Memorandum from Manchester Airports Group
Plc (MAG) (FT 26)
A. INTRODUCTION
1. This is the response of The Manchester
Airports Group Plc (MAG) to the Transport Committee's inquiry
into Freight Transport.
2. MAG is the UK's largest British owned
airport operator and comprises the airports of Manchester, East
Midlands, Humberside and Bournemouth. MAG handled almost 28 million
passengers in 2005 and 470,000 tonnes of freight. MAG welcomes
the committee's interest in Freight Transport.
3. East Midlands Airport (EMA) is the UK's
largest pure freight airport. Three of the world's biggest freight
integrator companies are based at EMA—DHL, UPS and TNT—and
in 2006 over 300,000 tonnes of freight passed through the airport.
4. "Pure" freight is carried in
dedicated freighter aircraft. This is distinct from the "bellyhold"
freight carried under the passenger compartment of many long-haul
passenger aircraft using airports such as Heathrow. Despite having
very little bellyhold freight, EMA is second only to Heathrow
in terms of total UK air freight.
East Midlands Airport
5. EMA's first class road links and central
location within 4 hours trucking time of 89% of mainland England
and Wales has helped it develop as the natural location for the
UK's express freight hub. Millions of pounds of private sector
investment have been made at EMA to establish state-of-the-art
facilities in response to the growing market.
6. EMA's hub role is a considerable national
asset in terms of the range of services and destinations available
to UK companies. The Future of Air Transport White Paper recognised
EMA as the leading airport for "pure" freight and highlighted
the importance of air freight to the future of the national and
regional economy.
7. East Midlands is the principal UK express
freight hub where aircraft from smaller bases on the periphery
of the network (the "gateways" or "spokes")
meet and transfer shipments both for domestic and onward international
travel.
Express freight industry
8. The express freight industry is considered
to be the "business class of cargo", and refers to guaranteed,
reliable, efficient, and integrated movement of goods and items,
mainly for business to business transactions in both domestic
and international markets.
9. Express freight connects 90% of the world's
GDP within 24 hours. The catalytic economic benefit of a typical
passenger flight has been estimated at £10,000 but because
of the high value of the goods carried, an express freight flight's
economic benefit is £58,000—nearly six times as great.
10. Air transport is only used by express
freight companies ("integrators") where other alternatives
are unavailable or unviable.
11. For long-haul and international next
day deliveries, air travel plays an essential role in what makes
the sector successful and attractive to business. UK business
increasingly relies on next-day and "just in time" deliveries,
which remove the need for large inventories and the storage of
spare parts.
12. A report commissioned by EMA and the
East Midlands Development Agency (emda) on the Economic Impact
of Express Carriers for UK plc (published in January 2006), by
Oxford Economic Forecasting (OEF) and Mott MacDonald, found that
the express delivery industry is one of the UK's fastest growing
economic sectors. It supports at least 72,000 jobs nationally,
and this has been growing at an average rate of 6% a year since
the mid-1990s—six times the UK employment growth rate. The
industry directly employs 4,700 and overall supports 10,200 jobs
in the East Midlands region.
13. Crucially, the report also found that
the "catalytic" impact on the performance of the rest
of the economy contributes £1.3 billion to the UK's GDP each
year. These catalytic impacts are captured through enabling better
and faster trade links to businesses and markets abroad which
assists business and regional economic competitiveness. This contribution
is forecast by OEF to increase to £5 billion a year over
the next twenty years. Overall the industry transports more than
£10 billion of UK exports each year, contributing directly
to national and regional objectives around international trade.
B. QUESTIONS:
MAG has chosen to focus on air freight only.
International distribution patterns involving
air freight increase carbon dioxide by up to 30 times that of
sea transport—what more can be done to promote modal shift
from road and air freight to inland waterway, shipping and rail?
How can the Government encourage and incentivise further efficiency
improvements?
14. Air transport has an important role
to play in the carriage of goods, alongside other modes of transport.
Air freight is predominantly used for next day delivery for business-to-business
transactions—as mentioned above UK business increasingly
relies on the swift access to world markets that can only be provided
by express air freight. Continued access to next day delivery
by express air freight is crucial in ensuring the continued competitiveness
of UK business.
15. Freight integrators are "multi-modal",
and road transport is still used wherever possible. However, the
options for express surface transport from the UK to international
destinations are limited, meaning that air is the best placed
mode to provide this service.
16. Similarly, the demand for urgent delivery,
and for goods to be collected at the end of one business day and
delivered at the beginning of the next, makes transport by air
essential for a significant proportion of the integrators' volumes.
17. In other words, the question of modal
shift is not simply one of air versus shipping, or rail versus
road. For urgent next day deliveries, such as important documents
or perishable cargo, there is often no alternative to delivery
by air.
18. It should also be remembered that international
shipping makes a contribution to global emissions. Shipping accounts
for approximately 5% global CO2, as opposed to aviation's contribution
of approximately 3% of global CO2 emissions.
19. MAG recognises aviation's environmental
impact and has lobbied for the industry to be included in the
EU Emissions Trading Scheme.
CONCLUSIONS
20. MAG welcomes the committee's interest
in UK freight and air freight in particular. Air freight plays
an important role in linking business to overseas markets and
in providing swift access for urgent business requirements.
21. MAG believes that air freight provides
one of many options for the transportation of goods. We believe
that the market, rather than Government incentives, should be
used to promote different transport modes.
October 2007
| 
