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The weekly newspaper for air cargo professionals Volume: 20
Issue: 21
29 May 2017
Prime Air pilots picket outside Amazon shareholder meeting
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ir cargo pilots who fly for Amazon Prime Air picketed outside the e-commerce heavyweight’s annual shareholder meeting in Seattle on 23 May. The 65 pilots (pictured below) said they wanted to flag up the “intensifying challenges at their airlines” and “potential risks for Amazon’s growing logistics operations” as there is a “looming” pilot shortage, which will disrupt operations and the future success of Prime Air. This protest comes as pilot unions continue negotiations over new collective work agreements. Unions claim the pilot shortage “combined with substandard pay and years long delays” in union contract negotiations has also “triggered extreme staffing and attrition problems at Prime Air carriers”. Amazon Prime Air has contracts to fly with Air Transport International (ATI) and ABX Air, both owned by Air Transport Services Group (ATSG), and Atlas Air Worldwide Holdings (AAWW) to fly 40 aircraft by 2018. Each has committed to wet-lease 20 Boeing
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ELIESON GETTING TO GRIPS AS AMERICAN CHIEF
737-300F. Amazon has also secured warrants to purchase equity in AAWW and ATSG. Atlas Air first officer, Marvin Tait who has flown for the company for two years says: “Amazon is at the heart of our carriers’ vision for the future and that’s why it’s our responsibility as pilots to alert shareholders about the underlying issues at our airlines that could spell trouble for our relationship. “AAWW has made huge commitments to Amazon even though we’re losing dozens of pilots a month and are not able to replace them. We urge Amazon investors and executives to heed the voices of those on the frontlines, and encourage its contracted carriers to help build a successful partnership that works for customers, pilots and our businesses alike.” Concerns about the future of Prime Air were aired in a letter to the Amazon board of directors from the pilots’ union - the International Brotherhood of Teamsters general secretary treasurer, Ken Hall.
The letter asserts of a “tightening pilot supply and looming operational risks” at Amazon’s cargo contractors should be of concern to board members, explaining: “Amazon is highly dependent on both ATSG’s and Atlas Air’s ability to staff, maintain and operate the aircraft leased to Prime Air…We grow increasingly concerned both companies are experiencing operating difficulties that could jeopardise their ability to adequately fulfill their obligations to Prime Air and Amazon.” The letter encourages Amazon to work with pilots and the union to solve any issues, emphasising “working collaboratively will decrease any potential disruption of service and lead to improved outcomes for both Amazon and our ATSG and Atlas Air member pilots”. Earlier this year, Amazon said it will construct a $1.5 billion hub at Cincinnati/Northern Kentucky Airport while it is also rumoured to be planning to purchase a raft of new Boeing 767s to grow its logistics capabilities.
creates more advantages for China connecting with other countries from the perspectives of logistics and economic trade.” Asia Pacific continues to register strong growth and in April the Association of Asia Pacific Airlines (AAPA) said cargo volumes rose year-on-year (YOY) by nine per cent. AAPA says this was on the back of strong international demand, as business conditions continued to improve across Asian economies. This helped underpin growth in volumes in April, with demand in freight tonne kilometres increasing nine per cent compared on the same month last year. Offered freight capacity grew 2.8 per cent in April. The average international freight load factor increased by 3.7 percentage
points to reach 65.1 per cent. L o o k i n g ahead, AAPA director general, Andrew Herdman (right) says: “Business and consumer confidence indicators remain positive and underpin expectations of continued growth in....cargo markets in the coming months. However, the impact of rising fuel and staff costs are a concern.”
New Chinese cargo carrier takes-off as Asian traffic booms HNA Modern Logistics Group has taken off in Xi’an with European and American routes to support China’s ‘Silk Road Economic Belt’. Two intercontinental freight flights have been started on Shanghai – Xi’an – Amsterdam and Xi’an – Shanghai – Anchorage – Chicago routes following one month trials. The flights have been moving imports and exports with high added value as well as fresh products and electrical goods. HNA will extend intercontinental freight routes from Xi’an. HNA Modern Logistics Group chairman and chief executive officer, Zhang Weiliang says: “As deeply carrying on of Chinese The Belt and Road Initiative, the cooperation between China and global freight market will expand, which
HEALTH CENTRE DEVELOPMENT FOR LUG IN FRA
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CHANGI STRENGTHENING ITS POSITION MIAMI BELLY ROUTE ADDED BY EL AL ISRAEL
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Cathay restructures
CATHAY Pacific has reorganised its head office and made around 600 people redundant in Hong Kong and restructured the cargo department. The carrier says it will “streamline” the structure by removing the role of cargo director. Last month, Cathay Pacific revealed Simon Large was leaving his role as director of cargo to become director of customer on 1 June with James Ginns taking on the position. Ginns will now take on another role. The commercial and planning functions will report into the director of commercial and cargo, and be overseen by the chief customer and commercial officer. The services function will report into the director of service delivery. Cathay Pacific says the moves are part of a transformation programme to make Cathay Pacific and Cathay Dragon more effective by “improving the speed and quality of decision-making and putting a greater focus on its customers”. Around 190 management and 400 non-managerial roles will go, representing 25 per cent of management and 18 per cent of non-managerial positions.
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NEWS WEEK Perishables flying out of Vietnam for Emirates
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mirates SkyCargo says over the last year it has seen a near five-fold increase in the volumes of exports of fruits including rambutans and lychees from Vietnam to Dubai. Vietnam’s agro-forestry-fishery exports were valued at over $32 billion in 2016. Emirates SkyCargo says it has been working closely with the Vietnam’s Trade Promotion Agency to understand the requirements of Vietnamese exporters and develop export opportunities for Vietnamese perishables in international markets, specifically in the UAE and other parts of the Middle East. As a result of the collaborative efforts, the volume of perishables exports from Vietnam to Dubai increased considerably reaching close to 110 tonnes in January 2017. Emirates vice president for cargo commercial in the Far East and Australasia, Ravishankar Mirle says: “By working closely with Vietrade and by building upon our expertise in shipping perishables, we developed air freight solutions that have helped increase the exports of premium fruits and vegetables from Vietnam to Dubai. “We will work with our customers and stakeholders to promote and develop new trade lanes for exports from Vietnam to global markets.”
Tonnage up 8.9% at HKIA
Emirates SkyCargo offers exporters in Vietnam a weekly capacity of over 580 tonnes through 18 flights including four weekly freighter services. The launch of the daily passenger flight from Dubai to Hanoi on the Boeing 777-300ER, offering up to 20 tonnes of cargo capacity per flight from 1 July 2017 will further support trade from Vietnam to other markets through Emirates SkyCargo’s global network of 155 destinations in 83 countries. In addition to perishables Emirates SkyCargo also helps export electronics and marine products from Vietnam.
THE positive start to the year at Hong Kong International Airport (HKIA) continues as the world’s busiest freight hub saw year-on-year (YOY) cargo growth in April of 8.9 per cent as it handled 398,000 tonnes. The strong performance was largely attributed to a 14 per cent YOY growth in exports and among the key trading regions, North America and Europe increased most significantly in the month. Combining March and April to even out the seasonal impact of the Easter holidays, YOY cargo tonnage showed growth of 13.4 per cent. During the first four months of 2017, HKIA handled 1.5 million tonnes of cargo – up 10.9 per cent compared to the same period last year. On a rolling 12-month basis, cargo tonnage registered a YOY increase of 7.3 per cent, reaching 4.7 million tonnes.
Volga powers Madagascar
VOLGA-Dnepr Airlines has delivered 11 generators on board a series of six Antonov AN-124-100 flights to increase capacity at the power plant powering Antananarivo in Madagascar. The flights were completed over a 14 day period from Mauritius to Madagascar on behalf of Turkish freight forwarder, Kupa Proje Tasimacilik Ve Lojistik. The generators, which weigh 57 tonnes each, will boost capacity of the existing power plant to 120MW,. The project was implemented by Turkish company Aksa Energy, to significantly improve power supplies for the city’s businesses and residents. Volga-Dnepr head of cargo planning centre, Vladimir Bykov says: “In Mauritius, we loaded the generators into the aircraft using an external crane, while in Madagascar the cargo was unloaded directly to trailers to save time and money for the customer.”
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Abu Dhabi posts 14.4% freight fall argo traffic into Abu Dhabi International Airport fell by 14.4 per cent in April as the getaway handled 54,382 tonnes – a fall on the 63,500 tonnes in April 2016. In the first four months of the year, the UAE airport’s freight figures are down by 4.4 per cent on the same period last year to 243,722 tonnes. From January to April in 2016 the airport handled 254,907 tonnes. The Middle East has seen a slowdown in cargo this year.
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NEWSWEEK 1GSA network to use e-Cargoware Key appointments made by WFS
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GSA – the general sales and service agent (GSSA) network launched at air cargo europe – has appointed e-Cargoware as its preferred supplier of IT systems, which it says will provide members with access to a GSA management system at preferential rates. e-Cargoware is operational at 1GSA founder member Select Airline Management. . M&C Aviation, one of the first GSSAs to join the network, covering countries in Asia, has also chosen e-Cargoware and is mid-way through implementation across its network. e-Cargoware is a state-of-the-art GSSA system with networking features, is web-enabled and
cloud-based. Provided as a software as a service solution, it will enable all 1GSA members to interface with each other, and act as a single unit managed from one location, in cases where airlines wish to appoint multiple 1GSA stations. e-Cargoware supports multi-station and multi currency, is e-AWB and e-freight compliant, and uses e-Pouch to store documents electronically. e-Cargoware GSA is one element in a total supply chain solution can seamlessly link shippers, forwarders, airlines and GSSA, handlers and consignees. 1GSA president, David Lee says: “e-Cargoware will enable 1GSA to offer a total cargo management solution to airlines. We will be the first truly digital network GSSA, and this will be a real differentiator, as well as enabling our members to work smarter.” Members now signed up total six and also include CRS, GCAir, and Kargo Sistem.
WORLDWIDE Flight Services (WFS) has announced new appointments to its top team, - which it says will further strengthen the company’s leadership team and signals its ambition to build its cargo and ground handling operations globally. WFS’ Europe, Middle East, Africa & Asia regions will be divided into two service product regions – cargo and ground handling – to execute the company’s strategic plans. John Batten will lead WFS’ cargo operations as EVP Europe, Middle East, Africa & Asia (EMEAA), while Will Facey, currently head of network operations at EasyJet, will join WFS on 28 August this year as EVP ground handling operations for Europe, Middle East, Africa & Asia (EMEAA). Barry Nassberg becomes group chief commercial officer, while Justin Jaques, for-
merly VP Asia & Middle East, will become SVP group commercial to focus on global key accounts and major tenders. Catherine Thomas has been named as general counsel & head of legal. WFS chief executive officer, Craig Smyth says: “We have clear strategic goals for the future of WFS and the leadership team we are building will drive this next phase of our expansion.”
Angola B747 Freighter contract renewed
NETWORK Airline Management and TAAG Angola Airlines – the national airline of Angola – have renewed a long-term freighter aircraft contract. Operating a weekly scheduled service from Liege in Belgium, to Luanda, the capital of Angola. Network Airline Management provides a Boeing 747-400F factory-built freighter with nose door, which carries up to 120,000 kilos of oil-related and general cargo.
The agreement continues to offer export capacity from Angola back to Europe with forwarding connections worldwide. Trucking connections from all over Europe into the Liege hub are also included, as well as interlining facilities from North America, Asia and the Indian sub-continent. Network Airline Management commercial director, Andy Walters says: “We are delighted to be continuing our partnership with TAAG. “Network Airline Management has a long-established track-record of offering our customers cost-effective solutions and this service is no exception, providing the capacity to carry oversize cargo and pieces up to 20 metres in length.”
Alaska salmon run makes first flight
THE season’s first shipment of fresh Copper River salmon made the 1,300-mile journey from Alaska to Seattle onboard an Alaska Airlines Boeing 737 last week – marking the start of the summer salmon grilling season. In addition to the 22,000 pounds of fish delivered Alaska ran four flights scheduled throughout the day to bring up to 77,000 pounds of Copper River salmon to market in Anchorage and the Lower 48. Alaska Air Cargo managing director, Jason Berry says it plays a “significant role” in supporting the Alaska seafood industry, adding: “Our cargo employees are working around the clock to ensure we deliver the first catch
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of the coveted wild Copper River salmon to market, often within 24 hours of being pulled from the water.” Alaska Air Cargo partners with seafood firms - Ocean Beauty Seafoods, Trident Seafoods and Copper River Seafoods to bring salmon to Seattle, Anchorage, and places beyond.
NEWS WEEK
SIA Cargo to be reintegrated into Singapore Airlines
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ingapore Airlines’ (SIA) wholly-owned subsidiary – SIA Cargo – is to be reintegrated as a division within SIA - in a move intended to improve efficiency through greater synergy with the wider SIA Group. The reintegration is expected to be completed in the first half of 2018, when SIA Cargo will become the ‘Cargo Division’ of SIA. It will be business as usual from a customer perspective, as there will be no change to SIA Cargo’s operations. Seven Boeing 747-400 Freighter aircraft will continue to be operated, while the division will continue to manage the bellyhold space for SIA, SilkAir and Scoot. SIA Cargo was a Division of SIA until 1 July 2001, when it became a separate company within the SIA Group. At the time, it was in the process of growing its fleet to up to 17 747-400Fs, and it was better suited to carry out its expansion as a standalone all-cargo airline. The carrier notes the airfreight market has since seen structural change, however, and SIA Cargo’s freighter fleet has been “right-sized” in recent years to the current seven aircraft while the proportion of revenue from bellyhold capacity has increased significantly.
Despite the smaller freighter fleet, SIA Cargo’s overall capacity, including from passenger aircraft, grew four to five per cent in each of the past two financial years. The carrier says the majority of SIA Cargo’s nearly 900 employees will be retained in the new division, while some will be transferred to other SIA divisions. SIA chief executive officer, Goh Choon Phong says: “Re-integrating SIA Cargo as a division within Singapore Airlines makes sense from a business standpoint. It will improve efficiency and offer greater flexibility for staff deployment by maximising synergies
with the larger SIA business. “Importantly, the Cargo Division will continue to provide high-quality products and services that customers have come to expect from SIA Cargo. “Cargo remains an important part of our business, and we remain committed to operating a fleet of dedicated freighter aircraft to carry specialised cargo and provide feed to the overall SIA Group network.” SIA says the move is not expected to have a material impact its financial performance in the 2017/18 financial year.
Singapore move for Panalpina PANALPINA is to build a new build-to-suit facility in Singapore, which it says demonstrates its continued commitment to a strong and successful logistics platform in Asia-Pacific. Singapore country head of sales, Matthew Gallagher says: “As we celebrate 40 years of doing business in Singapore, this is Panalpina’s largest ever warehousing investment outside Europe in the company’s history.” The freight forwarder says the investment will help itexpand its logistics business in Asia-Pacific by offering customers an ultra-efficient and tailored solution for their specific logistics needs. Construction is currently under way, and the facility will be ready for customers in early 2018. The new 30,000 square metres facility is being built at Pioneer View, in West Singapore, where the city-state is developing a new deep-water port to keep up with ocean freight growth. It adds to a facility at Changi Airport and other sites. Once opened it will have 100,000 square metres of warehousing space in Singapore. “Singapore is a very important consolidation hub for ocean and airfreight. We plan to offer our services in this area including value-added logistics services to new customers particularly in the healthcare, technology, manufacturing, consumer and retail as well as fashion industries. And we will continue to service existing customers including global telecom equipment manufacturers, sporting goods retailers and medical equipment companies,” says Gallagher.
Kalitta receives two B747Fs
KALITTA Air has taken delivery of the first of two leased Boeing 747-400F factory freighters from aircraft lessor GECAS. GECAS has previously provided debt financing to Kalitta on several 747-400’s (both factory and converted freighters), but this delivery is the first aircraft on lease to Kalitta from GECAS, adding capacity to Kalitta Air’s existing fleet of more than 15 widebody freighters. Serving a wide range of clients from DHL to the US military – Kalitta combines global air cargo service with comprehensive airframe and engine maintenance solutions. Kalitta founder and chief executive officer, Conrad Kalitta adds: “GECAS has been very supportive of Kalitta Air as we have renewed our fleet. As a trusted partner, I value GECAS’ focus on the air cargo sector.”
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AIR CARGO COMMUNITY FRANKFURT
Cool chain investments to be made by LUG in Frankfurt
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UG aircargo handling is building a health care centre/cool chain area at its Frankfurt Airport station to meet the growing demands of the sector. LUG handles freight for 16 carriers at Frankfurt and a further eight at Munich Airport, which it is also eventually looking to develop cool chain facilities at. Speaking to Air Cargo Week at air cargo europe in Munich on 10 May, managing director and chief executive officer, Patrik Tschirch explains the new cool chain developments are about meeting customer needs.
He says: “We are starting to develop a new health care centre for pharmaceutical shipments, which will be most likely be IATA CEIV Pharma certified by the end of the year. We have had our pre-audit already and with the new set-up and development we are quite certain we can achieve that. “It is going to be a separate area inside our current facility. The issue we have had is that we don’t know the exact volumes to expect and have had a real hard time getting an answer on that who we talk to. “Right now in Frankfurt we have about 150 square metres (for temperature sensitive cargo), which suffices what we do, but it is not certified and is outdated in terms of the technology.” Tschirch says LUG will start developing the new facility with three modules, which will add up to 600 square metres.
Each module will have different temperature zones where it can store and handle cargo from +2 degrees Celsius to +8 degrees Celsius and +15 to +25, but he notes the plan is to one day develop 2,200 square metres. However, that is something LUG will have to look at and decide whether to carry out, and will be dependent on demand and volumes handled. He adds: “Once it is done in Frankfurt once it is started we will certainly do it in Munich as well as there is a benefit. It is not necessarily about the bandwagon that everybody jumps on but it is a pre-requisite for major clients of our industry to offer and provide that service.” However, he notes: “I personally question the value in terms of is there a really higher revenue stream expected and I question that. If you look at the likes of Cathay Pacific, Korean Air and Emirates SkyCargo – all these carriers that actually focus on this product and it grows and grows and it is important for them. If you as a service provider cannot offer this service (for pharma) then they will not look at you - so once Frankfurt is done we will look at Munich.”
Etihad running smoothly
LUG started a contract with Etihad Cargo at Frankfurt in March and Munich in February which proved a challenge in the early part of the year, but Tschirch says it has settled down. “We have settled in and the teething problems are over and we hired additional staff, but besides having Etihad and what was the killer for us was all our carriers saw a 10-15 per cent growth margin in the first quarter (Q1). “The combination of that in Q1 was not healthy for us, but we have settled in which took us about six weeks and now everything is fine,” he says. Tschirch adds Etihad is delivering what they said and LUG is delivering back, noting the UAE carrier is particularly happy with the on-time performance of their freighters, which he says is a lot better than what they had before with the previous partner, and is a testament to the handler’s quality.
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LUG expects through the Etihad contract to be handling an extra 50,000 tonnes a year through the two bellyhold flights a day to each of the hubs and full freighters (Airbus A330F and Boeing 777F) which serve Frankfurt twice a week. As for the rest of 2017, Tschirch says he is targeting adding a new contract in Frankfurt as it is a year when handling contracts are up. “Our business works in cycles and in Frankfurt it is one of the years where a lot of contracts are coming up. “Two of our clients contracts are coming up, but there are also another four clients from other service providers, which are also coming up as well and there is a tender as we speak.
Contract win targeted
“We are hoping to add at least one more client and it also depends if we lose one or two of ours, but if we don’t then one more is what we can achieve, but the aim for this year is to really stabilise everything,” Tschirch says. He explains handling tenders can be quite similar, but he feels what is changing is you now have the professional carriers who “know what they are talking about” and are really prepared and you have the others that “just tender” and don’t know what they are talking about. Tschirch says: “This is part of the big problem we have in our industry as people just don’t know what they are talking about anymore and it is becoming more and more of a sales orientated industry, which is not wrong, but you cannot lose out on the basics and there is a trend there. “But on the positive side, more and more carriers are becoming more and more professional. The times when you just have a procurement person sitting there who just came out of university seems to be over, they play a role, but the young people who don’t understand are not left alone anymore and you have someone sitting with them who knows a little more.” It seems the rest of 2017 is certainly shaping up to be eventful in the cargo handling sector in Frankfurt.
AIR CARGO COMMUNITY FRANKFURT More members set to sign up as community spreads its wings
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he Air Cargo Community Frankfurt now totals 50 members with more set to join up soon. Executive director, Joachim von Winning says it is in talks with several companies that are interested in joining the community. “Unfortunately, we cannot disclose anyone right now – but I think it is safe to say that there will be a significant increase in members within this year,” he explains. Von Winning hails the impact the community initiative has had on air cargo in Frankfurt and says it is continuously working to improve the cooperation between all participants at Frankfurt Airport. “The increasing volumes in air cargo and many joint approaches of our members for digitalising processes show our work has proved successful. It demonstrates our members are willing to work together to optimise processes on all levels,” he says. Air Cargo Community Frankfurt aims to optimise logistics processes and represent and promote the interests of air cargo-related companies at Frankfurt. Von Winning says: “All
members share the common interest to increase competitiveness of the site for the benefit of all and ultimately keep Frankfurt Airport as he leading cargo hub in Europe.” Cooperation is possibly the biggest win from the community scheme and von Winning says this has not only between companies, but also within companies. “In our competence groups, various companies but also staff from management and operations of one company are closely working together. Thus, they learn to understand the different requirements each actor in the process chain has,” he explains. Von Winning says to improve efficiency and productivity, it has set up several projects and for the registration process of truckers at cargo terminals, it has brought together forwarding agents, handling agents and airlines on site to agree on a standardised form that fits the needs of all. He explains while there were several forms in the past, there will only be one in the future: “This is an important step towards unifying the whole process for truck drivers and achieving significant time savings and cost reductions for all participants.” Pharmaceuticals is a key sector and much of the commu-
nity is working towards gaining IATA CEIV Pharma certification. Fraport ground handlings services (BVD) and Swissport, Celebi, LUG and FCS are currently being audited while more than half of the airlines are already CEIV Pharma certified along with the Perishable Center and forwarders like Bolloré Logistics. Von Winning says it is rolling out an IT platform to members in the summer to boost pharma traffic at Frankfurt. “We also continuously invest in the optimisation of the ordering process and the operation management of pharmaceutical transports, which already showed huge effects as well,” von Winning adds.
Innovate and digitise
PUSHING innovation within the air cargo supply chain is a top priority for Fraport – the operator of Frankfurt Airport (FRA). Senior vice president for cargo, Dirk Schusdziara says the hub wants to keep its role as “innovation leader”, adding it is always searching for new solutions “to offer our customers faster processes, greater reliability and transparency and an improved service”. But Schusdziara says everyone across the chain has to be willing to exchange information, agree on common standards, and push forward innovations. “We have to develop from an EGOsystem where every company works only for itself to an ECOsystem where we all join forces – in order to stay competitive as an industry as a whole. Our Air Cargo Community Frankfurt is a perfect example on how we could work together in future,” he explains. Schusdziara says it is intent on continuing its digital journey and with its community platform Fair@Link it sets the place for the most advanced airport community system. This is just the start and to continue this, Fraport is planning on adding some additional modules to Fair@Link. Schusdziara says: “The German Customs’ system is linked to Fair@Link and with the cooperation of the community – we want to integrate the local EU border checkpoints. Like that, documentation and clearance can be digitalised speeding up the whole process. “We also want to connect the shippers to the system, so they can enter data directly to the system. This proves especially interesting for special handling products like perishables, animals and DGR where many data has to be transmitted. “Additionally, we are now developing a digital access control system to enhance the access and access control to our cargo areas. At the moment, all visitors to CargoCity have to register at the entrance gate. The new system will allow them to register in advance online to expedite access to their destination within the airport site.” Other developments include a focus on cool chain and he says several parties are expanding their cool facilities. At the end of 2017, FRA will have more than 10,000 square metres of temperature-controlled areas. Another big project is the new Terminal 3, which will add cargo capacity and improve access to cargo areas thanks to a new autobahn interchange. “We are also investigating the need of a second truck parking lot. Last year, we opened a new truck parking lot with very good results. The new facility has reduced traffic congestion and enhanced the overall experience for truck drivers,” Schusdziara says. Things are looking good. In Q1 traffic rose 5.8 per cent to 530,000 tonnes and Schusdziara says this was the highest Q1 tonnage in six years.
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AIRLINES AND AIRPORTS
Elieson getting to grips as American cargo chief
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merican Airlines Cargo (AA Cargo) president, Rick Elieson says he is “very optimistic” about the future of the airline after a successful start to the role he only took on a few months back. Elieson, who started working at American Airlines on the Japanese desk in the Fort Worth reservations office in 1994, succeeded Jim Butler, who took over as senior vice president – international and cargo, following the retirement of Art Torno. He says he has had a lot of fun and has been surprised at how wel-
coming people in the industry have been since he took the helm. Speaking to Air Cargo Week at air cargo europe in Munich on 9 May, Elieson explains: “I’ve been really impressed by how friendly everybody’s been in an industry where everybody knows everybody, where you have a lot of people with really deep experience, but at the same time it’s been really opening and welcoming.” Elieson admits he did not know what to expect, and thought in an industry with so much experience it may not be open and friendly. He says he was very fortunate to join a team already functioning very well with good communication across the teams with high levels of expertise across the organisation. Elieson jokes: “For me I feel it’s been tremendous fun but for the team I feel like maybe it’s been torture because they have had to repeat
everything in triplicate, but for me it’s been great fun.” He says the strength of the carrier’s cargo team means he does not feel the need to rip apart and fix, with clear objectives and it has been an easy transition saying, “I just show up and do what I’m told!” In keeping with his previous roles, the new role is something Elieson says some might argue he is not qualified to do or may not be an area of expertise even if it is of interest. He comments: “I’ve been amazed each time at the commonalities, whether it’s basic business principles or the need to facilitate coordination across an organisation.” Elieson says his predecessor, Jim Butler, who is now his boss, had been very strategically minded as to how the organisation should be structured and what are AA Cargo’s focuses.
Three focus areas
The three areas Elieson says AA Cargo is focusing on are operational reliability, customer experience and investing in the future. American has a wide network and will have 150 widebody aircraft in service by the end of the year, but they need to operate efficiently. Elieson says: “We have a lot of energy and efforts underway to improve performance so operational reliability is first and foremost.” The customer experience is very important, some things are outside of Elieson’s control, such as the weather, but recovering well and learning from events are extremely important. Elieson says American is making “significant financial investments”, surpassing anything seen over the past decade, both in facilities and
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technology, allowing the company to do more business and types of business. These are long term plans, extending beyond 2017, recognising that AA Cargo is in the logistics business. He says: “Anyone who quits investing in their future, making financial and technological investments is going to find themselves disrupted and irrelevant very quickly.”
Integration
These include the Philadelphia International Airport pharma hub, which Elieson says is not the kind of investment that will pay for itself in a month but is for the long term, along with upgrades at other facilities including ground equipment, and extended warehouses at Miami International Airport and Dallas/ Fort Worth International Airport, along with new coolers and increased staff numbers. Elieson says: “As an airline we’ve really focused on the merger and integration [with US Airways] and one of the underlying principals that helped it go so smoothly was to integrate before we innovate, it has been a mantra of ours.” He adds: “We’re now coming out of that having successfully integrated two very large airlines and we’re now in a financial position to make investments and do it.” Elieson says American has a strong future, saying: “I love working for American and in the airline industry. I have never felt more optimistic about it, in part because of the investments and the changes we are making to the way we work and operate.”
AIRLINES AND AIRPORTS
Changi strengthening its position Bud expecting stable growth
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fter breaking through the two million tonnage a year barrier - Changi Airport managing director of air hub development, Lim Ching Kiat (pictured below) expects the strong growth to continue. Speaking to Air Cargo Week at air cargo europe on 10 May, he said Changi has set a new tonnage record of two million tonnes on a 12-month basis up to April, the first time it has reached the figure, and 2017 is shaping up well. He said: “It looks like it’s going to continue but of course the economic environment is difficult, things can change from month to month or quarter to quarter. In Singapore the outlook is looking favourable.” Changi is focusing on building capabilities in premium products including pharmaceuticals, perishables and e-commerce. Lim believes Changi has done well developing these in the past 12 months, with new developments. For e-commerce, DHL has opened a South Asia hub at Changi, tripling handling capacity, which Lim expects will increase volumes at Changi while Singapore Post and SATS have also opened up e-commerce hubs. Lim says: “We think all these steps are positive developments to strengthen our position and an e-commerce centre.”
Pharma has been a major focus, as the first airport community in Asia to undergo the International Air Transport Association CEIV Pharma certification, and joining Pharma.Aero with Brussels Airport, Miami International Airport and Sharjah International Airport. Lim says: “We hope this is a platform to change best practices. One area that we’ll cover is engaging with shippers to see how we can better serve them and maybe kick start a few projects to improve pharma handling. “We think there are still areas I think the shippers feel that they are not completely satisfied.” Perishables are the other main area, with ground handlers SATS and dnata now having specialist temperature controlled facilities. Singapore has become the first country to handle air-sea transhipments for chilled meat from New Zealand to the European Union (EU). Lim explains: “Previously this type of transhipment was done mostly be sea-sea, typically taking about a month and by the time it reaches the EU the shelf life would only be two weeks.” He feels these niches can take advantage of Singapore’s position of a strong air hub and seaport. Changi is ranked sixth largest passenger hub in the world and eighth for cargo. Lim feels these are linked, as increasing the number of passenger aircraft means more cargo capacity. Using China as an example, he said Changi has links to 32 cities meaning valuable cargo can reach these destinations. Lim adds: “I think as long as we are strong in both areas, we will do well as a hub but we are not resting on our laurels.”
BUDAPEST Airport is expecting cargo to grow five to six per cent a year over the next 10 to 15 years, cargo manager Jozsef Kossuth (above) predicts. The Hungarian gateway handled 112,000 tonnes of cargo in 2016, a record figure, and the strong growth has continued into 2017, with volumes increasing 22.7 per cent in the first quarter when trucking is included. Kossuth told Air Cargo Week at air cargo europe on 10 May: “We forecast a stable five to six per cent increase every year for the next 10 – 15 years. We have a nice catchment area and with this region we are not competing with the Western European airports like Frankfurt and Amsterdam.” He believes with road trucking that driving at 90 kilometres per hour for eight hours, Budapest is very attractive for distribution, and connect Budapest with neighbouring countries. Many major companies have distribution centres and factories in Hungary, with Audi, Mercedes-Benz, Opel and Suzuki producing over 600,000 cars a year in the country. Kossuth explained: “They have to order the
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parts for the cars so they are generating air cargo on the import.” Companies are spending a lot of money expanding their presence in Hungary, with Mercedes-Benz doubling its facility 60 kilometres from Budapest, and Audi has the largest car engine factory in the world based in Hungary. There are other major companies based in Hungary, including Samsung, which is opening a third factory, investing over €300 million in a battery factory for electric vehicles. Added to the fact that major pharma companies have a presence in Hungary, producing high-end biotechnology medical products, meaning imports and exports are well balanced, at 52 per cent for the former and 48 per cent for the latter in 2016. He says this is important for freighters and cargo operators, and adds: “All the big freight forwarders are present in our country, they are looking for direct solutions rather than trucking 12, 16 or 20 hours to Western Europe. They like Budapest offering a nice price and service and can use direct flights instead of extra trucking with extra costs and time.” Kossuth compares cargo to a stream, it will find the right way and he wants the right way to end up in Budapest. He added: “If there are obstacles or problems it goes somewhere else, it will always find the right way. We want to be the right way for cargo in Budapest and create an environment that is attractive for cargo. This will bring the volumes and opportunities to grow.”
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ISRAEL Miami belly route added by national carrier EL AL Israel Airlines
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argo into and out of Israel is set to be given a boost as EL AL Israel Airlines is to start the only Miami to Tel Aviv nonstop bellyhold service from November with three weekly flights using a widebody Boeing 777-200 aircraft. Miami International Airport (MIA) will be the first EL AL destination in Florida and the airline’s fifth route in the US and it is sixth international belly airline to schedule a service launch into the Miami market this year. Others have
included Mexican carrier Volaris to Guadalajara and Mexico City on 1 February, WOW air to Reykjavík, Iceland on April 5, while Aer Lingus will start flights to Dublin, Ireland on 1 September and SAS will begin weekly service to Stockholm, Sweden on 29 October. EL AL Israel Airlines president and chief executive officer, David Maimon says: “This decision is part and parcel of the strategy in which we recognise the importance of trans-Atlantic routes and our desire to expand EL AL’s presence in North America. “This new gateway city in the USA will help ensure that as the national airline, EL AL continues to be the leading airline for travel to Israel, offering the most nonstops.” Miami-Dade aviation director, Emilio T. González adds: “In our efforts to make MIA a
truly global gateway, Israel has always been one of our top strategic targets because of its unique
and historically significant global location, and because of its deep cultural ties with Miami.”
Cargo up 6.5% in Q1 at Tel Aviv’s Ben Gurion FREIGHT through Tel Aviv’s Ben Gurion International Airport grew year-on-year (YOY) by 11.3 per cent in March as Israel’s main cargo gateway handled 30,738 tonnes. In the first quarter (Q1) of 2017, the airport handled 80,809 tonnes, a YOY increase of 6.5 per cent, largely down to CAL Cargo
Airlines and EL AL Israel Airlines. Much of the growth has been achieved through the rising number of aircraft movements into and out of Tel Aviv. In March they were up 10.9 per cent to 9,153 and in Q1 they were up 10.2 per cent reaching 25,055.
Norway seafood service started by CAL
CAL Cargo Airlines launched a new weekly Boeing 747-400 Freighter service from Oslo Airport to Tel Aviv’s Ben Gurion International Airport from 16 May. This new route is mainly to service the Norwegian seafood industry, and it leaves Norway every Tuesday. CAL which has its main hub at Liege Airport in Belgium as well as in Tel Aviv - operates a fleet of nose-loading 747 freighters on routes in Europe and into the US. CAL operates three Boeing 747F and has its main cargo handling gateway at its Liege Air Cargo Handling Services (LACHS) facility. CAL chairman, Offer Gilboa says: “We are
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very pleased with the opening of the new route and are confident that this will be a great success that will strengthen the existing relationship with the local fish market.” Avinor is the operator of Oslo and director of cargo, Martin Langaas says: “Israel is one of the greatest destinations for air-freighted seafood from Norway, and Tel Aviv will be the tenth largest airport for airfreight from Oslo Airport. This route will cover a significant void in our global demand for capacity.” He says the new CAL cargo route will be able to service Norwegian seafood at an export value of approximately a quarter of a billion NOK annually ($33 million).
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NEWSWEEK Pakistan e-commerce given boost Forwarders on automation path
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libaba has signed a memorandum of understanding (MoU) with the Trade Development Authority of Pakistan (TDAP) to grow the e-commerce sector in Pakistan, which is set to give the airfreight sector a boost. Executive chairman, Jack Ma and Pakistan PM Nawaz Sharif penned the MoU during PM Sharif’s visit to the Alibaba Headquarters in Hangzhou, China. Alibaba, Ant Financial, and TDAP have agreed to foster growth of worldwide exports of products by small and medium sized enterprises (SMEs) in Pakistan through e-commerce. Online and offline training programs for the SMEs will also be conducted by Alibaba in a bid to assist SMEs with on-boarding on to Alibaba’s platforms and optimising exports through e-commerce. Ma says: “With the globalisation of e-commerce, developing countries are well-placed to
support the growth of their small and medium enterprises and to seize opportunities which can help bolster their economies. “E-commerce has been established for developing countries and for SMEs. Pakistan has seen significant progress in recent years and we look forward to working together with TDAP to further enhance the potential of their SMEs through the signing of this MoU.”
A survey by Freightos has found 75 per cent of freight forwarders predict their industry in five years time will soon be running like personal banking – with high automation augmented by the personal touch. The online freight booking portal’s report on the state of service differentiation in the era of digital freight surveyed nearly 70 global freight forwarders. Forwarders believe processes will be largely automated, although there will be exceptions when they will have to get actively involved in shipments and winning quotes. They suggested beyond just the process flow, much of the physical movement of goods will also be automated by technology like automated stowage and self-driving forklifts and anticipate that customer service will become a more important factor in
provider selection, thus eroding price’s role as the main decision driver for executives. Freightos chief executive officer, Dr. Zvi Schreiber (pictured below) says: “Freight digitalisation is inevitable. Prudent forwarders see this and are preparing for it, looking at what benefits it will bring. “Those forwarders intent on providing a good service have a lot to gain from digitalisation. “Far from the threat it was once perceived to be, it may be their best bet for future proofing their business.”
Second aircraft for Sky Gates
AFTER launching services between Russia, Europe and the Far East at the end of last year Sky Gates Cargo Airlines is going to increase their freighter fleet with another Boeing 747-400 Freighter. Senior vice president, Nidjat Babayev, responsible for the commercial development, says the next aircraft is going to be delivered by mid-June. It will be the carrier’s second aircraft. The Boeing 747-400F is an ex-Cathay Pacific aircraft which is currently operated by Silk Way West Airlines who is the partner airline of Sky Gates. Sky Gates is a Russian all-cargo airline with its European Hub in Maastricht serving Moscow and Novosibirsk on scheduled bases to and from The Far East. Babayev explains: “As a startup carrier we are happy to pursue our strategy in increasing our fleet step-by-step. After having received the 2nd aircraft, the planning of a 3rd 400F will start. “We are motivated by the support of our customers and we are convinced of the huge potential The Russian air cargo market will offer to Sky Gates. Not only we do see high numbers of flown hours on our 1st aircraft, we already do have commitments on the 2nd aircraft.” “We can expect further exiting news on our development as we do plan an integrated approach towards the Russian air cargo market in the future,” Babayev adds.
Pharma product for EgyptAir
EGYPTAIR Cargo is to launch a pharmaceuticals product this summer using passive containers from va-Q-tec’s passive container rental service. The two companies sealed the deal at Air Cargo Europe in Munich earlier this month. The North African carrier has signed a deal which will it use temperature-controlled solutions for six temperature ranges from -70 degrees Celsius to +25 degrees Celsius in five sizes. EgyptAir Cargo’s hub is in Cairo and it says va-Q-tec’s passive container rental service will enable deviation-free transportation of temperature-sensitive pharmaceuticals around the globe to over 70 destinations.