Cargo for airport viability 

Imagine travelling through Benin City airport in Nigeria from Lagos, the nation’s economic capital. The traveller goes online, orders plantain from Ohosu and it is delivered as the flight arrives. Same applies to someone travelling through Asaba, Osubi or Umuleri and orders yam tubers from Oyoko market in Abavo, shrimps from riverine Niger Delta communities, or vegetables from surrounding villages and cities close to airports in Nigeria and delivered as the flight arrives. There are many possibilities for leveraging on cargo along the lines of our predominantly agrarian population here in Africa to make our airports more viable.

Air freight not only plays an important role in supporting global supply chains, but also in providing much-needed relief to the aviation industry. While some experts believe that it is not completely clear how airports perceive the value of air cargo to their business, Africa and Nigeria particularly seem to show that policy makers understand the difference cargo makes to the viability of an airport.

The challenge will come from crafting an effective strategy in the face of the social and political challenges in Africa. There might be one or two lessons to learn from the continued operation of the airport in Israel in the face of the hostilities in the Middle East that could be applied in the face of Africa’s security challenges. This will be like borrowing a leaf from the telecommunication operators who have found ways to power base stations in parts of Africa and the Middle East where power supply is erratic and security a challenge.

Cargo operations generate significant revenue for airports through landing fees, storage and handling charges, and other related services. Historically, air cargo has been estimated to represent, on average, less than 10 percent of total revenue of airports, say experts. This data is said to  include aeronautical revenue (like landing and parking) from freighter movements as well as from the rental of land and facilities. These facilities are located either at the airport (ground handling terminals and freight forwarder warehouse) or off-site (logistics park). Cargo revenue also includes handling fees when the airport operator is engaged in cargo ground handling.

Air cargo facilitates the rapid transportation of goods, stimulating economic growth, trade, and development in regions surrounding airports. This calls for a strategy from African airport operators to integrate the economy of the local communities in which the markets exist into their operations. Traditionally, in some parts of Midwest Nigeria and East of the country, there are market days associated with different communities. If you miss an Nkwo market in one community, you go to Eke market in another or Orie and Afor markets in some other communities. Here the people traded the goods from their farms. Leveraging on technology and integrating host communities into these airports could be input in a strategic plan for cargo.

Cargo operations create employment opportunities in areas like handling, logistics, and freight forwarding. Air cargo is an important enabler of global trade and an engine for local, regional and national economic development. This translates into employment opportunities created across various industries that rely on import/export activity. Airports with significant cargo operations can become logistics hubs, attracting businesses and driving local economic growth. Air cargo enables fast and efficient trade, connecting businesses and industries to global markets.

Cargo revenue can offset passenger flight operation costs, making airports more attractive to airlines and supporting the viability of passenger services. This will reduce the dependence of an airport on passenger traffic, providing a buffer against fluctuations in passenger demand. This points to the fact that airports can support local industries as well as local markets and even international trade routes. Small and medium enterprises hubs while benefiting from the airport as an energy city with its stable power supply have easier access to markets. This could be planned so that these small businesses operate at night and so enable night landing in airports which did not have any.

Cargo demand drives investment in airport infrastructure, including cargo terminals, warehousing, and ground handling facilities. Infrastructure will come from data driven forecasts of cargo demand. Also, the quality of the infrastructure plays a significant role in attracting cargo traffic, as sufficient capacity is required to minimise ground handling-related delays. This means that those airports that have up-to-date cargo terminals are in a better position to compete. With the hot African climate, storage facilities and ease of taking out produce fresh from the farms to the dining tables in urban areas should be given adequate consideration.

Planning for cargo is essential for its success. The planning should look at the end-to-end journey of the user of cargo airport facilities so that the airport experience will encourage such a person or business entity to continue to use that airport. The stages the customer is expected to pass through should be known and all charges laid out transparently. Also, cargo traffic requires a combination of multiple factors to grow, such as, strong connectivity, robust infrastructure and quality processes. Connectivity is among the most important of factors – the availability and quality of air cargo capacity is central to the airport’s role as a cargo gateway or hub. Leading cargo airports boast wide network coverage with diverse options of airlines and capacity types (freighter and bellyhold). However, airports can start small and plan for expansion.

Other factors that lie outside of the scope of control of an airport, can strongly determine its cargo prospects. Ground infrastructure is critical in extending the airport’s catchment area to further inland markets and in increasing its competitive potential. The quality of customs processes can heavily impact throughput times, and this can make or mar the competitiveness of an airport. Regulations, which lie outside the airport’s control, as well as local political sentiments, are determining factors.

The intricate nature of the cargo supply chain means that many stakeholders in the airports will need to work together to effect change so that airports benefit from cargo in the drive towards increasing airport revenues, such that they remain viable. 

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