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The weekly newspaper for air cargo professionals


The weekly newspaper for air cargo professionals Volume: 19

Issue: 48 5 December 2016

Strong growth in Asia Pacific a welcome boost

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he world’s biggest air cargo market - Asia Pacific - is on the rise after a difficult year, giving a welcome boost to the industry. Cargo in the region accounted for around 39 per cent of freight traffic in 2015, and a thriving Asia Pacific has a major impact on business for airfreight operators. China’s domestic market is growing strongly and emerging markets in the region like India, Vietnam, Cambodia, Thailand are developing, driven by increasing e-commerce shipments. Preliminary traffic figures for October released last week by the Association of Asia Pacific Airlines (AAPA) back this up, as showed a strong increase in air cargo demand. AAPA says the pick-up in international air cargo demand, which began in the middle of the year, extended to the month of October with a firm 7.1 per cent rise measured in freight tonne kilometres (FTK) - the strongest monthly increase of the year to date. Growth in demand significantly outpaced the 3.9 per cent expansion in offered freight capacity, leading to a 1.9 percentage point rise in the

average international freight load factor to 65.7 per cent for the month. AAPA girector general, Andrew Herdman explains: “The relatively strong upswing in air cargo markets in October sustains the positive trend established over recent months, although overall volumes for the first ten months of the year are up by just 0.7 per cent compared to the same period last year.”

Looking ahead, Herdman concludes: “The upswing in air cargo markets is a welcome development, although confidence remains fragile amidst still weak global trade conditions and signs that protectionist sentiments are likely to shape the political agenda.” October’s figures suggest Asia Pacific will register a strong finish to 2016, giving a further boost to air cargo.

DHL eCommerce is to build an Outbound Cross-Border eCommerce Distribution Center located in Narita, Japan to cater for the country’s booming cross-border e-commerce market. The new facility is expected to be built by April 2017 and will be co-located with the Japan Global Distribution Center. DHL says it will give Japanese e-tailers access to the group’s supply chain and extensive logistics network.

DHL eCommerce Japan managing director, Yoshihiko Sasaki says: “We are seeing incredible growth in the Japanese cross-border e-commerce market and look forward to helping local players surmount their challenges. Our solutions offer easy one-stop gateway services for e-tailers, enabling them to deliver greater customer experiences while remaining in control of their costs.” Japan’s e-commerce market is expected to be worth about €1.1 billion in 2018. DHL will offer its Parcel International Direct with transit times of four to six days for deliveries to the US and UK, and GlobalMail Packet Plus for Japan – Europe deliveries, with transit of times of five to 10 days. Sasaki adds: “By combining the deep understanding of the Japanese market which DHL eCommerce has, with the warehousing and transport management capabilities of our sister division, we will be able to explore operations such as fulfillment as part of a global partnership for our customers.”

Blue Dart Express has bought all the remaining shares of its aircraft operating subsidiary Blue Dart Aviation, it has said to the stock exchange. DHL owns 75 per cent of the Indian express operator. Blue Dart Express says it will increase its stake in the carrier from the current 74 per cent to 100 per cent. Blue Dart Express runs a fleet of six Boeing 757-200 converted freighters on domestic routes in India. The Indian air cargo market is one of world’s fastest growing.

PREMIUM PROVING A SUCCESS AT IAG CARGO

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ATLAS AIR UPBEAT ON FUTURE OF AIR CARGO BRUSSELS ON THE RECOVERY PATH CAPACITY EXPANSION DRIVES ICELANDAIR CARGO

DHL to build e-commerce centre in Narita

Blue Dart deal in India

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Lufthansa makes offer to end pilot strike LUFTHANSA has made the Vereinigung Cockpit (VC) pilots union a new offer to resolve the present industrial dispute – which has led to pilots striking and cancellation of numerous services. The VC union had called on its members to take strike action on six days in the latest wave of strikes, which began on 23 November. Lufthansa had to cancel 4,450 flights as a result, and has offered a two-step 4.4 per cent increase in remuneration plus a one-off payment. Remuneration would be increased by 2.4 per cent for 2016 and another two per cent for 2017. The carrier says this latest offer is not linked to any other terms or conditions and it is meeting a key VC demand. The union has started it would be willing to enter mediation on the basis of an offer made by the German carrier. Lufthansa chief officer for hub management, Harry Hohmeister says: “We want to urgently avoid any further damage,” adding: “We assume that VC will now end its strike action and we can return to normal flight operations from tomorrow onwards.” Lufthansa says it is immediately available to begin preparations for mediation on the Collective Labor Agreement.

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Chinese milk run for Qantas Freight

NEWS WEEK

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AN Dairy has chosen Qantas Freight to be its exclusive airfreight partner for transporting fresh Tasmanian milk to the Chinese city of Ningbo. Qantas Freight will carry more than 50,000 litres of milk on a Boeing 767-300 Freighter from Hobart to Ningbo, subject to government and regulatory approval. The service will be weekly to start with, with the view of increasing the frequency to meet demand. Qantas Freight executive manager, Alison Webster says: “Over the past three years Qantas Freight has developed particularly strong capabilities in dairy export which, with its short-life, requires close collaboration to ensure on time delivery and quality control throughout the supply chain.” “We’re really pleased to partner with VAN Dairy to help meet the booming demand for fresh Tasmanian milk in China – it’s the ultimate milk run.” VAN Dairy is owned by Moon Lake Investments, and managing director Sean Shwe says: “Establishing this trade bridge is an exciting venture for our dairy company, VAN Dairy who produce VAN milk, and opens the door for access for other Tasmanian producers of fresh, perishables such as seafood, fruit and vegetables to air

HACTL handles new freighter

freight their produce on this direct flight to China.” When the produce reaches Ningbo, local distributors will truck the milk to supermarkets and convenience stores in Ningbo and Beijing. Moon Lake has chosen the two cities as initial distribution areas with the plan to extend its reach to other cities including Shanghai and Hangzhou.

HONG Kong Air Cargo Terminals Ltd (Hactl) has been appointed to handle a new weekly Boeing 747-8 Freighter service for SW Italia. The new flight – which routes from Hong Kong to Prague – is for the exclusive use of Sto Express, one of the major Chinese express operators. The aircraft is operating in Sto Express livery, and is thought to be the first regular freighter operation to Europe for any Chinese express carrier. A VIP reception was held at Hactl’s SuperTerminal 1 facility, to welcome the incoming aircraft last week. SW Italia president and chief executive officer, Ignazio Coraci says: “We look forward to working with Sto Express on this exciting new project, and are very happy to entrust the vitally important ground handling element of the operation to our long-term service partner Hactl.” Hactl chief executive, Mark Whitehead adds: “We are delighted to extend our relationship with SW Italia to include this new operation, which clearly signals the growing role of the mainstream airfreight industry in e-commerce logistics.”

Aircraft parts job for B&H

SPECIALIST aerospace logistics and warehousing provider B&H Worldwide has been appointed to operate a new Heathrow Airport facility for aircraft parts provider Logix Aero. B&H Worldwide will provide inventory management at its 24/7 aerospace dedicated facility. Using its specialist warehousing and inventory management tool, OnTrack, the company will provide specialist round-the-clock solutions to support Logix Aero’s global operations. Logix Aero is one of the fastest growing aircraft parts providers in the marketplace and has a vast inventory of aircraft components, which will now be managed through B&H’s tailored inventory management solution. Traditionally an engine and APU lessor, this marks a new direction for Logix Aero, which B&H Worldwide says it is delighted to be a part of. B&H Worldwide customer solutions manager, Chris Allen says: “We are providing Logix Aero with a one stop solution for all operational requirements, including warehousing, receipt & dispatch, and repackaging all materials coming into the facility. “Logix Aero now has a dedicated team at B&H, covering operations, compliance and account management.”

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NEWSWEEK

Premium products proving a success at IAG Cargo

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AG Cargo’s Critical service has been described as a “roaring success” with some unexpected customers using it, commercial director David Shepherd (pictured right) tells Air Cargo Week (ACW).

The premium service was launched on 3 October providing shipments an absolute guarantee to fly on the service booked. It is designed for time urgent shipments which often have significant cost implications if

they do not arrive on time. Shepherd tells ACW: “Critical has been a roaring success in the first few weeks. Our three big premium products are showing good signs we hoped that they would.” He adds: “You are never sure which sectors are going to use it. It has surprised us, from the predictable sectors such as aerospace and pharmaceuticals that you would expect to dominate the service, but we have also moved perishables.” The service has been proving very reliable, with Shepherd explaining: “We haven’t had a single failure, which is what customers are hoping for.” He says IAG Cargo is confident entering the peak season and you never know what to expect but it has seen very strong demand in recent weeks, describing it as “better than previously thought”. Shepherd notes Asia Pacific is at its “strongest for a long time”, telling ACW: “Customers in Asia are looking for a lot of capacity.” IAG Cargo is continuing to make investments, Shepherd explains: “We are continuing to invest in infrastructure and premium products. What

is happening at the moment gives us confidence that we are right to make big capital expenditures. Infrastructure helps growth.” The airline group is also investing in new aircraft, and Shepherd says: “The new aircraft mean we can fly into a lot of places. There is strong cargo demand so they give the opportunity to align customer demand. “It is very helpful to have new generation cargo aircraft to help us do that.” In October, IAG Cargo posted commercial revenue of €240 million over the period from 1 July to 30 September in the third quarter of 2016 – a fall of seven per cent on the same quarter last year. Volumes were up 4.5 per cent, but yields decreased 10.5 per cent.

Royal opening at Amsterdam Schiphol

AMSTERDAM Airport Schiphol’s Joint Inspection Centre (JIC) has received royal approval, having been opened by King Willem-Alexander. The JIC is one project within the Schiphol SmartGate Cargo programme is designed to make cargo handling at Schiphol safer and more efficient by enabling different enforcement and inspection authorities to carry out checks together. Logistics and enforcement are brought together and facilities include an expedition floor, a scan hall, storage and examination rooms, a quarantine room for small animals, garages for scanning vehicles, offices and a training centre. It is a joint initiative by Schiphol, KLM Cargo, the Dutch Customs Administration and Air Cargo Netherlands.

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Schiphol Group chief executive officer, Jos Nijhuis says: “The Joint Inspection Centre came about by doing something we excel for 100 years at Schiphol; together. Collaborating between private and public parties. “What Customs, ACN, KLM Royal Schiphol Group and many have put down other players in the freight sector is unparalleled in the world.” ACN president, Jacques Heeremans adds: “ACN wants a safe, fast, efficient and cheaper freight. Customs acts as director of information of all government parties. The air cargo industry provides current and detailed information about each individual consignment. In short, we can confidently look forward to a bright future.”


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NEWSWEEK

Increasing perishables to Asia the main focus for Kenya Airways

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enya Airways (KQ) is looking to develop new Asian markets for the Africa countries flower-led perishables industry, acting general manager of cargo Peter Musola says. Some 70 per cent of the perishables market is Europe-bound Musola tells Air Cargo Week and the Nairobi-headquartered carrier is looking to do something similar in China by working its partners Musola adds. “KQ has a niche market into Asia these are actually some of the new markets we are developing,” he says. The lead will be flowers which are helped by Chinese plans to stimulate an auction akin to Amsterdam’s Schiphol in the Southwestern city of Kunming, “Every week we are moving about 16 tonnes of flowers into China which never used to be there before,” says Musola. Historically the trade used

to be samples of between two and three hundred kilos. “You can see the build-up,” he adds. Flowers are not the only export, although at 40 per cent they are the biggest component with fruit and seafood each being 30 per cent. Hindering things here is the trade relationship between China and Africa. Heavily biased in Beijing’s favour the Africans, with Kenya first and foremost, are engaging with the Chinese to open their markets to rebalance it. Another one where they are waiting on is the policy of the incoming Donald Trump presidency in the US. One piece of legislation is the Africa Growth Opportunity Act which supports exports to American from certain African Special Economic Zones. “These of course will be at risk should these policies change,” says Musola. Trade is not the only problem KQ is contending with. One of the markets it knows there is interest in the export of crabs – sometimes as

many as fifteen tonnes from Madagascar and Mozambique. That would warrant the use of its 17 tonne capacity Boeing 737-300 freighters except for the lack of inbound cargo. “This is one of the major challenges in cargo, where you have a uni-directional flow of cargo.” Musola says. This is a particular problem for Kenya Airways and not just about crabs in Mozambique. Busy on the outbound with exports just over two-thirds or seventy percent of its volumes of 55,000 tonnes this year and 62,000 tonnes last

Chapman tweaks management structure

CHAPMAN Freeborn Airchartering has unveiled a new senior management structure, which it says will help it deliver further growth across the group. The air charter firm says building on its strong performance this year, it has appointed Pierre van der Stichele to the newly-created role of group cargo operations director. He has a 25-year background in the air cargo industry having previously held positions with airlines including Southern Air Transport, Antonov Design Bureau and Evergreen International Airlines. Van der Stichele, who starts his new role with immediate effect, joins group cargo and OBC sales director, Reto Hunziker in heading up Chapman Freeborn’s cargo product on a global basis. Hunziker says: “We’re delighted to welcome Pierre to the senior management team and I look forward to working alongside him. He is highly respected across the industry and has made a significant contribution to the success of Chapman Freeborn over the last decade.”

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year its imports into Kenya are limited both to 30 per cent of the total moved and a limited range of high value good such as machinery and high-tech consumer products such as i-phones and electronics. Still there is hope as the perking of the oil price will bring oil and gas machinery movement back into play. It has handsome yields according to Musola and they have hope of a 2017 resurgence. This is the same year as its new express facility opens in Nairobi which underpins its goals to be an African hub.

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Van der Stichele’s promotion follows the appointment of Philip Mathews as chief commercial officer earlier this month. Van der Stichele adds: “I’m looking forward to working with Reto and the rest of the management team in helping to shape Chapman Freeborn’s future direction.” Chapman Freeborn says it is to build on strong performance in 2016, when it increased investment in emerging territories, the company has consolidated its position in key mature markets. Hunziker says: “Following a particularly strong performance in the third quarter, we’ve seen several of our global offices exceed their annual targets already – including our two largest operations in Germany and the UK. It’s also been very positive to see our teams achieving success in developing markets like Africa – where business is up over 60 per cent on 2015 figures.” Chapman Freeborn says in the commercial charter market, outsize cargo and project charters have helped to fuel growth in 2016, while the automotive sector has represented growth in several key markets.


NEWS WEEK

Seafood centre earmarked for development at Oslo Airport

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slo Airport is considering new areas for air cargo and the possibility of building a new seafood centre at Norway’s main airport. Avinor wants to make new areas available for carriers with activities directly linked to airfreight in cooperation with the largest exporters in the seafood industry. The airport operator has worked on a feasibility study for facilitating a 15,000 square metre seafood centre for air cargo, with industrial facilities built to accommodate future growth, commerce and value creation in the aquaculture industry. Avinor says it will we important for the Norwegian export industry at large and be crucial for reaching the seafood industry’s export goals in the future. Avinor chief executive officer, Dag Falk-Petersen says: “The current direct flight capacity from Norway is not sufficient to meet the increased demand for fresh seafood in Asia and North America. Every day, almost 600 tonnes of Norwegian seafood is exported as air cargo to the world. “Only 30 per cent of this goes by air from Oslo Airport, the rest is carried by land transport to Europe for flight connections to Asia and North America. The main players in the Norwegian export

Bangkok for MAB Kargo

industry want future-oriented facilities at Oslo Airport. These must be able to accommodate future growth, ensure top product quality and facilitate export of Norwegian seafood in an even better way. He adds: “We are therefore inviting private actors in the export industry to build and operate a state-of-the-art seafood centre that will give Norway an important competitive advantage compared to other countries and airports.” Avinor notes salmon is now the number one air cargo product in Europe and volumes from Norway give a significant competitive advantage in attracting new inter-continental routes in the future. The Norwegian Seafood Federation (NSF) says it wants to strengthen Oslo Airport as a national hub for air cargo and the close distance to the main distribution sites in Norway, in addition to the steady increase in intercontinental flights, makes Norway’s main gateway well suited for facilitating growth and value creation within air cargo.

It says a state-of-the-art seafood centre will ensure the quality of the seafood, with efficient administrative functions and cost-effective solutions. NSF deputy managing director, Trond Davidsen says: “The seafood industry is vital for the Norwegian economy, and there is a huge potential for increasing value creation in the years to come. “New and future-oriented facilities at Oslo Airport for transport of fresh seafood to Asia and North America will make the Norwegian seafood industry even more competitive.”

MAB Kargo has expanded its presence in Thailand with the launch of a freighter service to Bangkok Suvarnbhumi International Airport from Kuala Lumpur (KL). This weekly service will be operated with an Airbus A330 Freighter with a capacity of 60 tonnes of payload and has been started to tap into the rising demand for air cargo shipments between Bangkok and KL. The once a week flight starts in KL, stops in Bangkok via Hanoi in Vietnam before heading back to Kuala Lumpur International Airport. MAB Kargo says Bangkok is one of the rising South East Asia hubs for air cargo carriers and flights will handle lots of machinery and agricultural products from both countries along with general cargo. The Malaysian Airlines cargo arm now has a network of 22 destinations around the globe and its says the new route will expand its presence in South East Asia and capitalise on airfreight growth in Thailand. MAB Kargo recently launched two new twice a week freighter routes to China - one to Eastern China with flights to Guanghzou Baiyun International Airport and just before that a service to Chongqing Jiangbei International Airport.

Record month for Etihad Cargo ETIHAD Cargo has achieved its busiest month ever in October this year – uplifting 53,785 tonnes of cargo and thereby surpassing its previous best recorded in November 2014 – by 501 tonnes. The Abu Dhabi-based carrier says this reflected growth in perishables traffic from Africa, US inbound and outbound traffic, and volumes from Europe to Asia Pacific. This comes a few days after enrolling its 4,000th member into its CargoConnect loyalty programme. Etihad Cargo senior vice president, David Kerr says: “Customer loyalty plays a big part in the success of Etihad Cargo operations worldwide. We’re delighted to have the ongoing support and commitment of our partners who have contributed to the record levels of uplift during October.”

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NEWSWEEK

Atlas Air upbeat on future of air cargo as it looks to e-commerce

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his year has been a busy one for Atlas Air with the $106 million acquisition of Southern Air and the landmark agreement to provide air cargo services for Amazon. Last month, Atlas posted a loss from continuing operations, net of taxes, of $7.5 million for

the third quarter (Q3) ending 30 September 2016, better than Q3 last year when it saw a loss of $12.8 million, and said the Q3 result this year was due to “non-deductible expenses” triggered by warrants granted to Amazon. On an adjusted basis, income from continuing operations, net of taxes, in Q3 was $27.4 million,

near the upper end of its range of expectations, and near the $30.7 million it generated in Q3 2015, which included benefits from the favorable resolution of a tax exam. The aircraft lessor remains optimistic for the peak season, and is looking forward to a strong closing quarter for the year. Atlas is pleased with progress it is making in implementing a fleet of 20 Boeing 767-300 aircraft for Amazon, and its focus is on e-commerce and the express markets, rather than traditional air cargo where growth has slowed. Atlas now has 86 aircraft; a far cry from the 27 in 2009 and with more to come in for Amazon in 2017 and 2018, the magic number of 100 aircraft may be hit by 2018. Executive vice president and chief commercial officer, Michael Steen (pictured) tells Air Cargo Week the “strategic acquisition” of Southern Air is a perfect fit as both have a mutual customer in DHL Express, and the addition of 737s and 777s to its fleet has boosted operations. Steen says the company is in the midst of combining the airlines into a Single Operating Certificate which will be in place next year. He says so far, the merger is progressing smoothly and the two fit well together.

Added capabilities

As for Amazon, the first aircraft for the online giant came into operation in August and Atlas will ramp this up in 2017 and 2018. Steen says: “With our large fleet of 747s, 767s and capabilities added with the 737s and 777s - it gives customers optionality to choose the gauge of aircraft they need depending on their network. “The acquisition of Southern Air has given us more opportunities to offer solutions and we see that across the board. We now have 37 aircraft, five different fleet types with DHL Express (Atlas, Polar, Southern and Titan Air) and we lease aircraft through Titan to Aerologic who operates for DHL Express. The strategy we have rolled out over the years to have a complete array of services throughout the air cargo supply chain is now coming to full fruition.” E-commerce has been a strong focus for some time and Steen says it has been interesting to see the impact it is having on the supply chain and feels it is “changing the paradigm completely for the entire industry”. He adds: “e-commerce feeds airfreight because of the short lead-time and demand and the fact that manufacturing happens all over the globe.” Because the consumers are located across regions, e-commerce calls for flexible networks so operators have to react and respond quickly. It does not matter whether you are an airline or an integrator; you have to be that much more flexible: “Earlier this year, we announced a longterm agreement with FedEx. We are adding five 747s for their peak lift, which is where flexibility comes in play – providing lift for higher demand

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in certain times of the year,” Steen notes. Some see Amazon’s fleet plans as being detrimental to express operators, but Steen says integrators are, by definition, the first to benefit from e-commerce. They can set up a network and tailor it for B2C business demand which “drives the paradigm shift”. He notes: “e-commerce will benefit the integrators and some of the scheduled carriers who can tailor their networks accordingly. We, as an operator, serve many customers and we operate for all three of the major express companies, we lease aircraft to domestic express operators in China and we support Amazon’s air network.”

Freighter requirement

As for the future, he says Atlas looks at air cargo in three categories – first traditional air cargo - moved predominantly on scheduled airlines, then the express market and e-commerce. Steen says: “General cargo has grown at a rate around 1 to 1.5 per cent per year, the express companies according to their filings are growing at 6-7 per cent a year, and e-commerce, is experiencing double-digit growth. “What that tells us is airfreight is growing as a whole and the requirement for freighters is growing as well. Domestic China, for instance, has a higher demand for aircraft than what they currently can find supply and pilots for. “If you look at the growth scenario vis-a-vis the general discussion about overcapacity, it is only true about certain routes and not necessarily where demand is growing. The integrators, express firms and e-commerce companies are adding significant freighter lift. The 40 aircraft Amazon has committed to and the significant amount of freighters added in the domestic China express market were not there before, so that is incremental demand. “I think by and large the global airfreight industry is growing in a healthy fashion but customers have new requirements – speed, flexibility and new network solutions.” Steen says on-time performance (OTP) is a key success factor for Atlas. Because it operates such a large network for DHL Express, it runs its entire operations on an express basis. “This means that we run according to the schedule and do not delay aircraft. So our OTP is leading in the industry and is what we sell to our customers,” Steen says, adding investments in specialist segments is also critical, and Atlas is working with customers to refine services.


NEWS WEEK Tough business environment in Brazil as weak economy takes its toll

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016 has been a challenging year for RIOgaleao Cargo as it has been for most Brazilian airports due to the “unprecedented economic and political crisis”, which has impacted all sectors of the Brazilian economy. The gateway says as a result, imports and exports volumes have dropped quite significantly versus the previous year. Performance this year was expected, but the airport says the decline was probably more pronounced than it had forecasted. The silver lining for Rio de Janeiro was the 2016 Olympic Games, which bolstered volumes between June and September. Among freight handled was 300 horses for the event, an operation it notes it received a lot of attention from local and international media and the challenging task went without a hitch. The Olympics generated 2,000 tonnes of import business in 2016 and it was an opportunity to showcase cargo operations and the improvement it has made to infrastructure and processes since the privatisation in 2014. This saw $10 million invested in the cargo terminal and since the privatisation of the airport, the cash ploughed in has seen upgrades across the airfreight infrastructure. These investments included a brand new fork lift fleet, the refurbishment of our exports terminal, tripling our cold storage facilities and the implementation of 180 CCTV cameras. In 2017, the gateway is planning to invest in a new warehouse management system and further improvements to its pharmaceuticals centre to tap into the opportunities on offer. Rio did manage to significantly grow its share of the aero parts business in 2016 as says it won a large strategic account and as a result grew its market share of this segment. And in a declining market, pharmaceuticals also held up better than expected and this is where it has made significant investments in the past two years, tripling capacity and it was the first airport in the Americas to be awarded the International Air Transport Association CEIV Pharma certificate last month. Europe as whole remains the strongest import market, led by Frankfurt from where it has grown by 45 per cent in 2016, much of it pharmaceuticals. The strongest individual trade lanes, it explains are Houston and Miami, reflecting Rio de Janeiro´s rise as an oil and gas market in the past few years. In 2016, it has managed to attract its first regular European freighter - a weekly Cargolux Boeing 747 Freighter service. The airport notes: “We work very closely with Cargolux and all our airline partners and given the success of this service to date we are confident that we can soon announce a second frequency. “From Miami, we currently have a weekly 777F LATAM service and as the oil and gas market bounces back in 2017, we see an obvious opportunity to add another frequency. Our business model allows us to offer freighter operators attractive incentives for starting a new route.” There are challenges in Brazil with the most immediate the state of the Brazilian economy, which is impacting business. The gateway explains: “However, we are seeing consumer confidence returning and a modest GDP growth is forecasted for the

first quarter of 2017. These numbers are reflected in our own performance where we are starting to see a modest recovery. The Brazilian economy is a roller-coaster. “During the last recession, air cargo volumes dropped by 20 per cent only to bounce back with 50 per cent growth the following year so I am optimistic about 2017. “Another challenge for air cargo in Brazil remains the volatile

performance of government agencies involved in the cargo clearing process. Dwell times for import cargo in Brazil are well above those of comparable economies and mitigate much of the time gained by shipping by air. “Another challenges for air cargo in Brazil are the varying tax benefits between Brazilian states which do not encourage efficient supply chains.”

AMI hits the eight million mark THE UK arm of AMI – the world’s largest trade-only airfreight and express wholesaler – has passed another major milestone in its history, with the receipt of its eight millionth booking. The landmark booking, from AMI Express customer Kepair, was for a shipment to Australia – AMI’s first major export market. AMI Express’ share of all AMI UK business grew by five per cent in 2016. The profile of AMI bookings has changed dramatically in recent years - while average shipment sizes have reduced in line with market trends, a large proportion now also involve value-added services. These include security screening, ground transportation, documentation and Customs processing. Although AMI’s original UK business was entirely exports, five per cent of its throughput is now imports. AMI’s vice president for Europe, Sharon Wright says: “The lessons we have learned in the process of creating and refining AMI Express click2ship have been invaluable in steering our entire business here and around the world. “The result is a faster, more customer-friendly and transparent service that is proving particularly relevant  to our increasing engagement in e-commerce.”

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WORLD AIRPORTS

Brussels recovering following terrorist attacks

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russels Airport is on the rise following a difficult start to 2016, when airlines moved and it was hit by terrorist attacks, head of cargo Steven Polmans explains to Air Cargo Week

(ACW). He says Brussels had a negative start to the year with the loss of Ethiopian Airlines Cargo due to traffic right issues at the end of 2015, and Jet Airways moving to Amsterdam, then it was hit by the terrorist attacks in March. Polmans says: “Although cargo recovered rather quickly, the reduction in capacity had its effects on the total volumes we saw in the first six months at our airport.” The airport serving the Belgian capital has been recovering since August, with the return of Ethiopian Cargo and Qatar Airways Cargo expanding services. In October total cargo volumes rose 6.5 per cent to 46,603 tonnes, with full freighters registering a 28.8 per cent surge to 17,119 tonnes. Integrator traffic was down 2.4 per cent to 17,878 tonnes and belly cargo by 4.5 per cent to 11,606 tonnes. Year-to-date volumes after 10 months of the year are down 2.3 per cent to 399,554 tonnes, mainly because of the 13.5 per cent fall of belly cargo to 103,307 tonnes.

Strong finish

Polmans comments: “The increase in full cargo traffic is making up for the reduction we still see in the bellies, but it looks that we will make up the loss of the first half year and see a full year result in line with last year.” The last months of the year are expected to be strong and Polmans says: “2017 looks to be more promising and I am expecting a full year growth in volumes based on our current forecast and knowledge of route development of our customers, both full cargo and long haul passenger traffic.” Companies at the airport are looking at expanding; DHL Express is finalising its new terminal. And freight forwarder Panalpina has started work on doubling its facility with first line handling building will be refurbished in 2017 as well as a 40,000 square metre project for new handling facilities and first line forwarding warehouses. Polmans adds: “In November we also launched our vision for 2040, where cargo plays an important role and where we give a good idea of how we think the area will look like.” Pharmaceuticals are a major part of Brussels’ growth, registering double-digit increases, having become International Air Transport Association (IATA) Center of Excellence for Independent Validators in Pharmaceutical Logistics (IATA CEIV) certified.

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He tells ACW: “Our focus and attention on cool chain, of which IATA CEIV is one aspect, for sure has contributed to that. “But also our cool dolly, our regular pharma forum with the pharma manufacturers in Belgium have contributed to this growth.” Brussels Airport was also a founding member of Pharma.Aero, an association aiming to achieve reliable end-to-end air transportation for pharmaceutical shippers. Pharma.Aero was founded by Brussels and Miami International Airport, with Changi Airport Group and Sharjah International Airport as strategic members. Brussels Airlines Cargo, Singapore Airlines Cargo and Brinks Life Sciences have also joined as full members - which was announced at TIACA’s Air Cargo Forum in Paris in October. As it was launched in October, so Polmans says it is too early to say how effective it has been so far but it is looking promising. He says: “So we are putting high hopes on the positive effects we will see coming from this new organisation. “You will hear more on this in the next years but it is good to see that we see an interest from parties to join and that we can announce some new members soon.”

Tackling the issues

The community has also come together under the Air Cargo Belgium organisation, bringing the airport and all stakeholders together. Polmans, who is the organisation’s first chairman, tells ACW: “Air Cargo Belgium also has the resources to have staff in place and thus respond better to the needs and requirements of its members. 11 working groups were defined and have been set up: from operational efficiency, customs, e-commerce, pharma to innovation.” He adds: “It shows we are tackling the issues we are all confronted with today as an industry and at the same time, we also look forward on how we would like our cargo area to look in 10 years from now.” Brussels is certainly back on track after a tough start to the year from events to a certain extent out of the hub’s control, while it looks set to have a strong finish to 2016 and expand volumes next year and remain one of Europe’s key air cargo gateways.


WORLD AIRPORTS

Full steam ahead for Istanbul New Airport

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onstruction of Istanbul New Airport is continuing at full speed, and IGA Airport Operation chief executive officer, Hüseyin Keskin says it is hoping to commence operations in the first quarter of 2018. The new airport is a very ambitious project, which will be constructed over a number of phases and will have six runways when it is completed. The site will cover 7,594 hectares, in comparison Ataturk International Airport covers 1,165. Keskin comments: “İGA continues to work at full speed, the construction has even been more accelerated. That means we are currently even ahead of the schedule in terms of construction works.” He says over 34 per cent of construction work has been completed and Keskin adds: “While the official deadline for the opening of the first phase of the project is November 2018, we are targeting to commence operations in the first quarter of 2018.” The project includes big plans for cargo; in the first phase IGA plans to build a cargo centre over an area of 1.4 million square metres and expand to 1.6 million in the future. Keskin says the annual reversible cargo capacity for the first phase will by 5.5

million tonnes, with an area of expansion up to six million tonnes in later phases. He tells ACW: “We have planned an impeccable operational infrastructure for the Cargo / Logistics centre, where more than 30 widebody air freighters can park simultaneously. The area will be far from passenger terminals and entrepots, with airside service tunnels under runways and taxiways.” The cargo city includes bonded warehouses, agency buildings, customs offices and operations offices, while banks, test laboratories and parking will be available for employees. Keskin says: “We will be providing all the latest technology to have a very smooth and efficient environment for cargo business.” Keskin adds: “Turkey’s strategic location coupled with recent investments from foreign capital makes Istanbul New Airport one of the largest hubs in the world. This status allows our airport to contribute to Turkey’s increasing role in global air cargo.” Construction of the new airport will have many benefits for Istanbul and Turkey, and is expected to generate 100,000 direct jobs and another 1.5 million indirectly. He says: “Atatürk is a very good airport, but its capacities are

restricted and we need Istanbul New Airport in order to meet future demand. With this mega project, Turkey has taken an enormous step towards meeting the challenges that the world aviation industry will face in the coming years.”

A good year for Changi CARGO volumes have continued strong growth at Changi Airport, with October up 8.9 per cent to 177,000 tonnes. Singapore’s airport has seen year-on-year growth in every month of 2016, from as little as 0.1 per cent in February to as much as 9.4 per cent in July. On a year-to-date basis, cargo has grown 5.9 per cent to 1.6 million tonnes. Changi Airport Group assistant vice president cargo & logistics development air hub development, Phau Hui Hoon says: “It has been one of the best years so far over the last five years. A lot of the growth was driven by imports and transhipments. The cargo segments that have done well are perishables and pharmaceuticals for the Far East.” Hoon says imports have been driven by e-commerce while transhipments are due to the strength of Changi’s connections, with more than 6,800 weekly flights to over 300 cities. Changi also has its airfreight centre, a 24/7 Free Trade Zone, allowing transhipments to be broken down and reconsolidated with minimal customs formalities. She says Singapore is well located in the region for exporting perishable countries: “Our strong connections enables our cargo partners to tap into the growth of perishables.” Changi has been focusing on niche cargo segments such as pharmaceuticals, having joined Pharma.Aero and gaining International Air Transport Association Center of Excellence for Independent Validators in Pharmaceutical Logistics (IATA CEIV) certification. Hoon says this is part of Changi’s strategy to diversify, and it has been investing in because of its strong potential. “Earlier this year we started forming a community of partners to go through the IATA CEIV certification to raise the local pharma handling standards as well as capabilities.” Pharma.Aero is a “good opportunity” as it allows it to work together and collaborate with other communities with the same vision of an end-to-end lane pharma shipments: “We hope as the first airport in Asia with our community of like minded partners we will be able to work closely and contribute with Pharma.Aero.” Hoon adds there have been close discussions with the other parties to explore projects. “We are looking to exchange best practices and expertise. There will be more announcements.” Hoon is expecting the strong growth to continue into 2017, she says Changi is “cautiously optimistic” considering the slow growth in global trade. New airlines have been added, including six new freighters - AirBridgeCargo Airlines, SilkWay West and Polar Air Cargo, and three regional carriers. Hoon says: “This shows there is still an attractiveness in Changi especially as a freighter destination.” Changi offers support to airlines such as landing rebates for freighter flights. To cater for the continued growth, Changi will be investing in air cargo and express services as part of Changi East, which will almost double handling capacity. Hoon says: “This will secure the long-term growth of the cargo and logistics industry in Singapore as well as enhance and strengthen Changi Airport’s air cargo position.”

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MIDDLE EAST

Wheels in motion for Emirates SkyCargo

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mirates SkyCargo has launched Emirates SkyWheels – a specialised transportation product for high-value automobiles. Through its latest offering the Dubai carrier will provide customers a complete transportation for vehicles such as classic, luxury and sports cars, across its network. Customers who would like to have their cars transported can choose between Emirates SkyWheels Premium and Emirates SkyWheels Advanced. The customisable premium product package covers door-to-door transportation of the vehicle from select origins and destinations. It includes collection of the vehicle from its home and delivery overseas, in addition to export and import customs clearance processes for the vehicle at both ends of the journey. Emirates SkyWheels Advanced will offer air-

port-to-airport transportation for automobiles, providing a complete round-trip handling of vehicles under both premium and advanced products. Emirates SkyCargo has a fleet of over 245 widebody aircraft including 15 freighters; 13 Boeing 777Fs and two 747-400ERFs. Last month, Emirates announced that profits fell 75 per cent in the first financial half of 2016 to 786 million dirhams ($214 million), with the chairman warning that the bleak global outlook could be the new norm. Airline revenue was down one per cent to 41.9 billion dirhams, due to the strength of the US dollar, while it was also hit by currency devaluations and shortages in some African countries. Cargo volumes remained steady at 1.3 million tonnes. Group revenue was up one per cent to 46.5 billion dirhams though profits were down 64 per cent to 1.3 billion dirhams.

1st month of growth in 2016 for Abu Dhabi CARGO volumes at Abu Dhabi International Airport grew in October for the first time in 2016 - but year-to-date volumes still remain down four per cent. Volumes were up 6.7 per cent to 73,649 tonnes in October, compared to 69,005 tonnes in the same month last year. Year-to-date volumes are still down four per cent, having handled 662,549 tonnes between January and October. The airport says aircraft movements grew

1.3 per cent in October to 14,763 but were down 0.7 per cent to 143,310 on a year-todate basis.

Elite horses flown from UK to Kuwait

ETIHAD Cargo has transported 72 elite racehorses from the UK to Kuwait following the European racing season. The racehorses, worth a combined £36 million ($45 million) travelled from Stansted Airport to Kuwait City on board a Boeing 777 Freighter, where they will spend the winter months training and racing. Etihad Cargo has transported more than 1,200 horses in 2016, and senior vice president David Kerr says: “Safety is the most important thing for our equine customers, which is why it is imperative we offer a safe and reliable service on all of our shipments.” Stansted Airport’s owner, Manchester

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Airports Group head of cargo, Conan Busby says: “We are delighted that Etihad Airways chose Stansted to handle this delicate and valuable cargo. Stansted is the UK’s number one airport for horse travel and handles many specialist flights every year.” A team of six grooms handled the horses during loading, during the flight and on arrival in Kuwait. When the horses arrived at Stansted they were loaded by their grooms into International Air Transport Association approved jet stalls, which were loaded onto the temperature controlled cargo hold for the six hour flight.


MIDDLE EAST

Strong October for Dubai International Airport

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ubai International Airport’s cargo tonnage grew year-on-year (YOY) by a significant 9.5 per cent in October, its operator Dubai Airports says. The hub handled 236,169 tonnes of cargo during the month, and this increase was the biggest monthly uplift it has posted this year. In the first 10 months of 2016, the airport handled 2,127,589 tonnes of cargo, up by 2.8 per cent over the same period of 2015. Dubai International handles cargo for Emirates Airline’s bellyhold freight, with its freighter arm Emirates SkyCargo’s flights all handled at Dubai World Central’s (DWC) Al Maktoum International Airport (pictured right). Last year, Dubai International was ranked as the sixth busiest gateway around the globe for cargo handled. Meanwhile, DWC which is listed among the world’s top 20 international freight hubs and is home to 32 scheduled cargo operators that connect the airport to as many as 107 destinations around the world, saw a fall in cargo in the third quarter (Q3). In Q3, Dubai Airports says it handled 215,556 tonnes of freight

EU expansion for Etihad

compared to 219,131 tonnes handled during the corresponding period in 2015, down 1.6 per cent. The year to date cargo as at the end of September reached

645,698 tonnes, which was a contraction of 2.5 per cent compared to 662,143 tonnes recorded during the first nine months of 2015.

ETIHAD Cargo has expanded its European freighter network to nine destinations with new routes to Stansted Airport and East Midlands Airport in the UK, and Copenhagen Airport in Denmark. The routes will be served using Boeing 777 Freighters, and joins Amsterdam, Frankfurt (both Main and Hahn), Milan, Brussels and Zaragoza as Etihad Cargo freighter destinations. Etihad also offers bellyhold capacity on a number of routes throughout Europe. Etihad Cargo senior vice president, David Kerr says: “We have responded to our customers’ demand for freighter capacity out of Europe, and our freighter fleet gives us the flexibility of deploying capacity when and where it is required.” He adds: “These three new services will connect producers with consumers halfway around the world. Manufacturers in the UK and Denmark can now get their merchandise to their customers in the Middle East even faster, in as little as 24 hours in some cases.”

More routes added by Qatar Airways

QATAR Airways is to add another eight more bellyhold routes in 2017-18 – in addition to seven previously announced new cities for a total of 15 new gateways. Joining the network are: Canberra, Australia; Dublin, Ireland; Las Vegas, USA; Rio de Janeiro, Brazil; Santiago, Chile; Medan, in Indonesia; and Tabuk and Yanbu, both in Saudi Arabia. These newly-announced destinations join the already announced list of new routes to start in 2017. Auckland, New Zealand will start 5 February 2017. Also in 2017 it will start services to Sarajevo, Bosnia; Skopje, Macedonia; Libreville, Gabon; Nice, France; Chiang Mai, Thailand; and also Douala, Cameroon. Qatar Airways has opened 12 new destinations in 2016 year-to-date, with two more cities set to join the network in December. It will begin services to Krabi, Thailand, on 6 December and service returns to the Seychelles on 12 December. The carriers runs bellyhold services to more than 150 destinations and is growing its network. It is now one of the world’s biggest airfreight carriers.

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ICELAND

Icelandair Cargo boosted by capacity expansion

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leet upgrades have extended the cargo possibilities for Icelandair Cargo as the addition of widebody aircraft on routes has boosted capacity and the chance to move more fresh seafood. The carrier was affected by the Iceland economical crash in 2008, but fleet changes and improving economic conditions has lead to an increase in imports this year. Icelandair Cargo managing director, Gunnar Már Sigurfinnsson (pictured) says there has been strong demand for fresh fish and it has been and will be the strongest product looking ahead. Performance varies across trade lanes, he says: “We do have

some good trade sectors but there is no one really stronger than others. We have about 50 destinations with direct flights out of Iceland in our network, flown either by freighters or by passenger aircraft. You can say 20-30 per cent of them are really strong, and then 20-30 per cent are weak and then the rest average.” Seafood is the strongest sector, Sigurfinnsson says: “It has been strong these last years, particularly to the US where we have had high demand for years. We serve that market now with widebody passenger capacity, which is increasing our possibilities a lot. “We have developed a logistic concept with the industry where we can bring the fish to the consumer in US or Europe basically within 36 hours after it comes out of the sea. “That gives us product that has more freshness than any other similar product at the market. We have been working on fine tuning weaknesses for years and I believe we have now a developed a good logistic product, bringing our clients an advantage.” The strongest export seafood markets from Iceland are the East Coast of the US, UK and to the European continent. Fleet upgrades have given Icelandair more possibilities, and Sigurfinnsson says in the past it moved most cargo by freighters,

but in 2017 it expects to move more by belly than freighters. Icelandair has been adding widebody Boeing 767-300 aircraft to its fleet and increased the number of this aircraft giving the cargo arm more opportunities to accommodate growth plans. He notes: “The fact we work with both freighters and good capacity of belly creates lot of flexibility for our operation, which makes us strong at our home market. Our freighters are still in good shape and I don’t see any major changes there for the coming years.” Sigurfinnsson says extra widebody capacity is a “game changer” and due to growth in belly capacity through passenger aircraft there is currently no need to add freighter capacity, but there is a need to add freighter capacity to Greenland and it is aiming to come up with a solution soon. It’s base Keflavik International Airport has grown, but he says the airport’s facilities have not coped with the increasing number of airlines operating and authorities are looking to make upgrades to accommodate growth. Icelandair itself has grown from 10 aircraft a few years to ago to more than 30 aircraft in only few years along with two freighters. Sigurfinnsson says it has been a challenge to deal with growth as infrastructure needs to be adopted, so it working on new facilities at Keflavik to make operations more efficient. He adds: “We will see lot of changes in the coming future at the airport and a new cargo area we will move too, but not in the next few years. We have increased the space for perishable and pharma products and our warehouse space about 30 per cent.” He believes air cargo in Iceland can be further developed through e-freight, modernisation and shorter transport times, while more perishables can be moved by air. He says Icelandair Cargo is aiming to move more transit cargo between Europe and North America using its expanding widebody capacity, as previously, due to the lack of space it was unable to compete in this market. Sigurfinnsson sees great potential in operations to Greenland from Iceland and notes it needs to add capacity for the freight market, but it is doing that with sister company Air Iceland. Overall he is optimistic for airfreight as feels coming generations are changing buying behavior and setting new standards for delivery and quality, both in favour of air cargo. He adds: “Short delivery time is a key in e-commerce world and airfreight should have great potential to be in a key role. I believe the future generation will be more demanding on healthy food and fresh products. This means more demand for shorter delivery time, giving air cargo great potential again. In a developing world we will have more people buying products that need air.”

Air Atlanta’s BMW mission

EARLIER this month Air Atlanta Icelandic chartered a Boeing 747-400F production freighter for Senator International’s new regular service between Munich Airport and Franfkurt-Hahn Airport and US gateway Greenville Spartanburg Airport in South Carolina. One of Air Atlanta Icelandic’s B747-400F’s took off from Munich towards Greenville-Spartanburg, filled to the roof with shipments mostly consisting of auto parts and components destined for BMW’s Spartanburg located US plant. The ‘Senator Air Bridge operation will operate two times a week, Saturdays and Wednesdays, securing a constant stream of materials between the company’s facilities in Germany and USA. During the days in between, the freighter will be operating both scheduled and ad-hoc charter missions in cooperation with Chapman Freeborn.

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NEWSWEEK Pet service launched by SAA Cargo

SOUTH African Airways Cargo (SAA Cargo) has introduced a new ‘Pet Lounge’ facility for domestic pets Cargo OR Tambo International Terminal in Johannesburg. The Pet Lounge started operating from 1 October and is designed for the pets’ comfort and safety. SAA Cargo says it ensures they experience a stress-free environment during their journey as it minimises any environmental factors likely to cause distress.

SAA Cargo’s general manager, Tleli Makhetha says: “This milestone is a welcome service enhancement and demonstrates our commitment to improving the handling of domestic pets. We pride ourselves in providing a valueadded service in an effort to cater for the needs of our customers.” Makhetha adds: “The hands-on approach highlights our resolve to care about the welfare of live animals.”

dnata invests in GTA Aviation

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nata has entered the Canadian market with an investment in GTA Aviation’s cargo and ground handling operations. The UAE-based cargo handler has reached an agreement with Canada’s GTA to purchase a 50 per cent stake in its cargo and ground handling operations at Toronto Pearson International Airport. This investment marks dnata’s first step into the Canadian market and it says it is a significant development in the company’s expansion into the Americas, less than a year after announcing investments in the US and Brazil. GTA’s airport handling operations were launched by Mario D’Urso in 2014, who will continue as a joint partner. The company has 130 employees, serving over 1,400 flights annually. It handles over 58,000 tonnes of cargo each year at its state of the art 83,000 square foot warehouse facility at Toronto Pearson. In under three years, GTA has secured handling deals with Lufthansa, Austrian Airlines, Brussels Airlines, Cargojet, China Southern Airlines, Emirates, Ethiopian Airlines, Fly Jamaica, Korean Air, SWISS and WestJet. This transaction does not include GTA’s other businesses including GSE sales and maintenance, which will continue to be owned and managed by Mario, Angelo and Domenic D’Urso. The company’s cargo and ground handling

operations will be rebranded as GTA dnata. The current chief executive officer, Gary Ogden, will continue to manage the business and operations. All current management and employees will also remain with the company. dnata’s divisional senior vice president of international airport operations, Stewart Angus says: “This investment in GTA is another important milestone for dnata. It allows us to fulfil our strategy to provide the highest level of customer service in the key markets across the Americas. “We are very impressed with the way GTA is managed by Mario, Gary and their team. We look forward to playing our role in helping GTA develop in the next phase of its growth in Canada, and building on the excellent foundations.” GTA’s owner and chairman, Mario D’Urso adds: “dnata’s commitment to service and safety excellence and its continued investment in its product is in line with our philosophy and ensures our customers will continue to receive the quality service they expect. “Having started the company with the concept of service excellence, I am confident GTA will continue to flourish as part of the dnata team.” Within the last year dnata has made investments in cargo facilities in Amsterdam and operations in Milan - as well as 26 airports in Brazil and 25 gateways in the US.

E-commerce network started by WCA WCA has launched the first e-commerce logistics network to cope with the changing global economy and shift towards online shopping. Launched in mid-October, it has already seen over 100 logistics companies apply for membership, and attracted a wide range of companies across the supply chain. WCA eCommerce is open to all independent freight forwarders, who will first join at eMember level, giving them access to resources including webinars, training sessions and consulting before they apply for eVendor status, allowing them to trade directly and build volumes and business with

fellow e-commerce partners and e-tailers. WCA eCommerce managing director, Alex Allen says: “To become a certified eVendor a member must undergo a comprehensive eCommerce capabilities audit. As an eVendor, the company is free to offer logistics services back to the network. The beauty for eVendors is that they are also fully covered by WCA’s industry-leading financial protection program.” WCA founder and chairman, David Yokeum adds: “By 2020 it is projected freight forwarding will be 20 per cent e-commerce driven. Our decision to become involved in e-commerce is a result of these projections.”


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