Business booming at Liège as e-commerce growth accelerates

7/14/2020

A €75 million project to establish a ‘smart logistics’ hub for Alibaba’s logistics subsidiary Cainiao at Liège Airport (LGG) next year is progressing according to plan and is set to further boost expansion of the cargo airport’s already growing traffic, which is expected to break records again this year, the airport’s VP commercial Steven Verhasselt has told Lloyd’s Loading List.

The planned 220,000 sqm facility to support the Chinese e-commerce giant’s cross-border trade, especially between Europe and China, is scheduled to enter service next year at Europe’s fastest-growing cargo airport.

“The building permit application has been approved and everything is ready to move forward,” Verhasselt confirmed. “The lockdown situation in Belgium, and the travel restrictions, have caused some delays, but a lot of progress has been made even during these challenging times. All the partners are moving ahead to be ready and operational in 2021 as scheduled.”

He highlighted the strong growth in cross-border e-commerce between China and Europe and that LGG, as one of the prime movers in the segment, has been consolidating its ‘pole’ position.

Eye-opening growth

“B2B e-commerce specifically, which is the fastest-growing product of the LGG cargo community, has for the past few months been an eye-opener to say the least. The systems were already in place for us to accommodate it and have now really delivered. At the same time, by being forced to rely on e-commerce (during the COVID-19 lockdowns) even the most hesitant buyers have now a proof of concept. So, we believe that cross-border e-commerce will be the ‘new normal’ and we are ready to meet the requirements.”

Returning to Cainiao and the recent reports that it plans a five-fold increase in its chartered flights – to 1,260 from 260 – over the next nine months, to reduce delivery times from 7-10 days to 3-5 days worldwide, Verhasselt declined to go into detail on what this would mean in terms of additional air cargo activity at Liège.

“We welcome the announcements made during the Cainiao Smart Logistics Summit,” he responded. “It was great to get confirmation of the expansion. We were lucky to have Willy Borsus, minister and president of the (Belgian) Walloon region, on the panel (at the summit) to emphasize the importance of Liege as part of Cainiao’s network. But we can only confirm that the number of (Cainiao) flights, and the cargo throughput of the network is growing strongly, and we look forward to it continuing on this path.

“What I can say is that preparations for the world biggest online shopping festival, 11.11 (in November), are already ongoing and demand for cargo capacity will surpass last year’s record numbers again. Alibaba, Cainiao and the whole of the Liege Airport Cargo Community are readying themselves for another peak period coming soon.”

2019 was a record year for cargo traffic at Liège, and provisional figures for the first six months of 2020 (H1) show that throughput was up 11% on the same period last year, Verhasselt revealed.

“We definitely hope to be able to consolidate this H1 performance in the second half of the year,” he added. “The high level of demand has put a lot of pressure on all service providers at Liège, but we’ll keep working hard to make sure the peaks in traffic don’t create dips in throughput times and impact service quality.”

As reported earlier this weeka ‘pop-up’ handling facility set up at LGG earlier this year to facilitate the import of medical supplies in the wake of COVID-19 is to continue in service until the end of July. It was scheduled to be stepped down at the end of June.

Verhasselt told Lloyd’s Loading List: “Due to the ongoing challenges to meet demand, we have agreed to extend the operations of the facility until 31 July. Although passenger services are resuming, the long-haul flight networks, which provide wide-body belly capacity, are nowhere near pre-COVID 19 levels. Demand for maindeck capacity remains high and LGG is demonstrating its flexibility in accommodating any freighter charter operations required.”

He said more than 10,000 tonnes of cargo had been handled at the pop-up facility since the start of the relief operation, adding: “With the support of all stakeholders, and with special thanks to WFS and AirBridgeCargo, it has been a success not only in terms of volumes but also in the quality of the operation which has surpassed all expectations.”

Handling more than 900,000 tonnes of transported goods a year, Liège Airport has grown and developed rapidly in recent years to become Belgium’s largest freight airport and the fastest-growing cargo airport in Europe.