Pan-European air freight RFS volumes set to be ‘exceptionally high’ in Q4

Source: Lloyd’s Loading List
Date: 22st September 2021

Pan-European air freight road feeder services (RFS) to and from the UK and across Europe are on course for a very strong end to the year as the prevailing market dynamics in the air cargo sector show little sign of change.

Demand has been very high for some time and subject to various ‘volatilities’, including the continued suspension of many passenger flights, the high number of charter flights, additional charter flights to secondary cargo airports and a modal shift from maritime to air. Volumes will be exceptionally high for the whole of Q4.

Demand for RFS will also be higher than usual because a large proportion of scheduled capacity has been block booked for the peak season and many shippers will not obtain space on direct flights to final destinations.

The congestion that has affected cargo handling facilities at most of Europe’s hub airports. This has been an ongoing challenge right through the current year and is hardly surprising as major hubs such as Amsterdam, Frankfurt and Liège are handling up to 40% more cargo when compared with last year.

The congestion ‘factors’ include more scheduled and chartered freighters, more mixed ULDs, more cabin cargo on ‘preighters’, and more shipments moving by RFS – all of these requiring additional docks and labour at airport warehouses.

This congestion has, of course, increased truck dwell times during a period of extremely tight truck capacity and pan-European HGV driver shortages caused by EU legislation, working conditions and macro-economic factors.

Pax flight complications
Commenting on the re-opening of airline passenger services in response to the easing of COVID-19 restrictions, this has been “very gradual so far, especially to and from the Asia-Pacific region while non-essential transatlantic travel is also still not permitted.

On some corridors, the resumption of passenger flights has actually reduced cargo capacity that was previously deployed as pax freighters. I don’t expect any significant changes this year that will reduce RFS demand from and to the UK. While slots are more readily available at UK airports, most airlines prefer to operate freighters from and to mainland Europe and use RFS to connect the UK.

As to whether the issues linked to the new post-Brexit trading regime between the EU and the UK – which earlier this year led to serious delays at border crossings over a prolonged period – have now disappeared. Most traders and LSPs have adapted to the new procedures and our trucks are not delayed at borders.

Border checks further delayed
As “surprising” the UK’s decision to further delay post-Brexit checks on food and farming imports to the UK from the EU which were due to take place next month and are now to be introduced in January and July next year.

The freight industry was already prepared for these controls and the decision has actually been driven by concerns that border delays would result in food not reaching the UK.

However, it was “very good news” that the S&S (safety and security) GB declarations for all consignments from the EU to UK will now take effect from 1 July 2022 and not 1 January next year.

This will give hauliers more time to persuade the UK government to streamline the S&S GB declaration process. From the beginning of next year, they were set to be burdened with an excessively heavy workload to collect and declare a considerable amount of data.

It was also unclear if HMRC had sufficient resources to risk-assess and clear all consignments before trucks arrived at the UK border. Congestion at the Sevington IBF (Inland Border Facility) in Kent has increased recently and were anticipating more delays from 1 October and especially from next January when more trucks would have been diverted for documents and goods to be inspected.

It’s likely that a mid-term solution to the EU HGV driver shortage will come in the form of an increase in the number of drivers from Eastern European countries taking up employment in Western Europe and earning higher salaries than previously and this will inevitably lead to higher prices for road haulage. Eastern European drivers would probably travel ‘home’ every two or three months instead of every fourth week.

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