Tuesday, May 21, 2024

Maersk Air Cargo unveils Denmark-to-China freighter service

Ocean shipping and logistics giant Maersk on Monday opened a new air service between its new cargo hub at Billund Airport in Denmark and Hangzhou, China, in response to increasing demand, the company announced.

It’s the second Asia route established since parent company A.P. Moller-Maersk consolidated airfreight forwarding and an existing private airline under the Maersk Air Cargo brand last year to give businesses more seamless logistics options. A second China route to the U.S. is also planned, according to sources.

Maersk’s repurposed airline made its North American debut in late October with the first of three newly built 767-300 freighters purchased from Boeing flying twice weekly from Seoul to Greenville-Spartanburg International Airport (GSP). Maersk has outsourced flight operations to Miami-based Amerijet

Maersk said its internal cargo airline, Star Air, will operate three newly converted Boeing 767-300 freighters three times per week on the Denmark-China route. The three aircraft were leased from Ohio-based Air Transport Services Group (NASDAQ: ATSG), according to a previously announced order from Maersk and real-time flight tracking data. FlightRadar24 shows the first flight is en route and is scheduled to make a refueling stop in Tashkent, Uzbekistan. 

Maersk operated Star Air for many years as an outsourced provider of airlift for UPS and other express couriers in Europe. Using huge ocean profits, it branched out and expanded its fleet last year to provide direct air cargo service to its own customers as part of a strategic move to become an integrated logistics provider. 

“With the introduction of our new service between Europe and China, we have taken another leap with our customers in providing true integrated logistics,” said Michel Pozas Lucic, Maersk’s global head of air, in a news release. “We want to ensure that our customers have the visibility, reliability, and resilience in their supply chains. In this, air freight with scheduled flights and controlled capacity represents a crucial part of our customers´ end-to-end logistics needs.” 

Executives have set a goal of carrying about one-third of the company’s annual air tonnage within its own controlled freight network through a combination of owned and leased aircraft. The remaining capacity will be provided by commercial carriers and charter flight operators.

The inaugural flight marks the first scheduled air cargo operation between Denmark and Asia. The corridor from Billund Airport is expected to significantly increase access for high value and time sensitive cargo between Scandinavia, Northern Europe and the Asia-Pacific, Maersk said.

Denmark’s top exports include pharmaceuticals, machinery, electrical equipment, meat and fish, and optical equipment, according to government data. Maersk Air Cargo will also provide airlift for regional shippers around Denmark.

Maersk’s new service comes amid challenging times for air cargo operators. The yearlong drop in air cargo volumes accelerated in December but could be stabilizing after a 4% year-over-year drop in February and a recent uptick in March. BMO Capital Markets also estimated a 4.7% drop in freighter flight hours last month. But there are signs air exports from China are picking up after factories took a lengthy break for the Lunar New Year holiday and no longer have to deal with extreme COVID-19 restrictions. In the past couple of weeks, demand from southern China to Europe has increased, according to market watchers. 

Billund base

Basing flight operations in Billund is also noteworthy as part of a growing trend in which cargo airlines and logistics companies direct freighters to smaller, less congested airports where they don’t have to compete with passenger airlines and receive priority ground handling and other services. Maersk shifted its air hub from Copenhagen to Billund to support the expansion of the air cargo business. The proximity of the aircraft parking apron to Maersk’s warehouse facility allows for better control and faster cargo clearance. 

The airport facility in Billund covers 43,000 square feet for imports and 140,000 square feet for exports, with separate areas for cold storage, dangerous goods, scanning and container buildup and deconsolidation. Maersk’s pilots, maintenance personnel, flight operations and freight forwarding staff are co-located there.

Maersk Air Cargo has 22 767-200 and 767-300 aircraft in its fleet, with two production 777 freighters on order from Boeing.

U.S. market

Meanwhile, Amerijet is operating with more capacity on the South Korea-South Carolina service after two planes were out of service for several weeks for what Maersk described in an advisory to customers as technical issues. One of the aircraft is flying again, but the other hasn’t been activated, according to flight tracking databases. Company officials said the operational impact was negligible because demand for airlift during January and February was extremely soft.

A source not affiliated with Amerijet or Maersk said Maersk Air Cargo plans to connect the airport in Shenyang, China, the capital of Liaoning province, with GSP via Seoul. FlightRadar24 data shows a Maersk Air Cargo freighter made two stops this month in Shenyang. The flights are likely being conducted to test ground handling and other operational components before full commercial service is offered.

Maersk in October opened a freight station near Chicago O’Hare International Airport to facilitate quicker shipment flows for customers. The warehouse will also serve as a staging point once Maersk begins flights to its other dedicated U.S. freighter hub at Chicago Rockford airport, about an hour’s drive west of O’Hare. 

Ocean carriers CMA CGM and Mediterranean Shipping Co. have in the past 15 months followed Maersk’s lead by establishing cargo airlines of their own as part of a comprehensive logistics strategy. But Japan’s NYK Line recently decided freighter operations were a distraction from its core business and said it plans to sell Nippon Cargo Airlines this year.

Click here for more FreightWaves stories by Eric Kulisch.


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