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The weekly newspaper for air cargo professionals Volume: 19 Issue: 36 12 September 2016
UK runway debate continues as decision gets closer
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he ongoing UK runway saga is set to draw to a close soon as the UK Government plans to decide whether Heathrow Airport or Gatwick Airport gets the go ahead in the autumn. However, chiefs from the two airports continue to lock horns and did so once again on 5 September at the Westminster Energy, Environment and Transport Forum seminar – ‘What now for airport expansion in the South East?’. During a speech to delegates at the Royal Society, in London, Gatwick’s chief financial officer, Nick Dunn claimed there were flaws with the Airport Commission’s figures concerning the potential economic benefits the UK would gain from expansion at Heathrow Airport over Gatwick.
Dunn said a Freedom of Information Act request made on data used by the commission found building a second runway at Gatwick (above) would boost the UK economy by £9.1 billion ($12 billion) compared to £5.3 billion from a third runway at Heathrow. He said the figures were taken out of the commission’s final report at the request of the government and answering a question from the floor, Dunn said: “Those
IATA: positive month but challenges
flaws are very evident and I am sure will be taken into account by the government. If it chooses not to listen, I imagine there will be plenty of people in London who will be interested in that.” He also questioned assumptions and methods used in the report in July last year, which backed another runway at Heathrow - due to the economic gains. During his speech Dunn claimed another runway at Gatwick would
Airfreight has had “a positive month” in July with Europe posting the strongest growth for only the fourth time in a decade, the International Air Transport Association (IATA) says. The association says freight tonne kilometres (FTK) grew five per cent, the fastest pace since early 2015 and despite the subdued global trade backdrop, carriers in Asia-Pacific, Europe, North America and the Middle East grew. Europe saw the strongest growth, up 7.2 per cent helped by strong German exports, followed by the Middle East at 6.7 per cent, then Asia Pacific at 4.9 per cent driven by intra-Asian traffic, and North America increasing 4.1 per cent despite the continuing strength of the US dollar hitting exports. But IATA’s new director general and chief executive officer, Alexandre de Juniac warns it is not all positive. “July was a positive month for airfreight which is an all too rare occurrence. Despite that, we must recognise that we face some strong headwinds on fundamental aspects of the business. “Global trade growth is sluggish and business confidence is weak. And the political rhetoric on both sides of the Atlantic is not encouraging for further trade liberalisation.” Overcapacity continues, with available FTKs up 5.2 per cent, pushing the load factor down 0.1 percentage points to 41.3 per cent.
have more benefits to the UK than a third at Heathrow, as it would be faster to build, cost less and have less of an environmental impact. And in his opinion a second runway at Gatwick is “deliverable” as it is a “simple scheme”, unlike Heathrow’s, which he feels is not deliverable as is more complex. Dunn did though fail to set out much detail about how Gatwick’s project would grow air cargo, trade links and British exports. Only after being pressed from the floor, he said Gatwick’s masterplan includes growing freight and it will invest in cargo. Dunn added by growing long-haul routes to emerging markets, this would lead to a surge in bellyhold tonnage. Heathrow chief executive officer, John Holland-Kaye also spoke at the forum (see page four).
TIACA appoints Polmans to board
BRUSSELS Airport Company (BAC) head of cargo, Steven Polmans has pledged to continue encouraging greater collaboration across the supply chain following his appointment to The International Air Cargo Association’s (TIACA) board of directors. Polmans has over 15 years of experience in the aviation industry, joining BAC in 2010 and being promoted to head of cargo in 2012. He is also chairman of the newly established Air Cargo Belgium Association based at Brussels Airport. Following his appointment to the board, Polmans says: “I strongly believe that more cooperation between all stakeholders is to the benefit of our industry. “We are facing challenging but interesting times. Our industry is in need of change, and digitisation and innovation must become part of our behaviour and culture.” TIACA chairman, Sanjiv Edward says: “We welcome Steven to the TIACA Board. With his leadership skills and proven ability to promote cooperation among stakeholders, he is a valuable addition to the team.”
livestock remains a pillar for cargolux STANSTED BIP HAS CAPACITY FOR GROWTH ceva reacts to market movements sas cargo working towards ceiv
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Korean orders five new Boeing 777F GE Capital Aviation Services Limited (GECAS) has signed a purchase-and-leaseback transaction with Korean Air for five new Boeing 777 Freighters. The commercial aircraft leasing arm of GE says the 777Fs will be powered by GE90 engines as part of the carrier’s fleet renewal program. Deliveries of the aircraft are scheduled in late 2016 and 2017. Korean Air’s passenger and cargo divisions together serve more than 125 destinations in more than 40 countries. Korean Air Cargo currently operates a fleet of 30 freighter aircraft, including the 777F and 747F. Korean Air is currently undergoing a fleet renewal programme and has orders in place for aircraft including the A321neo, the 787 and newer versions of the 737. Formed in 2000, GECAS’ Cargo Aircraft Group currently leases nearly 100 freighters to airline customers worldwide. Their fleet includes Boeing 737, 767, 747 and 777 freighter models. As announced back in 2015, GECAS is carrying out a programme of converting up to 20 737-800NG passenger aircraft to freighters.
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NEWS WEEK CAL adds freighter services to Puerto Rico and Italy
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AL Cargo Airlines has added Puerto Rico and Italy to its network with services to San Juan and Rome from 15 September. The service will operate on a Tel Aviv – Liege – New York John F. Kennedy – San Juan – Rome – Liege – Tel Aviv route with trucking connections to other European and US destinations. CAL says it expects to expand the service in the next few months. CAL Cargo Airlines chairman and chief executive officer, Offer
Zhukov appointed to key role at Volga
VOLGA-DNEPR Group has appointed Vasiliy Zhukov (pictured) as global director of energy & heavy machinery to continue growth in these industry areas. Zhukov joined Volga-Dnepr in 2015 having spent five years working for one of Russia’s largest power engineering and construction corporations. He is the fourth global industry director after Axel Kaldschmidt, who is responsible for aerospace, Fayçal Boumerkhoufa, who covers oil & gas, and Colon Miller, who is in charge of government & defence programmes. Zhukov says: “At Volga-Dnepr Group we are constantly developing relationships with OEMs (original equipment manufacturers) in power and heavy machinery in order to learn more about their transportation and logistics challenges.”
Gilboa says: “We’re thrilled to open the flights to SJU. We recently added a third B747-400 freighter to our fleet, and now with SJU we are continuing our momentum to expand our network throughout the Americas.” He adds: “Our entire infrastructure is built to provide a rapid solution for the complex cargo, time and temperature sensitive goods such as Pharma, being our no. 1 product. “We identified SJU as a hub for this kind of cargo transport, which is why we targeted it as our next destination. Given our equipment, team and experience, CAL is uniquely positioned to support the needs of the local catchment area.” Meanwhile, Cathay Pacific Airways has expanded its Airbus A350 network with bellyhold flights to Dusseldorf Airport and its new service to London’s Gatwick Airport. The Gatwick flight is Cathay Pacific’s first UK long-haul route served by the A350-900, and the airport says it will encourage growth of trading links with China and the Far East. The Gatwick – Hong Kong service that started today (2 September) will operate on Mondays, Wednesdays, Fridays and Sundays. Cathay Pacific started Dusseldorf – Hong Kong flights in September 2015 and was upgraded to the A350-900 on 1 September.
Dubai posts volumes fall in July of 1.2% FREIGHT volumes into Dubai International Airport fell year-on-year (YOY) by 1.2 per cent in July reaching 203,153 tonnes, the hub’s operator Dubai Airports has reported. This figure was down on the 205,526 tonnes that was recorded during the corresponding month last year. During the first seven months of 2016, Dubai handled 1,485,177 tonnes of cargo, up 3.2 per cent compared to the 1,438,904 tonnes recorded during the same period in 2015. Freighters are increasingly flying to and from Dubai World Central and away from Dubai International Airport due to the latter having limited room to expand. In the first half of 2016, volumes rose 3.8 per cent to 1,282,025 tonnes compared to 1,233,378 tonnes during the same period in 2015. Dubai handled 226,175 tonnes of freight in June compared to 217,896 tonnes compared to June last year, a rise of 3.8 per cent.
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NEWSWEEK Heathrow CEO confident on expansion, takes a swipe at Gatwick
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eathrow Airport chief executive officer John Holland-Kaye said he feels it has finally come to a point where the government will make a decision to back Heathrow expansion, while also questioning whether Gatwick Airport can meet the needs of British exporters. He was speaking at the Westminster Energy, Environment and Transport Forum on Monday, 5 September, which held a seminar at the Royal Society in London entitled – ‘What now for airport expansion in the South East?’ A decision on airport expansion is set to be made this autumn after it was put on hold due to a change of UK Prime Minister and the referendum to leave the European Union (EU) dubbed ‘Brexit’. The UK runway debate has been lingering since the Airports Commission backed Heathrow for expansion in July 2015, saying building a third runway at the hub offered more economic benefits to the UK than a second runway at Gatwick. Holland-Kaye said the Brexit vote has made a decision more imperative than ever: “Leaving
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the EU means that it’s more essential than ever that we create trading links to the growing markets of the world – and that we control our own trade routes. Only Heathrow expansion can do this. And it’s an urgent task, if we are to have a strong and fair post-Brexit economy.” Much of Holland-Kaye’s forum speech was on exports and he said an expanded Heathrow will boost UK exports and improve trade links while helping the country make the most of Brexit: “The same planes that carry Britain’s exporters around the world also carry their exports – in fact almost 30 per cent of all non-EU exports go by air from Heathrow. “Anything high value, with a short supply chain or a short shelf life goes by air from Heathrow. Heathrow provides Britain’s trade routes to growth markets, and helps us to be an independent and strong trading nation. But we have been at capacity for a decade. “And that lack of capacity increasingly means that British exporters have to go through a foreign hubs to get to world markets, which adds time and cost – putting them at a competitive disadvantage and handing control of Britain’s
supply routes to our competitors. “If we want Britain to remain strong, then we need to sustain and grow our own links to those burgeoning economies.” Holland-Kaye cited Mexico as an example saying it is a key emerging market and has 120 million consumers, “hungry” for British goods and expertise and should be developing stronger trade links. He took a swipe at Gatwick as said you can get a seasonal flight to Cancun “the party capital of Mexico” but at Heathrow you get a daily service, all year round, to Mexico City – the business capital, where the economy is growing at almost five per cent a year. Holland-Kaye said these links are the “lifeblood of a stronger economy” and said the economic benefits of an expanded Heathrow far outweigh that of rival Gatwick. He said the UK cannot ignore the Brexit decision on 23 June and the whole country needs the ability to trade with the world, adding: “Britain needs to rebalance the economy towards exports, and Heathrow can help make that happen, delivering a fairer Brexit. “You may wonder how here in London, we can talk about the benefits of Heathrow expansion to towns and cities hundreds of miles away. But exports show how Heathrow’s global connectivity is crucial to the prosperity of our regions and nations. “You may be surprised to learn that the biggest export through Heathrow by volume is high quality salmon, worth £280 million ($373 million) to the Scottish economy. Regular connections from Heathrow mean fresh salmon can get from the farm in Scotland to the seafood
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market in Tokyo within 24 hours. “Think how much more could we export, with more flights from Scottish cities to Heathrow, connecting to 40 new long haul destinations?” He also singled out the North East, which he said is was one of the UK’s most successful exporting regions, and said Heathrow’s six flights a day there connects the region to every corner of the globe. Holland-Kaye said: “Miller Manufacturing, based in Cramlington, export their specialist construction equipment via Heathrow to India and China, and they are now expanding into Australia and the Middle East.” He questioned whether Gatwick could be the airport to get British exporters, from every region, to those emerging markets: “History says not. In spite of spare capacity, they serve fewer emerging markets, serve fewer UK cities and carry fewer exports than they did six years ago. “In spite of being at capacity, Heathrow serves more emerging markets, serves more UK cities and carries more exports. “In fact, we carry more cargo in a bank holiday weekend than Gatwick does in a year.” But ultimately in his view it comes down to one main factor: “So the real question we face is quite simple. Which will Britain choose to be – a hub or a spoke?” The UK awaits the landmark decision and the green light from the government to build its first runway in the South East for 50 years, and Holland-Kaye for one, is sure which scheme will benefit the UK’s economy, export market and trade links the most in an uncertain post-Brexit world.
NEWS WEEK
States urged to sign up to scheme
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he International Air Transport Association (IATA) is urging states to sign up to the Carbon Offset and Reduction Scheme for International Aviation (CORSIA). IATA says it is optimistic for an agreement when governments meet for the 39th Assembly of the International Civil Aviation Organization (ICAO) later this month. The draft negotiating text for CORSIA, published on 2 September 2016, broadly aligns with the aviation industry’s call for a mandatory global carbon offset scheme as a tool to help manage the industry’s emissions as it pursues its goal of carbon-neutral growth. Instead of being mandatory from the start, however, the draft text defines a voluntary ‘pilot
and implementation’ period (2021-2027) after which participation would be mandatory for all eligible States (2027 onwards). IATA director general and chief executive officer, Alexandre de Juniac (pictured) says: “I am optimistic that we are on the brink of a historic agreement – a first for an industry sector at the global level. The aviation industry would have preferred a more ambitious timeline than is currently outlined in the draft text. “However, what is most important is that the substance of the negotiating text will allow for meaningful management of aviation’s carbon footprint. Airlines support it and urge governments to agree when they meet at ICAO.” He explains that airlines are committed to environmental responsibility and industry is ready, but achieving it requires a partnership with governments. IATA is encouraging governments to commit to their voluntary participation as soon as possible and says last year’s much-lauded Paris climate change agreement was a combination of voluntary measures to which the vast majority of countries have already committed themselves and it expects no less of an outcome from the ICAO Assembly.
Phillips promoted by Virgin Atlantic Cargo
VIRGIN Atlantic Cargo has promoted Claire Phillips to the role of regional sales manager – Continental Europe, where she will be responsible for revenue and budget attainment in the region. Phillips, who has worked for the airline for five years, will work closely with Virgin Atlantic Cargo’s customers in the region and be the direct contact for the 17 general sales agent (GSA) partners in Continental Europe. In her role she will be based at Virgin Atlantic Cargo’s headquarters close to London’s Gatwick Airport. She took up her new post from 5 September. Prior to this she was route development
manager and capacity controller, and played an integral role in training and development of the customer service team. Commenting on her new role, Phillips says: “It’s only when customers start to book cargo with Virgin Atlantic that they realise the wide choice of access points we offer into our international network to major cities across the US as well as to Hong Kong and China, Dubai, South Africa, Nigeria and Australia. “I look forward to supporting our customers and GSA partners in the region and to identifying new opportunities and countries where we can achieve further growth.”
American starts LAX - HK belly service
AMERICAN Airlines Cargo has expanded its Asian network with Boeing 777-300 services between Los Angeles and Hong Kong. The 777-300 service can carry over 40 LD3 containers and compliments existing Dallas/ Fort Worth – Hong Kong route launched in 2014. Antares International will continue to represent American as the general sales agent for Hong Kong while Hong Kong Air Cargo Terminals remains the handler. American Airlines managing director of cargo sales – Asia, Keijiro Ishii says: “Amer-
ican continues to build a great network in Asia and the Pacific. We also started service to Tokyo-Haneda and Auckland. Demand for our cargo services is strong, not just to our hubs in the United States, but throughout our unrivalled network in Latin America.” The airline says Los Angeles offers Hong Kong customers direct access to fresh goods and produce while US and connecting markets will benefit from access to Asian commodities such as mechanical parts, garments and electronics.
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ANIMAL TRANSPORTATION Livestock remains an important pillar of Cargolux’s business
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ransporting livestock remains an important pillar of the Cargolux Airlines International business, having transported more than 2,000 horses in 2015, global product manager, Christian Theis (pictured) tells Air Cargo Week. Theis says Cargolux has had a very strong year so far in 2016 and he expects this year will be better than 2015. He says: “We have built up an unparalleled expertise and a team of highly qualified specialists over many years. Being such an important part of our activity, live animal transports in 2015 were particularly strong – for example, we flew over 2,000 horses during that year.” Theis says all animal shipments are interesting and bring their own unique challenges, and Cargolux prepares to safeguard the welfare of animals so they travel safely and comfortably. Cargolux does some very interesting animal shipments such as transporting four rare Indochinese tigers to Hanoi, Vietnam. Theis comments: “That was a special occasion for us, similar to the transport of a rare white rhino that we returned to its natural habitat in Africa many years ago.” He adds: “But every animal is handled with special care at Cargolux, rare species, expensive race horses, alpacas, dogs or breeding bulls. “It requires preparations and coordination both at the origin and destination including complete check of regulations providing customer with all information regarding IATA [International Air Transport Association] Live Animal Regulation and the Convention on International Trade in Endangered Species.”
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Cargolux launched its CV Alive product in May 2015 to give customers a clearer view of what they can expect in handling and a dedicated team to ensure the well-being of animals during journeys. Theis says: “They know that, at Cargolux, no animal is ever left without supervision and every flight is met, no matter what time.”
Cargolux has a European Union certified veterinary station in Luxembourg with holding spaces for different kinds of animals with overnight accommodation in noise protected areas with temperature and lighting controls. Theis describes CV Alive as “a complete package of competence that gives customers ease of mind.”
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“Our handlers are qualified to the highest standards and give personal attention to all animals. CV Alive also gives customers with special requirements tailor-made services. We plan those shipments with the customer well in advance and make sure that special equipment, food or veterinary services are at hand.” In addition, Theis says Cargolux’s fleet of Boeing 747-8 and 747-400 Freighters are ideal for animal transportation, with ventilation and temperature control systems to duplicate natural environments from 4 degrees centigrade to 29, and four separate climate zones. He comments: “We have room for animal handlers that travel on the upper deck and can easily take care of their animals during the flight on the main deck. “The long range of the aircraft eliminates unnecessary fueling stops, shortening the travel times considerably. We can carry 84 horses on our 747-400Fs and up to 90 on the 747-8F.” Animal transportation can be challenging, but Cargolux, which is IATA Live Animal Regulations and Convention on International Trade in Endangered Species compliant, makes sure they are transported safely and efficiency. Theis says: “Personal attention is a high priority that guarantees the well-being of our, mostly, four-legged guests.”
ANIMAL TRANSPORTATION
CAL expects business to grow at Liege Horse Inn
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AL Cargo Airlines is hoping its animal transportation business will continue growing with its Belgian ground handling agency gaining a three-year contract to manage Liege Airport’s Horse Inn. Liege Air Cargo Handling Services (LACHS) was awarded a three-year contract to manage the Horse Inn and hopes this will drive growth, along with the new service to San Juan, Puerto Rico, which will start on 15 September. CAL says: “The Horse Inn is intended for horses being transported by air and to accommodate them during transit by road. It represents a total investment of €2.6 million [$2.9 million].” LACHS has been busy recently, having exported 180 horses and 80 tonnes of equipment to the Rio Olympic Games with more expected in the coming months. “The transportation required five charter flights to collect horses and equipment from 32 different federations. All the horses were stabled before the flights in the brand new horse inn managed by LACHS.” This month LACHS will also handle two flights with 70 horses for the Paralympic Games in Rio de Janeiro and CAL will operate a charter to Calgary in Canada with 66 horses. In mid-September,
66 horses will be transported for the Longines Masters in Los Angeles. CAL has extensive experience of transporting live animals gained over 37 years, whether its horses, cattle, exotics or pets and equipment includes horse stalls and collapsible horse stalls, pet containers and customised shipping systems. LACHS also has the benefit of being located in the centre of the European ‘gold triangle’ between Germany, the Netherlands and France, as well as a temperature controlled warehouse, dedicated trained personnel, indoor loading abilities for livestock, quarantine facilities, fast service and 24/7 operations. CAL comments: “Over the past 10 years, CAL has transported
almost half a million live animals all over the world. From poultry to exotic animals, family pets to thoroughbred horses, livestock to bees we have the experience, team and tools to take care of live animal cargo.”
Stansted BIP facility has capacity for future growth Stansted Airport has welcomed new non-European services in recent years, which have benefitted from the ability to fly horses into the UK, Stansted Airport Border Inspection Post (BIP) manager, Shane Stephens (pictured) tells Air Cargo Week. He says Stansted welcomed nearly 1,200 horses from outside the European Union in 2015 and nearly 600 departing domestically and internationally, and exports are likely exceed those numbers this year. Stephens says Stansted’s BIP facility was purpose built for importing horses and has plenty of capacity for future growth. He says: “Over recent years the airport has attracted new services by non-European based carriers including Qatar Airways, China Southern and Turkish Airlines. “These carriers are able to benefit from the ability to fly horses into the UK at their freighter gateway as other existing customers including Panalpina, Martinair, Asiana and FedEx already do.” Stansted is located near Newmarket, the heart of the UK’s bloodstock industry, so the majority of shipments are for equines. Stephens says this means Stansted handles a lot of interesting shipments: “The airport receives many of the world’s finest thoroughbred race horses and polo ponies, but some of the more interesting flights this year have been the Oman Cavalry which was flown in across two B777 freighters to celebrate the Queen’s 90th birthday.” It also handled flights carrying horses for several teams for the Rio Olympics and has flown polo ponies from South America. The BIP facility is purpose build for handling horses, offering full veterinary facilities, stables, shower facilities and alternative examination rooms. It is immediately adjacent to the aircraft stands and can handle any aircraft up to a Boeing 747-8 Freighter, and has specialist handling equipment including ramps and transport equipment to move animals from aircraft to horse box. Stephens comments: “It is imperative that the animals arrive and depart in as seamless a manner as possible – any unnecessary hassle or stress can have an impact so everything we do is planned well in advance to ensure a quick processing and easy transfer between aircraft to horse box.” He adds: “We get to see some of the finest animals in the world arrive into London Stansted, and the variety of the handling requirements you get from flight to flight ensure no two flights are the same.”
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EUROPEAN FORWARDERS
CEVA reacts to market movements with new strategy
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EVA Logistics has drawn up new strategies for the European market as it targets further growth. Chief operating officer for air and ocean at supply chain services, Helmut Kaspers (below) explains: “Our main focus in Europe is on growing outbound volumes to increase our market share. “Especially in Europe, we have significantly increased our field sales footprint and aggressively target specific volumes on focus trade lanes. As of now, we can see a really good volume performance for European exports with a good two-digit yearon-year growth in the first half (1H) of 2016.” Kaspers continues:
“When it comes to particular countries that contributed to this growth, the largest contributor was the Benelux countries. To a large extent, Italy, the UK and Germany benefited from an increase of volumes from smaller and medium-sized customers.” In CEVA’s 1H results airfreight was strong with volume growth of 6.6 per cent year-onyear (YOY) in the second quarter (Q2). Kaspers notes: “This means we significantly outpaced the airfreight market which, according to IATA, only grew 0.5 per cent YOY in the 1H of 2016. Volume growth was achieved by optimising our trade lane approach through focusing on specific trade lanes (Europe to Asia and transpacific routes) as well as our ongoing investments in field sales. We see additional volumes from small to medium-sized and multinational companies.” Challenges remain, such as over-capac-
ity, Kaspers points out: “However, especially towards the end of last quarter, we experienced more and more capacity-reducing measures from carriers, especially out of Asia. This includes flight cancellations and limiting available capacity meaning airlines only sell a certain share of their capacity. Carriers try to restrict their available capacity in order to at least stabilise the negative rate developments. “In addition, several carriers are generally announcing rate increases, the actual increase differing between trade lanes.” The biggest challenge in the second half of 2016 will be Asia’s export peak season. Kaspers expects demand to show similar patterns as in 2015, with significant shortening of available capacity as carriers realise a peak season effect can be created artificially by limiting capacity.
He adds: “We have seen the first carriers’ actions already towards the end of the Q2 during the usual high-tech quarter end when carriers cancelled flights and created constraints. Rates went up towards quarter end. Since then, rates from China and Hong Kong remain at those levels, significantly above previous year – a consequence of carriers’ focus on yield management and thinning out of freighter schedules.” Kaspers says demand, especially from Southern European countries (France, Italy and Spain) has been picking up: “We see a common trend of growing perishable exports, in particular to Asia from these countries. “The same applies to demand for perishable airfreight from Norway. Spain’s airfreight demand growth is also supported by a strong increase of fashion exports.”
DSV enjoys synergies from UTi integration
ONE of the bigger pieces of M&A news in the freight forwarder sector of late has been Denmark-based DSV’s acquisition of supply chain management company UTi. The process of integrating the two giants is ongoing – but chief executive officer, Jens Bjørn Andersen says the process is ahead of schedule and the two are “more and more becoming one”, adding the available evidence suggests UTi employees are integrating well in the DSV structure. As of August, 60 per cent of offices had been merged (100 per cent in the US), while a significant amount of rebranding under the DSV name had also already taken place. The better than expected rate of integration has in fact seen DSV update its forecasts for when it expects to realise the beneficial synergies of the union – 40 per cent of the financial reward now being expected this year, 40 per cent in 2017 and
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20 per cent in 2018. Bringing UTi into the DSV fold has of course had a significant effect on the latter’s performance and financial results. August saw DSV announce its second quarter (Q2) and first-half (1H) results, the figures including UTi-based effects in two months of the first quarter. DSV’s Q2 gross profit rose by 46 per cent year-on-year (YOY), while with an 11 per cent improvement, its earnings before interest and taxation (EBIT) in the Q2 was the company’s highest ever EBIT result. DSV’s Air & Sea division put in “a very strong performance” during the quarter, Andersen notes, despite a very weak market that saw the airfreight sector grow by just about two per cent. Q2 air cargo volumes were up by 97 per cent, volumes over the 1H of this year up by 84 per cent over the prior-year period. Most of that increase came from the effect of UTi’s acquisition but DSV nevertheless enjoyed organic above-market growth rates, in line with past years. On air cargo, total gross profit rose by 99.1 per cent YOY in Q2, gross profit per tonne by 1.3 per cent. Air & Sea revenues were hit by lower average freight rates and by lower fuel prices but, overall, Andersen observes, it was a “very, very busy quarter with plenty of focus on integrating UTi into the division”.
EUROPEAN FORWARDERS
Bolloré Logistics expands offering at Paris CDG
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rench firm Bolloré Logistics is continuing to develop its operations at Europe’s second-busiest airfreight gateway - Paris Charles de Gaulle (CDG) Airport. The Roissy CDG hub, benefits from the range of international air connections offered by the Paris gateway, and the more than two million tonnes of cargo passing through the airport just last year. The Bolloré facility covers over 25,000 square metres of space, brought together the four sites at CDG previously operated by various companies that have since been brought together under the single Bolloré Logistics brand (most notably SDV). Fully operational under the Bolloré name since February this year, the Roissy hub incorporates state-of-the-art technology as well as sheer scale, says Claude Picciotto, director of airfreight in the middle office and represents the consolidation of the firm’s “number one position” in the French logistics market. Development is continuing, the first half of next year will see another 5,000 square metres added to the footprint of the site and by mid-2017 it will cover 30,000 square metres, and there
is further space for expansion when required, Picciotto confirms. More expansion may well be needed. Imports through the hub rose by 27 per cent last year, although export traffic remained flat. In terms of exports, primary markets include the Asia-Pacific region (telecommunications equipment and IT sourced from China being particularly important) and the Indian sub-continent (garments and the like being flown in from India and Pakistan, for example). Aerospace-related shipments, from Boeing and Airbus, flying in from the US was a strong source of import traffic.
In terms of exports, Bolloré’s traditional strength in the African market continues to be valuable. Although oil and gas-related volumes are down due to the fall in oil prices, cargo shipments to Africa remain an important source of airfreight traffic out of CDG for the company. Plus, French fashion items are being exported to the Asia-Pacific region, while cosmetics and perishables moving to the Middle East also represent a source of export business. One growing area of business for the hub is pharma – the facility has its own temperature-controlled storage areas and is certified to IATA’s Center of Excellence for Independent Validators (CEIV) Pharma standard. Furthermore, Picciotto and his team are also focusing on increasing the volume of valuables shipments through the hub – it offers the latest in high-security security measures with this in mind, he points out. “It’s a magnificent platform,” Picciotto says, and is contributing to Bolloré’s generally strong performance this year. With further expansion of the site planned, it seems its contribution is only likely to grow.
K+N looks into the future
SWISS freight forwarder Kuehne + Nagel (K+N) announced in August the launch of its latest digital offering - gKNi short for global Kuehne + Nagel indicators. The technology uses logistics data and predictive analytics – based on K+N’s insights in to markets and data on global trade flows – to offer insight into the very recent past, the present and the very near future on economic developments. Intended for logistics customers as well as corporations, governments, banks and investors, gKNi adds to K+N’s core KN FreightNet product, a digital service providing instant quotes, online booking and track and trace for air and sea shipments. Making the most of opportunities offered by digitisation within the logistics industry is a key strategy for the supply chain services provider. K+N chief executive officer, Detlef Trefzger (pictured) says: “Kuehne + Nagel has always been a frontrunner in the transport and logistics industry in applying new technologies, information systems and process optimisation. “The company is currently focusing on new technologies, optimised processes and data. With its knowledge and experience to handle big data, predictive analytics and cloud technologies, K+N is able to further improve the efficiency and effectiveness of its customers’ transportation needs and supply chains.” Trefzger continues: “K+N will continue to develop digital products and solutions which enable its customers to optimise their supply chains. Especially in the commoditised area of transportation, the KN FreightNet suite of solutions will enable our customers to quote-book-trace their shipments in a very efficient way. These services will be enhanced and expanded further. “We explore, apply and evaluate all technologies in dedicated Kuehne + Nagel Innovation Centres in Singapore and Utrecht. For any application the customer benefit and the proof of the solution or technology in a real business case are essential before global roll-out.” Also on the radar is the e-commerce phenomenon that may well radically alter global logistics. “E-commerce fulfilment is our fastest-growing industry segment,” Trefzger says. “With KN FreightNet, we are able to connect in a fast and efficient way with all e-commerce platforms, thus enabling their customers to execute their logistics requirements via these platforms easily.”
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SCANDINAVIA
SAS Cargo working towards gaining CEIV Pharma
T
he pharmaceutical cargo sector is proving to be a major opportunity for air cargo carriers and SAS Cargo is targeting growth in the market. To grow its pharma volumes, the Scandinavian airline is working towards gaining the International Air Transport Association (IATA) Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma) certification. SAS Cargo president and chief executive officer, Leif Rasmussen (pictured) says it is in response to the growing pharma industry, which relies on air for speed, consistency and efficiency in delivering high-value, time-sensitive, temperature-controlled products. He explains: “We at SAS Cargo have acknowledged the need to get on the right track to achieve pharmaceutical handling excellence. In order to do so we are securing the entire SAS Cargo cool chain through CEIV certification. “This, as well as including a new pharma product in our product offering, is received positively by our customers and we expect the pharma cargo sector to increase as a result.” SAS Cargo is investing in its three major hub stations in Scandinavia (Copenhagen, Stockholm Arlanda and Oslo) in cooling facilities and controlled room temperature facilities to meet the standards required by the pharma industry. Rasmussen notes the entire cool chain is undergoing IATA CEIV certification in order to secure reliable shipments of temperature-sensitive pharma. The IATA CEIV certification during this autumn includes procedure training of staff at all stations, a full upgrade of all facilities and sales control as well as quality management. Rasmussen says SAS is increasingly moving more temperature-sensitive medications such as insulin, vaccines
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and bio-tech medicines, but being in Scandinavia it also transports considerable volumes of seafood. This he says needs to be effectively segregated from pharma products, and SAS needs to apply to the segregation rules in order to avoid contamination as well as secure enough capacity for the different items. Other investments the carrier is making is developing an enhanced booking portal which the airline says has been positively received by customers and new features have been introduced into the portal, which will offer customers an easy and efficient online booking experience. SAS has recently launched services to CEIV certified hub
Miami the focus
Miami International Airport from Scandinavia and together with its large trucking network and interline partnerships, it is set to expand in the Southeastern US and Latin America. The main trade lanes SAS is targeting unsurprisingly is an increase in business between Scandinavia and the US. The carrier is also upgrading and developing its fleet with a strategy to replace older aircraft with newer ones and is increas-
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ing the number of fuel-efficient aircraft into service on both short and long-haul flights such as the new Airbus A330 (from 2015), Airbus A320neo (from 2016), and Airbus A350 (from 2019). As for the Scandinavian air cargo market as a whole, Rasmussen says there is a lot competition from many carriers flying direct in to Stockholm, Oslo and Copenhagen, especially during summer when it competes with a lot of extra belly (lower deck) capacity. However, SAS Cargo is still the largest carrier to, from and within Scandinavia so has a strong market position, while its extensive trucking network ensures fast deliveries to all major cities in Scandinavia and Northern Europe. It will come as no surprise what the strongest cargo sectors are for SAS, as Rasmussen notes: “Seafood is currently very successful in both the Asian region, as well as in the US market. “However the pharma industry within the “Øresunds region” also gives us a healthy market situation, where transportation time and high value products play an important role.” Much of the Scandinavian airfreight market is dominated by the movements of seafood, but there are other sectors which SAS is seeing good opportunities, notably perishables, pharma as mentioned previously, and also interestingly - spare parts.
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NEWSWEEK Vietnam orders 40 Airbus aircraft
Vietnamese carriers have been busy ordering Airbus aircraft, with orders for A320s, A321s and A350s during a state visit to Vietnam by the President of France. During the visit, Jetstar Pacific Airlines finalised a purchase agreement for 10 A320ceos, VietJet placed a firm order for 10 A321ceos and 10 A321neos while Vietnam Airlines signed a memorandum of
understanding for 10 more A350-900s to be used on non-stop flights to the US. Airbus president and chief executive officer (CEO), Fabrice Bregier signed the deals with Vietnam Airlines president and CEO, Duong Tri Thanh, VietJet president and CEO, Nguyen Thi Phuong Thao and Jetstar CEO, Le Hong Ha, in the presence of French president, Francois Hollande and Vietnamese president, Tran Dai Quang. (Pictured left to right, Hollande, Bregier, Quang and Thanh). Thanh says: “The start of non-stop transpacific services with the A350 is yet another example of the commitment we have at Vietnam Airlines to strengthen our position as one of the world’s leading international carriers.” After the VietJet signing, Bregier says it is benefitting from significant economies from operating a single aircraft family.
Manston night flight war of words
A
war of words has flared up as the US investment firm attempting to acquire Manston Airport dispute claims made by a campaign group about the potential for night flights. RiverOak Investment Corp has been trying to acquire the site since it closed in May 2014, and has been trying to use a development consent order (DCO) to gain control, with the intention of turning Manston into a cargo hub capable of handling at least 10,000 air traffic movements per annum handling up to 600,000 tonnes a year. The US investment company has previously said it plans to turn Manston into a cargo hub similar to Liege Airport in Belgium or Germany’s Cologne Airport. Campaign group No Night Flights claim supporters living under the flight path would be more affected by plans than when Manston was originally open, saying it will be “a noisy, polluting, over-developed space” that will do nothing for residents, the environment or future prosperity. In response, RiverOak says the comments, published in a local newspaper contained “numerous inaccuracies”. RiverOak says Manston is not “undeveloped land”, it will protect Manston’s heritage and it used accepted methodology for assessing noise disturbance of 18 night flights, which do not relate to its plans for the airport. The US firm says: “RiverOak understands that
the reintroduction of airport operations is of concern to some residents and we remain committed to being absolutely transparent at every stage of the DCO process to enable the community in East Kent to make informed decisions on our proposals.” “Indeed, it is for this reason that our environmental studies will be so thorough and will be published for consultation, along with all other aspects of our proposals, as soon as they are ready.” In direct response to the claims about night flights, RiverOak says: “It is frustrating to see this method statement being so willfully misused, causing unnecessary alarm to some members of the local community.” The No Night Flights released its own report accusing the answers from RiverOak’s public consultation meetings of being underwhelming or misleading. It says: “RiverOak provided very little information to tell people about their plans and nothing at all to tell them what the impact of a cargo airport might be on the area. Most questions were answered with: “We are not at that point yet.” The group also says RiverOak answers gave a lack of clarity or were contradictory. It says RiverOak was unable to answer questions such as where the figure of 600,000 tonnes of freight came from, measures to compensate local residents, the number of jobs or if the airport was going to have night flights.
IAG upgrades Madrid animal hub IAG Cargo has enhanced animal handling capabilities at Madrid-Barajas Airport. From this month, every pet travelling through Madrid will benefit from a full veterinary check-up and a new 25-strong care team dedicated to ensuring safe transit of each animal. The veterinary check-up, undertaken by qualified staff from the Hospital Veterinario Alberto Alcocer will take place every two hours with staff monitoring food and water intake. In addition, investments in bespoke inhouse staff training on animal handling, welfare regulations and container requirements are the first phase of enhancements
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into IAG’s Live Animal Product at its Madrid hub and manager for global products, Daniel Johnson says: “We pride ourselves in going above and beyond requirements set out by IATA Live Animal Regulations. “Having worked closely with the City of London Animal Reception Centre at Heathrow, we have an unrivalled understanding of the needs of a variety of species, including endangered animals.”