VIE’s Cargo Day 2024: Cargo in the semi-limelight

Vienna International Airport hosted its second annual Cargo Day on 22OCT24, bringing around 160+ interested parties to its new conference and innovation center, to network, present, and discuss the challenges and opportunities shaping the air cargo industry. There was certainly an ambience of opportunity given the healthy number of logistics students in attendance from Vienna’s WU university, but it was also clear that despite the repeated emphasis on the need for collaboration, when it comes to a unified cargo focus, Vienna Airport faces its greatest challenges from within.

Turning up the volume on cargo at VIE for a day. Image: CFG/B. Gledhill

Full marks for effort on the part of Ralph Rösener, Manager Cargo Business Development, Vienna Airport, who opened the event and is proactively involved in positively marketing the airport to potential new cargo customers. In his opening address, he outlined the wish to build on the first Cargo Day’s discussions from the previous year, where the emphasis had been on sustainability and hydrogen technology, and to offer a platform for more innovation and networking. The global role of cargo faces an increasing number of challenges and Cargo Day 2 should therefore explore all the possibilities for the industry’s future. Among the challenges stated over the course of the day, were the ongoing double-digit growth in demand pitted against a lack of capacity, leading to higher freight rates and aircraft operating at high utilization. Other examples were e-commerce-related risks, cybersecurity risks, and general aviation safety in an industry under pressure.

A perfect breeding ground for cargo
If you take a look at Vienna Airport’s services, the ingredients for a potentially thriving cargo segment are all there: 24-hour airport and customs operations, a seriously good emphasis on sustainability and the environment, and substantial investments in office and warehousing facilities, notably in pharmaceuticals, which saw its own dedicated conference over the following two days, 23-24OCT24. The airport celebrated longstanding relationships with Korean Air Cargo (20 years), and Emirates (20 years), this year, and naturally has a close relationship with Lufthansa Cargo – one of the co-sponsors of the Cargo Day event – given that the Lufthansa Group plays a significant role in the airport’s business success.

Passenger this, Passenger that…
Yet, both the opening presentation by Prof. Dr. Günther Ofner, Joint CEO & CFO of Vienna Airport, as well as Route Developer for East Asia, SE, Asia, and Oceania [the airport’s most important cargo regions, by the way], Ursula Pusch’s explanation on how routes are strategically considered and steered, focused almost entirely on tourism and the future of aviation from the point of view of the passenger business. In fact, when CargoForwarder Global raised the question as to how cargo figures in route planning, Pusch’s frank answer was that cargo does not bring in as much money as passenger. Apparently, a different department exists for freighter steering, but oddly enough, that department or contact was neither named nor present.

Clearly, the passenger business is the number one focus for any new routes or capacity increases at Vienna Airport in its goal of attracting more airlines, more destinations and increased frequencies. Yet the air cargo industry cannot survive on bellies alone, and the airport’s stance here appears oddly outdated and short-sighted, particularly in the aftermath of the pandemic – and not to mention, a flourishing cargo airport just down the road, in the shape of Budapest (BUD), which held its own Cargo Day a couple of weeks beforehand. CFG reported.

Cargo is six times more financially significant
Those focused purely on the passenger business, would do well to ask TIACA’s Glyn Hughes for his slide on the significance of air cargo in global economies. He used his welcome slot to spread the much-needed message yet again: that while tourism’s global economic contribution in 2023 was a staggering USD 1.4 trillion, air cargo’s value during the same time was USD 8 trillion. In plain words: the air cargo sector is nearly six times as valuable as tourism.

Vienna has a lot to be proud of
Despite air cargo’s lower-class (or maybe that should be ‘belly-class’?) status, those actively involved in air cargo at Vienna Airport, have much to be proud of. “Well done, Vienna Box Kickers*!” was Sam Okpro’s message in his presentation when he echoed Michael Mottl, Vienna Airport’s Head of Customs and Documentation’s figures on the airport’s cargo performance. Vienna has seen record-breaking months this year, with cargo volumes up 18.8% from JAN24 to AUG24. JUL24 saw 25,000 tons of cargo in what is usually a quiet month – and next to MAR24, was the strongest month so far. “This year is completely different to every year before,” was Mottl’s verdict, and at 4.4% over 2019’s cargo figures, “It looks like cargo is back again!

Belly capacity increased from 37% to 41% this year. Freighters make up 29% of business, and trucks 30%. Mottl pointed out that Vienna is growing faster than many German airports, but admittedly not as fast as Budapest. Imports make up 55% of the business, Exports 45%. The Far East, at 72% market share, is by far the hub’s most important focus. Vienna Airport’s recent CEIV Lithium Battery certification was triggered by a request from Korean Air Cargo, and the airport illustrated a number of other innovative measures currently being worked on.

e-commerce up, general cargo going nowhere
e-commerce is the main driver of cargo volume increase,” Mottl stated, warning that general cargo is facing challenging times, and the industry in general is plagued by uncertainty in the consumer markets, international crises, and EU overregulation and bureaucracy. Despite 25 years of talking about going paperless, paperwork is massively increasing, and he believes: “We now have 50% more paper for the same amount of cargo, compared to 10 years ago.” Hence, a Cartken initiative being trialed to autonomously transport paper documents to the aircraft.

A cargo milk round**
Taking a look at the booths at the Cargo Day 2, which included freight forwarders, specialist pharma couriers (in preparation for the following two days where the focus was 100% on pharmaceuticals transportation), and airlines, training clearly stood out as a focus in the shape of the WIFI (the Austrian Chamber of Commerce training institute), the Zollakademie (Customs Training Institute), and – not often seen at cargo conventions, but also a large factor in global transportation – the Austrian military logistics school. From that perspective, Vienna’s Cargo Day 2 did well to inform and possibly attract the large group of WU students to a future in air cargo logistics – whichever form it may take.

“Paddle before you know the wave is good!”
One eye-opening and entertaining highlight was Prof. Dr. Sebastian Kummer’s (Vienna University of Economics and Business) exploration of the potential of AI in freight and supply chain management. He illustrated its role in improving forecasting accuracy and tackling industry challenges, and highlighted AI’s use for predictive analysis, route optimization, and crisis mitigation, while also cautioning that reliance on technology without transparency and oversight, poses risks. Kummer observed that as AI adoption grows, companies with limited resources often benefit more from the efficiency gains than those already skilled and achieving. He surmised that air cargo’s slow move towards AI could be due to the large focus on safety and security. Nevertheless, he recommended that AI can be used in almost all freight transport processes and saw its greatest potential in route planning and handling optimization. “It is better for single tasks than business intelligence,” he said, and encouraged the audience to try it out and learn from “hopefully not too many errors!”. His closing motto was: “Paddle before you know the wave is good!”

*‘Box Kickers’ are what passenger colleagues in North America call their cargo counterparts.

**‘Milk round’ is the term used in the UK for the semester in which companies visit universities to attract and recruit their graduates

spot_img
spot_img

LEAVE A REPLY

Please enter your comment!
Please enter your name here

See Also