The weekly newspaper for air cargo professionals No. 988
2 July 2018
Heathrow faces drastic warehouse shortage
Heathrow expansion clears parliament
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he UK’s Parliament has said yes to expanding Heathrow Airport, with 415 members of parliament supporting a third runway at the London airport. Following a vote in the House of Commons on Monday 25 June, the government won the vote by a majority of 296, with Conservative MPs under orders to support the government though eight voted against and Foreign Secretary Boris Johnson, who is opposed to a third runway was out of the country. Labour MPs were given a free vote with 119 supporting expansion while 96, including party leader Jeremy Corbyn, shadow chancellor John McDonnell, shadow defence secretary Emily Thornberry and shadow home secretary Diane Abbott voting against expansion. Ahead of the vote, transport secretary Chris Grayling said the expansion would
THE BIG INTERVIEW WITH ... HACTL’S WILSON KWONG
be governed by five key pledges: no cost to taxpayers; economic boost to the country with benefits of up to £74 billion; guaranteed benefits for the whole of the UK with 15 per cent of slots for domestic routes; environmental protection built in, meeting air quality obligations and a ban on scheduled night flights; and making pledges legally enforceable with punishments of unlimited fines or grounded aircraft if promises are broken. The move has been welcomed by the industry, with the Confederation of British Industry (CBI) director general, Carolyn Fairbairn describing it as a “truly historic decision” that will “lift prosperity across the country”. She says: “As the UK forges a new path to trade, we must also make the best use of existing runways in regions across the country. A truly global Britain will need
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increased connections and routes from the whole of the UK, now and for the future.” Heathrow Airport will now prepare an application for development consent, which if granted should mean construction starts in 2021 with the new runway opening in 2026. Speaking after the vote, British International Freight Association (BIFA) director General said Robert Keen: “Detailed plans will still need to be drawn up, and will again have to go out for public consultation. There is talk of several local authorities around Heathrow mounting a legal challenge, as well as a judicial review. Separate reviews of flight paths and airspace are also required. “Each new hurdle that appears will only increase delays further and the chance of another political volte-face is ever present.” He adds: “I hope all concerned move quickly to maintain the momentum now that this crucial hurdle has been cleared.”
KEEPING IT SIMPLE IS THE KEY TO SUCCESS
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COMING TOGETHER FOR CARGO
London Heathrow faces a drastic shortage of industrial land with the coming of the third runway, a major property agent is warning. This week, MPs approved the new runway for the major UK hub. Canada-based global commercial real estate services organisation Colliers International’s head of industrial and logistics Len Rosso warns that the resulting increased traffic and business around Heathrow could drive up industrial rents near the airport even higher. “Industrial land values and rents are already at record highs around Heathrow, well in excess of £3.5 million per acre and £16 per square foot, respectively,” he says. “The positive outcome from Monday’s vote on a third runway has removed any uncertainty regarding development and it is likely to help propel demand and rents to even more stratospheric levels as occupiers adapt to the increased traffic flowing through the airport,” he continues. “I have deep concerns that the industrial sector will quickly find itself incredibly challenged by the severe lack of suitable land and the dearth of speculative space in the development pipeline.” Rosso says that in the face of increased demand, landlords may look again at the possibility of two storey warehouse units. However, the industry was slow to take to SEGRO’s X2, a two-storey warehouse development close to the southern runway. Another possibility is creating warehouse space underground, such as that planned at Rectory Park in Hounslow, but Rosso adds the costs are significant and the market appetite for this type of space hasn’t yet been tested. “We need to find a way to ease the development pipeline pressures and I urge local councils and planners to work closely with industry to deliver a smart and strategic industrial development plan around Heathrow,” Rosso adds. This could entail reassessing nearby green belt land which has “strong potential” to be converted for industrial use.
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THE LAND OF RISING AIR CARGO VOLUMES
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Saffron powers Kabul - Jeddah flights
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new airfreight route between Kabul and Jeddah was launched on Monday June 25, private sector sources in the Afghan capital have told Air Cargo Week. Officials at Afghanistan’s Chamber of Commerce and Industry said the flights had started but declined to confirm details appearing in local news agencies. The Tolo news agency reported the first flight, which was shown on the Tolo TV channel, transported 500 kilogrammes of saffron to Saudi Arabia. The flight is part of a much under-reported emerging trade, landlocked Afghanistan using air freight and air corridors or AFGs to boost its trade figures. Giving this a twist neighbouring Pakistan sometimes closes its border at short notice – further disrupting the overland routes. “Afghanistan has earned $51 million since June last year, when the first air freight route was launched between Kabul and Delhi,” Tolo reported. “Since then, exports, air freighted out of the country, have increased considerably.” officials said. Last year saw two air corridors between Afghanistan and India. These were followed by another to Kazakhstan and then to Turkey, with Saudi being the fifth route. More are planned. “We are supposed to finalise another memorandum of under-
Air New Zealand fined for cargo price fixing
THE Australian Federal Court has ordered Air New Zealand (Air NZ) to pay A$15 million in penalties after legal action by the ACCC against a global air cargo cartel four years after it initially dismissed the case against the airline. The Court found Air NZ made and gave effect to agreements with other airlines to fix the price of fuel and insurance surcharges on airfreight services from Hong Kong, and insurance and security charges from Singapore, to various locations, including Australian airports, between 2002 and 2007. “These illegal price fixing agreements unfairly reduced competition for the transport cost for goods flown into Australia,”
Australian Competition and Consumer Commission (ACCC) commissioner Sarah Court says. The Court ordered Air NZ to pay a pecuniary penalty of A$11.5 million for price fixing in relation to fuel surcharges imposed for cargo from Hong Kong to Australia. An additional A$3.5 million penalty is payable for price fixing in relation to the insurance and security surcharge from Singapore to Australia. “This decision sends a strong warning to overseas and domestic operators that the ACCC can and will continue to defend competition and the rights of Australian customers and businesses by taking action against anti-competitive conduct,” Court says. Since the ACCC first launched its investigation into the air cargo cartel in 2006, penalties totalling A$113.5 million have been imposed against 14 airlines. “Our efforts over the last decade and these significant penalties make clear the ACCC commitment to tackling cartels,”Court adds. Air NZ has also agreed to pay A$2 million towards the ACCC’s legal costs. The penalty hearing against the 15th airline, PT Garuda Indonesia Ltd, was heard before Justice Perram this week. Judgment in that matter has been reserved.
LATAM extends European network to Lisbon and Munich
LATAM Cargo is continuing to expand in Europe with new routes to Lisbon and Munich, in addition to connecting northern Chile with Miami. The flights from Sao Paulo Guarulhos Airport in Brazil to Lisbon will begin in September, and the first half of 2019 in the case of Munich, which is still subject to regulatory approval. LATAM Group will offer five weekly flights between Lisbon, Portugal and Guarulhos carrying products from the Iberian Peninsula and the surrounding area to South America in the belly of passenger aircraft. The Munich flights will increase connectivity with the industrial centres of southern Germany, especially the automotive industry, and once approved it will be the second German city and ninth in Europe with direct services to South America.
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LATAM commercial director for USA, Europe and Asia, Gabriel Oliva says: “Maintaining our leadership position in the air cargo market to, from and within Latin America requires being in permanent evolution in order to satisfy our customers’ needs. Accordingly, we are constantly pondering new alternatives to offer premium service, including a reduction of the enroute time of our customers’ cargo.” LATAM Cargo is boosting connectivity with Chile’s northern region with two weekly flights from Miami to Antofagasta and from Antofagasta to Santiago, using a Boeing 767 Freighter with 50 tonnes of cargo capacity. Mining is very important to Chile’s northern region and unmet demand led the company to consider new routes to decrease delivery times. Oliva says: “A direct Miami-Antofagasta and Antofagasta-Santiago link gives us the opportunity to satisfy our customers’ requirements, integrating it to the existing LATAM Cargo network of over 150 destinations. With this new route, we will further contribute to the economic development of the region.” The city of Iquique, located 400 kilometres north of Antofagasta is expected to benefit as it has a customs-free zone that needs a steady supply of offshore products, so connections with Miami will allow it to stock merchandise quicker than before. Oliva says: “We are the air cargo company with the best connectivity between Latin America and the world, and we will continue developing our network to satisfy the needs of our customers.”
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standing with the UAE, which is to do with the first cargo flight to Dubai. In the meantime, we are in the final stages of signing a memorandum of understanding with European Union,” Sameer Rasa, the Head of the Public Relations Office of the Senior Advisor to the President in Banking and Finance told Tolo. Over 100 cargo flights have left Afghanistan in the past year, Rasa’s office said. In total, 2,600 tonnes of dry and fresh fruits, medicinal plants and carpets were exported to India, Kazakhstan and Turkey. Tolo also reported Rasa as saying around 15 tonnes of goods will be transported to Turkey during the first flight.
Silk Way flies urgent aid to Iraq
SILK Way West Airlines has supported the German NGO Wings of Help by flying urgently needed aid supplies to Iraq where more than 23,000 children were awaiting help. A Boeing 747 Freighter departed Frankfurt Hahn Airport on 23 June, loaded with infant food, nappies and rusk, and on 26 June an Ilyushin IL-76 of Silkway Airlines provided a feeder flight from Baku, Azerbaijan to Erbil, Iraq. Silk Way West Airlines president and chief executive officer, Wolfgang Meier says: “We are supporting Wings of Help since a long time and are very proud to be also part of this mission. “Wings Of Help is doing a very important job by providing aid supplies to the refugee camps of Hasan Sham and Dibaga and we are doing our utmost to support them with our knowhow and fleet of cargo aircrafts wherever we can.” Talking about the Ilyushin flight, Meier says: “Despite the fact that such feeders are daily routine for Silkway, these dedicated aid supplies in cooperation with Wings of Help will always remain something special for all of us at Silkway.”
ACW REWIND
TWENTY years ago, our arrival marked a new direction for airfeight. Other publications only had fortnightly or monthly frequencies but we presented the news as it happens, every week.
Opportune arrival of a new weekly Volume 1 Issue 1 1 May 1998 Sir, A letter to welcome your arrival on the air cargo scene at a time of change and challenge in the industry. Shippers’ needs are setting new parameters for time definite services to be available globally. We like to believe that the traditional airfreight industry and its key suppliers are responding. For the past few years, Unisys and companies like us have been leading industry thinking on how shippers’ needs can be met effectively. The industry media have a key role to play in keeping all concerned up to date with developments such as these and in stimulating debate. Your arrival on a weekly basis is opportune and we wish you much success. Hugh Doyle, MD, Unisys Freight Management, Ireland
Air China connects Gatwick with Chengdu
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atwick Airport’s long-haul network continues to grow with Air China launching flights to Chengdu on 3 July, the UK’s only non-stop link to the capital of Sichuan province. Air China will operate three flights a week on Tuesdays, Fridays and Saturdays leaving at 22.00h, and arriving in Chengdu at 15.40h using an Airbus A330-300, providing over 1,500 tonnes of cargo capacity per year. Chengdu is China’s fourth largest city, located in the geographic centre of the country and is developing the country’s largest western transport and logistics hub. This development is boosted by the nation’s ‘Belt and Road’ initiative to stimulate trade and economic growth across Asia and beyond into Europe. The city is also home to the Chengdu Research Base of Giant Panda Breeding, and Sichuan Province is home to around 80 per cent of China’s wild panda population. Gatwick Airport chief commercial officer, Guy Stephenson says: “Chengdu is a strategically important destination and a major logistical hub so this new route – the UK’s only direct flight – opens up a range of opportunities to access markets throughout central
ABC lands in Budapest
SINGAPORE Changi Airport experienced moderate growth in airfreight in May, with a 1.8 per cent yearon-year increase to 180,490 tonnes. So far in 2018 airfreight has grown by 3.4 per cent, handling 872,000 tonnes in the first five months of the year. On 16 May, Changi welcomed LOT Polish Airlines’ inaugural flight from Warsaw, Poland operating on a Boeing 787-8. The airline is operating three flights a week between Warsaw and Singapore, with an additional flight between July and October. and western China, be it by air, road or rail.” He adds: “This new service is Gatwick’s 67th long haul route. Our growing long haul network looks set to play an increasingly important role connecting the UK to global markets at this vital stage in the country’s history.” Air China UK and Ireland general manager, Chen Hongbing says: “We hope to promote the friendly exchanges between the people from our two countries and promote the political, economic and cultural exchanges between the two cities and the two countries.”
Cargo is a fine art
The King and Queen of Spain visit the exhibition, picture credit Casa de S.M. el Rey AIRBRIDGECARGO Airlines has extended its European network with two flights a week to Budapest Airport on Tuesdays and Saturdays. The two Boeing 747 Freighter flights will provide up to 139 tons of capacity, covering the entire cargo catchment area of Budapest, as well as Central and Eastern Europe, and guaranteeing expertise transporting all of types of cargo. AirBridgeCargo general director, Sergey Lazarev says: “Budapest has been expanding at a fast clip, upgrading its facilities, infrastructure, and solutions for freighter carriers and following a cargo-friendly strategy. “Its advantageous central location in Europe makes Budapest Airport a perfect location for carriers operating between Asia and Europe. On top of this, we foresee an upsurge of e-commerce traffic with swelling demand for internet purchases among European consumers.” Budapest Airport chief executive officer, Jost Lammers adds: “Through ABC’s network of more than 30 destinations Hungarian companies producing electronic, automotive, pharmaceutical and other high quality products could reach out to their customers around the world through Moscow. From next year on our cargo partners in Budapest can operate from our brand new Cargo City which will provide 20,000 square metres of warehouse and office space, including for AirBridgeCargo staff.” A launch event was held to mark the first flight, with representatives from the Hungarian government, the local freight forwarding community and media representatives. Hungary’s deputy foreign minister, Levente Magyar emphasised the role Budapest Airport plays in developing aviation connectivity, praising the fact that AirBridgeCargo chose Budapest as its new Central and Eastern European hub for widening its international network.
Quote of the week “There’s nothing wrong if something goes wrong what is wrong is that we don’t share what is going wrong” TIACA chairman, Sebastiaan Scholte
WORLDNEWS
AMERICAN Airlines Cargo has transported priceless Spanish art by masters including Goya and Picasso to San Antonio, Texas for the city’s tri-centennial celebration. The works by El Greco, Velazquez, Goya, Picasso and other masters will be displayed at the San Antonio Museum of Art exhibition, “Spain: 500 Years of Spanish Painting from the Museums of Madrid” from 23 June to 16 September. The exhibition includes more than 40 masterpieces from eight different collections, including the Prado Museum, the Thyssen-Bornemisza Museum and the Reina Sofia Museum in Madrid. Transporting the unique pieces of art required a special level of care as they were not only extremely valuable but are also priceless as cultural artefacts. American Airlines team members partnered with freight forwarding specialists in four countries to ensure the paintings were handled with great care. Due to the value of the artwork, security officials were involved at every stage of the journey including loading and unloading, packaging and processing through Customs.
AIA answers Mercy Ships’ call AIRBRIDGE International Agencies has become the first UK-based air cargo company to partner with Mercy Ships for the charity’s annual Cargo Day initiative. Mercy Ships Cargo Day has been running for two years and is a fundraising campaign that asks the shipping industry to unite on 3 October to donate cargo, commissions, address commissions and individual pledges to Mercy Ships, raising money for medical programmes in countries that the Africa Mercy hospital ship visits. Last year ship owners, charterers, brokers, port agents and inspection companies united to donate more than £500,000 to the charity and Mercy Ships is calling on the air cargo industry to help smash that target in 2018. Airbridge International Agencies (AIA) chief executive officer, Mark Andrew says: “For AIA it just looked like a perfect match to find a charity that is involved in logistics like us. With Mercy Ships, you are giving to an organisation that is actively going out to different places to heal people – be it children or adults – so every day is different.” Andrew says as one of the largest independent cargo GSAs, it represents a number of airlines that can potentially offer airfreight capacity for urgent shipments, and he intends to get the airfreight industry involved in Mercy Ships Cargo Day.
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NIPPON Cargo Airlines has extended the grounding of its fleet, with operations not expected to restart for at least another week. Operations were suspended on 17 June to verify all maintenance records were accurate and complete. At the time the Japanese airline anticipated operations would be suspended for about one week but verifying records has taken longer than expected. AIR Charter Service (ACS) has moved its onboard courier team to a dedicated office next to Frankfurt Airport due to rapid growth. The move comes three years after ACS announced revamping the division and is two years ahead of schedule. ACS Time Critical Manager, Oliver Weigelt says contract numbers grew by more than 50 per cent last year to almost 1,700 jobs, with strong growth continuing in 2018. He says: “Our team here in Frankfurt has grown so quickly that we needed to move from the ACS charter office to a new premises here at the airport sooner than we originally intended. VIETNAMESE start-up airline Bamboo Airways has ordered 20 Boeing 787-9 Dreamliners in a deal worth $5.6 billion, with deliveries starting in April 2020. The announcement was made during a signing ceremony at the US Chamber of Commerce office, witnessed by Vietnam’s deputy prime minister, Voung Dinh Hue, and US Department of Commerce – International Trade Administration assistant secretary for industry analysis, Nazak Nikakhtar. Bamboo Airways is a start-up airline that plans to begin commercial operations in 2019 out of Hanoi, starting flights within Vietnam before moving into Northeast Asian markets including China, Korea and Japan. SWEDEN’s Visby Airport has gone entirely fossil-free after years of focused work including electrification of its vehicles, a switch in fuels and implementation of efficiency measures. Airport operator Swedavia is aiming for entirely fossil-free operations at all ten of its airports by 2020, and Visby has achieved this objective two years ahead of schedule. In 10 years, fossil carbon dioxide emissions at Visby have decreased from 300 tonnes a year to zero due to replacing all vehicles that run on fossil fuel. Energy consumption has fallen and the airport’s energy is provided by green or renewable electricity. Swedavia also buys biofuel for its employees’ travel on official business. SkyCell containers have transported 2.5 tonnes of experimental drugs from London to Baghdad to treat patients suffering from copper poisoning. Copper poisoning is a widespread problem in Iraq due to the burning of electronic waste and plastics, with copper overdoses affecting mental functions, irritating the nerves and nervous system leading to inflammatory conditions such as skin irritations, asthma and depression. In cooperation with the Iraqi Ministry of Health, the experimental drugs, which were temperature sensitive and worth $6.8 million, were delivered to Baghdad in SkyCell containers, successfully completing a difficult logistical challenge, delivering the pharmaceuticals to a hospital in Baghdad. The drugs required a fully controlled cold chain with an unbroken temperature environment between 2-8 degrees Celsius, and any temperature deviations would result in the shipment becoming unusable.
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NEWS
Hong Kong and Paris to strengthen cargo cooperation
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irport Authority Hong Kong and Groupe ADP has signed memoranda of understandings (MoU) to strengthen cooperation between Hong Kong International Airport and Paris Charles de Gaulle Airport. The two MoUs on airport management and aviation development, and cargo development were signed by Airport Authority chief executive officer (CEO), Fred Lam, and Groupe ADP chairman and CEO, Augustin de Romanet at the Paris Air Forum. Under the airport management and aviation development MoU, the two airports will cooperate to improve performance in efficiency, safety, security, quality and environmental protection, and have agreed to enhance network connectivity and share experiences through a staff exchange programme. The cargo MoU aims to strengthen cooperation between the airports as well as Asia and Europe. It targets promoting and facilitating the transport of fast growing cargo segments such as e-commerce, temperature controlled goods as well as luxury products. Both airports will share experience, best practices and infor-
Fred Lam (left) with Augustin de Romanet mation of common interest to enhance safety, security, reliability and efficiency of air cargo development. Lam says: “Through this collaboration, we hope to construct a mutually beneficial partnership that will help both parties continuously enhance airport operations and development in
K+N opens Bogota control centre
Kuehne + Nagel (K+N) has opened its first regional Logistics Control Centre (LCC) for integrated logistics in South America, with the new base located in Bogota, Colombia. The company says following growing demand for integrated logistics and requirements for lean and demand driven supply chains in South and Central America, the LCC was developed to offer digital supply chain management in a shared environment. Based on data analytics and continuous improve-
ment methodologies, the LCC will provide customers tailored solutions focusing on cost efficiency, reduction of supply chain complexity and increased supply chain performance. K+N president of South and Central America, Ingo Goldhammer says: “We are pleased to further enhance our existing partnerships especially with our leading pharma, healthcare and beauty industry customers by an upgraded infrastructure and optimised set-up of services and customer-related teams.”
various areas. “I believe that by sharing experiences and working together hand in hand, we can offer even better airport experiences and services to our respective passengers and the logistics sectors, as well as elevate the competitiveness of our airports.” De Romanet adds: “By sharing their experiences and best practices as well as exchanging staff, we will definitely increase our performances in terms of quality of service, productivity, safety, security and environment protection. “We are also very proud to partner with HKIA on the development of aviation industry talents and to explore new opportunity in Mainland China. On cargo, each airport will benefit for best practices and from developments of high value activities such as luxury products and e-commerce.” There are on average 44 flights a week between Hong Kong and Paris, which carried more than 480,000 passengers and almost 40,000 tonnes of cargo between the two cities. Both the airports have attained IATA CEIV Pharma certification, a global standard on competency and preparedness in handling pharmaceuticals.
IAG Cargo flies Assyrian treasures
IAG Cargo will be the logistics partner for the BP exhibition ‘I am Ashurbanipal: king of the world, king of Assyria’ at the British Museum. The carrier will transport a number of important loans from museums across Europe with its Secure service for the exhibition, which will be open to the public from 8 November 2018 to 24 February 2019. The exhibition will immerse visitors in the ancient world of Assyria through the life and legacy of King Ashurbanipal, telling his remarkable story through the narratives recorded on his palace sculptures, the texts that survive from his library, and from the wealth of objects discovered by archaeologists working in the region. Over 200 objects from all corners of King Ashurbanipal’s empire will be brought together, offering visitors the chance to see objects that have never travelled to the UK before or been on display anywhere for the last 20 years. IAG Cargo chief executive officer, Lynne Embleton says: “This landmark exhibition builds on the work we have completed previously with the British Museum, marking three successful years of partnership. “The extraordinary Assyrian collection dates as far back as 7th century BC and it’s the responsibility of our ‘Secure’ product team to ensure these important objects and artworks arrive safely in London.” British Museum director, Hartwig Fischer adds: “I am delighted to announce this new exhibition and bring visitors face to face with a king whose reign shaped the history of the an-
cient world. “I would like to express my gratitude to IAG Cargo who are safely transporting some of the incredible loan objects to London. Each of our exhibitions take a number of years to plan so having a logistics partner to provide secure transportation is absolutely critical.” The British Museum’s collection of Assyrian treasures will be complemented by loans from around the world including object artworks from the Museo Gregoriano Etrusco, Musei Vaticani, Vatican City; and the Cyprus Museum in Nicosia.
Dear editor, I really must say ... RE: Infrastructure requires a major upgrade, Issue 986 Dear Sir, OK, I’ll bite! Everyone agrees there’s a need for more modern infrastructure - me included - but I don’t hear much agreement on modern processes or technology. Why? I don’t believe building is the silver bullet - it will help but it won’t solve it. It’s exciting to see dnata planning for expansion and I look forward to hearing about the other operators. All the major hubs in Europe experienced problems last peak so it’s not a Heathrow only
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issue. We all need to develop new ways of working that improve efficiency and predictability. Working smarter and more collaboratively will deliver far more than just building on its own. Just my opinion so I’ll don my ‘tin hat’ again. Nick Platts Head of Cargo London Heathrow Airport
ary s r e v i A nn
The big interview with ... Hactl’s Wilson Kwong Having said that, although commodities may change, the underlying justifications for using airfreight – usually urgency, value, security or perishability - are unlikely to have changed. “Going on long-term historic growth patterns, and recognising more recent factors such as increasing consumer wealth within Asia, I think it is reasonable to suggest that cargo will maintain growth at its current rate, or possibly faster, provided the airport’s continuing growth is still supported by all stakeholders.” Anyone speaking with Wilson will know fairly quickly that he is as passionate about HACTL’s workforce as he is about its bottom line performance. And this does not look like it will change over the next 20 years. He says: “We would be very happy if Hactl continued to provide full-time, salaried and secure employment for similar numbers to those of today - around 2,400. With the realistic prospect of continuing growth in cargo throughput, that would certainly remain viable.
For 20 years, Hactl has operated at Hong Kong International Airport (HKIA), which, like ACW, is celebrating its 20th anniversary this year. Air Cargo Week caught up with Hactl chief executive Wilson Kwong to hear his thoughts on the next 20 years for airfreight in Hong Kong.
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he roots of Hong Kong Air Cargo Terminals Limited (Hactl) go back over 40 years. For around half its existence, it served Hong Kong Kai Tak International Airport until it moved to the new Hong Kong International Airport in 1998. HACTL was already more than 20 years old when it undertook that move as Air Cargo Week was being launched in 1998. Created under British rule in the colony to operate at the older Hong Kong Kai Tak International Airport, Hactl made the move in July 1998 to the new HKIA. Though recently installed in his position at Hactl, Kwong takes strategic view of whether the handler will still be in existence in 20 more years from now. He says: “Hactl has already enjoyed a distinguished 42-year history, and has successfully made the transition from being the sole operator in Hong Kong to a strong player in what is now a highly competitive, liberalised handling market. We are confident that our longstanding obsession with quality and performance, supported by continuing investment in infrastructure, systems and people, will ensure we can look forward to a long and successful future.”
Having recently assumed his chief executive role at Hactl, the Hong Kong native is keen that he remains in the position is currently enjoying for as long as possible, even potentially past 2038. He says: “I was delighted to accept the post as Hactl’s chief executive, which I view as a tremendous privilege. I would be very happy to serve out my time with the company, so long as that is what my customers, shareholders and colleagues want!” Should he still be in position then, he is convinced that airfreight in 2038 will be similar to that of 2018. He says: “I think it will still be the vital global trading tool it is today, albeit with considerable changes to geographic markets, trade flow patterns, and commodities.”
Accurate reflection
Whether the products moved by air will change, he says: “If you had asked that question twenty years ago, I doubt the answer would have been an accurate reflection of today’s reality. Technological change is constantly accelerating, so it’s hard to envisage what will be moving in just five years from now, let alone twenty.
Recruitment issues
“However, the reality is that recruitment at Chek Lap Kok continues to be challenging due to the low unemployment situation in Hong Kong. This could compel us to increase our reliance on automation, but there will always be a role for experienced, caring staff to drive and innovate our business, and maintain and enhance our service standards.” At the same time, Kwong is confident that he can build on a contended workforce to reach out of the Special Administrative Region should the market be there for Hactl’s services. He says: “Hactl will continue to examine all opportunities to expand its business, in terms both of scope of activities, and geographical location. We are interested in any such opportunity that enables us to develop a sustainable business that benefits our shareholders, our customers and our work colleagues. “SuperTerminal 1 has provided a strong base to develop our business over the past twenty years, largely because its design was so forward-thinking. “Even today, our terminal is still regarded as state-of-theart, thanks in part to a programme of perpetual investment in upgrades. The most likely driver for significant development would be when we foresee saturation of capacity, which is currently some years away. “Nearer that time, we will certainly review our options, with reference to space availability and costs, and any new technologies that may enable better use of our existing footprint. One thing is for sure: Hactl maintains a long-term commitment to being the handler of choice in Hong Kong, and will support that ambition as we always have done since 1976 with whatever investment is necessary.”
Take a trip down memory lane with ACW’s 20th anniversary supplement
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ony Blair had been British prime minister for just one year when Air Cargo Week was launched. While the two events are not directly linked, both speak of optimism about the future. Blair would go on for a decade as prime minister before honouring a pledge to step down; Air Cargo Week is still with us. Twenty years after its launch, Air Cargo Week is the only weekly newspaper for the air cargo professional. In this issue, we have included a special souvenir supplement, twenty pages in length to mark our twentieth anniversary. This year also sees our 1,000th edition, coming out on September 24, that marks the anniversary of our regular publication in September, 1998. In the supplement, you will enjoy features that look at the world into which Air Cargo Week was launched, memories of the time and a range of features that call to mind the launch and many events since. Take a look and memories will surely be stirred. What was the mystery
of flight 111? How many names from the past can you recall from TIACA’s Hall of Fame? Did you ever work for Emery Worldwide, Affretair or MK Airlines? They are there in our section of grounded carriers. In 1998, an airport was opened in Hong Kong to great applause, while in Washington, DC an airport was renamed. These are just some of the contents of our ACW 20th Anniversary Supplement. If this is not your copy of ACW or you are missing the supplement, just contact the editor, James Graham, james.graham@ azurainternatuonal.com and he will be glad to send you a copy.
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PHARMACEUTICALS
Keeping it simple is the key to success
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lear and precise product messaging is one of the keys behind Virgin Atlantic Cargo’s success in pharma, according to managing director Dominic Kennedy, writes Neil Madden. “We know from speaking to our customers that they consider our products to be clear and simple, and that’s always been our aim,” Kennedy tells Air Cargo Week. “Everything we do is based on what our customers tell us they need. There’s no need to overcomplicate products because customers are very knowledgeable and they just have to be confident that you will deliver what you promise, irrespective of the product or service they’re buying.” Pharma has been one of the fastest growing markets for the carrier along with e-commerce shipments.
The Pharmaceutical and Life Sciences product offers passive or active temperature control, but these can also be tailored to fit with the carrier’s ‘Just Ride’ and ‘Must Ride’ services. “In the case of pharma, we are certainly benefiting from the opening of our new Pharma Zone at London Heathrow and we also recently received our GDP (good distribution practice) compliance for our global headquarters and Pharma Zone,” Kennedy says. “So, we are expecting another strong year of pharma growth in 2018.” The 4,000 square foot pharma zone opened in October 2017 and provides two walk-in pods capable of maintaining 2-8°C (COL) and 15-25°C (CRT) temperature ranges for loose pharma shipments, along with temperature-controlled storage for 24 pallets (CRT + COL), located high
above the warehouse floor in the ETV system to ensure the security and integrity of the cargo. Along with 10 charging points for active containers, the facility has a segregated area dedicated to pharma handling and pallet building.
Opening doors
A designated door for pharma shipments is designed to speed their flow through the warehouse and reduce the time products spend outside of a temperature-controlled environment. “Our network and frequency of services is another key factor in the growth of both pharma and e-commerce,” Kennedy adds. “The biggest market for pharma products is transatlantic and, along with our joint-venture partner Delta Cargo, we now provide around a quarter of transatlantic cargo capacity. “We are also seeing more pharma shipments on our direct services to other markets too, such as India and China, and we have increased the choice of temperature-controlled ‘active’ cargo containers we provide to give our customers
Kennedy
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more choice. For example, at the start of 2018, we were the first UK airline to approve the new CSafe RAP container for higher volume pharma shipments.”
Frequent services
As a belly hold-only carrier Virgin can offer high frequencies of direct services to and from major markets such as the US, China, Hong Kong, India, Africa and the Middle East, says Kennedy. “We also sell the belly hold capacity on Virgin Australia’s long haul network between Sydney, Brisbane and Melbourne and Los Angeles, Melbourne-Hong Kong and from July, the airline’s new Sydney-Hong Kong services,” he points out. “Demand for cargo capacity, especially ex-UK, was exceptional in the Q4 2017 peak and our load factors continue to be well above the industry average. The level of demand towards the end of last year certainly put us and our freight forwarder customers under great pressure but we had learned a lot from our experience of managing the peak at the end of 2016 and we worked closely with our customers to ensure we moved their cargo as they wanted us to.”
PHARMACEUTICALS
New products, same industry leading service
B
y acting as the launch customer of CSafe Global’s new RAP e-container, Air France KLM Martinair Cargo (AFKLMP) will give customers greater flexibility when moving pharmaceuticals. The CSafe RAP has a number of features including ThermoCor VIP insulation, operational capabilities between -30 and +54°C, the largest RAP payload in the industry and automated data logging. Other features include user-selectable temperatures between +4 and 25°C and a control panel similar to the CSafe RKN. Speaking to Air Cargo Week, CSafe Global strategic sales director and key account director, Sebastien Berrous says: “The new CSafe RAP offers the same industry-leading technology and innovation seen with the proven CSafe RKN, but with a larger cargo capacity that offers increased efficiencies for both airlines and shippers.” He adds: “The superior performance characteristics of the CSafe RAP ensure that payload temperatures are kept precisely where they need to be, thus providing piece of mind to all partners across the supply chain.” Customers will appreciate the capacity of the CSafe RAP, with Berrous pointing out that it can accommodate up to five Euro pallets or four US pallets, meaning customers no longer need to use multiple RKNs. AFKLMP already offers a number of cool chain solutions, with active and passive containers from CSafe, va-Q-tec, Envirotainer and DoKaSch. The airline’s head of product and development pharma logis-
Fabrice Panza (left) with Sebastien Berrous tics, Fabrice Panza says at busy times there can be shortage of containers. He tells Air Cargo Week: “One reason to partner with CSafe Global is we have a very large, competitive backup to the market. We are very happy to have the RAP in the fleet because it is the latest state-of-the-art products. It is important for the pharma industry that you have a very reliable product.” Panza expects the new RAPs to be popular with the bioscience
sector, carrying products including vaccines and insulin. The data the RAP provides can also help shippers to understand their product. Panza explains: “For shippers, from a quality point of view it lets them study the product, its validity and stability depending on conditions, humidity and pressure. They can see how the drugs will react under the different variables.” AFKLMP gained IATA CEIV Pharma certification in 2016 for both its hubs in Paris and Amsterdam, and all related airline processes. The airline group will be up for re-certification in 2019, in the two years since AFKLMP was awarded its certificate, numerous other companies have undergone the process. Panza says: “This proves what we saw as the market’s expectations of the industry for pharma and air cargo.” Cold chain volume growth shows no signs of slowing down, with Berrous saying: “CSafe Global, being the only cold-chain packaging provider that offers both active and passive solutions, will work to apply the resources required to ensure that our partners have the transportation solutions they need and desire for their specific needs.”
The benefits of collaboration AMSTERDAM Schiphol Airport is often cited as model for transparency and competence in handling pharma shipments. In 2016, this competence was given concrete form with the setting up of Pharma Gateway Amsterdam (PGA), an alliance between Schiphol Group, Air Cargo Netherlands and 23 pharma logistics companies with the aim of establishing Schiphol as the best European pharma hub. The purpose is to retain, enhance and attract pharma business to the airport by offering shippers a closed supply chain that is IATA CEIV Pharma certified, and/or equally qualified programmes focused on airfreight. Of the 23 logistics partners in PGA, some 90 per cent of the members are CEIV certified. The others are in the process of gaining certification and PGA hopes to have 100 per cent certified membership by the end of this year. In fact, some are already in the process of CEIV recertification, which is obligatory every three years. The pharmaceutical business has been a focal point for Schiphol for some years and will remain so, explains Schiphol director business development cargo Ferry van der Ent. “We communicate, collaborate and co-operate with all players within the cargo community,” van der Ent says. “We have open dialogue and common interests to make sure that pharma remains high on the priority list. It is very important that all parties are IATA CEIV certified to maintain high quality standards.” Some four per cent of Schiphol’s total cargo volume was stated as pharma shipments in 2017. That was 14 per cent higher compared with 2016 in volume terms and 13 per cent up by value. “Within the air cargo chain pharma is very valuable and important,” van der Ent continues. “Pharmaceuticals generally are constantly growing due to socio-economic developments. “Mid-value pharma shipments will gradually migrate to ocean logistics leaving high-end products to rely on air transport. Therefore our prediction is that the average value of pharma by air will increase more rapidly compared with volume. So we expect growth, but slow growth.” As previously reported in Air Cargo Week, Schiphol is implementing a number of initiatives, including technology tools, to match demand for shipments with available belly space. The airport believes that pharma is well suited to benefit from these initiatives, as pharma shipments are generally smaller in size. Collaboration is key, adds van der Ent. PGA works with the different members to have “the best qualified and transparent air cargo chain”. “However, our members themselves continuously invest in staff training and new facilities,” he says.
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ASSOCIATIONS
Coming together for cargo
A
ccording to the Oxford English Dictionary an association is “a group of people organised for a joint purpose” and in virtually no other industry is this more important than in air cargo, writes Stuart Flitton. While there are several bodies working in individual sectors of airfreight, The International Air Cargo Association (TIACA) is the only one that represents the whole supply chain. TIACA’s roots go back to October 1962 when the Society of Automotive Scholte Engineers in the US
held the first International Air Cargo Forum in Atlanta. The focus was on stimulating interest in air cargo, as well as building common standards in equipment, ground handling and procedures. This led to the formation of the International Air Cargo Forum Association in 1990 and TIACA four years later. Sebastiaan Scholte, who became the association chairman in October last year, said that TIACA’s only objective was to make the industry better. “We are the neutral oil that flows through the machine. We can be the facilitator, the initiator,” Scholte says. TIACA has about 300 members, of which roughly 20 per cent are airports, another 20 per cent airlines and the rest come from all other parts of the industry, including giants such as
Boeing to forwarders, shippers, general sales agents, ground handlers, logistics companies, customs brokers, consultants, educational institutions, equipment manufacturers, IT systems providers, and screening technology developers. Scholte says that since he became chairman, TIACA has redefined its strategy and that one of the main goals of his two-year term is to improve transparency and visibility of the supply chain. One method of achieving this is the online Cargo Service Quality (CSQ) tool, which is currently being rolled out.
Open platform
The aim is to create an open platform for customer ratings of services across the supply chain from forwarders to airports to ground handlers. Participants in the CSQ programme are able to fill out an online form to assess the quality of airfreight services either every quarter or every six months. These will then be published twice a year in TIACA Times. During the programme’s pilot phase, assessments are focusing on airports and cargo terminal operators before being expanded to other segments of the supply chain. “We have spoken to a lot of shippers and they say there is a lack of visibility and transparency. Our aim is that it will become a quality benchmark. If you get a good CSQ rating it says something about your company,” Scholte says. He says that part of the purpose of CSQ was to counteract the tendency to try to mask mistakes or mishaps in the process. “There’s nothing wrong if something goes
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wrong - what is wrong is that we don’t share what is going wrong. If we do share, then the other parties can react adequately and readjust.” TIACA’s now biennial Air Cargo Forum is one of the biggest gatherings in the industry. It circulates across the continents: in 2014 the event was held in Seoul, South Korea, the 2016 one in Paris, and in 2020 it will be in Miami.
Toronto here we come
The 2018 ACF is being held in Toronto (pictured below) in October and TIACA general-secretary Vladimir Zubkov, says the event will be attended by up to 4,000 delegates. This year, the TIACA AGM will take place during the ACF and there will also be the simultaneous Multimodal Americas and Supply Chain Americas conferences. “The ACF used to be the only game in town. We were the pioneers of this event. Now there are many more events in air cargo industry, and these all help to contribute to the development of the industry,” Zubkov says. TIACA sees other organisations and events not as competitors but as complementary to its own activities and it is keen to engage with them. Zubkov says the wide breadth of TIACA membership was important because all are treated equal with the smaller players being able to network with industry leaders. This gives bigger players direct access to and frequent contacts with forwarders and handling companies. “It’s all mutual interest.”
ASSOCIATIONS
Industry must drive own cool chain standards
T
he air cargo community should drive its own standards for perishables and not wait for other groups and agencies to supply them, says Cool Chain Association (CCA) chairman, Stavros Evangelakakis. A lack of accountability is contributing to 1.3 billion tonnes of food being wasted along the supply chain every year, about one third of all food produced, delegates heard at the CCA’s “World Without Food Waste – what can air cargo deliver?” conference in Luxembourg. Collaboration, transparency and data sharing as well as training for perishable growers and better facilities are needed to improve quality in the fragmented and disconnected supply chain, speakers explained at the two-day event. Evangelakakis (pictured fourth from right), who is also global product manager healthcare and perishable at Cargolux, says: “We should aim for quality, we should not wait for other agencies to come up with standards, we should look internally and act now. A standard in perishables should be something akin to the standards in pharmaceuticals, and over the next two years as Chairman I am going to push for that.” He asks: “Are you ready for collaboration?” Keynote speaker Philippe Schuler, a food waste prevention consultant and CCA researcher in perishable cool chains says the information needed for the supply chain to make improvements is already there. He says: “The information needs to be made accessible. When we all start to have access to the data, we can start to solve the problems.” Schuler was commissioned to undertake a “farm to fork” study of papayas from Brazil to Europe looking into waste in perishable logistics, which is called “Papayas – studying waste in perishable logistics” and is available to CCA members. COLEACP director of operations, Jeremy Knops says collaboration could drive change and the supply chain is only part of the issue. He says: “By showing more producers practical examples, working with leaders, for example, from the transport industry, we can make a very positive impact. The key word is to look for partnerships, this has to be a joint effort, not only because of the waste, but because of the potential for agriculture to go one way or another.” The CCA held its Annual General Meeting as part of the event, formally welcoming Perishable Products Export Control Board general manager, Vijan Chetty (pictured left) as a board member, and formally electing Air France KLM Cargo and Martinair Cargo global head of perishables director verticals, Eric Mauroux (pictured third left) as treasurer. Xtreme Technology chief executive officer (CEO), Edwin Kalischnig (pictured second left) was re-elected secretary general. Brussels Airport Company cargo and product development manager, Nathan de Valck (pictured right) and Jan de Rijk Logistics CEO, Sebastiaan Scholte stepped (pictured fourth left) down from the board.
Blockchain makes its arrival
ASSOCIATIONS spring up when companies in regions decide to work together or new developments occur. One of the latest initiatives is blockchain, the open-source encrypted database that is shared and updated automatically between companies, creating a permanent and secure record of transactions. Blockchain in Transport Alliance (BiTA), a growing association of logistics and other companies involved in cargo, was founded in August 2017. BiTA promotes the development and adoption of blockchain applications in the trucking, transportation and logistics industries, including establishing industry-wide standards. Members include truckload, LTL, and parcel carriers, as well as shippers, tech startups and incumbents, insurance companies, law firms, and other industry participants who have an interest in integrating blockchain technology into their organisations.
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JAPAN
The land of rising air cargo volumes
A
n improving Japanese economy as well as rising global demand for electronics, automotive parts and even salmon is helping the airfreight market leap forward, writes David Craik. Lufthansa has recorded a 27 per cent increase in
capacity to Japan in the last 12 to 18 months both in freighter and belly to destinations including Tokyo Narita and Nagoya. It has also launched two new weekly freighter movements to Osaka. Lufthansa said the “metal neutral” strategic partnership with All Nippon Airways has boosted performance. “With ANA we are jointly selling perishable and pharmaceutical capacity and customers have really responded to our services,” said Lufthansa director of sales and handling, Michael Vorwerk. “Market demand has also picked up in the last two years both to and from Japan. It was initially driven by capacity issues in ocean freight which meant that some new commodities such as rubber for car tyres came over to airfreight. Demand to fill inventories
in Europe, especially Germany, has also led to more movements of machinery and automotive parts such as gear boxes. We have also seen increasing demand from South America for car manufacturing.”
Fashion imports
On the imports side Vorwerk states that more demand from Japanese consumers for high-fashion brands from Europe, as well as consumer goods including wine, has helped. So, what of All Nippon Airways (ANA)? How are they doing? Its 2017 figures were mixed. The group recorded a 26.5 per cent increase in international air cargo revenues to 118 billion yen and a 4.3 per cent rise in freight carried to 994,000 tonnes. However, revenues from domestic cargo dropped 0.5 per cent to 30.7 billion yen with freight carried down 3.2 per cent to 436,000 tonnes. Concerns facing ANA include striving to improve the load factor and yield in the intra-Asian market as well as President Trumpled ‘trade wars’. “The Japan to Asia and China market is experiencing an oversupply,” ANA executive vice president, Hiroshi Sugiguchi explains. “Although we don’t see any negative impact resulting from global trade at this moment we will pay close attention to trade policies and trends related to industries such as automotive and hi-tech.” ANA expects to see sustainable growth especially in the Asia to North America market in the coming months focusing on next-generation products such as semiconductors and other electronic devices around the Internet Vorwerk of Things, AI and automotive. “Temperature control technology could also create new demand in air freight such as very sensitive pharmaceuticals,” says Sugiguchi. As a result, in March it announced that it is introducing two new Boeing 777 freighters to transport oversized cargo and special items such as aircraft engines, semiconductor manufacturing equipment, lithium batteries, and pharmaceuticals in large quantities. Delivery is scheduled for 2019.
Demanding customers
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Finnair believes overall the Japanese quality of air cargo handling is very high. “Japanese customers expect a lot, they are demanding, and the airports cater to that demand,” says Finnair Cargo managing director, Janne Tarvainen. “There is a culture in place that demands high standards, perfection even. I think that has contributed to our volumes and success too. They understand that we are also sticklers for perfection and attention to detail.” Finnair, which is one of the largest European airlines out of Japan by belly capacity, is continually increasing its volumes to and from the country. It now flies double daily to Tokyo Narita with three new weekly frequencies. Osaka and Nagoya are served daily, and Fukuoka has three weekly frequencies. “We are carrying a lot of consumer electronics and perishables, for example salmon to Japan,” adds Tarvainen. “Demand for fresh high-quality seafood produce from Norway is booming and set to continue growing. This is a huge market and we’re a key player because of our temperature-control expertise seen at our new COOL terminal and the simple fact that the quickest way for seafood to travel from Norway to Asia is through Helsinki. We have some of the fastest times in Europe to Japan and we’ve invested in a new massive €80 million terminal that includes dedicated 3000 square metres of space for perishables in Helsinki.” Other operators are also revelling in Japanese growth. Polar Air Cargo Worldwide has recently announced new Boeing 747 freighter services to Japan from Cincinnati whilst Cargolux has added Narita to its network through a code-share cargo flight agreement with Nippon Cargo Airlines. It sees a new weekly flight between Luxembourg airport and Narita. Nippon Express has recorded a 29.3 per cent rise in international airfreight exports handled in the last 12 months. This was again driven by electronic components, semi-conductor devices, automotive, medical equipment and food.
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