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The weekly newspaper for air cargo professionals Volume: 18

Issue: 36

14 September 2015

Middle East and Africa growing volumes

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he Middle East and Africa were the glowing regions of the industry in July, as all other regions saw falls in demand, according to the International Air Transport Association (IATA). Airfreight volumes fell yearon-year (YOY) across the globe in the month compared to July in 2014, the association reports. Volumes measured in freight tonne kilometres (FTK) declined YOY by 0.6 per cent, which IATA says is in line with weaker global economic growth. IATA says the most pronounced falls were in the Americas, where international FTK volumes were down YOY by more than 5 per cent compared to same month last year. “The recent stock market turmoil shows that investors have real fears about the strength of the global economy. And the disappointing July freight performance is symptomatic of a broader slowdown in economic growth,” says IATA’s director general and chief executive officer, Tony Tyler (pictured).

2015 IS A SUCCESS SO FAR FOR CARGOMIND GEODIS SEEING PRESSURE ON YIELDS move forward and take action is the message IN ASIA

Tyler adds: “The combination of China’s continued shift towards domestic markets, wider weakness in emerging markets, and slowing global trade indicates that it will continue to be a rough ride for air cargo in the months to come.” Demand only grew in the Africa and Middle East regions, which saw surges in FTKs of 3.6 per cent and 10.8 per cent respectively. Africa’s capacity rose by 11.4 per cent, and growth has come despite underperformance of the sizeable Nigerian and South African economies. The Middle East saw capacity expand a substantial 18.3 per cent,

and the strong monthly figures were also slightly subdued due to the timing of Ramadan, which took place in June this year, as opposed to July in 2014. Asia Pacific continues to see a slowdown and IATA says the region has experienced a notable decline in imports and exports with Chinese manufacturing particularly struggling. FTKs fell YOY by 1.9 per cent in July, but capacity rose by 5.3 per cent. Three regions suffered in July, notably Latin America where carriers saw a YOY fall in FTKs of 5.1 per cent. Capacity expanded by 3.2 per cent. European airlines saw a YOY fall in FTKs in July of 1.5 per

cent compared to a year ago and capacity rose 3.9 per cent. Central and Eastern Europe have seen trade fall 10 per cent since the end of the first quarter. In North America, FTKs fell 3.7 per cent and capacity grew by 5.4 per cent.

Next stage reached in cargo airship development Development of the world’s first vertical takeoff and landing (VTOL) capable heavy-lift cargo airship has reached the next stage. The Aeroscraft Corporation (Aeros) progamme has completed the engineering scale down prototype “Dragon Dream” phase, and is ready to enter the design freeze phase for the ML866 (66-ton) Aeroscraft cargo airship. Aeros is currently developing main component and test articles for the patented buoyancy management system known as COSH, or control-of-static-heaviness, as well as structural components for the operational Aeroscraft. The heavy-lift, variable-buoyancy cargo airship features an onboard buoyancy management system, rigid structure, vertical take-off and landing performance, and opera-

tional abilities at low speed, in hover, and from unprepared surfaces. Aeros’ COSH technology allows airships to address global logistics applications for the first time, the company says. This new capability will reduce the time and cost involved in deliv-

ering large container cargo around the world, especially to areas lacking in infrastructure. The company says the aircraft “is unique in terms of its capability, size, cargo handling and propulsion, featuring infrastructure independence with VTOL capability at max payload”. Aeros is planning to complete the configuration design freeze for the Aeroscraft by the end of 2015, as part of fleet development efforts now underway to satisfy global demand for the vehicle’s new logistics capabilities, it explains. Aeros chief executive officer, Igor Pasternak, says: “We are excited to reveal production is underway on the 555-ft long ML866, and committed to achieving FAA operational certification for the first deployable Aeroscraft in approximately five years.”

cargo infrastructure drive in sweden

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Nippon scraps freighter order BOEING says Nippon Cargo Airlines has scrapped orders for four Boeing 747 Freighters valued at around $1.5 billion. Nippon Cargo still has two of the aircraft on order after taking delivery of eight 747-8 freighters since July 2012, according to Boeing’s website. The cancellation comes as the air cargo market struggles to gain momentum amid China’s economic turmoil and a fall in yields. Through the end of August, Boeing had just 29 unfilled orders for the 747-8. The freighter version is the company’s second most expensive aircraft, with a list price of $379.1 million. According to Boeing’s 2015 Current Market Outlook, 14,330 new aircraft, worth $2.2 trillion will be needed in the Asia Pacific region by 2034. In Europe. UK carrier Jet2.com has ordered 27 Boeing 737-800s, valued at around $2.6 billion at current list prices. Jet2.com operates an all-Boeing fleet of nearly 60 aircraft. The aircraft will be used to take package holiday and flight only customers to leisure destinations in the Mediterranean, and European cities.


NEWSWEEK

Aeroflot deal to acquire Transaero approved

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eroflot Group’s board of directors has approved the purchase and restructuring of struggling Russian airline Transaero. The directors met on 3 September where they discussed Transaero’s financial position (the airline’s debts have reached an estimated $1 billion) and the results of an earlier interagency meeting with the government’s first deputy prime minister Igor Shuvalov, who had approved the acquisition. Having decided ‘that it was necessary to involve Aeroflot Group in the restructuring of Transaero’, the directors instructed Aeroflot management to develop proposals around a number of urgent measures. These include the transfer of operational management of Transaero to Aeroflot, and ensuring corporate control over the bailout procedure. A tender offer from shareholders of

Transaero was considered. This consists of an offer to sell at least 75 per cent plus one share of Transaero within 24 days from the date of the offer at a price of no more than one rouble for the tendered shares. The board of directors approved a motion to create a working group consisting of members of the committees of the board of directors and the company’s man-

agement, to hold negotiations regarding substantial restructuring of Transaero’s debt. “In the whole time I have served as chairman of the board of Aeroflot this is undoubtedly the most important and significant decision that we have taken, and one that will be of transformational significance for Aeroflot,” Aeroflot’s chairman of the board, Kirill Androsov says. The Aeroflot Group is 51 per cent owned by the Russian government and is the country’s largest carrier. Transaero is Russia’s second largest airline.

Tonnage fall again for Finnair Cargo

FINNAIR CARGO has seen another double-digit fall in cargo volumes in August, dropping by 10.3 per cent year-on-year (YOY) to 11,398 tonnes, because of weak European traffic. August saw the second lowest YOY fall of 2015 after February, when cargo volumes dropped by 6.8 per cent to 9,785 tonnes. Cargo volumes fell by 17.1 per cent YOY to 9,346 tonnes in January, before the smaller decline in February and then it dropped by 16 per cent in March 11,299 tonnes. April saw a 19.2 per cent YOY fall to 10,233 tonnes before a 20.3 per cent drop in May to 10,301 tonnes. In June, cargo volumes fell by 15 per cent to 10,940 tonnes and then 16.2 per cent to 11,150 tonnes in July. Between January and August cargo volumes fell by 15.3 per cent to 84,453 tonnes. Year-to-date (YTD) European tonnage is down 13.6 per cent to 13,623 tonnes. YTD North Atlantic tonnage is up 2.1 per cent to 5,221 tonnes and Asia is up 0.2 per cent to 53,924.

Air Canada launches eAWB campaign AIR CANADA CARGO has launched a new campaign promoting the benefits of the electronic air waybill (eAWB) and urging customers to adopt it. The Go Digital initiative will run until the end of the year. Messages will be sent promoting the benefits of moving away from paper air waybills, and outlining strategies for freight forwarders and shippers to get on board. “Our industry generates a large amount of paper, and we welcome any effort to reduce this practice, which is wasteful as well as inefficient”, says Air Canada Cargo vice president, Lise-Marie Turpin. “As an air carrier, speed is what we’re all about. Any move towards digitisation is an advantage for us – technology speeds up service at our counters and reduces errors, which in the end helps us provide better service to our customers. It’s a win-win”, she adds. Tools have also been developed that will make it easy for customers to switch to eAWB, the airline explains. These include e-Booking, which allows Air Canada Cargo account holders to book and manage shipments online and submit eAWBs. In addition, cargo portal service (CPS) users can book both specialised and general cargo shipments with Air Canada Cargo, submitting an eAWB via CPS. “Developing these functionalities has been a priority for us this year,” says Turpin. “We’ve also made it a priority to turn up eAWB across our network.”

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Global airport cargo volumes rise a fraction in July

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reight volumes stagnated in July butvolumes still grew by 0.2 per cent worldwide, as large increases in Africa were not able to make up for slowdowns in countries including China, according to Airports Council International (ACI). In Africa, freight increased by 15.8 per cent year-on-year (YOY) in July, but the Middle East fell by 0.9 per cent in the same month. Asia Pacific saw no growth while Latin America-Caribbean and North America both saw increases of 0.1 per cent and Europe was up 0.3 per cent. ACI says China and oil producing nations have suffered slowdowns, which has affected hubs across Asia. ACI says: “The strong correlation between changes in airfreight volumes and the business cycle coupled with the fact that a high concentration of the world’s major airfreight hubs are located in the Asia Pacific region has inevitably

resulted in a slowdown.” Hong Kong International Airport is one of the airports suffering from a weak July. It saw cargo volumes fall by 1.9 per cent YOY to 363,000 tonnes in July, which the airport says is because of falling transshipments, exports and cargo throughput to and from China, Taiwan and Europe underperforming. ACI says North America has been mixed, with

Memphis International Airport, a FedEx hub and Louisville International Airport, a UPS base, have seen growth, while Anchorage Ted Stevens International Airport and Miami International Airport (pictured) have both declined. In July, Memphis saw a YOY increase of 2.5 per cent to 364,224 tonnes. ACI says Louisville saw a YOY increase of 4.2 per cent but the airport did not have any tonnage figures available. Miami saw freight fall by 2.3 per cent in July to 169,553 tonnes. ACI says Anchorage saw freight fall by 5.6 per cent but the airport did not have any tonnage figures available. The year-to-date (YTD) results are more positive. Worldwide freight was up 2.9 per cent. Africa saw the largest increase, of 11.5 per cent, followed by the Middle East, at 7.2 per cent. North America was up by 4.3 per cent while Asia Pacific saw an increase of 2.4 per cent. Latin America-Caribbean was up 0.8 per cent while in Europe it rose by 0.5 per cent.

NEWS WEEK WorldNews JET AIRWAYS is now accepting e-bookings via the Worldwide Information Network (WIN) e-platform. The carrier’s acting vice president, James Gilliard, says Jet Airways has been connected with WIN since spring 2015 for electronic air waybills and has seen steady growth in electronic transactions with small-medium enterprise forwarders on the platform. FREIGHT forwarder Blue Bird Logistics has launched ‘e2ecargo.com’, India’s first e-platform for the exporting community. The platform allows exporters to book general cargo air export shipments to 40 global destinations. Blue Bird says the booking process, normally taking between four and six hours, can now be completed in less than five minutes.

Growth continues at Brussels BRUSSELS AIRPORT has seen cargo volumes increase by 8.2 per cent year-on-year in August to 37,387 tonnes because of a big rise in freighter traffic despite a fall in bellyhold. Total cargo traffic rose by 14.9 per cent in August to 26,036 tonnes, with freighter volumes increasing by 34.9 per cent to 11,138 tonnes. Integrator tonnage increased by 3.4 per cent to 14,898 tonnes while bellyhold cargo fell by 4.4 per cent to 11,351 tonnes. The airport says it has been helped by Ethiopian Airlines starting four times a week freighter services to Brussels from Addis Ababa in January. Brussels Airport says: “Cargo transport at Brussels Airport displayed healthy growth of 8.2 per cent in August. The transport of cargo on board passenger planes fell slightly by 4.4 per cent. Cargo transport in passenger planes is extremely sensitive to economic fluctuations.” Between January and August, cargo volumes rose 10.6 per cent to 325,868 tonnes, with freighter tonnage increasing by 14.6 per cent to 229,859 tonnes. Freighter aircraft tonnage increased by 25.5 per cent to 98,234 tonnes and integrator volumes were up 7.6 per cent to 131,535 tonnes. Bellyhold cargo was up two per cent to 96,009 tonnes. Cargo flights were up by 12 per cent from January to August to 8,515. In August they were up by 13.3 per cent.

Volga-Dnepr delivers Cyprus trees

CYPRUS trees grown in Germany and destined to improve the landscape of Uzbekistan’s capital city Tashkent have been transported by Volga-Dnepr Airlines. The 28 trees, each 7.5 metres tall, were transported to Brno in the Czech Republic onboard one of Volga-Dnepr’s IL-76TD-90VD freighters for Russian logistics company Haltec-Avia. Volga-Dnepr sales executive, Vyacheslav Shakhov, says: “Our main priority was to transport the trees in the shortest possible timescale. They were packed in protective boxes that were too tall to be loaded using the aircraft’s onboard crane system so we brought in our own special loading equipment which enabled us to load them using the aircraft’s ramp and rail system and a forklift truck.” The trees are being planted as part of a reconstruction project in Tashkent for the city’s preparations to host the 2016 Shanghai Cooperation Organisation (SCO) summit.

ACW 14 SEPTEMBER 2015

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NEWSWEEK Atlanta service for CAL Cargo

CAL CARGO AIRLINES has announced a new round-trip service from Atlanta, Georgia (US), to Liege Airport in Belgium. The service includes two weekly rotations, with the first flight set to depart from Liege on 25 September. CAL Group chief executive officer, Eyal Zagagi, says: “CAL’s fleet of Boeing 747-

400s with nose door and team of specialty experts in DG (dangerous goods), pharma, live animals and oversize/overweight goods combine to answer the unique needs of the Atlanta catchment area. “Until today, Atlanta was an offline station, with service to/from the European Union via our JFK (New York) operation. We found tthe Atlanta catchment area has great potential for us, so to improve the service we offer to this market we are adding Atlanta as an additional online station.” He adds it is another step in CAL’s growth strategy, strengthening its US network and foothold and the carrier looks forward to increasing its presence throughout the year. CAL Cargo services the Atlanta area with local general sales agent ATC Aviation.

Swissport strikes deal with Oman

SWISSPORT INTERNATIONAL is to provide cargo handling services for Oman Air in Europe. The newly-inked contract will see Swissport provide full cargo handling services at Heathrow Airport, Munich Airport, Frankfurt Airport and Paris Charles de Gaulle Airport. The Heathrow services began on 3 September. There will be a phased transition at the other three airports, with completion due by 1 November this year. Swissport and Oman Air hope that this one-stop approach will lead to increased standardisation in process flows, with a common service level agreement and KPI measurements. Oman Air’s chief officer service for delivery, Andrew Walsh, says: “In support of our world class service, Oman Air heavily relies on the punctuality and reliability of the quality standards of its ground and cargo handlers. After a careful review we are confident that Swissport will be the right partner

in supporting us towards our journey to become the best.” This is the first major contract win for Swissport since the Zurich-based cargo handler was bought by the HNA Group, the owner of China’s fourth-largest airline Hainan Airlines. HNA bought Swissport International from PAI Partners SAS for 2.73 billion Swiss francs ($2.81 billion) in July 2015. It will run Swissport as a stand-alone business within its group, HNA said when announcing the acquisition. Swissport’s executive vice president global cargo services, Nils Knudsen, says of the Oman Air deal: “We are proud of this intensified cooperation. It shows Swissport’s dedication to highest performance and quality. “We are very much looking forward to developing our global relationship with Oman Air and establishing a fruitful partnership in the coming years.”

AirBridgeCargo opens ninth Asia station

AirBridgeCargo Airlines (ABC) has started twice weekly flights from Moscow to Singapore’s Changi Airport, its ninth station in Asia. The direct flights, using a Boeing 747 Freighter, launched on 3 September. They will operate on Thursdays and Sundays, offering onward connections to Hong Kong and other ABC freight destinations. ABC says that its dedicated cargo services to Singapore will facilitate the movement of cross-border shipments and enhance the country’s product offerings for its customers in Asia. The airline explains it now provides more than 500 weekly deliveries from Asia, all with a delivery time of less than 48 hours, including

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handling procedures. “With the addition of this route, ABC is continuing its strategy to provide customers with better access to point-to-point deliveries within its global route network, while providing them with on-time, reliable and high quality service levels”, says ABC’s senior vice president of sales and marketing, Robert van de Weg. “Singapore, via ABC’s Moscow hub, will be directly connected to gateways like Amsterdam, Frankfurt and Milan without trucking. Asia is a vitally important market for AirBridgeCargo and we look forward to further growth in this dynamic region.” Changi Airport’s assistant vice president for cargo and logistics development, James Fong, sees the new service as a significant milestone for Changi, opening up new cargo opportunities between Singapore and Russia. “Logistics players, who were previously limited by capacity constraints between Singapore and Russia, now have a direct option to transport large freight shipments as well as general cargoes between the two countries. The enhanced air connectivity will foster further trade between both countries which is already growing steadily”, Fong says.


EUROPEAN FREIGHT FORWARDERS

Challenging times for QCS as markets slowdown

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uick Cargo Service (QCS) is making the best of difficult market conditions in Western Europe and in other regions of the globe. QCS president, Dieter Haltmayer, has been in this business for decades and explains to Air Cargo Week: “Business is a little slow at the moment,” and he adds August is being characterised in Germany – as across much of Western Europe – by workers taking extended holidays and trade in general slowing. This year has generally been difficult, Haltmayer notes. Year-on-year, QCS’s revenue has dipped by 2.2 per cent so far in 2015, but QCS will be far from the only European freight forwarder to have experienced a small decline, he insists. Import traffic from China, in particular, has been slow, although exports to Shanghai and Hong Kong, such as machinery and electrical

parts, have held up well. Much outbound volumes are destined for big German companies like BMG and Daimler-Benz which have set up operations in China. But this in itself could be a problem for the future, Haltmayer believes, as Germany is exporting its knowledge and expertise to what is likely to be a lower labour cost economy for many years to come, perhaps establishing an economic power with which it will be difficult to compete. The US market has proved somewhat stag-

nant of late, after a strong start thanks to the US West Coast port disruptions. Haltmayer is hoping for better things over the remainder of 2015. Another challenge that Germany and its airfreight business will have to meet is the threat to its traditional role as a cargo hub for much of Central and Western Europe. Dubai International Airport’s growth as a gateway to Europe threatens the dominance in this role of gateways such as Frankfurt Airport, Europe’s busiest airfreight hub. Space constraints at Frankfurt and Heathrow Airport make it difficult for them to meet the challenge of gateways that face no such space limitation, and seemingly little in the way of

financial constraints either. The nature of the European airfreight business is changing in other ways, too and e-freight is changing the way the industry works, Hatmayer remarks, while the trend towards ever smaller and lighter shipments may threaten the role of the dedicated all-cargo aircraft, a position also put under serious threat by the cargo capacity of many of today’s long-haul passenger aircraft. QCS is among the numerous European freight forwarders, dealing in specialised cargo, meeting the needs of niche markets that require customised service. For QCS, these markets include the urgent delivery aircraft-on-ground segment and the pharmaceutical business, for which it maintains specific departments within the business. With regard to the pharma shipments, the forwarder has its own cool-chain container service flying to Nigeria, Egypt and Dubai. “QCS guarantees the end-to-end temperature-controlled transport of pharmaceuticals and perishables to its customers,” Haltmayer observes.

Dachser ramps up in France with new facilities DACHSER has opened up two new facilities in the greater Paris area - one at Wissous, near Paris Orly International Airport, and one at Pantin. The logistics services provider has other sites around the French capital, including three warehouses and an office of its air and sea division at Paris Charles de Gaulle Airport. The two new terminals are dedicated to road-based logistics, airfreight being handled by the Dachser Air & Sea facility at Charles de Gaulle. Dachser France Air & Sea Logistics managing director, Vincent Touya, says: “Branches are closely linked to the

Dachser network in Europe. In fact, Dachser has pole position in the European groupage market (and) by efficiently linking all our networks, we are able to offer our customers integrates supply chain solutions worldwide, whether goods are transported by air, sea or road.”

2015 a success so far for Cargomind CARGOMIND is on the up, according to the freight forwarder’s president Uwe Glaser (pictured) who explains last year was successful, but 2015 is even better to date. The cargo agent is expanding and now has 20 offices across Europe, offering air, sea and road forwarding, as well as warehousing services. It has an annual turnover of more than 50 million euros ($56 million) and, says Glaser, while it has done well in the German and Polish markets, Cargomind’s airfreight business has been on the rise across Europe. Glaser is on the board of the Cargo 2000 (C2K) airfreight quality improvement project. C2K, a programme for creating and implementing quality standards across the

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global airfreight industry that is supported by the International Air Transport Association has been a big success, he suggests.


EUROPEAN FREIGHT FORWARDERS

Geodis seeing pressure on yields

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he global airfreight market is pretty flat right now, and air cargo traffic through Europe remains little better than stable, according to Geodis. The firm’s global product director for airfreight, Henk Venema (pictured), says that European outbound volumes have not seen growth this year, while yields have also been under pressure. Venema points to declining confidence in China’s economy that has hit both exports out of and imports into that most important of airfreight markets, while there remains significant over-capacity on the China sector. The market “is what it is”, Venema remarks. He says forwarders like Geodis can’t change that, but they can adapt their own strategy to maximise the value of the opportunities on offer. And Geodis is doing just that, he says. Most notably, just last month, the company confirmed its decision to acquire Ozburn-Hessey Logistics (OHL), one of the world’s biggest third-party logistics companies. OHL will, in time, be rebranded under the Geodis banner, and integrating its people and its operations in North America within the compass of Europe’s fourth-largest supply chain specialist will take time and effort.

Another focus of late has been the full integration of the Central and Eastern European operations of Geodis Calberson into the wider Geodis business ambit. Geodis Calberson has more than 30 years of activity in Central and Eastern Europe, as well as in the Middle East, Far East, the Caucasus and Central Asia. That process has formed part of a wider rebranding that was launched in May and a reorganisation in business lines that has seen entity names such as BM, CalbGE and Wilson all integrated into the one Geodis entity. Finally, Venema points to the heavy investments that Geodis has been making in Germany. It has chosen Frankfurt to act as a hub gateway, and has invested in new freight managers, new sales teams and infrastructure in Germany’s air cargo capital.

Second UK airfreight office for Velta International VELTA INTERNATIONAL has opened a second UK airfreight office in Manchester, having initially opened their Heathrow Airport office at the beginning of 2014. The freight forwarder says it has undergone an extensive expansion, following an “ever increasing demand for their provision of supply chain solutions”. The company says the “new office enables the team to handle airfreight services more efficiently; providing direct control and consistency on all shipments from the North of the country, as well as cutting down transit times for client’s goods that previously would have entered the country via Heathrow”. Additionally, it allows Velta to offer the export of goods from the North of England, and comes at a time when the Government has pledged funding for the development of the ‘Northern Powerhouse’ to boost the economic growth of major cities such as Manchester, Liverpool and Leeds,

as well as the surrounding areas. The opening of the new office comes months after Velta established a Glasgow badge, enabling faster clearance on goods arriving into the UK via Scotland, and enhances the business model already offered across the organisation on the transportation, storage and fulfilment of goods.

Logwin expanding its business in Poland LOGISTICS service provider Logwin is building up the Polish arm of its business. In its latest move, the company has expanded its sales office in Krakow, although Logwin operational staff have only been based there since July. The Krakow branch handles both air and sea freight shipments and, the company says it is seeing more Polish exports, spurred by an economy that is enjoying steady growth, which has encouraged it to build on its footprint in the southern Polish city. Logwin’s Krakow branch manager, Bartosz Hruszka, explains: “In recent years we have built up close relationships with companies in the Krakow area and accompanied their growth. We speak the local languages, are familiar with the conditions on the ground and enjoy good relationships with airlines, shipping companies and customs authorities. This allows us to help our customers to open up new markets.” Logwin Air and Ocean, managing director for Europe and the Middle East in Warsaw, Piotr Sprzczka, expects to see Poland’s airfreight volumes grow yet further in the near future. At present more than 100 tonnes of air cargo are moved by air each month by Logwin in the Polish market. “We are offering airfreight to and from Frankfurt with daily truck shuttles,” Sprzczka notes. Warsaw International Airport’s traffic consists mainly of narrowbody aircraft (exceptions being widebody services of the national flag-carrier LOT Polish Airlines and

Emirates Airline). As such, it is not suitable for bigger cargo shipments. “We use Warsaw Airport for urgent and smaller shipments, whereas most of the cargo we handle is trucked to/from Frankfurt,” Sprzczka explains. Primary destinations for shipments include locations in the Far East of Asia, although destinations in the Middle East are “gaining importance, and we observe significant volume increase on these trade lanes,” he adds. Logwin is primarily moving goods such as fashion, cosmetics, electronics, fabric and automotive goods out of Poland for its airfreight customers. Airfreight volumes are on the increase, and import volumes have remained stable, Sprzczka says. “We expect to handle more airfreight cargo as we develop our presence in the country,” he adds. The company handled more than 146,000 tonnes of air cargo last year.

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AIR CARGO HANDLING CONFERENCE REVIEW

Move forward and take action is the message from Asia

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or a conference whose underlying but key theme was about trying to move forward, be resolute and take action, moreover outline specific actions to take to the International Air Transport Association’s (IATA) Cargo Handling Council (ICHC), the 7th Air Cargo Handling Conference (ACHC), held in Bangkok from 1- 3 September talked a lot. The conference at the Shangri-La Hotel in the heart of Thailand’s capital, saw a focus cargo handling, but also on other key industry issues. Some of these were about the sort of things that always get tongues, moving such as electronic air waybills (eAWB) and the lack of skilled personnel. Some of it such as unit load devices (ULDs) was new. What was also instructive during the three days, was that the tone not just about specific issues but about the overall industry.

“We need to change and come up with solutions to the problems we face we’ve talked for years and years,” was one fairly typical delegate comment throughout. It was surprising especially when it came from the podium and was met with broad agreement from the floor. That said there was a certain realism about things and about what was discussed and the chances of moving it on, let alone an action plan be agreed on and even implemented. “Any conference is very unlikely to reach concrete and solutions as they are not a governing body. Any suggestions that may arise from last week will take a lot of work and effort to get adopted in this Industry,” Bangkok Flight Services general manager for cargo, David Ambridge, tells Air Cargo Week (ACW). One reason why ULDs were so commented on, according to IATA’s global head for cargo, Glyn Hughes (above, middle), is the annual dam-

age they log up and the cost it represents for the industry is said to be in the region of $300 million. This was slight compared the costs of not going eAWB and e-freight but is a significant hole in the balance sheets of many cargo carriers. “The vast majority of that damage is caused by not handling in a proper way” Hughes explains to ACW. ULDs should never be put on a forklift truck or dragged along. They should be on roller dollies, he said, describing the issue as both “critical” and “very big” for the industry. What was even more surprising is this was a conference where names were not so much named as places, surprising ones, cited for being ULD unfriendly. The biggest culprit it appears is not so much the emerging, or even frontier, markets where the lack of a sophisticated aviation market might lead to poor usage. North America was openly acknowledged to be “the worst culprit” with a “shovel it in” approach leading to the use of wrong and incompatible equipment, according to Ambridge.

Fear of losing business

“For me the whole process of ULD’s going off airport needs to be much tighter controlled as the people handling those ULD’s off the airport are generally not trained, not qualified, and not certified to handle them,” Ambridge later tells ACW away from the conference sessions. His argument as to why this is is a surprising one is because of fear. What he meant was fear that asserting rights of ownership might get a partner’s back up. “Fear of losing business” came a voice from the hall. The ACHC this year was a very interactive affair, a kind of forum, where delegates spoke up and got involved. This though was a subtext, maybe the key one of this conference with the comment being made several times is that the industry has a fear of change. Another view is not so much that its fear as there seemed to be an acknowledgement of the need to change but there is no clear consensus on what to change or how. “All of the supply chain needs to refamiliarise themselves with the fact the ULD is an aircraft component” says IATA’s Hughes. “Those who are

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touching it need to be adequately trained.” That said the training on offer, or at least being taken up, is maybe not commensurate with the scale of the problem. Last year, IATA taught two courses ULD Managament and ULD Handling which were attended by 120 people for the two, Hughes says.

We have to look at ourselves

This though is just part of another problem. When it was asked from the podium how many people felt their organisations had enough talent and competence only a half dozen or so hands went up. This out of over a 100 or so attendees. There was a moments silence as that sank in. “We have got to look at ourselves,” Robert Fordree, Etihad Cargo’s head of cargo handling explains. The end of the first days conference sessions on 2 September saw delegates network in the evening at the glittering Gala Dinner at the Royal Navy Convention Hall, where they dined while taking in views across Bangkok’s Grand Palace and the Chao Phraya River. An exhibition was also well attended throughout, where exhibitors included World Flight Services, Bangkok Flight Services, Fraport Cargo Services, LUG, Jettainer, ULD Care, Vienna International Airport, Brussels Airport, Consolidated Aviation Services, ALHA Group, CHAMP Cargosystems, SACO Airport Equipment, IATA, EDIfly Innovative Software, and Hermes Logistics Technologies.


AIR CARGO HANDLING CONFERENCE REVIEW

eAWB and e-commerce under the spotlight

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he 7th Air Cargo Handling Conference (ACHC), held in Bangkok from 1- 3 September at the Shangri-La Hotel in the heart of Thailand’s capital, also saw dicussions on issues where there is progress in the industry, as opposed to work waiting to be done (although its not an either or) such as electronic air waybills (eAWB) and to a much lesser extent e-commerce. On the plus side there is progress. Etihad Cargo’s head of cargo, Robert Fordree, tells delegates the carrier is to start rolling out their eAWB within the next two weeks. He says it will be staggered and will start out as a cost. It will be a saving later he said, but not right away. This is one explanation for the slowness with which eAWB is being applied, even though the savings would be more than incidental. Another was the industry is very good at adapting to change regulators insist on, but is slow and hesistant to impose change, even when it knows it will benefit from it, upon itself. There are other reasons as well, as Worldwide Information Network managing director, John Debenedette, notes. There are many local practices in local markets that create obstacles in the implementing of eAWB he explains, describing the situation as “a patchwork”. Just how much complicated was elaborated on by CHAMP Cargosystems head of commercial operations in Asia Pacific, Oliver Neerfeld. Firstly he made the point that eAWB is very European and Middle Eastern centric and that looking at Singapore and Hong Kong is not enough for Asia. Complicating this, the regions’ other two technology savvy nations are not as advanced as their image suggest. “Many think that South Korea and Japan are far ahead but they are not,” Neerfeld says. The other example he gave was the Philippines where English is already broadly spoken but the depth of knowledge about how to use technology is very limited. CHAMP recently hosted a seminar well attended with 55 delegates from the freight forwarder community and 20 delegates from the country’s two airlines, Cebu Pacific and Philippine Airlines. “Most of these participants, especially from the freighter forwarders they didn’t have a clue,” he adds.

Issue is though not the language, but the implications of what IATA’s Hughes describes as “mega numbers of smaller shippers” who do not have the knowledge or the foresight to check the regulations. One example Hughes gave was lithium batteries sold by one bright spark who admitted via Facebook the product was being mislabeled and its size and weight misreported. It would be funny if it wasn’t so stupid or dangerous. The proliferation of e-commerce sites is a very significant concern for IATA Hughes says, adding it was working to educate those involved. Offsetting this is an awareness the opportunity the double-digit growth sector presents providing issues referred to as the three Ts - tracking, tracing and transparency - are tackled.

“There is a tremendous opportunity in doing a product portfolio for this market,” Strategic Aviation Solutions International senior executive director, Stan Wraight, points out. It is true of the market overall and while the conference made no great statement, ringing declarations or outline specific measures, it started moving towards that by discussing them thoroughly and openly.

White spot

The Philippines, Neerfeld went on to point out is an Interational Air Transport Association (IATA) white spot and has passed but has still to ratify MC99. That might be the least of the problem though according to Debenedette, who says the industry was having the wrong conversation by mobilising to express what is essentially a written document. His view, one clearly resonating with many both at the conference and beyond is air cargo must become much more like other sectors of the economy. “We actually need to have each others business systems talk to each other over free ubiquitous internet communications that’s how billions of dollars a day of transactions securely take place in retail and other commercial industries. We are not really solving the problem,” he says. “That’s a challenge” Debenedette adds in what was probably the understatement of the conference. “That’s insane” he said in its most concise summary. Behind this is the failure of the airlines to tap into e-commerce which actually warranted a session in its own right. Part of the problem here it was expressed, is that there are too many stakeholders as the industry fragments. In a sector where mobilising for change is already difficult it has become harder because of the rise of the one-person seller. The phrase ‘e-fulfillment operator’ was actually used, and eyebrows were correspondingly raised at one point.

ACW 14 septembeR 2015

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SWEDEN

Cargo infrastructure drive at Sweden’s airports

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irport operator Swedavia, and pension management company, Alecta, have signed an agreement to jointly manage 20 properties across Stockholm Arlanda Airport, Malmo Airport and Gothenburg Landvetter Airport (pictured) in a deal worth 3.9 billion kronor ($461 million). The agreement will cover 260,000 square metres of space for logistics, hangers and offices. Arlanda’s Cargo Center and Gothenburg’s Cargo North and South centre. Swedavia will be managing the development through its subsidiary, Swedavia Real Estate. When the deal was announced in June, Swedavia chief executive officer (CEO), Torborg Chetkovich (pictured), said: “The collaboration gives us a stable foundation, which Swedavia can continue to work and invest to develop our inter-

national hubs and thus enhance Swedish access.” In May, groundbreaking work started on a logistics facility at Gothenburg to be leased to DHL Express for 10 years. It is due to be completed in early 2016. The 7,500 square metre facility will replace DHL’s existing 1,700 square metres of space and will be built adjacent to the Northern section of the airport. At Airport City Gothenburg, an area of about

two million square metres is being planned for development, of which 100,000 square metres is reserved for logistics. When representatives from Swedavia, DHL Express and the facility’s building contractor, Veidekke, broke ground in May, Swedavia Real Estate property manager, Stefan Stenberg said: “DHL is a strong player, and its investment is a very good way to enhance Airport City Gothenburg as a destination for logistics and drive development in the entire region.”

Customers benefit

Logistics Park at Gothenburg Landvetter Airport. The work started with 170,000 square metres of land being prepared for constructing 100,000 square metres of logistics properties, warehouses and offices. Swedavia Real Estate chief executive, Karl Wistrand, said at the time: “This agreement is an important step in the continued development of Gothenburg Landvetter Airport as a hub for travel and logistics in the region.” Bockasjo chief executive, Joakim Hedin, said: “Based on goods flows and customer demand, we believe there is significant potential for the development of highly efficient logistics and distribution facilities here.” Swedavia made a profit of one billion kronor ($118 million) in the first half of 2015, compared to 699 million kronor for the same period of 2014. Revenue in the first half of 2015 was 2.7 billion kronor, up from 2.6 billion kronor for the same period of 2014.

At the time, DHL Express Sweden CEO, Ted Soderholm commented: “Our customers will benefit as a result through increased service quality, with faster deliveries and later pick-ups.” In February, Swedavia Real Estate signed the development agreement with logistics and property developer, Bockasjo, to develop Landvetter

Airports seeing mixed results this year

SWEDEN’S principle cargo airports have seen varied growth so far in 2015 with Stockholm Arlanda Airport and Malmo Airport seeing rises while Gothenburg Landvetter Airport is down on 2014. Between January and June 2015, cargo volumes at Arlanda increased by 4.2 per cent to 71,726 tonnes. Operator Swedavia’s director of key accounts and manager for passenger and cargo, Ylva Arvidsson, says it is because of increased capacity from Qatar Airways and Norwegian Cargo. Arvidsson notes: “Once we have capacity the market responds positively.” Malmo has seen its cargo volumes increase by 16.5 per cent from January to July, helped by AirBridgeCargo Airlines operating two flights a week to Moscow, up from one. Gothenburg’s January to July figures are 25.4 per cent below 2014 at 31,552 tonnes, as it continues to feel the effects of Emirates SkyCargo cancelling its twice-weekly freighter service in July 2014. Arvidsson says: “From March this year AirBridgeCargo increased from one to two freighters a week Malmo to Moscow and Korean Air Cargo increased from two to three freighters per week from Arlanda to

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ACW 14 SEPTEMBER 2015

Incheon.” She also tells Air Cargo Week TNT returned to Arlanda at the end of August, having been based at Vasteras Airport. In Sweden, a lot of airfreight comes in the bellyhold of passenger aircraft. Scandinavian Airlines (SAS) is increasing services from Stockholm to the US. Arvidsson says: “Belly cargo capacity will increase thanks to SAS opening Arlanda to Hong Kong [International Airport] in September and flying Chicago [O’Hare International Airport] and Newark [Liberty International Airport] daily this winter traffic programme.” SAS will start daily services from Arlanda to Los Angeles International Airport in March 2016. Norwegian will start from Stockholm to McCarren International Airport and to Puerto Rico’s Luis Munoz Marin International Airport in October this year.


ACW 14 September 15