Air cargo also disrupts supply chains as goods spill out of warehouses.

by Doug Cameron | UPDATED December 23, 2021 05:30 AM EST

Freight flights boom O’Hare, other airports closed; Shippers are increasing staff to ease jams

Cargo flights this year provided a solution for producers of consumer electronics, machine parts and toys struggling to move goods through rail and ports. After this there was a jam at the airport.

Labor shortages at air-cargo hubs such as Chicago O’Hare International Airport during the fall have disrupted operations for ground-handling companies that land planes, and leave luggage unloaded. Airlines, handlers and freight companies said they are working to expedite loading and security checks, harness warehouse robots and trained sniffer dogs.

O’Hare, America’s fifth-busiest airfreight hub by volume, has been a US focus for cargo pileup problems during the fall, handling and airline executives said. The lack of staff to unload planes and sort shipments, as well as drivers to take them away, left baggage in the airport staff’s parking lot.

“We had cargo sitting in warehouses for weeks,” said Warren Jones, vice president of business development at Alliance Ground International, O’Hare’s largest cargo handler. Alliance, which typically handles 250 flights a week to Chicago during the fall season, closed about 50 flights in October and November so it could deal with existing customers.

Labor shortages have disrupted the rhythm of an air cargo industry, which carries 30% of the world’s trade, according to the International Air Transport Association. Cargo officials said shortages have eased in recent weeks, especially after supplemental unemployment benefits ended in September. Officials said labor issues have not intensified with the latest infection surge due to the Omicron version of COVID-19.

Global trade data shows the impact of the standoff during what is traditionally the busiest period for airfreight ahead of the holiday shopping season. According to IATA, a trade group, air cargo shipments typically increase in the second half of the year, generating about 30% of annual industry revenue in the last quarter.

According to Clive Data Services, an Amsterdam-based consultant, while business traditionally grew every month in the last quarter of the year, air cargo volume fell by 1.2% last month and planes took off.

“Volumes in November were lower than in October, which is quite remarkable in any year,” said Niall van de Vau, Clive’s managing director.

Mr van de Vouw said planes were leaving airports in Asia without a full load due to insufficient staff to pack and then land at the hub. Chinese airports were hit by COVID-19 restrictions, while airports in Los Angeles, New York and Amsterdam faced staff shortages, with pallets and containers waiting on the tarmac, according to Mr. van de Vouw.

Many cargo flights depart and arrive at night, Mr van de Vouw said, and time pressures created by long airport curfews to avoid local noise restrictions compounded the problems.

Industry officials said the worst of the impasse was being addressed, with ground-handling companies and airports using their own trucks to move goods to and from warehouses. Some have asked customers such as manufacturers to fill pallets used to carry cargo on board with the same type of luggage, so they do not need to be broken and repacked at the airport.

While those measures have provided temporary relief, they are inefficient and push down the supply chain, said Robert Fordry, executive vice president of cargo at UK-based John Menzies plc, one of the world’s largest ground handlers. Mr. Fordry said, using his own drivers to haul cargo to and from the airport, Menzies left elsewhere, and the pallets would eventually have to be broken down, so that the goods could be sorted to their final destination.

Menzies and other cargo handlers said they raised warehouse storage rates in an effort to encourage freight forwarders, who arrange trucking for retailers and manufacturers, to pick up goods more quickly. Globally, the company’s cargo volumes are running 15% above 2019 levels this year, and analysts expect profits this year to more than double from 2020.

O’Hare responded to the freight backlog by opening Terminal 5, which is usually reserved for international passenger service, as well as handling cargo-only flights. The Chicago Department of Aviation said the terminal has now returned to passenger flights only, but it has also created a dedicated office for new cargo-handling staff to process security and customs clearances, including extensive background checks. .

The Cargo Handlers Alliance said the office has helped cut processing times for new fares by a third to more than 60 days.

With airport warehouses full, operators have taken over the surrounding space. Over the summer the Alliance invested $17 million in a 253,000-square-foot facility near O’Hare to sort imported cargo before handing it over to freight forwarders.

The Alliance’s Mr Jones said that sorting out the airport’s incoming and outgoing loads makes it easier for goods to catch their flight, but that off-airport facilities have the advantage of being larger.

New global cargo screening rules that come into effect on July 1 require all loads to be screened before takeoff, a change the industry has been preparing for the past two years. Using sniffer dogs is more cost-effective and faster than using X-ray machines, handler officials said, and the baggage can be more easily dispersed for canine inspections at large off-airport facilities.

During the fall cargo operators ramped up efforts to improve efficiency. Oscar de Bock, chief executive of Deutsche Post AG’s DHL supply chain unit, said it includes technological rollouts ranging from more advanced data analytics to robots and self-driving vehicles that can move around warehouses to grab loads.

Menzies and other operators have increased pay and offered signing bonuses to retain and attract employees. Menzies received $122 million in federal government support in the first half of the year to support wage costs. Mr Fordry said employee welfare and benefits were a priority, as the company expects the current boom in business to last through 2023.