EXTRANS GLOBAL - Air Freight News - Week 38 2024

Air Cargo General 

1. Air Cargo General

1) LH Cargo - First Direct Cargo Service Connecting Asia and the US (FRA-SGN-LAX)

• Reflecting the soaring demand for air cargo departing from Asia to the US ahead of the peak season, Lufthansa Cargo (LH Cargo), a German airline, announced the launch of its first direct cargo service from Asia to the US.
• The new cargo service will use Boeing 777 freighters, operating in a circular route between Frankfurt, Ho Chi Minh, and Los Angeles International Airport. LH Cargo also plans to increase the number of flights to various destinations in the future.
• Additionally, Lufthansa Cargo has announced increased flights to India and Taiwan in response to the ongoing growth in e-commerce and general cargo. In the Asia-Pacific region, weekly flights to Mumbai (BOM) and Taipei (TPE) will increase by one, while Chennai (MAA) will operate twice weekly in conjunction with Hyderabad (HYD) or Mumbai (BOM).
• In August, LH Cargo added Shenzhen (SZX) and Zhengzhou (CGO) in China to its cargo network, enabling the airline to operate 50 weekly flights to the Asian market. This increase in flights is due to the full operation of the 18th B777F, which was recently delivered.
• Furthermore, LH Cargo plans to add a weekly flight between Frankfurt and Tel Aviv (TLV) and Cairo (CAI) using Boeing 777F.

2) Hong Kong Air Cargo – Launches Twice-Weekly BUD Route Using A330-200F

• Hong Kong Air Cargo announced the launch of a new dedicated cargo route connecting Budapest, Hungary, and Hong Kong.
• The route will operate twice a week using Airbus A330-200F freighters, making it the airline's fifth new destination this year. This expansion strengthens Hong Kong's position as an international cargo hub.
• Budapest Airport, a key cargo hub for Central and Eastern Europe, handled a record 201,000 tons of cargo in 2023. This new route is expected to further enhance cargo transport between Hong Kong and Budapest, and the broader Central and Eastern European region, particularly meeting the growing demand in the e-commerce market.

3) Global Shipping Giants Expanding into Land and Air Transport

• Global shipping companies, which earned astronomical profits during the pandemic, are accelerating competition for “End-to-End” logistics services in preparation for an expected downturn. Moving beyond the traditional “Port-to-Port” model using container ships, they aim to dominate the entire logistics process, from storage to air, rail, and truck transport, all the way to the consumer's door. This strategy reflects a shift from the typical competition focused on economies of scale and freight rate reductions to transforming into comprehensive logistics companies during economic downturns.
• The background to this shift lies in the unprecedented logistics crisis during the pandemic, which led shippers to seek logistics companies capable of providing services from origin to destination. Shipping companies responded by aggressively acquiring land and air logistics companies, supported by their massive profits from the pandemic.
• HMM, under the management of creditors including the Korea Development Bank, canceled its sale to the Harim Group consortium earlier this year but proposed aggressive investment just six months later, indicating that future sales could still proceed. HMM has about 15 trillion KRW in cash assets accumulated during the pandemic, which it could use for investments.
• The top three global shipping companies—Switzerland’s MSC (19.9% market share), Denmark’s Maersk (14.3%), and France’s CMA-CGM (12.5%)—have already laid out future plans as comprehensive logistics companies. The “End-to-End” strategy is also being widely considered by other logistics companies like UPS, DHL, and FedEx, but shipping companies are transitioning more rapidly due to the nature of shipping.
• MSC Air Cargo, a subsidiary created in 2022, has expanded through the acquisition of an Italian air cargo company. Maersk followed its 2021 acquisition of Asia’s land logistics company LF Logistics for about 3.5 trillion KRW by acquiring a German air cargo company last year. CMA-CGM began air cargo operations between Asia and North America through its subsidiary in July.

4) US – Significantly Strengthened Air Cargo Pre-Inspection from October

• The US Customs and Border Protection (CBP) will significantly strengthen air cargo pre-inspections (ACAS) starting October 7.
• Cargo rejected during pre-inspection will be refused at the departure airport, so domestic forwarders are advised to exercise caution.
• The key requirement is specific item descriptions; vague terms like “Animals” will not be accepted—specific terms like “Horse” must be used. Similarly, terms like “Appliances” are not allowed; they must be described as “Refrigerator.” Brand names or trademarks are also not permitted.
• The CBP had previously allowed message corrections during a 30-day grace period, but starting October 7, misreporting could result in penalties.
• The US government also expanded the information required for electronic submission from August 21, increasing the number of mandatory items to at least 25 per Air Waybill.
• Since June 12, 2018, the CBP has implemented the ACAS program, requiring electronic submission of cargo information to the CBP for any cargo bound for or transiting through the US before it is loaded onto aircraft. This is part of efforts to prevent dangerous air cargo from entering the US.
• Although airlines are primarily responsible for transmitting this data to the US government, forwarders or other parties with more knowledge about the cargo may also submit the information.

5) Airlines/GSA Movement

• Air Premia (YP) will increase flights from Incheon to Newark Liberty from November 14, 2024, to August 29, 2025. The Incheon (ICN) to New York Liberty (EWR) route will increase from four to five weekly flights. An additional flight departing from Incheon on Thursdays and Newark Liberty on Fridays will be added.

Share this article :