The air cargo hubs of Montreal, Toronto, and Vancouver are attracting new services and shifting their focus from delivering tonnage for shippers to ensure reliability for high-value shipments, particularly for technology trade with Canada’s top four partners: the United States, the United Kingdom, China, and Japan.
“Air tonnage is an archaic way of reporting growth because it doesn’t tell you the value of what was hauled, the speed to market, or the destinations reached,” said Ray Segat, director of cargo and business development at Vancouver International Airport. "Today, to meet the needs of transit-time and cost-sensitive shippers, we must be more entrepreneurial minded. Money we make at the airport has to be invested” in geographic and infrastructure expansion, he added.
Toronto Pearson International (YYZ) is continuing to expand its global reach. This year, it is connecting Canadian air exporters and importers with 70 percent of the world’s economy, up from 67 percent a year earlier, airport officials report.
Some 63 airlines currently operate scheduled belly, freighter, and charter flights providing non-stop and same-plane air cargo service to 184 global destinations worldwide, up from 176 in the last year, the expanded capacity, driven heavily by Air Canada’s nine new foreign routes in 2017-18, is aimed at its goal of generating more high-value, high-yield traffic through North America’s second busiest airport in terms of international passengers. However, it’s not necessarily just maximizing tonnage throughput.
“Toronto Pearson is more concerned about providing efficiency and markets to air shippers and forwarders,” Paul Ritchi, senior manager of strategy and growth for the Greater Toronto Airport Authority (GTAA), told JOC.com.
The airport’s objective aligns with carrier aims of “seeking the maximum revenue and highest returns per cubic meter and weight carried at the least amount of cost,” Ritchi added.
Volume — still a closely-watched yardstick
Volume is still a closely watched yardstick. Air cargo tonnage through Toronto Pearson has been growing after a flat 2016. “Two years ago, we mirrored the air cargo industry but in 2017, we were up 14.1 percent, from 472,300 to 538,900 metric tons (520,000 to 593,000), and the outlook for 2018 is looking even better,” said Ritchi.
Toronto Pearson is not a hub nor even a destination for Amazon’s Prime jet freighters and Ritchi isn’t worried about it. “E-commerce is not the most profitable air cargo product because it is lightweight and bulky and takes up a lot of space at less revenue,” he said.
Current air freighter operations include Lufthansa with weekly MD-11 and 777 trans-Atlantic freighters, Korean Air Lines running a 747-8 freighter twice a week, Cathay-Pacific with a twice weekly 747-8 freighter, Cubana Airlines lying a Russian-built Tupolev jet freighter to Havana once a week, and Turkish Airlines, which last year launched A330 widebody freighter service between Istanbul and Toronto that makes a stopover at Chicago O’Hare. Japan Air Lines nor All Nippon provide freighter lift into Pearson. Ontario importers and exporters lost substantial lift late last year when Air Canada and Toronto based Cargojet ended their four-year-old freighter partnership over a pilots' union dispute. The 767-300F service, which operated out of nearby John C. Munro Hamilton (ONT) International Airport, linked the region with Mexico City, Dallas-Fort Worth, Atlanta, Bogota, Lima, and Frankfurt.
Air Canada said this year it will be replacing some of the lost capacity with belly lift from additional 767 passenger flights to Mexico City and Lima. An Air Canada Cargo spokeswoman said there are no current plans to form a partnership with another freighter operator; however, it still has a freight interline relationship with Cargojet.
Air Canada later this year will add new widebody passenger flights to Buenos Aires and four European cities — Bucharest, Shannon, Zagreb, and Porto. British Airways is adding capacity to the United Kingdom with three-times-a-week service to London Gatwick and Ukraine International Airlines is launching three weekly widebody flights in July between Toronto Pearson and Kiev, Ukraine.
There is labor peace at Toronto Pearson after a crippling strike in 2017 when cargo and baggage handlers went on strike for about 80 days. Since then, Dnata, a unit of Emirates Group has formed a 50-50 partnership with locally-owned GTA Aviation to provide cargo and ground handling operations at Toronto Pearson. The new venture, called GTA Dnata, has signed up 11 airlines including Lufthansa, Swiss, China Southern Airlines, and Korean Air and is putting a particular emphasis on handling perishables, pharmaceuticals, and technology cargoes.
Officials say congestion inside the airport is not a problem for truckers or forwarders. The airport has round-the-clock customs clearance, 1.2 million square feet of on-airport warehousing facilities that meets the needs of today’s tenants, and no new-construction is planned in the next 12 months, an airport spokesman said.
Vancouver — a ‘village’ with strong Asia links
Vancouver International (YVR) markets itself to shippers and importers as a multimodal logistical “village” and transshipment point, not just as Canada’s second-busiest airport. YVR is 20 minutes from Vancouver Harbor, adjacent to the Trans-Canada Highway system, 25 minutes from the Canada-US border crossing, and a few miles from the Canadian Pacific Railway rail line.
“In the last decade and a half, we have created a 1-million-square-foot cargo village under roof which includes 100 businesses — air carriers, freight forwarders, consolidators, integrators, customs brokers, Canada Border Services Agency staffers, and ourselves,” he said.
YVR, said Segat, has thrown the traditional airport rulebook out the window, by leaning into customers' needs. “Airports normally push the integrators off their property. We pursued them. Forwarders and truckers have a huge impact on the supply chain. We court them. We really don’t care how the goods move. We place them on the transportation mode that delivers the best value to the shipper or consignee. If something takes two days to deliver, why fly it?” he said.
YVR is served by 56 airlines, and all except the integrators and Cargojet, are belly freight carriers. In 2017, Hong Kong Airlines, Interjet, a Mexican airline, and Flair, low-cost Canadian carrier, began operations. This month, China’s Hainan Airlines will launch A-330 Vancouver to Shenzhen via Tianjin service, cementing its status as one of the best-connected airports to China within North America.
Vancouver International lost its only scheduled trans-Pacific freighter service after 22 years in early 2017 when Cathay Pacific moved its 747 all-cargo aircraft south to Portland International Airport. The capacity to and from Asia has been replaced with belly lift from Cathay’s A-350 and 747-800 passenger flights. An airport spokesman insists no airlines have dropped YVR in the last several years.
“We’re punching above our weight class and growing,” said Segat who said C$14.9 billion ($11.6 billion) in air exports and imports moved through YVR in 2016, the most recent totals available, a 26 percent gain over the prior 24-month period. Volume topped 313,000 metric tons in 2017, up 10.8 percent over the previous year, and air cargo traffic is 10 percent ahead so far in 2018, he said. Perishables, seafood, and pharmaceuticals all posted sharp gains. Segat said air freight growth outpaced passenger traffic last year on a percentage basis.
"Last year, air freight growth surpassed passenger growth on a percentage basis,” said Segat, who added the trend is continuing.
Montreal-Mirabel (YMX) International, one of the city’s two airport handling cargo, opened in 1975 and was touted by developers as a “super airport” designed for the coming supersonic air travel age that never materialized. It has, however, attracted integrators UPS, DHL, FedEx, Purolator, and several pure freighter airlines and occasional cargo charter flights. International and domestic passenger airlines and the t forwarding community are more concentrated Montreal-Trudeau International Airport (YUL) which is newer, larger, and closer to the city.
Montreal-Trudeau, with its network of TK destinations and extensive wide-body belly capacity, handles more air freight, 110,667 tonnes in 2017, up 7.8 percent over the prior year, according to a spokeswoman. Mirabel’s volume, was 95,352 tonnes last year, a 7.2 percent gain.
Truck congestion and delays, even in harsh weather, is “minimal,” said a cargo agent at Trudeau who handles Air France and KLM. “They’re quite organized here. We have few complaints.”
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