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10 Operations
More with less
How detailed information and modest behavioural changes can help to achieve field service excellence with fewer resources.
18
18 Distribution
Best practice in distribution
26
The rapid rise in the number of products available requires new delivery systems to improve driver longevity and fleet efficiency.
26 Customer service
What the future holds for the field service industry Customer satisfaction is increasingly being seen as a top priority in the fight to attract and retain customers.
4 | BE Transport & Logistics
contents
44
aviation: 32 Air Mauritius
Flying into recovery
Air Mauritius has worked hard to become a profitable carrier and national asset.
44 COMAIR
PUTTING THE EASE IN TEASE
Running an airline is a serious business, but this South African operator likes to make passengers laugh, too.
66 TAAG Angola Airlines Angola’s take-off
Angola’s national airline is now planning to extend its international, regional and domestic footprint.
80 Air Botswana Flying the flag
66
Botswana’s national airline is set to emulate the country’s transformation into a vibrant democratic economy.
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88 Abu Dhabi Aviation AIRBORNE ABILITY
Abu Dhabi Aviation is the most effective and largest operator in the region with MOR services to match.
98 Zodiac Aviation Support, Inc. In-flight service
88
Building customer and passenger loyalty with reliable expertise at competitive pricing.
98
Logistics: 108 Imperial Group In imperious form
How the diversified nature of Imperial Group’s business activities is helping it to prosper.
118 Aspen Logistics Services Taking a chilled approach
A leading service provider to blue chip clients in the fast moving consumer goods sector.
108 6 | BE Transport & Logistics
contents
132
132 DHL Express Network Management Global focus
Leading the market in global express delivery services, and is continuing to hone and improve its performance.
158 DHL Express Australia Delivering quality
Investing in facilities and infrastructure as it moves to grow further in one of its longest-standing markets.
Service providers: 168 EUROPCAR
Move as you choose
Understanding the behaviour of travellers keeps the leading global car rental brand ahead of the trend.
176 Avis Philippines Still trying harder
168 188
Driving in the Philippines can be fun and adventurous; but being chauffeured is convenient and more practical for travellers on a tight schedule.
188 AMERICAN EXPRESS TRAVEL SERVICES SOUTH AFRICA AFRICA EXPRESS
Developing its continent-wide American Express franchise network to meet the unique requirements of Africa’s rapidly growing oil and gas industries.
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226
Ports & Shipping: 196 Grupo Unidos Por el Canal
The next hundred years
As the Panama Canal approaches its first centenary, the $3.2 billion new locks project is about to equip it for its second.
226 Konecranes
Heavy lifting champion
One of the largest crane manufacturers in the world ironically comes from one of the smallest countries in the world.
234 KHALIFA BIN SALMAN PORT (KBSP): APM TERMINAL
Tomorrow’s trade solutions, today
234 8 | BE Transport & Logistics
Chief executive officer Marco Neelsen discusses the crucial role KBSP is playing in the development of Bahrain as a centre of trade and economic activity.
contents
242
242 Flinders Ports
Overcoming adversity with diversity Andrew Pellizarri of Flinders Logistics and Peter Cheers of Flinders Adelaide Container Terminal, on adapting to evolve.
254 Strategic Marine Uncompromised quality
The diversification of the company has helped it become globally recognised as a builder of first-class vessels.
262 Sturrock Shipping The know-how people
Nothing would ever get done in oil and gas production without the support of experienced service providers.
272 Port of Beira
Changing perceptions
254
One of Mozambique’s most strategically important ports is delivering a cost-effective service for the region’s land-locked states.
262
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More with
How detailed information and modest behavioural cha help to achieve field service excellence with fewer resou
written by: Mark Forrest
10 | BE Transport & Logistics
Operations
less
anges can urces
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Operations
A
gainst a bac kg round of r isi ng fuel prices, restricted budgets, a changing regulatory landscape and spiralling customer expectations, field service businesses have endured a tumultuous environment over the last few years. The ability to meet customer demands and achieve cost goals has become a more difficult balance, leading many struggling to achieve more with less in the battle to deliver field service excellence. Trimble recently carried out an independent study entitled, The Road Ahead: The Future of Field Service Delivery among directors and senior managers operating large field-based work forces in the UK, and found that businesses are struggling to fully deliver on their vision for field service excellence due to economic restraints putting pressure on internal resources; just 48 per cent of respondents were on target to achieving their annual business goals. Field service management systems have come to the fore as enablers to help streamline
business processes to improve workforce productivity and customer satisfaction, without the need to increase the size of a field-based workforce. However, there is often a lack of understanding of the capabilities and huge cost savings these technologies can deliver. According to AberdeenGroup surveys, investment in field
48% Number of respondents who where on target to achieving annual goals service management tools provides far reaching benefits including: • 32% improvement in fleet utilisation • 31% reduction in daily mileage • 25% reduction in idle times • 22% reduction in fuel consumption • 21% reduction in vehicle and operating costs • 11% increase in service revenue • 9 % improvement in workforce productivity
Tackling the budget black cloud The availability of budget emerged as being a major barrier to achieving field service excellence for around one quarter of the Road Ahead report respondents: 27 percent said the board is fully committed, but lack of budget meant they could not follow through on their planned vision; while a small minority (11 percent) felt that the board only paid lip service to field operations. Indeed, only 18 percent of those surveyed currently possess fully automated scheduling, dispatch and mobility tools. The majority are operating partly-manual, partly-automated systems, integrating a diverse mix of often incompatible legacy systems. However, by producing a detailed business case, it is feasible to demonstrate that investing more now can significantly reduce costs in the long run. Field Service Management solutions including the likes of Fleet Management and Work Management technologies have emerged as being powerful management
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“the fleet management technology typically includes the vehicle location, speed and time” tools and provide new levels of field service and vehicle fleet performance. Interestingly, those field service organisations that operate fleet management, for example, say they recoup the benefits, with a more efficient workforce, reduced insurance costs and improved working practices, all factors which can lead to a rapid ROI. Given that doing more with less is a concern for 60 percent of respondents, investment in such technologies is recommended in order to improve efficiency in a short timescale. The capabilities of modern field service management solutions can improve a company’s productivity and level of service by enabling every aspect of a mobile operation to be identified, measured, and analysed. Efficiency can be increased by completing more tasks per day with the same
workforce and a boost in customer satisfaction and retention can be achieved through greater appointment flexibility. The technology also helps boost customer satisfaction by enabling better communication, answering more customer service calls per day and mitigating return visits by getting the right worker to the right job at the right time. In addit ion, t he information provided by the fleet management technology typically includes the vehicle location, speed and time, but also may include work order information, driver behaviour and vehicle diagnostics data such as mpg, fuel use or vehicle faults. As a result of the insight delivered, businesses can start to reduce direct expenses such as fuel costs by optimising route planning, improving operational efficiencies and driving
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£$€
€
Operations revenue generation through top quality customer service and maximum flexibility. With the knowledge of where resources are, their status and time on site, businesses can make the real-time decisions required to keep their operations running as smoothly and as cost effectively as possible. Minimise the impact of fuel price hikes The Road Ahead report revealed that rising fuel prices have become the number one concern in meeting field service priorities, and as vehicle utilisation is a daily necessity for field services, it is a major contributor to budgetary concerns. However, although fuel costs may be beyond the control of fleet managers, consumption is not. Once deployed, fleet management technology can decrease a business’s fuel costs by
reducing unauthorised vehicle use, curbing excessive speeding as well as lowering vehicle idling times by 50-90 per cent. By improving ve h ic le ma i ntena nce scheduling and monitoring a vehicle’s performance fleet management solutions can also help businesses reduce the amount of fuel used by their fleet, and increase the amount of time vehicles are in productive use. This increased asset utilisation reduces vehicle component wear and tear, which lowers the risk of mechanical failure, increasing a company’s profits further. However, it is worth noting that fuel utilisation can vary significantly between drivers due to driving style and also the health of the vehicle. You cannot manage what you cannot measure. It is for this reason that fuel data use per individual vehicle can be of significant value to managers,
“fuel prices have become the number one concern in meeting field service priorities” BE Transport & Logistics | 15
“Simple policies to improve driver efficiency can also play an important role in containing fuel costs.” rather than the overall fuel use of a fleet. Simple policies to improve driver efficiency can also play an important role in containing fuel costs. This could be as ‘low tech’ as introducing ‘how is my driving?’ stickers which are proven to improve safe driving (and therefore fuel consumption), or look at a driver training programme that teaches more efficient driving. Small changes in driver behaviour, vehicle condition and intelligent routing all make a significant difference to fuel use and can be controllable through driver education, better work scheduling and regular maintenance, servicing and even tyre pressure checks to minimise fuel wastage. The Energy Saving Trust (EST), for example, provides training for fleet drivers through its Smarter Driving training programme that
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Operations focuses on more fuel efficient driving which goes handin-hand with safer driving. However good drivers may think they are, the practical vehicle-based course shows drivers what is possible and how differently an individual can actually drive. The course, which has trained over 30,000 fleet drivers, is about changing driver behaviour through showing people how to think differently and increase their awareness on the road. The course typically shows a 15 percent improvement in fuel saving. Address customer service priorities while boosting productivity Trimble’s Road Ahead report revealed that, above all, achieving customer satisfaction is the number one priority for field services and 60 percent felt that this will need to be achieved with fewer resources. The vast majority of respondents (80 percent) find that customers are more demanding than five years ago, and in terms of deliverables, meeting those challenging consumer expectations is an area businesses must concentrate on to truly excel.
80% Believe customers are more demanding than five years ago Effective delivery is critical to a positive service experience. Tardy arrivals, missing deliveries and the inability to specify a time and date for arrival are the key contributors which have left consumers feeling let down by field service deliveries. It is no longer acceptable to say anytime during the day and a staggering 81 percent of respondents placed a high priority on offering acceptable appointment slots, as they recognise the busy consumers of today want more certainty from their suppliers. Building a relationship with a customer, making a promise and delivering on it will allow for a happier
customer base but achieving this can exponentially affect costs in terms of resource allocation, something many businesses are struggling to control. Managers can tackle this by optimising scheduling to ensure customers are offered acceptable appointment slots, which are met and attended to by qualified and prepared staff. Recent consumer research commissioned by Trimble found that customers are willing to pay for next day delivery, allowing organisations to charge a premium price for a premium service, as well as improving workforce utilisation and avoiding the financial and environmental costs of repeat appointments. Ultimately, getting it right the first time round will utilise your resources in the most efficient way whilst keeping the customer happy and brand reputation intact.
Mark Forrest is general manager of Trimble’s Field Service Management Division, which provides visibility into field and fleet operations so businesses can streamline efficiency and increase productivity. www.trimble.com/fsm
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Best practic
in distributio 18 | BE Transport & Logistics
ce
on
Distribution
The rapid rise in the number of products available requires new delivery systems to improve driver longevity and fleet efficiency
written by: Thomas R. Cutler BE Transport & Logistics | 19
Distribution
T
he beverage industry has seen an explosion of new products and SKUs in recent years as craft brewers assume a larger market share and electronic inventory management becomes more critical. These data result in a new complex reality about truck loading and delivery. As fuel costs rise, it is increasingly essential that distributors make effective use of space, manpower, and trucks. These factors have generated a need for more efficient and flexible delivery systems. Industry changes like warehouse automation, SKU proliferation, and an increase in alternative store types, along with work force dy na m ic s, combine to necessitate route distribution systems that increase productivity and decrease operating
costs. New lift-pallet systems offer the biggest promise for supporting product innovation in the marketplace. Customer demand for package and size options The need for improved route distribution systems results from extraordinary growth in the number of product innovations. Food and beverage segments have seen the greatest growth, with chips now available in twelve or more flavors, to beers offered in different sizes (with multiple flavors in each size), to a boom in single serve packages; customers are purchasing a much wider variety of products. This change in how consumers want to purchase has introduced complexity into the supply chain, with resulting impacts to warehouse management systems as well as route
“The change in how consumers purchase has introduced complexity into the supply chain”
distribution systems that get the goods onto the shelves. The rapid rise in SKU growth from increased product options over the past few years is illustrated below. The average number of SKUs on a route has more than doubled between 2003 and 2011. This increase makes it more difficult to move goods through the supply chain and is causing the need for innovation in route distribution systems. The two-wheel hand truck in use since the 1940s is not sufficient and store managers believe distribution equipment is taking up valuable aisle space, creating a desire to get product delivered to the shelf faster. “The SKU proliferation has intersected with the need to speed up delivery by taking it out of the route drivers’ hands,” noted Greg Ecker, executive vice president of Magline. “Those companies which efficiently pre-pick and package the large number of different items in the warehouse differentiate themselves by meeting the growing demand for packaging variety.”
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Best practice in beverage distribution Watkins Distributing Sales and Service, a family-owned and operated distribution business in Idaho, was investigating ways to improve efficiency and driver longevity. Watkins has more than 130 employees and delivers approximately four million cases of beer per year. Wat k i n s began e x p e r i me nt i n g w it h warehouse and delivery changes several years ago. Like other beverage distributors looking for best practices, the company delivered for major companies like AnheuserBusch, as well as shipments for craft breweries, such as Craft Brewers Alliance and Firestone Walker. The variety of beverage products being delivered required Watkins
4 Million Cases of beer delivered by Watkins Distributing Sales and Service to organize both warehouse and trucks quickly and effectively. The company began to phase out 16- and 18-bay trucks, typically sideload, in favor of end-loader trucks with lift gates. Convenience stores and large grocery stores Cont i nued process improvement mandated that the company find easier methods for drivers to deliver products at their many stops. Watkins experimented with various options, including
pallet jacks, six-wheel carts, and the Magliner CooLift Delivery System. These new pallets are smaller than traditional pallets; CooLift holds about 35-50 cases, as opposed to up to 75 cases on a regular pallet. Larger traditional pallets require the assistance of an electric pallet jack, however, and cannot fit into the back rooms of most convenience stores. Watkins found that these smaller pallets allowed them to create “hybrid� routes, tailored to the realities of this delivery model. According to Mitch Watkins, president of Watkins Distributing, “We have a lot of routes where a driver has to deliver to ten smaller stores and one or two large grocery stores. The smaller pallets are perfect for the convenience
Impact of SKU growth on delivery and warehousing Side load aggregate build
2003
2007
2008
2011
Average # of unique SKUs at distribution center
220
312
337
365
Average # of SKUs on route
105
153
165
212
Average # SKU picks per customer stop
12
14
21
29
Source: Magline
22 | BE Transport & Logistics
Distribution
“We have a lot of routes where a driver has to deliver to ten smaller stores and one or two large grocery stores” stores, because the driver can roll the pallets right through the front door and into the back room before he even has to touch a case. Meanwhile, we can also load regularsized pallets for the grocery stores, next to the CooLift pallets on the truck. It allows
us to be flexible and pack for different kinds of routes.” The system allowed product to be delivered to the store with a 50 percent reduction in driver product touches. At the delivery location, drivers transfer product to the final destination through The Magliner CooLift delivery cart
a standard sized door, unlike with full-size pallets, because of the pallets’ compact size. The system was designed around the footprint of getting through a doorway easily, maneuvering store aisles, and turning in tight radius corners. The system’s pallet height is 13.5 inches, judged by major ergonomic studies as the best height from which to lift products, as compared with a standard pallet height of 4-6 inches. Customers have reported an astounding 60 percent reduction in worker lost time events, directly tied to the driver avoiding bending when lifting a case of product. Happy drivers yields best practice delivery Watkins ran an in-house comparison with six-wheel carts and hand carts, and drivers responded most favorably to CooLift. With
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“The shrinking workforce means tenured employees tend to stay on the job longer” hand carts, every case still had to be transferred one at a time onto a hand cart. Drivers had to wheel that cart into the store, move the empty cart back to the truck, and manage the empty carts as they accumulated over the route. A convenience store might receive a hundred cases in a delivery and a driver will typically have to go back and forth from his truck eight times before checking with the manager. Afterward, there is still an additional eight to ten runs into the cooler to put product away. Watkins reported that with the new solution drivers had a lot less physical and organizational stress and strain. When drivers do not have to pull every case of beer off a truck one at a time drivers deliver more stops with less impact on their bodies. Several pallet lengths with differing weight capacities are available, which
optimizes space on the trailer as products can be “cubed” out most efficiently on the truck. The optimum build on the pallet can optimize space on the trailer. The system has been in use for several years and several new innovations to increase warehouse productivity have been introduced, based on process observation and customer feedback. For example, a pallet adapter tool allows the warehouse to use a forklift or walky rider to move two pallets at once from a warehouse picking process. With more than 1000 of the systems on the ground, customers
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15% Increase in overall productivity using the CooLift system
reported an increase of about 10 percent in the number of deliveries made, with about a 20 percent increase in product moved by each vehicle, for an overall productivity increase of about 15 percent. Fewer trucks on the road result in smaller fuel bills, and less physical impact on the driver. Attracting and retaining employees At the same time as SKUs are proliferating and new outlet types are developed, there
Distribution
is a growing concern about the employees performing distribution jobs. Seeking produc t iv it y gains, companies have turned to warehouse automation, which is resulting in fewer trucks and trailers out on
the road and a potentially shrinking workforce with fewer route distribution drivers. The shrinking workforce means tenured employees tend to stay on the job longer and, as the workforce ages, it becomes
Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc. Cutler is the founder of the Manufacturing Media Consortium including more than 4000 journalists, editors, and economists writing about trends in manufacturing, industry, material
more difficult to do the work at the same level with the amount of bending and twisting involved. These new best practice solutions keep dedicated hardworking delivery drivers on the road.
handling, and process improvement. Cutler is a member of the Society of Professional Journalists, Online News Association, American Society of Business Publication Editors, and Committee of Concerned Journalists. trcutler@trcutlerinc.com
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What the futu the field serv
Customer satisfaction is incr priority in the fight to attr
written by: M
26 | BE Transport & Logistics
Customer service
ure holds for vice industry
reasingly being seen as a top ract and retain customers
Mark Forrest
BE Transport & Logistics | 27
A
s field service organisations review their priorities, it’s important to note what factors are driving them. Budgets? Productivity? Efficiency? All of these play a role in some capacity but when it comes to key strategies, there are several that come up time and time again.
Good customer service drives profitability Field service organisations are recognising the importance of delivering a greater customer experience to be successful. Happy customers are loyal customers and critical to improving revenue streams, both through their spending as well as referrals. At Aberdeen’s 2012 Chief Service Officer (CSO) Summit, 85 percent of attendees said that their organisation was placing an increased importance on service, given the constraints of the economy and the competitive marketplace. In addition, the delivery of excellent customer experience was spreading across the entire organisation, by focusing on increased value for the customer, which
in turn improves results for the business. Aberdeen also found that ‘best-in-class’ organisations have reduced churn and achieved a 92 percent level of customer retention, as opposed to 72 percent for all others. The strategic importance of field service delivery as a driver of customer satisfaction and brand reputation was confirmed in Trimble’s latest research report, The Road Ahead The Future of Field Service Delivery. Of the field service departments sur veyed, 90 percent of companies see field-based staff as the face of the company and 68 percent consider customer satisfaction a top priority. Safety is a key priority Vehicles driven for work purposes are clocking up the highest mileage on Britain’s
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85% Attendees of Aberdeen’s 2012 summit who are placing an increased importance on service
roads. A recent survey into the Fleet200, the UK’s 200 biggest fleets, revealed an average 35 percent accident rate, suggesting the need to mitigate road risk is of the utmost importance. Because of this acceleration in road accidents, field service organisations are becoming increasingly aware of their legal responsibilities when it comes to employees driving a vehicle for business. Businesses are looking for ways to safeguard their fleets, both to minimise insurance claims and to reduce the number of driving incidents. The result is an increase in next-generation technology solutions to help mitigate road risk. These solutions include in-vehicle safety devices that monitor driving behaviour as well as maintenance and diagnostics reports to ensure vehicles are safe and “roadready.” The best solutions also include exception alerts that warn of hazards or out-ofcompliance issues, including lapsed certifications. Technology will streamline fuel costs The volatile cost of fuel has caused a headache across
Customer service
“Field-based employees are now being rightly recognised as the new frontline in customer service” many businesses and this isn’t likely to subside soon. In fact, rising fuel prices were cited as the number one concern in meeting field service priorities, according to the Road Ahead report. Regulating fuel consumption has been an on-going challenge for fleet managers trying to maintain control of operating budgets. Re-evaluating the types of vehicles in their fleets as well as initiating programs to raise awareness of excessive idling will help remedy the problem, but savvy businesses will also harness technology that monitors and identifies excessive waste in fleets to encourage fuelsaving strategies. In addition to streamlining fuel costs, businesses can seek “connected-vehicle” technology (i.e. GPS based fleet management devices, workforce management/ dispatch and routing software
and driver-monitoring devices) to regulate and enhance efficiencies and improve per for mance management across the entire organisation, which ultimately improves the bottom line. Technicians will take on a lead role Field-based employees, whose potential as brand ambassadors had gone largely unnoticed, are now being rightly recognised as the new frontline in customer service. The Road Ahead report found that nearly all (93%) of respondents agreed that mobile workers are the ‘company face’ and an additional 89 percent consider field staff to be important for the image of the business. Two thirds agreed mobile workforces must be made aware of company campaigns and values if they are to
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reflect a positive corporate brand out in the field. Nearly half of those surveyed hold regular customer service training sessions and a further 31 percent meet frequently to discuss how to interact with clients. So it is not surprising that there has been an increase in technicians undergoing training to promote the brand and helping to drive revenue by finding opportunities to cross sell and up-sell products and enhance service to increase c ustomer sat isfac t ion (and retention). Aberdeen’s Field Service 2012 report revealed that 26 percent of visits require a secondary or additional follow up, so it is very important that technicians get it right the first time to ensure customer satisfaction. Companies that empower their workers with better information and tools will resolve customer issues
Customer service faster and more effectively. By investing in appropriate technology and improving worker training, businesses will not only retain customers (and good workers), they will develop brand agents who are more knowledgeable and better equipped to do their jobs efficiently and productively. The importance of the cloud Many field service businesses are starting to lean towards cloud computing as a way of helping remote workers stay connected to company data and applications from anywhere at any time. The ‘software as a service’ (SaaS) form of cloud computing is well suited to organisations with field based operations. SaaS cloud-based applications can offer visibility into day-to-day fleet operations to identify, manage, and improve areas such as driver safety, customer service, back office administration, fuel use, and fleet efficiency. Businesses are able to access their account and information at any time from any computer and manage
the mobile workforce in real time. Benefits of increased productivity of up to 30 percent, dispatch efficiency up to 60 percent and a reduction in overtime expenses of up to 70 percent have been recorded. Information is key, not data It is important to note that the data collected through f leet and field service technologies can only be
of value if it’s turned into meaningful information and the analysis is provided to the right stakeholders, who can then analyse and use it to impact areas of the business most in need of support. Decision makers are suffering from data overload in their attempts to operate the most efficient workforces and fleets on the road. What they need are high level trends and benchmarking, not a mass of information. Analytical tools allow companies not only to extract rich, meaningful data from their various solutions, but also ensure that key stakeholders get that information in salient, relevant reports and snapshots. These give an instant, clear picture of business performance whether that’s for operations, finance, customer service, HR or the CEO.
Mark Forrest is general manager of Trimble’s Field Service Management Division, which provides visibility into field and fleet operations so businesses can streamline efficiency and increase productivity. www.trimble.com/fsm
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Flying into
Mauritius may seem remote but it is reaching Europe, Africa, Asia and Austra of using that advantage to be a profita
written by: jo research by:
32 | BE Transport & Logistics
Air Mauritius
o recovery
strategically placed, with a network alia – Air Mauritius has worked out ways able carrier as well as a national asset
ohn o’hanlon : vince kielty
BE Transport & Logistics | 33
Business class cabin
Air Mauritius
A
nyone with an eye on the travel industry will see that there has been a lot of activity around Air Mauritius in the last year and that it has begun to make ripples that will get it noticed even by its biggest competitors. The fact is that Air Mauritius is not simply a regional airline but one that flies each week to four continents and is punching way above its weight in the global industry. As an example, this month alone it announced that it is about to re-establish two weekly direct flights to Durban, one of South Africa’s most vibrant commercial centres, and had expanded its services to Johannesburg and Nairobi in order to reinforce connectivity to Africa and better position Air Mauritius as a bridge between Africa and Asia. Mauritius has economic, political and cultural ties with Europe, Asia and Africa. On the other hand, from an airline connectivity perspective it is not ideally situated and is at a disadvantage compared to hubs in the Middle East, Johannesburg, Nairobi or Addis Ababa. The status of the country as a leading tourist destination and financial centre has been hugely supported by air connectivity as reflected by the Air Mauritius network that has managed to overcome the geographical disadvantage of Mauritius and made it a potential hub for the region. So, also this month, the airline said it would start flying direct to Beijing on July 6 2013. Following the introduction of twiceweekly direct flights to Shanghai earlier this year and adding flights to Hong Kong, Kuala Lumpur that provide connections to mainland China, the direct link to the latter’s
BE Transport & Logistics | 35
€6.1 million Profit in Q3, FY 2011/12
André Viljoen, CEO Air Mauritius
36 | BE Transport & Logistics
capital, Beijing will be yet another catalyst for the development of the Chinese market, said Air Mauritius’s CEO André Viljoen. “It opens new avenues for the consolidation of ties between our two countries and allows Mauritius to further tap into the opportunities offered by one of the world’s fastest growing economies.” All this activity is part of the ongoing implementation of a new ‘7-Step Plan’ that he has put in place to turn Air Mauritius’ business around from the lossmaking situation it was in when he came on board in 2009. Formerly, Andre Viljoen was the CEO of SAA, where he restructured the organisation and oversaw the replacement of its entire fleet. Dating back to 1967, just as the island was gaining its independence, when it was set up as a joint venture between the government of Mauritius, Mauritian company Rogers, Air France and BOAC, Air Mauritius is based at the capital Port Louis and operates out of Sir Seewoosagur Ramgoolam International Airport. Over more than four decades it has grown to become the fourth largest carrier in sub-Saharan Africa. While it is the flag carrier of an independent nation, it has suffered from being a destination airline, whose main business was seen as bringing tourists and visitors to what is after all one of
Air Mauritius
the most idyllic and attractive places to visit, with its appealing French ambiance, though it remained predominantly under British influence since the early 19th century. And Air Mauritius had to face negative financial results in recent years. In the fourth quarter of 2011 alone the airline lost €3.6 million. But reel back to when Viljoen joined the company in 2009 as CFO at the time of the US sub-prime crisis. “We faced a huge challenge,” he says, “but we managed to get out of a fuel hedging loss of €150 million
– and the following year we turned that into a profit of €10 million. However at the start of the 2011 financial year oil prices shot up from 90 to 120 dollars a barrel and the Euro fell against the dollar.” Air Mauritius receives most of its income in Euros, while fuel, representing around 40 percent of all its costs, is paid for in dollars. “Those market shocks are not in our control any more than the weather,” says Viljoen. It all goes to show how volatile the market is. The company recorded losses of
“All this activity is part of the ongoing implementation of a new ‘7-Step Plan’ put in place to turn Air Mauritius’ business around” BE Transport & Logistics | 37
“We needed to make some radical changes, changes that would not be accepted by our shareholders unless they were supported by an independent professional services company” €21.2 million in the nine months to December 31 2011: however in the third quarter ending December 31 2012 it made a profit of €6.1 million, against a €3.6 million loss in the corresponding period the previous year. These green shoots, he says, can be credited to the company’s 7 Step Recovery Plan. What he refers to as market shocks may not be in an
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airline’s control, but there is a smarter way to manage the business, he believed. Right at the beginning of 2012 he called in Seabury APG, a consultancy that specialises in the airline industry. “We chose Seabury above all other consultants,” Viljoen explains, “because they had some impressive tools. Some consultants just tell you the time using your own watch!
Air Mauritius
Air Mauritius pilots
We needed to make some radical changes, changes that would not be accepted by our shareholders unless they were supported by an independent professional services company. Seabury did some interesting diagnostics. They started by asking whether our business model was challenged only because of fuel prices and the Euro, or was there more? Well, we knew there was more! They helped us put it concisely into presentations we could show to our stakeholders and shareholders.” Using these diagnostic tools, Seabury was able to predict that if Air Mauritius carried on business as usual, with its current fleet flying over its current network, it would make losses between €27 and €33 million in each of the years to 2017. “The time had come to revisit the business model,” he says. Seabury
worked with the airline over five months, examining every detail of the business, making constant presentations and in the end put a very convincing argument forward to the shareholders that if nothing was done there would be no Air Mauritius in a year’s time. The first task for Seabury was to approach a hundred stakeholders from government right down to the hotel and bar owners on the island, to find out exactly what kind of an airline they wished Air Mauritius to be. “They found that everyone loves Air Mauritius – they see it as their national carrier – but they all had different ideas. Some thought we should be like Emirates: that the government should give us a blank cheque to renew our fleet and bring the world and his wife to Mauritius. It all centred on whether our main purpose
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should be profits or national interest.” The trouble is that Mauritius does not have any oil or natural resources of its own so it can’t afford to support a loss making airline of the ‘National Developer’ type, whose core objective is to stimulate the country’s economy. “We concluded that our primary purpose is to be profitable in the national interest – the two are not mutually exclusive. Once you are in profit, then you can start to
think about being the flag carrier. Our role is to be a profitable national airline.” Seabury helped Air Mauritius to create a matrix, the quality of service index (QSI) that determine the passengers’ choice of an airline. Among the parameters, the more frequent the flights, the more ‘friendly’ the times of those flights, and the better the connections with other airlines, the higher the QSI. Armed with the QSI, supported by a global database,
“Air Mauritius has demonstrated its ability to adapt and we have every reason to believe that we are equipped to meet the challenges ahead”
Premium class check-in area
40 | BE Transport & Logistics
Air Mauritius
Air Mauritius cabin crew
he says, it is possible to make competitors. Today BA flies to Mauritius four times a changes that will increase it – deals with other airlines, week from Gatwick: we fly changes to flight times – then the same number of flights work out whether the entire from Heathrow. Neither gives Number of Air Mauritius travel industry, down to a perfect service; but if we employees. individual agents, are giving work together we can cover Air Mauritius the market the entire week.” share that is its due. The 7 Step Plan grew out An important factor affecting the airline’s of Seabury APG’s network model, which uses credibility in the market was the frequency of planning and financial evaluation tools to its long haul flights, which at 2.2 per week put estimate the market share the airline should it on a par with charter companies. Emirates achieve. The first step is to concentrate the has competed successfully in Mauritius network, with fewer destinations, greater precisely because it grew its frequency from frequency and more alliances like the one three to five, and then to seven flights a Viljoen outlines while suspending unprofitable week, Viljoen says. “Frequency stimulates routes. Step 2 identified ways of maximising the market and takes people away from revenues. The company initiated a number of
3,000
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Air Mauritius measures to boost sales, like rewarding frequent flyers better, making better use of e-commerce and entering partnerships with other airlines, banks or car hire companies. Cost reduction across the board and disposal of non-core assets were taken care of in Steps 3 and 4. Step 5, described as a game-changer by Viljoen, would see the replacement of Air Mauritius’s fleet of old A340-300 aircraft with new generation Airbus A350 or Boeing 787s, attracting partner airlines and saving up to 25 percent in fuel. That will take some time to implement, of course and is expected to be complete by 2017. Meanwhile the move to dramatically upgrade levels of service by Air Mauritius’s 3,000 employees is just about fully implemented via a training programme delivered by the management guru Ron Kaufman. That’s Step 6: the final step, Step 7, involves leveraging the company’s human capital by instilling a performance management culture, including a performance related bonus plan. In contrast to the bleak scenario of the ‘business as before’ model, Air Mauritius is now set on a path of profitability this year and beyond, André Viljoen believes. “Since we undertook a review of our business model and embarked on the path of transformation Air Mauritius has demonstrated its ability to adapt and we have every reason to believe that we are equipped to meet the challenges ahead.” For more information about Air Mauritius visit: www.airmauritius.com
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Putting the ease in tease
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Comair Running an airline is normally a deadly serious business but this South African operator has made a name for itself by poking fun at just about everybody
written by: Alan Swaby research by: Paul Bradley
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The Comair operations centre
Comair
C
omair in South Africa could just well be the most unusual airline in the world. Operations director Martin Louw doesn’t much care for the term Jekyll & Hyde but it’s hard to deny there is something of the schizophrenic about Comair. It’s not the country’s oldest airline—that distinction rests with the national flag carrier South African Airways—but it is certainly the longest surviving private commercial flyer. Started in 1945, at the cessation of WWII by a couple of ex-fighter pilots, it had a low key presence for years until the market was deregulated in 1994. “Governments of all shades,” says Louw, “have always been very protective of SAA as it is considered much more than simply an airline. It is a symbol of the country’s status. That meant for years Comair had to feed on the crumbs left over from SAA’s table.” Some would argue that the scales are still heavily weighted in favour of the state airline. Since deregulation 12 airlines have been started and gone bust. In addition to Comair there is one other – 1time – but even that is struggling. While the private companies have had to rely purely on their own resources, SAA has a safety net in the form of funds from central government. At least, though, since deregulation, Comair has been free to compete on routes it was banned from for many years. The real turning point came in 1994 when the turbo prop fleet Comair had been obliged to stick with started to be replaced with jet powered aircraft. On the strength of that move, Comair entered discussions with
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COMAIR Comair
ATM AND THE ENVIRONMENT In the aviation industry, it is glaringly obvious that there is only so much sky. Balancing the increasing demands of air traffic with this finite resource falls to Hennie Marais, executive of air traffic management for Air Traffic and Navigation Services (ATNS) “ATM is all about getting things done more efficiently and cost-effectively,” explains Hennie Marais. “The sky is only so big, and yet the need for air travel has increased over the decades as economies around the world have grown. Customers now have heightened expectations from the aviation industry, such as more flights between London and Johannesburg, for example. ATM tries to find better ways of doing things that not only increase capacity but also keep costs affordable. It’s about making the most efficient use of the airspace we have available.” Given this long-term, strategic approach, Marais explains that everything that Air Traffic and Navigation Services (ATNS) does with regard to ATM is based on forecasts, taking into account economic growth (or decline), socioeconomic statistics and the resultant anticipated demand. For ATNS, the first draft operations plan for the 2010 FIFA World Cup was ready for evaluation in October 2008, and the planning for King Shaka International Airport took three years. “During the planning, we take into account
aspects such as airport and airspace capacity, and the projected needs of customers. But it’s a fine line, because while you have to create capacity about 12 to 24 months in advance, you cannot create too much capacity because this would incur unnecessary costs,” explains Marais. It is often the small things that make the biggest difference. “Sometimes you can make an operation more efficient without spending a lot of money. Instead of building new runways or taxiways to reduce the amount of time airplanes remain in a holding stack, a small piece of added tarmac in exactly the right spot might allow airplanes to make a quicker turn. If this reduces the time of each airplane on the ground by 10 or 15 seconds, by the end of the day you have an extra hour, which means that 40 additional airplanes can be accommodated.” Marais proudly recounts how, on 5 December 2011 during COP17, ATNS cut 35 minutes of flying time off an airplane flying from Dubai to Durban. “The airplane flew the same distance as always, but we implemented a totally efficient flight trajectory. The result was that we saved approximately 4,500kg of CO2 emissions and over a ton of fuel.” Proof of efficiency? Exactly! www.atns.co.za
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COMAIR Comair tempor incididunt ut labore Lorem ipsum dolor British Airways to become sit internal amet, franchisee consectetur et dolore magna aliqua. Ut the of adipisicing elit,routes sed do enim ad minim veniam, BA. Long haul in quis nostrud exercitation eiusmod incididunt and out tempor of South Africa ullamco laboris nisi ut ut labore et magna remained thedolore province of aliquip ex ea commodo aliqua. Ut enimbut ad Comair minim British Airways consequat. Duis aute irure veniam, nostrud was able quis to operate on dolor in reprehenderit in exercitation ullaroutes mco internal and regional voluptate velit esse cillum laboris ut aliquip ex wearing nisi its colours and for dolore eu fugiat nulla ea consequat. the commodo first time, giving SAA pariatur. Excepteur sint Duis aute irure dolor in some competition. occaecat cupidatat non reprehenderit “ T he rolein voluptate of BA This is a caption this is a caption Overview of Comair’s training centre proident, sunt in culpa qui velit esse cillum franchisee,” says dolore Louw, eu fugiat nulla pariatur. sint franchise officia deserunt mollit est laborum. “was not uncommon at theExcepteur time but these fee and the anim moreidsuccessful we occaecat cupidatat non proident, sunt in are Lorem ipsum dolor amet, consectetur in expanding thesitpassenger base, the days, apart from Comair, we believe there culpa mollit anim id adipisicing sed doOther eiusmod tempor lower this feeelit, becomes. than this, we is onlyqui oneofficia other deserunt left – a very small scale est laborum. Lorem ipsum dolor amet, labore dolore magna aliqua. have a freeut hand. Weettake responsibility for operation in Denmark. To earn thesitright to incididunt consectetur adipisicing elit,we sedpay do eiusmod enim ad costs minim nostrud act as BA’s representative a small Ut all running butveniam, also takequis all profit.”
THE BOEING COMPANY MAXimizing today’s success for tomorrow Boeing’s 737 MAX provides another chapter for the world’s most successful commercial airplane. The single-aisle airplane accounts for roughly 64 percent of Africa’s airplane demand over the next 20 years. That’s why airplane manufacturers must get their future products right. That’s exactly what Boeing is doing by improving today’s Next-Generation 737 with tomorrow’s 737 MAX. As airlines look to update fleets with the most fuel efficient airplanes to mitigate rising costs in fuel, the 737 MAX becomes the perfect airplane of the future. As the name states, the newest member of the 737 family will maximize efficiency, reliability, and comfort – it’s the total package for single-
aisle airplanes. As with today’s 737, tomorrow’s 737 MAX gives airlines the lowest operating costs in the single-aisle segment with an 8 percent advantage over its competitor. The airplane’s fuel burn is expected to be 16 percent lower than the competitor’s current offering and 4 percent lower than their future offering. For emissions, when compared to a fleet of 100 of today’s most fuel-efficient airplanes, this new model will emit 277,000 fewer tons of CO2 and save nearly 175 million pounds of fuel per year, that’s $85 million in cost savings! Take this new efficiency coupled with the reliability and maintainability of today’s 737, include the new Boeing Sky Interior, and you truly have an unbeatable airplane.
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first
Nouveau Monde DDB Toulouse / Pixteur - © ATR.
Environment
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Comair’s first brand new aircraft, a Boeing 737-800 in kulula.com livery
It’s a win-win situation. British Airways business he refers to is kulula.com—the has a South African presence that would Mr Hyde to British Airways’ Dr Jekyll. otherwise be prohibitively expensive to “The 1990s saw a mushrooming of low maintain and a greater chance of picking cost air travel,” says Louw, “and our view up long haul passengers by virtue of having was that we could either watch some other routes timed to connect with scheduled organisation fill that slot in South Africa or flights. Comair carries overseas passengers take the initiative ourselves.” internally and regionally who might So in 2001, kulula was launched onto otherwise have travelled the main domestic routes in some other way to their linking Johannesburg with final destination. “Having Cape Town, Durban, Port BA flights at our disposal,” Elizabeth and George in says Louw, “also helps the Western Cape. It has with the other side of our to be remembered that at Airline industry business, giving us greater the time, the promise of deregulated in operational flexibility.” low cost travel under the South Africa The other side of the original advertising slogan
1994
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B13208/3883
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Comair “now everyone can fly” was a truly novel proposition. Unt il t hen, crossing the hundreds of miles bet ween Johannesburg and anywhere else by air had been the privilege of the middle classes. Now ordinary people could swap the hours on a train or behind the wheel for a one to two hour flight. Last year, between the traditional BA and the low cost kulula, Comair had revenue of R4.3 billion. It operates two fleets of Boeing 737s – 14 for BA and 10 for kulula with a total of 182 pilots and 420 cabin crew from a grand
An African Welc An amazing e
Operations control
workforce of 1800. At its peak, the schedule contains 130 flights a day. Safe, reliable service into Afr Low cost competition for the dominant SAA would no doubt have been sufficientYour answe to make kulula a success but the joint chief
Providing quality ground handling services to m airlines operating 16 500 flights a month. BidAir S most experienced A380 handler in Africa!
BidAir Services BidAir Services is an integral member of the Bidvest Travel and Aviation Division of the Bidvest Group. Providing a full spectrum of ground handling services, BidAir Services is in the unique position of being the only wholly South African ground handling company operating in the South African market. BidAir Services provides handling services to more than 20 international and domestic airlines at Johannesburg, Cape Town, Durban, Port Elizabeth, East London and George airports and since March 2008 has handled in excess of 850,000 flights. BidAir Services is proud of the fact that the first three airlines to operate scheduled A380 services to South Africa were all
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clients of ours. Having handled in excess of 1,200 A380 turnrounds we can quite proudly say that we are the most experienced handler of this aircraft type on the African continent. Due to the acquisition of Comair’s inhouse ramp handling services provider our association with Comair pre-dates 2008 and we are honoured to play a significant role in the success achieved by the airline. Ramp and grooming services are provided to more than 5,500 Comair flights a month and we are justifiably proud of the sustained high levels of service given to the airline. marketing@bidair.co.za
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Comair
Boeing 737-3/4/500 simulator
“At the front of house, we never take ourselves too seriously and we invite passengers to enjoy the joke with us” executive at the time decided to make the brand utterly unforgettable by taking a most un-PC approach to marketing. “Kulula,” explains Louw, “is the Zulu word for ‘easy.’ We aim to inject this same feeling of ease into the way we run the business. Behind the scenes, kulula is run exactly like any other airline. In our case, all pilots and 50 percent of the cabin crew are interchangeable. But at the front of house, we never take ourselves too seriously and we invite passengers to enjoy the joke with us.”
Rather than striving for corporate grandeur in the planes’ livery, kulula’s fuselages are covered in cheeky captions indicating which are the doors and where the black box (which they point out is actually orange) is located. Passengers are shown that the big cheese is on the left of the cockpit and the other pilot with the PA system is on the right. Working as part of kulula’s cabin crew gives free rein to all wanna-be comedians. The safety instructions they are obliged to
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Comair
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Old Mutual helping South Africans achieve their retirement goals For over 40 years Old Mutual has partnered with Comair Limited to provide retirement fund solutions for Comair employees, thereby enabling them to take ownership of their retirement planning and finances, creating the futures they desire for themselves and their families. Through Old Mutual’s Financial Wellbeing Programme (FWP), Comair employees are provided with ongoing and comprehensive financial health assessments, educational workshops, financial advice and support, helping them to make informed decisions regarding their financial futures. Modules include risk management, investment and retirement planning and more! As part of FWP, Comair employees also have access to Member Support Services (MSS)—designed to help retirement fund members make good financial and investment decisions at certain life events, such as retirement and resignation. By partnering with SMEs through to large corporate employers in South African industry, Old Mutual Corporate provides leading solutions to help South Africans achieve their financial goals. Our solutions include retirement investments, savings, risk management and retirement fund administration products and services as well as actuarial and consulting services. Through Old Mutual’s SuperFund, we cater for all businesses with Easy Benefit Plan, Orion and Evergreen umbrella funds. For more information about Old Mutual Corporate and the Financial Wellbeing Programme, contact us on 021509 1098. WE HAVE OVER 165 YEARS OF WISDOM TO INVEST IN YOU Contact your Old Mutual Corporate Consultant on +27 21 509 1098 I www.oldmutual.co.za/evergreen
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Capt Martin Louw, Director Operations of Comair Limited
recite are sent up mercilessly. Passengers who can’t figure out how to use the seatbelts, for example, are told that perhaps they shouldn’t be out alone. The instructions relating to the use of oxygen masks include directions to stop screaming and pick a favourite child to look after. Pilots also get in on the act. They might be heard to urge their plane to “whoa there big fella; whoa!!” There are often jokes about landing in the wrong place and even VIPs aren’t immune. Puppets of Nelson Mandela and Archbishop Tutu have been enlisted to help advertise the airline while kulula took the Mickey out of the polygamous President Jacob Zuma by announcing a special offer for the 4th wife to travel free. This kind of irreverent humour goes down well with South Africans but kulula
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AIRPORTS ARE VITAL TO ECONOMIC GROWTH Airports Company South Africa’s nine principal airports play a key role in the broader transport sector, so vital to the health of our economy. Over the years, Airports Company South Africa has successfully transformed its airports into effective global competitors through infrastructure development and efficiencies, and award-winning passenger service levels. This enables South Africa to link people efficiently with their business and leisure destinations, whilst at the same time facilitating trade around the globe. There is no doubt that our airport
Boeing
services underpin our efforts to drive economic development for all our people. Today, some 51 airlines fly into South Africa, up from a mere 18 in 1993 when the company was formed. Passenger traffic has also grown from 12 million in 1993 to reach some 36 million passengers a year currently.
www.airports.co.za
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Comair knows it is a difficult act Airports Company South Africa to manage and get right. Formed in 1993 to own and operate South Africa’s nine “We do get complaints from principal airports, Airports Company South Africa inherited frequent travellers,” admits aged and basic infrastructure. Over the years, airport Louw, “that they have heard infrastructure has been upgraded, but it was the recent fiveall the lines too many times. year, R17 billion expansion and upgrading programme that So our crew will probably propelled our airports to world-class status. The programme included the building of the greenfield King Shaka turn down the humour on International Airport, which serves the Durban region. early morning business In parallel with this investment was a strong focus on flights but lay it on thick for customer service and this has resulted in numerous awards less frequently travelling from Airports Council International and SKYTRAX for the leisure passengers.” quality of passenger service. Airports Company South Of course, all this talk Africa truly lives up to its vision of being a world-leading of out of control planes airport business. www.airports.co.za and bumpy landings can only work if the airline has absolute faith in the professionalism of its crew and the airworthiness of its aircraft. Here, Comair draws no distinction between the two brands. “Our safety record speaks for itself,” says Louw. Comair is a pilot oriented airline. It was started by pilots and even Captain Louw prefers swapping his administrative duties for the flight deck. All Comair’s pilots are trained in-house and in fact, the company runs quite a profitable side business offering its instructors and four
68 Number of years Comair has been trading Inside Comair’s operations centre
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LANSERIA INTERNATIONAL AIRPORT awarded an open tender by the British Government to operate the St Helena international airport from 2015 for a period of 10 years. The high standard of Lanseria International Airport’s emergency service department has resulted in the department launching a service to provide training for emergency staff from various airports in South Africa and other parts of Africa. For the last three years Lanseria International Airport’s fire department has won a national fire fighting competition against teams from municipalities with staff complements of more than 1200 people. One of the challenges being addressed by Lanseria International Airport is the provision of infrastructure to meet both current and anticipated growth in demand.
The ability to rapidly handle arriving and departing aircraft and passengers is one of the core values entrenched in the business model applied by management at Lanseria International Airport. “We focus on the stringent application of management controls,” says Lanseria International Airport manager Gavin Sayce. “Safety and security is of paramount importance and for that reason we adhere meticulously to tried and tested international operational safety and security principles. We focus on training, on certification and on rigorously regulating access to operational areas.” Lanseria International Airport’s ability to maintain international standards can be gauged by the airport’s success in being
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• Fast and efficient boarding • No toll roads to Lanseria Airport • Choice of airlines • The preferred international VIP hub for South Africa • Experience travel like you’ve always wanted to
Comair
Boeing 737-3/4/500 and Boeing 737-200 simulators
“With fuel accounting for 40 percent of our costs, it is cheaper now for us to buy brand new, more fuel efficient planes” flight simulators to more than 30 airlines throughout Africa and the East. For every one of Comair’s 68 years of trading, it has made a profit although the past 12 months have been as difficult as they have ever been. The recession and global difficulties, together with vastly increased charges, have produced a perfect storm. A breakdown of a typical BA fare to Cape Town
reveals the extent of fees and taxes that the airlines have to pay. An R1258 flight, for example, has an R490 flight component and R768 of charges. “We’ve been hit with a 70 percent increase in airport fees,” says Louw, “and even air traffic control has increased its charges by 35 percent. Such way above inflation charges hit us much harder than the government owned SAA.”
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Comair’s training centre
Comair
20% Cost saving per passenger with a Boeing 737-800 To counter these and ever increasing fuel costs, Comair is investing heavily in new aircraft. “For many years,” says Louw, “company policy was to lease pre-used aircraft. But with fuel accounting for 40 percent of our costs, it is cheaper now for us to buy brand new, more fuel efficient planes than struggle on with the old. The new Boeing 737-800 gives us 20 percent cost saving per passenger. So we’ve ordered eight new replacements – four we’ll get this year and a further four over the next couple of years.” The final link in the efficiency chain has been to replace a mix of computer programs with Sabre – a single IT package to handle everything from reservations to operational matters. BA will continue with its own portal but the two can communicate and it is possible to book a BA flight on the Kulula website. It seems as though the government has no interest in whether or not private airlines survive but with investments on the scale that Comair has made, it’s clear that they intend to give SAA a run for its money for many years to come. For more information about Comair visit: www.comair.co.za
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the Boeing company ©
Angola’s take-off
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TAAG Angola Airlines
TAAG Angola Airlines has done much to earn the loyalty of its customers. Director Rui Carreira talks about plans to expand the airline’s international, regional and domestic footprint
written by: Gay Sutton research by: James Boyle
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TAAG Angola Airlines
I
TAAG operates long-haul and domestic flights
n the 10 years since peace has been achieved in war-torn Angola, the transformation has been enormous. The economy has blossomed and grown; so much so that according to figures from The Economist, Angola has been ranked as the world’s fastest growing over the 10 years to 2010, outpacing even those of the much-vaunted BRIC countries. And for the state-owned Angolan national airline, TA AG Angola Airlines, the opportunities are enormous. Increasing numbers of business people are attracted from around the globe to the capital Luanda and to the outlying regions, not only to exploit the nation’s rich diamond, oil, gold and copper resources but also to engage with commerce and smaller business. The increase in demand for air travel is not confined merely to the business sector, either. Tourism is growing rapidly, and the people of Angola generally prefer to make major journeys by air. “Our country is very large,” explains director Rui Carreira, “and some roads are not in good condition after nearly 30 years of war, so air travel is sometimes safer and cheaper.” The airline currently has a fleet of 13 aircraft. Five Boeing 777s operate scheduled long-haul flights to Brazil, Cuba, Dubai and China, as well as to Portugal. Eight Boeing 737s service domestic flights to 14 destinations in Angola along with regional flights to Johannesburg and Cape Town in South Africa, and to the capitals of Cameroon, Central African Republic, Republic of Congo, Namibia, Cape Verde, Sao Tome, Zambia and Zimbabwe. Destinations like the UK, France,
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On one hot afternoon in 1987, Aero Industrial Sales (AIS) began an exciting new business relationship with TAAG Angola Airlines. Our company’s founder, Mr Mohammed Mahmoud, worked vigorously to prove to TAAG how his small start-up company could deliver solutions better, faster and economically. AIS is privileged to have worked with this great African carrier over the past 25 years, serving it with the best that the aviation industry can offer: FAA-accredited safe and economical products; on-time delivery; the latest environmentally green ground support equipment (GSE); and broad and open financing. In August 2009, TAAG’s entire logistics department and spare parts inventory was destroyed by a devastating fire. AIS, always being committed to give its services without delay and uphold TAAG on any AOG situation, was one of the first to step up to the plate and assist TAAG in re-establishing its warehouse inventory as well as other requirements.
As the commercial aviation industry continues to struggle with the global economic crisis and soaring fuel and operating costs, TAAG continues to show its resilience by completely revamping its ageing fleet—with brand new Boeing 777-200, 777-300 and the 737-NG, and the latest GSE equipment. TAAG has catapulted itself into a new African aviation echelon: it was recognized by AFRAA as the winner of the annual African Aviation Achievement Award during the Stakeholders and Suppliers Convention held in Nairobi, Kenya, in March 2012. Aero Industrial Sales salutes TAAG’s staff and management, led by Eng. Pimentel Araujo, for its stellar role in the African aviation industry. We are proud of our two companies’ longlasting business relationship. On behalf of all the team at AIS, I look forward to seeing TAAG achieve great success in all its endeavours, now and in the future.
Congratulations! Mohammed Mahmoud President Mohammed@aeroindustrialsales.com www.aeroindustrialsales.com
TAAG Angola Airlines
There has been greater demand for international flights
Belgium, Spain, Germany, Nigeria, Kenya, plans to expand its international, regional Morocco and Mozambique are served in and domestic services. “There is currently code share with local flag carriers. some restructuring taking place in Angola,” Strong growth is projected for the near Carreira explains. “When the runways future. In 2011, TAAG carried 800,000 and airports are ready, we will fly to more passengers. “In 2012 we estimate we carried domestic destinations. Many people also 1,200,000 passengers. The busiest periods want to fly from one country to another for us are the holiday months of July and within Africa, but they can currently only do August, and December and it via Europe or Dubai, so we January,” says Carreira. would like to conquer many Looking more closely at more capitals in Africa. But much will depend on the the projections, by far the greatest increase in demand economic growth of these is for international flights. In countries. We also want to the short term this demand expand our services into Current size of can be met by the existing Europe, which is already a TAAG fleet aircraft fleet, but TAAG has major destination.”
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TAAG Angola Airlines
AMERICAN GENERAL SUPPLIES, INC. (AGS) For over 30 years, American General Supplies, Inc. (AGS) has partnered with TAAG Angola Airlines to provide them with unrivaled commercial aviation support services. American General Supplies, Inc. is a commercial aircraft spare parts supplier to the aviation industry, with a particular focus on and expertise in the African market. From three locations in the United States, we supply: • Airframe, engine, avionic components and chemicals • Ground support equipment, tools and shop equipment • In-flight service amenities. In addition to our being a long-time partner of TAAG Angola Airlines, we also provide a wide range of services to the industry’s leading airlines and support organizations, including: • Establishing branch stock at client locations • Consignment of customer surplus parts • Exchange, repair and overhaul services • Providing technical assistance and training on site or at our offices in the USA.
Europe: Air France, British Airways, TAP Air Portugal Asia: Garuda Indonesian Airlines, Indian Airlines, Pakistan International Airways, Spice Jet, Sri Lankan Airways. North America: Air Canada, Delta Airlines, United Airlines. At American General Supplies, we are proud of our long association with TAAG Angola Airlines. African aviation can, as our esteemed partner TAAG Angola Airways does, rely on American General Supplies to satisfy their commercial aviation support needs. At AGS, our pledge to TAAG Angola Airlines and all our customers is our motto: “Our business is to keep you flying”. E. kennethc@agsusa.com www.agsusa.com
The AGS customer base is as diverse as our capabilities, as attested to by the following listing of our long-time customers: In Africa and the Middle East: Air Burkina, Air Madagascar, Air Senegal, Ethiopian Airlines, LAM-Mozambique Airlines, South African Airways, TAAGAngola Airlines, TACV-Cape Verde Airlines, Tunisair, Egypt Air, Cameroon Airlines, Kenya Airways, Air Algerie, Air Nigeria, Air Namibia, Precision Air.
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To prepare in a measured way for this international, regional and local customers programme of expansion, TAAG has already and providing a safe, efficient, comfortable purchased two new Boeing 777s which and profitable service. To achieve this, the will go into service in 2015. Further fleet company launched a turnaround programme expansion will take place in 2017 and again in 2008. “We have rolled this out into all in the future, catering for further long- areas of the business, from maintenance haul destinations, and for expansion of the and commercial through to financials,” regional and domestic service. “We plan to says Carreira. “And we have achieved expand our fleet gradually, some big improvements as this will require a major in our safety record, in investment,” says Carreira. passenger confidence and “We are currently examining in the confidence of the all the options, but we aeronautical authorities, hope to be able to double our pa r t ic u la rly in t he fleet by 2020.” European Union.” Year TAAG’s turnaround programme was launched All of this, however, is As pa r t of this improvement and dependent upon attracting
2008
A TAAG Angola Airlines Boeing 737-2M2 Advanced at Charles de Gaulle Airport
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TAAG Angola Airlines
“We are currently examining all the options, but we hope to be able to double our fleet by 2020” modernisation programme, TA AG has implemented a number of IT tools to manage and survey the operations and engine functionality in real time. A new safety management system has been put in place and the company is currently implementing a modern integrated aviation management system. “The improvements are not just IT based, though. We have made significant
changes to the way we manage TAAG. We have changed the board of directors completely, and introduced a range of new management processes that are aligned with best practice in the industry,” reveals Carreira. “These are now in place in our maintenance department, flight operations and in the quality and safety departments.” Staff also play a critical role in the company’s success, and as part of the improvement programme TA AG has introduced a rigorous recruitment and staff evaluation process supported by a range of motivational initiatives to improve and reward good performance. Part of this is an intensive training programme. “We have a training facility here at Luanda airport where we train our staff and provide refresher courses to ensure they are up to date with the latest industry standards in all areas of the business.” With increased competition throughout the airline industry in general, and costs spiralling due to rising fuel prices and increased security requirements, the company’s major focus at the moment is to improve the customer experience. “There is a great deal of strong competition flying to Luanda, so our concern now is to create
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the Boeing company Š
Boeing delivers first 777-300ER to TAAG
TAAG Angola Airlines
1.2 million Estimated TAAG passengers in 2012 comfort for our passengers and to build customer loyalty,� says Carreira. Customers are surveyed at all the interface points: at the booking agencies, at check-in and on board flights. Based on this wealth of information the airport and in-flight facilities and services are continuously being upgraded to increase customer comfort. Meanwhile, a frequent flyer programme has recently been introduced, offering a range of privileges to loyal customers; a website is now up and running offering online ticket sales and check-in facilities; and a call centre has been opened to enable customers to interact with the company in real time. Through a combination of modernisation, expansion and improvements to safety, security and customer service the company is raising its profile. But none of these are quick fixes: in each case they have been thought through and tackled in a measured and sustained fashion with the aim of capturing a significant share of the blossoming market in flights within Angola and to regional and international destinations. For more information about TAAG Angola Airlines visit: www.taag.com
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Flying the flag
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Air Botswana
Botswana has transformed itself from a sleepy African country to a vibrant democratic economy and its national airline is trying to emulate the country’s progress
written by: alan swaby research by: jeff abbott
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I
t’s an understandable aspiration that developing countries want to be represented on the larger international stage through their own national airline carrier. Understandable, but fraught with danger—at least of the economical kind— as many African countries have discovered to their cost. “It’s unlikely,” says Sakhile Reiling, recently appointed general manager of Air Botswana, “that any regional airline can survive, unaided by government subsidies, on just that country’s own population. To provide a service to their citizens, airlines must look inwards; but to stand on their own feet economically, they have to look outwards.”
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Since independence from Britain in 1966, Botswana has seen a succession of airlines trying to satisfy that local need. But in 1988, the government decided the time was right for a national flag carrier and created Air Botswana through an act of parliament. In its current form, the airline is not at all grand. It’s based at Sir Seretse Khama International Airport in the capital Gaborone and runs a modern but modest fleet of turbo-propeller aircraft from the specialist French-Italian manufacturer ATR, comprising two new 68-seat ATR 72-500 aircraft and three smaller 47-seat ATR42-500s. It also has a BAe 146 jet. The airline was created no doubt with a touch of national vanity in mind but
Air Botswana
Air Botswana plane on runway
its main role is to leverage other aspects of the country’s economy. As such, Air Botswana runs a regular schedule of flights on a hub and spoke basis from Gaborone to Francis Town, Kasane and Maun—the other main cities in Botswana—and to important neighbouring destinations such as Johannesburg, Lusaka and Harare. With Botswana destined to become a major diamond trading centre, the mix may well change in future years but presently tourism accounts for 60 per cent of passengers carried and business the other 40 per cent. Maun lies on the edge of the great Okavango Delta— the largest inland delta on earth—while Kasane is the gateway to Chobe River and National Park on the northern border with
Namibia. In all cases, the timetable pays close attention to the needs of both business and leisure travellers. As Botswana is not yet ready to accept inter-continental flights, tourists generally arrive at Johannesburg on long-haul flights and then transfer readily to Air Botswana services for their onward flight direct to these tourism centres. In terms of occupancy rates, Air Botswana is doing very well, with an average of 80 per cent. Last year, for example, US airlines reported a domestic occupancy rate of 77 per cent—the highest level achieved since 1946, according to data compiled by the Air Transport Association. “There are two ways we can improve matters,” says Reiling. “We can put our planes in the sky
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Air Botswana
The airline is based in Gaborone
“To provide a service to their citizens, airlines must look inwards; but to stand on their own feet economically, they have to look outwards” for more hours in the day by expanding our night time cargo carrying business. We can also operate longer star burst routes from Gaborone to a larger number of destinations south of the equator.” As a still practicing pilot herself, this part of the job probably represents the interest closest to Reiling’s heart because Air Botswana has a £380 million investment plan in place for six new aircraft with the first two jets making an appearance in the next few weeks. But as an experienced airline manager, Reiling knows that change
must be handled slowly and painstakingly. In aviation, there are no second chances. “Our first step will be to go from a maximum route length of 2.5 hours,” she says, “to something in the order of 3.5 to four hours. The new jets will bring Cape Town, Durban, Windhoek and Nairobi within our reach and once they are bedded down we can look even further afield.” The airline is not without some previous experience of jet aircraft so there is a degree of embedded knowledge within the company that can be re-awakened. Nevertheless, it still
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“We can put our planes in the sky for more hours in the day by expanding our night time cargo carrying business” means that new pilots need to be hired along with maintenance engineers and ground staff who are all experienced on jet aircraft. Even the whole process of passenger relations is being re-evaluated and re-vamped. Reading between the lines, this is possibly one of the biggest challenges Reiling faces. Having been—and still is for that matter— solely owned by the state, it seems that
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the conversion of the mindset among some employees from that of government arm to efficient flying operation capable of competing profitably with all comers has some way to go. There are another couple of aspects of modern aviation practice that are keeping Reiling busy. “We can also try to improve utilisation,” she says, “by offering passengers packages of services they need when
Air Botswana
Air Botswana runs a regular schedule of flights on a hub and spoke basis
visiting—car hire for example. Just this week we have signed our first agreement with a hotel and much more needs to be done to create a simple to buy, integrated offering.” The other consideration is code sharing with carriers on certain routes. “It’s often the case,” says Reiling, “that airlines want a presence in a particular market but simply don’t have the traffic to justify a high frequency schedule. In such cases, we can partner up with another airline and share the route. At times this means we are the carrying partner and at others the marketing partner. But in either case we look after each other’s passengers as if they were our own.” For Reiling, the appointment at Air Botswana must feel like coming home. Her
flying career started there as a second officer before taking up a position with the country’s civil aviation authority. A similar career step in South Africa—combining flying with working for the aviation regulator—has given her a well-rounded view of both sides of the fence. She is also determined to keep her pilot’s licence and regularly ‘moonlights’ to maintain the flying hours she needs. So it may not come as too big a surprise if her name appears on the manifesto of the new jets when they arrive. For more information about Air Botswana visit: www.airbotswana.co.bw
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AIRBORNE ABILITY 88 | BE Transport & Logistics
Abu Dhabi Aviation
Abu Dhabi Aviation (ADA) is the most effective as well as the largest operator in the region with MOR services to match
written by: John O’Hanlon research by: Richard Halfhide BE Transport & Logistics | 89
Abu Dhabi Aviation
A
bu Dhabi Aviation (ADA) approximately 40 percent of ADA’s business was formed in 1976 as a coming from outside the UAE.” The facility is located at Abu Dhabi joint venture between the emirate of Abu Dhabi and International Airport. The maintenance an overseas company, its complex consists of two hangars for fixed and mission to provide the Arabian Gulf offshore rotary wing aircraft – all under one roof. Total oil industry with air support services. Its hangar floor space is 5,130 square metres. journey from those tentative beginnings, The hangars are linked by the engineering operating just two aircraft, to become the management and administration block and largest commercial helicopter operator in the associated support workshops. Total workshop Middle East is a remarkable success story. It floor space is 3,769 square metres. More than currently operates more than 100 of its own 220 people are employed in the engineering and its client’s helicopters as well as three Department, including over 140 qualified and fixed wing aircraft, offering its experience experienced aircraft maintenance engineers and its services globally. & workshop technicians. With assets of nearly Abu Dhabi Aviation $1 billion, ADA operates was awarded a special mainly Bell and plaque by Bell Helicopter AgustaWestland helicopters after completing 700,000 and Bombardier Dash 8 helicopter flight hours – the Hours of operation in Bell helicopters figure is now approaching series turboprop transport a million hours. Due to the aircraft but it also offers high intensity of offshore oil these aircraft on lease to clients around the world – often the most support work, around 200,000 landings and cost-effective solution for them. take-offs are required annually, while the It is also one of the region’s largest repair, company transfers around 26,000 passengers maintenance and overhaul companies, and 162,000 kilograms of freight to and from servicing both helicopters and fixed wing offshore facilities each month. Sustaining aircraft, whether for its own fleet or for these impressive rates has required a high outside clients. Many of the world’s largest degree of dedication, commitment and petroleum companies turn to ADA for the professionalism on the part of the pilots, heavy maintenance and modification of their engineers and support staff. aircraft. “There is no facility in the Middle East Following many years of successful – or indeed the Far East – which will provide collaboration with AgustaWestland ADA the services we are planning to deliver,” created a helicopter maintenance joint venture says chairman Nader Ahmed Mohammed Al with this major supplier in 2011. The new Hammadi. “Our current capabilities provide company, named AgustaWestland Aviation services to our clients on a global basis with Services, will carry out a range of services and
100,000
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Aircraft Maintenance & Modification
Component Total Support
Engine Total Support
Engineering & Development
Weekly Because a month is a long time to wait... Your weekly digest of business news and views www.bus-ex.com
Abu Dhabi Aviation
activities for the sale of helicopter spare parts The joint venture will be of mutual benefit for and accessories, helicopter/component repair both partners to further expand their range and overhaul, customisation, modification of services, capabilities and presence. The and upgrading. According to the evolution demand for helicopter maintenance across of future market requirements, the joint the Middle East is growing and providing this venture’s scope of activities could be further service right at the doorstep of our clients is a expanded to encompass special configuration benefit that will see huge returns in terms of development, component production and overall industry growth,” said Al Hammadi. even helicopter assembly. While most of the company’s work is Customers are now offered a wide range of still for oil and gas industry clients, it services in Abu Dhabi that have historically has diversified as demand for helicopter been available only from intervention has grown. the manufacturer in Italy These days it routinely or the United States. “We conducts ag r icult ural, aim to be a global aviation geological and search and company beyond its current rescue operations. It leases international business scope, aircraft and helicopters to Area of maintenance and the new joint venture is the fire fighting services facility in Europe and Australia at a step in the right direction.
3,769 m2
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the height of their fire fighting seasons. It has variously provides seismic support in Yemen, assisted the telecommunications network in Oman, carried out crop spraying in the UAE, disaster relief in Pakistan and has been happy to provide health evacuation and medical services to the huge crowds that gather in Riyadh, Jeddah, Mecca and Medina during the busy Ramadhan and Haj seasons. It is of course well versed in the techniques of medical evacuation, a vital contribution to the health and safety support of offshore oil rigs. In 1984 ADA pioneered the technique of long line vertical referencing in the Middle East. Vertical reference flying is flying while looking downward rather than horizontally using the natural horizon. It’s an extremely unnatural way to fly a helicopter but it can be learnt, and is very useful in the kind of seismic surveys used when looking for oil or other resources. The work is performed by helicopters specially configured to utilise under-slung load techniques that incorporate a long-line of up to 200 feet, enabling the helicopter to remain clear of all obstructions. As part of this service ADA has completed a number of contracts in the rugged mountains of Oman and Yemen, using a 40 metre long line. Similar long-line vertical
referencing techniques are also being applied to numerous construction projects in the UAE, Saudi Arabia, Oman and Yemen. Some very successful applications have included the erection of electricity pylons as part of government schemes to bring electricity to remote areas, and in the construction of microwave towers for data and voice transmission by the telecommunications sector. Another key service provided by ADA is
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Abu Dhabi Aviation
search and rescue support ADA’s helicopters can also be configured to perform a for the Armed Forces of number of other specialised the United Arab Emirates. This is operated out of four tasks. From 1996, for strategic bases located within example, the company Annual movements in the Emirate, with a dedicated has been under contract support of O&G clients fleet of seven state-of-theto Catalonia to undertake fire-fighting services as and art AgustaWestland AW139 helicopters fully equipped for search and when required. Spain, with its dry climate rescue. Each carries a complement of two and wooded terrain, is very vulnerable to pilots, a winch operator and a specialist wildfire outbursts particularly during the rescue paramedic. The SAR helicopters are in hot summer months. 2009, for example, was readiness to be called out 24 hours a day and a particularly bad year, and fires during the seven days of the week. They operate over dry season were severe enough to achieve both land and sea, and can also be called out international news coverage. The helicopters to provide assistance to the general public, used for this vital task are Bell 212 and 412s working in coordination with civilian rotary fitted with highly effective Isolair ventral wing operations. They also undertake inter- tank and snorkel systems for scooping up and delivering water to quench the flames. These hospital patient transfers.
200,000
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“our fleet and crews stand ready 24 hours a day, for search, rescue, support and logistic operations, at sea and on land” are regularly seen in action in Catalonia. The company’s Bell 212, 412 and 206 helicopters can also be fitted with specialised camera equipment, and these are then contracted to provide coverage for live photo missions. Among the missions the company has fulfilled are contracts to provide live local
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TV coverage of dhow races at one end of the spectrum, through to taking the dramatic ‘tanker war’ footage that was shown on the major news networks worldwide during the Iran-Iraq war. On a less perilous note, the company has diversified into a range of services that promote health and productivity. A number
Abu Dhabi Aviation
of the Bell 206 helicopters, for example, can be configured to carry spray equipment capable of applying both insecticides and pesticides. In this role the company regularly carries out extensive spraying programmes in both the UAE and Oman. February 2013 saw Abu Dhabi host Idex, arguably the most strategically important tri-service defence exhibition in the world. ADA was present, with a large pavilion, in common with its partner Finnmeccanica, owner of AgustaWestland. However ADA’s presence was as much about showing the company’s commitment to the government and its requirements. “We seek to harness
our participation in Idex to show support for police throughout the UAE and other countries, who are either participating or observing the activities of the expo, especially in the field of search and rescue operations,” said Al Hammadi. “The message we are bringing to Idex is that our fleet and crews stand ready 24 hours a day, for search, rescue, support and logistic operations, at sea and on land.” For more information about Abu Dhabi Aviation visit: www.abudhabiaviation.com
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Zodiac Aviation Support, Inc
In-flight
service
General Manager Yilma Kassaye talks about building customer and passenger loyalty by delivering customized quality products at competitive prices
written by: Kenneth Connor research by: James Boyle
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Z
odiac Aviation Support, Inc. (ZAS), based near John F. Kennedy International airport in New York City, is a proven and respected provider of the full range of in-flight products and services. The highly experienced ZAS staff caters exclusively to the international aviation community. They are skilled at meeting both deadlines and budgets while routinely exceeding customer expectations. “Over the past 16 years, many of Africa and the Middle-East’s top international carriers have turned to ZAS for their
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in-flight service requirements,” said General Manager Yilma Kassaye. “Since 1996, the year we opened for business, we have been one of the leading suppliers to some of the industry’s most quality-oriented airlines. We count Air Madagascar, TAAG Angola, LAM Mozambique, TACV, Kenya Airways and Ethiopian Airlines and many others amongst our customers. “ QUALITY AND PRICE “Airlines concerned with quality and the on-board experience of their customers routinely put ZAS on their short-list
Zodiac Aviation Support, Inc
of providers for both off-the-shelf and custom on-board service and merchandise solutions. Any airline that selects ZAS to provide onboard products and services can rest assured that their customer will experience and appreciate that extra quality “something” in their onboard experience,” remarked Kassaye. “In-flight supplies from Zodiac are not only durable, lightweight and attractive, more importantly, they are also competitively priced. As experts in the field, we have exclusive business relationships with the best manufacturers from around the world.
These relationships ensure ZAS customers the highest quality products delivered on-time and on-budget.” WHAT’S ON OFFER ZAS handles the merchandising of the full line of on-board products and services including: Blankets, Glassware, Amenity Kits, Disposable items, Rotable items, Porcelain serving items, Beverages, and a full range of in-flight catering. Blankets: “Our blankets are warm, featherweight, fire retardant and come in different sizes, designs, and colors to allow
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LookiNg For A grEAT rESTAUrANT AT 40,000 FEET? No matter what your need – glassware, fine china, blankets, amenity kits, wines, liqueurs, Champagnes, or complete in-flight catering – ZAS can deliver it for your airline. While our roots are international and our staff multi-lingual, ZAS makes it easy to do business with offices in New York (at JFk), and sales teams in Maryland, California and Europe. Call us to upgrade your in-flight image today.
11 Sunrise Plaza, Suite 306 Valley Stream, NY 11580 U.S.A. www.zasusa.com
ZODIAC AVIATION SUPPORT, INC.
Tel: (516) 593-3500 Fax: (516) 593-3540 E-Mail: info@zasusa.com
Zodiac Aviation Support, Inc
First class cabin
them to match any aircraft interior. The blankets are available in either Wool, Mod Acrylic or Polyester. We can also provide costsaving disposable blankets if the customer wants them.” Glassware: “Our Bohemian crystal glasses are on a par with stemware used in fine restaurants. Many of our customers use these handsome, multi-purpose glasses in their First
and Business class cabins. Our customers may select from a wide variety of existing styles or we can have something custom designed for them. “ Amenity Kits: “Our amenity kits provide our customers a unique opportunity to bond with their best customers by providing them useful, personal care items contained in custom designed cases. Customers love
“Airlines concerned with quality and the on-board experience of their customers routinely put ZAS on their short-list of providers” BE Transport & Logistics | 103
the complimentary and stylish assortment of eye shades, headsets, slipper-socks, cosmetics and other gender specific personal care items. The long-haul premium cabin passenger views these items as essential for international travel and they believe they have paid for these little “extras” in the ticket price. What’s important for our customers to understand is that ZAS can create an amenity kit for any budget” Disposables: “The nature of the airline business requires that our customers are offered a wide range of options across products like serving trays, cups, dishes, flatware, glasses, napkins, pillowcases and other essentials. Our clients need packaging, materials, design and price-point choices in order to align their customer profiles, route structures, aircraft –types and budgets.” Rotables: “Value is the one constant in all Zodiac-supplied products, but especially with re-used items such as service trays, cups, casseroles, dishware, hollowware and stainless steel products. We are experts at matching our product offering to the tastes and budgets of our clients.” Porcelains: “To our airline customers, image is everything and nothing communicates that better than porcelain. Our professional staff can guide the most demanding customers
Ms. Nariema Hazratalie, Office Manager
through the myriad options in bone china, fine china and regular porcelains. “ Wines, liqueurs and champagnes: “Our customer’s flight attendants are expected to be semi-professional “sommeliers”. That’s where we come in. Our beverage professionals are knowledgeable about the characteristics and food pairings for all manner of wines, beers, spirits and other non-alcoholic choices.
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Zodiac Aviation Support, Inc
James Marlow, Senior Sales Manager
Mr. Yilma Kassaye, General Manager
They know and can help to always provide our client with the best-value-for-money our customers select the best beverages from France, possible remains constant.” Italy, Spain, Portugal, DELIVERING THE GOODS Chile, South Africa and the Zodiac Aviation “Another personalized aspect USA. Best of all, individual Support established and customized size choices of the services ZAS provides are available.” is our concern for and focus Catering services: “The on our customers desired customers who involve us in their catering delivery schedule. We know the value of needs, think of us as their airline’s executive on-time delivery and we prove it on a daily chef. Working in conjunction with renowned basis. We also routinely help customers lower food connoisseurs and catering organizations their expenses by planning deliveries to worldwide, the staff at Zodiac brings a new coincide with an airline’s flight schedule which level of excellence to every meal selection reduces freight costs by arranging deliveries and presentation. The selections may vary, directly to the airline at a destination their to fit individual budgets, but our commitment aircraft serve,” said Kassaye.
1996
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Zodiac offer a customized in-flight design service
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Zodiac Aviation Support, Inc
“Working together, our airline customers and our ZAS in-flight service designers define the airline’s on-board service goals and design” MAKING THE RIGHT CHOICES “Many times it’s not about added expense but rather about making the right choices. Raw materials and manufacturing techniques differ from supplier to supplier so you need an experienced guide. Our customers look to Zodiac to provide sturdy yet light weight pieces that won’t collapse on their customer, and long-lasting rotables that keep their shine flight in and flight out. We treasure the moments when our customers tell us that their passengers have commented about their great in-flight product experience. That’s the Zodiac difference.” ON-BOARD SERVICE DESIGN “Working together, our airline customers and our ZAS in-flight service designers define the airline’s on-board service goals and design. Together we define the image our airline customer seeks to project. Working with Zodiac ensures that the customer ultimately gets the right products at the best price in order to deliver their customized in-flight service design vision.” SUPPLIES ON HAND “It’s not surprising that when an airline serves thousands of customers each day, sometimes supplies can run short. ZAS customers needn’t
worry about such situations. Our “buffer stock” program provides our customers with peace of mind. They know that ZAS keeps ample supplies of their most ordered items on-hand. These buffer stock items can be expedited and delivered to them on a “just in time” basis. CHALLENGING TIMES FOR AIRLINES “Commercial aviation is a tough, competitive, cut-throat business at the best of times—and these are hardly the best of times. Airline operational costs are high and profit margins are historically thin. Today ’s global economic environment is challenging for any company. When the marketplace is tough and the economic times are hard, Zodiac has the financial strength to work with our customers no matter what their credit needs are. We’ve even entered into joint ventures with customers to have our products manufactured in their home countries using local labor and raw materials. Zodiac Aviation Support, Inc. always goes the extra mile for the customer,” said Kassaye. For more information about Zodiac Aviation Support, Inc visit: www.zasusa.com
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Imperial Group
In imperious form Mohammed Akoojee, executive responsible for investor relations and corporate strategy, talks about how the diversified nature of Imperial Group’s business activities is helping it to prosper despite some challenging conditions
written by: Will Daynes research by: Candice Nice
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The Kia models compete well in a buoyant South African market
Imperial Group
O
ver all,” explains Mohammed Akoojee, executive responsible for investor relations and corporate strategy, “our performance over the last 12-to-18 months has been good, with the majority of our core business segments showing strong growth. We just released a report that shows that our earnings during the last six months were up 14 percent, even in the face of some challenging market conditions that we were exposed to during that time period.” Imperial is a diversified industrial services and retail group with activities that span the logistics sector, car rentals, tourism, financial services, vehicle distribution and retail, automotive parts and industrial products distribution. Listed on the Johannesburg Securities Exchange, Imperial employs more than 47,000 people, each of whom it credits equally for the continued success of a group that began life as a motor dealership in downtown Johannesburg in 1948. “Our motor business in South Africa continues to perform well, despite being subject to supply issues caused by labour disruptions in Korea from where we import many of our products,” Akoojee continues. “Meanwhile, our after sales parts and service business and used car sales have remained buoyant and contributed strongly to the growth achieved. The strength of our integrated business model in the motor business is really starting to come through.” The last four years have seen the South African vehicle market ride a wave of success on the back of factors such as the
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CUMMINS ISX ENGINES POWER IMPERIAL LOGISTICS’ FLEETS FORWARD Imperial Logistics has more than 3 800 vehicles in its fleet powered by ISX engines that are manufactured and supplied by Cummins - a global leader in the manufacture, sales and servicing of diesel engines and related technology. All 30 vehicles in one of Imperial Logistics’ refrigerated fleets are able to successfully complete their service delivery projects throughout South Africa from Tzaneen, Limpopo, despite accumulating more than 1-million km of mileage, as a result of the reliability of the American Drive Line range of Cummins ISX engines. Cummins SA Heavy Duty Account Manager Leon Nel notes that the basic Cummins 15l ISX engine is highly diverse. “It has a wide range of horse power and torque and, without a waste gate turbo, is capable of running between 400
hp and 450 hp, with torque of up to 2237 NM, between 1100 and 1500 rpm. By changing to a waste gate turbo, it can run between 475 hp and 565 hp with between 2237 and 2510 NM. The main use of this low rev, high torque engine is in heavy duty 6x4 truck tractors.” According to Nel, the American Drive Line range is perfectly suited to African conditions, as it allows for exceptional mileage and availability of parts and service across the border. “This is evident in the fact that some vehicles in a particular refrigerated fleet are still running smoothly with well over 1.2-million km on the clock. The American Drive Line with Cummins ISX is a great choice as it is extremely durable and the service intervals are 30 000 km.” www.cummins.com/southafrica
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47,000 People employed by Imperial Group worldwide
Imperial’s logistics division
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penetration in the South African economy is in line with emerging market peers and has great potential in the country as it is proven that as emerging countries develop vehicle penetration increases. With interest rates in South Africa at a 40 year low and the vast majority of banks willing to provide credit towards vehicle purchases, Imperial has witnessed considerably strong buying patterns at an entry level where it has a number of products including Hyundai and Kia models that compete well. This has allowed the group to gain a decent share of the market over the last three years. From a logistics perspective however, South Africa continues to prove to be a challenging market to operate in, especially with many of Imperial’s clients being exposed to the pressures that the country’s manufacturing and industrial sectors are experiencing at present. Fortunately for Imperial, it has made numerous investments into other parts of the continent in recent years that are counteracting this. Indeed, outside of South Africa, Imperial’s logistics business has performed exceptionally well over the last 6 months, with operating profit increasing by 22 percent. “If you look at our activities in Africa,” Akoojee states, “our strategy has been to focus
Imperial Group
Fleet management
on the demand for consumer goods on the continent. We believe that this sector of the African economy has got excellent long term growth prospects. We are a major distributor of fast moving consumable goods in markets such as Namibia, Botswana, Zambia and Mozambique, and with consumer growth in those parts in Africa increasing we will benefit from accordingly.” Expansion across Africa is a core element
of Imperial’s future strategy, the success of which it sees as crucial to its long-term development, both from a distribution and logistics perspective. “As part of our longterm vision,” Akoojee highlights, “we recently acquired a South African business called RTT Health Sciences, which is involved in the distribution and logistics of pharmaceutical products on behalf of manufacturers. While being based in South Africa, half of the
“Expansion across Africa is a core element of Imperial’s future strategy, the success of which it sees as crucial to its long-term development” BE Transport & Logistics | 115
company’s profits actually originate from markets such as Kenya, Nigeria, Ghana and Malawi. As a result of this acquisition we now have a presence and a distribution channel in these important markets that we did not have previously.” From a geographical point of view, Imperial also remains keen on examining the potential of expanding its activities in Europe, where it already boasts a presence in Germany, where it is a major operator of bulk and container ports along the country’s inland waterways. “In Germany,” Akoojee says, “we occupy critical industrial choke points and provide value added services where we are integrated into the supply chain of our customers. We are seeing a clear trend where our customers are also looking to grow into surrounding markets such as Eastern Europe, which is something we also hope to be doing as we follow our customers into new markets.” Imperial Group prides itself on the fact that it is a leading player in virtually all of its business areas, however what it also benefits greatly from is the fact that within several of these areas there is still much more growth to be had. If you take the automotive industry in South Africa as an example, sales volumes are relatively low when compared to those
seen in the developed world. As a matter of fact they are much more in line with those of other emerging nations, suggesting that as the economy grows so too will the sector. It is Akoojee’s view that internally Imperial also benefits from being a de-centralised business and one that possesses a strong entrepreneurial spirit that runs throughout the
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Imperial Group
The logistics division’s aim is to continue expanding across Africa and further into Europe
group. “We strive to give our people the freedom to find new opportunities for growth. We also endeavour to provide opportunities for people to be entrepreneurial in their work and we find that is a big factor when it comes to retaining the best men and women.” Going forward it is clear that Imperial’s focus remains on improving its returns on capital and putting more capital into logistics, which is a sector with a good long term growth outlook, especially in the markets it serves. “Certainly we would like logistics over time to become a much larger contributor to the group,” Akoojee concludes, “however this is just one of a number of new revenue
streams that are starting to make a big positive difference to our underlying profit. Meanwhile, from a geographic perspective we intend to continue a gradual expansion across Africa and hopefully further into Europe. So while it is too early to say that we have ambitions to be a global company, it can certainly be said that we intend to become a much more international business entity in the not-too-distant future.” For more information about Imperial Group visit: www.imperial.co.za
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Founded in the latter weeks of 200 efforts and dedication to its work provider to blue chip clients in the
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Aspen Logistics Services
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00, Aspen Logistics Services’ tireless mean it remains a leading service fast moving consumer goods sector
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Operating in high-temperature zones south of the equator
Aspen Logistics Services
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he margin of error when it comes to retaining the quality and freshness of perishable fast moving consumer goods (FMCG) in general is minimal wherever you are on the planet. Nevertheless this small margin decreases further still when one is operating in high-temperature zones south of the equator. For blue chip retailers in such parts of the world maintaining the cold chain during transit and having the right goods available in store on a just-in-time basis is fundamental to their brand integrity and their market reputation. Operationally, it is a demanding, high-pressure environment with no margin for error. Aspen Logistics Services is a leading supplier to the FMCG logistics sector in Southern Africa. While its core business remains located within South A frica, the company also ser vices a growing customer base in Botswana, Namibia and Mozambique. A level 3 BBBEE accredited business, Aspen is committed to achieving sustainable commercial success, principally in the road transportation of temperature controlled products, adding value to all stakeholders within the supply chain, while also retaining its position as being the benchmark for quality transportation service within the sector. In order to achieve this Aspen operates under a clear set of principles. These include striving to create smart partnerships with its clients by providing a tailored, premium service at a cost effective price, to constantly
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Aspen Logistics Services improve efficiencies within Altech Netstar the supply chain through The long standing relationship between Altech Netstar on-going innovation and to Fleet Solutions and Aspen Logistics has evolved over continually develop its staff many years. The diverse and customizable solutions and by providing what it calls services provided by Altech Netstar Fleet Solutions to “dynamic leadership”. Aspen Logistics and its equally diverse requirement for In addition, Aspen is Fleet solutions has produced market leading technologies and service delivery .The Altech Netstar suite of committed to being a products and solutions extends beyond conventional socially responsible service vehicle tracking, driver management and communication provider with sound and to include, workflow management, efficiency and ethical business practices optimisation management and reporting of fleets and in which comply with the cab remote management. principles of good corporate www.anfs.co.za governance. By being such a business it is able to achieve sustainable and controlled growth that complements its clients by conducting operations in a sound manner. As part of Aspen’s sustainability drive, great attention has been paid to reducing carbon emissions from the fleet, year-onyear. For example, its trailer builders have embarked on a number of environmentally friendly initiatives in their factories. Aspen operates Thermoking SLX refrigeration units which have made enormous strides in reducing CO2 emissions as well as reducing fuel consumption and reduced noise pollution.
“Aspen was the first CAT customer to be awarded a Cat Million Kilometre certificate”
Aspen Logistics’ drivers are among the best in the industry
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Trailer Skirts for improved fuel economy
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Durban: 031 508 1000 I JHB: 011 397 8993 I Cape Town: 021 959 7660 Email: info@serco.co.za I Website: www.serco.co.za
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Supported by national manufacturing and after-sales repair service 36-month warranty.
KEEP IN
SPECIALIST MANUFACTURERS OF: Truck bodies and trailers that are relied upon by leading transport operators • Fibreglass dry freight and refrigerated vehicles offering superior strength and corrosion resistant panels • New generation ‘Super Reefer Lite’ which offers a substantial weight reduction
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Serco has introduced an innovative fuel saving accessory for their semi-trailers. The innovative aerodynamic side skirts developed by Freightwing in the US can be fitted to the trailers resulting
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Pictured are the Aspen and Serco team. From right: Eugene Erasmus, Chris De Villiers, John Thompson. Clinton Holcroft, Sujen Padayatchi, Rhada Padayatchi, Trevor Holcroft
in a fuel saving and an accompanying reduction in carbon dioxide emissions. Typically fleets report a 4 to 6% improvement, depending upon their application and driving environment. The accessory helps reduce wind drag under the trailer and is particularly suitable for long distance transport. Serco Managing Director Clinton Holcroft said what made the side skirts special was the lightweight flexible plastic panels which were resilient in the event of contact with fixed objects. The panels have a smooth finish providing an ideal surface for branding. “The side skirt concept is used in the United States where fuel savings of 7.45% were achieved during independent testing. The fuel economy improvements from skirting have been well documented, but the second part of the equation is these things must hold up for fleets. The under body skirts are designed to bend and bounce back from minor collisions. Flexibility is important because the lower you get to the ground, the more fuel you can save”. Sujen Padayatchi, Managing Director of Aspen Logistics Services who are testing the new Aerokit, said “reducing fuel costs and carbon emissions is a strategic focus point for Aspen. We are always willing to try new innovations to stay ahead and improve our business”. Holcroft was confident that based on initial testing and some refining of the specifications to suit local conditions, the fuel benefits will make for a solid return on investment.
Aspen Logistics Services
Cold store in transit
Aspen prides itself on having an exceptionally high standard of operations with an advanced technological infrastructure and a very high standard of equipment, including its fleet of trucks. The company is indeed highly passionate about the condition of its 80-strong fleet of trucks that use Caterpillar
engines because of their global reputation. Aspen can be counted among the most famous names in the on-highway truck industry to have Cat engines under the hoods of their vehicles. It was recently announced that as part of Caterpillar’s drive to reinforce its reputation for
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Nashua Limited is the leading distributor of digital office automation equipment and document output solutions in Southern Africa. We have a wide range of industry leading office automation products, including multifunctional printing devices, colour laser printers, all-in-one devices, wide format printers, and high volume printing devices. Our business solutions include digital storage, document security and compliance as well as document and records management. We can help reduce your operating expenses through optimising your fleet of printers, streamlining business processes through installing intelligent software to manage your printing devices and documents, as well as improving user behaviour management.
Aspen Logistical Services & Nashua Central! A working relationship! Together with Nashua Central, Aspen Logistical Services has improved areas within the organization that affects most businesses today – Their pockets! By identifying these important areas Nashua Central has allowed for faster processing of invoices, improved collection times of POD’s from branches and dramatically reduced paper usage. Nashua has also reduced the chance of misfiling of documentation and by doing that Aspen has decreased the amount of queries leading to holding back of payments. As in the transport industry Nashua central is all about SPEED, Reliability and TRUST! Contact Nashua Central to find out more about the solution at Aspen Logistical Services. Eben Steyn - 082 773 7653 | 011 249 8279 Email: ebens@nashuacentral.co.za | www.nashua.co.za
Aspen Logistics Services dependabi l it y it wa s helpi ng to l au n c h Together with Nashua Central, Aspen Logistical Services Barloworld Power’s Million has improved areas within the organization that affects K i lomet r e C a mp a ig n , most businesses today – Their pockets! which encourages a strong By identifying these important areas Nashua Central maintenance partnership has allowed for faster processing of invoices, improved between customers and collection times of POD’s from branches and dramatically reduced paper usage. TEPS dealers. Nashua has also reduced the chance of misfiling of Qualif y ing clients documentation and by doing that Aspen has decreased the and their dealers receive amount of queries leading to holding back of payments. a special certificate in As in the transport industry Nashua central is all about recognition of their service SPEED, Reliability and TRUST! partnership. Perhaps more www.nashua.co.za significantly, clients can in turn affix the Cat Million Kilometre logos to their truck’s cab, sending a clear message to the market that their fleets are in optimum condition and geared towards on time consignment delivery. Aspen was the first CAT customer to be awarded a Cat Million Kilometre certificate. Speaking during the award ceremony in September, Aspen’s managing director, Dr Sujen Padayatchi, said that the Million Kilometre campaign epitomises the quality of the Caterpillar brand and underscores the company’s confidence in the reliability of Cat’s on-highway engines. “As a company, we have an absolute All vehicles are monitored on a constant basis by a flagship satellite tracking system passion for what we do and our trucks
Nashua Central
“As a company, we have an absolute passion for what we do and our trucks are the lifeblood of our business” BE Transport & Logistics | 127
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Aspen Logistics Services
Maintaining the cold chain during transit is fundamental to a brand’s reputation
“Aspen has focused on the logistics niche that deals with express overnight transportation of mostly perishable products” are the lifeblood of our business,” said Padayatchi. “For this reason, our drivers are amongst the best in the industry and our maintenance programmes strictly adhered to, ensuring high availability at all times. This is underscored by the fact that Aspen’s workshop was accredited by Freightliner in 2005 in terms of OEM compliance. One of
the most remarkable features of our Cat engines is that, old or new, we get the same consistent performance from our Freightliner trucks, which is very reassuring both for us and our customers in terms of on time delivery.” Aspen has focused on the logistics niche that deals with express overnight
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Express overnight transportation
Aspen Logistics Services
2000 Year Aspen Logistics was founded
transportation of mostly perishable products, due for next day in-store delivery. The company chose this market because it is highly consistent with yearround dependability and little seasonality. It also has huge growth potential with an emerging middle class who aspire to eat better quality food which includes many chilled products. T he company is ideally placed to win more business within South Africa’s dynamic food market through st r a ig ht for wa rd orga n ic g row t h, however it also sees large opportunities in surrounding markets where it aims to expand its geographical footprint. While in the past the warehousing and infrastructure to support refrigeration in many parts of Africa has been poor, with big names like Walmart moving into Africa, there will inevitably be a surge in demand for quality transportation providers able to operate within its very tight guidelines as the demand for refrigerated products grows in line with increasing living standards. For more information about Aspen Logistics Services visit: www.aspenlog.co.za
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Joerg Andriof talks about managing this complex and extensive network and returning the company to profit
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DHL Express Network Management
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I
t’s interesting how many company names are acronyms of three letters. There is a satisfying symmetry in the way these letters look and sound: more often than not, their origins are lost and the acronym achieves a powerful brand status in its own right. In the case of DHL, the initials represent its three founders—Dalsey, Hillblom and Lynn of San Francisco—who came up with a revolutionary new concept in logistics and launched the world’s first genuine intercontinental express delivery service in 1969. Today, DHL is recognised by businesses and householders around the world and leads the market for international express delivery services. Synonymous with service and reliability, it is a truly global organisation with an air and road network spanning more than 220 countries and territories in all corners of the world. “In fact,” says Joerg Andriof, global head of Network Management, “DHL Express services can be bought in more countries than Coca-Cola or McDonald’s. And our air fleet is currently comparable in size to Lufthansa, and larger than British Airways’.” The latest chapter in the story of this remarkable brand began in 2002 when Deutsche Post, the rapidly expanding German postal services company, acquired 100 per cent of DHL shares. Retaining its formidable brand name and cultural identity, it was the German company’s first foray into the international express business. The final step in the brand development took place in 2009 when Deutsche Post restructured its extensive business, integrating and bringing together the many
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Ground support staff on the deck of a DHL freighter
DHL Express Network Management
DHL Express Network Management businesses it had either Southern Air launched or acquired since Southern Air is proud to support DHL’s new round-the its privatisation in 1990, world service connecting Hong Kong, Los Angeles and and rebranding them to Leipzig, Germany daily. Thanks to a new fleet of Southern incorporate the DHL identity. Air 777 long-haul freighters, the new route shaves a day Today the group is known as off shipments from Asia Pacific and the US West Coast and Deutsche Post DHL, which lowers fuel costs by as much as 25 percent, and extends cargo pick-up times for US suppliers shipping to Europe. better expresses the breadth As the world’s only aircraft, crew, maintenance and of the organisation and its insurance (ACMI) provider of 777 freighters, Southern Air global reach. is offering its customers the most versatile, efficient and Internally, Deutsche Post environmentally friendly cargo solutions in the industry. DHL now has four divisions. Southern Air supports DHL’s GoGreen environmental Mail is Deutsche Post’s protection program, which offers customers innovative, original core business and sustainable solutions. www.southernair.com the DHL Express division is essentially the original DHL business. The third division, DHL Supply Chain, is the old Exel Logistics, which became part of Deutsche Post in 2005. And finally DHL Global Forwarding, Freight stemmed from a range of companies including the well-known Danzas Group. In spite of its excellent brand reputation and global reach, DHL Express has not been without its challenges, and the last few years have been ones of internal change and improvement. “DHL Express has always been a successful international business, but it was never a very profitable
2002 Year Deutsche Post acquired all DHL shares Worker at the DHL Hub, Leipzig
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one,” Andriof says. A quick look at the history of DHL Express illustrates one of the difficulties it encountered. The company began as an international express organisation and did so by overcoming many of the previously held beliefs about logistics, creating a new set of standards and business procedures. Developing a global network across many countries, it has always had a decentralised management structure. By contrast, the major competitors in the market, such as FedEx and UPS, originated as regional parcel service providers in the US, building up large delivery fleets. From this solid foundation they then began to widen their horizons and expand into an international express sector. DHL’s growth took place in reverse order. “Having developed a very strong base in the international express business, we then decided to expand into the domestic parcel delivery sector in countries like the US, the UK, France and China,” he continues. “This was not successful, and was not delivering profitable growth for the international express business.” While recognizing the company has to focus on its core competencies, DHL Express embarked on a restructuring of the business at the end of 2008, beginning with a withdrawal from domestic delivery
services within the US (to focus on international delivery) and followed by an in-depth examination of the nature of the business. “We asked, for example, do we need innovations?” Andriof explains. “The answer was that while we do have small innovations, the nature of the business is the same as it was 40 years ago. The real improvements in profitability are likely to be achieved through business excellence: things like bringing the costs down, improving the
“The aim is to focus on what we’re good at and improve that, and deliver real value” 138 | BE Transport & Logistics
DHL Express Network Management
Final checks before push-back and departure
IT systems, streamlining and The first logical step to standardising processes and increase profitability and creating a core discipline bring the company back to its throughout the operation.” core area of excellence was to The strategy to emerge divest the non-profit making Number of DHL Express domestic express services. from this process is called global air hubs Interestingly, not all the Focus, and it drives domestic services were loss improvement today. Focus is articulated in four pillars: making, so the company has motivated people, great service quality, loyal retained profitable services in India and other customer, and profitable network. “This is not countries such as Australia, Germany and a big long-term plan to build a shiny future,” Russia. However, others have been sold off. he continues. “The aim is to focus on what Customers in many of DHL’s operating areas we’re good at and improve that, and deliver will continue to see the familiar yellow and real value. We were not good at the domestic red liveried vans collecting and delivering business; however, we are extremely good at parcels, but these packages are in transit the international express business so that is between international destinations and not within the home country. where we will concentrate.”
three
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“We also restructured our global and regional head offices,” Andriof says. Over the last few years, the turnaround has been impressive: from loss making business into significant profitable growth (almost €1 billion in EBIT in 2011), and the improvements delivered by the ongoing drive for business excellence continue to become apparent. “We continue to operate as a very decentralised, matrix organisation. In fact I head up one of the very few functions that is centralised in planning, but decentralized in execution. However, all those who report to me sit in the regions and I travel to them. The business doesn’t come to me.” Andriof heads up the DHL Express global
network, and is responsible for its planning and day-to-day operations. It’s not difficult to see why this position should require a central identity: the sheer size, scale and complexity of the network requires a consistent overview and direction. The global logistics network closely resembles a backbone with a complex and interconnecting nervous system radiating out to the customer. The backbone of the network consists of long-haul intercontinental flights linking three global air hubs located in Cincinnati in the US, Leipzig in Europe, and Hong Kong in the Far East. Over 100 aircraft, including new Boeing 777 freighters, shuttle exclusively between these hubs. Smaller
DHL Airbus A300 cargo aircraft takes off on an early morning flight
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DHL Express Network Management
“In all, we operate over 700 network flights a day around the globe. To do this we are currently operating a fleet of over 250 aircraft” aircraft then radiate out like the spokes on a wheel to 15 regional hubs which then serve over 500 local airports. “In all, we operate over 700 network flights a day around the globe. To do this we are currently operating a fleet of over 250 aircraft, 40 per cent of which we own or have on long-term contracts. The rest
are on a mixture of short-term and midterm lease and they operate on a dedicated basis for us,” explains Andriof. “On top of that we manage more than 2,000 flights on which we buy capacity from the major airlines so that we can put Express cargo into the belly of scheduled passenger or cargo airlines. This combination of capacity gives us great flexibility.” Flexibility is one of the foundations of DHL’s ability to deliver a reliable and efficient express service. If, for example, there is an unexpected increase in demand that can’t be met with the regular fleet capacity, then extra space can be found at short notice by negotiating with an airline partner. This flexibility has been achieved over many years, and is managed through close long-term relationships with more than 300 carriers and national airlines. For DHL, maintaining a close relationship with its hub airports is crucial to ensuring continued excellence of service. Candace McGraw is CEO of Kenton County Airport Board at Cincinnati/Northern Kentucky International Airport (CVG), and has witnessed the many benefits that the airport’s partnership with DHL has brought. “We have established a very good partnership with DHL,” she says. “They account for about
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Delivering your freight
ever
GLOBAL SALES CONTACTS USA – WALLACE AIR CARGO GROUP Phone: 949-484-3804 E-mail: sales@wallaceair.com
EUROPE - Inter Aviation Services Phone: +31 20 3160 380 E-mail: ams.charters@iasaviation.com
erywhere - ontime • Provides scheduled, AMCI and on-demand cargo service over a worldwide network • Fleet of 15 B747-200F and 7 B747-400F • Excellent schedule reliability
MIDDLE EAST & AFGHANISTAN - International Air Services Phone: +971-4-2990929 E-mail: dxb.kalittaops@iasaviation.com
ASIA – PACIFIC AIR SERVICES CO. LTD. Phone: +852 2237 0033 E-mail: DavidSung@PASCO.com.hk
KALITTA AIR Kalitta Air, based in Yipsilanti, Michigan, is a US-based and US-certificated FAR 121 air carrier with worldwide operating authority. Kalitta Air provides scheduled, ACMI and on-demand cargo services over a worldwide network. Scheduled service lanes include HKG and PVG to the US, and Europe to the US, as well as various destinations in the US to the Middle East and Afghanistan. Our fleet consists of 22 B747-F aircraft (15 B747-200Fs and seven B747-400F freighters). The company has a diverse customer base encompassing DHL, over 500 multi-national freight forwarders and agents, as well the United States Postal Service and United States Department of Defense. To ensure the highest level of schedule reliability, Kalitta Air performs all aircraft maintenance and engine overhaul in-house at its own maintenance facility in Oscoda, Michigan, which is staffed by 850 mechanics. The company was awarded the FAA Diamond Award for excellence in maintenance training. Kalitta also keeps crew training ‘inhouse’ with B747-400 and B747-200 CAT III Flight Simulators. It is our commitment to maintenance and crew training excellence, coupled with our knowledgeable and dedicated operations staff, that we are able to maintain the highest level of dispatch and schedule reliability. Kalitta Air has been fortunate to partner with DHL for the past eight years in an exclusive contract with the US Post Office, transporting mail from the US to US troops in Afghanistan. In 2011 alone, the two companies combined delivered 38 million kilos of mail to various bases in Afghanistan. For the duration of this program, Kalitta and DHL have never received a
performance rating less then ‘Excellent’ by the US Post Office. In addition, Kalitta currently operates four B747400Fs on an ACMI basis for DHL, logging in excess of 20,000 flight hours in 2011 over DHL’s extensive international route structure. Fortunately, Kalitta’s strong reliability and ondemand flexibility have proven to be a perfect fit with DHL’s global time-definite requirements and we are honored to be part of its team. Kalitta Air looks forward to continuing to provide DHL and our other customers with the high level of service they expect and deserve. E: sales@wallaceair.com www.wallaceair.com
DHL Express Network Management
Monitoring shipments at Leipzig
40 per cent of our landed weight here now, so they’re a huge partner for us and we want to do everything we can to help them grow and prosper here.” DHL is currently embarking upon a $47 million investment into expanding its package sorting facility at CVG, and has been considering other opportunities, too. “We have a lot of land here that’s ripe for development and we have been talking to DHL about some end-of-runway development opportunities to establish complementary businesses that will
help them grow their business here at the airport,” says McGraw. The two organisations also work together on issues such as the environment. “For example, DHL has a state-of-the-art de-icing system that ties to our own system to reclaim all the spent glycol, which we then treat. We’re also going to be rehabilitating some of our facilities and we thought if we can team together at that time looking at certain sustainability initiatives, we can probably achieve greater ‘bang for our buck’.” It’s a
“DHL is currently embarking upon a $47 million investment into expanding its package sorting facility at CVG” BE Transport & Logistics | 145
DHL transport vehicle
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mutually beneficial relationship, she says, very much a partnership. Alongside the air network, DHL Express has an extensive collection and delivery network that reaches out by road to customers in all four of the operating regions—the Americas, Europe including Russia and Turkey, the Middle East and Africa, and Asia. The service is delivered by a fleet of more than 30,000 vehicles that shuttle between the customer and the local DHL service station facility. Here, pick-ups are consolidated and then transferred by truck to the airport Gateway, and deliveries are sorted and loaded into the vans. This delivery service plays a vital role in DHL’s brand awareness and is important from both the customer loyalty and service excellence perspectives. “In most normal business environments the customer interface is generally with the commercial team,” Andriof explains. “In our business, that primary interface is our operational people, the drivers who pick up or deliver to the door.” As the public face of DHL, the drivers tend to leave the greatest lasting impressions on the customer. For this reason, collections and deliveries are made primarily by DHL’s own personnel, while the truck transfer from the service station to the airport can be safely outsourced to other local logistics partners. The DHL training programme is the foundation upon which DHL builds company-wide excellence in customer service. “One of the unique elements of our training programme, which helps us standardise everything we do across the business, is that the course material is the
DHL Express Network Management
Overlooking DHL aircraft at Leipzig
same for everyone regardless of where they’re working around the globe. It’s just translated into and presented in the local language,” Andriof says. “We have roughly 100,000 people globally and we train every one of them through our Certified International Specialist programme,” he continues. The training is designed to give the staff all the necessary skills and tools to perform well and do justice to the brand. While reinforcing corporate best practice across the business, it also has
to be engaging and fun. “They even carry a passport which is stamped as they pass the test for each element.” This initial training includes the history of DHL and a corporate overview of the business. The training then hones in on the country in which the person is working, and then focuses in more closely on to the details of the operational role, including specific processes and applicable aspects of management. After qualifying as a Certified International Specialist, staff then have access to a wide
“We have roughly 100,000 people globally and we train every one of them through our Certified International Specialist programme” BE Transport & Logistics | 147
IAI-BEDEK CONVERSIONS BEDEK Aviation Group - acknowledged worldwide as a leading Full Service Provider and Cargo Conversion house. The BEDEK Aviation Group is the senior group of Israel Aerospace Industries (IAI) and one of the six groups, has more than 3,000 skilled engineers, technicians and supporting personnel in its four specialized divisions located at the Ben-Gurion International Airport, Israel. Being one of the largest one-stop maintenance centers in the world, BEDEK is licensed by virtually all major civil aviation authorities, including the US Federal Aviation Administration (FAA), European Aviation Safety Agency (EASA) and the Civil Aviation Authority of Israel (CAAI). BEDEK provides under one roof, comprehensive maintenance services for aircraft, engines and components, including heavy maintenance, modifications, upgrades, conversions and development programs, all at minimum down time. BEDEK’s extensive, modern facilities provide the full spectrum of maintenance and overhaul services, handling both wide-body and narrowbody aircraft, 160 of them annually, including Airbus, Boeing, and Lockheed aircraft. BEDEK’s world-leadership position in passenger to cargo conversions of the B747, B767, and B737 families of aircraft is based on its ability to provide customers with the full spectrum of services. BEDEK is a leading worldwide cargo conversion house with more than thirty-five (35) years of experience (More than 160 different aircraft redelivered). The growing list of BEDEK’s satisfied customers around the world testifies to its commitment to excellence. BEDEK has developed, received STCs (Supplemental Type Certificates) and produced an extensive line of passenger to Special Freighter conversions. Since the modifications these freighters have accumulated more than 2 (two)
million flying hours with no ADs issued (relating to BEDEK’s conversion). The current BEDEK conversion lines include: • 737-300BDSF (Bedek Special Freighter) and BDQC (Bedek Quick Change) certified in 2003 • 737-400BDSF - certified in 2009 • 767-200BDSF - certified in 2004 • 767-300BDSF - certified in 2009 • 747-400BDSF - from PAX and from Combi certified in 2006 BEDEK is experienced at Design-to-Cost and Design-to-Weight efforts. All of BEDEK’s conversions have met its customer’s design weight goals. As part of the conversion to cargo aircraft, IAI provide aircraft operating weights upgrade – MTOW, MLW and MZFW. BEDEK also has been involved for over 30 years in the design, development and implementation of air refueling solutions on various platforms (B707, C130, IL78 and B767) and has successfully delivered more than 35 tankers in a wide variety of configurations to more than 12 Air Forces world wide, including the Israeli Air Force. Other BEDEK military conversions include SIGINT, COMINT, ELINT and AEW among others. Quality Control and Quality Assurance are built into every aspect of BEDEK’s operations and activities. The most stringent system of checks and inspections, performed by highly qualified personnel utilizing state-of-the-art test equipment ensures reliability, peak performance and complete customer satisfaction. BEDEK Aviation Group Ben-Gurion International Airport, 70100, Israel T: +972 3 935 3090 E: bedek@iai.co.il www.bedek-iai.com
range of further training courses, all of them designed and delivered in-house using modern motivational learning techniques. Standardisation across the business is reinforced continuously. At its heart lies the company-wide IT system which was in place before the company became part of Deutsche Post, but continues to be developed both in-house and with major IT partners. The system automates all transactions that take place worldwide, monitors performance, tracks every package in transit and enforces standard business rules. “There will always be human error, that’s inevitable. But if you can standardise and automate processes and procedures then the likelihood of error is
Packstation in Frankfurt am Main
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much smaller,” Andriof explains. “And by implementing this system at a global level, we can be sure everybody in the organisation is heading in the same direction, achieving the same targets and abiding by the same business rules.” These business rules are enshrined in a set of Global Standard Operating Procedures (GSOPs) which encompass all major business processes. The GSOPs are documented and monitored online. “They’re what we call our ‘Idiot’s Guides’ which provide a handy pocket overview. And we have staff who look at those processes and make sure they are properly implemented.” Staff working in Germany, for example, can transfer to Hong Kong, and
DHL Express Network Management
“If you can standardise and automate processes and procedures then the likelihood of error is much smaller” know exactly what to do, how to do it, and what is required of them. The IT system also interlinks with the systems of the various carrier and airline partners, a level of integration that is both complex and time consuming to set up. However, it delivers accurate and essential data to the DHL system, right down to the details of exactly where a container is loaded into the hold of an aircraft and the identity
of its contents. This in turn assists with planning for forward movements, and keeps the customers informed of the location of their package. Development of the IT system is an ongoing process, and the latest addition is a capacity management tool, which will assist with management of the fleet. “We manage our fleet very carefully and one of the reasons is to increase utilisation as much as possible,” Andriof explains. “An aircraft can only deliver maximum value when it’s flying as many hours as possible and when it is full.” The first step in planning and managing capacity is to predict how many shipments are likely to be moved between the different locations in the network. This is done by the DHL forecasting system. Then, the entire supply chain can be planned in advance, including scheduling shipments for specific flights. However, this process is far more significant than simply cost cutting: it’s all about ensuring the business is able to deliver the service it has promised to the customer, and about building customer loyalty. Delivering great service quality is one of the four key elements of the Focus strategy, and an imperative in everything DHL’s staff do. However, with a logistics network of this size and complexity, this can be quite a challenge. It is inevitable that issues will creep in regardless of the standardised IT
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driven processes, and problems will occur. An aircraft may develop a fault or be delayed due to bad weather, for example. “Our customers understand this,” Andriof says. “The important thing is not that we have a problem, but how we handle it. If we have promised to deliver in two days then we have to do it, there’s no excuse. So if we have an aircraft grounded for any reason, the first thing we aim to do in many markets is to pick
up the phone and talk to the customer. We then look for the fastest alternative pick-up that will deliver those packages on time, or perhaps very slightly later. And this might be spare capacity of our own, or with one of our partner airlines. We find that it’s by keeping the customer informed, and working quickly to find a solution to the problem, that we develop customer loyalty.” Two important services have been
“We find that it’s by keeping the customer informed, and working quickly to find a solution to the problem, that we develop customer loyalty”
Shipments being sorted
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DHL Express Network Management
Workers in action at the Leipzig Hub
established to provide this degree of customer relationship management: the global quality control service and the customer service desks. Firstly, the company has four global quality control centres located in Bonn, Leipzig, Cincinnati and Singapore, which monitor shipments in real time from pick-up to final delivery. Within each of the four regions, there is also a network for further quality control centres and these are manned 24/7 by a service quality team who monitor the shipment movements, identify delays or breakdowns in the supply chain, source solutions to the problem and offer those solutions to the customer. The centres are equipped with large screens and media walls displaying in real time all the traffic in their catchment
area. The displays are simple and effective and follow a standard traffic logic. When a flight is on time it appears green on the screen. If there is a short delay the flight goes yellow, and once the delay reaches an hour or more it goes red. This simplicity and accuracy is only possible because the displays are powered by the company’s IT system which houses continuously updated information about the location and content of every shipment along with its predicted location. If the two diverge then there could be a problem. A very complex set of operational definitions also reside within the system, and these are unique for each location. For example, part of the delay calculation might include the amount of time it takes to transport a
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Unmatched Performance. Game-Changing Solution.
We are known as the world leader in ACMI and CMI outsourcing solutions and as one of the foremost global providers of value-added cargo charters. Through our Polar Air Cargo Worldwide, Inc. subsidiary, we provide time definite, 747-400 freighter network service to DHL Express and others, primarily in the trans-Pacific trade lanes. Most recently, we commenced Boeing 767 cargo service in North America for DHL Express under a previously announced long-term CMI contract. Additionally, we have extended our services to the passenger charter market, operating VIP and highdensity flights for military and commercial customers around the world. Now in our 20th year, we are known for our outstanding flexibility and customer commitment. Let us show you how we operate.
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DHL Express Network Management shipment to the airport, load it into a container and deliver it across the airport and into the aircraft. Each airport is different, and DHL agrees a unique set of operating criteria with every one of its operating partners, and these are embedded into the IT system. The service quality teams not only find solutions for delays as and when they occur, but they continuously monitor the company’s performance for large customers, and also for new customers during the two or three month period while they are being implemented into the system. “Once everything is working well for new customers, and they are integrated into the system as a standard process, they then become the responsibility of the customer service desk, which manages the relationship on a day-to-day basis,” Andriof says. The company has a reputation for delivering this level of service not only in stable and prosperous regions, but also in some of the world’s most troubled places including Afghanistan, Syria, Bahrain and Algeria. “We try to remain there as long as possible so that we can continue delivering a reliable service for our customers. But we have rules in place to judge how long we can continue to operate without jeopardising the safety of our employees. And our top priority
DHL Brussels sorting unit
is always our employees’ welfare.” Under these difficult circumstances, security, which has become a primary concern for governments, logistics companies and their customers, becomes even more critical. DHL has globally embedded a raft of thorough security measures, including investing heavily in scanners at each of its facilities. “Security is one of our few global functions. It’s only by enforcing a global set of standards that we co-ordinate security across the organisation.” With the direction, drive and investment coming from the corporate level, the company has ensured that it has installed the right competence and expertise within the regions to carry the initiatives forward. The world is also prone to natural and man-made disasters, and these are a good
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“In the case of the Japanese tsunami, we put on extra charter flights to bring water and food into the region�
DHL Express Network Management
Parked aircraft at Leipzig
test of character, stamina and staff morale. “You probably remember the earthquake and tsunami in Japan last year. On the Monday following the disaster our people were in the office very early in the morning, cleaning everything, and taking care of our first flight and the delivery to our customers,” Andriof says. The company runs a crisis command centre at its head office in Bonn, from where it monitors world events and how they may impact on global operations, shipments and employees. And in times of crisis, the quality control centres also take on some of the crisis management role. Whenever disaster strikes, though, it’s not only the business DHL takes care of. The company also marshals its logistics capabilities to bring in essential first aid and disaster relief supplies. In the case of the Japanese tsunami, for example, “we put on extra charter flights to bring water and food into the region.” Having refocused the global operation on the core international express delivery business, DHL continues to deliver improvements in customer service and operational efficiency. With the four pillars of the Focus strategy guiding future development, best practice across the company is being achieved through standardisation of operational procedures, company-wide training and staff motivation. For more information about DHL Express Network Management visit: www.dhl.com/en/express
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DHL Express Australia
DHL Express Australia is investing heavily in its facilities and infrastructure as it moves to grow further in one of its longest-standing markets
written by: gay sutton research by: Jon Bradley
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Sorting operations
DHL Express Australia
D
HL has been in operation since 1969, when in San Francisco, Dalsey, Hillblom and Lynn launched the world’s first intercontinental express delivery service. Today, DHL’s air and road network spans over 220 countries across the globe, and has become a household name and market leader in express delivery. It may have a truly global reach; but it is still important to differentiate between the way operations are run in different territories of the world. Using the correct terminology can be important in putting across the right message and managing expectations: for example, DHL Express Australia operates seven ‘gateways’, as opposed to the ‘hubs’ of the European model. “Unlike Europe, Australia doesn’t have a central hub—where a plane flies in to Leipzig, say, and the cargo is unloaded, sorted and the plane flies out again,” explains Lachlan Powell, VP of Network Operations for DHL Express Australia. “If you ship a parcel from the UK to Australia you don’t want to then ship it from Sydney to Perth as this adds to the transit.” DHL Express Australia was established 40 years ago and is thus one of the company’s oldest non-USA markets. It is headquartered in Sydney and now has seven gateways in Brisbane, Darwin, Cairns, Sydney, Adelaide, Perth and Melbourne. And the Brisbane gateway is currently the subject of a major AUS$10 million investment. “The shipment growth in Australia means continual investment in new facilities. The current Brisbane facility is at capacity so
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Direct Couriers has a national network of branches in Sydney, Melbourne, Brisbane, Perth and Adelaide operating a combined fleet of over 600 diverse vehicles. Our comprehensive range of services includes: • Metropolitan: courier, taxi truck and local cartage of LCL and international airfreight • National: road, overnight, priority overnight and sameday interstate • Storage and container unpack services (excluding Adelaide) Our service is enhanced by industry leading technology including innovative and user friendly online tools and the support of our professional team.
DHL Express Australia
DIRECT COURIERS Direct Couriers has 29 years of experience within the Australian domestic courier/transport market. Today we assist customers from our network of offices in Sydney, Melbourne, Brisbane, Perth and Adelaide. With a diverse national fleet comprising motorbikes up to semi trailers and including tail lift vehicles, we have the flexibility to deliver a range of transport and logistics solutions. Our comprehensive delivery services include: metropolitan (courier, taxi truck and local cartage of LCL and international airfreight) and national (road, overnight, priority overnight and sameday interstate). We also provide a storage service at our modern facilities in Sydney, Melbourne, Brisbane, Perth and Adelaide. In addition, we offer a container unpack service in Sydney, Melbourne, Brisbane and Perth. Our service is enhanced by our award-winning and innovative technology. We are constantly investigating, investing in and developing technological solutions to better support our customers’ needs. Over the years our range of online tools has grown collaboratively to include: database management options (to maintain various databases including regular pickup and delivery addresses); daily usage functions (to prepare quotes, book and track deliveries and access electronic proof of delivery [POD]); and administrative functions (to access invoices and prepare informative reports). We can also offer a data integration option in some cases, whereby customers make bookings in their internal system and transfer the data
to our system. In turn, we send back status updates and when the delivery is complete, we upload the POD. Recent additions to our suite of technology solutions include a Direct Couriers APP to keep track of deliveries and access POD details on the run; a delivery pre-alert facility; and an online GPS tracking facility, to track the progress of your metropolitan deliveries via GPS. Delivery pre-alerts notify your recipients, or any other interested party, that a delivery has been picked up and is en-route. Pre-alerts can be sent via email or SMS. Once a metropolitan delivery is picked up, keep track of the driver’s progress by viewing a GPS locator map. This can be done securely online or by refreshing the map included with the email delivery pre-alert. Working with Direct Couriers, you can be confident you are in partnership with a business committed to ‘Driving Solutions’. Direct Couriers can be contacted nationally on 13 16 10 or visit our website www.directcouriers.com.au for further information.
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we’ve commenced building a completely new gateway there,” says Powell. “The new facility will remain strategically located on-airport and will include new state-of-the-art X-ray technology. New global security regimes are coming into force and it’s a matter of ensuring that our supply chain is secure.” The new facility will keep DHL Australia ahead of the game: Powell describes the building as looking like a typical on-airport warehouse but the interior and its equipment will belie its modest exterior. As well as the X-ray equipment, it will have a more automated environment, with the capacity for direct loading onto delivery vehicles. “It will increase our capacit y significantly,” he explains. “It is difficult to say exactly how much because we get more efficient every year, in many ways, but we are forecasting that it will meet our needs for the next 10 years.” DHL Express Australia deals with a range of global businesses in the medical, aeronautical and fashion sectors, providing express and just-in-time delivery of items as diverse as clothing, car parts and contact lenses. Freight arrives by air from China, Europe and the rest of the world and is then dispatched to service centres, which undertake final deliveries. The
service centres utilise some cross-docking techniques and they are strategically positioned to provide the earliest deliveries and latest pick-ups for customers. Australia has particular needs that are dictated by its geographical and other realities: it’s a huge country but the population
“We are essentially a people business: we are selling a high quality service and that is about having the right people on the ground” 164 | BE Transport & Logistics
DHL Express Australia
Airfreight facility, Melbourne
is small and mainly confined to the coastal margins. It has major mineral activities but not a huge amount of indigenous industry. That means that the majority of consignments that DHL—and other shippers—handle are inbound to the country; the ratio is around 70/30. Bulk servicing is by airfreight and ocean freight; few people would need to deliver finished goods by express mode. “We are involved in the express component,” says Powell. “This is a premium service and we operate where customers are looking for fast, reliable, consistent service levels on a regular basis.” DHL’s service includes shipping, tracking, export
and import, domestic and time-definite deliveries, as well as complete industry and small business solutions. Delivering consistently high levels of quality service is absolutely key.
Each year, DHL Express Australia handles millions of shipments weighing several million kilos. DHL recently upgraded its Tasman aircraft to a Boeing 757 freighter which operates daily between Auckland and Sydney: the larger aircraft was required to provide greater cargo capacity and ensure the highest service levels are achieved. Partnerships are in place with several airlines to utilise
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“We invest in quality controls and processes at all our facilities, to ensure the experience of shipping by DHL is the best in the industry” their cargo holds to move freight into and out of Australia, providing direct access to key markets with the fastest routing. DHL Express Australia has also developed a partnership with eParcel to strengthen its residential delivery capability to meet the increasing demand from online consumers. “This strong residential delivery model enables us to provide our customers with different delivery solutions,” Powell explains. Among those offers is the ability to collect a
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parcel from the local post office, or from the DHL office, if a customer misses a delivery because they were out when the courier called. The partnership has been valuable in driving DHL’s growth, which has been exceeding 20 per cent each year—but Powell and his team are not sitting back and just letting things happen. “Leveraging mobile technology is a key part of our strategic plan,” he continues. Something as apparently simple as getting
DHL Express Australia
DHL facility at Melbourne
the consignee’s mobile phone number helps to improve service; it is a more direct and effective communication route than online tracking or even e-mail. The company uses various high-visibility tracking methods, based on robust, tried and tested technology, with checkpoints and physical scans of barcodes. “We are committed to driving continuous improvement in every aspect of our business, to sustain our credentials and corporate responsibility.” The company has also invested in a new fleet of vehicles, in partnership with Ford, which are proving to be around 20 per cent more fuel-efficient than the previous model. But, in the end, high service levels can only be delivered by people who are well recruited and effectively trained, and Powell pays credit to a strong internal culture within
DHL of investing in training for all staff. “We are essentially a people business: we are selling a high quality service and that is about having the right people on the ground,” he asserts. “We invest in our people and ensure we have the right people in the right roles. The quality of our staff is confirmed by our high results and feedback from our customers. We have systems to proactively ensure that our service levels are the highest they can be; and we invest in quality controls and processes at all our facilities, to ensure the experience of shipping by DHL is the best in the industry.” For more information about DHL Express Australia visit: www.dhl.com
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Move as you choose Most travellers would be unaware how fast their individual needs are changing, but understanding their behaviour keeps the leading global car rental brand Europcar ahead of the trend
written by: John O’Hanlon research by: Jon Bradley
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Europcar
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Europcar buys around 270,000 cars a year
Europcar
R
oland Keppler has been at the helm of Europcar for nine months and is determined to lead the company towards a new and not always familiar role in the travel industry. In the public eye Europcar is seen as one of the big three car rental companies, together with Hertz and Avis. Its strategic alliance with the global Alamo and National Car Rental brands provide it with the world’s largest car rental network. What the public eye does not always see is the direction in which its own behaviour and needs are moving the market. Car rental is beginning to complement other modes of transport rather than simply competing, revealing new opportunities that Keppler for one is keen to seize. Keppler came to Europcar in 2009 from the German low-cost airline TUIfly where he was CEO. Having made the German subsidiary, which represents approximately 30 percent of Europcar’s revenues, into its most profitable asset, he also played a key part in the launch of several projects including car2go urban mobility, which represents one of the sources of future growth for Europcar. Since his appointment earlier this year he has continued to push forward his enthusiasm for customer focus and developing people in that sense, innovative mobility models, digital solutions, and operational excellence. Europcar is owned by investment group Eurazeo. It is organised into nine ‘corporate’ countries (Germany, France, Spain, the UK, Italy, Belgium, Portugal, Australia and New Zealand) in which it owns 100 percent of the operation and 140 franchises around
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Statistics show a fall in private car sales across the developed world
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the world, normally one to a country. Global revenues for the brand are in the region of €3 billion, including National and Alamo, while the corporate territories generate two thirds of that. Traditionally car rental customers fall into two broad categories, business and leisure. Germany, having been more dependent on business travel than other countries, has been hit the hardest by the recession in Europe, but private rentals have remained surprisingly buoyant. “This year we are performing better than in 2011, and beating our own business-to-consumer targets.” This may be partly due to investment in direct sales channels and more flexible pricing, he says, but he suspects underlying customer behaviour has played its part. Statistics show a fall in private car sales across the developed world. “The signs are that people are looking for mobility on demand rather than owning a car. So I think the onus is on the industry to bring out more flexible offers. We are certainly more accessible and customer oriented than we used to be.” In 2011 Europcar entered a joint venture called car2go Europe, a business its partner Daimler has been developing since 2007. It’s a bit like Boris Bikes in London except that the vehicle members pick up or relinquish is a Smart Fortwo. The system combines swipe card technology with mobile apps to locate and book vehicles without reservation, and is currently available in Dusseldorf, Hamburg, Ulm, Lyon, Vienna and Berlin though there are plans to launch in 40 to 50 European cities. Mobility by the minute is a concept unlike
Europcar
Europcar is increasingly accessible and customer oriented
any other, traditional car rental included, he believes. It’s already very successful where it has been in operation for a while, as in Hamburg where it launched in April 2011. “People like the spontaneity and that it makes it so easy to move around the city. We believe it will grow as customers get used to the idea – the market will change over time, not overnight.” Now Europcar, car2go Europe and the Hamburg Hochbahn metro are embarking on a two year trial to join up services in a way that will accommodate both private and business users. Passengers could seamlessly
switch between train, underground, bus, spontaneous or pre-planned rental vehicles, and even bike, he explains. “All the modes will be connected via an app, and physically located at centres close to subway stations.” Initiatives like this suit customer lifestyles, but are made possible through technology. And investing in digital technology is one of his central strategies. A further example that is now streamlining the work of the rental stations across the Europcar group is a new fast-track service for business users called eReady. Registered customers who book
“The signs are that people are looking for mobility on demand rather than owning a car” BE Transport & Logistics | 173
online can cut out the usual form filling, so at the dedicated Ready Service counter all they need to do is sign the rental agreement and collect the vehicle. At the other end of the process eCheck-in will scan the vehicle and its inventory using a handheld device linked to back office software that controls the rental process from end to end. “All customers will notice is that the process is fast and paperless,” says Keppler. “People are coming to expect this level of service from our industry – after all it is very convenient to buy something from Amazon – one or two clicks and the item is delivered to your home. Invoicing, payment, delivery are all digital. This is what I think people now expect from our industry and we are preparing ourselves to meet these expectations.” Operational excellence (the customer’s expectation that the process – and the car – will work) can’t be separated from customer focus. Europcar introduced its Promoter Score feedback system at the end of 2010 with the question ‘would you recommend us to friends and family?’ Respondents giving nine or ten out of ten are classed ‘promoters’; nought to six ‘detractors’. “When we started about 50 percent of respondents were promoters: we
are now up to 70 percent, well on the way to our target of 80 percent ‘convinced customers’ who would actively promote our business.” The detractors were in for a shock too – senior managers were asked to pick up the phone to talk to customers about whatever issues they raised. Here Keppler leads by example, enjoying the reaction of people taken aback by a personal call from the CEO. “It was a learning experience for us too,”
“The buy-back model is one of the strategic pillars we have as a company. We believe that in the long term it is more robust than the risk model” 174 | BE Transport & Logistics
Europcar
Vehicles are repurchased by the manufacturer after around six months
he admits. “Suddenly head favoured by competitors, he office managers are talking believes, because it allows to customers where formerly Europcar to concentrate on they were making decisions its core business of selling mobility. The balance of value without much idea of what Target for was happening on the ground. between rental company and ‘convinced customers’ Now they are getting first manufacturer is a delicate one, depending largely on demand hand feedback and dealing with it, and that’s a cultural for new and used cars. change for the whole organisation!” Nevertheless, “The buy-back model is one of By and large Europcar operates on what is the strategic pillars we have as a company. We called the buy-back model – rather than being believe that in the long term it is more robust a long term asset, vehicles are repurchased by than the risk model.” the manufacturer after around six months and resold. “You could say we are a big producer For more information about of young used cars,” he jokes. “We buy around Europcar visit: 270,000 cars a year.” Buy-back works better than www.europcar.com the lease or outright purchase ‘risk’ scenario
80%
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Still trying harder 176 | BE Transport & Logistics
Avis Philippines
Driving in the Philippines can be fun and adventurous; but being chauffeured is convenient and more practical for travellers on a tight schedule
written by: Alan Swaby research by: Abi Abagun BE Transport & Logistics | 177
Avis operates the largest limousine fleet in the country
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Avis Philippines
A
collection of over 7,000 islands measuring a total length of around 1,500 kilometres, the Philippine archipelago covers a similar amount of the earth to Sweden. But while the latter has 165,000 kilometres of paved roads for a population of less than 10 million, the Philippines has just 40,000 kilometres of paved roads for a population of more than 90 million—a familiar situation in most developing nations. However, the Philippines offers some exciting tourist destinations that remain largely unexplored; likewise, the economy is poised to be one of the bright spots in a bearish world market. A challenge and opportunity indeed for G&S Transport Corporation (G&STC) which, since 1972, has operated the Philippine licence of Avis Rent A Car International. “For many years,” says Rafael V. Lucila Jr., the company’s president and CEO, “we operated as a conventional self-driven rent-a-car company. But over the years, greater affluence means more Filipinos are driving and the roads have just gotten busier and more crowded. For motorists, especially in Metro Manila, driving in the Philippines can be a daunting task, not to mention the difficulty of finding a parking space. Not surprisingly, therefore, 80 per cent of our business is now chauffeur-driven. For the less crowded regions, however, selfdrive offers the opportunity to discover the countryside. Avis has rental locations in these favourite destinations, offering motorists the convenience of GPS navigation.” It’s been a bit of a rollercoaster ride for Avis. In the early years, being the first and
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AVIS Avis Philippines
CATS MOTORS, INC. Renowned for providing only the best for its clients, CATS Motors, Inc., the Philippine General Distributor of Mercedes-Benz Passenger Cars, has partnered with Avis Philippines to provide Shangri-La’s five-star hotels with the most luxurious limousine service of all—a fleet of Mercedes-Benz S-Class sedans. Though the exclusive use of the S-Class isn’t a new development for Shangri-La, the recent acquisition of S 400 BlueHybrid sedans is. That’s because the S 400 BlueHybrid sedans don’t just offer guests the exceptional comfort of the world’s most luxurious sedan, but the seamless integration of breakthrough technology and green innovations in one car. Mercedes-Benz made international automotive news when it launched the S 400 BlueHybrid. A luxurious S-Class, it takes luxury to the ecological level. It is the first to succeed in adapting a lithium-ion battery in a passenger car. Compared with its nickel-metal hydride counterparts, it has higher ampere-hour efficiency, longer service life and a vehicle climate control system that regulates temperature ensuring optimal performance. The S 400 BlueHybrid consumes only 7.9 litres of gas per 100 kilometres and has low carbon emissions of 190 grams per kilometre while still staying powerful at 299 horsepower with 375 newton metre torque, and fast at 0 to 100 kilometres per hour in 7.3 seconds. Since the time of Al Gore’s award-winning documentary, An Inconvenient Truth, more and more businesses are realising that going green is the wave of the future.
Going green doesn’t mean sacrificing luxury, efficiency, technological advances or even profit. The S 400 BlueHybrid is, in fact, a living testament to that. Its low carbon emissions and fuel efficiency is actually a result of the breakthrough use of lithium-ion as its battery. Since Avis Philippines has acquired these units, it has been able to save up to 50 per cent on its previous fuel expenses, proving that going green isn’t just a smart choice for the environment, but for business as well. Sharing the same passion for sustainable business management, Shangri-La has partnered with Avis to procure Mercedes-Benz S 400 BlueHybrid sedans. With this business venture, Shangri-La’s limousine service is now the first hybrid limousine fleet in the country. It’s this kind of passion for quality, service and innovative-thinking that brought together Shangri-La Hotels, Avis Philippines and CATS Motors. It’s this kind of partnership that stands as a paradigm for successful and sustainable business opportunities in the hope that others will follow suit. www.mercedes-benz.com.ph
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Avis Philippines foremost global brand in the Toyota country, Avis Philippines had Toyota ensures a great car experience for you and your a jumpstart on international loved ones, with Toyota’s Sure Advantage: Quality, inbound travel through Durability & Reliability, for more years of driving; WorryManila International Airport. Free Maintenance, so you can go anytime, anywhere; Great With the growing economy, Value from financing options, uncompromising performance more players entered the car to high resale value; and Pioneering Technologies that help sustainability. We do all these, because we believe you rental industry; and added deserve nothing less. pressure came in the early www.toyota.com.ph 1990s when the US scaled down operations and shut two key military installations that provided bread and butter for many sectors in the Philippine economy. Since then, Avis has taken a different tack and has increasingly targeted the corporate sector, without losing focus on leisure travel. For business clients who have touch points all over the Philippines, Avis offers transport solutions that bring people to and from airports and business destinations. Anyone staying at the country’s five-star hotels is a potential customer and Lucila and his team work hard to establish good relations with the best hotels and the most important businesses with offices in the country. “A typical Avis customer,” he says, “will be here for two or three days, travel to a series of business meetings and want to see the city when
40,000 KM Total length of paved roads in the Philippines
80 per cent of Avis’ business is now chauffeur-driven
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the working day is over. Our aim is to give them the most enjoyable driving experience possible during their stay.” At the basis of Avis’ focus on excellence are four action principles that G&STC works hard to instil in its 400-plus drivers and employees. “Primarily,” says Lucila, “we put care for our customers above everything else. Next, we try to ensure attention to detail in every conceivable respect. Then we want to get everything right the first time and finally, we motivate our staff to go the extra mile to maintain a distinction between ourselves and every other car rental company in the country. We invest in our people through our in-house training school and performancebased compensation system.” In essence, added Lucila, these principles are the legacy of the founder, Domingo M. Guevara Sr., a self-made man and a foremost Filipino entrepreneur. Starting as a young radio mechanic in the early 1930s, he pioneered the all-Filipino manufacturing and distribution of affordable home appliances under the Radiowealth brand; and later, he ventured into the assembly and manufacture of Volkswagen automobiles. DMG, as he was fondly called, was one of the framers of the 1970 Philippine Constitution; and with great foresight he established G&STC in 1972 to
carry the Avis brand in the country. The DMG heritage lives in the 10 companies of the Guevent Group under the flagship Guevent Investment Development Corporation. Not surprisingly, when dealing with corporate customers who are used to the highest levels of pampering, Avis does get complaints. Lucila believes the most important aspect of customer complaints is how genuine problems are dealt with
“We motivate our staff to go the extra mile to maintain a distinction between ourselves and every other car rental company in the country” 184 | BE Transport & Logistics
Avis Philippines
Avis executives receiving 40th anniversary recognition
not w it h s t a nd i ng t he servicing, scheduling and dispatch, chauffeur service, nuisance and self-serving ones. Any feedback with real accident claim processing merit is a cause for concern, and repairs, and vehicle and steps must be taken disposal. Avis Philippines is Approximate fleet to ensure it will not also the preferred transport size of G&STC happen again. provider to international As well as self-drive and and domestic special events chauffeur driven cars, Avis that require large numbers Philippines offers worry-free, flexible leasing of various vehicles for a short period of options of three months or more catering time shuttling participants around with to customers’ specific requirements, such clockwork precision. Until now, by far the majority of business as projects and temporary assignment of executives. Businesses can outsource for Avis has been in-bound. But with a running their own fleet since Avis has a growing economy and more investment fleet management division covering the full in priority areas such as energy, mining, spectrum of needs from vehicle acquisition, communications, construction and registration and insurance to periodic infrastructure development, a growing
400
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“In 2008 we opened a domestic 24/7 call centre which can now handle all enquiries for both inbound and outgoing business” sector of the population travel overseas, needing car hire at the other end. “As part of the Avis group,” says Lucila, “we can satisfy their car hire needs, anywhere in the world. In 2008 we opened a domestic 24/7 call centre which can now handle all enquiries for both inbound and outgoing business, giving us a more integrated connection with the rest of the world.”
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Such outbound business is still very small but Avis Philippines is now wellplaced to take full advantage of any growth that occurs. In the meantime, in line with the government’s intention of encouraging greater development in other parts of the country, Avis is looking actively for growth outside Manila. When G&STC started operations in 1972,
Avis Philippines
Avis can take tourists past the end of the paved roads
it had six cars and one station in the capital. Today, the fleet stands at around 400 vehicles based in 16 strategic rental locations and a number of five-star hotel concessions throughout the country, many of them providing a round-the-clock service. Last year, revenue reached nearly US$8 million, making it the leading rental company with a 20 per cent share of the market. To mark its 40th anniversary, G&STC introduced the first hybrid limousine service in the country. In 10 years’ time, coinciding with its 50th anniversary, Lucila wants Avis Philippines to be billing five times that amount—more of it being generated by activity out in the regions. Lucila is aware that the highest level of
government is formulating the right policies for development but implementation must be on fast-track through national and local agencies to have significant impact on the ground. With a tourist-friendly people, a few more roads would be more fun. In the meantime, Avis Philippines is ready to provide a luxurious ride in a Mercedes Benz S-400 to take you on your next business appointment, or in a Toyota SUV capable of taking tourists past the end of the paved roads. For more information about Avis Philippines visit: www.avis.com.ph
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American Express Travel Services South Africa
AFRICA EXPRESS
American Express Travel Services South Africa is developing its continent-wide American Express franchise network to meet the unique requirements of Africa’s rapidly growing oil and gas industries
written by: john 0’hanlon research by: Jeff Abbott
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American Express Travel Services South Africa forms part of the Tourvest Travel Services division
American Express Travel Services South Africa
T
his is a company with big resources and a wide umbrella by virtue of its affiliation to Tourvest, Southern Africa’s largest tourism group. American Express Travel Services South Africa forms part of the Tourvest Travel Services division which provides travel management services to many of South Africa’s top 100 companies. Corporate travel is a specialist activity within the organisation as a whole and American Express Travel Services does it well. However it recently took the decision to leverage its network of 23 franchisees across the continent to establish itself in the oil and gas (O&G) industries which are transforming many African economies and promising to bring prosperity to yet more. Nigeria and Angola are the main established oil producing countries in subSaharan Africa while Chad, South Sudan, Uganda, Namibia and South Africa itself are aiming to increase or start production. Recent large scale gas discoveries off the coast of Mozambique and Tanzania have attracted massive overseas investment. “We have recently taken the decision to establish a dedicated team within the American Express Travel Services business in South Africa to focus exclusively on this industry,” says Clive Jones, Chief Operating Officer. “The needs of the corporations bringing in expatriates, and of those individuals, are so complex and special that they need to be delivered through a separate infrastructure with a different value proposition from our normal corporate travel management process.”
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The travel services division does a great deal of work for the mining sector, but being land based, that is a lot easier to manage than O&G clients. The latter tends to work offshore, or in remote places and their travel needs are different, he explains. “These companies depend on expatriates with skills that are scarce in the local markets. Many bookings are not generated in the country in which you are delivering the service.” This is an industry that employs specialist engineers from Canada, Russia, India or Singapore. They are typically paid from the moment they board the plane in their country of origin until they return, so the client companies like to be assured they will spend as little time as possible sitting in transit lounges. There will generally be an outgoing passenger going on leave for every incoming one, and they can’t leave till their replacement arrives. Travel is therefore a highly business critical activity for the exploration, drilling, support services and supplier companies as well as for the main contractor. But the routes, from say Russia to a rig lying off the coast of Angola, are complicated. And the fare structure is equally complex – American Express Travel Services staff have had to be trained to understand the
concept of ‘marine and offshore’ fares offered by airlines to accredited seafarers. These rates are available only to appointed travel management companies. Generally, the traveller should be travelling to or from a cruise ship, private yacht, commercial vessel, port, or offshore rig. Every airline imposes its own eligibility conditions for the use of these fares and some airlines
“Our vision is to cater for every conceivable need the local and international traveller might have” 192 | BE Transport & Logistics
American Express Travel Services South Africa
Managing travel services for the oil & gas sector is a complex business
permit travel by land based The Cape Town based staff employed in the team is multilingual and able shipping industry. to send out documentation The opportunity is not in any language likely to simply to provide a service be needed. It is also sensitive Number of Tourvest to the O&G companies, to the different cultural employees says Jones. “They go home needs that might crop to spend time with their up – dietary requirements families or they might for example. “We know travel in Africa or elsewhere using their the right questions to ask!” allowances. We can come in at that point and The job gets even more demanding when manage their itinerary, accommodation and things go wrong for the client. If someone is leisure time. It takes the kind of specialised injured on a rig and needs to be repatriated, travel consulting backup that we can give delay is not an option. The job is, he says, them, as well as an understanding of the a combination of the routine, complicated combination of routes and the air fares that as it may be, and the unexpected. There is apply to them.” never a dull moment.
4000
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“We can manage their itinerary, accommodation and leisure time. It takes the kind of specialised travel consulting backup that we can give them� American Express Travel Services is already carrying out this demanding service for some of the largest oilfield service companies in the world. Nigeria is the only franchise market where Tourvest owns a significant part of the business. The remaining franchisees in Africa are entirely locally owned. This local knowledge is something that a
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service provider, even an American Express Travel Services office, operating outside of Africa could never hope to deliver. Tourvest is a level 3 BEE (black economic empowerment) company, and while that does not give it official status in other countries, it does give it a unique understanding of the emphasis African governments place on using local
American Express Travel Services South Africa
Tourvest has become the leading travel group in Africa
resources. By working with American Express Travel Services South Africa or one of its locally owned franchisees the client company stands to improve its scorecard. Tourvest operates businesses which range from travel management companies through to souvenir shops and foreign exchange bureaux, under some 67 sector-leading brands, employing more than 4 000 people. While based in South Africa, it is a global business, with operations in East and West Africa, the United Kingdom and the Caribbean, as well as having principals, associates and clients throughout the world. Tourvest’s expansion has been impressive since its establishment in 1997. “In 16 years
we have become the leading travel group on the continent,” says Jones, “with the vision of catering for every conceivable need the local and international traveller might have: from the duty free on their flight, providing foreign exchange, selling gifts at our airport shops, putting them up at our hotels, feeding them in our restaurants, entertaining them at our game lodges and safaris and managing all their travel from arrival to departure.” For more information about American Express Travel Services South Africa visit: www.americanexpresstravel.co.za
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The next hundred years
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t s
Grupo Unidos Por el Canal The Panama Canal will celebrate its centenary in 2014. The huge expansion program currently under way should see it through the next 100 years, as Jan Kop and Willmar Muller explain
written by: martin ashcroft research by: dan finn
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General view of the Atlantic locks site
Grupo Unidos Por el Canal
T
he $5.25 billion Panama Canal Expansion Project is Central America’s most visible infrastructure program and the largest project in the canal’s near 100 year history. When it was opened in 1914, it offered a cost saving alternative for shipping to avoid the lengthy route around Cape Horn, and a much safer trip than could be expected through the Strait of Magellan. In the centur y since it opened, however, global maritime traffic has multiplied several fold, and the size of vessels has grown well beyond the capacity of the existing canal. It’s a testament to the importance of the Panama Canal to world trade, however, that it has lent its name to the modern definition of ship size —Panama x, and post-Panamax. The existing sets of locks, which raise ships 88 feet (27 meters) above sea level, define the Panamax standard, which limits the size of container vessels to a maximum of 5,000 TEU (twenty-foot equivalent units). To accommodate the transit of post-Panamax vessels up to 13,000 TEU, and guarantee the future of the Panama Canal as the natural route for international trade, it became clear several years ago that a major expansion program would be required. The Panama Canal Authority (Autoridad del Canal de Panama - ACP), came into being after the United States finally granted ownership of the canal to Panama on 31 December 1999. In 2006 a national
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Atlantic lock construction, upper, middle and lower chambers, and corresponding water saving basin excavations
Grupo Unidos Por el Canal referendum was held in post-Panamax locks, one which over 76 percent of southwest of the existing the population voted in Miraf lores Locks at the southern end of the canal favor of the expansion of the canal. on the Pacific side, and The expansion program the other to the east will almost double the of the existing Gatún Value of new locks capacity of the canal, and Locks on the Atlantic contract involves several different side to the north. Fo u r inter nat iona l projects along its 80 kilometer (50 mile) length, consortia were prequalified including a new Pacific Access Channel to for the $3.2 billion project and three were bypass Miraflores Lake, wider channels involved in the final bidding process. along its length and deepening of the The request for qualifications (RFQ) was existing waterway. issued in August 2007, followed by the The most expensive and prestigious request for proposals (RFP) in December. aspect of the project, however, is for Eighteen months later, the decision was the construction of two new sets of made in July 2009 to award the contract
$3.2
Billion
INTERNATIONAL® TRUCKS As a pioneering innovator for over 180 years, and the parent company of International Truck, Navistar has always pushed the boundaries of what is possible. From inventing the first mechanical reaper that helped feed the world, to supplying a fleet of trucks that is helping to double the capacity of the Panama Canal, Navistar has led the way. Our advanced engineering and state-of-the art manufacturing are backed by a customer-centric approach to building trucks, buses, RVs, military vehicles and engines. Now, more than 170 INTERNATIONAL® trucks are working for the ongoing Panama Canal-widening project, in 11 different applications, including dump trucks, concrete mixers, water pumps and cranes. www.navistar .com
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Grupo Unidos Por el Canal to Grupo Unidos Por el MICHELIN Canal (GUPC). Since 2010, Michelin has held a contract with GUPC GUPC is a consortium to supply the tires for equipment operating in the comprising Sacyr Panama Canal Expansion Program. Vallehermoso of Spain, Through its local distributors in Panama, Durallantas Impregilo of Italy, Belgian and Kaltire, Michelin is supplying the best products, dredging specialist and options and services, most of them related to handling, control and repair. civil contractor Jan De In this way we obtain the best result in terms of Nul and the Panamanian performance, as well getting the best cost per worked con st r uc t ion compa ny hour and the maximum productivity of the equipment. Grupo Cusa. The ACP Together, Michelin, its distributors and GUPC are announced that GUPC had overcoming the challenges of the operation and ensuring submitted the “best value” compliance in the delivery time of this project. proposal for the new set www.michelin.com of locks during a public event held on Wednesday 8 July 2009. This was considered such an important event that it was broadcast live on Panamanian television. “The ACP had very stringent criteria which included a technical evaluation and a financial evaluation,” said Jan Kop, co-ordination manager for the joint venture and acting project director at the time of the interview. “The technical package was studied first and evaluated; they had a system to award points for various technical subjects, working
5,000 teu
Capacity of Panamax vessel Excavation work in progress
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Grupo Unidos Por el Canal methods and experience of prev ious work s of Michelin introduced the first radial tire in 1946, since when comparable scale.” At we have been a driving force in the development, innovation the 8 July event, the ACP and technology of new tires and support services to revealed the technical customers. Michelin is a world leader. We manufacture scores and opened the around 176 million tires per year and 36,200 marketed products. We have commercial presence in 170 countries, consortia’s sealed price with 69 factories in 18 countries and a workforce of 115,000 proposals. A final weighted employees. Michelin has tires for many different vehicles; score was calculated, trucks, cars, motorcycles, pickups, aircraft, mining and constituting 55 percent for industrial equipment. Michelin is committed to social the technical proposal and responsibility and is constantly developing technologies for 45 percent for the price the conservation of environment. submission. “There could www.michelin.com have been a possibility that the one with the highest technical score but a lower financial score could have won the contract, but as it happened there was no doubt who was the winner,” said Kop. GUPC entrusted the conceptual design for the locks project to US-based wet infrastructure specialist MWH Global. “The first part of our contract was to verify that the ACP’s basic conceptual design was viable,” said Willmar Muller, project controls manager for GUPC. The plan is for two new flights of locks to be built parallel to, and operated in addition to, the original locks, each Construction on the Pacific site suppor ted by approach channels.
MICHELIN
“The first part of our contract was to verify that the ACP’s basic conceptual design was viable” BE Transport & Logistics | 207
CONCRETE COOLING SYSTEMS NR Koeling BV | P.O. Box 95 | 2920 AB Krimpen a/d IJssel | The Netherlands T +31-(0)180-545111 | F +31-(0)180 545110 | info@nrkoeling.nl
www.nrkoeling.nl
CHILLED WATER The water used for the concrete is cooled down by a chilled water unit. This chilled water unit is connected to a buffer basin and recirculates the water to keep the low temperature. From the cold water basin the water is supplied to the batching plant.
FLAKE ICE Flake Ice is produced by rotating Ice makers connected to a refrigerating system. The produced Flake Ice is stored inside a Rake system. From the rake the Flake Ice is distributed to the batching plant.
AGGREGATE COOLING BY AIR Aggregate is stored inside silos, used as a buffer. While remaining in these silos cold air coming from a cooling plant is blown trough the aggregate cooling it down. No influence on the moisture content of the aggregate. BY WATER Wet-belt, during the transport of the aggregate from the stockpile to the weighing system of the batching plant, cold water from a cooling plant is prayed on the aggregate cooling it down. Cooling Silo, the aggregate is stored inside cooling silos and sprayed with cold water, for cooling the aggregate. A sedimentation plant/system is needed for cleaning the cooling water.
SAND COOLING The sand coming from the stockpile is loaded into a special rotating drum. During the remaining time of the sand inside the drum, cold air from a cooling plant is blown trough the sand cooling it down. No influence on the moisture content of the sand
Grupo Unidos Por el Canal One complication here, NR Koeling however, is the layout of NR Koeling is a world leader in design and assembly of the existing locks on the installations for concrete cooling, for example: Pacific side. Currently, • chilled water installations ships entering the canal • flake ice systems and matching transport and scales from the Pacific are raised installations to 18 meters in two stages at • air cooling systems for aggregate and sand • water cooling systems for aggregate the Miraflores Locks, then NR Koeling was awarded the delivery of the total concrete travel at this level for three cooling plant for the Atlantic and Pacific sites for the miles through Miraf lores expansion of the Panama Canal locks. Lake before being raised The total capacity of each plant is an additional 9 meters by • 336 tons of flake ice and 140 tons rake the Pedro Miguel Lock. • 1550 kW sand cooling, 420 ton/h The new locks have • 5375 kW aggregate cooling, 800 ton/h • 1075 kW fresh water plant, 42 m3/h been designed as a single Final concrete temperature: 7°C str uct ure, h o w e v e r, www.nrkoeling.nl which will raise vessels from zero to 27 meters above sea level in three stages at the same location. This means that ships travelling north will emerge from the locks at 27 meters, right next to the lake, which is only 18 meters above sea level. The difference in levels has required the construction of four Borinquen dams—massive, impermeable dykes which have to withstand seismic activity and the potential for grounding
427
metres Length of each lock chamber
Barge discharging crushed basalt rock from the Pacific site
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SAND TREATMENT UNIT
WATER TREATMENT PLANT
FILTERPRESS UNIT
WASHING PLANT
COMPLETE PLANT
FILTERPRESS MUD
SAND TREATMENT • INDUSTRIAL SAND PROCESSING • CONCRETE SAND • BENTONITE SLUDGE SAND REMOVAL • WASTE WATER TREATMENT PLANT • SLUDGE PRESSING
www.sotres.fr
Grupo Unidos Por el Canal SOTRES
SOTRES, known the world over as a specialist in mineral processing, was given the opportunity to supply two complete plants for GUPC Panama (on the Pacific and Atlantic sides) to treat sand and clarify water for materials production to prepare concrete for the Panama Canal enlargement. Each plant is designed to treat 2500 m3/h of
Upper chamber construction
washing water containing 600 t/h of sand. The water for screening and washing used for this process is treated in a clarifier of 24m diameter, which is continuously recycled while the plant works in closed circuit. The concentrated sludge removed from this system can be then stored. www.sotres.fr
of post-Panamax-size ships. Two dams with a combined length of almost 4 kilometers are needed to form the eastern bank. Two additional dams, with a combined length of about 1.4 km, are necessary along the western bank to keep the canal waters out of the drainage of the Cocoli River. However carefully designed, with a project of this magnitude the occasional surprise is inevitable. One unexpected challenge in the early stages involved the basalt on the Pacific side which was used in making the aggregate for the concrete. “The basalt behaved a bit differently from how it was envisaged,” said Kop, “which affected our plans and gave us a bit of delay.” To put this into perspective, it had
“We had to open two rock quarries to obtain quality basalt, which involved excavating an extra six to eight million cubic meters” BE Transport & Logistics | 211
Grupo Unidos Por el Canal originally been thought hidroca that the basalt for the Hidroca is a wholesale company in the field of industrial aggregates, for the Atlantic supply and vehicle business, with its marketing and and for the Pacific sites, distribution services throughout the country, the market would come from the leader, with over 25 years of successful experience, well locks’ excavation on the known for both its customers and for its suppliers. The Pacific side, but as the quality of its products and service to customers has led her to be the benchmark in the wholesale and industrial quality was not what was lines hoses, hydraulic fittings and brass, glues, adhesives, expected, GUPC had to automotive and industrial belts and professional tools. make contingency plans. www.hidrocapanama.com “We had to open two rock quarries to obtain quality basalt,” explained Kop, “which involved excavating an extra six to eight million cubic meters by drilling and blasting than we originally expected.” The operations at both ends of the canal have much in common, but there are also significant differences, as we shall see in due course.“Each complex consists of three chambers, so we go from sea level to plus 9 meters in chamber one, plus 18 meters in chamber two and plus 27 meters in chamber three,” said Kop. “That’s the same on both sides. The only additional feature with these locks is that in contrast to the old Panama Canal locks, we are also building water saving basins next to the locks, which allow water to be reused so that waste is reduced by 40 percent.” Construction under way on the Pacific site
“To date, we have excavated 16 million cubic meters on the Atlantic side and on the Pacific side we are at roughly 13 million cubic meters” BE Transport & Logistics | 213
BASF will support Panama’s growing construction market, which has been stimulated by infrastructure projects for the government of Panama, including enlargement of the Panama Canal, construction of a new subway line and new hydroelectric power plants. T +507 210-0050 | E juan.jaen@basf.com | www.basf.com
Grupo Unidos Por el Canal Muller added a little more detail. “We have Cemento Panama is the leading company in the production three chambers, lower, of cement, concrete and aggregates in Panama. With middle and upper, and each more than 60 years in the country, we are central to the chamber is 427 meters long development of one of the thriving economies of the region, and 55 meters wide. The participating in emblematic projects such as the Panama water depth is 18.3 meters.” Canal Expansion. Cemento Panama is a Cementos Argos enterprise, There is a lot of earth the fifth largest producer in Latin America, and fourth to be moved. An overall in the United States. 62 million cubic meters, www.cementopanama.com including 8 million of dredging and 13 million of borrow areas are foreseen, plus 26 million of fills and backfills. “Permanent excavation is about 80 percent complete on the Atlantic side and 70 percent complete on the Pacific side,” said Kop. “To date, we have excavated 16 million cubic meters on the Atlantic side and on the Pacific side we are at roughly 13 million cubic meters.” The equipment required for this kind of excavation is serious stuff. During the course of the project GUPC has used five Terex & Liebherr 16 cubic meter capacity hydraulic excavators, six Hitachi 7-10m3 The Pacific site hydraulic excavators, and 21 Caterpillar 2-5m3 hydraulic excavators. Thirty BASF Caterpillar and Komatsu BASF is the world’s leading chemical company—The Chemical Company. Its portfolio ranges from chemicals, 90 ton off-highway trucks plastics, performance products and crop protection have been used, together products to oil and gas. We combine economic success, with another 17 Caterpillar social responsibility and environmental protection. Through 50-65 ton off-highway science and innovation we enable our customers in almost all trucks, and no less than industries to meet the current and future needs of society. 54 Caterpillar and Volvo We create chemistry for a sustainable future. 38 ton articulated trucks. www.basf.com One of t he major
Cemento Panama
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HIGH PERFORMANCE THREAD BAR SYSTEMS
SAS steel construction products are used worldwide from the Panama Canal to Abu Dhabi to the New York City World Trade Center Towers
Contact us to see how we can help you with your next project
SAS
100 New Dutch Lane, Fairfield, NJ 07004 o: 973.244.5995
www.stressteel.com
CENAMEP AIP services:
Calibrations aimed to industries, testing and calibration laboratories, and all companies that by nature of their services, must use calibrated measuring equipment.
Other services:
• Proficiency Tests • Metrological Courses • ISO 17025 audits • Consultancies
Clayton, City of Knowledge, Building 215 Phone: (507) 517-3100 | Fax: ( 507) 517-3200 e-mail: servicios@cenamep.org.pa www.cenamep.org.pa Twitter: @cenamepaip. www.facebook.com/cenamepaip IMPROVING THE QUALITY OF PANAMA, THROUGH THE ASSURANCE OF MEASUREMENTS
STRESSTEEL
www.gruaspanama.com
Grupo Unidos Por el Canal differences between the sas stressteel two sides of the project is SAS Stressteel, Inc. provides innovative products and the nature of the ground. solutions for the construction industry, saving time and The basalt for the aggregate value on projects. Thread bar sizes from 12mm to 75mm is found only on the Pacific in grades 500/550, 670, and 1050 MPA with a full line of side, so some of this has to accessories are used in a wide range of applications; from be carried to the Atlantic rock anchors and deep foundations to high performance reinforcing systems for concrete structures. side for use there. Both www.stressteel.com projects have secondary crushing plants, but the 3,300 ton / hr primar y crushing takes place only on the Pacific side. The basalt is carried six kilometers by trucks to Gatún Lake, from where it is loaded on to 7,500 ton barges for the rest of the journey to the Atlantic project. An added complication is that the Pacific side is located on a fault line, too, so it is subject to earthquake risk. Another important challenge was that the contract stipulated that the locks would have to be built with concrete that would be durable for 100 years. Achieving the right mix was not straightforward. “We had to do extensive testing to arrive at the desired concrete mixes,” said Kop, “and that cost us some time.” With most of the excavation work now complete, GUPC is in serious concrete The concrete is durable for 100 years pouring mode. “We are at 23 percent
“We had to do extensive testing to arrive at the desired concrete mixes, and that cost us some time” BE Transport & Logistics | 217
FARA INTERNACIONAL, S.A. MINERIA Y CONSTRUCCION Fara Internacional has been serving the construction and mining industries in Panama for over 15 years, supplying machinery, parts, and accessories. • Heavy equipment • Air compressors • Water jetting • Concrete plant accessories With global network of suppliers in the US and Europe, Fara Internacional is able to support customers involved in some of Panama’s largest infrastructure projects, such as the Panama Canal Expansion, Metro Line One, and Hydropower Plants. What we do: Sales-Service -Rentals-Repairs Proudly contributing to the Panama Canal Expansion Fara Internacional is supplying Gardner Denver’s water jetting high pressure machines for the concrete joint treatment in the construction of the water saving basin conduits in the chamber floor on both Atlantic and Pacific locks Authorized distributor for Gardner Denver Water Jetting Systems
www.fara-internacional.com Ciudad Bolivar frente al Hangar de Pete, Las Cumbres, Apartado 0834-00321, Panamá, Republica de Panamá Tel. + 507- 268-6597 / 268-6598 e-mail: info@fara-internacional.com www.fara-internacional.com
Grupo Unidos Por el Canal of the 2.2 million cubic meters on the Atlantic side, Started operations in 1983 and is currently the largest and 20 percent of the 2.5 petroleum distribution company in Panama. We have been million m3 of the Pacific Mobil lubricants and greases distributor for the Republic side,” said Kop. of Panama since January 2007. We differentiate ourselves “Our two project teams by selling lubrication solutions, using the high quality Mobil are carefully watching products, with a very high level of service and added value, at a fair price. each other’s performance,” www.petrodelta.com he added. “Last Thursday the Atlantic team achieved 5,0 0 0 c ubic mete r s of concrete in one day, which was a record, but it lasted only until the next day as the Pacific project produced 6,000 cubic meters in 24 hours on Friday 29 June. This shows that we are gradually approaching our originally planned average of 85,000 cubic meters per month. Our goal is now to ramp up to 100,000 cubic meters per month on either side.” If the dimensions involved in this project seem awesome already, perhaps we should look more closely at the electromechanical components—the lock gates themselves. “There are sixteen gates, eight each for the Atlantic and Pacific,” said Muller, “which are being fabricated in Italy by a company called Cimolai.” A series of three locks would normally require only
PETROLEOS DELTA (DELTA)
55,000 tons Weight of steel in 16 main lock gates Artist’s impression of lock complex
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At FALL LINE, we understand that our responsibility is to provide the technical test data our clients rely on to evaluate the quality of the materials that are being incorporated into their projects. We understand that our specialized work is difficult and often in remote areas with extended working hours. • We come prepared to do the job right the first time. • Our experience and training provides our clients with a level of expertise unmatched in the industry. • We are willing to go where and when the work is. • We care about our clients and value our long term relationships. Our business is based on providing the best construction materials testing services where and when the client needs them. We understand that major construction is an around-the-clock, year-round effort. Our employees are all part of a family that works together and supports one another, while accomplishing the goals that our client set forth. The technical expertise of our staff is evident on complex, major heavy civil projects, whether it is a mass earth moving project or roller compacted concrete dams that require our services. Our attention to detail and previous experience enables the FALL LINE staff to provide the on-time, reliable test data that the industry requires in this day and time. Phone: + 001-706-533-5015 | Email: info@falllinetesting.com
www.falllinetesting.com
“We won’t go home until the job is done!”
Grupo Unidos Por el Canal four gates (one at each Fall Line Testing and Inspection end and one between each Fall Line engineers and technicians are highly qualified in chamber). But this is the the inspection and testing of many types of construction Panama Canal, so each materials and varied construction techniques, and have gate is doubled, for safety. years of hands-on experience through their participation “ T he si x teen ma i n in many projects throughout the United Sates. We have gates represent about one of the largest trained RCC testing staffs in the United States. Fall Line is dedicated to providing superior quality 55,000 tons of steel,” assurance and quality control for construction projects by added Muller. “They vary offering stringent testing oversight. in weight from roughly www.falllinetesting.com 2,000 to 4,000 tons each. The gates on the Pacific side are heavier as there is more earthquake risk, so those gates had to be designed to withstand earthquakes.” As well as the main lock gates, there are many smaller gates (valves and bulkheads) which are being built in South Korea by Hyundai. These vary from three to four meters wide by four to six meters in length—and there will be 242 of them altogether. “These will regulate all the water flow from chamber to chamber, between the water saving basins and the chambers and vice versa, and finally to the ocean,” said Kop. “That’s why there are so many of them. These 242 valves and bulkheads represent about 20,000 tons of steel.” The new lock chambers will feature Atlantic lock construction
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Paige is a supplier of electrical wire and cable in both aluminum and copper conductors ranging with control, and signaling. Products include high voltage, medium voltage, power, control and instrumentation and fiber optics. We also have
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Grupo Unidos Por el Canal sliding gates instead of the Paige Electric miter gates which are used Paige is honored to be part of the Panama Canal expansion by the existing locks.The project. We have been in business for 54 years supplying all water saving basins, three types of electrical wire and cable from high voltage, medium per lock chamber, will voltage to low voltage. We can also offer communication, each be approximately 210 fire, sound, security and fiber optic cables. Contact Dan meters wide, 430 meters Pritchard at Paige for your wire and cable needs. www.paigeelectric.com long and 5.50 meters deep. These gravity-fed basins will allow 60 percent of the water used in each transit to be reused. “The Panama Canal locks are completely operated by gravity,” observed Kop. “There are no pumps to pump water back up.” The deepening of Gatún Lake, and the raising of its maximum water level, will also provide significant extra water storage capacity. These measures are intended to allow the expanded canal to operate without the construction of new reservoirs. Engineering and construction have evolved a great deal in a hundred years, so the manpower requirements of the expansion program are not on the same scale as those of the original Panama Canal. “We do not have as many as Barge loaded with basalt in Lake Gatun worked here 100 years ago,” agreed Kop, headed to the Atlantic unloading dock. “but at the moment we have a work force of Norchem, Inc. some 6,500 Panamanian Silica fume is a key component for enhancing the strength, durability and sustainability of concrete structures. For laborers, complemented over 30 years Norchem has built a strong reputation for by some 1,500 office staff, outstanding technical expertise and superior customer laboratory staff and so support while delivering the highest quality silica fume forth. On top of that we products. Norchem’s silica fume is being specified and have subcontractors with used by the most respected engineering and construction around 2,000 personnel, companies around the globe. too.” Skilled labor is a www.norchem.com challenge, he admits,
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Grupo Unidos Por el Canal
6,000
cubic metres Concrete poured in one day
as there are several competing infrastructure projects being under taken in Panama at the moment. The country is fortunate to have an unemployment rate of three to four percent, which in my textbook is pretty close to full employment. The original completion target for the project was October 2014, to coincide with the centennial celebrations. It now looks like being early 2015 before the works are completed, however, after delays arising from the quality of the basalt, the approval of the concrete mix, and a freak storm in December 2010 which delivered 35 inches of rain in eight days, adversely affecting the excavation process. The present locks, which will soon be 100 years old, will then be able to give engineers greater access for maintenance, and are projected to continue operating indefinitely. So, the Panama Canal looks forward to its next 100 years.
Lock construction, Pacific site
For more information about Grupo Unidos Por el Canal visit: www.acp.gob.pa www.pancanal.com
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Konecranes
One of the largest crane manufacturers in the world—which ironically comes from one of the smallest countries in the world written by: alan swaby research by: vince kielty
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W
atch any strong man competition and the odds are there will be a Finn in the final. For a country with a population of far less than Greater London, Finland manages to create some of the biggest and strongest specimens in the world. It’s only fitting, then, that one of the most important crane manufacturers in the world is also from Finland. Within the industrial sector, Konecranes believes it is in first place while in the port handling sector, it ranks as either third or fourth. “Within the sectors where we operate,” says vice president Mika Mahlberg, “we estimate that our market share globally is about 15 per cent.” Even for those not in the crane business, the name might sound familiar. Konecranes used to be part of Kone Corporation— manufacturers of lifts, escalators and automatic doors, products that all of us will have ridden in or walked through many times. But in 1994, the crane division was the subject of a management buyout and went public just two years later. To give some perspective to the company, Konecranes is just putting the finishing touches to the world’s largest goliath crane, being supplied to the Ecovix-Engevix shipyard in Brazil. This monster has a span of 210 metres and can pick up ship sections weighing 2,000 tons. At the other end of the scale, many thousands of family-run workshops around the world make their lives lighter with Konecranes chain hoists. Alongside industrial cranes such as these are port cranes—the division headed by
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Konecranes
Rail mounted gantry crane at BNSF Railway, Seattle, Washington, US
Rubber tyred gantry crane at Valencia, Spain
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Mahlberg. “Cranes to handle containers account by far for most of the machines we make,” he says, “but we still need to have the full spectrum of options so that we can provide equipment to suit every specialist activity that an individual port or shipyard performs. These past 12 months have been our busiest for some years and output has been higher than it was before the recession in 2008. In 2010, sales exceeded €1.5 billion.” Mahlberg puts the success that Konecranes has achieved down to several factors: “We are not typically the cheapest manufacturer in the industry,” he says, “but generally the orders that we want to win come from clients who are making a more rounded assessment of whole-of-life costs and for whom the highest levels of productivity are the key to better value. Therefore, we put considerable effort into maintaining technological superiority and pushing the boundaries of what can be achieved. Having said that, though, customers know that the designs we provide are well proven and more than reliable.” Cranes might be bigger and reach further than they used to do in order to satisfy the bigger vessels in service these days but on the whole they don’t look much different to how they did 20 years or more ago. On the other hand, the way they operate has changed enormously: the speeds at which they accelerate and travel, as well as the speed at which objects are lifted and lowered, are all significantly faster than they were. “The crane design plays a major role in this: the steel structure has to cope with the millions of changes in stress that a crane
Konecranes
Ship-to-shore crane at Terminal De Contenidors Barcelona, Spain
has to contend with in its life as loads are lifted and lowered,” explains Mahlberg. “But equally important is the contribution that comes from advances we have made in control systems. All Konecranes designs share similar technology and components. As well as the software we have developed, the volume of cranes we make justifies having our own manufacturing facilities rather than being obliged to buy proprietary products from others. This represents a major technological difference between ourselves and our competitors.” Commonality of design also makes life
easier to provide service for any Konecranes product. With close to 5,000 technicians in 578 service locations across 46 countries, a service engineer is never far away from a customer. Additionally though, by having no distinction in the way any of the products operate, a service engineer taking care of an overhead ladle crane in a steel mill can just as easily service the same client’s bulk iron ore and coal handling cranes. The most common types of crane found in a port are likely to be rubber tyred gantry cranes (RTGs) or rail mounted gantry cranes (RMGs). These are the bread and butter machines of
“Customers know that the designs we provide are well proven and more than reliable” BE Transport & Logistics | 231
Straddle carrier at Kotka, Finland
Konecranes any installation handling containers, with RTGs giving complete freedom of movement while RMGs are to be found at container terminals or inter-modal junctions—loading containers onto trains, for example. Over the years, operators and crane designers have tried to squeeze the last drop of productivity from these machines by making them work harder and at greater levels of safety. The limiting factor, as always, has been the human component. Some drivers are more skilled than others and some work harder, while no-one likes working in rain or high winds. When incidents and accidents occur, schedules go out of the window. So the holy grail has been to have a completely driverless scenario: and this option is getting ever closer. Already, Konecranes produces automated stacking cranes (ASC) that can follow pre-programmed instructions to a very large degree, although in practice—and not dissimilar to automatic airline pilots— touch downs are generally carried out by human operators, albeit working from a remote location. “The advantages are enormous,” says Mahlberg. “By working in a cleared environment, safety issues are virtually eliminated. Machinery can work around the clock with no diminishing of performance. Rain or shine—it makes no difference to an ASC. Productivity is appreciably higher.” These machines carry a hefty price premium over a manually operated equivalent but since Konecranes sold its first ASC five years ago, the number of sales has been rising rapidly. Recent significant
16-wheel rubber tyred gantry crane at MassPort, Boston, US
investments in ASCs have been made in Abu Dhabi and Barcelona, where 30 and 36 ASCs respectively are under delivery. Developments in crane engineering are gradual and evolutionary so don’t expect quantum leaps. Mahlberg is content to work hard to retain the company’s leadership in technology while maintaining the huge investments in labour and resources constituting the high level of customer service Konecranes provides. Just like the strong men of Finland, he knows that only those who work hardest will ultimately win the prizes. For more information about Konecranes visit: www.konecranes.com
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Tomorrow’s trade solutions,
today
Chief executive officer Marco Neelsen discusses the crucial role KBSP is playing in the development of Bahrain as a centre of trade and economic activity
written by: Will Daynes research by: Abi Abagun
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Khalifa bin Salman Port (KBSP): APM Terminal
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Yard operation in CT area
Khalifa bin Salman Port (KBSP): APM Terminal
W
ith a total area of some are taking on an increasing amount of 765 square kilometres, transhipment business, steaming mainly the island country of from the upper Gulf, and that raises the Bahrain may be small profile of Bahrain immensely. Our land based in size, but what it activities, conducted within our terminal lacks in scale it more than makes up for in facility, include the operational management economic status. According to a January of several warehouses, where we strip and 2006 report by the United Nations Economic stuff containers and provide loose cargo load and Social Commission for Western Asia, and delivery services.” Bahrain boasted the fastest growing economy Under the management of global terminal in the Arab world. Two years later it was operator APM Terminals, KBSP has quickly recognised as the world’s fastest growing evolved into one of the most modern financial centre by the City of London’s ports in the Gulf, capable of handling Global Financial Centres Index before being container vessels with a degree of efficiency named the freest economy that matches or exceeds in the Middle East, and any of the world’s most productive ports. the twelfth overall in the “In offering modern, world, in the Wall Street innovative services for Journal’s 2011 Index of Economic Freedom. the shipping industry of Having opened for the 21st century,” Neelsen continues, “KBSP is playing business on April 1, 2009, Total land cover and located on 110 hectares a fundamentally important of the port of reclaimed land, Khalifa role in the growth of Bahrain as a whole.” Three specific bin Salman Port (KBSP) is ideally positioned to be the premier things highlight this fact. First is the history transhipment hub for the northern Gulf. of the country as a trading community. With its deep-water berths and approach Indeed, Bahrain has existed as an epicentre channel, KBSP is a multipurpose terminal, for Gulf trade for hundreds of years and to able to accept large oceangoing container this day several highly influential trading and passenger vessels. families remain globally active, while being “With one of the most diversified port based in the country. Secondly is the fact that, as an island, service operations within our global portfolio, we are not solely reliant on it is absolutely imperative that Bahrain containerised traffic, however this still maintains well-run ports throughout the makes up approximately 50 percent of our country if it is to grow. Lastly, it is the very business revenue,” explains chief executive geography of the island that places it the officer, Marco Neelsen. “Furthermore, we enviable position of being something of
110
hectares
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Khalifa bin Salman Port (KBSP): APM Terminal a half-way point between Shutdown Maintenance Dubai and Kuwait, right at We have the honour to be a business partner with APM the heart of the Arab Gulf. Terminals, a company with great experience in logistics and Depending on the port management. business indicators, KBSP Our business relationship started in April 2007 in Mina has the ability to increase Salman, the old port within the Kingdom of Bahrain. Two its capacity by one-andyears later APM terminals moved its port management operation to Khalifa Bin Salman port. a-half times its current During the past five years we have experienced APM level, simply by bringing in terminals’ sustainability initiatives and safety awareness on additional quay and yard many occasions. equipment. This will in turn A recent approach was to focus on zero work accidents support the company’s drive by maximizing mechanical means through using road towards regional growth. sweepers, floor scrubbers and mechanical hygiene, thus “While we do not see offering a safe work environment to all beneficiaries of the Khalifa Bin Salman Port. ourselves as being in direct smswll@batelco.com.bh competition with the UAE,” Neelsen states, “we are concentrating our efforts on targeting countries in the upper Gulf, such as Kuwait, Iraq and the Eastern Province of Saudi Arabia. In doing so we aim to promote Bahrain as something akin to a distribution epicentre within the region. Indeed this is where the geography of the island plays an important role in helping Bahrain achieve its mission of becoming much more visible in the Gulf.” Another aspect of this mission to increase Bahrain’s global significance is the cruise business. While the cruise season in Europe CEO-Marco Neelsen
“Khalifa bin Salman Port is ideally positioned to be the premier transhipment hub for the northern Gulf” BE Transport & Logistics | 239
may be over for another year, in the Middle East it is only now entering the first stages of its yearly cycle. For its part, KBSP has confirmed that it will play host to two cruise liners per week over the coming six months. Such a development is helping to put Bahrain back on the map as a cruise destination. This understandably provides the county’s tourism sector with an added boost and really highlights the importance of the port to Bahrain’s future prosperity.
“Looking at current levels,” Neelsen says, “we are seeing an increase in container volume throughput, driven mainly by regional transhipments, while local growth continues on both the containerised and general cargo side, with projects that were previously on hold during the global financial slowdown now starting to come on-stream as the country finds its feet again. The Free Trade Agreement that Bahrain has with the United States has
“What we want above all else is to make as many people within the maritime world as possible take notice of Bahrain”
Aluminium shed
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Khalifa bin Salman Port (KBSP): APM Terminal
Car carrier
made it an increasingly attractive option for those businesses that are looking to engage with the US market.” KBSP’s commitment to the growth of Bahrain as a nation can also be seen in its employment of a localisation policy. Of its 530 strong workforce, some 400 plus employees are local Bahrainis, giving the company a localisation rate of more than 80 percent, a figure that exceeds its target as set out by the government. “For our part as a terminal operator with a global portfolio,” Neelsen states, “our job is to come in and run the port effectively, while training and grooming young talent to operate the port. Achieving this is core to our commitment to the country and, as our productivity results show, we are well on the way to succeeding.”
In the long term, KBSP plans to transform itself into a centre for transhipment in the northern Gulf region. “What we want above all else,” Neelsen enthuses, “is to make as many people within the maritime world as possible take notice of Bahrain. In doing so we believe they will quickly recognise the potential this country has when it comes to serving this part of the world, and that it is from here that we at KBSP can provide the transhipment solutions that assist in a customer’s movements through the international market.” For more information about Khalifa bin Salman Port (KBSP): APM Terminal visit: www.gop.bh/kbsp.asp
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Overcoming adversity with diversity
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Flinders Ports
Andrew Pellizarri, general manager of Flinders Logistics and Peter Cheers, general manager of Flinders Adelaide Container Terminal, discuss how Flinders Ports has adapted to evolve
written by: Will Daynes research by: James Boyle
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Flinders Ports
M
Flinders logistics loading copper concentrates using the rotating tippler system to discharge concentrates into bulk vessels
any companies around the world have felt the effects of the global financial crisis since it first began to take hold in 2008. Harsh lessons have been learned in the time since, yet some businesses have managed to weather the economic storm and, in some cases, come through stronger than before. Often what we find is that one characteristic these businesses share is diversity. “By moving away from being purely a port owner,” explains Andrew Pellizzari, general manager of Flinders Logistics, “we have diversified as a business and this has sheltered us in some ways from the financial crisis and allowed us to go from strength to strength.” The diversification he mentions relates to the steps taken by Flinders Ports, over the last 18 months, to establish a logistics business, take full ownership of the Adelaide Container Terminal and expand its reach across Southern Australia. As the mining sector within South Australia has grown, the company has been increasingly looking to develop its ports to offer a competitive supply chain solution to the industry. It is South Australia’s growing importance within the commodities and raw materials markets that first spawned the concept of Flinders Logistics. What was originally positioned as a bolt-on to the main business has rapidly evolved into its own entity, providing infrastructure and specialised services in niche markets. Despite its short history, Flinders Logistics has already made its presence felt, introducing its rotating tippler solution to the
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Flinders Ports marketplace. “What we have Worksafe SA done,” Pellizarri continues, Worksafe SA provides a range of drug and alcohol “is develop a technique screening and education services and has been appointed that is changing the way by Flinders Ports Holdings to conduct testing at all sites concentrates are handled and including Flinders Adelaide Container Terminal and other that is now being embraced Port Adelaide and regional sites. across Australia, and soon Worksafe SA offers assistance in the development of policy and procedures; alcohol and drug screening by breath, the world over.” In recent urine or saliva analysis; consultation with both management months, CEOs and directors and employees in regard to alcohol and drug related matters from companies near and and conducts drug and alcohol awareness sessions. far have visited Adelaide Employers who have used Worksafe services report many to examine the company’s benefits including decreases in absenteeism, accidents, solutions and they all agree downtime, turnover and theft as well as increases in that Flinders Logistics is the productivity and overall improved morale. www.worksafesa.com.au market leader when it comes to this technology. Integral to the technology is the company’s DF misting system. Designed to eliminate air contamination from the dust generated from the movement of container loads, the system has been a revelation for both Flinders Logistics and the sector. “Naturally,” Pellizzari states, “different products and loads create different types of dust particle. Additionally we have to adjust the misting system to varying degrees of pressure, wind and humidity in order to supress the dust. The DF misting system is flexible enough to do all of that.” In July 2012, Flinders Ports confirmed that it had acquired 100 percent ownership of the Adelaide Container Terminal following its buyout from previous co-owner DP World. The deal valued the business, which handles approximately 300,000 containers a year, at more than $223 million. With the success of the terminal being integrally linked to the success of Flinders Ports as The rotating tippler system
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Flinders Ports a whole, the company has company’s employees, but also its clients that Flinders taken the view that major investment is needed to take Ports is ready to invest to the business further. provide a more efficient, effective service. Presently “When we went into the terminal,” Peter Cheers, the company is assessing general manager of Flinders the market for additional Adelaide Container Terminal quay cranes. explains, “we knew we The port side of the had to spend capital in company is constantly order to buy equipment looking at ways in which it can grow, be it through the such as additional cranes, Operations at the Flinders expansion of its existing and implement a planned Adelaide Container Terminal assets or through the maintenance programme. These are the sort of things that, once acquisition of mature or new opportunities. in place, allow you to more effectively One on-going development for Flinders Ports manage your resources.” Such actions also involves the Port of Bonython, 20 kilometres send out a strong message not only to the east-northeast of Whyalla, South Australia.
INTERMODAL SOLUTIONS GROUP (ISG) Oz Minerals supplied with 1,400 specialised copper concentrate containers Oz Minerals went to tender in 2011 for the supply of 1,000 specialised copper concentrate containers for its Prominent Hill operation, choosing containers specially designed by the Intermodal Solutions Group (ISG) engineering team. The containers were the first in the global market to be certified to BK2 and ADG7 dangerous goods code. The shipping containers are designed for minimum product hang up which includes curved gussets in all corners, and tapered side and end walls. The containers are designed to be suitable with all tipplers in the global market, and include a pioneering lid which is automatically
locked and unlocked by the tipplers. After the successful on time delivery of the first 1,000 copper concentrate containers a further 400 more were ordered. “The new containers allow OZ Minerals to export its copper concentrate to a high environmental standard,” said OZ Minerals Project Manager Andrew Fitzgerald. OZ Minerals exported its first shipment of copper concentrate from Prominent Hill using the specialised containers in January this year from Flinders Port in Adelaide.” Intermodal Solutions Group (ISG) is the largest bulk container design company in Australia. Please visit www.intermodalsolutionsgroup.com.au or phone Garry Pinder on +61 400 035 548
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Flinders Ports A large greenfield site, it is SA Lift and Loader intended to become a deep SA Lift and Loader Pty Ltd supplies and maintains Flinders water port tailored for the Ports’ materials handling-equipment. This includes two sixtybulk commodities sector. As five tonne Omega reach stackers, a Fantuzzi reach stacker, the leader of the consortium and five Omega empty container handlers. that won the tender for this The ten-year relationship between the two companies has development, Flinders Ports resulted in an efficient method to move and store shipping containers from the ship to the customer. is currently undertaking an The guys at SA Lift and Loader are dedicated and make sure environmental impact study the equipment is available and ready when the drivers need on the project. The Port of it to move containers. Above all, managing director David Bonython is expected to Mudge and his team are good people to do business with. take around three years to www.saliftandloader.co.au build, at a cost of between $600 and $750 million. The successful growth of Flinders Ports and its various businesses is clear to see, yet evidently there is much still to come. “From a logistics perspective,” Pellizzari says, “our natural progression involves replicating what we have achieved locally on a grander scale. Through word-ofmouth alone, we are now working on several interstate projects and this will be the way forward. While we want to avoid overstretching or overcapitalising the business, what we are able to do is Operations at the Flinders Adelaide pick strategic points in the region where ContainerTerminal we can set ourselves up and invest in capital with plant, MooreAir equipment and operations.” MooreAir has been an airconditioning and refrigeration provider to the shipping industry for the past 18 years. W hen it comes to The company specialises in design, installation and its Adelaide Container maintenance for a broad range of industries including rail, Terminal, the company shipping, earthmoving, public transport and airport ground has a clear mission in front support. MooreAir has a strong commitment to providing its of it and that involves customers with service excellence, ensuring a comfortable tackling the issue that, at working environment at all times. current rates, the terminal www.mooreair.com.au will have reached its full
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“We have developed a technique that is changing the way concentrates are handled and that is now being embraced across Australia, and soon the world over” capacity within 12 to 18 months. “Unlike other terminal operators,” Cheers says, “we are in a position where we have significant land holdings adjacent to and around the
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terminal itself.” Ownership of this land will allow any future redesign of the terminal to be undertaken in the most effective way. Additionally, it provides Flinders
Flinders Ports
Flinders Adelaide Container Terminal has benefited from recent capital investment
Ports with the opportunity to establish and run empty container depots and other businesses that are ancillary to its main container operations. “In addition to having good management and a professional, dedicated workforce,” Cheers concludes, “one of the core strengths of Flinders Ports is that it has always retained a very strong ethical position. The transparency we have with our employees and clients allows them to see
the good work that we are doing and having the sort of demonstrated business record that we have, particularly in the maritime and stevedoring industry, is a very strong selling point for the growth of our business in the future.” For more information about Flinders Ports visit: www.flindersports.com.au
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Uncompromised
quality
written by: will daynes research by: Jeff Abbot
How diversification has helped Strategic Marine become globally recognised as a builder of first-class vessels
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Strategic Marine
s tt
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Strategic Marine boasts an evergrowing reputation for producing quality, high performance vessels
Strategic Marine
A
ustralia’s maritime history is closely linked to the global spread of mankind across the oceans. From the first Pacific island mariners who engineered the earliest vessels capable of travelling thousands of kilometres, up to as recently as the 1950s, Australia’s history of trade, colonisation and settlement was dependent upon its maritime activities. The significance of the country’s maritime past can still be seen today in the form of its new generation of shipbuilders. A dynamic, Western Australian shipbuilding and engineering company, Strategic Marine boasts an ever-growing reputation for producing quality, high performance vessels that service markets all around the globe. “Known for never compromising on quality under any circumstance,” explains Ron F. Anderson, executive director, “Strategic Marine is recognised globally for being the very best at what it does.” With its origins in Geraldton Boat Builders, one of Australia’s leading aluminium shipbuilders, Strategic Marine was incorporated in 2001. In the time since, it has produced more than 400 vessels, focusing on offshore crew boats, support vessels and high-speed patrol boats. In recent years, the company’s portfolio has grown and seen its capabilities expand to offer larger, purposebuilt and designed steel vessels. Employing over 1000 staff, the company presently operates facilities in Australia, Singapore, Vietnam and Mexico. Across each of these locations, the industry
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sectors in which Strategic Marine has been experiencing the greatest levels of growth include the military and oil and gas. As issues such as terrorism continue to bring trauma to different parts of the world, countries have made decisive moves to boost their security infrastructure. “Strategic Marine has a long, proven track record of delivering craft used for security purposes,” Anderson continues. “To date it has built 60 vessels for the Singapore Police Coastguard, 15 for the Royal Malaysian Police and over 250 patrol boats in various models to customers in Nigeria. What makes the latter figure all the more impressive is that these vessels were successfully delivered over a four year period between 2004 and 2008.” When it comes to the oil and gas sector,
Strategic Marine
The company has strived to diversify to service the changing demands of customers around the world
the company continues to benefit from a growing demand for utility vessels, crew boats, PSVs and other such craft. One current project involves the building of two, 40 metre vessels for Syarikat Borcos. These vessels will join the nine, fast, crew utility boats that Strategic Marine has already delivered to the company and have been put to use in nearby oil fields. Throughout its relatively short history, the
company has strived to diversify and expand in such a way that it is able to service the changing demands of customers around the world. The most recent example of this ability to adapt and grow is currently underway as Strategic Marine looks to enter into the ferry building business. Much like its activities in other industry sectors, this work will take place on an international scale and will see the company utilise its
“Known for never compromising on quality under any circumstance, Strategic Marine is recognised globally for being the very best at what it does� BE Transport & Logistics | 259
proven ability to deliver customer-specific, purpose-built vessels of the highest order. Today, Strategic Marine also finds itself pushing heavily into the offshore wind farm market. “As part of the company’s strategy to further diversify,” Anderson says, “it has entered into a teaming agreement with UK-based vessel design company BMT.” Signed in October 2011, this arrangement has already begun benefitting both parties, with Strategic Marine in the process of building the first run of boats under this partnership in Singapore. “The teaming agreement with BMT is one that both companies see as delivering long term success,” Anderson enthuses. “On one hand, Strategic Marine is able to turn to BMT to gain access to its many different vessel designs. Meanwhile, BMT now has the opportunity to partner Strategic Marine on all manner of different undertakings. It is the two-way nature of this relationship that has both companies very excited about what the future holds.” The company’s move into the offshore wind sector went a step further in May 2012, when it announced the signing of a sales and service agency agreement with the marine and repair company, Testbank Ship Repair. As a part of its commitment to establishing
a network of sales and service agents, this partnership will see the two companies working together to provide marine, ship repair and through life support services to offshore wind clients. “What this partnership demonstrates,” Anderson says, “is the commitment that Strategic Marine has to the European offshore
“It is Strategic Marine’s long-held belief that service and quality are paramount to a company’s prosperity, and will remain so for the foreseeable future” 260 | BE Transport & Logistics
Strategic Marine
Strategic Marine provides its clients with turnkey shipbuilding, planned maintenance and ship repair services
wind market. It highlights that the company is not merely there to sell boats. In addition to this, it is also concerned with making sure that its vessels have a long, successful life after they have been delivered.” By providing its clients with turnkey shipbuilding, planned maintenance and ship repair services, Strategic Marine is able to add real value to the vessels it delivers to the region. “Depending upon where the company takes its operations in the years to come,” Anderson highlights, “it fully expects to build on the success it has had with Testbank Ship Repair by forming similar alliances with other such companies.” The business model that Strategic Marine
has developed and adapted over its lifetime has undoubtedly brought it great success and will remain as the backbone of the company as it continues to evolve. “The issue of pricing within the market remains an important factor when it comes to winning projects,” Anderson concludes. “However, it has been Strategic Marine’s long-held belief that service and quality are paramount to a company’s prosperity, and will remain so for the foreseeable future.” For more information about Strategic Marine visit: www.strategicmarine.com
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The know
a
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Sturrock Shipping
w-how people
While the excitement of oil and gas production centres around the wells themselves, nothing would ever get done without the support of experienced service providers
written by: Alan Swaby research by: James Boyle
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lsewhere in this publication there is an account of what the South African Oil and Gas Association (SAOGA) is doing to coordinate and encourage South African based businesses to be part of the overall development of Africa’s oil and gas industries. Here is a perfect example of what can be achieved by a business that has no interest or involvement with engineering or manufacturing and yet is still making money from oil and gas. Sturrock Shipping has been around for almost half a century. It’s not a shipping company as the name might suggest but rather a ship’s agency plus forwarding and logistics company. It’s the type of business you go to when you want someone to take responsibility for the full supply-chain of services related to sea transportation or the import and export of goods into and out of Africa. It does have links with the actual shipping process – its BEE (black economic empowerment) partner is Calulo who is involved in ship chartering around the African coast as well as bunker brokering, but Sturrock is essentially a facilitator – it gets things done on behalf of others. “We specialise in the oil tanker sector,” says ships agency director Clive James. “As such, there are very few of the larger names in oil that we don’t service with freight forwarding, landside logistics and a whole gamut of vessel and cargo requirements.” For many years, during the apartheid era, Sturrock’s expansion plans were hamstrung by poor relations between South Africa and the rest of the continent. However, when
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Sturrock Shipping
Sturrock Shipping the ANC government came to power and sanctions fell away, Sturrock had the green light to start its expansion plans. The first office was opened in Mombasa with Dar es Salaam following later, both bringing Sturrock into contact with a whole new range of clients, particularly in oil related businesses. “We decided to start on the east coast,” says James, “as there we shared the English language – something which would make life just a little easier while adapting to a new set of conditions and business habits.” It’s an easy trap for Europeans and Americans to fall into thinking that Africa is all the same. “The common features,” admits James, “are the high incidence of bureaucracy and the generally poor state of the infrastructure, but in each case, the fine print is different.” It wasn’t until they had gathered considerable experience in English speaking zones that they ventured south a little and
opened two offices in Mozambique. “We’re neighbouring countries,” says James, “but the fact that business is conducted in Portuguese creates a considerable gulf.” Now though, the network is extensive: eight offices throughout South Africa, three in Mozambique, three in Tanzania, five in Madagascar, plus offices in Angola, Kenya, Ghana and Sudan. “We try to understand local conditions and not be Eurocentric,”
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says James. “Instead, we try to find good partners to deal with who share our ideals of good service through reliability and then tailor a modus operandi around the specific conditions in each country.” Having someone reliable is exactly what clients want. Many of the above branches have been created at the behest of customers tired of sloppy service from agents working for their own best interests and not the
client’s. “Everything about the way Africa operates is improving,” says James, “the roads, phone system, broadband speeds and even bureaucracy. It means the barriers to entry are coming down and competition is increasing. But it’s not always improving fast enough for some of our clients based in Asia, Europe or the US. They have little tolerance for a lack of punctuality, promises that aren’t kept and poor quality work.
“The first thing that takes new clients by surprise is that we show them it is possible to have an answer within minutes”
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Sturrock Shipping
While we adhere to our own broader experience when ever improving quality combined becomes a potent standard, we strive to remain force.” ahead of the pack.” Sturrock then works on the basis that the most The services provided by Sturrock became corrosive element for good all ship’s agents are similar, ISO certified client relationships is poor if not identical, so Sturrock communication. “The first places the emphasis not on what is done but rather how thing that takes new clients it is done. “It’s all about relationships,” says by surprise is that we show them it is James. “First we need to work closely with possible to have an answer within minutes the appropriate authorities to make sure we rather than the hours or days that might understand what they want. Here it helps previously have been their experience.” for us to partner with strong local firms Another point of difference Sturrock which have demonstrated a high level of claims in its favour is the extent of its capability. Their inside knowledge and our health, safety, environmental and quality
1996
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Sturrock Shipping management systems. SHEQ has traditionally not featured too prominently on the radar of many African countries, but as a result of Sturrock’s long track record dealing with the oil majors it has become a serious and necessary focus of its business today. “All the most important oil companies,” says James, “are fully aware of their social, health and environmental responsibilities and want their agents to be equally prepared and like-minded in their approach to these non-negotiable aspects of the business. Of course, every effort is made to avoid environmental damage but should something untoward occur, clients need to know that we are ready to deal with any situation. Sturrock has been ISO certified since 1996 and has experienced teams that it can deploy to assist with incidents at short notice. The amount of investment taking place in African oil and gas production is making the region an attractive target for some of the largest international agency names. But Sturrock remains confident that its focus on an African presence has numerous benefits for potential new clients. “We can demonstrate,” says James, “that the service we offer is equal to anywhere in the industrialised world but with a true understanding of what it is like to do business in Africa. And for multinational clients, we promise a consistent way of working regardless of the location.” For more information about Sturrock Shipping visit: www.sturrockshipping.com
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Changing perceptions The Port of Beira, Mozambique, is playing a major role in the nation’s economic growth by delivering a cost-effective service for the region’s land-locked states written by: Gay Sutton research by: Abi Abagun
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Port of Beira
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Lifting freight
Port of Beira
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ccupying over 1,300 miles of and marketing manager Félix Machado. The the eastern coast of southern obligations were far-reaching and included Africa, Mozambique is a investing in equipment and infrastructure, strategically significant cutting costs, and improving efficiency transport corridor for land- and productivity. The port was required to locked Zimbabwe, Zambia, Malawi, DRC and improve its safety and security, facilitate of course, Mozambique itself. Over the past local and regional trade and growth, and 15 years, the Port of Beira, which has strong protect the environment. “And we have infrastructure links with these hinterland achieved all of those. Today, we are locally countries, has been undergoing significant and regionally competitive and make a expansion and investment and attracting major contribution towards the growth increasing volumes of trade. Today, it is of the economy. We are efficient and cost making a major contribution to the economic effective and have captured a major share growth of the region. of the import and export market.” The period of investment began in The Port of Beira operates within its original 12-berth footprint. October 1998 when The port comprises a Mozambique started with new reforms (oriented by the container terminal and World Bank and the IMF) general cargo (operated by to place the ports under CdM), fuel terminal, coal terminal, grain terminal and private management and Proportion of port quay number one reserved stimulate growth; and the throughput destined as a fishing harbour. The government handed the for export container terminal handles a management of the Port variety of products including of Beira to Cornelder de Mozambique (CdM). A joint venture 67 per tobacco, soft timber, ferrochrome, logs and cent owned by Rotterdam-based Cornelder cotton, and the general cargo terminal handles Holding and 33 per cent owned by the fertiliser, wheat, clinker for cement, sugar, government entity Mozambique Ports and maize and coal. Today, 60 per cent of Railway (CFM), CdM has steered the port throughput is in imports and 40 per cent is through a period of infrastructure and in goods for export. The condition of the road network commercial development and plans to accelerate that growth to support trade and along the Beira Corridor is generally good to excellent; however, there are some industry in the region. “We took over on 15 October 1998 with sections which are in poor condition or a 25-year concession and a further 15-year have severe speed restrictions, for various extension if we achieved our obligations reasons. Beira is the central hub of the within the first 15 years,” explains sales Beira Railroad Company, the country’s
40%
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Port of Beira longest established railway Nectar system. The Machipanda The Nectar Group provides port-related bulk handling and Line extends to Harare in bagging services, primarily for the discharge of bulk, dry Zimbabwe, creating a cost and free flowing commodities, such as grain, cereals and effective route to port for fertilisers. The Group also offers consultancy, terminal all the land-locked central design and development, in addition to the management southern African states. and maintenance of mobile harbour cranes, ship-to-shore gantry cranes and the wider range of bulk handling and The Sena Line links the terminal equipment. port to the lucrative and In 2011 the Group established Nectar Coal Handling nationally important coal Mozambique Ltda to provide operation, maintenance and mining province of Tete, management support for a coal terminal. providing a low cost export Nectar Mozambique Ltda and the wider Nectar Group are very route for companies such as proud to be associated with CdM, CFM and the Port of Beira. Vale and Riversdale Mining. Nectar: Driven by innovation. www.nectargroup.net A considerable amount of work has recently been done on the Sena Line, which reopened recently. The Machipanda Line, meanwhile, is to undergo further improvements. In spite of the obvious commercial benefits of this accessible and cost effective import and export route, attracting hinterland trade to the port has not been easy. “One of the big challenges we have had to face is a long-standing negative perception of safety and security at the port,” Machado says. Security was one of the first issues to be tackled from the beginning by CdM as part of its investment plan; however changing Ships docked at the port
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Port of Beira
The port operates within its original 12-berth footprint
the negative perception and convincing is an excellent example of the success of possible customers of the economic benefits these policies. In 1998, Beira handled just of using Beira was an uphill task. “People 10 per cent of the trade; today, it accounts were very resistant to change,” he continues. for 60 to 70 per cent. “To overcome this reluctance we made a On the sea side, the port is accessed via strategic decision to offer the Mancuti Channel, which lower import rates, increase was dredged between 2010 the free period of any and July 2011. The port can now receive deepwater commodity coming from vessels. As a result of the the hinterland countries, positive market-oriented and generate availability philosophy of CdM, container of empty trucks in all traffic in 2011 rose from those countries to attract the exports.” 105,000 to 160,000 TEUs, Gradually, habits have an increase of 50 per cent. General cargo General cargo throughput been changing, and the throughput, 2011 has also grown by around Malawi tobacco industry
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million tonnes
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40 per cent, from 1.2 million tonnes to 1.9 million tonnes, in the same period. The vision for the future of the port is ambitious. A number of critical expansion projects are currently underway and more are planned for the future. Construction work is in progress at the container terminal, and this will increase container storage capacity from 6,400 TEUs to 11,400 TEUs. At the general cargo terminal, the final touches are being made to a dedicated tobacco storage facility. Both projects should become operational by August this year. “We are also putting in a new dedicated container gate, to separate the access routes for container and general cargo traffic and to facilitate the flow of trucks,” Machado says. In the medium term, plans are in hand to double the storage capacity at the grain terminal from 30,000 tonnes to 60,000 tonnes, and to construct a dedicated fertiliser terminal to improve the efficiency and capacity of the operation. The aim is to improve vessel turnaround time and triple or even quadruple offloading capacity from the current 2,000 tonnes a day to 8,000 tonnes. If all goes according to plan, construction will begin this year. Looking to the future, the company
is examining the viability of building new dedicated terminals to improve the efficiency of mineral, sugar and car handling. Meanwhile, it’s also addressing longer term capacity planning. “The container terminal was originally designed for 100,000 TEUs, and with all the improvements we’re making it should have a capacity of 400,000 by 2015. We believe we can continue to operate the container
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Port of Beira
A number of critical expansion projects are currently underway at the port
side of the business for the illustrate this. In 1998 just next 15 to 20 years with 15 per cent of total traffic the quays we have. The through the port was general cargo terminal, generated by Mozambique. however, is likely to come Today, it accounts for Proportion of the port’s under pressure,” Machado 54 per cent of the traffic, traffic generated by explains. “So our plan is to Malawi for 22 per cent, Mozambique construct a further 300 to Zimbabwe 15 per cent and 600 metres of quays with a Zambia eight per cent. With draft of 12 to 13.5 metres the region’s economic growth for general cargo, and together with CFM set to continue, the Port of Beira is well placed (the landlord), we’re currently engaged in to provide a cost effective and efficient import and export route for future trade. the feasibility studies for this project.” Since achieving political stability in the mid 1990s when the current spate of economic For more information about reform began, Mozambique has enjoyed Port of Beira visit: continuous growth, strongly supported by www.cornelder.co.mz the Port of Beira. And the figures amply
54%
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