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The weekly newspaper for air cargo professionals Volume: 19 Issue: 37 19 September 2016

Hanjin crisis impacting airfreight and world trade

he collapse of Korean sea freight container line Hanjin Shipping is likely to help airfreight like the US West coast port strike boosted the industry in the early part of 2015, although to what level is as yet unknown. However, one major air cargo industry player is set to be affected negatively, as Hanjin’s biggest shareholder is Korean Air, which is taking a hit in the pocket. Last week on 10 September, Korean Air approved a plan to stump up a loan of 60 billion won ($54 million) to the troubled shipper, and the crisis could well end up costing the world’s third largest air cargo carrier significantly. This loan may take considerable time to secure according to reports, while Korean Air’s sup-

port was reportedly offered on condition the shipper gave it a stake in Hanjin’s Long Beach Terminal as collateral. Korean Air purchased a 15.4 per cent share in the shipping firm, which is part of the Hanjin Group (the owner of Korean Air), for 250 billion won in 2013 and added another 17.8 per cent share the following year for 400 billion won. The Hanjin bankruptcy has also

Europe’s hubs post 2.3% rise

had a major effect on the global economy, as the shipper is said to handle 20 per cent and 40 per cent of cargo for LG Electronics and Samsung Electronics, respectively. Samsung is looking to remove its trapped cargo from the bankrupt shipper’s vessels and last week, it said goods worth $38 million, mostly televisions and appliances, were stuck aboard two Hanjin ships. The technology giant said it may have to charter at least 16 aircraft to move the goods if the cargo cannot be unloaded immediately, costing it at least $8.8 million. Last week, the Hanjin Group pledged to raise a total of 100 billion won ($90 million) in funds to help rescue around $14 billion cargo that is stranded at sea

Freight volumes grew by 2.3 per cent in July with European Union (EU) airports making up for declines at non-EU hubs, the Airports Council International (ACI) Europe says. The association reports that freight traffic across all European airports were up 2.3 per cent, with EU hubs registering growth of 1.3 per cent while non-EU airports were down 7.3 per cent. ACI Europe says this mirrors the trend seen in passenger traffic, where the continent saw growth driven by EU hubs performing strongly while non-EU airports struggled. ACI Europe director general, Olivier Jankovec explains: “Here we are again in a two-speed market – but the other way around this time. While air traffic growth after the global financial crisis was down to non-EU airports, the EU market is now the one in growth mode.” Among Europe’s top airports, Frankfurt Airport grew 1.4 per cent in July to 170,674 tonnes and Paris Charles de Gaulle Airport was down one per cent to 157,537 tonnes. Amsterdam Airport Schiphol was the top performer with 4.4 per cent growth to 139,650 tonnes and Heathrow Airport grew by 2.6 per cent to 124,451 tonnes. Outside the EU, Istanbul Ataturk Airport fell 19.5 per cent to 51,556 tonnes though the city’s other airport, Sabiha Gokcen International Airport grew 11.7 per cent to 4,757 tonnes.

following the failure of Hanjin – which is the world’s seventh largest container carrier. More than half of Hanjin‘s 141 ships have been blocked from docking at ports and ports around the world have refused to accept Hanjin ships. Hanjin reportedly handles about eight per cent of trans-Pacific US cargo, which is usually auto parts, furniture, and pulp and paper products. Hanjin filed for court receivership in Seoul on 31 August with a debt of 6.1 trillion won, according to its half-year results.

New Samsung mobile banned

Finnair Cargo and American Airlines Cargo have both banned cargo shipments of Samsung Galaxy Note 7 mobile phones - due to fire hazard concerns with the battery cell. Finnair Cargo says: “Finnair does not accept any cargo or mail shipments containing these Samsung Galaxy Note 7 devices. This embargo covers new shipments to distributors and possible return shipments from customers. It is effective immediately until withdrawn by a separate notification.” It adds the hazard comes under dangerous goods special provision A154. American says: “For the safety of our passengers, employees and other cargo, we will not be transporting recalled Samsung Galaxy Note 7 devices. This policy follows new IATA guidelines, which were put into place after reports of the battery catching fire during or after charging.” A number of airlines including Delta Air Lines, Cathay Pacific and Qantas and regulators, the Civil Aviation Authority and Federal Aviation Administration have issued warnings to passengers with the mobile phones not to charge them or turn them on board during flight, and to pack them in hand luggage, not checked baggage.

merger paying off for fcs cool chain cargo a priority for cargolux collaboration the key to a better chain future looking bright for hactl

China forecasted to need 600 freighters CHINA is predicted to need over $1 trillion of new aircraft over the next 20 years including almost 600 freighters for e-commerce, Boeing says in its China Current Market Outlook. Boeing predicts 6,810 aircraft worth over $1 trillion will be needed by 2035 including 5,110 single aisle units worth $535 billion. Air cargo is predicted to be a key driver for continuous growth of China’s aviation market due to constant demand for e-commerce. The manufacturer predicts China will need 180 new freighters and 410 converted units over this time period. Boeing Commercial Airplanes vice president of marketing, Randy Tinseth says: “The continuing expansion of China’s middle class, coupled with new visa policies and a wide range of widebody airplanes with new technologies, capabilities and efficiencies, gives us every reason to expect a very bright future for China’s long-haul market.” In addition to the 5,110 single aisle aircraft China is predicted to need, Boeing expected to deliver 140 regional jets, 780 small wide-bodies, 630 medium wide-bodies and 60 large wide-bodies.

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NEWSWEEK UK gateways enjoy tonnage uplifts in August

he UK’s four busiest cargo gateways Heathrow Airport, East Midlands Airport, London Stansted Airport and Manchester Airport have all posted year-on-year (YOY) rises in cargo volumes for August. As many question what impact the UK voting to leave the European Union, the so called Brexit, will have on the economy, it seems airfreight may have been boosted by the falling pound against the US dollar. Heathrow saw volumes grow YOY 0.3 per cent to 122,909 tonnes and says fast growing markets were very strong, with Latin America up 12 per cent, the Middle East by 5.7 per cent and East Asia by 3.7 per cent. Heathrow Airport chief executive officer, John Holland-Kaye continues to push the hub’s case for a third runway: “Britain should not accept bronze, when we could

so easily win gold. So now is the time to back the winners in our economy and expand Britain’s biggest and most successful port, Heathrow. “We can get exporters, large and small, from all across Britain connected to the growing markets of the world, and it is urgent that we get on with it. That is why we are looking at options to connect Britain to growth quicker and cheaper.” Manchester Airports Group owned Manchester Airport - was helped by rising

belly traffic after network development, handled 9,837 tonnes in August, an 11.9 per cent YOY rise on the month last year. London Stansted Airport saw YOY growth in August of 6.8 per cent compared to August 2015, handling 20,219 tonnes, while MAG’s busiest airport for cargo, East Midlands Airport saw volumes surge YOY by 7.1 per cent to 26,251 tonnes. Earlier this month, Gatwick reported volumes have continued their recovery, rising 12.7 per cent in August to 6,396 tonnes.

Cargo up 6.6% at Brussels

CARGO volumes at Brussels Airport have grown for the first time since the hub serving the Belgian capital was hit by terrorist attacks in March. Volumes in August were up 6.6 per cent year-on-year to 39,848 driven by the full-freighter segment, which benefitted from the development of Ethiopian Airlines Cargo. Freighter cargo grew by 13.3 per cent to 29,511 tonnes with full-freighters up 26.2 per cent to 14,053 tonnes and express rising 3.8 per cent to 15,459 tonnes due to worldwide growth of e-commerce. Bellyhold cargo was down 8.9 per cent to 10,336 tonnes mainly due to the departure of Jet Airways. Year-to-date volumes were down 4.9 per cent to 310,044 with total freighter traffic declining 0.3 per cent to 229,059 tonnes and bellyhold by 15.6 per cent to 80,985 tonnes. Full freighter cargo was down 2.1 per cent to 96,293 tonnes while express was up 0.9 per cent to 132,766 tonnes.

E-commerce drive at Schiphol THE cargo community at Amsterdam Airport Schiphol has teamed up with Dutch Customs to simplify e-commerce declaration with VENUE. VENUE is designed to help shippers import and export items purchased via e-commerce platforms such as fashion, personal care and homeware throughout the Union Customs Code transition period, ending in January 2021. VENUE-authorised shippers are able to submit a pre-declaration leaving out one or more particulars such as Harmonised System (HS) code, while goods valued at 22 euros of less require no supplementary declaration. The airport says VENUE offers significant advantages because generating HS codes can be time consuming and this innovation will keep cargo flowing smoothly while maintaining efficient and reliable Customs clearance processes. VENUE declaration is available until Q3 2019. Schiphol Cargo business development director, Saskia van Pelt says: “The air cargo market is changing and we are seeing a huge increase in e-commerce parcels. “At Schiphol we are focused on ensuring we continue to provide a high quality, efficient service for our e-commerce customers and VENUE will help us to do just that.”

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NEWS WEEK Qatar becomes the first carrier to adopt Cargo-XML

atar Airways Cargo has become the first carrier to fully adopt, implement and integrate the next generation messaging standard, Cargo-XML in its cargo management system – CROAMIS. The Cargo-XML messaging is an initiative mandated by the International Air Transport Association (IATA) as a preferred standard for electronic communication between airlines and shippers, freight forwarders, ground-handling agents, regulators, as well as customs and security agencies. Qatar says IATA’s Cargo-XML eliminates the constraints posed by the traditional Cargo Interchange Message Procedures (Cargo-IMP) standard and is designed to promote greater and seamless data interfaces. The carrier says the new messaging standard while providing better data quality, will also simplify the electronic data interchange

between airlines and other stakeholders and Cargo-XML is recognised as the universal language for improving e-commerce, and facilitates growth in trade and encourages participation in global commerce through electronic data submission for all air cargo shipments. The airline says the new messaging system supports easier transmission of more electronic

documents, thereby streamlining air cargo processes and reducing costs. Qatar Airways chief officer for cargo, Ulrich Ogiermann says: “With the implementation of this new messaging standards, we are now able to offer numerous benefits to our partners in the supply chain including customers and regulatory authorities who have adopted Cargo-XML. IATA’S global head of cargo, Glyn Hughes says: “Achieving alignment across the industry – IATA’s goal – not only facilitates trade growth and improves cargo security, it also helps to ensure the millions of tonnes of air cargo transported annually from medicines to crucial electronic components reach the consumer more easily.” The Cargo-XML specifications are compatible with industry standards such as the World Customs Organization and International Standards Organization.

WorldNews HAE has been appointed as the general sales agent for DHL Aviation in the United Arab Emirates (UAE). The contract started on Thursday, 15 September. HAE is responsible for all sales and customer service activities of DHL Aviation across the UAE. HAE says with global destinations served through all UAE airports it enables direct access into Europe, Middle East, Asia and Africa. CATHAY Pacific Airways carried 153,733 tonnes of cargo in August, a rise of 3.8 per cent on August 2015. The cargo load factor rose by 2.7 percentage points to 63.3 per cent. Capacity, dropped by 2.6 per cent but cargo revenue tonne kilometres (RTKs) increased 1.7 per cent. In the first eight months of 2016, tonnage rose 1.2 per cent, capacity was up 0.3 per cent and RTKs fell 0.7 per cent.

Shenyang to be cargo hub

SHENYANG Taoxian International Airport in north-east China is set to be turned into a regional cargo hub. The owner, Liaoning Airport Management Group Co has entered into a strategic cooperation framework agreement with HACTL Development Holdings Ltd (HDHL) – the business development arm of Hactl Group - as a first step in developing the gateway as a major regional cargo hub. Shenyang has one runway and one cargo terminal. It is served by China Southern Airlines, Shenzhen Airlines, Beijing Capital Airlines, China Eastern Airlines and Spring Airlines, while China Postal Airlines and SF Airlines operate freighter services. In 2015 cargo was 142,000 tonnes – up 2.7 per cent on 2014. Specific plans are yet to be agreed, but Shenyang is set to target cool chain and pharma traffic and will devote initial attention to market analysis with development targeted within the next few years. HDHL is set to act as a consultant, on design, construction and operation of new facilities.

Libyan mission for Cargo Movers

CARGO Movers, an X2 Cold Chain member, has arranged a payload of medical products to war-ravaged Libya and carried out the ground handling. The full charter of Fresenius medicals were flown to Mitiga Airport in Tripoli, and it included 217 pallets of medicine, medicals and related materials. The total weight was 90,833 kilogrammes. Cargo Movers key account manager, Marcel Macke says: “It was a very big deal and very difficult but was handled successfully.” Beside air and sea freight in general cargo, one of the firm’s main topics is the handling of perishables and pharma shipments by air, sea and truck. The company was founded in 1998 by Robert Mattern and Thomas Heiler, both with lengthy experience and leading positions in the cargo business at Frankfurt Airport.

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ACW 19 SEPTEMBER 2016

60 NEWSWEEK

Seconds with

Justin Burns, ACW: Why did Turkish get certified at IATA’s CEIV Pharma cerfitication? Kazanci: IATA CEIV Pharma certification is recognised as one of the important indicators of our process for pharmaceuticals shipments. The fact the temperature changes pose serious

SEREF KAZANCI

Turkish Cargo has recently been awarded the International Air Transport Association’s (IATA) Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma) at its Istanbul hub and for the airline itself. Air Cargo Week spoke to the carrier’s senior vice president, Seref Kazanci about the sector and why Turkish gained the certificate.

threats to integrity of these sensitive products of the healthcare products market that has a-trillion-dollar annual volume has required to establish more complex but more reliable methods in air transportation. To that end, special equipments, storage facilities, compatible handling procedures,

and above all, strong harmonised among all elements of the entire cold chain are very important. From this approach, IATA has developed the IATA CEIV Pharma certificate that meets the sectoral needs with the joint work of the regulators and the co-operators. In this context, Turkish Cargo management seeks strong and long-lasting co-operations in the pharmaceuticals and healthcare products transportation, and adopting the approach that all elements of the cold chain will win, it gives priority to such transports in all aspect.

Justin Burns, ACW: How is the pharmaceutical cargo sector performing for Turkish? Kazanci: Turkish Cargo’s strategy in 2016 is to increase pharmaceuticals share in our all shipments. Owing to our new investments and projects that support this strategy, we expect a more than 40 per cent increase at the end of the 2016 in pharmaceutical transportation.

Justin Burns, ACW: Is pharma cargo a growing sector for Turkish and are you seeing more demand? Kazanci: The pharmaceutical industry is fast-growing business in the global market. We are aware of the huge potential in the pharmaceutical market that continues to grow day-by-day. The demand for pharmaceuticals will increase, as long as medical problems occur.

Justin Burns, ACW: Which trade lanes are strongest for pharma cargo? Kazanci: To talk about the pharma business worldwide, Europe is the biggest source. As Turkish Airlines, we have freighter services to many European countries and moreover, we are continuously opening new passenger routes in Europe, in line with the expansion of our network. As our focus in Europe will be stronger in the future, it can be said that we will have more pharma shipments. Besides, when we analyse the growth in the cargo types, pharma shipments have the highest growth rate, as twice as general cargo. To fill our increasing capacity, we have to get share from the growth in the pharma

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SEREF KAZANCI shipments.

Justin Burns, ACW: Are you planning on expanding your facilities and infrastructure to meet demand for cool chain? Kazanci: Turkish Cargo opened the brand new cargo facility with high standards in January 2015. Our new cargo terminal comprises of over 3,000 square metres of special storage area and 39 separate special cargo rooms which have high quality standards, including temperature-controlled storage units designated for drug, vaccine and medical supply shipments. All of our climate-controlled storage units are monitored for temperature and humidity levels via an online tracking system.

Justin Burns, ACW: What are your future plans for pharma now you have CEIV? Kazanci: We have built local pharma handling expertise and a pharma mindset training the employees on pharmaceutical handling. For instance, standard operating procedures checks on correct use of IATA pharma label, use of IATA pharma acceptance checklist, service providers implementing pharma specific SOP’s and dedicated pharma handling. We have signed agreements with active temperature controlled container providers. Furthermore, with all this improvements we are planning to launch a new product for pharmaceuticals shipments in 2016. Turkish Cargo will continue to provide technology-driven logistics solutions to individual customers and major corporations.

Justin Burns, ACW: Why does Turkish put a lot of focus on growing its volumes of pharma cargo? Kazanci: Geographically, our hub, Istanbul, is located in a very strategic area. The natural hub position of Istanbul enables us to provide rapid connection between pharmaceutical producers and consumers from Asia to Europe. We’ll work to make Istanbul one of the biggest players in the air cargo trade between East and West, benefitting from its strategic location at the centre of world trade routes.

NEWS WEEK

Puerto Rico flight added by Cargolux to its network

argolux Airlines International has introduced a new direct flight from Luxembourg to Aguadilla, Puerto Rico, on 2 October – targeting the perishables and cool chain markets. The flight leaves Luxembourg every Sunday at 22.15h and arrives in San Juan on Mondays at 01.30h (local times). Cargolux utilised highly specialised cool chain equipment and the most modern dedicated freighter in the industry, the Boeing 747-8 Freighter, which it says is ideally suited for perishable and cool chain shipments with its four independently adjustable climate zones, superior range and speed. The carrier has already established four weekly services from Aguadilla to Europe that are strongly supported by shippers and forwarders in the South and Central American perishables and flower industry. In addition, Cargolux already operates four indirect weekly flights from Luxembourg to Aguadilla. Building on growing demand for faster services on the sectors to Puerto Rico, the new, direct south-bound flight complements the established services perfectly.

Cargolux executive vice president for sales and marketing, Niek van der Weide says: “Our long-standing experience in the cool chain transport field, coupled with our dedicated, customer-oriented mentality, makes the Cargolux service to Aguadilla a superior offering for our partners in the pharma and perishables industry. “Only Cargolux serves this sector directly, fast and reliably. Customers have recognised our efforts in providing the best equipment and the most personal service and made us the pre-

ferred partner for their business. “Our cool chain experts regularly assess the specialised and often unique requirements of our customers and offer solid and practical solutions. This dedication is well received and has made our CV Fresh and CV Pharma products a sound success.” Cargolux was the world’s first GDP-certified cargo airline and utilises Luxair’s modern pharma and healthcare centre at Luxembourg airport, itself a GDP-certified facility. (See page eight for more about Cargolux’s cool chain plans)

Fine growth for Finnair

FINNAIR’S cargo capacity in scheduled traffic measured in available tonne kilometres (ATK) grew by 4.9 per cent, and revenue tonne kilometres (RTK) increased by 8.7 per cent year-on-year (YOY) in August. In August, ATK was 121.8 million, while RTK was 69.4 million and for the first eight months of 2016 - ATK is 923.4 million, a YOY rise of 7.1 per cent and RTK is 521.7 million, a YOY surge of 13.8 per cent. The Finnish carrier handled 11,210 scheduled cargo tonnes in August, a rise of 12.3 per cent on the same month last year and so far this year it has handled 84,695 tonnes of freight – a 14.7 per cent YOY surge. In August, this included 2,220 tonnes to Europe, a YOY rise of 37.4 per cent, 7,972 tonnes to Asia, a YOY uplift of 6.1 per cent and 884 tonnes in the North Atlantic, an increase of 22.8 per cent. In August, the cargo load factor rose 1.9 percentage points to 57 per cent and for 2016 so far it stands at 56.5 percentage points, up 3.3 percentage points. Finnair’s total freight capacity has been boosted in Europe and now includes two weekly freighter flights between Helsinki and Brussels and two weekly freighter flights shared with IAG Cargo between Helsinki and London, both operated by DHL. Finnair recently launched bellyhold services to Fukuoka in Japan and Guangzhou in China.

American boosts EU links AMERICAN Airlines will connect Dallas Fort Worth International Airport with daily seasonal flights to Rome and Amsterdam from May to September 2017. The airline will use a Boeing 777-200 for flights to Rome’s Leonardo da Vinci – Fiumicino Airport and a Boeing 767300 for the Amsterdam Airport Schiphol services. DFW chief executive officer, Sean Donohue explains: “One of our top goals at DFW Airport is to grow international passenger and cargo air service in order to spur new business and travel opportunities in our home region.” He adds that the addition of these new flights “will certainly help” connect the Dallas Fort Worth area to more of Europe. American Airlines vice president for network and schedule planning, Vasu Raja says: “We are excited to offer these new seasonal routes from our largest hub. “This announcement is further confirmation of American’s long-term plan to enhance its global network.”

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GERMANY Lufthansa launches new products in challenging conditions

ufthansa Cargo is expanding its product portfolio through the launch of td.Basic and myAirCargo, as well as taking complete control of time:matters, as it navigates its way through a challenging environment. The German national carrier tells Air Cargo Week (ACW) that business remains challenging, and like much of the market, it is performing slightly below last year. It expects the fourth quarter to be strong though 2016 is unlikely to show significant growth compared to 2015. Lufthansa Cargo explains to ACW that it is going on the price offensive with td.Basic, a slower service than its standard td.Pro product for the price-sensitive customer. Lufthansa Cargo says: “We want to grow together with our customers and want to give ourselves access to new customer groups. With

“td.Basic” we have added a price offensive to our long-standing quality offensive. Thus, our customers are able to benefit from Lufthansa quality with particularly price-sensitive cargo as well.” The myAirCargo product gives private customers the chance to book with Lufthansa Cargo, and is described as a product that can be used for shipments such as large souvenirs from exotic holidays. “With “myAirCargo” we are occupying an innovative niche in the market and generating additional business for the industry. We are excited that private clients can now benefit directly from our many years of air cargo experience,” the carrier says. In August, Lufthansa Cargo took complete control of time:matters covering global same day deliveries and time-critical international spare part logistics. Lufthansa Cargo says: “We

are aiming to grow our business in the special segment as well. Our focus is all about maximum reliability, exceptional service and customised solutions.” In addition to new products, Lufthansa Cargo has been collaborating with other airlines, such as expanding its joint venture with All Nippon Airways (ANA) Cargo and working on agreements with Cathay Pacific Cargo and United Cargo. Lufthansa’s cooperation with ANA has been expanded with the German carrier’s entire European feeder network being combined with direct the flights of both partners: “Customers from all European countries will benefit from access to the joint venture’s strong network. Before, this had only been possible for custom-

ers in Germany, Austria, France, Great Britain and Belgium.” When the partnerships with United and Cathay Pacific are operating, customers will benefit from not only using Lufthansa freighter and bellyhold network but also Austrian Airlines and Eurowings: “Together with our cooperation partners ANA, United Airlines and Cathay Pacific, we are making our network even more attractive.” The market may be challenging, but Lufthansa Cargo says it remains in a strong position: “We are of course very happy that our hub in Frankfurt is situated very well in the heart of prospering European industries. We are able to provide services of highest quality, however, the overall market situation remains challenging.”

Minor August dip for Frankfurt Airport

Cargo volumes at Frankfurt Airport dipped in August by 0.1 per cent though year-todate (YTD) volumes are still up 0.7 per cent after strong growth in the middle of the year. Frankfurt Airport, Germany and Europe’s largest cargo hub, handled 171,871 tonnes in August, down 0.1 per cent year-onyear (YOY) though YTD volumes were up 0.7 per cent to just under 1.4 million tonnes. Most months of 2016 have seen declines though April was very strong with five per

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cent growth to 181,948 tonnes helped by routes to and from China, Japan and India registering double digit increases. June was also strong with a YOY increase of 3.3 per cent to 179,808 tonnes while July was up 1.5 per cent to 180,425 tonnes. Fraport’s other German airport, Hannover-Langenhagen Airport rose by 19.7 per cent to 1,400 tonnes in August and was up 10.7 per cent to 12,493 tonnes between January and August.

GERMANY

Merger paying off for FCS

4% growth in Munich

Munich Airport’s cargo volumes grew four per cent in the first half of 2016 and it is expecting further growth as forwarders plan to set up their hubs at the airport. The airport handled 163,000 tonnes in the first half of 2016 and long-haul capacity has grown with new routes such as Delta Air Lines to Detroit and Lufthansa to Denver while the express market has grown with DHL launching flights to Ljubljana in Slovenia. Munich Airport tells Air Cargo Week: “In addition, we expect more demand in freighter services. Furthermore, various forwarders are planning to set up their hubs at Munich Airport which will give us further boost next year. From all this, we forecast a further gain in cargo tonnage for 2016.” To cater for long-term growth, Munich Airport plans to build a third runway. All legal challenges against expansion have been dismissed and now the project is awaiting shareholder approval. Munich Airport comments: “Munich Airport’s future

cargo growth will also depend on major expansion projects such as a third runway.” In the meantime, the airport says: “Currently we are screening opportunities to expand our cargo areas to several thousands of square meters due to requirements by clients. We are currently in negotiations with various interested parties. A decision is expected very soon.” Munich Airport, based in Germany’s Bavaria region in the South of the country is an important gateway for a number of industries such as high-tech, IT and automotive. A number of global companies such as Siemens, BMW, Audi, Porsche, Daimler and Bosch have their headquarters and production plants in the region. “Further and additional investments from these and other Southern German corporations are planned in those markets. With its large flight network and the proximity to those global players, Munich is the perfect gateway for cargo traffic,” the gateway explains.

raport Cargo Services (FCS) is “more than proud” of the growth it has achieved following the merger with Worldwide Flight Services (WFS), managing director Hans-Georg Emmert tells Air Cargo Week (ACW). Emmert says merging with WFS gives FCS the chance to act more globally, and he expects 2016 to be a successful year having acquired new customers along with existing ones renewing contracts. He says: “We are delighted and more than proud that our business in 2016 has considerably increased. With a total volume of cargo handled of 347,300 tons at the end of July we have recorded an increase of 27.7 % in the year-to-date comparison.” For the rest of the year, Emmert explains: “We are very much looking forward to further boost our increase in the volume of cargo handled, also with our current customer which grow above market

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average. “FCS is constantly working on improving our service by implementing new, better and faster processes as well as by developing new additional products. Therefore, we are more than convinced that the business will increase as well as volume and turnover.” Exports still mainly consist of goods such as machines and spare parts, high value cars, pharmaceuticals, chemicals, consumer electronic and medical devices. Imports have not changed much in recent years either, mainly handling fashion items, consumer electronics and perishables. He also says Frankfurt is in a strong location in the centre of Europe, adding: “All continental European destinations can be easily reached by truck or train. “We dispose of a strong economy keeping the export rates of high value goods produced in Germany high.”

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COOL CHAIN

Cool chain cargo continues to be a priority for Cargolux

argolux Airlines International has been busy adding to its network over the last few months across the globe, and cool chain cargo remains one if its priority targets for growth. Indeed, the carrier added a service last week to San Juan in Puerto Rico - specifically targeting the sector as it sees opportunities in the market. The carrier’s global product manager for healthcare and perishables, Stavros Evangelakakis (pictured), who is also a board member of the Cool Chain Association (CCA) says it has seen single-digit growth over the last few years in cool chain and is working to grow the business.

But he explains Cargolux thinks it is important to nurse and maintain existing contracts, by staying in personal contact with and giving personal attention to customers. Cargolux has invested heavily over the last few years to meet the demands of cool chain such as carrying out aircraft thermal analysis, developing its CV Pharma product and adding the latest passive and active containers, while its GHA has invested in a new healthcare facility.

This has been necessary as cool chain comes with its challenges due to the different investment made in infrastructure and facilities at airports across the globe and to meet new changing regulations. Evangelakakis says regardless of regions, cool chain cargo is challenging at every airport it flies to that does not have dedicated facilities, but still relies on cool chain shipments as they are important for the people living there: “In these cases, we have to work with the infrastructure and facilities that exit and we try to establish a set-up that is satisfactory to all parties involved.” He notes customers expect better transparency, so the carrier has to follow new requirements set by the authorities and pharma firms have to watch their costs, so it can difficult

to bring all this “under one roof”. Cargolux is itself not International Air Transport Association (IATA) Center of Excellence for Independent Validators (CEIV) Pharma certified, but has the GDP certification, although Evangelakakis feels CEIV has helped increase the expectations from the customers. As for whether there is a modal shift of cool chain cargo, in Evangelakakis’ view, certain media push the idea that commodities use to fly airfreight now go via sea freight, explaining: “But there are new commodities in the market requiring airfreight, and many countries do not have the port facilities, which leaves airfreight as their only option.” But cool chain is not just about pharma and perishables are described by many as the life-blood and staples for air cargo and Evangelakakis says perishables have shown renewed growth over the last couple of years, especially the share flown on all-cargo carriers. Evangelakakis says collaboration is key and has proven important to Cargolux as it forces it to be transparent and honest about what it can and cannot provide, adding: “As a board member of the CCA I would like to see more collaboration in the market.”

Lufthansa Cargo awarded CEIV certificate

LUFTHANSA Cargo has become the sixth airline to be awarded the International Air Transport Association (IATA) Center of Excellence for Independent Validators (CEIV) Pharma certification. The certification covers airline operations and the 4,500 square metre Lufthansa Cargo Cool Center in Frankfurt and it awarded the certificate following independent specialists reviewing processes using its Cool/td Active and Cool/td Passive products. Lufthansa Cargo board member for product and sales, Alexis von Hoensbroech says: “Being one of the first airlines worldwide to receive IATA’s new international certificate is the fruit of the work we have done on our Cool/td product over the last few years.” He adds: “CEIV certification by IATA – combined with further innovations and product improvements – will help make us an even more attractive proposition to our

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customers from the pharmaceutical industry. That’s why we will continue to invest in our infrastructure and processes.” IATA global head of cargo, Glyn Hughes says: “In achieving IATA CEIV Pharma certification across its global network, Lufthansa Cargo joins an elite group of six airlines whose customers can have even more confidence that their pharmaceuticals will be delivered in impeccable condition.” Lufthansa Cargo says it has been investing heavily in technology, infrastructure and processes such as developing Opticooler with Dokasch, a refrigerated container that does not need dry ice. The Lufthansa Cargo Cool Center, which opened in 2011 offers four cold-storage rooms at different temperatures and a deepfreeze room ensuring required temperatures are guaranteed for each and every piece of cargo.

COOL CHAIN

Collaboration the key to a better supply chain

nvestments in facilities, staff training, dollies and other areas to meet the demand of the cool chain are certainly one of the main trends in the supply chain, as businesses look to take advantage of the opportunities on offer, especially in pharmaceuticals and healthcare. The 4th Cool Chain Association (CCA) Pharma & Bioscience Conference takes place from 19-20 September in Dubai and will cover a range of issues and key areas of the sector. CCA chairman, Sebastiaan Scholte (pictured), who is also chief executive officer of Jan de Rijk Logistics, says a key aspect of this year’s event will be hearing the voice of shippers on how air cargo performs as a supply chain in the cool chain sector. He explains that hopefully the conference will also hear from shippers that the International Air Transport Association’s (IATA) Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma) is the “standard they trust”. Scholte notes the CCA has received positive feedback from the shippers’ community about CEIV and it has created awareness, while it is becoming more and more a standard being adapted in the airfreight supply chain, although he notes a discussion has started whether GDP or CEIV is the right certificate. The CCA event will have a high focus on the Middle East and Scholte says given the high temperatures in the region, the event will hear from airlines like Emirates how they manage the cool air cargo supply chain, while the latest sector trends will also be on the agenda. Cool chain is such a huge sector for freight and there is a constant multimodal battle for cool chain cargo with sea freight, but Scholte says there will always be a need for air cargo for certain products, especially if they are time critical.

He says: “The cool chain with sea freight is maintained better than with air freight because with sea freight all is transported on active cool containers whereas with airfreight loose products need to be cooled in different transport modes (aircraft, dollies, trucks etc). The tarmac remains the weak link. Luckily you see more refrigerated dollies at some airports.” Scholte says in his role at Jan de Rijk Logistics, which was one of the first firms to implement CEIV, he is definitely seeing increasing amounts of cool chain cargo being transported. He notes: “This is an increasing trend in Europe where governments look at more efficiency in the home care of an increasing aging population. More patients are being treated at home and therefore the logistics around this is becoming more important.” Investment is high in air cargo to meet changing regulations and demands for cool chain cargo. More and more handling facilities are being upgraded, but highly trained staff are also key to meeting complex regulations in the sector. Scholte says: “There is more investment in training of people. We always talk about new technology, but at the end it is the people who make the difference.

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“Many airlines now have a dedicated team for pharma and/or cool chain. This was not the case 10 years ago.” More collaboration in the supply chain it seems is what many in the industry are calling for and Scholte agrees, but he says on the positive side, initiatives like CEIV, and Cargo iQ force more collaboration, adding: “There is however still a lot of room for further improvement. We could share more information and be more pro-active in the air cargo supply chain.” He is very upbeat about the potential of air cargo to meet the needs of the cool chain sector in future years, explaining: “I think that we are a conservative industry where change and innovation is slow. This is also in part due to the fact that regulation (customs, safety, traffic rights etc) sometimes is hindering innovation. “But there are stakeholders who do invest but since tarmac is always an issue we like to see more ramp handling, GHA and customs working together for this product as it is simply special.” In Scholte’s view, the biggest cool chain challenge is in having a complete transparent efficient cool chain, but the tarmac remains the “weak link” and needs to be focus of future efforts to improve standards and efficiency in the supply chain.

ACW 19 september 2016

HONG KONG

Future looking bright for Hactl with HKIA expansion

onstruction of a third runway at Hong Kong International Airport (HKIA) will expand the hub’s cargo capacity to nine million tonnes by 2030. Work began this summer and it is set to be ready by 2024. Hong Kong Air Cargo Terminals Limited (Hactl) chief executive, Mark Whitehead (right) says it is good news as it will enable HKIA to go to the market with a much stronger and more positive message. He says in the interim, mitigating measures are helping Hong Kong to cope with growing demand: “Operationally, the airport expansion may lead to the return of some freighter parking which we have had to give up; although we counteracted the effects of this through streamlined operations and processes, it could further reduce our turn-round times and enhance our customer service.”

The Asian region has picked up and Whitehead says business is “robust” and in-line with expectations with tonnages holding up well, given the softening of Chinese exports and moderate growth in air cargo. He notes: “The size of our customer portfolio, and the geographic spread of our carriers, provides some insulation. At the same time, our constant drive to improve service levels has helped us and our customer carriers to retain and develop business.” Hong Kong’s role as a regional hub for the whole of Asia continues to grow, offsetting slowing in export traffic from China, Whitehead says and he adds Hactl has been predicting intra-Asian growth for some time, it is “certainly showing” in transhipment figures. He says countries such as Vietnam, Philippines and Indonesia are all emerging industrial economies, and this is creating new traffic that

includes part-finished goods moving between manufacturing sites and Hong Kong is benefiting from this growth. Perishables and pharma are the fastest growing sectors for Hactl, while it is targeting e-commerce through its logistics arm Hacis. Hactl is also taking steps to speed the flow of inbound e-commerce traffic distributed via its growing RFS network (Superlink China Direct). The new Hong Kong-Zhuhai-Macau Bridge will make RFS transit times attractive over a wider area, and open up new opportunities across the western Pearl River Delta region. As for trade lanes, Trans-Pacific is growing, and the traditional imbalance is disappearing, which is good news for carriers who are gaining better utilisation. Whitehead adds there is also significant growth in traffic into Hong Kong among the Gulf carriers. And Whitehead says Hactl will soon announce a new project, as it is working on several at the moment, only revealing future projects could take a number of forms - joint ventures, consul-

tancy, or direct capital investment. He says for Hactl now it is all about investments in upgrading and improving facilities such as eco measures that have significantly reduced its carbon footprint, and it will continue to expand and improve the capabilities of its cargo management system, COSAC-Plus, which has transformed ramp operations through the increased use of mobile data. Whitehead adds: “The concern must be the general health of the air cargo industry, which suffers from over-capacity that drives rates to unsustainable levels. This impacts the profitability and ROI of all sectors, including handling, which is key to overall industry performance levels. It seems likely oil prices will eventually return to nearer historic levels, at which point some capacity will be driven out of the market.”

Net profit rise for Kerry Logistics in 1H

KERRY Logistics recorded a year-on-year (YOY) increase in turnover of three per cent in the first half (1H) of 2016 – as it reached 10,461 million Hong Kong dollars. The logistic group’s core net profit was up YOY by one per cent to HK$548 million for the period to 30 June 2016. Performing particularly strongly was Kerry’s international freight forwarding (IFF) division, which rose YOY by nine per cent to HK$208 million, up on the HK$191 million for the same period in 2015, while the integrated logistics (IL) segment saw a one per cent YOY fall to HK$799 million. Kerry Logistics group managing director, William Ma says: “The operating environment remained tough in 2016 1H due to flat global demand and stagnated trade flow in the logistics industry. “Negative currency effects caused by the strong US dollar also affected our overall per-

ACW 19 september 2016

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formance. Nonetheless, we held on strong to our core competences and achieved sustainable results, in which performance from major markets recorded steady growth. “Riding on the complete integration of APEX in the US in the next 18 months, the IFF division is expected to achieve higher growth than the IL division in 2016.” In the IL division, flat global demand has led to decelerating trade activities and lower production volumes. However, the IFF division achieved a growth of nine per cent in profit despite a slight drop in the Mainland China market. The growth was mainly from South and Southeast Asia, in particular India, Singapore and the Philippines. Kerry plans to add Indonesia into its express network within this year to strengthen its capabilities for the increasing intra-ASEAN trade and e-commerce business.

TRADEFINDER Airlines

Airports

Cargo Handling

Turkey

Lithuania

United Kingdom

Freight Forwarders Hong Kong

Spain

Freight Forwarders India

Iraq

United Arab Emirates

Forwarder Announcement

Freight Forwarders USA

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ACW 19 SEPTEMBER 2016

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