ACW 24th October 16

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The weekly newspaper for air cargo professionals

The weekly newspaper for air cargo professionals Volume: 19

Issue: 42

24 October 2016

Hollande looking to make France gateway to Europe

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rance is looking to take advantage of the UK leaving the European Union (EU) and it’s dithering over aviation runway capacity by making the country the gateway to the European market.

President Francois Hollande believes Brexit should bring more investment into France and make it showcase its “attractiveness”.

He was speaking last week at FedEx’s facility at Paris Charles de Gaulle (CDG) International Airport where the express freight firm announced a 1.4 billion euro ($1.54 billion) investment in France and doubling of its logistics operations (see page 10 for more).

Hollande says its not about “taking what Britons have” but they must live with the consequences of Brexit and France must become the “point of access to the European market”. He adds: “The opening of this facility is an additional sign of

France’s attractiveness. With the decision by Britons to leave the EU, it should lead us to attract even more investments.”

The extra 25,000 square metres of space will make FedEx’s Roissy centre its second biggest in the world after Memphis in the US. TNT Express, bought in May by FedEx, also plans to open a new facility in the Paris region.

As competition hots up with the UK leaving the EU, the UK Government continues to drag its heels on airport expansion as it decides

whether to give Heathrow Airport the nod for a third runway, or Gatwick Airport a second runway.

The Government is set to announce its preference this week, but it could still be at least a year before MP’s vote on the issue to allow for a full debate, which will be welcomed by Paris CDG, and other EU gateways.

A cabinet airports sub-committee meeting this week is set to name Heathrow as its preferred option as recommended by the Airports Commission. The Freight

Transport Association, British International Freight Association, various regional airports, and the Scottish Government back this move.

Heathrow released its ninemonth figures last week, which said cargo volumes increased by 2.1 per cent while revenue was up 1.2 per cent to £2,093 million ($2.45 billion) but it reported a £210 million post-tax loss - compared to a £419 million profit in the nine-month period last year.

Chief executive officer, John Holland Kaye says: “Heathrow is the right choice to help make Britain stronger and fairer for everyone – that’s why there is such broad support across the UK from Newquay to Inverness for our plans – and we stand ready to deliver the runway that will keep Britain a confident, outward looking trading nation as soon as we get the green light from Government.”

have capacity to handle 5.5 million tonnes of cargo a year and have significant dedicated freight facilities. In the first two phases the annual cargo capacity will be around 4.5 million tonnes per year.

After opening Terminal 2, there will be another cargo and logistic

area close to the terminal with an additional one million tonnes per year of cargo capacity bringing space for 5.5 million tonnes. There are plans to expand the airport further in the years ahead to six runways and three terminals.

On opening, 180,000 square metres of online warehouses and 50,000 square metres of offline warehouses with custom and cargo agent offices will be ready before the beginning of 2018.

When completed there will be 300,000 square metres of online warehouses and around 100,000 square metres of offline warehouses for freight forwarders.

Istanbul New Airport is being built on an area of 76.5 million square metres, and is located 35 kilometres from the city centre.

Istanbul New Airport on track and accepting lease bids

Istanbul’s new 10.2 billion euros ($11.1 billion) gateway - Istanbul New Airport - is now seeking companies to lease spaces in the first terminal building, set to open on 26 February 2018.

The Istanbul Grand Airport (IGA) company is calling any firm wanting to operate at the hub, which is set to see 250 airlines run services, including all-cargo carriers. IGA has sent invitations to more than 60 airlines and carrier service companies to submit request forms by 18 November this year.

The airport project consists of four phases. The first phase consists of two detached parallel runways 1,700 metres apart, and two attached runways.

When all phases are completed,

the hub will be able to handle 200 million passengers a year, and the 1.4 million square metre Cargo City within the airport’s customs zone will include 300 cargo agency offices, on which the book-building process has already begun.

Istanbul New will eventually

60 SECONDS WITH JONAS VAN STEKELENBURG 60 SECONDS WITH ARIAEN ZIMMERMANN SWISS MARKET BOUNCING BACK AFTER TOUGH 2015 STATES URGED TO TAKE ACTION ON LITHIUM BATTERIES

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Charters up 9% so far in 2016 for ACS AIR Charter Service (ACS) saw charter numbers rise year-on-year (YOY) by nine per cent at its financial year’s halfway point as of 31 July.

ACS Group’s chief executive officer, Justin Bowman says numbers are up nine per cent compared to the same time last year at more than 5,800 contracts to the end of July.

He explains: “We’re very pleased with this continued growth, as last year was our best year by quite some way, exceeding our expectations.

“This year so far we have not had any ‘special events’, such as the West Coast Port Strike last year, for which we were doing up to three Boeing B747 charters a day for three weeks.”

ACS says the largest project it has undertaken in 2016 was the 48-leg Iron Maiden world tour between February and July using the B747 nicknamed ‘Ed Force One’.

Bowman adds: “Away from full charters, our revamped onboard courier division is doing very well, with an increase of 94 per cent. They are on track to hit 1,000 jobs this year, which will be a remarkable achievement.”

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Air cargo conditions improving as year rolls on

NEWS WEEK

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he airfreight market conditions have improved since the start of the year, though world trade volumes and low loads continue to cause problems, the International Air Transport Association (IATA) reports in its Airlines Financial Monitor.

The association says conditions have improved after a weak patch at the beginning of the year but the world trade outlook continues to present a stiff headwind.

Capacity growth in available freight tonne kilometres has eased in recent months mainly due to fewer passenger aircraft with bellyhold capacity being delivered, particularly in Asia Pacific.

Industry load factors remain at record lows, keeping cargo yields and revenue under pressure though IATA says they have stabilised, though remained at a historically low level.

IATA says: “Low freight loads continue to exert pressure on yields and revenues – a particular headwind for Asia Pacific carriers, for whom cargo is a key part of their business.”

Fuel prices have increased slightly, with Brent crude oil finishing September at just under $50 a barrel before rising to just above $52 in early October, rallying after OPEC agreed to cut oil output in the coming months, though IATA comments the lack of detail

surrounding the deal caused some analysts to question its success in rebalancing the market.

IATA says oil prices are around five per cent higher than a year ago and a weak upward trend is predicted over the foreseeable future, with prices remaining relatively low at below $60 until 2020.

Net post tax profits of sample airlines have remained robust by historical standards but were 20 per cent lower in dollar terms in the second quarter of 2016 compared to 2015 reflecting lower unit revenues.

Unlike last year, Latin America made a profit and Africa & Middle East saw an improvement, while North America, Europe and Asia Pacific were all down.

Spectre orders driven by e-com

SPECTRE Air Capital is continuing its rapid growth with an order for 18 Boeing 737-700s and 737-800s due to demand caused by the rapid growth of e-commerce.

The Texan aircraft lessor has ordered 15 firm plus rolling options for 737-700 and 737-800 passenger to freighter conversions with Israel Aerospace Industries and a launch order from Air Incheon for three 737-800 freighters on long term lease for delivery in early 2017.

Spectre chief executive officer and co-founder, Jordan Jaffe says demand for express freighters is at an all-time high, with hundreds more required in the coming years to meet the demand created by “rapid growth in e-commerce and expansion of the global middle class”.

Volumes falling at Abu Dhabi ABU Dhabi International Airport continues to be affected by the slight slowdown in the Middle East as it handled 64,626 tonnes of cargo in September, which was a year-on-year (YOY) fall of 3.8 per cent on the same month in 2015.

For the first nine months of the year, the United Arab Emirate gateway handled 588,900 tonnes, a YOY decline of 5.2 per cent on the 621,191 tonnes handled in the same period last year.

Cargo traffic has performed better in the last three months as for the first half of the year from 1 January to 30 June it was down six per cent on the first half of 2015.

Abu Dhabi’s passenger traffic has been going in the opposite direction and was up YOY by six per cent after nine months of 2016 compared to the same period last year.

WorldNews DESCARTES Systems Group has acquired Appterra – a US-based provider of cloud-based business-to-business supply chain integration services. Descartes struck a deal which involves a consideration of $5.8 million, plus a potential performance-based consideration.

THE Airports Council International Europe says in August freight traffic across the European airport network grew by 4.5 per cent. For the first eight months of this year cargo is up by 1.9 per cent across the European airport network, compared to the same period in 2015.

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NEWSWEEK K+N’s airfreight EBIT and volumes grow in first 9 months of 2016

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uehne + Nagel’s (K+N) airfreight business has registered a strong growth in EBIT in the first nine months of 2016 despite the company seeing falls in the third quarter (Q3).

Airfreight earnings before interest and tax (EBIT) rose by 8.9 per cent to 220 million Swiss francs ($222 million) in the first nine months of 2016, with volumes increasing by 2.2 per cent.

Airfreight turnover dipped from 4.1 billion in the first nine months of 2015 to 3.9 billion this year.

K+N explains: “The global airfreight market remained tense in the third quarter and pressure on margins continued due to shrinking demand and further capacity increases. Against this trend, Kuehne + Nagel grew its tonnage by 3.8 per cent and gross profit

per 100 kilos by 1.4 per cent, mainly due to further scaling its industry-specific solutions.”

For the whole company, turnover declined 1.4 per cent to 12.2 billion Swiss francs though profits were up 4.1 per cent to 533 million Swiss francs.

In Q3, turnover was down 2.4 per cent to 4.1 billion Swiss francs and profits dipped by 4.8 per cent to 177 million Swiss francs.

K+N chief executive officer, Dr Detlef Trefzger (pictured left) says: “By maintaining our Group’s focus on industry-specific logistics solutions and high-quality services, we succeeded in achieving growth and stable results despite the demanding market environment. We are confident about the business development in

the fourth quarter of 2016.”

K+N has gained various contracts this year including being chosen as the preferred provider of intercontinental cargo flows and end-to-end shipment order management partner for beauty and cosmetic manufacturer, Belcorp.

The partnership covers shipment order

management, door-to-door visibility, monitoring, tracking and exception management through a team of integrated logistics experts in Bogota.

The transportation services include all airfreight operations from Europe, Asia and within the Americas.

Hartrodt helps rare rhino move to Oz

Freight forwarder a. hartrodt (Belgium) arranged the transportation of a rare rhino via Singapore Airlines Cargo and says it was delighted to “contribute to the survival of rhinos”.

The challenging task saw a 1100 kilogramme rhino from a German zoo via Brussels Airport to Australia.

The highly endangered mammal was destined for a breeding facility Down Under to broaden the genetic diversity of the Australian rhino population and ensure its survival.

This rhino airlift was deemed critically important to increase the number of animals born. It’s a proven tool for rhino conservation.

The Australian government has very strict rules and regulations in relation to the

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importation of live animals the transport project had to be carefully planned and all paperwork meticulously completed before the animal was able to take off.

In addition, a. hartrodt had to comply with the Washington Convention on International Trade in Endangered Species. a.hartrodt (Beigium) director, Philippe Fierens says: “The transport of the rhino continues a proud tradition of a. hartrodt to support animal conservation efforts.

The welfare of the animal is, of course, the most important thing for us.

“We therefore asked Singapore Airlines Cargo to delay the flight out of Brussels.

This way we were able to reduce the transit time in Singapore and the overall travel time for the rhino to a minimum.

“The well-being and comfort of the animal was closely monitored during the whole trip by a very experienced veterinarian who accompanied the shipment.”

The rhino with its tailor-made transport box weighed in at 3150 kg and it adds to the live animals the forwarder has moved over the last 20 years, which has included everything from lions, to leopards. a. hartrodt regional managing director for Belgium, France and Switzerland, Jens Roemer: “We are proud that we have been able to develop such good relations with zoos and breeding stations as well as state vets, customs authorities, and airlines.

“It allows us to prepare and manage such challenging projects to the highest professional standards both on the ground and in the air. This is a niche market. It requires a passion for animals. I am proud that a. hartrodt has such staff.”

NEWSWEEK BARIG calls for more infrastructure

Bannerman gets top Cargolux role Cargolux Airlines International has appointed Christoph Bannerman (pictured) as its new vice president of corporate development and strategy - succeeding Maxim Strauss - who took over as executive vice president and chief financial officer.

Bannerman has gained extensive experience in the aviation and logistics industry including for the Lufthansa Group as manager of the sales steering and marketing for

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he Board of Airline Representatives in Germany (BARIG) says if Germany wants to maintain its status as the world’s leading export nation, it must build more suitable logistics infrastructure.

BARIG says the airfreight business in Germany is in need of locations that are “allowed to develop dynamically” and if this is not the case, then logistics routes will evade Germany and increasingly shift to airports in neighbouring countries that are already equipped with far better framework conditions.

BARIG says its standpoint is clear - the infrastructure for air cargo and logistics in Germany must be “further optimised and organised more efficiently” and large infrastructural projects at gateways shall no longer be delayed, but rather tackled consequently.

BARIG secretary general, Michael Hoppe says: “If we miss out on laying the fundament for a prosperous future today, Germany will continue to lose ground in international competition, thereby putting its important position in scheduled, charter and cargo flights at risk.

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This in return would have serious consequences for economy, jobs and consumers.”

The call was made at BARIG’s recent industry event in Munich, attended by over 100 guests.

To strengthen individual air cargo locations in Germany, BARIG is inducing additional regional initiatives aimed at securing growth and enhancing Germany’s position towards competitors from neighbouring countries.

BARIG says a good example is the Air Cargo Community Frankfurt, a coalition of firms, institutions and associations with the clear goal of growing air cargo in Frankfurt and features over 40 members from all areas of the air cargo supply chain.

Hoppe adds: “Without a perfectly working infrastructure air cargo has no future in Germany. A rapid enhancement and optimisation of infrastructure is urgently required. Further obstacles shall not be placed in the path of airlines.

“New bans on night flights, additional noise intermissions or noise ceilings imply obvious and more operational restrictions for airlines harm the business location Germany.”

Asia Pacific at Lufthansa Cargo.

Cargolux president and chief executive officer, Richard Forson says: “We welcome Christoph Bannerman as a veteran of the industry.

“His knowledge and experience will be a valuable contribution to the development of our company and in the formulation of its strategy in an increasingly challenging market environment.”

Strong September for world’s busiest cargo hub HONG Kong International Airport (HKIA) posted strong year-on-year (YOY) growth of 7.2 per cent in September, handling 394,000 tonnes compared to 368,000 tonnes in the same month in 2015.

Transshipments – experienced a 15 per cent increase compared to the same month last year, and continued to be the main driver of growth in cargo throughput.

HKIA says traffic to and from key trad-

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ing regions in North America and South East Asia saw the most significant rises in September.

During the first nine months of 2016, HKIA cargo traffic increased YOY by 1.2 per cent to 3.2 million tonnes.

On a rolling 12-month basis, HKIA handled 4.4 million tonnes of cargo, marking YOY increase of 0.9 per cent. Last year, HKIA was the world’s busiest cargo hub.

NEWS WEEK Belly capacity upgrades for Etihad

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tihad Airways is to add three more flights a week on its Abu Dhabi to Madrid Airbus A330-200 service from 1 June 2017, making it a daily service.

This will add another 36 tonnes of freight capacity with industries including fashion, petrochemicals and construction likely to see benefits of the change.

Etihad Aviation Group chief strategy and planning officer, Kevin Knight (pictured) says: “The extra flights will cater to the strong demand between the two capital cities, and connect our diverse international network even more with the Spanish capital and destinations across Spain and beyond, through our partners.”

The extra flights will provide access to markets across the Middle East, Africa, Indian Subcontinent, Asia and Australasia.

Etihad has also announced increased

bellyhold services to Dublin and Dallas Fort Worth.

From 2 February 2017, the three times a week Abu Dhabi – Dallas will become daily, providing an additional 96 tonnes of cargo capacity using a Boeing 777-200LR. Dallas Fort Worth International Airport chief executive officer, Sean Donohue says: “We are excited by the news that Etihad Airways will soon increase their service from Dallas Fort Worth to Abu Dhabi to daily flights.”

“This move shows the strength of the North Texas market for international travel, and further demonstrates that a great amount of global business flows through DFW.” The Abu Dhabi-based carrier will also celebrate 10 years in Dublin by doubling cargo capacity to two A330-200 flights a day to the Irish capital on 1 April 2017.

Knight comments: “This is a commitment to the Irish market and demonstrates our confidence to dedicate capacity throughout the year on a route that has enjoyed tremendous support from travel partners.”

Qantas to return to Beijing

Qantas is to return to Beijing for the first time since 2009 with daily Airbus A330200 bellyhold flights from Sydney as of 25 January 2017.

The flights are subject to government and regulatory approval.

Qantas Group chief executive, Alan Joyce (pictured) says: “The business travel market is another key focus for this route, particularly off the back of the free trade agreement with China, which is increasing the amount of freight we’re carrying.”

Beijing is Qantas’ third Chinese route, adding to its daily return services to Shanghai and 28 returns a week to Hong Kong.

It will increase capacity into Greater China by 18 per cent and Asian capacity by seven per cent.

Qantas is focusing on Asia, having added services to Hong Kong, Singapore, Japan, the Philip-

pines and Indonesia over the past 12 months, with 50 per cent of international capacity focused on the region, compared with 30 per cent 10 years ago.

Qantas will also be expanding its presence in Japan with daily Melbourne – Tokyo Narita bellyhold services from 16 December using an Airbus A330-300, adding to the Sydney – Tokyo Haneda and Brisbane – Tokyo Narita launched in 2015.

More widebody belly flights for Jet Jet Airways is to increase domestic connectivity with the introduction of widebody services and will also be introducing new routes across India.

It will introduce Airbus A330s on Mumbai – Delhi and Delhi – Kolkata routes, doubling bellyhold capacity on the fast growing routes.

On 30 October, Jet will introduce new flights between Delhi and Kochi, which is home several businesses including heavy industries, industrial minerals, fishing and information

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technology. For its winter schedule, Jet will also add a fifth daily Delhi – Kolkata service and a third to Bengaluru – Kolkata.

Meanwhile, Icelandic transatlantic airline WOW air has announced plans to increase the number of bellyhold flights from London to its hub in Iceland to two per day, as well as increases to onward long-haul services to California. From 27 March 2017, the carrier will fly daily from London to Los Angeles and San Francisco, via Reykjavik.

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NEWSWEEK Expanded Changi Airport hub opened by DHL Express Strong September for Cathay

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HL Express has opened an expanded DHL South Asia Hub within Changi Airfreight Centre (CAC) at Singapore Changi Airport as part of an 85 million euro ($93.5 million) investment.

The 24-hour express hub facility spans 23,600 square metres and outfitted with the industry’s first fully automated express parcel sorting and processing system in South Asia.

DHL says it will boost its operational capacity and efficiency – offering speedier deliveries for customers in the region and says the opening is “timely” – as it has recorded healthy shipment growth in recent years, particularly in the southern part of Asia Pacific.

Between 2012 and 2015, the average daily shipments for Oceania grew approximately 50 per cent, South Asia at 30 per cent and Southeast Asia rose 25 per cent. This facility is 33 per cent larger than the previous hub, providing DHL with additional capacity to handle the growing shipment volumes for regional and international destinations.

DHL explains with the hub located within the CAC, a 24-hour Free Trade Zone managed by Changi Airport Group, it improves the flow of goods between aircraft and the facility, and allows consignments to be shipped or transshipped within an hour.

DHL Express chief executive officer (CEO), Ken Allen says:

“Over the years, we’ve invested significantly to bolster our network and services in Asia Pacific.

“Our investment in the DHL South Asia Hub is the most recent in a series of global network investments made, and is the largest infrastructural investment made in Singapore to date.

“The country’s strategic location not only boosts our operational network capabilities, but also supports growing trade in the region aided by a stronger global economy.”

DHL Express Asia Pacific CEO, Ken Lee says with four hubs in Asia Pacific – Hong Kong, Shanghai, Singapore and Bangkok - it links over 70 DHL Express Gateways located throughout the region.

He adds: “This will also allow us to add more network flights in and out of Singapore , such as the recent introduction of the Phnom Penh – Bangkok flight that adds to our existing Bangkok – Singapore service, as regional trade continues to grow.”

DHL says the facility processes up to 24,000 shipments and documents per hour and can handle more than 628 tonnes of cargo during the peak processing window.

This processing speed is six times faster, while the handling capacity is three times more, as compared to the manual operations in the previous facility, significantly boosting DHL’s operations in the region.

CATHAY Pacific Airways had a strong September as Cathay Pacific and Dragonair carried a combined 162,116 tonnes of cargo and mail, a year-on-year (YOY) surge of 7.1 per cent on the amount handled in the same month in 2015.

The cargo and mail load factor also rose by 2.6 percentage points to 65 per cent and capacity, measured in available cargo/mail tonne kilometres, increased by 2.2 per cent, while cargo and mail revenue tonne kilometres (RTKs) increased by 6.3 per cent.

In the first nine months of 2016, the tonnage carried rose by 1.9 per cent against a 0.5 per cent increase in capacity and it was flat in RTKs. Cathay Pacific general manager for cargo sales and marketing, Mark Sutch says: “Overall cargo demand in September was fairly strong and tonnage continued to grow. Exports from Europe, Asia and Mainland China all saw good growth, while demand for freight on our North America routes was robust.

“The last week of the month, prior to the long national holiday in Mainland China, saw us break the company’s weekly uplift tonnage record. Although yield is down from the same period in 2015, we plan to maximise our freighter schedule over the last quarter as we expect demand to strengthen during the traditional peak season.”

New cargo facility to be built in Jakarta GARUDA Indonesia has signed an agreement with stateowned airport operator Angkasa Pura II at Jakarta’s Soekarno-Hatta Airport for development of a commercial cargo area.

Local media report both penned a deal to develop AP II’s commercial area in the gateway’s cargo warehouse at Garuda’s cargo operational service area. The area is set span 23,000 square metres.

There will reportedly be revenue sharing between Garuda and AP II from the airfreight business. Garuda is targeting growing its cargo business and is seeking to obtain a $269 million of cargo profit share in 2016.

Garuda Indonesia has 70 Cargo Service Centres (CSC) across Indonesia with 46 CSCs located in airports and 24 are in city centres, but is looking to expand its business to remote corners of Indonesia to support the rapid growth of domestic and international cargo shipping.

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60 SECONDS

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jonas van stekelenburg Amsterdam Airport Schiphol is one of Europe’s main air cargo hubs and arguably its most forward thinking and innovative freight gateway. Director of cargo, Jonas van Stekelenburg spoke to Air Cargo Week about how business is and how the airport is working to tap into the opportunities that e-commerce presents.

Justin Burns, ACW: How has tonnage performed this year?

Van Stekelenburg: We have experienced 1.6 per cent year-onyear growth during the first eight months of 2016. August saw a small decline compared to last year, but other months were on average better than last year. Asia remains our biggest market.

Justin Burns, ACW: Which sectors are growing at Schiphol?

Van Stekelenburg: Flowers continue to be a strong performer worldwide. We are also seeing promising results in pharma, boosted in part by the Pharma Gateway Amsterdam initiative, put in place by the whole community.

E-commerce has surprised us with its performance; and through conversations with Dutch Customs, the number of small shipments are up. They are seeing an increased number of declarations each month. Together with Customs, we identified this as a particular area of opportunity to improve service delivery, and introduced our new declaration, VENUE, which assists e-commerce shippers to streamline Customs procedures.

through two pre-existing Customs online platforms. This increases speed of fulfilment and security of the data.

Last month we entered into a pilot data-sharing project with KLM Cargo, Jan de Rijk Logistics, Cargonaut, Swissport, Kuehne+Nagel, Customs services, and tax authorities. The initiative is part of the “Schiphol 2020 Mainport Programme”.

Data is being shared real-time. We will have a Cloud platform for data exchange, reuse, supplementation, and modification.

jonas van stekelenburg Justin Burns, ACW: How can we tap into e-comm more?

Van Stekelenburg: Air cargo needs to offer even smarter and more efficient products than we are doing, and push datasharing on all fields, not only in paperless processes, but also to sharing operational data that allow for better planning and increased efficiency. Being able to handle huge flows of data is essential in this matter and it is all about capacity and being able to be connected to e-commerce hubs wordwide.

Justin Burns, ACW: What growth has Schiphol seen in e-commerce?

Van Stekelenburg: E-commerce is a fast growing segment. We seeing strong growth in consolidated e-commerce shipments and FBA (Fullfilment by Amazon) shipments through our airport, Post NL gateway is also showing double-digit growth in parcel units shipped via Schiphol.

Justin Burns, ACW: What kinds of e-comm are you handling?

Van Stekelenburg: Exports are milk powder and other baby foods, beauty and skin care products, handbags, and fashion.

Imports -personal electronics, sportswear, and fashion.

Justin Burns, ACW: What is Schiphol doing to capture more e-comm business?

Van Stekelenburg: We are engaging with business partners to discover more about what their requirements are to use Schiphol as their main e-commerce gateway in and out of Europe. We have built up a strong network of e-commerce businesses in China that are using our strong network and carriers such as Air China, China Southern, and Yangtze River Express to ship through Schiphol. Due to our strong ties with Chinese markets, more logistic companies in China are setting up around Schiphol.

Justin Burns, ACW: What are the strong e-trade lanes?

Van Stekelenburg: China is the largest market, and other trade lanes are growing fast, especially looking at mail and parcels.

Inbound, the UK is leading as expected, but NL is ideally situated as a European Union distribution hub for large markets such as Germany and France. Special events such as Singles day, Valentines’ day, Black Friday, and Cyber Monday play an increasingly important role in cross border e-commerce trade.

Justin Burns, ACW: How important is Asia for e-commerce?

Van Stekelenburg: Very important, both in terms of import as exports, and due to our strong networks even to Australasia.

In China the e-commerce boom is largely attributed to women, particularly overseas shopping for Western products. Known as China’s ‘she-economy’, women are responsible for more than 60 per cent of online shopping and a higher spend value, despite making up 44 per cent of online users. Baby formulas, beauty products and health supplements are top items.

Justin Burns, ACW: How important is digitisation?

Van Stekelenburg: We see digitisation as absolutely vital to secure a strong future for air cargo. The new VENUE Customs declaration is completely paperless, and data is transmitted

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NEWSWEEK FedEx to expand 40% at CDG

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edEx Express is to spend €200 million ($219.7 million) to increase capacity at its Paris Charles de Gaulle Airport (CDG) distribution hub (artist impression pictured above), increasing capacity by 40 per cent.

Construction is set to begin in the summer of 2017 and is scheduled to be operational by 2019. The CDG hub will include an automated sorting system for large, over-sized packages, a first for FedEx Express and an increasing market trend as e-commerce grows.

This is part of a plan by FedEx to invest €1.4 billion in its Paris hub as part of a 30-year lease as it especially targets e-commerce traffic which is set to grow significantly.

FedEx Express president and chief executive officer (CEO), David Bronczek says: “This strategic expansion in Paris is an example of how we will continue to invest to move goods faster and more reliably across borders, which means our customers can decrease costs, improve their supply chain and identify new opportunities for growth and profitability.”

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FedEx Express Europe president and TNT CEO, David Binks explains the investment is part of the company’s network expansion strategy, creating more capacity and “enabling more business connections in Europe and around the world”.

He adds: “This new expansion, coupled with the recent TNT acquisition, supports the evolving needs of our customers and the global marketplace while increasing our ability to support trends like cross-border e-commerce.”

The new building will be HQE and BREEAM certified, meaning it will be built with non-polluting materials and equipped with LED lighting.

FedEx also expects the expansion will create new jobs, adding to the existing CDG workforce.

In addition, TNT will open a ground hub just North of Paris in the Ile de France region along with three TNT ground depots, which it says will improve connectivity between France, Europe and the rest of the world.

FedEx Express has been active in France since 1985, and CDG became its main European hub in 1999.

Lufthansa picks myAirCargo partner Lufthansa Cargo has appointed Militzer & Münch as its exclusive European partner for the myAirCargo product, to allow private customers to transport bulky goods by air.

It was awarded the contract in January 2016, and Militzer & Münch will coordinate the handling in the Europe region from Frankfurt.

Staff from the branch office are responsible for the collection of goods for export, drawing up accompanying documents and getting the shipment ready for transport including weighing, measuring, customs clearance and security check. For imports, staff do the customs clearance and on-car-

riage to the consignee.

At present, myAirCargo is only available on routes connecting Europe and the US. Militzer & Münch’s US partner Pilot Freight Services does the US handling.

MyAirCargo is for items weighing over 50 kilogrammes and is designed for products such as an art object that is too large or heavy to take home as carry-on luggage.

Meanwhile, Lufthansa Cargo and DB Schenker say they have saved 10,000 tonnes of CO2 over the past five years and hope to save another 10,000 by 2020.

Schenker says 40 per cent of its direct and indirect CO2 emissions are from air cargo.

WFS and PIA sign 3-year UK deal Worldwide Flight Services (WFS) has signed a three-year deal to provide Pakistan International Airlines (PIA) with cargo handling and trucking services in the UK. WFS will handle import and export cargo on PIA flights from London’s Heathrow Airport, Birmingham Airport and Manchester Airport, connecting UK customers with Islamabad, Karachi and Lahore.

WFS operations director, UK & Ireland, Cliff McKrell (pictured) says: “This is another important contract win for WFS. PIA has recognised the value of having a single cargo handler at all three of its online

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airports in the UK, which we are also able to connect using our UK coastwise trucking network.

“Combined with our close working relationship with the airline’s GSA partner in the UK, this increases the potential to generate cargo for the airline’s flights from across the country.”

Cargo carried onboard PIA’s 10 flights a week at Heathrow will be managed at WFS’ Building 551 at the World Cargocentre. WFS also operates terminals at Birmingham and Manchester, and PIA does 10 flights a week from Manchester and four a week from Birmingham.

NEWS WEEK Boeing 767 part shipped by Volga

A

large aircraft production component for a Boeing 767 was delivered this month to Paine Field Airport in the US on a Volga-Dnepr Airlines An-124-100 under the logistics support agreement between Boeing and Volga-Dnepr Group.

The oversized component, was transported inside an ocean container to ensure its secured and timely delivery from the production plant in Japan. With additional aircraft parts and other equipment, the total weight of the shipment from Nagoya was 35,000 kilogrammes.

The cargo was delivered from Japan to Paine Field and onto the nearby Boeing factory in Everett within 24 hours of its arrival at the airport in Nagoya.

To expedite the handling process, the container was loaded onboard

the An-124 Freighter using Volga-Dnepr’s specially-developed loading ramps.

Volga-Dnepr Group’s global director for the aerospace industry, Axel Kaldschmidt (pictured) says: “This latest transportation is a further demonstration of the fast and dependable logistics support we continue to offer through our valued partnership with Boeing.”

In July, Boeing and Volga-Dnepr Group strengthened their cooperation by signing a new agreement for the Group’s subsidiaries AirBridgeCargo Airlines and Volga-Dnepr Airlines to provide long-term logistics support for Boeing Commercial Airplanes and its partners using Boeing 747-8F and Antonov 124-100 Freighters.

In addition, Volga-Dnepr Group confirmed its order for the acquisition of 20 747-8 Freighters.

Meanwhile, Volga-Dnepr Group has promoted Robert van de Weg to senior vice president of sales and marketing. He is responsible for the scheduled cargo operations and charter businesses covering ABC Airlines, Volga-Dnepr Airlines and Atran Airlines.

Between them, they have a fleet of 16 747s, 12 AN-124-100s, five Ilyushin IL-76TD-90VDs and three Boeing 737-400 Freighters.

12 Dreamliners for China Southern

CHINA Southern Airlines has finalised its order for 12 Boeing 787-9 Dreamliners valued at $3.2 billion - to further strengthen its expanding long-haul fleet.

The 787-9’s fuselage is six metres longer than the 787-8, and can fly more cargo further. Boeing says the 787-9 uses 20 per cent less fuel with 20 per cent fewer emissions than similar sized aircraft.

China Southern Airlines chief executive officer, Tan Wangeng says: “The 787 Dreamliners have helped us to achieve initial success in implementing our internationalisation strategy in the past few years and enabled us to make our operation and services more appealing to passengers.”

“The additional new 787-9s will further increase our capacity and services for our long-haul routes.”

Boeing Commercial Airplanes senior vice president Northeast Asia Sales, Ihssane Mounir says: “China Southern has been a long-standing Boeing customer and we truly appreciate their confidence in the 787. The 787-9 will help the airline achieve a new level of efficiency and profitability.”

China Southern was the Chinese launch customer for the 787, operating 10 787-8s which enabled it to launch six new nonstop routes to London and Rome in Europe, Vancouver in North America and Perth, Auckland and Christchurch in Australasia.

Hyperloop capsule mission for DHL

DHL has helped the future of transport by delivering the TU Delft Hyperloop capsule to the US for the Hyperloop Pod Competition.

The Hyperloop came from US entrepreneur, Elon Musk’s desire for faster, durable, safe and reliable transportation, and is designed to transport people and goods at a speed of 1,200 kilometres per hour through tubes of very low air pressure.

The competition capsules are half shelled prototypes, which are not able to transport passengers or freight at this time, and

Delft’s unit weighs 149 kilogrammes and is about 4.5 metres long and one high.

DHL Express chief executive officer, Ken Allen says it is happy to support any initiatives that look to “push the boundaries of logistics to new levels of speed and efficiency”.

DHL’s logistic support consisted of transportation, and advice on feasibility and data to give the Delft team a benchmark against existing modes of transport and building a business case for the technology.

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NEWSWEEK Business on track for HAE in the US

T

he North American general sales and services agent (GSSA) market has been challenging in some parts for HAE, but also rewarding.

HAE has eight offices in the US and represents the likes of Ethiopian Airlines, Hainan Airlines, and Swiss World Cargo.

America’s president, Ian Hutchinson explains that business this year has been about what it expected given the overcapacity in the market and the “challenging nature” of the GSSA business at the moment.

He notes: “Challenging, requirement constant innovation and creativity, with a strong costs control style and a drive for greater IT solutions.”

Hutchinson says the GSSA marketplace is extremely competitive, given the current market demands and rising cost pressures such as health care benefits and he notes HAE tailors its offerings to suit clients.

On 1 June, HAE Canada became a functioning part of the HAE Group and based at Toronto Pearson International Airport and a partnership between the HAE Group and GSM Cargo.

Hutchinson says: “The global scope of HAE, combined with local expertise, and strong Canadian relationships of GSM will ensure a welcomed addition to the HAE Group.

“HAE Canada’s aim is to develop a strong

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ACW 24 octoBER 2016

GSSA presence, coupled with a dynamic and creative solutions business, using HAEs global footprint, unique tools and twenty years of aviation experience. HAE will also expand its training business into the Canadian market over the coming months.

“HAE Canada is proud to represent Aztec Airways, Air Jamaica and SATA Azores Airlines, with a few more in the pipeline.

“HAE Canada’s team is comprised of industry focused professionals, who have many years of experience related to GSSA, international project and airline training activities lead.”

HAE he explains is on supporting its current client list, while driving sustainable growth.

Hutchinson adds: “We are also focusing on the US Government related business to Africa and the Middle East, where we have invested in our new transit hub in JNB and expanded on our products and support via HAE DXB. “These investments enables us to offer carriers, and freight forwarding customers, value added services that are not available elsewhere.

Global expansion of our IATA Training division into US and Canada is also been evaluated.”

As for the future of the North American GSSA marketplace he expects a continued “drive for efficiencies” and an “increased call” from the airline to dedication to their individual cause.

Drones deliver blood in Rwanda RWANDA has operated drones to make emergency deliveries of blood to transfusing facilities as part of an international partnership between UPS, Gavi, the Vaccine Alliance and Zipline.

The Rwandan government will start using drones to make up to 150 on-demand, emergency deliveries a day to 21 facilities in the Western half of the country following a ceremony in Muhanga District.

The delivery programme will enable blood transfusion clinics to place emergency orders by text message, which Zipline will receive at its Muhanga District distribution centre where it maintains a fleet of 15 drones called Zips.

Zipline chief executive officer, Keller Rinaudo says: “The inability to deliver life saving medicines to the people who need them the most causes millions of preventable deaths each year around the world.

Zipline will help solve that problem once

and for all. We’ve built an instant delivery system for the world, allowing medicine to be delivered on-demand and at low-cost, anywhere.”

Zipline says the Zips can fly up to 150 kilometres on a round trip carrying 1.5 kilogrammes of blood, with the drones taking off and landing at the Nest. The Zips make deliveries by descending close to the ground and air dropping medicine to a designated spot called a ‘mailbox’ near the health centres and can make fulfil orders in around 30 minutes.

Alaska Airlines opts for SmartKargo SMARTKARGO has been selected by Alaska Airlines to provide its booking engine for Alaska’s expanding cargo business throughout North America.

The IT provider will provide the technology to drive growth and business innovation for the carrier. The cloud-based SmartKargo solution will feature ease-of-use for cargo customers through a smart booking process that provides a robust backend system to allow users to input the booking require-

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ments on a single screen.

The engine comes pre-loaded with key information, such as IATA regulatory and commodity codes. The technology also enables the electronic air waybill.

Alaska Airlines managing director of cargo, Jason Berry says the carrier is excited about the future capabilities SmartKargo provides, while its commitment to drive innovation aligns with its own to deliver the “best customer experience in the business”.

NEWS WEEK

Miami launches ocean-to-air transhipment program

M

iami International Airport (MIA) is expecting to handle its first ocean-to-air transhipments by the end of this year after its permit was approved by the US Department of Agriculture (USDA).

It says the ocean-to-air pilot program will save cargo shippers time and money, who will receive expedited air transport for perishable products and will not be required to pay US Customs and Border Protection (CBP) duties.

MIA partnered with Crowley Maritime subsidiary Customized Brokers to gain approval allowing the logistics company to coordinate ocean shipments of perishable products from Latin America to PortMiami or Port Everglades and then transport them to MIA, where they will depart by air via KLM Cargo or Centurion Cargo to foreign destinations in Europe and Asia.

The CBP has granted approval for expedited processing of ocean shipments before departing by air.

Miami-Dade Aviation director, Emilio Gonzalez (pictured) says: “We deeply appre-

Budapest aiming high

ciate the USDA and CBP for recognising the value of this pilot program to both the local and national economy.

“Cargo shippers now have an additional, expedited channel for transporting perishables through the U.S., which incentivises

them to do more business at MIA and PortMiami – two of our state’s strongest economic engines. The pilot programme also continues our efforts to grow cargo at MIA through outside-thebox initiatives.”

Customized Brokers vice president, Kimberly Wakeman adds: “This pilot program follows wins that we’ve had in securing additional entry points in South Florida, South Carolina and Savannah for certain perishables entering the U.S. from Central and South America. This further expands the distribution of fresh produce into supermarkets across the globe.”

Miami-Dade County mayor, Carlos Gimenez says: “Congratulations to MIA and PortMiami, our County’s two largest economic engines, on collaborating to generate new revenue and better serve our local cargo industry.

“Innovative programs such as this one also help our business community strengthen ties within the global marketplace.”

MIA is the busiest hub in the US for international cargo and 10th in the world, says handling the new shipments from the seaport will add to the 1.9 million tonnes of international airfreight and over 2.1 million tonnes of total airfreight it processes annually.

Budapest Airport is expecting to handle over 100,000 tonnes of cargo in 2016 after breaking the 10,000 tonne a month mark for the first time in September.

Cargo volumes grew by 33 per cent in September helped by strong growth from Cargolux and Turkish Cargo, and Qatar Airways Cargo’s decision to operate a third weekly Airbus A330 Freighter from 7 October is expected to further increase cargo.

In addition, bellyhold cargo has grown with Emirates offering daily Boeing 777 services and new flights to Beijing with Air China and to Toronto with Air Canada Rouge.

Budapest Airport property director, René Droese says the strong growth means it is even more important that the dedicated air cargo base, Cargo City opens as planned in 2018.

“We are working hard on commencing the process of development of the Cargo City, negotiating with potential tenants who may start or continue their activities in a state-of-the-art air cargo facility within two years replacing the infrastructure currently used by them,” he adds.

Integrators have also been performing well, with the likes of DHL, UPS and FedEx flying at night to major distribution hubs in Western Europe and returning at dawn with new cargo. DHL added a second daily aircraft in Budapest to cater for demand.

5.9% surge for Frankfurt Cargo volumes at Frankfurt Airport surged by 5.9 per cent in September helped by “the slight recovery” of the global economy.

September cargo throughput, which includes airfreight and mail for import, export and transit, increased to 180,252 tonnes, and was up 1.3 per cent to 1.58 million tonnes for the first nine months of the year.

Frankfurt’s operator, Fraport operates a number of airports around the world. In Slovenia, Ljubljana Joze Pucnik International Airport was down 0.6 per cent in September to 923 tonnes, while Lima’s Jorge Chavez International Airport in Peru declined 9.5 per cent to 27,479 tonnes.

In Bulgaria, Burgas Airport increased by 19.3 per cent to 1,131 tonnes and Varna Airport was up 23.7 per cent to 12 tonnes. Germany’s Hannover-Langenhagen Airport increased by 15.8 per cent in September to 1,565 tonnes while Fraport’s Chinese airport, Xi’an Xianyang International Airport dipped two per cent to 22,040 tonnes.

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13

60 60 SECONDS

Seconds with

Justin Burns, ACW: What have you achieved since the rebranding?

Zimmermann: We have implemented changes.

Some has been ‘under the hood’ of Cargo iQ, such as preparing full membership options for members, finalising selection of our external audit partners, and aligning our door-to-airport

ariaen zimmermann Cargo iQ has added to its members over the summer and is set to announce more soon as it grows since its rebranding from Cargo 2000 in March. Executive director, Ariaen Zimmermann spoke to Air Cargo Week about what the International Air Transport Association interest group has been up to and got his views on the air cargo industry.

and airport-to-door specs.

Some have been very visible, such as our bi-monthly newsletter inSight, and our reports.

We have new members in ground handling and airports, and are in promising discussions with several airlines. Many members have upgraded their level of commitment. An initiative I am

excited about involves commercial departments of members becoming more involved in Cargo iQ. We are producing a commercial toolkit that will be distributed to members. This will help the commercial side of organisations better understand and communicate what we do for them, and keep the Cargo iQ message clear.

Justin Burns, ACW: What response has Cargo iQ had from across the supply chain?

Zimmermann: Overall, we feel a great shift in how we are perceived. In short I’d say reservation has been replaced with expectation. People are understanding the nature of our work better: we’re no longer seen as a project, but rather a movement of change and improvement. The popular opinion at the time of our rebranding was change was needed industry-wide, and we feel we have captured this. We are sure the uplift in the amount of members becoming Cargo iQ accredited is down to clearer messaging about the benefits. To drive quality, the market and our members need to value quality; it is up to us to demonstrate value and make quality visible.

Justin Burns, ACW: Why should air cargo focus on quality?

Zimmermann: There is no alternative. We feel the industry is under duress from low rates and the economic setup of our markets. The current players will have to intensify their efforts to be part of the future. Quality has effects on the cost as well as on the value of our products.

With ever increasing pressure on our margins, we cannot afford any more waste. Losing control of shipments comes with huge costs.

We see shipments are driven by budget, but also those by an absolute need for speed.

We need to be able to sell different products to these types of demand. For this we need control, and to reduce waste and offer a fitting product, sometimes with thin and very generous margins. The reality is if we don’t do it…our competitors will and before we know it our spot at the table will be taken by another.

Historically the industry has focused on quantity and volume as an indicator of success.

Although these are crucial for forecasting especially, it means we lose the analytical edge, and do not have the ability to look at how and why things may go wrong.

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ariaen zimmermann Justin Burns, ACW: What finds have you made in your data analysis?

Zimmermann: Two things pop out, one has to do with the overall numbers of our industry and the other is we have started to realise the potential of this data tool. We can learn so much more from our data. We can provide detailed information on our members’ processes in the context of comparison to that of their competitors. We can help our members focus their quality investments where they actually matter. We can even check our members’ performance data regarding various elements – a kind of real-time continuous audit.

We already notice we are providing insight in door-to-door journey times (around 5.5 days, of which 33 per cent is spent under carrier control) the discussion becomes more focused on where we need to improve.

Quality and measurement are the pathways to process improvement. The data we are gathering now tells us and our customers much more. We are able to demonstrate success, areas for improvement, and how we plan to get there. These are what customers really need.

Justin Burns, ACW: What are the biggest challenges facing the industry?

Zimmermann: The biggest challenges seem to be the economics of an industry where most of our costs are fixed on the short term, demand seems more or less stable, and a systemic state of overcapacity puts pressure on rates.

We need to differentiate our products, and demonstrate to the customer what they are paying for. There is a lot of demand out there for our premium services and we should offer those services in addition to serving our budget driven customers. When we can demonstrate we are best equipped to address the needs of every customer, we should offer a premium product and only then we may expect a premium return. It’s true we do need to reduce costs, but not merely at specific parts by reducing the rates we are willing to pay. The best way for our industry and our customers to reduce costs is to avoid them.

Improved quality and control will allow us to differentiate our products and avoid waste. If we are good and efficient enough, whole new markets are open to us such e-commerce.

Tabloid trim.indd 1

30/09/2016 17:03

PERISHABLES

US gateway for perishables to expand facilities

M

iami International Airport (MIA) is America’s principle perishables gateway, handling more than 66 per cent of all perishable imports and nearly 90 per cent of all flower imports coming into the US. This year, the perishables industry has continued to exhibit “strong growth” through MIA, explains Miami-Dade Aviation department division director of marketing, Chris Mangos.

For example, in terms of flowers, the number of stems handled during the Mother’s Day and Valentine’s Day peak periods were up by nearly eight per cent over last year. “We expect to see continued growth the rest of the year as well,” he observes.

Flowers make up a large share of the perishables imported into MIA. Fish and crustaceans are also an important source of business, as are vegetables. There has been traffic growth

through MIA in each of these three major perishable segments over the last five years.

But with increasing perishables traffic, MIA is going to require more infrastructure to handle it. “Our Cargo Optimisation, Redevelopment and Expansion (CORE) Program is a seven-phase plan still in the conceptual stage that is designed to - optimise the use of existing facilities and space to provide additional near-term capacity; remove and re-develop select existing facilities that are costly to maintain with newer, more efficient and better demand-serving facilities; and expand cargo facilities incrementally in order to serve demand-driven needs and growth,” Mangos explains.

“This year, we expect to finalise the plan, identify viable sources of funding, and commence Phase 1, with Phase 1 and 2 projected for completion in 2021,” Mangos adds.

The airport operator is also working on its

cargo master plan, which includes plans to significantly expand its perishables facilities by the year 2035.

MIA has 24/7 Customs and Border Protection (CBP) operations and extended hours for US Department of Agriculture (USDA) inspections on site, which help importers to minimise costs in the processing and clearing of goods.

Moreover, MIA is also the only US gateway with two on-site fumigation facilities, which provide for efficient pest control of perishables needing immediate fumigation.

However, improvements in this area are being sought by the airport operator. For example, “The current volume of perishable imports and increased volumes of other commodities is putting a strain on the limited number of CBP and USDA inspectors currently assigned to MIA,” Mangos observes.

He adds: “Increased delays in the inspection process may result in additional business being diverted elsewhere. USDA providing 24/7 operations similar to CBP would greatly expedite the inspection process.”

Flowers power AFKLMP uplift

MANY of the world’s big air cargo carriers have developed their time and temperature sensitive products to support the movement of perishables along with pharmaceuticals.

One is Air France KLM Martinair Cargo (AFKLMP), which moves a substantial amount of perishables with a large part of this consisting of flowers flown into the Dutch capital to support what is Europe’s biggest flower market – Aalsmeer - just outside Amsterdam.

“We fly roughly 100,000 tonnes (of perishables) a year into Amsterdam,” informs AFKLMP director of perishables, Pieter Fotma. “Out of Amsterdam, we are talking about roughly 40,000 tonnes a year.

“A vast amount of this traffic consists of flowers (as well as the imports, flowers are re-exported out of the Netherlands), although more and more flowers are delivered directly to the end-customer.

“Out of Africa, flowers destined for the Netherlands tend to go via the auction in Aalsmeer.”

Fotma continues: “The perishables business is a very important and consistent factor in the airfreight industry, and for AFKLMP. We are still the number one play-

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er in the flower business and are trying to maintain that position by focusing our full freighter capacity on the main flower corridors linking Quito, Bogota and Nairobi to the Netherlands.”

To support its perishables business, AFKLMP offers three dedicated services, Fresh 1, Fresh 2 and Fresh 3, each with different specifications to meet the needs of various customers.

Ensuring the integrity of perishable shipments is a top priority. “We constantly strive to keep a closed cool chain for our perishables and involve our partners in the chain as much as possible to ensure this integrity,” Fotma says.

He continues: “A good example of this is the recently formed Holland Flower Alliance (HFA), created together with Royal FloraHolland and Amsterdam Schiphol Airport.

“In this non-exclusive alliance, we strive for elevating the quality of the integrated cool chain to the highest possible level, ensuring an extended vase life for flowers.

“Under the umbrella of the alliance, we are currently preparing for a couple of workshops in which we will look into the potential to design the ‘ideal’ cool chain.”

PERISHABLES

Asia driving Panalpina Fresh is big in China

F

or Panalpina, perishables represent an important business, but preserving the integrity of the cool-chain throughout the entire shipping process is key and requires care and thought.

The worldwide perishables airfreight sector grew by around eight per cent in 2015 and Panalpina’s volumes grew above the market average, says global head of specialty vertical perishables, Colin Wells.

Asia is an increasingly important import market, he observes, driving growth in the sector.

Many perishables traditionally imported into Europe are now also in high demand in Asia.

Moreover, there’s been strong growth in volumes moved out of South America and Central America, especially Mexico, while the European market continues to hold up well.

The forwarder has moved into new areas of the perishables business. It has focused on a number of types of artisan produce, away from the well-recognised segments like flowers, fish, and fruit and vegetables. Panalpina is also now overseeing the movement of British cheese into the Middle East and moving ice cream from the UK into the southern Mediterranean.

As well as ensuring perishables reach their destination quickly and in the condition that they left their place of origin, Panalpina offers its customers value-added services, such as pick and pack and quality control reports.

Panalpina’s perishables business chief in Europe, Quint Wilken notes relations with cargo carriers is vital to ensure the needs of the customer for cool-chain integrity are met, perhaps even more important is how the cargo is treated on the ground – on the apron, in the warehouse

and on the road, which is hard to manage for any shipper or forwarder.

One trend Wilken and Wells point to as having a potentially huge impact on perishables in airfreight is e-commerce. More and more consumers are ordering them online and direct from sources remote from their own location. Given their expectations of rapid delivery of orders, that is going to require airfreight shipping.

We may start seeing more perishables previously moved by sea freight move by air, Wells predicts, describing e-commerce as a “positive influence to be embraced”.

Panalpina’s perishables business requires investment in people, facilities and equipment.

It is now trialing new cool-chain blankets and a container alternative to Envirotainer while its ‘Product Empathy’ strategy is key – focusing on understanding the product, producer and how each perishable product needs to be handled.

PERISHABLES are a huge part of business for Hong Kong International Airport’s (HKIA) biggest cargo handler, Hong Kong Air Cargo Terminals (Hactl).

Chief executive, Mark Whitehead says in 2015, Hactl handled around 73,000 tonnes of perishable cargo. “Hactl has provided for the needs of this sector for many years,” Whitehead notes, adding it provides “special treatment” for inbound perishables, including segregation at aircraft unloading.

Capabilities have been further streamlined with adoption of mobile computing throughout operations, “enabling our teams to alert the terminal direct of arriving perishables, so that all necessary resources are in place”, Whitehead says. “Where temperature extremes exist and the cargo is particularly temperature-sensitive, we have the option to deploy temperature-controlled thermal dollies to protect goods during ramp transfers.”

Hactl operates a dedicated Perishable Cargo Handling Centre, next to the HKIA cargo apron, allowing rapid transfers of perishables including seafood, fruit and flowers between aircraft and waiting trucks.

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The centre has dedicated airside access and 33 landside truck docks. It handles exports and imports, and standard time for release of imports is two hours after arrival, but this window can be reduced further by prior arrangement. It also has easy access to temperature-controlled storage, for holding import cargo in peak condition when required for later collection, or when exports are delivered early for outbound flights.

Perishables are a major focus for Shanghai Pudong International Airport Cargo Terminal Co (PACTL). Vice president, Lutz Grzegorz says: “The volumes of temperature-sensitive cargo on both passenger and freighter aircraft have been increasing for several years in a row now.”

In April 2016, PACTL opened a 3,500 square metre Cool Center. Grzegorz notes: “The facility features a capacity of up to 100,000 tonnes of temperature-sensitive air cargo per annum and contributed to development of Shanghai Pudong International Airport as the number one pharmaceutical gateway in China. To secure the integrity of cool chain on the apron, we provide the ramp handlers with special refrigerated dollies.”

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17

SWITZERLAND

Swiss market bouncing back after a tough 2015

2

015 was a tough year for the Swiss airfreight market from pressure on yields and exchange rates, but through a combination of creativity, technology and the further development of key sectors such as pharmaceuticals it is looking to bounce back.

Swiss WorldCargo head of cargo, Ashwin Bhat (pictured) describes 2016 as a “year of change” as it strives to drive a recovery in tonnage volumes and revenues from a rocky 2015.

Last year, revenues were hit by currency changes after the Swiss National Bank abolished its previous minimum Swiss franc/euro exchange rate. The value of the franc rose and with Swiss WorldCargo taking around 80 per cent of revenues in foreign currencies, figures were hit. Overcapacity battered yields with lower fuel surcharges also proving a headache.

But now Bhat says tonnage volumes, at least, are beginning a fightback.

One of the main drivers has been the new additions to the Swiss fleet including its new Boeing 777-300ER (above), the first of which was delivered to Zurich Air-

port in January. Swiss has ordered nine of the long-haul twin-jet aircraft, offering it the opportunity to improve airfreight services between Zurich and cities such as New York JFK, Hong Kong, Montreal, Los Angeles, Bangkok, Sao Paulo, San Francisco and Tel Aviv.

“Utilising the capacity of the 777, which is more flexible than we had previously, has helped our tonnage numbers. With Airbus 340-300s we could offer between 15 to 18 tonnes but with the Boeing it is close to 20 to 25 tonnes,” says Bhat. “The increased tonnage has however not converted into revenues as the pressure of the market is still there in terms of yield.”

Bhat says its focus remains on not just general cargo as it looks

to fill this increased capacity but “special, niche cargo” such as pharmaceuticals.

“Pharma is developing fast. There is a demand given that some of the big players are based here in Switzerland and it fits our skill-sets. We want to penetrate further into this area and take a bigger part of the pie but whatever we offer in pharma, quality must be of the highest standard,” he states. “We have Good Distribution Practice and CEIV Pharma certification in Zurich but now we are undertaking certification of Swiss WorldCargo as an organisation. We have started the process and realistically we could have it by the end of this year to the first quarter of 2017.”

CEIV trade lanes

It is also developing CEIV lanes such as the deal in June where it, Cargologic and SATS secured a temperature-controlled, quality corridor between Singapore’s Changi Airport and Zurich. The primary target is the pharma industry with its need for “the highest level of certified, temperature integrity and tracking”.

“We needed to get our handling agents together to create these quality corridors where the big pharma traffic is passing through,” Bhat states. “We are looking at more quality corridors around the globe and for like-minded partners. Certain discussions have already started but it is too early to reveal anything.”

It also recently signed a partnership deal with va-Q-tec, developer of passive closed cold chain container solutions. The aim is to further support pharma manufacturers and forwarders to ship their temperature goods within the Swiss WorldCargo’s global network through direct airline container rentals. va-Q-tec offers five hard shell container sizes, taking up to two pallets inside, and temperatures ranges from -70 degrees Celsius to +25 degrees Celsius.

“The focus for this deal is again on the quality of service,” explains Bhat. “We will also soon be announcing that we have an active tracking device on our network as it is one of the pain points in pharma. We will have one central team supporting our customers if they have any questions relating to their shipments.”

Away from pharma, Swiss WorldCargo is also making the case for the new electronic air waybill (e-AWB).

“It is about improving efficiency, speed and transparency and we are part of the IATA e-AWB 360 initiative. I would like the penetration to be much higher, but our customers and handling agents must be in the same mindset,” Bhat says.

Digitisation vital

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Digitisation in a wider sense is also vital. “How can we use developing global technology to our and our customers benefit in terms of transparency, data exchange and efficiency?” he says.

“We will be coming out with our new track and trace module within SwissWorldCargo.com in the last quarter of this year.

“With a click of our button they can know about their shipments but also our capabilities at any given station. Also what does machine learning mean for us? What does Big Data mean – how do I bring value to our customers and improve their experience?”

Bhat also believes customer service is growing in importance: “Airfreight is becoming more commoditised and one way of differentiating your self is further developing your brand proposition,” he says. “It is not just about moving say pharma products.

It is about knowing how to talk to the industry and understand their requirements. You need to have a knowledge based organisation and understanding every part of the customer journey.”

Swiss WorldCargo is also further evaluating the potential of perishables and e-commerce and what both may mean for the group. “We will have a role to play in the growth of e-commerce and the continued growth of perishables. We have to find our own space,” Bhat states.

He adds: “There are opportunities and we are getting our capabilities ready for those areas. It is about finding solutions and giving services to our customers.”

2016 looking better for Swiss hubs

Z

urich Airport (pictured) had an encouraging first-half of 2016 recording a 1.8 per cent increase to 206,215 tonnes compared to 2015.

“We’ve been boosted by the extra capacity given to Swiss International Airlines thanks to the new fleet of Boeing 777s,” says Zurich’s head of cargo operations, Andreas Keller. “The Swiss economy has also recovered a bit after the EU/Swiss franc currency changes last year. The freight market is highly competitive and rates have dropped. But we expect a plus of about two per cent for the whole year.”

Keller identifies pharma, valuables and ‘specific goods’ as most prone to growth. “We have a new project called E Freight which should simplify processes and make them more efficient,” Keller says. “We are also planning, among other projects, the extension of already existing infrastructure for special goods.”

Geneva Airport stumbled in 2015 when cargo activity declined by 10.3 per cent to 65,016 tonnes. It blames increased processing capacities at other competing airports in Switzerland with imported and exported volumes remaining at encouraging levels. “The weakening of the business climate and regional economic conditions also had a negative impact on air cargo activity,” the airport explains.

2016 looks more promising helped by the introduction of Qatar Airways’ Dreamliner and Emirates, adding a second daily service to Geneva from 1 June. Emirates has added additional cargo capacity of 20 tonnes per day in each direction including pharma products, spare parts, chemicals and semi-conductors.

Geneva business development and cargo

manager, Samer Jabr says: “We are recovering and we should end the year slightly positive. But 2017 should be even better. We had been progressing for six consecutive years (until 2015).”

It is also developing a pharma project. “We are looking at a facility dedicated to pharma as here in Geneva we have many pharma plants. People tend to think that only Basel has this kind of business but we have many important groups here as well, so we are targeting it,” Jabr says.

“We are looking at developing a temperature controlled storage facility which we expect to open in 2017 or 2018.”

Geneva is also focusing on more long-haul cargo: “We have space for this. We are looking at one or two more Asian airlines, one or two in Africa and Latin America and talking to airlines interested in coming,” Jabr states.

He is a backer of e-freight: “It’s time for it to take-off so we don’t lose too much ground to other transportation modes. It’s a standard process here and should be extended to all major airlines, freight forwarders and agents.”

SWITZERLAND Export falls impacting air cargo

PANALPINA’s head of airfreight in Switzerland, Andre Kaiser says the market in 2015 and 2016 has been “truly challenging.”

The currency decoupling of the Swiss franc and the euro in January 2015 has had a significantly negative effect on Swiss exports. “From summer 2015 to summer 2016 we have lost ground in tonnage movements produced by the Swiss export industry. This is partly down to some Swiss companies moving production into lower cost countries, especially the machinery industry, and a decline in the high-value market worldwide,” he says.

“Sales of traditional strong sellers such as Swiss watches are down because of the strong Swiss franc as well as weakening consumer demand.”

Kaiser notes the traditionally healthy pharma sector has been hit in the last year with a “quite drastic shift of mode from air to ocean because of cost pressures”.

The resulting blows from major export industries has led to a two to five per cent drop in tonnage volumes in the market.

Panalpina was hit over the period, but has maintained its leading freight exporter position in Switzerland.

“Because of the strong currency the

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logistics industry has looked at ways of potentially shifting freight from Swiss airports to others such as Luxembourg, Frankfurt, Amsterdam and Paris. Airlines in Switzerland have reacted in the meantime, so this effect has decreased,” he states.

What is the Swiss market doing to fight back? Kaiser says some logistics providers and airlines are offering customers longer transit times at lower operational costs.

“You have to give your customers other alternatives to remain with airfreight and airlines have reacted by lowering prices in the Swiss market. In other areas such as pharma and high-value cargo it is up to Swiss freight companies to offer and promote their specialisms and quality.

You need to show you are more customer oriented, that you are lean and low cost.”

Challenging times has led to Swiss players coming together in forums: “We have been looking at e-freight and working out how we can collaborate more closely with the manufacturing industry. How can we communicate with each other more effectively in every part of the chain.”

Kaiser says. From this has emerged a pilot project to test e-freight: “We are talking to a couple of airlines and customers and expect it to begin in early 2017,” he adds.

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DANGEROUS GOODS Volumes grow with capacity

T

he growing number of airlines refusing to carry certain lithium batteries is helping AirBridgeCargo (ABC) Airlines’ volumes rise in line with capacity, Volga-Dnepr Group senior vice president of sales and marketing, Robert van de Weg (pictured) tells Air Cargo Week (ACW).

ABC, which operates freighter aircraft only, has benefitted from the restrictions placed on UN3090 and UN3480 lithium ion batteries, banning them from carriage in the bellyhold of passenger aircraft.

Van de Weg comments the market has been stable, with traffic volumes rising by 25 per cent, in line with capacity growth. “Growth numbers, for transportation of certain lithium batteries (UN 3090/UN3480) are higher due to restrictions on transportation since 1 April, 2016 and refusal of a number of airlines from their carriage,” he explains.

ABC strictly complies with International Civil Aviation Organization (ICAO) and International Air Transport Association (IATA) Dangerous Good Regulations, and van de Weg says: “The airline has a special department that regulates dangerous goods transportation and controls the actions of ground agents’ participants to which it assigns its responsibilities.”

He adds: “When transporting lithium metal batteries such specialists check the documents of each shipment offered for transportation on ABC aircraft.”

ABC transports all types of dangerous goods permitted under ICAO Technical Instructions / IATA Dangerous Goods Regulations, and seen the amount of lithium batteries and equipment containing batteries growing.

“We have made a decision to proceed with transportation of all types of lithium batteries under ICAO TI/IATA DGR, therefore we will arrange procedures of approving the batteries, local restrictions for loading onto the aircraft,” he says.

Van de Weg tells ACW: “Due to obtaining the license for transportation of radioactive and divisible cargo, the number of packages containing radioactive materials has grown.”

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Note7 banned due to fire fears The US Department of Transportation (DOT) has banned Samsung Galaxy Note7s from all aircraft as the Korean firm halts production of the troubled mobile phone.

The Note7 was released on 19 August but was subject to a recall following a number of battery fires. Samsung stopped production on 11 October after the replacements also suffered battery fires.

The emergency order issued by the DOT, the Federal Aviation Administration and the Pipeline Hazardous Materials Safety Administration (PHMSA) on 15 October prohibits Note7s in carry-on or checked in baggage on flights to, from and within the US, and bans them from being shipped as air cargo.

Transportation secretary, Anthony Foxx admits it will cause inconvenience, but says: “We are taking this additional step because even one fire incident inflight poses a high risk of severe personal injury and puts many lives at risk.”

The PHMSA has issued a special permit to Samsung to facilitate commercial shipment of the recalled devices by ground transportation.

Even before the DOT’s decision, a number of airlines in the US and around the world announced they would not accept shipments of Note7s, whether they were the recalled versions or the ‘new’ versions. United Cargo for example, prohibited the acceptance and carriage of the smartphone on 16 September, before extending the ban to include all devices on 11 October.

On 11 October, American Airlines Cargo announced: “For the safety of our passengers, employees and other cargo, we will not be transporting any Samsung Galaxy Note7 devices. This policy follows new IATA guidelines, which were put into place after reports of the battery catching fire during or after charging.”

Following the emergency order, Alaska Airlines’ vice president of safety, Tom Nunn said: “The safety of our customers and employees is our top priority. In light of recent events involving the Note7, we will be complying with the FAA ban in order to ensure these devices are no longer allowed to fly onboard our aircraft.”

Other airlines including Emirates SkyCargo, Qantas Freight and Lufthansa Cargo have also issued warnings that they will not accept shipments of Note7s due to safety concerns.

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DANGEROUS GOODS

States urged to take action on rogue lithium battery manufacturers

L

ithium batteries are the hottest dangerous (DGR) goods topic in air cargo due to the threat they pose to safety.

Just over six months ago, the International Civil Aviation Organization (ICAO) prohibited the carriage as cargo of lithium ion batteries (UN 3480 only) on passenger aircraft.

Other changes, include the requirement UN 3480 be shipped at no more than 30 per cent state of charge and restricting shippers consigning as cargo, the small lithium ion and lithium metal cells and batteries to not more than one package per consignment for packages largely excepted from the regulations.

The International Air Transport Association’s (IATA) head of DGR and assistant director for cargo safety and standards, Dave Brennan (pictured) believes a period of consolidation is now needed to allow time for the effectiveness of the last round of regulatory changes to be assessed.

He says: “These changes had a significant impact on shippers’ logistics processes, so we believe more time is required to identify if the changes have solved some of the safety concerns or whether more changes are warranted.”

But does Brennan feel there are more safety regulations that could be introduced to improve the safety of shipping lithium batteries?

He explains: “We believe there are opportunities to look at additional risk mitigation measures. One that the IATA Dangerous Goods Board is considering is to limit which other dangerous goods can be placed in the same package with lithium batteries and also to limit shippers from placing packages containing lithium batteries next to packages containing certain other dangerous goods in an overpack.

“The idea here being if there was to be a fire involving the lithium batteries we should not have other dangerous goods such as flammable liquids or flammable gases right next to the package containing the lithium batteries.”

Brennan says there is also work ongoing through the SAE G-27 Committee to develop a packaging performance standard and the broad objective is to have packaging that has been demonstrated to contain a fire involving lithium batteries. He notes the G-27 Committee started work in early 2016 and the original plan was to have the packaging performance standard completed and approved by the end of 2016, but that date has slipped and the target is now late in the first quarter of 2017.

are subject to “proper oversight” and where necessary - enforcement.

He also says there should be appropriate penalty action on rogue producers who flout regulation to address non-compliance and where it is identified shippers are knowingly shipping counterfeit lithium batteries, or avoiding compliance with the regulations, then the penalties applied should be “very severe” and “made public”.

Prohibition of shipping lithium batteries is also impacting authentic manufacturers and exporters. Brennan says it has had a “significant” impact on the ability of shippers of genuine products to get their products to customers: “There

are parts of the world such as New Zealand and Australia where there are also no options to be able to get lithium ion batteries by air.

This has meant that manufacturers and shippers have had to completely redesign their logistics system to instead move to sea freight and then establish local centres to store products.

“The challenge with this is where in airfreight you can ship a single package, in sea freight the standard shipping unit is a container. Shippers of small numbers of packages are then having to wait for months until the freight forwarder has sufficient freight to fill an entire container.”

But Brennan says lithium batteries are different to other DGR goods, as they are manufactured and shipped in very significant numbers - estimating a mind-boggling eight billion lithium cells will be manufactured in 2016.

States need to do more

Brennan adds: “Potentially the standard will allow lithium ion batteries and possibly lithium metal batteries as cargo back onto passenger aircraft, although this remains to be seen.”

IATA, airlines and the battery industry believe governments need to do much more to address safety at the point of origin.

Brennan says the work to date has been focused on air transport and the regulations on what can be shipped by air, however, given lithium batteries may be manufactured in one State, but placed into air transport in a different State, the air transport system and regulators cannot solve all the safety issues.

He says: “The safety of lithium batteries in transport, and the safety of consumers must be addressed across governments and across States. Lithium battery safety must involve enforcement of appropriate manufacturing standards in the State of manufacture as well as other authorities such as Customs, consumer safety and of course transport, including aviation, road and sea.”

Brennan believes cooperation between jurisdictions to address situations where lithium batteries are manufactured in one country and driven to another is essential. “There must be cooperation between States to ensure the regulations are properly enforced and non-compliances are addressed,” he says.

IATA, the Global Shippers’ Forum, The International Air Cargo Association (TIACA), the Rechargeable Battery Association (PRBA) and RECHARGE - the Advanced Rechargeable & Lithium Batteries Association have written to governments in a number of States requesting ministers take urgent action to improve cross and inter-governmental action to address non-compliance.

Brennan says States have a “duty of care to their citizens” to ensure relevant laws and regulations on lithium battery safety

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PHARMA NEWS ROUND-UP Pharma logistics initiative launched

T

he TEAM-UP pharma-logistics initiative has been founded with the aim to improve corporate efficiencies, better overall sector performance and enhanced patient/user safety when it goes live in January 2017.

The initiative was announced at the International Air Transport Association AirPharma

Conference in Brussels on 12 October and is modelled around supply chain models from other sectors. TEAM-UP was conceived as a hands-on, interactive community with all participants committing to following agreed collaborative principles, commitment to a programme of continuous improvement and all having access to a shared repository of collaborative tools, templates and advice.

TEAM-UP founder, Alan Kennedy says: “With the huge challenges it is facing, the pharmaceutical logistics sector faces a very uncertain future unless it is prepared to abandon its traditional silo thinking and practices in favour of a more collaborative approach.”

“The advent of the TEAM-UP integration framework will help accelerate the changes needed and open the doors to faster, more equitable, more systematic supply chain integration.

There is no longer any excuse for inertia.”

TEAM-UP is a not-for-profit organisation.

Container deals for va-Q-tec

IAG Cargo and Cargolux Airlines International have both signed rental container agreements with va-Q-tec.

IAG’s deal will see it use va-Q-tainers, which it says will mean cool chain is transported in a “safe and cost efficient way”.

The va-Q-tainers deployed will provide temperature controlled solutions for six temperature ranges ranging from -70 degrees Celsius to +25 degrees Celsius in five container sizes and will be used as an advance passive shipping service.

IAG says the units are a cutting-edge face change material which, when placed in the correct environment, allows the coolant to be re-charged; providing a consistent layer

of protection from temperature deviation.

Global head of pharmaceuticals and life sciences, Alan Dorling (pictured left) says: “With consistent year on year growth in Constant Climate shipments, we are continually investing in innovative customer solutions that match our own high standards; as such we are fully confident that this agreement will be welcomed by customers looking to ship pharmaceuticals across the globe.”

Va-Q-tec managing director, Dominic Hyde (pictured right) adds the broad network offered by IAG and the integrated va-Q-tainer rental option will provide pharma shippers with a “solution that meets challenging requirements for global health care flows”.

And Cargolux has signed a deal to use va-Q-tec advanced passive containers to strengthened its CV Pharma product.

The carrier started flying to Aguadilla in Puerto Rico last month mainly to cater for the pharma industry, and the Luxembourg-based airline says the va-Q-tec containers are ideally suited for these operations.

Cargolux director global logistics services, Franco Nanna says with the “intuitive vaQ-tec passive solutions”, it has the “most appropriate and proven shipping tool for temperature sensitive healthcare products”.

More carriers seek to gain IATA’s CEIV

AMERICAN Airlines Cargo has started the process to obtain International Air Transport Association (IATA) Center of Excellence for Independent Validators (CEIV) Pharma certification.

Initially its home base and key hub Dallas Fort-Worth International Airport, and Miami International Airport will be assessed followed by its 25,000 square foot pharmaceutical and healthcare facility at Philadelphia International Airport, which opened in 2015.

American Airlines Cargo manager of cold chain strategy, Tom Grubb says: “We’re extremely proud of our temperature-control network.

“Our focus is on moving pharmaceuticals safely and efficiently across the globe, and being the first U.S. carrier to promote this certification will help show our partners and customers how confident we are in our

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abilities to offer the best cold-chain service possible.”

The IATA CEIV certification impartially validates capabilities of temperature controlled pharmaceutical shipments. CEIV facilities training for warehouse handling staff on regulations and best practices.

American developed its ExpediteTC product to develop handling and shipping of pharmaceutical and healthcare commodities.

It says the certification will help promote the investments American made towards facility, technology and process enhancements to ensure high quality compliance, training and handling processes across its cold-chain network.

SAS Cargo is also working towards gaining CEIV, while Lufthansa Cargo and Turkish Cargo were recently awarded the certificate.

TRADEFINDER Airlines

Cargo Handling

Freight Forwarders

Turkey

United Kingdom

Caribbean

Freight Forwarders Hong Kong

Spain

Freight Forwarders India

Iraq

United Arab Emirates

Industry Events

Freight Forwarders USA

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