DSV tailors chartered freighter network to shifting market conditions

Global logistics power DSV continues to invest in dedicated freighter services that leverage cargo-friendly secondary airports in the U.S. despite an 18-month rut in international shipping demand that has left many freight forwarders struggling to fill leased charter aircraft. At the same time, the frequency of some flights has been temporarily reduced until conditions improve.

The Denmark-based company this month, in partnership with Qatar Airways, launched another air cargo operation connecting its U.S. hub at Huntsville International Airport (HSV) in Alabama, with Europe and the Middle East. The Middle East carrier is providing Boeing 777 freighters for a twice-weekly route that originates at Felipe Ángeles International Airport on the outskirts of Mexico City, with stops in Huntsville and Luxembourg on the way to the final destination in Doha, Qatar, according to a joint news release.

DSV leases 130,000 square feet of warehouse space, including temperature-controlled storage for pharmaceuticals and perishable items, on the HSV tarmac to process shipments on its controlled freighters.

The primary exports from Huntsville carried on the Qatar Airways Cargo flights are auto parts for various manufacturers in Europe and South Africa, pharmaceuticals for customers in Europe, as well as components for oil and gas projects in the Middle East, Mads Ravn, U.S. executive vice president for air and sea, told FreightWaves. Top goods originating from Mexico include perishable food and cars.

The DSV flights offload Europe-bound shipments in Luxembourg, load more cargo for the Middle East and transfer to Asia through Qatar’s passenger and freighter network.

Ravn said the company’s decision to start its own freighter flights sprang from strong demand in the Middle East and other parts of its charter network that could be fed via Luxembourg. The Qatar Airways dedicated transport contract will last for an initial term of one year. The service is only one way now because demand out of Europe and yields are low, he added.

The third-largest logistics provider by gross revenue also has long-term transport service agreements with Qatar Airways for services out of Asia.

DSV in the past operated a round-trip service with Emirates SkyCargo through HSV to Frankfurt, Germany, and back to Mexico. Panalpina, which DSV acquired in 2019, pioneered the use of second-tier airports in the U.S. when it launched its Dixie Jet airfreight service between Huntsville and Luxembourg more than 30 years ago. DSV currently offers that service twice per week, down from three times weekly because of the drop in air cargo demand, on Cargolux 747 jumbo jets. 

Last year, DSV began providing customers round-trip capacity on full Boeing 767 freighters operated by Latam Airlines from Huntsville to Sao Paulo, Brazil, with return stops in Bogota, Colombia, and Miami. The service was scaled down to once per week from three times because of the weak market. All-cargo operator Atlas Air also flies 747s on DSV’s behalf from Hong Kong or Hanoi, Vietnam, and Seoul, South Korea, to HSV two times per week. The flights reload in Huntsville and continue to Miami and Sao Paulo.

DSV in total operates three cargo flights, conducted by Atlas Air,  from Miami to Sao Paulo, down from four per week.

Logistics companies are increasingly moving to secondary airports like HSV because the ability to manage their ground handling and warehouse operations, and receive priority service from Customs inspectors, without the congestion at large passenger gateways makes it possible to deliver customer shipments quickly at much lower cost.

In June, DSV began operating from a second U.S. base at Phoenix-Mesa Gateway Airport to support rapidly growing semiconductor and electric vehicle industries in Arizona.

Cargolux is operating a weekly scheduled service for DSV from Luxembourg to Phoenix, which continues to Los Angeles. Plans with Atlas Air for inbound flights from Asia have not materialized yet. That is because there is not enough demand for an extra stop en route to Huntsville and DSV also wants to first secure export commitments. But Ravn said the program is expected to get underway in the first quarter of 2024.

Additional routes, including to Latin America, will be evaluated once global market conditions improve, he added.

Ravn confirmed a report in The Loadstar that DSV will add a second Phoenix-Mesa/Luxembourg rotation, returning via Huntsville and Chicago, in early 2024.

Many large forwarders are stuck with entire freighter aircraft they leased to guarantee capacity when the airfreight market was booming between late 2020 and early 2022 and are aggressively slashing rates to attract enough business to offset operating costs.

San Francisco-based Flexport, for example, controls three Boeing 747-400 freighters under a long-term contract with Atlas Air. Newly reinstalled CEO Ryan Petersen noted on X, previously known as Twitter, and in a recent phone interview that the company is losing money at the moment on its trans-Pacific services.

France-based Geodis has suspended scheduled  flights between Asia, Europe and the U.S. with its controlled freighters and is now deploying them for impromptu charter flights and short-term lease operations, The Loadstar reported. 

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

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