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  August 10th, 2015 | Written by

Carriers For Specialized Cargo

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  • #Special services generate better yields than general #cargo for airlines
  • This May, European #global #freighter #airline Cargolux broke tradition...

This May,  European global freighter airline Cargolux broke tradition. For 45 years the carrier had moved all kinds of airfreight without bothering to develop specific services for any special category, stressing its overall attention to service and detail. Now it has a portfolio of eight defined products catering to specific segments, such as perishables, pharmaceuticals, valuables and live animals.

Cathay Pacific, the largest international airfreight carrier in recent years, last September introduced a special service to move wine that uses cool containers and cooler facilities at airports, helping keep the beverages within a certain temperature range. Other airlines have launched or refined offerings targeting pharmaceuticals, perishables, aircraft spares or live animals.

These special services generate better yields than general cargo for the airlines, but it is not always clear if shippers really need them. In the pharmaceutical arena, particularly toward the lower end, there has been a growing emphasis on better packaging solutions to replace sophisticated temperature control offerings.

Still, if airlines field defined services, shippers have clearer ideas of standards, expectations and processes involved, remarks Albert Saphir, president of logistics advisors ABS Consulting.
As flight arrangements are usually handled by forwarders, many shippers have no idea which airline is actually moving their traffic.

This can be costly. One of Saphir’s clients, a large importer, was using several forwarders to move cargo from two origin airports in China to five gateways in the U.S. Between them, the forwarders engaged more than 30 airlines—with different routings and transit times—resulting in significant discrepancies in reliability and delivery windows.

“I always encourage my clients to take a bigger interest in who is actually moving their cargo,” Saphir says, adding that shippers of perishables tend to be better informed about carrier selections and usually have preferences based on airlines’ cool-chain infrastructure at either end of the route as well as at transit points in-between.

Airlines have invested heavily in equipment and technology to handle special freight, especially pharmaceuticals, which can absorb higher logistics costs than fruit and vegetables. While this is important, shippers and forwarders should not automatically equate it with competence in handling special cargo, warns Oliver Evans, chief cargo officer of Swiss WorldCargo. The Swiss airline has a long-standing reputation for being one of the premier carriers of pharmaceuticals, thanks to its long history of moving this traffic for industry giants based in its home market.

A considerable portion of the pharmaceutical traffic actually does not require sophisticated temperature control solutions, but dealing with this industry requires an appropriate skill set that goes beyond technology, Evans argues. “You need a combination of the appropriate equipment, ground handling, and you need the in-depth experience and knowledge within your organization,” he says.

Unlike other industry verticals, the pharmaceutical sector has spawned closer communication between shipper, airline and forwarder. “Pharma companies look for true partnerships, they look for tripartite communication with carrier and forwarder,” says Evans.

Most shippers gladly leave the logistics management fully in the hands of their forwarders. This may result in less than optimal supply chains but it should not cause any serious problems. When it comes to goods that fall under hazardous materials rules, however, ignorance can be dangerous. Fines for violations meted out by the Federal Aviation Administration (FAA) have hit shippers as well as airlines, Saphir points out.

In May, the FAA proposed civil penalties ranging from $54,000 to $81,669 against three companies for allegedly violating federal hazardous materials regulations. In all three cases the shippers had failed to declare cargo as hazardous when handing it to express carriers. The products in questions ranged from flammable liquids and spray paint to one-pint plastic containers of corrosive phosphoric acid solution.

Saphir says hazardous material regulations vary from country to country. “In the U.S., whether you ship one box of flammable liquid in a year or 35 boxes in a week, you have to have trained staff who know the rules,” he says. “Something like spray paint itself is not classified as hazardous, but the moment you offer it up for transportation, it is hazardous.”

Lithium batteries have turned into a veritable minefield. After several incidents linked to lithium-metal batteries, many airlines have banned them from transportation if shipped in bulk. Saphir urges shippers not to take any risks.

“If you deal with carriers directly, talk to them, check their websites for updates. If you’re uncertain, consult with a hazardous materials specialist,” he says.