020.

The Covid-19 pandemic has led to a shift in cargo flows at Schiphol and some usually high-volume verticals have decreased such as the import and export of flowers, but we expect this product for example to slowly return. Economies globally will restart in different phases so general cargo and the usual flows will pick up dependent upon when they get up to speed.

Schiphol has seen different cargo trends during the Covid-19 outbreak and is processing large amounts of imports from China and the US.

The amount of PPE (personal protective equipment) being moved will soon fall and as economies and factories in the European Union start up, then cargo flows will slowly change back to like how they were pre-Covid but whether it will be at the exact time we don’t know.

We are looking at exports and imports each week so we can see the flows from China and the USA and other regions and to see how it is changing.

We expect that with the increased full freighter capacity we are able to meet any change in demand and belly capacity is gradually returning too.

At this stage we cannot forecast exactly what air cargo demand will be and this is dependent on how quickly industries get up to speed.

We are in constant dialogue with our air cargo community and operators to see what flows are coming in and forecasted to come in so we can meet make sure the available capacity is there and we meet demand.

At this stage we cannot tell exactly when ‘Passenger-cargo-only’ activities will stop flying into Schiphol although we have seen a reduction in the number being flown in recent weeks.

Our expectation is that upper deck cargo will reduce when belly capacity increases and more passengers will start flying on long haul routes. Currently most of the upper deck cargo consists of light weight PPE cargo boxes.

Concerning manual loading/ unloading, this is labour intensive work and requires an extensive loading protocol. This results in considerably time increase of the aircraft turn-around time and with it the occupation time of an aircraft stand.

Certain types of goods (flowers, medicines) that depend on temperature settings are less suitable for transporting on the main deck, because there are no different climate zones that can be set there. Belly however, can arrange the right temperature zones.

We have seen strong demand through the pandemic to the Asia and North American regions.

In May, the latest figures available, the total number of air traffic movements (ATMs) to and from Schiphol increased by 87 % compared to the same month last year, to a total of 5,878.

The number of cargo-only flights during the month rose by 1,318 (+108%) compared to the same month last year, to reach a total of 2,543. The increase in the number of full cargo flights was mainly to North America (+414%) and Asia (+161%). The number of cargo flights on the other continents also increased compared to 2019.

However, as in April, the increase in the number of cargo movements was insufficient to compensate for a decrease in total tonnage. As a result of the considerably lower number of passenger flights with cargo in the hold, the total tonnage transported decreased by 22%.

Freighter aircraft and combinations of passenger aircraft with freight in the hold have increased and there has been an increase in the number of freight charters while passenger planes loaded with cargo are also being operated.

The number of passenger flights at Schiphol is increasing every week but it is difficult to forecast and exact figure as this is obviously dependent on airlines running flights so at the moment it is unknown.

Each region and country will take longer to emerge from the pandemic at different rate. Flight networks from Schiphol to the rest of Europe are beginning to increase and many airlines have outlined plans to resume routes this month and in July, while flights are also increasing and planned to Asia and North America.

However, Covid-19 seems to be very active in Latin America at the moment, so flights to/from this region are likely to take longer to start up.

In May, the latest figures available, the total number of air traffic movements (ATMs) to and from Schiphol fell by 87% compared to the same month last year, to a total of 5,878.

We expect June figures to be slightly improved as more airlines operate scheduled passenger flights and we expect that in each of the following months there will be an increase in belly flights as airline restart their passenger networks. Among other things, these developments depend on airlines partially continuing to restore their network and on whether or not countries reopen their borders.

Access to the market and connectivity will remain important in the future and that is where Dutch mainports are always marked strongly. It is difficult to predict how supply chains will be adapted in the medium and long term (regionalization and simplification of supply chains, and or buffering close to the market), but it is imperative that the connectivity of both Rotterdam and Amsterdam stay high in the future.

Dutch mainports must keep the focus on innovation and remain a world leader in digitization and automation. The mainports can play a leading role in supply chain visibility and cooperation between different partners within the value chain. Dutch mainports should also look to become the first port of choice for European exports.

Belgium will always be a tough competitor with its equally beneficial geographic location and strong seaports and airports. However, from the perspective of labour costs and flexibility, as well as efficiency of (customs) authorities and infrastructure, the Netherlands still has a competitive advantage and should keep making efforts to stay in front of the competition like Belgium.

Nearshoring works for some activities, but it will take some time before entire supply chains regionalize, if at all. Investments and partnerships in place cannot be abandoned in the short term. As long as components or sub-assemblies are produced overseas, there will be a need for air freight. It could even lead to more transport movements if the finished product is not made entirely in Asia.

There is some buffering going on, but it is not intentional, rather it is product that is not being sold, because of a lack of demand. Strategic buffering could though be a risk mitigation strategy for multinationals in the years to come, but it isn’t having an effect as of yet. For Brexit though, there has already been some strategic buffering taking place.