Tuesday, January 21, 2020

Air Cargo Tonnage Figures are Up in the Air says Data Services Company

New Boys Weigh in with Revised Freight Calculator and Old Argument
Shipping News Feature

WORLDWIDE – It is not only one of the oldest chestnuts in logistics, but one that would make little sense to an outsider (or a lot of insiders for that matter). The relativity of tonnage set against cubic capacity. Whether you hark back to 80 cubic feet to the imperial ton for a British road haulage outfit, (or the later one tonne equivalent to three cubic metres), or the 1/1 ratio for LCL ocean transport, the system is back under the spotlight for air cargo.

The history of the particular system used for air freight however makes the other transport formula look simplistic. Many veterans will recall the air freight calculation for chargeable cargo was 6m3 to the tonne, this is because carriage by air is much more sensitive to weight rather than cube. Then at some point the fashion changed to freight volumetric charge calculation, however not as measured today.

Before October 1981 all calculations used a factor of 7,000 cubic centimetres i.e. a pallet measuring 1 metre on all sides and weighing 150 kilogrammes was calculated as 100 x 100 x 100 centimetres = 1,000,000 which was divided by 7,000 = 143 kilogrammes (so the chargeable rate is the 150 kilos). After that date the ratio changed to 6,000 making the same goods equivalent to 167 kilos, therefore chargeable on cube.

In 2002 the international Air Transport Association (IATA) put a cogent case (revision of Resolution 502) for the ratio to change again, saying that cargo volumes carried by modern aircraft had changed over two decades and proposing finally a ratio of 5,000, making our theoretical pallet ‘weigh’ 200 kilogrammes.

IATA went on to point out that aircraft weight & flight /distance uplift capabilities meant modern planes such as Boeing and Airbus passenger jets now had the capability to carry in excess of 25 tonnes weight with a usable space of 72m3. This meant if all freight carried was charged at 6m3per tonne the approximately 72m3of ‘usable’ space would generate only 12 tonnes chargeable weight.

IATA proposed either a change to the road haulage standard of 1 tonne equalling 3m3, or the sea freight standard of 1 tonne to 1m3, but accepted that the market impact would be too drastic and that therefore the 5,000/1 ratio would be preferable.

That argument raged until 2005 when it was dropped (although this ratio is actually used by some carriers for certain consignments), but now data service company CLIVE, which specialises in air transport matters, has raised the point that it believes the global utilisation of air cargo capacity is 35% higher than the traditional industry indicator based on its own ‘dynamic load factor’ analyses.

CLIVE’s Managing Director, Niall van de Wouw raises the old IATA point saying refreshing the way air cargo capacity usage is measured to reflect modern day reality will strengthen the airlines’ voices with all stakeholders, not least airports, slot coordinators, legislators and aircraft manufacturers.

According to van de Wouw underpinning this new way of thinking by CLIVE Data Services’ award-winning ‘Selfie app’ is the realisation that air cargo load factors based on weight utilisation now paint a misleading picture of how full flights really are. He comments:

“This [anomaly] is caused by the methodology used. Traditionally, the amount of cargo flown in kilogrammes is divided by the level of cargo capacity in kilogrammes. But, the reality for the vast majority of wide body and freighter flights is that it’s the cargo capacity in cubic metres which is the limiting factor, not the cargo capacity in kilogrammes. Consequently, existing load factors, based only on weight, underestimate how full planes really are, and thus give a distorted picture of how the industry really is performing.

“The fact that flights nearly always ‘cube out’ before they ‘weigh out’ is a result of the aircraft’s higher capacity density (available kilogrammes per cubic metre) than the average density of the goods moved by air. Looking ahead it is very likely that this discrepancy in capacity density and cargo density will further increase. On the capacity side, we have new planes entering the market which can lift more kilogrammes of cargo per cubic metre than ever before. And, on the cargo side, the surge in e-commerce traffic will further decrease the average density of the cargo flown.”

“We therefore believe it is time for a new yardstick: the dynamic load factor. To support this change in thinking, we will now be publishing this dynamic load factor analyses each month. It considers both the volume and the weight perspective of the cargo flown and capacity available. The analyses are based on flight data shared by a representative group of airlines operating to all corners of the globe. We strongly believe that this new yardstick will create a better understanding and more appreciation for the industry at regulatory and governmental levels.

“Going forward, in the first week of each month, we will be reporting an overview of the load factor trends for the previous month to ensure the industry has access to both the most accurate and most recent data.

Photo: CLIVE claims the results of this new analysis will paint a more realistic picture of how air cargo capacity on a global level is being used.