JOHN WHELAN: Air freight deals up in the air over Brexit worries

More than €39bn worth of goods are air freighted annually from Ireland, but not all of it through our airports.

A recent study by InterTrade Ireland established that 26% of all air-freighted goods actually were moved by ‘air-truck’. 

These trucks collect goods for shipment by air, but as the nearest direct flight to the ultimate customer is not available from Ireland, the truck transits to the UK and loads the freight directly onto aircraft in Heathrow, or proceeds to Paris Charles de Gaulle or Amsterdam’s Schiphol Airport.

There is widespread concern amongst Ireland’s exporters that this critical ‘air truck’ transit arrangement, using the UK as a land-bridge to reach international airports with large freight hubs - will be jeopardised when Brexit fully kicks in, as the current system is facilitated by the EU free trade agreement.

Air cargo is integral to the supply chain for exporters to get their high-value products and perishable goods around the world. 

The pharmaceutical industry, Ireland’s largest exporter sector, relies on air transport for its speed and efficiency in transporting high-value, time and temperature sensitive cargo to global markets. 

Getting fish and other perishable food products from Ireland to many distant markets would not be possible without air transport. The thoroughbred equestrian market favours carriage of live animals by air.

The availability of air freight capacity has not kept pace with the growth in Ireland’s international trade for many years. 

The rise of low-cost carriers such as Ryanair, who do not handle any air cargo as part of their strategy to give rapid turn-around of aircraft, has added to the lack of capacity. 

Air-trucks became a default mechanism to meet exporters’ needs, but now have become an integral part of the Irish supply chain to reach international markets.

However, there has also been other pressure for air freight space from the rise in Internet buying globally using platforms such as Amazon, eBay, and Alibaba. 

The express courier service providers such as DHL, Fedex, TNT and UPS have become the delivery method of choice for those both buying and selling online. 

These express couriers use a hub and spoke system for delivery of goods ordered online.

In Ireland’s case, the most efficient method of getting the products to the end customer is via their air freight hubs in the UK, France, the Netherlands and Belgium. 

To do this they rely on ‘air-trucks’ leaving every night from the ports of Dublin and Rosslare to reach their airport hubs early the following day for onward flights to the ultimate destination.

Some exporters are not happy with the ‘air-truck’ phenomena, as they are paying for full air freight delivery, but part of the journey is by road and sea. And there is a school of thought which says that it has led to the demise of air cargo from Cork Airport.

The bottom line for businesses, whether exporting or importing, is the need for an effective range of logistical and supply chain solutions to remain competitive in international markets. 

The matter will be a test of the ability of Shane Ross, the new Minister for Transport, to get down to brass tacks with Chris Grayling, Secretary of State for Transport in the UK, on a key issue for Irish exporters.

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