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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. 1,171
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14 MARCH 2022
HAE Group set to embrace the market ...
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INSIDE
MAROM APPOINTED CEO ...
ISRAEL freight forwarder and customs brokerage, Ruth Cargo, has appointed Rami Marom as CEO. He will take up his position at the beginning of March 2022. PAGE 2
GET READY FOR SAN FRANCISCO
QR CARGO AND CAINIAO ...
CAINIAO and Qatar Airways Cargo have partnered to support the growing e-commerce market in South America ... PAGE 2
LATIN AMERICA CARGO CITY ...
MONTEVIDEO Free Airport has unveiled its new Latin America Cargo City (LACC) brand, a new business concept that it says will boost trade in the region. PAGE 4
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rom March 22-25, the global air cargo and logistics industry will meet face-toface at the 2+2 event in San Francisco. A two-day conference programme at the Hyatt Regency Hotel in San Francisco will feature panel discussions, keynotes, workshops, and presentations. In addition to the air cargo sector’s experiences and insights from the pandemic, topics such as digitalisation, sustainability as well as gender diversity and UAV technologies will also be discussed.
The future of the industry will also be addressed: TIACA board chairman Steven Polmans, for example, will moderate a panel discussion on the future direction of the association. The subsequent two-day Innovation Journey gives visitors direct and on-site insights at innovation leaders and up-and-coming Silicon Valley start-ups. The number of exhibitors, speakers, sponsors, and trade visitors is already high and the anticipation is rising among everyone involved. The event was postponed from its original
September 2021 date as a precaution due to the pandemic at the time. The current Covid regulations and the full implementation of applicable protective measures in the state of California allow the event to take place in the usual attendance form. There will be no restrictions on the number of visitors. Since last November, the US has allowed foreign citizens to enter the country if they are fully vaccinated and present a negative Covid-19 test or proof of recovery recognised by the WHO.
URUGUAY’S WISE MOVE ...
Uruguay was the last country in South America to start its Covid-19 vaccine distribution, but thanks to an efficient distribution model, which used ... PAGE 10
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Marom appointed CEO QR Cargo and Cainiao launch China – Brazil of Ruth Cargo ISRAEL freight forwarder and customs brokerage, Ruth Cargo, has appointed Rami Marom as CEO. He took up his position at the beginning of March 2022. Marom has worldwide global management experience and served until recently as the head of global logistics at Elbit Systems. Ruth Cargo owner, Eli Yeheskel, said: “Rami has an impressive track record and rich management experience and I am certain that he will bring with him a new spirit and momentum that will push the company forward. Selecting him puts the emphasis on a man who has the ability and the experience that will be necessary for a CEO who will lead our company in the coming years”.
Teleport joins WebCargo
TELEPORT, the logistics venture of Capital A (formerly AirAsia Group) goes live on WebCargo this month, allowing freight forwarders to take full advantage of increased global air cargo capacity, it says. The move will enable easier and faster digital access to Teleport’s fleet capacity for over 3,000 global freight forwarders around the world. Since 2020, Teleport has built a cargo-only network to key markets in Asia, connecting via its hubs in Kuala Lumpur and Bangkok to cater
for the increasing e-commerce and overall cargo demand. It also offers the extensive belly space on AirAsia passenger flights in Malaysia, Thailand, Indonesia and the Philippines. Teleport’s capacity will initially be available to customers in Malaysia, Singapore, Japan, Australia, Korea, Manila and India before rolling out to WebCargo’s user base later in 2022. With this, over 31% of global cargo capacity will be available for real-time freight pricing and booking on WebCargo.
charter service CAINIAO and Qatar Airways Cargo have partnered to support the growing e-commerce market in South America. The two-year strategic deal sees the launch of a weekly B77X freighter service linking Hong Kong, China and Sao Paolo, Brazil.
future. “With our existing extensive fleet as well as the new order for freighters, we are perfectly placed to serve the current and future e-commerce demand.” Cainiao has been serving Brazil for six years.
The first Cainiao-chartered Boeing 777X will depart Hong Kong Airport on March 5, headed for Guarulhos Airport Sao Paolo, Brazil, via Qatar Airways Cargo’s Doha hub. “We hope to expand our partnership in future as e-commerce between China and Latin America is growing rapidly,” says Dandy Zhang, commercial director of Global line haul, Cainiao’s cross border business. “Over the past few years, especially during the pandemic, e-commerce growth spiralled and Latin America was not immune to this,” explains Guillaume Halleux, chief officer cargo at Qatar Airways. “Latin America has very strong potential where e-commerce traffic is growing fast, so we will see a demand for increased services in
It is one of its most important emerging markets with huge potential for e-commerce. The country is Cainiao’s preferred gateway to Latin America, along with Chile on the West Coast and Mexico in Central America. Zhang says: “We offer cross-border, clearance and last-mile delivery services for AliExpress’ merchants and customers in Brazil. In September 2021, Cainiao’s parcel volume to Brazil surged by over 200% compared to the same time period in the year 2020.” Halleux also notes that Latin America is a “key market” for the carrier. “We operate a mix of passenger aircraft and Boeing 777 freighters from Doha to Mexico City, Bogotá, Quito, Campinas, São Paulo, Santiago de Chile and Buenos Aires,” he says.
TIACA welcomes six new members to the Board of Directors
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THE International Air Cargo Association (TIACA) announced that six new members have been elected by the trustees to serve on the Board of Directors, expanding industry expertise of the Board. The new Board members bring a wealth of experience from the airport, airline and handling sectors. New Board members include, Kai Domscheit, CHI Handling; Dan Sheehan, UPS; Tushar Jani, Cargo Service Centre India; Kamesh Peri, Celebi Ground Handling; Roos Bakker, Schiphol Airport and Massimo Roccasecca, Verona-Brescia Airport. Kai Domscheit is the chief executive officer of CHI Deutschland Cargo Handling – CHI Deutschland Cargo Handling offers forwarding and airline handling; trucking and air cargo secu-
rity in the largest air freight hub in Europe, Cargo City South, Frankfurt. Dan Sheehan is the director of industry of UPS – UPS’ comprehensive hub-and-spoke network provides you with access to key transportation centres across the U.S. and beyond. Tushar Jani, is the chairman of Cargo Service Centre India – Cargo Service Centre India is an end-to-end cargo handling group that handles both general, sensitive, as well as perishable cargo. Kamesh Peri, is chief executive officer, Delhi Airport – Celebi Ground Handling is a ground handler offering ramp, passenger, cargo handling, warehouse management, bridge operations, trucking, general aviation, airport lounge management and premium services. Roos Bakker, director of business development for airline route and network development, Schiphol Airport – Schiphol Airport is renowned for its collaborative model. Schiphol Cargo successfully brings together our logistics community, Dutch Customs and academia. Massimo Roccasecca , is the group cargo director for the SAVE Group. The SAVE Group is the managing company for Venice, Verona, Brescia and Treviso Airports. “We look forward to the perspective and experience that each of these Board members will bring to the table,” stated Steven Polmans, TIACA chair. The association has additional Board positions open and those interested should reach out to the Secretariat.
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Latin America Cargo City opens South America to the world
MONTEVIDEO Free Airport has unveiled its new Latin America Cargo City (LACC) brand, a new business concept that it says will boost trade in the region. “We are presenting an innovative solution to the market that really seeks to redefine Latam logistics and the way that companies distribute their products in Latin America,” Bruno Guella, managing director at LACC tells ACW. LACC builds on Montevideo Free Airport’s concept for a multimodal logistics free zone with medical Good Manufacturing Practice (GMP)-compliant infrastructure, client-centred information systems and highly skilled personnel. The airport authority says it is set to consolidate its role as the leading distribution platform for the region. “The Uruguayan government has given us approval to operate the airport until 2053, which allows us to think big and expand what we have
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been doing up until now,” Guella explains. “Our MVD Free Airport concept proved that global companies were attracted to the region. Now with LACC we are expanding the first multimodal airport free zone in Latin America, adding an additional 80,000 sq m within the airport premises to host new players and tenants, who can install their own operations here. “Again, we are thinking globally when it comes to LACC tenants. These will be not only pharmaceutical companies but also e-commerce and technology businesses along with several other verticals that can benefit from our distribution model,” he says. LACC says it provides a wide range of distribution set-ups designed to meet clients’ specific needs, including pay-per-use storage services, fully integrated conditioning lines or tailored warehouse construction for client-operated models.
“Digital operations are also a key issue for logistics today,” says Guella. “In our new cargo city, we updated our information systems and warehouse management system (WMS), and are also connecting our own system to those of our clients.” He notes that sustainability is at the heart of the business model and has been important since the airport’s establishment. “We were the first airport in Latin America to generate solar energy, we phased out fossil fuels and all our ground equipment is electric,” he explains. “This is something that as a company, both on the passenger side and cargo side, we are always looking at improving. “In fact, this year we have plans to gain ISO 14001 certification.” Guella says that LACC is “strategically located” for business. Due to its location inside an international airport, he explains, it offers advantages for all airfreight, in terms of cost efficiency, lead time, tax benefit as well as the ability to handle sea and land freight 24 hours a day, 365 days a year. Though Uruguay is one of the southern most countries in South America, Guella explains that the airport is a viable trade gateway to the continent. He says: “We already have companies that are distributing to all of South America from our site. “Actually, 75% of the region’s GDP is concentrated within a two hour flight of Montevideo.” MVD’s vaccine distribution operation was the last to get underway in South America but was a success due to its distribution model, which
gained international recognition, says Guella. The model highlighted the benefits of using the Montevideo Airport free zone, especially for pharmaceuticals. AstraZeneca has already put down roots in Montevideo and runs its distribution operations from LACC to Brazil and Argentina and plans to expand this, Guella explains. Following this, the airport recently inaugurated a new pharma warehouse, which enhances its current capabilities. Pharma HUB 2 doubles the existing capacity in the +15, +25 and triples the +2 +8 temperature ranges and provides GMP-compliant conditioning areas and premium office space available for client business and administration activities. Guella adds: “The first pharma warehouse raised awareness with many global pharmaceutical players of the possibilities that MVD’s Airport free zone presented, both for airfreight as well as sea and truck freight, to reach the region safely and more efficiently. “With the second warehouse we are expanding our scope of services under a GMP environment, including special areas for conditioning services, packaging material sourcing, storing, calibration and assembly, direct-to-patient shipments, amongst others.” Guella concludes: “The Cargo City environment allows for reliable and efficient last-mile distribution, that is fully compliant with good manufacturing and distribution practices, and that enhances synergies within its tenants or clients. “LACC is redefining Latin American logistics.”
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HAE GROUP
HAE GROUP SET TO EM A “Competitive GSSAs will also be asked by their customers to provide more solutions, especially in the SME space”
GSSA should be a solutions provider to both the airline partner and the forwarding client as the world comes out of the COVID period, believes Neville Karai HAE Group managing director. “It will be the most agile companies that offer the most options that prevail,” he
says. Karai forecasts those agencies that prevail will, in ten years’ time, be a hybrid of a number of roles in the industry: “We think GSSAs will be a digital distribution channel for multiple airline partners to access a territory’s potential customer base, a hub if you will – a one stop shop for multiple service providers and offering API-type integration to as many service partners as possible for shipment options. “We believe the GSSAs’ responsibility will grow into dynamic pricing, capacity management and linking a number of carriers inventory and network partners to maximise the return for the carrier and give the customer competitive options. “The GSSA will provide more services to the airline as we believe the airline base will grow as well – examples are back office, data management services and finance and accounting - more carriers means more compeition for GSSAs also. We also think GSSAs may get into payments handling to a greater extent than they do today. “Competitive GSSAs will also be asked by their customers to provide more solutions, especially in the SME space. We also believe that GSSAs will take a greater role in underwriting capacity for their airlines so they can resell to their customers as they compete with each other. “In summary, although the role of GSSAs is evolving, they will always be vital.”
Digital presence In the future, a GSSA will have to have a strong digital presence not just in sales, believes Karai, but good product knowledge repositories, constant contact availability to the customer and a fixed presence that its airline partners need them to present to the market.
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There has been an evolution in the industry; customers want more information, more background, and want to make an informed choice. The GSSA is key to that on behalf of its airline partner, he notes. “It would be a dull industry if AI took over! However, for dynamic pricing, showing options and the mundane tasks of FSU and status updates and full data capture it has a role. “For negotiation, product differentiation, and product knowledge, the human role will always be there; we have seen the same in our training business. However, the traditional sales role will need to modify and evolve into more product specialisation, responding to the pull of the customer, rather than a push from the GSSA. “We think network events and more co-ordinated customer interaction will be more key than they ever have been as we have learnt to work and in many cases been successful in our video conferencing customer contact world,” Karai says.
Build back better The majority of cargo, of course, goes in the bellies of passenger flights. What can cargo GSAs and GSSAs do to help their principals recover from the pandemic? How can they help to build back better? Karai says: “The GSSA has a key role in ‘build back better’. They should offer their airline partners more services as I have alluded to before. Cost reduction opportunities exist too as airline cargo departments look to come out of the pandemic leaner and greener, we can help them offshore, digitalise the interface to their customers, and increase sales through marketing and direct engagement. “I think consolidation of GSSAs will continue but only where it adds value - it is not inevitable. The very small agency, local heroes as we call it, has a vital role in our industry for the customer to interact with owners of business on the ground. It makes a special relationship and human interaction happen. “There are many airlines out there for many GSSA partners and one size does not fit all. Our business is still a human one and will continue to be just that.”
FEATURE
EMBRACE THE MARKET Worldwide representation
HAE represents over 20 airlines worldwide, through offices in North and South America, UK, Ireland, UAE, Kenya, Egypt and South Africa. New offices are under formation in Italy, China and Hong Kong. The company has a Global Solutions Team based in the UK, a training team also in the UK and cargo handling activity in the UK and South Africa. It also has offshore service teams in Poland and Kenya. Worldwide, there are some 400 staff in the HAE team. The company is hiring as its products, services and office network is growing, Karai reports.
Strategic targets The agency’s longest represented client joined in 1997, the year the agency was launched. As yet, HAE has not lost any client to a move to take GSSA functions in-house. However, Karai has no complacency as to retaining his client base. He says: “We are not complacent enough to think a carrier will not rethink its strategy, but in a post-Covid-19 world we think we have a lot to offer a carrier in addition to cargo sales. “We are getting more strategic in targeting principals where we can add value to their business and where we do not conflict with carrier portfolios. We also have a network of carriers who we regularly update how we are growing and if we can help them. “Our digital road map includes AI, but not to the exclusion of other digital strategies. Our industry has much it can put in place to benefit from AI that it hasn’t done already. “Increasingly, we are able to offer market leading sales intelligence we do not just make bookings, we sell! We measure number of quotes, missed opportunities for the carriers, we subscribe to market data and analyse it to the benefit of the carrier and customer alike. “Our reports and dashboards of activity are automated so we can offer dynamic pricing, capacity management, quote conversion analysis and where opportunities can be targeted.”
Karai concludes: “We have a growing offshore team that allows our in-country teams to target sales and then pass over parts of the workflow to the offshore team, who are also highly trained and customer focused. This allows us to be competitive when we are bidding for new contracts. “We offer integration with our systems and minimise the number of times the data is rekeyed in. As well as this, we offer smaller carriers additional services to sell the customer so the customer can buy from them and service his clients.”
“We also offer integration with our systems and minimise the number of times the data is rekeyed in”
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Swissport acquires Belgium Airport Services
With effect from March 1, 2022, Swissport International has successfully finalised the complete acquisition of Belgium Airport Services (BAS). Between them, the two companies operate cargo centres with a combined capacity of 76,000 sqm in Belgium, about half of which is at Liège Airport. Swissport also operates a modern 38,000 sqm air cargo facility at Brussels Airport, including a state-of-the-art Swissport Pharma Centre. “I am very excited about the co-operation between Swissport and BAS at Liège Airport, a world-renowned air cargo hub,” says Jan van Engelen, head of continental Europe at Swissport. “This positions Swissport as an even stronger partner for airlines and forwarders in Liège and in Belgium as a whole. Swissport will continue to invest in developing its cargo business as a strategic pillar in Belgium and beyond. In Amsterdam, for example, we are adding an additional air cargo centre, which significantly increases our capacity at Schiphol Airport.” With BAS, Swissport gains access to an attractive
and well-established customer portfolio of airlines and logistics service providers such as El Al, Turkish Airlines, Hongyuan group and many others. BAS will initially be run as a standalone business to ensure service consistency for its customers. The operational leadership team of BAS will remain in charge of running the BAS operation, and employment and working conditions will also be maintained. At a later stage, services will be integrated and consolidated under the Swissport brand. Swissport has been expanding with a strong global footprint. Earlier this year the international handler announced it had finalised the acquisition of AGS Aviation Ground Services in Aruba and assumed the Dutch Caribbean company’s ground handling operations at Queen Beatrix International Airport in Oranjestad (AUA). The consolidation of the Dutch Caribbean company with Swissport added a dozen new international carriers from North America, Latin America, and the Caribbean region to the Swiss aviation service provider’s network of global airline customers.
ATSG commits to 29 A330P2F conversions from EFW
AIR TRANSPORT SERVICES GROUP (ATSG), the world’s largest lessor of freighter aircraft, has committed to 29 Airbus A330 Passenger-to-Freighter (P2F) slots with converter Elbe Flugzeugwerke (EFW). ATSG said it reflected a strategic step towards diversifying its existing fleet of 117 aircraft with the addition of next generation wide-body freighters. “The A330-300 passenger-to-freighter conversion is a natural next step for ATSG as it is an excellent complement to the Boeing 767-300 medium wide-body freighter, which has long been the freighter of choice for the e-commerce air cargo market,” stated ATSG CCO, Mike Berger. “The availability of feedstock combined with impressive cargo capacity make the A330 a very attractive option for conversion and will enable ATSG to continue to meet the demands for
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full-capacity freighters long into the future. The customer response to the news that we will have A330-300 freighters available for lease has been exceptionally strong, and we already have customer deposits towards future leases for half of these 29 converted freighters.” “To have a key market player like ATSG adopting the A330P2F programme with such a high commitment is a major milestone for us,” added EFW CEO, Andreas Sperl. “This is a great sign of confidence in next-generation Airbus freighters and trust in EFW’s competency as a centre of excellence for Airbus freighter conversions.” The A330P2F conversions for ATSG will be carried out from mid-2023 to 2027, mainly at EFW’s facility in Dresden, Germany, but also at ST Engineering’s conversion sites in China. Multiple conversions will be carried out in parallel.
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Market close to prepandemic levels in February - but what now?
The global air cargo market continued to catch up with pre-pandemic levels in February as freight volumes, capacity and load factors stabilised close to 2019’s performance, said CLIVE Data Services. Rates also slowly trended downwards, according to the latest data from industry, said the analysts. Chargeable weight in February was at -0.7% to the pre-Covid level in 2019, and +2.6% compared to February 2021, with capacity in the market standing at -5.4% and +6.9% to the respective 2019 and 2021 figures. CLIVE’s weekly and monthly analyses of the general air cargo market continue to measure performance against the pre-Covid 2019 level, as well as giving 2021 yearover-year comparisons, to provide a meaningful assessment of its current performance. Consequently, CLIVE’s ‘dynamic load factor’ – which considers both the volume and weight perspectives of cargo flown and capacity available to produce a true indicator of airline performance – of 65% was 4.5% pts lower than in 2021 and close to 2% pts higher than in 2019. After the peak season put pressure on supply chains in November and December, average airfreight rates increased by as much as 168% in the final month of 2021. The quieter market conditions at the start of the year saw overall rates ease for a second consecutive month. Rates, while still very high, were seen to be slowly winding down in February +137% versus 2019 as capacity returned to the market and the stress on supply chains seen over the past two years began to ease. The war in Ukraine, however, means the market is heading into another period of significant uncertainty. “Airfreight market conditions feel insignificant when you see what is happening in Ukraine and the suffering of the Ukrainian people since Russia’s invasion,” said CLIVE managing director Niall van de Wouw. “The war in Ukraine is another example of an external event over which the air cargo industry has no control, but which is having a profound impact, as happened with Covid. When we consider the recovery of the aviation industry from the pandemic, the return of passengers is still a big question mark. The war in Ukraine presents another big question mark, particularly over Europe-Asia trade flows. It is difficult to overestimate what this could mean down the line.” The sudden drop in capacity on Europe-Asia
routes and overflight issues were already having an effect on North East Asia routes in the closing days of February, he said. CLIVE is closely monitoring the situation on a daily basis. Rising oil prices are also expected to significantly impact global airfreight rates. “Whilst we were seeing some clear signs of normality returning, there is still so little slack in the global air cargo system. It is quite unlikely that the trend of slowly declining rates will continue in March. The war in Ukraine causes immediate capacity issues to North East Asia and, therefore, will likely push up rates even more for these particular markets. “Air cargo trucking services might also be affected as numerous Ukrainian drivers – who form an important share of the truck drivers in Europe – have decided to go back to their home country. A fragile global air cargo supply chain is already sensitive to minor shocks. War in Europe and its resulting sanctions could turn the industry upside down once again, just at the time when the Covid impact was looking more under control. We remain in volatile and uncertain times,” he added.
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One of the first scientists who commercially used vacuum insulation was Reinhold Burger, who invented the famous “Thermos” bottle in 1904. After that vacuum as an insulation material became more and more common in various areas and industries. In recent months this technology has gained even more attention as it has been the one technology, integrated in thermal boxes and containers, which enabled the global distribution of CoViD-19 test kits and vaccines. For over 20 years now, the German company va-Q-tec has been doing valuable pioneering work in the field of thermal insulation using vacuum insulation panels (VIPs). The founding idea already included a more disruptive approach: originally developed as a highly efficient insulation material for the construction industry, va-Q-tec has since become a highly sought-after supplier of innovative thermal boxes and containers that meet even the most demanding standards of temperature-controlled logistics. The company, which has globally eight subsidiaries, now offers a broad product portfolio. It ranges from multi-use solutions that can be rented or purchased to special solutions for reliable and environmentally friendly transport to countries with less-developed logistics infrastructures. Especially in the context of the Corona pandemic, va-Q-tec’s agile, progressive approach became apparent: Within a very short time, it developed a special solution for the transport of Corona vaccines - the va-Q-pal SI, which was precisely tailored to these special requirements. This rapid product development was made possible by the flexible and versatile key technology of the company, which has experienced a breakthrough not only in public perception at the latest since the Corona pandemic and the associated challenges of thermal logistics: va-Q-tec combines its innovative insulation material, called vacuum insulation panels (VIPs), with temperature storage elements (phase change materials - “PCMs”) to create highly efficient thermal boxes and containers, which have become one of the most sought-after solutions on the market to date. Thanks to their variable technology in various sizes and temperature ranges from -70 °C to +25 °C, they are the ideal solution for large-volume long-distance transports as well as for the fine distribution of valuable pharmaceuticals over the last mile. They made the largest global vaccination campaign of all time possible during the Corona pandemic, but have also been used for the international, temperaturecontrolled logistics of test kits from the very beginning. However, the use of advanced passive thermal boxes and containers for temperature-controlled
supply chains has not just been growing since the Corona virus outbreak: it has been growing steadily since the biotech industry boom of the early 2000s. In most cases, they are the first choice when it comes to transporting temperature-sensitive products, such as pharmaceuticals, active pharmaceutical ingredients (APIs) or chemicals. Completely novel and temperature-sensitive mRNA vaccines promise a way out of the global infectious disease situation, but have to be transported in high-tech thermoboxes and -containers. And the market with mRNA vaccines and drugs will continue to grow, with promising approaches for therapies for cancer and other diseases such as multiple sclerosis (MS). However, the deployment for the global Corona vaccine campaign is still ongoing, so va-Q-tec expects an unbroken deployment of its delivery solutions: Just under 10.1 billion vaccine doses have been administered worldwide [as of Feb. 03, 2022], representing a global vaccination rate of approximately 53.6%. The company estimates that approximately 90% of all international Corona vaccine shipments were handled using the key technology pioneered by the German company. However, these were primarily delivered to industrialized nations in the Northern Hemisphere. A large proportion of the population in developing and emerging countries is still waiting for protection against a severe CoViD course. Especially for the transports to countries with challenging climatic conditions, va-Q-tec has developed a special solution with the va-Q-pal SI based on the outstanding passive technology of vaQ-tec. With the help of this transport solution, regions with less-developed logistics infrastructure can now also be reliably supplied in a temperature-controlled manner. Within the COVAX program more than 1 billion vaccine doses have been distributed to these countries so far. va-Q-tec supports this initiative since its beginning by using its products and services and turns out to be the ideal partner for the involved logistics and airfreight companies due to its years of experience and special expertise. Dr. Joachim Kuhn, CEO and founder of va-Q-tec AG, comments. “I am very proud to have pioneered and continuously developed VIP technology together with my motivated team. Today, we are an important part in the fight against the globally raging Corona pandemic with our worldwide operating box and container fleet. In the future, we will continue to be a relevant partner in the fight against other diseases, not afraid to contribute massively to the further development of safe, reliable and sustainable temperature-controlled supply chains. It has been shown that our key technology together with our permanent drive for further development is an important part of our success!”
For further information visit Virtual Forum | va-Q-tec.
va-q-tec.com
A D V E RTO R I A L
Vacuum insulation technology takes a decisive role in global temperaturecontrolled supply chain
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URUGUAY’S COVID VACCINE DISTRIBUTION MODEL: “A WISE MOVE”
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ruguay was the last country in South America to start its Covid-19 vaccine distribution, but thanks to an efficient distribution model, which used the airport for the storage and handling of the vaccines, the country has now vaccinated 78.6% of its population. Bruno Guella, CEO of Latin America Cargo City explains how.
ACW: Can you explain the model that Aeropuerto Internacional de Carrasco has adopted for Covid vaccine logistics? Guella: Carrasco International Airport is the main entry door to Uruguay for airfreight, and through our cargo terminal we handle 100% of the air cargo that comes into the country. As such, even before the vaccines were a reality we started thinking and developing a strategy to guarantee the delivery of vaccines to the country as soon as they became available. We were aware we had a key role in the logistics process, which is why we joined forces with all the actors in the chain, and led the development of a strategy to guarantee the fast, safe and efficient distribution of the vaccines to Uruguay. We developed and executed what we called a lean logistics last-mile distribution model strategy for the Covid-19 vaccines. Its key characteristic and value proposition was to use our airport facilities to store, prepare and distribute vaccines directly from the airport to the vaccination centres and finaly to patients all over the country. To be able to do this we first enhanced the capabilities of our pharma hub located within airport premises, adding modern ultra-freezers to preserve the cold and ultra-cold chain, and training our staff in the correct handling of these products according to the standard operating procedures established by the pharmaceutical companies. At the state-of-the-art pharma hub facilities in the airport, the shipments were split into smaller conditional thermal boxes and delivered to vaccination centres all over the country through a multi-level distribution network to reach the final patient in record time. ACW: How has this model impacted Uruguay’s Covid vaccination efforts? Guella: The strategy developed was instrumental in Uruguay’s Covid-19 vaccination efforts. Even though the country has long experience in mass vaccination plans, this one in particular posed unprecedented challenges due to the specific characteristics of the vaccines themselves, as well as the need to act faster than ever. The strategy adopted proved to be a success and allowed Uruguay to go from being the last country in the region to start vaccinating to vaccinatiing 70% of its population in less than six months. The logistics model developed, and the strong synergies achieved within the entire logistics chain helped reduce delivery times for vaccines shipments from the moment they arrive at the airport to delivery to any point in the country to 10 hours, which saved at least a day in the supply chain. In a recent Pharma.Aero case study of the process, which showcased Uruguay as an example of efficient vaccine distribution, the words of the Minister of Public Health of Uruguay, Dr. Daniel Salinas, best summarised the success of the strategy when he said: “It was a wise move to choose the airport for the storage and handling of the Covid-19 vaccines, which require ultra-cold conditions. It has allowed for quick implementation and avoided cold chain failures.” ACW: Who was responsible for the planning of the vaccine operation? Guella: This was an operation that spanned continents and that required the involvement and commitment of many different people, companies and authorities. Each of them was
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“Our pharma hub is a key value proposition for our multimodal logistics free zone” instrumental in its success and indeed the entire process would not have been possible had it not been for the strong synergies achieved. Different actors in the logistics chain had been working on their own to identify the challenges, think of strategies and plan for a moment that was a turning point in the pandemic. It was only when all these efforts came together and we formed a cooperative multi-task team that involved the public and private sectors that we were able to really move forward, solve the complexities of the operation and eventually put in place an innovative and successful operation. ACW: Will the Airport itself invest more in its pharma facilities? Guella: It is part of our core strategy to enhance our pharma facilities and capabilities, and to consolidate our role as a logistics hub for the region. We have recently inaugurated a new, modern pharmaceutical warehouse at Carrasco International and we are already in the process of expanding the pharma facilities again in order to comply with new client needs. Our pharma hub is a key value proposition for our multimodal logistics free zone, the only one located inside an airport in the region. Our second pharma warehouse will help us meet growing global customer needs, doubling the existing capacity in the +15+25 and +2+8 temperature ranges and providing GMP-compliant conditioning areas and premium office space available for client business and administrative activities. ACW: For how long do you expect the vaccine operations to continue? Guella: We have learnt to be cautious in making predictions when it comes to pandemic-related issues. However, data shows that Covid-19 will eventually become endemic which will mean that vaccine operations might eventually become part of our yearly operations. It would of course depend on the industry itself and on the country of origin of the vaccines so there are many factors involved. We will have to wait to see how they develop. As for now, we have signed a contract with the Ministry of Health that ensures the operation until, at least, December 2022. ACW: How does it feel to be a major player in Uruguay’s fight against Covid? Guella: When we first started developing our pharma infrastructure and capabilities, we had seen potential in the industry and a trajectory of growth. We did not predict it becoming instrumental in the country’s fight against Covid19 so we are immensely proud of the work developed, and energised to keep playing an important role in the country’s logistic industry. ACW: What have been some key takeaways from this effort? Guella: There are many takeaways from this effort that range from more technical aspects such as the importance of investing in first-rate modern equipment and guaranteeing complete alignment with standard operating procedures, to softer skills related aspects such as the importance of team work, commitment and dedication to our job - from the most macro strategic issues to the micro details that can make or break operating of such a large scale. For us everything starts with the question: “Why not?” We thrive when we think out of the box and step out of our comfort zone. Every time we prove to ourselves we can do whatever we set to do it encourages us to keep doing this in the future. If I had to pick one aspect of this operation in particular, I would highlight private-public collaboration and co-ordination, with one shared mission, a team of dedicated people and a full commitment to the task ahead: a lesson that we will always carry with us moving forward.
FEATURE
There is never a bad time to invest in pharma capabilities
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ince its launch in 2015, Qatar Airways Cargo’s pharma business has grown exponentially and Guillaume Halleux, chief cargo officer notes that its specialised product, QR Pharma is now one of the carrier’s strongest. But for new and smaller players, is now a good time to get a slice of the pharma pie? “There is never a bad time for interested parties to invest in the pharma and healthcare supply chain,” says Halleux. He explains that there are many things at play when ensuring the integrity of pharma shipments: “The pharmaceutical industry is highly regulated and extremely stringent across the entire spectrum from the manufacturer to the end patient, including the supply chain. “Safety and security in the supply chain go hand in hand with temperature management, making it a highly complex set of controlled activities. The eventual outcome is to ensure that the efficacy of medicines remains unchanged from the time they leave the manufacturer until they reach the patient. “Therefore, it is essential to adopt a highly evolved quality management system, properly defined procedures, effective partnerships, robust training, oversight of infrastructure around
different airports in the world, investment in facilities and equipment as well as embracing new solutions and technologies that support this endeavour.” QR’s global share of the total airfreighted pharma market now exceeds 11% (12 months average from December 2020 to November 2021), reaching nearly 15% during the peak of the pandemic. Halleux says many lessons have been learnt along the way. “While we considered ourselves a market leader even prior to the pandemic, the situations and challenges we faced in the past two years are invaluable for us. “As borders around the world began to close at an unprecedented rate, we found ourselves in uncharted territory; our schedules and capacities were no longer something we could take for granted. The market around us changed overnight and brought new demands every day: from the initial scramble to move desperately needed PPE to many markets, evolving to relief goods being transported by air, followed by Covid vaccines. “We have not only survived, but thrived at a time when our capacity was inversely proportionate to market demand in unprecedented times of heightened urgency.
“We had to be more agile than ever, find solutions every day, be creative and most of all untiring and committed. “Our product offering evolved to accommodate these new scenarios and we emerged from this journey stronger, more confident, and proud of all that we learnt from the crisis.” For emerging players, the time is now to invest in pharmaceutical capabilities. Halleux explains: “The pharma supply chain is a highly rewarding domain. One of the biggest reassurances for smaller cargo players is that unlike many other industry verticals, the healthcare industry is not seasonal: it is growing as healthcare needs of the global population and new therapies continue to evolve. “Given the added layer of trust and consistency, pharmaceutical customers are not as volatile as in many other sectors. Customers tend to build supply chains with partners and work with them over a prolonged period of time to minimise risk and uncertainty. This will help smaller players build a customer base and scale up over time. “Additionally, lessons learnt in the pharma supply chain will help provide the highest levels of services in any other industry sector they wish to diversify to.
What are the biggest threats to the pharma industry’s growth?
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he pharmaceutical industry is growing and airfreight plays an imperative role in supporting this but what could hinder this growth? “We are now in a situation of capacity constraints and rates are high and pharmaceutical companies feel the pain of that,” explains Marcel Kuijn, global head of pharmaceutical logistics AFKLMP. “As an airline we make good money from our cargo business but it doesn’t compensate for the losses on the passenger side. Gradually capacity will come back into the market and at a certain moment we may return to a situation of overcapacity on part of the lanes. This will put pressure on the rates. In order for us as an airline to continue to invest in the dedicated processes, facilities and services that our customers expect from us we will need a fair price. “For pharmaceutical air transport to continue to grow it’s important that all parties in the chain, forwarders, airlines, ground handling agents and airports, continue to invest in processes and facilities. “Another important factor is to agree industry standards that reduce complexity, allow for efficiency and facilitate the exchange of information. “For example, data standards to make it easier for forwarders, airlines and GHAs to share milestone information giving them more control of the end-to-end process. I also see an opportunity in terms of CEIV compliance and audits. “Air France and KLM have just been certified for the third time by IATA for CEIV Pharma. I’m wondering why forwarders are not allowed to use this certification by an independent auditor to confirm that AFKLM is compliant. “Instead, we both need to spend time and money on an audit in which we go through the same checks as we did for the IATA audit. It’s important that we work together in the industry to capitalise on opportunities to reduce complexity because otherwise the cost of doing business becomes very high. “ Kuijn says that Covid vaccine transport has “without a doubt” been a rewarding feat to be involved in. “Airlines have not always been positively exposed in the media due to their need for government support and CO2 footprint but this allowed us to show the important role we play in ensuring that people have access to what they need. This doesn’t only apply to Covid vaccines but also to other types of pharmaceuticals (which can be equally life-saving) and other commodities.”
ACW 14 MARCH 2022
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VIEW FROM THE MAINDECK ONWARDS AND UPWARDS AT MIAMI INTERNATIONAL
You’re a fast growing and ambitious cargo gateway on the south eastern seaboard of the US but, with the city all around the airport, there is no new land available for expansion. What do you do? The answer is obvious, says Jimmy Nares who, as marketing section chief at Miami-Dade Aviation Department is responsible for cargo at Florida’s Miami International Airport (MIA): build a multi-storey terminal. With MIA approaching its on-airport cargo capacity, the Vertical Integrated Cargo Community (VICC) plan will help it keep pace with projected growth in demand for air cargo. The VICC will open in about four years and would ultimately double MIA’s cargo capacity to approximately 5.6 million US tonnes of cargo and would satisfy capacity demands for the next 25 years. Multi-storey cargo terminals are not common in the US, but the concept has been used successfully in Hong Kong and VICC has in fact been patterned on that gateway’s experience, says Jimmy Nares. He told ACW: “We have the city, housing all around us, so we can’t just purchase additional land.” While other solutions such as satellite cargo areas were considered, “there’s no substitute for on-airport facilities and it’s what our tenants demand, as it makes logistics faster and easier.” And cargo certainly is booming at MIA. Total throughput for 2021 finally came in at 2.74 million tonnes, 17% up on 2020 which was itself a record year. Heading the list of commodities handled at MIA were pharma, perishables, e-commerce and computer chips. The value of the latter moved through Miami was up over 2,000% at $4.31 billion. Pharma exports were running at over 15.36 million kilos in the year to date October 2021, compared with 10.5m kilos in October 2019. Total trade through the gateway soared by $15bn to hit $67.5bn in 2021. Jimmy Nares is not expecting 2021 to be a high water mark – all the signs are that traffic through MIA will go on rising in 2022. For instance, deliveries of the Covid vaccine to Latin America and the Caribbean –for which MIA is the pre-eminent air gateway – are due to ramp up further as the region gets to grips with the pandemic.
e-commerce is surging Much of the e-commerce traffic is carried by the integrators and a couple of MIA’s largest operators, FedEx Express and DHL Express, have just completed expanding their facilities at MIA to meet growing customer demand and to strengthen their service capabilities to Central and South America, the Caribbean and worldwide. FedEx completed a $72.2 million expansion to its main sort facility, adding 138,000 square feet to bring the facility to a total of 282,000sq ft. DHL Express invested $78 million to renovate and expand its cargo hub to double volume throughput. Perishables also did very well. Indeed, the proportion of such imports into the US handled by MIA has increased from the already impressive 60-64% of recent years to around 70%. MIA is in one respect a rather atypical US gateway. Most of the country’s airports follow the 80-20 rule in that 80% of freight moves on bellyhold, scheduled passenger airlines with the remaining 20% in all-cargo aircraft - but at MIA these proportions are reversed, with freighters the dominant mode. Indeed, one challenge for 2022 will be increasing the amount of freight on all-cargo aircraft operated by MIA’s 40-plus freighter carriers, given the extremely tight market situation and lack of available aircraft in this segment. However, there are encouraging signs that bellyhold is bouncing back and could start to play a greater role, says Jimmy Nares. While direct cities served on the key Transatlantic routes to Europe, the Middle East and Africa fell to just nine in February 2021, in February 2022 the figure was back up to 19. To take just one example, Israel’s El Al halted its direct MIA-Tel Aviv service for most of 2020 due to the pandemic but resumed service in late October 2020 and continued into 2021. MIA-Israel trade in 2021 similarly bounced back, surging from 1.9m kilos in 2020 to just over 3m kilos in 2021.
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