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The weekly newspaper for air cargo professionals Volume: 18

Issue: 42

26 October 2015

Carriers in Asia Pacific remain subdued


sian Pacific air cargo carriers continue to be hit by the slowdown in world trade recording a 1.1 per cent year-onyear (YOY) decline in demand in quarter three of this year, according to the Association of Asia Pacific Airlines (AAPA). The association released its preliminary figures on Thursday 22 October and says airfreight markets “remain subdued” as it seems the impact of weaker output in China and the slowing of some Asian economies continues to negatively affect airfreight volumes. AAPA director general, Andrew Herdman (pictured), explains: “Air cargo markets have weakened in recent months following the slowdown in world trade. The region’s carriers experienced a 1.1 per cent yearon-year decline in air cargo


demand during the third quarter of 2015, after registering a 4.5 per cent increase during the first half of the year.” In September alone, AAPA says demand measured in freight tonne kilometres (FTK) just matched the same month in 2014, reaching 5.3 billion during the month. Capacity offered by Asia Pacific carriers continues to outstrip demand and in September the available freight tonne kilometres (AFTK) was 8.4 billion, a 2.3 per cent YOY rise on the 8.2 billion in the same month last year. The average freight load factor also fell again in September, this

time by 1.5 percentage points to 62.7 per cent for the month. Herdman says despite the challenging trading times, the Asia Pacific region has still seen growth of 2.6 per cent in the first nine months of the year compared to the same period in 2014. For the first three quarters of 2015, FTK was 47.9 billion, up on the 46.7 billion that was recorded at the same time last year. Capacity grew in the first nine months with AFTK at 75.5 billion, a four per cent rise on the 72.6 billion for the same period last year. The freight load factor also fell

by 0.9 percentage points for the period to 63.4 per cent, down on the 64.3 per cent in 2014. Herdman continues: “The operating environment for Asian airlines remains challenging, complicated by the effects of slowing economic growth in emerging markets, and associated exchange rate volatility. “However, the continued growth in travel demand and lower oil prices have been a positive factor, helping to keep air fares affordable. Overall, Asia Pacific airlines’ profitability is showing modest improvement in an intensely competitive market.”

War of words over former cargo hub Manston Airport Thanet District Council (TDC) is to hold an extraordinary cabinet meeting on 29 October to discuss the future of Manston Airport after a war of words broke out between the council leader and indemnity partner. The UK council is trying to carry out a compulsory purchase order (CPO) on the airport, which closed in May 2014, funded by RiverOak Investments. TDC leader, Chris Wells, has been supporting the CPO but RiverOak Aviation Associates partner, George Yerrall, has released emails between the two because of disagreements between the two parties. In reply to the email by Wells, Yerrall says: “I am disappointed and distressed because your response leaves me with the clear message that you have no interest in doing a CPO with Riv-

erOak in your role as leader of TDC.” Wells had sent Yerrall an email on 7 October setting out what he saw as risks of RiverOak’s proposals. In the email he raised concerns about acquiring the land, blight notices on the airport and who was funding the CPO. Yerrall responded accusing a number of Wells’ points as being “nonsense”. He says: “I find your list of eight issues to be completely without merit and nothing more than another attempt to inexplicably throw one road block after another in front of us in order for you to carry out whatever your real agenda might be.” In Yerrall’s response, he says: “I am no longer willing to jump through hoops based on ‘advice’ from officers who are clearly inexperienced in CPO practice.”

He also added: “Everything we have received from TDC since you decided not to use KCC [Kent County Council] Legal as your consul attempts to obscure and confuse that fact. And that is why I am convinced that you have no interest in partnering with RiverOak as an indemnity partner on a CPO.”



tough times expected to continue into 2016




FedEx takeover of TNT clears hurdle FEDEX is set to be given the go ahead by the European Commission for its 4.4 billion euro ($4.8 billion) takeover of Dutch courier delivery firm TNT Express. The deadline for the commission to issue any antitrust objections to the merger was Friday, 23 October, but both companies say they have not received any from authorities in Brussels. In a joint statement on Tuesday, FedEx and TNT said the Commission has informed them no statement of objections will be issued. Both expect to close the deal in first half of 2016. The integrators reached a conditional agreement on the deal in April, before FedEx made the offer in August and TNT shareholders approved it in October. The European competition authorities rejected a 5.2 billion euro offer for TNT by UPS two years ago, but the FedEx deal was given the green light as it has less activity in the European market. The takeover would give FedEx a significant foothold in the European express market. Industry forecasters say the two firms will have a combined 17 per cent share in Europe, in second place to DHL, but ahead of UPS.


Black hole in Heathrow’s runway plan?


atwick Airport has accused Heathrow Airport of having a £6 billion ($9.2 billion) black hole in its expansion plans after it was confirmed the UK government will not pay for required road and rail improvements. The government’s transport minister, Robert Goodwill, told parliament that the airports will be responsible for any surface access improvements required with expansion. As part of Heathrow’s plans, it would be required to spend about £6 billion on road and rail work, including re-routing the M25 motorway into a tunnel under the airport. Goodwill told parliament: “In terms of surface access proposals, the government has been clear that it expects the scheme promoter to meet the cost of any surface access proposals that are required as a

direct result of airport expansion and from which they will directly benefit.” The two airports are trying to convince the government they should have a runway instead of the other. In July, the government appointed Airports Commission recommended Heathrow should have a third runway. In response, Gatwick, seeking a second runway (expansion picture above) has been saying it will deliver it cheaper and easier. The government is expected to formally respond to the Air-

ports Commission by the end of the year. Gatwick Airport chief executive officer, Stewart Wingate, says: “There is now a £6 billion black hole at the heart of Heathrow’s plans. Heathrow has said it won’t meet the bill and now the government has done the same. As we approach a decision on expansion, Heathrow owes taxpayers, passengers, airlines and government an explanation of how they plan to meet it as this cost increase alone is almost the entire cost of the Gatwick scheme.”

Boeing order penned by EVA

EVA AIRWAYS has ordered 24 Boeing 787-10 Dreamliners (artist impression pictured above) and an additional two Boeing 777-300 Extended Ranges (ER) in a deal worth $8 billion. EVA now has 15 777-300ERs on order, 24 787-10s and five Boeing 777 Freighters, which were ordered at the Paris Air Show in June and finalised in July, in a deal worth $1.5 billion. Boeing says the 787-10’s fuel consumption and emissions are 25 per cent better than aircraft it replaces. Boeing Commercial Airplanes president and chief executive officer, Ray Conner, says: “We look forward to welcoming EVA Airways as Boeing’s newest member of the 787-10 Dreamliners launch customer group. EVA Airways has been a valued Boeing customer over the past decades and we are honoured that they continue to introduce new Boeing widebody airplanes into their growing world-class fleet.” Boeing says the the aircraft will allow EVA to expand in different regions.

Pricing change at Brussels Airlines

BRUSSELS AIRLINES CARGO introduced a new pricing structure for the start of the winter season, on 25 October. The carrier says the new structure better meets the market demand for more transparency, by instead of charging various surcharges on freight prices, as is the case today, there will only be one consolidated ‘Airfreight Surcharge’ in the future. Lufthansa Cargo and Swiss WorldCargo have already introduced a new pricing structure for the next International Air Transport Association winter season and Brussels Airlines has decided to join this new model. The airline explains that increasingly, more cargo customers and transporters want a simpler and more transparent pricing structure that is less volatile and provides more clarity. Brussels Airlines and the airlines of Lufthansa Group say the new and “much clearer cargo pricing model” from the end of October has been established in order to meet this demand. The carrier says prices will consist of two elements: a fixed net sum and an Airfreight Surcharge.



Profit up despite airfreight fall at Panalpina


analpina has seen year-to-date (YTD) profit increase slightly to 69.3 million Swiss francs ($72.6 million) despite revenue and airfreight earnings before interest and tax (EBIT) falling. The profit was up from 69.2 million Swiss francs despite revenue dropping from 4.9 billion Swiss francs to 4.4 billion Swiss francs. Airfreight EBIT fell to 67.6 million Swiss francs from 85.3 million Swiss francs in 2014, which Panalpina says is because it transported less oil and gas and automotive cargo, though perishables increased. Panalpina chief executive officer, Peter Ulber, says: “In the first nine months of the year we succeeded in keeping EBIT and consolidated profit at previous year levels, despite a contracting airfreight market in the third quarter, our exposure to the oil and gas industry and historically high IT investments.” In the third quarter, revenue fell by 14.9 per cent in 2015 to 1.4 billion Swiss francs from

1.7 billion Swiss francs. Profit declined by 4.7 per cent in the period from 25.2 million Swiss francs in 2014 to 24 million Swiss francs. Panalpina’s airfreight division saw revenue YTD fall from 2.3 billion Swiss francs in 2014 to 1.9 billion Swiss francs in 2015. In the third quarter of 2015 airfreight revenue was 652.6 Swiss francs, down from 793.9 Swiss francs in 2014. Airfreight EBIT in the third quarter was 21.5 million Swiss francs, compared to 28 million Swiss francs during the same period

Flat August in Asia Pacific

of 2014. YTD airfreight volumes in 2015 fell to 615,000 tonnes from 629,800 tonnes in 2014. In the third quarter, it fell from 212,500 tonnes in 2014 to 207,200 tonnes this year. For the future, Ulber, says: “The air and ocean freight markets will continue to be soft at best and a rebound of the oil price in the near future seems unlikely … We will accelerate our investments in less cyclical business to further reduce our exposure to certain industries.”

NEWS WEEK WorldNews AIR CHARTER SERVICE has opened its doors in Miami – its fifth office in North America. The firm already has three US offices in Los Angeles, Houston, and New York and one in Toronto (Canada). Heading up the Miami office will be Joel Fenn, who has been working in the company’s Hong Kong operation for the past two and a half years. Head of the cargo team will be Brian Rodriguez. CARGOLUX AIRLINES INTERNATIONAL has appointed Jason Holt as its new nominated person for flight operations. He succeeds Wieger Ketellapper, who will concentrate on the planned joint venture airline in Zhengzhou (China), Cargolux China. Meanwhile, Cargolux Italia has started a second weekly flight from Milan (Italy) to Zhengzhou.

AIRPORTS in Asia Pacific saw volumes remain flat in August while the Middle East saw a small increase of 0.9 per cent, according to the Airports Council International (ACI) Asia Pacific’s FreightFlash for the month. ACI Asia Pacific says volumes remained weak during August because of slowdowns in Asian exports and in oil producing economies. It explains the largest freight airport in the region, Hong Kong International Airport (HKIA) saw volumes fall by 1.4 per cent in August. When HKIA released its August figures, it blamed the drop in volumes to 361,000 tonnes on a fall in transhipments and weakness in China and Taiwan. The association says the second largest freight airport in the region, Shanghai Pudong International Airport saw volumes fall by 0.6 per cent. Pudong does not publicly release figures, but the handling agent at the airport, Shanghai Pudong International Air Cargo Terminal saw volumes increase by 4.9 per cent in August to 133,798 tonnes. Dubai International Airport, the third largest in the region saw tonnage increase by 5.3 per cent to 207,427 tonnes.

Volga-Dnepr adds two An-124s

VOLGA-DNEPR GROUP has signed a finance lease agreement with JSC Sberbank Leasing to acquire two Antonov AN-124-100 Ruslan freighters. The Group’s senior vice president, Sergey Shklyanik, says: “The AN-124-100 aircraft acquisition goes in line with the Group Strategy 2020 which provides for the fleet extension with Russian and foreign-made aircraft.” Volga-Dnepr Airlines, vice president of sales, Dennis Gliznoutsa, explains the two extra Ruslan freighters will secure the airline’s leadership in the global outsize and super-heavy air transportation market. “Great knowledge and expertise as well as broad maintenance infrastructure is required to operate this aircraft successfully. “Volga-Dnepr Group is proud to have all of these prerequisites in place; for over 25 years we’ve been using the advantages of this great aircraft worldwide,” Gliznoutsa says. He adds: “We are confident that by extending our fleet we receive even more flexibility to fit the demands of our customers.”



NEWSWEEK Lufthansa starts Vietnam route VIETNAM is to become a permanent fixture of the Lufthansa Cargo network after the carrier added a freighter service to and from Ho Chi Minh City. Following a successful test phase over the summer months, the cargo airline will be flying a Boeing 777 Freighter weekly to Ho Chi Minh City. The freighter will be departing every Thursday from Frankfurt (Germany), heading for Ho Chi Minh City via Mumbai in India, and will finally terminate in Hong Kong. Lufthansa Cargo’s vice president in Asia Pacific, Frank Naeve, says he is pleased about the stable demand coming from Vietnam: “We are proud to have built up excellent relationships with our clients in Vietnam, which we will now be further cultivating with the fixed freighter connection. “Using our flexible network management

we will be able to effectively meet demand. We are constantly working on making our network in the Asia Pacific region even more attractive for our customers.” Lufthansa will also start a bellyhold service to San Jose International Airport five times a week from Frankfurt using an Airbus A340-300 from 29 April 2016.

Perishables purring for American AMERICAN AIRLINES (AA) CARGO is seeing strong growth in perishables, according to the carrier’s managing director for global and key accounts, interline and general sales agents, Roger Samways (pictured). Perishable goods are central to the airline’s strategy along with increasing widebody capacity on new routes such as Dallas (US) to Beijing, and expanding services on routes like Miami (US) to Sao Paolo (Brazil) and Miami to London. “In these growing markets we see strength in commodities such as seafood, flowers and produce that benefit from the use of our highly fuel-efficient aircraft,” Samways explains to Air Cargo Week. This time of the year is lucrative for AA Cargo for perishables out of Latin America, according to Samways. “Our perishables traffic is really growing out of Latin America and we have recently also seen lots of other interesting moves, such as a pharmaceutical-related projects from the northeast US

into Latin America, and some automotive related increases out of Europe to America.” Cargo volumes have been holding up for American, albeit slightly down on 2014, as it focuses on growing its network and freight was a key contributor to the airline’s record financial performance. Samways says: “Broadly, overall volumes in 2014 were a bit higher, which is reflective of the challenging economic environment in certain areas around the world, although there have been many encouraging bright spots and we are very confident in the success of the months to come. Our Asia-Latin America volumes have continued to be robust and our continued focus upon cold chain has driven a significant increase in activity across our network when compared to 2014.” Samways says American is in the midst of a huge fleet renewal plan, which will result in around one widebody aircraft per month being delivered into its network for the next five-plus years. “We are also making substantial investments in ground service equipment (forklifts, warehouse equipment) and technology, all designed to further enhance our customer experience,” he adds. With next week’s Air Cargo Americas (ACA) show in Miami on the horizon, Samways says this event will reveal interesting insights into issues and trends in the industry, such as electronic air waybill development and reducing supply chain risks. The show is an important date in the year for the carrier: “ACA is a really important part of our plans, allowing us to spend time with many of our customers and suppliers,” Samways says.

Monthly volumes rise for Hong Kong


ong Kong International Airport (HKIA) has seen cargo volumes increase in September by 1.1 per cent to 368,000 tonnes, the first year-on-year (YOY) rise since February. The airport says the surge comes from a three per cent YOY rise in exports, making up for no growth in imports with transhipments falling by three per cent. HKIA says traffic to and from North America and Australasia rose most. So far this year, cargo volumes have increased by 0.2 per cent to 3.2 million tonnes. Until September, January and February had been the only months of the year to see YOY increases,


ACW 26 octoBER 2015

with January rising by 1.6 per cent to 356,000 tonnes and February was up by 22.6 per cent to 303,000 tonnes. March was the first month to see a YOY fall, down 8.2 per cent to 364,000 tonnes, which HKIA blamed on a 16 per cent decline in imports. Cargo volumes were down by 0.7 per cent in April to 360,000 tonnes. In May there was a 0.3 per cent drop to 366,000 tonnes while June saw a fall of 3.5 per cent to 349,000 tonnes. July was down by 1.9 per cent to 363,000 tonnes, because of weakness in China, Taiwan and Europe, with transhipments falling by five per cent. August saw a drop of 1.2 per cent to 361,000 tonnes.

Asia fuelling growth and plans at DFW


allas Fort Worth (DFW) International Airport says Asia continues to drive growth and it sees an opportunity for the gateway to be the main connecting point for the region with Latin America (LATAM). DFW continues to grow and in the 2015 fiscal year ending 30 September, cargo volumes rose 6.6 per cent compared to 2014. The airport’s assistant vice president for cargo and global logistics, Mark Thorpe, tells Air Cargo Week: “Imports, particularly from Asia, continue to drive air trade growth at DFW, and DFW is ideally located for North American distribution. This combination has made our airport and our customs district an increasingly important point of distribution for new regions to North Texas, such as the Middle East. “Moreover, DFW is an efficient connection point for trade between regions, such as Asia and South America, and a growing gateway for

consolidation of exports from the central US region and Mexico to Asia and Europe.” American Airlines continues to drive cargo traffic growth at DFW by increasing its operations, replacing its fleet with larger aircraft with more cargo capacity and adding routes such as a daily service to Beijing. Freighters continue to play an important role in the airport’s growth, Thorpe explains. He says Air China Cargo’s route change adding Edmonton (Canada) as a mid-point between Shanghai and DFW, is an important link as

AEI gains EASA go ahead

“opens opportunities for technology, perishables, and oil and natural gas sectors.” In the future, Thorpe says DFW believes there is the chance to efficiently connect Asia with Latin and South America, providing the best trade lane between the regions. The Americas region continues to be DFW’s staple due to its location to manufacturers along the US and Mexico border and for distribution of imports to the US from Asia and Europe. Thorpe sees continued freighter and bellyhold cargo capacity and service growth in the future and says it is focused on developing infrastructure to be more competitive in targeted trade lanes and commodity classes. Next week’s Air Cargo Americas in Miami is vital for DFW. “This show provides us with a unique opportunity to establish and grow partnerships that will help DFW achieve its traffic growth goals.”

NEWS WEEK WorldNews SILK WAY WEST AIRLINES has been made a member of the International Air Transport Association (IATA). The carrier was presented with membership at the 6th Caspian Air Cargo Summit in Baku, from 5-7 October. A certificate was given to the airline by IATA area manager for Turkey, Azerbaijan and Turkmenistan, Funda Calisir, to the carrier’s chief executive officer, Kamran Gasimov. BRETT Hart is to take over as United Airlines chief executive officer (CEO) with immediate effect after Oscar Munoz suffered a heart attack on 15 October. Hart, who was the airline’s executive vice president, will be acting CEO until Munoz is well enough to return, though United says it is too soon to know how long this will take.

AERONAUTICAL ENGINEERS (AEI) has received European Aviation Safety Agency (EASA) approval for the MD-80SF freighter conversion. AEI has been awarded a Supplemental Type Certificate (STC) by EASA. The original Federal Aviation Administration STC for the MD-80SF was received in February of 2013. AEI is the only conversion company that offers the industry a freighter conversion for the MD-80 series aircraft. AEI’s vice president of operations, David McDonald, says: “We began the approval process with EASA several months ago and everything progressed smoothly and as planned.” The AEI MD-80SF comes with an Ancra Cargo loading system capable of carrying 12 containers and depending upon the particular aircraft model, has a main deck payload capability of up to 21 tonnes. AEI says the converted MD-80SF allows AEI customers to keep their aircraft – “In the air, generating revenue.”

Special live animal movement for AA

AMERICAN AIRLINES (AA) CARGO’s first ever live animal movement between The Netherlands and the US has seen Tiffany flown across the Atlantic Ocean. The Dutch Smoushond dog became an animal VIP when specialist animal movements’ forwarder – Animals to Fly – called on AA Cargo to organise her transport to Philadelphia. Dutch Smoushond’s are extremely rare and Tiffany is only a puppy so required additional specialist handling and care. AA Cargo’s general sales agent in The Netherlands – FlyUs – assigned animal loving team members Patrick Smidt and Benny Bekker to take care of the special passenger. The night before her flight she was brought to the Animals by Air facility where she slept overnight and on the morning of departure she played happily and had a walk before being taken to the aircraft. As a very unusual breed she created quite a stir during the check-in process. Safely loaded onto the Boeing 757 aircraft for the flight Tiffany was re-united with her delighted owners just nine hours later. FlyUs team member, Patrick Smidt, says: “We’ll never forget our first Tiffany and we believe she is a trailblazer for many others to fly with American Airlines Cargo.”




More than 5,000 delegates set to attend key logistics show


he Air & Sea Cargo Americas conference and exhibition in Miami (US) from 4-6 November will bring together logistics industry players from across the globe looking to boost their business in the Americas. More than 5,000 delegates are expected to make their way to the Miami Airport & Convention Center for the event. Held every two years, when it last took place in 2013, it was the largest attending air and maritime cargo show in the Western Hemisphere. Two years ago, the exhibitors and international aviation saw more than $57 million in actual and projected sales, and business executives flocked from 65 countries. This year’s conference is designed to increase cargo growth and international business in the Americas region and provide a platform to update the latest security and safety regulations being used to secure cargo from the intrusion of biological, chemical or explosive materials.

Trade trends

The first conference topic session will be Trade Trends in The Americas, where panelists will give their views on trends in trade, the supply chain and transportation, as well as their visions, strategies and forecasts for air cargo growth in the Western Hemisphere for the next two years, giving forecasts for several trade markets. Among the panel will be Copa Airlines senior director for cargo, Jaime Alvarez, and DHL Global Forwarding chief executive officer (CEO) for the Americas, Mathieu Floreani. Next up is Increasing Productivity of Airports

and Seaports, which will look at some of the issues that create congestion and slow the transit of shipments through airports. These issues range from labour union contracts, insufficient handling systems, and lack of space for expansion. Miami Dade Aviation Department director and CEO, Emilio Gonzalez, will be giving his views along with Quiport Corporation president, Andrew O’Brian. Both will aim to address what is being done to achieve efficiency and productivity to correct process deficiencies, reach agreement with different labour unions, prevent congestion and modernise equipment and processes. American Airlines Cargo president, Jim Butler (pictured), will then take centre stage for

the third session - The Future of Air Cargo in the Western Hemisphere: Key Issues and Trends. In his presentation he will focus on recognising new opportunities and embracing change, the industry-wide adoption of modernised processes and need for streamlined communication.

The American way

Butler will also explain to delegates American’s efforts to improve its customer service experience, while also sharing his thoughts about how the carrier sees the future of technology and partnerships. Wednesday’s final session will be Cargo Transportation Innovations: Going Green – where key industry players will discuss the search for more

efficient, cost effective and ecologically friendly logistics processes. Panelists will debate investments made by transportation and logistics service providers in innovative solutions in such areas as drones for door-to-door delivery of packages, alternative fuels, paperless transactions including electronic shipping documents, lighter cargo containers, more efficient temperature control freight containers and GPS systems for tracking shipments, containers and vehicles. Boeing president for Brazil and Latin America (LATAM), Donna Hrinak, will be among the panel of three discussing cargo innovations. Day two on Thursday, 5 November, will start with the session Reducing Supply Chain Risk. A panel will talk about the continuous threats to air cargo such as terrorism, contraband, theft, governmental security mandates and liability insurance, all which puts a costly security burden on handling companies, aircraft and transshipment centres. Representatives of the regulatory sector including AirForwarders Association, executive director, Brandon Fried, and the International Air Transport Association’s (IATA) head of airport, passenger, cargo and security for The Americas, Filipe Pereira dos Reis, will be aiming to address planned future governmental security regulations with which air cargo operators and airports must comply.

ACW 26 october 2015



Perishables market in the Americas high on the agenda


he Air & Sea Cargo Americas conference and exhibition in Miami (US) from 4-6 November will focus on one of airfreight’s key markets, perishables, which will be the hot topic at the start of the second day on Thursday, 5 November, in the session Perishables Trade Trends. In today’s world seafood, fruit, vegetable and poultry from Latin America (LATAM) are exported to North America, Europe and Asia and beef, poultry and fruits are exported from North America to LATAM, Asia and Europe. Innovations in the handling, packaging and temperature control technology in the supply chain have opened new trade lanes for high value temperature-controlled pharmaceutical products, which are shipped via air. LAN Cargo vice president for cargo operations and continuous improvement, Julian Diaz Renyi, American Airlines Cargo cold chain strategy manager, Tom Grubb (pictured below), and the International Air Transport Association’s (IATA) project lead for its Center of Excellence for Independent Validators (CEIV) on Pharmaceutical Handling programme, Ronald Schaefer, will be among the panelists. The panel will give delegates insights and forecasts on present and possible future trade lanes of perishable goods, and discuss the development of infrastructure in the market. They will also talk about the equipment and processes needed for the efficient transport and safeguard of temperature-sensitive cargo during the transit from production site to the end consumer and what is being done to improve the efficiency of cold chain infrastructures and processes. Key air cargo industry players will then give presentations about specific challenges, opportunities and initiatives, which are set to affect air cargo in the future.

Airlines Cargo, Transcarga, Silkway Airlines, Brussels Airport Company, Centurion Air Cargo, FedEx, National Air Cargo, Hartsfield Jackson Atlanta International Airport and St. Louis Lambert International Airport.

For more information about Air & Sea Cargo Americas visit - which will have updates and news from the trade show in Miami. See Air Cargo Week later in November for a review of the event.

Air cargo in the future

First up, is US Customs and Border Protection (CBP) commissioner from the Department of Homeland Security, Gil Kerlikowske, who will discuss the latest schemes that CBP is carrying out and reveal the department’s plans. Following Kerlikowske will be the United Nation’s (UN) procurement division chief of logistics and transportation, Soomi Ro. She will explain the procurement opportunities for companies at the UN, which moves a substantial volume of cargo in support of UN peacekeeping operations around the globe including to destinations in LATAM and the Caribbean regions. Cuba will be the theme for the final presentation when BG Consultants managing partner and CEO, Dr. Teo Babun Jr, gives an update on trade opportunities in Cuba. The focus of his talk will be on what the reality is versus the dream of trading with Cuba, where relations with the US have thawed. Babun Jr will provide an analysis of the investment and commercial activities on offer in Cuba, how the political landscape is shaping up between the US and Cuba, a likely roadmap for the normalisation of relations between the two neighbouring countries, the difference in regulations between the two and also analyse the opportunities and risks in doing business in Cuba. The conference will draw to a close on Friday, 6 November, when the only session will be Developing Tomorrow’s Transportation and Logistics Leaders.

Need for quality personnel

Many industry commentators say there is a great need for qualified personnel in the various transportation and logistics fields as there is a lack of suitable candidates to take on roles in the coming years. This is despite the existence of many universities, colleges, technical institutions and training centres that provide for the industry. Panelists will join moderator, IATA’s assistant director of cargo facilitation and standards, Michael White, to address what is being done and needs to take place by both the public and private sectors to recruit, educate and train tomorrow’s transportation and logistics leaders. Among those joining White, will be Miami Dade College’s school of business associate dean, Thania Rios, and US CBP executive director for trade and policy programmes, Cynthia Whittenburg. An exhibition will also be held alongside the conference and this year exhibitors will include Turkish Cargo, Accenture, Copa Airlines, American

ACW 26 OCTObeR 2015



Tough times expected to continue into 2016


argologic managing director, Marco Gredig (pictured) tells Air Cargo Week (ACW) business in Switzerland has proved difficult this year and he is not expecting any great improvement next year. Gredig says: “Airfreight has been struggling in the whole of the Swiss market: minus seven per cent compared to 2014.” As for the rest of the year and 2016, Gredig tells ACW: “The market will not pick up and we expect less turnover in kilogrammes and shipments until the end of 2015. For 2016 we are not too optimistic and are not expecting any change from the 2015 figures.” Gredig says despite this, airfreight remains very important for Swiss business, as one franc in four of export volume leaves Switzerland by air. He tells ACW: “We handle pharma, high value goods, watches and parts in the machinery and

electronics sectors.” This year Cargologic has opened a new cold storage facility at Zurich Airport and moved into new premises at EuroAirport Basel-Mul-

house-Freiburg’s Cargo Terminal. Gredig says: “For Zurich we see a slight increase in pharma cargo, mainly in the transfer segment. For EuroAirport the volume handled by Cargologic is the same as last year.” “But we think it will increase in the coming year as the industry is looking for such solutions and will reward suppliers who invested in the proper handling of pharma goods.” In 2015, Cargologic received International Air Transport Association Center of Excellence for Independent Validators certification at Zurich and Good Distribution Practice at EuroAirport. Gredig tells ACW: “With these two certifications we are giving our customers and the air cargo industry a clear sign that our identities in Zurich and Basel are prepared to handle pharma cargo at a very high level.”

Pharma to grow

He believes this will help Cargologic increase its market share in the pharma business. Gredig says: “At these two stations we can offer our friends in the forwarding and airline business highly sophisticated pharma handling that they can rely on. Again this is a clear sign to the

pharma industry that it can ship its goods via Zurich or Basel.” In January this year, Cargologic signed a memorandum of understanding (MoU) with Swiss WorldCargo and SATS to improve collaboration on: “Quality, e-initiatives, temperature controlled transport management and specialised handling solutions.” Nine months on, Gredig explains to ACW: “We have already generated some benefits for all customers. “I’m confident we will continue and improve our services with our two partners and, if I could, I would sign more MoUs with independent handling agents. But – as in the case all over the world – staff allocation is the main problem.” Gredig says Switzerland cannot compete on price because of high costs, so it has to show its quality is worth the premium. He notes: “Personally I think the very great process skills and competencies will help us to create a good future.”

Swiss happy despite competition SWISS WORLDCARGO is remaining optimistic despite competition from freighters in Basel and the strong Swiss franc making exports more expensive. The carrier’s head of market for Switzerland, France and Benelux, Adolfo Liguori tells Air Cargo Week (ACW) that removing the cap on the Swiss franc has resulted in a fall in volumes and cargo moving to other European airports such as Frankfurt, Munich, Luxembourg and even as far away as Amsterdam and Paris. Liguori says: “Compared to last year, there was an overall slowdown, mainly due to the effect of the strong Swiss franc on Swiss exports. We expect business to remain more or less stable.” Swiss does not have any freighters, as it uses bellyhold capacity in passenger aircraft. Liguori says the increasing numbers of freighters at EuroAirport, which services Basel, is providing Swiss’ base of Zurich with strong competition but he is optimistic



that customers will continue to use Zurich. He tells ACW: “Our customers still prefer the direct connections from Zurich with high quality and service level.” The carrier is expanding facilities, with improved temperature controlled facilities at Zurich Airport to cater for rising pharmaceutical and biotech shipments. Liguori says: “The new facility caters for the increasing volumes of pharmaceuticals and biotech shipments via Zurich Airport – and transfer shipments in particular – by offering 120 euro pallet spaces for cargo that needs to be stored at between two and eight degrees centigrade.” Liguori is excited about the airline receiving its first nine Boeing 777-300 Extended Ranges from January 2016, describing them as “a new era in our long-haul aircraft fleet” with an additional 25 per cent cargo capacity. He explains to ACW: “The ‘Triple Sevens’ will be deployed on routes to and from Asia, South America and the US West coast from summer 2016 onward. “The range and payload capacity of the airplane will be a major asset to Swiss WorldCargo.” In the first nine months of 2015, the carrier’s load factor fell 3.7 percentage points to 75.2 per cent compared to the same period last year. Revenue cargo tonnes kilometres were down 3.3 per cent.


Swissport expects continued Basel pharma growth


witzerland as a whole is has seen stagnant volumes, with business in Geneva proving hard work but it is positive in Basel, Swissport vice president for cargo in Switzerland, Andreas Muller tells Air Cargo Week (ACW). Muller says Swissport has a new state of the art terminal in Basel, which he expects to result in strong growth in 2016 while Geneva is facing competition from other European airports. He tells ACW that Basel is proving successful because of its expansion, local authority support, being Cargo 2000 and ISO certified and late cut off times for deliveries. Muller is expecting Swissport to get Good Distribution Practice certified in 2016. Muller says: “Overall, we see a positive attitude from local airport authorities supporting our activities. Further to this we have a state-of-the-art brand new warehouse with the latest equipment to support a ‘get it all’ solution for all our customers – there is simply nothing we cannot handle in Basel.”

Basel, the pharma city

The city of Basel is home to a number of pharmaceutical companies, so Swissport handle a lot of these products at the airport, so it has facilities to cater for them. These include temperature controlled warehouses for products to be stored between two eight degrees centigrade or 15 and 25. It can also handle frozen products in Basel. He continues: “We expect to see Basel continue its positive development based on its current trade and the opportunities we see in front of us, and should see this translate into 2016.” For Geneva, Muller says: “It is difficult to forecast, especially as the summer season was very quiet, however we to see a slight positive year-end peak, which should trans-

late somewhat into 2016.” Swissport does not handle cargo at Zurich Airport so Muller says this could be an opportunity area but he also tells ACW the company has no immediate plans for further expansion. Switzerland as a whole is an expensive country to do business in, with the Swiss National Bank removing the cap on the Swiss franc earlier this year adding to the costs. Muller tells ACW: “It’s a fact that Swiss exports became 20 per cent more expensive from one day to the other, which of course has had an impact on our competitiveness as a country in comparison with other countries. How this will develop over the coming period is hard to say.” It cannot compete on price with other countries so it has to convince customers it is worth the premium through quality. Muller says: “The opportunity lies within our ability to offer a high level of flexibility, quality and reliability – these are still key differentiators.”

Airport results mixed

AIRPORTS in Switzerland are seeing mixed results in 2015, with EuroAirport Basel-Mulhouse-Freiburg seeing freighter growth but Zurich Airport (pictured above) says the currency has caused a decrease. Until January the Swiss National Bank pegged the Swiss franc at 1.2 to the euro. It removed the cap because the euro was so weak against the US dollar causing its value to rocket. Zurich Airport head of cargo, Michael Sack tells Air Cargo Week (ACW) so far this year: “Business is slightly decreasing. [The] main reason is the strong Swiss franc.” Sack adds he expects volumes to remain stable in 2016 and capacity to increase when Swiss International Airlines introduces Boeing 777-300s from January onwards. EuroAirport Basel-Mulhouse-Freiburg has seen growth of 16 per cent so far this year despite currency problems, because of increasing freighter services. Basel has six freighter flights a week including services to Moscow by AirBridgeCargo Airlines and Qatar Airways to Doha, among others. Express volumes have also increased by three per cent in the same time period. Though the airport is expecting volumes to only grow by two per cent to 100,000 tonnes, it is anticipating an increase of 6.5 per cent in 2016 to 106,000 tonnes. EuroAirport opened a new cargo terminal earlier this year to help pharmaceutical firms in Basel and tells ACW the main goods it handles are cool-chain-sensitive pharma. EuroAirport will also spend three million euros ($3.4 million) refurbishing the old cargo terminal into the express cargo terminal - bringing integrators under one roof.

ACW 26 OCTObeR 2015



Lithium batteries top DGR shipments at CEVA


angerous goods (DGR) shipment levels at CEVA Logistics are being driven by products containing lithium batteries. CEVA’s corporate risk analyst and health, safety and enviornment (HSE) hazmat specialist, Rusty McMains, tells Air Cargo Week the proportion of shipments classified as dangerous goods handled has remained fairly constant. The number one DGR growth commodity is products containing lithium batteries, but CEVA is also seeing growth in Class 3 flammable liquids. “CEVA’s historical mainstream hazardous traffic was commodities containing classified chemicals and flammable materials. The new trend is high-tech (lithium batteries) and pharmaceuticals (which often contain large quantities of dry ice in the packaging),” he says. McMains adds CEVA’s main concern in the

handling of DGR is “overall global consistency in safety and compliance”. To achieve this, the firm reviews its working methods, he says. Processes are improved and efforts made to find more efficient ways to communicate and train all employees – from those responsible for loading and onloading of materials, to country manag-

ers – in the handling of DGR. “Just recently, CEVA Global HSE issued very defined expectations and directives for CEVA as a whole”, McMains says. “Within those directives, each region is responsible for their internal workings, along with responsibilities to ensure communication with other CEVA regions intended to improve safe handling, increased regulatory awareness and compliance,” he adds. CEVA has revised its North American ground bill of loading and updated its data entry system to better identify dangerous shipments and improve efficiency in data entry while removing the potential for improper or incomplete data entry, McMains says. McMains says: “Recent restrictions on certain types of lithium batteries is limiting the routing choices, forcing more shipments to fly on freighters.” With shipments containing metal lithium batteries now excluded from carriage on

passenger aircraft, he has seen, “some all-cargo carriers either banning them, or being more restrictive about their acceptance”. According to McMains, CEVA has not experienced any difficulty offering customers options. “We and the carriers we use are meeting increased demand through a combination of promoting higher awareness of dangerous goods, increasing manpower and training more staff in DGR regulations, adding resources and constant reviews of processes,” he says. CEVA has equipped its gateway export facilities with X-ray and explosive trace detection equipment to comply with latest legislation and for detection of questionable shipments. “CEVA welcomes DGR cargo when some might turn it away because we have the knowledge, trained staff and resources to ensure it is handled professionally, safely and in total compliance with all regulations”, McMains stresses.

Lithium batteries remain biggest headache THE International Air Transport Association’s (IATA) assistant director for cargo safety and standards, Dave Brennan, says the largest challenge around dangerous goods (DGR) remains the “improper preparation and shipping of lithium batteries”. He says IATA member airlines are continuing to find undeclared and counterfeit lithium batteries, which pose a significant safety risk to both the air transport sector and the end users, as the batteries have been shown to be susceptible to catching fire, particularly during charging. “IATA continues to call on governments and regulatory authorities to perform oversight, surveillance and, where necessary, enforcement actions of the manufacturers and shippers of lithium batteries to ensure the safety of the air transport supply chain,” Brennan says. He adds IATA is nearing the end of the biennial review cycle undertaken with the International Civil Aviation Organization (ICAO) Dangerous Goods Panel (DGP), with the 25th meeting of the DGP taking place later this month, in Montreal (Canada). This review cycle includes the adoption of the changes from the United Nations as part of the multi-modal regulatory harmonisation. “Proposed changes around the provisions for the transport of lithium batteries by air remain high on the agenda as the DGP looks to identify and adopt methods to more safely transport lithium batteries,” Brennan says. “On the training side, IATA has been part of an ICAO DGP working group that has been



working on competency-based training for dangerous goods. This work has culminated in a proposal that will be submitted to the ICAO DGP to propose the adoption of competency-based training for dangerous goods from 1 January 2019.” He says this proposal will see the details of the new competency-based training provisions published for industry and public comment for the period 2016 – 2017. The information will be available on the ICAO and IATA websites from 2016 and as attachments to the 2017 edition of the IATA Dangerous Goods Regulations and the 2017 – 2018 edition of the ICAO Technical Instructions. “Based on comments received, the ICAO DGP will review and revise the competency-based training provisions as appropriate, prior to adoption into the 2019 – 2020 edition of the Technical Instructions,” Brennan concludes.


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NEWSWEEK Menlo starts work on facility Carriers expand belly networks MENLO LOGISTICS and industrial real estate developer Prologis have held a groundbreaking ceremony for their new 70,000 square metre regional logistics facility in Eindhoven (Netherlands). A time capsule was buried as part of the ceremony containing an artist impression of the completed building, a Polaroid picture of the ceremony and a newspaper dated 14 October. The laying of the building’s foundation, was preceded by work on the site, which is on schedule and set to be operational by April next year. Menlo president, Robert Bianco (pictured right), says the firm’s 17th facility in Europe is an ideal location for the company to continue increasing the scope of its logistics capabilities. The logistics centre is located at the Acht Industrial Park in Eindhoven, which has direct access to Belgium and Germany, as


well as Amsterdam to the north. When completed, it will be one of the largest build-to-suit projects in the region. Menlo’s managing director in Europe, Tony Gunn (pictured in the middle), says it will provide to customers across the high-tech, healthcare, retail and consumer, manufacturing and e-commerce sectors.

ellyhold routes continue to be added by airlines with Asia the focus for Air China and Finnair. Air China will start a four-times a week service from Beijing to Kuala Lumpur from 25 October 2015, using an Airbus A330300 aircraft. In 2014, imports and exports between Malaysia and China exceeded 100 billion Chinese yuan renminbi and Malaysia was China’s largest trading partner among ASEAN countries. Air China says the non-stop service, will promote cooperation between economies, trading and investment between the two countries and adds impetus to the growth of the local economy. The carrier will follow the launch of Beijing-Kuala Lumpur service with the introduction of Beijing-Mumbai, Beijing-Colombo and Beijing- Islamabad-Karachi routes. Finnair will operate routes to Fukuoka in Japan and Guangzhou in China for the sum-

mer season in 2016. Finnair will open a route from Helsinki to Fukuoka in spring 2016, with three weekly frequencies and from Helsinki to Guangzhou with four weekly frequencies between 6 May and 29 October 2016. Qatar Airways has launched daily non-stop flights between Doha and Adelaide (Australia) from 2 May, 2016. It will be first route to Australia using its new Airbus A350 aircraft adding to its daily flight to Sydney from 1 March, next year. Cathay Pacific Airways will discontinue its daily flight between Hong Kong and Doha from 15 February 2016, due to commercial reasons.

UPS widens express reach

UPS has extended its UPS Worldwide Express service to more than 41,000 new postal codes around the world, including nearly 15,000 postcodes in Europe and 1371 postcodes in the UK. The integrator says this creates earlier money back guaranteed delivery options for customers who previously had only end-of-day money back guarantee delivery options. UPS claims it already delivers more packages internationally and offers more money back guaranteed small-package delivery options than any other integrated logistics company. The company says the service is particularly beneficial to those with time-sensitive international shipments and says companies in the high-tech, retail and industrial manufacturing industries are the biggest users of UPS Worldwide Express shipping. UPS Europe vice president of marketing, Scott Aubuchon, says: “We are pleased to expand the global footprint of UPS Worldwide Express in Europe, in important trade lanes like Asia and around the world. “As international trade continues to grow and supply chains become increasingly global, European businesses need money back guaranteed time-of-day delivery options they can count on. Their success, in turn, drives their commerce with other European countries and the rest of the world, which creates European jobs.”

ACI Asia Pacifc and CCAA sign MoU


he Airports Council International (ACI) Asia-Pacific and the China Civil Airports Association (CCAA) have signed a memorandum of understanding (MoU) to strengthen cooperation in promoting airport excellence. The MoU was signed by ACI Asia-Pacific regional director, Patti Chau and CCAA deputy secretary general, Li Xiaome, at the ACI Asia-Pacific HR best practice seminar in Tokyo on 7 October. The MoU aims to drive exchange of knowledge and expertise by introducing and promoting ACI programmes to members of CCAA. The two associations agreed to enhance collaboration through training, the Airport Carbon Accreditation Programme, the APEX in Safety Programme and the Economic Data Exchange. Chau says: “We believe the agreement will allow both associations to pursue our mutual goals of achieving airport excellence for our members in the region.”

ACW 26 October 15