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WORLD AIRPORTS .COM ACW Digital is sponsored by FREIGHTERS.COM
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The weekly newspaper for air cargo professionals No. 1,188
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11 JULY 2022
Planning for the pharma logistics peak ...
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INSIDE
SILK WAY ADDS AIRBUSES ...
AIRFREIGHT OPERATORS URGED TO PREPARE FOR NEW EU IMPORT RULES
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ew import rules come into force for freight forwarders, air carriers, express couriers, and postal operators in Europe from 1 March 2023 under the second phase of the EU’s new customs pre-arrival security and safety regime, Import Control System 2 (ICS2), Release 2. ICS2 is a major initiative to enhance customs oversight of the movement of goods prior to their arrival at the EU external borders by air, maritime, land and inland waterways. It will allow customs authorities to identify high-risk consignments that necessitate early intervention, while facilitating legitimate trade into the customs territory of the EU, Norway, and Switzerland. All operators transporting goods to or through the European Union, Norway or Switzerland will be required to submit advance cargo information in the form of a complete entry summary declaration (ENS). They will have to comply with new advance data reporting requirements for pre-loading and pre-arrival customs risk assessments. ICS2 will collect data on all goods entering the EU prior to their loading and arrival to support risk-based customs controls. However, the European Commission says it will also facilitate the
free flow of legitimate trade across the EU’s external borders and simplify movement of goods between customs offices at the first point of entry and final destination in the EU. It will also streamline requests for additional information and pre-departure risk screening by customs authorities. In addition to air carriers’ ENS filing responsibilities, forwarders, couriers and postal operators will also be legally responsible for providing data. They will either have to share it with the air carriers, who will then complete the ENS filing requirements, or submit the data directly to ICS2. Postal operators and express couriers, who have previously been declaring partial information on inbound shipments (under ICS2 Phase 1), will now also be required to coordinate with their air carrier to submit all required data. Operators who are currently filing advance cargo information into the Import Control System (ICS) will have to gradually start filing this data into ICS2 during the operational roll-out of Release 2. They are strongly advised to prepare in advance for Release 2, in order to avoid the risk of delays and non-compliance. To help prepare for Release 2, the European Commission says it will make available a confor-
mance testing environment from July 2022 until February 2023, to verify operators’ ability to access and exchange messages with customs authorities through the intended ICS2 trader interface. Conformance testing is mandatory for all economic operators concerned. Economic operators responsible for filing ENS data to ICS2 should determine whether they have an existing Economic Operators Registration and Identification (EORI) number. If not, they should contact the EU customs authority of their choice to get this and to receive support in preparing for ICS2 Release 2. They should also evaluate their handling of imports into the EU and contact their selected customs authority to take part in the upcoming Release 2 conformance testing. The system is being implemented in three releases. With Release 1 covering the pre-loading process for postal and express consignments by air completed on 15 March 2021, Release 2 is the next step in the system’s implementation, and it will go live on 1 March 2023. Release 3 will be implemented from 1 March 2024, requiring operators carrying goods on maritime and inland waterways, roads and railways to comply with the new regulations.
AZERBAIJAN-BASED Silk Way West Airlines has signed an agreement with Airbus for two A350 Freighters, due for delivery in 2027-28 ... PAGE 2
RHENUS OPENS PHARMA HUB ...
RHENUS Air & Ocean UK has launched a life sciences and healthcare department at a newly refurbished site in Ashford ... PAGE 2
MENZIES WINS ASIA WORK
MENZIES Aviation has won new contracts in South East Asia and China with Rimbun Air, My Indo and Raya Air. ... PAGE 4
AIR FRANCE-KLM GOES GREEN
AIR FRANCE-KLM said it would take a “scientific approach” based on “rigorous criteria” to accelerate environmental transition, in its ... PAGE 4
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NEWS
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Rhenus UK launches Life Sciences arm at Heathrow RHENUS Air & Ocean UK has launched a life sciences and healthcare department at a newly refurbished site in Ashford, close to London’s Heathrow airport. The German-owned forwarder says it is the first warehouse of its kind in Europe for the Group and will be a one-stop-shop for all import and export logistics, offering a white glove service for temperature-controlled storage and distribution from end to end. It will serve a broad spectrum of customers in the life sciences and healthcare industries. The new department is led by MarieLouise Watkins, head of life sciences and healthcare for North-West Europe, and Jayne Fox, UK life sciences and healthcare manager. Watkins explained: “This is a brandnew venture for Rhenus in the UK that will deliver service excellence to our customers.
With the patient at the forefront of our minds, our focus is on quality and compliance, providing our customers with industry expertise and solutions to ensure the safe and secure handling of pharmaceutical and medical products.” She continued: “As we are a global company with more than 920 offices worldwide, including our wholly owned charter service company, we can assist our customers to de-risk their supply chains and unlock the potential of new customers and markets globally.” Frank Roderkerk, CEO North-West Europe, added: “Rhenus has a well-established track record in the pharmaceutical industry in Europe, and the opening of this new department marks the next stage. Led by a stellar team, with the appointments of Marie-Louise and Jayne, we can say with confidence we have fast-tracked a worldleading offer for our customers in this complex, rapidly evolving sector.”
Silk Way West Airlines confirms A350 freighters order AZERBAIJAN-BASED Silk Way West Airlines has signed an agreement with Airbus for two A350 Freighters, due for delivery in 2027-28, along with an option for two further aircraft. The agreement, the first between the two companies, was signed at a ceremony in Baku on June 28, attended by Wolfgang Meier, president of Silk Way West Airlines, and Wouter Van Wersch, executive vice president region and sales Europe Airbus. It is the first order for A350F in the Central Asia and CIS region. As a new member of the A350
family, the A350F benefits from state-of-the art technology, aerodynamics and unrivalled operational flexibility and reliability. It will feature a large main deck cargo door and a fuselage length optimised for cargo operations. Over 70% of the airframe is made of advanced materials, reducing take-off weight by 30 tons. Powered by Rolls-Royce engines, the A350F generates lower fuel burn and CO2 emissions and will contribute to Silk Way West’s sustainability goals.
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Air France-KLM takes scientific approach to green aviation AIR FRANCE-KLM said it would take a “scientific approach” based on “rigorous criteria” to accelerate environmental transition, in its 2021 Sustainability Report, published on 29 June. The digital document also outlines the group’s actions to promote diversity and inclusion in all its businesses. Air France-KLM also presented its Destination Sustainability, a programme bringing together the Group’s ambitions on the environment and climate change on the one hand, and the human factor on the other, by bringing the values of respect, equality and tolerance to the fore. In an airline market still marked by the aftermath of the pandemic and international tensions, Air France-KLM intends to strengthen its commitment towards sustainable air transport. It is doing so by following a scientific
approach based on rigorous criteria, which has been validated by the independent SBTi organisation. In addition to achieving zero net CO2 emissions by 2050, Air France-KLM aims to reduce its emissions per passenger-km by 30% compared to 2019. The Group is also committed to using 10% of Sustainable Aviation Fuel by 2030, well beyond the regulatory mandate envisioned in Refuel EU for flights departing from Europe. Air France-KLM Group airlines participated in the European Commission’s Connecting Europe Days in Lyon on 28-30 June in Lyon to discuss transport policies and promote sustainable mobility. Five flights operated by Air France, KLM and Transavia flew to their destinations powered by at least 30% sustainable aviation fuel. Social and societal responsibility is the second pillar of the Destination Sustainability strategy. With more than 71,000 employees, Air France-KLM Group is a leading employer, and says it is determined to foster an ever more inclusive culture and to fight against all forms of discrimination and inequality at work. For example, a third of the positions on the Group’s executive committee should be held by women and women should represent 40% of management positions by 2030. CEO of the Air France-KLM Group concluded: “In 2021, the Air France-KLM Group was able to count on its 71,000 employees and their unfailing commitment. The report we are publishing today is the result of their actions and efforts to place our Group at the forefront of a sector that is reinventing itself. “Our Destination Sustainability program embodies our willingness to position ourselves as leaders in sustainable aviation.”
Menzies wins new Indonesia and China business MENZIES Aviation has won new contracts in South East Asia and China with Rimbun Air, My Indo and Raya Air. A new three-year contract with Indonesian cargo and regional passenger airline Rimbun Air will see Menzies handle up to six daily cargo flights for the airline’s two 737-300F aircraft at Soekarno-Hatta International Airport (CGK). The win will add 40 flights per week to Menzies’ Jakarta ground services operations. Also at CGK, Malaysian cargo carrier Raya Air has selected Menzies to support its operations, starting with four weekly flights. Menzies has also won new business with My Indo Airlines, providing freighter, ramp and cargo services to the airline at Macau International Airport (MFM). Under the initial two-year contract, Menzies will handle an estimated 2,000 tonnes of cargo per year. The win reflects Menzies’ longstanding relationship with the airport, where it has been operating since 2000. These contract wins follow the appointment of James Wong as senior vice president South East Asia and China. While this is a new role in Menzies, he has been with the business since 2019 in a variety of roles in the Americas region, most recently as the vice president cargo and sales North America. Wong is focussing on developing new business throughout South East Asia and China as part of Menzies’ strategic growth plan. Raymond Lo has been reappointed to the role of Menzies Aviation Macau managing director. Alistair Reid, executive vice president – Oceania and South East Asia, Menzies Aviation, said: “We are pleased to announce our recent contract wins alongside the appointment of James Wong as SVP South East Asia and China. It’s great to see he is already strengthening our existing relationships and developing new partnerships. “I am looking forward to working with him to develop our operations as the region continues to emerge from the pandemic and the associated travel restrictions.
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PHARMACEUTICALS
PLANNING FOR THE PHARMA LOGISTICS PEAK SEASON SHOULD START NO
“Shippers are moving to air freight but capacity is down. Yet pharmaceutical firms need more air capacity than ever to move vaccines and other drugs”
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nvirotainer chief operating officer, Niklas Adamsson, says that planning for the pharma rush in the final quarter of the year can never start too soon. In the peak season between Black Friday and Christmas, demand for all types of global logistics is huge. But there are goods that cannot be delayed – such as life-saving medical treatments. Getting them to patients and practitioners can be life-or-death. Furthermore, the explosion in temperature-sensitive biopharmaceuticals requires a robust cold chain that cannot fail in the face of peak season demands. So planning needs to start now. Every year, we’re warned the next peak will be even bigger and every year this has been proven to be correct. As the economy keeps growing, peak keeps getting higher as more goods flow through all parts of the global supply chain – air, sea and truck. You might be forgiven for thinking global GDP had stalled, but it grew to $94,935 billion in 2021, up from $87,390 billion in 2019 – despite the pandemic . In 2022 GDP is forecast at $102,404 billion, although this may be affected by Ukraine. For now, however, it’s safe to assume demand for logistics will keep going up. Normally, capacity creeps up to meet demand, but the pandemic has reversed the trend. Analysts say disruption and shortages are set to continue well into 2022. Air freight – a mainstay of cold chain logistics – has been impacted badly and there is now a significant squeeze on space as lockdowns hit passenger flights, which accounted for 47% of global air freight prior to the pandemic. At the start of 2022, global airline capacity was still 27.7% behind the same period in 2019 and while it is likely to be 50% higher in 2022 than 2021, there will be less space for cargo than there used to be. Shippers that usually use sea are also opting for air freight due to the logjams in ocean shipping, which puts even greater pressure on those sectors that usually rely on air freight, such as pharmaceuticals.
The challenges While pharmaceutical firms battle to hold onto the air freight capacity they’re used to, they face the added pressure of continuing to deliver the vaccine airlift with 40% of the globe having not received even a single dose . While 60% of the world has received at least one vaccine , this is predominantly in developed nations. Vaccination rates in the western economies, often the countries where the vaccine is manufactured. are high and some of the logistics burden has been taken by road and rail. But Nigeria has just 6.5% of its population vaccinated with a sin-
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gle dose and there are no manufacturing sites in the country. To get vaccines there, it needs to be flown. The hardest part of the airlift is still to come. Added to this is the ever-growing use of other temperature-sensitive pharmaceuticals and biomedicines, such as insulin for those with diabetes, which shot up from 108 million doses in 1980 to 422 million in 2014 and is still growing . What’s more, the traditional peak season will be less focussed on the end-of-year crescendo. It will remain at fever pitch throughout 2022 with mini peaks as vaccine surges take place. We saw this in late 2021 when developed nations rushed to introduce boosters in the face of omicron. Shippers are moving to air freight but capacity is down. Yet pharmaceutical firms need more air capacity than ever to move vaccines and other drugs. It makes planning for peak – and the bumpy ride as we approach it – crucial. How do pharmaceutical companies respond to such a tough situation?
What action is needed? Trying times like this call for innovation. One solution has been smarter ways to manage cold-chain logistics, cutting out as much waste as possible with triangular shipping methods. This allows far greater levels of direct delivery, reducing unnecessary trips. But this on its own isn’t enough. The sector needs to maximise every single cubic metre of air freight space. This calls for highly efficient cold chain packing that can protect cargo while reducing wasted capacity. Often, manufacturers pack their products in a “passive” container, a giant cool box with insulation and cool packs, often using dry ice. They’re bulky and take up space. If there’s a delay, they will eventually be unable to maintain temperature. Companies have therefore turned to temperature-controlled containers. These are rechargeable and reusable units that move around the globe, like high-tech shipping containers. With an 11hour charge, some can maintain internal temperatures for over a week. The significant benefit of a temperature-controlled container is that they can squeeze more pharmaceuticals into a plane - up to 35% more in some cases, a crucial factor when capacity is limited. It eases the pressure on the system and reduces costs. What’s more, the larger the container, the bigger the payload. They also cut the likelihood of shipments being lost to a temperature deviation. According to an IATA study from 2019, up to 25% of vaccines have been degraded by the time they arrive, potentially requiring consignments to be scrapped and new sup-
FEATURE nerships rather than procurement departments.
Planning now will pay off in the future
NOW
It’s clear that the peak – and most of 2022 – will be challenging for pharmaceutical shippers, forwarders and the air cargo industry. But making slight changes – such as choosing the right packaging – can make it easier. Temperature-controlled containers instantly increase payload. At the moment, there is no other way to achieve such a colossal growth in capacity while improving outcomes and reducing total landed cost. Now is the time for the industry to act because there are few other options allowing it to live up to the huge expectations placed upon it. Medicines are needed around the globe – and they must be delivered regardless of the extraordinary pressures all stakeholders face. Planning and partnership can never start too soon.
plies flown out. Temperature-controlled containers can slash this. Just 0.06% of all such shipments suffer from temperature excursions.
What to look for in temperature-controlled containers Once a pharmaceutical company has decided on a temperature-controlled solution, there are a few key factors to keep in mind. Firstly, to maximise payload per container, choose the biggest on the market. As the dimensions of the box get bigger, the internal payload space increases significantly, without needing additional layers of insulation. Secondly, consider functionality. As pointed out above, 25% of vaccines have been degraded by the time they arrive at their destination. To minimise this to nearly zero, look for solutions that offer consistent temperature throughout, with no hot or cold spots. This ensures cargo will be protected independent of size, mass or position inside the container. Also consider live data, allowing continuous tracking of a shipment as well as the status of its cargo. Finally, flexibility. Containers must be as autonomous as possible. If a flight is delayed, or a container ends up sitting on the tarmac, it requires as much charge as possible to ensure the contents remains safe. It’s also worth remembering that containers themselves can be in limited supply. It’s worth weighing up options and going for suppliers with the largest fleets so there’s always availability – even if that means a mix-and-match approach where diverse types of large containers are available. With such high demand for containers, a slightly different approach to purchasing may also be called for, driven by part-
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