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Aviation History
1981
1981 - 3326.PDF
Containers: a liability to the airlines? By NICK BROUGH in New York and DAVID LEARMOUNT in London "THE ORIGINAL concept [of con- tainerisation] was for a shipper to pack a container at his door and transport it to the airport intact. At the end of the journey one consignee would collect it and unpack it on his own premises. This is an idealistic view of the story. We have found in practice that few accounts generate enough freight to use containers suit able for large aircraft such as we operate." So says Richard Haberly, Flying Tigers' v-p, eastern region. In this brief statement, Haberly touches on almost all the points raised at the Third International Air Cargo Container Conference held last month in New York. He implies there is something wrong somewhere: don't shippers pack, nor consignees unpack containers? Then who does? And who should? If present accounts don't fill big containers and big aeroplanes, why does Tiger operate either? Finally, if containers are not being used as they should be, why carry all that expensive excess weight? The cost in fuel of carrying con tainers, which are much heavier than pallets, was the peg on which all the conference discussion was hung. But it gave the anti-containerisation lobby plenty of room to point out reasons why containers may be all very well for truck-ship-truck intermodality, yet of more limited value when the goods have to fly. While nobody doubts the opera tional convenience of containers, the arguments revolve around their economics: is it cheaper to spend more on ground handling and fly the freight on lightweight netted pallets than to face extra fuel costs and use containers? No-one came up with a direct answer. But Pan Am's director of cargo services Louis Castellano thinks containers are expensive for many reasons. "We have no less than 17 different types of containers and pallets, rang ing in cost from $125 to $13,000 and in weight from 901b to 2,2001b. If we could reduce to five types we could cut our inventory value from $9 million to $4 million, save an addi tional half a million a year in [con tainer] repair costs, and a further $4 million in fuel costs due to lighter tare weights." Castellano advocates the use of containers only in "very special circumstances." He proposes collapsible fibreboard boxes mounted on pallets and held firm by nets. This would give container rigidity with less weight, would end repair expenses because the boxes would be dis posable, and by being collapsible they would occupy very little space if they had to fly one way empty. Experi ments with these are underway. Forwarders like containers because they pay a lower rate to the airline 1234 for pre-packed container loads than for a bulk consignment of small pack ages. Shippers like containers if it means their goods can go door-to-door in them, particularly where the load consists of delicate or small high- value items. The trouble is that con tainers are not always available be cause they are expensive, thus there is a limit to the number the airlines are prepared to own; and the carriers don't like letting them out of their sight for long either. The fibreboard boxes idea would solve these prob lems. Castellano wants to offer for warders the lowest rates for using pallets which they build up them selves, so that containers become less attractive and the airline saves on handling costs. Trans World Airlines' cargo direc- is evident." He obviously does not con sider a pallet to be a unit. Flying Tigers' Haberly again, on why intermodality should not be the sole object of worship some believe it to be: containerisation has not led to the slick, problem-free interchange envisaged 20 years ago, he says. Con tainers are heavy, and the square cross-section of the big Ml and M2 containers, which makes them ideal for intermodal use, at the same time means they do not fully exploit the circular cross-section of an aircraft. You cannot have it all ways. "Con tainerisation does aid our cargo sys tem, but not to the extent that we should offer large discounts to shippers who use containers," Haberly says. If shippers and forwarders want to send land- and sea-going containers tor Wayne Ritchie likes containers. But that appears to be partly because he sees cargo only as complementary to passenger operations. Since 1979 TWA has not operated pure freighters, and the shape of belly holds makes containers the best way of using the space. The airline is "as committed to cargo as ever," but has not the confidence in market growth forecasts to go for widebody freighters. And Ritchie points out that new fibreglass belly hold containers offer weight-savings of 40! per cent. American Airlines operates six Boe ing 747-lOOFs, and is dedicated to using the 20ft M2 container—the nearest thing to an ideal intermodal unit. It weighs a ton, carries up to 25,0OOlb, is similar in size to the truck/ship 20ft container, and has the same corner castings for lifting. But it can't take other containers stacked upon it. George Shipman, American's vice-president freight marketing, points out that "Shippers like the M2. They can keep their trucks moving because it only takes 15min to unload an M2 from a truck." Boeing comes in on the side of containers. Phil Peoples, Boeing's director of airfreight systems, points out that the average package carried by airlines weighs between 251b and 501b. So it takes 5,000-10,000 pack ages to fill a 747: "The need to unitise by air, he continues, then they should not expect rates which reduce the air lines' yield. Finally, he points out, there are many organisations and parts of the world where the handling equipment does not exist to take full advantage of containers. On container capital cost there is a solution: leasing from a pool. But though leasing companies own 58 per cent of the maritime containers in use worldwide, the airlines do not seem to have cottoned on to this idea. Perhaps because cargo is given too low a priority in the thoughts of air line management. Airlines still carry only 1 per cent of the world's cargo. Steven Serepca of CTI, the world's largest container leasing company, points out that leasing could help alleviate airlines' financial difficulties by allowing them to cut investments. Airlines cannot afford not to ex ploit the cargo capacity of their aero planes. Passenger yields are low, and and even Sir Freddie Laker now car ries cargo on his Skytrain. But two main factors are preventing efficient freight operations: reluctance to in vest in the non-passenger side of the business, and some remaining (but persistent) union problems. Container technology must continue^ to develop, and new rates structures must be created to encourage only discriminating use of containers. FLIGHT International, 24 October 1981
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