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Air cargo warned: Be prepared for Sino-Euro rail to take your customers

SHIPPERS are increasingly attracted to rail freight between China and Europe, and that threaten air cargo, DHL Global Forwarding Eastern Europe chief Kerem Inanc warned delegates to a Caspian Air Cargo Summit in Baku, Azerbaijan.

"The rail connection is with fast trains, and it is developing quickly," he said, reported London's Loadstar. "And it's finding acceptance among many customers."

It is a myth that the only low-value goods go by rail, he said. Instead, they are typically high-value goods and lifescience products carried by electronically sealed, temperature-controlled, containers.

"Services run like a Swiss watch," he said. "There are no major fluctuations, no capacity restrictions and LCL shipments are now taking place very successfully. This is a major challenge for air cargo."

Mr Inanc said DHL customers were also looking for something new and innovative. "Everyone wants new options, to change their supply chain models. They want new ideas - and this is one."

He also warned that air freight was lagging other modes in technology and data sharing.

"The flow of information is as important to customers as the flow of goods. And some modes are one step ahead of air cargo."

Kuehne + Nagel's perishables marketing chief Natasha Solano, spoke of the rail threat to air cargo.

"Temperature variations are far greater in air freight than sea freight," she said, adding that modal shift would come about because of lower emissions, lower costs and a better cold chain.

"Air is losing market share to ocean," she said, citing a new service by Maersk, launched in the second quarter this year, between Mombasa and Antwerp with a transport time of 24 days. "There is a cost saving of 20 per cent over air freight."

And savings were even greater, she added, on Colombia-Europe services, which had better infrastructure and were 40 per cent cheaper than air. It's a tradelane that has become the largest for containerised flowers.

However, air freight still had some advantages - freighters in particular, she said.

"There is more interest in freighter flights as the temperature fluctuation is less significant than it is in bellies. And soft fruit producers prefer fruit to go by air."

She cited one berry company which had saved EUR300,000 (US$338,382) in claims by sending its fruit on freighters.

And she said, global trends meant air would still have a place in the perishables logistics market, owing to increasing global demand for imported products and processed foods, as well as greater consumption of fruit and vegetables in new markets.