DB Schenker in it for the long-haul with cargo charter network

DB Schenker will continue its air cargo charter operation for the long-term and expects other forwarders to do the same despite recent market weakness.

Speaking to more than 400 delegates at a busy World Cargo Summit, DB Schenker global head of airfreight Asok Kumar outlined Covid-related developments that he expects to become permanent changes to the industry.

For one, Kumar said forwarders, faced with widespread capacity shortages during the pandemic, had started their own airfreight charter operations and these were here to stay.

At the peak of the crisis, he said, DB Schenker operated 58 flights per week to 15 different airports.

This has since reduced to 43 flights per week as the pandemic and capacity shortages have eased, but he is not expecting operations to end soon.

He told Air Cargo News that this was in part due to the fact that having control of the network meant it could operate to less congested airports with more of a cargo focus, while airlines tended to focus on the major gateways.

He pointed out that at some of these alternative gateways cargo could be on a truck within 2.5 to three hours of an aircraft touching down.

Shippers had also grown to appreciate this level of service. Meanwhile, demand for its own flights remained strong, he said.

“Is that going to go to zero because of the market slowdown?” he asked. “No – we will continue to operate our own-controlled capacity for the long-term future.”

Kumar also comforted airlines in the audience, saying that this didn’t mean freight forwarders would become their competitors.

He pointed out that around 16% of its volumes moved on its own network while the other 84% is still carried by partner airlines.

Kumar also highlighted other permanent changes brought about by Covid.

He said that he expected at least some of the shipping lines that have invested in air cargo operations over the last couple of years to remain in the market.

Meanwhile, freighter launches and conversion deliveries would continue as carriers looked to cater for e-commerce demand.

The involvement of finance departments and chief executives in air cargo procurement would continue due to the increased importance – and cost – of supply chain operations.

Alternative gateways would continue to succeed in attracting cargo as companies have seen the benefit of utilising non-congested airports.

Finally, supply chains will continue to diversify away from China as production sites in Southeast Asia and India grow in importance.