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The weekly newspaper for air cargo professionals No. 1,147

6 SEPTEMBER 2021

THREE DECADES BEYOND THE IRON CURTAIN

26AVIATION charter receives water-cannon salute in Dubai

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INSIDE

WORLD ROUTES CONFERENCE

IN less than seven weeks, the global aviation community will reunite at World Routes in Milan. Over 185 carriers are expected to ... PAGE 2

AIR VISTARA SIGNS STRIKE AVIATION USA

AIR Vistara and Strike Aviation USA have signed a General Sales Agency agreement covering Air Vistara’s impending flights from Newark ... PAGE 2

K-based cargo charter specialist 26AVIATION has arranged the charter of a 747-400F operating from Zhengzhou, China on its inaugural flight to the UAE, where it received a water-cannon welcome at Al-Maktoum airport, Dubai. The aircraft, which operates for Aerotranscargo, was paying its first visit to the UAE, and was carrying 90 tonnes of urgent humanitarian cargo that had been stranded in China due to the ongoing air freight crisis that has plagued the region in recent weeks. Following multiple cargo terminal closures, staff quarantine shortages and even rumours of full suspensions throughout the major Chinese

ETIHAD MOVES TWO FOOTBALL STATUES

air cargo hubs, the charter specialist’s dilemma was not based purely on short notice aircraft availability but also on finding an airport and cargo terminal able to handle the flight. 26AVIATION’s managing director Sam Heather (left) commented on the challenges that were faced securing wide-body charter capacity out of China at such short notice: “We focus on providing creative, outsideof-the-box cargo solutions, which is why our customer approached us to solve the problem of getting 90 tonnes of aid out of China on a go-now basis. Given the issues being seen in the region currently, we had to dig very deep to find a suitable solution.

“It was absolutely critical that we used a carrier who had a strong presence in China, as well as an airport that avoided the rapidly escalating disruptions in Shanghai, Nanjing,and Tianjin. “We worked in close co-operation with our GSA partner Air One Aviation, the carrier and handling agents in both Zhengzhou and Dubai to ensure that the cargo was delivered within the urgent time-frames required. “In fact, our charter was the carrier’s inaugural flight with their brand-new approval to operate to the UAE, meaning that we were welcomed with a water-cannon salute – a first for 26AVIATION,” Heather said.

MANCHESTER City football club has teamed up with long-standing partner, Etihad Airways in the international transportation of ... PAGE 4

KERRY LOGISTICS INTERIM RESULTS

KERRY Logistics Network Limited has announced the Group’s interim results for the six months ended June 30 2021. The group’s ... PAGE 4

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NEWS

World Routes conference to be held this October

n less than seven weeks, the global aviation community will reunite at World Routes in Milan. Over 185 carriers are expected to attend the event and engage in conversations during both in-person and virtual meetings, which will support the recovery of global air connectivity. World Routes will unite decision-makers from airlines, airports, and destinations to define recovery strategies. “Our ability to consistently unite decision-makers from the route development community, means Routes continues to influence the world’s air services; with over 3,500 new air services connected to meetings at Routes events in the last three years alone,” says Steven Small, brand director for

Routes. “The number of airlines and the seniority of the airline delegates confirmed to attend World Routes in Milan demonstrates the importance of in-person meetings to help overcome the impact of this pandemic.” In addition to meetings, there will be a strong conference programme; airline CEOs including Wizz Air’s József Váradi and Air Dolimiti’s Joerg Eberhart will deliver keynote addresses, highlighting how their respective carriers have adapted to the pandemic. Networking sessions including a welcome reception and formal evening function will also support airports, destinations and suppliers in fostering new and developing existing business relationships with target airlines.

Air Vistara signs Strike Aviation USA as GSA

ir Vistara and Strike Aviation USA have signed a General Sales Agency agreement covering Air Vistara’s impending flights from Newark to New Delhi. Air Vistara will operate B787-900s with 22 tonnes of cargo capacity per flight commencing at twice a week and moving up to a daily schedule. Additional United

States destinations are also planned from India in this launch.

Frank Ziesemer, president of Strike Aviation Group commented: “It is a great honour to represent Air Vistara and it clearly shows the credit our Strike Team has in the airline industry. Strike Aviation represents world class airlines and we focus on our commitments.” Strike Aviation Group is represented in 21 countries and with 32 offices in major markets.

EUROCONTROL starts work on new ops centre

CONSTRUCTION work on the new EUROCONTROL Network Manager’s ops centre in Brussels has commenced with a ‘breaking ground’ event attended by EUROCONTROL director general Eamonn Brennan, Philippe Close, mayor of Brussels and Brussels Commissioner for Europe and Inter-governmental Organisations, Alain Hutchinson.

ACW 6 SEPTEMBER 2021

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NEWS

Kerry Logistics interim results show core net profit up 81%

erry Logistics Network Limited has announced the Group’s interim results for the six months ended June 30 2021. The group’s financial highlights include: Revenue increased by 68% year-on-year to HK$36,709 million (H1 2020: HK$21,885 million); Core operating profit increased by 70% to HK$2,536 million (HI 2020: HK$1,489 million); Core net profit jumped by 81% year-on-year to HK$1,530 million (H1 2020: HK$845 million); Profit to shareholders for HI 2021 was HK$3,380 million (H1 2020: HK$1,073 million); Integrated Logistics (‘IL’) business recorded a segment profit of HK$1,292 million (H1 2020: HK$1,139 million) and International Freight Forwarding (IFF) business recorded HK$1,437 million (H1 2020: HK$379 million), which represent an increase of 13% and 279%, respectively;

Interim dividend of 21.1 HK cents per share, to be payable on Tuesday, September 28. William Ma, group managing director of Kerry Logistics Network, said: “The COVID-19 pandemic has entered into a new phase with the worldwide spread of the Delta variant, which has been severely affecting global and domestic supply chains and disrupting business operations at different levels around the world. “These disruptions and capacity chokeholds, together with different government approaches and restrictions in tackling the pandemic, have compelled the logistics industry to move towards a growing focus on service customisation. Leveraging our core competency in providing highly customised solutions, KLN Group capitalised on the opportunities in this new environment and achieved record growth in both revenue and core net profit in Hi 2021.”

Etihad transports two Man City player statues

anchester City football club has teamed up with long-standing partner, Etihad Airways in the international transportation of two player statues from across the world to Manchester. The statues of club legends Vincent Kompany and David Silva travelled 5,778 miles from the US to Manchester ahead of installation at the Etihad Stadium. Glasgow-born and raised, but now operating from his studio in Philadelphia, sculptor Andy Scott was appointed by the Club 15 months ago to bring the player legends to life in sculpture form. Uniquely, the entire process from commissioning, to

design and build has been conducted remotely due to travel restrictions relating to the global pandemic. Following completion of the statues in Philadelphia, they were carefully separated into four parts and meticulously packaged. They were trucked from Scott’s studio in Philadelphia to Chicago, loaded onto a B777 freighter and flown to Frankfurt before trucking to Manchester.

Bespoke Commenting on Etihad’s support, Manchester City’s director of Infrastructure Ed Dalton, said: “These statues are bespoke and premium pieces of art that have been 15 months in the making. The

precious nature of the pieces together with their sheer size and weight, meant that their transportation across the world to Manchester was always going to be a challenging and complex process. “Etihad Cargo’s dedicated team have worked with the Club closely throughout this process and have been the perfect partner – highly organised, professional and collaborative and we are extremely grateful for their invaluable assistance.” Martin Drew, senior vice president sales and cargo, Etihad Aviation Group, added: “The Etihad Cargo team is extremely proud to have been chosen by Manchester City to transport this unique cargo shipment.”

Air Logistics Belgium lends a hand

THE Air Logistics team in Belgium are supporting a local charity providing much needed supplies to children hit by last month’s floods that caused widespread devastation. The charity organises a drop-off point for local businesses and individuals to deliver relief goods, and this collection was specifically organised to gather school supplies for children. The Air Logistics team purchased 50 school bags and filled them with all the essentials for heading back to school including pens, notebooks, lunch boxes and more.

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In total the charity received over 1,000 school bags, along with 85 bicycles and toys to deliver to the areas most in need. “We are incredibly happy to support such a fantastic cause and provide some vital supplies to children whose lives have been turned upside down,” comments Jeremy Henno, country manager, Air Logistics Belgium. “We are proud to play a small part in supporting families at this difficult time and bringing a smile to the faces of both the children and their families.”

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e-Commerce A

Over the last few years, e-Commerce has become an indispensable part of the global retail frame work, supported by the global logistics industry. In 2020, over two billion people purchased goods or services online, and during the same year, e-re tail sales surpassed $4.2 trillion worldwide.

GEODIS expands On-demand e-Commerce fulfilment solutions TRANSPORT and logistics provider GEODIS is launching an extended GEODIS eLogistics service in the US to provide e-Commerce fulfilment solutions to emerging direct-to-consumer brands. The new service leverages GEODIS’ global expertise and utilises strategically placed US logistics hubs to support new and emerging brands seeking a 3PL provider who can not only fulfil orders but scale with their business. GEODIS eLogistics features multi-tenant, automated fulfilment centres designed to enable a faster, more convenient and more affordable shipping experience. Notably accelerated due to the COVID-19 pandemic, US e-Commerce revenue from fashion and accessories is expected to grow from $102.5 billion in 2019 to $153.6 billion in 2024. “At GEODIS, we have a proven track record of providing value-added, end-to-end supply chain solutions for a wide range of clients across our vast global network,” said Eric Douglas, executive vice president of technology and engineering at GEODIS in the Americas. “With GEODIS eLogistics, we are able to utilise our global expertise with large, enterprise brands and then scale to meet the unique fulfillment needs of startups and growing e-Commerce retailers through our flexible and cost-effective solution.”

Strategic positions GEODIS is set to operate the service from four new strategic GEODIS eLogistics locations across the US. The GEODIS eLogistics centre in Plainfield, Indiana, is currently fulfiling orders. Two additional locations in California and New Jersey will be fully operational before peak season this year. A state-of-the-art automated facility will be going live in Tennessee in Q1 of 2022. These four nodes are strategically located to provide two-day shipping to 91% of the US mainland population using standard shipping services. GEODIS’ new eLogistics sites complement the supply chain operator’s more than 150 current warehouse facilities across the US alone. GEODIS eLogistics utilises its fulfilment network and volume discounts, including dedicated year-round capacity, to minimise transportation costs, ensure fast delivery, and provide visibility on inventory, shipment data and tracking information. GEODIS eLogistics centres will utilise robotics and automation for goods-to-person order fulfilment in order to help deliver goods to the end consumer faster. Additionally, GEODIS eLogistics features guaranteed storage where brands only pay for what they use down to the cubic inch, no order minimums and no contract commitments. In the future, emerging brands are able to scale with GEODIS as operations grow as the supply chain operator offers customised solutions for businesses of all sizes across its global network.

ACW 6 SEPTEMBER 2021

HOW ASM’S SEQUOIA SYSTEM CAN BENEFIT E-COMMERCE

cant requirements to be fulfiled by the e-Commerce traders and all those making CDS declarations before they can operate under the new processes including registrations, training, guarantees, and payment systems. These requirements may well prove to be more challenging than the new declaration software. ACW: What has Brexit meant for UK-EU e-Commerce trade? Have the changes in regulations had negative effects on trade? MacSwiney: Increased declarations. Increased bureaucracy. Increased costs. ACW: In your opinion, were e-Commerce stakeholders that trade with the EU prepared for Brexit? MacSwiney: Some were fully prepared; some underestimated the scale of the change. A very significant number of GB/European traders had no prior experience of customs processes. ACW: What challenges arose from this and how were they resolved?

he e-Commerce industry in the UK is booming. But, a rise in e-Commerce can create challenges for new and small consigners as they navigate the sometimes complicated processes of customs. Peter MacSwiney, chairman, ASM talks to ACW about how the software can be used to manage these processes. ACW: Can you explain how ASM’s Sequoia system works? Peter MacSwiney: The Agency Sector Management (ASM) Sequoia Customs Clearance software has been developed to provide declarants, merchants, and their agents with the complete range of automated and integrated tools to cost effectively manage e-Commerce stock at both shipment and item level. ACW: How does it benefit small/ medium/large UK e-Commerce players? MacSwiney: The intelligent software ensures efficiencies by eliminating keyboard input wherever possible, utilising original data, automating processes, and maximising systems integration. Errors are minimised and productivity maximised with readily scalable modules operated in an industry standard environment. The Sequoia Worksheets module accesses and utilises manifest and commercial invoice data to auto-generate multiple line-item declarations without manual input. The Sequoia Customs

Warehouse and Duty Management module maximises compliance and cash flow by managing combined guarantees and Duty and VAT payments at the point of sale. ACW: How does Sequoia compare to other platforms available? MacSwiney: Sequoia is the product of ASM, a Mutual Trading Company owned by the users of the software. ASM is tasked to act in the interests of its users and its board of directors are unpaid volunteers drawn from the user-base. Additionally, ASM holds the remit from the British International Freight Association (BIFA) to represent the IT related interests of air forwarders in the UK. In these two unique roles, ASM has the advantage of being able to focus the functionality of the software exclusively on the specific needs of the industry. ACW: What’s your opinion on the government’s recent announcement that it will be closing CHIEF on March 31 2023 to be replaced by CDS? MacSwiney: ASM is pleased that HMRC recognises that the published CDS schedule is “challenging”. ASM will guarantee users’ business continuity by providing the necessary software tools in line with the HMRC CDS schedule. ACW: What will this mean for e-Commerce stakeholders?

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MacSwiney: There are very signifi-

MacSwiney: They underestimated the complexities and overestimated the amount of help available. The learning process has been slow because of the poor education resource and agent capacity. Whilst still below requirement, both are slowly improving. With a rise in e-Commerce, comes a rise in e-Commerce shippers. ACW: How is ASM helping educate new e-Commerce consignors/ consignees? MacSwiney: ASM provide user-friendly declaration, transit, and e-Commerce specific software tools that enable the community to better manage their logistics chain. The software license fees include unlimited access to the 24/7 IT Support Helpdesk. ACW: What is next for ASM? MacSwiney: For more than 27 years ASM has continuously provided a portfolio of current, compliant, and cost-efficient software in an ever-changing environment as well as a voice for the industry. ASM will perform both these roles throughout this period of unprecedented change and continue to serve the users of their software, who own the company. We are driven by the ethos that the best service is not just provided today but ensured for tomorrow and the day after that.

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AFRICA

Kenya Airways HY 2021 results nerships with other airlines, lease rentals re-negotiations, payment plans with suppliers and partial deferment of staff salaries.” According to IATA, Q1 2021 results show that the start of the year was still very weak for the airline industry, as virus outbreaks paused air travel recovery in many important markets. Faced with long recovery prospects, diminishing revenue occasioned by reduced demand in passenger business, and increased costs due to tighter health and safety measures, the business focus for the rest of 2021 will be ensuring the survival and the rebound of the company.

Kenya Airways Group managing director and CEO, Allan Kilavuka said: “Notwithstanding the current global crisis brought about by COVID-19 pandemic, we will continue to adopt an agile approach in responding to the current dynamic marketplace. “Our focus is on business recovery and to continue contributing to the rebuilding of economies and communities impacted by the pandemic. Restoring customer confidence for business and leisure travel will be key to growing demand, as well as creating agile and nimble business models that are sustainable and responsive to the customer’s needs.”

NATIONAL carrier Kenya Airways PLC (KQ), has released its financial results for the six-month period ending June 2021, at a virtual investor briefing. During the first half of 2021, operations continued to be severely impacted by the COVID-19 crisis, resulting in depressed half-year results. The airline however recorded improved performance compared to a similar period in the prior year. The Group’s total revenue during the period reduced by 9% to Kshs. 27,354 million (£181 million). The reduction is due to the cessation of domestic scheduled operations in the month of April 2021, as well as travel restrictions, and lockdowns due to a surge in virus cases in key domestic and international markets including UK, India, China, UAE, and the US.

Reduced frequencies Prior to the pandemic, the carrier flew to over 40 African destinations. Currently the airline operates in 40 international destinations and two domestic routes with significantly reduced frequencies of approximately 65% as compared to 2019. COVID-19 restrictions on travel by various states remain the biggest challenge. In addition, the rollout of the coronavirus vaccines in the African continent remains low; with less than two per cent of Africans having received the vaccine while in other markets high vaccination levels have allowed progressive reopening of their economies. The current upsurge coupled with the continent’s low vaccination rates has contributed to low passenger traffic from Africa to other markets like Europe who have issued or extend stringent travel restrictions on travellers from African countries in a measure to prevent the spread of the new COVID-19 variants. As a result, a total of 0.8 million passengers were uplifted during the first half of 2021, a 20% decline in comparison to a similar period in the previous year.

Strong focus on freighter operations Though passenger revenue declined by 17% to Kshs. 20,230 million (£133 million), cargo revenues went up by 60% due to strong focus on freighter operations. The Group has been able to uplift an increased 500 tonnes monthly, showing its cargo division’s outstanding agility in adapting its operations to provide air freight services in this new environment. Kenya Airways board chairman Michael Joseph said: “During the period, the company’s main focus was, and still is cash conservation. “The company has exploited opportunities of raising much needed revenue through passenger charters and ramped up cargo operations. “Other initiatives undertaken by management include part-

ACW 6 SEPTEMBER 2021

THREE DECADES BEYOND THE IRON CURTAIN

“The new generation is highly educated, IT versatile and focused on customers’ needs.”

EWER and fewer people nowadays in Russia remember the old Soviet times. You have to be well over 50 to really have had any commercial experience of the old Soviet Union. This is a reflection of Alfred Stienen, chairman, FSM Logistics, part of the FS Mackenzie International Ltd Group. He says: “It has changed completely. Now it is very similar to any other worldwide business environments with hard competition, clients selecting providers by tendering, Key Performance Indicators, latest IT technology requirements and so on. “The new generation is highly educated, IT versatile and focused on customers’ needs. It gets harder and harder to compete. All operational staff involved in international movements and sales speak English to a very high level. This has also changed over the years. FSM Logistics started exploring the Russian market just after Boris Yeltsin took over in 1991. This was in the early days after the collapse of the Iron Curtain. Stienen says: “We were one of the first UK-based freight Forwarders to set foot in that market. We gained many blue chip customers at the time when they needed help with transportation and customs clearance. “We still work for a number of these companies today. It was at the time a niche market for us, and we wanted to be one of the first offering customers a reliable service fully monitored door-to-door by us. We saw great potential here and attended at the time many business meetings hosted by the British Embassy in Moscow where we made numerous contacts. “This gave us the confidence that we are investing our time in the right place at the right time.”

COVID-19 During the first wave of COVID-19 in March 2020, when Moscow was on lockdown, the employees of FSM Moscow actively helped to deliver goods for doctors to the largest hospitals in Moscow. These were masks, dressing gowns for doctors and patients, as well as individual lung ventilation devices, which saved many lives in hospitals. Stienen recalls that on one Friday evening, a client who was carrying out a state contract for the supply of medical equip-

ment called and said that he had to carry out air cargo handling at the airports of Shanghai and Moscow and we had two days to organise all procedures in the cities. On the Monday, the world’s largest plane Antonov 124 with 24 crew members on board was already at Shanghai Airport and was awaiting loading, and in those two days the company and its partners picked up the cargo from the factory, completed all necessary customs procedures, received all permits and successfully loaded the cargo into the Shanghai airport. All these actions were taken against a total shortage of staff in the airport due to the huge number of humanitarian flights. On the Tuesday morning, eight trucks drove into VKO to load all the cargo and immediately despatch the goods to hospitals. It was an interesting and successful project. In its seven offices across Russia, FSM Logistics has over 100 employees with Russian-speaking staff in the UK office. Key staff in offices in Kiev, Tblisi and Almat speak local languages, Russian and English. Stienen says: “The problem of logistics in Russia in airfreight service is the centralisation of transport hubs. All major airports are concentrated in the European part, in particular near Moscow. “During the pandemic, we were faced with a total reduction in international traffic to the airports of the regions, which led to an increase in the workload of the Moscow hub. In order to provide a uninterrupted delivery service for clients, many efforts were made to expand partner networks, making it possible to deliver goods to the regions via Moscow. “During the pandemic, many companies turned to the air mode of transportation as a solution against cargo delays, because of the widespread restrictions on movement between countries and cities,” he says.

Russian export market The airline export market in Russia is small and a few major players have been on the market for more than 20 years, notes Stienen. For example, FF Cargo (12 international airlines and three Russian airlines) and their own company, Aircargopro (12 international airlines), are the general distributors of 90% of foreign companies flying in the Russian Federation.

Airfreight infrastructure is improving every year as its potential is very high; the number of SVO1 and SVO2 employees is at 4,000. They successfully handle thousands of tonnes of cargo every day. Freight traffic grows by about 10% annually. Near airports business centres are built for forwarding offices and other service infrastructure companies. Based on the open sources of the customs authority, 90% of the established declaration at Moscow airports is imported into the Russian Federation. Most of the cargo arrives from China to SVO, DME, VKO airports. The largest cargo hub in Russia is located at SVO, where it handles about 500,000 tonnes per year. Over the last three years, however, Russian air freight exports have been growing steadily, for instance in 2021, exports from Moscow airports rose by 34%.

Personal notes Stienen reflects on his three-decade contact with Russian airfreight and the staff that keep it flying. How are the Russians to work with generally? “I have been working with Russian people now for over 30 years. “There is not much difference now working with Russian people and others all over the world. We have found Russian customers usually fair and loyal, but also more and more cost-driven. “We are still dealing with a large number of top companies from the early days, who also appreciate the special attendance FSM staff provides in Russia and in the UK to deal with any unforeseen problem and the way we assist them when problems arise even after normal working hours,” he says.

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