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Freighter conversions plug capacity gap but have limitations

Converted freighters play an important role in the air cargo industry's efforts to add more cargo capacity to the market, but they come with limitations, delegates were told at the TIACA Air Cargo Forum. During the "Freighter at the Forefront" panel session on Wednesday, Atlas Air's chief strategy and transformation officer Martin Drew asked how much of a role freighter conversions play in fleet replacement and bridging the capacity gap until the new generation Boeing 777-8F and Airbus A350F come to market. Bernard De L'Estoile, senior director of freighter marketing at Airbus, said that while converted freighters help fill a gap in the market, "they will not be ideal for everything and (for every operator) because they come with challenges, (they) come with limitations as well for operations". "It will only bring part of the solution," said De L'Estoile. "A converted freighter to me works well if the utilisation is low, because as soon as the utilisation is high then fuel burn kicks in, especially on long ranges. "Clearly a line built with its fuel economy will make the business case flip in towards a line-built aircraft. So for me the conversion isn't a sort of fit-all solution." Responding to the same question, John Perdoch, Boeing's director, product marketing - freighters pointed out the technology, fuel efficiency and cost advantages that a newbuild freighter has over a converted freighter. However, he conceded that given the current demand for widebodies, conversions are an obvious, practical solution. "We are in a supply shortage in this industry, especially in the large widebody space, and so it's natural for the industry to look for a way to bridge their fleets today into their future fleets, and naturally, we're going to think about how conversions play into that space." There are three widebody passenger-to-freighter (P2F) 777 conversion programmes in the market currently. Israel Aerospace Industries' (IAI) Boeing 777-300ERSF passenger-to-freighter (P2F) conversion programme was first to market. The first converted aircraft entered commercial service in September last year and more recently, IAI, Ascent Aviation Services and World Star Aviation announced the commencement of Boeing 777-300ERSF passenger-to-freighter (P2F) conversions in North America. Meanwhile, in April, Mammoth Freighters received Supplemental Type Certification (STC) from the Federal Aviation Administration (FAA) for its 777-200LRMF (Long Range Mammoth Freighter) freighter conversion. The company continues to make progress on its 777-300ERMF programme and expects FAA certification of that variant this year. Kansas Modification Center (KMC) announced in January it had reached a cargo door milestone and expected to begin flight testing and the supplemental type certificate (STC) process for its 777-300ERCF freighter conversion programme in the third quarter. Speaking about the current 777 conversions, Perdoch said that they are a natural stepping stone to the 777-8F, given their operational similarities, which will also be helpful for crew and ground handlers. "I actually think it's a super smooth transition from today's fleet, which adds much-needed capacity in the state of the market. Maybe not quite as much payload, not quite as low a fuel burn as a newbuild. But they're 100-ton freighters. That's a pretty good capacity to add to the market, and we think there's absolutely a place for it in (the industry)." Aside from 777s, aviation advisory firm IBA noted earlier this year that Boeing 767, Airbus A330-200 and A330-300 conversions are also in demand.

XPO beats FedEx Freight & Old Dominion on volume growth - yet the bulls want more

Third-quarter update: XPO grew shipments almost 6% while Old Dominion and FedEx Freight shipped less, and its margins held up far better than the season usually allows, but its headline price growth slowed to 3.6%. Management puts that down to heavier, shorter-haul freight spilling over from a squeezed truckload market and says October pricing is already up 5%; the banks agree on the momentum and split on whether a stock valued on above-market pricing can afford a volume-led year.

Vessel operators need to prepare for compliance as UK ETS looms

Shipping operators face a new compliance burden under the UK Emissions Trading Scheme (UK ETS) - a £100 ($133) penalty for every missing allowance, adding financial pressure to a regime that will bring offshore vessels into scope from January. The requirements were outlined in a webinar hosted by Normec, which detailed the monitoring, reporting and allowance-surrender obligations facing vessel operators under the scheme. Operators of ships above 5,000 gross tonnes must monitor emissions of carbon dioxide, methane, and nitrous oxide, submit verified annual emissions reports, and surrender allowances to cover their liabilities. A key early hurdle is obtaining regulatory approval for an emissions-monitoring plan. Operators must apply within 42 days of their first maritime activity or port call in the UK, according to the webinar. Without an approved plan, operators risk complications with the verification process, with site visits and risk assessments among the requirements that must be addressed ahead of key deadlines. The first reporting period covers H2 26, before full calendar-year reporting begins in 2027. Annual emissions reports must be verified by 31 March 2027, while allowances covering the relevant reporting periods must be surrendered by 30 April 2028. Normec noted that the penalty for failing to surrender sufficient allowances was £100 per allowance, in addition to the outstanding obligation to surrender them. The scheme covers emissions generated while ships are at berth, as well as those produced during voyages, putting port activities firmly within operators' reporting calculations. Voyages between UK ports are covered in full, while different rules apply to international voyages, and services between Great Britain and Northern Ireland. For international voyages arriving at UK gateways, emissions from inbound port activities must be accounted for, even where the voyage itself is excluded from the scheme, according to the presentation. Offshore vessels are expected to join the regime in 1 January without a phase-in period, adding another segment of the maritime industry into the compliance framework. And the scheme's scope could widen further, with a proposal to include 50% of emissions from international voyages, although no outcome had been announced following a consultation at the time of the presentation. A registered shipowner is the default maritime operator responsible for compliance. An international safety management (ISM) company can assume that responsibility only if specified conditions are met, including a formal delegation. Delegations must be recorded for each ship, cannot be backdated, and changes in responsibility must be communicated through the reporting platform within 14 days. Operators must also keep fleet records current, and update monitoring plans when ships enter or leave their fleets. The webinar noted that, unlike the EU maritime emissions monitoring, reporting, and verification system, the UK scheme requires monitoring plans to be approved by the regulator rather than the verifier, creating an additional step for operators preparing for implementation.