ACW 10 April 2017 by Azura International

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The weekly newspaper for air cargo professionals Volume: 20

Issue: 14

10 April 2017

Strong 8.4% demand increase in February

he air cargo industry has continued the momentum in February gained from the first month of 2017 and last months of 2016, but the growth is still being treated with caution. According to February figures released by the International Air Transport Association (IATA) measured in freight tonne kilometres (FTKs) - global markets grew 8.4 per cent in the month - compared to the same month last year. After adjusting for the impact of the leap year in 2016, IATA says demand increased by 12 per cent – almost four times better than the fiveyear average rate of three per cent. Freight capacity, measured in available freight tonne kilometres (AFTKs), also shrank by 0.4 per cent in February, which will also be welcomed by carriers and the industry. The association notes the continued growth of airfreight demand in 2017 is consistent with an uptick in world trade which corresponds with new global export orders remaining at elevated

E-COMMERCE AND PHARMA FUEL VIRGIN IN THE EAST

levels in March. Expanded volume of semi-conductor materials typically used in high-value consumer electronics boosted demand. In February, Asia Pacific led the way with year-on-year (YOY) FTK growth of 11.8 per cent, Africa saw a YOY uplift of 10.6 per cent, Europe 10.5 per cent, North America 5.8 per cent, and the Middle East 3.4 per cent. However, Latin America remains in the doldrums and saw a fall of 4.9 per cent. IATA’s director general and chief executive officer, Alexandre de Juniac (pictured) says: “February further added to the cautious optimism building in air cargo markets. Demand grew by 12 per cent in February – about four times the five-year average rate. With demand growing faster than capacity, yields got a boost.

ECS subsidiary wins Leisure Cargo deal Leisure Cargo has appointed Globe Air Cargo (GAC) – an ECS Group subsidiary – as its general sales agent (GSA) in the Netherlands. The contract came into effect from 1 April and with Leisure Cargo shippers get access to a global network of 14 airlines under one airway bill. Amongst others Leisure Cargo through GAC Netherlands will offer TUI (pictured right) flights to Dutch Antilles, Mexico, Florida and various destinations in Europe as well as flights to Canada with Air Transat. Through this partnership ECS Group and Leisure Cargo will look to strengthen their service and product offering to customers and bring on board significant value addition to customers in Netherlands. Leisure Cargo managing director, Thilo Schaefer explains: “As globally acting total

OPERATIONAL EXCELLENCE THE FOCUS FOR DELTA

cargo management provider we are confident that with Globe Air Cargo we have found the right partner to develop our business further in two major aspects: (1) serving markets and customers the best way possible and (2) improving our interaction with all partners in the logistics chain.”

While there are signs of stronger world trade, concerns over the current protectionist rhetoric are still very real.” The rapid growth of niche markets such as cross-border e-commerce and time and temperature-sensitive pharmaceutical are showing robust growth, IATA also observes. “Any optimistic look at the future sees growing demand for specialised value added services. Shippers are telling us that the key to turning the current uptick in the cargo industry’s fortunes into longer-term growth is modernising our antiquated processes. We must use the current momentum to push ahead with the elements of the e-cargo vision – including the e-air waybill which is nearing 50 per cent market penetration,” adds de Juniac.

Awards tickets going fast Tickets are still on sale for the glittering Air Cargo Week World Air Cargo Awards 2017 at The Westin Grand Hotel in Munich on Wednesday, 10 May - which is taking place during the air cargo europe trade show. Guests will network and enjoy a champagne reception, a sumptuous meal with fine wines, live music, entertainment acts and the main event - presentation of the awards. The Air Cargo Week World Air Cargo Awards 2017 will be presented in 10 categories. Visit http://www.worldaircargoawards. com/tables.cfm or contact sales@azurainternational.com to reserve your seat or a table. Azura Productions continues to thrive and will be doing live video interviews at air cargo europe with ADP, Leipzig, Schiphol, Delta Cargo, United Cargo, ECS, ATC Aviation, Munich Airport and more. Email michael.sales@azurainternational. com for more details.

GERMANY, NETHERLANDS AND ITALY BOOST CEVA ISTANBUL NEW AIRPORT SET TO OPEN IN Q1 2018

Embleton replaces Crawley at IAG Cargo

IAG Cargo has appointed Lynne Embleton (pictured) as its new chief executive with immediate effect – replacing Drew Crawley – who has become chief executive of Avios. Embleton moves from her role as British Airways (BA) managing director at Gatwick Airport and will also join the IAG management committee, reporting directly into its chief executive Willie Walsh. She has over 25 years of experience across the Group, heading up strategy at BA, before moving on to become BA MD at Gatwick. Embleton previously sat on the IAG Cargo board as a non-executive director for over four years. Walsh says Embleton extensive experience will be invaluable in the “continued growth of our cargo business”. IAG Cargo includes BA, Iberia, Vueling and Aer Lingus.

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NEWSWEEK Ethiopian starts freighters to Milan and Zaragoza

frica’s largest cargo operator Ethiopian Airlines launched two new freighter routes to Europe – in the shape of Milan in Italy on 2 April and Zaragoza in Spain on 28 March. At the moment the carrier services the European continent to Liege Airport using Boeing 777 Freighters with a minimum weekly tonnage of 2,200 tonnes, and also runs 10 weekly freighter flights to Brussels Airport. These new routes add to the freighter route launched last month to Ahmedabad in India as the rapidly expanding African airline continues its expansion. Ethiopian has the largest freighter fleet and cargo network in Africa. Ethiopian Airlines Group chief executive, Tewolde GebreMariam says the carrier is contributing its own share in the fast and sustainable economic development of Africa. He adds: “Airfreight plays critical role in international trade and especially in the carriage of high value goods, temperature controlled cargo like flower, fruits and vegetables, pharmaceuticals, life science etc.” GebreMariam also explains: “While we are on the eve of the inauguration of the first phase of our state of the art cargo ter-

minal, addition of these cargo routes, makes our global air cargo service even more stretched to the world with adequate ground facilities and quality services. “This move will further strengthen trade and commercial ties between Africa and Europe.” Ethiopian is aiming to grow its freighter fleet to 18 aircraft by 2025 from the eight it operates today. It’s new Terminal 2 at Addis Ababa will be the largest air cargo facility in Africa and it is investing $115 million and the first phase is set to open in June. Ethiopian will be opened in two phases and each will give it 600,000 tonnes. It now has a terminal capable of handling 250,000 tonnes.

China Southern ups LHR services

HEATHROW Airport is to get extra capacity to China with a second daily China Southern Airlines flight to Guangzhou from 1 June. Guangzhou is located 75 miles up the Pearl River bay from Hong Kong and is one of China’s most vibrant business markets and its biggest port. The new service will boost trade capacity and doubling space for British exports to 8,760 metric tonnes a year. Heathrow Airport chief executive officer, John Holland-Kaye say direct connections to thriving markets like these “are essential to keeping our country a global, outward looking, trading nation.” Meanwhile, American Airlines Cargo has started daily widebody flights between San Juan Luis Munoz Marin Airport and Philadelphia International Airport, connecting the two pharma hubs. The daily Airbus A330-200 is an addition to the two narrowbody flights in operation, connecting Puerto Rico, a global hotspot for pharmaceutical manufacturing to Philadelphia, home to AA Cargo’s 25,000 square foot pharmaceutical facility.

IATA implements CASS in Russia THE International Air Transport Association (IATA) has implemented its Cargo Accounts Settlement Systems (CASS) in Russia in partnership with Russian bank VTB and Aeroflot. CASS is designed to simplify the billing and settlement of accounts between airlines and freight forwarders. It operates through CASSlink, a web-enabled e-billing solution. At the end of 2016, CASS was operating in 93 territories serving airlines, general sales and service agents (GSSAs) and freight forwarding companies. The on-time settlement rate was 99.999 per cent, settling a combined $26.4 billion. “The implementation of the CASS in Russia is an important step forward. IATA’s CASS links Russian aviation to a massive global network, bringing tremendous efficiencies to airlines and freight forwarders. “Now all freight forwarders and airlines operating cargo services from Russia can benefit from the global best practices and the new technology CASS is bringing to the market,” says IATA’S regional vice president for Europe, Rafael Schvartzman. VTB Bank, is the official clearing bank for CASS Russia. Aeroflot played a critical role during the CASS implementation, working closely with the Russian aviation authorities and other airlines.

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NEWS WEEK AN-132D makes its maiden flight from Kiev

ntonov’s latest aircraft, the AN-132D took to the skies for its maiden flight on 31 March, flying for one hour 50 minutes from the company’s Kiev airfield. Ukraine’s president, Piotr Poroshenko was present, explaining: “I am proud of my compatriots, thousands of employees of Antonov Company and other Ukrainian enterprises, who have and continue to work to launch the series production of this aircraft.” The AN-132 programme is being developed following a contract with a customer from Saudi Arabia in cooperation with King Abdulaziz City for Science and Technology and the Taqnia Aeronautics Company. Antonov president, Oleksandr Kotsiuba says: “The next important step will be the presentation of the AN-132D in the Kingdom of Saudi Arabia, which will be conducted after the completion of more aircraft tests.” The AN-132D multipurpose turboprop is intended for short and medium-haul routes, performing a variety of tasks such as transporting raw materials, mail and cargo, including bulk cargo, ULDs and light self-propelled and non-self-propelled vehicles weighing up to 9.2 tonnes.

BOC to lease to ABC

Meanwhile, Antonov Airlines has moved compressors and equipment from Stansted Airport for an oilrig in the Far East. It used an Antonov AN-124-100 to carry the three compressors weighing 22 tonnes each destined for the Far East, which flew from Stansted to Paris Vatry Airport to pick up other equipment, before a number of stops on its way to Incheon in South Korea. Journalists were invited to have a look around the aircraft prior to loading and meet members of the Antonov Airlines team. Antonov Airlines’ fleet includes seven AN-124s, the AN-22 and the AN-225. The AN-124 has a capacity of up to 150 tonnes and has been used for 6,461 flights since 2004, carrying 373,000 tonnes.

WORLDNEWS THE International Air Cargo Association (TIACA) has welcomed KLM Cargo and Icelandair Cargo as its newest trustee members. Both members are long-standing TIACA members and the new status means they will help elect the board of directors that manages affairs and establishes its policy. TIACA is looking to grow its general membership in Africa and South America. KERRY Logistics has opened a new office in Warsaw – Poland which it says will support its continual expansion in Europe, and its focus will be international freight forwarding. The new team will be headed by Diana Sokół, who will be managing director of Poland, and was previously general director for Poland at C.Spaarmann Logistics in Warsaw. Kerry opened a Shared Service Centre in Poznan in November last year to enhance the cost efficiency and service competitiveness of the region.

BOC Aviation has purchased two Boeing 747-8 Freighters both committed on long-term leases to AirBridgeCargo Airlines. The Singapore leasing company has a fleet of 483 aircraft owned, managed and on order, leased to 68 airlines in 32 countries. It is listed on the Hong Kong Stock Exchange and has offices in Dublin, London and Tianjin. AirBridgeCargo Airlines general director, Sergey Lazarev says: “We appreciate BOC Aviation’s trust and support in the development of our Boeing 747-8F fleet. We strongly believe in the capabilities of this state-of-the-art aircraft and the benefits that it brings to people all over the world. “We are glad that the number of companies and people who recognise the advantages of this aircraft and are interested in purchasing it is growing.”

Swiss restructures its top team

SWISS WorldCargo has restructured its departments and management team. The carrier says it has been made to “to keep pace with the modern challenges of global logistics and to align with the rapid transformation taking place across the supply chain”. The new structure, it says is designed to offer new business solutions in today’s logistics challenges and is based on three pillars: business development & customer experience, area & contribution management, and quality & services. The cargo business development & customer experience department is headed by Andrés L. Perez, while Alexander Arafa is head of cargo area & contribution management in 2016 and Christian Wyss, is the new head of cargo quality & services. All three departments are supported by the central functions of training & continuous improvement, marketing & communications, and procurement & supplier management. SWISS head of cargo, Ashwin Bhat says the restructuring is designed to make it more agile and put customers at the centre of activities. “In a people business like air cargo, it is extremely important that these services are supported by a well-structured organisation and delivered by skilled professionals who can play to their individual strengths bringing diverse and varied experience.”

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NEWSWEEK

Nordic air cargo issues on the agenda in Copenhagen

range of pertinent air cargo issues were debated at the Nordic Air Cargo Symposium in Copenhagen from 29-30 March at the Crowne Plaza Copenhagen Towers. Welcome remarks were made at the event by Copenhagen Airports chief executive officer (CEO), Thomas Woldbye and Copenhagen Capacity CEO, Claus Lønborg. Key decision makes speaking at the event included Kuehne + Nagel’s senior vice president for air logistics in Western Europe, Ufuk Sumerler who spoke in the ‘Air Logistics and the Supply Chain – Future Outlook’ session, which was the first one of the day. He explained to delegates that the freight forwarder estimates there will be year-on-year market growth of 3.5 per cent. In his mid to long-term outlook, he also said there would be shortened product lifecycles and

increased just-in-time needs, while there will also be increasing flows of pharmaceuticals and perishables. Pitfalls he identified included protectionism, which poses a potential headwind, and he noted the “finance-heavy” air cargo industry remains

vulnerable. Sumerler said dangerous goods (particularly batteries) will increase and present challenges and data security and integrity are “vital” in accelerated supply-chains while air cargo security is paramount. In his closing thoughts on a positive note he said air cargo remains vital for global progress, while the Nordic countries will evolve and transform the perishable sector. Also speaking in the session was Worldwide Flight Services CEO of Europe, John Batten (pictured above right) who talked about how the global cargo handler sees the marketplace and gave a future outlook. Sessions also included ‘The Impact of e-commerce’, and a roundtable session of Nordic air carriers, where Icelandair Cargo, managing director (MD), Gunnar Már Sigurdfinnsson and Finnair Cargo MD, Janne Tarvainen talked

about the challenges and what their carriers are doing in the marketplace. Others were on pharma logisitcs, the salmon and seafood market, which much is carried by air from the Nordics, airport infrastructure and the new Silk Road to China.

CEIV for DHL at Leipzig Halle Airport

DHL Global Forwarding has gained IATA Center of Excellence for Independent Validators (CEIV) Pharma certification at Leipzig Halle Airport. It started certifying stations in the third quarter of 2016 and the DHL Air Thermonet station in Leipzig received the label following independent third party audits and staff training. The Leipzig station consists of 2,760 square metres, of which 232 are for tem-

peratures between 2-8C and 265 for 15-25C. DHL Global Forwarding vice president airfreight Germany, Thilo Specht says: “We at DHL place great emphasis on improving our service quality and demonstrate through IATA CEIV Pharma Certification, that we are the right partner for transporting vital and temperature sensitive products.” Chief executive officer of LifeConEx at DHL Global Forwarding, David Bang who is also global head of DHL Temperature Management Solutions says: “Over many years, DHL has been actively involved with IATA’s continuous efforts to adequately answer to the regulatory demands of the pharmaceutical industry. This standardised approach in the air freight industry means productivity, accuracy, and reliability. All of those lead to product integrity and patient safety.”

Freight tracking tool upgrades for UPS UPS has made improvements to Flex Global View – a management and visibility tool for air, ocean and surface freight shipments, plus warehouse inventory, purchasing and customs entry. Upgrades include a new ocean container dashboard specifically for ocean containers where information can be sorted by carrier, port of loading and unloading, shipper or receiver. Others are more detailed shipping alerts – with email alerts to customers regarding specific supply chain events associated with shipments and/or customs entries. These

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will now include more shipment-specific details that were previously only available by logging into the system and searching for information. As a result, customers know instantly via email alert about changes in their supply chain. The upgrades include better dashboards and reports, making it easier for customers to find what they are looking for. UPS Freight Forwarding president, Cindy Miller says: “UPS is committed to continuous improvement to this important customer technology tool. No one likes supply chain surprises.”

NEWS WEEK

Industry must speak same language to improve quality

he industry needs to speak the same language to improve quality, Multimodal 2017 delegates were told in the ‘Valuing air cargo performance’ session in Birmingham on 4 April. Speakers agreed that quality has improved considerably but further improvements are still needed, and all players in the supply chain need to speak the same language. The session was moderated by Freight Transport Association director of global & European policy, Chris Welsh, who is also secretary general of the Global Shippers’ Forum. Welsh was joined by Cargo iQ executive director, Ariaen Zimmerman, Air Canada Cargo general manager Europe, Middle East, India and Africa, Mark Olney, Cargomind managing director, Paul Glaser, and DB Schenker director AVSEC and governance, Lothar Moehle. Zimmerman told delegates: “Cargo iQ is an organisation with its roots in Cargo 2000, founded by forwarders and carriers to improve quality. Ever since we started in 1997, we have come to the current level we believe we want to offer the world, quality and what we mean by quality.” He adds: “We work through collaboration, optimal quality the shippers need. The most important thing is we need to start

talking the same language.” Welsh says: “I can’t stress enough that shippers strive for reliable, predictable and secure supply chains. Some shippers strive for speed, but they want assurances that when they enter an agreement it will be delivered at a specific place and time. If it doesn’t do that then the product has failed.” Moehle believes the industry is too fragmented, saying: “The airfreight process is highly fragmented, with a number of stakeholders involved in the process. It is difficult to discuss in detail

where the limits are. With a large number of handling agents it is a task to bring all together in the same place. We need to go into the nitty-gritty to see where source of the problem is.” Welsh thinks the industry needs to take advantage of new opportunities such as e-commerce, and says: “With the e-commerce revolution, consumers are driving supply chains and shippers have to fulfil. Shippers want more transparency in the supply chain and need more confidence. “When they go to a forwarder they want a demonstration of what services they will get and how it is measured.” Moehle says quality has improved considerably since Cargo 2000 was founded but the industry cannot rest on its laurels. He adds: “E-commerce is a new challenge, the industry will have to be flexible.” Welsh also believes the shipper needs to be clear from the outset what product service they want, explaining: “Do they want a forwarder or flight specific service, it could be a week but that’s fine if it’s been agreed. It needs to be clear right at the outset, the type of service is critical to performance.” He points out airfreight is an expensive service so must demonstrate it is value for money.

Ground handling the area in need of improvement

THE industry needs to improve what happens to cargo on the ground, delegates were told during the ‘Airfreight – improving air cargo performance’ session at Multimodal 2017 on 4 April. Heathrow Airport head of cargo, Nick Platts says the air component of the supply chain is efficient, with its ability to move cargo around the world in 24 hours, but the problem is getting to the airport and what happens when it gets there. He points out it can take about seven minutes to get cargo from the control post to the aircraft stand but has often arrived two to three days ahead of the flight. Platts told delegates: “With margins what they are, I don’t understand why they are not pumping more volumes through. Airfreight is a quick service and we are letting consumers down. Shippers are not happy, pharma is moving to ocean, all service partners need to be aware of the threats. If we don’t improve we will lose market share.” Platts was joined by Air Canada Cargo general manager Europe, Middle East, India and Africa, Mark Olney, Manchester Airports Group head of cargo, Conan Busby and Amsterdam Airport Schiphol head of cargo, Jonas van Stekelenburg. The session was moderated by Freight Transport Association head of global policy, Alex Veitch. Understanding shipper requirements is very important but often they do not know what happens. Platts says: “Shippers don’t know what happens, don’t know which gateway was used, they give it to the forwarder and it makes it there. For some they are not educated and others don’t want to know.” Van Stekelenburg also believes the industry needs to stop worrying only about cost but also quality. He says: “Shippers do not care enough about quality, it’s all about costs, if it’s 1p less you move it. The supermarket has a contract with the forwarder, the handler does not have the contract with the supermarket, they only hear about costs and not other stuff, that’s the problem. Everyone should be more active in improving quality.” Something that was also discussed was how to cater for e-commerce. The speakers said the level of demand in the peak season took them by surprise but they just about managed. Olney says: “There was a huge shift of e-commerce into bellies, the issue was we couldn’t supply enough containers. We were swamped with it but just about managed. The sector demands air for the speed, whether it is prepared to pay remains to be seen. As an industry we need to be better prepared.”

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ACW 10 APRIL 2017

US EAST COAST

Operational excellence the focus for Delta Cargo

017 is set to be a year of growth following a year of reconstruction in 2016, Delta Cargo president Gareth Joyce tells Air Cargo Week. He says the intention is to create a clear strategy to grow the business in these challenging times, focusing on what he describes as “operational excellence”. Delta is also aiming to grow its customer base in the fiercely competitive marketplace. Joyce says: “We see customer service is at the centre of the validity to compete in a market like that. When customers have a surplus of

choice if you’re not outstanding at delivering on time every time with that added piece of customer experience on top then you have no USP to offer the market.” Making sure goods move on time every time is the common component anywhere in the supply chain, and having spent many years developing front end customer service, Joyce wants to bring this to Delta as he thinks it has not been as evident as it should be. “We have got to layer that on top of the processes we are building, to bring that premium brand service to the cargo industry,” he says. Delta is investing in premium products such as its DASH Express and International Air Transport Association CEIV Pharma. Robust processes are essential for a premium product. Joyce says: “You can’t perform on time every time if you don’t have robust processes and

system implementation. To do that you have to harness technology.” Delta performs over 5,500 flights a day in the US, both domestically and internationally and of DASH, Joyce says: “We can get a product onto a plane 45 minutes before departure and we can get it off a plane in 45 minutes too so when you have that kind of speed connecting so many destinations directly you have a product that has value in a market where speed is critical.” Critical goods are usually high value so customers demand to know where it is so Delta has fitted GPS trackers on every single packet for medical shipments under DASH Critical. “We are harnessing the technology on top of the process to deliver a flawless product for the customer.” CEIV is more about conforming to processes to give customers confidence it is shipping within standards that can be trusted so high value products are not compromised. “It gives customers peace of mind that you’re doing things the right way,” Joyce says. Delta was the first carrier to install RFID readers across its network for passenger bags, and Delta Cargo is busy piloting that technology. He says: “We are running pilots for the United States Postal Service with the intent of rolling

that out across the cargo system because we’ve seen the benefits that it can bring for process improvement and consistent delivery and the added benefit of customer peace of mind.” The industry has an abundance of capacity, something set to continue as more aircraft are built for belly demand. Joyce says only the strong will survive and companies will need to be outstanding to do so. He is confident Delta will be a survivor, increasing its notification for delivery metric by eight points in the last year, pushing into the top half of industry performance after years of lagging, and he expects to be near the top by the end of the year. He says: “All the improvements in operational performance that were developed during our strategic review are starting to pay dividends in our on-time performance.” Joyce adds customers are not bothered about yields or capacity, they want to know about operational performance, delivering on-time and recovering from unexpected issues: “At the heart of what we are doing lies that focus on truly understanding your customer’s business and then making sure that we can react to their demands and needs every single day so that they appreciate what we bring to their business.”

AFTER a tough middle to 2016, IAG Cargo’s strong performance in the final quarter of 2016, continuing in 2017, vice president North America Joe LeBeau tells Air Cargo Week. He says the results on the US East coast were broadly the same as other parts of the US and 2016 was challenging across the whole country. Despite having what he describes as a “rough middle of the year”, the fourth quarter was “very strong” and this has carried into this year. LeBeau says: “2017 has been pretty good, December was very strong. The first few months have been helped by imports, which have been very strong. The

East coast is used for access and capacity to feed into trucks.” IAG Cargo has been focusing on its premium products in recent years having made investments in its Constant Climate product for pharmaceuticals. LeBeau says: “Constant Climate pharma in the North East is by far the largest pharma market and is performing very well.” Its Cargo Connector delivery service, offering pick up and deliveries at locations including Atlanta, New York, Miami and Washington, which LeBeau says “has become a major part of express growth”, while e-commerce continues to grow. One thing that has remained a challenge is the strength of the US dollar, affecting exports though helping imports. LeBeau comments: “This has been an overall phenomenon over the last 24 months. It has had a noticeable impact on US exports.”cIAG is also working on its online booking platform.

The US has started well in 2017 for IAG

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US EAST COAST

E-commerce and pharma fuel Virgin in the East

he US East coast was one of Virgin Atlantic Cargo’s best-performing markets in 2016 in terms of volumes with the 112,000 tonnes carried to and from the region - up nine per cent year-on-year. E-commerce was one of the drivers of the airline’s growth with a record number of US-bound shipments in the fourth quarter, a level of demand continuing through the start of 2017. With Virgin’s 30 per cent share of capacity on the transatlantic, it is also gaining a growing share of what is the world’s largest pharmaceutical trade lane. New York and the relatively new market for Virgin of Atlanta both performed consistently well over the last 12 months. 2017 has seen its East coast commitment increase further with the launch at the end of March of three flights a week from Manchester to Boston, which will be joined by daily

Manchester - New York JFK services at the end of May. The depreciation of the pound, however, in the second half of last year impacted both demand and yields and looks set to continue in 2017. Virgin Atlantic Cargo managing director, John Lloyd (pictured) says: “Whilst not without its challenges, the East

Coast remained a significant revenue generator for Virgin Atlantic through 2016. We grew our capacity by 13 per cent over the course of the year and market demand remained buoyant in both directions.” Revenue on the East coast is up 10 per cent this year but the value of the pound and the impact of Brexit bring uncertainty to the market. Lloyd says Westbound remains stronger in volume and revenue terms but Eastbound continues to improve. “We also expect a good contribution from our new routes ex Manchester because we’ve had good support from customers in the north of England for many years and they appreciate having the choice of direct services from Manchester in addition to the Virgin destinations they already use out of London,” Lloyd explains.

Temp-sensitive boom

VOLUMES are continuing to grow at consistent rates in 2017 for American Airlines (AA) Cargo, filling up the widebody aircraft, senior manager for sales in the Eastern division Linda Dreffein says. She explains volumes declined entering the second quarter, (Q2) though this was not a problem exclusive to AA Cargo, but Q4 was a noticeable improvement and the outlook for 2017 is good. Dreffein says: “Thus far 2017 has been strong and consistent. Our widebody aircraft, while always in demand, are particularly heavy. We’ve seen an increase in business from all sectors, pharmaceuticals, seafood, printed matter, consolidation traffic, etc.” Imports and exports have remained broadly the same over recent years, though temperature-controlled traffic is the main growth area to and from Asia, Europe and Latin America. She says: “High-value commodities and perishables such as lobsters and other seafood products are also in demand not only internationally but to destinations across the US as well. We still see our share of machine parts, textiles, building materials, high tech and automotive in both directions.” Pharmaceuticals remain an important product on the East coast, with AA Cargo having invested heavily in its facilities. The Philadelphia cold room has been well received and Dreffein says: “The facility offers Controlled Room Temperature (CRT), a refrigerated area for passive shipments, and a deep frozen area as well. We have charging stations with capacity for simultaneously re-charging of 30+RKNs as well as 24/7 monitoring and a dedicated staff to assure quality.” The airline has also been busy upgrading facilities elsewhere: “In JFK and in other stations across our system we also have CRT’s dedicated to passive pharmaceuticals and re-charging stations for e2 type containers. American Airlines Cargo is committed to the cold chain industry and customers with specific temperature requirements at all our stations.” There are no plans to add new routes though a number of seasonal services will return and others will be upgraded. The Boeing 777-200 has returned on the Heathrow - New York JFK service and the second daily Airbus A330-300 began operating on the Philadelphia - Heathrow route on 25 March. She adds: “Along with our year round service seasonal flights to Rome, Venice, Barcelona and the widebody from JFK to Manchester provide a broad range of destinations for our customers to utilise.”

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ACW 10 APRIL 2017

EUROPEAN FORWARDERS

Germany, the Netherlands and Italy exports boost CEVA

EVA Logistics senior vice president global product airfreight, Peter Baumgartner (pictured below) says it has been a “very positive” few months for the logistics services provider, and for the airfreight forwarding sector across Europe in general. He notes airfreight volumes in the fourth quarter of 2016 showed a global seven per cent yearon-year growth and this was especially valid for the European market (imports and exports), where Germany, the Netherlands and Italy all

enjoyed above average export growth figures. “Growth has been especially marked for the trade lanes of Europe – Asia and Asia – Europe, as well as Europe to North America, and they have all seen a strong upward trend over the last few months,” Baumgartner recalls. “South American imports are suffering and exports from North America have seen only moderate growth, whereas exports from China enjoyed a very healthy peak season,” he adds. “What is more, we forecast the trend we have seen in the last few months to continue through this year,” he continues. “Not necessarily at the growth levels seen in the last quarter of last year, but globally at an average of 3-4 per cent. European Exports overall should continue to show better growth than North America’s (as we expect the Euro to continue to trade at its low level compared to the US dollar), though North

American exports are are forecast to slowly pick up again during 2017. Asian exports will continue above global average growth – again more to Europe than to North America. “Whereas growth has been positive across all industry sectors, going forward I believe it will be healthcare, lifestyle, consumer goods, fashion and perishables which will continue to show the highest growth rates over the course of this year,” Baumgartner explains. He says automotive and high-tech will probably lag behind, noting: “There are good reasons for this, the latter partly because of some modal shift but also a drop in tonnages (not in demand) as a result of miniaturisation/combination

(several functions formerly requiring different products now being combined in one product). CEVA’s focus going forward will continue to lie in increasing its footprint in Europe, Baumgarter says. “Our main European gateways are placed in those growing markets (of Germany and the Netherlands) and we have geared our route development organisation to focus on those trade lanes – amongst some other strategic lanes. “We are aiming to take advantage of the above-mentioned growing industry sectors, but at the same time we want to try to keep a good mix between the sectors, in order to mitigate risks from cyclical markets.”

Rhenus targets air cargo in France

GERMAN freight forwarder Rhenus has moved to grow its European air cargo operations in recent times and earlier this year its French division was awarded cargo agent accreditation by the International Air Transport Association (IATA). According to the forwarder, it recently enjoyed a boost in demand for its air cargo handling services, and the certification will help it to grow this aspect of its business further. “We are very pleased we have been granted the IATA accreditation, which will allow us to have direct contracts with airlines and handle airfreight shipments via France, instead of having to use our airfreight hub at Amsterdam Airport Schiphol,” says chief executive officer for air & ocean in Europe, Jörn Schmersah. “France has now joined our European network, which will allow us to grow even further with comprehensive European coverage,” Schmersahl notes, adding: “We will be opening new offices in France and have hired

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additional dedicated staff in preparation for the rapid growth expectations.“ Certainly, Rhenus is exploiting the general surge in airfreight demand that the industry has welcomed in recent months. “There has been a significant pick-up in the last few months, specifically for exports out of Europe,” Schmersahl explains. “In the last quarter of 2016, we saw a huge peak in shipments from Asia which is in line with global market and economic developments. In Europe, we do see a capacity problem as a result of the rate of exchange of the Euro which results in more export shipments. This is especially visible in Germany. Therefore, some lines are under pressure. However, another positive are the low kerosene prices.” He is also predicting better times again this year. “We expect that the positive trend will continue and further growth is expected. Geographically, central China and India are becoming more and more important. “Moreover, growth will be visible in temperature-controlled and pharma shipments. Furthermore, we expect a rising demand for high quality and luxury products from Europe, especially in China, as well as more seasonal flights. Concerning the Arab states, we expect an ongoing demand for heavy-sized parts for the oil and gas industry,” Schmersahl says.

EUROPEAN FORWARDERS

Dachser sees Q2 improvement

ooking back over the forwarder’s recent air cargo business into and out of Europe - Dachser Air & Sea Logistics head of global airfreight, Timo Stroh says last year’s second and third quarters, which saw an improvement in demand for airfreight capacity, were followed by a “powerful peak” in the last quarter. He explains to the end of the year the demand of capacity grew strongly and the airfreight market saw an “unprecedented high.” Stroh continues: “So far in 2017, we have seen an increase in demand on key routes from/to Europe to/from Asia, as well as on transatlantic routes over the first two months of this year, which resulted in part to a capacity bottleneck.”

Furthermore he adds: “As a result of growing demand and cancelled capacities from Latin America (by the end of 2016), we now have a tight capacity situation into Latin America, especially Brazil and Mexico.” Stroh is expecting further improvements in demand for airfreight services as 2017 goes on, partly based on a modal shift

from sea to air freight. “Air cargo traffic will gradually accelerate in 2017 and will return to the long-term trend of growth in 2018,” he predicts. “Asia will continue to lead the world in average annual air cargo growth, with domestic China and intraAsia markets expanding strongly; the Asia – North America and Europe – Asia markets are meanwhile expected to grow slightly faster than the world average growth rate.” Latin America markets with North America and with Europe will grow at approximately the world average growth rate, as Middle East markets will with Europe. Of course, Dachser is aiming to participate in this development as much as possible,” Stroh says. For Dachser’s European operations, its main growth engines are the Europe – North America trade lane, as well as Europe to Asia. Consumer goods plus the automotive and aerospace sectors, are leading the way. As for the forwarder’s own plans for product/service development, one of its main projects on the go at the moment is called ‘Interlocking’. “We develop holistic solutions for our multinational customers that combine the very best we can offer in overland transport and air and sea freight services,” Stroh reports. “We interconnect our Road Logistics and Air & Sea Logistics business fields at all levels to generate added-value for our customers. As a result of this in-depth integration, customers can successfully handle their global supply chain management with one single provider.” Dachser will also be responding to opportunities from technological improvements. “Dynamic rate systems for carriers, depending on supply and demand, on trades and flights, will speed up and may change the future booking process,” Stroh forecasts. “More transparency based on a fast technology development alongside the whole supply chain will create customer benefit. For special commodities like life science and healthcare, realtime transmission of temperature data will become more visible.”

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B&H focusing on home markets

LONDON Heathrow Airport headquartered logistics specialist B&H Worldwide is looking to follow where market demand takes it, although Europe is likely to remain a strong focus. The firm’s regional managing director for EMEA, Mark Nightingale (pictured below) explains: “As a specialist in aviation logistics, our demand is driven by the needs of our customers, be they airlines, MROs (maintenance, repair and overhaul companies), stockists, etc. “Therefore, our demand is not driven (or impacted) as much by global market conditions rather than by the aviation sector. In any case, Europe has remained strong for us across all of our products.” As for his predictions in 2017, he notes: “Our indications are that the market remains strong in 2017 and we see numerous opportunities to grow to support our customers with AOG (aircraft on ground) needs, including airside deliveries. “During 2017 we will be looking to expand our airside deliveries service across the region and believe there will be other opportunities for our specialist products as the year progresses.” In February, AeroVision International announced it was to pen a new forward stocking location to service customers in Europe, the Middle East and Africa in collaboration with B&H Worldwide.

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TURKEY

Istanbul New Airport set to open in Q1 2018

stanbul New Airport (INA) is on schedule to open in the first quarter (Q1) of 2018 and it is set to evolve into one of the world’s key cargo hubs. The gateway’s operator is IGA Airport Operation and chief commercial officer, Abdullah Soner Akkurt says the contract states the opening will be planned for November 2018, but the target is Q1 of 2018. He explains that there are currently 22,500 people who are working at full speed at the construction site to make this happen. INA will host nearly 100 carriers when all

phases are finished completely and it will be the main hub for Turkish Airlines. Akkurt says it will be one of the largest airport cargo areas in the world with a total land area of about 1.4 million square metres and the cargo city will have 29 separate park positions for freighters. The airport will be able to handle 5.5 million tonnes of cargo per year, when it is completely finished, but in the first two phases the cargo capacity will be planned for about 4.5 million tonnes per year. After finishing Terminal 2 the capacity will rise to 5.5 million, when another cargo and logistic area near the terminal will be opened. Akkurt says he cannot right now give any details about what air cargo carriers will be operating at the new airport as this has yet to be finalised.

Turkey has in recent times had economic and political instability, but Akkurt says this has not had any effect on the project and IGA is complying with the timetable and there are no changes. Turkish Airlines is sure to reap the rewards of the opening and will be the hub carrier at INA and its expansion is sure to continue, Akkurt notes. He adds: “We see Istanbul as a global platform of international airport operators. In addition

we benefit from a very good geographic location, which enables to reach many destinations within a few hours. “The development of Turkish Airlines as the hub carrier is another advantage for us and it shows that Turkish Airlines is ready to serve much more destinations when Istanbul New Airport is opened. “Therefore we are sure that Istanbul New Airport will be a global hub like Dubai International Airport.”

TURKISH Cargo says it is focusing on increasing its route network and on providing a “qualified service and strong sales network”. The carrier says it is its “working principle to meet the trade points in the world” according to its global mission and to create new trade routes. Turkish says it is closely monitoring, supporting, and providing new alternatives to the economic downturns at different points. “Our 2017 targets will continue in this direction, we continue to offer more destinations, qualified service and strong sales network, to our regular traffic and our customers. With our complete infrastructure and globally integrated system, we are more assertive than ever,” the airline explains. This year, Turkish Cargo expects it will see growth in Asia/Far East, the Middle East, and Europe and it notes in the last two years, global business is growing stronger.

The carrier notes: “This increase in the economic performances of the countries will be reflected in both on sectoral level and in world trade scale positively. We also see great potential in South America. “Although the commercial activity in the continent is intensive, we see progress signals in the overseas trade of these countries. From this point of view, 2017 will be a year of rising trend in terms of world trade.” The bellyhold arm Turkish Airlines has launched a new three-weekly route to Voronezh in Russia, adding to services in its network it already runs to Moscow, St.Petersburg, Sochi, Rostov, Kazan, Ekaterinburg, Ufa, and Stavropol. Last month it also added a four-times a week belly route to Kharkiv in the Ukraine. Turkish now operates flights to 298 destinations in 120 countries.

Routes and service focus for Turkish

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ACW 10 AprIL 2017

NEWSWEEK

Fresh focus for Emirates with new perishables products

mirates SkyCargo has launched Emirates SkyFresh – a service to help maintain the freshness of perishables and revealed its new cool dolly product. Emirates SkyFresh includes three levels – Emirates SkyFresh, Emirates SkyFresh Breathe and Emirates SkyFresh Active. They offer different levels of protection for perishables. The basic product Emirates SkyFresh, is geared towards temperature tolerant fruits and vegetables and will offer quick ramp transportation and thermal protection through Emirates SkyCargo’s ‘White Cover’ blanket. Emirates SkyFresh Breathe provides protection for temperature sensitive perishables such as fresh cut flowers, ready to sell cut fruits and vegetables and fresh fish. Features will include prioritised ground handling as well as the use of the Emirates SkyFresh Ventilated Cool Dolly a new cool chain dolly launched.

Emirates SkyFresh Active will “offer the highest protection for perishables” that cannot withstand any temperature deviation using specialised temperature controlled containers during transportation. The carrier says the Ventilated Cool Dolly will help preserve the freshness of perishables requiring constant circulation of fresh cool air such as fruits, vegetables, fresh fish and seafood, meat and flowers. The dolly features aluminium and PU insulated panels and can carry up to 16 tonnes and fit a variety of bellyhold unit load devices, including pallets, in its interior. Emirates SkyCargo says moving perishables is an “important part of its business” as people all over the world are increasingly aware and interested in culinary flavours and produce from different countries and regions. In 2016, Emirates moved close to 400,000 tonnes of perishables across its network. This included salmon from Norway, strawberries

from California, flowers from Ecuador, meat from Australia, mangoes from the Indian subcontinent, wine and cheese from France. Since 2015, it has brought over 20,000 tonnes of perishables exports from the US to the rest of the world, while over 4000 tonnes of fruits and vegetables are uplifted from India every month

and brought to the Middle East and beyond. Freighters bring fresh cut flowers from Nairobi in Kenya and Quito in Ecuador to Amsterdam. Emirates SkyCargo operates a fleet of 259 wide-bodied aircraft including 15 freighters and has over 25,000 square metres of temperature controlled storage space in Dubai.

Cambodia freighter for Qatar

QATAR Airways Cargo started its first freighter service to Phnom Penh in Cambodia on 3 April using an Airbus A330 Freighter. It will operate on the Doha–Phnom Penh–Doha route once a week and will offer over 60 tonnes of cargo capacity each way. Garments represent the largest portion of Cambodia’s manufacturing sector and account for 80 per cent of the country’s exports, represent the majority of uplift out of Cambodia for the carrier. Qatar Airways Cargo currently carries more than 70 tonnes of bellyhold cargo on the daily widebody passenger flights to Phnom Penh via Ho Chi Minh City, Vietnam every week. The introduction of direct freighter services offers exporters increased capacity and flexibility to transport Cambodian commodities to Qatar Airways’ global network of more than 150 destinations via its hub in Doha. Qatar Airways Cargo chief officer for cargo, Ulrich Ogiermann says: “This is our fifth freighter destination launched this year, in tandem with our increased fleet size. Intra-Asia air cargo has grown over the years, and we have observed substantial migration of manufacturing trade from China to Southeast Asian countries such as Cambodia and Vietnam. “Leveraging our extensive network of more than 70 cities in Africa, Europe and the Americas, we are in the lead to provide our customers in the Southeast Asia region adequate capacity, flexibility and world-class airfreight solutions via our state-of-the-art Doha hub.” The introduction of direct freighter services adds 60 tonnes of weekly capacity to the Doha-Phnom Penh route. Asia Pacific is a prime airfreight market for Qatar Airways Cargo, and it says the launch of freighter service to Phnom Penh increases the cargo carrier’s freighter network to seven destinations on the continent. New bellyhold flights to Canberra in Australia and Medan in Indonesia have also been announced by the airline recently, in addition to the existing 29 bellyhold destinations in Asia Pacific. Qatar Airways Cargo recently took delivery of its 12th Boeing 777 Freighter, taking its freighter fleet to 21.