The Freight 50: Top carriers vie for answers to overcapacity

One reason lists are so popular is that they bring order to a chaotic world. This is especially true of this year’s Freight 50 list, which seems at first to reflect little change among the world’s largest air cargo carriers. For the top 10 companies this year, no one carrier has moved more than two spots from the previous year. But scratch the surface, and you reveal a churning industry ready to transform itself under the pressures of overcapacity, a gradual rise in fuel prices and a scramble to exploit more of the e-commerce market.

To discover signs of these coming changes, look no further than the top three non-express carriers on the list: No. 2 Emirates, No. 4 Cathay Pacific Airways and the No. 5 Lufthansa Group.

Emirates, which reported 12.32 billion freight tonne kilometers (FTKs) in 2015 – an 8.8 percent increase over the previous year – notified its customers in August that it was increasing its rates for all cargo by US$0.10 per kilogram in an effort to raise revenues.

Cathay Pacific, however, which overtook Lufthansa Group to nail down the No.4 spot, decided to take a different tack to capture more revenue, which may not sit well with forwarders and shippers. Beginning this month, the Hong Kong-based carrier will bring back the dreaded fuel surcharge. Many carriers had stopped adding surcharges after customers complained that the extra fees made it too hard to determine definitive cost estimates for each consignment.

Not to be outdone, Lufthansa Cargo, which saw its 2015 FTKs fall by 14.5 percent, compared to the previous year, is beginning to offer more specialized tiers of service. Starting Sept. 1, the German carrier is launching its td.Basic deferred delivery service. For those willing to add a few more days to their delivery, td.Basic will offer deep discounts on shipping. On the other end of the scale, Lufthansa Cargo bought back its time:matters Group, which offers same-day delivery service for time-critical and emergency shipments. Lufthansa had spun time:matters off as a separate subsidiary in 2002, but has now folded it back into its corporate structure with the repurchase of the 51 percent it had previously sold.

It remains to be seen whether any of these revenue-generating tactics by the world’s largest carriers will have any impact on the market, or will drive away potential customers, but they do indicate that the long decline in yields and freight load factors is forcing some carriers – most of which are on this Freight 50 list – to take some kind of action.

The 50 airlines and airline groups included here carry nearly 96 percent of the world’s cargo traffic. While there is no single, definitive source of carrier data to cover the entire air cargo business (see sidebar), Air Cargo World feels that this Freight 50 listing – based on information from IATA’s latest “World Air Transport Statistics” (WATS) report, the U.S. Department of Transportation (DOT) and from statistics supplied by more than 200 carriers – is the most comprehensive and inclusive report in the business.

To read more analysis of the Freight 50 list, click here.

For additional content:

• The full Freight 50 listing
• The top 10 fastest growing and fastest contracting carriers
• The Freight 50 list, measured in domestic FTKs
• Breakdown of carriers within aviation groups
• A few caveats about the Freight 50