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The weekly newspaper for air cargo professionals Volume: 20 Issue: 35 11 September 2017

The beat goes on as double digit growth continues in July

uly has been another strong month for air cargo, with WorldACD and the International Air Transport Association (IATA) both reporting double digit growth. WorldACD says year-on-year (YOY) volumes were up 11.8 per cent, with above average growth of 14.2 per cent from Europe, 13.5 per cent from Middle East & South Asia and 13 per cent from Asia Pacific. The southern hemisphere was weaker, with growth of 3.6 per cent in South America and 2.6 per cent in Africa. WorldACD comments that recent develop-

ments may be getting monotonous following another double digit month, saying: “As Sonny Bono wrote 50 years ago in his famous, yet rather repetitive song: “the beat goes on, yes, the beat goes on”. It is not too difficult to imagine that quite a lot of people in our industry do not mind the monotony at all, after a number of years in the doldrums.” One development WorldACD says is noteworthy is Chinese growth slumped relative to previous months. Growth from China was down to eight per cent compared to the average rate of 19 per cent. WorldACD adds incoming traffic in China

continued to boom with 21 per cent growth. It says: “It grew faster than the world market every month, but not in July. Air cargo needed the compensation of high growth from places like Hong Kong, Germany, India, the United Kingdom, Singapore and the Netherlands, to achieve its July growth of 11.8 per cent YOY.” IATA shared the same view, reporting double digit growth for the fourth time in five months, with freight tonne kilometres increasing 11.4 per cent compared to July 2016. This is nearly four times the 10-year average growth rate of 3.1 per cent. The association thinks growth may be nearing a peak, and also says the results are consistent with an uptick in global trade, rising export orders and upbeat business confidence. IATA director general and chief executive officer, Alexandre de Juniac says: “July was a strong month for air cargo with double-digit growth. And for the third consecutive month demand for airfreight grew at a faster pace than demand for air travel.” “While the outlook for the rest of the year remains positive, there are signs that the cyclical growth period may be nearing a peak.” Capacity across the world also grew by 3.7 per cent in available freight tonne kilometres, and load factors improved by three percentage points to 43.7 per cent.

AirBridgeCargo Airlines (ABC) has further enhanced pharma services by gaining Envirotainer QEP accreditation at its global hub at Moscow Sheremetyevo International Airport and in Dallas. Envirotainer created its Qualified Envirotainer Provider Training and Quality Program (QEP) to recognise transport service providers which demonstrate their ability to properly manage Envirotainer container shipments in accordance with Good Distribution Practices. ABC global director of pharma, Fedor Novikov says: “We have been heavily involved in pharma transportation since 2016 and our focus over the last 18 months has been to invest in developing the products and services our customers need. QEP accreditation is one of the benchmarks we and our customers recognise

as being very important as we grow pharma volumes across our network.” The abcPharma product was developed in close consultation with customers by ABC’s pharma industry vertical team, which includes qualified staff at all levels. In November 2016 ABC became the first airline in Russia to receive IATA CEIV Pharma

certification, which addresses the need for more safety, security, compliance and efficiency through a globally consistent pharma product handling certification programme. Envirotainer compliance manager, Chris Fore says: “QEP accreditation sends a strong message about the high standards the airline is committed to delivering.”


AirBridgeCargo Airlines gains Envirotainer QEP accreditation






China to need 180 freighters by 2036 CHINA will need 180 new widebody freighter aircraft through to 2036, and the Asia Pacific region will require 320, Boeing predicts in its annual Current Market Outlook. Boeing says it projects demand for 7,240 new aircraft over the next 20 years valued at nearly $1.1 trillion, with the majority being single-aisle units, with 5,420 required at a value of $570 billion. Boeing Commercial Airplanes vice president of marketing, Randy Tinseth says: “China’s continuous economic growth, significant investment in infrastructure, growing middle-class and evolving airline business models support this long-term outlook.” He adds: “China’s fleet size is expected to grow at a pace well above the world average, and almost 20 per cent of global new airplane demand will be from airlines based in China.” The widebody fleet is expected to require 1,670 new aircraft as airlines shift to small and medium widebody units, while very large widebody aircraft will be reserved for the freighter market. The forecast predicts 4.7 per cent annual growth for air cargo in Asia Pacific, and carriers will need 320 new production freighters and 630 converted freighters.


Germans to inspect exports in Thailand


hailand is working on a deal which could see German inspectors in Bangkok supervising agricultural exports, officials in both Thai Airways International (THAI) and Airports of Thailand (AOT) have said. This would allow development of the perishables sector, something long undervalued in Thailand and is a part of a broader plan to step up the country’s air cargo industry. Goals are ambitious with plans for Bangkok’s Suvrarnabhumi Airport to become the first certified hub in Thailand, AOT president Nitinai Sirismatthakarn told a recent conference. “We expect to have all the agricultural products inspected at Bangkok before going to Europe,” he says. “We believe that the cost of exporting agricultural products will be reduced significantly,” he says. AOT says it is expecting to carry out the plan but did not add extra details when asked by Air Cargo Week. AOT would like to coordinate with Munich Airport to have European quarantine officers positioned at the airport to do the pre-quarantine first hand in Thailand, THAI Cargo and Mail managing director, Dumrungchai Sawangcharoen explained in an interview.

“After the shipment arrives at Munich or the other airports like Frankfurt they will not have to do anything about quarantine. They will not have double work,” Sawangcharoen went on. “That’s a good method that can improve the export of perishable shipments from Thailand.” THAI will also create its own ‘Perishables Village’ by consolidating its currently scattered refrigerators at its warehouse, Sawangcharoen adds.

Use of e-AWBs to increase in Thailand following Montreal Convention 1999 ratification THAILAND has ratified the Montreal Convention 1999 (MC99), which will result in changes including significantly increasing the use of electronic air waybills (e-AWB) when it is implemented on 2 October. The overwhelming majority of carriage to and from Thailand will be subject to an international convention and to internationally defined and accepted standards for the first time, providing transparency, certainty and clarity



to liability in carriage by air. MC99 covers both passenger and cargo, and for the latter, the Act introduces a liability limit of SDRs 19 per kilogram for cargo loss, damage or delay claims, which international law firm Watson Farley & Williams (WFW) says would represent “a long overdue improvement on the previous position, particularly given the volume and value of air cargo carried to and from Thailand” if correctly and consistently applied.

The law firm also says a critical feature is the elimination of the need for carriers to demonstrate express consent of a shipper to contractual liability limits, which will end the practice of settlement by reference to the invoice value of cargo claims. The use of e-AWBs should also increase significantly once The International Air Transport Act and the International Air Transport Amendment Act comes into force as many legal issues including the notice of

limits of liability are addressed. WFW says one issue to consider is potential customs duties and other taxes where cargo is delivered to a party in transit. The firm says: “Although the consignor is liable for any expenses resulting from the exercise of the right of disposition, airlines may face pressure to meet customs duties and any storage and handling charges, particularly where the consignor is not based in Thailand.”

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HAV to move from Cardington Ethiopian merges with airport


ybrid Air Vehicles (HAV) is to move to a new site away from Cardington as it looks to continue to develop the Airlander 10. The new location has yet to be confirmed but HAV says it does not plan to move far away and it will be making further announcements in the coming weeks. A new location for engineers will be announced first and for its other office-based teams from the beginning of December. HAV will start to use other airfields to undertake testing and operations, and with extended flight testing and customer demonstrations about to start, some of these tests require more take-off and landing distance than Cardington allows. HAV says this is the natural time to make sure it is set up for the future at the right site with the right facilities. It says: “We have concluded that we now need to begin a process of moving HAV to a new site, away from Cardington.”



“We have worked with everyone on and around the site to make every effort to find a way to stay here, but after that extensive exercise we believe that moving is the right and pragmatic decision for us.” HAV also plans to announce where its planned production location for the Airlander will be sited. It says the location will be the focal point of new employment both in HAV and the supply chain providing nearly 2,000 additional jobs in the UK, delivering parts and sub-assemblies for building, testing and delivering 12 or more aircraft per year. The company plans to do so from ‘right-size’ hangars, purpose designed for the Airlander 10. Work is being finalised but the company has turned to the event structures industry to develop a road transportable hangar that can be erected in a new location, giving the company and customers the flexibility to respond quickly to demand for hangars, or in future operating locations for the aircraft.

ETHIOPIAN Airlines Group has merged with the Ethiopian Airports Enterprise to form the Aviation Holding Group following regulatory approval by the Council of Ministers. The new Holding Group comprises of Ethiopian Airports Enterprises, Passenger Airline, Cargo Airline & Logistics Company, Ethiopian Aviation Academy, Ethiopian Inflight Catering Services, Ethiopian MRO Services and Ethiopian Hotel & Tourism Services. The merger is part of Ethiopian Airlines’ 15 year strategic plan dubbed “Vision 2025”, and companies under the airline have been preparing themselves to stand autonomously for the last seven years since the launch of the plan. Ethiopian Airlines Group chief executive

officer, Tewolde Gebremariam (pictured) says: “The primary objective of the merger is to make our airports’ services more effective and efficient so as to enable it provide global standard customer services with the aim of promoting competitiveness with international airports in the region.”

DoKaSch builds 500th Opticooler DoKaSch Temperature Solutions is expanding its fleet of Opticoolers with 50 new RAP-containers, bringing the total number of active containers available to 500. The Opticooler provides reliable transport conditions for shipments across continents and climate zones or during unexpected events, for goods that must be kept within a very strict temperature range. Equipped with battery powered cooling compressors and heaters as well as a self-regulating temperature control, the internal temperatures consistently stay well

within range at any point in the storage area. The flying “smart warehouse” only needs one electrical outlet to fully charge the energy storage after a flight and to ensure that there is always enough power is available to deal with unexpected events. DoKaSch Temperature Solutions managing director, Andreas Seitz says: “We are proud that our products have proven worthy in the day to day air cargo business and that we can offer our customers an extremely reliable product.”

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NEWSWEEK Cathay Pacific to connect with key European markets in 2018


athay Pacific is to increase services to Europe in 2018 with flights to Dublin, Brussels and Copenhagen. Brussels will be the first airport to gain a new link with four Airbus A350-900 flights a week from 25 March operating on Tuesdays, Thursdays, Saturdays and Sundays. These flights will leave Hong Kong at 00.35h and land in Brussels at 06.55h, with the return service departing Brussels at 13.10h and arriving in Brussels at 06.55h. About 11 per cent of Belgian exports go to Asia, a figure that continues to rise, and Brussels Airport says it will seize opportunities to expand its network and further develop direct connections between Belgium and other countries. Brussels Airport Company chief executive officer (CEO), Arnaud Feist says: “This is an important step in the development of direct connections between Belgium and Asia.” Describing all the routes, Cathay Pacific CEO, Rupert Hogg says: “Growing our reach to new destinations that aren’t served from Hong Kong boosts the city’s status as Asia’s largest international hub and enables us to capture new and important sources of revenue.” The Copenhagen flights will operate from 2 May to 12 October,

leaving Hong Kong at 01.10h and arrive at 06.30h on Mondays, Wednesdays and Fridays, with the return flight departing at 13.55h and landing at 06.35h. Services to Dublin will start on 2 June, leaving Hong Kong at 00.50h on Mondays, Wednesdays, Thursdays and Saturdays, and arriving at 06.45h, with the return flight going at 11.55h and landing in Hong Kong at 07.05. Dublin Airport managing director, Vincent Harrison says the

airport is “thrilled” to have this link saying: “Dublin Airport is competing for routes like this with other major European airports, so winning this new business is hugely positive news for Ireland, for foreign direct investment, for Irish exporters, and for inbound tourism.” Trade between Ireland and China is worth more than €8 billion per annum and almost 100 Irish firms have operations in China, employing 100,000 people there.

Air China cargo revenue grows 19% in first half

CARGO revenue at Air China has increased 19.6 per cent in the first half of 2017 as global trade picked up though the domestic market was “relatively slow”. The sector’s revenue was 4.5 billion yuan renminbi (RMB) ($688 million) with yields increasing by 12.6 per cent to RMB1.27. Capacity in available freight tonne kilometres was up 1.9 per cent to 6.4 billion, with revenue tonne kilometres increasing 6.2 per cent to 3.5 billion. Load factors improved by 2.2 percentage points to 55 per cent. Air China comments: “In the first half of 2017, the global trade recovery accelerated with emerging signs of growth pick-up in the international transport market. However, domestic market growth was relatively slow amid China’s economic transformation.” Total turnover for the period rose 8.8 per cent to RMB58.7 billion, and net profits increased by 3.3 per cent year-on-year to RMB3.9 billion. The Group introduced 16 aircraft to its fleet in the first half of 2017, including two Boeing 787-9s, and 11 aircraft were phased out. The total fleet size was 628, with an average age of 6.5 years.

Jettainer appoints new director of operations

FRANK Muehlenkamp has taken over as director of operations at Jettainer, making him responsible for the complete management and maintenance of about 90,000 containers and pallets worldwide. He started his career at the ground operations department at the Lufthansa hub in Frankfurt, then spent two years at Augsburg Airways before returning to the Lufthansa Group. He has held several leading positions in the ground and flight operations departments. Jettainer managing director, Carsten Hernig says: “We’re delighted to have found an extremely competent manager in the person of Frank Mühlenkamp; he brings with him many years of experience in the operational business and an excellent knowledge of the aviation industry.”



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NEWSWEEK FedEx renews ISO14001 at CDG GBA opens up in Germany


edEx Express has renewed its ISO 14001 certification at its European hub at Paris Charles de Gaulle Airport, meeting a new, more demanding standard. The site was originally awarded ISO 14001 in 2011, and has had it renewed for a period of three years against the more demanding 2015 standard. To receive certification, the overall impact of the hub was analysed to consider aircraft de-icing and maintenance, sorting systems, LPG and glycol tank storage, and waste management. Electricity consumption has been reduced by 9.4 per cent since 2013 through retrofitting of lighting despite increased activity levels. 97.7 per cent of standard waste is now reused with 64 per cent being recycled, and FedEx is working with suppliers to find operational solutions that are better for the environment. It says as an example, where glycol is used for aircraft



de-icing operations, sophisticated pumping operations have been introduced to ensure efficient storage of the substance and safeguard against pollution of rainwater systems. FedEx Express Paris-CDG hub managing director of operations, Julien Ducoup says: “This certification reflects the efforts made by some 2,100 FedEx team members working at our Paris-CDG Hub, who are all encouraged to adopt energy- saving habits as part of FedEx’ environmental programs.” In May 2016, FedEx appointed an ISO 14001 project manager who has provided training on environmental issues for around 60 employees, including 12 process managers, across all areas of the business and at all levels of the organisation to champion environmental and sustainability programs. The Paris-CDG hub is the largest FedEx facility outside the USA and is due for expansion in 2019.

GBA Services is expanding operations into Germany as part of its strategy to protect itself from a possible fragmentation of the single market following Brexit. Bremen based GBA Logistics Germany will provide a full portfolio of services including time-critical, high-security and temperature-critical transport, and though it will mainly focus on express road services, German operations will offer global multi-modal forwarding of imports and exports. The German operation will be headed up by joint managing directors Jan Gredigk and Maik Maertens, who have over 30 years combined experience in express road freight operations specialising in the engineering and automotive sectors. The expansion marks an important step in GBA’s post-Brexit strategy as the UK based business readies itself for a possible

fragmentation of the single market, and potential restrictions and added regulation on future cross-border transport operations. GBA Services managing director, David Birkbeck says: “GBA remains entirely optimistic about the long-term impact of Brexit, in which there will be both challenges and opportunities. But we share the widespread uncertainty about the more immediate steps we must take to maintain and expand our business in a newly-configured Europe.” “So, while we hope for the continuation of the single market and its simplified trade procedures, we must plan for the possibility that some of the current flexibility may not carry through.” He says GBA’s strategy is to look at each major European market in isolation and assume a physical presence will be required in European locations.

NEWS WEEK Kerry Logistics profits grow 5% to $73.6m All change in Salzburg at Gebruder Weiss


et profits at Kerry Logistics were up five per cent to 576 million Hong Kong dollars ($73.6 million) in the first half of 2017. Turnover surged by 31 per cent to HK$13.7 billion with the Integrated Logistics sector seeing profits increasing 11 per cent to HK$884 million and International Freight Forwarding up seven per cent to HK$222 million. Kerry Logistics Group managing director, William Ma says the period was challenging, with global demand stalling in the first quarter but picking up in the second, with strong performance in Asia and the Americas did well. Despite these figures Ma was not happy with the results saying: “Core net profit only reported a five per cent growth due to the unsatisfactory performance of our investments in associates, which reported a 52 per cent year-on-year decrease in contribution.” Kerry Logistics continued its strategy to take

advantage of the opportunities from China’s Belt and Road Initiative, and subsidiary Globalink Logistics operations gave Kerry access to countries including Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, Turkmenistan, Georgia, Armenia, Azerbaijan and Ukraine. The Integrated Logistics sector was affected by weak performance in Mainland China but Hong Kong proved strong. International Freight Forwarding experienced growth helped in Europe by the acquisition of Tuvia Italia and the launch of a new sales office in Poland. In March 2017 Kerry Logistics entered into a share purchase agreement to divest its 15 per cent interest in Asia Airfreight Terminal Company to Holistic Capital Investment, a subsidiary of Hong Kong Airlines. The transaction is subject to certain conditions precedent which the directors believe will be satisfied in the third quarter of 2017.

MICHAEL Thomsen has taken over as branch manager of Gebruder Weiss Salzburg, succeeding Peter Schafleitner, who will focus on his role as director of the Central Region. The 35-year old, who was originally from Flensburg, started his career with Gebruder Weiss in 2006 after completing his studies at Salzburg University of Applied Sciences in Business Administration and Information Management with a focus on production and logistics. He completed the company’s “Orange Future” training program before starting work in the areas of logistics solutions and sales in various positions. As assistant to the manager of the Central Region, he was responsible for controlling and optimisation of processes and further develop the Salzburg location. Thomsen says: “My goal is to further expand Gebrüder Weiss’ position on the market as a full-service logistics provider, and impress our customers with the highest

quality standards.” Schafleitner adds: “I am pleased that Michael Thomsen is taking over management of the Salzburg branch. He knows the location and, in addition to the necessary specialist expertise and social skills, he also brings the proper customer focus to continue on the path of success with our proven team.” Schafleitner is taking over the Central Region, which consisted of the provinces of Salzburg and Carinthia, but is being expanded to include Upper Austria and the Czech Republic national organisation. He says: “This is an exciting and interesting challenge to me. Upper Austria is known for its high economic performance and is an important central location for Gebrüder Weiss, as is the very successful Czech Republic national organisation.” “In order to further develop the region positively, we intend to further expand our product portfolio in the future and strengthen our Service Excellence reputation.”



CARGO HANDLERS Pharma, perishables and e-commerce help Hactl soar


ong Kong’s (HK) air cargo market has been flying high this year and the biggest cargo handler Hong Kong Air Cargo Terminals Ltd (Hactl) has benefitted from the strong growth. From January to June year-on-year tonnage was up 16.6 per cent to 860,242 tonnes and Hactl has outperformed the market every month since September 2016. Chief executive, Mark Whitehead says it has been driven by several factors including a small shift away from ocean due to slow steaming, capacity cutbacks and port issues. Other reasons have been continuing growth in e-commerce imports and exports to/from China via HK, and significant growth in freighter charters (606 in the first five months of 2017, compared to 100 in 2016). Whitehead also feels in addition to these, HK has a lot to offer as it is in the right location for all of Asia, bilingual-



ism is widespread and it has an “unparalleled” spread of destinations and frequencies. But what sectors are driving growth? Whitehead explains: “Pharma continues to perform well, partly due to increasing global production and demand, and partly due to our own efforts in compliance (first in HK to gain WHO GDP and first to gain IATA CEIV Pharma as part of the airport’s initiative). “Perishables are also proving robust - both for the HK market, and for China via HK. China continues to look for increased quality and variety in its food products, and that is driving demand from overseas.” As for CEIV Pharma, which was gained in February as part of the

airport sponsored initiative to position HK as a leading pharma hub, he expects the results to be “progressive and long-term”. He notes the industry as a whole still has a lot more to do to create a true network of pharma trade lanes on which the required standards are applied end-to-end.

Asia’s middle class keeps growing

Whitehead says e-commerce is a fast developing area of business, driven by expanding Asian middle-class populations and the thirst for Western goods and Whitehead notes traffic via HK is bi-directional. He says Chinese consumers are increasingly developing an appetite for all kinds of foreign products, from designer handbags to baby formula: “At the same time, China is the producer of many items that are heavily sold globally via e-commerce. “The common factor in both directions is that the ‘traditional’ airfreight industry is gaining from the maturing of e-commerce and its supply chains. “The days of one-off, straight-to-customer packages via integrator are giving way to consolidation of freight flows over longer sectors, with final-mile deliveries from RDCs closer to final market; this achieves welcome logistics economies.” Hactl’s logistics subsidiary, Hacis, is helping it meet demand and providing fast, reliable and cost-effective bonded RFS into and out of China via HK, and offering collection and delivery points at its eight inland cargo depots. Whitehead says one of Hacis’ recent innovations is putting together a viable alternative route for ex-China mail containing e-commerce items and it is handling 1,000 mailbags a day, providing welcome traffic for Hactl’s airline customers. He adds: “Hacis complements the basic Hactl service offering. Most notably, it effectively adds eight more destinations in China to any of our carriers’ networks – six of them IATA-coded, so carriers can sell on through AWBs – without the cost and commitment of adding flown services. “Hacis plays a big part in Hactl’s success, and it’s why we tightened the relationship between the two businesses by appointing its MD, Vivien Lau, to Hactl’s executive board.” Hactl has also been on an efficiency drive and is using technology to improve processes. An example of this has been adoption of mobile computing throughout the HK site. Whitehead says now, instead of ramp staff having to drive to fixed data terminals to input information and receive instructions, they can do this on the move from any location using mobile devices, using an app, which accesses its COSAC-Plus cargo management system, saving time and manpower, and cuts fuel consumption and pollution. He explains: “Customers can also use the app set to access flight arrival information, optimise their arrival for collections and deliveries, obtain pre-allocated truck doors and pre-check handling charges. COSAC Mobile is now in use on 3,000 staff and customer mobile devices. It has revolutionised our operations.” There is fierce competition between handlers in HK with the current over-capacity, but despite that, Whitehead says Hactl is outperforming the market, and growing its share of traffic thanks to new contracts (Vietjet and Virgin Australia most recently) and successes of customer carriers. Investment wise moving forward, Whitehead says it is about less obvious things like new staff training technology, IT enhancements and compliance. He notes the end game is better efficiency and enhanced customer service, but Hactl is an important element of the total package any customer carrier offers to his market; and service differentials are created on the ground. “We want that package to be the best possible, both in scope and in quality. We never lose sight of the fact Hactl can only succeed through the success of its carrier customers,” he concludes.

CARGO HANDLERS PACTL sets personal bests Virgin Atlantic picks AGI


hanghai Pudong International Airport Cargo Terminal Co (PACTL) saw strong volume growth in the first half of 2017, beating the tonnage in the corresponding period of last year by 12 per cent and setting its best records in history. The cargo handler’s tonnage for the six-month period was 873,573 tonnes with the strongest performance on international imports, which were up 17.1 per cent to 353,587 tonnes. International exports also showed a positive growth by 10.3 per cent to 471,781 tonnes, but the only weak performing sector was domestic volumes, which declined, down 4.3 per cent compared with same period of last year. PACTL vice president, Christian Haug says: “We are happy to see a quick recovery of global economy since the second half of 2016 that is driving strong volume growth at PVG for international export.

“Meanwhile, the fast growth for international imports also showed more surging demands in mainland China. The market performance is a little bit surprised to us but still within our expectation. “As the peak season is coming, we are quite confident we will have a promising performance this year. It’s estimated that PACTL’s annual volume in this year will be over 1.8 million tonnes.” Meanwhile, the PACTL Nantong Xingdong Airport Cargo Terminal Co (PACTL-NTG) at Nantong Xingdong Airport founded on 29 November last year has been introducing successful management experiences of Shanghai PACTL and integrating all resources of both airports. In the first half of 2017, PACTL-NTG handled 21,000 tonnes, up 10.8 per cent and is forecasting handling 47,000 tonnes this year. PACTL-NTG is working closely with several charter companies and airlines for international charter service and hopes to make Nantong Xingdong Airport as alternate airport for airlines. Besides, the international trucking transshipment service for outbound cargo has achieved substantial progress; Customs of Shanghai and Nantong are working on Operation Memorandum for signing. At the same time, PACTL-NTG plans to further expand its terminal facility and upgrade its operational system. Part of Hermes system, an air cargo operation system now widely used by PACTL, is scheduled to put into service at PACTL-NTG this August.

VIRGIN Atlantic Cargo has appointed Alliance Ground International (AGI) as its cargo handler in San Francisco to support its growing operations at the US West Coast gateway. The airline operates twice-daily services connecting London Heathrow and San Francisco and added another three direct flights a week from Manchester at the end of March. Virgin Atlantic Cargo says it has seen high cargo volumes on nearly all of its routes from the UK to the US since the start of 2017. Following an 18 per cent increase in tonnage from London-San Francisco in 2016, volumes for the first half of 2017 rose a further 15.5 per cent year-on-year, boosted by shipments such as fresh salmon. Customer support has also been strong for the new Manchester-San Francisco route with the first month of operations seeing tonnage 34 per cent above budget from the UK.

AGI already handles cargo for the airline in Miami, Newark and Orlando. The San Francisco facility incorporates a dedicated location to handle ‘active’ cargo containers for temperature-controlled pharmaceutical shipments as well as a security cage/vault for valuable cargoes and a cooler for perishables. Fresh produce accounts for nearly half of shipments from San Francisco to the UK and includes blueberries, fresh fruits, lettuce and peas. Virgin Atlantic director of cargo operations and business development, Paul Fallon says: “San Francisco has been an important and growing West Coast cargo gateway for Virgin for 23 years, with strong support from our customers on both sides of the Atlantic. “Based on our experience of working with AGI at other airports in the US we are confident they will also deliver the high quality of services we expect for our customers in San Francisco.”



EUROPEAN AIR CARGO IATA: Europe proves buoyant According to the International Air Transport Association (IATA), European air freight, is like much of the globe, enjoying a buoyant 2017. European airlines posted a 14.3% year on year increase in freight demand in June 2017 and a capacity rise of 6.1%. Over the first-half of the year cargo volumes were up 13.6% and capacity up 5.4%. IATA commented: “The ongoing weakness of the Euro persists in boosting the performance of the European freight market which continues to benefit from strong export orders.” Head of freighter advisory at the IBA, Moshe Haimovich, says it has been driven by demand for e-commerce, perishables and pharmaceuticals. “European cargo is on the rise with shipments to Africa, Asia and North America

Stellar year for Swissport

doing well,” he says. “We are seeing a 50-50 split between belly and dedicated freighter movements.” So, what has the European industry seen in the last 6 to 12 months? If they are experiencing growth where is it coming from and do they expect it to continue in the months ahead? Air Cargo Week talked to airports and airlines to get their views and finds that sushi, Middle Eastern politics and dwindling sea freight has played its part.


argo handler Swissport International has had a stellar 2017 to date. According to Claus Nickel, vice president for cargo in Europe, who is responsible for Spain, France, Belgium, Netherlands, France and Cyprus, tonnage volumes are 25-30 per cent above regional budgets.

was awarded IATA’s CEIV Pharma Certification, adding to the certificates Swissport already holds in other airports such as Barcelona and Brussels. “We see more pharmaceutical growth going forward and our strategy is to gain further CEIV certifications in other countries such as France” explains Nickel.

“Europe has performed very well. It is one of our best performing regions” he states. “It’s been boosted by increased volumes from various Middle East carriers which included new services at our stations in Paris, Lyon and Nice, both inbound and outbound of Europe. “Besides, the European economy has strengthened and there has been increased demand from the Far East, Australia and Middle East for goods such as automotive spare parts and pharmaceuticals. Pharma in particular will never go into recession for the next 30 or 40 years. There is a huge global focus on it.”

“We’re investing in warehousing and storage facilities with different cooling areas, technology to control temperatures, harmonised handling procedures and strong co-operation among our cool chain partners.” There has also been increased investment in track and trace technology to meet growing cross-border e-commerce demand within Europe.

Europe performing very well

Cross-border growth

Moreover, pharma movements within Europe have increased as well. Especially, the cross-border traffic of products between Germany, Belgium, Switzerland, France and Spain. Much of this volume emanates from the Pharma Gateway Amsterdam at Amsterdam Airport Schiphol. Swissport’s acquisition of Schiphol cargo handling group Skylink last year and a dedicated product line for the handling of life science and healthcare shipments from Terminal 9 and 11 led to this increase. In July 2017, Swissport The Netherlands



Investments in warehousing

Transparency is essential

“You have to be more transparent in the exchange of information with customers and partners” says Nickel. Time sensitive shipments such as e-commerce, spare parts and pharma are also increasingly moving from ocean to air freight. “There are growing opportunities for air cargo around the movement of special products” Nickel explains. Returning to the Skylink acquisition Nickel describes it as a “great success”. The deal extended its warehouse capacity at Schiphol by 10,000 square metres. “In general, we are looking at other acquisitions” says Nickel. “We are also looking at new stations in Europe with a potential focus on Eastern Europe where we don’t have a presence at the moment.”


Europe to Asia proving very strong for Finnair Cargo


argo revenue at Finnair was up 16.1 per cent between April and June helped in particular by movements between Europe and Asia. “Market capacity continues to increase but supply and demand are more balanced than previously, leading to higher cargo load factors and yields,” the report said. Finnair Cargo managing director, Janne Tarvainen says: “We have added more widebody belly capacity with the Airbus A350 and we have our dedicated freighter service focused on pharmaceuticals to Brussels. The market is much, much better than it was last year when it was really difficult for everybody.” Tarvainen says Helsinki’s geographical position gives it an advantage for Europe to Asia freight movements. “Everything is growing on these routes particularly special loads such as perishables and sea food,” he states. “The salmon from North Norway is particularly popular for the sushi plates of Asia and our CEIV status is a boost to us when moving pharmaceuticals.” Tarvainen is confident of further growth boosted by the opening of its COOL Cargo Nordic Hub later this year. The site will have

Brussels volumes rise 10%

cool storage areas for fish and perishables and a separate temperature area for pharmaceuticals. The site will be completely digitalised, with Finnair promising the end of pen and paper through a warehouse app and tablet computers. “It will be the most modern cargo terminal in Europe,” says Tarvainen. “Our cargo management system will be fully integrated

with our warehouse system and our COOL Cargo Control Centre will also allow us to monitor all our activities air side, at the terminals and in the warehouses. The unit will also be positioned very close to the airport gates which will quicken up transportation times. That is particularly essential for special cargo. “ Another crucial factor in its success is the close collaboration between the passenger airline and cargo divisions. “We have leveraged some of the experience in the passenger airline operations at our new hub. We used to be a bit of a silo in cargo but we now have our say on new destinations and types of aircraft for certain regions. We are now definitely in the mainstream,” he says. He also praises Finnair Cargo’s work in data analysis to improve services. “Air cargo has a very old-fashioned way of working. The delivery chain is so fragmented and digitalisation needs to disrupt it to lower costs and speed up movements. A big part of that is data quality, flow and analysis,” he says. “We are getting more disciplined about the data we are processing and its quality. We are also looking at the possibilities of blockchain in air cargo. We are getting world class tools to work with.”

AIR freight volumes have performed strongly in 2017 at Brussels Airport with growth of 10 per cent in the first seven months of the year driven by e-commerce, pharmaceuticals and perishables. Brussels says it is experiencing its strongest growth since the financial crisis in 2007. “The overall strong global economic performance is the main and most important driver for our growth,” the airport says. “The bankruptcy earlier this year of Hanjin Shipping and the shortage of capacity on certain maritime lanes have also been of assistance to us. However, we believe that cargo growth is still fragile with economic stability in certain global regions so crucial to it continuing.” In terms of other challenges Brussels says the key one is aiming to work with partners at the airport such as handlers or government bodies to cope with the current growth. “Airports are also struggling and fighting for a stable legal framework allowing them to grow. Brussels is suffering with noise issues imposed by the regional government and there are constrained slots at Amsterdam till 2020,” the airport adds.

Leipzig keeps growing VOLUMES at Leipzig Halle Airport have grown for the 13th year in a row, with a 6.4 per cent increase between January and June to 637,560 tonnes. Head of cargo/logistics development, Mario Patyk (pictured), says: “This growth is particularly due to the e-commerce sector, handling pharmaceutical consignments and freight charter traffic which increasingly involves longterm charter chains,” he explains. “Exports and imports continue to be a market that is becoming increasingly important particularly for Germany and this is developing positively in the areas of general air freight and e-commerce.” China is increasingly important, Patyk comments: “The greatest challenge here involves optimising the customs procedures in the e-commerce sector in Europe and the gateways in China.”



EXPRESS OPERATORS DHL to invest €250m in India UPS to use virtual reality


HL eCommerce has opened a new distribution centre in Delhi to create opportunities for cross border e-commerce, as part of Deutsche Post DHL Group’s plan to invest in €250 million ($297 million) in India by 2020. The Delhi distribution centre forms a vital component to enable end-to-end logistics for e-commerce, allowing e-tailers to reach out to customers globally and enable quick fulfilment of orders at all times to popular destinations such as the US and Europe, further enhancing DHL’s existing logistics infrastructure in India, helping boost India’s e-commerce industry. DHL eCommerce says the distribution centre provides e-tailers with its extensive services for the e-commerce industry, such as Packet and Packet Plus enabling economical shipments worldwide, and DHL Parcel International Direct, offering favourable



transit times from four to seven days for shipments to the US, UK and Australia. DHL eCommerce Asia Pacific chief executive officer, Malcolm Monteiro says: “India has been identified as a key market for DPDHL Group and we’re leveraging our experience and successes globally and customising our services to meet the needs of the India market.” “We’re confident that our new cross-border solutions will provide an added boost to the growing e-commerce industry in India.” DHL eCommerce India country director, Suraj Bangera adds: “India’s booming e-commerce market, coupled with the government’s implementation of GST and greater ease of claiming benefits like MEIS for cross-border shipments, has made e-commerce exports more attractive and business-friendly than ever before.” “We are positive of the growth and are hugely committed to enable Indian e-tailers to fully capitalise this exciting e-commerce market.”

UPS is to train student delivery drivers to spot and identify road hazards using Virtual Reality (VR) headsets to simulate the experience of driving on city streets while making classroom lessons more memorable. The training will begin at its nine UPS Integrad training facilities, and UPS says the adoption of VR for driver safety training reflects the company’s commitment to use the latest technology to protect onroad employees and the communities they serve. Students using the modules must verbally identify potential road hazards such as pedestrians, parked cars and oncoming traffic, and the 360-degree view inside the headset is realistic down to the finest details. UPS chief information and engineering officer, Juan Perez says: “Virtual Reality offers a big technological leap in the realm of

driver safety training. VR creates a hyper-realistic streetscape that will dazzle even the youngest of our drivers whose previous exposure to the technology was through video games.” The VR training modules replace the touchscreen devices UPS Integrad facilities use to teach lessons on road hazards. For now the training is only for those who drive package delivery trucks but UPS is exploring VR or even Augmented Reality to train tractor trailer drivers and performing other duties throughout the operation. UPS Integrad facilities teach students the fundamentals of driving delivery vehicles and delivering packages using a hands-on approach, and they even drive UPS delivery trucks in a replica outdoor city that has real streets and pavements and simulated delivery and pickup sites.


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