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WORLD AIRPORTS .COM ACW Digital is sponsored by FREIGHTERS.COM
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The weekly newspaper for air cargo professionals Volume: 21
Issue: 3
22 January 2018
HKIA breaks 5 million tonne barrier in 2017
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reight volumes have flown the past the five million tonne mark at Hong Kong International Airport (HKIA) for the first time in its history. The airport handled 4.94 million tonnes of cargo in 2017, an increase of 9.2 per cent, additionally it processed 112,000 tonnes of airmail, pushing total volumes past the five million tonne mark. In December, total cargo volumes increased 6.3 per cent to 462,000 tonnes, with traffic to and from Europe and India seeing the most significant rises during the month. Airport Authority Hong Kong chief executive officer, Fred Lam says the airport is the first in the world to pass this barrier and it is pushing ahead with a number of development projects as it looks forward to celebrating its 20th anniversary year. He says: “On the cargo front, in addition to the IATA CEIV Pharma Partner Airport accreditation achieved in 2017, the AA is also launching a tender to develop a premium logistics warehouse in Kwo Lo Wan to enhance the handling of e-commerce shipments.” Hong Kong based Cathay Pacific Group also had a strong year in 2017 with cargo and mail
growing 10.9 per cent to 2.05 million tonnes, and by 10.2 per cent in December to 192,190 tonnes. Capacity measured in available tonne kilometres was up 3.6 per cent 17.1 billion in 2017 and by 5.7 per cent in December to 1.5 billion. Load factors for the year rose by 3.4 percentage points to 67.8 per cent and by 2.4 percentage points in December to 71.9 per cent. Cathay Pacific director of commercial and cargo, Ronald Lam says: “Cargo’s strong momentum continued well into December,
with volumes growing well ahead of capacity. We were able to sustain a high load factor and high yield during the month. As a result, revenue efficiency gains were observed in all route groups. “Not only did our home market of Hong Kong perform well, strong cargo feed from across the network enabled us to achieve an all-time weekly tonnage uplift record in the week ending 9 December. In terms of the nature of commodities carried, perishables were much in demand in the lead up to the festive season.”
Mark Whitehead (pictured) is to retire as chief executive of Hong Kong Air Cargo Terminals (Hactl), handing over the reins to Wilson Kwong on 7 March. Whitehead joined Hactl in 2010 with the task of steering the company through the challenge of losing majority shareholder and major customer, Cathay Pacific, which became a competitor. Hactl has become the largest freighter ramp handler in Hong Kong, handling over 100 airlines and more than 1.8 million tonnes of cargo in 2017. Its subsidiary, Hacis, has undergone significant investment and expansion, and will continue cross-border trucking services. Whitehead says: “I look back with great satisfaction on what we achieved at Hactl and am clear that our extraordinary progress has only been possible through the drive, support and hard work of our workforce. I am proud to have
led the team, and to have been part of such a strong ‘can do’ culture.” He adds: “I look forward to hearing about Hactl’s continuing growth and successes. For my own part, I have grown to love the air cargo industry, and the people in it. I still feel I have a lot to offer, and I look forward to opening a
new chapter of opportunities and challenges – whatever and wherever they may be.” Speaking about his successor, Whitehead says: “I welcome Wilson to Hactl, and I am confident that Hactl will flourish under his proven leadership. He will be supported by our unique team, and I wish them all the best.”
60 seconds with aa cargo’s rick elieson changing consumer habits impact shipping africa getting ready for take off
Whitehead to retire as Hactl chief executive, Kwong to take over
latam offers opportunities to be explored
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Europe continues to grow in November
Freight traffic has remained consistent across Europe with growth of 8.6 per cent in November, Airports Council International (ACI) Europe reports. The association says growth has been stronger at non-European Union (EU) airports, up 12.7 per cent year-on-year, with EU hubs also performing well, up 7.9 per cent. Freight volumes have been strong throughout the year with year-to-date growth of 8.8 per cent, with non-EU airports leading the way at 15.5 per cent, and EU hubs by 7.8 per cent. In November, Frankfurt Airport remained the biggest freight hub in Europe with 4.8 per cent growth to 189,180 tonnes, followed by Paris Charles de Gaulle Airport growing 2.1 per cent to 182,207 tonnes. London Heathrow Airport volumes surged 11.8 per cent to 154,364 tonnes, while Amsterdam Airport Schiphol dipped by 0.9 per cent to 145,153 tonnes. On a year-to-date basis, Frankfurt was up 4.9 per cent to 1.94 million tonnes, Paris by 2.5 per cent to 1.81 million tonnes, Schiphol by 6.6 per cent to 1.61 million tonnes and Heathrow by 10.5 per cent to 1.55 million tonnes. Istanbul Ataturk Airport retained its position as the busiest non-EU hub, with 15.3 per cent growth to 954,341 tonnes.
aircargoweek.com
NEWSWEEK
Amazon buys more land for Cincinnati hub
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mazon has added more land to its future air hub in Cincinnati, by taking control of an additional 210 acres of land. The news was announced on Twitter by Amazon senior vice president of operations, Dave Clark, who tweeted: “#AmazonPrimeAir is getting ready for takeoff in KY! Just added 210 acres of land as part of the future CVG air hub. Excited for Amazon, Customers, and Kentucky!” Local press reports say the 210 acres is split over two sites on the west side of Aero Parkway, with the larger measuring 188 acres. Cincinnati Northern Kentucky Airport responded to the news by tweeting: “More great news for our region; further investment in @amazon’s future air hub! Appreciate the partnership & look forward to tremendous impact on local economy. #AmazonPrimeAir” The news comes a year after the online retailer announced it would create a new centralised hub at Cincinnati airport, creating a centralised air hub for its fleet of Prime Air cargo aircraft. It expects to create 2,000 new jobs to go with the 10,000 full-time positions across 11 fulfilment centres it already has in
SF Airlines starts flights to Mongolia SF Airlines has increased its international presence with flights on a Shenyang – Changchun – Ulan Bator – Shenyang route. The airline says the Boeing 757-200 Freighter flights will offer favourable air logistics for cross-border e-commerce cooperation between China and Mongolia as part of the ‘Belt and Road Initiative’. It says existing advantages of Shenyang and Changchun, and freight sources of Ulan Bator are expected to be further developed and inte-
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grated, bringing new business development opportunities. The new route continues the network expansion seen in 2017 including Changsha – Ho Chi Minh City flights starting on 2 December, Hohhot – Hangzhou on 31 October, and Dalian – Hangzhou services on 28 March. SF Airlines ended 2017 with the 41st aircraft joining its fleet, and successfully acquiring two Boeing 747-400 Freighters at an online auction.
the state of Kentucky. The company was already leasing more than 900 acres for over 50 years, and plans to construct three million square feet of buildings. Amazon has entered into agreements with ATSG and Atlas Air to lease 40 cargo aircraft to support operations, with the $1.4 billion investment supporting a fleet of over 100 aircraft in the future.
K+N signs joint venture to help start ups Kuehne + Nagel has signed a memorandum of understanding with Singapore headquartered investment company, Temasek, to establish a joint venture investing in early stage companies developing cutting-edge technology for logistics and supply chains. The joint venture will target investments in early stage companies, which are developing technologies and services with the potential to transform traditional business models in
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logistics and improve efficiency. The cooperation will focus particularly on areas of big data and predictive analytics, artificial intelligence, block chain and robotics. Kuehne + Nagel International chairman, Dr Joerg Wolle says: “For Kuehne + Nagel it is both another important step in the deployment of our digitalisation approach and to shape the future of our industry.”
Best of freight in the UK recognised
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he British International Freight Association (BIFA) has announced the winners of its Freight Service Awards Competition 2017. The awards luncheon was hosted by entrepreneur and musician Levi Roots, who sang his way to financial backing for the launch of his Reggae Reggae Caribbean sauce on the BBC show, Dragon’s Den. BIFA president, Sir Peter Bottomley MP welcomed the guests to the 29th awards luncheon ceremony, and along with Roots, presented the finalists with their certificates. Superior Freight Services UK won the project forwarding award, and TR Logistics picked up the specialist services award ahead of Advanced Forwarding, B&H Worldwide and James Cargo Services. The staff development award went to Dascher for recruiting bright, dedicated and motivating young people and then nurturing their talent in a highly supportive environment. The supply chain management award was given to B&H Worldwide for its visibility tool streamlining their customers’ time critical supply chains and delivered substantial cost savings. Louis Perrin was awarded the young freight forwarder of the
NEWS WEEK WorldNews Michael Harrell has been named president of freight forwarding for UPS Europe, taking responsibility for strategy, performance and revenue growth in the region. He started his carrier at US-based shipping company, Fritz, where he held several management positions in Belgium, Russia and Kuwait. Since UPS acquired Fritz in 2001, he has held various senior positions, most recently UPS country manager for France.
year, having worked his way up to director level within Hemisphere Freight Services in just 10 years.The air cargo services award when to Metro Shipping for leading a successful collaborative approach with Birmingham Airport demonstrating material benefits to the supply chain, reducing costs, transit times and carbon footprint while growing Birmingham as an airfreight centre. BIFA director general, Robert Keen says: “The BIFA Freight Service awards are all about rewarding excellence and the luncheon is an excellent opportunity for Members and guests to network, cement existing relationships, and develop new ones.”
THAI Airways is submitting electronic cargo declarations on its new flight services to Vienna to Austrian Customs for advance clearance using EzyCustoms. The product validates the shipment data according to the Customs requirement before the submission of the Entry Summary Declaration. The system also allows THAI Airways to receive the acknowledgement and status messages returned from the Austrian Customs.
Middle East Airlines to use IBS iCargo system
Airline IT solutions specialist IBS Software (IBS) has signed a multi-year contract with Lebanon’s flag carrier Middle East Airlines (MEA) to implement its iCargo solution to manage the worldwide cargo movement of the airline. IBS’ software was selected for its capability to provide a single unified platform to manage all cargo business needs, from worldwide sales, commercial and capacity management to handling operations at their Beirut operational nerve centre. The implementation of iCargo will help MEA to truly transform its cargo business through definition of new sales and capacity management processes, smarter workflow based decision making, accelerated and fully digitised flow of information between sales, operations and revenue accounting, says the software house. Pictured above, IBS Software head of airine cargo services, Ashok Rajan signs the deal with Middle East Airlines Ground Handling general manager, Richard Mujais.
ACW REWIND
In this third wander into the archives, we look at how the CIS was releasing main-deck capacity as the millenium approached.
AirRep evaluates AN-70 freighter Vol 1, Issue 1 1 May 1998 CIS AND Russian airfreight operator AirRep Group is evaluating the new Antonov AN-70 cargo aircraft with its longterm partner Inversija Cargo of Latvia. According to Colin Martin, managing diirector of Gatwick-based AirRep, this process could lead to the new aircraft being added to the charter airline’s fleet. Martin says: “We are also evaluating Western manufactured aircraft with a view to replacing the entire Inversija fleet of IL-76s over the next three years. “AirRep is very much aware of the of the environmental concern of operating non-compliant aircraft in the Western hemisphere,” he added. CIS aviation officials have finally certified the Ilyushin IL-96T freighter after several years of testing.
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NEWSWEEK
Noise reduction at the heart of plans to reopen Manston
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he company wanting to acquire Manston Airport to reopen it have published a draft Noise Mitigation Plan as it refines its proposals for the defunct site. RiverOak Strategic Partners, which acquired all rights and interests and assumed financial and operational responsibility for the Development Consent Order to reopen the airport in the south-east of England (pictured before closure), which closed in May 2014, has published the draft plan, including plans to restrict the operation of noisier types of aircraft and night time operations. The draft plan includes a quota count system to control the amount of noise from aircraft and other measures include an insulation scheme for residential and noise sensitive properties such as schools, along with fines for individually noisy aircraft and those who stray from approved flight paths without good reason. It is proposing a number of changes including additional parking to the east of the site, greater detail in and around the cargo facilities, addition of small business aviation hangars and helicopter stands, highway improvements including a major upgrade
of the Spitfire Way/Manston Road junction, and substantially redeveloping access to the passenger terminal, amongst other proposals. RiverOak director, George Yerrall says: “Although not the only aspect of our plans that we are seeking feedback upon, we have always been aware that the issue of noise created by the operation of a redeveloped Manston Airport would be one of the issues
of principal concern for Thanet residents. “We understand those concerns and, in response, have decided to proactively offer a range of commitments designed to address their concerns to the extent possible.” He adds that the Noise Mitigation Plan is not required at either consultation or application stages but will enable RiverOak to take the feedback into consideration. RiverOak says more than 50,000 postcards have been distributed to communities in and around Herne Bay and Ramsgate as well as advertising in local and national newspapers to make local residents aware of the consultation. Copies of consultation documents have been made available at the local libraries in Birchington, Broadstairs, Cliftonville, Herne Bay, Minster-in-Thanet, Newington, Sandwich and Westgate in electronic format, and hard copies are available in Deal, Ramsgate and Margate from 12 January. Two events are also being held at the Comfort Inn, Ramsgate on Tuesday 23 January between 12pm and 8pm, and at the King’s Hall in Herne Bay on Wednesday 24 January between 12pm and 8pm.
Rhenus takes over Piramide SeaAir
Rhenus Group has expanded its presence in Brazil by taking over Piramide SeaAir Comercio Exterior as part of its global expansion plans. Piramide has been operating as a licenced customs clearance broker for more than 20 years and has developed its own customs clearance software for this purpose. Rhenus says it can now not only operate classic freight forwarding services, but also offer greater efficiency in providing advice and completing customs clearance for imports and exports. Rhenus chief executive officer of air & ocean Europe & Americas, Jorn Schmersahl says: “Customs clearance for imports is a major focus of operations in Brazil. It often determines whether goods are handled smoothly in conjunction with the public authorities or not. “As a result of the customs clearance expertise available at Pirâmide SeaAir, we’ll be able to offer our customers here special time
benefits and value added in future.” Piramide has its headquarters in Sao Paulo and has branches at Guarulhos and Viracopos airports as well as the port of Santos, and will operate under the Rhenus-Piramide brand. Rhenus Group is strengthening its presence in Central and South America following growth in Asia, with Schmersahl saying: “Brazil is a growth engine and generates about half the economic power in South America. We’re sure that Brazil will not only be important for exporting investment and consumer goods in future, but also become increasingly significant as a production site and regional centre.”
ACE in the hole for airfreight THE SECOND ACE Air Cargo Event & Global Air Cargo Solutions Meeting, will take place in Shanghai, China on 13-17 May 2018 at the St Regis Jinan Hotel. The meeting happens before and during the Air Cargo China - Transport Logistics fair and the ACW World Air Cargo Awards. ACE hopes to attract over 200 delegates from the global forwarding & 3rd party air cargo logistics industry, says Christos Spyrou, Neutral Air Partner, CEO & Founder. ACE is a neutral open and independent networking event, dedicated to deliver partnering opportunities exclusively to the international forwarding and air cargo logis-
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tics community. The event is organised by Air Cargo Plus and is three days of workshops and networking, with face to face meetings and social activities, available to attendees. Spyrou says: “If you are a freight forwarder, consolidator or master loader, GSSA or aviation specialist, express or eCommerce operator, charter broker or carrier, airline or supplier to the trade, ACE will offer you several benefits and partnering opportunities that no other open meeting does.” The event’s website is www.aircargoevent. net.
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NEWS WEEK
Seconds with Rick elieson
American Airlines appointed Rick Elieson as president–cargo overseeing all aspects of the US carrier’s worldwide cargo business in March 2017, taking over from Jim Butler. Elieson started on the Japanese desk in American’s Fort Worth Reservations office in 1994. He takes time out to talk cargo, soccer and what he would do if he won the lottery.
ACW: You have been in charge of one of the largest cargo networks in the world since early last year. Any regrets in taking the position? Elieson: Moving to cargo has been fascinating and rewarding. Wherever I have gone, I have been fortunate to be surrounded by devoted and passionate people… and I am very impressionable. So if you combine a desire to learn, a willingness to be influenced and an environment full of passionate and informed people, it is no surprise that I’m having a lot of fun in cargo.
ACW: We finish the interview and you step outside the office and find a lottery ticket that ends up winning $10 million. What would you do? Elieson: I am assuming that I get to keep the money and this isn’t a morality test about keeping someone else’s ticket! I will confess that $10 million dollars would get tucked safely away for retirement. I don’t think my life would change in any meaningful way. Perhaps I become a bigger tipper.
rick elieson ACW: American football or soccer? Elieson: I know it is sacrilege for someone who grew up in Texas, but definitely soccer. Each of my three kids played soccer when they were little, but my youngest, has stuck with it since he was 4-years old. He plays for a Liverpool Academy team. ACW: Steak or spaghetti? Elieson: 16 oz. steak, cooked medium rare.
ACW: You do not seem to have had a freight background. Any surprises since you have been in the saddle? Elieson: There have been loads of surprises! I see something that amazes me every time I walk through a warehouse. I am ashamed to admit how much I took the cargo industry for granted. I have also been surprised that in an industry teeming with so many innovative and entrepreneurial people. We are still so heavily dependent on paper processes. I firmly believe that failing to modernise is a significant disruption risk to our business and at American we are prioritising investments in our readiness to adopt eFreight standards.
ACW: What do you see as the key requirements to get the most from your staff? Elieson: I am lucky to get to work with such great people and who know the business so well. I’m also lucky that my boss was also my predecessor and therefore has a good perspective on what it takes to succeed as a team. His advice to me when I took on the role – which of course I think is spot on – was to make sure the various teams and functions are all communicating well. High performers, who are unified in our objective to be the most trusted airline partner, need to stay close in order to make the most out of what each part of the business is developing and delivering.
ACW: American Airlines Cargo is committed to shrinking its carbon footprint. Is this something you will continue? Elieson: It is wonderful when doing the right thing long term also has near-term efficiency benefits. That’s true of many of the things we’re doing to reduce our carbon footprint, from lighter containers, to newer aircraft, participating in biofuel trials, or our many recycling programs. But the programs that make me proudest are the many locally initiated programs. They may not add up to as much as some of the corporate-driven initiatives that are reducing our fuel consumption, but I like what it says about our culture when individuals at location after location are identifying unique ways they can step up their recycling and conservation efforts.
ACW: In terms of AA Cargo’s business, what are the main opportunities you see over the next five years? Elieson: We need to be able to adapt to demand and the changing needs of our customers much faster. I’m a couple weeks premature to being able to share more, but 2018 will be a year of major investment for American in that ability to develop and distribute products more rapidly. It is a massive IT effort, but it is also a change in processes, decision making, and how we approach our business that I believe will benefit us for years to come – regardless of the direction the industry takes. ACW: Will Brexit produce any problems for AA Cargo once the UK has left the EU? Are you making contingency plans? Elieson: If anybody can tell me the impact that Brexit will have, they are hired! Given the size of our operation in the U.K., and how much of that freight originates elsewhere in Europe, Brexit is something we are monitoring very closely.
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PERISHABLES
Changing consumer habits are impacting shipping
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S carrier 21Air only launched 18 months ago to move fresh and perishable cargo domestically within the US and internationally with two 767200ER freighters. The airline’s success can be measured, according to 21Air new business development director, Rodrigo De Narvaez (pictured), in a massive expansion later this year. He says: “We are in the process of incorporating into the fleet three DC10-30Fs in the first semester of 2018.” Changing expectations of shoppers, whether buying
online or in bricks and mortar establishments, is impacting perishables logistics, considers De Narvaez. He says: “Change is coming, no doubt. Growers will have to change their packing, transportation will have to change the way they palletise and transport, airlines will have to change the way they calculate the flight yield, Customs will need to globalise in detail, importers and wholesalers will have to adapt and change their performance and service and small retailers will need to be able to compete in a very aggressive and review oriented market. “Customers understand that logistics and Customs barriers have faded, global availability at their fingertips calls for experimentation, internet and TV access to exotic food shows and recipes invite customers to look beyond their traditional food, millennials are great travellers
and are exposed to all kinds of food that they want to be able to have in their diet.” 21Air is a perishables-driven airline with daily flights from Bogota and Medellin to Miami with an average of 120 tons of flowers per day. From Peru the cargo is mainly asparagus from July through March, mangoes from November to March and other products such as ginger, fish, grapes, pomegranates and avocados complete the list. It carries many non-traditional perishables such as pharma, cosmetics, time and temperature-critical equipment.
More efficient routing
De Narvaez maintains that instead of flying Europe’s perishable imports via the Netherlands, leisure flights between South American and the Caribbean to Europe are more efficient and allow for higher margins. He says: “Passenger airlines historically base their revenue in their seat occupation. Lower decks to leisure destinations normally are not considered. Using this extra capacity and providing the airlines with an extra income has proven not only to be attractive to the airline but has proven decisive to maintain longer seasonal flights. “Logistics and transit times once addressed and professionally managed makes this a safe, economical and realistic alternative to destinations that are in high demand and have very little additional capacity for growth.” Very different buying habits in the US and Europe have had an impact on perishables logistics, De Narvaez says. “Buying habits determine packing, ripeness, cut stage, units per box, shelf life needs, quality guarantee and price flexibility,” he says. “European customers buy more times a week, are exposed to products more times as well and buy more times but in smaller quantities. This brings fresher product to the table,
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riper product and is held in the fridge for less number of days. Logistics have to be faster and leaner.
Better training
“Logistics has to have more trained personnel, mistakes such as needing repacking are expensive and fulfilment suffers. Customers have the opportunity to try products in smaller quantities therefore things that are affected by the transportation such as appearance; box, bag crushed or dirty become important. “Perishables are no longer determined just by temperature. Today we have perishables due to time, to mechanical injury, opportunity and many other criteria. A perishable is anything that will lose its value in the logistics chain. “Take a newspaper, if you don’t get it before 7am it is dead by noon, old news, a loss of effort, resources and money. A newspaper therefore has lost all of its value and therefore a perishable product. De Narvaez bats off environmentalists’ concerns as to airfreighting foodstuffs. He says: ”Flying has proven to have a smaller carbon imprint on the product than trucking. More efficient engines are coming into the market and are being adopted by the airlines for four reasons; they are more efficient, they last longer, they are less expensive to maintain, and the carbon imprint and emissions is very low. “Flying asparagus makes sense since not everywhere can produce the yields achieved in the current production areas. Peru has invested great sums to excel. He adds: “Probably the biggest change in the asparagus growing has been Peru proving to the world that a change in the way you address the cultivation was needed, something as big as changing tons of manure per hectare to parts per million per plant. It is agriculture versus science.”
PERISHABLES
Industry remains hungry for guacamole, salmon and wine
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ritish taste for frozen guacamole from Mexico has created good business for Panalpina Air Cargo. Forty-two tonnes were moved in six weeks in ten shipments recently. Flown from Guadalajara, Mexico, via Huntsville, USA, to Stansted, UK on scheduled charters of the Panalpina Charter Network, the product was transported on the lower deck of a Panalpina’s 747-8 freighter, with the ambient temperature set at 2 °C. Palletised, the goods had thermal covers (passive cooling) used for each pallet to maintain the temperature of the cargo during transport. There was immediate onward distribution from Stansted Airport to the customer in Braintree, Essex on arrival, with each shipment delivered to the customer between two and maximum five hours after the aircraft had landed.
Salmon keeps flying
In mid-December, 2017, Finnair staged the official opening of a new 80 million euro Cargo terminal COOL for its perishable cargoes. At an opening attended by Finland’s Minister of Transport and Communications, Anne Berner, guests were introduced to the new terminal’s most striking features, including the new high-tech Cargo Control Center (CCC) that intelligently manages and optimises the flow of goods and steers the performance of the hub. The new COOL terminal had opened its doors for seafood shipments in October, and at the opening, Finnair showcased salmon frequently transported on its flights to Asia and other key international destinations. Finnair managing director Janne Tarvainen (pictured) explained that salmon was a natural choice for the event because it is one of the products that benefit from the use of modern technology to monitor transport. Tarvainen says: “We transport 20 million kilos of salmon each year, in part because of the competitive advantage offered by the geographical location of Helsinki. We call it the short Northern route and it means salmon fished in Norway can reach a diner’s table in Tokyo in 36 hours. That might be fresher than the fish in your local supermarket in Helsinki. “Salmon is only one part of our cargo, but its journey showcases the kind of speed, focus on highest quality, and use of the best technology that have been our guiding principles in this 80-million-euro investment. With salmon and other seafood, it is essential they are transported at the right temperature and our new Cargo Eye monitoring system together with temperature monitoring trackers makes sure the salmon is kept in ideal conditions all the way to its destination.” Sustainability has been at the forefront of planning and design of the new terminal and in late December on Finland’s 100th Independence Day, the new COOL Nordic Cargo Hub at Helsinki Vantaa airport was awarded a rating of “Very Good” by one of the world’s leading sustainability assessors of buildings, BRE Global Ltd.
ft). The flight will depart daily from Jomo Kenyatta International Airport hub in Nairobi. While Kenyan roses have taken 40 per cent of the EU’s rose market, the percentage making it to the United States is considerably smaller. It suffers in the US market by being more expensive
than competing South American produce. The Africa Growth and Opportunity Act afforded Kenya and other developing countries duty-free access of some goods into the US market. The cut flower sub-sector is Kenya’s top forex earner but has remained underexploited.
Capital connections
In August 2017 the first direct flight from Canbarra, Australia to Singapore was used by producers throughout the national Australian capital region for the first shipment of local perishables direct to Singapore from Canberra airport. Producers were able to get their wares to Singapore within a day of an order rather than the five days such cargoes normally took through Sydney. The inaugural shipment on Singapore Airlines comprised fresh bacon and smoked salmon from Pialligo Estate; Helm Wines and Ravensworth Wines from Murrumbateman, Nick Spencer Wines from Canberra, Lark Hill wines from Bungendore and Nick O’Leary Wines from Lake George as well as Fedra olive oil from Collector. The produce ended up at international hotels, supermarkets and leading restaurants in Singapore.
Coming up roses
Rose growers in Kenya are set to benefit from Kenya Airways new non-stop daily New York flight which launches in October 2018. It becomes the first airline to offer a non-stop flight between East Africa and the USA. The airline will operate a Boeing 787-8 Dreamliner with a cargo capacity of 137 m3 (4,826 cu
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AFRICA
African airfreight getting ready to take off
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irfreight in Africa is on the verge of massive expansion, driven by a landmark co-operation and regulations liberalisation agreement, a diversification of routes and improvements to infrastructure, writes Stuart Flitton. These developments follow the strong and steady growth that led to the largest year-on-year increase in demand last year of nearly 18 per cent. The signs are that this increase is likely to be maintained, or improved, over the next five to ten years.
Behind, and supporting, increased airfreight in Africa are a wide range of positive developments, including healthy GDP growth in many countries, expanding middle classes, a reduction in armed conflict and an increase in democratic, peaceful transitions of power. Of course, these green shoots should be seen against a backdrop of enormous challenges and difficulties. There are several factors that make the aviation experience in Africa different to that in other parts of the world. Perhaps the first thing to note is that, to misquote the Douglas Adams in The Hitch-Hikers’ Guide to the Galaxy, Africa is big, really big. Not only is the landmass enormous, with 15 countries landlocked, but Africa has a huge population of roughly one and a half billion people, or 12 per cent of the world’s people. Africa is not
homogeneous but is made up of 54 countries, each with a history, culture and prospects of its own. Hassan El-Houry (pictured), co-author of Fly Africa: How Aviation Can Generate Prosperity Across the Continent with Eric Kacou, notes that with such a large area and number of people, the aviation industry has developed to produce a total of more than 720 airports and around 420 airlines. However, the development has been slow and stuttering and the continent accounts for a tiny fraction of the world’s passengers and an even smaller proportion of airfreight. Among the main obstacles have been a lack of liberalisation in air traffic rights leading to limited connectivity. This is a particular problem for bellyhold cargo, especially perishables. The lack of direct routes also leads to high costs, especially in taxes and fuel. Another major obstacle to growth is poor infrastructure. Some airports have freight aircraft offloading cargo but then leaving empty because there is not an x-ray machine or weighing scales and airlines are unable to carry cargo that hasn’t been screened properly. An x-ray machine can cost in the region of $100,000, scales even less, so relatively small investments can transform local trade and industry.
Infrastructure being addressed
Some infrastructure problems are much bigger, such as poor quality and insufficient warehouse space, old and sometimes dangerous runways, which many governments simply can’t afford to improve. However, refurbishments are taking place. An $80 million upgrade at Roberts International Airport in Harbel, Liberia has led to the opening of a new passenger terminal last month and the renovation of the decrepit 1970s runway into one that will support heavy loads and help to improve air safety.
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The 57,000 sq m aprons have been expanded to 85,000 sq m. Much of the work was financed by the China Export-Import Bank, the Saudi Fund for Development and the Arab Bank for Economic Development for Africa. Construction was carried out by China Harbor Engineering Company and Sino Hydro and completed in just 15 months. El-Houry says that such partnerships are key to the modernisation of facilities and believes that these then need to be run not by government departments but by professional airport management companies. Felix Houphouet Boigny Airport (pictured above) in Abidjan, Côte d’Ivoire, is a prime example. “Management was handed over to a private company (Aeria),” he says. “The airport is doing very well. It’s top-of-the-line, perfect service, clean, secure. As good as any in the world.”
Government light touch
A light touch from governments over airlines is another area that has led to success. El-Houry points to Ethiopian Airlines that is “shielded from the political ramblings of the government and the political in-fighting. They have been able to do very well. They have a clear strategy and it has a professional management team and a professional board of directors,” he says. However other national carriers are more strictly controlled and are sometimes an extension of the government and its political dynamics. These include South African Airways and Kenyan Airlines. While both these airlines are doing well, they are a huge burden on the national budget and susceptible to dramatic political changes. El-Houry believes that the role of governments should be restricted to setting up the regulatory arrangements with the management of the airlines being handed over to the private sector.
AFRICA
Free trade, a single market and airships on the agenda
O
ne of the keys to the future of aviation in Africa is the successful implementation of the Single African Air Transport Market that is being launched in Addis Ababa in January. The SAATM agreement has been signed by 22 countries, including the biggest continental players in aviation, Ethiopia, Kenya, Nigeria, Côte d’Ivoire and South Africa. The 22 countries have a combined population of roughly 670 million, more than half that of the entire continent, and they account for 65 per cent of Africa’s GDP. The agreement builds on the Yamoussoukro Decision of 1999, which was aimed at eliminating all non-physical barriers in the aviation industry, including those linked to the granting of traffic rights, tariffs and the frequency and capacity of air services. According to an African Union document, liberalisation and unification of the African air transport markets is one of its priority flagship projects and is in line with the goals of the AU Agenda 2063 for an “integrated, people-centred, prosperous, peaceful and stable Africa”. One of the main Agenda 2063 projects is no less than the creation of a continental free trade area, which will revolutionise airfreight in Africa. The widespread removal of restrictions on trade and travel are estimated to create a huge number of jobs and boost GDP. This has already been demonstrated when, for instance, Morocco and the EU liberalised air traffic and when South Africa and Mozambique went through the same process. Liberalisation introduces an element of competition, which tends to reduce prices. It also increases volumes of traffic that, for the airlines, compensates for the lower prices. The virtuous circle of reduced red tape and financial benefits goes hand-in-hand with one of the main drivers of airfreight in Africa – the growing middle class. This has already led to the growth of imported electronic goods from countries such as China, Japan, South Korea and Dubai. While some commentators have criticised the Yamoussoukro
Decision for failing to achieve its goals, El-Houry believes that it was an important first step in the liberalisation of travel and trade. “Of course it wasn’t going to have an impact on all countries immediately. They all have their own economic policies, language, people and needs. It’s a process that takes time and effort
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and energy and Yamoussoukro was the first step in the right direction.” One way around the infrastructure problems is the use of airships which are used in other parts of the world with large landmasses and a lack of extensive road and rail transport, such as Canada. An even more promising area is the use of drones, which El-Houry terms “flying donkeys”. These are already being used to transport time-sensitive products, such as blood for transfusions, and the extension to perishable goods could soon follow. While the most development in airfreight has been in the south and east of the continent, North Africa is expected to become one of the growth areas over the coming years. While Egypt is the only country in the region to have signed up to the SAATM, others could soon follow once they have achieved some degree of stability after the turmoil of the Arab Spring. While a thriving air trade with Tunisia and Libya might seem a pipedream, economic recovery and development can swiftly follow the end of political conflict and violence, as has happened in Côte d’Ivoire. The increase in the oil price will benefit the likes of Nigeria and Angola and elsewhere in Africa GDP growth is healthy with countries such as Tanzania, Uganda, Ghana and Mozambique developing their economies. El-Houry believes that the growing diversification in trading partners is one of the keys to the continued success of African airfreight. Historic trade with Europe continues to be important, while there are increasing exports and imports with the US as well as other parts of the world. There is also significant room for growth, for instance with the Middle East and the Indian subcontinent. “If, for some reason, there’s a reduction in one trading partner, such as China, someone else will step in and fill the gap. The business and economic fundamentals for continued growth are there and I don’t see any reason why there should be a significant reduction in demand,” El-Houry says.
ACW 22 JANUARY 2018
9
LATIN AMERICA
American exploring new opportunities region has to offer
F
ollowing a very encouraging year in 2017, American Airlines Cargo is looking to explore new opportunities to exploit its vast network, managing director for Florida, Caribbean and Latin America, Lorena Sandoval (pictured) tells Air Cargo Week. She says 2017 a very good year with strong growth, particularly for perishables being shipped into the US from Latin America. The whole American Airlines Cargo network grew 16 per cent in 2017, with Latin America proving an important part, and the region has had a very promising start to the year. Sandoval says: “In Latin America and the Caribbean, we are exploring new opportunities that will help grow the business especially those that take advantage of our widebody network into both Europe and Asia.” Perishables remain the main commodity exported from Latin America. The blueberry season has just ended and significant additional demand from US customers prompted Ameri-
can to do more domestic shipments than in previous years. Sandoval adds: “In 2017, we also shipped a new type of mango from Peru and Ecuador, which was in high demand across Asia. Thanks to our experienced team, we were quickly able to marshal
our resources to cater to this new business.” With the blueberry season out of the way, now it is time for flowers, Sandoval comments: “We are coming up on the traditional peak flower season, when there will be huge demand on our flights out of Colombia and Ecuador into the U.S. and Europe. Of course, roses will be the No. 1 item shipped around Valentine’s Day.” The products across the region have largely remained the same, but main variation is originating and final destinations. Sandoval says seafood shipped from Brazil to the US, Europe and Asia has grown most significantly over the past 12 months. She adds: “Believe it or not, one of the biggest factors around change is the weather, which is something we’re always watching, as it impacts the growers and their changing production areas. “But by working closely with our customers, we can develop plans to fly their goods out to meet their exact requirements. This is particularly true in Peru and Mexico.” Customers across the region also benefit from American’s extensive widebody connections with the region, providing services from its hubs of Miami and Dallas Fort Worth to the rest of the network. Miami has been the traditional hub for Latin American traffic but Dallas is increasingly important due to a growing number of connections. Sandoval says: “The nonstop service to Dallas is a unique connection for customers in Latin America, and our connections to Asia from there will be extremely popular in 2018. And out of Los Angeles (LAX), our Sao Paulo (GRU)-LAX flight offers quick and easy onward connections, as well.” She believes the outlook is positive, with perishables continuing to prove important out of the region and product assembly parts moving into Latin America. American Airlines is also working on a more streamlined, paperless operation by encouraging the use of electronic air waybills throughout the network. The main new opportunities are likely to come from Brazil and Peru in 2018, while Sandoval also predicts auto parts may start moving by air in greater volumes as manufacturers move away from the traditional ocean transportation. Along with the ever growing demand for e-commerce, Sandoval is optimistic about the regions performance, saying: “It’s exciting to be engaging with new types of business in such a positive way.”
TIACA signs MoUs with key organisations
TIACA has strengthened its presence in Latin America by signing memoranda of understanding (MoU) with key organisations and by appointing a sales agent in the region. The MoUs are with Buenos Aires, Argentina-based Americas Alliance (AA), Bogota, Colombia-headquartered Federation of National Associations of Cargo Agents and International Logistical Operators of Latin America and the Caribbean (ALACAT), and Santiago, Chile-based logistics provider AGUNSA. AGUNSA has been appointed The International Air Cargo Association (TIACA) sales agent for Latin America, to encourage companies in the region to attend and exhibit at TIACA’s events and to grow membership. TIACA secretary general, Vladimir Zubkov says: “We are continuing our efforts to expand the geography of TIACA membership and connections, and these three MoUs are in line with our current policy of globalisation and regional partnerships.” The association has pledged to work with the three organisations on new air cargo events, training, and to promote industry best practices across Latin America. AGUNSA vice president, Eric Hartmann says: “We at AGUNSA are proud to be working with TIACA expanding its presence in Latin America. Our objective is to bring South America closer to the world as we look to support the success of this year’s Air Cargo Forum in Toronto.” TIACA chairman, Sebastiaan Scholte, who is also the chief executive officer of Jan de Rijk Logistics, says: “Latin America is an important growing region where up till now TIACA did not have that much exposure. With the partnership with these three highly regarded organisations we are expanding our presence in Latin America.” In November, TIACA signed an MoU with the African Airlines Association as part of its global expansion drive.
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ACW 22 JANUARY 2018
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Looking at what people in the air cargo industry are thinking about
BelugaXL leaves the hangar with a smile
T
he first structurally complete airframe for the new BelugaXL has rolled out of the assembly hangar in Toulouse ready to start flying by mid-2018. It features a bulging upper forward fuselage and enormous cargo area, and once operational, a fleet of these next-generation airlifters will be used to transport completed sections of Airbus aircraft among the company’s European production sites and to its final assembly lines in France, Germany and Spain. The BelugaXL is based on the A330-200, and head of the BelugaXL programme, Bertrand George says: “We have the A330 as a foundation, but many changes have been successfully designed, introduced into the aircraft and tested. Transforming an existing product into a super transporter is not a simple task. “The whole team is really looking forward to seeing its first flight and, of course, its smiling livery,” he adds, referring to the supersized smile that will be painted across the ‘face’ of the transporter, the winning design
of six options presented to Airbus employees for a vote in early 2017. The aircraft will undergo a battery of tests after installation of its two jet engines, ensuring each of the system’s function as intended. George says: “We will perform bench tests in Toulouse and Hamburg, Germany – testing our systems on flight simulators and in laboratories” as well as using hydraulic jacks to simulate flight loads on full-scale copies of specific joints between the new upper bubble and A330’s lower fuselage. The second A330 has arrived to be converted into a BelugaXL, and lessons leant from the production of the first one should mean assembly time is two months shorter. The XL programme was launched in November 2014, and the aircraft is six metres longer, one metre wider and has a payload capacity six tonnes greater than the BelugaST transporter it is replacing. The new aircraft will be able to transport both wings of the A350 XWB at once, instead of the single wing currently accommodated on the BelugaST, and five XLs are scheduled to enter service.
Boeing to use CAV prototype to test autonomous technology Boeing has unveiled its unmanned electric vertical-takeoff-and-landing (eVTOL) cargo air vehicle (CAV) prototype that will be used to test and evolve autonomy technology. It is designed to transport a payload of up to 500 pounds for possible future cargo and logistics applications. The CAV prototype will be used as a flying test bed for autonomous technology for future applications. Boeing HorizonX, with its partners in Boeing Research & Technology, led the development of the CAV prototype, which Boeing says complements the eVTOL passenger air vehicle prototype in development by Aurora Flight Sciences, which was acquired by Boeing in late 2017. The CAV it was designed and built in less than three months by a team of engineers and technicians, with test flights taking place at the Boeing Research & Technology’s Collaborative Autonomous Systems Laboratory in Missouri.
Boeing chief technology officer, Greg Hyslop says: “This flying cargo air vehicle represents another major step in our Boeing eVTOL strategy” Boeing HorizonX vice president, Steve Nordlund says: “Our new CAV prototype builds on Boeing’s existing unmanned systems capabilities and presents new possibilities for autonomous cargo delivery, logistics and other transportation applications.” The CAV is powered by an electric propulsion system and is outfitted with eight counter rotating blades allowing for vertical flight.
JAL to send freight out of this world
Just before Christmas, Japan Airlines (JAL) revealed to the media that it had invested in the Japanese lunar exploration company ispace and put an undisclosed sum of money into the venture. Boldly going where airlines have not gone before, the Japanese carrier told the earthbound press that this was its first step into expanding its business into space. This is no space tourist business the airline is helping to support. ispace, which saw some $90 million pumped into it in December alone, is determined the project will deliver cargo that is truly out of this world. The financing will be used to develop a lunar lander and conduct two lunar missions by the end of 2020. ispace’s lunar lander will be able to accommodate roughly 30kg of payloads. This includes two lunar exploration rovers, also developed by ispace, each of which could install up to 5kg of payloads. ispace will provide transportation service
to the moon for future customers including government agencies, research and academic institutions and private companies. JAL has been sponsoring HAKUTO, a team managed by ispace, since 2015. The investment will deepen the co-operation and can open up new business opportunities for the airline. Not just on this planet, it seems.
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