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The weekly newspaper for air cargo professionals Volume: 21

Issue: 21

28 May 2018

EgyptAir Cargo reboots

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fter several years of seeming hibernation, EgyptAir Cargo is easing itself back into the cargo game, with fleet renewal and growth alongside expansion of its Cairo cargo hub all translating to a 30 per cent boost its cargo capacity, writes Donald Urquhart. Among the first crucial steps are three A330-200 P2F conversions, the first of which will be delivered in June, followed by another in October with the third and final expected in the Q2 2019, EgyptAir Cargo VP economic affairs sector, Adel Helal, told Air Cargo Week. “This is the current plan, the future plan will be to increase from three to five aircraft, or more,” Helal says, adding “we are moving step by step.” These aircraft will replace Egyptair Cargo’s existing maindeck of two

mab kargo to undergo iata ceiv pharma

A300-600F and one A300-B4F which currently operate on services into Ostend East, Cologne-Bonn, Milan and Rome, Istanbul and some African and Middle East cities. The added range and capacity of the A330s – 58 tonne capacity versus the 40-42 tonnes of the older aircraft – will give the carrier the ability to serve more distant and higher volume markets including the US, China, along with African destinations Johannesburg and Nairobi. The US route will initially see New York JFK where the carrier already has traffic rights, but Helal adds other destinations could be added if “economically viable”. Another important link will be A330F services to Shanghai and Hong Kong. The cargo side is currently supported through the bellies of the passenger side – with 60 aircraft serving nearly 72 destinations –

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acs to move into larger beijing office

including Bangkok, Guangzhou, Beijing and Tokyo in Asia. “It is supporting already our airfreight movements, but China is a big market and Hong Kong is a big market so in addition to our belly capacity we are going to support it with our new freighter aircraft,” he adds. Another key step in the fleet arena will be the P2F conversions of two B737-800Fs – with a payload capacity of about 20-22 tonnes – in 2020 which will complement the longer range A330Fs by taking on a regional role. “The A330s out of the Far East, Europe or the US will have their cargo consolidated in Cairo and we will use the narrowbody aircraft on short haul services to the regional airports either in the Middle East, Africa or in some places in Europe like Istanbul maybe,” he says.

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Qatar Airways touches down in Gatwick

Qatar Airways’ inaugural flight from Doha to London’s Gatwick Airport has touched down, making it the airline’s sixth gateway into the UK and the second one for London. The double daily service is operated by a Boeing 787 Dreamliner, and for the summer, Qatar Airways will operate 95 flights to the UK a week, with six a day to London Heathrow, 16 a week to Gatwick and Manchester, daily flights to Cardiff and Edinburgh and seven a week to Birmingham. Qatar Airways Group chief executive, His Excellency Akbar Al Baker says: “Qatar Airways is delighted to be expanding its reach in both London and throughout the U.K. Earlier this month, we launched direct flights to Cardiff, the capital of Wales, clearly demonstrating our continued commitment to this market. “We are very proud of our strong and extensive trade ties with the U.K. and look forward to offering our loyal passengers the chance to explore the newest and most exciting destinations within our global network.”

Lufthansa says Nihao to Chengdu Lufthansa Cargo has expanded its Chinese freighter network with two flights a week between Frankfurt and Chengdu. The Boeing 777 Freighter services, flight number LH8410 started on 5 May, departing Frankfurt on Mondays and Saturdays, returning from Chengdu every Tuesday and Sunday. Lufthansa Cargo vice president Asia Pacific, Frank Naeve says: “We are very proud to now be serving the western Chinese mega city of Chengdu twice a week with Boeing 777 freighter flights. This extension to our network will allow us to offer solutions for the booming markets in the west of China.” Chengdu is Lufthansa Cargo’s fifth freighter destination in China after Shanghai, Beijing, Guangzhou and Hong Kong.

the big interview ... with venkatesh pazhyanur

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it-friendly outlook profits champ

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NEWSWEEK

MAB Kargo to undergo IATA CEIV Pharma

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AB Kargo is to undergo the IATA CEIV Pharma process, making it the first airline and cargo terminal in Malaysia to embark on certification. The airline held a signing ceremony attended by MAB Kargo chief operations officer, Mohd Zulkefly Ujang and International Air Transport Association (IATA) regional vice president for Asia Pacific, Conrad Clifford, with Malaysia Aviation Group chief executive officer, Izham Ismail witnessing the signing. The certification process will take about six months to complete and IATA Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma) involves undergoing training, as well as an assessment of facilities and processes by independent, IATA certified auditors to satisfy the strict requirements on pharmaceutical handling before receiving the certification. MAB Kargo acting chief executive officer, Ahmad Luqman Mohd Azmi says: “We see great potential in pursuing the certification. Moving temperature-sensitive, high value pharmaceutical cargo can be challenging due to the multiple requirements and processes needed to cater for such shipment. “Moving forward, with MAB Kargo’s dedicated cold chain han-

Left to right: Mohd Zulkefly Ujang, Izham Ismail and Conrad Clifford dling service which is MH Centigrade that is supplemented by a cargo partner, Envirotainer, MAB Kargo will be well positioned to be the leading pharmaceutical and biotechnology cargo hub in South East Asia.” Clifford adds: “The shipping of pharmaceutical products is the fastest growing segment in the airfreight industry. Given the sensitive nature of the products, it is necessary to establish global time and temperature standards and best practices to ensure the integrity of pharmaceutical products are not compromised when they are shipped by air.

Cargo grows 6.7% in April for Cathay Pacific

Cargo and mail volumes for Cathay Pacific Group increased by 6.7 per cent in April with load factors also improving by 2.3 percentage points. Cathay Pacific and Cathay Dragon carried 174,489 tonnes of cargo and mail between them in April, a year-on-year improvement of 6.7 per cent. Load factors rose by 2.3 percentage points to 68 per cent. Capacity measured in available cargo/mail tonne kilometres was up 4.2 per cent to 1.4 billion and revenue tonne kilometres increased by 7.9 per cent to 978 million. Cathay Pacific director commercial and cargo, Ronald Lam says: “The positive momentum in our cargo business continued into April. Tonnage grew ahead of capacity while yield strengthened. After a slight slow-down in our Hong Kong and mainland China markets early in the month, volumes started to pick up again during the month and network flow from the Americas, Europe, India, Japan and Southeast Asia continued to show strength.”

ACW REWIND

WHAT a difference three years can make. A $7bn order for US aircraft from a Russia client may not be so easy today.

Volga-Dnepr to buy 20 B747-8Fs Volume 18 Issue 24 22 June 2015 Boeing and Volga-Dnepr have signed a Memorandum of Understanding for 20 Boeing 747-8 Freighters, valued at $7.4 billion at the US aircraft maker’s list prices. Volga-Dnepr Group was the first to order the B747-8F in Russia and took delivery of the first in 2012. These additional 20 aircraft will be acquired, according to Boeing, “through a mix of direct purchases and leasing over the next seven years.” No Volga-Dnepr statement about the MoU was available, but in the Boeing announcement, the group’s president, Alexey Isaikan, says: “Together with Boeing, we will keep the unique technology of air logistics offering both the Antonov 124-100 and our expandxed Boeing 747 fleet for benefits of global customers.” According to Boeing, Volga-Dnepr will utilise the 747-8F aircraft for the developmengt of its AirBridgeCargo Airlines (ABC) business.

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NEWS Emirates picks Switzerland boss ACS moves to larger Beijing office

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mirates SkyCargo has appointed David Harman as cargo manager for Switzerland, taking responsibility for all operational and commercial aspects in the country. He has over 30 years of international aviation and cargo experience, having previously worked as vice president for dnata Ground and Cargo Handling in Zurich, and held various positions through the years at CHEP Aerospace Solutions, Unitpool, Swissport International and Swiss WorldCargo. Harman succeed Nathalie Picaud, who has taken over responsibility for pharma sales in Europe for Emirates SkyCargo. Emirates country manager for Switzerland, Juerg Mueller says: “We are excited to welcome an experienced individual like David Harman on board for our cargo market in Switzerland.” He adds: “His leadership qualities and extensive know-how of the industry make him the

Harman ideal candidate for the Emirates SkyCargo team in Switzerland. We are confident that he will make a significant contribution to the continued growth of the cargo business in one of our key markets.” Switzerland is important for Emirates SkyCargo, with the airline operating two daily passenger flights from both Zurich and Geneva with belly hold capacity on board Airbus A380s and Boeing 777s.

Air Charter Service has moved into larger premises in Beijing to enable the next step in its plans for expansion as the Chinese market continues to grow. The new office is in the heart of the business district and will double the size of its previous premises. ACS China managing director, Wanny Wu says: “This is an exciting time for the Chinese aviation industry, with the government’s plans to increase the number of airports from 220 to 260 by the end of 2020. When you think that the US has more than 5,000 airports and airfields, there is still a long way to go, but we are heading in the right direction.” Air cargo charters are booming, with Wu saying: “Our cargo operation has also gone from strength to strength – we doubled the size of our cargo team and saw triple-digit growth in

Wu charter numbers last year. “We have ambitious expansion plans in China and in this new office we now have the space to triple the team size in the coming years.”

Finnair picks IAS as Belgian GSSA

FINNAIR Cargo has appointed Inter Aviation Services (IAS) as its general sales and service agent (GSSA) in Belgium. The GSSA agreement takes effect from 1 June 2018 and IAS will provide full cargo sales, marketing, customer service, administration and operational support. Finnair Cargo sales director for Europe, Anja Poyhonen says: “I’m pleased to announce the appointment of Inter Aviation Services. IAS has many capabilities that are essential to support Finnair´s growth. “IAS has a substantial knowledge in transporting pharma by air, and a strong position among the pharma producers and agents. IAS’ good connections and excellent service will pro-

vide a good ground for strong support to our customers.” IAS business development director, Esther Romar says the company is “delighted” to represent Finnair Cargo as its GSSA for Belgium and Luxembourg, saying: “Finnair Cargo has a globally recognised reputation as a first class operator providing reliable, competitive and top-quality services across a worldwide network including major Asian destinations. “With a fleet of modern A350 aircraft and several value-added specialist products including pharmaceuticals and other temperature controlled commodities, Finnair Cargo provides customers with an exceptionally high level of services.”

Quote of the week “We are in the sweet spot, but the requirements are much more than just being there” Liege Airport vice president commercial, Steven Verhasselt

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NCA accused of keeping damage quiet

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apanese media outlet NHK World is reporting that a Japanese air cargo operator has been found to be negligent in reporting serious damages to its planes on multiple occasions. The country’s transport ministry is examining these incidents. Nippon Cargo Airlines is alleged to have sustained heavy damage to its freighters in the United States twice, last year and earlier this year. The company flies B747 freighters. In one case, the firm did not submit a report to the Japanese government. In the other, the carrier is alleged to have given false details to make the damage appear less serious than it actually was, claims the media outlet. The transport ministry inspected the company’s headquarters at Narita Airport on Tuesday, and checked maintenance and servicing records. Sources close to the firm say there were nine

WorldNews ON 12 May, a KLM 747-400 freighter, operated by Martinair and carrying 52 horses from Miami to Amsterdam, made an emergency landing at Shannon airport, Ireland according to reports in The Irish Sun. Crew had reported a possible fire on board. REPORTS on The Himalayan Times website state that two pilots were killed when a shipment-laden Makalu Air Cessna crashed at Kharpunath Rural Municipality in Nepal on 16 May.

other cases in the last decade in which serious damage or defects were regarded as minor problems and went unreported. Damage to aircraft is not treated as an accident in Japan unless it is sustained while in

Royal Brunei speeds up London services

operation. However Tokyo mandates reports for serious damage. Though none of the flights were taken out of service, repairs were not immediately attended to, says NHK World.

Glasgow Airport in Scotland has confirmed that Mark Johnston has been appointed as managing director. Johnston is currently the airport’s operations director, a position he has held since 2015. He first joined Glasgow in 2004 and went on to hold a number of senior roles.

Royal Brunei Airlines is to launch of daily non-stop flights between London Heathrow and Brunei International Airport, effective October 28 2018. The non-stop flight to Brunei, a result of the airline dropping its Dubai stopover, will see route reduced from 18.1 hours to 14.6 hours and the Melbourne-Brunei-London Heathrow route reduced to 23.2 hours from 28.4 hours. Royal Brunei Airlines CEO, Karam Chand says: “The introduction of Royal Brunei’s non-stop flight between London Heathrow and Brunei is a significant milestone as, for the first time, Brunei and the UK will be seamlessly connected by a direct air link. With the strong cultural, economic and political ties between the two countries, we are very proud to be able to provide this daily connection. “Our Dubai stopover has served us well but following an increasing demand from our customers for a direct connection, we have been working toward this goal and are very excited to be able to announce its implementation before the busy Christmas period. We are also looking forward to announcing further product and service innovations throughout 2018.” Paris-based ECS Group is Royal Brunei’s European cargo GSA.

Glasgow wants air links to China SCOTLAND’S Glasgow Airport and Shanghai Airport Authority have signed a partnership agreement that will see the two cities work together to jointly petition China’s main airlines to establish direct air links between the West of Scotland and the Chinese powerhouse city of Shanghai.

Goodman and Damco lease at LAX INDUSTRIAL property group Goodman and freight forwarder Damco, part of AP Moller Maersk, have announced a new 10-year lease for 989,809 square feet in greater Los Angeles, California. The facility is located within the Los Angeles industrial market providing central access to LAX International Airport.

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Alaska brings Copper River salmon to Seattle in time for grilling season

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laska Air Cargo has delivered more than 29 tonnes of wild Copper River salmon to Seattle for the start of the summer salmon grilling season. The first flight landed at Seattle-Tacoma International Airport at 06.30am on 18 May, with an additional three flights delivering yet more fish following by midday, marking the start of the salmon grilling season, an event eagerly awaited by seafood lovers throughout the Pacific Northwest and beyond. Alaska Air Cargo managing director, Jason Berry says: “Alaska Airlines plays a significant role in supporting the Alaska seafood industry, which is recognised worldwide for its sustainable fishing practices. “Our cargo employees are working around the clock to ensure we deliver the first catch of the coveted wild Copper River salmon to market, often within 24 hours of being pulled from the water.” Every year Alaska Air Cargo partners with the state of Alaska’s three largest seafood processors, Trident Seafoods, Ocean Beauty Seafoods and Copper River Seafoods to bring the fish to Seattle where it will be delivered to restaurants and grocery stores throughout the Pacific Northwest and across the country.

The season’s first fish, a 31-pound king salmon donated by Trident Seafoods was the catch of the day for three Seattle chefs competing for the best salmon recipe in the ninth annual Copper Chef Cook-off. In an Iron Chef type competition, three culinary experts had 30

minutes to prepare and serve the salmon to an audience of Alaska Airlines customers, with Wildfin American Grill’s executive chief, Chris Bryant beating executive chef of Ray’s Boathouse, Paul Duncan; and chef owner of Lark, Slab Sandwiches + Pie, Southpaw, John Sundstrom.

Panalpina adds Queretaro to “Speedy” charter loop

Panalpina has added Queretaro International Airport in Mexico to the “Speedy” loop of its charter network, also connecting Mexico City and Guadalajara with its airfreight gateway in Huntsville, Alabama. Queretaro is located in the Bajio region, Mexico’s fastest growing economic area with key industries such as automotive and manufacturing, and one of the largest aerospace industry clusters in the world. On Friday, Panalpina’s Boeing 747-8 Freighter will operate on a Luxembourg - Huntsville - Queretaro - Guadalajara - Huntsville - London Stansted - Luxembourg route, and a Luxembourg - Huntsville - Mexico City - Guadalajara - Huntsville - London Stansted - Luxembourg loop, and two Luxembourg - Huntsville - Luxembourg circuits. In addition, Panalpina offers one more Luxembourg - Huntsville - Luxembourg round trip using a Cargolux full charter, bring the total number of trips to five. Panalpina Charter Network global head, Matthias Frey says: “Panalpina has been committed to Querétaro for over five years now. We have been working closely with Querétaro airport operatives and government authorities, strategic airline partner Atlas Air, and Huntsville International Airport to build on the continued success of the Network.” Panalpina’s country head of airfreight in Mexico, Enrico Boehme says: “Panalpina’s own scheduled flights connecting the US and Europe with Mexico are a well-known and appreciated product in the Mexican market thanks to a remarkable on-time performance and top-notch equipment. “Panalpina is a pioneer in the Mexican air freight market and the new scheduled flights to and from Querétaro are another testimony of that. They offer our customers access to our global network, greater flexibility for their supply chains and room to grow. We give local and multinational companies in Mexico the opportunity to export, import and resupply from their worldwide network in a seamless way.” Panalpina transported 995,900 tonnes of airfreight globally in 2017, with Mexico playing an important role. Of the 100 extra flights Panalpina pre-procured to operate regular charters during the peak season, 25 were Boeing 747 Freighters flying into Mexico. So far in 2018, Panalpina has operated 11 ad hoc charters to Mexico with 10 more scheduled in the coming weeks.

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VDTM to carry out maintenance in Liege

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olga-Dnepr Technics Moscow (VDTM) has completed the certification of a line maintenance station in Liege, Belgium for aircraft registered in Bermuda. The Russian MRO provider will now be able to carry out scheduled line maintenance for Boeing 737-300/400/500, 747-400 and 747-8, with work including daily maintenance and defect elimination. VDTM carries out maintenance operated by AirBridgeCargo Airlines, and the station will also start providing MRO services for Atran Airlines’ Boeing 737s in the near future. VDTM general director, Pavel Tereschenkov says: “The set-up of the line maintenance station in Liege is a huge step forward for us because it makes accessible the European maintenance market for B737-300/400/500, B747-400 and B747-8 aircraft. “Our employees managed to accomplish the whole certification process in a record-breaking five months, half of which was spent on the preparation and provision of facilities with the necessary equipment. We intend to expand a range of services with a focus on quality and timely fulfillment of commitments.” The company plans to develop a range of services at the line maintenance station in Liege, including engine washing as well as to facilitate cooperation with other airline partners.

The business was set up in 2008 to provide MRO activities within the Group and improve the quality of service. In Russia, VDTM provides services at Moscow’s Sheremetyevo, Domodedovo and Vnukovo airports, Krasnoyarsk’s Yemelyanovo Airport, and Krasnodar’s Pashkovsky Airport. All stations are certified MRO bases providing maintenance services for Boeing 747, Boeing 737, Airbus A320 and Sukhoi Super Jet aircrafts. A workshop for aircraft interior and loading equipment maintenance has been created and is now in development.

SF fleet keeps growing

SF Airlines continues to expand its fleet by adding a 43rd and 44th cargo aircraft to its fleet in quick succession. The 43rd aircraft, a Boeing 757-200 flew in from Singapore, landing at Shenzhen Bao’an International Airport at 18.00h on 7 May, in time for the charter season for transporting fruit. It was joined by the 44th aircraft, also a 757-200 on the morning of 10 May, bringing SF’s 757 family fleet to 22. SF Airlines’ fleet consists of Boeing 737, 757 and 767 cargo aircrafts, and the company says it is speeding up investment in new capacity in response to the coming peak season of chartered flights for fruit and fresh products.

DHL acquires Suppla

DHL Supply Chain has acquired Suppla Group, a specialised logistics firm with expertise in sectors including warehousing and packaging services across the life sciences and healthcare, retail, consumer and technology sectors. Suppla is present in five regions and 25 cities in Colombia, with about 500,000 square metres of storage capacity and around 4,500 employees. DHL says Suppla’s experience of the local logistics market will enable it to significantly improve its footprint in Colombia. DHL Supply Chain Latin America chief executive officer, Javier Bilbao says: “With Suppla’s proven business results, professional operations and a strong overlap to DHL Supply Chain’s culture, products, sectors and customers, we are taking one more step to tap the potentials of a promising market environment and be ready to serve our national and international customers.” DHL Supply Chain’s services in Colombia include Service Logistics operations, supported by a recently inaugurated warehouse in Bogota, and the acquisition will allow DHL Supply Chain to strategically expand its portfolio in the market. Bilbao says: “Colombia has ambitious investment programmes in the coming years, and we are confident that this acquisition will strengthen our presence to provide integrated and customised solutions to our local and regional customers.” Suppla president, Robinson Vasquez Escobar says becoming part of DHL Supply Chain is “spectacular news” for the company, saying: “We are looking forward to merge our local market knowledge with the resources and competencies of a global player, projecting our people in the most global logistics company and giving our customers service opportunities beyond our frontiers.”

Geodis creates four new regions Geodis has created new organisations to provide clients with easier access to its portfolio of intercontinental transportation, customs clearance, road freight transportation, warehousing and last mile distribution. Four new regions have been established, Western Europe, Middle East and Africa under Laurent Parat’s control; Northern and Central Europe overseen by Thomas Kraus; the Americas led by Randy Tucker; and Asia Pacific headed up by Onno Boots. The Group is enhancing two central departments, business, development & marketing with the mission to design and build end-to-end logistics solutions, and innovation & business excellence to embed innovative ideas in business processes.

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AIR CARGO CHINA REVIEW

Panel discussions that tackled a trio of issues

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series of panel discussions outside the main Air Cargo China hall allowed participants to hear a range of experts, both inside and outside the airfreight industry, share their expertise and thoughts on what the future might hold for the industry. Three panel discussions tackled the topics of blockchain, future developments and collaboration. Each of the 90-minute events was hosted by industry veteran Maresch Ltd owner and managing director, Bernd Maresch.

Blockchain arrives

Unheard off until quite recently, the idea of Blockchain is forcing its way to the top of the airfreight agenda, even if many in the industry still lack an understanding of its meaning. In a wide-ranging and thoughtful discussion, Jettainer managing director Carsten Hernig; Tongji SEM, School of Economics and Management professor of global business and strategy professor Ulf Henning Richter; and Brussels Airport cargo business development manager Sara Van Gelder took on the challenges of using Blockchain technology to Increase transparency, data security and efficiency within air cargo. In his presentation, Professor Richter answered the question that many have: what is Blockchain technology? He said: “It is simply a de-centralised database.”

“Opportunities multiply as they are seized.” In Townes’ view, these new opportunities for the industry must be seized. “It all boils down to the shipper asking: where’s my stuff?” Another panellist pointed out that in the 20th century, “it was cash and the customer who were king; now, AI is the king.”

The internet is now a long established business tool. What is more recent is arrival of the ‘Internet of Things’ (IoT), to say nothing of drones, Artificial Intelligence (AI), Blockchain, robotics and disruptors. This range of risks and opportunities were discussed by ECS Group CEO, Adrien Thominet; Lufthansa Cargo COO and executive board member Dr. Alexis von Hoensbroech; Ranger Aerospace CEO and founder, Steve Townes; and IATA regional cargo manager, Lindsey Niu who talked about how the power of the internet and how the resulting IoT is shaping the future air cargo world. Quite simply, can it be a curse and blessing at the same time? Key to the panellists’ observations is that the industry needs a “new mindset”. In many ways, the industry remains a very traditional placed to work.

20th century hangover

The future arrives

Sun Tzu speaks

Despite this being a talk on the future of air cargo, Townes did not hesitate to bring in the words of a Chinese general, Sun Tzu, who wrote:

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Working together

The final panel discussion, staged on the last morning of the event, tore into the idea that many in the industry as it is now work in silos where they should collaborate. Instead, the industry must come together to create a seamless supply chain. Too many roles are distinct and time-consuming and are hangovers from 20th century practices. The key to the direction of industry developments and collaboration along the supply chain and the rise of air cargo communities: are they capable of meeting the ever-rising transport needs of perishables and pharmaceuticals. The danger over the horizon is undoubtedly Amazon, whose name was uttered very soon into the discussion. Gazing into their crystal balls were Swiss WorldCargo senior director, head of business development and customer experience, Andrés L. Perez; Qatar Airways Cargo senior manager cargo products, David Beecham; Miami International Airport section chief, aviation marketing, Miami-Dade Aviation Department, Dimitrios ‘Jimmy’ Nares; Changi Airport associate general manager, cargo and logistics, Jaisey Yip; and Brussels Airport head of cargo and logistics, Steven Polmans, who is also the vice president of TIACA.


AIR CARGO CHINA REVIEW

Students explore the opportunities blockchain could bring

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lockchain has huge potential for the logistics industry, and students at Transport Logistic were given the chance to investigate how it could be applied. Students from Tongji University’s Chinese-German University College were given two days to investigate blockchain and become familiar with the technology and implications before making presentations on Friday 18 May in front of delegates at the show. IBM’s definition for blockchain is: “a shared ledger technology allowing any participant in the business network to see the system of record”, but despite many people believing it is the next big thing for the industry, not enough people understand it. The ‘Think-a-thon’ was spearheaded by Transport Logistic China organiser, Messe Muenchen and Jettainer, with Medienburo am Reichstag and Tongji University also providing backing. Jettainer head of marketing and PR, Martin Kraemer told delegates: “Students did research to see how blockchain can be used in logistics, it is the next big wave of innovation to hit us after big data. We don’t fully understand it but we are doing research to see how to apply it.”

Great opportunity

Technical University of Darmstadt and Tongji University research associate, Pascal Wolff added: “This was a great opportunity for students. They had 48 hours of not too much sleep and did a great job. Blockchain is the next big thing, it was a great chance to become familiar with the technology and implications.” The students were split into three groups who showed how it is easier to track damage and protection, how it can improve customs clearance and cool chain logistics, and its use in short term

decentralisation. To show how blockchain could be used in the real world, they used an auto company in Wuxi, China sourcing parts from a supplier in Penang, Malaysia. It was explained that 85 per cent of total door-to-door lead time was caused by customs clearance but blockchain would significantly reduce customs clearance time, meaning the auto company would receive their items much quicker.

Faster customs clearance

ULD leasing. The first group explained that logistics faces challenges due to a lack of transparency, complicated paperwork, time consuming processes and poor data. It was also pointed out that customers are concerned at not knowing where ULDs are, not being able to get information without the integration of IT platforms, damage takes too long to resolve and is too expensive. Ways these problems can be resolved include smart ULDs with sensors to detect shock and temperature, photos of loading and unloading, using existing computer infrastructure and integrating multiple data sources from airlines, ground handlers and forwarders. Benefits for Jettainer would include instant visibility so they know who to charge when ULDs are damaged and the data base would allow for more efficient analytics. The students predicted that in 10 years time, people will ask why we were not using blockchain sooner. The second group said features of blockchain include irreversible information, autonomy, openness, anonymity and

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Through this, Jettainer would benefit from reduced time and costs from customs clearance, higher ULD turnover rates and greater ULD visibility. The whole supply chain would benefit from reduced costs, higher customer satisfaction and improved digitisation. The cool chain was another talking point, as anything up to 40 per cent of vaccines are degraded due to temperature variations with 60 per cent of this being caused by mishandling at airports. Jettainer provides cool ULDs, and if they can be combined with sensors, the end customer can get information to improve transparency. It was pointed out that medicine can be expensive and it is often hard to know if it has degraded though using blockchain will make it easier to know if there have been any issues. The third group looked at blockchain’s potential for short term ULD leasing, explaining that it can decrease transaction costs, improve efficiency, transparency and data security, and create a trusted network. Through the use of blockchain, it was estimated that there could be 10 per cent additional utilisation and revenue through short term leasing and other benefits would include smart contracts that are valid and fraud resistant, along with simple to record transactions.

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australasia Air cargo hinges on perishables and e-commerce growth

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erishables and e-commerce remain key growth sectors for the Australasia trade as the demand for fresh produce, seafood and meat in Asia continue to drive volumes out of Australia and New Zealand, while inbound e-commerce continues its unabated growth, writes Donald Urquhart. For Australia’s dominant home carrier, Qantas, Asia remains key to its cargo growth. “Of particular importance is our relationship with Asia,” says Qantas Freight chief operating officer Nick McGlynn. Noting that over 50 per cent of the Qantas Group’s international passenger capacity now serves the region, he says that in the 2016-2017 financial year, Qantas Freight uplifted approximately 19,000 tonnes of freight to Southeast Asia alone across both passenger and charter flights. “Our commitment to the region Ionides was bolstered on 31 August when we

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announced that we will be re-routing our daily Sydney-London A380 service via Singapore rather than Dubai, while also upgrading our existing daily Melbourne-Singapore flight from an A330 to an A380 – an arrangement that will significantly increase both freight and passenger capacity,” he adds. For Singapore Airlines Cargo, which just came off a healthy year posting an operating profit of SGD 148.1 million ($110.7 mil-

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lion) in the 2017/18 financial year, the Australasia trade is also an important one. “January and February 2018 reported good year-on-year growth, even with Chinese New Year holidays in mid-February, providing a good end to the perishable season,” says Singapore Airlines divisional vice president public affairs, Nicholas Ionides. “However, the general freight market for exports out of the region has remained flat since March 2018,” he said adding that the overall cargo market is expected to “remain stable and overall yields are forecasted to stay relatively healthy.” Likewise, the view from further offshore where Customs Brokers and Freight Forwarders Federation of New Zealand (CBAFF) president Glenn Coldham, said the New Zealand air cargo market has also softened in the first quarter of 2018. “This slow down is expected as perishable volumes Ex-New Zealand wind down and the import market reacts to a falling New Zealand dollar.”

Asian perishable demand

But in between the peak seasons, there is none-the-less persistent demand from the growing middle class in Asia, particularly China, for these perishables. Virgin Australia, whose cargo sales are handled by Virgin Atlantic Cargo, up-scaled its Melbourne-Hong Kong service to a daily flight last November has seen steady cargo growth in both directions on its A330-200 passenger flights which offers nearly 14 tonnes of belly capacity. Aside from perishable fruits and vegetables, regular shipments have included meat and dairy products, garments, shoes, electronics goods, vitamins and milk powder. Perishables are also a key export commodity out of Australia and New Zealand for Singapore Airlines Cargo, but the cargo also comes with its own set of challenges, Ionides says. “Perishables, our main export commodity, is dependent on a number of variables such as weather conditions, export country quarantine and customs restrictions, as well as international perishable commodity supply and pricing. This creates volatility in export volumes when a single variable changes,” he says. Apart from perishables such as produce, meat, seafood and dairy, other commodities including general freight, aircraft engines, event and concert movements, as well as e-commerce products are moved in and out of the Australia and New Zealand by the Singapore carrier. Being a story of growth all-round last year, New Zealand saw consistent growth on both airfreight import and export lanes, says Coldham. “A strong peak season in the NZ summer assisted this volume growth with seasonal produce, dairy, fish and meat perishable volumes complimenting dry import and export cargo volumes.” But there was a downside to this as capacity shortages were experienced on trans-Tasman route in the peak season, as well as on import volumes Ex-Asia and Europe, he adds. “Cargo on trans-Tasman route remain congested in the NZ /AU summer months due to seasonal increases in dry cargo volumes aligning with increased demand from the perishable sector,” he says. While NZ has seen overall market capacity growth on Asia and US trade lanes with new carriers entering the market, overall Australia-New Zealand capacity has declined slightly, Coldham notes. Freight forwarders also face new challenges through the rapid expansion of B to C e-commerce volumes at the expense of traditional B to B supply chains more suited to traditional freight forwarding business, Coldham adds. This is also exacerbated by large retail online platforms moving into the logistics and freight forwarding space. And with the trans-Tasman crucial for New Zealand shippers, forwards and consumers, Coldham says that “from a New Zealand viewpoint we believe trans-Tasman airfreight demand will grow as the big online retailers are likely to follow in the footsteps of Amazon and set up warehousing on the Australian eastern seaboard to service both the AU and NZ marketplaces.” For Qantas, the changing nature of the freight industry also means that there are opportunities for the carrier to improve its business and the services it offers, says McGlynn. “We have been proactive in making necessary changes to meet those evolving needs, including the changing of routes and aircraft types to optimise our network to better meet demand. This is something we will continue to do across our business to ensure we’re consistently providing our customers with reliability and choice.”


The big interview with ... Venkatesh Pazhyanur

Better data means increased efficiency

Paper continues to burden the air cargo industry despite e-AWB penetration rates passing 50 per cent. Venkatesh Pazhyanur spoke to Air Cargo Week about what Unisys is doing to reduce the burden and how new technology could affect the air cargo industry.

T

hough the air cargo industry is embracing digitisation, more work must be done as higher quality of data increases the ease of doing business, according to Unisys senior industry director – freight solutions, Venkatesh Pazhyanur. Electronic air waybill penetration breached the 50 per cent mark in 2017 but was still some way off targets set by IATA but it now has a positive momentum having broken this barrier. Initiatives and focused work by air cargo operators has helped with the e-freight programme aim of taking away the paper burden across the supply chain. He says: “E-AWB was the first initiative towards that broader goal. Our subscribers are in the top 80 per cent and in the international market we have carriers leading the charge. IATA publishes a scorecard for the top adopters for those who have put it into practice and got tangible gains, and our clients are at the top of the list.”

In the case of shipments such as pharmaceutical and healthcare products, this can be a life or death situation so improving the data quality gives companies the ability to take proactive steps to ensure there are fewer delays or issues. Looking to the future, the goal is to increase the ease of doing business. E-freight is just one method and the major target is to remove paper processes.

New initiatives across the industry

Pazhyanur is optimistic about it but the problem in the industry is the wide range of capabilities. Saying that there could be 100,000 shippers and forwarders dealing with airfreight, there will be a wide variety of maturity levels. He says: “The reason why we miss the mark in terms of targets is that air cargo organisations have to deal with this reality. Our value proposition as a technology enabler want to raise the bar, taking people in the lower level of the maturity levels to the higher end and our solutions can do that.” “We are optimistic that these levels will go up in the coming years but that is only one part. E-AWB was the first initiative and it has to expand to the trading of documents so the experience should quickly propagate to take paper away from the full logistics chain.” Pazhyanur says paper is burdening the business and one of the prime gains of going paperless is quality of information. He explains: “When information transfers electronically then it is trapped at the source where the quality is best. What paper does not only in terms of operational inefficiencies is it reduces the quality of data as it travels across the supply chain.”

Better quality of data

Improving the quality of data is an enabler to get the visibility of the shipment as it travels, and the visibility leads to process efficiencies. Giving an example, he says: “If a very important shipment is delayed in transit, if we get to the point where there is proactive visibility then the stakeholders can collaborate to identify and execute the best recovery mechanisms. If the visibility is not there then it inevitably leads to a reactive measure, which then leads to shipment not reaching the destination at the right time.”

aircargoweek.com

Personalised experience

Unisys has launched a personalised experience for pet shippers. They can book the shipment using a smart device, get constant visibility of where their pet is and how comfortable the animal is. He explains: “If there are reasons to believe that the pet is not comfortable then the technology enables the owner to talk to the pet to comfort them. If there are going to be temperature variations that could put the pet in inconvenience then there is clear prior visibility and it can ease the transport of the pet.” To do this, Unisys has used emerging technologies of device integration and machine learning mechanisms. “These kind of enablers are going to come not just in pet transport but in various other products in the chain that lends itself to towards the personalised business experience.” Unisys saw a lack of business solutions and recent high profile cases of animals not being treated appropriately and even dying during transportation means something must be done to resolve this issue. “There was a definite need for things to get better and as we saw this opportunity we brought this solution to market.” Unisys is working with specific carriers who are “delighted” about the new product because they have happy customers and could expand the solution to other product areas. Pazhyanur says that when it brings new products into the airfreight market, it is uniquely positioned with its experience. He says: “We have been in this business for the last three decades, we understand the business. We have built in vast experience. Security is built into all of our solutions, it is not an afterthought and we have secure solutions across the freight supply chain to serve the airfreight industry.” Looking to the future, Pazhyanur says: “Over the next few years, as we play in all three parts of the business on the passenger, airport and freight sectors we are in a unique position to discover the synergies across the three and to bring in solutions that connect these parts of the business. In our freight solutions we make the freight business easier Venkatesh Pazhyanur to operate at cost levels that are sustainable.”

Pazhyanur says: “There are multiple new initiatives that we and the whole industry are launching, which aims at this common goal that when there is a subscriber and provider of a service,

Variety of maturity levels

then the question is what are the other ways of bringing in appropriate technology enablers to make those business transactions easier.” One key thing, in his opinion is personalisation. “If I as a shipper am shipping a specific kind of product, when I interact with the providers of transport, my interaction has to be very persona and with the right context.”

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benelux Region’s growth driven by the traditional and the new

C

argo volumes continue to grow across the Benelux region, with new game-changing cargo sources emerging out of Asia and ongoing challenges as airports face growing capacity constraints, writes Donald Urquhart. Across the Benelux region, like much of the world, 2017 was a good year. For Liege Airport it was a record year. And it is by now, a not unfamiliar story – relatively flat volume growth until about August when things began to change. From SepPouwels tember onwards,

Liege posted record month after record month all the way through to April 2018. “The market has continued to be strong and Liege Airport is still surfing on the increased demand wave. Our first four months were the best in the history of the airport, by a long way, and we sure hope it continues,” says Liege Airport vice president commercial, Steven Verhasselt The business was driven both by growth from existing players and the addition of new services. Similarly, over at Brussels Airport, cargo volumes grew by 8.3 per cent in 2017, although the loss of some main deck capacity resulted in a slight dip in full cargo volumes in Q2 of 2018. Its traditional core strength in pharma was also up 20 per cent. “We had a good start this year and due to all

Amsterdam Airport Schiphol

the extra flights we already have and the ones we expect to materialise in the near future, 2018 should again be a good year for us,” says Brussels Airport Company head of cargo and logistics, Steven Polmans. The airport attracted new capacity recently, with Emirates operating double daily B777 passenger aircraft, along with Hainan Airlines adding routes to Shanghai and Shenzhen. Together with the start of Cathay Pacific, this translates to a considerable increase in belly capacity, Polmans notes. On the full cargo side, Brussels welcomed some extra weekly Singapore Airlines Cargo flights, as well as LATAM and recently also Turkish Airlines. A good start to the year indeed.

Blooming flowers

Meanwhile, at Amsterdam Schiphol Airport, where flowers still reign supreme, an uptick in cargo throughput saw total figures for January to December 2017 reaching 1.75 million tonnes. In the first three months of 2018, the airport has seen a mixed bag in terms of its key markets, with Asia, Latin America up, Africa mixed and European, North American and Middle Eastern trade down in Q1, year-on-year. But for Schiphol the most significant factor were the full freighter volumes, which overall were down 2.4 per cent, with 7.4 per cent fewer full freight air traffic movements (ATMs). On top of this belly cargo volumes eased slightly, showing a 1.6 per cent drop compared with Q1, 2017. Of course for Schiphol, the well known problem is the constraint on air traffic movements which continues to have a deleterious effect on the expansion of full freighter flights. “We see growth opportunities in combining cargo with belly capacity,” says Cargo@Schiphol director of business development Bart Pouwels. He notes that more and more network planners are looking at cargo when planning new passenger routes. To that end Schiphol has created a tool that shows airlines the potential of additional cargo on intercontinental routes to help the planners understand the benefits which additional cargo can bring and what aircraft to operate on a route.

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The reduction in full freighter has had a “knock-on effect in our first quarter results, but there are nonetheless underlying positive growth trends in cargo business from China and Latin America that we hope to build upon over the coming year,” adds Pouwels. There are of course beneficiaries of these constraints at Schiphol, namely Liege Airport. Verhasselt is quick to point out that it has had the same strategy – #freightersfirst – for many years and is not, in fact, a reaction to what is happening in other airports. “All our customers, existing, new and future, have a strategy that needs what Liege can offer – 24/7 operations, flexibility, close to the market, both in distance and especially in time, are the key drivers. For freighter operators into this part of Europe, the cargo DNA of Liege Airport is a perfect match with their own,” Verhasselt says. “We are in the sweet spot, but the requirements are much more than just being there. For oversize cargo, we have dedicated services, a close knit cargo community and experienced handlers, customs and customs agents, and trucking that minimise time to market.”

The China factor

While China has been a key driver of volumes to the Benelux region for quite a number of years, its importance is clearly growing and growing rapidly. “China remains our largest market, with Shanghai our main destination,” says Pouwels. “We see many e-commerce and high-tech shipments coming from China to the Netherlands and many e-commerce, luxury items and baby powder going out from the Netherlands to China. “China, our largest country market, showed an increase of 2.1 per cent at 30,735 tonnes from January to March 2018, year-on-year, boosted by increased volumes from both freighter and belly cargo flights.” Trade with the Asian continent overall remained relatively stable, with a four per cent decrease in inbound cargo to 67,629 tonnes but a one per cent increase in outbound cargo, up to 75,182 tonnes.


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benelux

Luxembourg’s IT-friendly outlook profits CHAMP

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ne of the hidden strengths of Luxembourg is it is indirectly helping push the air cargo industry towards fuller digitisation, writes Michael MacKey. “They do encourage innovation in the IT sector. It’s a very IT-friendly country to be in,” said CHAMP Cargosystems, VP global sales and marketing, Nicholas Xenocostas. CHAMP is a 51/49 joint venture between SITA and Cargolux. CHAMP uses what Luxembourg offers to provide IT services to the main stakeholders in the air cargo community: airlines, ground handlers, freight forwarders, general sales agents and airports. And nothing else. “We are very focused on the air cargo sector. This is our key focus, We don’t have any distractions,” Xenocostas told Air Cargo Week adding it would stay that way.

Near-bluetooth development

This cuts out CHAMP’s market for it even though there are sometimes problems in the shift over to a digital industry. One is the industry wide uncertainty, or maybe just lack of understanding, about the advantages of digitisation and automation. The latter is a big, sprawling field covering robotics, Bluetooth and one specifically mentioned by Xenocostas: a prototype near-Bluetooth for ULD tracking. Xenocostas

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ACW 28 MAY 2018

“I see a big uptake of ground handler looking to automate,” says Xenocostas of South America. The company is also seeing a similar turn of events in North America.

Asian carriers

Another problem identified by Xenocostas is the tech is becoming available faster than it is being implemented. “There is a disparity,” he says. Complicating this is the issue of upstream and downstream compatibility and different standards to factor in here. That said things are changing – albeit not as fast as some would hope. As Xenocostas points out the majority of stakeholders do have a level of implementation with even what could be termed fragmented sectors such as the many, many small freight forwarders are seeing progress. “I think there is a lack of technological uptake but it’s happening,” he says. There is also a regional twist to this with Asia which tends to be the star of the class when looked at in terms of the implementation of IATA’s e-AWB being joined by South American countries.

aircargoweek.com

There is though seemingly some way to go before those regions catch up with Asia. IATA lists four Asian carriers in the top ten for use of e-AWB. These are Cathay Pacific, Singapore, Korean and China Airlines with Asian airports such as Hong Kong, Changi and Pudong dominating. By sector, the other market starting to move is shippers who are increasing keen to offer their customers visibility especially in the high-yielding pharma and high value goods sectors, he added. Also having an impact is e-commerce which is driving demand for portal services. One issue CHAMP has identified with all this is what Xenocostas referred to as resistance-to-change management. This makes itself felt in two ways management does not step back and look at how it can do things better. Or, alternately, loads up on new tech but uses it in the same way. CHAMP can help with consulting for the former and does training for the latter. Curiously for a tech company its training approach is a 50:50 mix of online and face-to-face. “We bring customers to our premises” says Xenocostas. What should be pointed out is whilst CHAMP is headquartered in Luxembourg it has several offices throughout the world so those premises are nearer than thought. It has a strong global footprint with its services present in over 100 countries, although it is weighted towards Asia-Pacific and the Middle East North Africa and Europe.


TRADEFINDER Airlines

Online Services

Training

Turkey

Cargo Handling

Charters

GSSAs

Freight Forwarders

United Kingdom

United Kingdom

United Arab Emirates

Hong Kong

Freight Forwarders India

United Arab Emirates

United Kingdom

Freight Forwarders USA

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