Working as a key logistics provider for the energy sector and related industries, freight forwarder deugro is no stranger to the heavy transport of outsized project cargo by land, sea or air. In an interview, Pavel Kuznetsov, head of air chartering at deugro, gives a rundown on the nuisances of handling and flying mega shipments by air amidst transport curbs and congestions across every mode.
Can you give us a brief description of deugro? What’s your specialty and where do you operate?
deugro is the industry-leading specialized project freight forwarder with a global network of offices. Offering complex and non-standard air freight solutions as well as air chartering are just two of our key competencies.
Given the Russia and Shanghai situation, have you been able to secure capacity for transporting outsized cargo shipments by air? What’s the best way to transport project cargo right now?
The air freight market has experienced a substantial impact on both scheduled as well as charter flights due to the situation in the Ukraine.
Used to having a fair share of the international air freight market, Russian carriers are now unable to operate in many key regions, meaning the number of options available to clients is lower. Besides that, many cargo and passenger airlines have had to reroute their flights around the Russian and Ukrainian air space. Some flights on the EU–Asia–EU lane have been canceled altogether. By operating these same flights with longer routes, fuel consumption increases and with it, the prices in general. All of this has taken its toll.
The niche of heavy and oversized air freight has been impacted the most. The pool of Antonov and Ilyushin aircraft still available on the market has become even more limited than it used to be. The iconic Antonov-225 Mriya (which means “Dream” in Ukrainian), the biggest freighter aircraft ever built and literally a dream of everyone dealing with air freight and air chartering, was tragically destroyed. There will be—in the near future—no substitute for this aircraft with comparable capabilities.
These developments make finding a suitable solution for heavy lift air freight even more challenging. While the landscape has changed fundamentally, we kept working closely with our partners and were able to identify alternative options for our clients. When there are only a handful of aircraft in the whole world that can do the job of transporting certain out-of-gauge equipment, you of course need to be able to make decisions quickly to secure the required aircraft. Leveraging the relationships we have built for years, coupled with our own in-house understanding of the airline business, has helped us tremendously to successfully navigate and stay on top of the situation to secure both needed capacity and favorable conditions for the needs of our clients.
As for the Shanghai situation, with the lockdown there the shortage of flights and capacity has not been the only problem—trucking the cargo to and from the airport has also become a challenge. And the Shanghai lockdown is not an isolated case; we are seeing similar dynamics and challenges developing at other airports where, with the local growth in COVID-19 cases, the carriers are canceling flights or have stopped accepting new bookings. The only solution here is constantly keeping an eye on those developments and routing the shipment through alternative airports.
When the market gets challenging like it is now, I see it as an opportunity for specialized companies like ours to demonstrate our expertise and ability to think outside of the box to offer reliable solutions to our clients.
Which regions or sectors do you think will see huge demand for deugro’s services?
If we talk about the demand side in the current situation, of course we have seen a reduction of activities involving air freight in the projects related to Russia. But at the same time, we are seeing strong demand in other regions, for example for projects in the Middle East and India. With energy resources being a hot topic in the world, I am sure we will continue to see a steady need for air freight solutions to transport outsized equipment for this market.
Which factors do you think will add pressure to freight and logistics in the current environment? Do you think air cargo will sustain its momentum over the next 12 months?
Despite current impacts related to the situation in the Ukraine as well as the lockdowns in China, which certainly have an influence on capacity and pricing, I think the air cargo market will continue to remain strong over the next 12 months. We will continue to see interest from clients in air freight, since ocean freight will continue to contend with its own disruptions. So, even with all the factors adding pressure on the supply side of the cargo market, it will remain competitive enough to be in strong demand.