Getting into the Cargo Business

[NZelenkova]

So I've been dabbling a little but have yet to use an actual freighter, reason being they have humongous holds and I never see demand that could fill even 20%. I know it's a different and highly lucrative thing in the right circumstances. I guess what I'm wondering is where can you actually go to be a successful all cargo operation? I've done some scouting recently and was very disappointed that my dream of running a turboprop cargo operation somewhere like Congo is impossible due to zero demand domestically and regionally.

Meanwhile in Generations I'm based in East Germany and there is cargo demand to all eight domestic airports (one airport only has cargo demand) and then really big demand to certain seemingly random European cities. Switzerland is oddly my biggest source of cargo.

Can it only be done in the realy big hub cities of the world? Is there anywhere that props are viable?

[groundbum2]

think of the real world. Props can only do small distances, so generally trucks are used. Air freight is really expensive, and is used when speed is important. And air is only really faster over large distances, eg Tokyo-London. London-Manchester would be quicker by truck as it would go door-to-door rather than truck to airport warehouse to plane to next airport warehouse to truck to customer. Whew!

Cargo can make good money at 30% LF one-way, cargo is often asymmetrical. There's also a risk of flying cargo into a big hub, as handling fee's at LAX,ORD etc are sky high and wipe out any profit from short-haul cargo. For example I can get 80% LF ATL-LAX and still lose money, just down to LAX handling fee's.

Simon

[mp81]

Also keep in mind you will need a decent sized aircraft with a higher payload. Even larger aircraft such as CRJ2F and DC93F simply cant haul enough to make it worthwhile or barely profitable. At minimum, a 727F/737F is usually needed to make a decent profit. IMO

[tungstennedge]

Ive never experimented too much with smaller cargo aircraft, where only light and standard cargo are available, but any routes which get heavy cargo are generally quite viable for dedicated freighters.

I've looked a bit at east Germany in the world I'm in, HATF(1971), and there is some heavy cargo available to the US. In general, any routes which generate heavy cargo should be vastly profitable, tiny load factors should be breakeven (20-30%). I would recommend flying dc6f, or simular freighters to the US to start off, if there are any routes with heavy cargo as early as the 1950's I'd be surprised, but there is good money to be made!

Now, on another note, looking for cargo around the globe can be tough, so I'll give a few pointers to start out. Since east Germany is not a cargo stronghold, (I believe only Berlin will have OK numbers), you need to look for other countries with great cargo. The US(export/import) and Japan(export/import), and the UK(mostly export) are the strongest early game, so you should look in those places for cargo first.

[gazzz0x2z]

722AF and later TU204F really are excellent money makers. 321F later is even better. All those planes are in the 27/28 tons class.

A bird with 21 tons like the MD88SF is really inferior, and in my experience, does not make much money. A 27-tons, OTOH, has to be full one way, and can afford to be empty the way back.

I don't have much experience with cargo pre 722AF, though - i.e. before the 80s. In Warsaw, I had 14 722AF (2 sets of 7), and they were doing 25% of my profit in the 80/90s (out of 300+ planes).

[knobbygb]

Remember not to be afraid of tech-stopping your cargo routes as it has absolutely no effect on load factors.  I don't mean it's a good idea to do that with Medium aircraft as they're just not going to make enough money, but with the 727/737 size, they can quite easily make money with two stops, even with a payload penalty.  This might give you a few more options from East Germany - you should even be able to reach Asia!  China and Hong Kong become bigger markets later.

Medium aircraft are really hampered by the in-game rule that they can only haul Light and Medium cargo.  The Heavy is where the real money is! Remember that when you're flying into big European hubs, you're competing with all the belly cargo capacity on all those 737/A320 sized pax. aircraft (who also only take Small and Medium).  The Large often goes totally unserved on fairly short routes.

[Maarten Otto]

I was able to get my hands on some EMB120FC aircraft and bought them for 1,5 million each. They can carry about 3.5 tones of cargo. While their range is advertised as 340NM I do not hesitate to put them on 700 mile legs and sacrifice some cargo hold for it. They generate about 200K to 300K per week. Slotting them is relatively expansive but considering all things together they are a massive cash cow.

[Captain Morph]

I've been thinking about getting into the cargo business and was wondering if anyone here has experience with it. What are the main challenges you faced when starting out? Any tips on how to successfully break into this industry?

[alvdom]

One of the main challenges you'll face is understanding the logistics and regulatory requirements, which can vary greatly depending on your location and the types of goods you'll be transporting. A good tip is to start by doing thorough market research to identify a niche where demand is high but competition is relatively low. Building strong relationships with suppliers and customers is also crucial, as is investing in reliable transportation and tracking systems to ensure efficiency and reliability in your operations.

I recently came across an article that provided a lot of useful information on this topic. It highlighted something called The Secret Growth Killer, which is essentially a bottleneck in operations management. It explained how identifying and addressing these bottlenecks can significantly improve your business operations and help you grow faster. If you're interested, you might want to read more about what is a bottleneck in operations management .

[Sami]

Building strong relationships with suppliers and customers is also crucial, as is investing in reliable transportation and tracking systems to ensure efficiency and reliability in your operations.

Please do stop posting these AI-generated replies that make absolutely no sense to the question.

[Sami]

I've been thinking about getting into the cargo business and was wondering if anyone here has experience with it. What are the main challenges you faced when starting out? Any tips on how to successfully break into this industry?

Profit comes from lower LF compared to pax flights, but finding routes with enough demand to fill a large cargo-only plane can take time. Generally cargo is profitable for long haul cargo routes only, shorthaul cargo demand is usually much lower.

[knobbygb]

Pros:

Break-even can be as low as 15% LF on the right route
Flight timings don't matter - fly at 3am - cargo is happy
Multiple flights at the same time?  No problem
Stopovers?  Again cargo doesn't care - stop 4 times if you need to
Cargo aircraft, especially as conversions from obsolete pax. aircraft can be very cheap.

Cons:

Routes take a LOT longer for RI to build. Be careful how many new routes you start at once as they can be HUGH loss-makers for months!

You have to be careful with demand - usually it's only in once direction. Don't worry though as flying one-way empty still usually allows you a great profit. Remember you might only need to tech-stop in one direction because of this.

Demand doesn't really reflect the real world. For example there is a HUGE market flying INTO China but almost nothing coming out. Same with Japan.

You'll get LOTS of competition from pax carriers on high demand routes due to city-based-demand. Cargo-only is almost impossible in highly fragmented markets such as London - New York City or the LA Basin, for example.  Look for 'niche' routes you wouldn't normally consider. (example: one of my most profitable 757PF routes is BHX-GCN - Grand Canyon of all places!) Try to base your operation somewhere without another airport nearby. Learn to use the "Other Airports" tools (top right of the map on airport information page).

Cargo handling and overflight fees can be VERY high - but should still allow a decent profit.  I think this is why (as Sami said) long-haul works better - greater income for lesser handling-fees overall.


Just have a go and see what happens. You'll be pleasantly suprised just how much profit you can make if you're careful.

[NZelenkova]

I love how a thread I started a thousand years ago on my previous attempt at East Germany is still valid. Probably going to take some of the advice people gave me in 2021 and run those Tu-204Fs! I'm also intrigued by the person who talked about EMB-120 freighters. My thing has always been doing whatever people say can't be done. So we're talking like 12 years ago but the first thing I did successfully was base in Africa, then I ran an all-Soviet airline for a full game, then I ran a pure EMB-120 operation in the South Pacific. Everything is possible if you can find the right niche, I think. Cargo was still relatively new when I started this thread and I've been away for quite a while since. But if as they suggested three years ago, that I might find an odd randomly lucrative transcontinental route out of East Germany that fits one of my fleet types, I just might pursue that.

I'm wondering though how much cargo demand reflects real world realities? For instance the random quiet Kentucky, US airport that sees hundreds of late night cargo flights from the likes of FedEx.

[knobbygb]

Probably going to take some of the advice people gave me in 2021 and run those Tu-204Fs!

I finally just got around to doing that after years of meaning to and ending up going for the sensible 757-200PF instead.

I can confirm that my Tu-204-100C are indeed very profitable.  Not as much as a 757. Probably similar to what An A321-200F would be a bit later in the game.  I'm flying about 90 of them MAN to USA, Asia and India.  Even with a big competitor (with A300F and A330F and quite deep pockets) I'm still making good money - more than all my pax. routes over three bases combined.  The downside, apart from the obvious (fuel consumption, maintenance, three crew) is range.  I'm pretty nifty at arranging tech-stops but they are VERY difficult to fly across the Atlantic with full capacity. There's actually only one good way to do it from the UK, involving a tech-stop airport with a curfew and it's a bit of a pain but it works and keeps me busy. On the positive side they are SUPER cheap to aquire on the used market ($5M to $8M for a/c with a book value of $20M+) so you can buy-em, fly-em and scrap-em without too much overhead.  New ones are also for almost-nothing - $31M vs $112M for a 757-200F or $157M for a self-converted A321-200F.

[gazzz0x2z]

Profit comes from lower LF compared to pax flights, but finding routes with enough demand to fill a large cargo-only plane can take time. Generally cargo is profitable for long haul cargo routes only, shorthaul cargo demand is usually much lower.

I4d go further : even a full Shorthaul cargo airplane is not maknig a lot of profit. I did extensive testint during an Asian game with TU-204CE from Japan. Profit lies when you do a tech stop, basically. Maybe not with the very long range airplanes like the 747, but on anything not that big, if you don't have a tech stop, you're not flying far enough.