Platts’ ambitious plans to develop Heathrow as a European cargo hub
11 / 11 / 2015
Heathrow Airport cargo boss Nick Platts is a man on a mission: to make Heathrow the preferred European air cargo hub of choice, and he has the money to realise that ambition.
Platts, previously head of ground handling at Heathrow, was appointed cargo boss in May at the UK’s number one airfreight gateway – handling 1.5m tonnes in 2014.
After 12 months of canvassing wide-ranging industry opinion from airlines, forwarders, truckers, shippers and other key stakeholders, Platts is a man with a plan and the funding to carry it out.
A blueprint for the doubling of cargo volumes at Heathrow within 15 years was announced last week by Heathrow chief executive John Holland-Kaye, who spoke of a vision to invest around £180m in “revolutionising” the UK hub’s airfreight facilities, including a new pharma storage area.
After that speech by Holland-Kaye, Platts told Air Cargo News: “It is fantastic news and I am finally able to talk about our strategy that we have been working on for a good 12 months.
“The end result is that with our strategy worked out I am now on a mission to deliver it and to make Heathrow one of Europe’s leading cargo airports.
“It is right for our airlines, it is right for businesses and it’s right for our passengers as well.”
As a regulated airport, Heathrow’s owner has to negotiate every five years with the Civil Aviation Authority as to how much it can charge the airlines and how much it can earn from its asset base.
The current round, or Q6, ends in 2019 when the next round, H7, kicks in.
The end result is that Platts expects to have five major process changes in place by the end of 2017, followed by the next round of investment – the approximate £180m of investment – that will deliver such items as the pharma centre.
Heathrow is an important facilitator of the British economy, with around 70% of UK air cargo passing through Heathrow, equivalent to 26% of UK trade by value.
Said Platts: “We are investing millions in revolutionising cargo at Heathrow to become one of the leading airports in Europe, an investment that is going to halve cargo throughput times, and streamline processes to make Heathrow better for airlines and forwarders.”
As an airport that secures 95% of its freight volumes via passenger aircraft bellyholds – more than Frankfurt and Schiphol combined – Heathrow has to prepare for the next generation of widebodied aircraft with their capacious cargo holds, often labelled as mini-freighters.
Said Platts: “These quiet aircraft are going to give us the capacity to grow and so we need to improve our cargo infrastructure as well, to support that growth.”
The initial improvements will see better cargo control post processes “to make it a little easier to get through the front door” and also a call-forward area for trucks on the landside, to get them out of Heathrow’s ‘horseshoe’ (cargo area) and the roads in surrounding villages.
Added Platts: “We are looking at a fast track system for cargo customers going through the control posts, similar to that for passengers going through security.”
Because it is a regulated airport Heathrow has got to treat every customer equally as part of its licence condition. But cargo can offer a value added service, such as slot-booking for truckers, and charge accordingly.
Said Platts: “I need to raise money to pay for the operational improvement. So if I make money I can spend money.”
Heathrow’s cargo team is also looking at an airside facility for airlines to transfer freight more quickly from aircraft to aircraft, getting the time down from from six hours to around two hours.
“The timescale has yet to be determined for the airline part but I would envisage somewhere around 90 minutes to two hours, but certainly less than six hours.”
“And we’re going to put some stillage [racking] down in the cargo area so that the ULDs are securely stored.”
These projects should be given approval to go ahead by October next year, and in operation by year-end 2017. Heathrow will also work closely with IATA Cargo on e-freight initiatives, such as to generate greater take-up of e-air waybills and so promote paperless airfreight.
With those projects in train, Platts will then turn to H7 business cases, which include the pharma cool chain facility and a centralised Customs inspection area, plus other additional infrastructure requirements for the medium and longer term.
But this cargo “revolution” has been pretty peaceful, with Platts keen to emphasise the lengthy consultation with Heathrow stakeholders, both home-based and further afield.
“The whole programme has been developed from the ground up. We have spent the last few months working with industry partners and stakeholders representing forwarders, truckers, airlines, handlers, the landlord, and the border force.
“We sat down with everybody and asked ‘what are your priorities? What do you want us to do? And what do you want to see in the future?’
“The answer is that they want us to be one of Europe’s leading cargo airports, and that is quite a journey.”
Hence the 15-year timescale, but also a pragmatic view of Heathrow’s freight profile and geography, so the ambition is not to be the largest cargo hub (by volumes) in Europe, but the best in service quality.
Said Platts: “We have got two runways, we have got a curfew and we have slot and land constraints, and we’re not in the middle of Europe but on an island off the west coast of Europe.
“So the market knows that we will never be the centre of European transportation because, geographically, it is just not possible.”
Heathrow was given the green light on a third runway by the independent Airport Commission earlier this year, but Gatwick has not dropped its call for a second runway and the UK government has still to give its official seal of approval to the Heathrow expansion that would not be in place until after the planned cargo investment has run its course.
Platts continued: “We can provide good service and good connections, with a particular focus on UK exporters. And we know that, just like passengers, boxes like to go direct. So if we can get those 40 extra destinations with a third runway, that is fantastic.
“But even if we don’t have a third runway, we still want to support UK exporters and we still want to be a leading airport. We asked customers, ‘what do you want from us?’ What they require is a predictable process.”
Freight forwarders and their shipper customers need not just a predictable airfreight process but a faster one too, and that is what the investment aims to achieve.
Platts said: “All of this is about reducing our throughput times, stabilising them so that they are predictable, and to make it easier to do business by improving the service quality.
“And through that we become the preferred gateway to Europe. We have the most transatlantic capacity of all our competitors but we are not the preferred gateway, so we need to work on that.”
A survey of stakeholders nominated Amsterdam-Schiphol and Hong Kong as the benchmark cargo hubs in Europe and worldwide, and Heathrow cargo management is not too proud to pick up a few tips from the competition after a series of neighbourly fact-finding visits. Heathrow also has a few new ideas of its own.
As the number four cargo hub by volume in Europe, Heathrow should not be too dismissive of its achievements.
Said Platts: “We handled 1.5m tonnes last year, so we are doing something right and we want to do even better. I have had quite robust conversations with individuals in the industry and put my case.
“If you look at those benchmark airports and where they started, it has taken 10 years to get where they are today.
“I’m here now and I am on a mission. I am quite determined. I know where I’m going and what I want to achieve.”