Linking regional airports into global air cargo network
A third of air cargo in Baltic Sea region is delivered by truck, not air, study finds.
A three year’s long project, called Baltic.AirCargo.
Net, was finished in September, now it’s fading out period. The objective was to see how the Baltic Sea region can benefit from air cargo traffic.
A problem was that the business is very closed. “You can’t go to someone, do an interview and ask for details – they just won’t tell you,” said Gunnar Prause, a visiting professor of entrepreneurship and logistics at TUT. “But we got some light.”
Air cargo business is not very developed in the Baltic Sea region. Only 5% of European cargo flows through the region – the biggest part goes mostly through large Central European industrial areas like Paris, Frankfurt or Amsterdam. The biggest air cargo player in Baltic Sea area is Copenhagen where about half of the Baltic air cargo is handled.
Interestingly a large part of it isn’t even delivered by airplanes. “We found out that about 1/3 of air cargo in Baltic Sea region is not transported by air, it’s transported by trucks, so-called flying trucks,” Prause said.
If you want to send an air cargo package, maybe from Estonia to Shanghai, a truck will come to the air cargo terminal where the package is checked in as air cargo and loaded into the truck. The truck is then sealed by the customs and drives into Frankfurt, where the package is loaded onto a Lufthansa Cargo plane heading for Shanghai.
After mapping cargo flows and hotspots, the objective was to look for success business models for Baltic regional airports and how to link interesting air cargo destinations to the main European air cargo hubs. For Estonia, the main question is the future of Ämari airport – could it have a practicable business plan as a private airport and how the business model could look like?
Volumes are usually too small for airports like Ämari, but flying trucks could help out in this. Also, to survive as a regional airport you have to specialise – like Billund airport in Denmark that has found its niche as a transporter of life stock. But the tricky part is that it is not enough to focus on specific cargo, it also necessary to find destinations for it.
Other concept for air cargo business is planned for Parchim airport in Northern Germany where in the final stage a bond business park, including logistics and manufacturing facilities related to air cargo activities, should be realised. Concepts like this need the involvement of local firms cooperating with the regional airport and contributing to air cargo services. But the air cargo business is dominated by large international companies which are not that keen to accept new small firms among their ranks. “Companies who are handling the air cargo have their own links,” Prause said. “It’s complicated to come into this network as a distributor or logistics service provider.” So a part of the project was constructing a new IT platform in order to create an open transport spot market and to allow regional SMEs to access the market of delivering and handling air cargo.
The future outlook for the region is a little bit cloudy. Air cargo is a profitable business which is expected to grow the coming years but the volumes in Baltic Sea region are too small due to low population density and missing industry. New future hubs like St. Petersburg or Berlin can bring more dynamic to the region but destination Tallinn which enjoyed in the past relatively high air cargo volumes compared to Riga and Vilnius because of high air cargo handling activities (fashion, furs) for St Petersburg will probably not benefit from this. Additionally new security regulations will make air cargo business from the middle of 2014 more complicated and expensive.
TUT took part in the European project as a member a larger network. It was one of only two air business related projects in Baltic Sea region. The lead partner was University of Wismar in Germany, where Prause worked for many years. Other partners came from Belarus, Estonia, Finland, Latvia, Lithuania, Poland, and Sweden.