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WORLD AIRPORTS .COM ACW Digital is sponsored by FREIGHTERS.COM
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Etihad New Sponsorship Page.indd 1
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The weekly newspaper for air cargo professionals Volume: 21
Issue: 7
19 February 2018
Oslo feeds global hunger for Norwegian seafood
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argo volumes at Avinor Oslo Airport soared in 2017 with growth of 35 per cent as it satisfied global demand for Norwegian seafood. In 2017, 185,000 tonnes of air cargo were flown in and out of Oslo Airport, an increase of 35 per cent, with a number of cargo airlines choosing to add the Norwegian capital to their networks, including Atlas Air flying to Seoul, CAL to Tel Aviv, Turkish Cargo to Istanbul and DHL services between Lakselv and Oslo. The new routes have reduced onward journey length of Norwegian seafood and to increase capacity significantly. Avinor director of air cargo, Martin Langaas says: “The biggest volumes in air cargo at Oslo Airport are in fresh Norwegian seafood, which is exported to global markets. This is good news for the Norwegian seafood industry, which during last year has increased its competitiveness further, thanks to better connectivity and capacity directly out of Norway.” He says Norway generated 230,000 tonnes of seafood as air cargo in 2017, of which 39 per cent flew directly and the remaining 61 per
PHARMA.AERO PICKS SECRETARY GENERAL 60 SECONDS WITH DOMINIC HYDE
cent travelled by trucks to other airports in Northern and Central Europe, something that Avinor and the seafood industry would like to change. Langaas says: “We want to ensure that as much seafood as possible can reach its global markets directly from Norway. It saves time and allows the seafood industry to get its products out to the world as quickly as possible. “Direct flights for seafood from Oslo Airport will also help to reduce the number of heavy
goods vehicle convoys which have to drive from Norway down to Central Europe, where the seafood is loaded onto planes for its onward journeys.” E-commerce imports with airlines such as TNT, FedEx, DHL and UPS increased 25 per cent, with 58 per cent of air cargo from Oslo being transported on dedicated cargo aircraft. Cargo volumes on intercontinental passenger routes to Asia, Africa and the USA have grown 52 per cent, and inbound cargo has increased 110 per cent.
The project will be financed by the British government’s UK Export Finance agency and a commercial bank, and the Ugandan government intends to use the facility as the country’s second international airport. It will include the paving of 3.5 kilometres of runways, carrying out earthwork and drainage activities, the pouring of asphalt and cement, the building of electro-mechanical, communications and navigation systems, and the construction of a cargo terminal, an air traffic control tower and additional residential
and service structures. Shikun & Binui chief executive officer, Yuval Dagim adds: “Uganda’s selection of SBI demonstrates once again the high level of trust that we have earned from our clients in Africa – their confidence in our ability to build complete complex engineering infrastructure projects with a high degree of success and efficiency. “This project adds to the long list of projects that we have carried out in the past – and that we will continue to carry out in the future – to improve the infrastructure of developing countries.”
Shikun & Binui secure contract to construct airport in Uganda ISRAELI construction firm Shikun & Binui has secured a contract to build an airport in Uganda, located in the rural area of the oildrilling region near Hoima and Lake Albert (pictured) in the northwest of the country. The construction phase of the project to support the development of the region’s oil industry, and is expected to last for three years, with the total paid to the firm’s international construction arm, SBI, estimated to reach $309 million.
DELTA TRACKS CRITICAL SHIPMENTS
HANDLERS MUST LOOK FOR WAYS TO SAVE COSTS
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ACI Europe: Airports grow 8.5% in 2017
AIRPORTS across Europe had a strong year in 2017, with freight volumes growing 8.5 per cent, according to figures from Airports Council International (ACI) Europe. The association says European Union (EU) airports grew by 7.5 per cent while non-EU hubs were up by 14 per cent, with both benefitting from a cycle of sustained and synchronised expansion in the global and European economy. Frankfurt Airport retained its position at the top, handling 2.1 million tonnes representing growth of 3.9 per cent; Paris Charles de Gaulle Airport was second with 2.9 per cent growth to two million tonnes; Amsterdam Airport Schiphol was third with 5.4 per cent growth to 1.7 million tonnes, while London’s Heathrow Airport volumes increased 10.2 per cent, handling just short of 1.7 million tonnes. December was also a strong month, with European airports seeing 4.5 per cent, with EU ones growing four per cent and non-EU ones by 7.4 per cent. Both Frankfurt and Amsterdam fell in December, with the former by 5.8 per cent to 166,786 tonnes and the latter by 6.1 per cent to 140,239 tonnes. Paris was the busiest in December, handling 191,000 tonnes, an increase of 6.7 per cent.
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NEWSWEEK
NCA and SIA build on block space MoU
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ippon Cargo Airlines (NCA) and Singapore Airlines Cargo (SIA) have signed a memorandum of understanding (MoU) to develop strategic partnership, building on existing block space agreements. In the first phase, the two airlines have agreed to introduce codeshare services on routes between Tokyo and Singapore after 1 April 2018, subject to regulatory approval, which will mean customers will enjoy added flexibility. NCA operates six weekly flights between Singapore Changi Airport from Tokyo Narita Airport using a Boeing 747 Freighter, while SIA connects Singapore to Tokyo with two daily flights to Narita and three a day to Haneda Airport. NCA president and chief executive officer, Fukashi Sakamoto says: “NCA has maintained a continual presence in Singapore for over three decades, and we are excited to embark on new partnership initiatives with SIA under this agreement. The proposed codeshare service will pave the way for future ventures, leading to greater customer satisfaction.” SIA Cargo president, Chin Yau Seng says: “We value our longstanding relationship with NCA. The signing of this MOU marks our commitment to explore synergies and mutually enhance our
product and service offerings for the benefit of our customers. Our planned codeshare services between Tokyo and Singapore represent an important first step in building a strategic partnership between our companies.” Singapore Airlines has also released its third quarter results, with the cargo division seeing strong results. Cargo and mail carried was up 4.1 per cent in the third quarter to 347,200 tonnes and by 4.5 per cent to 989,000 tonnes in the nine months up to 31 December 2017.
United takes off from Knuffingen
UNITED Airlines’ smallest aircraft, a B757, has taken off from Knuffingen Airport for its maiden flight, which lasted metres. The Boeing 757-200 made the incredible journey at the model German airport based at the Miniatur Wunderland Hamburg. Miniatur Wunderland founder, Gerrit Braun says: “We are delighted to welcome United Airlines at our miniature airport. Knuffingen Airport can now also offer transatlantic flights to our small Wunderlandians.” The Wunderland attracts more than 1.4 million visitors every year, and Knuffingen, which opened in May 2011 has been expanding continually ever since. United Airlines has operated non-stop Hamburg – Newark Liberty International Airport services since 2005, moving thousands of tonnes of cargo and over a million full size passengers on more than 7,000 flights on the route.
ACW REWIND
JUST BEFORE financial crisis of 2007, ACW flagged up intriguing developments in potential Chinese-made maindeck capacity
Chinese plan to build freighters Vol 10, Issue 15 16 June 2007 THE CENTRAL Chinese government has decided to build its own freighter aircraft, local press replorts say. A local government official in China says Beijing has a plan to build an assembly line for ‘homegrown’ large freighter aircraft in Xi’an, a city more famous for its Terracotta Army. REPORTS FROM India last week said that Jet Airways had reached a new agreement to acquire Air Sahara, reviving a merger that was called off with acrimony last June. WESTERN CHINA’S largest air freight handling facility - the 11 hectares, $26 million Chengdu Air Cargo Terminal - with a capacity of 380,000 tonners, has opened for business in the capital of Sichuan Province.
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Delta tracks critical shipments with GPS
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elta Cargo has launched a new GPS enabled service called Equation Critical for international time sensitive shipments. The premium service for shipments that must travel on the next available flight, offers GPS tracking and moves with the highest priority across Delta’s network, allowing customers to know where their shipment is, anywhere in the world in real time. The Critical service comes with distinctive pink packaging and does not require pre-booking, and can be tendered up to 90 minutes before a flight. It caters for customers who are shipping time-sensitive items such as legal documents, essential machinery parts and aircraft on ground components. Shipments come with a service-level guarantee and Delta’s Cargo Control Center proactively monitoring Critical shipments throughout the journey. Delta Cargo vice president, Shawn Cole says: “Following the successful launch and roll-out of DASH Critical in the United States, we have taken that formula to the next level and introduced our new Equation Critical service for international shipments which have the highest boarding priority in our network. “With GPS tracking and 100 per cent service level guarantee,
NEWS WEEK WORLDNEWS FREIGHT volumes at Dubai World Central are approaching the million tonne mark, with 8.3 per cent growth of 972,295 tonnes. The figures are up from 897,998 tonnes recorded in 2016, and growth in the fourth quarter was robust, reaching 267,560 tonnes, up six per cent compared to 252,300 tonnes. The other Dubai airport, Dubai International Airport grew 2.4 per cent in 2017, with volumes increasing to 2,654,494 tonnes.
we are introducing a service that ensures important international shipments are in the right place at the right time, throughout the shipping process – giving our customers complete confidence when shipping critical and time-sensitive shipments across our global network.” The Equation Critical service will launch for international shipments originating in Atlanta, Savannah and London, destined for Bogota, Colombia; Johannesburg, South Africa; Quito, Ecuador; and Seoul, South Korea.
HERMES Logistics Technologies has chosen Alexis Labonne as chief technology officer (CTO) as it prepares to roll out its latest system, Hermes 5 (H5). Labonne has over 20 years of experience in technology, most recently with Hitachi Consulting working on security and customs, education and government projects as architect and CTO. He will head the HLT team of air cargo technical experts, who are now following a digital roadmap to use the power of Cloud services, IoT, AI and blockchain technologies.
AAT handles cargo for daily Air Seoul service
AIR Seoul has appointed Asia Airfreight Terminal (AAT) as its cargo terminal operator in Hong Kong for its daily Airbus A321 service to Seoul. The low cost Asiana Airlines subsidiary was launched in 2016 and has focused on building an international network, especially to Japan and South East Asia. AAT also serves its parent and sister companies, Asiana Airlines and Busan Airlines. AAT general manager, Kuah Boon Kiam says: “South Korea is widely regarded as a leader in international exports, particularly for technology and electronic products, and we are glad to partner Air Seoul to build on that legacy in Hong Kong.” On 20 December 2017, AAT also picked up a contract with Lanmei Airlines for its link between Sihanoukville, a coastal city in Cambodia and Hong Kong, operating three times a week. The city is renowned for its beaches and also has a vibrant logistics sector due to its deep water port and designated industrial zone.
Longines horses fly with Etihad FOR the second year in a row, Etihad Cargo has successfully shipped a consignment of show jumping horses to Hong Kong for the annual Hong Kong Longines Masters. Eight professional grooms and a veterinarian accompanied the 51 horses as they made the round trip from Liege Airport in Belgium to Hong Kong International Airport. Among the special guests were the Hong Kong Longines Grand Prix winner Aquila HDC, Paris Longines Grand Prix winner Cornet D’Amour, as well as other champions including Pegase du Murier, Silver Deux de Virton HDC and Garfield. Etihad Cargo vice president, Justin Carr says: “Our equine customers are very important to us and our focus on safe, comfortable and reliable services made us a preferred partner for these specialist services. Last year alone, Etihad Cargo’s SkyStables shipped more than 2,500 horses around the world.” The horses were transported on a Boeing 777F equipped with a specially designed ventilation structure and temperature control system. It is also equipped with IATA-approved horse air stalls, and designed with non-slip floors that are covered in absorbent materials, the stalls are stocked with
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NEWSWEEK Pharma.Aero picks secretary general dnata to handle cargo in Brussels
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harma.Aero has appointed Frank Van Gelder (pictured) to the role of secretary general. He has held a number of senior management positions in the air cargo industry, specifically in pharmaceuticals and perishables. Van Gelder has served in different boards and presented at different international conferences, and is active on an extended international level within global healthcare R&D. He has served as an expert in the development of business projects, educational training programmes, research programmes and management of acute time critical processes and logistics in the medical and phar-
maceutical field. Supply chain improvement and innovative approaches towards time and temperature critical commodities through cross sectional industry exchanges underline his vision. Van Gelder was an early believer of airport community approaches and the CEIV training programme. Van Gelder says: “The dynamism and support we see from many different stakeholders, strengthen the belief we can really make a difference in the supply chain of life science products in airfreight. “We can only do this if we all speak the same language, in which Pharma. Aero already fulfills the crucial role of a reliable facilitator to all partners and members, both today and tomorrow.”
BRUSSELS Airport will welcome dnata as a new cargo handling partner, as it awards new licences for various ground handling categories. The airport launched a selection procedure to grant licences in 2017 to ground handlers pursuant to the Royal Decree of 6 November 2010 on access to ground handling, this gives two licences for baggage handling, two for ramp handling for passenger aircraft, three for cargo aircraft, three for cargo and mail handling and two for catering transporting. The licences for ramp handling for cargo aircraft and cargo and mail handling were awarded to Aviapartner Cargo, dnata and Swissport Cargo Services Belgium. The selection was based on financial requirements in the first phase, and qualitative
requirements in the second phase. Brussels Airport has also released January traffic figures, with total volumes up 2.7 per cent to 56,846 tonnes despite full freighter traffic continuing to fall. Full freighter volumes were down 21.2 per cent to 13,651 tonnes, while integrators were up 5.6 per cent to 17,848 tonnes and belly cargo increasing 8.8 per cent to 11,680 tonnes. Total flown cargo was down 3.9 per cent though trucked cargo increased 31.1 per cent to 13,668 tonnes.
London hubs get off to a flying start HEATHROW Airport has started 2018 with cargo volumes continuing to break records, with a 6.9 per cent increase in January. The London airport handled 133,030 tonnes of cargo in January, with the US top the list of destinations seeing growth, followed by Spain and China.
Since February 2017, Heathrow Airport has handled 1.7 million tonnes of cargo, up 10.4 per cent on the same period the previous year, and follows a record breaking year in 2017 when volumes rose 10.2 per cent to 1,698,455 tonnes. Added to this, passenger numbers are also
booming, and airport chief executive officer, John Holland-Kaye says: ““Heathrow is off to a flying start, with record passenger numbers and cargo volumes and the start of our public consultation on the third runway. Heathrow expansion will provide the global trading routes to super-charge Britain’s economy as we leave the EU.” Gatwick Airport is continuing its double digit cargo growth with volumes increasing 29.6 per cent, helped by an increasing longhaul network. In January, the airport handled 7,824 tonnes of cargo, on a moving annual total basis from February 2017 to January 2018, Gatwick handled 98,834 tonnes, an increase of 25.4 per cent. The airport has benefitted from a growing long haul network, which consists of more than 60 destinations, with a new route to Buenos Aires to be added this month.
Frankfurt looks west in January CARGO volumes at Frankfurt Airport have risen 1.3 per cent in January with eastbound traffic declining but traffic heading west performing well. The German airport handled 170,700 tonnes of air cargo in January, with airfreight up slightly by 0.5 per cent to 162,100 tonnes and airmail hitting its highest peak for 13 years, with 18.1 per cent growth to 8,600 tonnes. Fraport, the airport operator says that Chinese New Year festivities being in February will have a positive effect, though losing a Sunday will almost completely negate this
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positivity. Tonnage heading west to the Americas performed well in January, with North America increasing 6.3 per cent and strong growth in Mexico and Brazil contributed to Latin America rising 28.3 per cent. Traffic heading east struggled, with cargo heading via Moscow, Saudi Arabia and Hong Kong declining, which 10.6 per cent growth in Qatar, 1.7 per cent from China and 34.3 per cent from Vietnam could not compensate for. Africa grew 5.8 per cent helped by South Africa proving strong, though cargo to and from Kenya declined.
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NEWS WEEK
Seconds with DOMINIC HYDE
After more than 23 years of engineering expertise and leadership experience including senior roles at va-Q-tec and Envirotainer, Dominic Hyde joined Peli BioThermal as vice president of the Credo on Demand rental programme. He took time out of his busy schedule to talk about topics including working for a former competitor, and doing business with tribespeople in Botswana.
ACW: How do you feel about your new appointment? Hyde: I am very excited about the appointment. I’ve already had insight into the team, the people and the plans and it is all very encouraging.
ACW: What appealed to you when considering your new role as vice president of Crēdo on Demand? Hyde: Pelican has got a very good reputation and a long background in protective cases for demanding environments. It has diversified into temperature controlled packaging solutions over the last couple of years by acquisition and development and it has built a strong product portfolio and a very good market position.
Hyde: I have been involved in standards development within the AGE-2 Air Cargo and Aircraft Ground Equipment and Systems committee and it has been a privilege to work with some of the older members who have been contributing since the start of containerisation. Medway Rugby Football Club where my sons are all players and I coach. With regular fixtures, events and tours there are many opportunities to socialise and we have made
DOMINIC HYDE
some great friends along the way.
ACW: What’s the most interesting thing about you that we wouldn’t learn from your CV alone? Hyde: I was born in Botswana where my parents were building a school and a clinic in Tutume. I was named Mbiganyi by the Bakalanga tribespeople in return for some sorghum and a chicken although I think they should have held out for a goat.
So I think with the thermal technology they have, and the experience that I have of that technology and the belief that I have in it, I was really delighted to be considered to lead the development of the global rental service offering.
ACW: Tell me about your new role and the challenges you will be facing? Hyde: My role will be to build a GDP compliant, market leading rental global service offering. Part of my job is to help build a partner network with airlines, freight forwarders and integrators so together we can realise the benefits of the sector for the benefit of pharmaceutical shippers. ACW: What was your previous experience of Pelican/Peli BioThermal in the market place? Hyde: Previously Peli BioThermal was a competitor and I liked to keep an eye on them.
ACW: What will be the most immediate projects you will be involved with on joining the company? Hyde: Peli BioThermal has been developing its global service offering over the past two years from building from nothing and is gaining considerable traction with new and established customers and my most immediate projects will involve expanding the global footprint to support those customers and introducing new products that they have into that service model. There is immediate demand and we need to satisfy that before going onto the broader, more strategic plan to serve the wider market, which is a great position to be in, to start with your customers demanding things. ACW: Given the current market conditions, what wider challenges do you anticipate you may face in your new role? Hyde: Quite rightly the regulatory environment continues to evolve so its scope is expanding to encompass clinical but also the intermediate APIs as well as the bulk and packaged finished goods. ACW: What are the most exciting developments planned for the business that you are looking forward to helping implement? Hyde: I think outwardly a lot of these products just look like boxes but actually Crēdo Cargo is a technological leap forward and enables us to rethink the global supply chain, particularly where there are imbalances between imports and exports. Where you have those imbalances, such as where if you have a consumer market that doesn’t produce pharmaceuticals, then containers will flow into that market and until now you have had no alternative other than to pursue quite expensive repositioning of empty containers to get them back to where they are needed for the next customer. ACW: Which two organisations outside your own do you know the most people at and why?
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CARGO HANDLING
Swissport to go public following HNA’s spending spree
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aving posted tonnage volume increases of 25-30 per cent above regional budgets, particularly in Europe, Swissport has now confirmed its intention to seek an initial public offering (IPO) and list its shares on the SIX Swiss Exchange, writes Neil Madden. The IPO is expected to take place this year. The ground handling firm’s sole shareholder, China’s HNA Group, will most likely retain a long term shareholding following the IPO although Swissport will continue to function as an independent company. “The objective of the contemplated IPO is to accelerate Swissport’s long term growth strategy, provide additional financial flexibility and liquidity, and position the company to strengthen its leadership position and service offerings,” says Swissport group president and
CEO, Eric Born. However, while Swissport could fully stand on its own feet as a listed company, it may have to do some work to calm investor concerns ahead of the listing. At the end of January, Barclays agreed to underwrite a €325m loan to Swissport which will be used to back the company’s acquisition of Australian flight support operator Aerocare. In one sense it showed that the ground handler can still raise debt from investment banks despite the ongoing liquidity problems at HNA Group. A few days before the Barclays agreement, Swissport announced that HNA had repaid €52m of a loan that Swissport made last year to another HNA subsidiary. But Swissport’s short-term loans to HNA affiliates have sparked
controversy with analysts and investors, who have suggested that the company is helping the Chinese parent to get through short term liquidity gaps among some of its companies. HNA has been on a buying spree in recent years snapping up not just Swissport in 2016, but also Irish aircraft leasing firm Avalon Holdings, and a majority stake in Frankfurt Hahn Airport, Germany. This asset binge has left the parent group strapped for cash. In late January, Reuters reported that HNA told a creditors meeting that it faces a potential cash shortfall of at least RMB15bn ($2.4bn) in the first quarter, even
though the company is looking sell more assets and reduce its leverage. In December 2017, rating agency Standard & Poor’s cut its rating on Swissport and its related entities to ‘B-‘ from ‘B’. “The revision reflects significant debt maturities and tightening liquidity at HNA Group,” S&P said, adding that while HNA continues to access the debt market, its cost of funding has materially increased from a year ago. So one factor investors will be looking for in a Swissport IPO is a degree of distance from HNA, ensuring that the Swiss firm will function primarily in the interests of shareholders.
Telair makes 737 loading more flexible
SWEDISH handling systems firm Telair International has received certification for its new Flexible Loading System (FLS) for all current production and in-service B737 aircraft. The system allows 737 operators to carry containerised cargo in the belly, along with bulk-loaded bags. Aircraft lessor GECAS is now set to offer the FLS to its B737-800F conversion customers on aircraft entering service this year. As announced at last year’s Paris Airshow, GECAS has committed to convert 30 B737800s to freighters, with deliveries beginning this year. “The FLS enables operators to interline the Telair containers and reduce bulk loading times,” says Cargo Aircraft Group, GECAS, senior vice president and manager, Richard Greener. “It allows Telair’s containers to be preloaded and screened at the cargo sort and brought on board the aircraft using ex-
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isting bulk loading equipment.” The FLS includes three components. First is Telair’s ‘Edge’ Sliding Carpet, an on-board conveyer system for loading and unloading bulk cargo, which is currently installed on the 737 MAX. The manufacturer claims it is about 40 percent lighter than existing variants. Secondly, new containers have been designed specifically by Telair for use with the Sliding Carpet on the 737. The final component is a powered doorway ball mat for transferring the containers on and off the Sliding Carpet, to and from standard ground-handling equipment. “(We) will work with GECAS and its customers to install the system in the second quarter of 2018,” says Telair International president and CEO Anders Helmner “We are extremely excited that the system’s launch installation is on the 737, the most popular aircraft in the world.” The Telair Sliding Carpet has been used on thousands of aircraft by carriers worldwide for more than 25 years. Edge models use carbon fibre technology to achieve a weight reduction compared with previous designs, and to provide higher reliability. The FLS containers and ball mat similarly use stateof-the-art materials to achieve low weight and durability.
CARGO HANDLING Handlers must look for new ways to achieve cost savings
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arrier margins remain under relentless pressure and so they are in no position to stomach big increases in freight handling charges. So ground handlers must constantly look for ways to achieve cost savings and other efficiencies. This was the backdrop to meeting between Menzies Aviation and Air Menzies International (AMI) management teams from Australia and New Zealand which took place in Sydney, Australia, in December. The meeting was convened to develop co-operative ways to develop business in Oceania and South East Asia. Discussions and workshops identified a number of opportunities for both businesses, such as the cross-utilisation of vehicles and equipment, and shared opportunities arising from Menzies’ existing presence in SE Asia. Air Menzies EVP Oceania and SE Asia Alistair Reid, commented: “As part of the Menzies family, and given that Menzies Aviation and AMI have daily interactions with one another, there is a wealth of opportunities for development in Oceania and SE Asia for both businesses and we are excited to advance these discussions.” Air Menzies VP AMI, South Pacific Geoff Young (pictured) said the meeting was “a great success” and opened the door for a stronger partnership in the future. Meanwhile, the group continues to win new customers. Most
recently, Menzies Macau won a handling services contract for MASkargo, as the Malaysian carrier started a weekly cargo flight between Macau and Kuala Lumpur on 21 January. Menzies Macau managing director Raymond Lo said the
launch of the route would not only increase the competitiveness of Macau in the Southeast Asia logistics market, it would also benefit to third-party logistics providers, enabling them to accommodate China’s huge e-commerce market.
Indian victory for SATS APRIL sees the start of SATS’ latest concession win as the handler continues to expand beyond its home base of Singapore. SATS ran a successful joint bid with Cargo Service Center India (CSC) for a cargo handling contract at Chhatrapati Shivaji International Airport (CSIA) in Mumbai, India’s economic nerve centre. The concession will run for 18 years. Through its subsidiary SATS Investment (II), SATS bought a 49 per cent stake in CSC’s wholly-owned subsidiary Mumbai Cargo Service Center Airport Private Limited (MCSC) in December. MCSC will be responsible for operating the concession, under which it will manage the international cargo facilities at CSIA. SATS president and CEO Alex Hungate said of the award: “Mumbai is the commercial hub of India and its largest station for international cargo handling. With this latest win, SATS and CSC will connect this dynamic hub to SATS’ panAsian cargo network, increasing connectivity for our airline customers and shippers.” Apart from Mumbai, CSC provides handling services in Delhi, Ahmedabad and Chennai. CSIA is the main international airport serving the Mumbai Metropolitan Area and the second busiest airport in India after Delhi.
LATAM gains CEIV at MIA
AFTER becoming the first airline in the Americas to obtain the Center of Excellence of Independent Validators (CEIV) Pharma certification from IATA, LATAM Cargo was also recently awarded the CEIV Pharma certification for its handling service in Miami International Airport (MIA). “For LATAM Cargo, the value of this certification lies in our commitment to the transportation of medicines and vaccines,” said LATAM Cargo project manager Rodolfo Marre. “The recognition encourages us to continue improving our processes at each station, adopting global quality standards to guarantee that all our sensitive shipments will reach their destination in perfect condition.” WFS was also awarded the CEIV certification at the same time as LATAM and the two companies join Amerijet and Swissport as the four CEIV-certified cargo handlers at MIA, the most of any North American airport. In 2015, MIA was designated a pharma hub by IATA for organising nine of its logistics providers to undergo the CEIV programme.
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CHINA
Growth to keep accelerating with new model
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hina’s air cargo industry, already epic in its scale, brings with it changes in where business is being done as well as offering a new model for how that business can be done, writes Michael
Mackey. There can even in its early stages be no doubting the scale of the air cargo sector or the growth it enjoyed in 2017. “(D)ata from IATA’s Cargo Account Settlement Systems (CASS) volumes point to an increase in the order of 20 per cent year-on-year for both imports and exports to/from China in 2017, but this data does not cover 100 per cent of the market,” IATA’s chief economist Brian Pearce told Air Cargo Week. A number of factors are driving this industrial upgrading, strong consumer spending and the recovery of world trade and, of course,
e-Commerce. Wide-ranging though the goods moved are, the majority is high-tech material such as computers, mobile phones, automotive and auto parts and fashion such as clothing and apparel sectors, Panalpina’s head of Air Freight for Greater China Jack Liu told Air Cargo Week. Silicon is also a growing market logging up increases of 10 per cent. Not there can be no forgetting or getting away from the importance that e-Commerce and its explosion has in China. Worth $1.14 trillion in 2017 the estimate is this year China’s cross-border e-Commerce will reach $1.49 trillion, Shenzhen Cross Border E-commerce Association deputy executive president William Zhang said at a recent conference in Bangkok to the sound of jaws hitting the floor.
As if that wasn’t enough, Zhang also made two other points. These figures are on the low side as a lot of the China’s e-Commerce is moved through Hong Kong. Furthermore, by 2020 the expectation is over a third of China’s total trade will be e-Commerce, Zhang added All this is bringing with it changes not so much in where business is done, although some of it is surprising, but in how it is done. “Chinese investment in Africa, has contributed to the development of new capacity and trade flows between Asia-Africa. And, export order books amongst the Asia-Pacific key exporting nations, including China, are at elevated levels, pointing to air freight growth remaining robust in the first part of this year,” says IATA’s Pearce. Traditionally volumes moved through Hong Kong, from the Pearl River Delta, Shanghai from the Yangtze River Delta economic zone as well as Zhengzhou, Beijing and Tianjin for northern China, Panalpina’s Liu said. That model is holding but with variations. “Hong Kong, Shanghai and Zhengzhou, all grew tremendously last year, but Zhengzhou grew exceptionally fast considering the low base it had a few years back when compared to the traditional airfreight hubs such as Hong Kong and Shanghai,” Liu told Air Cargo Week. “However, with the high-demand situation experienced last year, alternative routings are being explored by airlines and charter operators, not only in tier one cities such as Shenzhen, Guangzhou, but also in tier two and three cities such as Ningbo, Wuxi, Nanjing, Wuhan, Jinan, Hefei, Kunming.”
The Changi Connection
Corroboration for this much of this comes from Changi in Singapore, a noted air cargo hub, whose largest air cargo market turns out to be China, according Air Hub Development Changi Airport Group managing director Lim Ching Kiat. In 2017, Changi’s China trade grew 15 per
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cent as imports and exports grew 19 per cent and 12 per cent respectively. Due to the higher proportion of passenger services with China, a majority of the cargo is currently being transported belly hold. Changi Airport is now connected to 34 cities in China with over 340 weekly services. Compared to 2013, this is an increase of 10 cities and about 60 weekly services – and there is more to come “Intensifying our air connectivity, both increasing frequencies and establishing new city links, with China has always been our key priority. In the coming year, we hope to establish links to other provincial capitals such as Taiyuan, Hefei and Nanchang,” he added.
Infrastructure issues
There is in all this one problem: not yet major but looming, infrastructure. Whilst there might be some leeway to be had in the growth of secondary airports, with Wuhan and Xian both being cited regularly there are concerns, about the constraints at airports especially at the hubs. “Currently the challenge is limited slots,” said Nippon Cargo Airlines head of marketing/business strategy Hiruyuki Homma, who with others also noted another upcoming worry: the lack of the right type planes. Limited large freighter production against the dramatic growth of e-commerce could squeeze the market in future they argue. What mitigates the infrastructure problem is government support which among more thoughtful and forward-looking industry sources is a worry in itself. China is building a lot of infrastructure at the moment to boost the country’s central and western regions. That building tends to be where government wants and maybe not where the industry needs. Some have also questioned the sustainability of government support. “Government policy can change any time,” said one source before asking rhetorically “how long will subsidies last?”
CHINA Government role a concern
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nother marked concern is the role of the government in the business which is helping set up a potentially messy conflict of interest. Government, especially provincial governments, as airport builders and owners and also as airline owner/operators means decisions are made more to suit home base carriers and airports and are as the official put it “not normal competitive behaviour.” Government also has another role and it is this which is pointing to e-commerce not just as a non- traditional business but as a new way, a more collaborative way of doing business one which take the business-government partnership beyond infrastructure planning and into actual services. The Shenzhen Cross Border E-commerce Association who claim their patch as being the spearhead of the cross-border e-commerce revolution are working with the government in not one but three initiatives. The first of these is a standard cooperation scheme working with local universities to cultivate personnel; lack of skilled staff is a problem in China especially in the more developed
regions such as Shanghai and the Pearl River Delta. But the other two take cooperation significantly further. One is a product tracing and tracking platform the other is an online dispute resolution with a third party element brought in. “We are building this platform together,” says Zhang who acknowledged it was sometimes difficult. Nor is Shenzhen (pictured above) alone in this as there is a general movement to work with Customs Bureaus throughout China in order to facilitate trade and the movement of goods. Before panic buttons are hit, accusations made and lawyers get involved, China has long given local officials considerable powers. “(It’s the) utmost importance to work with the Customs Bureau,” says SF Express Aviation Advisor to the President Chung Mak. “Different airports have different interpretations of the regulations. We have been able to share with them our pain points.” This new, much more collaborative approach explains much of the current boom in China’s air cargo though whether it causes its bust further down the line cannot be said yet.
Fun and growth at SF Express
If any one company illustrates the scale of air cargo potential in China it is SF Express who are already big, the number two in China in terms of volume, and who plan to build a new brand, Asia’s first dedicated cargo airport and have fun whilst doing it. The airport is both key and anchor of what will be effectively a multi-modal hub. It will be built on a greenfield site in the middle of China at Ezhou, in Hubei Province, some 70 kilometres from Wuhan and its 12 million people. “This airport was selected for its location,” says SF Express company president aviation advisor Chung Mak. The city, he pointed out, is not the centre of China, that’s further west, but is a mere two hour flight from 95 per cent of China’s GDP. Better still Ezhou is close to China’s upgraded infrastructure which SF Express is eyeing and planning to smartly leverage. Key here is not rail but river. It is on the Yangtze which allows it to tap maritime markets. Wuhan is the centre of China’s massive and soon to go international High Speed
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Rail network. SF will not be loading high-value cargo onto blue vans to take to Wuhan’s almost space-age rail station. “We have been working with the rail companies, the bureau, to test using rail cars, dedicated carriages, to carry freight. We are planning to have the High Speed Railway directly into our airport through a new rail line,” Chung says. It’s hard to think of a place outside Asia where there is such convergence even then the examples are rare. SF acknowledges it is building a hub, one it stresses is open to other companies but it also building its own franchise, its own brand and dare it be said its own community. This is a company with 410,00 employees. Contractors are there but the brand rests on all those who face customers and they are staff. And this year because this is a coming growing in some sections by 25 per cent, according to Chiung, the company’s owner has decided they should have some fun. This was not defined, but for China where management tends to be aloof and imperial, it is very different.
ACW 19 FEBRUARY 2018
9
AUSTRALASIA
Hobart looks to give local producers direct export links
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ustralia’s vast, sparsely populated territory means export gateways for many shippers boil down to just the big cities of Sydney, Melbourne, Brisbane and Perth, Neil Madden reports. This is frustrating for businesses on the southern island of Tasmania. However, Hobart Airport (pictured) is looking to develop a freight handling facility there to give local producers the chance to freight produce direct to international export destinations. Tasmania is an important producer of farm products and seafood, primarily abalone and Pacific salmon. The airport says it identified the unmet needs of southern Tasmanian growers of high value produce needing to be exported to meet rising demand in Asia and further abroad. Hobart Airport CEO Sarah Renner tells Air Cargo Week that currently Tasmanian producers have to truck freight to the north-west coast of the island. From there it is loaded onto a ship and taken to Melbourne or Sydney, before being transferred to aircraft.
“This is certainly not the most efficient, nor cost effective logistics chain for Tasmanian businesses, so we decided to put the wheels in motion to make direct freight services from Hobart Airport possible,” Renner says.
The completion of the runway extension will be the first step. The airport is also developing a wide-body aircraft parking position that is needed for international services. “With the feasibility study now complete, we are now undertaking further studies to identify the best location for the freight handling facility, which will also include cold storage, providing a facilitation point for time sensitive, high value goods,” Renner adds. It is hoped that the A$13 million investment will obviate restricting factors Tasmanian producers face when exporting from the island state. “Imagine a punnet of berries handpicked from a farm in the Coal Valley one day, and then being purchased at a market in southern Asia the next; the possibilities this will open up are immense,” she says. Of course, infrastructure projects based on ‘build it and they will come’ don’t always turn out as hoped. The airport accepts that its initial position would be to attract international passenger services to Hobart, and use the opportunity to move belly freight. Currently, the flight schedule is dominated by services to cities on the Australian mainland. In 2016, a Qantas Freight service to Ningbo, China was scheduled which would have flown local dairy products to the Asian powerhouse. However, the service never took off due to “reasons beyond our control”, according to the airport. “We remain hopeful that a direct service will be seen as an attractive alternative to the current delivery method,” she continued. One hope lies in Tasmania’s booming tourism industry. If this continues it could encourage carriers to fly in visitors direct from Asia and elsewhere.
New services gives Auckland more capacity NEW Zealand’s Auckland Airport continues to see rising services to destinations across Asia, and consequently more cargo capacity. In December 2017, Air New Zealand and Singapore Airlines announced they would increase daily codeshare flights on the Singapore-Auckland route from two to three, starting in October 2018. The two flag carriers will operate a combination of A380, B777 and B787-9 aircraft. Auckland Airport’s general manager Scott Tasker says the additional daily service would add more than 10 per cent of direct cargo capacity to and from Singapore. In the first 10 months of 2017, fruit and vegetables exports to Singapore increased by 25 per cent, driven by growing demand for avocados, apples and strawberries. Prior to this Philippine Airlines introduced a direct A340 service between Manila and Auckland, replacing a flight which had also called at Cairns, Australia. Introducing a larger aircraft on the route allows for an additional 14 tonnes of cargo capacity per flight, says Tasker. In the year to March 2017, New Zealand exported NZ$468m of dairy products to the Philippines, making it the eighth largest market for the country’s dairy exports.
Qantas hoping to bounce back QANTAS Freight will be hoping that the resurgent air cargo market will help its performance bounce back. The Australian carrier posted earnings before interest and tax (EBIT) of just A$47m in the 2017 financial year, which ran to June. This was down from A$64m the previous year and way below the A$114m in FY2015. Cargo revenue has also been on the slide since peaking at A$1.084bn in FY2014. Last year, the carrier posted revenue of A$938m. Qantas put this down to weakness in international markets caused by increased wide-body aircraft capacity, softer demand, a reduction in fuel surcharges and adverse foreign exchange. The new B737-400F purchased during the year will open up growth opportunities in the domestic market.
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ACW 19 FEBRUARY 2018
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ACW 19 february 2018
11 13/02/2018 11:11
LOOKING AT WHAT PEOPLE IN THE AIR CARGO INDUSTRY ARE THINKING ABOUT
Airway Bill finds deadly cargo in his baggage
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was enjoying time with my friend, Gentleman Jack, a smooth Tennessee sippin’ whiskey, when I learned that every day last year in the United States 11 firearms were removed from passengers travelling through 440 federalized airports. A record setting 3,957, firearms were discovered in carry-on bags at checkpoints across the country, averaging 76.1 firearms per week. Almost 85 per cent, 3,324 were loaded. And these are only the ones they discovered. It’s enough to make a man spit out his whiskey, I can tell you. We airfreight people spend so much time making sure our cargo is safe throughout the whole supply chain. We train for years in dangerous goods handling. But really, what is the point if the passenger cabin above our cargo contains people who have brought on board loaded guns? Lord knows, America’s trigger happy enough as a country on the ground but at 35,000 feet? If all that wasn’t enough to turn my teetotal Aunt Bessie to the moonshine, it seems guns weren’t the only scary stuff stopped by the Transportation Security Administration. A checked bag containing an ammo box with three live ground burst simulators, two live M83 smoke grenades, and one inert practice grenade was discovered at Palm Springs International Airport. A live flashbang grenade was discovered in a carry-on bag at the San Diego International
Airport. A live smoke grenade was discovered in a carry-on bag at the Raleigh–Durham International Airport. Not only do smoke grenades deploy a thick blanket of smoke, they also burn extremely hot and are considered hazmat. The most firearms discovered in one-month – a whopping 31 - were discovered in August at my favourite US airport, Hartsfield–Jackson Atlanta International Airport. Perps can get fines in excess of $13,000 if caught it seems. At the same time guns and ammo were being caught, 98 prohibited items were deliberately hidden in attempts to sneak them through security in 2017. The TSA calls this “artful concealment” and can lead to fines, arrests, and missed flights. And what stuff they found! A comb dagger, a knife found concealed inside a stick of deodorant, a stun gun disguised as a tube of lipstick, a sword cane, a stun cane and a lipstick knife were also discovered at airports in the United States. I know there are millions of bags that do not contain handguns or ammo or deadly lipstick. But I for one will be keeping a lookout next time I’m in the TSA line.
ACW’s reach is truly global ACW editor James Graham was recently in Singapore to enjoy the Air Show as well as visit the cargo facilities at Changi Airport, one of his favourite in the world. While enjoying the city sights, he came across this sign in Chinatown. Posing proudly next to the sign, he was still uncertain as to the significance of the Anti Clockwise Deliveries order. If you are familiar with Singapore and know the significance of Anti Clockwise deliveries, he would be keen to learn. If you have an answer, please send the editor, James Graham an email on: james. graham@azurainternational.com, or write to us at: Air Cargo Week, Robert Denholm House, Bletchingley Road, Nutfield, Surrey, RH1 4HW, United Kingdom; or call on +44 (0) 1737 645777. Also, if you have seen any other ACW signs on your travels showing the global reach of the world’s only weekly air cargo publication please send us the pictures and we will be happy to publish them.
Dear editor, I was thinking ... DEAR Editor, I enjoyed the article, “All creatures great and small go in the cargo hold” (ACW February 5). I’m a relatively new ‘student’ of the air cargo industry, so this may be a novice question. Do you know why “one day-old chicks” are the animals that Skyfast ships “most widely?” I always imagined that companies who sold chicken meat and eggs also bred their own birds. But perhaps that’s not the case? Also, do you think other animal freight forwarders would agree that young chicks are the most widely-shipped animals, while biological-control inspects are the types of life that are shipped in greatest numbers? Finally, why did you find Lotte Custers’ answer “un-nerving?” Is it the idea of millions of insects being shipped on a plane, with the possibility of them escaping containment? Oh wait, lol... I think I just answered
my own question! : ) And suddenly I wonder if a real life incident was the inspiration for Samuel L. Jackson’s movie, “Snakes on a Plane!” Michael J. Schoen Washington, DC A lover of aviation since a child, Schoen has worked in the law and remains passionate about aviation, specifically navigation, weather observation, drones and the airline industry. Do you worry about livestock getting loose in the hold? Contact the editor: james.graham@azurainternational.com or call on +44 (0) 1737 645777. If there are any other issues concerning you and wish to share your opinions we would love to hear from you.
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