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The weekly newspaper for air cargo professionals Volume: 20
Issue: 23
12 June 2017
IATA pledges to accelerate air cargo modernisation
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he International Air Transport Association (IATA) adopted a resolution to accelerate modernisation and transformation of the air cargo industry at its 73rd Annual General Meeting in Cancun, Mexico last week. The resolution calls on industry to “take a customer-centric approach to transformation to meet the evolving needs of shippers” and urged industry to adopt four points. Firstly, conclude the digitisation of the supply chain to allow information to be shared instantly to improve efficiency and simplify processes. Secondly, adopt modern and harmonised standards that facilitate safe, secure and efficient operations, particularly for dangerous goods.
Thirdly, use enhanced technology to provide customers with responsive services based on intelligent systems able to self monitor, send real-time alerts and respond to deviation. Lastly, harness the power of data to drive efficient and effective industry quality improvements. The resolution builds on momentum created by the entry of the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA). IATA director general and chief executive officer, Alexandre de Juniac (pictured) says: “To ensure that air cargo is ready to benefit from the expected $1 trillion boost in trade growth arising from the TFA and the improving global economic environment, we need a major overhaul of industry processes. And there is no time
Delta and Aeromexico tie up agreement
Delta Cargo and Grupo Aeromexico Cargo have signed a cargo joint cooperation agreement to improve cargo operations between the US and Mexico. The agreement will allow customers to work with either carrier to transport cargo across a broad network of flights and joint trucking operations, and developments are underway to integrate technologies and create a seamless experience to customers. Aeromexico and Delta have co-located warehouses in Mexico, Boston, New York
JFK, Miami, San Francisco and Chicago, with Orlando and Detroit opening in the summer, and the two companies will be able to implement joint sales and marketing initiatives in both countries. Delta Cargo president and senior vice president for airport customer service, Gareth Joyce says: “By working together on the cargo side we can really provide a seamless logistics experience in the US and Mexico. This enables us to bring faster, more reliable and flexible solutions to our customers in the US, Mexico, and beyond those borders globally.” Aeromexico Cargo chief executive officer, Rafael Figueroa says: “Aeromexico and Delta as partners have the largest, most comprehensive and expanding air cargo network in the US-Mexico market. Now by delivering outstanding quality service and innovative commercial and logistics solutions, we will definitely bring extensive value to the industry and to our customers.”
to lose; our customers already expect the efficiency of electronic documentation.” IATA calls on world governments to: rapidly implement the TFA so the benefits such as harmonised rules for expediting the movement, release and clearance of goods crossing borders and the acceptance of e-payments and electronic documentation can be realised; developing smart regulations that not only improve the safety and security of the air cargo supply chain but also facilitates the efficient transport of goods. Global airfreight growth slowed in April but freight tonne kilometres still rose by 8.5 per cent, well above the five year average, IATA data shows. The April figure is down on the 13.4 per cent growth seen in March but well above the 3.5 per cent five year average. IATA says business confidence indicators remain upbeat, suggesting growth will remain robust for the second quarter. De Juniac says: “Demand eased in April. Growth rates, however, are still much more robust than anything we have seen in the last six years. That’s good news, but it should not be taken as a message that all is well in air cargo.” He says modernisation is too slow but eAWB utilisation topped 50 per cent in April.
Key role for Kim
A-Z Group Limited, publishers of Air Cargo Week, has promoted Kim Smith to the key senior management role of director of operations. A-Z Group director Norman Bamford says: “This is an entirely new position which reflects the company’s growth in a variety of areas, especially major new industry events and the expansion of our digital media offerings. “Kim has been with us for over 16 years in a number of important positions and is therefore very well qualified to take overall control of the Group’s operations as we develop our growing range of products and services for the air cargo sector in the future.” Email kim.smith@azurainternational.com
60 seconds with franz-josef leuchter momentum returning after low prices
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new freighter services the aim for billund
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new afklmp inititaive for sme segment
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Gulf row leads to flight suspensions AIRLINES have suspended routes to and from Qatar after a diplomatic row, which is set to have an effect on air cargo in the Middle East. The moves came after Saudi Arabia, the United Arab Emirates, Egypt and Bahrain cut off diplomatic ties with Qatar and broke off transport links. Saudi has also closed its land border with Qatar. The Arab states have accused their neighbor of supporting terrorism and destabilising the region. Qatar says the claims are “unjustified” and “baseless.” The two main air routes in and out of Qatar are over Saudi Arabia and Bahrain with the latter controlling most of the Gulf airspace. Qatar Airways has suspended 50 flights a day to Saudi Arabia, Egypt, Bahrain and the United Arab Emirates - until further notice. Emirates, flydubai and Etihad Airways suspended all flights on 6 June to and from Doha while Air Arabia, suspended flights on the same day. Saudi Arabian Airlines cancelled all flights to Qatar from 5 June. Gulf Air suspended its daily service between Manama and Doha until further notice. EgyptAir halted all flights between Egypt and Qatar. Saudi Arabia also cancelled Qatar Airways’ license in the kingdom and shut down its offices within 48 hours.
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NEWSWEEK
New express freighter service launched by MASkargo
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AB Kargo Sdn Bhd (MASkargo) launched a new express freighter service from Kuala Lumpur to Kota Kinabalu and Kuching on 6 June – to meet demand in the growing cross-border e-commerce sector. The new service flies from its home base at Kuala Lumpur International Airport (KLIA) to the two cities in East Malaysia, on the island of Borneo, using its A330-200 Freighter aircraft, five times weekly. Besides carrying general cargo, the new service is designed to cater to the growing e-commerce and courier business demand between East and West Malaysia. MASkargo chief executive officer, Ahmad Luqman Mohd Azmi says: “As the Asian cross-border e-commerce is booming, MASkargo is poised to tap into this market given the world class warehouse facilities we operate and our vast belly and freighter network. “This express freighter service to East Malaysia is timely as we intend to position KLIA to be a major e-commerce hub in the region.”
Recently, Malaysian PM Datuk Seri Najib Tun Razak announced the introduction of the world’s first Digital Free Trade Zone; and the air cargo carrier is set to support the nation’s aspiration. Flights are scheduled to depart early in the morning, allowing shipments to arrive and be processed before noon. The inaugural flight MH6164 to Kota Kinabalu departed KLIA at 06.00h, while MH6114 departed for Kuching at 06.20h carrying 30 tonnes of express cargo each.
Qatar freighter lands at LHR
HEATHROW Airport has welcomed the first freighter flight operated by Qatar Airways Cargo. The Airbus A330 Freighter landed on 3 June and will depart weekly from Doha on Saturdays returning via Basel, bringing the carrier’s total cargo capacity out of the UK to 1,500 tonnes a week. Qatar Airways Cargo also operates freighters to London Stansted Airport and transports cargo on passenger flights to and from Birmingham, Edinburgh, Heathrow and Manchester. Qatar Airways chief officer cargo, Ulrich Ogiermann says it is the sixth new freighter destination for 2017 and boosts bellyhold capacity available on 72 passenger flights to the UK every week.” The flights will service UK industries including electronics and telecoms, vehicles and automotive, engineering, information technology, pharmaceuticals, biotech and health, and perishables. Qatar Airways Cargo has launched new freighters to the Americas and Asia with Buenos Aires, Sao Paulo, Quito, Miami and Phnom Penh flights, and increased frequencies to Brussels, Basel and Hong Kong.
Atlas to operate 747 for Yangtze
ATLAS Air Worldwide has announced the ACMI placement of a Boeing 747-400 Freighter with Yangtze River Airlines – a subsidiary of the HNA Group in China. The 747-400F will be operated by Atlas Air, and will fly on behalf of Yangtze River Airlines through an ACMI agreement. It will commence this month and serve routes between China and the US. Atlas Air Worldwide president and chief executive officer, William J. Flynn says: “Yangtze River Airlines is a leading Chinese carrier with a strong ambition to expand its operation. We are delighted to work with Yangtze River Airlines to support its growth plans. This agreement is a further testament to our keen focus and continued expansion in the fast-growing Chinese and Asian markets.” Yangtze River Airlines president of cargo business units, Jevey Zhang adds: “It’s our pleasure to build a longterm cooperation between Yangtze River and Atlas Air, and it’s a great beginning of HNA Modern Logistics Group launching its global strategy.”
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NEWSWEEK AirBridgeCargo profits rise 17% and joins Amsterdam pharma initiative
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irBridgeCargo Airlines (ABC) has got off to a strong start in 2017 with 17 per cent year-on-year growth in the first quarter to 158,000 tonnes. The airline has registered 13 years of consecutive growth since its launch in 2004, and welcomed its 10th Boeing 747-8 Freighter in March, bringing the total fleet of 747s to 17 aircraft. Asian tonnage grew 19 per cent, and ABC has consistently developed its network in the region, most recently with flights to Taipei in April, in addition to flights to and from Tokyo, Seoul, Singapore, Hanoi, Taipei, Phnom Penh, Hong Kong, Shanghai, Beijing, Chengdu, Chongqing and Zhengzhou. High demand for exports from Europe enabled ABC tonnage from the region to grow 22 per cent, notably to Asia, which was up 24 per cent, while North America remained strong, with up to 30 flights a week to Atlanta, Chicago, Dallas, Houston, Los Angeles and Seattle. Special products saw high growth, with pharmaceutical shipments increasing 70 per cent and off-size cargo by 15 per cent.
ABC general director, Sergey Lazarev says: “We will continue to stay in close contact with our customers to provide the network services and product solutions they require, and this will be supported by further growth of our fleet and more focus on carrying special cargoes.” And ABC Airlines has joined Pharma Gateway Amsterdam (PGA), the second airline to join the 14-member pharma initiative.
The carrier operates 22 flights per week from Amsterdam to significant pharma destinations in Europe, Asia, and the United States, including Moscow, Chicago, Shanghai, and Singapore. ABC is already IATA Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma) certified, which is one of the requirements for all PGA members. Amsterdam Airport Schiphol head of cargo, Jonas van Stekelenburg (pictured left) says: “We look forward to the input AirBridgeCargo Airlines will bring as our second carrier member. Since launching the initiative just over 12 months ago, the tangible results across the entire pharma supply chain at Schiphol have been very satisfying to see.” PGA was formed in March 2016 to provide transparency and quality within the Pharma air cargo supply chain. Members benefit from regular knowledge sharing sessions, organised by Schiphol Cargo to facilitate co-operations between the different players in the cool chain. Schiphol Cargo also provides members with support in working toward their CEIV Certification.
Etihad and RAM sign cargo MoU
Royal Air Maroc and Etihad Airways signed a memorandum of understanding (MoU) to develop cooperation over cargo activities on 29 May in Casablanca. The signing was penned by Royal Air Maroc chairman and chief executive officer, Abdelhamid Addou, Etihad Airways senior vice president cargo of David Kerr, and Royal Air Maroc cargo manager, Amine El Farissi. Royal Air Maroc Cargo offers a freight transport service throughout the Royal Air Maroc network, to about destinations 100, but also cargo flights that serve Europe daily and some African cities from their Casablanca hub. The carrier says to reinforce its network, its capacities and to have access to new markets, Royal Air Maroc Cargo is partnering with Etihad Airways Cargo and the networks of both are complementary and allow the
development of commercial synergies. RAM Cargo carries daily cargo from Abu Dhabi to the Americas via Casablanca. Royal Air Maroc has a fleet of 56 aircraft consisting of six Boeing 737-700s, 30 737-800s, one Boeing 747-400, four Boeing 767-300ERs, five Boeing 787-8s, four Embraer E190s, five ATR 72-600s and one Boeing 737-300 Freighter.
New CEO at DHL Global Forwarding
Tim Scharwath (pictured) has joined the Deutsche Post DHL Group board of management as the chief executive officer (CEO) of DHL Global Forwarding - Freight. He previously headed up the airfreight business at Kuehne + Nagel International (K+N), and takes over from Group CEO, Frank Appel, who managed the function in the interim. Scharwath has over 20 years of experience in the logistics industry, holding several positions at K+N, including management of global airfreight and sales organisation, the integration of acquired companies, and steering it to become the number two air forwarder globally. Scharwath says: “I am enthusiastically looking forward to joining Deutsche Post DHL
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Group at a time of significant opportunity. As we build a strong foundation for DHL Global Forwarding, Freight, I want to reinforce our core business model, lead a strong and proud organisation and enhance sustainable customer value.” Appel says: “As a real expert in the freight forwarding world, I am certain that Tim is prepared for his new responsibilities and is the right choice to realise the ambitious goals we have for the DHL Global Forwarding, Freight division.”
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60 SECONDS
Seconds with
Franz-Josef Leuchter Topsystem Systemhaus has developed a new cargo system called ECHOS (electronic cargo handling and operations system) and showcased it at air cargo europe last month. Chief executive officer, Franz-Josef Leuchter explained to Air Cargo Week about ECHOS and the industry’s need to update cargo applications.
Justin Burns, ACW: Tell me about your new ECHOS (electronic cargo handling and operations system)? Leuchter: We have developed ECHOS as an extension of our ground handling system (GHS). The request came through a client who worked for many years with GHS. The features we implemented for this customer were then tested.
Justin Burns, ACW: What are the unique features of ECHOS? Leuchter: Our goal is a paperless workflow in the warehouse area and a seamless interface to all connected systems. Data is exchanged electronically and, instead of on a piece of paper, captured via mobile applications. Key feature is, similar to the ground handling system, the multi-station capability of the software. If a customer operates several warehouses or, as they are better known - cargo processing areas, the software is installed only once and can be used simultaneously on each station. The functions also include a number of mobile dialogues, which can run on a variety of mobile devices.
ensure a qualified project management for each new and existing customer. For this reason, we have founded a community where we bring interested parties for ECHOS under one roof and inform them about new developments.
Justin Burns, ACW: Do handling systems need updating? Leuchter: We have found the majority of the cargo applications on the market are either proprietary, or already very old. The need
Franz-Josef Leuchter of a modern replacement is obvious. At the moment, we are only seeing the tip of the iceberg in the conversations we are having with potential customers. Large cargo handlers are not flexible in choosing IT solutions and not part of the potential customer base of topsystem for the moment. However, sufficient small and medium-sized cargo handlers for which the functional scope of ECHOS is already more than adequate. They offer potential for implementation of new ideas and development of the product.
Justin Burns, ACW: Is it used just for air cargo? Leuchter: The core of the system covers the processes in a cargo warehouse. However, we think outside of the box and want to also connect freight forwarders and airlines. The system is networkoriented. Depending on how developments such as e-freight or Cargo iQ evolve, we will provide solutions to support these standards as well. A major difficulty is freight forwarders use a variety of different systems. They store a wide range of data in electronic form, but cannot distribute or share it, due to the lack of standards. Justin Burns, ACW: Does it feature the latest technology? Leuchter: We deploy web applications that run on devices of all types, and require only a browser. We also use a high-performance database, the license for which is free of charge. On mobile devices we can run our applications regardless of the platform. We are not bound to manufacturers and use PDAs, tablets, or mini-tablets. In short, any kind of mobile device, capable of running a web application can be used.
Justin Burns, ACW: How will ECHOS improve processes? Leuchter: There is a lot of manual work associated with the build-up and break-down of ULDs, document handling and with the comparison of documents and physical goods. Productivity can be increased by automating these processes. Our considerations go even as far as warehouse robots for ULD handling. Our processes fully support the concept of a cargo processing area (CPA) - shipments and goods are not stored, but moved from the delivery on the landside to the airside and vice versa. Process improvement can also be achieved through an optimal employee deployment, calculated depending on the amount of cargo to be handled at any given moment. For this purpose, we have developed a resource-planning tool, which evaluates storage, process and shipment data and optimises the deployment of staff. The database includes extensive process data, as we document each movement of any given shipment within the CPA. We can determine so-called KPIs, which provide feedback on the optimisation of processes and contribute to the better overall performance of the system. We provide a billing system from our GHS which leads to an increase in efficiency. Justin Burns, ACW: Have you had good interest in ECHOS? Leuchter: We have found there are many proprietary systems, some 15 or 20 years old being shown repeatedly. We have also found manufacturers of systems no longer plan to invest in the future of their cargo solutions. We have met a large number of customers who are interested in the replacement of their existing airfreight handling software and are intensively involved with ECHOS. The interest is so great we cannot pursue all projects to
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CHINA
Innovation improving but more needs to be done
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hina’s central government has done well in adopting the needed policy and legislative framework to enable air cargo but some areas still need to be tackled although innovation by companies is seeing the sector power ahead. Beijing has ratified the relevant international conventions needed to enable electronic air waybill (eAWB) and support development of the air cargo industry. However, gaps remain in implementation and deployment of much-needed customs capabilities. To measure effectiveness of customs and border processes the International Air Transport Association (IATA) developed several measures, including the Air Trade Facilitation Index which China ranks 61st out of 124. “China’s ranking is held back by lower performance of its customs capabilities despite having a good central government policy framework in place. In China, eAWB penetration and eFreight usage has increased significantly but scope for greater uptake in electronic processing remains, especially outside the main gateway hubs,” an IATA official who asked not to be named tells Air Cargo Week. Whilst China is in pole position in terms of e-commerce (see other story) trade flows by air to and from China are dominated by the shipment of electronics and non-electrical machinery. However, increasingly food products and chemicals (including pharmaceuticals) are contributing an increasing share of the inflows to China. IATA’s data highlights the continued prominence of electronics and non-electrical machinery in the trade carried by air. China’s main gateways have unlocked this potential, with e-freight enabled at airports such as Shanghai Pudong International Airport, Guangzhou Baiyun International Airport and Beijing Capital International Airport. The problem is not in the Big Three but elsewhere as “cargo facilities and customs capabilities across most airports lack the
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ability to handle full paperless processes and deliver on the seamless flow of goods that is essential for integrating into global value chains,” the IATA official notes. China could help itself further by fewer customs restriction on transferring shipments and increased intermodal connectivity, particularly with the ability to move cargo by road feeder service, it added. That said some Chinese firms are being innovative, highly so, to get round this. Special mention must go to JD.com for its head-on approach to problem solving and engagement with new technology.
Innovation for the future
JD.com, China’s largest retailer, online or offline, has done a deal the Shaanxi’s provincial government to build China’s largest low-altitude drone logistics network, the company said in a statement. A drone network solves many of these problems. Other companies are into this as well but the scale of what JD.com is doing is a striking example of what is effectively going to be the future. Within a 300 kilometre radius, the network will include hundreds of routes and drone air bases throughout the entire province for e-commerce shipments. It is a huge step up from branded vans and scooters but maybe not as chic as JD.com’s white glove service. This is just the beginning as the plan is for heavy load drones
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which would be able to carry as much as a ton. This would allow the transport high-quality products to remote areas and bring agricultural products to the cities, the company said in a statement. “JD.com will be the first in the world to test drone delivery on this scale. We envision a network that will be able to efficiently transport goods between cities, and even between provinces, in the future,” Wang Zhenhui, CEO of the newly-formed JD Logistics says in a statement. Not for nothing does Wang refer to the move as “a milestone not only for JD, but for the entire transportation industry.”
Research and development
Other firsts include a research and development campus in partnership with the Xi’an National Civil Aerospace Industrial Base (XCAIB), where unmanned systems will be developed, manufactured and tested. This will be the first of its kind in China, and will include a global headquarters for JD Logistics, a center for unmanned systems, and a facility for JD’s cloud computing and big data operations. Nor is JD.com alone in this and again the scale and the innovation of it is stunning. Cainiao Network, Alibaba’s data-driven logistics affiliate, is to partner with Chinese carmakers including SAIC Motor and Dongfeng Motor, to manufacture one million green-energy delivery vehicles equipped with Cainiao’s AI technology. The issue is not so much the one million figure but the adaption of those vehicles to the new, big-data way of doing things The carmakers will reduce electric delivery vans equipped with computer hardware and software based on Cainiao’s advanced big data and algorithms, providing drivers with optimal delivery routes based on real-time traffic and order information, company president Wan Lin said via the Alibaba website. Cainiao’s route-planning system uses location information and AI, and drivers can interact with the software through voice recognition technology. During a recent test of the system in Shenzhen in April, the technology cut vehicle use by 10 per cent and travel distances by 30 per cent, reducing energy consumption, operational costs and air pollution, the site added. Rapid growth is expected to continue. “In the next five to eight years, the number of parcels in China may surge to one billion per day,” says Alibaba Group executive chairman, Jack Ma. The innovation seem so far just might be the beginning of a major realignment of China’s air cargo industry.
CHINA
E-commerce driving air cargo and logistics growth in China
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n China’s booming air cargo industry there are two strong trends which are driving growth and expansion of operators: one is e-commerce, the other is cross-border trading. On the e-commerce side there can be no doubting the importance of this to airfreight as increasingly affluent consumers buy more, helped by new platforms and a push by the government, which in turn is fuelling the need for fast and efficienct logistics services. “China is already the largest online retail market in the world with GMV (gross merchandise value) surpassed the sum of US and Europe market by end of 2015, not to mention large online shopper base over 460 million with average annual online spending (of approximately) 10,000 RMB, ($1470),” says McKinsey & Company partner, Chenan Xia. That is a retail e-commerce market worth RMB 6,500 billion ($955 million) in 2018, Xia adds. If that is hard to visualise, a better way comes from Alibaba, China’s main e-commerce company reports 80 million parcels are moved a day in China, making for an annual total of 31.3 billion. One of the discernible trends within e-commerce is the rise of cross-border trade as mainland consumers, for a number of reasons, go for imported rather than local goods. “11.7 per cent of online e-commerce will be for cross-border retail e-commerce, at 758 billion RMB (2018),” Xia notes. That’s a big leap from an estimated 259 billion RMB ($40 billion) in 2015 when it was more than six per cent of China’s total consumer e-commerce, meaning growth of 50 per cent annually, global management consultancy firm McKinsey says.
Not surprisingly everyone wants a piece of the pie. China’s major e-commerce site, Alibaba’s Tmall, has moved into the market with a cross-border site Tmall Global, as have smaller consumer rivals and start-ups, while Amazon is increasingly active in China, it added pointing to Amazon.cn, Tmall Global’s links with American Costco and South Korea’s Lotte Mart. What drives this is a number of factors. Chinese middle and upper-middle-class consumers are keen for foreign clothing, health products and gadgets not available in China. Foreign still has some cachet to Chinese consumers. Overseas sites are also thought to be better at filtering out fakes.
Government policy has boosted the sector. Personal use items, and its large list, have a very favourable postal duty of between 10 per cent and 50 per cent, sometimes half of normal duties. On top of that duties of less than RMB 50 are waived. Eight cities, Shanghai, Chongqing, Hangzhou, Ningbo, Zhengzhou, Guangzhou, Shenzhen and Tianjin have established free trade zones, says the Fung Business Intelligence Centre. Cross-border e-commerce importers can also use free trade zones in other approved cities, it adds, among them Fujian, Nanjing, Qingdao, Pingtan and Yantai. This could be a barrier, maybe a significant one in years to come according to McKinsey’s Xia who flags limited players in cross e-commerce value chain, inconvenient tax claim process for the customers and not enough transparency in product quality check and control from the customer side. But the onus according to the Fung Business Information Centre lies with the government. “Our experts urge the government to further strengthen the supervision of product quality, stream line procedures, act against tax evasion and expand the number of pilot cities authorised to carry out cross-border e-commerce import business,” the centre says in its report.
China a key focus for Turkish TURKISH Cargo is looking to add services to Shanghai and Guangzhou and in the first quarter saw growth of 30 per cent to China. The carrier says China is a dynamic market and one of the biggest trade partners of Turkey. In 2016, export airfreight volume from Turkey increased around 25 per cent. Turkish now serves Shanghai, Beijing, and Guangzhou with daily Boeing 777-300ER passenger aircraft. On top of belly flights, it operates six times a week freighters to Shanghai and four times a week freighters to Guangzhou using Airbus 330 Freighers. Regional manager for the Far East, Huseyin Ceyhan says: “In order to boost this positive trend, Turkey has been investing heavily in infrastructure in recent years. One of the biggest projects, Istanbul New Airport, that is scheduled to be completed in 2018, will be the largest airport in Europe. In the first phase, Turkish Airlines would increase its cargo capacity by almost 40 per cent where we believe we will soon fully utilise thanks to our strategic advantage.” Ceyhan says for Turkish Cargo’s global strategy, e-commerce has became an important business segment and there is major growth of e-commerce from China, which offers great opportunity to air cargo. “Besides e-commerce shipments, pharmaceuticals is the other booming segment for Turkish Cargo. We received CEIV certification from IATA last year. In Turkish Airlines’ strategic hub, Istanbul, the new cargo terminal with special storage area can fullfill every special demand from customers,” he adds. Ceyhan explains: “Turkish Cargo experienced a remarkable growth in freight volume of e-commerce shipments in 2016 compared to 2015. In order to cater the booming demand of parcel and express shipment, we plan to add new freighter frequency to the major cites in China – Shanghai and Guangzhou.” China is key focus for Turkish moving forward. “China is the key manufacturing plant for many multinational companies and we also see some Chinese corporations start to invest in Turkey. In that regard, China is the globally logistics powerhouse also one of the greatest trade partners for Turkey,” says Ceyhan. He adds: “China is the biggest exporting country within international trade and plays an important role in exports of high technology products or machinery worldwide. In parallel, with the growth of China’s middle and upper income group together with booming e-commerce demand, there is also a big drive on import services.”
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OIL & GAS
O&G focus as Copperchase upgrades facilities in Najaf
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ajaf Airport is to have its cargo facilities upgraded with the sole cargo handling contract going to Copperchase Iraq, managing the business under the brand “Pegasus Cargo”. The multi-million dollar investment by Copperchase includes a new cargo terminal, freighter-parking apron and fully equipped ground handling capabilities. The capabilities and services provided by Pegasus at Najaf (city pictured right) serve the time-sensitive oil and gas market in the South of Iraq, industries within the region, plus companies in and around Baghdad. Cargo operations director, Rob Smith says: “With up to fifty passenger flights daily through Najaf the import quantity is increasing notably since Pegasus commenced operations. “The ability to handle scheduled freighter services marks a turning point for the airport and
we are in the final stages of negotiations with a carrier that is keen to commence scheduled services.” Speaking to Air Cargo Week, Smith says business has been increasing steadily as importers, forwarders and airlines have become accustomed to improved facilities and clearance times, and he expects continued growth with scheduled freighter services. He feels customers benefit from using Najaf, saying: “Compared to other airports there is much less congestion; reliable and effective clearance procedures; zero pilferage or damage to-date; We are generally able to count the time from aircraft arrival to freight cleared and delivered in hours rather than days.” Smith admits Iraq faces challenges as it evolves and stabilises, especially for conventional road transport and facilities at established airports, but says: “Security at Najaf is significantly bet-
ter than other locations and we benefit from an excellent geographical advantage in this respect. We receive commendable commitment from the
airport authority, freight forwarders and governmental agencies to support our initiatives and expansion plans.”
ACS squeezes shipment into Ilyushin
Air Charter Service (ACS) arranged the shipment of two high cube containers for the oil and gas industry, fitting them into an Ilyushin IL-76 with centimetres to spare. The containers were being transported from Italy to Saudi Arabia with vital oil and gas industry materials inside, and due to the size, the client had originally requested an Antonov AN-124. ACS Group cargo director, Dan Morgan-Ev-
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ans (pictured) says weeks of planning went into the operating, saying: “As can be seen from the photos, the high cube containers only just fitted into the Ilyushin IL-76, with a clearance of less than 10 centimetres with the doors open. “The client originally requested an AN124, as the cargo was three metres high, but after lengthy negotiations with them and the operator, as well as detailed diagrams, we were able to arrange the loading into the aircraft, saving the client a significant amount of money.” He adds: “We are highly experienced with heavy and outsized cargo, but it is rare for the freight to be quite such a tight fit!”
OIL & GAS
Momentum returning following low prices and volatility
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fter a slow couple of years due to oil price volatility, enquiry levels have risen in 2017 and Volga-Dnepr Group global director for oil and gas, Fayçal Boumerkhoufa (pictured below) says momentum will return in 2018. He says falling and volatile oil prices have resulted in numerous large scale projects being postponed in the upstream segment over the past few years. Volga-Dnepr has been receiving an increasing number of enquiries, which he expects to continue throughout 2017 and the timeline for 2018 looking good. Boumerkhoufa says: “As of yet the demand for our services is exceeding the forecast. The requirement is mainly driven by emergency transport and solution requirements.” Volga-Dnepr has been providing transport solutions for the oil & gas industry for over 26 years, and Boumerkhoufa says it has experienced the market highs and lows alongside its customers. He comments: “We expect to see more room for financial recovery in the Oil & Gas industry during 2018 and have already been engaged by some key players and project forwarders in a consultative manner in relation to several projects which are close to a Final Investment Decision (FID) between now and the beginning of 2018.” Boumerkhoufa explains the Group’s approach is that improvement in the oil & gas segment reflects developments in other verticals. He says: “The Group has always been an expert in recognising and assessing the opportunities, trends and tendencies related directly and indirectly to the Oil & Gas/Energy sector. The need for heavy machinery for infrastructure projects is a good example.”
Cargo Supermarket
Working in the oil & gas industry always results in interesting shipments, including supporting a major project forwarder delivering vital equipment for a liquefied natural gas production plant on the Yamal Peninsula in Northwest Siberia, which Boumerkhoufa says has been the perfect opportunity to demonstrate the value of Volga-Dnepr’s Cargo Supermarket service. He says: “Volga-Dnepr Group has operated a series of An-124100 and IL-76TD-90VD charter flights, combined with scheduled Boeing 747 freighter operations through our sister airline, AirBridgeCargo (ABC) out of Europe and the Asia Pacific region.” Recent flights have included an Ilyushin IL-76TD-90VD out of Liege, Belgium and an Antonov An-124100 out of Dalian, China destined for the plant in Sabetta, Russia. Boumerkhoufa adds: “Since the start of our work for this project we have also operated IL-76TD-90VD flights from Frankfurt-Hahn Airport to Sabetta and utilised. AirBridgeCargo’s scheduled 747 freighter services from Singapore to Frankfurt and from Shanghai Pudong Airport to Amsterdam, from where the shipments continued their journey by sea.” He says the majority of cargo destined for the Yamal Peninsula project is delivered by sea but with the winter season affecting ocean freight due to ice, the time-critical shipments carried by Volga-Dnepr and AirBridgeCargo helped support the construction before the severe winter weather slowed down the project. Volga-Dnepr has also had to design and manufacture special loading systems for oil & gas. It developed a unique solution to move a 70-tonne stripping tower for an oil refinery from the US to Iraq (pictured above). Boumerkhoufa explains: “At 38.4m in length it was two metres longer than the cargo hold of our AN-124-100 freighter but our load planning experts found a way to safely carry the tower, meeting all customer requirements.” Looking into the future, Boumerkhoufa says the outlook is positive in spite of the fast changing global geopolitical cycle and change within global economic drivers. Asia, Africa and the Middle East remain of long-term importance, but he also says: “Domestic production in the US and the Gulf also account for a huge proportion of the market potential. “We also view certain areas in South America as viable near future market, though the Latin American market in general has been branded the ‘opportunity of the century’ for the last two decades. Hopefully we will start to see this materialise.”
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SCANDINAVIA
More freighter services being targeted by Billund
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016 was a record year at Danish gateway Billund Airport. Last year, the airport handled 66,500 tonnes, with both imports and exports on the rise and more is set to come. Vice president of cargo, Jan Ditlevsen (pictured) says the momentum from 2016 has continued this year. “It was exciting to see if we could continue growth this year and we have. It has been very positive again in the first five months of 2017.” He says for the period from January to May tonnage is up 8.7 per cent on the same five months last year. “We hope we can reach 70,000 tonnes this year and this is quite realistic. I think the industry is on the up and
we are getting a part of it,” Ditlevsen says. Much of growth has been driven by Turkish Cargo, which added a second Airbus A330 Freighter frequency in November. Ditlevsen says the route is developing week in week out and it is “very satisfied” with services. At present the Far East is the most buoyant trade lane from Billund Airport and Ditlevsen says the airport’s location in the heart of where Danish industry output takes place helps it. Exports are manufacturing goods, machinery, industrial goods, electronics and furniture. Imports are generally electronics and textiles. Express operators like DHL, TNT and UPS also have a substantial footprint at Billund and are growing, while many charter services are also operated, which are both boosting numbers. Bellyhold traffic is also on the up largely again due to Turkish Airlines, which operates five weekly services, but the airport is hindered in
the development of belly tonnage as widebody aircraft operators do not operate at Billund. Ditlevsen explains 65 per cent of tonnage is from road feeder services (RFS) and it is seeing increasing volumes of RFS every month. The dream is to attract more freighters and the main target is a Chinese freighter operator. Ditlevsen says: “Our biggest destination is Shanghai and it would be good to have a direct link to China. We are working hard with airlines on the marketing side to see if we can.” A sector Billund is looking to tap into is e-commerce as the market is on the up in Denmark and Scandinavia too. “The future is e-commerce and we think it will be part of the growth at Billund Airport and it is a big segment and there will be strong growth in the sector. The sky is
the limit for e-commerce,” Ditlevsen explains. Billund has 18,000 square metres of cargo infrastructure and will find more space for e-commerce firms if there is an opportunity. Another sector targeted is pharma and he is sure it will add to its 800 square metres of cool chain storage space: “We expect to make space for pharma in the future and hope this will happen in 2018. It is a must for the future.” He has a clear strategy for the future. Ditlevsen believes it needs to focus on reducing the time cargo is on the ground. “One of our goals is to be very fast with short deadline/turnaround times for cargo and have express cargo handling times. We do not have wait for days to get our freighters in and out and one of the key points customers will look for is speed.”
IMPLEMENTATION of a new cargo management system (CMS) late in 2016 helped stabilise Finnair Cargo in January and 2017 has started well. Head of global sales, Fredrik Wildtgrube says the CMS has driven customer confidence in the right direction. “In addition we have executed our roadmap relentlessly with a clear customer mindset that has further fuelled our overall performance,” he adds. Finnair has seen a good level of demand in various segments, which it says may indicate overall demand is increasing for destinations provided while also service requirement is becoming more important. Wildtgrube says: “We are doing a lot of work in regard to customer experience and want to respond to our customer expectations. We are growing our fleet with new Airbus A350 aircraft and also preparing for our new terminal implementation. All of which are increasing the interest towards Finnair Cargo.” Finnair has been putting a lot of effort into special cargo such as pharma and Wildtgrube believes its service is resonating well with customers and he expects demand to grow. “The markets’ demand consistency is volatile whereby we need to work harder to discover elements of flexibility that allows everyone to be sustainable, while the whole supply chain keeps its promise,” he adds. All sectors are on the up, but the carrier’s Asia origins are doing well, but it has seen
improvements with origins that previously have been difficult and this year it has increased activity. Finnair Cargo’s new COOL Nordic Cargo Hub terminal project is on track and the plan is that it will be fully operational in September this year. Managing director, Janne Tarvainen says: “The terminal and required infrastructure is more or less already in place and our main tasks prior to the opening have to do with system tests and training of the personnel.” Tarvainen says the terminal is one of its “fundamental building blocks” needed to fulfill targets of a “very ambitious” airfreight growth roadmap. “With the COOL terminal and its cutting edge technology and processes combined with sophisticated and modern IT infrastructure we are able to improve speed, quality and transparency of air cargo in a consistent manner. “This means that we’ll have improved tools to make the most of the geographical location of Helsinki Airport offering the fastest connection between Europe and Asia.” He adds: “We have a holistic development roadmap in place beyond opening of the COOL terminal. Several projects listed and decided have to do with customer experience and how we are able to strengthen our customers’ business. Many initiatives also have a tight connection to new technologies and digitalisation connected with efficient processes.”
New Finnair Cargo terminal on track
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ACW 12 june 2017
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NEWSWEEK New AFKLMP initiative focusing on the small and medium customer segment
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ir France-KLM-Martinair Cargo (AFKLMP) is further enhancing its value proposition for small and medium sized customers by introducing a new initiative called ‘What Counts’. The group believes by making smart use of digital and big data it can further improve its customer approach giving it new opportunities to serve customers in an even better way. AFKLMP vice president for Europe, Gertjan Roelands (pictured) explains ‘What Counts’ was rolled in the Netherlands six months ago where it was developed and fine tuned and it has seen high customer appreciation. He says from this month AFKLMP is rolling it out to the rest of Europe starting with Germany, Italy, and the UK with the aim to do the rest of Europe by the end of this year. Roelands says if it works well it potentially has a lot of opportunity to expand it globally, while in the US it is also now looking into the initiative and testing it. But what is ‘What Counts’? Why has
it been introduced? “The development of big data and digital services gives us an opportunity to approach our customers in a different way and especially for silver and ivory – small and medium customers, which are always difficult to serve as they are very specialised. It is a large group with many specialisations so you cannot serve them in a traditional way (account managers etc), but we are now moving to a new way of approaching them,” Roelands says.
A clear picture
He adds: “The new proposition is called ‘What Counts’ as in the name is we wanted to clearly explain we understand what the customer’s specific needs are and we know what they want. “At the same time these customers are very valuable to us and we wanted to give them the right attention and approach them in the right way. The good news is after extensive research is that we have a clear picture of what they need and how they behave.” Roelands says the proposition is CRM based and it is able to target customers based on their own particular needs and as part of ‘What Counts’ proposition it has created different elements. He explains: “The first focus is on servicing and this is done
with a dedicated service desk which we have created in the Netherlands to focus on the small and medium segment. “Secondly, our new digital tools also allow 24/7 to service as well via online and we have also created myCargo, which is the portal where they can do their business to make bookings, quote requests, track & trace, do e-claims, and notify me.
Game-changer
“They (customers) are really in control and our aim is to be an extension of the way our customers do their business and that fits really well and especially the fact they can make bookings 24/7 and get instant booking up to 500 kilos – that is a big gamechanger in the industry because normally it is very traditional and always goes via customer service and emails and making a call and in office hours.” Roelands says with myCargo it is adding new services each quarter, which is done based on customer feedback it receives and to make sure it enhances customer value step by step. Another element of ‘What Counts’ is rewarding loyalty – as all customers will be members of Bluebiz – a passenger SME programme where customers earn credits for airline tickets on AFKLMP, and will also now get credits for cargo booked. These credits can be used to save on travel costs by redeeming blue credits for airline tickets. Roelands adds: “Another important area is we are sending them dedicated offers every week, which is the strength of big data and CRM. If we know for example we have opportunities to New York next week because our flights are not full then we know which customers are specialised there and we address those customers via mailing, saying we have specific offers and refer them to myCargo to make a booking. “And for product specialists we know they are and we can send them specific information to make sure we create value. “Altogether that really makes sure we fully benefit from the new digital solutions and big data, but at the same time still making sure we have the human touch as in large markets we will stay have dedicated sales managers for this segment.”
Singapore expansion for Bollore BOLLORE Logistics Singapore is to invest 10 million Singapore dollars ($7.2 million) in its first automation facility featuring a 12,000 tote multi-shuttle system. The 20,000 square metre facility featuring a 12,000 tote multi-shuttle system from Dematic to increase space efficiency and improve throughput by up to 10 times compared to conventional warehouse methods is supported by the Singapore Economic Development Board and is in partnership with French luxury products group LVMH. Bollore says the facility will bring significant transformation to tackle supply chain operations – from order preparation, inbound to final dispatch of orders, to integrating control checks that ensure greater accuracy. It will allow for higher storage density to make efficient use of limited warehouse space in Singapore, and improve throughput up to 10 times. Bollore says it should be completed in January 2018. Meanwhile, Bollore Logistics Australia became an Australian Trusted Trader under the Australian Economic Operator programme, with benefits including reduced cargo inspections at the border, improved cargo lead time, duty deferral, streamlined reporting and priority trade services. The certification covers all five sites – Brisbane, Darwin, Melbourne, Perth and Sydney.
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