Logistics giant DSV has commissioned a two billion Danish kroner (US$300m) 700,000-sq m multimodal logistics center in Denmark, to consolidate its warehouse and cross-docking terminals and accommodate the expected future growth of its business operations.
The planned new structure at Horsens in Jutland, includes a 200,000-269,000-sq m area for warehousing, a 50,000-sq m zone for cross-docking facilities and approximately 18,000 sq m of office space.
The project will replace the company’s current numerous facilities in and around the city which are now insufficient for its operations, it says.
Simon Galsgaard, managing director for DSV Road in Denmark, outlines: “As part of our growth strategy we want to consolidate all our activities within air, sea, and road into one location to ensure that our operations are efficient.
“Horsens is a strategic hub for transport between the Nordics and all other European countries. We also want to retain our many talented employees and with this new development we will maintain our connections with the city,” he adds.
The Jutland project is DSV’s largest single construction programme. “We look forward to the new and huge potential it [will] provide us, as it is part of our strategy to consolidate smaller sites and create larger, modern and future-proof facilities that will benefit both our customers and us,” Galsgaard explains.
Among other things, the new Horsens logistics center will be characterized by a large degree of automated processes, the introduction of which will ensure quicker and more efficient handling of expected larger volumes.
The company expects to break ground on the development in August next year and will begin occupying the facility by the end of 2022 or the beginning of 2023. The substantial structure is scheduled for final completion during 2026.
Peter Sørensen, mayor of Horsens, believes: “As far as I know, this is the largest sale of land for industrial purposes in the history of Horsens and I am very pleased that DSV has chosen to place its new logistics center in our municipality.
“Today, DSV employs around 750 people in Horsens; with the expansion, the number is expected to increase to more than 1,000 – and probably even more. In addition to administrative positions, [the company] is offering employment within transport and warehousing. For that reason, also, I am very pleased that we have entered this agreement,” he adds.
“Building a facility of this size will create a lot of additional jobs during the construction phase, something from which local craftsmen and hauliers will benefit. According to DSV’s estimates, the project may amount to 250 new jobs,” Sørensen underscores.
AIR CARGO volumes in the last week of June were 12 percent higher than in the final week of May, even though global demand for personal protective equipment (PPE) has started to decline, business analysis software company CLIVE Data Services reveals.
The year-on-year performance gap further closed with global volumes at minus 25 percent versus June 2019, in comparison with the minus 31 percent annual disparity for May, the company says.
Available capacity remained flat in this period, but the last two weeks of June saw capacity creeping up slowly week-over-week by around 1.5 percent per week.
Load factor figures of 71 percent in June were the highest level the analyst has recorded since it began measuring the industry’s weekly performance in 2018. CLIVE reports on cargo load factors using data sourced directly from airlines and which takes into account both volume and weight dimensions.
Niall van de Wouw, managing director of CLIVE Data Services, suggests a clearer picture of the state of the airfreight industry will emerge once the demand for personal protective equipment (PPE) dissipates.
“As governments around the world acted to protect their societies, they became unlikely price-insensitive customers of international air cargo capacity for urgent supplies of PPE,” he remarks.
“While our data for May and now June has shown month-on-month improvements, and airlines have been reporting peak weeks and months for cargo, the big question has been: ‘what happens when PPE volumes dry up?’ Now the noise of PPE is starting to fade, we can see where the industry is really at – and we do see an improvement.”
Van de Wouw says the company’s data analysis for June seems to suggest the first steps towards a structural market recovery. “Despite the decreasing demand for PPE in June, we still see that the volumes increased over May,” he observes. “We are starting to see a more recognizable airfreight market – [one which] follows more logical economic principles and more logical rates. The dynamic load factor in June was at a level we did not see even during normal peak Christmas periods, resulting in yields that are still well above the 2019 levels.”
In July, the air cargo industry would traditionally expect to see an influx of belly capacity for the summer holiday season. “But that’s not there at the moment. The next test will be how an influx of ‘normal’ passenger flights, which are not driven by cargo demand, will impact dynamic load factor.”
The latest report from freight and commodity derivatives inter-dealer brokerage Freight Investor Services (FIS) reveals airfreight prices on the China-to-Europe route have dropped to US$5.06 per kilo, whereas China-to-USA settled at $5.58.
“The drop-out in rates to the USA is significantly slower, reflecting continuing supportive demand and well-controlled capacity given the persistent lack of passenger schedules trans-Pacific,” says FIS’ Air Freight Forward Agreement (AFFA) report. “China-to-Europe has suffered more, with Shanghai-to-Europe the most, down by 44 cents.”
FIS broker Peter Stallion points out: “In a tale of two markets: deflated Asia-Europe air cargo trade lanes, [compared with] a fairly buoyant Asia-USA trade route. This might as well be a barometer of actual – or indeed, perceived – progress on certain regions combating Coronavirus.”
Today Malaysia Airlines joins the Trucking CDM platform for its Amsterdam operation. The CDM’s objective – developed by CargoHub – is to provide transparency and predictability in the transport chain for air cargo industry stakeholders.
Increasing the service level for transit cargo is the main reason for Malaysia Airlines starting to work with the Trucking CDM platform.
“Improving the connection between incoming cargo and the arrival time of the truck is one of the aspects of that service,” says Keesjan de Vries, cargo manager Europe of Malaysia Airlines.
“All parties involved should benefit from the CDM platform: reduction of waiting hours and less congestion on the roads around handlers’ warehouses in order to promise our customer that his cargo will arrive on time. It’s all about exchanging data which is enabled through the CDM platform. We are now starting at Schiphol Amsterdam but our aim is to participate at Brussels Airport as well.”
Raoul Paul, founder of CargoHub is delighted welcoming yet another renowned airline to the Trucking CDM platform. He says: “In the CDM platform all truck movements are visible to the handling agents and expected arrival times are continually updated. Predictability and transparency of trucking movements is necessary for all parties involved at the various airports in order to facilitate road transport of air cargo to its loading and unloading destinations as efficient as possible. The more parties sharing their data on the CDM platform, the more benefits can be reached through the entire logistics chain.”
For scallop producers in Hokkaido, which is a key source for importers of the premium delicacy, June typically marks the beginning of a new harvest season that ends in October. However, since the authorities started imposing travel restrictions due to COVID-19, exporters from the region were unable to fly scallops and other perishables directly to Hong Kong, the top importer of Japanese agricultural and marine products and a gateway to China, which saw overall seafood imports increase by 39% in 2019 to ¥1.6 trillion (€13.3 billion).
DHL Global Forwarding launched a thrice-weekly charter from Chitose to Hong Kong. The charter is the only direct air freight service from Hokkaido’s main international airport to Hong Kong since airlines halted international flights from the airport. Japan has seen its year-on-year export of seafood fall from ¥22.9 billion to ¥14.9 billion in April this year.
“As countries took time to recover and travel restrictions remained firmly in place for weeks before being gradually lifted, there was an urgent demand to bring fresh perishable seafood to consumers outside of Japan. As one of the leading international forwarders in Japan’s seafood trade, I am extremely proud that we were able to work with our partners to swiftly organize the first direct freight service from Chitose to Hong Kong. With an export pathway established for perishables, including scallops, sea cucumber and melons, producers in Hokkaido can be assured that their harvests will reach consumers in a timely manner and in their optimum states,” said Charles Kaufmann, CEO, North Asia South Pacific, DHL Global Forwarding and President/Representative Director, DHL Global Forwarding Japan K.K.
For the leading international provider of air, sea and road freight services, scallops make up the largest portion of seafood that it ships out of Japan and primarily from Hokkaido, a top producer of seafood in the country. Japan has seen its domestic consumption of seafood decrease by more than 20% and has been actively pushing its seafood overseas to support its 1.4 trillion yen (€10 billion) seafood industry.
In May 2019, DHL Global Forwarding marked its 50th anniversary in Japan with the opening of its wholly-owned office in Chitose. The freight forwarder’s dedicated presence in Hokkaido provides
critical customs expertise to local businesses exporting to overseas markets, and guarantee the quality of the seafood by using reliable state-of-the-art cold chain technologies.
Neutral Air Partner (NAP) has collaborated with PayCargo, aiming to provide digital air freight payment and settlement solutions to its members.
“We are pleased to announce the implementation of an advanced online freight payment and settlement system powered by PayCargo. NAP members will be able to use the PayCargo system for payments and settlement in different continents around the globe,” says Christos Spyrou, NAP CEO.
PayCargo offers centralized visibility, a payment approval and tracking system, multiple payment options and 24/7 access.
“Digitalization in the payments and settlement process is essential for the future-ready air freight logistics provider. PayCargo platform will enable our members to improve cash collection, reduce manual effort and make the overall process more transparent and streamlined. It will also save them time and money when making payments while improving operational efficiency and customer experience. Our long-term goal is to partner with PayCargo and to develop one global integrated netting system for our members” said Spyrou.
Adriaan Reinders, CEO Europe at PayCargo says, “NAP’s commitment to innovate the SME air cargo logistics community and digitize the process of air cargo transportation for its members is impressive. We are delighted to be part of their modernization plan, by providing the group with digital payment solutions, and we are confident that working together with partners like these, will drive direct value to our global customer base.”
Saudi Arabian Logistics (SAL) has launched the operations of its state-of-the-art pharma facilities recently opened at the Dammam-based King Fahad International Airport’s Cargo Village.
The new warehouses will support the infrastructure of pharma and medical equipment handling facilities as per the international standards of the World Health Organization (WHO), the European Union Good Distribution Practice and Saudi Food and Drug Authority (SFDA).
A subsidiary of the Saudi Arabian Airlines Corporation, SAL said the facility expansion plan is being implemented as scheduled at selected sites within the Cargo Village at the Dammam Station.
Before the expansion, the total area of the medical storage facilities stood at approximately 118 square meters but after expansion, it reached approximately 542 square meters with an operational capacity of 14,000 tons a year as follows: 262 square meters of the facilities are dedicated for storing goods with temperature ranging between 15-25 Celsius whereas 262 square meters are used for storing goods with the temperature between 2-8 Celsius. The facilities can also be used for storing different types of medical cargos with very low temperatures, below zero.
Omar Hariri, SAL CEO, said in a statement, “We usher in a new phase of advanced cargo handling services for pharma and medical equipment. We are creating the proper environment and developing the infrastructure needed for the current period, which has seen an increasing demand on pharma and medical equipment cargos during the COVID-19 pandemic.”
The Saudi Arabian Logistics has enhanced the quality of its medical storage warehousing services, bought state-of-the-art temperature-controlling equipment and devices, and installed efficient safety systems to prevent risks. All the equipment and devices meet the quality standards of the European Union Good Distribution Practice (EU GDP) for handling and storing medicinal products, explained Hariri, adding that SAL qualifies its cadre to efficiently handle such types of cargo.
Saudi Arabian Logistics works to provide integrated logistics operations and ground handling services. It acts as a link between land and sea shipping and the Saudi airports in line with the National Industrial Development and Logistics Program, which is one of the pivotal themes of the Vision 2030, especially in the light of the gigantic economic transformation the Kingdom has been seeing. The company directly contributes to reinforcing and developing the infrastructure to act as platforms and warehouses for handling different types of cargo while enhancing the quality of cargo equipment and warehousing facilities related to international trade and electronic commerce.
South African Airways, recently attracted interest from private investors and airline partners to establish a new airline in South Africa, stated a publicly issued letter by the South African Department of Enterprises (DPE).
The debt-ridden South African Airways has relied on government aid to navigate through a tough financial situation. However, in December 2019, the airline reached a tipping point and entered business rescue processes.
The Department of Enterprises stated there were numerous parties, including private funders, equity investors and even airline partners, willing to invest and participate in “a new national airline that must emerge from the SAA business rescue process.”
“Government has expressed its intent and commitment to fundamentally restructure and transform SAA into a viable, sustainable and competitive national carrier.”
While the DPE highlighted that private investors are lining up at its doors to invest in the Johannesburg-based airline, the government is keen to establish a new airline under the same name to rid it of “legacy financial and operational issues,” as the new company would be managed by “competent, competitive and skilled personnel” to ensure the success of the “new” South African Airways.
Going forward, the airline would downsize significantly and would go from 5,000 employees and 44 aircraft in its fleet to 2,900 staff and 26 jets in its post-COVID-19 state, indicated a plan released by the Business Rescue Practitioners (BRP) in early-June 2020. A further injection of $578 million would also be needed if the government wanted to keep the airline in one piece.
C.H. Robinson, one of the world’s largest logistics companies, and a member of the volunteer Minnesota Task Force that brought together government and private organizations to get personal protective equipment (PPE) for the state, has revealed costly transportation and logistics trends that are adding to budgetary challenges for states in need of PPE, especially as they deploy reopening strategies.
“Covid-19 has created unprecedented logistics challenges across the global supply chain when the rapid movement of PPE is more essential than ever,” said C.H. Robinson CEO and president Bob Biesterfeld.
“With our teams based all over the world, including over 20 offices in China, where the majority of PPE is sourced, we are tracking regulations that change weekly and leveraging our vast network to help our customers strategically manage the mounting risks the pandemic has presented.”
Increased demand for PPE, the proliferation of counterfeit products, enhanced FDA regulations of medical supplies, rapidly evolving customs compliance guidelines, and a sharp drop in passenger aircraft capacity have all contributed to the following trends:
Supply chain disruption: Over 90% of Internationally sourced PPE shipments have been disrupted in some way
Compliance issues: Cargo inspection rates of PPE out of China have dramatically increased, lengthening the average waiting period prior to transportation from 3 hours to 2-3 days. Additionally, there are increased import customs delays and shipment refusals happening across the globe
Longer transit times: Normal delivery time for air freight from China to the US has doubled or tripled from 4-6 days to 8-14 days
Higher transportation costs: The price of expedited shipping out of China for PPE has gone up to 3-4 times the average (and at times, as high as 8-10 times the average) amid unprecedented global demand all hitting at the same time
Other rising costs: Increased commodity prices (e.g., the price of face masks has increased 2-5x the average) and transportation disruption are creating the need for more cargo insurance policies and at higher rates
Navigating these trends effectively has been key for the state of Minnesota who leveraged C.H. Robinson to be the transportation and logistics leader on the state’s task force. To date, C.H. Robinson has helped saved the State of Minnesota more than $1 million in transportation costs associated with procuring more than 72 million pieces of PPE, including face masks, eye protection, gloves, gowns and N95 respirators.
“C.H. Robinson’s global expertise and scale provided the state with critical logistics and supply chain assistance that reduced the transportation costs and time needed to secure PPE needed for frontline healthcare workers,” said Wayne Waslaski, the State’s project manager for the Critical Care Supply Team.
As the number one freight forwarder from China to the US, C.H. Robinson was able to take action, while leveraging its full suite of global services including customs, air, ocean, and surface transportation expertise, to ensure essential PPE, largely produced in China, was moved as quickly and inexpensively as possible for the State of Minnesota.
“At C.H. Robinson, we remain focused on the important role we serve to provide continuity in the global supply chain – especially in this time of crisis,” Biesterfeld said. “We were honoured to lend our global expertise, network of local experts around the world, and technology to help the State of Minnesota navigate the complex global logistics system and optimise their budget at this critical time.”
Chapman Freeborn, a global aircraft charter specialist and company of the Avia Solutions Group (ASG), signed an agreement to acquire Arcus Air Logistics and Arcus Air OBC from the Arcus Air Group.
Offering ad-hoc air cargo charter and on board courier services primarily to the automotive industry, Arcus Air Logistics is a respected and established supplier with a brand history of over 45 years. The company provides cargo charter services with its own fleet of two Dornier 228-212 aircraft, and a variety of additional aircraft. Over the 2015-2019 period, Arcus Air Logistics’ average annual sales were €22 million.
Arcus Air Logistics is a valuable addition to Chapman Freeborn’s service portfolio. It brings significant synergies in the emergency cargo logistics space where Chapman Freeborn is a leading player with ambitious plans for future growth. “We are proud to welcome the highly experienced teams of Arcus Air Logistics to our growing family. This is an opportune time to join forces given the trends in the global cargo logistics space. I believe Arcus Air Logistics will further strengthen our group’s business as we continue our strategy of growth through diversification in the niche aircraft charter industry,” says Russi Batliwala, CEO of Chapman Freeborn.
“While the aviation industry is living through a challenging time, identifying and acting on the right investment opportunities can be a real differentiating factor for businesses who will emerge from this crisis stronger than before. ASG is pleased to be able to support the growth of our family of companies; Chapman Freeborn’s latest acquisition is a prime example of our successful cooperation,” says Gediminas Ziemelis, chairman of the board of Avia Solutions Group.
Arcus Air Logistics, with representative offices in Germany, Spain and Slovakia will trade under its current name, providing customers with a seamless, high-quality service experience. Francisco Mühlens will continue to act as managing director.
Worldwide Flight Services’ (WFS) investment in 12 dedicated pharma facilities at airports in Europe, the United States and Africa generated significant increases in time- and temperature-sensitive volumes in the first five months of 2020, and will provide vital support to airlines, freight forwarders and their healthcare customers involved in the global distribution of a coronavirus vaccine once one becomes available.
The growth of pharma shipments by air in the past 2-3 years and the development of premium products by airlines for temperature-controlled healthcare and life science shipments, prompted WFS to make a multi-million euro investment in pharma centers at its airport stations in Amsterdam, Barcelona, Brussels, Cape Town, Copenhagen, Frankfurt, Johannesburg, London, Madrid, Miami, New York and Paris CDG. With the importance of health and well-being taking on even greater significance for consumers since the outbreak of COVID-19, shipment volumes, and the number of airlines using the new WFS facilities have been rising month-on-month.
In Johannesburg, import shipments rose by more than 72% year-on-year in the first five months of 2020 to 627 tonnes, driven by the handling of particularly high volumes for Kuehne + Nagel. Amsterdam has also seen strong growth as new airline customers, including Saudi Arabian Airlines, boosted WFS’ pharma business by 285% and 134% in April and May respectively, while volumes at the airport for January-May of 1,444 tonnes were up 92% over the same period in 2018.
The opening of WFS’ new €10 million Pharma Center at Paris Charles de Gaulle Airport, and its subsequent IATA CEIV Pharma certification in February, has also encouraged rising pharma volumes from customers such as Qatar Airways, AirBridgeCargo Airlines, Air Algérie, Allied Air, Emirates and Kuehne + Nagel.
WFS will continue to evaluate opportunities for additional pharma facilities in line with customer demand. Already on the agenda is the further expansion of its temperature-controlled pharma operation in Copenhagen, which handles high volumes of medicines and insulin. The larger, enhanced facility will be completed by 2022.
John Batten, Executive Vice President Cargo, Europe Middle East Asia Africa (EMEAA), at WFS, said: “We are proud to be supporting our airline and freight forwarder customers, as well as the pharmaceutical industry, during this peak in demand for time- and temperature-sensitive medical supplies. Once a coronavirus vaccine is found, specialists air cargo services will help to protect the integrity of the vaccine as it is distributed globally. Our investment means we will be ready to meet this demand when it comes.”
Strategically located in the heart of airport cargo zones, WFS’ pharma operations provide dedicated warehouse space with landside and airside acceptance capability, specially trained pharma handling teams, temperature monitoring and reporting systems, and adapted transport fleets to guarantee the integrity of all pharmaceutical shipments in line with our high standards of safety and security.
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