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Major Air Cargo Carriers Expand to Meet On-Time Demand

The world’s major air freight carriers are expanding their logistics capabilities as the need for faster, more efficient deliveries increase, and as B2B and B2C transactions fuel enhanced cross-border commerce.

According to the International Air Transport Association (IATA), global air freight demand rose 8 percent in January compared to the year-earlier period and was up from the 5.8% annual growth recorded in December.

Freight capacity, measured in available freight ton kilometers, increased 4.2% year-on-year in January. IATA said the continued positive momentum in freight growth into 2018 is driven by high global demand for manufacturing exports and “companies seeking faster delivery times to make up for longer production times.”

“We expect demand for air cargo to taper to a more normal 4.5% growth rate for 2018,” Alexandre de Juniac, IATA’s director general and CEO said.

He did warn of “potential headwinds” ahead of President Trump’s imposition of tariffs on aluminum and steel imports last week, adding that, “Nobody wins when protectionist measures escalate.”

Among the logistics giants, the latest move finds DHL Global Forwarding, the air and ocean freight unit of DHL Group, and DHL Freight, a leading provider of road transport services in Europe, purchasing land in Austria’s Vienna airport region. The 60,000-square-meter DHL Campus at the Vienna Airport will be under development starting this summer.

“DHL Global Forwarding and DHL Freight are combining the individual strengths of their two networks at the new site in Fischamend, which will lead to an even faster, more efficient service for our customers,” Uwe Brinks, CEO of DHL Freight, said. “The site is in proximity to Vienna airport and as such strategically well-located, providing us with low-threshold access to Eastern European markets and Germany. Through this project, we will establish an important new logistics hub together, creating a gateway into and out of the East and enabling us to further grow our volumes.”

DHL noted that both divisions will build separate warehouses and office buildings on the new site, connecting them to the airport and linking them to its infrastructure. DHL Global Forwarding and DHL Freight have been managing their business from three locations in Vienna, which will now be merged into the new campus. The move is expected to yield significant efficiency gains, especially in turnaround times and handling costs, DHL said.

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DHL noted that the campus will comply with environmental protection requirements, and that the sustainable design and use of renewable energies will directly contribute to the company’s goal of reducing all logistics-related emissions to zero by 2050.

Last month, DHL Express opened a new regional hub at Brussels Airport, with an investment of about 140 million euros ($173.5 million), featuring a 36,500-square-meter, fully automated logistics facility that nearly quadruples the capacity of DHL Express in Brussels to 42,000 shipments an hour.

“Brussels plays a crucial role in the worldwide DHL Express network,” Ken Allen, CEO DHL Express, said. “Brussels Hub is one of our largest hubs in the world and because of its location in the logistics heart of Europe, it also plays an important role in connecting companies from this region with the world. This new hub is a key part of our worldwide investment plan and will support our growth, the efficiency of our network and the high level of quality for which customers turn to DHL Express.”

Now the fifth largest hub in the global DHL network, the Brussels site offers air and ground links to a wide number of European destinations, as well as direct intercontinental connections to the Americas, Middle East and Africa.

Danny Van Himste, managing director of DHL Express Belgium and Luxembourg, said: “We are addressing the needs of customers of all sizes and from all industry sectors in the Belgian market. With the hub giving us extra capacity, speed and flexibility, national borders should be no barrier to our customers.”

As part of DHL’s GoGreen program, the company said the new hub reduces its ecological footprint by 768 tons of carbon dioxide per year based on its more efficient sorting techniques and better insulation.

Also in February, UPS expanded its Worldwide Express package service to reach 124 countries and territories, providing an earlier delivery option for customers to more locations.

UPS expanded service in 57 countries, including Brazil, Pakistan and South Korea, while five new countries now receive Express service, including Bangladesh and Madagascar.

The UPS Worldwide Express service offers next-business-day guaranteed delivery by 10:30 a.m., noon or 2 p.m., depending on the destination. In 2017, UPS added Express service to new 7,000 postal codes in 57 countries and territories.

“Our international value proposition is to offer a powerful global network and portfolio that connects buyers and sellers through seamless cross-border movements,” Jim Barber, UPS International president, said. “With the latest expansion of Worldwide Express, we are making this connection in 124 countries, which comprise nearly 95 percent of the global gross domestic product and 96 percent of real imports.”

Harld Peters, president of UPS in China, said, “This latest Worldwide Express service expansion enables UPS to provide greater flexibility and accessibility to new markets for customers in China seeking a global presence. The Belt and Road Initiative and supply-side structural reforms aimed at opening up China’s economy will provide Chinese manufacturers with even greater opportunities for cross-border trade. Together with recent network and capacity enhancements, UPS is in a strong position to help Chinese manufacturers bring their products to markets quicker, speed up bilateral trade engagement with burgeoning markets for fast-growing and long-term sustainable business success.”

UPS noted that textiles and apparel make up 57 percent of Pakistan’s exports, and the new Express service will help the industry process orders faster.

UPS said it’s committed to investing $2 billion in its European network by 2019 and this development has already made UPS deliveries quicker between more than 350 cities and 28 European countries.

In January, FedEx opened the Shanghai International Express and Cargo Hub located at Shanghai Pudong International Airport. The facility provides greater connectivity and convenience to the FedEx global network and overseas markets for customers in eastern China, particularly those shipping to the U.S. and Europe.