ACW 18 June 18 by Azura International

The weekly newspaper for air cargo professionals No. 986

18 June 2018

Turkish and ZTO to set up express joint-venture

urkish Airlines and Chinese delivery giant ZTO Express are setting up an express and courier joint-venture to exploit the booming global e-commerce

market. The joint venture, which also includes Hong Kong GSSA PAL Air Ltd, will be based in Hong Kong and include door-to door-logistics, trucking, collection & distribution, freight transport, cross docking and final mile delivery. It will also provide warehouse, and order and supply chain management when necessary. The signing ceremony was held in Istanbul at which the joint venture was described as not only a huge strategic step for Turkey prior to the opening of the Istanbul New Airport but “a game changer” for the global express transport business.

TIACA CONCLUDES CSQ PILOT

Turkish Airlines chairman M Ilker Ayci said the move would propel what is already one of the world’s ‘super-connectors’ in passenger aviation into becoming one of the world’s biggest cargo integrators. He claimed that in five years’ time the joint venture will generate over $2 billion in revenue. The Istanbul New Airport will open by 29 October this year and function as Turkish Airlines’ main operating hub, gradually providing Turkish Cargo up to four million tons of cargo handling capacity. “The flow of e-commerce products globally with this joint venture and via Istanbul Mega Hub will provide maximum value to our customers,” he said. Ayci signed the deal with ZTO Express chairman, Meisong Lai and PAL Air vice chairman, Vivian Lau. Lai says: “The cooperation between the three partners will form synergy by

Bruno Guella (left) with IATA’s director for airport, passenger, cargo and security, Frédéric Léger

Montevideo awarded IATA CEIV Pharma

combining strong core competencies and integrating key resources, and will undoubtfully effect positive progress in the areas of global express delivery, warehousing, cargo freight, and aviation route development and more, and will ultimately benefit traders and consumers globally.” ZTO, which distributes some 28 million packages a day, is one of the largest express delivery companies globally in terms of parcel volumes. Chinese e-commerce giant Alibaba and its logistic arm Cainiao Network are investing $1.38 billion in ZTO for a 10 percent stake in the company, thereby giving Alibaba a stake in the joint venture as well. In reverse, ZTO, through its Cayman Islands arm, is buying 15 per cent of Cainiao Post, Cainiao Network’s phalanx of last-mile delivery stations, for $168 million.

INFRASTRUCTURE REQUIRES A MAJOR UPGRADE

URUGUAY’s Montevideo Free Airport has achieved IATA’s CEIV Pharma Certification. The airport’s cargo operation has set itself up to resemble a third party logistics provider (3PL) offering a tax-exemption regime, multimodal transport, and primary and secondary packaging, all located within the airport free zone. MVD Free Airport recently inaugurated the first module of its temperature controlled warehousing master plan and is currently working on the executive project of phase 2, as well as revamping its information systems to automate all data capturing and processing stages for real-time process mapping. “The IATA CEIV Pharma Certification has made the organisation align itself behind a very challenging objective, and has truly been a learning experience,” says MVD Free Airport managing director Bruno Guella. “We are proud to achieve this certification and look forward to keep raising the bar in pharmaceutical distribution in Latin America.” Last year, MVD Free Airport saw its pharma cargo in transit to other markets in South America grow 462 per cent compared with 2016. Some global pharma companies have even started centralising purchase orders at MVD, allowing for smarter stock management and just-in-time replenishment based on having safety stocks for the entire region at MVD. “Understanding the implications in the distribution of pharmaceutical products in the region, our entire organisational strategy is based first and foremost on a company culture that thinks ‘patient first’, and secondly, on taking the necessary steps in training, infrastructure development and information systems that allow for a total quality approach to our day-to day operations,” Guella continues.

CUTTING-EDGE AIRFREIGHT IN EUROPE’S CENTRE

60 SECONDS WITH LISA OXENTINE

aircargoweek.com

Strong freight performance for Air Partner

ir Partner’s statutory profits before tax increased by 20.4 per cent for the year ending 31 January 2018, with the freight division performing well. Statutory profits before tax were up from £4 million to £4.8 million while the freight sector had a record year with gross profits up 202.4 per cent and client numbers at their highest numbers. The performance was driven by charters carried out across the Caribbean to support the relief efforts following hurricanes Irma and Maria, new hires over the period and ongoing contracts in the Middle East. In April 2018 Air Partner underwent an accounting review after issues predominantly relating to the accounting for receivables and deferred incomes originating from 2010/11 were identified. Company chairman, Peter Saunders describes it as an “unwelcome, challenging and costly event, and certainly not how any business would wish to start a new financial year” though adding it was an accounting issue and not a business issue. Chief financial officer Neil Morris resigned with Chris Mann taking over in the interim, and Saunders says the rectification of issues is under way. Air Partner will incur a cost of £1.3 million in the 2018/9 financial year as a result of the review and an aborted

Ethiopian welcomes 100th aircraft ETHIOPIAN Airlines took delivery of its 100th aircraft on 6 June, a Boeing 787 Dreamliner. As part of Ethiopian Corporate Social Responsibility commitments, the new aircraft has carrying medical equipment from the Seattle-based NGO, Direct Relief to St Paulos Hospital. The shipment included surgical stools and other medical supplies to be used for both teaching and patient care. Ethiopian Airlines Group chief executive officer, Tewolde GebreMariam says: “It is an immense honour for all of us at Ethiopian to reach the milestone of 100 aircraft. This milestone is a continuation of our historical aviation leadership role in Africa and a testimony of the successful implementation of our fast, profitable and sustainable growth plan, Vision 2025.” He adds: “Ethiopian now operates one of the

youngest and most modern 100 aircraft, with an average age of less than five years. Fleet modernisation and expansion is one of the four critical pillars of our Vision 2025 strategic roadmap, in support of our fast expanding network, which has now reached over 110 international destinations covering five continents.”

Readers’ Poll: Just where should it go? NOW the UK goverment is set to give MPs a vote on a third runway at London Heathrow, many question whether this is the right airport to receive the South East’s new runway. Readers of ACW are professionally interested in the fate of the new runway and many have strong opinions as to where it should be built. We are launching our Readers’ Poll spot by asking just that question: where should it go? In other words, if not London Heathrow, where? Given your professional role in airfreight, where would you build the new runway to be in the best place for UK plc? Just choose from our list of possible locations. A bit tongue in cheek, perhaps, but it does reflect that the decision to site the new runway at LHR may still diivide opinion.

ACW 18 JUNE 2018

Where should it go?

A. London Heathrow B. London Gatwick C. London Stansted D.. London Luton E. London Oxford F. London Ashford G. Boris Island H. Tracy Island I. Maplin Sands J. Manston Airport K. Have a meeting and agree to do nothing Send in your choice of letter, or letters, to james.graham@azurainternational.com by Friday June 29.

acquisition. The company says that despite compelling strategic attractions of the acquisition, it had to focus on the accounting issues, meaning that despite six months of work and being days from an announcement, Air Partner had to let exclusivity lapse, with a cost of £0.5 million being incurred. On 4 June, Air Partner opened an office in Los Angeles, servicing southern California and the West Coast markets, strengthening the company’s existing US network. Air Partner chief executive officer, Mark Briffa says: “We are delighted to have opened an office in Los Angeles, providing local Air Partner representation to our established customers, and enabling us to deliver our services the length and breadth of the West Coast.”

Green light for Aero Centre Yorkshire THE Aero Centre Yorkshire at Doncaster Sheffield Airport (DSA) has received the green light for further expansion by Doncaster Council. The expansion will see up to 600,000 square feet of office, general industry, storage and distribution space developed with the potential to create up to 800 jobs for the local area at the 1,600 acre site at DSA. The news follows the launch of the airport’s Vision Plan, which is set to become a major catalyst for Northern prosperity, international connectivity and attracting investment into the region. Peel Land and Property, part of the Peel Group that owns the airport anticipates strong interest in the site and will open discussions with developers and owner occupiers seeking commercial development land opportunities. Peel Land and Property development man-

ager, Andrew Farrer says: “The application has been prepared to reflect the rapid growth in the cargo and logistics market at DSA, helped by the improved accessibility provided by Great Yorkshire Way as well as its location within a national logistics hot spot between the Humber ports and the motorway network.”

ACW REWIND

THE ISSUE of ACW dated 20 September 1999 was the opportunity for then-editor Ian Martin Jones and staff, including the present editor, James Graham, to look back on the first year of publication.

Twelve months of news to rely on Vol 2, Issue 37 20 September 1999

IN THE first 12 months of publication Air Cargo Week has witnessed, first-hand, the air freight (sic) market at a time of relative unhappiness. The financial crisis in Asia affected the marketplace badly; over-capacity on the transatlantic routes caused frantic cost-cutting and reduced yields; there were industry disputes - and a few closures. The newspaper has endeavoured to cover the global sphere and nature of the industry and ACW’s front page headlines have revealed

aircargoweek.com

the story in encapuslated form as it unfolded. However, much of air cargo activity is normal and free from trauma. As vital as our role is in bringing the reader objective news stories from around the world, we have also been a platform for industry leaders to voice their very personal outlooks. ACW will be on the scene to cover the marketplace reliably, concisely and with the provision of well-written intelligence and information in the next 12 months - and a long time after that. Ian Martin Jones, editor

TIACA concludes one month CSQ pilot

IACA has now concluded the one-month pilot stage of its new online Cargo Service Quality (CSQ) tool. Cargo operators at eighteen airports, including Asia Airfreight Terminal in Hong Kong, Celebi Cargo Terminal and Delhi Cargo Service Centre in Indira Gandhi International Airport, New Delhi, Celebi Cargo Terminal in Istanbul, Menzies Bobba and Air India SATS Cargo Terminal of Bengaluru Airport and SATS Airport Services in Singapore, took part in the pilot, says Delhi International Airport chief commercial officer Sanjiv Edward who headed the project. He says: “In about four weeks, we will have the international launch of CSQ.” The CSQ tool will benefit the worldwide air cargo community by improving visibility and facilitating global standards. The project incorporates a four-step process: benchmarking, assessment, improvement and excellence as a way of raising cargo service standards. Edward is pleased that all terminals that took part in the pilot will remain in the scheme once it goes live. TIACA had experienced no problems in attracting the cargo operators to take part in the pilot. The pilot cargo terminals were rated by forwarders on several factors including – process, technology, facilities, regulators and general airport Infrastructure. Edward, who admits to a “passion for cargo”, expects that rollout of CSQ across the industry and saturation will take up to two years,

RIEGE Software chief executive officer, Dr Tobias Riege has been elected to the Air Cargo Community Frankfurt Board (ACCF). He was already an interim member and says this confirms his commitment to the goals of the ACCF and its members. He says: “I didn’t come for the title, but for the challenges and results.”

Sanjiv Edward However, this is the first phase in what TIACA aims to be CSQ coverage of the whole supply chain. He says: “TIACA has the big ambition that CSQ will eventually cover the whole supply chain. The first stage is the terminals and cargo handling. Then we will look at airlines, forwarders and others in the supply chain.” One insight gained by TIACA during the pilot, according to Edward, was that “we found that those operators who engaged with their customers the most received the better quality rating scores.”

Cargolux powers another solar mission

Saudia Cargo co-sponsors World Cup motorbike tour CARGOLUX has once again taken part in a pioneering solar powered transportation project by providing the transport for a prototype boat heading to Calgary, Canada for an Arctic expedition. The Solar Arctic project was initiated by DreamTime, a non-profit organisation dealing with environmental awareness and climate issues. The expedition, undertaken by French navigator Anne Quemere, is a solo journey in a prototype solar energy propelled boat across the Northwest Passage that links the Atlantic to the Pacific. The completely autonomous undertaking is an attempt to complete a 3,500 kilometre trip between Tuktoyaktuk, an Inuit village in Northwest Canada and Pond Inlet, an Inuit village on Baffin Island. Cargolux head of corporate communications, Moa Sigurdardottir says: “Cargolux is proud of supporting the Solar Arctic project, which, like the Solar Impulse project, is an effort to explore new and innovative paths in the transportation industry.” This is not the first time Cargolux has supported solar powered expeditions, having transported the Solar Impulse aircraft on its two missions in 2013 and 2015. For its first mission, the ‘Across America Tour’, Cargolux brought the aircraft from Payerne in Switzerland to the NASA Ames Research Center at Moffett Airfield in the US, from where it flew across the country. For the second, more ambitious ‘World Tour’, Cargolux ensured the aircraft was flown from Switzerland to Abu Dhabi. Swiss visionary, Bertrand Picard conceived and designed both the Solar Impulse aircraft and boat.

Quote of the week “I have been truly surprised at how much paper is still involved in cargo” Lisa Oxentine compares the cargo business to the passenger side

WORLDNEWS

SAUDI Arabian Airlines and Saudia Cargo are sponsoring the Saudi motorcyclist’s tour as part of the companies’ support for the National Team at the 2018 World Cup in Russia. The sponsors will cover the travel expenses and motorcycle shipment costs of the tours, who will cover more than 8,000 kilometres in 20 days of travel, visiting several European cities before arriving in Moscow, their final destination. The four Saudis travelled from King Abdulaziz International Airport to Frankfurt, Germany while their motorbikes were shipped on a Saudia Cargo aircraft. From Germany they will travel to the Polish border and on to Belarus, touring major cities on route before reaching Russia. The motorcycle tour is part of the Saudi Airlines Company’s efforts to support national events and activities and show support for the Saudi National Team in the World Cup 2018. The motorcycle tour are providing regular updates on Saudia Cargo’s Instagram page.

Hactl makes light work of heavy load

Hong Kong Air Cargo Terminals (Hactl) has handled two charter flights for AirBridgeCargo Airlines each carrying 20 metre-long machinery components weighing almost 19 tonnes. Due to their length, the machinery components were secured to customised built up pallets and were unloaded through the aircraft’s nose doors. Hactl was unable to use cranes due to local regulations so had to deploy four main deck loaders, which had to be lowered in perfect alignment to avoid any damage to the cargo. Manoeuvring the unloaded cargo from the aircraft to the cargo terminal also presented a challenge with traffic on the ramp road being temporarily re-routed, and a direct path to the terminal was cordoned off to provide a straight journey without any sharp turns.

aircargoweek.com

BOARD of Airline Representatives in Germany (BARIG) secretary general, Michael Hoppe has been reconfirmed as executive board member of the Air Cargo Community Frankfurt (ACCF). Hoppe has been part of the ACCF since its foundation in 2014. As secretary general of BARIG he represents the interests of over 100 national and international cargo and passenger airlines. He says: “Active involvement in the ACCF is of great importance to us for example concerning the enhancement of infrastructure at the airport in Frankfurt as Europe’s largest cargo airport and regarding the targeted acceleration and optimisation of air cargo processes.” LATAM Cargo has joined the Board of Airline Representatives in Germany (BARIG), which represents the interests of 100 national and international airlines. The cargo division of the Chilean-Brazilian LATAM Airlines Group is the largest airline in Latin America with a network of over 140 destinations in 29 countries, with 10 dedicated purely to cargo. BARIG secretary general, Michael Hoppe says: “We are glad to welcome LATAM as new BARIG member, especially since the cargo field is continuously gaining importance within our association. Air cargo infrastructure and process optimisation at airports are essential topics regarding profitability and efficiency.” CARGO at Heathrow Airport has grown for the 22nd consecutive month, passing the 144,000 tonne mark in May. The airport handled 144,171 tonnes of cargo in May, a year-on-year increase of 0.5 per cent. In the first five months of 2018 cargo volumes have increased 3.1 per cent to 702,120 tonnes, and are up 7.9 per cent on a rolling 12-month basis to 1.7 million tonnes between June 2017 and May 2018. The fastest growing longhaul cargo markets were Brazil, increasing 33 per cent, followed by Japan up 28 per cent. CARGO volumes at Brussels Airport increased by 15.9 per cent in May to 65,250 tonnes driven by the growth of belly and trucked cargo. Total flown cargo was up 11.3 per cent to 48,800 tonnes, with a small increase in full freighter volumes, up 1.4 per cent to 13,801 tonnes, integrators growing by 7.5 per cent to 20,649 tonnes and belly cargo rising by 30.1 per cent to 14,349 tonnes. Full freighters have been declining for the past 12 months due to stricter noise standards in the Brussels Region, though they recovered slightly with particularly good performance from most carriers and new routes to Latin America. Belly cargo’s rapid growth was thanks to new long-haul routes that have been launched in recent months. Growth was mainly driven by imports, up 15 per cent primarily from Asia and Latin America, while exports were up three per cent thanks to Latin American flights. Trucked cargo reached record figures, with 32.1 per cent growth to 16,450 tonnes. PELI BioThermal will showcase its shipping solutions and reveal the newest of its bulk systems, the CoolPall Flex at Clinical Trial Supply Nordics in Copenhagen, Denmark. Experts from Peli BioThermal will attend the two day conference taking place from 19-20 June, where the company will exhibit its latest products for the global transportation of pharmaceuticals. Services and solutions on display at Stand 18 will include Chronos Advance and Chronos Express high performance single-use shipping systems, and the Credo Cube reusable thermal shipper that protects payload contents at defined temperatures longer than any other passive thermal shipper.

ACW 18 JUNE 2018

NEWS

Emirates touches down at Stansted

mirates’ first flight to London’s Stansted Airport touched down on Friday 8 June, bringing the total number of flights between Dubai and the London airports to 10 a day. The Boeing 777-300ER touched down just before 14.00h, making Stansted the seventh airport in the UK from which Emirates operates, and the third in London after Gatwick and Heathrow. To celebrate the airline’s arrival to the airport, Emirates and Stansted held a launch event for local dignitaries and stakeholders hosted by Emirates divisional senior vice president – commercial operations West, Hubert Frach; Emirates divisional

vice president – UK, Richard Jewsbury and Stansted Airport chief executive officer, Ken O’Toole. Frach says: “There’s been a real appetite for increased connectivity between the thriving business community in the East of England and our global network too. The new gateway will support the swell of new start-ups, SMEs and established businesses in the London Stansted Cambridge Corridor by giving them access to new cities and countries across the globe.” More than 25 of the world’s largest corporations have established operations in the wider Cambridge and Peterborough area including Airbus, AstraZeneca, ARM and GSK who will benefit from easier trading and business connections.

O’Toole adds: “In 2018 Stansted is set to be the fastest growing London airport and a key enabler of economic growth for both the UK and East of England, and the addition of the new Emirates service will provide a further boost to our long haul ambitions and ultimately save local passengers valuable time and money that is associated with flying from other airports across London.” The flights will offer local businesses about 20 tonnes of cargo capacity per flight, connecting cargo customers to over 155 cities across 85 countries. Emirates operates flights to London Heathrow, London Gatwick, Birmingham, Newcastle, Manchester and Glasgow, and will start flying to Edinburgh in October.

Stansted flights offer local companies more flexibility ADDING flights to London Stansted Airport will provide greater choice and flexibility for local companies, Emirates divisional vice president – UK, Richard Jewsbury tells Air Cargo Week. Speaking at the launch ceremony of Emirates’ daily Boeing 777-300ER flights to the Essex airport, Jewsbury (pictured left with Ken O’Toole and Hubert Frach) explained that freight make up approximately 15 per cent of revenue, varying from route to route. He says it is an important part of the revenue mix so the planning and cargo teams work closely together to understand opportunities for inbound and outbound volumes, adding that the airline is pleased to be able to offer 20 tonnes of cargo capacity on these flights. The 777-300ER is considered very useful from a cargo perspective, with Jewsbury commenting: “From a belly perspective, 20 tonnes is a good load with a good balance of volume and weight. We are very pleased with it from a freight perspective.” The sales team have been engaging with local customers to let them know about the opportunities, some of whom are already global customers supported by Emirates in other countries and regions. Pharmaceutical and technology industries in particular are expected to benefit from the new connection. He says: “One of the products that is doing very well for our cargo team are temperature controlled products so for pharmaceutical

ACW 18 JUNE 2018

companies that need to be able to transport medicines in a temperature controlled environment, I think that will be a very welcome and useful opportunity.” Added to this, customers will not have to truck goods to other UK hubs such as Heathrow, Manchester or Newcastle, or even abroad to other European airports. Jewsbury says: “It’s easier and more convenient, if you’re manufacturing or producing products you want to export then being able to take it to Stansted then to Dubai and across our global network it makes life easier and there is less risk of delay or disruption.” With Brexit on the horizon, strong air links are important for continuing prosperity of the nation. Jewsbury says it is “business as usual” and

Emirates remains committed to the UK market. He says: “We’ve had a long term commitment to the UK, we’ve been here since 1987. In addition to the London gateways we have operations in Newcastle, Glasgow, Manchester, Birmingham, along with Edinburgh coming in October, that will continue regardless. Brits will always want to travel, businesses based here will always be going overseas to open new markets and the UK is an important market.” Focusing on the regional airports is also important, saying Emirates has been very successful in this area, serving local communities. He says: “We can continue growing in London by growing in Stansted so you need a balanced approach.” When Emirates starts flying to Edinburgh in October, Jewsbury expects this to be a strong standalone market. Emirates already carries seafood and whiskey out of Newcastle and Glasgow, and he expects to see more of the same out of Edinburgh. He says: “It is very well placed for the oil market up in Aberdeen, a market already served out of Glasgow.” The UK will remain an important market for Emirates, with Jewsbury saying: “It is one of out most important markets, it’s been a long term commitment and we see it as a partnership. It is interesting that Stansted will be our seventh UK gateway and our 10th daily flight in the London area and the 18th flight out of the UK.”

aircargoweek.com

Emirates teams up with Cainiao Network EMIRATES SkyCargo has signed a memorandum of understanding (MoU) with Cainiao Smart Logistics Network to let the logistics arm of Alibaba Group use Dubai as a hub. The two companies will work closely to manage e-commerce shipments in the Middle East and other neighbouring regions, with further details of the tie-up to be announced as they are developed. The MoU was signed by Emirates divisional senior vice president – cargo, Nabil Sultan and Cainiao Global Business general manager, Xiaodong Guan at Cainiao’s global headquarters in Hangzhou. The deal will allow the companies to leverage each other’s strengths in cross-border e-commerce trade and cargo operations, also supporting Cainiao’s broader efforts to offer enhanced customer experience. Last month Cainiao unveiled plans to develop six global hubs in six cities around the global, including Dubai. Guan says: “As a key gateway that links Asia and Europe, Dubai is well positioned to help us achieve our goal of 72-hour global delivery. The MoU with Emirates SkyCargo is another milestone to reach this goal.”

NEWS

WILL WASTE FUEL A SUSTAINABLE FUTURE?

Can airlines, including all-cargo, make the move to waste-to-renewable jet fuel?

rom one flight in 2008, to 100,000 flights in 2017, to one million flights in 2020, the aviation industry is pushing hard to use sustainable fuels to cut emissions, says IATA, These can be from either waste products or specially-grown bio-crops. The issue of Sustainable Aviation Fuels (SAF) is coming to the forefront of modern concerns about climate change and CO2 production. IATA members, including freight airlines, are collectively committed to ambitious emissions reduction goals. SAF, have been identified as one of the key elements in helping achieve these goals. They are the only low-carbon fuels available for aviation in the short to mid-term. On February 24, 2008, a Virgin Atlantic B747 became the first aircraft flown by a commercial airline to fly on a blend of jetfuel and sustainable aviation fuel (pictured below). These commercial flights are the ones that provide bellyhold capacity and through that, produce airfreight’s share of emission production. IATA’s aim is to see a billion passengers fly on a SAF-blended flight by 2025.

Travelling by air has been on the rise since 2005, with 2.14 billion people travelling that year and 2.26 billion in 2006. Fast forward and 2010 saw a higher climb as the number of people travelling hit 2.7 billion. In 2011, the figure increased to 2.86 billion. In 2015, 3.57 billion travelled and in 2016, there were 3.77 billion travellers.

Some 30 per cent of agricultural and household waste is used on United Airline flights. From this, carbon dioxide emissions will be reduced by up to 60 per cent on a lifecycle basis in comparison to conventional jet fuel.

HAINAN AIRLINES

On a flight from Beijing to Chicago, which took 12.5 hours — Hainan Airlines used 15 per cent biofuels on the journey. The cooking oils, which included vegetable oils and animal fat, were taken from restaurants; and this could help reduce emissions by 50 per cent, if used instead of normal jet fuel.

PARIS AIR SHOW

PASSENGER NUMBERS

The key driver in bellyhold capacity is always the number of passengers and their destinations. Looking to invest in five new low-carbon fuel plants, the British government is set to invest $30 million which will cause big changes in the waste industry. This news comes at a time where the UK wants to become a zero-emission zone by 2040 with the removal of petrol and diesel cars and is eager to invest in environmental alternatives.

UNITED AIRLINES

Due to more aircraft in the sky, including freighters, air pollution is becoming a greater problem. Aircraft emit particles and gases into the air, which are claimed to be causing a long-term effect on global dimming, climate change and ocean acidification. Action needs to be taken say industry observers and this has been the driving force behind the big investment, of which 70 groups are bidding for the funding. With aims to turn waste into renewable jet fuel, British Airways has teamed up with Velocys with an investment set to be announced in 2019. The waste plant used is expected to bring in hundreds of thousands of tonnes of waste products each year, which will be converted into clean-burning fuel that will later be used to help get British Airway aircraft off the ground. The waste that is used is expected to reduce greenhouse gases by 60 per cent, with a 90 per cent reduction in particulate matter emissions in comparison to traditional jet fuel. Leading UK outsourced waste management and recycling solutions company Reconomy has taken a look at what some airlines around the world are doing to combat this issue.

aircargoweek.com

In 2011, a Boeing 747-8 freighter flew to the Paris Air Show on sustainable biofuel, making the Washington to Paris journey the first transatlantic flight of a biofuel-powered commercial aircraft. Boeing used the flight to mark the 747-8 freighter’s international air show debut (pictured below). Each of the 747-8 freighter’s four GE GEnx-2B engines powered by a blend of 15 per cent camelina-based biofuel mixed with 85 per cent traditional kerosene fuel (Jet-A). Camelina, an energy crop grown in rotation with dry wheat, is one of the biofuel sources identified during a comprehensive regional analysis conducted by Boeing and others in the Northwestern US as part of the Sustainable Aviation Fuels Northwest project.

ACW 18 JUNE 2018

HEATHROW GATEWAY

A world of opportunities are open to the UK

n 5 June the UK Government gave its backing to the expansion of Heathrow Airport through developing a new north-west runway, writes David Craik. Transport Secretary Chris Grayling declared that the airport’s third runway would lead to more jobs, greater economic growth and be an important milestone in building a ‘global Britain’. The Government hopes the expansion – which still must be voted on in Parliament – will lead to an additional 260,000 flights a year from Platts Heathrow in 2040

and nearly double the amount of freight capacity. Indeed, there may even be 40 possible new trading long haul destinations. The development – which has been mooted and reviewed since 2003 – would likely be operational from 2026. “We welcome the announcement on the Government’s decision to table a vote on expansion. Heathrow is the UK’s global gateway and the country’s largest port by value for non-EU goods, but our current capacity constraints mean that many of Britain’s key trade routes from our airport are virtually full and unable to accommodate further trade growth,” says Heathrow head of cargo, Nick Platts. “The airport’s expansion couldn’t be more important for Britain’s future, allowing us to double our cargo capacity, relieve pressure on those already

constrained routes and unlock new long-haul trading routes providing new trading opportunities for businesses up and down the country.” Heathrow’s air cargo performance is already strong. In 2017, 1.7 million tonnes of cargo went through the airport, up from 1.54 million in 2016. The biggest market, by far is the USA with India, UAE, China, Hong Kong and Japan also in demand. The top five exports are aircraft engines and parts, machinery parts, precious metals and jewellery, pharma and paintings and antiques.

Faster throughput

The third runway is part of an extensive cargo development strategy at Heathrow. It also includes halving current throughput times, being 100 per cent e-freight compliant and building new facilities such as a distribution and consolidation centre close to the airport. In addition, it is aiming for more efficient airside access with airlocks and compounds and automated vehicle tracking systems. But it isn’t just the airport authorities thinking about cargo progress. Back in January GEFCO Group chose Heathrow to open its third dedicated temperature-controlled warehouse for the life sciences and healthcare sector. The 15,000 square foot facility, located in nearby Ashford is in addition to existing GEFCO

ACW 18 JUNE 2018

aircargoweek.com

Forwarding warehouses in Frankfurt, Germany and Amsterdam, Netherlands. It features different temperature areas from ambient and cool to frozen.

More efficient handling

“We use pick and packing methods and x-ray machines to help us handle products such as human and veterinary medicines as well as medical devices more efficiently,” explains UK sales director, Iain Logan. “It minimises airport handling time and meets the clear demand from airlines. London Heathrow was a natural home for the new Logan facility and we want to grow the customer base here. Heathrow is a global hub especially for pharmaceuticals.” Logan says plans are already in motion to increase the size of the ambient area in the new facility. “We are looking at some very ambitious growth plans. It fits in with the development of the third runway which will help build on the cargo infrastructure that is already here at the airport and beyond,” he states.

HEATHROW GATEWAY

Infrastructure requires a major upgrade

argo handling provider dnata is also eyeing up expansion at Heathrow. dnata UK Chief Commercial Officer, Mohammed Akhlaq says it is currently looking at setting up an eighth handling facility near Heathrow within the next 24 months. dnata presently has seven facilities at Heathrow including the vast dnata City. The present facilities cover 500,000 square feet and account for 500,000 tonnes of cargo per year. “We are growing immensely at Heathrow providing bespoke and customer led services for our clients,” he explains. “We are looking to develop new facilities as demand continues to increase and we find ourselves at complete capacity. There is just no more space left for us at Heathrow which is exacerbated by old infrastructure on airport. Customers are looking for us to progress and that means another facility off airport. It’s at the very early stages of planning, indeed we are just going through the architectural designs at present.” Akhlaq adds that growth at Heathrow is being seen in e-commerce, multi-valuable cargo and pharmaceuticals. He sees further benefits from the third runway but only if Heathrow uses it to spur cargo development. “It is very positive for UK PLC. Heathrow is a major gateway and will continue to be so. But the present upscaling of the cargo development programme at the airport remains slow,” he states. “We also believe that lack of cargo infrastructure and strategy has not been as prominent as it should have been in the discussions around the third runway.” Europa Air & Sea National Airfreight Manager, Andy Serpant is also cautious. “At present when there is huge demand such as at Christmas the cargo infrastructure at the airport just can’t cope. You see some really bad queues and there is a real need for a total overhaul both now and in the future to deal with increased flights after a third runway is built,” he states. “The focus will be on passenger flights and travel and there are questions over whether some freight will be diverted to Stansted instead of Heathrow. It will be an interesting expansion.” There is more optimism from Lufthansa Cargo director sales and handling UK & Ireland, Phil Cimpoias says: “There is a lot of hope that extra capacity will bring extra cargo. We will have to see what happens with the extra slots but there is potential that it will lead to more freighter movements out of Heathrow,” he says. “At present we are working closely with Heathrow to increase the cargo capacity and improve flexibility. We really need more development for the future.” Despite those differing views both Europa and Lufthansa have seen strong demand at Heathrow over the last 12 months. Cimpoias hails a successful period of growth boosted by pharma, oil and gas and cars to the US and South America in particular. Serpant states that Europa’s volumes have also grown “hugely” particularly on exports out of the UK. “That could be the weak pound as a result of Brexit or more investment in our sales team. More loads such as food to engineering spares are going to Africa as well as China and Hong Kong,” he states. “With Brexit in mind we are seeing a surge in interest from companies thinking about exporting to new markets. We are getting a lot of quotes as people get a feel for air freight in the near future. Heathrow by its nature is the number one freight hub in the UK and is very important to us and the country.”

Serpant

aircargoweek.com

ACW 18 JUNE 2018

PERISHABLES

Is technology the answer for perishables?

hanks to the globalisation of eating habits, volumes of perishables being flown to consumer markets have risen by a third since 2007, more than for any other category of product, Neil Madden reports. While the past year saw something of a slowing in this trade, the potential for growth remains enormous. A decade ago, for example, the Chinese used to eat seasonally, but rising affluence now means they can afford to fly in red cherries from Chile for the Chinese New Year. Van Gelder

Yet, in many ways the air cargo industry needs to up its game such that service levels match demand growth. At this year’s IATA World Cargo Symposium, Adelantex business development manager perishables, Frank Van Gelder insisted that food supply chains would need to improve and data would become crucial in this process. The specialist freight forwarder, which is now owned by Panalpina, has put all its data on the cloud to show availability, and product and harvest information. This is then shared on a platform that in turn is connected to a food industry multi-data network. Van Gelder pointed out that in this respect air cargo lags both sea and road freight. Often, simple errors create headaches for airlines, forwarders and cargo handlers. A recent

study by non-profit group Oceana stated that 30 per cent of seafood shipped around the world is mislabelled; in some regions this can be as much as 80 per cent.

Wrong information

This can mean that temperature sensitive goods end up being handled as general cargo because the handling agent doesn’t have the right information at its disposal. On possible solution, according to technology firm Accelya, is to use blockchains. Blockchain technology allows companies to keep shipment records that include many data points, from shipping location to size and weight, says Accelya analyst, Sandeep Fernandes. Each shipment, or even each item within a shipment, could be tracked at this level of detail. Blockchains also mean decentralised data. The information is stored across multiple locations, making it impossible for a single person

ACW 18 JUNE 2018

aircargoweek.com

to tamper with records. Air cargo carriers can investigate incidents with full confidence in the data they’re reviewing. It could also help improve packing/ shipment methods and route efficiency.

The future is blockchain

One blockchain developer, Hyperledger Foundation, is hoping to use the technology’s potential to make temperature-control easier for air cargo. Using its blockchain framework Hyperledger Sawtooth, sensors could be set up around a plane’s holding area to monitor internal conditions, as well as temperature, humidity, location, motion and shock, all of which can affect the integrity of perishables. Using blockchain would also necessitate moving from manual paper-based airway bills as the right data have to be entered electronically at the very start of the chain.

PERISHABLES

Internet of Things can’t solve every problem

n some cases, however, the Internet of Things can’t solve all the problems shippers face when exporting perishables. Other, more prosaic technologies are called for. In 2017, Australian fresh fruit exports exceeded A$1 billion ($750 million) for the first time in a calendar year, according to figures from the Australian Bureau of Statistics. Of this, 38 per cent went to China and Hong Kong, where exports to China direct recorded a 57 per cent growth in volume. However, after tariffs the biggest obstacle to growing the trade is the Queensland fruit fly which can devastate harvests. Now scientists at Hort Innovation, a grower-owned horticultural research centre, are waiting to see whether a new project to eradicate the pest is going to bear fruit, so to speak. In April this year, millions of specially-bred sterile fruit flies were released near Adelaide, South Australia to cut a swathe through the breeding population. Now, they and the growers are waiting until the next growing season to gauge the effect.

Fruit flies wreak havoc

Hort Innovation SITPlus Director Dan Ryan and SA Biosecurity’s Will Zacharin

Hort Innovation CEO John Lloyd is clear about the significance of the project. “Apart from tariffs, the fruit fly is the number one barrier to trade and at a high cost we are ensuring that we remain fruit fly free,” he said. “We are uniquely positioned in the world, with 400-500 air freight capable flights leaving Australia each week going to Asia, capable of taking instant fresh produce to enter the stores tomorrow. So the opportunity is huge, and while there are other pests to worry about, fruit fly is the biggest.” Citrus fruits and grapes account for 84 per cent of Australia’s export volume, but the country is making plans to increase exports of other, more exotic produce, including papaya, passion fruit, lychees, bananas, persimmons and limes. In Vietnam, meanwhile, the obstacle facing local exporters is more mundane; high air cargo costs. Agrice Vietnam company general director, Dam Quang Thang told local media recently that his company has lost several export contracts to competitors in Thailand because of shipping costs.

High costs

According to Thang, the airfreight cost for a kilogramme transported from Hanoi to Australia is $3.05 while from Ho Chi Minh City the cost is $2.60. Freight costs from Vietnam to European markets also range from $2.90-3.20 per kilogramme. These costs are much higher than in neighbouring countries. Thang cited Thai airlines where equivalent costs are $1.20-1.80 per kilogramme for transporting to Europe. Thang said that his company has to use Thai, Malaysian and Singaporean airlines because their costs are half or even one third of their Vietnamese counterparts. But that raises issues of capacity access and availability.

Here the solution would seem to be injecting more competition into the market to shake up state-owned Vietnam Airlines. To this end the Viet government has begun liberalising the aviation market, principally for passenger transport, but this could also see more and cheaper belly space become available to help local producers reach more international markets. Vietnam’s exports of fruits and vegetables have increased sharply by 30 per cent in the first four months of this year to $1.32 billion. With the high export growth rate, they forecast that the sector’s export will surpass the threshold of $3.5 billion this year. Nafoods Group general director Nguyen Manh Hung says that because of high airfreight costs his company has to limit exports of passion fruit. But securing lower transport costs would the firm to raise exports sharply.

aircargoweek.com

ACW 18 JUNE 2018

SWITZERLAND

Cutting-edge airfreight in Europe’s centre

cutting-edge development in cargo tracking systems is being introduced by Zurich-based Unilode Aviation Solutions with Bluetooth Low Energy (BLE) tags being embedded into the structure of ULDs, writes Stuart Flitton. The ULD management provider for 40 airlines is teaming up with technology firm OnAsset Intelligence and leading ULD manufacturer Zodiac Aerospace. Among the airlines involved in the digitalisation project are Cathay Pacific, Air Canada, Cargolux and AirBridgeCargo. Unilode CEO Benoît Dumont, says: “Since winning the inaugural IATA Air Cargo Innovation Award in 2015 we have been working closely with customers to enhance our digital tracking technology with user input across the end-toend value chain. “We have now stepped up our efforts and are at present testing the BLE tags in the field in different environments, including airports and warehouses, and plan to roll out the solution in the coming months.” Unilode has ULD management agreements with many all-cargo carriers, including AirBridgeCargo Airlines, which recently extended the deal until mid-2023. Other customers include Cargolux, Cargojet, CargoLogicAir, National Air Cargo and Saudia Cargo. Unilode also provides ULD maintenance and repair services for around 50 customers, including American Airlines, United Airlines, British Airways, Air France, KLM, and Singapore Airlines. It has 50 certified ULD repair service stations, completing more than 430,000 maintenance and repair work orders every year

Blockchain

Basel-based forwarder and logistics company Panalpina, which has joined the Blockchain in Transport Alliance (BiTA), a forum of tech and transportation companies for the development and implementation of blockchain standards. Panalpina head of digital innovation, Luca Graf says: “We will look at ways to integrate blockchain technology in complex core systems in the long run. Here the focus is clearly on reliability, standardisation and partnerships with bigger, established companies. “We will also run pilots and trials using blockchain, likely together with start-ups. The focus here lies on exploration and specific market and customer needs.” Panalpina transported 995,900 tonnes of air freight last year, an increase of 8.1 per cent and has 500 offices in more than 70 countries. Its air cargo operating earnings grew by 17.3 per cent with a 22.3 per cent hike for Q4 over the same period the previous year. Swiss International Air Lines (SWISS) was founded in March 2002, after the bankruptcy of

ACW 18 JUNE 2018

aircargoweek.com

Swissair. SWISS’s freight division, Swiss WorldCargo, is based at Zurich Airport and offers a comprehensive range of logistics solutions for transporting various types of cargo, including high-value and care-intensive consignments to 130 destinations in more than 84 countries. The airline operates a mix of Airbus A330, A340 and Boeing 777-300ER on long-haul routes, and a mix of A319s, A320, A321 and Bombardier C-series aircraft on short or medium-haul routes. It is looking at continuing to refurbish its Airbus fleet, as well as replacing older models with the 777-300ER. “This is an ongoing process as we continue to work towards operating Europe’s most advanced fleet,” the airline says, adding that SWISS has recently placed an order for two more 777-300ERs, which will offer new opportunities. The Bombardier C-series offers various benefits, including reduced fuel consumption and noise, optimised aerodynamics, and overall is a lighter aircraft than some alternatives. The Bombardier offers Swiss WorldCargo increased capacity access on its European routes. The purchase of an additional two new Boeing 777300ER will offer an opportunity to open new routes over the next few years and these are expected to be Bhat announced next year. Expansion of the passenger route network means there will be new opportunities to ship cargo throughout the world. Swiss WorldCargo head of cargo, Ashwin Bhat says: “Our business continues to grow and shows signs of success. However, in the past year this has also raised expectations and thus we must continue to push ahead. “We certainly see a strong potential area of growth in the US, which is a major player. There, we must stay especially focused and continue to show our expertise, as we face fierce competition from an array of airlines flying to Europe. “In terms of key areas, we are continuing to focus on pharma and ecommerce. We hope to have gained IATA’s CEIV certification in the next few weeks, which will further showcase us as a pharma carrier of choice.” Swiss WorldCargo sees opportunities for grapid growth in pharma. The company has taken several steps, including preparing for the CEIV certification and creating designated quality corridors, or certified trade lanes covering global pharma routes between Zurich and other destinations.

TRADEFINDER Airlines

Cargo Handling

GSSAs

Turkey

United Kingdom

United Arab Emirates

Online Services

Freight Forwarders Hong Kong

Freight Forwarders

Iran

United Kingdom

Freight Forwarders United Arab Emirates

Industry Events USA

Freight Forwarder

Charters

United Arab Emirates

United Kingdom

aircargoweek.com 11_18 June 2018.indd 1

ACW 18 june 2018

11 11/06/2018 14:41

LOOKING AT WHAT PEOPLE IN THE AIR CARGO INDUSTRY ARE THINKING ABOUT

Seconds with...

ACW: You have been involved with cargo at American Airlines for just a year. What have you still to learn? Oxentine: Thanks to all the great people I’ve met, I’ve learned more than I ever thought possible in the past year. But, there’s always more to learn. This is an exciting time to be a part of American Airlines Cargo and I look forward to what’s to come. ACW: Any surprises since you have become managing director, global & key accounts? Oxentine: I have been truly surprised at how much paper is still involved in cargo. I came from the passenger side of the business and we switched over electronically quite a while ago. I’m part of an organisation that’s pushing for quick change from an e-freight perspective. ACW: Are you challenged or invigorated by

LISA OXENTINE

Lisa Oxentine is the managing director, global and key accounts – cargo sales. Prior to joining the cargo team in 2017, she led the customer recovery team in the Customer Experience department, managing 47 system-wide managers who focused on ensuring a top-notch experience for customers across the entire American Airlines network. She joined American in 1987.

the arrival of Amazon Prime? Oxentine: I feel very excited about all the possibilities and intrigued by how our society has to have everything in an instant. It is changing how we do business every day, but it’s going to make what we do even more exciting and cutting edge. ACW: What do you see as the key requirements to get the most from your staff? Oxentine: Listening to them on a daily basis and then taking that information to make the necessary changes they need to do their jobs better. Follow-through and trust are key requirements in maintaining a successful team dynamic.

ACW: In terms of AA Cargo’s business, what are the main opportunities you see over the next five years? Oxentine: The next several years are going to be about adjusting the way we do business to support the growing e-commerce demand. ACW: If you could eat only three foods for the rest of your life, what would they be? Oxentine: Bread, pasta and ice cream.

LISA OXENTINE

ACW: If you could be anyone in history who would it be? Why? Oxentine: If I could be anyone, I’d be Danny Thomas who created St. Jude Children’s Research Hospital in Memphis. I visited about two years ago and what an amazing place with the most amazing people! The work that they have been able to do there is magical and they have changed so many families’ lives that have to deal with so much pain. I would love to be able to touch so many people’s lives and save

the children the way Mr Thomas has.

ACW: What’s the most interesting thing about you that we wouldn’t learn from your resume alone? Oxentine: That I love sports; more specifically the Dallas Cowboys. I also love hockey and The Dallas Stars. Both of my kids played soccer and football in college, so it has been something I am very passionate about.

ACW: We finish the interview and you step outside the office and find a lottery ticket that ends up winning $10 million. What would you do? Oxentine: First I would take care of my Dad and make sure he has everything he needs. My kids of course, then make sure that my niece and two nephews are set for college. After that, I would donate to two charities – St. Jude and Scottish Rite hospitals since both of these do not charge families for care. I would have to think about if I would still work. I might retire and then volunteer at either of those hospitals and take golf lessons. I would then spend some of money on a great vacation.

ACW: When you’re having a bad day, what do you do to make yourself feel better? Oxentine: Call my sisters or my best friend to vent. They always make me laugh. I do try and remember that I have survived many bad days while working at the airport during bad weather. Thinking about some of those and how I made it through helps me remember that whatever I’m going through probably doesn’t measure up to those crazy days.

Picture credit: Mahanga, Wikimedia Oxentine: The last thing I watched on TV was the Voice. I love that show and specifically Blake Shelton. It is very funny too, so it really makes me laugh, and I enjoy that after a long day.

ACW: What was the last film you saw? Oxentine: Game Night at the movies and on the airplane I watched Three Billboards Outside Ebbing, Missouri. ACW: What did you want to be when you grew up? Oxentine: I wanted to be a teacher because I love to help others, especially kids. ACW: If you could sing one song on American Idol, what would it be? Oxentine: 9 to 5 by Dolly Parton.

ACW: Iced tea or Mint Julep? Oxentine: Iced tea, but unsweetened.

ACW: What’s the worst thing you did as a kid? Oxentine: The worst thing I did was opening all of my Christmas presents before Christmas and then I re-wrapped them.

ACW: Name a product or service you love so much that you’d happily be that company’s spokesperson. (Not AA Cargo!) Oxentine: Starbucks.

ACW: What’s the last thing you watched on TV and why did you choose to watch it?

aircargoweek.com