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The weekly newspaper for air cargo professionals Volume: 20
Issue: 11
20 March 2017
Air cargo must improve and modernise
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he air cargo industry must accelerate modernisation and focus on delivering high quality service, the International Air Transport Association (IATA) director general and chief executive officer, Alexandre de Juniac (pictured) urges. Speaking at the 11th World Cargo Symposium in Abu Dhabi, de Juniac told delegates that the two key areas for industry transformation are simple modern electronic processes and high quality services.
He says the industry has been pursuing a digital process transformation known as e-freight for over a decade, saying: “A key element of e-freight is the market adoption of the e-air waybill. Global penetration has nearly reached 50% and the industry is targeting 62% by yearend on enabled trade lanes.” He also says the two fastest growing and most profitable parts of business are e-commerce and time- and temperature-sensitive cargo such as pharmaceuticals. De Juniac says: “Shippers today want respon-
sive services based on intelligent systems able to self-monitor, send real-time alerts and respond to deviation. Technologically speaking, this is totally possible. The key to this and other innovations is using data efficiently and effectively.” After years of virtually no growth, air cargo demand grew in the second half of 2016 and January 2017 was up seven per cent year on year. De Juniac has identified three areas where the industry needs the support of governments to implement global standards, these are adopting the Montreal Convention 1999 for accepting digital documentation by governments, a perquisite for e-AWB. 124 countries have signed up but key markets including Thailand and Vietnam need to come on board. The Kyoto Convention of the World Customs Organization revisions to facilitate smart border solutions to reduce complexity and cost need adopting and the World Trade Organization’s Trade Facilitation Agreement needs to be quickly implemented to make trade cheaper, faster and easier.
€1million for pharma warning system Outlook bright but headwinds ahead Amsterdam Airport Schiphol is to invest €1 million ($1.06 million) in developing an early warning system for pharma shippers, starting this month and results expected later this year. The money, a subsidy from the Netherlands Organisation for Scientific Research, and TKI Dinalog, to fund data collection and monitoring of Pharma Gateway Amsterdam (PGA) shipments in order to identify exceptions such as temperature incursions. Schiphol has teamed up with Air France KLM Cargo, Cargonaut and PGA members for the project, with the Schiphol Cargo Community and Cargonaut adding performance management and alerting capabilities to the community Cloud, Amsterdam
University of Applied Sciences and Delft University of Technology doing underlying research, contribute to the development and measure benefits for shippers and their transport suppliers. Amsterdam Airport Schiphol cargo director, Jonas van Stekelenburg says: “Pharma shippers are asking for more visibility so they can have confidence that their sensitive cargo is being handled safely through the supply chain and find solutions if there are issues such as temperature incursions.” PGA was formed a year ago with 13 members representing forwarders, ground handlers, hauliers and airlines, who are expected to be certified to IATA Center of Excellence for Independent Validators Pharma standards.
The economic outlook is bright for air cargo as demand is rising, but there are various headwinds set to impact air cargo, delegates at IATA’s World Cargo Symposium heard. IATA’s senior economist, George Anjaparidze told delegates growth in air cargo in 2017 is set to be about the same as in 2016 when freight tonne kilometres grew by 3.8 per cent. “In 2017, there has been a good start and the tailwinds are strong – export orders are strong and consumer confidence is high,” he says. He explains the macro economy is strong, but there are concerns such as world trade which is still sluggish, despite air cargo punching above this rate, while rising
capacity and increasing fuel prices are risks. “Yields have been stable but rising capacity and rising fuel prices will put the profitability outlook under strain,” Anjaparidze says. He adds overcapacity was due to widebody bellyhold aircraft deliveries flooding the marketplace. “This is contributing to overcapacity on some trade lanes but not all trade lanes, but it is not an issue of the transpacific. However a lot of the newly added widebody capacity is being deployed on the Asia-Europe trade lane,” Anjaparidze adds. “Capacity increases have made it hard for yields to keep up with fuel prices and if this persists we can see how the profitability outlook will come under further strain.”
60 SECONDS WITH CARGOLUX’S CHRIS NIELEN 2017 LOOKING PROMISING AFTER 2016 CHALLENGES ABC TARGETS PHARMA TRAFFIC GROWTH NET PROFIT GROWTH IN 2016 FOR AGILITY
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ACI: Europe off to flying start in 2017 FREIGHT traffic in Europe continue to fly high with 8.4 per cent year-on-year (YOY) growth in January, helped by improved macro-economic conditions, especially in the Eurozone, Airports Council International (ACI) Europe. The association says freight has been particularly strong at non-EU airports, with 13 per cent growth YOY and the EU registered a 7.1 per cent increase. ACI Europe director general, Olivier Jankovec says: “2017 is off to a rather booming start for air traffic” for both passenger numbers and freight volumes. He says: “Coupled with solid gains in freight traffic, this primarily reflects much improved macro-economic conditions – especially in the Eurozone where unemployment is at its lowest in 8 years and the economy has recorded 14 consecutive quarters of growth.” Frankfurt Airport retained its position at the top, with 6.2 per cent growth in January to 158,649 tonnes, followed by Paris Charles de Gaulle Airport, which grew 0.7 per cent to 151,421 tonnes. Amsterdam Airport Schiphol grew 7.3 per cent to 135,172 tonnes and Heathrow Airport was fourth with 4.4 per cent growth to 124,400 tonnes.
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NEWSWEEK DHL gains CEIV in Bogota, 7 US stations to follow
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HL Global Forwarding is to certify seven of its 11 US stations by the end of the second quarter of 2017 to IATA CEIV Pharma standards following certification in Bogota, Colombia. The air and ocean freight specialist is to certify its Atlanta, Chicago, Cincinnati, Los Angeles, Miami, Philadelphia and San Juan to International Air Transport Association Center of Excellence for Independent Validators in Pharmaceutical Logistics (IATA CEIV) standards, which will involve audits by third parties and training courses for employees on site. DHL Global Forwarding chief executive officer (CEO), David Goldberg says: “Through the IATA CEIV certification, DHL is setting itself apart by meeting the highest global third party air freight regulatory standards.” “Through a targeted approach, we have selected stations in some of our key U.S. hubs to undergo the rigorous audit certification process in order to further solidify our leadership position in these markets.” CEO of LifeConEx at DHL Global Forwarding and global head of DHL Temperature Management Solutions, David Bang adds: “Over many years, DHL has been actively involved with IATA’s continu-
ous efforts to adequately answer to the regulatory demands of the pharmaceutical industry. This standardised approach in the airfreight industry means productivity, accuracy, and reliability. All of those lead to product integrity and patient safety.” DHL says its Air Thermonet stations will exceed usual quality standards and its cloud-based IT platform, LifeTrack means it can offer more transparency, shipment tracking and enable intervention throughout the supply process 365 days of the year.
Qatar flies champion horses
QATAR Airways Cargo has flown over 100 champion horses from Amsterdam for the annual Chi Al Shaqab equestrian event in Doha. The horses flew on board a Boeing 777 Freighter for the event of jumping, dressage and para-dressage from 2 – 4 March. The Chi Al Shaqab is the first equestrian competition of its kind in the Middle East and Asia to be sanctioned by the International Equestrian Federation and is one of only four International Equestrian Competition events in the world. Qatar Airways chief cargo officer, Ulrich Ogiermann says: “The team handling live animals is thoroughly trained and work in accordance with IATA’s Live Animal Regulations to provide the most comfortable journey for the horses.” “Each horse is treated with the utmost care and attention and our customers can count on us for the safe and reliable transportation of their thoroughbreds.”
Etihad adds 10th freighter to fleet ETIHAD Cargo has taken delivery of its 10th freighter aircraft, an Airbus A330 Freighter, its fifth Airbus, joining its five Boeing 777 Freighters. The airline says the delivery follows 12 months of sustained growth including 10 new freighter routes and carrying 602,026 tonnes of cargo in 2016, a moderate increase on 2015. Speaking at the International Air Transport Association World Cargo Symposium at the Abu Dhabi National Exhibition Centre, Etihad Aviation Group president and chief executive officer, James Hogan told delegates: “Etihad Cargo is a US $1 billion business, which makes it one of the world’s most successful air cargo operations.” He acknowledged factors such as overcapacity and China’s transition to a service industry made the outlook uncertain but feels Etihad Cargo is well positioned to maximise opportunities in 2017 thanks to investments in partnerships. He says: “We are working with Avianca to extend our reach in the important market of South America; with AirBridgeCargo in the US, Middle East and Moscow for the oil and gas industry; while our Preferred Handling Partner programme builds strong partnerships and ensures consistent quality and service across the Etihad Cargo network.” Etihad’s freighters serve 42 destinations worldwide.
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Saudia awards ULD contract to Unilode
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nilode Aviation Solutions is to manage Saudia Airlines and Saudia Cargo’s fleet of 21,000 containers and pallets from 1 April 2017. Unilode will set up a regional unit load device (ULD) management office in the airlines’ hubs in Jeddah and Riyadh, and will operate a repair shop in Jeddah for ULD and galley cart maintenance and repair, supplementing Unilode’s owned worldwide network of 30 repair stations. The deal was announced at last week’s IATA World Cargo Symposium in Abu Dhabi. In addition, Unilode will manage ULD accessories, and Saudia has chosen the ‘Hybrid ULD Management’ solution in which the containers are part of a dedicated fleet and pallets are supplied from Unilode’s pool. Saudia Cargo chief executive officer (CEO), Nabil Khojah says: “For our service delivery it is essential that we have the ULDs ready in an airworthy condition when and where we need them, and given Unilode’s fleet now counts over 120,000 ULDs, and they will provide us with additional services such as ULD accessories management, this will ensure the correct ULD availability during our partnership with Unilode.” Unilode president and CEO, Dr Ludwig Bertsch adds this is a great
start following the rebranding from CHEP Aerospace Solutions: “Middle Eastern carriers are the world’s fastest growing airlines and we are committed to support our customers’ growth plans which may include the purchase of additional assets and opening of new stations in our ULD management and repair network.” He says this is the second biggest ULD management contract Unilode has after Cathay Pacific, which it manages a few thousands more for. Bertsch adds there are more opportunities in the ULD outsourcing market forecasting there around 80 per cent of ULDs are still run in-house by carriers.
NEWS WEEK WORLDNEWS THE TIACA Air Cargo Forum is to take place in Miami in 2020, co-locating with Multimodal Americas and Supply Chain Americas. The 2020 event will be held at the Miami Beach Convention Center, which is undergoing a $525 million renovation ready to bring together supply chain decision makers from across the globe for The International Air Cargo Association’s (TIACA) biennial event. SWISSPORT International has appointed Luzius Wirth as chief executive officer (CEO) for Swissport UK & Ireland as of 1 June 2017 – replacing Tommy Watt – who is taking early retirement. Wirth will remain in his additional role as executive vice president of group services. As a member of the Group’s executive management, he will continue to report directly to Eric Born, president & CEO of Swissport International. Watt will retire from his daily activities by the end of July 2017.
Handling manual launched
THE International Air Transport Association (IATA) has launched the IATA Cargo Handling Manual (ICHM) to help airlines and cargo handlers work together more effectively while improving safety and efficiency. The ICHM, launched at the IATA World Cargo Symposium in Abu Dhabi last week, is the first complete set of standards covering operational activities of all stakeholders in the cargo handling supply chain. Developed in consultation with carriers and cargo handlers based on industry best-practices, the Cargo-iQ Master Operating Plan and international regulations and standards. IATA global head of cargo, Glyn Hughes says: “Cargo operations are performed at thousands of airports, by hundreds of handlers. With that number of parties involved, ensuring that global standards and best practices are being observed at all times is a constant challenge.” “The ICHM is a single reference source that will help promote global consistency and harmonisation of cargo handling procedures, thereby facilitating the movement of goods safely, securely and efficiently while contributing to a reduction in air freight logistic costs.”
Cargo iQ to work with auditor
CARGO iQ has appointed SGS to undertake its member Audit and Certification Scheme, working with external auditors for the first time. Members were previously audited internally by Cargo iQ’s management team, but now over 30 SGS offices will be involved, kicking off in June, with each audit including a desk review and two-day on-site visit. Cargo iQ executive director, Ariaen Zimmerman says: “It makes a difference that we now have external validation, and an external auditor, allowing us to be more objective in regards to the criteria.” The partnership was announced at IATA’s World Cargo Symposium in Abu Dhabi, where the group also showcased its Smart Data portal.
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NEWSWEEK Strong results in February for UK hubs
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eathrow Airport’s cargo volumes continue to surge with 4.4 per cent growth in February to 127,000 tonnes, and Gatwick Airport (pictured) and Manchester Airport also had a good month. It says emerging markets drove the cargo growth, with Brazil up 10 per cent, India by five per cent and China by 4.2 per cent, while North America grew seven per cent and the Middle East by eight per cent. Cargo volumes have grown 4.4 per cent in the first two months of 2017 to 251,212 tonnes and by 3.2 per cent to 1.5 million tonnes between March 2016 and February 2017. Chief executive officer, John Holland-Kaye says: “Heathrow is off to a flying start in 2017 – we’re delivering the best service of any major airport in Europe to record numbers of passengers and boosting British exports with record cargo volumes.” Tonnage at Gatwick Airport continues to climb and it grew six per cent in February reaching 5,965 tonnes for the month as new long-haul routes drive growth. On a rolling 12-month basis, Gatwick Airport has handled 79,136 tonnes, a 9.8 per cent increase on the 72,063 tonnes recorded in the previous 12 month period. Gatwick Airport chief executive officer,
Stewart Wingate says: “Our long-haul growth is driving the natural corresponding cargo increase, this month +6.0 per cent, which is joined by strong growth in Gatwick’s regional connections across Britain, demonstrating Gatwick’s vital economic role both within Britain and internationally, as we continue to offer the UK Government a credible and deliverable option for runway expansion.” Tonnage at Manchester Airport continues to surge due to new long-haul routes being added as in February it handled 8,066 tonnes of freight – a year-on-year (YOY) rise of 11.2 per cent on the same month in 2016.
Other Manchester Airport Group (MAG) gateways did not see the same growth as Stansted Airport’s tonnage was flat on the same month last year at 19,036 tonnes and East Midlands Airport saw tonnage fall YOY by two per cent to 24,523 tonnes. MAG notes that its UK airports imported 70 per cent of all roses into the UK on Valentine’s Day last month. MAG chief executive officer, Charlie Cornish called on the UK Government to improve links across the North of England: “Manchester Airport is continuing to show its importance in providing global connectivity to a wider and wider segment of the country.”
ISAGO for dnata at LHR
DNATA has been awarded its first IATA’s Safety Audit for Ground Operations (ISAGO) registration for its corporate headquarters and London Heathrow Airport (LHR) station. This is the 10th key station in dnata’s ground handling operations to receive the certification. The other ground operations which are also ISAGO-registered are Dubai (DXB and DWC), Geneva, Zurich, Manila, Singapore, Sydney, Melbourne and Brisbane. ISAGO is an internationally-recognised system for assessing the operational management and control systems of an organisation that provides ground handling services for airlines. dnata UK chief executive officer, Gary Morgan says: “Investing the time and effort in ensuring compliance with ISAGO standards reflect our diligence to continuous improvement in safety standards. It also highlights our goal to operate within globally recognised industry best practices.” For the latest certification, the ISAGO auditing team from British Airways, assessed dnata’s LHR station in the categories of organisation and management, load control, passenger and baggage handling, aircraft handling and loading, aircraft ground movement and cargo and mail handling, for both documentation and implementation. Moving forward in the ISAGO programme for dnata UK, London Gatwick Airport and Manchester Airport stations will be audited later this year.
SEGRO takes over APP
SEGRO has acquired the remaining 50 per cent in the Airport Property Partnership (APP) joint venture from Aviva Investors as part of a £365 million ($445 million) deal. The APP includes the majority of Heathrow Airport’s airside cargo facilities and gives SEGRO total ownership of the £1.1 billion valued APP. APP contains 21 direct property assets, valued at £1,097 million and totalling 350,000 square metres, 87 per cent of which by value are located at London Heathrow, including the majority of the airport’s airside cargo facilities. SEGRO’s chief executive officer, David Sleath says: “We believe now is the right time to take full control and ownership over APP in which we see a number of opportunities to realise further value from its unique portfolio in the short and long term. “We look forward to pursuing our development plans, taking advantage of strong occupier demand for facilities around Heathrow from customers needing rapid access both to the airport and to central London. “Our Heathrow portfolio is one of the jewels in our crown and we are delighted to be able to add scale in this supply-constrained market.” The most significant of the longer-term opportunities is the Heathrow Cargo Centre which was built in the 1960s and requires redevelopment.
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60 SECONDS
Seconds with CHRIS NIELEN
Cargolux Airlines International has been one of the pioneers in air cargo of animal transportation through its live animals product CV Alive. The carrier’s vice president of sales, Chris Nielen, who joined in October last year, talked to Air Cargo Week about what Cargolux is doing at its Luxembourg Airport hub and any trends in the marketplace.
Justin Burns, ACW: How important is the animal transportation sector to Cargolux? Nielen: Live animal transport is one of Cargolux’s core specialties. We have our specialised product CV Alive based on the competence our highly qualified specialists who discuss the individual requirements of each animal shipment with the customer to put together tailor-made solutions to perfectly fit the shippers’ needs.
Justin Burns, ACW: What percentage of your tonnage is it? Nielen: We cannot disclose figures, but CV Alive is an important part of our product portfolio and our business overall, as well as a key part of our strategy to grow our premium products.
and see positive yields compared to the rest of the markets. Our focus on premium products, such as horse transportation, helps us offset low yields in other market segments. Justin Burns, ACW: Do you have plans to grow your horse transportation facilities and services? Nielen: We will soon increase our new generation horse stall fleet by an additional 15 units to improve our service quality.
CHRIS NIELEN Our customers appreciate it - it’s visible to groom and horse.
Justin Burns, ACW: Do you expect the horse transportation market to expand? Nielen: We expect to expect to grow our horse shipments in the future. We have the capacity, tools and experts to boost our business.The demand is pretty diverse - race horses, breeding horses, and polo horses. The value of some can be astronomical.
Justin Burns, ACW: What growth did you see in 2016? Nielen: Live animal transportation is a stable segment with a slight upward trend. However, at Cargolux, we have seen steady growth in our animal shipments during the last two years. It was primarily driven by additional horse shipments from Europe to North America, and North America to the Middle East and Asia. Justin Burns, ACW: What opportunities exist? Nielen: We see many opportunities. Animal transport via air transport has many advantages over train, truck or ship transport, not least better comfort, less stress and shorter travel times. We still see the potential to grow this segments over long ranges, continent to continent.
Justin Burns, ACW: What facilities do you have in LUX? Nielen: We operate from an EU-certified veterinary station with ample holding spaces for all kinds of animals that gives the possibility for rest between, before or after flights, as well as overnight accommodation in noise-protected areas with temperature and light controls. We have access to 41 stables with an additional nine mobile stables if required. As an all-cargo carrier, we enjoy the advantage of parking our aircraft close to the cargo facilities in our network, thus reducing considerably travel from animal station to aircraft or vice-versa. Justin Burns, ACW: What kinds of animals are handled? Nielen: Cargolux was once described as ‘Noah’s ark of the skies’, and that seems a very fitting description. We have flown valuable race horses, alpacas, dogs, breeding bulls, white rhinos, orcas, almost too many to mention. To safeguard the welfare of these travelers, we afford them the safety, comfort and security they deserve. They are handled with extra special care and in full compliance with the IATA Live Animal Regulations, as well as the Convention on International Trade in Endangered Species. We do not carry endangered species or laboratory animals. Justin Burns, ACW: How big is the horse shipment market? Nielen: Horse transports are a major part of our animal shipments and an important segment of our CV Alive product. We have been able to grow our market share. We carry several thousand horses each year. These are breeding as well as race horses that travel in our next-generation horse stalls designed in cooperation with Van Riemsdijk Aviation (manufacturer), and Cargolux in-house experts in carriage of live animals. We invested in these horse stalls in 2012. The enhancements are important and further guarantee the welfare of the horses; they provide safer unloading and improved accessibility for grooms to check the animals during and after the flight. The horse boxes offer ample space for three horses and a groom area. Justin Burns, ACW: Are yields good from moving horses? Nielen: We are in very strong position to compete in the market
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BELGIUM
Brussels aiming for 500,000t after strong start
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he strong growth seen in the second half of 2016 has continued this year, and Brussels Airport head of cargo, Steven Polmans (pictured) is confident of hitting the 500,000 tonne
mark. Cargo volumes grew 1.1 per cent in 2016 to 494,637 tonnes, with freighters posting 6.8 per cent growth though belly volumes were down 12.6 per cent to 126,105 tonnes. The beginning of the year was affected by the 22 March terrorist attack. Though freighter traffic recovered quickly, belly-hold volumes struggled. The strong results
have continued into 2017 with 14.6 per cent growth in the first two months to 85,648 tonnes, driven by freighters, up 27.9 per cent to 65,177 tonnes but belly-hold cargo was down 13.9 per cent to 20,742 tonnes, partly due to Jet Airways leaving in March 2016. Polmans comments: “The trends of 2016 continue: full freighters continue to grow strongly, integrator traffic is raising steadily and remains robust while cargo on board passenger aircraft is still below last year’s volumes due to the departure of Jet Airways and the reduced capacity after the attacks.” He says though Brussels Airlines has been doing well, this was not enough to compensate for the loss of capacity. Polmans is not expecting the double-digit growth to continue but is confident volumes will keep rising above the market average.
He tells Air Cargo Week: “With some projects in the pipeline, we are confident that 2017 will be a very good year for us bringing us back above the 500,000 ton yearly which we did not see since the departure of DHL 10 years ago.” E-commerce and perishables have been the main drivers of growth, particularly the latter for imports on freighters.
Pharma keeps growing
Pharmaceuticals have also been a strong point, and Polmans says: “On the import side we are strengthening our position when it comes to pharmaceuticals. Brussels already handled relatively double the volume compared to the European average, but in 2016 we noticed a 35% growth in flown export volumes of pharmaceuticals!!” Brussels Airport was the first airport community where stakeholders underwent International Air Transport Association (IATA) Center of Excellence for Independent Validators (CEIV) certification. Polmans says: “Not only have we seen an increase in quality infrastructure, procedures are much better and aligned and the different training programs have led to better trained staff with a pharma mind-set. All this has resulted in a significant decrease in temperature excursions and higher quality of handling.” Gaining IATA CEIV is just one step, and Polmans says: “Next steps we are taking are the introduction of temperature controlled airside dollies to reduce the biggest risk to which pharmaceuticals are exposed at an airport, to strengthen cooperation between airports with a similar vision and mind-set via pharma. aero and to introduce pharma handling quality dashboards.” Brussels will continue to focus on the cool chain, but two other areas of interest are real
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estate and a digital platform. Polmans says Brussels has been focusing on second line buildings in recent years, and this year is focusing on the first line. He says: “A first project will be finished by end of June with the opening of the new DHL Express building at the cargo side, a second project will start with new handling buildings for both Swissport and WFS as well as for some forwarding companies investing in airside connected buildings.”
Digital platform to go live
The first applications on the digital platform for the cargo community will go live in the second quarter of this year, and Polmans comments: “This should result in savings and increased efficiencies for all participants and we are very much looking forward to this, especially since the Port of Antwerp last month chose the same system as their new port community system.” With this growth and expansion plans, Polmans believes Brussels Airport and Belgium has a bright future. Doing business in Belgium can be interesting, Polmans admits it is “a very complicated country when it comes to politics and the (in)stability our political systems with different regions in such a small countries brings”, and though it works, it can be hard to explain to outsiders. He admits: “That is a challenge and very often we are our own worst salesman.” Despite these complexities, Polmans says Belgium’s location; well trained and hard working staff, education system and a government focusing on the economy and creating jobs to make the life of companies easier. He says: “On the logistics index of the World Bank, Belgium scores very high. So this shows the focus we have as a transit country on logistics.”
BELGIUM
2017 looks promising after challenging year in 2016
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016 was a challenging year due to the 22 March Brussels Airport terrorist attack, but Brussels Airlines vice president global cargo, Alban Francois (pictured) tells Air Cargo Week that 2017 is looking promising. He says the airline saw some growth in 2016 despite the effect of the attacks in March, with the second half proving very strong with average growth of 21 per cent versus the previous year. This growth has continued into 2017, and the airline is looking forward to launching Mumbai services on 30 March. Francois says: “2017 looks promising: first of all, we are looking forward to the launch of our new BOM route (as of March 30th) and secondly we are capitalising on investments last year in our pharma capabilities and improved capacity management allowing increased volume on all flights.” He says the five flights a week to
Mumbai will mean convenient connections across Brussels Airlines’ network while a 10th Airbus A330 is joining the fleet. Francois says: “We are planning a fleet renewal of our A330s, but this is only foreseen in 2018.” Most of the cargo Brussels Airlines handles is general cargo, but perishables and pharmaceuticals make up a significant proportion. Brussels Airport was the first airport cargo community where stakeholders underwent International Air Transport Association Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV), and Brussels Airlines was one of the companies involved. It is also a member of Pharma.Aero, an association aiming to achieve reliable end-to-end air transportation for pharma shippers. Francois comments: “Thanks to the collaboration and investment of different stakeholders in Brussels in CEIV, Brussels Airport is Europe’s number one gateway for pharma products. This makes sense knowing that Belgium is one of the fastest (top
10) growing export markets for pharma.” Describing the general outlook, Francois says: “Brussels Airport is a very strategic cargo hub, thanks to its location right in the heart of Europe, but also thanks to its “human” scale allowing efficient handling. We have had a very challenging year due to the events of 22 March last year, but we have bounced back and are on a growth pad again.”
Chapman remains positive for 20th year in Belgium
THE outlook in Belgium remains positive for Chapman Freeborn as it celebrates its 20th anniversary in the country, country manager Chris Vandenplas (pictured) tells Air Cargo Week. He says 2016 was successful despite challenging market condition, despite low oil prices meaning a reduction in energy related shipments but Chapman Freeborn grew its portfolio and increased general business volumes. Vandenplas says: “The biggest positives for us were an increase in automotive and pharmaceutical shipments – and we also saw record demand for OBC hand-carry deliveries.” The first two months of the year are normally slower but he says Chapman Freeborn has been consistently busy and started off above expectations, and Vandenplas is optimistic about the outlook for the rest of 2017. He says: “Although we’re located in Belgium we cover the whole of the Benelux region as well as France – and our client base is growing all the time. In June we’ll be celebrating the 20th anniversary of our business in Belgium which is a real achievement.” Chapman Freeborn’s Belgium office is at Ostend Airport, chosen as it was the country’s main charter airport back in 1997, with many Boeing 707, Douglas DC-8 and Ilyushin IL-76 operators based there at the time. The office deals with charters from Ostend, but also from nearby airports including Liege, Vatry, Amsterdam and Luxembourg. Most charters are machinery or energy related equipment, though more unusual items include sports cars, printed matter and even trees. Chapman Freeborn has also been active in delivering humanitarian cargo. Recently it delivered a ship engine from Liege to Cesária Évora Airport in Cape Verde using an Antonov AN-26. Vandenplas says: “The replacement engine was for a 100 year-old Dutch-built vessel named Oosterschelde, which had been left stranded at sea off Cape Verde after a critical engine failure.” “The delivery of the new engine was a relief for the crew and passengers, who had been unable to move the ship for five days.”
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RUSSIA AND CIS
ABC targets pharma traffic growth while charters up
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irBridgeCargo Airlines (ABC) is building infrastructure as it aims to become a major player in pharmaceutical logistics. The Moscow-headquartered carrier is continuing to enhance its capability for the transportation of pharma products, which it expects to be generating between five per cent and 10 per cent of its business by the end of the year. Last November, it became the first airline in Russia and only the 7th in the world to be awarded IATA’s Center of Excellence for Validators in Pharmaceutical
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Logistics (CEIV Pharma) certification for the global transportation of pharma products via its cargo hub in Sheremetyevo International Airport. Meeting this important industry standard is also a further milestone in the strategic partnership between Volga-Dnepr Group and its hub, which is focused on long-term and mutually beneficial cooperation to develop the airport’s role as an international cargo hub in Moscow. Joint compliance with the CEIV standards by both the airline and airport it says is a tangible step towards raising the airfreight market for pharma shipments in Russia to a new level, delivering a globally-recognised level of service for customers shipping temperature-sensitive medical goods. ABC’s general director, Sergey Lazarev, says the airline’s ultimate goal is to become one of the
leading carriers of pharma products for customers across the globe. “Good health is one of our core corporate values so we clearly understand the importance of this certification. IATA CEIV is a confirmation that our quality procedures for the transportation of pharma products, including temperature sensitive goods, fully comply with IATA’s standards. “Every player in the pharma supply chain must follow strict procedures to ensure products reach consumers in good time and in perfect condition. AirBridgeCargo was able to complete its preparation for CEIV certification in just four months and as part of this we have also delivered specialist pharma training to 200 of our employees,” he says. Leading ABC’s focus on pharma is Andrey Andreev (pictured), the airline’s vice president for Europe, and now also sales director for global pharma. He says: “For us, CEIV certification is the entry ticket to the market. It proves the airline is on the right track in respect of the pharma handling rules and regulations set down by IATA. For our customers it is a good sign of our intent but we also recognise that we are working in a global industry an on specific lanes where there are also specific local requirements we have to meet. And, of course, customers have their own strict internal rules and standards,” he comments. As an all-cargo airline, ABC already has an important advantage, Andreev believes: “If you look at the market, 80 per cent of pharma shipments still move as general cargo and the remaining 20 per cent is carried within an active or passive cool chain environment. “It’s true that a good percentage of this business is carried in the bellyholds of passenger aircraft but we believe a lot of pharma customers will be attracted to working with us as an allcargo airline because for us cargo always comes first and they want that level of assurance.” ABC’s fleet and network also add to its appeal for pharma customers. Its Boeing 747-8 Freighters offer an advanced temperature-control capability, including being able to create separate onboard climate zones.
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The airline is also already a prominent player on the major pharma tradelanes, notably connecting Europe and North America as well as the growing Southeast Asia market where it’s already well established in big and growing pharma markets such as China, Korea and Japan. ABC is also looking at new initiatives to help differentiate its ‘abc Pharma’ product offering. One of these is set to address the critical subject of monitoring temperature excursions for pharma products during the transportation process. It is currently evaluating the use of data loggers that enable customers on the ground to track the temperature of their shipment in real-time.
Charter traffic growth
Meanwhile, ABC saw Boeing 747 Freighter charter demand grow 47 per cent in 2016, in addition to continued growth of scheduled operations. Its latest flights were on behalf of DHL Global Forwarding for Evatec, a producer of thin film coating solutions used in wireless communications, advanced packaging, MEMS, optoelectronics, high precision optics and power devices. ABC delivered a series of seven-tonne offsize wooden boxes containing machine tools from Europe to Asia with the first flight from Amsterdam to Hong Kong via its Sheremetyevo hub. This was followed two weeks later by a second delivery originating in Zurich flown on a Frankfurt – Moscow – Hong Kong route. ABC transported 80 tonnes of machinery for the mass production of thin film coatings to support Evatec’s growing business in China. Lazarev says: “This is also a strong reflection of the growing demand we are seeing for Boeing 747F charter services, which we are able to meet due to the continued expansion of our 747 fleet.” ABC’s fleet of 16 747s includes four 747400ERFs, three 747-400Fs and nine 747-8Fs.
RUSSIA AND CIS
Space satellite mission for Volga-Dnepr Airlines
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olga-Dnepr Airlines has transported three more space satellites to the Guiana Space Center - Europe’s Spaceport in French Guiana - in support of its long-standing partnership with Bolloré Logistics and Thales Alenia Space. These An-124-100 flights showed the international nature of the space industry with Volga-Dnepr working with leading French and French/Italian partners to deliver communications satellites for customers in Brazil, South Korea and Indonesia. It was the first time Volga-Dnepr used new lightweight and easier-to-stow aluminium extension ramps to load and unload satellites. The new ramps weigh less and take up less space when stowed in the aircraft, which allows increased volume and payload for cargo when required. Volga-Dnepr’s first flight for Bolloré and Thales Alenia Space in 2017 delivered the Telkom 3S satellite, built for the Indonesian operator Telkom Indonesia and launched on February 14. This was followed by a 13-hour An-124-100 Freighter flight from Nice to Cayenne carrying Brazil’s SGDC satellite and South Korea’s Koreasat 7 telecommunications satellite, built by Thales. Volga-Dnepr’s expertise in moving space cargoes and its close working partnership with Bolloré Logistics and Thales Alenia Space guaranteed both satellites arrived safely at the Guiana Space Center to ensure preparations continued as planned for the dual launch on 21 March onboard the Ariane 5 launch vehicle. The transport containers used to deliver the satellites have been specially designed to utilise the unique capabilities of Volga-Dnepr’s An-124-100 and have been used many times before for similar transportations for Bolloré and Thales Alenia Space. Volga-Dnepr customer service manager, Matthew Thear says: “Our long partnership with Bolloré Logistics and Thales Alenia
Space means we have great experience and finely-tuned processes in place to move highly sensitive satellite technology. This includes minute-by-minute monitoring of temperature, pressure
and vibration in flight. However, we are always looking for ways to advance the services we provide, and the latest development of the new loading equipment is further proof of that.”
Cargo revenue up for Aeroflot
AEROFLOT’s cargo revenue has grown 30.7 per cent in 2016 helped by wide-body fleet expansion, while the airline returned to profit. Cargo revenue was up by three billion roubles to 12.6 billion roubles ($213.6 million) with cargo and mail volumes rising 31.6 per cent with the addition of more wide-body aircraft. Revenue increased 19.4 per cent to 495.9 billion roubles and the airline made a profit of 38.8 billion roubles compared to a loss of 6.5 billion roubles in 2015. Aeroflot deputy chief executive officer for commerce and finance, Shamil Kurmashov says: “In the past year we managed to make significant progress, both operationally and financially, on the path to achieving the Group’s long-term strategic goals.” “Accelerated growth of our operating indicators in the fourth quarter of 2016 together with emerging macroeconomic improvements allow us to have an optimistic outlook for 2017 and the Group’s development prospects.” Meanwhile, Aeroflot took delivery of its new Boeing 737800 aircraft (pictured above) which features the livery of the SkyTeam alliance. Aeroflot has been a full-fledged member of SkyTeam since 2006. The 20-member alliance operates on an extensive network embracing 1,062 destinations in 177 countries worldwide. In January it also took delivery of a new Airbus A321 as it continues its fleet upgrade programme and is set to welcome more aircraft this year and beyond.
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SHIPPERS FOCUS Change is needed but shippers now at the forefront of debate
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hippers are now getting an even stronger voice in the air cargo supply chain and are more active than before in discussions, but they still seek more collaboration. The International Air Cargo Association’s (TIACA) Shippers’ Advisory Committee (SAC) has given shippers a platform to air their concerns and views on the industry and brought shippers closer to the key debates. Supporters of SAC include Ericsson, Bioforce, Chanel Perfums Beauté, Marine Harvest, Sandvik Machining Solutions, Teva Pharmaceutical Industries and Tosoh Corporation, together with the Global Shippers Forum (GSF) and European Shippers’ Council. The group was formed last year and is chaired by Tosoh head of supply chain and general affairs, Lars Droog (pictured) who says it has been a privilege to have in-depth debates with other members of SAC and all stakeholders, while he is convinced there are plenty of
opportunities for the global airfreight industry. A recent white paper ‘Change is needed’ was published in February by SAC and found shippers want all sectors of the supply chain to engage in constructive discussion and embrace new process and new technology. The paper says change is needed to benefit the industry, and all sectors of the air cargo supply chain must work together to drive adoption of new technology and greater transparency. Droog says shippers always felt like they had a voice, but having constructive discussions with all the other stakeholders in the industry is a huge positive change. “We’re not here to frustrate the industry; we are here to share our requirements and vision,” he notes. Droog explains shippers feel efficiency and quality are the most important focus areas for air cargo. “A more efficient industry can be achieved by introducing new technologies such as the logistics data backbone and by focusing on lean processes skipping unnecessary physical/process steps in the air cargo chain). “Certain commodities need special handling and the theoretical ‘verticals’ need to become reality. Pharma is a good example
where airlines, ground handling companies, freight forwarders and trucking companies invest in the realisation of a full temperature controlled air cargo chain,” he explains. His company, Tosoh Corporation works with all modes of transport so he says he has been able to bring to SAC a good understanding of the different modes and share best practices with the air cargo industry. But what does Droog see as the biggest challenges? “Global shippers more and more introduce an end-to-end supply chain approach. This means they would like to have full supply chain visibility and with airfreight this is still quite a challenge. “Also the relatively high number of damages and missing pieces is something to improve. So I think visibility and quality are the most important challenges shippers are currently facing,” he says. He believes the biggest opportunities for the air cargo industry are real collaboration between all the stakeholders and technological innovation such as the logistics data backbone. Droog explains: “The logistics data backbone will enable organisations to share data. It means organisations don’t need to re-enter the same data over and over. It increases efficiency and at the same time it reduces the risk on mistakes. It could also decrease overall lead-times as pre-arrival customs clearances can be done when reliable information is available for all the stakeholders in the air cargo chain. “Besides the technological innovation, there are plenty of other opportunities for the industry. It requires courage, faith and vision from the different stakeholders, but eventually it will increase the airfreight industry’s quality and thus competiveness. This will automatically lead to higher volumes.”
Fragmented
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He notes the traditional airfreight model is very fragmented and this has a negative effect on efficiency, quality and transparency. Droog says most airlines focus on the transportation of shipments from airport to airport and the logistic service providers take care of the transportation to/from the airport, while it is often urgent shipments are transported between warehouses (first line to second line warehouse facilities). “It is really important to identify and drop redundant processes in order to decrease lead-times, decrease costs and risk of damage, and/or missing pieces,” he says. But he is very upbeat about the future of air cargo as says when all stakeholders are open for the required change, innovation and collaboration, he is convinced there is a “beautiful future” for the industry. TIACA’s new talent programme the Air Cargo Supply chain Internship (TACSCI) is one way it is looking build a bright future. The initiative sees different stakeholders in the industry spend a full week visiting each other’s companies and discussing the business challenges. The first TACSCI took place last month in the Netherlands and was hailed a succees. Droog says: “It is inspiring to witness how the ‘next generation’ is used to work together and to share information. It seems collaboration and transparency is in their DNA and I am therefore confident that this new generation will realise the changes needed to improve the competitiveness of the airfreight industry.” The SAC fully supports the programme and is closely working with TIACA’s Education & Research Committee. Droog concludes: “Whatever the future will eventually look like, it is clear that more collaboration between the parties is needed. Stakeholders must take on their responsibility to contribute to an optimised and innovative air cargo chain. “Aviate, Innovate, Collaborate.”
TRADEFINDER Airlines
Cargo Handling
Freight Forwarders
Turkey
United Kingdom
India
Freight Forwarder Spain
Freight Forwarders Hong Kong
United Arab Emirates
USA
Industry Events
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NEWSWEEK
Net profit growth in 2016 for Agility but revenue falls 5.3%
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gility’s net profit grew by 10.6 per cent in 2016 compared to 2015 reaching KD 59.1 million ($193 million) as cost-cutting measures paid off. The Kuwaiti logistics firm’s revenue was down 5.3 per cent to KD 1,234.0 million in 2016 and EBITDA was up 15.4 per cent to KD 115.2 million. For the fourth quarter 2016, Agility reported a net profit of KD 15.7 million – an increase of 9.7 per cent over the same period in 2015. EBITDA for
the quarter stood at KD 31.4 million, a rise of 18.4 per cent over last year and revenue was KD 321.9 million – down 2.2 per cent. Agility chief executive officer, Tarek Sultan (pictured) says: “Agility continues to steadily improve its financial performance, with Agility GIL (global integrated logistics including airfreight) closing the year with an EBITDA improvement of 17 per cent and Agility’s Infrastructure group showing an EBITDA improvement of 30.1 per cent. “Agility generates healthy cash flows, and remains on track to reach its goal of $800 million in EBITDA by 2020. “To reach our target, we are focused on both continuously improving our underlying performance in GIL, while also investing for the future in our Infrastructure companies. “Agility is growing its Infrastructure busi-
nesses: undertaking a number of major industrial real estate projects in the Middle East and Africa over the course of the next few years, expanding the shipping fleet of its Tristar business, and investing in the Reem mega-mall in Abu Dhabi. “Agility’s balance sheet will move towards a net debt position as our Infrastructure companies fund their expansion plan.”
He says Agility starts 2017 with a strong position, adding: “We have our challenges, however we also see many opportunities on the horizon and are investing accordingly. “We are making bets on the importance of using technology to better serve customers in GIL, as well as investing to grow our Infrastructure companies exponentially. We are making good progress towards our 2020 target.”
Smart new logo and brand name for Jettainer
JETTAINER presented its smart new logo at the International Air Transport Association World Cargo Symposium in Abu Dhabi last week. The unit load device company name will now be followed by the additional phrasing ‘Smart – ULD – Pooling – People’. Jettainer says this emphasises that the ULDs themselves as well as their global management (pooling) through smart and intelligent solutions are visionary and employees are also an integral part of the claim the firm says,
because despite all digital means, they represent the company’s most important resource. Jettainer closely cooperates with Lufthansa Industry Solutions on the development of smart ULDs. The improvement of the management software as well as its usability on a wide range of mobile devices have helped to make the processes faster and more efficient. The IT systems also profit from the additional data of the smart ULDs, since they use it to learn how management or maintenance processes can be further improved. Jettainer head of marketing and PR, Martin Kraemer says: “Increases in efficiency in ULD management are the best arguments for our clients. That’s why we have invested in new technologies early on and consequently developed them. “We aim to mirror these developments in our new claim, which emphasizes that we combine smart technology with the knowhow of our experienced employees.”
Shippers says competitiveness up THE International Air Transport Association’s (IATA) Shippers’ Survey found shippers’ believe air cargo is more competitive than before. Results were revealed at IATA’s World Cargo Symposium in Abu Dhabi last week. The survey is carried out every two years. IATA’s head of cargo, Glyn Hughes says the global shippers satisfaction rating remains seven out of 10, the same as in 2015, but there was a greater number of shippers scor-
ing a nine or 10 for satisfaction of air cargo than two years ago, which shows shippers are more happy with the service they are getting. The survey also found 41 per cent of shippers’ felt air cargo was more competitive than other modes of transport, a rise on the 28 per cent in 2015. Hughes says it shows investments made in the air cargo supply chain in infrastructure and to improve processes and efficiency is paying dividends.
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