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The weekly newspaper for air cargo professionals Volume: 20

Issue: 5

6 February 2017

Amazon to invest $1.5bn in US air cargo hub

nline retail giant Amazon is to create a centralised US air cargo hub at Cincinnati/Northern Kentucky (CVG) Airport to support the growing fleet of Prime Air aircraft as part of a reported $1.5 billion investment, creating 2,000 jobs when the site opens. The retailer entered agreements last year to lease 40 cargo aircraft to support Prime members with fast, free delivery. 16 are in service with more due for delivery. The Cincinnati air hub will support Amazon’s dedicated fleet of Prime Air aircraft by loading, unloading and sorting packages.

Amazon senior vice president of worldwide operations, Dave Clark explains: “As we considered places for the long-term home for our air hub operations, Hebron quickly rose to the top of the list with a large, skilled workforce, centralised location with great connectivity to our nearby fulfillment locations, and an excellent quality of living for employees.” He adds: “We couldn’t be more excited to add 2,000-plus Amazon employees to join the more than 10,000 who work with us today across our robust operations in Kentucky.” CVG Airport chief executive officer, Candace McGraw says: “We’ve worked hard to ensure

CVG is a great place to do business and we couldn’t be more pleased that Amazon recognised those efforts with plans to build a top-in-class air cargo hub at our airport.” Governor of Kentucky, Matt Bevin adds Kentucky’s ideal location, proven workforce and an already extensive shipping and logistics industry have been the backbone of its relationship with Amazon for nearly 20 years. He adds: “This new project will pay dividends to both the company and our state, and we are truly grateful for the jobs and economic impact it will bring to the commonwealth.” Amazon employs more than 10,000 people in full time jobs across 11 fulfilment centres in Kentucky, and plans to create 100,000 jobs across the US over the next 18 months. It is also launching initiatives to improve delivery speeds and supply chain capacity for customers, including Amazon Flex to allow individuals to sign-up, be vetted and begin delivering for Amazon, 4,000 trailers to increase trucking capacity and a network of cargo aircraft. Amazon has also been trialing drone deliveries in the UK.

Brussels Airport and Miami International Airport. Singapore’s Changi Airport, Sharjah International Airport, Brussels Airlines, Singapore Airlines, Brinks Life Sciences and Johnson & Johnson have also joined. Pharma.Aero chairman, Nathan De Valck says Mumbai will take the co-ordinating role in the Indian subcontinent in bringing shippers together and creating end-to-end pharma lanes, adding: “The benefit for all participating airports and shippers is we will collaborate on creating end-to-end certified pharma lanes, sharing best practices in improving the overall handling quality of pharmaceutical shipments.”

Freight volumes outperformed forecasts in 2016 with 3.8 per cent growth helped by strong recovery in the second half of the year, the International Air Transport Association (IATA) says. Airfreight had a weak start to 2016 but picked up in the second half with a strong peak season, increased shipments of silicon materials and a turnaround in new export orders. Freight tonne kilometres surged 9.8 per cent in December, which IATA says may have been because of the early timing of Lunar New Year. IATA director general and chief executive officer, Alexandre de Juniac says: “In terms of demand, 2016 was a good year for air cargo. That was boosted by solid year-end performance. Looking ahead, strong export orders are good news. “But there are headwinds. The most significant is stagnant world trade which also faces the risk of protectionist measures. Governments must not forget that trade is a powerful tool for growth and prosperity.”

JIM BUTLER GETS PROMOTED BY AMERICAN OPTIMISM IN THE AIR FOR A STRONG 2017 IN HK GARCIA APPOINTED TO KEY ROLE AT WFS PACTL EXPECTING MORE GROWTH AFTER STRONG YR

Volga-Dnepr’s Robert van de Weg resigns

Mumbai signs up to the Pharma.Aero initiative IATA: 3.8% growth in 2016 Brussels Airport and Mumbai International Airport (MIAL) have announced their partnership in the recently launched Pharma.Aero initiative focused on improving pharma handling and quality in the air cargo industry. MIAL is the first airport in India to join the community approach for the International Air Transport Association Centre of Excellence for Independent Validators (CEIV) Pharma certification, to raise the local community’s handling standards and capability for temperature-sensitive pharma cargo. MIAL senior vice president and head of cargo, Manoj Singh says: “We believe this will really add value, quality and safety standards in the entire pharma industry. “This focused product management will grow leaps and bounds and the airports are going to be informed through shippers what exactly the quality they demand. This will open communication channels among stakeholders of pharma supply chain.” Pharma.Aero members includes founders

VOLGA-DNEPR Group’s senior vice president of sales and marketing, Robert van de Weg has resigned after three months in the role. The Russian operator says he will continue to co-operate with the Group on a strategic level. He was appointed in October last year. Van de Weg looked after commercial activities – including for AirBridgeCargo Airlines (ABC), Volga-Dnepr Airlines and Atran Airlines. Before that he was senior vice president of marketing and sales for ABC, which he joined in May 2014. The move is the second high-profile senior exit from the Volga-Dnepr Group in about six months, as in August last year, ABC’s executive vice president, Denis Ilin resigned his position after three years in the role.

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NEWSWEEK

Packages help UPS revenue grow 5.5%

PS revenue has increased 5.5 per cent in the fourth quarter to $16.9 billion, with strong growth for domestic and international packages. US domestic package revenue grew 6.3 per cent to $10.9 billion, of which next day air was up 4.2 per cent to $1.8 billion. International package revenue was up five per cent to $3.3 billion, with export revenue growing seven per cent to $2.5 billion. UPS chairman and chief executive officer, David Abney says: “Revenue and volume growth accelerated for UPS during the holiday season and we provided high service levels for our customers.” “The International segment delivered another extraordinary performance, while the U.S. managed through considerable changes in product mix. Our strategies and initiatives are creating long-term value for both UPS customers and shareowners.” Describing the outlook, chief financial officer, Richard Peretz says: “The investments in ORION and automation provided benefits during the quarter.” “However, bottom-line results were challenged by a shift in

product mix and the continued softness in industrial production. Strong growth, combined with our network investments, provide UPS with great opportunities for many years to come.” Revenue for the year was up 4.4 per cent to $60.9 billion, with US domestic growth of 4.2 per cent to $38.3 billion, and international was up 1.7 per cent to $12.3 billion.

K+N PharmaChain becomes CEIV certified KUEHNE + NAGEL has become the first logistics provider to become IATA CEIV Pharma certified across its entire network. The entire KN PharmaChain GxP air network has been International Air Transport Association Center of Excellence for Independent Validators certified, and Kuehne + Nagel says this is in line with its strategy to utilise audits by external parties to set the benchmark for pharma and healthcare logistics. Kuehne + Nagel senior vice president products & services global air logistics, Marcel Fujike says: “Achieving this confirms the high standards we set with our KN PharmaChain offer and together with IATA we even strengthened our product further now. We will drive this standard towards our supply chain partners as well for the benefit of our customers.”

IATA senior vice president, airport, passenger, cargo and security, Nick Careen adds: “Our joint effort to certify the global KN PharmaChain network as well as the integration of the IATA CEIV Pharma Standards, like the CEIV checklist, in Kuehne + Nagel’s quality process is a key step forward to roll out this program worldwide.” The certificate confirms the quality and credentials of KN PharmaChain, which can provide real-time monitoring and visibility through the use of active transmitting sensors and proactive intervention via the 24/7/365 CareTeam.

Bollore awarded CEIV certification BOLLORÉ LOGISTICS has been awarded the International Air Transport Association’s (IATA) Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma) – becoming the 1st transport and logistics firm in France to gain it. IATA’s chief executive officer, Alexandre de Juniac, and president of Aeroport De Paris, Augustin de Romanet presented the company with the certification. In a pilot phase of the CEIV Pharma certification process for one year with IATA, Bolloré Logistics has received it for its Roissy CDG platform in France after getting awarded it for sites in Brussels, Belgium, Frankfurt, Germany and Lisbon, Portugal.

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The logistics giant is looking to gain CEIV throughout its global network with certifications in progress at other sites in Europe, but also in other regions of the world, including in Singapore, Johannesburg, and Chicago.

NEWS WEEK

ABX Air strike to affect ATSG earnings

ir Transport Services Group (ATSG) has announced its earnings before interest, tax, depreciation and amortization (EBITDA) from continuing operations is set to be around $7 million lower than indicated in its fourth quarter (Q4) and full year 2016 forecast. ATSG says this reduction in guidance is due to the revenue loss resulting from a brief work stoppage in mid-November 2016 by pilots of its subsidiary ABX Air (pictured above). ATSG president and chief executive officer, Joe Hete says: “Over-

all, we achieved significant gains across our businesses in 2016, including strong revenue growth and cash flow from additional Boeing 767 Freighter deployments to external lease customers as well as other support services.” ATSG says it now expects 2016 adjusted EBITDA from continuing operations for the fourth quarter and full year 2016 to be approximately $56 million and $211 million, respectively. Hete says: “Overall, we achieved significant gains across our businesses in 2016, including strong revenue growth and cash flow from additional 767 freighter deployments to external lease customers as well as other support services. “The decision of the Teamster-represented pilots at ABX Air to resort to a work stoppage stemmed from a dispute over scheduling assignments and interrupted ABX Air’s operations for a short time prior to being enjoined by the US District Court.” Hete adds ATSG will report its full Q4 and year-end 2016 financial results and hold its earnings conference call in early March 2017. At that time, ATSG will also provide its outlook for 2017, which it says will benefit from the significant growth in ATSG’s externally leased fleet of 767F aircraft during 2016, as well as those additions planned during 2017.

WORLDNEWS THE Canadian International Freight Forwarders Association (CIFFA) will partner with The International Air Cargo Association (TIACA) and Multimodal Americas at the Air Cargo Forum (ACF) in Toronto in October 2018. CIFFA will take part in the exhibition and host a conference complementing the seminars and workshops organised by TIACA and Multimodal Americas. CRANE Worldwide in the Netherlands has invested in a brand new head office facility at the heart of Amsterdam Airport Schiphol. The new facility houses the country’s head office staff, as well as an active airfreight operation offering dedicated client support. The warehouse facility offers value-added services such as storage, pick and pack operations, labelling and any bespoke handing requirements that require the personal touch.

e-AWB penetration up THE International Air Transport Association (IATA) says the electronic air waybill (e-AWB) penetration target for 2016 reached 48.9 per cent in December. This was below the target set by the association in the year of 56 per cent, but it was a 2.8 per cent rise on November. The top country by e-AWB volume was the US with 42.5 per cent, top airport was Hong Kong International Airport at 71 per cent, top airline was the Cathay Pacific Group with 82 per cent and top freight forwarder was DHL Global Forwarding with 56.8 per cent. The leading carriers by penetration rate were Kenya Airways and flydubai who both achieved 100 per cent, and FedEx was the top forwarder at 87.6 per cent. Last year saw fluctuating progress in e-AWB penetration as in January it was 41.8 per cent, in February it fell to 37.6 per cent, in March it fell further to 37.2 per cent, but then climbed gradually in the next few months. In April it was 38.3 per cent, in May it was 39 per cent, in June it was 39.3 per cent, in July it was 39.6 per cent and in August it was 40.6 per cent. The last four months of the year saw better progress in the penetration rate as in September it was 40.6 per cent, in October it was 44.1 per cent, in November it was 46.1 per cent before reaching 48.9 per cent in December. IATA has set an ambitious e-AWB penetration target rate of 62 per cent for 2017 for the air cargo industry.

New Busan office for Rhenus

THE Rhenus Group has opened another office in South Korea – in Busan after launching there in November last year. The logistics firm will mainly provide air and sea freight services from the site, while the office will also handle project business for the oil and gas industry, provide third-party logistics services and operate domestic services. Rhenus board member responsible for Asia, Tobias Bartz says: “We can offer our logistics services from here and continue to broaden them. The new business site therefore matches the ongoing expansion of our Asian network.” Busan is South Korea’s second-largest city after Seoul. It has one of the largest container ports in the world. Busan is also one of the leading industrial cities in the country with a strong focus on shipbuilding and heavy industry. In addition to trade with Europe, Busan is also an important port hub for traffic to Japan and Greater China. The Asia-Pacific region is an important growth market for Rhenus.

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ACW 6 FEBRUARY 2017

NEWSWEEK DWC nearly hits the 900k mark Lobster run booming at Halifax

argo volumes at Dubai World Central (DWC) have grown 0.8 per cent to 897,998 tonnes in 2016 with a surge in the fourth quarter. In the fourth quarter, cargo was up 10.3 per cent to 252,300 tonnes up from 228,770 tonnes in the same period of 2015. Passenger numbers were up 84.5 per cent in 2016 to 850,633, and Dubai Airports chief executive officer, Paul Griffiths says: “After hav-

ing emerged as one of the top 20 international cargo hubs, DWC is now growing steadily in stature as a passenger hub, and we are pleased with the growth in passenger traffic in 2016.” DWC serves 27 passenger carriers, operating an average of 108 flights weekly to 44 international destinations while it is also home to 64 scheduled cargo operators that are servicing 138 locations around the world on every continent.

HALIFAX Stanfield International Airport saw cargo growth of 4.1 per cent in 2016 compared to 2015. The Canadian gateway handled 33,329 tonnes and says much of that freight moved was Nova Scotian lobster, which is growing in demand, especially in China and in the Asian region.

Halifax estimates that 187 million Canadian dollars of seafood and lobster exports were shipped from the gateway in 2016 up approximately CAN$40 million from 2015 and it is expecting this sector to grow further in 2017. As demand for lobster and seafood continues to grow, especially to Asia, the airport says ot is poised for continuing growth in all seafood exports. Halifax International Airport Authority vice president, and business development and chief commercial officer, Bert van der Stege says: “In 2017, we will remain committed to growth and development of air services. “We will focus on participating with airlines, industry and tourism agencies; pursuing new market opportunities in Europe, Asia and the United States; and promoting our advantages as Atlantic Canada’s air gateway.”

1.97m tonnes handled at Changi in 2016 CHANGI Airport’s tonnage grew 6.3 per cent to the new high of 1.97 million tonnes in 2016 with growth coming from imports, exports, transhipments, perishables and pharmaceuticals. Volumes were up 8.4 per cent in December to 177,355 tonnes. The top markets were China, Australia, Hong Kong, the US and India. Changi Airport strengthened its pharmaceutical capabilities by forming a community of cargo partners to undergo International Air Transport Association (IATA) Center of Excellence for Independent Validators (CEIV) Pharmaceutical Han-

dling certification, with Singapore Airlines Cargo, dnata Singapore, Global Airfreight International, Expeditors Singapore, CEVA Logistics Singapore and Schenker Singapore participating. SATS Coolport was the first facility in the world to undergo certification and Changi joined the Pharma.Aero organisation. The DHL Express South Asia hub was opened in October 2016, and SATS will be opening its eCommerce AirHub later this year. Changi welcomed freight carriers, Neptune Air and Silkway West Airlines, and K-Mile Air resumed operations.

Rickenbacker and Seattle on the up

RICKENBACKER International Airport in the US handled more than 91,000 tonnes in 2016, a 1.8 per cent rise on 2015. The Ohio gateway saw a 16 per cent rise in international cargo, which makes up 40 per cent of Rickenbacker’s tonnage, while the rest was domestic, down six per cent. Seattle-Tacoma International Airport saw cargo surge for the fifth consecutive year in 2016 as it handled 366,000 tonnes – an increase of 10.2 per cent on 2015.

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The gateway welcomed four new airfreight carriers last year in the shape of DHL Express, AeroLogic, Prime Air for Amazon, and AirBridgeCargo Airlines (ABC). Domestic airfreight shot up 20 per cent to 194,754 tonnes in 2016. Seattle was the first US airport in 2016 to welcome the Amazon-branded Prime Air Boeing 767 cargo aircraft into service. In April, Seattle welcomed AeroLogic – a joint venture between Lufthansa Cargo and DHL Express then started a daily service in September. Shortly after also in September, ABC launched twice-weekly Boeing 747 Freighter services from Moscow to Seattle - its sixth route within the US. Cherries are a popular export from the Seattle area, along with seafood and the airport is becoming an e-commerce hub through the Prime Air flights.

NEWS WEEK

ANA revenue falls Jim Butler gets promoted by American

ll Nippon Airways (ANA) profits rose 18 per cent in nine months despite cargo revenue falling by 23.6 per cent on international routes. The airline made a profit of 86.5 billion yen ($759 million) in the nine months up to 31 December 2016 and revenue was down 2.7 per cent to 1.3 trillion yen. Cargo revenue on domestic services was down 3.2 per cent to 23.6 billion yen while international revenue fell 23.6 per cent to 67.5 billion yen. ANA explains about the figures: “Due to a reduction in income from cargo departing overseas airports affected by the impact of the stronger yen and the abolition of sales commission for cargo sales agents, revenues decreased from the same period the prior year.” International volumes increased 17.1 per cent to 715,000 tonnes due to transit cargo from Asia and the US, and recovering Japanese exports. ANA says despite a healthy market for home parcel delivery services meaning it could operate extra flights, the overall market stagnated due to weather problems in Hokkaido. Domestic volumes were down 3.5 per cent to 347,000 tonnes.

merican Airlines has announced senior vice president (SVP) for international and cargo, Art Torno is to retire in April after 38 years with the airline and will be replaced by Jim Butler (pictured left). He has held various positions at the carrier since joining in 1979 and from 2012-2015 was SVP for Mexico, Caribbean and Latin America before being promoted in 2015 to the role he is retiring from. Butler will take on the role of SVP for international and cargo and report to SVP of customer experience, Kerry Philipovitch. He has been with American Airlines for 21 years and is currently president for American Airlines Cargo, a position

that he has held since 2013. In this role, Butler has helped strengthen cargo’s contribution to the airline and successfully led cargo’s integration process, becoming the first operation at American to fully merge. American’s chairman and chief executive officer, Doug Parker says: “During Art’s long career with American, he has helped establish the airline as a leading international carrier. His leadership and vision have been instrumental in supporting our people and strengthening our presence around the world. “American Airlines is a better place because of Art Torno, and all of us who have worked with him are better people. We wish him the best in his well-deserved retirement.” Philipovitch says: “As the leader of American Airlines Cargo, Jim understands the importance and the value of our unrivaled international network and the passion and enthusiasm of American’s people around the globe. “Jim’s experience, leadership and commitment make him the ideal leader to build on Art’s legacy of supporting our fantastic global team and delivering the best experience to our international customers, while continuing his efforts to further the growth of our cargo business.”

ACS makes India changes

AIR Charter Service (ACS) has promoted Ashish Wastrad to managing director of its India office and Shahvez Jafary has been promoted to commercial director of the same office. The appointments come hot on the heels of previous managing director, Tracy D’Cruz’s promotion to regional director for the air charter firm’s European offices. ACS chief executive officer, Justin Bowman says: “We are very excited to see this next phase in ACS India’s growth which has performed fantastically under Tracy’s careful stewardship over the past five years. “Ashish started his ACS career four and a half years ago and has built up the Mumbai operation’s private jet division in this time, whilst Shahvez joined the company four years ago and has led his cargo team admirably. “We are very excited and confident in the abilities of both Ashish and Shahvez to continue this growth.” Wastrad and Jafary have already started their new roles.

Kalitta Air plumps for CHAMP

CHAMP Cargosystems has completed Kalitta Air’s implementation of its Weight & Balance application used to manage its load planning more effectively. The US cargo carrier has a fleet of Boeing 747 Freighters and B767Fs, and recently obtained Federal Aviation Administration approval for use of CHAMP’s application with its freighter fleet. Kalitta Air operates freighters to Afghanistan, Argentina, Bahrain, Colombia, Egypt, Hong Kong, Israel, Pakistan and other international destinations, while also running extensive air cargo services across the US. Kalitta Air chief executive officer, Conrad Kalitta says: “Kalitta Air is delighted with its decision with CHAMP’s Weight & Balance, and is confident it will be a key benefit for the months and years to come. “Integrating this software is proof that using the most up-to-date IT solutions will reduce fuel consumption, and improve accuracy with a highly effective automated process.”

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ACW 6 FEBRUARY 2017

HONG KONG

Optimism in the air for a strong 2017 in Hong Kong

ong Kong’s air cargo industry is cautiously optimistic about the coming year as it digests changes ahead of new infrastructure set to underline its hub status. Supporting this optimism are good figures for 2016 as the territory is blessed not just with a first class airport but also top notch road links

to the Chinese mainland and the free port status avoided China’s slowdown, which limited some countries. Leading the way is the territory’s major facility, Hong Kong Air Cargo Terminal Limited (Hactl) which moved a total of 1.65 million tonnes in 2016 up 1.7 per cent on the previous year, its chief executive, Mark Whitehead (pictured above right) tells Air Cargo Week (ACW). One of the prompts for optimism about the coming year is much, if not all of the growth came in the second half of the year. “2016 was a mixed bag for our cargo business,” Cathay Pacific general manager for cargo sales and marketing, Mark Sutch explains to ACW. “The first quarter was disappointing with

weak cargo demand exacerbated by speculative concerns over the Chinese economy. The “Great Fall of China” did not materialise as some had predicted. Tonnages started to stabilise from the middle of the year, and we saw a strong finish to 2016 with the airfreight peak starting in September and continuing into December.” Hactl corroborates much of this and adds some interesting statistical details. Major market is Asia with 0.65 million tonnes or some 39 per cent of the total going intra-regional. This is clearly ahead of Europe which takes just under a third (32 per cent) or 0.53 million tonnes and the America both North and South which get just a quarter or 0.41 million tonnes. One detail within the Asia trade is “very strong demand for short haul services” pointed out Cliff Sullivan, chairman of the Hong Kong Association of Freight Forwarding and Logistics Limited (Haffa) who specifically cited markets such as Taiwan and Singapore which are “not really the destination.”

Strong performance

This in turn has boosted Hactl’s strongest performance transshipments which were up a huge 29.6 per cent on 2015. Mail, courier and other express traffic grew 8.4 per cent. This more or less matches the 8.4 per cent decline in imports whilst exports grew by 2.1 per cent although Whitehead did point out the negative trend between January to September was reversed in the last quarter with growth every month. A better way to illustrate the scale and dynamicism of what happened is how Hactl found itself setting a series of personal bests – at the end of the year. Weekly cargo handling through SuperTerminal 1, was 41,926 tonnes November 28 to December 4. “This was the second time we broke our previous record, in the space of two weeks” says Whitehead. But that was surpassed by the ramp handling business which set three new all-time records for freighter handling in the final few weeks of 2016. There were also records for 101 freighters in a single day (November 23) 628 freighters in a single week (28 November – 4 December) and 2579 freighters in a month (November). All of which is generating optimism, mild but persistent, about the coming year. The industry is aware of variables such as Brexit and a new American trade policy and is cautious but hopeful with it. “History tells that a good peak gives us momentum the following year, hence we are cautiously optimistic of a better 2017. Competition will remain fierce, but we should expect more stable volumes from the major markets that we serve,” says Sutch. It might also help rebuild yields which had remained under pressure for much of the past year. “Towards the last quarter, yields were

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finally getting back to peak season levels. A strong finish to 2016 should enable us to bring our 2017 yields back to a more sustainable level,” Sutch adds. Te m p e r i n g all this is a realisation some changes, even if creating growth brings some new challenges with them. Whilst everyone lauds e-commerce and is expecting it to grow in the future, it shifts the industry from dealing consignments with of 100s of kilos to a few consignees with a much more diverse load to many more destinations. Among the products Hong Kong is moving in this segment are electronics, mobiles, computers, toys and imitation jewelry. “For e-commerce we are talking about multiple shippers to multiple buyers,” acknowledges Sullivan. “We need some support to do the last mile.” Tellingly Haffa is less optimistic about 2017 than facilities such as Hactl or carriers such as Cathay. According to Sullivan 2017 “will be also a tough year”.

The last mile debate

Haffa is organising its own support within the industry as well as talks and seminars and working with the other transport bodies to help its members adapt and quicker, says Sullivan. Two ways are emerging for companies to deal with the prospective changes Sullivan said. One is stick to port-to-port business and work with 4PL “to fill the gaps” rather than get involved in the last mile business. Against this some Haffa members “will go futher into the e-commerce business and go the last mile. “At origin they will also invest in additional labour to do parcel sorting and labeling and hardware like sorting machines,” Sullivan adds. This tough market will not only see pressure on margins, “it’s a very tough market indeed” says Sullivan when speaking to ACW but add to the pressures to merge with others. “We expect there will be some more consolidation in the course of this year. Some members have merged already.” One problem the freight forwards and indeed the industry does not have to deal with is government opposition or lethargy. Nor are facilities such as Hactl doing anything other than help. Hactl has invested heavily in resources for pharma and e-commerce traffic and recently adopted mobile computing to enhance its ramp business and improved its truck flow management to speed delivery and collection of cargo.

HONG KONG Infrastructure expansion set to drive tonnage growth in HK

ong Kong Air Cargo Industry Services Limited (Hacis), the wholly-owned subsidiary of Hactl which provides integrated logistics support services onward into and from mainland China - is looking at adding road feeder service routes and frequencies connecting Hactl with its Chinese hinterland. “We’re also examining the opening of more depots (we currently have eight) to take advantage of improved truck transit times throughout the Pearl River Delta region, following the imminent opening of the Hong Kong-Zhuhai-Macau Bridge,” explains Hactl’s chief executive, Mark Whitehead. “We are about to launch a new all-inclusive service for charters, making it simple for shippers, agents, brokers and carriers to use Hong Kong as a charter hub. We expect this to attract new business to the airport as well as to Hactl,” adds Whitehead. Hong Kong as an airport and hub is already impressive but new infrastructure will add even more such as the Hong Kong – Zhuhai – Macau Bridge (pictured to the right), which Whitehead talks about above and December this year is likely to see the bridge starting to take traffic. This 55 kilometre piece of kit involving both bridges and tunnels consists of a main bridge in mainland China’s waters together with the boundary crossing facilities and link roads within Hong Kong, Zhuhai and Macau. The key point though is not how big it is, but how it links with roads and connects the three quite different regions much more efficiently. Previously only Zhuhai and Macau had a land border and Hong Kong only connected with them by ships or helicopter. The bridge will also give much better connections with mainland China, or as the website for the construction project says, put it “through its link in Zhuhai, the HZMB will connect with three major expressways, namely the Jing-Zhu Expressway, Guang-Zhu West Expressway and Jiang-Zhu Expressway, and then to the Mainland’s fast expanding road network.“ In short, the Pearl River Delta, where much of China’s industry is can be reached, and so much quicker. Currently Zhuhai to Hong Kong International Airport (HKIA) is 200Km road trip that takes some four hours. With the Bridge taking traffic that tumbles to 40km (ie a fifth of what it was) and will take 45 minutes. “The travelling time between Zhuhai on the western bank of PRD, and the Kwai Chung Container Port and HKIA on the other side, will be reduced by more than 60 per cent and 80 per cent respectively through the HZMB,” the website for the project explains. “Upon completion, the HZMB will shorten the distance of Hong Kong with most areas of the Western PRD (Pearl River Delta) to within a reachable three-hour commuting radius, bringing Hong Kong to the doorstep of the major industrial and commercial cities in the Mainland. “Moreover, the HZMB would enhance the attractiveness of the Western PRD to foreign investment and Hong Kong’s position as a trade and logistics hub,” it adds.

Beyond that the other major piece of hardware Hong Kong will gain from the airport’s third runway. This will allow the facility to handle 102 million passengers and nine million tonnes of cargo per year by 2030. Construction started on the 1 August this past year (2016) and is expected to complete in 2024, with the commissioning of the new runway in 2022. It is so much more than a runway as it will bring with it 650 hectares of land north of the existing airport island, taxiways and apron with 57 parking positions as well as expansion of the existing Terminal 2. When HKIA’s three-runway system (3RS) is complete it will

give air cargo operations a significant boost and help it grow volumes and allow it to add more routes including freighters. HKIA’s operator, Airport Authority Hong Kong (AA) says to protect the environment it will use non-dredge methods including deep cement mixing for land formation, while 3RS buildings will incorporate green and sustainable features in their design, construction and operational aspects. The cargo capacity of nine million tonnes by 2030 at HKIA will meet the airport’s long-term air traffic demand.

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AA chairman, Jack So Chak-kwong explained when the project was announced (pictured below left): “The 3RS is a critical infrastructure project to support the aviation industry and the long-term economic development of Hong Kong. We urgently need this expansion project as HKIA’s existing two-runway system is reaching its full capacity soon. “With the additional capacity to be provided by the 3RS, airlines can provide more destinations and more frequent flights, and passengers will have more choices and convenience.”

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CARGO HANDLING

Contract wins for Menzies as it grows its presence

enzies Aviation has started a new partnership with Orlando Melbourne International Airport as part of a four-year exclusive contract to provide ground handling at the Florida gateway. As part of the contract it will handle cargo for Delta Air Lines, American Airlines, Porter Airlines and Elite Airways. It will also run passenger and ramp handling and other services. The airport is close to NASA making it a leading home for companies in the aerospace and aviation sector as well as one of the fastest growing aircraft manufacturing and aviation centres in the US. Vice president for commercial in the Americas, Paul Walton says: “We are delighted to be selected by the Melbourne Airport Authority to be their exclusive partner of ground handling services at the airport. Our contract represents

the first of its kind for a US airport where we will be sole provider of services. “We were chosen for our proven experience and capabilities of providing quality handling solutions at this level and demonstrated our ability to partner with them to deliver a world-class handling service to their airline customers.” Emirates have also renewed contracts with Menzies in New Zealand for a further five years

until December 2021. In Auckland, Emirates operates four daily Airbus A380 aircraft and a daily A380 flight in Christchurch. Menzies grew strongly in the Oceania and South-East Asia (OSEA) region in 2016. Across 10 different stations in Australia and New Zealand, Menzies was awarded new contracts with Malaysia Airlines, American Airlines, Air Canada, Singapore Airlines, Cathay Pacific, Virgin Australia and Qantas. Providing around 204 additional flights or services per week, the contracts will offer a variety of services, including cargo and freighter ramp handling as well as core services. Malaysia Airlines was the most significant

win for the region - in addition to all existing contracts being renewed in Darwin, Auckland and Melbourne, Menzies was also awarded contracts in Sydney, Perth and Adelaide for services in Hyderabad. Two of these stations are new for Menzies, with operations beginning in Adelaide and Brisbane West Wellcamp Airport. Each contract has been locked in for three to five years and vice president for commercial in OSEA, Stuart Key says: “2016 has been a year of change for our global commercial teams; being set regional goals in line with the corporate strategy for the first time. “We met in March last year to identify areas, which needed strategic focus to meet these goals. “The team then went back to their regions and have performed better than anybody could have expected, despite a number of significant challenges. “The OSEA commercial team have increased business with key accounts, allowed operations teams to open new stations due to gaining new contracts, increased profitability through expanding complementary services, and achieved all of the goals we set in March.”

Garcia appointed to key role at WFS

WORLDWIDE Flight Services (WFS) has appointed Pedro Garcia (pictured below) as chief information officer. He will be based in Paris and joins after spending 10 years with Swissport, including the last five years in the role of vice president for cargo information systems. At WFS, he is responsible for the development of robust, sustainable and standardised IT solutions that will support WFS and its customers as WFS continues to efficiently grow its global airport services portfolio. WFS chief executive officer, Craig Smyth says: “I am delighted to welcome Pedro to our executive team. Technology is going to play an

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important role in our plans to grow WFS. “We want to standardise our applications to optimise our IT investment. We also see technology as a lever to add value to the company as we move to the next level across our ground handling business. “This requires a clear focus on governance and business intelligence to ensure the whole Group is heading in the same direction, is fully coordinated and achieving the highest levels of efficiency.” Prior to joining Swissport, Pedro worked in both the industrial and service sectors with his responsibilities ranging from finance to processes and IT. This included designing and deploying costs systems for industry on behalf of SAP in Spain and Portugal. WFS employs 18,000 staff and is present at 188 major airports in more than 22 countries on five continents, handling over four million tonnes of cargo per annum for 300 airline customers.

CARGO HANDLING

PACTL expecting more growth after strong year

argo volumes at Shanghai Pudong Air Cargo Terminal (PACTL) grew 4.5 per cent in 2016 and vice president for production, sales & marketing, Christian Haug (pictured) tells Air Cargo Week (ACW) he is expected to see further growth in 2017. He says PACTL handled around 1.67 million tonnes in 2016 after a slow start to the year and even though it is getting harder to forecast the future, he is expecting more in 2017. Describing 2016, Haug tells ACW: “After a slow start, the volumes started to pick up quite nicely already in the summer and we had a very nice peak in Q4 to finish the year strongly.” For 2017, he says: “It is getting more and more difficult to forecast, but we expect a similar development as last year.” Haug says particular commodities like textiles, electronics or car parts no longer dominate the Shanghai catchment area, and PACTL now handles a bit of everything. He comments: “There is more and more express cargo in domestic services since online shopping is as much an important part of people’s consumption habit and meanwhile special cargo like temperature cargo, dangerous cargo, fresh is quickly improving in international.” In April PACTL opened the International Air Transport Association Center of Excellence for Independent Validators in Pharmaceutical Logistics certified PACTL Cool Center in Terminal 1. Haug says it has been very successful so far, saying: “Just ask our customers, they are very happy

that we are able to have such a state of the art facility available for them and their customers. We see growth on both ends, although imports are still dominant.” At the end of December, PACTL set up a joint venture with

Nantong Xingdong Airport to establish a joint venture, PACTL Nantong Xingdong Airport Cargo Terminal (PACTL NTG). Haug tells ACW that the first few weeks have been successful, saying: “The opening went smooth and we also had the first shipments fed into PVG. We are satisfied with the start and on plan. We have many ideas, but will take our time to slowly implement.” He says PACTL is looking into new opportunities both inside and outside China. Haug says: “We working on several projects right now, we will start to talk about more details once we are more concrete. We are also looking into new technology that supports the business of our customers.” As a cargo handling agent, Haug says digitisation, automation and product and new business development is becoming more and more important, saying: “The Cool Center is a first step into that direction, PACTL-NTG another one.” Haug also believes the dynamics of the markets, new technology and new products such as cross border e-commerce are changing the industry. He tells ACW: “We are part of that, not only as an cargo handling agent, more like a logistic provider.”

Hermes chosen by ALSC for Noi Bai ALS Cargo Terminal (ALSC) has chosen the Hermes air cargo management system to run its cargo operations at Noi Bai International Airport in Hanoi, Vietnam. ALSC chose Hermes because of its hand-held device functionality, intelligent warehouse task steering and real time SLA monitoring, saying ALSC will be able to provide a faster and more controlled service to customers, something which is important when dealing with sensitive cargo such as electronics. ALSC deputy director, Le Thanh Binh says: “ALSC, together with our partner Hermes, pledge to reduce total service time, while increasing information accuracy, speeding up the information retrieval process, improving real time service level monitoring capability, supporting the synchronization between Airlines and Customs systems, as well as creating the connecting environment for e-freight in the near future” Hermes chief executive officer, Yuval Baruch (pictured) adds: “Both companies come from professional excellence cultures and have mutually committed towards ensuring this project is a success. We are confident that this is the start of a long term partnership between both companies.”

Revenue increases at SATS CARGO tonnage at SATS rose 7.9 per cent in the first half of the 2016-17 financial year from 840,640 tonnes with profits and revenue also increasing. Revenue over the same period rose to 862.7 million Singapore dollars ($609 million) from S$839.6 million in 2015, and profits rose from S$106.8 million to S$117.6 million. In the second quarter revenue was S$438.5 million compared to S$422.7 million in the previous year, and profits were up from S$59.7 million in 2015 to S$62.1 million in 2016. SATS says its cargo projects in Dammam in Saudi Arabia and Oman will increase its presence in the Middle East. The SATS eCommerce AirHub is scheduled to open in early 2017 and SATS says it will be able to serve customers better.

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PHARMA ROUND-UP

CEIV push for Paris CDG community

AEROPORT de Paris is to work with the International Air Transport Association (IATA) to implement Center of Excellence for Independent Validators (CEIV) certification with the Paris Charles de Gaulle Airport cargo community. Seven major names in transport and logistics, Europe Handling Group, Panalpina, Quickstat, Swissport, Tendron, Transdev and WFS have committed to obtaining CEIV Pharma certification, and Alyzia and DB Schenker will join soon. Most of the participating companies are expected to gain cer-

DHL vaccine tie-up

tification by the end of the year. The certificate is designed to ensure a worldwide standard in international regulations for the transport of pharmaceutical products, and Air France Cargo and Bollore Logistics are already certified at Charles de Gaulle. The initiative has been supported by associations including Transport and Logistics of France, Interprofessional Committee for Freight and Union of French Air Freight Companies. DEUTSCHE Post DHL Group and Gavi – the Vaccine Alliance – are teaming-up to provide efficient transport management and help improve vaccine supply chain for vaccine distribution in Gavi-supported countries. Kenya is one of the first countries to benefit from the new partnership, announcing a new initiative with DHL – the logistics arm of the Deutsche Post DHL Group. DHL says as immunization programs expand to include new, life-saving vaccines and strive to reach more people, often in remote areas, they are increasingly constrained by outdated supply chains and with vaccine volumes continuing to increase and the persistence of often weak or broken health systems, there is a critical need for improvements in immunization supply chain infrastructure. Over the next three years, the new partnership will help to provide countries with efficient supply chain solutions to improve health care delivery. Kenya is one of the first countries to benefit from the new partnership, and together Gavi, DHL and the Kenyan Ministry of Health will test a dedicated transportation management service for the efficient distribution of vaccines throughout the East African country. Incorporating a control tower called a Transport Support Hub, to better manage and coordinate third-party transport carriers and the use of DHL’s own global transportation network, the solution will improve the speed and reliability of vaccine deliveries to hospitals, clinics and medical professionals in the country. Deutsche Post DHL Group chief executive officer, Frank Appel says: “This enhanced relationship will allow Deutsche Post DHL Group to contribute its world class supply chain expertise and network towards making a real difference to vaccine distribution in the developing world – and, with this, to improve lives.”

Peli launches new product PELI BioThermal has launched a new CoolPall Vertos Advance single-use passive bulk freight shipping product. The design and manufacturer of temperature-controlled packaging for the life sciences and pharmaceuticals industry says it builds on the success of its existing CoolPall Vertos product range. The latest addition was developed following feedback from customers who highlighted a need for a passive shipper that could be placed in refrigerated storage, when necessary, during transportation. It has a temperature range of two to eight Degrees celsius for up to five days and a volume of 1680 litres. The company says CoolPall Vertos Advance’s reliable, robust specifications make it ideal for the rigours of global logistics applications covering routes to more exotic locations such as Brazil, Russia, the Far East including Indonesia and Eastern European destinations, where there is an increasing need to be able to put a shipment in refrigerated storage for part of its journey.

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