Sunny with a stiff breeze
The pleasure and satisfaction of participating in IG Air Cargo Switzerland’s Air Cargo Day at the end of August was palpable. After months of uncertainty it was finally possible again to bring a large number of airfreight experts together in one place for a personal exchange of opinions. The figures in the new airfreight logistics study also provided added motivation – if only it wasn’t for the virus.
Sunny, but with a stiff breeze – those were the weather conditions at Lake Lucerne, outside the Swiss Museum of Transport, on 26 August. The atmosphere inside the museum, where the interest group IG Air Cargo Switzerland held its latest Air Cargo Day, was similar.
The meeting is usually held in Zurich every two years. This spring a special edition scheduled for Lucerne had to be postponed, on account of government measures to contain the outbreak of Covid-19. The staging was planned to commemorate the 10th anniversary of the ‘voice of the Swiss air cargo industry’ (see also page 10 of ITJ 31-35 / 2020). Around 140 guests attended the get-together, coming to congratulate the body, rejuvenate their networks and to hear seven reputed industry experts divulge their projections on the state of the sector.
Thomas O. Koller, managing director of the welcoming committee, confirmed in his opening address what airfreight industry insiders already know – the segment’s status as a bit of a wallflower in the aviation sector is unjustified.
CHF 1,314 per exported kilo
It has also been ten years since the University of St Gallen’s erstwhile logistics management chair presented its first study analysing airfreight as a factor influencing Switzerland’s ability to compete in the global economy. Now IG Air Cargo asked the university’s successor body, the Institute of Supply Chain Management to conduct an extensive survey in H1 this year. Its results were now presented – the ‘Airfreight Logistics Study Switzerland 2020’.
In the past ten years the volume of goods handled at Switzerland’s airports grew from 578,000 to 639,000 t. The country’s trade is nevertheless still dominated by sea freight. Air cargo’s share thus stood at a mere 0.6% of exports and less than 0.2% of imports. These figures change substantially if the value of the goods flown is considered (figure 1). The value of the exports (without gold) flown out of Switzerland rose from CHF 73.7 billion in 2012 to CHF 102.6 billion last year. Imports flown in rose from CHF 26.9 billion to CHF 43.1 billion. In 2019 50% of all exports by value left Switzerland by air, compared to 33% in 2008. The share of overseas destinations (mainly the USA, followed by Asia, see figure 2) came to more than 80%. Their share of imports has more than doubled, from 15 to 35%.
Advantages and disadvantages
Professor Wolfgang Stölzle has stated that “high-value, time-critical and perishable goods drive airfreight. Pharmaceutical products, machinery, watches and other high-value Swiss products are exported by air.” These have an excellent reputation, as does the country’s airfreight logistics. 86% of all forwarders of the Central European country dispatch their air cargo consignments through Zurich, Geneva and Basel airports. These nevertheless have to face stiff competition from neighbours, such as Frankfurt, which 67% use regularly, Amsterdam (60%), Luxembourg (40%), Paris CDG and Milan MXP (24% each). National hubs score highly in a European comparison with their Swiss reliability, security and speed.
The high level of costs is considered a problem though. Further challenges in the international context include restrictive airport operating hours and limited access during night-time and weekend driving bans for lorries.
Global crises represent opportunities
The study also addresses climate change, admitting that “purely ecological reasons will never justify airfreight.” A consignment shipped by air from St Gallen via Zurich to Hong Kong emits 567.2 kg of CO2e (TTW); a sea freight shipment via Hamburg 9.5 CO2e (TTW). Airfreight only contributes around 0.5% to global CO2 emissions, though – and Switzerland is also developing technical improvements.
Recent government measures designed to contain Covid-19 (which the study has analysed in detail in a chapter of its own) have shown, however, how indispensable this mode of transport is for trade and industry. The recent loss of belly capacities showed airfreight logistics’ susceptibility. Resourceful airlines were able to fill the largest gaps with only-freighters, as we know, but “the downturn isn’t over yet,” Stölzle warns. Things are actually even worse. “We don’t even really know where we stand yet.”
