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Why Did DL Terminate The Dedicated 747 NW Cargo?  
User currently offlinezmp0psa From United States of America, joined Jul 2012, 29 posts, RR: 0
Posted (2 years 3 months 2 weeks 3 days 6 hours ago) and read 13634 times:

I attempted to search the forum for relative threads, and the internet for information, and I've been struggling to find definitive (semi trustworthy) answers, and unbiased information, as to why DL ended the NW dedicated cargo services and cargo hub in Anchorage.. At the time I was fairly young and uninterested in the industry, so if this is 'common knowledge' please forgive me.

After my quick research I've seen many reasons for the shutdown, including, but certainly not limited to:
1. The dedicated 747F nearing what DL would see as a mandatory retiring age.
2. The loss of the DHL contract
3. NW pleading guilty to price fixing.

I'm not trying to standup for, debate, or stand behind any of these three reasons I stumbled upon, as they certainly are not my opinions.

Any help?!

ZMP

40 replies: All unread, showing first 25:
 
User currently offlinePHX787 From Japan, joined Mar 2012, 7975 posts, RR: 19
Reply 1, posted (2 years 3 months 2 weeks 3 days 5 hours ago) and read 13551 times:

Don't quote me 100% but I believe it was a combination of things:

Quoting zmp0psa (Thread starter):
1. The dedicated 747F nearing what DL would see as a mandatory retiring age.
Quoting zmp0psa (Thread starter):
3. NW pleading guilty to price fixing.

And also the fact that DL found no profitability in it. DL Cargo is perfectly fine in the cargo holds of it's PAX fleet.



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User currently offlinezmp0psa From United States of America, joined Jul 2012, 29 posts, RR: 0
Reply 2, posted (2 years 3 months 2 weeks 3 days 5 hours ago) and read 13496 times:

Thanks for your opinion. My first thought was that DL was able to send enough freight on its passsenger flights, especially their passenger widebody flights across the Pacific, that the dedicated service could be done away with. I couldn't draw a conclusion as to how DL would have came to said conclusion utilizing the previous NW routes and how NW didn't see this.

User currently onlinePanHAM From Germany, joined May 2005, 9755 posts, RR: 31
Reply 3, posted (2 years 3 months 2 weeks 3 days 5 hours ago) and read 13439 times:

NW was the last US combination carrier and DL has practically zero history as such, except operating a L100 which may have the only explainable reason in the fact that these are build at Mariettam, an ATL suburb. They may have operated a DC8 freighter as well but I am not sure about that.

NWA operated 707 and 747 freighters from the 60s onwards until DL sold the last freighters. NW has been successful with that operation over the years, they have employed Japanese and Chinese sales staff in the US and the service was reliable.

The fat that NW pleaded to "price fixing" which in fact was a scam by ill informed federal attorneys (there was no price fixing, just the fuel and security charges were pretty much the same at each carrier, which did not need to be fixed, one carrier started with raising or lowering these add-ons and the others followd, the justice system made this a criminal offence which in fact it never was, it wa sjust cheaper to paqy the fines than fighting the system)
cannot have been a reason.

Carriers with belly only capacity have been charged as well.



Es saugt und blaest der Heinzelmann wo Mutti sonst nur blasen kann. Frueher war mehr Lametta.
User currently offlinewjcandee From United States of America, joined Jun 2000, 5366 posts, RR: 22
Reply 4, posted (2 years 3 months 2 weeks 3 days 4 hours ago) and read 13410 times:

DHL bought an interest in Polar and gave them the contract for the work that had been performed with the NW freighters. If the DHL business could sustain the Polar operation (which then sold additional space/weight), it is conversely a significant enough loss to NW to affect the financial viability of their operation. It's not like that revenue was easily-replaceable.

User currently offlinejfk777 From United States of America, joined Aug 2006, 8515 posts, RR: 6
Reply 5, posted (2 years 3 months 2 weeks 2 days 23 hours ago) and read 13081 times:
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NW 747 Cargo fleet was old still 747-200 planes. Most Asian cargo fleets were 744 by the time of the Delta & NW merger. NW planes were inefficient and old, the planes werer well over 20 years old.

User currently offlineCOSPN From Northern Mariana Islands, joined Oct 2001, 1661 posts, RR: 0
Reply 6, posted (2 years 3 months 2 weeks 2 days 22 hours ago) and read 12853 times:

FedEx UPS and many others are good at moving freight you can not do everything,

Also freight is only one way.... over the last 25 years USA makes nothing that needs to fly to asia..


User currently offlineblueflyer From Northern Mariana Islands, joined Jan 2006, 4190 posts, RR: 2
Reply 7, posted (2 years 3 months 2 weeks 2 days 20 hours ago) and read 12602 times:
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The price fixing settlement was a blip on the radar. What did Northwest Cargo in was losing the DHL contract. Without it, the unit was forecast to post losses for years to come, whether or not the -200s were replaced by -400s.


I've got $h*t to do
User currently offlineMountainFlyer From United States of America, joined Jul 2005, 477 posts, RR: 0
Reply 8, posted (2 years 3 months 2 weeks 2 days 20 hours ago) and read 12543 times:

Quoting COSPN (Reply 6):
FedEx UPS and many others are good at moving freight you can not do everything,

  

This is just a case of a business (DL) focusing on their core strengths, passenger flying, and shedding other activities.

Although, perhaps that theory is out the window now since DL bought an oil refinery.  



SA-227; B1900; Q200; Q400; CRJ-2,7,9; 717; 727-2; 737-3,4,5,7,8,9; 747-2; 757-2,3; 767-3,4; MD-90; A319, 320; DC-9; DC-1
User currently onlinePanHAM From Germany, joined May 2005, 9755 posts, RR: 31
Reply 9, posted (2 years 3 months 2 weeks 2 days 19 hours ago) and read 12523 times:

DL belly revenue is 1 billion US$ ++ p.a.

UPS and FEDEX are integrators. That's something different than cargo airlines or combination carriers.

DHL certainly has a better deal and more flexibilkity with Polar. polar's major shareholder Atlas is an ACMI specialist who flies for other airlines such as EK as well as a forwarder, panalpina for which they operate 2 brand new 748F.



.



Es saugt und blaest der Heinzelmann wo Mutti sonst nur blasen kann. Frueher war mehr Lametta.
User currently offlinemayor From United States of America, joined Mar 2008, 10674 posts, RR: 14
Reply 10, posted (2 years 3 months 2 weeks 2 days 19 hours ago) and read 12497 times:

Quoting PanHAM (Reply 3):
NW was the last US combination carrier and DL has practically zero history as such, except operating a L100 which may have the only explainable reason in the fact that these are build at Mariettam, an ATL suburb. They may have operated a DC8 freighter as well but I am not sure about that.

Nope, no DC-8 freighter. But before the L-100 there were C-47s and C-46s. I doubt the reason they bought the L-100s was because the factory was nearby. The reasons that DL terminated the L-100 service was, mostly, that we had widebodies, which could haul anything that we were currently loading on the Herky. Towards the last, we were loading carts of regular belly cargo on board, just to fill up the plane. I believe that it was also felt, in ATL, that they would like to get out of a dedicated cargo service. The powers that be, were at that time, people that had come up thru the ranks, mostly out of the passenger service ranks, with very little cargo experience. Not until Richard Anderson came along, did we have a CEO that actually promoted cargo and understood it.


Besides, three L-100s was almost the smallest orphan fleet, ever and they didn't have all that much dispatch reliability. You had 3 planes that were covering a system that went to ATL, ORD, BOS, EWR, MIA, MEM, MSY, DAL, LAX, SFO, 5 days a week. We used to joke that if it was less than 24 hours late, it was still on time.



"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
User currently offlineseabosdca From United States of America, joined Sep 2007, 5856 posts, RR: 6
Reply 11, posted (2 years 3 months 2 weeks 2 days 19 hours ago) and read 12437 times:

Passenger widebodies have gotten much, much better at moving cargo in recent years. The A330 and 777 both significantly increased the cargo handling capability of DL's international passenger fleet, making the old 742s even more redundant in light of all of the factors listed by others above.

User currently offlinecargolex From United States of America, joined Apr 2010, 1278 posts, RR: 8
Reply 12, posted (2 years 3 months 2 weeks 2 days 19 hours ago) and read 12434 times:

A number of reasons, really, starting with the actual aircraft - most of which were quite old. The top-tier carriers began phasing out the 747 classics after 2002. Though a few are still flying for major carriers like Atlas and Air Bridge, they've been on the way out for years and I'm guessing that within three years, there will be very few classics flying for major carriers.

The planes were old, and the cost of replacing them with newer 744s at the time of the merger would have been enormous. They also did not fit with DL's cargo model, which focused on belly cargo. DL has done quite well with belly cargo since the merger and arguably it's a better business for them than also operating dedicated freighters. That's why they chose not to keep doing that - beyond the DHL issue.

Now, for the record, any carrier with a cargo division and a passenger division is a "combination" carrier. You don't need a dedicated freighter fleet to be one. There is, however, still one major US airline with dedicated freighter and passenger aircraft serving alongside one another - Alaska Airlines, with it's single 737-400SF and sextet of 734 Combis.


User currently offlineLHCVG From United States of America, joined May 2009, 1642 posts, RR: 2
Reply 13, posted (2 years 3 months 2 weeks 2 days 19 hours ago) and read 12426 times:

Quoting COSPN (Reply 6):
FedEx UPS and many others are good at moving freight you can not do everything,

Yup, and how much cargo really needs the outsize capabilities of a dedicated freighter? Not that much, especially when your core competency is belly cargo (i.e., pretty standardized and easily handled, plus somewhat fungible if you have to take a hit for some reason on a given flight) anyway.


User currently offlineFlyASAGuy2005 From United States of America, joined Sep 2007, 7004 posts, RR: 7
Reply 14, posted (2 years 3 months 2 weeks 2 days 19 hours ago) and read 12427 times:

Should be of note that for the first time, ever; DL surpassed UA in Cargo Ton Miles (back in July I believe). Quite interesting, considering UA}s much larger fleet of 744s and 777s.

Quoting mayor (Reply 10):
ATL, ORD, BOS, EWR, MIA, MEM, MSY, DAL, LAX, SFO,

How things haven}t changed. The biggest domestic cargo stations as of right now seem to be ATL, ORD, BOS, EWR, MIA, LAX, SFO, JFK, SEA, and ANC. Not particular order.

[Edited 2012-09-11 09:00:13]

[Edited 2012-09-11 09:00:39]


What gets measured gets done.
User currently offlineAlnicocunife From United States of America, joined Mar 2011, 177 posts, RR: 0
Reply 15, posted (2 years 3 months 2 weeks 2 days 11 hours ago) and read 9596 times:

Quoting COSPN (Reply 6):
FedEx UPS and many others are good at moving freight you can not do everything,

Also freight is only one way.... over the last 25 years USA makes nothing that needs to fly to asia..

Soo FedEx, UPS and every other airline flying to Asia does not fly any cargo there?
Take a look into the Top 25 Export Destinations by Industry from the USA http://www.ita.doc.gov/td/ocg/exptab.htm Yes some of the exports leaving the USA go to Asia.


User currently offlineBoeing757/767 From United States of America, joined Jun 1999, 2282 posts, RR: 1
Reply 16, posted (2 years 3 months 2 weeks 2 days 10 hours ago) and read 8839 times:

Just to clarify, Atlas no longer operates -200Fs. Just -400s and -8Fs.


Free-thinking, left-leaning secularist
User currently offlineNWAROOSTER From United States of America, joined Feb 2005, 1159 posts, RR: 3
Reply 17, posted (2 years 3 months 2 weeks 2 days 10 hours ago) and read 8803 times:
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Northwest Airlines used their dedicated freighters, which had nose doors to haul a lot of out size cargo, such as oil rigs and any other cargo that would not fit through a side cargo door. Northwest was very aggressive in promoting its cargo business. It even hauled cattle on the hoof from Canada and the United States to France and other European , Asian and Middle East destinations. Some were shipped for breeding and some countries preferred to slaughter the cattle themselves. Cargo was big business for Northwest Airlines. Northwest bought eight 747-200s factory new. It had modified two of its passenger 747s into freighters. It bought two 747-222s from United Airlines and had Boeing modify them into freighters. These were the last Classic 747s that Boeing ever modified into freighters. They were the only 747-200s that United ever bought new and were some of the last Classic 747s Boeing built.   


Procrastination Is The Theft Of Time.......
User currently offlineCOSPN From Northern Mariana Islands, joined Oct 2001, 1661 posts, RR: 0
Reply 18, posted (2 years 3 months 2 weeks 2 days 10 hours ago) and read 8667 times:

Quoting Alnicocunife (Reply 15):

Soo FedEx, UPS and every other airline flying to Asia does not fly any cargo there?
Take a look into the Top 25 Export Destinations by Industry from the USA http://www.ita.doc.gov/td/ocg/exptab.htm Yes some of the exports leaving the USA go to Asia.

They will fly you stuff to Asia but at below cost of operations, You can fly your cattle to Japan from the USA but you will only be paying about 0.50 cents per pound ...so 100% of the money is ex Asia


User currently offlineseabosdca From United States of America, joined Sep 2007, 5856 posts, RR: 6
Reply 19, posted (2 years 3 months 2 weeks 2 days 9 hours ago) and read 8396 times:

Quoting FlyASAGuy2005 (Reply 14):
Quite interesting, considering UA}s much larger fleet of 744s and 777s.

Don't forget the A330s when thinking about DL's cargo capacity. Those things are cargo beasts. An A330-300 can handle considerably more belly cargo than a 744 and exactly as much as a 772, and can max out on weight on TATL routes from any DL hub except SLC.

[Edited 2012-09-11 18:49:19]

User currently offlinecargolex From United States of America, joined Apr 2010, 1278 posts, RR: 8
Reply 20, posted (2 years 3 months 2 weeks 2 days 8 hours ago) and read 7095 times:

Quoting Boeing757/767 (Reply 16):
Just to clarify, Atlas no longer operates -200Fs. Just -400s and -8Fs.

Yes, that's correct. I meant to say that they were still operating them recently - which they were. Air Bridge is also done to only one classic, and it'll be gone soon too.


User currently offlineFlyASAGuy2005 From United States of America, joined Sep 2007, 7004 posts, RR: 7
Reply 21, posted (2 years 3 months 2 weeks 2 days 8 hours ago) and read 6996 times:

Quoting seabosdca (Reply 19):

Don't forget the A330s when thinking about DL's cargo capacity. Those things are cargo beasts. An A330-300 can handle considerably more belly cargo than a 744 and exactly as much as a 772, and can max out on weight on TATL routes from any DL hub except SLC.

True that. However I did find it a bit surprising. The combined data has been used for quite some time now (some years) and only 2 months ago did DL ever pass the cargo giant that had always been United. MRO had always been a BIG thing for DL by way of Tech Ops for "top off" revenue as I like to call it but cargo really took off over the past few years.

In other news, UA reported a DROP in unit revenue for the month of August (although slight). A 180 compared to its peers included AA; yes AA (DL saw a 4% increase for the month of August).

Little stuff but...



What gets measured gets done.
User currently offlinemayor From United States of America, joined Mar 2008, 10674 posts, RR: 14
Reply 22, posted (2 years 3 months 2 weeks 2 days 7 hours ago) and read 6595 times:

Quoting FlyASAGuy2005 (Reply 21):
MRO had always been a BIG thing for DL by way of Tech Ops for "top off" revenue as I like to call it but cargo really took off over the past few years.

Was it just a coincidence that it was after I left???  



"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
User currently offlineFlyASAGuy2005 From United States of America, joined Sep 2007, 7004 posts, RR: 7
Reply 23, posted (2 years 3 months 2 weeks 2 days 7 hours ago) and read 6389 times:

Quoting mayor (Reply 22):
Was it just a coincidence that it was after I left???

HAHA. Should have stuck around another 7 years and retired THIS go around!



What gets measured gets done.
User currently offlinedl747400 From United States of America, joined Sep 2008, 334 posts, RR: 0
Reply 24, posted (2 years 3 months 2 weeks 2 days 7 hours ago) and read 6246 times:

DL has already publicly stated that the dedicated 747 freighter operation was losing money was not identified during the merger as a core line of business. Add to that the fact that the global freight business was already weak and continuing to soften, so there were no profits in the foreseeable future. Pretty much a no brainer to shut it down.

25 mayor : Well, my original plan was to retire in June of 2010, after I turned 62, but when this came up, I couldn't resist.
26 PanHAM : That's a belly carrier. Most airlines, with few exceptions, carry freight on their paqx aircraft. FR is one noted exception. To be a combination carr
27 cubastar : You brought up old memories, Mayor. The L100's were actually at least fair in their reliability but they just came behind everybody else when it came
28 mayor : Wonder if any of those C-46s are still flying, particularly for Buffalo Airways?
29 Post contains images Rwy04LGA : Except maybe 747s, 777s, 767s, and 737s.
30 mayor : Funny, tho how when either one of them can't move some of their packages, they have to rely on the legacies and their belly freight capacity.
31 yyz717 : These are valid reasons, but then it begs the Q why did NW mgmt keep the 742F operation going with such a large fleet?
32 MSPNWA : Undoubtedly it was because the cargo division had been profitable for decades. I don't doubt that it was losing money at the time it was eliminated,
33 mayor : In my experience IN DL cargo, I can tell you that there wasn't much chance that DL was going to keep a dedicated freighter division. For years we tri
34 LAXintl : Having done some work behind the scenes, the NWA Cargo operation was on the ropes the last few years. Once the world started experiencing the fuel pri
35 mayor : Well, Tony Charaf, current head of Tech Ops, WAS head of DL cargo before Neel Shah came to DL, so he does have SOME experience in that field.
36 LAXintl : Actually 4 years between 2000 and 2004, way before Shah -- But fact remains Charaf is an A&P by trade. His entire professional career baring those
37 Post contains images NWAROOSTER : Yes ex Delta N9874F is flying for LAC Lineeas Aeres Canedo of Bolivia as CP-973. The others are long gone.
38 mayor : True, but what I said was that Charaf was before Shah. From what I can remember, there was no real leader in between the two of them. Also what I ref
39 DTWPurserBoy : Slightly off topic but NW f/a's used to joke that they would like to work freighters because strawberries never yell at you! Of course, we never had a
40 B4REAL : Yes, that's a big big deal and DL moves a lot of cargo from NRT and AMS on these birds to and from US locales.
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