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The weekly newspaper for air cargo professionals Volume: 20
Issue: 34
28 August 2017
Second phase of $220m cargo development at O’Hare opened
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hicago O’Hare International Airport has opened the second phase of a massive $220 million northeast cargo development as it looks to meet rising demand and grow its airfreight traffic. Chicago Mayor Rahm Emanuel joined the Chicago Department of Aviation (CDA), Aeroterm and cargo executives for the opening last week (pictured below). In 2016, O’Hare was ranked by the Airports Council International as the 20th busiest cargo hub in the world at 1.52 million tonnes and sixth busiest in the US. O’Hare’s air cargo volumes are already up year-on-year by 15 per cent in 2017 compared to last year, putting Chicago on track to handle 1.8 million tonnes this year. The 240,000 square foot Phase II building is home to Burak, Cargolux and Swissport. When complete, the facility will be the largest airside cargo development built in the last
BANGKOK AND THAI PEN PARTNERSHIP CRITICAL INVESTMENTS FOR IAG CARGO decade at a US gateway. Keeping pace with Phases I and II of the northeast cargo development, Phase III is now expected to open in two to three years. The expansion of O’Hare’s cargo operations is funded by a $160 million investment by Aeroterm and more than $62 million worth of airport funds. Mayor Emanuel says: “The City of Chicago is making investments and improvements to ensure O’Hare has not only the best commercial service, but the best cargo space. “With the next step of this project complete, we are delivering on our promise to grow O’Hare’s capacity and competitiveness, and in turn, its ability in the long-term to provide thousands of new jobs and serve as an economic driver for our city.”
Expanding new cargo warehouse capacity provides O’Hare with the ability to process a greater volume of air cargo. The addition of Boeing 747-8 capable aircraft ramps provides 50 per cent additional capacity to handle cargo from freighters, and in its final form, the development will provide 800,000 square feet of warehousing and apron pavement. These investments will make way for up to 15 widebody aircraft to unload at any given time at O’Hare. Each freighter is estimated to deliver cargo valued at $3 million on average. The airport says Chicago has surpassed its large hub peer airports as the top destination for air trade with China, and trade with Asian countries continues to grow each year as new capacity becomes available at O’Hare.
Transport – has issued a permit so the $80 million facility, which is spread over 43,000 square metres and has a capacity of 380,000 tonnes, can be operated. The terminal was constructed in conjunction with Moscow Cargo LLC – Sheremetyevo’s cargo handling partner and has the capability of increasing this number to one million tonnes. Work commenced in March 2016 and it was completed in July 2017. The airport says the new cargo terminal creates “favourable conditions for further development of the global cargo hub at the premises of Sheremetyevo Airport in partnership with Volga-Dnepr Group and Aeroflot”. Before operations start next month. works at the facility are being carried out to test equipment for cargo handling and storage, as well as to test information systems.
According to Drewry’s East-West Airfreight Price Index – airfreight rates went up year-onyear by 1.5 per cent in July. The index says rates rose on east-west routes to an average of $2.64 per kilogram, an increase of 1.9 per cent from the previous month and up 1.5 per cent from the same month in 2016. Drewry also explains in its latest Sea & Air Shipper Insight publication that in anticipation of a strong peak season, several forwarders have upped their capacity out of Asia and lined up charter capacity. Drewry expects airfreight rates to grow further in August.
Work completed on largest terminal in Russia Airfreight rate rise
Sheremetyevo International Airport has completed construction of Moscow Cargo – the largest cargo terminal in Russia. It will begin operations next month as the city gets set to welcome more freight ahead of the 2018 FIFA World Cup and the airport is modernised to meet rising demand. Rosaviatsiya – the Federal Agency of Air
60 SECONDS WITH FITSUM ABADI
NEAR 10% GROWTH AT BILLUND AS IT TARGETS MORE
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Solar to help power Finnair’s new terminal
SOLAR power will help Finnair keep its salmon and pharmaceuticals fresh at its new COOL Nordic Cargo Hub in Helsinki, which will begin full cargo operations in January 2018. Finnair’s new facility at Helsinki Airport will use solar power produced by 1,200 panels installed on the building’s roof. Each panel can produce up to 260 Watts of energy. Solar energy produced will represent over 10 per cent of the consumption. The carrier says sustainable development was a key part in construction of the new cargo terminal, and sustainability features will earn the facility a ‘very good’ rating under the BREEAM sustainability certification. Finnair will start operating at the new terminal in phases from October. The solar panels were already taken into use in May. The new terminal is spread over 37,000 square metres and Finnair has invested about €80 million in the project. It will have specialist handling areas for pharma and perishables. Finnair’s new Airbus A350 fleet will bring it up to 50 per cent more capacity by 2020.
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NEWS WEEK Qatar enhances pharma services with DoKaSch deal
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atar Airways Cargo has enhanced its pharma services by signing an agreement with DoKaSch Temperature Solutions to use its Opticooler range of containers. The Active Cool Containers RAP and RKN Opticooler are equipped with electric, battery-powered cooling compressors and heaters and require no dry ice. The solution safeguards the efficacy of vita pharmaceuticals throughout the transportation chain, and the containers keep the cargo within a temperature range of two and eight degrees Celsius or 15 to 25 degrees Celsius. The system features a straightforward touchscreen interface, making the temperature setting extremely dependable. Qatar Airways chief officer for cargo, Ulrich Ogiermann says: “We understand the intricacies of a seamless cool chain and always aim to provide value to our customers. Through this agreement with DoKaSch, we have now expanded our active container offering for customers, presenting our business partners with more options to transport their pharmaceuticals globally.” DoKaSch Temperature Solutions managing director, Andreas Seitz says: “We are very pleased to make our Opticooler containers available through one of the world’s largest international cargo
carriers. We are convinced that with Qatar Airways Cargo’s extensive and rapidly-growing network, and our joint commitment to quality and customer satisfaction, this partnership will provide a great solution for the global pharma cool chain.” Qatar Airways Cargo has announced a brand new Climate Control Centre, a 2,470 square metre airside transit facility for temperature sensitive cargo featuring two temperature controlled zones operated at two to eight and 15 to 25 degrees Celsius with capacity to hold a total of 156 unit load devices at any one time. Pharmaceutical volumes across Qatar Airways Cargo’s network grew 42 per cent in 2016-17 compared to 2015-16.
Atlas to operate 747 for NCA
ATLAS Air has entered into an agreement to operate a second Boeing 747-400 Freighter for Nippon Cargo Airlines (NCA), with an opportunity for additional aircraft in the future. This aircraft will be flown on key routes across the transpacific connecting Asia and the US Service is scheduled to begin in September 2017. Atlas Air Worldwide president and chief executive officer (CEO), William J. Flynn says: “We are very pleased that NCA has chosen to expand its partnership with Atlas Air. “This follows the successful start of the first aircraft for NCA earlier this year and underscores our focus on the fast-growing Asia Pacific market.” NCA president and CEO, Fukashi Sakamoto adds: “We are delighted to expand this strategic arrangement with Atlas Air by adding the second aircraft, and we look forward to having a long, mutually beneficial relationship.”
American Airlines picks HAE as GSA for UAE
AMERICAN Airlines Cargo has picked Heavyweight Air Express (HAE) as its general sales agent (GSA) for the United Arab Emirates. HAE is replacing Airline Cargo Resources, which has chosen to downsize its commitments to the region. This is the second area of the world where HAE was chosen by American following its appointment to cover sales across a number of central, eastern and northern African countries, as well as South Africa in 2016. American Airlines Cargo regional sales manager – South Asia, Middle East and Africa, Richard Hartmann says: “Following a thorough search, we are very pleased to have chosen HAE based on their extensive knowledge of the Middle East market, their innovative approach, comprehensive network and – more crucially – their very strong relationship with some key partners of American Airlines in Dubai.” HAE Group vice president for the Middle East, Africa, ISC & Asia, Peter Kerins adds: “We will be deploying our local market experts who know where business opportunities are in this region for American.” As with other offline stations in Europe, the Middle East and Africa, the majority of traffic will initially go via London Heathrow, where it can access both US operations and onward destinations such as Central and South America.
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NEWSWEEK Revenue and tonnage up for Turkish
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urkish Cargo’s cargo revenue has grown 24.4 per cent and tonnage is up 26.1 per cent on a year-on-year (YOY) basis in the first half of 2017 to the end of June, as it expand its services. The carrier says it has also grown YOY by 46.8 per cent in the Chinese market during the six month period. Turkish Cargo has launched seven new service points all at once within the last two months, including to Paris, Sao Paulo, Johannesburg, Antananarivo in Madagascar, and Kano in Nigeria. This brought its cargo destinations to 72 by the end of August, which were 55 as of the beginning of 2016. Turkish says it has generated a wide corridor extending to Africa from Asia and to the Latin America from the Europe, and utilised its two Boeing 747-400Fs.
The carrier says it was ranked among the top ten international air cargo carriers based on data for June of 2017 by WorldACD. Turkish adds it has become the third air cargo company linking up Pakistan, Poland and the United Arab Emirates to the world, and the fifth linking up Austria, Bangladesh, Egypt and Finland to the world.
CEIV Pharma for DHL stations DHL Global Forwarding’s stations in Frankfurt and Hamburg have gained IATA CEIV Pharma certification, following approval in Leipzig in April 2017. DHL started to certify its global stations according to International Air Transport Association (IATA) Center of Excellence for Independent Validators (CEIV) in Pharmaceutical Logistics in the third quarter of 2016, with around 30 locations running through an independent auditing process in the first phase. IATA examines the station’s correspondence to Temperature Control Regulations, Good Distribution Practice guidelines of the European Union, the Annex 5 of the World Health Organization and the United States Pharmacopeia Standards. The DHL Thermonet Station in Leipzig was
the first German station in the network to receive the quality label in April 2017, followed by Frankfurt and Hamburg, enhancing its transportation and storage quality levels of pharma goods and exceeds common quality standards in the DHL Air Thermonet stations. DHL’s IT platform, LifeTrack offers transparency for temperature controlled shipments, ensuring it is not only tracked but also enables intervention if necessary during the supply process around the clock 365 days a year.
Miami pharma certificate for Amerijet AMERIJET International Airlines has been presented with its IATA CEIV Pharma certificate in a ceremony at Miami International Airport. Miami is the only North American airport to be designated a pharma freight hub by the International Air Transport Association (IATA), having organised nine of its logistics providers to undergo the Center of Excellence for Independent Validators (CEIV) in Pharmaceutical Logistics program. So far Swissport, LATAM Cargo, Kuehne + Nagel and Amerijet have all achieved the certification. Amerijet plans to expand its operations at Miami in 2018 with two weekly freighter flights between Miami and Brussels, the world’s first two IATA pharma hubs.
Miami-Dade aviation director, Emilio T. Gonzalez says: “Thanks to hub partners like Amerijet, MIA’s pharma trade has grown 140 per cent in value since 2010 to $4.4 billion in 2016. Our pharma hub initiative, combined with our extensive global network, continues to broaden MIA’s already sizable economic impact in our community.”
Fresh fish flying through Oslo Airport
SEAFOOD freight is flying through Oslo Airport and it is set to handle double the amount of fresh fish in 2017. The gateway is served by 17 weekly cargo flights exclusively serving the Norwegian seafood market. In the last eight months, Emirates SkyCargo, AirBridgeCargo Airlines, Cargolux, Turkish Cargo, CAL and DHL have added routes. In 2017, the airport expects to handle up to 90,000 tonnes of seafood, an increase of over 50 per cent on 2016. Avinor’s director of cargo, Martin Langaas says: “Proactive work with the airfreight companies and cooperation with the seafood exporters have generated tangible results and an increase of 105 per cent in available tonnage for the seafood industry out of Oslo Airport.
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“This truly highlights the importance of Avinor’s work at providing the right conditions to enable Norway to achieve its seafood export targets to overseas markets.” Avinor’s says it efforts to reduce the distance between Norway and the global markets is vital to the Norwegian export industry. “This is a must if we are to guarantee the quality of Norwegian seafood all the way to consumers in Asia, the Middle East, Africa and North America. It also ensures that Norwegian products are competitive,” Langaas adds.
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60 NEWSWEEK
Seconds with
Justin Burns, ACW: How has 1H2017 been? Abadi: As far as Ethiopian Cargo & Logistics is concerned, it was a record breaking period. Ethiopian Airlines Group has experienced the best performance ever in terms of tonnage, revenue and FTK, which is an increase in all parameters. ATK growth was 26 per cent and
FITSUM ABADI
Ethiopian Cargo is Africa’s largest and fastest growing freight carrier and has ambitions to grow its network and offering significantly in the years to come. In June, it opened a new $150 million cargo terminal in Addis Ababa, giving it capacity of one million tonnes. Air Cargo Week spoke to Ethiopian Cargo & Logistics managing director, Fitsum Abadi.
FTK growth was 34 per cent. In addition, it completed and inaugurated its world-class cargo warehouse covering area of 40,000 square metres, which enables us to have annual turnover capacity of 600,000 tonnes, increasing our annual capacity close to a million tonnes together with the existing one.
Justin Burns, ACW: Is 2017 above or below your forecast and expectations? Abadi: In terms of FTK, compared to the 2015/16 fiscal year, 2016/17 showed 85.89 per cent average increase in the major trade lanes Africa, Asia and Europe. In terms of tonnage; when we compare 2016/17 actual tonnage with the target we exceeded by 12.54 per cent.
Justin Burns, ACW: What cargo sectors have proven strong? Abadi: We are improving in all areas, particularly northbound (ADD-LGG/BRU), HKG-ADD/Africa, PVG-ADD/Africa & CANADD/Africa, Europe – HKG, Europe – CAN, we have excelled.
Justin Burns, ACW: What trade lanes have been the strongest? Abadi: Our major growth is seen in triangular operations: Africa-Europe, Europe-Asia and Asia-Africa.
Justin Burns, ACW: How will your new cargo terminal help drive business? Abadi: The aim of having a state-of-art-cargo terminal is as per our business growth strategy to increase capacity to 820,000 tonnes of freight per annum. In line with this strategy and the regional development plan, the new terminal will also create an integrated logistics and multimodal transportation services by making Addis Ababa a logistics and distribution hub, for Ethiopian in particular and Africa in general, improving national as well as regional air connectivity index. It is also expected to significantly impact FDI in our country and position Ethiopia and Africa high on the global value chain. This terminal expansion is in line with the growing global e-commerce market, which is part of our business strategy. The new facilities are equipped with sophisticated cargo handling equipment enabling different climate chambers for storage and handling of temperature critical items (horticultural, pharma and life science products) it will enable the airline to provide competitive and outstanding freight services. Justin Burns, ACW: How have your new freighter routes to Ahmedabad, Milan and Zaragoza performed?
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FITSUM ABADI Abadi: All the three routes are performing well and showing growth potential. We are planning to increase the frequency to and from Zaragoza.
Justin Burns, ACW: Are you planning on adding more routes to your network? Abadi: Ethiopian plans to introduce a new freighter service to North America, South America and more frequency to and from Asia.
Justin Burns, ACW: How is your fleet? Abadi: Ethiopian is in an aggressive investment to meet its Vision 2025 - fleet being one of the four major components of our pillars. Our fleet consists of 92 aircraft with five Airbuses, 19 Boeing B787-8, 10 B777, six B767-300ER, 25 B737, 19, Q400 Bombardier and eight freighter dedicated aircraft. Two B777F and two 767300F aircraft are in a pipeline to join.
Justin Burns, ACW: Is Ethiopian seeing increased intra-Africa trade? Abadi: Ethiopian is witnessing increase in intra-Africa traffic especially from/to LOS, LFW, LUN, JNB, HRE, EBB, KGL, BZV, and it is the strategic objective of the airline. Despite Ethiopian’s vast network coverage in the continent is unrivalled by any other carrier, Ethiopian is eying serving the entire continent in additional cities and frequencies.
Justin Burns, ACW: What are the biggest challenges and opportunities? Abadi: Challenges: 1) Stiff competition as mega carriers are focusing on Africa 2) Excess capacities created as a result of introduction of widebody passenger aircraft putting further pressure on yield 3) High operational cost in Africa 4) Closed African air space and application of royalties and expensive/ prohibitive handling charge 5) Possible spike in fuel price that might go beyond stimulation for fuel-based nations Opportunities: 1) Increased traffic as we have inaugurated a new cargo terminal; product diversification like pharma will also be source of competitive opportunity 2) Growing economy of both the continent and the nation, which is attractive for FDI growth 3) Growing trade relationship between China and Africa 4) E-commerce growth to serve the cargo business and the like
SOUTHEAST ASIA Bangkok and Thai pen partnership Team effort helps Air Asia A330
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angkok Airways and Thai Airways have signed a freight partnership agreement as part of a move to strengthen each others’ networks. Through this cooperation with Thai Airways, Bangkok Airways cargo can be transported to China, South Korea, Japan, Taipei, the UK, Germany, France and Australia seamlessly, while Thai Airways cargo can be transported to Cambodia, Myanmar, Laos PRD, Vietnam, India and Bangladesh. This partnership will not only offer customers of both airlines access to an extensive cargo network in Asia, Europe and Australia, but also
helps strengthen the relationship between the two Thai airlines. Bangkok Airways senior director for cargo and charter, Amornrat Kongsawat, and Thai Airways managing director for the cargo and mail commercial department, Dumrongchai Sawangchareon, signed a cargo special prorate agreement (SPA) at Thai Airways Operation Center, at Bangkok Suvarnabhumi International Airport. Earlier this year, Bangkok Airways and Thai Airways entered into a codeshare agreement to facilitate commercial sales, and to improve passenger convenience in flight connections.
Jetstar to service Clark International JETSTAR Asia has announced a new direct service from Singapore Changi Airport to Clark International Airport, the growing international gateway serving Metro Manila, Central and Northern Luzon. From 28 November, Jetstar Asia will operate three weekly services from Singapore to Clark in Pampanga province using an Airbus A320. The carrier says Central Luzon is home to more than 12 million people, is a growing metropolitan and Clark International Airport provides the gateway to this under-served region. Jetstar Asia chief executive officer, Bara Pasupathi says these services complement the 19 weekly flights to Ninoy Aquino International Airport (NAIA) in Manila.
The launch of the new Jetstar Asia service comes as welcome news to the Philippine government as it increases capacity into the country as well as expands the catchment area to a fast-growing region just beyond Manila. From Singapore, Jetstar Asia also operates up to five weekly services to Osaka in Japan and from NAIA, there are 17 international services on sister airline, Jetstar Japan, to Tokyo, Osaka and Nagoya in Japan.
WHEN an Airbus A330 operated by Air Asia got stuck in Perth due to a mid-flight engine failure, members of the X2 Logistics Network helped transport parts from around the world to get the aircraft back in service. Experts at AGX chartered an Ilyushin IL-76 from Kuala Lumpur International Airport and a Boeing 747 from Singapore to move with Trent 700 Rolls Royce Engine, which powers the A330. X2 critical member Royale International chartered another 747 from Hong Kong to move the engine nose cowl weighing 11 tonnes from Xiamen to Singapore, which was then picked up by AGX to be delivered
to Perth. X2 elite member Executive Air & Sea Logistics moved the thrust reversals from Paris Charles de Gaulle Airport to Perth, X2 elite & projects member JAG – UFS moved other spare parts and equipment and AWA transported remaining parts and equipment from the US to Perth. X2 founder and chief executive officer, Richard Overton says: “This is an amazing shipment, and what makes it even better is seeing multiple X2 agents working together. “This shows the level of professionalism within the X2 network. And it is cases like this that make me proud of having started X2.”
Belly routes to SE Asia all the rage QATAR Airways is to launch flights to Chiang Mai (pictured) - its fourth destination in Thailand with four flights a week. The services will operate from December 2017 to May 2018. Chiang Mai joins belly routes to Bangkok, Phuket and Krabi. Qatar Airways operates five flights to Bangkok a day, a double daily service to Phuket and three a week to Krabi, which will be upped to a daily flight later this year, bringing the total number of services to Thailand to 60 a week. Qatar Airways will up services to Bangladesh and Sri Lanka from 1 September, with
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a fifth daily flight to Colombo and a third to Dhaka. Meanwhile, Vietnamese carrier Vietjet has launched a new belly route from Ho Chi Minh City to Jakarta in Indonesia’s capital. The carrier also recently strated a service from Hanoi to Kaohsiung in Taiwan.
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COOL CHAIN
Delta enhances processes with CEIV certification
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ndergoing International Air Transport Association Center of Excellence for Independent Validators in Pharmaceutical Logistics (IATA CEIV) certification has helped Delta Cargo enhance cool chain operations, the carrier says. Delta Cargo was awarded IATA CEIV over the summer, making it the first US global passenger carrier to receive the accolade, covering the headquarters and Atlanta operations. This has created the first trans-Atlantic CEIV certified network with partners, stations and handlers in Amsterdam, Brussels, Milan, Paris and Rome having also undergone the process. The airline explains to Air Cargo Week: “We have strong policies and procedures in place at all our station facilities, and our employees are all focused on quality and continuous
improvement.” Customers have been very happy, Delta says: “We have received very positive customer responses since we achieved CEIV certification in Atlanta and we anticipate strong demand for the rest of the year.”
Consistent procedures
Undergoing certification means processes and procedures are consistent across the airline’s network. Delta says: “This ensures that we are safeguarding and transporting pharmaceutical products with the highest level of excellence and in line with international and national compliance improvement. We now also have a more robust CAPA and quality management system that drives continuous improvements.” Making sure cool chain products are han-
dled appropriately is very important. Delta Cargo ensures that they only move through pharma certified stations in its network, saying: “All locations adhere to the same set of pharma acceptance and handling procedures that are based on the IATA Temperature Control Regulations and Annex 5 WHO good distribution practices for pharmaceutical products guidelines.”
Continuous innovation
Gaining the IATA CEIV certificate is not the end of the process, companies must continue to improve and innovate. Delta Cargo is looking to expand its pharma station network as well as the number of stations that have CEIV certification over the coming months. The industry is moving towards a global standard for the transportation of pharmaceuticals,
and Delta Cargo says being the first US based passenger airline to gain CEIV puts it at the forefront of this transformation. Delta says: “Currently airlines are the weak link in the logistics supply chain of moving pharmaceutical shipments however with globally harmonised industry-developed standards such as IATA’s CEIV, customers can stand assured that the air cargo industry is doing its part to reduce damage and loss to shipments due to temperature deviations and excursions.” A major problem the industry needs to overcome, Delta says is inconsistent regulations. It says: “One of the main challenges in the air cargo industry is the absence of a single global regulatory framework around the movement of cool chain cargo. “There are different national regulations and controls in place that can often conflict with each other.”
CEIV part of LUG improvements LUG aircargo handling is undergoing IATA CEIV certification as part of its program to upgrade infrastructure, senior project manager Dominik Misskampf explains. He says though LUG’s customer portfolio changed this year, temperature controlled shipments have been stable, and it is working to capacity. This was behind the decision to expand and modernise the Health Care Center. LUG expanded its capacity of temperature controlled storage area up to 1,200 square metres in Frankfurt, with segregation into eight rooms of different sizes and flexible temperature settings. The facility is totally new, and was constructed with a state-ofthe-art IT system. Misskampf says: “Real-time monitoring of the temperature with a record and alarming system will assure the right surrounding temperature. On this occasion we question our processes and thrive for their optimisation.” The majority of temperature controlled shipments are exports, with 15-25 degrees Celsius the most popular. Misskampf says: “In the past, changes of the products or respectively of the structure had been mostly related to the airlines in our handling.” LUG has welcomed Emirates SkyCargo as
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a new customer, and he says: “We expect a massive increase in volumes of temperature-controlled cargo at LUG aircargo handling. “On the basis of first analysis we do not expect a change in the structure of the freight.” Indicators for the future suggest demographic changes, individualisation and the development of bio-tech pharmaceuticals will increase volumes, Misskampf says, but competition is hard. He explains that handling agents like LUG have to fight on three levels until the shipment reaches the warehouse. “At first, shippers decide whether they send their products by air or by ocean. Unfortunately, the relative portion of airfreight has decreased in recent years. “Second, freight needs to be routed via Frankfurt. Finally, you have to compete on your local station.” Stricter regulations, demand for speed and cost reduction are major challenges for handling and transporting pharmaceuticals, but he adds: “At the same time, increasing requirements pose opportunities for single companies to outline their abilities. A chance LUG aircargo handling is pursuing.”
COOL CHAIN
DFW facility upgrades to benefit Americas - Asia trade
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outes between the Americas and Asia are expected to benefit from Dallas Fort Worth International Airport (DFW) upgrading cool chain facilities, vice president of airline relations Milton De La Paz tells Air Cargo Week. The new facility is on track to open late this summer and there has been a lot of interest from freight forwarders and shippers looking to utilise the facility’s services. DFW has handled more than 435,000 US tonnes between January and July, a 12 per cent year-on-year increase, and De La Paz predicts the cool chain facilities will mean more growth: “Based on the interest the Airport has received thus far and the thriving North Texas economy, along with the growth in perishables we have seen to date from Latin America, it is expected that the facility will show strong performance when it opens.” Brazil – Asia and Chile – Asia are expected to be the key cool chain markets for perishables via DFW. De La Paz says: “Daily passenger flights to China from DFW operated by American Airlines, along with dedicated Asian freighter service, provide
Critical investments for IAG’s pharma services
significant lift and connectivity. American Airlines also offers strong Latin American service already operating out of DFW.” With a booming world population and increase in per capita consumption, demand for food and agriculture is expected to increase tremendously, and the cold chain logistics market is expected to reach $386 billion by 2024, according to research by ASD Reports. De La Paz says DFW sees the cool chain as an
opportunity to develop cargo flows between Latin America and Asia, as well as the central USA, Canada and Europe. The growth of e-commerce provides an interesting opportunity. De La Paz explains: “The success of grocery delivery services offered by Amazon and other companies indicates that cool chain in the air cargo industry will be more important than ever.” Amazon plans to expand its distribution centre from 149,000 square metres to 446,000 by the end of 2018, giving the airport even more capacity to grow. The increased volume of cool chain shipments worldwide also increases the risk of damage or loss, and De La Paz says tighter networks of logistics partners will be necessary across air, truck and rail transport. Cooperation will be necessary to minimise losses and damage. With this in mind, DFW is supporting local logistics stakeholders across the supply chain in establishing an IATA CEIV community at the airport. De La Paz says: “We view this CEIV Certification as an opportunity to attract more pharma shipments and establish DFW as a viable logistics hub in the global supply chain.”
IAG Cargo is continuing to make significant investments in cool chain services, most recently with the launch of Constant Climate Critical, according to global head of pharmaceuticals and life sciences, Alan Dorling (pictured). The airline group’s Constant Climate product has been performing well with year-on-year volume growth of three per cent in the first half, with the second half gathering pace and volumes are now nine per cent above last year. Dorling says the increase was fuelled by significant growth from the UK and Ireland market, up 28 per cent, and Europe rising 21 per cent. The LATAM region saw a 35 per cent rise in exports, with exports to India and Europe providing the strongest flows. IAG Cargo has added the Critical ‘must-fly’ guaranteed product to its Constant Climate service. Dorling says there have been several significant orders on the new product. He explains: “This new product allows pharmaceutical shippers and forwarders access to the highest priority, guaranteed capacity across our network and a dedicated monitoring service through hubs at London Heathrow, Madrid and Dublin.” He adds: “Constant Climate Critical is also well positioned to meet the transport requirements of cell therapies and personalised medicines which have limited time windows for patient administration.” Several trade lanes are proving strong for different products. The proliferation of diabetes in Latin America is driving demand in shipments in insulin to countries including Mexico and Costa Rica, with blood plasma and oncological drugs contributing to growth particularly out of Dublin and Basel. The development of Indian cities including Hyderabad and Mumbai as pharmaceutical manufacturing hubs has boosted generic shipments from the country, most notably to Latin America and Mexico. India exports the highest volume of vaccines in the world, supplying the World Health Organization and Unicef. Dorling comments: “With the advent of newer pentavalent vaccines coming to market and vaccines for Dengue fever and Rotavirus shortly to be launched we expect to see even higher demand for air freight temperature-controlled services from Mumbai and Hyderabad.” Though there has been some modal shift to sea freight, Dorling believes there are also a large number of opportunities for air cargo. The overall pharmaceutical industry is growing by about five per cent a year, and 54 per cent will be biological, which he says bodes well for airfreight. Dorling is optimistic, saying: “With the well documented growth in pharmaceutical shipments we believe that we are well placed to offer a secure and highly efficient service to our specialist customers.”
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DENMARK Near 10% growth at Billund as it targets more freighters
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illund Airport is looking to add another freighter to its roster and is sure it can attract new carriers after the success of Turkish Cargo. Growth of the twice a week Airbus A330 service by Turkish from Istanbul and express operators UPS, TNT, DHL and Lufthansa Cargo owned time:matters have led to a 9.7 per cent uplift in tonnage in the first seven months of the year to 40,100, up 3,500 tonnes on the same period in 2016. Last year was itself a record year for Billund as it handled
66,500 tonnes, as both imports and exports increased strongly. Vice president of cargo, Jan Ditlevsen (pictured) believes Denmark’s number two gateway for cargo after belly driven Copenhagen Airport, has benefited from the overall uptick in world trade and in the industry as a whole. Exports mainly consist of machinery, manufacturing goods, electronics, turbines, spare parts and IT and telecommunications equipment, and imports are generally textiles while e-commerce shipments are on the up. The airport is looking for a strong finish to 2017 and Ditlevsen forecasts the peak season from September to November will be busy based on feedback he has received from the market. He explains: “We expect to handle more than 70,000 tonnes this year, which is good for an
airport of this size. I think the total market is going up and nothing is going down. Imports and exports are both strong.” Ditlevsen says Billund is in an ideal location for carriers to the manufacturing heart of Denmark and the rest of the Europe and about 65 per cent of tonnage is from road feeder services. “What we see is there is cargo from northern Germany coming on trucks to the Turkish freighter and express operators. We have widened our catchment area to 500 kilometres from Billund,” he explains. He believes there is room for more freighters into and out of Billund and the airport is working hard to secure more routes. “We are not expecting one straight away and are targeting
one in the long-term, but we will keep on fighting for it. We have a big warehouse of 18,000 square metres so we are in a position to grow and adapt to more capacity.” Belly traffic is still low at Billund as no widebody passenger aircraft fly into the gateway and the majority of belly traffic into Denmark comes via Copenhagen. The airport is growing its passenger business so belly cargo may get a lift in the future, but it is firmly positioning itself as a freighter focused hub. Ditlevsen is sure it has a bright future: “We are very optimistic about the future. Denmark is doing well economically and trade is strong. Billund will have a piece of the international growth.”
Strong volumes uplift for DSV in 1H17
DANISH freight forwarder DSV’s airfreight volumes grew year-on-year (YOY) by 10.4 per cent in the first half of this year to 302,869 tonnes, but second quarter (Q2) volumes were only up 2.6 per cent to 155,430 tonnes – lower than its competitors. These growth rates compare with the market average of 10 per cent in Q2 and eight per cent in the first half of 2017. Adjusted gross profit for the airfreight sector at DSV was 2,105 million Danish Krone (DKK)($335 million) in the first half of the year and 1,072 million DKK in Q2, up 12.5 per cent and four per cent, respectively. The Air & Sea division saw net revenue of 17,343 million DKK, up 12.1 per cent in the first half of this year and for Q2 it was 8,873 million DKK, up 5.4 per cent on Q2 last year. Across the whole business, DSV saw net revenue for the first half of 2017 rise to
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37,147 million DKK, a 12.8 per cent rise on the 32,925 million DKK in the same period in 2016. Gross profit was 8,437 million DKK, up 7.9 per cent on the 7,821 million DKK last year. The forwarder has been integrating US forwarder UTi into the business with the final parts set to be completed this year. DSV chief executive officer, Jens Bjørn Andersen says: “With more than 50 per cent growth in earnings and cash flow we are very satisfied with the Group’s performance in the first half of 2017. Only 18 months after the acquisition of UTi Worldwide, our productivity and financial results are at an all-time high. “On the back of a strong start to 2017, we upgrade our expectations for the year and start a new share buyback programme of one billion DKK.”
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