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By Alex Lennane
The developer of Manston Airport, which aims to re-open as a cargo hub in spring 2023, will target market share from continental airports as well as scoop up any UK air freight growth, such as that driven by e-commerce.
Despite publicly voiced concerns by cargo consultants, Tony Freudmann, director of Manston owner RiverOak Strategic Partners, and leading the charge to re-open the Kent hub, is confident of the need for a new cargo-focused airport in the UK.
“We can see there are symptoms of overcapacity in the London system,” he explained. “And there is trucking, for ludicrous miles. There is no slot flexibility at Stansted, and with e-fulfilment there is now a shifting of the sands.
“If you parcel that up, it is viable. International trade is vital to the UK, and the constraints on capacity is bad for the country and very serious.
“There is not enough capacity for freighters in the UK, we have a crisis. We are dependent on [bellyhold] passenger services, which is unhealthy.
“Try getting slots at Manchester Airport Group [airports] – cargo is all about available slots, not just capacity. If there is limited capacity, you’ve got to take it where you can find it. You can’t build another runway in the Midlands.”
“And look at Liege Airport – it’s in the back of beyond, its growth came from nowhere and 80% of its traffic is UK origin or destination,” claimed Mr Freudmann, figure not yet been confirmed by The Loadstar.
Liege has famously benefited from the slot shortage at Schiphol, is home to FedEx’s European air freight services and has a partnership with Chinese e-commerce site Alibaba. It grew volumes 3.6% between 2018 and 2019, to more than 900,000 tonnes.
Mr Freudmann said Manston could, in theory, offer slots to express operators, but would be unable to offer night flights.
“You can only get into the UK at certain times. Everything is constrained because of the UK situation, and there’s a logjam at Stansted,” he claimed. “There are delays at big hubs and forwarders accept that there is no alternative at the moment.”
RSP believes Manston can be viable with about 11,000 cargo movements, or 150,000-200,000 tonnes. By way of comparison, Stansted handles about 258,000 tonnes, Manchester – which says it has “ample room for growth” – handles 117,000 and East Midlands, an integrator hub, sees some 328,000 tonnes pass through each year. It too says it has “ample room to grow”.
But Mr Freudmann believes the biggest seam of opportunity is in air cargo currently trucked into and out of the UK for carriers such as Lufthansa and American.
“We suspect a million tonnes are trucked through the Channel Tunnel. It’s unsustainable and can’t continue. And airlines doing that will need to look at that again.”
He cites Manston’s environmental requirements as part of the drive to cut out trucking.
One of the main concerns about Manston is its positioning in the south-east, far from the main distribution centres of the UK. But Mr Freudmann argues that the road network is “not bad”, and there is a possibility of using rail.
He is also in talks with Port of London Authority to move goods by water from Ramsgate, and then up the Thames to central London, “a clean solution to cut out lorries”.
While air freight has undeniably had a good year, owing to Covid-19, its extreme pricing has led shippers to look to other modes. The shipping lines are now offering more ‘express’ services and better pharmaceutical products, while China-Europe rail has blossomed. And, as companies increasingly look to cut carbon emissions, is a move to more air freight really what shippers want?
Mr Freudmann argues that some products cannot travel any other way.
“Urgent pharma won’t go on rail, or on a reduced speed service. Much will have to be shipped by air. Large rail volumes are a long way off, and aircraft have become more efficient.”
He believes the Covid-19 pandemic has bolstered Manston’s viability.
“People will have got used to using freighters, now. They are not driven by passenger routes, and large airports will be reluctant to switch to freighter traffic. Freighter services will expand, plus there will be growth in the market. And there are new players, such as Amazon, which don’t depend on night flights.”
Manston has already had one incarnation as a cargo-focused airport, but closed in 2014 with the loss of 150 jobs, reportedly losing £10,000 a day. So what has changed at an airport predicting creating 3,000 jobs?
“It didn’t have the infrastructure,” said Mr Freudmann. “It has a 2,800-metre runway, withy two parking stands and no additional facilities. It was also all inbound perishables, and aircraft were leaving empty.”
He acknowledges that automation may change the job prediction, but adds that with high unemployment in the area, one of the airport’s conditions is to support training and education.
“And we start at Manston with a clean sheet, no legacy practices, very modern.”
Cargo operations at airports can be notoriously hard to profit from, but Manson’s busines model will be to keep as many services, such as fuel and handling, in-house as possible.
“That will improve margins, but you need a degree of flexibility, and you contract it out if you can’t do it.”
And what of the investors in the £300m to £500m project? The developer appears shy.
“I can’t tell you who they are, but I can say that they are UK non-dom residents (those who live outside the UK and pay no tax).
“Our investors understand the airport and the opportunities, and are taking a long-term view. This could be the last airport ever in the UK to get the go-ahead.
“As we develop over the next 12 months to two years, we will have some more institutional investors joining us, and the original investors will take a back seat.”
Manston acquired a development consent order (DCO) from transport minister Andrew Stephenson. However, the planning inspectorate recommended that the DCO be rejected and Mr Stepheson’s decision is the subject of a judicial review, driven by unhappy locals.
But Mr Freudmann said the politician had defended his decision “robustly”, and claimed a lot of local support for the project, including MPs and the county council.
He is confident: “We wouldn’t have serious investors if the airport wasn’t viable,” he said.
Comment on this article
Tired of Tony
September 28, 2020 at 2:41 pmGreat you reached out to check most of Tony’s unsubstantiated lines. Thank you
The article cites a comment by Mr Freudmann of “there is a possibility of using rail”. As you will be aware there is no rail freight terminal near the Manston site nor is one in the works. There is a passenger station in the works.
The article further cites Mr Freudmann is “is also in talks with Port of London Authority to move goods by water from Ramsgate, and then up the Thames to central London, “a clean solution to cut out lorries””.
They mind boggles as to the USP of Manston and its last mile offer.
Come fly to Manston, land and unload your freight on to an HGV, drive 15-20 minutes to Ramsgate Port. Once at Ramsgate Port offload your freight off the HGV and then load it on to a barge. Your just in time goods will then be ferried from Ramsgate Port to the Port of London (aka just near Tilbury docks and a few other airports) and then on reaching the Port of London your freight will be off loaded and on loaded on to another HGV???
Aside from the obvious time and cost problems. Every move puts pharma at risk. If the pharmaceuticals are compromised not only will it be a very expensive loss, they can lose efficacy. So why an earth would pharma move anything this way?
Simon Crow
September 28, 2020 at 3:23 pmThese are extraordinary claims by Mr Freudmann.
His original justification for a cargo airport at Manston bore little credibility. After a two year review, it was rejected by the government’s own inspectors.
Today, with the Covid impact resulting in much spare capacity at all UK airports, likely for years to come, together with the real environmental concerns from flying, his plans are pure fantasy.
samara jones-hall
September 28, 2020 at 3:43 pmThe position statement of the County Council that Mr Fruedmann refers to as “support” can read here> https://www.kent.gov.uk/about-the-council/strategies-and-policies/transport-and-highways-policies/aviation/manston-airport-position-statement
It concludes on page 12 saying that “the truth is that Manston has failed over a prolonged period of time to run as a commercially successful airport. Kent County Council gave strong support to various investors but the reality of commercial aviation at Manston Airport led to very significant losses. In fact, in the 16 years since it was taken into privately ownership it has incurred losses by those who have tried to operate it in excess of £100 million”.
Barry James
May 21, 2021 at 6:34 pmwhy on earth is there not an article refuting comments by dear Tone or one looking at his business acumen.
Airfreight is expensive but pure freighters are much more expensive and Tony must believe he is some sort of expert to believe that after the passengers come back and airfreight moves back to bellyhold the discerning freight forwarder will cut their own throats and carry on using freighters.
“He is confident: “We wouldn’t have serious investors if the airport wasn’t viable,” he said.” yet he won’t say who they are and that in itself is telling. I personally cannot see any intelligent investor throwing £300M into a freight Hub when there are better returns available. As to long term Manston has been handling freight since 1959 and not one business has ever made a profit.