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The weekly newspaper for air cargo professionals No. 1,046

26 August 2019

Have a pawfect National Dog Day

TWO BECOMES ONE

DSV completes acquisition of Panalpina

SV completed the acquisition of Panalpina on Monday 19 August, with the Danish forwarder changing its name to DSV Panalpina. The integration of the Danish and Swiss companies is expected to take two to three years, and combining the two will have a workforce of 60,000 employees in 90 countries. Kurt Kokhauge Larsen will be chairman, with Jens Bjørn Andersen, Jens Lund and Thomas Stig Plenborg joining the Panalpina board, giving DSV full control. Andersen, CEO of DSV says: “We are very excited to welcome Panalpina’s customers, employees and shareholders to DSV. Our two companies will achieve more together, creating even more value for all our stakeholders. The settlement of the deal marks the beginning of the integration process, during which we will strive to provide the high level of service our customers know and rely on.” The transaction is worth 5.4 billion Swiss francs ($5.5 billion) and DSV expects to achieve annual cost synergies of 2.2 billion Danish krone ($330 million). The cost synergies are expected to have full-year effect by 2022 and will come from consolidating operations, logistics facilities, administration and IT infrastructure.

Altalto Immingham, a subsidiary of renewable fuels company Velocys and a collaboration with British Airways and Shell have submitted a planning application to develop the site in Immingham, Lincolnshire.

INSIDE AIRGLADES CLOSER TO OPENING

AIRGLADES International Airport is one step closer to becoming an all-cargo airport after the Federal Aviation Administration deemed ... PAGE 2

GROUND BROKEN IN HALIFAX

GROUND has been broken at Halifax Stanfield International Airport’s Air Cargo Logistics Park in a ceremony attended by airport executives and local ... Picture credit: Panalpina, courtesy of The Boeing Company

PAGE 6 TAKING NOTHING FOR GRANTED

British Airways jet fuel plan is a load of rubbish

BRITISH Airways is closer to powering its fleet with sustainable jet fuel made from household and commercial waste, after plans were submitted to develop Europe’s first solid waste to fuel plant.

Page 12

The plant would take over halfa-million tonnes of non-recyclable household and commercial waste destined for landfill or incineration including meal packaging, nappies and takeaway coffee cups and convert it into aviation fuel. Velocys says the technology will reduce greenhouse gas emissions by 70% for every tonne of sustainable jet fuel that replaces a tonne of conventional fossil fuel. The fuel will lead to a 90% reduction in soot from aircraft engine exhausts and almost 100% reduction in sulphur oxides, and reduce the amount of waste going to landfill. Jonathon Counsell, head of sus-

tainability at British Airways parent company International Airlines Group says: “This is a fantastic step forward for the project. We strongly welcomed the inclusion of sustainable aviation fuels into the renewable transport fuels policy framework and call on Government to continue to provide support given the significant near-term opportunities offered by these fuels.” Henrik Wareborn, CEO of Velocys says: “This will cut greenhouse gas emissions from aviation, as well as improving air quality and helping to tackle our waste problem. This is a vital step towards the ultimate goal of living in a net zero carbon world by the middle of the century.”

INCREASED global regulatory focus on international trade abuse is driving the need for organisations to better understand the risks they may be ... PAGE 8

THE GATEWAY OF INDIAN CARGO

HAVING been connected to Mumbai through its partnership with Jet Airways, Virgin Atlantic Cargo is ready to add the city to its network again ... PAGE 10

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ALL Nippon Airways will adjust its freighter network for the peak season. On 29 October, three flights a week will be operated between Tokyo Narita and Chicago using a Boeing 777 Freighter on Tuesdays, Thursdays and Saturdays. From 23 December, Narita – Shanghai Pudong services will be reduced from seven to six a week, with the Monday flight being suspended. UNITED Airlines will launch flights between four US hubs and Tokyo’s Haneda International Airport from 28 March 2020. Nonstop services will be launched from Chicago, Los Angeles, New York Newark and Washington DC, adding to San Francisco flights. The Haneda flights will be in addition to Tokyo Narita flights to Denver, Guam, Honolulu, Houston, Los Angeles, New York Newark and San Francisco. Narita flights to Chicago and Washington DC will be shifted to Haneda. VALLAIR has signed a letter of intent to lease the first Airbus A321 Passenger to Freighter conversion to Qantas. The aircraft, MSN835 will be operated by Qantas Freight on behalf of Australia Post when it is delivered in 2020. Qantas will be the first airline in the world to operate the A321 as a freighter aircraft. CARGO throughput at Hong Kong International Airport decreased by 7% in July to 401,000 tonnes. The fall was attributed to a 12% decline in imports and transhipments, with Southeast Asia and North America seeing the biggest falls. In the first seven months of 2019, throughput was down 6.8% to 2.7 million tonnes. LUSAKA in Zambia will return to Air France KLM Martinair Cargo’s freighter network on 3 September with weekly Boeing 747 services. It is returning to the schedule after a three-year break and flights will depart Amsterdam Airport Schiphol on Tuesdays, arriving in Lusaka on Wednesdays. The service, flight number MP8320 leave Amsterdam at 18.45 local time, and operate on an Amsterdam-Johannesburg-Lusaka-Harare-Nairobi-Amsterdam circuit, arriving back at Schiphol at 03.45 on Thursday. OSLO Airport will gain a new link to China when Suparna Airlines launches twice-weekly connects to Nanjing on 1 September. The Boeing 747-400ERF service will leave the Norwegian capital at 16.30 on Thursdays and Sundays, arriving in Nanjing at 09.00 the following morning. MENZIES Aviation has renewed its contract with Norwegian Air for two years at four major US airports. The renewal will see Menzies deliver ground handling services at Newark Liberty International Airport, Fort Lauderdale-Hollywood International Airport, Orlando International Airport and Los Angeles International Airport. Nearly 3,000 flights per annum will be serviced, and 18,000 tonnes of cargo will be processed in Los Angeles.

irglades International Airport is one step closer to becoming an all-cargo airport after the Federal Aviation Administration deemed its application “substantially complete”. The application under the Airport Investment Partnership Program for the airport in Clewiston, Hendry County, Florida passed the milestone with the publication in the Federal Register for a 30-day notice-and-comment period ending on 18 September. AvPORTS has been selected as the airport operator and Star America as a private investor and equity provider in the all-cargo and perishables airport to be located at the General Aviation Airglades Airport. Fred Ford, president of Airglades airport (AIA) says the decision represents a major boost for long-term plans to develop a logistics complex to reshape the flow of perishable goods from Latin American producers to US consumers. He says: “Much more work still needs to be done, but this airport represents a big win for consumers, airlines, and perishable suppliers, offering streamlined logistics to reduce cold chain disruptions, while reducing trucking and airport congestion.” Ford adds that the Federal Aviation Administration, US Cus-

toms & Border Protection, Transport Security Administration and the United States Department of Agriculture. Jennifer Davis, administrator of Hendry County applauded the private infrastructure, saying the project could not have come so far without private partners and investment. She says: “We’ll be upgrading our general aviation facilities while bringing much-needed infrastructure improvement and jobs to support this innovative, perishable goods facility.”

OMAN Air Cargo has launched its mobile app for customers as the first step on its journey towards digitally transforming the business. The app is available to all customers including shippers and freight forwarders, and is a collaboration with QuantumID Technologies, Oman Air’s cargo system solution provider for the SmartKargo platform. The mobile app is available to download on both Apple and Android, and builds on the deployment of SmartKargo’s cloudbased Cargo Management system launched in September 2017. Shippers and clients will receive self-service and mobile capabilities for information including quotes, flight schedules and capacity queries, to real-time bookings and tracking notifications.

AIT Worldwide Logistics has extended its network in Mexico with an office based at Mexico City International Airport. The Mexico City office will provide an array of logistics products including transborder expertise, warehousing, customs brokerage and IMMEX services with a focus on airfreight, particularly in the automotive, food logistics, technology and life science sectors. It is the fifth station in Mexico along with offices in Guadalajara, Hermosillo, Monterrey and Tijuana. Vaughn Moore, president and CEO at AIT says: “We’ve been looking forward to adding Mexico City to our network. It’s a mecca for major business, with tremendous client diversity, access to our current customers and government agencies, and a location central to growers in the southern part of the country.”

Appy days in Oman Hola Mexico City

Flight of the simulator

AIR Charter Service’s Florida office chartered a Boeing 747 to fly a 35-tonne flight simulator from Texas to Japan. The charter was for a large defence contractor who will be using the flight simulator to train military personnel to fly a recently delivered aircraft. Richard Thompson, president of ACS Americas says it was a tricky load, with the dimensions leaving no room for error in fitting it into the 747, with only two centimetres to spare. He says: “The flight, including a fuel stop in Alaska, took a total of almost 16 hours and required meticulous planning for loading and offloading. The delivery date shifted drastically from September to June, so we had to work fast when we finally got the go-ahead. Fortunately, we had put in the work beforehand so we were ready to go.”

Old Words

During August, we are looking back at old editorial comments that were once a feature of Air Cargo Week

his story contains a serious modern-day moral with a direct relevance to the way some parts of the airfreight business are modernising the way they trade, so it should be read carefully. Last week, the people who had been providing our connection to an Internet service on aircargoweek.com completely disappeared into the ether just like that! One moment our service was there, the next it was gone - and with it our ability to send, or more importantly, to receive worldwide e-mail communications. Our service provider was moving offices, we were informed, and had forgotten to tell us. Our IT people eventually found someone who said the service would be plugged back in after the weekend, when the move between premises had been totally completed. Wrong information, it seems the move was never intended to be

ACW 26 AUGUST 2019

Airglades ready to be a perishables hub

ACWBITES

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completed in the first place. The firm concerned - for whatever reason - had decided to take to its heels and it never turned up at the new address. In fact, it has not resurfaced or been heard of since. Fortunately, ACW runs with a staff of old-fashioned style journalists who are no stranger to the telephone, fax or face-to-face meetings and although the full scope of our usual international coverage was a little down last week, the issue managed to pull through well enough. It should ring warning bells for those dealing with virtual organisations that hardly seem to exist. Where companies have bricks and mortar it is very hard to complete an overnight disappearing act. Over the next months and years, more and more of you will be asked to join in the new electronic way of doing business. Unquestionably it is the way forward. However, until a reliable method has been found of policing and regulating the way all sorts of companies can set up and freely do business on the worldwide web, you should be aware of the pitfalls.

5 March 2001

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ACWBITES VIETNAM Airlines has taken delivery of the first of eight Boeing 787-10 Dreamliners on lease from Air Lease Corporation. The 787-10s complement the existing fleet of 787-9s and will be used on the airline’s busiest routes. AIR India resumed flights from Birmingham Airport on 15 August with flights to Delhi and Amritsar. The direct services to Delhi operate three times a week on Mondays, Wednesdays and Sundays before continuing to Amritsar. Three flights a week go to Amritsar then on to Delhi on Tuesdays, Thursdays and Sundays. A Boeing 787 Dreamliner is used on the service. GUERNSEY, Channel Islands property investment vehicle NR Investments has acquired 95% of the concession company of Chisinau International Airport, the international airport of Moldova. The agreement was ratified by representatives of Avia Invest and NR’s sole beneficiary, Nat Rothschild on Monday 19 August.

DB Schenker says g’day to Western Sydney Aerotropolis DB Schenker has signed up as a foundation partner of the Western Sydney Aerotropolis at Western Sydney Airport. The memorandum of understanding (MoU) was signed in Berlin, Germany by Gladys Berejiklian, premier of the state of New South Wales and Alexander Doll, chairman of the supervisory board of DB Schenker. By signing the MoU, DB Schenker intends to work with the Western City and Aerotropolis Authority to promote the development of the Western Sydney Aerotropolis. The Aerotropolis is a commercial, logistics and education hub in the vicinity of the airport, which will be located 44 kilometres outside Sydney when it opens in 2026. Doll says: “The Aerotropolis is set to be-

come a pioneering project on our path to building smart cities with integrated transportation concepts and sustainable logistics solutions.” Ditlev Blicher, CEO of DB Schenker’s Asia

Pacific Region says: “We are delighted to join in this unique effort of building the Western Sydney Aerotropolis for the benefit of the enterprises and the residents of New South Wales.”

Hogg and Loo leave Cathay Pacific RUPERT Hogg and Paul Loo left Cathay Pacific on Monday 19 August following the board of director’s decision that the airline needed new leadership. Augustus Tang took over from Hogg as chief executive officer and Ronald Lam has filled Loo’s role of chief customer and commercial officer. Lam’s position as CEO of Hong Kong Express has been filled by Mandy Ng. Lam has also been appointed chairman of Hong Kong Express. John Slosar, chairman of Cathay Pacific says: “Augustus Tang and Ronald Lam have the experience and depth of knowledge of aviation and our people to be strong and effective leaders of Cathay Pacific at this sensitive time.” Hogg says: “It has been my honour to lead the Cathay Pacific Group over the last three years. I am confident in the future of Hong Kong as the

key aviation hub in Asia. However, these have been challenging weeks for the airline and it is right that Paul and I take responsibility as leaders of the company.” Slosar adds that Hogg and his team’s execution of the three-year Transformation Programme has been important to Cathay Pacific’s recovery but recent events have called into question the airline’s commitment to flight safety and security. Describing this as regrettable, Slosar says: “We therefore think it is time to put a new management team in place who can reset confidence and lead the airline to new heights. Cathay Pacific is fully committed to Hong Kong under the principle of ‘One Country Two Systems’ as enshrined in the Basic Law. We are confident that Hong Kong will have a great future.”

TIGERS South Africa has opened a dedicated e-commerce centre at its Johannesburg warehouse facility as online retail demand soars. The centre is equipped with the Tigers-developed ScanPak App to allow staff to conduct scan checks while packing shipments and create waybills. The e-commerce centre is the first of its kind for Tigers in South Africa and coincides with the freight rate quote engine Doozee being rolled-out across its network. Paul Lawrence (pictured right with Ewald Fernandes, general manager Tigers), managing director of Tigers South Africa says: “With the ongoing e-commerce revolution and digital technology transforming the way consumers shop, we find ourselves in a very good strategic position to further en-

hance and grow this vertical for Tigers.” Andrew Jillings, chief executive officer of Tigers says: “The new dedicated e-commerce centre in South Africa is an important investment for the future direction of Tigers and is a testament to the hard work of the team in South Africa in developing the new facility.”

Tigers ready for soaring e-commerce

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Ground broken at Halifax air cargo logistics park

capacity at the airport. This facility will create jobs, enhance trade and expand international capacity to foster exports not only for Nova Scotia, but also for the entire region.” The logistics park has been funded by a C$18 million investment from the federal government, C$5 million from the provincial government and a C$13 million contribution from HIAA. Cargo exports out of Halifax Stanfield have seen five consecutive years of growth, and are worth C$514 million to the provincial economy. In 2018, New Brunswick and Prince Edward Island’s economy benefitted from Halifax Stanfield’s cargo services with $65.7 million of goods exported through Halifax. Premier McNeil says: “The new cargo processing and logistics facility – the largest in Atlantic Canada – will be an important addition to our transportation network. I’m pleased to see more opportunities for businesses in Nova Scotia and the region to get their high-quality products to market. Growing our exports will help create jobs at home and strengthen our economy.”

round has been broken at Halifax Stanfield International Airport’s Air Cargo Logistics Park in a ceremony attended by airport executives and local dignitaries. The logistics park will be built on 10 hectares of vacant land at Halifax Stanfield and include a new cargo apron area, buildings for cargo handling, an aircraft de-icing facility and associated operational areas both airside and groundside when it opens in early 2021. The ceremony on Tuesday 20 August was attended by Joyce Carter, president and chief executive officer of Halifax International Airport Authority (HIAA); Sean Fraser, parliamentary secretary to the minister of environment and climate change; Lena Metlege Diab, minister of immigration on behalf of premier Stephen McNeil; Mike Savage, mayor of Halifax Regional Municipality; and Wilbert Marshall, chief of the Potlotek First Nation. Carter says: “HIAA is thrilled to officially break ground on our new Air Cargo Logistics Park, which will further increase cargo

Swissport refinances €1.5b of debt SWISSPORT Group has refinanced debts worth €1.5 billion to repay existing debts, for organic growth and make acquisitions. The refinancing includes €410 million of 5.25% senior secured notes, €250 million of 9% senior notes and a €850 million term loan B facility at EURIBOR plus 4.75%. The 5.25% senior secured notes will mature on 15 August 2024 and have been issued at 100% of par value. The 9% senior notes will mature on 15 February 2025 and have been issued at 100% of par value, with interest being paid on the 15th day of February and August from 2020. Swissport will use the net proceeds from the notes and term loan B facility to repay

outstanding borrowings consisting of existing outstanding term loan B facilities, an existing outstanding revolving credit facility and to fully redeem the aggregate principal amount of existing secured and senior notes, and pay transaction fees and expenses. Eric Born, president and CEO of Swissport International says: “The successful refinancing significantly increases our cash position and enables us to further enhance our leading global market position through organic growth opportunities and selective bolt-on acquisitions. At the same time, we continue to focus on improving our customer service delivery and reducing our cost structures across the globe.”

Pilots raise concerns in Cincinnati PILOTS flying for Amazon Air and DHL through contracts with Atlas Air, Southern Air and ABX Air protested outside Cincinnati/Northern Kentucky International Airport to raise concerns about working conditions. The pilots protested outside the Atlas/Southern headquarters in Florence, Kentucky near the airport carrying signs reading “AAWW + ABX Air Pilots: Overworked, underpaid & exploited. It’s just plane wrong” and “Poor management, awful retention & low morale: Now AAWW investors are paying the price”. The protests come as Amazon Air broke ground at its $1.5 billion hub at the airport in May, which plans to officially open for business

in 2021. The pilots were represented by the union, Airline Professionals Association Teamsters Local 1224.

Nexxiot and Unilode to digitise ULD fleet SATS and TUM bring AI to cargo handling

NEXXIOT is officially partnering with Unilode Aviation Solutions to digitise its entire fleet of unit load device within 18 months. The ULDs will be equipped with Bluetooth sensors, with data being processed, analysed and made available by Nexxiot for Unilode. This will enable continuous, automated tracking of ULDs both on the ground and in the air for the first time.

Helmut Kaspers (pictured), CEO of Nexxiot says: “For the first time, we are now developing solutions to digitise the air freight market and make the handling of ULDs transparent worldwide. We achieve this by combining freight and movement data.” Benoît Dumont, CEO of Unilode Aviation Solutions says: “After a long review, it turned out that Nexxiot is currently the only supplier worldwide with whom we can implement this kind of project in such a short time. That’s why we’ve brought Nexxiot on board as a strategic partner and benefit from the company’s vast expertise in the digitisation of large fleets.” The first joint trials have been running since September 2018 and all 125,000 ULDs supported by Unilode will be fitted with a digital twin by the beginning of 2021. Nexxiot has developed and maintained a neutral user interface for Unilode where customers can view ULD data including location, temperature, shock, light and humidity measurements, as well as tracking.

SATS and TUM CREATE have teamed up to develop the world’s first artificial intelligence (AI) powered robotic arm cargo system to digitise handling. The system, Speedcargo comprises of three products – Cargo Eye, Cargo Mind and Cargo Arm, which are targeted at optimising cargo acceptance as well as palletisation through intelligent ULD planning and packing. The AI-powered operating system enables data connectivity for end-to-end optimisation and improves safety and security across cargo operations. SATS and TUM CREATE have achieved 99.99% accuracy rate for accepting cargo during trials of Cargo Eye, which produces a digital fingerprint for incoming cargo in real-time using a 3D camera system for pallet optimisation. The Civil Aviation Authority of Singapore (CAAS) facilitated the collaboration with its second Aviation Challenge where TUM CREATE was awarded S$1.9 million for Speedcargo’s prototype development. The project received S$4 million in funding from the National Research Foundation Singapore’s Central Gap Fund.

THE time has come for the UK government to put the politics of Brexit to one side, come clean with industry, and share its full impact assessment for a No Deal departure from the EU, according to FTA, the organisation which speaks for the logistics sector. After the leak of the government’s own Operation Yellowhammer report into the potential impact of the UK leaving the EU without a deal, FTA’s James Hookham is in no doubt that the government needs to start rebuilding trust with

the logistics sector by sharing its full contingency plans: “Some of the scenarios leaked in the Operation Yellowhammer report came as a surprise to the industry, despite FTA’s constant conversations with government since Article 50 was triggered: the areas of concern which have never been mentioned yet would have a significant impact on the way the country conducts business. “This is not about the politics of Brexit - for

the past three years, FTA has been pressing government for clarity on the trading environment we will be working in once the UK leaves the EU, with only limited success. Following the revelations in the media, it is disheartening to discover that the government has been concealing the facts which business needs in order to keep Britain trading effectively. “FTA has written to Michael Gove, urging him to come clean over the detail contained within the Operation Yellowhammer report so

Alex Hungate, president and chief executive officer of SATS says: “Piloting this technology in Singapore is part of our wider innovation programme to enhance services and scale our operational efficiency. These capabilities would enhance our cargo network across Asia Pacific, along with COSYS+, our cloud-based cargo terminal management system, to augment real-time cargo visibility along our digital corridors.” Dr Suraj Nair, head of Speedcargo Technology says: “This partnership with SATS is a unique opportunity for us to develop our technology into a fit-for-purpose solution for the airfreight industry. Support from industry players and regulators like CAAS is essential in realising Speedcargo’s vision of the automated airfreight terminal of the future.”

It is time for politics to give way to action, says FTA

ACW 26 AUGUST 2019

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that logistics businesses can complete effective preparations to protect the UK’s supply chain from the worst impacts of a No Deal Brexit. FTA is still waiting for answers from government to the most critical questions which directly affect the way the sector operates, now and in the future.” Hookham concludes, time is now running out to protect the UK’s supply chain, both at home and overseas, which could have dire consequences for the economy.

Delta to return to Gatwick as part of 2020 UK-US plan

irgin Atlantic and Delta Air Lines will boost UK-US flights for the summer of 2020, joining forces at London’s Gatwick Airport for the first time. Gatwick will become Delta’s seventh trans-Atlantic destination with flights from Boston starting on 22 May. One day before, Virgin will launch daily flights to New York JFK from Gatwick, with the two airlines offering up to four flights a day to three US cities. Delta’s return to Gatwick will mark the first time the airlines have both served the airport since their partnership in 2014. Customers shipping to the UK from northeast USA will benefit from a choice of up to 18 daily flights between Boston and New York to two London airports, plus Manchester, Edinburgh and Glasgow. From 29 March, Delta will operate three

flights a day between JFK and London Heathrow, with Virgin flying five times a day. The Delta flights will include a daytime slot for the first time, complementing Boston and JFK services offered by Virgin. Virgin will also increase frequencies to Seattle from seven to 11 a week, and Los Angeles services will rise from 14 to 17 flights per week. Delta will return to Manchester with Boston flights starting on 21 May, taking over Virgin’s operations and increasing services from three a week to daily. Dominic Kennedy, managing director of Virgin Atlantic Cargo describes the partnership as “great news” for cargo customers shipping goods between the UK and US. He says: “As we continue to build a platform for long-term growth, our summer 2020 schedule represents another strengthening of our joint venture with Delta Cargo and will help to

reinforce our position as a carrier of choice on the highly-competitive trans-Atlantic market.” Shawn Cole, vice president of Delta Cargo says the airline is excited to be returning to Gatwick and Manchester, and growing the network from Boston.

He says: “Our new services from Heathrow will also be supported by the opening later this year of our new joint cargo terminal, which will ultimately double our cargo handling capacity at the airport and ensure we continue to meet our customers’ service expectations.”

HERMES Logistics Technologies’ CEO Yuval Baruch has completed an Ironman triathlon through the Klagenfurt Alps, Austria, in a time of 13 hours and 30 minutes. “Taking part in the Ironman Triathlon was both a challenge and a pleasure, and while competing I had plenty of time to think about the logistics industry, which I have become very passionate about,” said Baruch.

Two men arrested after MDMA and Ice haul

A MAN has been charged by New South Wales (NSW) police over the importation of MDMA and ice, which was detected by Australian Border Force (ABF) officers in an air cargo consignment from Germany. On 7 August 2019, ABF officers located 5.5 kg of 3,4-Methylenedioxymethamphetamine (MDMA) and 500g of methylamphetamine (ice) concealed within a package containing garden lamps. This led to a presumptive test returning positive results for both MDMA and methylamphetamine. The drugs have a total estimated potential street value of more than A$600,000. The matter was referred to detectives from Sydney City Police Area Command. Following extensive inquiries, two men were arrested by detectives outside an apartment on Sussex Street, Sydney. Following the arrests, investigators executed a search warrant at the apartment. During the search, police seized air cargo packaging, mobile phones, and various documentation. One man was charged with possessing commercial quantity unlawful import: border-controlled drug and attempted possessing of a marketable quantity of unlawful import border control drug. He was refused bail to appear at Central Local court. The other man was later released pending further enquiries.

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NEW TECHNOLOGIES

“The world is a dangerous place to live; not because of the people who are evil, b

Take nothing for gran

The days when a forwarder or airline could accept a consignment with no questions

ncreased global regulatory focus on international trade abuse is driving the need for organisations to better understand the risks they may be exposed to through the trade transactions they execute and finance: the nature of the goods, the destination and the parties and entities involved. That is the opinion of Dow Jones Risk & Compliance, just one of the many companies interested in providing third-party compliance screening software and systems to the global supply chain and the companies that operate in it. Compliance screening can be loosely described as ‘due diligence’ for airfreight shipments. It is not connected to any physical examination or screening undertaken on the consignment itself. Instead, at its broadest, it is a check of the consignment’s paperwork against United Nations, international and domestic lists to ensure the goods being shipped are not dual-use goods or related to money laundering activities. Likewise, they must be checked against sanction lists against individuals, organisations or countries.

Fuzzy logic failings

When a Maersk company carried arms components from North Korea to Egypt, in a violation of international sanctions, in recent times, this was seen as a fresh warning for those facilitating global trade to be diligent in monitoring and reporting suspicious activity. The transportation of electrical components by a Maersk subsidiary, which had the potential to be used for military purposes, highlights the growing need for vigilance across the cargo industry. Forwarders and airlines tasked with compliance screening must be aware there are significant penalties for a failure to correctly carry out compliance screening activities. These are not simply monetary: the badpress that follows can often damage a forwarder’s or airline’s reputation. According to Accuity, which offers compliances suites to the air cargo industry, in April 2018 the US Department of Commerce’s agency, the Bureau of Industry and Security (BIS), issued a $500,000 penalty to FedEx for an inadequate screening of items on the US Commerce Control list. The goods in question, which included aviation parts and electron microscope manufacturing items, are classified under a series of Export Control Classification Numbers (ECCNs) for anti-terrorism purposes. The delivery of such goods

ACW 26 AUGUST 2019

requires a license from the relevant authorities, which was not obtained. One of the most interesting points raised within the BIS order was a reference to the screening software FedEx used to identify red flags (potentially suspicious elements requiring further investigation) when checking its transaction and trading documents. BIS noted that the recipient or consignee names screened by the software could only trigger a red flag or match by using the full name of the company involved in the transaction. The

use of fuzzy logic, synonyms or hyponyms was not part of the software’s functionality. In one particular case, FedEx was attempting to screen a company called Aerotechnic, which is listed on the BIS Entity List as a restricted party for its role in supporting terrorism and enhancing the military capabilities of Iran. However, the software used could only pick up a match on the company during screening if the search contained its full company name, ‘Aerotechnic SAS’. A check on the simplified company name of

just ‘Aerotechnic’ produced no matches and no red flags, which resulted in FedEx transporting goods without obtaining the necessary export licenses. Other recent examples clearly demonstrate the importance of freight forwarding businesses and airlines using a robust and dedicated solution when screening commodities, so they can be sure to comply with all relevant export license obligations. In 2017, US freight forwarder American Export Lines received a fine of $518,000 for transporting auto parts to Iran and Afghanistan. Pilot Air Freight distributed restricted goods to a denied Pakistani customer and received a subsequent fine of $175,000 in another case in which the screening software had major flaws.

Lufthansa Cargo

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In 2012, Lufthansa Cargo became aware of emerging regulatory concerns around dual-use goods and sanctions compliance, which highlighted multiple risks to its business. The company’s compliance unit looked into the scale of the problem using trial data sets of typical traffic and quickly realised

COMPLIANCE SCREENING

evil, but because of the people who don’t do anything about it.” Albert Einstein

anted

estions asked are gone.

Dual-use airfreight: what the European Commission recommends

n 30 July 2019, the European Commission published Commission Recommendation (EU) 2019/1318, setting forth its recommendations on Internal Compliance Programmes (ICP) for dual-use trade controls under Council Regulation (EC) No. 428/2009. It applies to every company that deals with trade of goods, whether it is financial or in the supply chain or brokerage.

Besides the seven core elements regarded as foundational to a company’s ICP, they also have laid down the expectations under this recommendation, and also stated how this can be achieved. This is the first time the Commission has addressed air cargo in its recommendations. According to the Commission, “an effective, uniform and consistent system of export controls on dual-use items is necessary to promote

How ACW reported on how compliance screening was sidestepped by the North Korean regime to supply luxury Mercs to Kim Jong-un

that manual checking was not an option. Responses to customer requests that are expected in minutes could take hours to respond to, resulting in lost business. In fact, Lufthansa Cargo was forced to temporarily suspend consolidated shipments to countries such as Iran, where restrictions were high, until they resolved the issue. Lufthansa Cargo then turned to Firco Trade Compliance to resolves its issues. Seven years later, five other major carriers have turned to Firco to undertake their own compliance screening. Firco Trade Compliance helped Lufthansa Cargo to check airway bills supplied by customers against comprehensive sanctions and dual-use goods watch lists, with speed and accuracy. The airline was also able to enjoy an across-the-board trade compliance vetting capability very efficiently, using a team of just six people. As a result, the airline was able to check over 47 million records using Firco Trade Compliance, which would otherwise need to be manually verified. Patricia Pfeiffer, regulatory affairs manager, Lufthansa Cargo, quoted on the Accuity website, said: “Non-compliance with sanctions lists carries a risk of up to six months imprisonment. We also fly freight on Lufthansa passenger flights so our parent company’s business could also have been affected.

EU and international security and to ensure both compliance with the international commitments and responsibilities of the Member States and of the European Union (EU), especially regarding non-proliferations. “Taking into consideration rapid scientific and technological advancements and the complexity of today’s supply chains, effective trade controls depend to a great extent on the awareness of exporters and their active efforts to comply with trade restrictions.” The Commission states: “If a company holds a valid Authorised Economic Operator (AEO) authorisation, the assessment of the company’s compliance covering relevant customs activities could be taken into account for the purpose of developing or reviewing an ICP. “Taking into consideration that customs authorities have checked the customs routines and procedures of your company, the AEO status could be an asset for establishing or reviewing procedures relating to ICP core elements such as recordkeeping and physical security.” Dual-use trade control staff should be protected as much as possible from conflicts of interest. This staff is entitled to directly report to the person(s) with the overall responsibility for dual-use trade controls and should additionally have the power to stop transactions. Dual-use trade control staff must have access to the relevant legislative texts, including the latest lists of controlled goods and lists concerning embargoed or sanctioned destinations and entities. Appropriate operational and organisational processes and procedures, relevant for dual-use trade controls, are documented, gathered and distributed to all relevant personnel. The company should have documented processes and procedures that are is up-to-date. Depending on its size and its business volume, the company should in best practice consider the need for IT support for internal compliance procedures.

A compliance framework

What are dual-use items?

ual-use items are goods, software, technology, documents and diagrams which can be used for both civil and military applications. They can range from raw materials to components and complete systems, such as aluminium alloys, bearings, or lasers. They could also be items used in the production or development of military goods, such as machine tools, chemical manufacturing equipment and computers.

The types of dual-use goods listed (and hence-controlled) are wide ranging, encompassing goods in the telecoms, avionics and security sectors. International arrangements seek to harmonise lists of dual-use (and military) technologies. These include the Nuclear Suppliers Group, Australia Group, Missile Technology Control Regime and the Wassenaar Arrangement, which covers conventional arms and dual-use technologies.

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ON May 2, 2019, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) published ‘A Framework for OFAC Compliance Commitments’ outlining five critical components of a risk-based sanctions compliance programme. Along with the framework, OFAC also released a list of compliance programme deficiencies most likely to cause breaking of OFAC regulations. OFAC regulations do not require companies to maintain a sanctions compliance programme (SCP). Nonetheless, OFAC encourages firms subject to US jurisdiction — including foreign entities conducting business in or with the United States, US persons, or using US-origin goods or services — to adopt a formal SCP. While each firm’s SCP will depend on factors such as the company’s size, products and services, customers and counterparties and geographic locations, each SCP should have five essential components: management commitment; risk assessment; internal controls; testing and auditing; and, training.

ACW 26 AUGUST 2019

INDIAN SUB-CONTINENT

Mumbai is the gateway of air cargo

aving been connected to Mumbai through its partnership with Jet Airways, Virgin Atlantic Cargo is ready to add the city to its network again. Managing director Dominic Kennedy tells Air Cargo Week that services across India have been performing well this year, and adding daily London to Mumbai services on 27 October reflects confidence in the market. The services are resuming after a four-year gap, which was filled by Jet Airways until it ceased operations on 17 April. A Boeing 787-9 will be used on the route, which is popular with passengers and has up to 26 tonnes of cargo capacity. Kennedy has high hopes for the Mumbai route, saying: “We expect to benefit from the strong growth of the Mumbai market in recent

years, which has seen revenues ex Mumbai to the UK and US increase by more than 50% since 2015 in revenue terms, and an increase of 46% to India from both countries over the same period.” Virgin has served the Indian market for almost 20 years, and Kennedy says the airline has a lot of loyal customers supporting the new route. He says: “In addition to our direct services to and from the UK, Virgin Atlantic’s extensive choice of destinations in the US, alongside our fast connections over London, has always been a prime reason why customers moving cargoes to and from India have worked with us and we expect this to increase when Mumbai re-joins our network in October.” The pharma market out of India is particularly strong. Kennedy says Virgin’s GDP compliance and Pharma Zone at Heathrow Airport will be attractive to customers. He says: “Mumbai is India’s commercial centre, and with the country’s vibrant economy and growing manufacturing base, we expect to see a diverse range of products on board our daily flights.” The first half of 2019 has been good, with strong revenue on daily Delhi flights, which are operated by an Airbus A340-600. Kennedy says: “Delhi-Heathrow has been especially buoyant and we are on target to outperform 2018 which was a record year for us on this key cargo route.”

Delhi has been served by Virgin for 19 years. Kennedy says: “It has been a very sustainable route from a cargo perspective and the growth we saw in 2018 and the first half of 2019 shows the level of demand we continue to experience.” Virgin is committed to the Indian market and is confident it will remain an important part of

the airline’s network. He says: “The Indian government has set a very ambitious growth strategy for the country’s economy in the years ahead so we expect India to become even stronger and more significant, driven by its large consumer market and thriving manufacturing and services sectors.”

Addu Atoll gets MRI machine thanks to Chapman Freeborn and Maximus Air CHAPMAN Freeborn has teamed up with Maximus Air to deliver an MRI machine to Addu Atoll, the southernmost atoll of the Maldives archipelago. The machine is being installed at Hithadhoo Regional Hospital in Addu Atoll and was delivered with 166 components to allow the hospital to be opened on time. It will provide medical services for 76,000 people without the need to fly to the capital of the Maldives, Malé 350 miles away. To deliver the machine, Chapman Freeborn worked with Maximus Air to charter an Antonov AN-124 from Al Maktoum International Airport in Dubai. The delivery marked the first time an AN-124 had landed at Gan International Airport, which completed a runway extension and other upgrades in 2016. Because of limited cargo-handling capabilities at Gan, Chapman Freeborn project managers accompanied the cargo on the six-hour flight to help oversee unloading and handling of the

ACW 26 AUGUST 2019

shipment. Vikas Chaturvedi, commercial manager cargo at Chapman Freeborn Dubai says: “We’re delighted to have successfully arranged this charter with Maximus. Transporting this type of medical equipment on short notice requires careful planning and close attention to detail. Our strength lies with our global reach and the aviation professionals working with Chapman Freeborn. We want to thank the team at Maximus and Wings 24 for their valuable support.” Samir Ramadan, vice president commercial at Maximus Air says: “The moment this enquiry came to us from Chapman Freeborn, we realised the importance of on-time delivery for this MRI machine. All departments at Maximus got into action and synchronised as this was first ever AN124 operation into Gan island. We are very proud to be part of this project and successfully operate this charter within 48 hours of its confirmation.”

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TRADE&EVENTSFINDER Airlines

Freight Forwarders

Turkey

Hong Kong

Freight Forwarders USA

Industry Event

aircargoweek.com 11_26 Aug 2019.indd 1

ACW 26 august 2019

11 16/08/2019 10:50

HE LOVES HIS PET DOG TYSON THE CHIHUAHUA

Every dog has his day T

Today is National Dog Day in US - the pawfect date for The Ark at JFK to share its tails he ARK at JFK wanted to share with ACW readers some canine ‘tails’ of recent stories about various rescues from China, stranded canine members of the family and a Goldendoodle’s first flight to Kenya that had passed through their doors at the New York gateway.

These dogs must consider themselves lucky: research by The Washington Post into recorded animal deaths from 2015 to 2017 on flights showed in those three years, 85 animals died while in the care of a US air carrier. Of those deaths, 41 occurred on United. Nearly 40% of those deaths were suffered by a dog that identified as a higher-risk breed.

Stranded canine members of the family at JFK

wo weeks ago, The ARK at JFK received calls from pet owners whose dogs were stranded at JFK. Both owners were travelling internationally from Hong Kong and also from Saudi Arabia. They also both had young (human) children travelling with them, making it nearly impossible to reschedule their own flights and stay back with the canine members of their family. The temperatures at their final destination were too hot and flights needed to be rescheduled at the last minute. Delta Cargo referred these families to ARK Pet Oasis and told them that The ARK team can reschedule their dogs’ flights, care for them until their departure, and even pick them up from Delta so that the pet parents could rush back to the terminals to catch their own flights. The team at The ARK at JFK was on the phone with Delta, American, and United Airlines trying to book flights for these dogs. The Saudi Arabia dog, Roy, was in a large kennel making it even harder to find a flight which would fit his crate, let alone work with the temperatures. Roy was destined for Orlando, Florida, but

there were no routes for him to fly there out of JFK. The only two options would be to fly Roy out of Newark five days later, or get him booked on a flight to Miami which would require a bit of driving for Roy’s mum and dad. Roy’s ‘pawrents’ were eager to have him home, so an American Airlines flight was booked with temperatures one degree below their rejection point and Roy was on his way after sleeping over at ARK Pet Oasis for two nights. The Hong Kong dog, Mizu, was small enough to fit on any plane however, temperatures in Atlanta would not cool down until the following week. The ARK set up ground transportation for Mizu to drive 15 hours instead of waiting an extra week and before they knew it, Mizu was reunited with her human parents. A happy ending, but a good lesson to always be prepared for the worst when travelling with pets, especially in the hot and humid summer months.

55 dogs rescued from China and moved to the United States

ver the course of three days and six different flights, 55 dogs were rescued and transported from China to Loxahatchee Groves, Florida. Collaborating with the Big Dog Ranch Rescue, the largest cage-free, no-kill dog rescue in the US, The ARK at JFK picked up each group of dogs directly from the aircraft in temperature-controlled vehicles, transferred them to ARK Pet Oasis for their post-flight care and accommodation, and processed the large amount of paperwork for an international move of this kind. For three days, the dogs were accommodated in spacious kennels, fresh

water, food, blankets, toys and with frequent walks outside. There were a variety of pure-bred dogs such as Tibetan Mastiff, Basset Hound, Husky, among others, that were being rescued from inhumane environments. During the three days, The ARK at JFK expert team worked with each individual dog to identify certain behaviours, adjusted their handling techniques and created a stress-free and comfortable temporary stay. Once all the dogs arrived safely in NYC and had a chance to stretch and relax, a transporter was waiting to drive the pack to the Big Dog Ranch Rescue facility in Florida to begin rehabilitation and rehoming.

ational Dog Day is celebrated on August 26 annually in the United States and was founded in 2004 by pet and family lifestyle expert and animal advocate, Colleen Paige, also the founder of National Puppy Day, National Mutt Day and National Cat Day. The Ark at JFK provides pre- and post-travel animal care and veterinary services for pets, horses, birds, livestock and exotic animals in a competent and compassionate manner.

Louie does Nairobi

ast autumn, Kenya Airways launched its first non-stop service between JFK International Airport and Nairobi. Soon after word got out, The ARK at JFK received their first enquiry for a puppy named Louie to travel as cargo on the inaugural flight At the time, Louie, the Goldendoodle, was only 3.5-months-old and was travelling across the oceans to meet his ‘furever’ family. Thanks to the joint efforts with Avia Cargo and The ARK’s Pet Oasis, Louie received the white glove treatment to make his journey as smooth as possible.

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