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Netting growth in Norway

Declining markets in Denmark, Sweden and Finland are balanced by expanding salmon exports from Norway, reports Will Waters from this year’s Nordic Air Cargo Symposium in Stockholm

The Scandinavian air freight market shares many of the characteristics of most northwest European economies; however, it also differs in several significant ways. High local wages mean that the population has considerable buying power for imports, per capita at least, while also making export manufacturing unviable – except for high-value goods.


Having said that, the comparatively low population size means the market potential, as a whole, is relatively modest. The population density and distribution has meant that the region “lacks significant logistics clusters, which makes it difficult to operate freighters profitably”, according to Alexander Kohnen, Lufthansa Cargo’s director for Nordic and Baltic countries.


Historically, the region’s air freight customers have also been dominated by a small number of major shippers, notably Nokia in Finland and Ericsson in Sweden. Both companies however, have dramatically reduced their use of air freight in the last decade – initially as production of their mobile phones was outsourced to Asia and then as the companies themselves became smaller players in the mobile phone handset market (not to mention being taken over by their giant rivals – Ericsson by Sony and Nokia recently by Microsoft). Both remain significant air freight users, but primarily due to their network infrastructure business.


Juha Järvinen, managing director for Finnair Cargo, comments: “Finland is still suffering from post-Nokia trauma. We have been forced to look to other markets because our natural home market is not growing and is not going to get back to the peak levels until 2017 or 2018.”


Sweden’s air freight market these days consists mainly of companies in the healthcare, telecommunications, machinery and automotive sectors, including customers such as Volvo and Scania. Finland’s market includes the pharmaceutical, machinery and heavy electrical components sector, while Denmark’s features customers from the healthcare, oil and gas, and ship spare parts sectors, observes Kohnen.


Norway’s air freight market also includes healthcare volumes and significant traffic related to the country’s thriving oil and gas business. But its market is unique, as it is also overwhelmingly dominated by one commodity: fresh salmon.


While other elements of the region’s air freight markets have stagnated or declined, the attraction of salmon grown in Norway’s extensive fjords has continued to grow throughout the last decade. CASS figures indicate that total export tonnages for the region as a whole reached around 320,000 tonnes in 2013, roughly the same as in 2007, 2010, 2011 and 2012, and well ahead of the volumes during the recession years of 2008 and 2009.


According to WorldACD, both inbound and outbound revenues, as well as volumes, have declined by single-digit percentages over the last two years in Denmark, Sweden and Finland. Norway also recorded a 5% decline in inbound air cargo revenues during the last two years, while inbound volumes were flat. But Norway’s outbound volumes – driven primarily by salmon exports – rose by an average of 16% per year between 2011 and 2013, with outbound revenues up by 9%, in Euro terms. 


Whereas Denmark, Sweden and Finland can mainly be served by passenger bellyhold capacity and road feeder services connecting with Europe’s main air freight hubs, Norway’s expanding export market attracts significant freighter capacity. However, with Norway’s salmon exports expected to continue expanding for the foreseeable future, Tom Mikkelsen, head of air freight at salmon and seafood producer Marine Harvest, is concerned that air freight capacity may struggle to keep up with demand in the coming years. >>

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