ACW 8th August 2016 by Azura International

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The weekly newspaper for air cargo professionals Volume: 19

Issue: 31

8 August 2016

Fastest growth in air cargo demand for 14 months

he month of June finally brought some positive news for airfreight as global demand rose strongly, according to latest figures released by the International Air Transport Association (IATA). IATA explains freight tonne kilometres (FTK) for the 265 airlines (83 per cent of global air traffic) it represents, have grown at the fastest pace for 14 months in June, but it notes yields remain “under pressure” with capacity growing faster. FTK grew by 4.3 per cent, with the Middle East and Europe performing the best, but available FTK (AFTK) was up 4.9 per cent, pushing load

factors down 0.3 percentage points to 43.1 per cent. IATA says market shares by region in terms of FTK – Asia Pacific had 38.9 per cent, Europe 22.3 per cent, North America 20.5 per cent, the Middle East 14 per cent, Latin America 2.8 per cent and Africa 1.5 per cent. The association’s soon outgoing director general and chief executive officer, Tony Tyler (pictured) says: “June saw an improvement in demand for airfreight. That’s good news. However, we cannot read too much into one month’s performance. Air cargo markets have been in the doldrums for several years during which there were sev-

eral false starts on indications for improvement.” He adds: “We will continue watching developments closely, keeping in mind that the air freight business environment is fragile. Global economic growth remains sluggish, world trade volumes continue to trend downwards and the industry faces heightened uncertainty in the aftermath of the Brexit vote.” Middle East FTKs were up eight per cent, posting the largest rise by region for the 16th consecutive month, but despite international freight growing 6.5 per cent in the first six months, this is less than half what it was a year ago, when it registered 14.3 per cent. Capacity was up 8.7 per cent pushing the load factor down 0.3 percentage points to 42.7 per cent. Europe was the next most buoyant with growth of 5.1 per cent helped by increasing export orders in Germany, and seasonally adjusted volumes for the continent

Tough 1st half for Lufthansa and IAG

Lufthansa Cargo and the International Consolidated Airlines Group (IAG) both suffered in the first half of 2016 as cargo revenues took a dive. Revenue fell by 19.1 per cent to 976 million euros ($1.09 billion) for the logistics segment of Lufthansa, including Lufthansa Cargo and it made an earnings before interest, tax, depreciation and amortisation (EBITDA) loss of four million euros in the first six months of the year, down on the 88 million euros in the first half of 2015. Lufthansa says global airfreight capacity is growing faster than demand, resulting in significant overcapacities, which are having a highly adverse impact on revenue. IAG’s cargo division IAG Cargo saw revenue fall by 6.9 per cent to 503 million euros compared to 540 million euros in the first half of 2015. Volumes also declined by 13.1 per cent to 375,000 tonnes compared to 432,000 tonnes in 2015.

are trending upwards. AFTK grew by 4.9 per cent, and the load factor increased by 0.1 percentage points to 44.3 per cent. North America saw a 4.3 per cent growth in FTK and four per cent in AFTK, though international volumes continue to suffer from the strength of the US dollar putting US exports under pressure. Asia-Pacific grew by 3.5 per cent with noticeable growth of intra-Asian traffic, though ‘emerging Asia’ continued to suffer from headwinds and weak trade. Africa saw growth of 0.4 per cent in June, but capacity surged by 19.9 per cent as carriers continue long-haul expansion, pushing the load factor down five percentage points to 25.6 per cent. Political and economic problems in Latin America, particularly in Brazil pushed FTKs down 9.8 per cent in June, while capacity was cut 2.6 per cent. The load factor was down 2.7 percentage points to 34.4 per cent.

Ilin resigns from ABC

Denis Ilin has resigned as executive president of AirBridgeCargo (ABC) Airlines after three years “in accordance with mutual agreements”. Ilin initially joined ABC as director of operations, before working as general director between 2006 and 2008. He rejoined ABC as executive president in 2013. Volga-Dnepr Group, the owners of ABC says Ilin made significant contributions, including opening stations in North America and Southeast Asia and establishing business relationships with the likes of Boeing and General Electric.

dhl profits rise and makes e-com upgrades

acs gaining new business in miami

sas aims to grow latin america nordic trade

call for development of cargo fast-lanes

Amazon to get 1st B767 from Atlas in Q3 ATLAS Air is hoping to provide online retailer, Amazon with its first aircraft in the next quarter as it announced first half profits fell to $21 million due to acquisitions and investments. Atlas signed a deal with Amazon earlier this year to provide 20 Boeing 767-300s by the end of 2018 and says the quarterly and half year profits were down due to the expenses in starting up the service. Net income during the half was down from $57.6 million in 2015 to $21 million this year, while the second quarter fell to $20.5 million from $28.4 million in 2015. Atlas also acquired Southern Air in April this year, adding Boeing 777s and 737s. Atlas Air president and chief executive officer, William Flynn says: “We expect to place our first aircraft into service for Amazon soon in this quarter. We have secured all of the conversion slots and the vast majority of the feedstock aircraft required to support 20 B767-300s for Amazon by the end of 2018. “The acquisition of Southern Air creates more options in all of our market segments, and our relationship with Amazon includes an opportunity for additional business beyond our initial service for them.”

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NEWSWEEK

Qatar Airways up IAG stake to 20.01%

atar continues to flex its financial muscles in aviation as state airline Qatar Airways has increased its shareholding in International Airlines Group (IAG) from 15.67 per cent to 20.01 per cent and the Qatar Investment Authority has bought 10 per cent of Fraport’s stake in St. Petersburg’s Pulkovo Airport (pictured). Qatar Airways says the shareholding reflects the strength of commercial and strategic ties between the companies and its continued support for the ongoing strategy of IAG, which consists of Aer Lingus, British Airways, Iberia and Vueling. Qatar Airways Group chief executive, Akbar Al Baker says: “The recent market valuation of one of the world’s leading airline groups has provided what we believe

is an attractive opportunity to increase our shareholding in IAG.” He adds: “We do not intend to increase our percentage shareholding further unless there are material changes to the current situation.” Meanwhile, Fraport still remains the operator of Pulkovo Airport despite selling 10 per cent of its shares to the Qatar Investment Authority. Fraport, along with consortium partners

has reduced its share in Thalita Trading from 35 per cent to 25 per cent. Thalita Trading is the parent company of Northern Capital Gateway, which has the 30-year concession to operate Pulkovo. Fraport is expecting to make a profit of between 30 and 40 million euros on the deal, set to close in the second half of 2016. Fraport executive board chairman, Dr Stefan Schulte says: “Pulkovo Airport has developed well since the operating concession started. In selling part of our stake, we are realising value enhancement while maintaining our role in the consortium.” He adds it will strengthen Pulkovo Airport to meet the challenges and opportunities of the future and despite the current difficulties in Russia, it is an attractive market.

Sizeable cargo fall at Abu Dhabi

CARGO tonnage continues to struggle at Abu Dhabi International Airport and it was down six per cent in the first half of 2016 from 1 January to 30 June. The operator Abu Dhabi Airports says the gateway handled 389,191 tonnes during the period, which was a fall on the 414,203 tonnes in the same six months in 2015. In June, Abu Dhabi handled 68,640 tonnes, a fall of 5.9 per cent on the 72,949 tonnes in June last year. The airport’s passenger traffic went in the opposite direction to cargo and saw a significant rise of 6.6 per cent in the first half of 2016.

Holt out, Zehren in

CARGOLUX Airlines International has appointed Claude Zehren as interim executive vice president and nominated person for flight operations – taking over from Jason Holt with immediate effect. Zehren has been with Cargolux for 18 years and he has a wealth of experience, not only as a pilot, but also being a member of the carrier’s management structure. Incoming chief executive officer, Richard Forson says: “It is my pleasure to welcome Claude Zehren in his new position and as part of the new ExCom team. Having worked with him closely throughout the last couple of years, I am convinced that he will be an excellent addition to the Cargolux leadership team.” The carrier says Holt is leaving Cargolux to move on to a new opportunity and Forson explains: “Jason has made a major contribution to the airline by bringing his experience and talent to bear on the airline, including playing a major role in achieving the CWA agreement with our unions in December 2015.”

ACW 8 august 2016

WorldACD: rise in belly capacity outpacing volume growth

ir cargo market analyst WorldACD says there was some “improvement at last” in June, but notes the increase in bellyhold capacity still outpaces volume growth. The analyst explains that worldwide chargeable weight improved by 2.7 per cent year-on-year (YOY) and the uptick in June was largely caused by a strong showing in Asia Pacific. The region grew 7.1 per cent in incoming and 6.6 per cent in outgoing air cargo. Europe posted a YOY rise of 4.8 per cent, but Africa and Central & South America fell almost 11 per cent, while African imports were hard hit, North America performed on average, and the Middle East & South Asia (MESA) was “lacklustre”. Most product categories grew in June more or less in line with general cargo, except pharmaceuticals, which continues to thrive and saw a rise of over 10 per cent.

WorldACD observes: “Thanks to this growth, with yields well above average, the overall USD yield in June remained stable. The first quarter of 2016 hardly lent itself to a proper comparison with the same quarter a year earlier. “The second quarter (Q2) may be a better indicator of what 2016 will turn out to be - it showed an average YOY volume increase of 2.1 per cent worldwide.” As for the relationship between volumes

carried and belly cargo capacity offered, WorldACD says the growth of capacity on passenger aircraft outpaced the percentage rise in cargo carried on these aircraft. Bellyhold capacity grew most from MESA to Europe by 6.8 per cent, but cargo carried was up 4.9 per cent. In the other way, figures were up 5.3 per cent and 2.2 per cent, respectively. For Europe to North America it says the picture was “more worrisome” - bellyhold capacity grew 5.5 per cent combined with a volume decrease of 1.5 per cent. The result was better the other way, from North America to Europe, where it grew by 3.2 per cent and cargo carried in the belly fell by 0.7 per cent. Between MESA and Europe, more than half of carriers saw a higher volume growth than capacity growth for belly, but between North America and Europe, the picture was quite different - only 20 per cent of airlines improved their cargo load factor on passenger aircraft.

NEWS WEEK WorldNews PRIORITY Freight has enhanced its operations by setting up a new emergency airfreight department at its office in Willich, Germany 25 kilometres from Düsseldorf International Airport. The office has tracking and IT systems, which it says will improve speed and reliability of airfreight movements. The cloud-based IT system provides real-time tracking of deliveries, route mapping and automated processing and handling. ASIA Airfreight Terminal introduced a radio-frequency identification ULD tag for pre-packed cargo at Hong Kong International Airport on 25 July. The firm says it will streamline the cargo acceptance process and help it achieve “higher operational efficiency” and will have time-saving benefits.

4.7% revenue uplift for Dimerco

DIMERCO Express Group has seen sales revenue increase by 4.7 per cent to 7.6 billion Taiwan dollars ($237 million) in the first half of 2016, with North America and Europe particularly strong. The firm provides services including freight forwarding and warehousing, saw North American sales revenue rise 28 per cent and Europe by 14.4 per cent. Dimerco chief executive officer, Edward Lin says: “While there has been economic turmoil post Brexit and we recognise there are other potential barriers to world economic recovery, Dimerco has continued buck the trend, driving forward business development in both air and ocean freight, securing new contracts and growing our global network.” He adds: “In June alone we achieved an extraordinary 52.2% growth in sales revenues for North America and have seen a general increase in tonnage and volumes in air and ocean freight. Going forward, we will be proactive in building on our success in Europe and North America, while continuing to invest in other areas including India, China and Southeast Asia.”

Air cargo Olympic mission

THE action at the 2016 Olympic Games in Rio de Janeiro kicked-off on 5 August and air cargo has played a huge role in making sure sporting events started and were broadcasted around the globe. Among them were American Airlines Cargo, which delivered over 65 tonnes of broadcast equipment and athletic gear to Rio’s Galeão International Airport via its two gateway hubs, Los Angeles and Miami. Broadcasting equipment was shipped out of Japan and London to Rio for high-resolution filming and travelled in the bellies of American’s widebody aircraft. Other shipments travelling to Brazil included sporting goods from Australia, jerseys and promotional items and athletic training equipment from various locations. Olympic horses departed from London Stansted Airport to Rio on 29 July on a cargo flight bound for the Olympics. There were 34 horses from 10 nations on board the Emirates SkyCargo Boeing 777 Freighter. The payload included 17,500kg of equine cargo, 9,900kg of horse equipment and 6,000kg of feed. It was the first of nine shipments delivering more than 200 horses to the Olympics, which involved three hubs in Europe and America: Stansted, Liege and Miami.

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NEWSWEEK HK starts 3rd runway construction

HONG Kong International Airport (HKIA) has started construction of the three-runway system (3RS), which it expects to complete by 2024. The construction will include 650 hectares of land reclamation, the runway itself, taxiway system and the Third Runway Building with 57 parking positions. 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. HKIA will have a cargo capacity of nine million tonnes by 2030 and AA says the 3RS will meet the airport’s long-term air traffic demand. AA chairman, Jack So Chak-kwong says: “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.”

AAPA: uptick in June mildly encouraging

AIR cargo saw “modest growth” of 4.1 per cent in June 2016 while overall demand remains subdued, the Association of Asia Pacific Airlines (AAPA) says. Volumes in freight tonne kilometres (FTK) were up 4.1 per cent in June to 5.4 billion while capacity in freight available tonne kilometres (FATK) increased by 3.6 per cent to 8.6 billion, while in good news - the load factor in June increased by 0.3 percentage points to 63.6 per cent. AAPA director general, Andrew Herdman says: “International air cargo demand remained subdued, registering a 2.5% decline for the first half of the year, although the uptick in the June figures is mildly encouraging.” Between January and June 2016, FTK was down 2.5 per cent to 31.2 billion with FATK up 2.3 per cent to 51.2 billion and the load factor fell three percentage points to 61.1 per cent. Looking ahead, Herdman says: “The

outlook for air cargo remains a concern, reflecting generally weak trading conditions in the global economy.” However, airfreight’s momentum is at risk from a sluggish trade outlook, the aftermath of Brexit and weak demand, though strong consumer confidence and low oil prices could reenergise growth, the International Air Transport Association (IATA) reports. In its Q2 2016 Cargo Chartbook, IATA says air cargo continues to outperform the global merchandised trade, but growth remains weak. The association warns that overcapacity, weak trade, lower yields and rising fuel prices could result in falling profits. IATA says new widebody freighter deliveries have outpaced retirements by 17 per cent since 2008. Most of the retirements have been Boeing 747s, particularly -200s, along with DC10s and MD-11s, with 747-400s, 767s and 777s the favourite replacements.

Booming month for Changi Airport

hangi Airport has seen cargo volumes grow 7.8 per cent in June, having welcomed new freighter services from K-Mile Air and Silk Way West Airlines. Volumes in June were up to 163,070 tonnes and by 4.2 per cent in the first six months of 2016 to 950,250 tonnes. Aircraft movements increased by 2.9 per cent in June, with 29,350 landings and takeoffs, and it rose by 4.7 per cent to 177,810 between January and June. Changi Airport welcomed cargo services, with K-Mile Air starting five weekly flights between Bangkok and Singapore and Silk Way West flying between Singapore and Azerbaijan twice a

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week via Kuala Lumpur and Dubai. Connections to China were upped with West Air and SilkAir each increasing services to Chongqing from five a week to seven, Tigerair starting three times a week flights to Zhengzhou and China Eastern Airlines started a daily Shenyang – Nanjing – Singapore route on 10 July. Changi also saw increased services to Australia with Singapore Airlines increasing frequencies to Sydney from 31 a week to 35, and Qantas flying to Perth nine times a week. Scoot increased services to the Indian city of Amritsar to four-times a week.

NEWS WEEK

DHL profits rise and e-commerce upgrades on the horizon

eutsche Post DHL Group has seen its first half net profit increase to 1.1 billion euros ($1.2 billion) from 821 million in 2015 with Express performing well and Global Forwarding EBIT doubling. The profit growth came despite revenue falling to 28 billion euros from 29.4 billion due to currency effects and revenue generated from abroad falling. Global Forwarding revenue fell by 15.7 per cent to 4.7 billion euros and airfreight revenue declined 17.3 per cent to 2.1 billion euros, with volumes down 7.7 per cent to 1.7 million tonnes. Despite the revenue drop, Global Forwarding earnings before interest and tax (EBIT) more than doubled to 120 million euros. DHL Express saw revenue increase by 1.2 per cent to 6.7 billion euros during the first half and EBIT was up 9.7 per cent to 777 million euros with network improvements, strong international business growth and pricing initiatives. Deutsche Post DHL Group chief executive officer, Frank Appel (pictured) says the company is on the right track as the operating profit increased to 1.6 billion euros: “Our successful business performance and the strong increase in operating profit we achieved in the second quarter demonstrate that we took the

right decisions and made the right investments in 2015, a year of transition, to set the stage for improving our profitability this year and in the years to come.” The company is investing $137 million on upgrading US domestic and cross-border e-commerce capabilities, to cater for the market that is expected to be worth $1 trillion by 2020.

The $137 million will be spent on expanding fulfilment capabilities with eight new distribution centres and enhancing two existing facilities in Los Angeles and Columbus. The Group will make investments as part of its Strategy 2020, with regional centres in New Jersey and other locations. DHL Express has also opened a $1.3 million service centre facility in Chicago to cater for e-commerce, and DHL Global Forwarding opened a $35 million centre in Chicago. The 38,000 square foot, $1.3 million express facility is just North of Chicago Midway International Airport can process more than 2,500 shipments per hour and was primarily driven by heavy demand and international shipment growth from local businesses trading internationally, e-commerce shipping and major customers based in Illinois. Over in Asia, DHL Express has launched a new express freighter service between Phnom Penh and Bangkok, one of its hubs in Asia Pacific. Operated by K-Mile Air, the service runs five times a week using a Boeing B737-400 Freighter with a payload of 19 tonnes. The new route will help meet rising import and export demands in Cambodia, especially in high-growth industries such as garment and construction.

UPS grows 3.2% in Q2

UPS has seen second quarter net profits increase by 3.2 per cent to $1.27 billion with US domestic and international packages making up for supply chain & freight weakness. The operating profit was up four per cent to $2 billion, with US domestic growing 2.7 per cent to $1.2 billion, followed by international package up 11.1 per cent to $613 million. Supply chain & freight was down 7.2 per cent to $192 million despite revenue growing 13.2 per cent to $2.5 billion due to the strength of the distribution unit in aerospace, automotive and particularly healthcare. UPS says the domestic growth came from Next Day Air, while international saw Daily Exports from Europe and Asia offsetting lower US levels. It says the Europe – US grew at a double-digit pace because of the strong US dollar, and export shipments increased across all categories with premium outpacing non-premium. UPS chairman and chief executive officer, David Abney says: “We are investing to expand our global network, implementing new technologies and capturing new revenue in high-growth markets. These strategic investments in our diversified business again this quarter generated strong value for our customers and shareowners.”

PEMCO converts 100th 737

Pemco World Air Services (PEMCO) has redelivered its 100th Boeing 737-300 converted aircraft, which was modified for SF Airlines. The 100th conversion was also the 16th -300/-400 aircraft for SF Airlines, with three more planned in 2016. PEMCO started converting 737-300s in 1991 for L’Aeropostale, and has provided aircraft for customers including China Postal Airlines EMS, Kahala Aviation, Swiftair, and TNT Express. SF Airlines vice president, Liang Xi says: “Since inducting the first B737 Classic in 2011, SF now operates 13 Classics all converted under PEMCO’s STC. We’re very grateful for PEMCO’s excellent STC program and continued support. By the end of the year, we expect the B737 Classic to surpass the B757 to become the largest SF fleet.”

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ACW 8 AUGUST 2016

MIAMI ACS gaining new business in Gateway to the Americas

ir Charter Service has gained regional business and new clients since opening its Miami office in 2015, head of cargo Florida, Brian Rodriguez (pictured) tells Air Cargo Week (ACW). He says so far this year Miami business has been very similar to 2015, mainly due to the geo-political climate in the South American market. “Since we only opened the Miami office in 2015, we have already gained regional business and have had more new clients in this region than last year.” For the rest of the year, Rodriguez comments: “I expect our growth will continue steadily into the rest of the year – in the US cargo business there’s always a ramp up in the fourth quarter of the year.” A lot cargo travelling to and from South Amer-

ica goes via Miami, making it an essential place to have an office. “Our local expertise, along with our relationship with area-based operators and clients are built on deep relationships that begin with faceto-face business dealings. To sum it up, we are in the heart of the operation.” The new US-Cuba relationship could offer great opportunities, Rodriguez tells ACW: “As Cuba is the largest island in the Caribbean and strategically located it could become a second base for a lot of shipping companies.” He believes now the US embargo is lifted, corporations will invest in Cuba but says: “At the moment the current hurdles are the poor infrastructure and customs procedures our clients have to deal with.” Rodriguez says operating in Miami can be challenging due to the aircraft capacity out of

Miami International Airport, and he describes Miami as “a big city with a small town mindset – everyone knows everyone”. Despite its global presence, ACS is still the new company in town, but Rodriguez it has a major opportunity strengthening its office through a

growing presence in the South East, Caribbean and into the Americas. Rodriguez comments: “Miami has a strong and solid logistics hub which is very attractive for our clients, whether they are chartering, or using any other means of transportation.”

New routes to Europe and direct flights to Asia could be on the horizon

Miami International Airport (MIA) is looking forward to welcoming new airlines in the coming months, with Eurowings, Silver Airways, Scandinavian Airlines (SAS), Dominican Wings, KLM Royal Dutch Airlines and Meridiana all starting services. In September, Eurowings will launch three weekly Cologne – Miami flights, Silver Airways will start four weekly services to Bimini in the Bahamas, and SAS will fly Copenhagen – Miami three times a week and offer four to Oslo. KLM will restart services to Miami with three flights a week to Amsterdam and Meridiana will operate two weekly Milan – Miami services from December. In addition to these new services, management at MIA have been meeting with delegates from airlines and airports, particularly from Asia to discuss the possibility of non-stop flights between the regions. In April, Miami representatives visited China and Taiwan, meeting with officials from China Eastern Airlines, China Southern Airlines and Hainan Airlines to discuss

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the possibility of nonstop flights from China to Miami. This was followed up with Taiwan’s president, Tsai Ing-wen visiting Miami on the first nonstop Asia-Miami. MIA has been meeting with officials from Japan about the possibility of direct services. In June, Miami-Dade Aviation Department (MDAD) officials met with representatives from All Nippon Airways to discuss the potential for Tokyo – Miami services, followed by executives from Kagoshima visiting Miami in July to learn about MIA’s operations as well as discuss direct flights. Representatives from Tokyo’s Narita International Airport also visited in April to learn about cargo operations and redevelopment plans at Miami. At the time, MDAD director, Emilio Gonzalez said: “Japan is an important market in our strategic plan for cargo and passenger expansion. It was an honour to host our colleagues from Narita International Airport and to discuss growth opportunities in both of our world regions.”

MIAMI

SAS aims to grow Latin America - Nordic trade

candinavian Airlines Cargo (SAS) is hoping its planned Copenhagen – Miami and Oslo – Miami will be the catalyst of growth for trade between Latin America and Scandinavia, president and chief executive officer, Leif Rasmussen (pictured) tells Air Cargo Week. The flag carrier for Sweden, Norway and Denmark will operate three Copenhagen – Miami flights a week and four Oslo - Miami services from 28 September using an Airbus A330. Rasmussen says: “We see great potential for our Miami routes to offer our customers a more direct link between the Nordics and Latin America versus transiting over central European hubs. “Miami continues to be regarded as an important air cargo transit hub for trade between Latin America and Europe, and this is certainly true for many smaller Latin American countries where there is little or no direct service being offered.” He says there are important export markets from Latin America to the Nordics, particularly for pharmaceuticals and perishables, which can benefit from access to quick, reliable air transport. “Together with selected partners, we see the opportunity to provide an important link to facilitate trade in both directions by offering a reliable premium air cargo service between Scandinavia and Latin America via Miami,” Rasmussen says. Rasmussen says data from the World

Bank shows the four major categories for Latin America – Nordic trade consist of foodstuffs, chemicals, precious metals and ores, and pharmaceuticals, as well as seasonal commodities such as flowers. Europe – Latin America trade largely consists of high value machinery and machine parts. SAS is establishing interline partnerships to link these markets to and from Scandinavia, he says: “We also anticipate an increase in heavy machinery and oil field related exports, primarily from Texas and Louisiana to and from Norway, as a result of the close proximity and well established road feeder links between these markets.” Rasmussen hopes to connect Southwestern US markets such as Dallas, Houston and News Orleans with the Miami – Oslo and Copenhagen flights.

“Doing so will offer our cargo customers in these markets a much shorter door to airport transit time, versus trucking goods into and out of New York.” “Our goal is to open new opportunities for our customers in Scandinavia and the US with premium all-air services via our new Miami service.”

Miami key for American

Miami International Airport will remain a key international gateway for American Airlines Cargo to transport goods such as perishables, regional manager cargo sales – Miami, Marah Schobert tells Air Cargo Week. She says Miami is an important transit station, playing a significant role in shipping cargo through its network. American will utilise routes and fuel-efficient aircraft such as Boeing 777s and 787s to transport temperature-sensitive goods such as perishables. “We not only have the ability to connect key markets in the US and Europe to South America, Mexico and the Caribbean, but can also offer our customers efficient connections from Asia to South America, where we have a strong perishables market. During the upcoming holiday season, we hope to see a high demand for high-tech products into Latin America.” The carrier has benefitted from the Rio Olympic Games, starting on 5 August, with a lot of shipments travelling via Miami. “A lot of sporting equipment, broadcasting equipment, team jerseys, and other items of the sort, have had a positive impact on our business these last couple months.” Miami become International Air Transport Association Center of Excellence for Independent Validators in Pharmaceutical Logistics certified is a great opportunity for American’s customers. Schobert describes this as: “Great for our organisation and customers who ship a variety of pharmaceutical products internationally.” American will also be keeping its eye on cargo opportunities in Cuba, having received approval for a number of flights from Miami to airports across the island. Schobert says: “American has a rich history in the Cuban market and we look forward to exploring opportunities regarding our cargo business into the region.” Miami is a transitional hub, which Schobert says gives customers a variety of product options and connections via 250 daily flights to and from 130 worldwide destinations. It has direct access to a number of South American locations, though the competitive environment creates challenges, along with the region’s economic situation: “The economic situation in Brazil and Argentina has also been challenging, but we’ve worked hard to utilise our expansive network and interline partners to ensure are customers’ needs are met and business continues to flow successfully.”

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ACW 8 AUGUST 2016

E-FREIGHT e-AWB progress being made as US hubs make the switch

he electronic air waybill (e-AWB) is gaining momentum but adoption is still short of targets and below where many in the industry want to see it. The International Air Transport Association’s (IATA) e-AWB360 conferences are aiming to further drive penetration rates and launched the e-AWB360 program to help airlines, freight forwarders, ground handling agents (GHA) and technology partners roll out the e-AWB globally. Destined for the top 50 e-airports worldwide, the initiative began in early 2016 in Europe and took off in May to Canada and then the US over the summer. On 1 July, 16 carriers at New York’s John F. Kennedy International Airport (JFK) (the second largest hub in the US by e-AWB volume behind Chicago O’Hare International Airport) and Dallas-Fort Worth (DFW) International Airport (pictured) said they were switching to the e-AWB as the preferred means to ship air cargo. JFK and DFW are the first US gateways with airlines making the transition toward the e-AWB, and carriers at O’Hare moved to the e-AWB on 1 August. Descartes Systems Group director of logistics execution solu-

tions, Jim Alemany (pictured) gave his thoughts to Air Cargo Week about where the e-AWB is at in his view after speaking at events in North America. Alemany says: “These education-oriented launch sessions are confidence-building exercises. The trepidation surrounding the move from paper to electronic has been one of the biggest obstacles to date. The sessions are clarifying the lines of responsibility between forwarders and airlines, and answering the question ‘What exactly happens after you hit send?’ “The sessions are delineating the rules of engagement, explaining what the carriers are going to do, showcasing some of the tools and solutions available, discussing the costs, and defining how all participants are going to collectively make it work.”

He notes nine airports throughout North America are now mirroring the trend at JFK and DFW by implementing e-AWB, including Chicago O’Hare, Hartsfield-Jackson Atlanta International Airport, Los Angeles International Airport, Miami International Airport, Montréal–Pierre Elliott Trudeau International Airport, Toronto Pearson International Airport, and Vancouver International Airport. Alemany says in an industry characterised by tight margins, streamlining air cargo processes is the name of the game for all participants, which is why e-AWB adoption is so important. He explains: “Air carriers, forwarders and GHAs all face increasing pressure to operate efficiently and move goods as quickly as possible at the lowest possible rate. Taking the paper out of the air cargo industry is one of the most significant ways to achieve these goals.” According to IATA, every international airfreight shipment can require more than 30 different paper documents, but with the e-AWB, there is no longer a need to print, handle or archive the paper AWB. “It’s one of the most important steps that air carriers, freight forwarders and GHAs can take to dramatically simplify the airfreight supply chain process,” Alemany notes. He adds: “Benefits include better communication, reduced data entry, improved customer service, added security, increased quality and reliability. Since carriers are facing pressure from customs authorities to submit advance manifest information ahead of wheels-up, airlines can also benefit from enhanced regulatory compliance.”

Resistance to change

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Alemany feels for the first time there is a concerted ‘call to action’ to adopt the e-AWB with a concrete program encompassing special operating processes that specific hubs and air cargo industry partners are undertaking together around the world. “If the attendance at the Canadian events and US attendance thus far is any indication, there’s now much tighter alignment among top carriers, GHAs and forwarders who are at the centre of trade moving freight and information between carriers, agents, consignees and more,” he says. More major air cargo hubs are adopting the e-AWB as standard practice, and Alemany notes adoption is rising in the wake of North American launch events, which have seen double the amount of people compared to 2014: “New airlines are onboarding, more and freight forwarders and GHAs are signing up, and technology providers have seen upticks in customer bases.” Alemany feels it is “definitely encouraging” as the industry tracks toward the year-end target of 56 per cent e-AWB penetration on feasible trade lanes, despite this looking an unlikely target (see page nine). There are clearly areas of the supply chain that are resistant to move across from paper to e-AWB, which Alemany agrees with: “On the forwarder side, some businesses, especially small to medium enterprises (SMEs), have been hesitant to adopt the e-AWB due to a perception that the initiative would require a large cost outlay to implement or would dramatically impact operations.” But he explains many SME forwarders who have rolled out the e-AWB with little effort and minimal cost have slowly countered this view, but the need for forwarders to leverage a simple solution with minimal disruption to operations is essential: “Leading SME forwarders have benefited from web-based portals that can quickly and easily transmit e-AWB and electronic consignment security declaration (eCSD) details to carriers. “With a simple, one-to-many interface, forwarders and GHAs can communicate digital airway bill details to multiple connected carriers. This ends the need to jump to numerous carrier portals and switch context and focus.”

E-FREIGHT

e-AWB penetration rate climbs 0.2% in June, IATA says

he latest electronic air waybill (e-AWB) report for June by the International Air Transport Association (IATA) has found the e-AWB penetration rate in the air cargo industry was 39.2 per cent. This was a slight 0.2 per cent rise on May, but is still 16.8 per cent below the e-AWB penetration target for December 2016 and it looks likely this objective will not be achieved, unless there is a significant late surge. The total volume of e-AWBs was 593,022 shipments, which was in countries where the e-AWB is legally feasible. IATA says there are still a number of countries that are not open for e-AWBs, which is holding back the penetration rates across the globe, but the rate has been steadily improving. In July 2015, the penetration rate was at 29 per cent, meaning in the last 12 months it has risen by 10.2 per cent, although the margin of increase has slowed in recent months. By country of origin ranking by e-AWB volume, the US has a penetration rate of 36.2 per cent, and the rest of the top five includes Hong Kong with 66.5 per cent, China 38.3 per cent, Singapore 67.4 per cent and India 52.9 per cent.

Call for development of cargo fast-lanes

THE penetration rate of the electronic air waybill (e-AWB) is “never fast enough” but is steadily on the rise - in the view of Worldwide Information Network (WIN) managing director, John DeBenedette (pictured). He thinks adoption can be improved by developing ‘fast-lanes’ at the ground handlers’ warehouse for cargo tendered with electronic data in advance, and if more airlines can use the ‘Single Process’ so forwarders don’t have to keep track of which lanes can go paperless. But DeBenedette feels there is still “complacency” in parts of the supply chain and barriers to ditching the paper airwaybill, but generally air cargo is heading in the right direction, while feels there are only benefits to the e-AWB: “Generally speaking it is more cost-effective to go e-AWB and there is always complexity in implementing new processes. Some operators deal better with process change and so we see leaders and laggards.” He believes in 2016 most people understand the benefits of accurate and timely computerised information rather than a piece of paper which is covered in “scribble and stamps”. DeBenedette says: “By making the leap to e-AWB our users enjoy cost reductions, fewer errors and delays, but most importantly improved shipment visibility meaning they and their customers are better informed.” He does not feel air cargo is falling behind other modes in the digital race, and says there are of course variations, but ocean shipping is facing the same challenges and slow progress in digitising booking and documentation processes. WIN has launched a new mobile application platform for independent freight

For airports ranking by volume, Hong Kong had a penetration rate of 66.5 per cent, next was Shanghai Pudong with 40.5 per cent, Changi Airport at 67.4 per cent, Incheon at 45.1 per cent and Dubai continues to have the highest rate at 91.4 per cent. As for airlines ranking by volume, Cathay Pacific was at 70.9 per cent, Air France KLM Martinair 50.8 per cent, Emirates 33.3 per cent, Singapore Airlines 58.9 per cent and Korean Air 45 per cent. By e-AWB penetration flydubai is the only carrier with 100 per cent, followed by FedEx with 70.9 per cent, Cathay Pacific the 70.9 per cent, Kenya Airways 70.1 per cent and SriLankan Airlines 66.2 per cent. The top five freight forwarders ranking by e-AWB volume are DHL Global Forwarding with 48.1 per cent, Schenker 54.1 per cent, Panalpina 57.2 per cent, Expeditors 57 per cent and UPS 55.7 per cent. By e-AWB penetration DHL Express had a penetration rate of 66.3 per cent, Panalpina 57.2 per cent, Expeditors 57 per cent, UPS 55.7 per cent and Schenker 54.1 per cent.

forwarders and DeBenedette says it will benefit them greatly: “Forwarders use WIN’s online apps and many connect their systems to WIN in order work with carriers and other forwarders electronically, gaining real-time shipment visibility, cost-savings and efficiency in the process. “Now they can extend those same benefits to their customers, multiplying the value of their transactions in WIN.” The app features real-time track and trace, an interactive agent directory, instant messaging, route checking, and shipment status tools allowing users to track and update status on any shipment including proofs of delivery or pictures of damaged cargo. DeBenedette says WIN is well placed: “Our modern web-services approach to collaboration not only powers our mobile platform, but also our integrations with leading software providers serving the international cargo and logistics industry. We are leveraging that same infrastructure to pilot crowd-sourced first and last mile provider options to expand the network further.”

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ACW 8 august 2016

SOUTH AFRICA EgyptAir struggling in South Africa but looking to expand

outh Africa has been struggling economically in recent times and this has affected the air cargo market. EgyptAir Cargo operates three flights a week into the country from Cairo using an Airbus A330-300 passenger aircraft and has felt the strain. The carrier’s vice president of cargo operations, Walaa Yousri says the air cargo business is “not good enough” for EgyptAir Cargo at the moment due to flight frequency decreasing and unstable

economical status. He says the economic slowdown in South Africa has impacted business, explains it has had a great effect especially on export of goods into South Africa. The main types of cargo he notes that it moves are meat, flowers and automotives. EgyptAir Cargo is aiming to grow in the region and Yousri says it had approved a fleet development plan and network expansion to achieve its strategy on Africa growth by converting two A330-300

passenger aircrafts to freighters as well as A320 aircraft to expand the network as a first step. He would like to see improvements to boost the South African air cargo market: “We hope to reach an open skies policy applied for better utilisation of the space and routes offered in the South African air cargo market.” Yousri says within five years, EgyptAir Cargo will acquire a mixed fleet of aircraft from short to long range and five freighters, including three A330-300 Freighters and two A320 Freighters to cope with its expansion plans on the network. There are operating challenges though across Africa, which continue to hinder growth and expansion for carriers such as EgyptAir Cargo. Yousri says there are: “Air traffic rights difficulty especially on the fifth freedom within Africa. The transport of cargo from one African nation to the other, sometimes may not be possible for overflying restrictions, or road transport - this process contributes to the enormous cost added to the movement of cargo from/to sister African countries. “Local currency devaluation, which has a negative impact on the trade exchange between nation states. Movement and the government rules being more strict on transference of airlines’ dues.”

Agility forms JV in SA KUWAITI logistics firm Agility has formed a joint venture in South Africa with Super Group, a Johannesburg-based supply chain management and transportation specialist, after acquiring a minority stake in the freight forwarding unit. SG Agility Proprietary will be led by Henk Theron, formerly chief executive officer (CEO) of Micor, Super Group’s freight forwarding business. Super Group specialises in the supply chain and contract logistics market. Super Group’s Micor unit has been a strategic partner for Agility since 2005. The new venture, SG Agility, will offer local and multinational customers a range of logistics and supply chain solutions, including airfreight, ocean freight, road freight, customs clearance, warehousing, and distribution. SG Agility has its head office is in Johannesburg with branch offices in Port Elizabeth, Durban and Cape Town. Agility’s CEO of Middle East & Africa, Elias Monem says: “South Africa is vital to our strategic growth and expansion in Africa. It has well-developed financial, legal, communications and transport sectors, along with an open trade policy and a comparatively strong domestic market. The joint venture with Super Group is a sign of our commitment to both South Africa and the continent.” Theron says it gives customers access to a leading logistics provider with a “strong global network and a legacy of proven performance”. He adds its team in the market will allow it to add value to Agility’s operations and further the growth and development of the logistics industry in sub-Saharan Africa.

ACSA launches barometer AIRPORTS Company South Africa (ACSA) has launched an Aviation Barometer - a quarterly indicator of air traffic movements through its nine airports. The barometer will provide a snapshot of the state of air traffic relating to passengers and cargo and trends, which underpin aeronautical data. ACSA expects over time it will provide a useful insight into the status of the aviation industry domestically and internationally. Chief executive, Bongani Maseko (pictured) says: “The consistent strength of air travel to and from local and international destinations underpins our aim to continue developing our infrastructure to support long-term economic growth.” Maseko adds: “The continued development of the aerotropolis zones around our three largest international airports will create vital business hubs for South Africa and the continent.” In the second quarter (Q2) from April to June this year, ACSA says the barometer shows in spite of continuing challenges and disruptions in the global economy it saw reasonable growth compared to Q2 of 2015.

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