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The weekly newspaper for air cargo professionals Volume: 20
3 April 2017
Lufthansa focusing on costs for 2017
eing more cost efficient and cutting costs are the most important things for Lufthansa Cargo in 2017, following annual losses, chief executive officer Peter Gerber (pictured) says. Speaking at Lufthansa Cargo’s annual press conference at Frankfurt Airport on 29 March, he admitted 2016 had been very tough, though the fourth quarter was good, but believes its plans to improve efficiency will put it in a stronger position in the future. Lufthansa Cargo made a loss of €50 million in 2016. He told journalists, including Air Cargo Week: “I wasn’t surprised, maybe I would be the
wrong CEO if I was surprised. 2016 was a tough year, the first six months were very tough. I think luckily we had our cost cutting efficiency program and accelerated the right things.” Gerber adds a number of programs have helped results and will continue to do so this year, including cost cutting, new products and partnerships. Lufthansa Cargo has been working on areas including revenue, IT, using its fleet more efficiently and its products, having launched myAirCargo and td.basic. He comments: “It is really important to invest in the future with new products and look for future developments.”
Lufthansa Cargo will continue to partner with other airlines following the success of its All Nippon Airways joint venture and moving under one roof in Frankfurt and Hong Kong as part of its partnership with Cathay Pacific Cargo. Lufthansa Group and Cathay Pacific also signed a cooperation agreement for codeshares on Lufthansa, Swiss, and Austrian Airlines flights on 27 March. Gerber comments: “The joint venture with Cathay Pacific Cargo is one step ahead in this case.” It is also continuing negotiations with United Cargo, and the joint venture is expected to start this year. Gerber also says Lufthansa Cargo remains committed to freighter aircraft, operating five Boeing 777s and 12 Boeing MD-11s. Its two MD-11 that are parked are up for sale and so is one in operation, though Lufthansa is happy with them, as they are not old aircraft and the fuel efficiency is still good. He says: “We will fly with the MD-11, we are happy at the moment as they are not that old, we have the last production freighters ever build from around 2000, that is no age for a plane, especially not a freighter.”
Lawlor says: “We have always been aware that, without a fully independent UK operating company, it has been much tougher to convince some of our stakeholders of our genuine commitment to Manston.” “The creation of RiverOak Strategic Partners Limited should therefore be viewed as a
firm indication of our absolute and ongoing determination to revive Manston Airport as a successful and profitable airfreight hub, of national significance, with complementary passenger and engineering services.” He adds: “We believe that we can bring a comprehensive approach to the shaping of a stronger economic future for Thanet and the wider East Kent region, creating a vibrant economic air cargo hub which delivers high quality jobs for local people and utilises the muchneeded runway capacity for the South East that Manston is ready and able to provide.” RiverOak says the new venture is not affiliated to RiverOak Investment Corp and is fully funded and resourced to accommodate all costs arising from the DCO and acquire and reinstated Manston as a fully operational airport to be operated, owned and managed independently of RiverOak Investment Corp.
RiverOak founds new venture to take over Manston Airport
RiverOak Strategic Partners has acquired all rights and interests, and taken on all responsibilities for the Development Consent Order (DCO) to reopen and operate Manston Airport from RiverOak Investment Corp. Manston Airport (pictured) was closed in May 2014 and since then there has been a long running local campaign to reopen it. The site has been sold to developers but RiverOak Investment Corp attempted to acquire the site as an indemnity partner to Thanet District Council funding a compulsory purchase order. Thanet rejected the plan in late 2015 and RiverOak has been attempting to take control of the site by a DCO, and has set up the operating company RiverOak Strategic Partners to assume all responsibilities for the order to reopen and operate the airport. RiverOak Strategic Partners director, Niall
60 SECONDS WITH UNITED CARGO’S JAN KREMS SHIPPERS DEMAND TRANSPARENCY FOR PHARMA NAVITRANS FOCUSES ON PERISHABLES PREMIUM CARGO DRIVES GROWTH AT CHANGI
Healthy start to 2017 for Asia Pacific AIR cargo has had a “healthy” start to the year with 7.6 per cent growth in the first two months of 2017, according to the Association of Asia Pacific Airlines (AAPA). Freight tonne kilometres (FTK) were up to 9.96 billion, with capacity rising 2.5 per cent to 16.68 billion available FTK, helping push load factors up 2.9 percentage points to 59.8 per cent. In February, FTKs were up 11.3 per cent to 4.58 billion, capacity by 1.2 per cent to 7.62 billion, with the load factor rising 5.4 percentage points to 60.1 per cent. AAPA director general, Andrew Herdman says: “During the same period, air cargo demand registered a healthy 7.6% increase, with a boost in demand for air cargo shipments of intermediate and finished goods.” He continues: “High levels of business and consumer confidence across most major markets underpins continued optimism for further growth in both air passenger and cargo demand.” “However, intense market competition, rising fuel and other costs will continue to put pressure on yields. As such, the region’s carriers remain vigilant in seeking further opportunities to enhance growth and increase operational efficiency.”
1.8% volume growth for Virgin in 2016
irgin Atlantic Cargo’s freight volumes rose 1.8 per cent in 2016 helped by a strong second half of the year and high peak season, with revenue of £174 million ($218.4 million). The airline carried 218,000 tonnes but says growth was offset by price pressure driven by overcapacity in the market and weakness of the pound, though December’s performance was strong with volumes up five per cent year-on-year and revenue 16 per cent above target. Virgin’s load factor of 64 per cent is above the industry average supported by increased pharma and e-commerce business, notably to and from the US, helped by the transatlantic joint venture with Delta Air Lines. UK routes to New York, Boston, Chicago, Detroit, Atlanta, Los Angeles and San Francisco saw strong growth, as did Dubai, and flights from the US to London and Manchester also performed well. Virgin says it also saw double digit increases in Delhi and Lagos. Virgin Atlantic senior vice president for cargo, John Lloyd says: “2016 was a challenging year for a whole variety of reasons. The impact of overcapacity on yields and the falling value of sterling
were major factors and we also saw a reduction in revenues due to route changes driven by passenger demand.” “The second half of the year was much stronger, particularly for business from the UK, and it ended with a welcome pre-Christmas peak season which resulted in some improvement in average yield. We expect to see some more stability return to the market this year.” It ordered 12 Airbus A350-1000s in 2016 with deliveries expected from early 2019, and the new aircraft will offer 10-22 per cent more lower deck cargo capacity depending on configuration.
Kerry to sell AAT share as profits rise KERRY Logistics Group is to sell its share in Asia Airfreight Terminal as part of a strategy to streamline business and increase performance. It says the cash and working capital will allow the group to restructure its business position and focus on pursuing development opportunities in core businesses or potential future acquisitions. The news came as it announced turnover increased 14 per cent in 2016 to 24 billion Hong Kong dollars ($3 billion) while net profit was up four per cent to HK$1 billion. Group managing director, William Ma says:
“Kerry Logistics has managed to weather market headwinds in 2016 and minimised the adverse macro-economic impact on its business with quick response to market changes. Despite the tough operating environment, the Group managed to achieve a 14% growth in turnover, while core net profit grew by 4% in 2016.” “The sustainable increase in earnings was attributable to strong growth of our IFF [international freight forwarding] business, solid growth in South and Southeast Asia, as well as synergies generated from recent acquisitions.”
time:matters launches airmates platform
TIME:MATTERS has launched airmates, a software-based platform for on-board courier services offering fast quotes, maximum cost efficiency and a global courier network. Using the platform, customers can input their shipment details and receive a complete quote in less than a minute, which can be used to make an immediate online booking with all costs included, from transfer to the airport, tickets and hotels. It says optimising processes and scaling the service globally, savings from cheaper flight tickets can be passed onto customers. Suitable couriers are identified in real
time, and are pinpointed via the specially developed app and informed about the order, and can accept the job directly from the app, with the potential to be on the road within two hours. time:matters chief executive officer, Franz-Joseph Miller says: “Having goods transported personally is an especially popular option for particularly urgent or sensitive shipments. These often involve critical situations such as a grounded aircraft, equipment failure or assembly line stoppage, when every minute counts.” He adds: “By digitising the business model on time:matters airmates, we can work far more efficiently and extend our global reach. This allows us to offer customers maximum speed with the greatest reliability and best price. This is the kind of innovation that sets us apart at time:matters.”
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NEWSWEEK Alibaba sets up KLIA e-hub and signs Malaysia MoUs
libaba Group has set up an e-hub or Digital Free Trade Zone close to Kuala Lumpur International Airport (KLIA) with enthusiastic support from the Malaysian government and business. Working with the Malaysia Digital Economy Corporation (MDEC) China’s e-commerce giant, its logistic affiliate Cainiao Network and Malaysia Airports Holdings Berhad (MAHB), Ant Financial and two of Malaysia’s largest banks CIMB and Maybank signed four Memorandums of Understanding (MOUs), witnessed by Malaysian Prime Minister, Dato’ Sri Mohd Najib Tun Abdul Razak and Alibaba executive chairman, Jack Ma (pictured right). The principal one allows for the establishment of an e-fulfillment hub near KLIA, basically a logistics hub organised to provide centralised customs clearance and warehousing. This is for both Malaysia and the region, Alibaba stressed
in a statement. Backing this up is are E-service platform, E-payment and financing and the development
of E-talent MOUs. “Connected to Alibaba’s OneTouch platform, it will link Malaysia directly to the e-commerce pilot area in Hangzhou, China to enable SMEs and businesses to trade conveniently and efficiently between the two countries,” Alibaba said of the first. “Relevant parties from both sides will explore e-payment and financing opportunities with a particular focus on facilitating B2B trade for Malaysian SMEs,” it added of the second. Both sides stress the Digital Free Trade Zone (DFTZ) is the first in the world outside of China adding it will have physical and virtual spaces and provide offline as well as online digital services. Malaysia is billing the deal as a major coup. Not only it is the first in the region, but such a deal with not only shows the South East Asian country is open for business but is an e-commerce trend-setter.
“The e-Fulfillment Hub aims to help SMEs and businesses in exporting their goods easily, the Satel(l)ite Services Hub will be the region’s digital hub for global and local internet-based companies facilitating end-to-end support. The third component of DFTZ is the e-Services platform that will manage cargo clearance and other processes needed for cross-border trade,” Malaysia’s Prime Minister wrote in a same-day blog. The government also believes it will boost economic development. “With DFTZ, we aim to double SME export growth rate by 2025. We estimate $65 billion worth of goods will be moving through the DFTZ, with 60,000 direct and indirect jobs created as a result of this growth. “There is enormous potential in this industry and I intend to fully explore this opportunity so that many more Malaysians will get to take advantage of it,” the blog-post added.
Western Global flies aid to Madagascar
WESTERN Global Airlines airlifted 175,000 pounds of humanitarian supplies to Madagascar to provide relief to citizens affected by Cyclone Enawo. The Florida based airline flew a Boeing MD-11 Freighter loaded with essential aid including medical emergency supplies and educational material from Liege, Belgium to Ivato International Airport in Antananarivo on 17 March, joining forces with Network Airline Management and UNICEF. The cyclone caused significant damage to Madagascar’s Northeast coast on 7 March and impacted more than 240,000 individuals, with more than 5,000 unable to return to their homes following the storm. Western Global Airlines chief executive officer, Jim Neff says: “We are proud to support UNICEF’s relief efforts for the Madagascar population that was so severely impacted by Cyclone Enawo. Our fleet of airplanes and team of dedicated professionals are standing by 24/7 to do the impossible in order to bring a positive outcome to those in need.” Western owns and operates 16 fuel efficient, wide-body freighter aircraft routinely providing flights and assistance during natural disasters and other crisis situations.
Cargolux to use squAir timber beams CARGOLUX Airlines International has signed an agreement with Trinkaus-Solutions to use its squAir-timber product, lightweight beam with a load capacity of 10 tonnes while being significantly lighter than the beams they replace. The new beams are 80 per cent lighter than conventional wood, which Cargolux says increased payload and lowers fuel consumption of its aircraft, and claims it will reduce fuel consumption by 1,200 tonnes a year. The cardboard fibre composite beams only contain raw materials from sustainable sources, weigh 1.2 kilogrammes per metre and are resistant to humidity, and enable shorter build-up times, eliminating the need for forklifts. They can also be reused and are 100 per cent recyclable with lower disposal costs than wooden materials. Cargolux executive vice president global logistics, Lars Syberg says: “The use of modern, environmentally-conscious tools in air cargo underlines our standing as a green cargo carrier at a time when many of our customers put more emphasis on working with a partner who is aware of its responsibility towards the world we live in.”
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Seconds with JAN KREMS
Whether it is an endangered species or a family pet, it is essential they are transported safely. United Cargo transports all kinds of animals, whether two or four legged, scaly, feathered or furry using its PetSafe product, something president Jan Krems, a dog owner, takes pride in. He spoke to Air Cargo Week about this important business segment.
Justin Burns, ACW: How important a segment is animal transportation to United Cargo? Krems: The animal transport segment is extremely important to United Cargo. United Airlines is among the largest animal transporters in the worldwide air cargo supply chain – we carry approximately 500 pets a day. We know how people feel about their pets – our PetSafe specialists recognise that we’re transporting our customers’ family members. That’s why we ensure we have the right people and proven processes in locations all over the world. Handling animals takes special care, so it’s important to have people in place, both at our PetSafe desk and in locations worldwide, who are animal lovers themselves. I have dogs of my own, so I take special interest and pride in our PetSafe service.
of pet, but small mammals such as sugar gliders are becoming increasingly popular. We’ve shipped a number of animals between zoos for breeding purposes to help maintain certain species in danger of extinction. These movements always require close collaboration between United and the zoo, because each animal and shipment requires its own individual preparation. Special attention is paid to what
JAN KREMS the enclosure will be, what other cargo will be carried on the flight, the temperature in the pit and whether the animal will be sedated. We have a lot of animal lovers on our team, and they’re enthusiastic about shipping dogs, cat and birds, but there’s always a little extra excitement when they are a part of the transport of a special, unusual or rarely-shipped animal.
Justin Burns, ACW: What growth did you see in the sector in 2016? Krems: We’re pleased to report that United PetSafe continues to be the U.S. leader in this market segment, and our total of pets shipped, market share and revenue all increased year-over-year in 2016. From a regional standpoint, the bulk of our pet business is in North America. But percentage-wise, the largest growth in 2016 was in the Latin America region.
Justin Burns, ACW: What are the biggest opportunities that exist in the animal transportation sector? Krems: From United’s perspective, the biggest opportunities in the animal transportation sector are in expanding the awareness of PetSafe in markets outside North America. We’re pleased to be the market leader in the U.S., but considering the global reach of United’s network and the number of cities we serve in Asia and Australia, Europe, Latin America and the Middle East, we believe there is significant opportunity for growth in the international realm. Justin Burns, ACW: Tell me about your PetSafe service – why was it introduced? Krems: Before the merger with Continental, United carried pets either as cargo or as passenger baggage. In 1999, Continental introduced the PetSafe name and program, where all animals (with very limited exceptions) travel as cargo. Because we share our customers concern that their animals’ travel experience is as stress-free as possible, following the United-Continental merger, the PetSafe name and program was adopted by the combined United. Justin Burns, ACW: Where do you run the service? Krems: United’s PetSafe service is available at nearly 300 United and United Express locations across the globe. The rules and regulations for importing and exporting animals vary from country to country, so to avoid any issues it is vital we know exactly what these policies are at each destination. That’s why we have pet shipping experts, not only at our PetSafe Desk at our Customer Contact Centers, but in the countries we serve worldwide. We make sure our customers know far in advance about requirements for vaccines, health certificates, import and export permits – in this way, when they bring their pet to us there are no surprises and we can fly their pet so it arrives safely, on time and in good health. Justin Burns, ACW: What kinds of animals are handled? Krems: PetSafe accepts animals of all types, but of course there are some species that are embargoed for transit. There are also some special breeds of dogs that are restricted under certain conditions and at specific times of the year. Dogs, cats and birds are 1, 2 and 3 among the most frequently shipped types
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Shippers demand transparency for pharma
hippers are demanding more transparency in pharmaceutical cargo, meaning forwarders are using specialist handling codes, Schiphol Cargo director business development, Ferry van der Ent (pictured) tells Air Cargo Week (ACW). He says it was common for forwarders to book pharma as general cargo in the past but they are having to use specialist handling codes more frequently as shippers are demanding more transparency, such as seeing temperature excursions, including where and when they happened. He explains the growth in pharma
cargo is not necessarily down to more shipments but increased use of specialist handling codes. Van der Ent predicts pharma will grow 20 per cent in the coming years, backed by Seabury predicting 4-5 per cent growth annually. Schiphol handling 70,000 tonnes of pharma cargo in 2016, and van der Ent says aviation will have to work hard to keep growing. He says: “Cool pharma is increasing significantly faster than non-cool pharma, making ambiance measurement critical, and we need to be able to prove our capabilities.” Van der Ent is also project manager for Pharma Gateway Amsterdam, a programme to make the Schiphol pharma chain fully IATA CEIV Pharma-certified. It was launched in March 2016, and van der Ent is very happy with the progress so far, telling ACW: “I am encour-
aged every day I work with Pharma Gateway Amsterdam to see how our initiatives are helping to demonstrate the quality that the air cargo industry adds to the pharma shipment process.” So far 13 companies including airlines, handlers, hauliers and logistics service providers have signed joined and a number have been improving facilities. He says handlers added 5,000 square metres of cool facilities, while Yusen Logistics, DHL and Kuehne + Nagel have all added dedicated pharma facilities. Van der Ent says: “Looking at the total square metres of facilities we now have, it’s clear we have the capabilities to handle high volumes of
pharma shipments with ease, without compromising on quality of service.” The companies involved are also benefitting, he says: “I have heard first hand from two or three partners that their certification has brought them new business, and put them on the trusted lists of several more shippers. The next step is to monitor how much additional volume that brings them.” Van der Ent adds the key is customer confidence from the shipper and manufacturer, saying: “By certifying the process, the shipper knows we are working to a quality stream to minimise risk.”
CLOSE collaboration with the cargo community is the focus of 2017 for Amsterdam Airport Schiphol as volumes keep growing following a record year in 2016, cargo director Jonas van Stekelenburg (pictured) tells Air Cargo Week. Schiphol handled 1.66 million tonnes of cargo in 2016, a 2.5 per cent increase on 2015, with particularly strong results in December, and welcoming several new carriers. This year is also looking good, up seven per cent so far, with specialist areas including pharma proving strong. Van Stekelenburg says: “Pharma Gateway Amsterdam was recognised by IATA just this month for commitment to the CEIV Program, and shipments using the official pharma shipping code have increased 10-15 per cent. Moreover, we have announced that we will be investing one million euros in an early warning system for pharma shippers.” All Pharma Gateway Amsterdam mem-
bers must be IATA CEIV certified or equally qualified, with van Stekelenburg saying: “All our customers can be assured of receiving the highest levels of service when choosing Schiphol for the pharmaceutical shipments.” He predicts more air traffic growth for 2017, and collaboration with the cargo community is the focus, saying: “Together with the Community we will continue to pursue ambitions such as better digital information exchange and further quality improvements in the supply chain, particularly for pharma, e-Commerce, and perishables.” 2017 is not just about volume growth, improving efficiency is just as important. Schiphol is renovating Truck Parking 3 to make it more intelligent and efficient and further developing the Smart Cargo Mainport Programme to find innovative schemes to improve cargo flows underpinned by data exchange. Van Stekelenburg says customers are demanding more environmental transparency, saying: “The Milkrun project demonstrated a 30 per cent reduction in CO2 emissions for the trucks involved, and 3000 fewer truck movements in its first year. It’s great that in turn, trucking and forwarding members of our Cargo Community can demonstrate their own environmental responsibility by joining the group.”
Closer collaboration the focus for 2017
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Cargonaut aims for 100% data coverage in 2017
argonaut is inviting all customers to share their data on its platform and will help them improve the quality of the information, as it aims for 100 per cent data coverage and quality, commercial director Luc Scheidel (pictured) says. It has a number of projects for this year, including contacting shippers, making necessary changes to the platform to support the demands from customs for an Air Single Window, and supporting the Smart Cargo Mainport Program. Scheidel says the shippers are now the missing link in the processes and information sharing. He says: “The shippers, by the Shippers Advisory Committee, have recently published their needs for a predictable, reliable, secure and sustainable distribution of their cargo globally. We see an important role for Cargonaut and the Schiphol Community to cooperate with the shippers.” Making the necessary changes to the platform is a huge challenge, as Cargonaut has had to make changes on both the old and new platform. He says: “Big advantage is that our customers do not have to change a thing in their systems or messages. We take
care of a smooth implementation without any inconvenience for our customers.” Cargonaut continues to support the Smart Cargo Mainport Pro-
gram, and the Steering Group has defined its priorities for 2017, four pilots/projects and three feasibility studies. Scheidel says: “This includes a pilot with the Holland Flower Alliance for tracking & tracing at box level, and a pilot Incursion Alert, focussed on the (further) improvement of the Pharma Gateway Amsterdam by alerts for temperature deviations.” He says the Smart Cargo Mainport Program has made a good start, and participants aim for optimal ground operation throughout the cargo chain and necessary information sharing. As well as the Pharma Gateway Amsterdam and Holland Flower Alliance initiatives, there was also a pilot with KLM Cargo, Jan de Rijk Logistics, Swissport, Kuehne + Nagel, Cargonaut and Dutch Customs to encourage European Green Fast Lanes. Scheidel says: “The pilot kicked off on the route from Frankfurt and aimed at speeding up and enhancing the efficiency of European supply chains bringing cargo to Schiphol for subsequent international transport.” He adds: “To facilitate new initiatives, we are restructuring the platform to an open platform by development of API’s, to support new message formats and use business intelligent tools.”
Flowers blooming at Schiphol for AF-KL-MP
AIR France KLM Martinair (AF-KL-MP) Cargo is committed to helping Amsterdam Airport Schiphol retain its position as the world’s preferred flower hub. The airline says the central question was how Schiphol and Royal FloraHolland Aalsmeer were able to retain this position, how the trade was going to in floricultural products can be further expanded and how trade that had ‘leaked away’ could be retrieved. Royal FloraHolland, Schiphol Cargo and AF-KL-MP Cargo have joined forces in the Holland Flower Alliance, and for its part, the airline will deploy freighter aircraft on routes dedicated to the transportation of flowers and plants including Kenya, Ecuador and Colombia. This is in addition to belly capacity on its passenger network. AF-KL-MP says it is also contributing to optimising the supply chain. It says: “Regular consultations with the parties in the chain are held and have already resulted in a description of the ideal circuit for the fragile horticultural products.” It is investigating introducing a standard for packaging, and IT systems are coordinated through a platform where all players are connected. The airline adds: “The alliance wants to actively present the region (through marketing) as THE European hub for flowers and plants.” AF-KL-MP director – fresh, Eric Mauroux says the main benefits it can offer customers are: flexibility, reliability, professionalism, quality and capacity & network. The airline will reduce flights from other points to increase services to flower stations. Mauroux says: “On top of that we use very professional interline partners (respecting our cool chain and handling requirements) from Quito and Bogota in order to connect the flowers to one of our passenger network points (e.g. Curacao, Tocumen, or Miami) and fly onward to Amsterdam.” The aircraft fleet are also a major part, Mauroux says: “We use both full freighter capacity as well as passenger aircraft capacity to transport flowers to Amsterdam. All our aircraft have full temperature controlled cargo capacity.” Perishables are not the only premium product AF-KL-MP specialises in at Schiphol, it is also IATA CEIV Pharma certified for all operations in both Amsterdam and Paris. Cargo director for the Netherlands, Ivo Frankort says: “As IATA CEIV certificated airline(s) we will ensure optimum Pharma facilities will be in place to ensure temperature controlled solutions fulfilling the industry needs. Fresh, a strong Dutch airfreight pillar, is being updated in such a manner that a fast and efficient cool chain process is in place from grower to buyer.”
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AIR CHARTER ACS not putting eggs in one basket
he eggs are certainly not in one basket at Air Charter Service (ACS) as its range of offices across is propelling it forward and giving it the flexibility it needs in an unpredictable and changeable marketplace. ACS has 20 offices around the globe and has in the last year added new locations in Sydney, Miami, Beijing and Houston. This was one of the contributors to last year’s performance which was a record 12 months as it arranged 12,462 contracts, an average of 34 every day and an 11 per cent increase on the number in 2015 and almost double the 6,500 in 2011. 2017 could be yet another big year as in 2016, Alcuin Capital Partners took a minority stake in the company, which it ACS says will accelerate growth plans and bring access to capital. ACS group cargo director, Dan Morgan-Evans (pictured) who was only appointed to the role in December last year, says its spread of offices gives it an advantage - as it seems to be the trend that one market goes up and another goes down at the same time. “There is a lot of growth in the small offices. Sydney performed really well last year, Miami is flourishing and we see our Frankfurt office is in a good position and this year we can see good growth there and from Hong Kong, which has started well in 2017 too. We are not too heavily reliant on one office or department,” Morgan-Evans says. Last year was a strong year for ACS and 2017 has started in a similar vein, he explains: “The year has started well. We are up on the same time last year. Thing seem to be going quite well. The level of enquiries is up and increasing so I am cautiously optimistic we will have a decent year. “There is always that feeling in
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a very ad-hoc market about where your business is going to come from. But we have got everything in place from our sales teams to our broker’s teams around the world to capitalise on opportunities. “We are in a strong position and this year we are seeing good growth in our people, which we invest a lot of time and money into. The goal is for that to pay us back.” But what are the toughest markets for air charter cargo operators at the moment in his view? Morgan-Evans says: “The African market is a really difficult one as it is heavily reliant on the O&G market, which is still in its infancy. That market is though picking up with the number of enquiries on the up. I do not think we see the O&G projects for a little while though, but oil firms are going to have to invest sometime soon. One area expanding is the on board courier (OBC) sector, which was launched in the spring of 2015 and was expanded into Asia last August. In 2016, ACS arranged 1,093 jobs and revenue was more than £6 million ($7.5 million) and Morgan-Evans says its investment is paying dividends and it is targeting more growth. “At the moment there is lots of opportunities in OBC and it is growing phenomenally. We will continue to push that with anyone we can offer an OBC too, but that is not what the essence is, it is having the couriers with the visas, which we have in place. Hopefully business will grow a lot. “It is not just a support offering. It is an offering by our brokers and it is something we can have the confidence knowing we can do a good job. The investment will hopefully give us opportunities.”
Volga-Dnepr sees growth for Cargo Supermarket VOLGA-Dnepr Airlines is forecasting a year of growth for its air charter services based on growing demand for its ‘Cargo Supermarket’ of solutions, its continued strong performance in the aerospace market, and positive signs of recovery in the oil & gas and energy sectors. The airline’s air charter business remains as diverse as ever. Recent shipments have included fire-fighting helicopters from the US to Chile, space satellites and launch vehicles to Europe’s Spaceport in French Guiana, oil & gas pumps and vaporizer skids from Switzerland to Seoul, ball valves from Australia to Italy, an 88-tonne gold mining ‘jaw crusher’ to Magadan in Russia, a large aircraft production component for a Boeing 767 delivered to Paine Field Airport in Washington, and 79 tonnes of switchgear equipment for a power plant in Zimbabwe. As well as one-off charter operations, Volga-Dnepr’s participation in projects around the world has also contributed to its strong start to 2017. It says one of the key factors is its ‘Cargo Supermarket’ offering, which enables it to offer customers the best and most cost efficient delivery solution for every requirement.
Volga-Dnepr Airlines commercial director, Alexander Kraynov explains: “After 26 years of operations, we are best known for operating the world’s largest fleet of An124-100 freighters and for the solutions this enables us to deliver for big, heavy and complex cargoes. However, having a fleet that also includes five modernised IL76TD-90VD freighters, 16 Boeing 747s and three Boeing 737-400Fs means we can always give customers options when they want to use our expertise but may not need to use the biggest aircraft in our fleet. It also means we can look for ways to reduce cost for customers by using a combination of our aircraft.” The airline is also enhancing its air charter capabilities by offering customers engineering solutions to design and manufacture special frames for the transportation and protection of the most complex cargoes. “We continue to look for ways to add more value for our customers and this also includes the range of special loading equipment designed by our engineers. We know we have to give customers the best options in terms of capability and value.” “The fact that we’re able to do this has enabled us to see a year-on-year improvement in the opening months of 2017 and there are some very positive indicators that this will continue, particularly in the US, European, Asia Pacific and Middle East markets.” He says the aerospace market is particularly strong generating 35 per cent of annual business, while oil & gas should improve in 2017 after a difficult year in 2016, and return to pre-slump levels in 2018, which should mean more charters. Kraynov adds: “The signs are encouraging.”
Solid start for HAE with part charter opportunities
he first quarter in 2017 has been a solid start to the year for HAE with a focus on Africa with part charter rather than full charter opportunities. The company’s president for the Americas, Ian Hutchinson (pictured) says HAE has also been focusing on the US Government related business, where it has invested in a new transit hub in Johannesburg and expanded its products and support via HAE Dubai International Airport (pictured) into Djibouti–Ambouli International Airport. “These investments enable us to offer freight forwarding customers value added services that are not available elsewhere. “This type of business is somewhat unpredictable. Having a wide spread focus enables a high success rate,” Hutchinson says. He says the air cargo charter market is as competitive as ever, pointing to the added scheduled capac-
ity available in the marketplace. “Competitive – but rewarding for creativity, close customer relationships built on expert knowledge and integrated office network,” Hutchinson notes.
But what sectors has HAE seen are growing or dropping off? “We have found project business is growing, this is built around our growing office network – enabling added value beyond airport to airport services,” Hutchinson says. As for the strongest charter trade lanes and sectors for HAE, Hutchinson says given its growing capabilities it has found Africa to be strongest. He adds: “Our combination of GSA and solution products enables us to offer creative, non full charter, solutions.” This year it plans on growing, but Hutchinson notes it will continue to assess organic and non-organic network expansion. The air cargo marketplace has been going through a challenging period over the last few years and Hutchinson feels to be successful in the future it needs more creativity and a commitment to re-inventing itself constantly to keep pace with other parts of the overall supply chain industry. But what is his outlook for the industry? “Rewarding for companies who develop new revenue verticals linked to their traditional sales channels. Our moves into training for example has illustrated this clearly,” Hutchinson says.
Navitrans hopeful perishable focus will pay off for 2017
US air charter firm Navitrans had a challenging year in 2016 but is hopeful a move into the perishables market and a global focus will lead to a better 12 months in 2017. The company operates a round-the-world freighter service connecting the US, Europe and China, which chief executive officer, Shen Hong (pictured) says came under pressure in terms of rates and volumes last year. “The year started very slowly in terms of volume, accompanied by very low rates. We noticed a volume increase toward the end of the second quarter (Q2), gaining steam during the third quarter (Q3) and culminating with a good peak season, with seasonally adjusted rates,” Hong says. “We had excellent results in Q3 and Q4. Aside from our share of general cargo, which supported our weekly scheduled flights from China to the US, we moved into the area of perishables, operating full charters during the latter part of the year. “Perishables have proven to be very profitable business for our company, complementing our scheduled freighter services. As the demand for fresh fruit and seafood continues to grow in China, we are carefully analysing this market to see how we can continue to grow our business and capture a larger market share within this specialised sector,” Hong adds. Navitrans has a freighter hub at six major international airports where it provides connecting flights or interline road feeder services to all destinations. Hubs include Chicago, New York, Frankfurt-Hahn, Baku, Zhengzhou and Shanghai. It has offices in Shanghai, Beijing, Chengdu, Zhengzhou, Hong Kong, Tokyo, Frankfurt, Moscow, New York, Chicago, and Los Angeles, and operates more than 100 scheduled cargo flights a year. Hong explains Navitrans has, for the most part, been a regional player operating charter and scheduled charter flights from China to and from the US, Europe, Japan and Russia. But he explains: “This year, 2017, we are changing our business strategy to focus more on global business. Our goal is to expand our global footprint. “We want to increase our presence by operating charter flights, not only originating in the China trade but to include origins such as the US, Europe, Japan, the Indian subcontinent, and wherever charter demand exists on a worldwide basis.
ACW 3 APRIL 2017
SINGAPORE Premium cargo to remain key growth drivers at Changi
remium cargo including e-commerce and pharmaceuticals are expected to remain the key drivers of growth at Changi Airport, managing director air hub development, Lim Ching Kiat (pictured below) tells Air Cargo Week. The airport saw strong growth in 2016, hitting 1.97 million tonnes with volumes increasing 6.3 per cent, with improvements from all areas, with pharmaceutical and perishable throughput up seven per cent and 14 per cent respectively. In 2016 it beat the previous record of 1.91 million tonnes seen in 2006, helped by two new freighter airlines, Silk Way West and Neptune Air, and the return of K-Mile Air. 2017 has also started well, up 3.9 per cent to 305,560 tonnes and Lim remains optimistic it will be a good year despite the uncertain political and economic outlook.
He says: “We are optimistic that sectors such as e-commerce, aerospace and pharmaceuticals will continue to grow and be amongst the key drivers for Changi Airport’s cargo throughput.” “To position ourselves for this growth, we will also continue to work with our airline partners to strengthen our strategic links and deepen our connectivity across the world.” Premium products are very important, Lim explains: “Focusing on these special cargo segments allows Changi Airport and our stakeholders to not only diversify our cargo base against the
cyclical movement of the airfreight industry, but also allow the stakeholders to handle more high yielding cargo volumes.” Changi has undergone International Air Transport Association Center of Excellence for Independent Validators in Pharmaceutical Logistics (IATA CEIV) certification and joined the Pharma.Aero association. It is the first airport community in Asia Pacific to undergo the certification where at least one company from each mode is certified, and since then Singapore Airlines Cargo and Global Airfreight International have also gained IATA CEIV. Lim says: “Pharmaceutical shippers can ship their products through Singapore with the highest handling standards. Moving forward, we will progressively be working with more cargo partners in our community to attain the IATA CEIV Pharma certification.” Joining Pharma.Aero also gives Changi a chance to learn from other members, Lim says: “Changi Airport looks forward to taking lead and participating in some of these projects and applying the key learnings with our air cargo community so as to ensure that we remain as a relevant, trusted and reliable hub for pharmaceuticals handling.” There are other developments, SATS’ eCommerce AirHub is due to open this month, integrating SATS and SingPost operations under one roof. Further into the future, the Changi East Industrial Zone will be developed for airfreight, express and MRO by the late 2020s.
More CEIV certificates awarded
Global Airfreight International has been awarded IATA CEIV Pharma certification, adding to the companies who have gained the certificate in Singapore. Six staff have completed essential modules of the International Air Transport Association Center of Excellence for Independent Validators in Pharmaceutical Logistics (IATA CEIV) training programme including temperature-controlled cargo operations and audit, quality and risk management. Global Airfreight International deputy chairman and senior managing director, William Chong says: “We are extremely proud to be CEIV Pharma certified by IATA. This is an important milestone for our healthcare, life Science and pharmaceutical vertical, following our successful attainment of the Good Distribution Practice certification by Health Sciences Authority of Singapore in 2016.” Changi Airport Group (CAG) is supporting a community consisting of Singapore Airlines Cargo, dnata Singapore, Global Airfreight International, Expeditors Singapore, CEVA Logistics Singapore and Schenker Singapore to pursue IATA CEIV certification. SATS Coolport, Singapore Airlines Cargo, Global Airfreight International, Bollore Logistics and Kuehne + Nagel have attended IATA CEIV. Bollore Logistics Singapore has gained IATA CEIV (pictured above) at its platform in the Airport Logistics Park. The company aims to gain certification on other sites in Asia-Pacific, including Australia, Hong Kong and Japan, and says the certificate shows it is committed to the highest quality standards in the global pharma supply chain. IATA CEIV Pharma means Bollore Logistics Singapore fully conforms to all applicable pharmaceutical standards expected from pharma manufacturers in terms of facilities, equipment, operations and staff and being to provide seamless cool chain transportation. The initiative is in place in Paris Charles de Gaulle, Brussels, Frankfurt and Lisbon, and is in progress in Johannesburg and Chicago.
ACW 3 APRIL 2017
Freight Forwarders Hong Kong
Freight Forwarders Iraq
United Arab Emirates
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