JUPITER SEA & AIR SERVICES PVT. LTD, EGMORE – CHENNAI, INDIA.
E-MAIL : Robert.sands@jupiterseaair.co.in Mobile : +91
98407 85202
Corporate News
Letter for Wednesday April 03, 2024.
:: Today’s Exchange Rates ::
Source : The
Economic Times RATES
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CURRENCY |
PRICE |
CHANGE |
%CHANGE |
OPEN |
PREV.CLOSE |
DAY's LOW-HIGH |
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83.38 |
-0.030006 |
-0.035975 |
83.37 |
83.41 |
83.335- 83.4025 |
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1.0772 |
0.0029 |
0.269944 |
1.0743 |
1.0743 |
1.0725- 1.0777 |
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104.8092 |
-0.452103 |
-0.429505 |
104.5606 |
105.2613 |
104.5219- 104.83 |
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|
89.5605 |
-0.312897 |
-0.348153 |
89.481 |
89.8734 |
89.3844- 89.5903 |
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|
151.536 |
-0.113998 |
-0.075172 |
151.65 |
151.65 |
151.468- 151.801 |
|
|
1.2564 |
0.0012 |
0.095599 |
1.2552 |
1.2552 |
1.254- 1.2577 |
|
|
104.966 |
-0.052994 |
-0.050461 |
105.007 |
105.019 |
104.956- 105.10 |
|
|
0.5497 |
-0.0016 |
-0.290217 |
0.5498 |
0.5513 |
0.5491- 0.5501 |
/// Sea Cargo News ///
Russian Entry into Red Sea and Shipping Implications
Russian
warships have recently entered the Red Sea, leading to heightened geopolitical
tensions in the region. While the exact objectives of these ships remain
unclear, their presence has prompted speculation and raised concerns among
stakeholders in the shipping industry.
As your trusted partner in logistics, we are closely monitoring the situation
to assess any potential impacts on shipping routes and rates. Rest assured, we
are committed to providing you with reliable and cost-effective shipping
solutions, even in the face of geopolitical uncertainties.
If you
have any questions or concerns about how these developments may affect your
inland shipping operations in the USA, please don't hesitate to reach out.
Our team is here to support you and ensure the smooth execution of your
logistics needs.
Sri Lanka to promote
registration of ships under its flag
The government is eyeing to promote the registration of ships under the Sri Lankan flag in a bid to general direct and indirect employment opportunities.
As such, the
Cabinet of Ministers has green-lighted a proposal, tabled by the Minister of
Ports, Shipping and Aviation seeking permission to invite qualified domestic
and foreign investors to register ships under the Sri Lankan flag.
The government will thus call
Expressions of Interest (EOIs) and proposals to select the most suitable
investor on the recommendation of the Procurement Committee, consequent to the
evaluation of the proposals by a Technical Evaluation Committee.
Ship registration is a major
source of foreign exchange to the country’s economy and has the potential to
generate many direct and indirect employment opportunities, the government said
in a statement.
A Global Carbon Tax on
shipping is coming, says ABS Chairman and CEO
A universal, global carbon tax on shipping is coming, as
alternative blue fuels made with carbon capture emerge as a critical step in
the energy transition at sea.
“Last year the conversations
were focused on going from oil to a green fuel economy. Today, we are seeing
the emergence of the blue economy that addresses carbon management, carbon
capture, carbon pricing and carbon credits and offsets, as an essential
stepping-stone.
The EU has recognized the
importance of this intermediate economy with Fuel EU Maritime, and I believe
you will see a universal carbon tax emerging as the IMO and the EU will synch
together.” Effective regulation under one global regulatory framework is going
to be key to success in the energy transition at sea, he said.
Will conditions attached
market rate for VOC Port outer harbour box terminal work?
The private entity winning the
rights to build a 4 million twenty-foot equivalent units (TEUs) capacity
container terminal in the outer harbour of stateowned V O Chidambaranar Port
with an investment of Rs7,055.95 crores will have the freedom to set rates
based on market forces in a deviation from the eligibility conditions for
securing viability gap funding (VGF) for public-private-partnership (PPP)
projects.
But this freedom to set market
rates is “conditional” as the tariffs cannot be more than the highest tariff
levied by any container terminal in any major port authority (those owned by
the Union government).
The project will be awarded to
the bidder seeking the lowest VGF, which has been capped at Rs1,950 crores or
actual quote, whichever is lower.
On 8 November 2023, the Public
Private Partnership Appraisal Committee (PPPAC) headed by Secretary, Department
of Economic Affairs, recommended the project to the Cabinet for final approval.
ONE upgrades online booking process
Singapore-headquartered container carrier Ocean Network Express
(ONE) has announced the launch of "enhanced booking process" through
ONE QUICK Booking.
"This enhancement will make your booking experience
smoother, quicker, and more personalized," said the company in a
statement.
Through Pattern Booking, ONE's clients will be able to check
their top six frequently used routes and booking details are auto populated,
simplifying the booking process. "Your time matters, and this upgraded
process is designed to reflect that," pointed out ONE.
ONE Quick Booking is available via ONE eCommerce portal under
the “Booking” menu after login.
Hope for Baltimore bridge survivors vanishes
Source: VesselFinderAny hope of rescuing victims following the collapse of
Baltimore’s Francis Scott Key bridge has evaporated according to the US Coast
Guard, which called off the search after dark yesterday.
According to US emergency services, there were eight maintenance
staff repairing the potholes in the road when the Maersk-operated, 10,000 TEU
Dali crashed into the bridge, which immediately collapsed.
Two workers were rescued, one seriously injured, another
uninjured and six remain missing. It is not certain whether there were vehicles
on the bridge at the time of the collapse, if there were the casualty rate will
surely increase.
Coast Guard Rear Admiral Shannon Gilreath said in a briefing,
"We do not believe that we're going to find any of these individuals [the
six maintenance staff] alive".
US authorities, including Maryland State Police and US Coast
Guard officials, reported that conditions had deteriorated, with diminished
visibility and treacherous currents in the channel where the wreckage has made
search efforts too risky to continue overnight.
State police Colonel Roland Butler told reporters late Tuesday
that the search for the bodies of the six maintenance workers would resume at 6
am local time on Wednesday.
"We're hoping to put divers in the water and begin a more
detailed search to do our very best to recover those six missing people,"
he said.
US authorities praised the crew of the Dali, who quickly raised
the alarm allowing the authorities to clear as many vehicles from the bridge
before the accident as possible, they said this would have undoubtedly saved
lives.
All 22 crew on the Dali are safe and there has been no reported
pollution from the vessel, which is insured by the UK-based Britannia P&I
club.
Meanwhile, US Transportation Secretary, Pete Buttigieg, warned
of “major and protracted impact to supply chains” following the closure of the
Port of Baltimore for the foreseeable future.
The Port of Baltimore Administration confirmed, “Vessel traffic
into and out of the Port of Baltimore is suspended until further notice. This
does not mean the Port of Baltimore is closed. Trucks are being processed
within our marine terminals.”
However, the administration also conceded that “we do not know
how long vessel traffic will be suspended. As soon as that is determined we
will provide an update.”
Baltimore Port is best known for its handling of cars, but the
terminals at the inland port also handle, bulk much of the US coal is handled
in Baltimore, Ro-Ro and container cargoes.
In the top ten ports for cargo handled in the US, Baltimore
announced a record year on 24 February, handling 52.3m tonnes, with a record
value of over US$80 billion in 2023, including 1.1 million TEUs at its
terminals.
Port administrators also reported the increase in container
traffic would be boosted by the CSX-owned Howard Street Tunnel expansion
project, that will allow double-stacked container rail cars “and enable
seamless double-stack capacity from Maine to Florida. The project involves
clearance improvements in the 127-year-old tunnel and at 21 other locations
between Baltimore and Philadelphia.”
Completion of the tunnel expansion is expected in 2027.
Dali after knocking down the Baltimore bridge / Source:
VesselFinderThe 10,000 TEU container vessel Dali that hit Francis Scott Key Bridge in Baltimore has been involved in another shipping accident back in 2016.
In particular, the boxship smashed into a quay at the port of
Antwerp in Belgium on 11 July 2016, as it was exiting the North Sea container
terminal.
The Antwerp port authorities said the vessel had remained at the
dock for repairs for some time after the incident.
The Antwerp accident happened due to a mistake by the Master and
pilot on board the vessel, according to VesselFinder reports.
As is evident, Dali's latest accident is notably more severe,
likely resulting in fatalities and expected to cause significant
challenges to the global supply chain.
Maersk to omit Baltimore calls as Singapore authority reveals ship “lost propulsion” before incident
Photo taken from the X feed @HarforCoFireEMS Harford County,
MD Volunteer Fire & EMS showing a portion of the Francis Scott Key Bridge
in Baltimore, US, collapsed after a large boat collided with it. Source: AAP /
Harford County, MD Volunteer Fire & EMS/PA/Alamy.Maersk Line's five services that call at Baltimore port will be affected by the collapse of Francis Scott Key Bridge. The bridge collapsed after the Maersk-operated 10,000 TEU Dali hit one of its pillars after coming out of Baltimore Port’s Seagirt terminal.
Maersk said its TA2 and TA5 Transatlantic services, TP12
Transpacific service, Amex (US East Coast-South Africa service) and AGAS (US
East Coast-Caribbean) service will be affected.
The Danish mainline operator stated, “Due to the damage to the
bridge and resulting debris, it will not be possible to reach the Helen Delich
Bentley port of Baltimore for the time being. In line with this, we are
omitting Baltimore on all our services for the foreseeable future, until it is
deemed safe for passage through this area.”
Containers already sailing toward Baltimore will be diverted to
nearby ports for discharge. From those ports, the containers could be moved via
truck or rail to their final destination.
Maersk noted in its advisory that for cargo set to discharge in
Baltimore, delays may occur, as they will need to discharge in other ports.
"We’re keeping a close eye on the safety situation in the area and
continuing to assess the viability of transportation through the area,"
added the Danish carrier.
Box lines’ stock prices fade as Red Sea crisis windfall slows
Stock prices of listed liner operators, which rose at the height
of the Red Sea crisis, have corrected in tandem with freight rates, according
to Alphaliner’s report.
Maersk and Hapag-Lloyd, which will form
Gemini Cooperation in February 2025, have seen their
stock prices falling as their forecasts for 2024 are the lowest among listed
box lines.
At the start of this week, only Evergreen Marine Corporation’s
stock price was higher than before the Houthi rebels began terrorizing vessels
in the Red Sea in October 2023.
The Taiwanese operator’s stock price closed at TW$113.50
(US$3.51) on 2 October 2023; today (27 March), it closed at TW$175.50
(US$5.48).
In comparison, AP
Moller Maersk’s stock price closed at DKK12,765
(US$1,793) on 2 October 2023; the stock is now trading at around DKK8,960
(US$1,300). Hapag-Lloyd’s
stock price closed at €175.70 (US$183.38) on 2 October 2023; the stock
is now trading at about €131 (US$142)
Alphaliner explained, “Instead, poor financial earnings
have replaced capacity re-routing as the main driver of stock prices, with the
release of generally weak Q4 earnings accelerating a downward trend that had
already started in February.”
Stock prices for medium-tier carriers OOIL,
COSCO, HMM and ZIM are
now below, or in the case of COSCO Ship Holding, which has yet to release
earnings, back to pre-conflict levels.
OOIL and ZIM saw their stock prices decline by 17% and 14%
respectively, immediately after announcing 2023 financials.
Evergreen achieved a US$1.1 billion net profit for 2023, making
it among the best three performing box lines that year.
Alphaliner said, “The trend contrasts with freight rates
which, while also falling, are still firm compared to pre-conflict levels.”
On 25 March, the Shanghai
Containerised Freight Index (SCFI) stood at 1,733
points, marking a sixth straight week of decline, although it remains 95%
higher than on 1 October.
/// Air Cargo News ///
Challenge Group launches scheduled twice a week service to Mumbai
The new scheduled flight between
Mumbai and Liège creates a direct link between strong economic geographies with
operations serving the whole of Europe and the US.
Offering a payload of 52 tons
per uplift, the freighter will mainly carry pharmaceuticals and electronics,
but also the large and complex main deck cargo shipments that are Challenge
Group’s expertise.
“Given that India is striving to
become the factory of the world, and the production of key verticals has
significantly increased during the past few years, our strategic decision to
now launch a regular and direct India-Europe service goes some way towards
satisfying the intense customer demand on this route,” said Or Zak, chief
commercial officer of Challenge Group.
“In fact, after the inaugural
flight, we are already adding a second weekly frequency from April onwards.”
“The launch of our Mumbai freighter service is the result of extensive market
preparation conducted over the past year.
Azul on way to scoring a Go(a)l
Brazilian budget carrier, Azul
Linhas Aéreas (Azul), intends to take over rival, Gol Linhas Aéreas
Inteligentes, following Gol’s Chapter 11 bankruptcy filing in the U.S. The move
is heralded by an initiative from Azul to secure funding for a proposal to Gol
stakeholders. Global investment bank, Citigroup, and advisory and investment
firm, Guggenheim Partners, were commissioned to draft a proposal for financing
the deal.
According to Brazilian
circles familiar with the matter, the merger project is currently still being
explored. Neither airline has yet entered into talks on the takeover plans
considered by the Azul management. This is likely to change when the two banks
present a financing plan that does not overburden Azul and appears lucrative
enough to Gol’s shareholders to enter into official negotiations.
Should the takeover take place, the combined airline Azul/Gol will
have a major say in both the Latin American passenger and cargo markets
– courtesy: Azul.Remarkable ascent
Incepted in 2008 by JetBlue founder, David Neeleman, his and Azul investors’
mutual aim was to create a large domestic low-cost airline in Brazil. Equipped
with a fleet of Embraer aircraft and A320/A321s, Azul has meanwhile become the
third largest South American airline after LATAM and Gol, but ahead of the
Colombian Avianca.
A comparison of the route networks of Azul
and Gol shows that the overlaps are limited. Azul operates roughly 70% of its
routes independently. This fact could play a role for Brazil’s Administrative
Council for Economic Defense (CADE), in case the regulator must ultimately
decide for or against the takeover. According to latest data published by the
National Civil Aviation Authority (ANAC), the domestic Brazilian aviation
market is led by LATAM (36.7%), followed by Gol (34.1%) and Azul (28.7%).
Without a solid financing concept,
no takeover
It remains to be seen if Azul can finance the takeover, given that the budget
carrier went through a debt renegotiation process only recently. Azul told
Bloomberg Businessweek that it is always attentive to the strategic dynamics of
the airline industry and possible partnership opportunities. It also said that
it has not negotiated or approved any specific transactions to date. Gol, Citi,
and Abra, the holding company that controls Gol, declined to comment.
Cargo is an important contributor to
Azul’s sales
Although primarily known as a budget carrier, Azul has also made a name for
itself in air freight circles. The division is branded Azul Cargo Express and
headed by Izabel Reis, one of the rare female leaders in the Latin American
cargo industry. The product offering ranges from premium to e-com and standard
freight.
In addition to the lower deck compartments
of its more than 212 passenger aircraft, Azul Cargo operates two leased
B737-400SF with a capacity of 20 tons each. Today, Azul Cargo Express offers
door-to-door service at 153 domestic destinations and operates international
routes to Miami, Ft. Lauderdale, Lisbon, Paris, Montevideo, Uruguay, and
Bariloche in Argentina.
Liège snags next customer
Not just an impression, but reality:
cargo airlines have recently been lining up at the door of Liège Airport’s
(LGG) management. They include Turkish Cargo, which has now walked through the
entrance portal and been warmly welcomed.
As a gift to its hosts, it
announced that it will launch three cargo flights a week. They will commence at
the end of this month with the start of the summer flight schedule, and will
connect the Belgian airport with Turkish Cargo’s home hub, Istanbul.
Turkish Cargo freighters will soon be seen regularly at Liège
Airport – courtesy: TK
It is worth taking a look at it from a
broader perspective: since the beginning of this year, Turkish Cargo is the
fifth cargo airline to add LGG to its flight
program. The expanded ground infrastructure that keeps growing according
to demand, plenty of free slots, the 24/7/365 operational permit, and an
airport management that focuses entirely on the cargo business, are convincing
selling points that increasingly attract freight carriers.
Widebody freighters
This also applies to Turkish Cargo. The carrier will mainly use A330Fs on the
route IST-LGG. However, sometimes an older Airbus model A310-300F will also be
utilized. This aircraft belongs to the Turkish ACMI provider, ULS Airlines
Cargo, but is operated by Turkish Cargo.
The carrier’s flights to Liège are backed
by some big boys from the e-com sector. While on the westbound leg they are
operated non-stop, on the way back to the Turkish metropolis, the freighters
make a stopover in Basel or Budapest. This flight path shows that the export
volumes in LGG are still insufficient to completely and permanently fill the
main deck of the aircraft.
“The
flights are an important step to making the services more widely known within
the European cargo community. We believe that the frequencies will soon be
increased and that the return flights will then be operated non-stop,” estimates
Torsten Wefers, VP Cargo Sales & Marketing at Liège Airport.
The pull effect
His main argument for this assumption: in addition to the acquisition of new
cargo airlines, the Walloon Airport’s management has succeeded in upping the
number of forwarding agents opening a station within the airport’s perimeters.
Airlines attract forwarders. More forwarders mean more freight volumes handled
and flown.
He emphasizes that the flights soon
operated by Turkish Cargo have not been relocated to Liège from other Western
European airports, and are therefore at their expense. “We don’t support the cannibalization of
traffic. These Turkish flights are additional services between Turkey and
Western Europe.”
Top three global brands
What makes Turkish Cargo’s services particularly interesting for the cargo
community in Liège, is the fact that the airline offers a huge international
network via its Istanbul gateway. “Due
to these advantageous conditions for cargo customers, we hope to develop a
strategic partnership between Liège Airport and Turkish Cargo,” states
Mr. Wefers.
The carrier ensures long-term growth
through its expanded infrastructure, operational capabilities, and constant
fleet growth. “It can be expected that
Turkish Cargo will rank among the top three global cargo brands by 2028,” forecasts
Mr. Wefers.
Lessors
reached first deals with Russia over seized aircraft
Numerous leasing companies are among
those financially affected by the Russian invasion of Ukraine. Moscow refused
to return leased aircraft to them and instead confiscated foreign assets and
transferred them illegally into the Russian registry. Consequently, when flying
abroad, Aeroflot, S7, AirBridgeCargo and others risk having their leased
aircraft chained.
But now, things have started to move. Many
leasing companies inked deals with the Russian insurance company NLK Finance.
Financial volume of the settlements to date: USD2.5 billion. This means that
Russia has legally acquired the aircraft from their former owners.
Aeroflot operates a total of 171 Airbus and Boeing aircraft, many
of them leased and not returned to their owners – photo: SU.
Eight lessors involved
According to a report published by the San Diego-based Insurance Journal, this
includes agreements reached between eight lessors and NLK Finance. This applies
to Ireland-based AerCap, the world’s largest lessor, that had received US$645
million over 17 jets and five spare engines leased to state-controlled airline
Aeroflot and its subsidiary Rossiya.
Ireland-headquartered lessor CDB Aviation,
owned by the China Development Bank had settled for US$197.50 million over four
planes followed by a settlement for one aircraft (US$20.6 million).
Dubai Aerospace Enterprise said in December
it had received a cash settlement totaling around US$118 million for seven
aircraft previously leased to Aeroflot.
BOC welcomes repossession of eight
B747-8F
Another lessor is BOC Aviation from Singapore. Last November, the company had
received US$208 million under an insurance settlement for eight aircraft stuck
in Russia.
Now BOC has repossessed three B747-8
freighter aircraft leased by Moscow-headquartered AirBridgeCargo Airlines and
sidelined at Sheremetyevo Airport since the outbreak of the war.
For tax reasons, the three aircraft were
all Bermuda-registered. As ABC had not returned them to BOC, the Russian cargo
airline risked the aircraft being confiscated by local authorities in the event
of foreign operations. This and the refusal to return other freighters to
leasing companies led ABC’s business model go to ashes. It was primarily based
on cargo flights between the Far East and destinations in Europe with a
stopover in Moscow.
Silk Way West replaces ABC
The resulting capacity gap is now being filled by Silk Way West Airlines, based
in Baku-Azerbaijan, which has a similar route profile to ABC. Its president,
Wolfgang Meier, held leading positions at ABC for many years before moving to
Silk Way West.
Even though leasing companies have now
reached various settlements with the Russian insurance company NLK Finance,
numerous Airbus or Boeing aircraft continue to fly illegally on domestic
Russian routes, operated by state-owned flag carrier Aeroflot, its subsidiary
Rossiya or S7. So far, the lessors as their rightful owners have not benn
compensated for this illegal act of piracy. The financial volume of this theft
of assets is shown in a list published by the San Diego-based Insurance
Journal.
Further claims are still awaiting a
solution
According to this filing, Air Cap is the main affected party. It has sued
insurers such as AIG and Lloyd’s of London for US$3.5 billion over the loss of
116 aircraft and 23 aircraft engines in London’s High Court under its all-risks
policy. A legal decision is still pending.
Aircastle filed a claim in New York against
more than 30 insurers in October 2022 over nine aircraft and other equipment
stranded in Russia, reports the paper.
Irish-headquartered SMBC, owned by a
consortium including Japan’s Sumitomo Corp and Sumitomo Mitsui Financial Group,
recorded an impairment of US$1.6 billion in 2022 to cover the full financial
impact of having 34 jets stuck in Russia. It is suing insurers in Dublin.
Whether and when the aforementioned
aircraft insurers will reach an agreement with the Russian NLK Finance on a
settlement is completely open. After all, the Western sanctions regime against
Russian airlines has not changed and neither have the leasing companies’
ownership claims.
But even if an agreement is reached and
there is a legal change of ownership, the supply of spare parts to Western
aircraft is still ruled out. These are subject to Western sanctions.
More than 20 parties interested in buying DB Schenker
Photo: DB
SchenkerDeutsche Bahn (DB) yesterday provided an update on its plan to
sell DB Schenker during the announcement of its full-year results, which showed
the forwarder delivered a “reliable” profit performance.
Levin Holle, member of the board responsible for finance and DB
Schenker, said that more than 20 parties had registered an interest in
purchasing the forwarder after DB launched a bidding process earlier this year,
reports Air Cargo News sister
title DVZ.
Holle said that the bidders could submit their first offers in
the next few days and that a decision as to buyer could be made in the second
half of the year.
However, he ruled out any chance of the transaction being
completed this year.
“We have been very pleased with the general market interest in
our attractive logistics subsidiary,” DB said. “The rest of the process will be
confidential, as is customary. We will only sell if it makes financial sense to
do so.”
DB confirmed that its subsidiary DB Schenker was officially up
for sale in December, a year after it began reviewing its options for the sale.
Interested parties had until January 15 to ask for extra
information and until February 6 to submit their registration documents.
Most recently, shipping giant AP
Moller Maersk said it would consider making an offer after
previously dismissing the idea.
Other companies rumoured to be interested include MSC, DSV, UPS,
DP World and Abu Dhabi Ports.
However, DHL
Group has declared itself out of the running for
acquiring DB Schenker following much speculation over which company will buy
the freight forwarder.
Full-year results
DB Schenker reported lower volumes, revenues and operating
profits last year – a reflection of overall market conditions.
The forwarder’s airfreight volumes for the year declined by
13.4% year on year to 1.2m tonnes, revenues were down 30.7% to €19.1bn and
adjusted earnings before interest and tax (ebit) was down 38.7% to €1.1bn.
The company said that while operating profit had fallen last
year, it was still twice as high as it was pre-Covid and revenues were also
above pre-Covid levels.
“DB Schenker has delivered an extraordinarily high contribution
to Group profits for years,” the company said of the performance. “During the
Covid pandemic, markets were in a special situation, with global transport
capacity in short supply and rates for air and ocean freight extremely high.
“DB Schenker achieved the best performance in its history over
this period. We now know from 2023 that even with normalised global freight
rates, DB Schenker remains a reliable profit contributor, with profits we can
be very happy with and good prospects for the future.”
The company highlighted growing e-commerce volumes as the year
progressed.
“The effects of global geopolitical and financial policy
uncertainties were also noticeable in demand for airfreight transport,” the
company said. “As a result, 2023 was characterised by significant weakness in
the airfreight market.
“2023 started very weakly and the summer months did not bring
any noticeable recovery. In the second half of the year, however, business in
particular with perishable and low-priced e-commerce goods from Asia rose
sharply.
“Due to the very dynamic increase in the e-commerce business,
the available air freight capacity in the last months of 2023 was concentrated
on a few connections to and from Asia.
“Overall, this led to a regional imbalance in terms of available
capacity with correspondingly volatile developments in freight rates and
earnings in the airfreight market.”
For comparission, Kuehne+Nagel saw its
2023 air cargo volumes decline 11.2% year on year to
2m tonnes and DHL Global Forwarding’s air volumes were down 12.1% to 1.4m tons.
Amazon Air expands capacity and simplifies network
Source:
RDNichols / Shutterstock.com
Amazon Air expanded its air cargo capacity last year through the
addition of larger aircraft but also simplified its network and conducted fewer
flights.
The latest study from The Chaddick Institute for Metropolitan
Development shows that in the five weeks running to March 12, Amazon Air
increased its US tonnage capacity by 4.9% compared with the same period last
year, while total daily flights fell by 1.8% compared with the same period last
year.
This comes as the airline moved to larger aircraft and
consolidated operations at fewer hubs. Since March last year, the carrier has
added three Boeing 767-300s, all operated by Air Transportation International,
and its first Airbus A330-300, operated by Hawaiian.
In the process, the percentage of the fleet comprised of 737 or
smaller planes has fallen from 38% to 33% over the past year.
The carrier also stopped using ATR-72 turboprops over the last
year and reduced the number of airports it flew to.
Overall, Amazon Air’s US fleet increased by one aircraft to 78.
“The push to simplify the US airport network ended regular
flights to Des Moines International (DSM), Mobile International (BFM), Omaha
Eppley (OMA), San Jose (Mineta) International, (SCJ), Tampa International (TPA)
and Wichita/Eisenhower National (ICT), several of which had only seen the
turboprops,” the report stated.
“Amazon Air halved service to Las Vegas, NV, which is less than
a four-hour truck trip from its San Bernardino hub, and cut service by roughly
a third at Baltimore-Washington Marshall Intl. (BWI), which is approximately
7.5 hours from the Wilmington, OH, hub.
“No new US airports gained regular service, giving Amazon Air a
consistent presence in 47 US airports, down from 53 last year.”
Looking ahead, Amazon has plans to expand its A330 fleet to 10
aircraft, which would place more emphasis on larger aircraft.
If this occurs, Amazon Air’s tonnage capacity will grow by 17%
compared with a year ago.
The report said that the move to a hub and spoke operation and
away from point-to-point flying brings its strategy closer to that of express
giants UPS and FedEx.
“Amazon Air’s network has gradually grown to be more like that
of FedEx and UPS,” the report states. “These air cargo integrators have long
been hub-centric, with nearly identical schedules day after day (except for
weekends and holidays).
“Their networks have been gradually fine-tuned to maximise their
versatility for guaranteed delivery the next morning or afternoon. Amazon is
pursuing a similar strategy in North America. More than four in five Amazon Air
flights (80.5%) within the US mainland operate to or from its five largest
hubs, up from 65.6% in early 2021.”
But while the carrier has been growing capacity in the US, in
Europe it has been rapidly
decreasing its flight activity.
The report shows that the number of flights in Europe has fallen
by 37.5% since last year as the airline has reduced its activity at
Leipzig/Halle, Cologne/Bonn and East Midlands.
Source: The Chaddick Institute
for Metropolitan Development
Looking ahead, Amazon is expected to continue expanding its US
hub and spoke, and international operations.
“Amazon Air’s restraint over the past two years and the redesign
of its network have laid the groundwork for focused expansion aimed at further
expanding its next-day package delivery
capabilities.
“We believe the retailer will primarily emphasize CVG and growth
in Fort Worth, Lakeland, and San Bernardino.
“Amazon’s entry into India foreshadows new routes in developing
countries, with South America, the Pacific Rim, and Middle East flying being
solid possibilities. However, we expect Amazon to start small in these
regions.”
The report also predicts some growth in the European network,
although at a considered pace.
“Amazon will remain relatively small in Europe, but it will at
least partially bounce back while continuing to adjust its flight schedule more
frequently than the air cargo integrators. We expect most of the growth to be
where its logistics infrastructure, including fulfilment or sorting centres, is
expanding.
“Scandinavia and Southeast Europe, including Greece and the
Balkan countries, are particularly positioned for more service. However, the
ability to transport cargo by truck or in aircraft from other providers will
prevent US-style hub development.”
The report was authored by Joseph Schwieterman, Toni Jahn and
Steve Rudolph.
I reckon you have enjoyed
reading the above useful information.
Have a nice day.
Thanks & kind regards
ROBERT
SANDS, Joint Managing Director
Jupiter
Sea & Air Services Pvt Ltd
Casa
Blanca, 3rd Floor, 11, Casa Major Road, Egmore
Chennai –
600 008. India.
GST
Number : 33AAACJ2686E1ZS.
Tel : + 91 44 2819 0171
/ 3734 / 4041
Mobile : + 91 98407
85202
E-mail : robert.sands@jupiterseaair.co.in
Website : www.jupiterseaair.com
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