Under the realignment, DB Schenker will transition its operations from an asset based model to a non-fixed asset model and will phase out their dedicated US based fleet. This portion of the business represents only 10% of their overall US business which was primarily serviced through their BAX Global integration. The US business serviced by DB Schenker’s international air, ocean, contract logistics and warehousing operations will remain fully operational and is unaffected by this realignment.

The following was given as reasons for the US realignment:

“As a result of the prolonged recession and spiking fuel prices, more and more of our customers are opting for expedited ground-based solutions instead of domestic air freight, and they are looking for partners who can provide transportation management services rather than transactional transportation,” said Heiner Murmann, CEO of Schenker, Inc.

Approximately 700 employees (primarily part-time positions) will be affected. The company has stated that they are working to redeploy as many employees as possible to other parts of the business.

With almost $3 billion in revenue, over 200 locations and in excess of 10,000 employees, DB Schenker is one of the leading logistics providers in the Americas. The company is currently ranked #2 in air freight, #4 in ocean freight and #5 in contract logistics and supply chain management in North America.

Commenting on the results, Mr. Herdman (AAPA Director General) said the following:

Over the first five months of the year, Asian airlines have seen 2.5 percent growth in the number of international passengers carried, whereas international air cargo traffic has declined 2.4 percent during the same period.  The combination of slower revenue growth and sharply higher fuel costs means airlines operating margins are under severe pressure.  Continued vigilance in controlling costs, and carefully matching capacity to the projected changes in demand will be the key to sustaining profitability.

Mr. Herdman also suggested that the decline in volume reflects some moderation in the pace of global economic growth when compared to a very strong rebound in global demand that we experienced last year.

It will be interesting to see if demand picks up as we head into the second half of the year.

Click on the image above for a larger view that you can print or download. For your easy reference, here’s a simple and quick list just by name:

Rank Airport
1 MEMPHIS (MEM)
2 HONG KONG (HKG)
3 SHANGHAI (PVG)
4 INCHEON (ICN)
5 PARIS (CDG)
6 ANCHORAGE (ANC)*
7 LOUISVILLE (SDF)
8 DUBAI (DXB)
9 FRANKFURT (FRA)
10 TOKYO (NRT)
11 SINGAPORE (SIN)
12 MIAMI (MIA)
13 LOS ANGELES (LAX)
14 BEIJING (PEK)
15 TAIPEI (TPE)
16 LONDON (LHR)
17 AMSTERDAM (AMS)
18 NEW YORK (JFK)
19 CHICAGO (ORD)
20 BANGKOK (BKK)
21 GUANGZHOU (CAN)
22 INDIANAPOLIS (IND)
23 NEWARK (EWR)
24 TOKYO (HND)
25 LUXEMBOURG (LUX)
26 OSAKA (KIX)
27 SHENZHEN (SZX)
28 KUALA LUMPUR (KUL)
29 DALLAS/FORTWORTH (DFW)
30 MUMBAI (BOM)

Via IATA.org:

“March results show that the pace of the upturn is strong. But the trauma of the recession is not over. The industry has lost two years of growth, and passenger and freight markets are still 1% below early 2008 highs. Nonetheless, the pace of improvement, based on an improving global economic situation, is much faster than anybody would have expected even six months ago,” said Giovanni Bisignani, IATA’s Director General and CEO.

The good news is that global airfreight is now within 1% of it’s high in early 2008. I would expect the cargo numbers to dip slightly in April due to the Icelandic volcanic eruption which shut down European air travel for 6 days.

Nearly all regions showed outstanding growth, with the Latin America region leading the charge with a 47.9% increase. Despite the continued sluggish U.S. economy, U.S. airfreight grew 32.2%.

Lets hope this is a sign of good things to come for the remainder of 2010. According to some of my colleagues on the freight forwarding side of the business, airfreight space out of Hong Kong is extremely tight and rates are on the rise.

IATA attributed the improvement in cargo demand to companies re-stocking depleted inventories. Although the numbers are improving, IATA does not foresee a quick rebound.

Once inventories are at desired levels in relation to sales, improvements in demand will level off until business and consumer confidence returns. Given the large amount of debt in all sectors of the economy, instant relief is not in the forecast,” said Bisignani.

In terms of regional volumes, all markets with the exception of Africa showed an improvement compared to June and the Middle East was the only market to show any growth.

Here is a breakdown by region:

* Falls by Asia-Pacific carriers, European carriers and North American carriers were 9.5%, 16.2% and 14.6% respectively.

* African carriers posted the worst performance at -25.9%. This was the only region to see a deterioration in freight demand compared to June when the region’s carriers posted a 20.2% decline compared to the same month in the previous year.

* Middle Eastern carriers were the only region to grow, posting a 1% growth in demand compared to July 2008.

* Latin American carriers posted a 1.2% fall in demand compared to July 2008.

Source – IATA.org

According to the article, airline passenger volumes didn’t fare very well either.

The Air Transport Association of America (ATA), the industry trade organization for the leading U.S. airlines, today reported that passenger revenue[1] fell 26 percent in June 2009 versus the same month in 2008 – the eighth consecutive month in which passenger revenue has fallen from the prior year.

Seafreight

K&N stated that although the global ocean market was characterized by declining volumes and fierce competition, the company was able to build upon their first quarter 2009 numbers by increasing volumes 10 percent from the 1st to 2nd quarter.

Airfreight

Although global cargo volumes have suffered greatly in 2009 (IATA figures show decline of 20% to 24%), K&N’s air cargo volume declined at a below market level of 19 percent. From the first to the second quarter 2009, K&N increased volumes by 10 percent.

Outlook

The Swiss Forwarder said it does not expect a substantial short-term improvement in the global economy and markets. “The company will therefore continue its focused dual strategy of disciplined cost management and market share expansion.”

Via IATA.org:

* In May, freight volumes rose by around 3% above April levels as manufacturers began to add to their product inventories in anticipation of an economic recovery. However, inventories remain 10-15% higher than normal in relation to sales levels, indicating that a significant recovery is not expected in the near term. Surveys of purchasing managers indicate we could experience a further improvement in air freight demand during June and July to levels that are 12-15% below last year’s levels.

* Most regions were relatively aligned in the severity of the freight declines. Latin American carriers were the worst performers with a 21.0% fall, followed by Africa (-20.0%), Europe (-19.2%), North America (-18.8%), and Asia Pacific (-18.1%). Middle East carriers were the exception with a 3.7% fall.

* Capacity adjustments in freight markets have been catching up to demand declines. Freight load factors are 3.6 percentage points lower than a year ago. Freight yields fell by 17% in the first quarter, reducing revenues by 35%. Given the continuing downward pressure on yields, even the improvement in volumes in May will likely come without a corresponding improvement in revenues.

Click here for the complete results.

In regards to the new service, Executive Manager Qantas Freight, Mr Stephen Cleary said:

“Vietnam is one of the few countries in the region that continues to see export growth, and we are very pleased to be able to support initiatives to grow trade between Australia and Vietnam and between Vietnam and the rest of the world,” Mr Cleary said.
“Our service will offer Vietnamese exporters one of the shortest transit times to the US and is conveniently timed to connect with our scheduled mainland China trucking services as well as passenger and freighter aircraft operating from Shanghai back into Australia.
“Importantly, we also have the option to add a second weekly service once global air freight volumes pick up.”

Via Delta.com:

“This strategic partnership puts us in a good position compared with other major alliances, which are extremely active on the world’s leading long-haul market. By integrating our trans-Atlantic operations, we will give our passengers what they desire: more choice, more frequencies, more convenient flight schedules and superior customer service,” said Pierre-Henri Gourgeon, president and CEO of Air France KLM. “By optimizing the use of our pooled resources, this joint venture will help us weather the current economic situation and protect our product offering.”

News of the joint venture came just weeks after Delta announced the grounding of the entire Northwest freighter fleet. The new JV will provide Delta with access to the freighter equipment of Air France, KLM and Martinair.

Here are the highlights of the JV from Delta’s official press release:

* More than 200 daily transatlantic flights (100 roundtrips)
* The joint venture represents approximately 25 percent of total trans-Atlantic capacity.
* Over 400 destinations in Europe and in North America
* Annual revenues estimated at more than US$12 billion (approximately 9.3 billion euros, reference year 2008/09).
* Over 100,000 employees at Air France KLM
* 70,000 employees at Delta
* The venture is a long-term, evergreen arrangement that can only be cancelled with a three year notice, after an initial term of 10 years.