Cargo struggles to kick back

About half of the 50 busiest cargo airports in the world saw a decline in freight activity – and most other airports’ cargo volumes barely budged.

Hong Kong International Airport was once again No. 1 on the list of the busiest cargo airports according to Airports Council International. In 2012, it saw a 2.3 percent increase in freight year over year.

Memphis International Airport and Shanghai Pudong International Airport were No. 2 and No. 3, respectively.

In general, Asian airports saw stagnant or falling cargo volumes with a few bright spots in China, Indonesia and the Philippines. Indian airports were all down.

North American airports saw little to no growth, and many European airports’ freight tumbled.

In Africa and the Middle East, the only airports that experienced growth were in the United Arab Emirates, Saudi Arabia and Qatar.

Cargo volumes remained sluggish in Latin America; Santiago grew the most at just over 6 percent.

Many airports interviewed blame low cargo levels on the European economy.

“We are very much affected by global economic trends, regional economic trends in the European context as well,” says Robert Payne, international spokesperson for Fraport, which manages Frankfurt Airport. “It’s no secret that the last few years there has been some weaknesses in the airfreight industry worldwide, and so we are affected by that.”

Frankfurt Airport is the No. 9 busiest cargo airport. In 2012, it saw a 6.7 decline in cargo.

“Germany is considered an economic driver or main motor of activity in Europe. It’s still soft,” Payne says.

Leipzig/Halle Airport in Germany, No. 25 on the list, bucked the European trend of falling cargo volumes; the airport increased its freight by almost 14 percent, one of the highest percentages among the top 50 cargo airports.

“Leipzig/Halle Airport is Germany’s largest hub for express cargo, which DHL’s European hub handles here and which has significantly contributed to the airport’s on-going growth for nine years now,” Markus Kopp, CEO of Mitteldeutsche Airport Holding, says in an email interview. “We are also increasingly successful in niche markets such as freight charter traffic and the handling of heavy-duty and oversized shipments and large animals.”

Mitteldeutsche Airport Holding manages Leipzig/Halle.

Larry Cox, president and CEO of Memphis-Shelby County Airport Authority, says Memphis Airport being FedEx’s world hub helps tremendously. The airport saw a slight pickup in cargo.

As a result of Asia’s soft economy, FedEx decided to reduce its flights and workforce at other airports – so now Memphis receives more of that transfer traffic, Cox says.

Narita International Airport in Tokyo, the No. 10 busiest cargo airport, saw cargo increase slightly. Fumio Gunji, director cargo business department, attributes this slight growth to several factors, including the Japan earthquake in 2011.

“[The earthquake resulted] in a domestic supply chain disruption and significant negative impact on Narita,” Gunji says in an email interview. “At the same time, long continued high exchange rate of the Japanese yen and the world economy recession led to downturn in cargo volume at Narita by 10 percent compared with the previous year 2010.”

But in 2012, airlines implemented measures to fill in gaps with transit cargo, he says. That’s why in 2011, Narita experienced a 10 percent drop in cargo year over year; in 2012, it rose by just over 3 percent.

Taiwan Taoyuan International Airport, the No. 15 busiest cargo airport, saw a decline in freight of about 3 percent. Yung-Sung Wen, senior vice president of Taoyuan International Airport Corporation, says in an email interview that this is due to the deteriorating cargo revenues of two major home carriers, China Airlines and EVA Air.

Asian cargo volumes at Seattle-Tacoma International Airport, No. 71 on the list, grew by 12 percent year over year.

“But it was counterbalanced by an even steeper percentage loss for Europe, both import and export,” says Tom Green, senior manager air cargo operations and development at Sea-Tac.

Altogether, the airport’s international cargo rose 0.2 percent.

Indianapolis International Airport, the No. 22 busiest cargo airport, saw a small jump in freight. Chris Matney, air service director at Indianapolis, says 97 percent of the airport’s cargo volume is tied to FedEx’s hub operations.

“FedEx is the big straw in our drink,” he says. “We’ve been very fortunate that we’ve seen the efforts and volumes of FedEx continue to grow.”

Indianapolis also moves a lot of freight in the pharmaceutical industry.

“When it comes to the pharmaceutical product, those quality managers and the supply chain people for those industries are always looking for the most reliable environment to make sure that the product is handled in a timely fashion without any delays or handling risks,” Matney says. “That’s definitely been one type of air cargo that has grown significantly in terms of the volumes we’re seeing go through the airport.”

Detroit Metropolitan Wayne County Airport, near the bottom of the list at No. 90, was among the best-growing airports in North America due to the resurgence of the auto industry.

“Everything here was kind of paralyzed for awhile, particularly during the GM and Chrysler bankruptcies,” Scott Wintner, public affairs manager at Wayne County Airport Authority, says. “The bankruptcy [at GM] really sort of chilled the entire industry, and things slowed down quite a bit in terms of movement of cargo.”

The auto industry, including parts manufacturers and technology developers, makes up the bulk of Detroit’s cargo. With the revival of the U.S. auto industry, the airport’s cargo demand is now relative to where it was about six years ago.

“A lot of that growth is really rebounding from the drop that we had in the years past,” Wintner says.

Even with airports around the world reporting mediocre cargo numbers, people interviewed say they remain hopeful.

Payne of Frankfurt Airport talks about the logistics center Lufthansa Cargo is building. Lufthansa is also taking delivery of their first low-emission 777Fs.

At Leipzig/Halle Airport, ACC AirCargo Center Leipzig will develop an area of 60,000 square meters (645,900 square feet) with direct apron access. It is expected that the first construction phase of the new air cargo center, with an area of 23,000 square meters (248,000 square feet), will be completed by the first quarter of 2014.

Another 15,000 square meters (162,000 square feet) of air cargo area will be built in the second construction phase, to be completed by the end of 2018.

“Leipzig/Halle continues to grow in terms of both cargo volume and infrastructure,” Kopp says.

Gunji says the reinforcement of aprons, parking stands and taxiways at Narita Airport are under construction.

“By expanding the capacity, we expect to boost the extensive aviation network of Narita, our competitive edge, to attract more cargo,” Gunji says. “We bear in mind that the scale of the cargo facilities in the future will need to be decided after careful assessing of air cargo trends and air carriers’ and forwarders’ needs.”

Right now, the capacity of Narita’s cargo facilities is 2.35 million tonnes per year.

Cox says Memphis International Airport continues relying on FedEx to connect cargo through the airport. But at the same time, companies are opting to use less airfreight.

“If the economy locally and globally starts to pick up,” Cox says, “then I believe the air cargo will pick up as well, even though there has been a market shift from air cargo to surface transportation as companies try to reduce their expenses to reduce their transportation costs.”

Wen of Taiwan Taoyuan International Airport says the airport is expanding two cargo terminals to improve capacity and operation speed.

Though he remains bullish for air cargo, he has an air of caution.

“We expect an energetic global economy in the near future as mature markets are recovering from EU debt and U.S. financial crisis, and consumer confidence increases,” Wen says. “However, given the high fuel price and the trend of shifting from air to seafreight, future growth will not be as immense as that of a decade ago.”

A previous version of this story said Narita International Airport’s cargo rose by just over 3 percent in 2011. It is actually 2012. Correction appended Oct. 3, 2013 at 9:11 a.m.