ACW 16 July 18

The weekly newspaper for air cargo professionals No. 990

16 July 2018

A-LIST LAUNCHED

Who are airfreight’s future influencers in 2018?

Ethiopia reconnects with Eritrea

E

A VIP flight carrying Ethiopia’s prime minister touched down in Asmara on 8 July

thiopian Airlines will resume flights to Asmara, Eritrea on 17 July following agreements reached by Ethiopia’s prime minster, Dr Abiy Ahmed and Eritrean president Isaias Afewerki.

The cities will be connected with daily Boeing 787 flights, departing Addis Ababa at 09.00h and arriving in Asmara at 10.10h, with the return flight leaving at 11.00h and landing in Addis Ababa at 12.10h.

Ethiopian Airlines Group chief executive officer, Tewolde GebreMariam says it is an “honour and joy” to resume flights after 20 years, opening a new chapter of peace and

OGIERMANN JOINS VOLGA-DNEPR

friendship between the two countries following Ahmed’s visit to Eritrea.

He says: “The resumption of air links will play a critical role in boosting the overall political, economic, trade and people- to-people ties between the two sisterly countries.”

GebreMariam says Ethiopian’s flights to the Eritrean capital will provide connections to the Eritrean diaspora across the world and boost investment, trade and tourism into Eritrea.

He says: “Very quickly, we plan to operate multiple daily service and to start cargo flights in view of the huge market potential between the two sisterly countries.”

4

STANDARDS MORE CRUCIAL THAN EVER

Ethiopian Airlines’ network consists of more than 110 international passenger and cargo destinations, and it has a fleet of Airbus A350s, Boeing 787-8s and 7879s, Boeing 777-300ERs and 777-200LRs, 777-200 Freighters, and Bombardier Q-400s.

The leaders of the two countries signed a peace deal on 9 July ending the war between Ethiopia and Eritrea, meaning trade and diplomatic ties have been re-established. For 20 years there have been no flights between Ethiopian and Eritrea, no land links or telephone lines, and Ethiopia will be able to use Eritrea’s Red Sea ports again.

6

Full story Page 2

Shippers won’t get new high from drug law change

RECREATIONAL marijuana is to be legalised in Canada on October 17, making Canada the first G7 country to allow the drug nationwide and the second in the world after Uruguay.

However, shippers aiming to take advantage of the change in the law by airfreighting marijuana into the country are warned by Canada Border Services Agency (CBSA) officials that under the Cannabis Act, laws around importing and exporting cannabis will not change.

CBSA spokesperson Jayden Robertson says: “It will remain illegal to import into Canada, or export from Canada, cannabis and cannabis products without a valid permit, issued by the Government of Canada. As is the case today, permits may only be issued for limited purposes: medical, scientific or industrial hemp. The unauthorised cross border movement of cannabis will remain a serious criminal offence.”

This will be the case even if cargo is being shipped from places that have legalised or decriminalised cannabis.

Robertson says: “Through its programs and services, the CBSA will continue to uphold laws governing the illegal cross-border movement of cannabis, while facilitating the free flow of legitimate goods.”

IAG shipment is tip of the iceberg

IAG Cargo has prevented a national shortage of lettuce in the UK with one shipment alone carrying over 30,000 of the vegetables from Los Angeles.

As the UK swelters in its heatwave, lettuces were disappearing fast from supermarket shelves, but IAG Cargo has plugged the gap with a shipment of over 30,000 heads of iceberg lettuce coming from Los Angeles this weekend alone.

IAG Cargo director of sales, marketing and products, Camilo Garcia says: “We take the responsibility of shipping lettuce to the UK very seriously – our dedicated ‘Constant Fresh’ product team ensure that lettuce heads arrive promptly and in excellent condition in London Heathrow ready to hit supermarket shelves across the country.”

CARGO IN THE SPOTLIGHT AT FARNBOROUGH

8

WILL BREXIT MEAN ANARCHY IN THE UK?

10

aircargoweek.com

Edmonton to pursue IATA CEIV Pharma

E

dmonton International Airport (EIA) will be the first airport community in Canada to pursue IATA CEIV Pharma certification.

The International Air Transport Association Center of Excellence for Independent Validators in Pharmaceutical Logistics (IATA CEIV Pharma) certification provides consistent standards for shipping pharmaceuticals using airfreight by working alongside industry stakeholders and regulators to harmonise the supply chain, and establish a common baseline from existing standards and regulations to safeguard product integrity while addressing air cargo’s needs. The airport says achieving certification will ensure the highest global standard for transporting pharmaceutical products by air and is a vital step in building cargo connectivity from the Edmonton Metro Region to the rest of the world by providing shippers with the confidence that EIA can handle pharmaceutical products safely.

EIA president and chief executive officer, Tom Ruth says: “With the emerging pharma and bio-pharma development and clustering we continue to see in our region, EIA and our key air cargo stakeholders are looking to continuously improve the quality of how pharma cargo is handled, while connecting our airport to the

Panalpina opens Singapore logistics centre PANALPINA has opened its new purpose build logistics centre in Singapore, located on Pioneer View, covering an area of 3.5 football pitches.

The facility is constructed over six floors and offering 25,800 m2 of usable warehouse space, of which the majority is already rented out to customers. Speaking at the official opening of the facility, chief executive officer Stefan Karlen explained that Singapore is very important to Panalpina and 96 of its top 100 global customers have a base in Singapore.

He says: “Singapore is a very important consolidation hub for ocean and air freight. The nation-state is investing in the expansion of its ports, and a third runway is under construction at Changi Airport.

“Against this backdrop, Panalpina plans to offer air and ocean freight services including value-added logistics services to companies, particularly in the energy, healthcare, high tech, manufacturing, consumer and retail, as well as fashion industries.”

Panalpina plans to test and use new technologies in Singa-

pore including the Internet of Things, augmented reality and various automation systems. The new facility could also run 3D printers on behalf of customers, potentially making it a hub for distributed manufacturing in the future.

Karlen, who has once based in Singapore, took time to meet and chat with Panalpina’s front-line staff, as well as with attending dignitaries, including the Swiss ambassador to Singapore, Fabrice Filliez.

Who belongs on our A-list?

T

o mark our 1,000th issue, Air Cargo Week is launching the Airfreight A-List. We are looking for individuals, companies, trade bodies or associations, airlines, airports, in fact anyone or anything, that will influence and change airfreight over the next years and decades or who are simply at the top of their profession.

Despite the industry being a multi-billion operation employing hundreds of thousands worldwide, some individuals, companies and trade bodies are driving change and shaping the direction of the industry Air Cargo Week will continue to report on for years to come.

We would like to create a special A-List of the individuals or companies that you feel are setting the agenda, being disrupters or marking a new direction in the industry.

Just nominate the individual, company, trade body or association, airline, airport, 3PL, educator that you think is setting the agenda. This is not a vote. The editor will select the list from the nominations received.

ACW editor James Graham says: “This is more than a popularity contest. We are looking to list those individuals, companies, trade bodies or others who are beginning to make the changes that will shape the industry in years to come.

“Some people are always in the freight media. Are they disruptors, thinkers or is real change being effected behind the scenes?

“We recently quoted an aviation professional who was not afraid of disrupters but felt challenged by them. In fact, as he pointed out, FedEx were once disruptors.”

Readers can submit the names of individuals, companies, trade bodies or others who are setting the agenda. A few words as to why they should be included would be welcome. Entries

2

ACW 16 JULY 2018

will be collated by ACW staff and the top influencers will be listed in our issue of September 24, our 1,000th issue.

Please read the criteria below before making your nomination:

• All individuals involved in the air cargo business are eligible to nominate persons for the A List.

• All members of the air cargo industry, past or present, are eligible for nomination.

• Include a short reason for your nomination.

• Successful nominees will be those who can be described as influencers, disrupters, thinkers outside the box or are making a special contribution to air cargo in some specialised area and/or to the business in general, going forward.

• Self-nomination is not allowed.

• Nominations must be made to james.graham@ azurainternational.com or Air Cargo Week, Robert Denholm House, Bletchingley Road, Nutfield, Surrey RH1 4HW by August 31, 2018.

• The decision reached by the editor shall be final.

• The A List will be announced in ACW’s 1,000th edition on September 24, 2018.

aircargoweek.com

global pharmaceutical network.”

IATA senior vice president for airport, passenger, cargo and security, Nick Careen says: “IATA congratulates Edmonton International Airport on its important decision to pursue CEIV Pharma certification, and to be the first airport community in Canada to do so!

“Pharmaceutical products not only enhance lives but can actually save them, so it is critical that all participants in the cold chain adhere to these global industry standards to ensure recognised pharma handling at every step of the process.”

K+N extends pharma network to Santiago

KUEHNE + Nagel is extending its KN PharmaChain network in South America with a new logistics hub in Santiago, Chile benefiting from a dedicated warehouse.

The logistics hub complies with the highest security standards and state-of-the-art technology to increase operational capacities.

The facility will provide an area of 17,600 sqm for storage and distribution of temperature sensitive products, which can be extended to 23,300 sqm, including a cold chamber to handle temperature requirements of 15-25C and 2-8C. A renewed laboratory for quality control allows customers to comply with the regulatory requirement to carry out local analysis of imported pharmaceutical products.

GMP compliant repackaging and relabeling areas following Chilean and international specifications will be available as value added services.

Kuehne + Nagel South and Central America president, Ingo Goldhammer says: “With more than 40 years demonstrating commitment to the Chilean market, this cutting-edge facility will leverage the knowledge and experience of our specialised teams and enable Kuehne + Nagel to offer its unique pharma solutions to an extended customer base.

“This investment is in line with our strategic ongoing commitment to the pharma & healthcare industry globally strengthening our position as a leading player in pharma logistics.”

The logistics hub will use clean energy via a geothermal system to keep temperature of its general area between 15-25C.

ACW REWIND

DURING THIS World Cup, it is interesting to see the role that Qatar Airways took in handling the 2006 World Cup match ball. For football fans, Italy won the World Cup on penalties that year.

Qatar Airways quick on the ball Volume 9 Issue 44 6 November 2006 - ACW’s 400th issue QATAR AIRWAYS has flown the actual match football used in the 2006 FIFA World Cup final out to Dubai, where it was due to be auctioned on 4 November. This special piece of sporting memorabilia was expected to raise a significant amount of money at the Reach Out to Asia (ROTA) charity gala dinner being held in the Qatari capital.

The ball, which was used in the World Cup final between Italy and France on 9 July, was given special treatment as a ‘First Class passenger’ onboard a Qatar Airways flight before it went under the auctioneer’s hammer.

A Qatar spokesman said there was intense interest expected from collectors and football fans around the world, as the ball had been signed by all the members of the World Cup’s winning team, Italy.

Auction guests included Natalie Imbruglia and Pierre Cardin.

Thumbs up for new 777Fs from Lufthansa board

L

ufthansa Group’s decision making board has approved the operation of two brand-new Boeing 777 Freighters by Lufthansa Cargo.

The aircraft were ordered in May this year, but it was not decided who would manage and operate the aircraft, which are expected to be ferried from the Boeing plant in Seattle to Lufthansa’s base in Frankfurt in February and March 2019.

Lufthansa Cargo chief executive officer and chairman of the executive board, Peter Gerber says: “We are thrilled to soon be welcoming two brand-new freighters to our Triple Seven fleet. This major investment in the future of Lufthansa Cargo has been made possible by last year’s outstanding results.

“This is a fitting reward for the tremendous efforts of all Lufthansa Cargo employees and emphasises that we have taken the right course at an early stage.”

The new 777Fs are expected to replace MD-11Fs in the long term, but Lufthansa Cargo will continue to operate MD-11Fs earmarked for retirement for the time being to provide customers

Hariri joins Cargo Committee

SAUDIA Cargo chief executive officer, Omar bin Talal Hariri (pictured centre) has been selected as a member of the Cargo Committee of the International Air Transport Association (IATA).

The committee of 19 members represents different airline companies and is one of six main IATA committees along with finance, environment, industry affairs, legal and operations.

The Cargo Committee advises the Board of Governors, the director general and other IATA bodies on all air cargo industry issues including cargo security and safety, cargo technology and automation, cargo handling, distribution, cargo related regulatory developments, cargo trade facilitation and agent and carrier relations.

Hariri was appointed as chief executive officer of Saudia Cargo in February 2018 and has held senior positions in several companies during his career across the transportation, supply and logistics services.

Code of conduct goes online

ULD Care has launched an online process to allow industry organisations to sign up to the ULD Care Code of Conduct.

The association says the practice of outsourcing ground and cargo operations to third party service providers has moved the majority of ULD handling and operations outside the directly regulated environment in which most airlines operate.

ULD Care vice president, Bob Rogers says: “All too often, ULD don’t receive the respect they require, respect that is particularly essential when recognising that ULD are aircraft equipment whose primary function is to provide flight safety by securing cargo in its allocated location on the aircraft during all phases on flight.”

He says the Code of Conduct puts in place simple guidelines that will lead to safe and sustainable operations and handling.

The code is voluntary and free of charge, relying on the commitment of its signatories to live up to its principles.

Quote of the week “The last mile doesn’t matter if the first mile and all the other miles in between are broken” Susan Bell

with more capacity as needed.

Gerber adds: “This allows us to fully participate in the market growth but respond flexibly to signs of change. Accordingly, we will decide on when to phase out individual MD-11Fs based on the market situation. Our strategic goal remains to operate a solely B777F fleet going forward.”

Asia and North America to lead freighter fleet growth

THE worldwide freighter aircraft fleet is predicted to reach 2,722 in 2037, with Asia and North America leading the way, Airbus predicts in its Global Market Forecast 2018-2037.

In its Global Market Forecast 2018-2037, Airbus predicts that the freighter aircraft fleet will increase from 1,650 at the start of 2018 to 2,722 in 2037.

Of these new aircraft, Airbus says 826 will be new deliveries, 1,560 will be converted freighters and 336 will be remaining aircraft already in use today.

Most of the aircraft will be in North America, which Airbus predicts will be home to 1,080 followed by Asia with 802 by 2037.

Elsewhere, Airbus says Africa will have 107 freighters by 2037, the CIS will have 93, Europe will have 405, Latin America will have 99 and the Middle East will have 136.

Airbus is predicting that 37,390 new aircraft will be needed over the next 20 years valued at $5.8 trillion, with 26,540 needed for growth and 10,850 required to replace older units.

60 years young for AEI AERONAUTICAL Engineers (AEI) has celebrated its 60th birthday and is on track to deliver its 500th freighter conversion by the end of the year.

The company started operations on 9 July 1958 when James Addison had the vision of providing the airfreight industry with dependable and cost-effective freighter conversions.

AEI made its mark with conversions of aircraft including Convair 440s and DC6s, before solidifying its reputation in the 1980s and 1990s with conversions of the Boeing 727 series. The company has recently passed the milestone of delivering 100 Boeing 737-400SF freighter conversions to customers around the world.

AEI chief executive officer, David Sandri says: “Today is a day for us to pause for a moment and reflect on the many great accomplishments that we have achieved as a team over the years.

AEI is a resilient and globally recognised expert in the field of narrow-body freighter conversions, an accomplishment in which we can all share immense pride.”

President Roy Sandri adds: “Our 60th anniversary is a brilliant milestone in AEI’s history and certainly worthy of commendation.

With robust orders and commitments continuing to pour in from our customers for newly introduced freighter conversion products, we believe that AEI has an extraordinarily bright future.”

aircargoweek.com

WORLDNEWS A further earthquake was felt near Gatwick Airport, this time measuring a magnitude of three on 5 July.

The British Geological Survey (BGS) says members of the public reported tremors in Newdigate, Dorking, Horley and Charlwood in Surrey, as well as Crawley and Horsham in West Sussex. Residents reported shaking, with one person who contacted the BGS saying it “felt much bigger than the last two recent quakes”.

The latest earthquake was the fourth recorded by the BGS since April, with the first one measuring a magnitude of 2.7 on 1 April, followed by 2.6 on 27 June and 2.4 on 29 June.

KLM will suspend direct flights to Tehran, Iran from 24 September citing commercial reasons.

The airlines says due to the negative results and financial outlook for Tehran operations, the last flight will take off from Amsterdam on 22 September and land at Amsterdam Airport Schiphol on 23 September.

PROJECT management, engineering, procurement and construction firm Bechtel has been selected by WSA Co as its delivery partner and project manager for the Western Sydney Airport.

The A$5.3 billion greenfield facility in Badgerys Creek, New South Wales will provide additional aviation capacity to meet growing demand in the Sydney basin and improve access to Sydney when it is completed by the end of 2026.

Bechtel managing director for Australia, Ailie MacAdam says: “Construction of the Western Sydney Airport is a once in a generation infrastructure development opportunity for the region and the country, and we are honoured to be working with the Commonwealth of Australia and WSA Co on this iconic project.”

CRANE Worldwide Logistics partnered with AerFin to help an aircraft stranded in London requiring a critical replacement part.

Crane’s Time Critical team were called upon urgently as the AerFin team had less than 24 hours to find a replacement unit and get it to London City Airport to avoid downtime and potentially expensive charges from their client.

The unit was located in Texas and needed to get to London, with Crane managing the entire transportation from collection to customs to delivery.

AerFin head of operations, Ben Pinington says: “Crane understood our urgency for this delivery and they seamlessly made it happen.”

Crane Worldwide UK managing director, Chris Lee says: “We understood that this critical shipment did not only have financial implications but also reputational implications for our client.”

CHISASIBI Airport will receive C$4.2 million from Transport Canada to rehabilitate its taxiways and aprons.

The funding comes from Transport Canada’s Airports Capital Assistance Program, which as seen investments of more than C$829 million for 927 projects at 185 airports since its launch in 1995.

Canada’s minister of transport, Marc Garneau says: “The Chisasibi Airport is an important hub for residents and businesses in this region. This project will help the airport ensure continued safe operation for passengers, flight crews, and employees, who rely on the airport as it supports the regional economy and its social development.”

Chisasibi Airport is 1.7 nautical miles northwest of Chisasibi, Quebec and has one gravel runway measuring 1,156 metres.

Estrela, a student-run company from Kirkwall Grammar School in Orkney, Scotland has been awarded the FedEx Access Award at the Company of the Year Competition of Young Enterprise. The FedEx award was given to the company that best demonstrated innovation and access to global markets. Estrela designed a controlled battery operated cylindrical lamp with unique Orcadian designs.

ACW 16 JULY 2018

3

Volga-Dnepr flies world’s largest jet engine home to Ohio

V

olga-Dnepr Airlines has returned the world’s largest jet engine to Ohio, partnering with GE Aviation following the GE9X’s successful on-wing testing in Victorville, California.

The airline provided logistics support for the GE9X engine’s return to Ohio for additional testing at GE Aviation’s Test Operations facility in Peebles.

This was the second flight in support of GE’s GE9X programme having previously transported the engine from Columbus to Victorville last November. Due to schedule requirements, Volga-Dnepr was able to customise flight planning for GE Aviation and bring the return delivery to Ohio forward by two days, saving valuable time and maximising testing hours in Peebles.

The delivery was the culmination of two years of planning and development by GE engineers and Volga-Dnepr’s team of load planning specialists to create a loading platform and handling procedures for GE’s largest next generation jet engine.

Volga-Dnepr Group global director for aerospace, Axel Kaldschmidt says: “This most recent GE9X flight is the latest demonstration of our continuing relationship with GE which

began in 1992 with the first airlift of GE90 engines to Boeing.

Our partnership will continue to evolve into the future. This partnership has been further enhanced by the implementation of Volga-Dnepr’s strategy to establish an operating base in Houston.

“This gives the airline the ability to work within arm’s reach

Ulrich Ogiermann joins Volga-Dnepr

INDUSTRY veteran Ulrich Ogiermann has Cargolux president and CEO between 2003 joined Volga-Dnepr Group as senior vice and 2011, which he joined in 1998, and more president for operations and deputy general recently as chief cargo officer for Qatar Airways between 2012 and 2017. director for CargoLogicManagement.

He has also been a member He will be based in London of the IATA Cargo Committee and be responsible for the imfor many years and served as plementation of Volga-Dnepr’s chairman of The Internationinternational cargo airlines al Air Cargo Association in group strategy, managing 2009 and 2010. control of the airlines’ annual Volga-Dnepr Group presioperational results and standent, Alexey Isaykin says: “We dards compliance, as well as are delighted that Ulrich has the network under the strategic joined our international team partnerships, and international and believe his knowledge team development. and experience will bring Ogiermann has more than synergies within our network 25 years of air cargo industry Ogiermann of airlines to new levels.” experience, having served as

HNA to keep going after Jian’s death FOLLOWING the death of co-founder and chairman Wang Jian, HNA Group’s management have promised to continue with the company’s strategy and operations.

Wang died on a business trip to France, when he reportedly fell up to 15 metres from a wall while taking a picture during a sight seeing tour.

Local police in the village of Bonnieux, Province are not treating the 57-year-old’s death as suspicious.

HNA says operations will continue under the leadership of chairman Chen Feng and chief executive officer Adam Tan, with Chen taking over Wang’s duties and Tan continuing in his role.

The company says: “HNA’s Board and senior management team are comprised of talented

4

ACW 16 JULY 2018

individuals with deep global experience, and a long track record of working together successfully. They remain focused on steering the company and its operations through this difficult period.

“The disposition of the shares in HNA Group held by Mr Wang at the time of his death will be addressed in due course, consistent with his pledge to donate them to charity, and in accordance with all applicable legal and regulatory guidelines. HNA Group is committed to providing timely updates, as appropriate, when they become available.”

The Chinese conglomerate has interests in a number of areas including aviation, owning handling agent Swissport, a major share in Frankfurt-Hahn Airport and numerous airlines including Suparna Airlines.

of our customers, thus ensuring the ongoing cooperation of our technical experts along with sharing a culture of continued innovation with our key partner GE. These efforts are part of our continued commitment to deliver as promised for our customers in the Aerospace industry.”

SEKO looks at cross-border growth

SEKO Logistics is demonstrating its confidence in cross-border growth of British brands by investing in a new airfreight and omni-parcel services facility close to Heathrow Airport.

Moving into the new 22,000 square foot purpose built location in Egham this month is part of a £5 million-plus commitment to support SEKO customers’ fast-growing international shipment volumes, which include a rapid expansion of e-tailer business from the UK to Australia, New Zealand and the USA. It also provides additional capacity to manage new business from British brands taking advantage of SEKO’s fulfilment, forwarding and cross-border e-commerce services, and supply chain software.

SEKO chief operating officer – EMEA, Keith O’Brien says: “We are growing organically mainly on the strength of existing customer recommendations as well as our specialist expertise, expanding global footprint and reputation

for helping British companies to quickly access the lucrative cross-border eCommerce space, which has been our biggest growth area in the past two to three years.

“This will continue because of the international demand for British brands. Our decision to invest in this new facility close to Heathrow will make the cross-border delivery process even easier for our customers.”

Menzies picks up Virgin contract VIRGIN Atlantic Cargo has awarded a three year cargo handling contract to Menzies Aviaiton in Australia.

The agreement saw Menzies take over cargo handling in Melbourne on 8 June, Brisbane to follow on 9 July and Sydney on 7 August. The move supports Virgin Atlantic’s cargo sales and management agreement with Virgin Australia.

Virgin Atlantic is responsible for marketing the cargo capacity on Virgin Australia’s daily services from Sydney to Los Angeles, its six weekly flights from Brisbane to Los Angeles, and its five weekly services from Melbourne to Los Angeles.

aircargoweek.com

In 2017 this was extended to include Virgin Australia’s Melbourne – Hong Kong services, and increased this July to cover daily Sydney – Hong Kong flights. Cargo volumes generated by Virgin Atlantic into Australia in the first quarter of 2018 increased 30.5 per cent, while revenue from Australia also saw strong growth.

Virgin Atlantic Cargo director of operations, Tania Boyes says: “We believe that Menzies Aviation are the right partner to help us achieve our goals in this market and we will continue the high standard of handling services our customers expect from us.”

Gatwick gives local businesses global opportunities

G

Inaugural Air China flight at Gatwick on 3 July

atwick Airport is providing local businesses with export opportunities with £7.5 billion of goods passing through the West Sussex airport.

Over two thirds of the airfreight, valued at £5.3 billion and coming in at 61,000 tonnes was exported, and the other £2.2 billion, or 35,600 tonnes was imported, according to the research carried out by Oxford Economics.

The report looked at businesses that trade internationally in the seven local authorities in the Gatwick Diamond region and found them to be more export-focused, with the proportion of local businesses sending goods to international

markets 50 per cent greater than the rest of the UK. The seven local authorities in the Gatwick Diamond are Epsom and Ewell, Reigate and Banstead, Horsham, Tandridge, Crawley, Mole Valley and Mid Sussex.

Over 11 per cent of Gatwick Diamond businesses export goods compared to the UK average of 7.2 per cent, with 60 per cent of Diamond’s exports going to non-European markets, compared to the national average of 51 per cent.

Gatwick Growth Board chairman and former UK government transport minister, Steve Norris

says Gatwick is a “nationally significant infrastructure asset”, adding: “Much of the region’s economic activity is centred around the airport, which is why there is a greater concentration of company headquarters clustered in the region around Gatwick than in London.

“This constellation of high value industries attracts significant foreign investment and trade activity and the access the airport gives them to international markets is a key reason why they invest and locate in the region.”

Gatwick Diamond Business chief executive, Jeremy Taylor welcomed the report but says more can and must be done.

aircargoweek.com

He says: “Too many businesses and cargo companies send their goods past Gatwick and round the M25 to Heathrow. As the airport’s long-haul network grows, so too do welcome opportunities for local firms to use Gatwick as their local global gateway.”

The airport’s long-haul network of 67 destinations was singled out in the report as important for trade outside the European Union, with cargo flying in the belly of passenger aircraft.

Top non-EU destinations for Surrey, East and West Sussex exports are the USA at £2.5 billion, China at £450 million, Japan at £250 million and Russia at £200 million.

ACW 16 JULY 2018

5

PERISHABLES

Standards are more crucial than ever

T

he numbers say it all: One third of all food produced globally – 1.3 billion tonnes worth – is wasted somewhere along the supply chain, each and every year, writes Donald Urquhart.

A shocking statistic for a world under severe ecological pressure and one in which millions of people are malnourished. But many involved in the global cool chain business are pushing for standards to help make this sector both efficient and safe.

In a step aimed at redressing this and the fundamental gaps that exist in the Evangelakakis global perishables

cool chain, a clarion call was made recently by Cool Chain Association (CCA) chairman Stavros Evangelakakis for the air cargo community to drive its own standard for perishables, before it is imposed upon the industry.

A lack of accountability is a key contributing factor to this wastage says Evangelakakis.

“Collaboration, transparency, and data sharing, as well as training for perishables growers and better facilities are needed to inject quality into a fragmented and disconnected supply chain,” he says. “We should aim for quality, we should not wait for other agencies to come up with standards, we should look internally and act now.”

Indeed this theme is echoed by Sealed Air vice president of strategy and business development Susan Bell, speaking in Singapore recently she

highlighted the importance of the public safety aspect, particularly in the rapidly evolving e-commerce environment.

This enormous food waste on a global basis combined with food safety issues highlights the need for not just proper packaging and logistics, but an industry-wide initiative to cooperate and develop standards in what she said is a “call to action for the industry”.

The temperature is not enough

“There’s a lack of digital connectivity – the industry truly needs a digital interface,” Bell argues. “Today many companies offer temperature monitors but that’s not enough. To truly ensure product safety we as an industry must band together and create a digital infrastructure, a digital ecosystem.”

Temperature, shock, vibration, humidity can all be tracked throughout the entire supply chain journey to ensure product integrity, but its important to use that data proactively she says and that’s where the industry is not keeping up with changes in demand.

Noting that B2C global e-commerce is expected to reach $4.5 trillion by 2021, she observed that buying groceries online are a growing part of this, which in turn is a reflection of the growth of the global perishables trade.

“If you think about the groceries you ordered

6

ACW 16 JULY 2018

aircargoweek.com

online last week, most of the meat or fruit you ordered has gone through 10 steps or more and supply chain. The insulin you picked up in the pharmacy last week, the vaccine your daughter got at the doctor’s – those are biological pharmaceuticals, which by and large go through 17 to 20 points from active pharmaceutical ingredient to patient use. Whether food or pharmaceuticals, these are both very highly complex supply chains,” she says.

Life or death

Those two industries – food and pharmaceuticals – require cool chain solutions, she said.

“What happens along the logistics journey when perishable foods or pharmaceuticals are inside that shipper, it’s not about the package or the logistics chain, it’s about public safety.

“Lives can be on the line. It may sound like an exaggeration, but when it comes to e-commerce shipping, it’s really not,” she says.

The problem, Bell highlights, is that food products are not regulated through this shipment process, whereas pharmaceuticals are, but only from the first point of distribution, or the first point of manufacture, to the first point of distribution. But crucially, the key differentiating factor is that the pharmaceutical logistics industry does at least have voluntary certification such as IATA’s CEIV.

PERISHABLES

Lack of regulations causes a stomach upset

I

n the non-pharma perishables sector there is no equivalent, although talk in the industry suggests IATA may come up with a similar programme for the food side of the business.

“This means,” Bell says, “without laws or even voluntary temperature regulations in the perishable supply chain, consumers have no choice but to put their trust in product and logistics providers.

“So that chicken you’ve eaten for dinner last night, you assume it’s safe. And for the most part, the reputable companies assure that safety, but not all start-ups do,” Bell says in reference to the plethora of food-related e-commerce platforms that have sprung up.

In what is clearly one end of the perishables supply chain, one of the problems she notes, is that these platforms offering e-meals, or speciality foods for instance, may not have any food safety experts onboard. “But you ordered from them and they put it in an EPS (expanded polystyrene) cooler, or another type of item and they stuck an ice pack in it. You assume it’s safe, but it may or may not be.”

She notes that the “dangerous lack of regulations” around perishable foods was highlighted in the US with a Rutgers University study last year. Encompassing nearly 400 online food-related services including the two biggest – HelloFresh and Blue Apron – it was found that despite the fact all the companies in the study used cold packs and some kind of thermal insulation, half of all the meat, seafood and poultry arrived at consumer’s doorsteps higher than 4.4°C. “That’s a temperature that makes meat unsafe to consume. One order in the study arrived with the temperature between 15.5 and 20°C – that’s halfway cooked,” she said. “Food containing that many pathogenic bacteria can cause food borne illness. And for a child or an elderly person it could be worse,” she adds.

Part of the problem is that the rapid rise of e-commerce has driven massive changes and added complexity in both the B2B and B2C fulfilment supply chains. The centre of e-commerce has shifted from North America to the Asia-Pacific, Bell highlights.

And with 1.4 billion people joining the global middle class by 2020, according to a McKinsey & Company study, a full 85 per cent will be in the Asia-Pacific region. The global affluence of this new emergent middle class – especially in Asia – has led to rocketing demand more expensive, imported foods. This can be seen in everything from rampant demand for Chilean cherries, to US meat, of which 50 per cent of all that is produced is now exported to Asia.

But the problem, Bell highlights, is that cross-border trade – including e-commerce – is even more challenging for temperature sensitive products because of various reasons, chiefly delays in customs. Part of this is just the sheer volumes involved. Bell notes that earlier this year China’s General Administration of Customs reported that the annual growth rate over the last three years for cross-border e-commerce was over 50 per cent.

“The last mile is absolutely a critical challenge and one that we must continue to solve, but I’m here to tell you the last mile doesn’t matter if the first mile and all the other miles in between are broken. It’s a very highly complex supply-chain with multiple handoffs,” she highlights.

And with the problems that exist today including a lack of infrastructure in the emerging markets cool chains are already struggling. “What about the major growth that’s coming tomorrow?” she asks.

Bell

aircargoweek.com

ACW 16 JULY 2018

7

FARNBOROUGH AIR SHOW

Cargo in the spotlight at FIA 2018

C

argo is to take centre-stage at this year’s Farnborough International Airshow with a 1,000 square metre village centred around a static display of “giants of the sky”, including 747s and an Antonov. Air Cargo Week is an official media partner of the air show.

Air Cargo Week editor James Graham says: “I am pleased that we are so closely involved in the show and the cargo village.

I know many readers of ACW will be at the show to see the latest aviation technology, meeting business contacts and strike van de Weg

deals. While you are there, I invite visitors to our stand where you can pick up a copy of our limited edition 20th Anniversary Supplement.”

For the first time there will be a dedicated cargo conference programme curated by IATA (International Air Transport Association) at the show. The conference programme is a chance for industry experts and thought-leaders to discuss the issues, opportunities and challenges facing this fast-growing sector, including an analysis of the future for air cargo, through to the impact of exponential demand for express and e-commerce freight.

Farnborough International commercial director Amanda Stainer says: “We’ve created a hub for the cargo industry at the Farnborough International Airshow. The cargo village brings people, companies and aircraft together; the conference programme means a conversation will happen simultaneously; and I think the discussions during the conference will be influential.”

IATA global head of cargo Glyn Hughes supports this new Farnborough initiative remarking “Air Cargo transports 35 per cent of global trade by value, representing a crucial supply chain partner for the global economy, The cargo village is great recognition of the importance of air cargo and how it is critical for commercial aviation success.”

The role of drones

As the role and impact of unmanned aerial vehicles (UAV), commonly known as a drone, continues to grow, the IATA-curated conference will serve as an important focus for analysing how a future with UAVs might look and what needs to be done to achieve the opportunities this presents, particularly with delivery to inaccessible areas.

Coming just 37 weeks before the UK leaves the European Union, the airshow has attracted the most international attendance ever. Show organisers suggest that this is a strong indication of companies wanting to extend their trading links – something likely to have direct effect on the cargo industry.

Sponsors of the cargo village 2018 are CargoLogicAir, Volga-Dnepr and AirBridgeCargo.

In recognition of the renewed growth that the air cargo sector has witnessed in recent years, the village was introduced at the 2016 Farnborough International Airshow. As in 2016, the Cargo Village will once again be situated by the business aircraft park.

Volga-Dnepr vice president for sales and marketing at Volga-Dnepr Group, Robert van de Weg, says: “Farnborough is a very important event for us because the aerospace industry has always been one of our key focuses. Having a

8

ACW 16 JULY 2018

aircargoweek.com

Cargo Village and conference at this year’s Airshow is the best possible way to demonstrate the vital role air cargo plays in aerospace supply chains. It is a great opportunity to discuss the time and money-saving solutions we can offer customers around the world using our unique fleet of AN-124-00, IL-76TD-90VD, Boeing-747F and Boeing-737F aircraft.

“During the first five months of 2018, Volga-Dnepr has completed more than 100 deliveries of outsize commodities using charter services in the interest of aerospace industry customers. This has included deliveries of more than 20 satellites and supportive equipment and 25 helicopters.

“AirBridgeCargo Airlines have also provided dedicated scheduled cargo lift for more than 6,000 tonnes of aerospace equipment, 70 per cent of which is classified as oversize and heavy and falls under our abcXL product category, including engines, helicopters, and other aircraft spare parts.”

Showcase the UK

British all-cargo airline CargoLogicAir CEO David Kerr says: “We want to use Farnborough to showcase the fact that the UK now has a dedicated all-cargo airline with a growing fleet and operating network serving destinations in Europe, North America, the Middle East and Asia Pacific.

“Britain is home to many of the world’s leading Aerospace companies, which have thriving export and import order books. We are looking to build long-term relationships with these businesses and their partners overseas. With over 100,000 trade visitors expected at this year’s airshow from more than 50 countries, we expect to be discussing some very interesting new business opportunities with delegates who join us onboard our Boeing 747-8 Freighter in the Cargo Village.”

FARNBOROUGH AIR SHOW

Let’s talk drones, e-commerce and the future

T

he first day has the theme of the ‘Future of Air Cargo’.

After an introduction by IATA global head of cargo Glyn Hughes, an opening address by CargoLogicAir CEO David Kerr will be followed by a spotlight on special cargo from Robert van de Weg of Volga-Dnepr.

This will be followed by a panel discussion on express and e-Commerce freight with DHL Global Forwarding senior vice president of network carrier management Henk Venema; Seabury Consulting managing director Marco Bloeman; Etihad Airways managing director cargo and logistics services Abdulla Shadid; and, Turkish Cargo chief cargo officer Turhan Ozen.

After a coffee break, Boeing VP marketing Randy Tinseth, will look at the “compelling future” of air cargo and Heathrow head of cargo Nick Platts will look at how airfreight can capitalise on UK cargo growth.

This will be followed by a panel discussion describing “our vision of the future of air cargo” moderated by TIACA secretary general Vladimir Zubkov. Panellists are TAPA EMEA vice chairman Jason Breakwell; Qatar Airways vice chairman Rob Veltman; CEVA Logistics senior vice president for global air procurement David Lara.

The second day’s opening remarks will be given by former IATA global head of cargo Des Vertannes. The first panel discussion will look at the future of humanitarian air cargo supply chains and will consist of CargoLogicManagement director humanitarian engagement Stuart Smith; Humanitarian Logistics Association associate member Mike Whiting; DHL VP humanitarian affairs Chris Weeks; and Aviation Sans Frontieres International general secretary Pauli Immonen.

The second panel discussion will look at new routes to market - the future of unmanned aircraft.

It will consist of Natilus founder Alexey Matyushev; Dronoamics co-founder Svilen Rangelov; and Falcon Drones Technology UAV development engineer Pau Martinez Prat.

Between panel discussions, “will cargo drones replace freighters in Africa?” That will be the question asked by Astral Aviation founder and CEO Sanjeev Gadhia.

The next panel discussion will be looking at the topic of developing cargo aircraft.

Israel Aerospace Industries (IAI) Bedek Group VP marketing Rafi Matalon and Boeing VP of product strategy and future airplane development Mike Sinnett will take part.

Paul Rodwell, international business development at OnAsset Intelligence, Inc will be the last contributor when he talks about cognitive logistics – the emerging capabilities of connected cargo, aircraft and infrastructure.

Vertannes will then close the two-day cargo conference.

LM-100J goes on display

LOCKHEED Martin will showcase its LM-100J Super Hercules commercial freighter at the airshow.

The LM-100J, the production variant of the C130J Super Hercules will participate in the show’s daily flight display and be on static display. It will be joined by Sikorsky S-92 helicopter and Lockheed Martin leaders and staff, who will be offering insights and updates on the company.

Lockheed Martin vice president and general manager for air mobility and maritime mission programmes, George Shultz says: “While the LM-100J is known for its cargo delivery capabilities, the aircraft has been cited throughout industry as the perfect platform for specialised requirements such as firefighting, medevac, aerial spray, and humanitarian relief support.

“Farnborough Airshow is the year’s premier aerospace industry event and it offers us an ideal opportunity to showcase the LM-100J’s unmatched versatility and superior performance to the world.”

aircargoweek.com

ACW 16 JULY 2018

9

UNITED KINGDOM

Will Brexit mean anarchy in the UK?

W

ith huge changes in international trade caused by Brexit and the implementation of the Customs Declaration Service (CDS), all eyes will be on Birmingham next June with the 12th Multimodal being held at the NEC, writes Stuart Flitton.

Among the many challenges forwarders are facing is the impending launch of CDS, which will replace the existing system for customs declarations in the UK. The Customs Handling of Import and Export Freight service (CHIEF) is one of the world’s largest and most sophisticated electronic services for managing customs declarations.

However, it is nearly 25 years old and cannot be easily changed to meet new requirements under the Union Customs Code (UCC).

“There are some concerns about the readiness of the new system,” says British International Freight Association (BIFA) director-general Robert Keen. “We are working hard to provide companies with greater understanding of what CDS is, why it is being introduced, how it will impact their businesses, and when the system will be fully launched.”

Unanswered questions

He added that there are still a lot of unanswered questions about what will be required from the freight industry and the issues faced by companies that make customs declarations, which will need time to adjust their internal computer systems to accommodate CDS. As well as the introduction of CDS, which relates to trade outside the EU, there will also be discussion at Multimodal 2019 about Brexit.

Keen said: “There remains a great deal of uncertainty for UK freight operators and their customers. Clearly, the implications of Brexit will vary across freight modes and types of freight. The huge uncertainty on how trade

10

ACW 16 JULY 2018

arrangements and supply chains will change post-Brexit is making many freight forwarders nervous about the future.

“It really is time for the UK Government to give a clearer explanation to businesses and the wider country as to what kind of long-term trading relationship it is looking for.”

A happier topic of conversation will be the backing of MPs for a third Heathrow runway.

“BIFA believes that an expanding global hub airport, with increased capacity for air cargo, will assist importers and exporters to establish new trading partnerships and support existing ones,” Keen says.

Freight forwarders are facing increasing competition than ever, with many logistics companies now providing forwarding and NVOCC type services.

“Of course, everyone is talking about how even Amazon is getting in the game as well,” Keen adds.

Another area likely to be covered at Multimodal is the tender management process.

“A big part of most forwarder’s business comes from responding to tenders. Because the volume of these bids is so high, and each is usually so complex, they are a big drain on resources. Smart forwarders are focused on improving their process to make sure they are bidding accurately and fast, but also on the best types of business for them,” Keen says.

Clarion Events, logistics portfolio director Robert Jervis, which is organising Multimodal 2019 for BIFA, says the conference will be bigger and better than the recent 2018 event.

“There will be an increase in content specific to supply chains and for the Jervis

future direction of logistics, as well as a focus on digitisation, blockchain and technological developments,” Jervis says.

Virgin remains upbeat

Despite the slight softening of the UK freight market in the first few months of this year, partly as a result of the shift in sterling/dollar exchange rates that slowing overseas demand for British goods, Virgin Atlantic Cargo managing director, Dominic Kennedy, remains upbeat about the prospects for the rest of this year.

This comes on the back of a record year for volumes for the airline which carried 230.5 million kg, a five-year high, with revenues climbing nine per cent year-to-year to £199.6 million.

“We set a fairly ambitious target for 2018 and we’re on track to achieve our goal,” Kennedy says. “Our revenues from the UK are up, both to our combined US routes as well as on our direct services from London to destinations including Johannesburg, Lagos, Hong Kong and Shanghai.

We’re also seeing positive growth in our UK-Caribbean revenues.

Virgin Atlantic’s pharma volumes grew by 50 per cent year-on-year, boosted by the opening of its new JV Pharma Zone with Delta Cargo at Heathrow and the recent confirmation of the airline’s GDP (good distribution practice) compliance for the facility and its global headquarters.

The airline is focussing on greater simplicity, digitisation and leveraging its partnerships, notably with Delta Cargo. The two airlines now offer around a quarter of all transatlantic cargo capacity.

“We can see a great opportunity for technology to modernise our business. It’s an exciting challenge in terms of the potential to remove paper, modernise and automate warehouses, and deliver self-service for our customers,” Kennedy says.

aircargoweek.com

HAE keeps scoring in second half AS 2018 enters its second half, HAE director, UK & Ireland John Ward is confident that the year will prove very strong for the Derbyshire-based multi-platform air cargo industry services provider.

He says: “In our experience the first half of 2018 has been very strong, with positive gains made in both volumes and yields. While summer volumes have reduced as expected, our customers are confident of a very strong end to the year with capacity demand outstripping supply.

“However, while the lack of answers to critical ‘exit day’ questions prompts major UKbased manufacturers to broadcast threats of withdrawn investment from the UK, it is hard to know how long the current level of confidence can last.”

HAE is headquartered in the UK, and has been since its inception in 1997. It now has business in 13 countries throughout Europe, The Americas, Middle-East, Africa and Asia.

The majority of the revenue generated in the UK comes from HAE’s GSSA business, and this is also where most of the business’s activity is channelled.

Ward says: “This business is complemented by our charter, solutions, training and handling divisions which are growing Ward rapidly, providing more options for our freight forwarding customers, and contributing increased revenues to our airline principals.”

HAE’s experience so far has been positive with regard to Brexit, as the general weakening of sterling against the dollar is contributing to an increase in exports across the Atlantic.

“We expect to see a negative impact on overall European volumes post-Brexit, but there is a possibility that the impact on air cargo could be offset by some mode shift from road to air if the border processes become too onerous,” says Ward.

“There will always be changes which we need to adapt to, the largest in my career so far will be Brexit. We can only speculate as to what the impact of that might be, as important questions remain unanswered, but HAE is an agile organisation which is quick to adapt to the needs of the customer and the business. In recent years we have remodelled our business through centralisation, and through implementation of new technologies, both of which are realising significant benefits to our airline and freight forwarding customers.

FY 2017/18 has been a very busy time for HAE in the UK. “In the previous 18 months, our handling division has added 70,000 sq ft of capacity across three airport locations, which has allowed us to enhance the service that we provide to our freight forwarder customers. Our GSSA division has been awarded the regional CSA contract for Oman Air Cargo, and through their excellent performance and hard work, has successfully retained key contracts with our principal airline partners.”

Ward looks to a post-Brexit future: “Whether one agrees or disagrees with Brexit, it certainly is an exciting time for the industry. Great Britain is on the cusp of a new era in transport and logistics. Open minds and a can-do attitude will be required to make a success of it.”

TRADEFINDER Airlines

Cargo Handling

GSSAs

Turkey

United Kingdom

United Arab Emirates

Online Services

Freight Forwarders Hong Kong

Freight Forwarders United Arab Emirates

Freight Forwarder

USA

USA

azfreight.com : Featured Company Listings

United Arab Emirates

aircargoweek.com 11_16 July 2018.indd 1

ACW 16 july 2018

11 06/07/2018 12:20