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WORLD AIRPORTS .COM ACW Digital is sponsored by FREIGHTERS.COM
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The weekly newspaper for air cargo professionals Volume: 20
Issue: 43
30 October 2017
Kerr to leave Etihad and become CargoLogicAir CEO
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tihad Cargo senior vice president, David Kerr will takeover as chief executive officer (CEO) of British freighter carrier CargoLogicAir on 1 January next year. On 19 October, it was announced Kerr was leaving Etihad at the end of the year to pursue another opportunity. The UAE carrier itself has appointed Justin Carr (pictured middle) as vice president of cargo commercial. The current CEO of CargoLogicAir is Dmitry Grishin, but the carrier has revealed no details of what is happening to him, although some reports believe he will stay within the Volga-Dnepr Group. CargoLogicAir advisory board chairman, Sir John Holmes says: “David is a highly respected, experienced and well-known air cargo industry executive who will bring new insight into the business and lead CargoLogicAir towards our strategic goal of recognition as one of the leaders in the European airfreight industry.”
Kerr has more than 20 years of experience in the airline sector, holding senior roles for companies in Europe, Asia and the Middle East. In his role of CEO of CargoLogicAir, Kerr will be responsible for the successful implementation of the airline’s strategic development plans, orchestrating the growth of its freighter fleet and its network, with the focus on specialized logistics solutions for different industries. CargoLogicAir has recently started its first UK scheduled Boeing 747-800 Freighter flights to Mexico International Airport from London Stansted
Airport and is also starting a 747-8F scheduled service to Dubai and Hong Kong. The Etihad Aviation Group has itself been undergoing a restructuring and the announcement of Kerr leaving for pastures new and Carr’s appointment comes hot on the heels of Tony Douglas being named last month as group CEO to lead its overhaul. He will join the company in January 2018. Etihad Airways announced in July a massive loss of $1.87 billion for the 2016 financial year, due to falling yields, aircraft impairments and equity investments. This compared to a $103 million profit in the 2015 financial year. The loss included a $808 million charge on assets and financial exposures to equity partners, mainly related to Alitalia and airberlin, which Etihad pulled out of this year. Figures also showed the slowdown in the cargo market in 2016 put increased pressure on cargo revenues and yields, with cargo revenue down from $1 billion to $900 million, though tonnage was marginally up from 591,000 tonnes to 596,000 tonnes. Kerr will lead Etihad until the end of 2017. His successor will be named in the coming months.
TIACA has appointed Jan de Rijk Logistics chief executive officer, Sebastiaan Scholte (pictured left) as its new chairman and Brussels Airport Company head of cargo and logistics, Steven Polmans as vice chairman. Both were welcomed to their new roles at the Annual General Meeting, part of TIACA’s Executive Summit in Miami on 20 October. Scholte was previously vice chairman for two and half years and takes over as chairman from Delhi International Airport head of cargo business, Sanjiv Edward (pictured with Scholte). “TIACA is, and will be, the only organisation covering the whole air cargo supply chain, and in order to stay and become more relevant we will now work on becoming more agile and engaging more with our membership base,” says Scholte.
“There is a need for more transparency and visibility across the supply chain and TIACA can play a role in facilitating this. We can collectively truly make this industry better.” Scholte has worked in the industry for over 20 years, including for Aeromexico and Cargolux before taking over as CEO at Jan de Rijk Logistics in 2010. Polmans (pictured below) has 20 years experience in the airfreight industry and says: “Collaboration and cooperation between all parties in the air cargo supply chain is the only way forward to solve many of today’s issues. “TIACA is the only organisation representing all of those different players, and we are the natural platform to facilitate genuine collaboration and work towards a more innovative and qualitydriven industry.”
Lufthansa Cargo is recovering from a challenging 2016 with the Logistics business segment posting an EBITDA profit of €167 million ($196 million) in the first nine months of 2017. Earnings before interest, tax, depreciation and amortisation (EBITDA) improved by 16,600 per cent from €1 million between January and September 2016, and the third quarter also recovered, growing from €5 million in 2016 to €42 million in 2017. Revenue increased by 18.2 per cent to €1.7 billion due to volumes and prices, and net traffic revenue was up 15.9 per cent to €1.6 billion with all areas of the world registering growth. Lufthansa says the expansion of the Lufthansa Cargo Cool Center is progressing well, and the Road Feeder Service Cool service has been introduced. Two Boeing MD-11Fs held for sale since 2016 were sold, and another decommissioned MD-11F returned to service due to good business performance.
TIACA appoints Scholte and Polmans to key roles
Strong year for Lufthansa
60 SECONDS WITH MIKE STEWART TIACA LOOKS TO RAISE PROFILE OF AIR CARGO ASTRAL TO START TESTING THE FLYOX DRONE FLEXPORT LOOKING TO GROW ITS FOOTPRINT
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Gross profit per ton falls 7% at Panalpina AIRFREIGHT tonnage has grown in line with the market at Panalpina but gross profit per ton has fallen by seven per cent in the first nine months of 2017. The forwarder’s airfreight volumes increased eight per cent from January, though gross profit per ton was down seven per cent to 632 Swiss francs (CHF)($646). Gross profits increased marginally to CHF456 million compared to CHF453.4 million in the same period of 2016, and reported EBIT increased from CHF60 million in 2016 to CHF69.4 million. In the third quarter, airfreight revenue was CHF738.9 million compared to CHF634.1 million in 2016, and EBIT was up to CHF30.3 million from CHF26.9 million. Panalpina chief executive officer, Stefan Karlen says: “Nine months into the year, airfreight and logistics are well under way and showing continued solid performance.” Net forwarding revenue increased from CHF3.86 billion in 2016 to CHF4.06 billion in 2017, and consolidated reported profit saw a small increase, up from CHF46.5 million to CHF48.4 million. As for the peak season, Karlen notes: “We are well-prepared for another strong peak....in airfreight, however it remains to be seen how dynamic the carrier market will be this year.”
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NEWS WEEK London losing out due to capacity constraints
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he London airport system is likely to be full by the mid2030s and it is already losing out to European rivals, the Airports National Policy Statement warns. The report on runway capacity and infrastructure in the South East of England says aviation contributes around £20 billion a year to the UK economy, but the UK faces long term capacity problems. It says Heathrow Airport is operating at capacity, and so is Gatwick Airport at peak times, and this is causing the UK to lose routes to European rivals. The report says: “With very limited capability at London’s major airports, London is beginning to find that new routes to important long haul destinations are being set up elsewhere in Europe. This is having an adverse impact on the UK economy, and affecting the country’s global competitiveness.” It acknowledges the importance of airfreight to the UK economy providing more opportunities to trade, saying that it benefits from greater quantity and frequency of services, especially long haul: “By providing more space for cargo, lowering costs, and by the greater frequency of services, this should in turn provide a boost to trade and GDP benefits.” The report says expanding Heathrow Airport with a third run-
way would deliver the biggest boost in long haul flights, helped by existing and proposed development of freight facilities as part of the Northwest Runway scheme. Plans would include doubling freight capacity, and the report says Heathrow already handles more freight by value than all the other UK airports combined and twice as much as the UK’s two largest container ports. It says: “Heathrow Airport currently has a substantial freight handling operation, around 20 times larger by tonnage than that at Gatwick Airport, and accounting for 34 per cent of the UK’s non-European Union trade by value – around 170 times more than Gatwick Airport.”
Edmonton warehouse opened
A new state-of-the-art $10 million Canadian ($7.9 million) cargo and logistics warehouse opened on Friday, 20 October at Edmonton International Airport (EIA). The new 50,000 square-foot cargo facility is the third building owned by Aeroterm and construction began in Spring 2016 and it opened earlier this month. Local media also reported on Friday, that Korean Air Cargo will be expanding its Edmonton service, although there was no confirmation of how many additional flights would be added, but the report said it would not be a scheduled service. So far this year, Korean has flown eight flights from EIA, and a further two more a scheduled by the end of 2017. In August, Nippon Cargo Airlines included Edmonton as a Canadian cargo destination, as part of its alignment with Atlas Air. For the first time last year, EIA carriers brought in fresh cherries from Washington state to be moved to China while EIA has also moved crabs, which were then flown on an Air China Cargo flight to China. Other operators at EIA include Icelandair Cargo and Air France/KLM Cargo.
737 programmes hit milestones
PEMCO World Air Services (PEMCO) has held ceremony to mark the cutting of a cargo-door opening in a passenger airframe for the conversion of its first Boeing Next Generation 737-700 Passenger-to-FlexCombi aircraft. The event is a milestone for Bahrain-based Chisholm Enterprises, the customer for this aircraft. Its subsidiary Texel Air, a non-scheduled cargo airline, will operate the B737700 FlexCombi from Bahrain International Airport. PEMCO director of conversion programs, Mike Andrews says: “To reach this moment in the development of the B737-700 passenger-to-freighter conversion program solidifies our presence as a global leader in the B737 aircraft conversion marketplace.” Israel Aerospace Industries (IAI) has received a new Supplemental Type Certificate (STC) for cargo conversion of the Boeing 737-700BDSF from the US Federal Aviation Administration (FAA). IAI has recently completed its first ever conversion of a prototype aircraft from passenger to freighter configuration at its facility, including the installation of a wide cargo door. The aircraft was delivered to Alaska Airlines as the first of three aircraft on order. The work was carried out at IAI’s Bedek Aviation Group facilities in Israel.
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NEWSWEEK
Cathay Pacific keeps growing and earns IATA CEIV Pharma
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athay Pacific has become the first airline in Hong Kong to be awarded the International Air Transport Association’s (IATA) CEIV Pharma certification. The carrier says this underlines its capabilities in the treatment and transportation of high-value, time-sensitive and temperature-controlled pharmaceutical products with “speed, consistency and efficiency”. Cathay Pacific director of commercial and cargo, Ronald Lam says: “It is a great honour to have been awarded IATA CEIV Pharma certification, which recognises our commitment to our pharmaceutical customers. “Cathay Pacific Cargo adheres to the highest operating standards and this certification highlights our capabilities in handling these precious, time-sensitive and often life-saving shipments.” Cathay Pacific operates a freighter fleet to
46 destinations, and manages cargo capacity on passenger flights operated by both Cathay Pacific and Cathay Dragon. CEIV Pharma is supported by Hong Kong International Airport, which sponsors community-wide certification for organisations in the air cargo supply chain. Cathay Pacific Services Limited (CPSL) – a wholly-owned subsidiary of Cathay Pacific which operates the Cathay Pacific Cargo Terminal, and Hong Kong Airport Services (HAS) – another wholly-owned subsidiary, which provides ground handling services to airlines, have also been awarded CEIV Pharma. Cathay Pacific and Cathay Dragon carried 177,691 tonnes of cargo and mail in September, an increase of 9.6 per cent compared to the same month last year. The cargo and mail load factor rose by 3.1 percentage points to 68.1 per cent. Capacity, measured in available cargo/mail tonne kilome-
tres, was up by 2.6 per cent while cargo and mail revenue tonne kilometres (RTKs) increased by 7.5 per cent. In the first nine months of 2017, the tonnage rose by 11.6 per cent against a 3.2 per cent increase in capacity and a 9.3 per cent increase in RTKs. Lam says: “The performance of our cargo business remained robust. We ramped up our freighter capacity on transpacific, India and China routes to commensurate with growing
demand, and also added a charter operation to the United States. “Tonnage growth was well ahead of capacity growth, with a commendable load factor achieved on both long-haul routes as well as regional services. The week of 17-23 September saw us break the company’s all time weekly uplift tonnage record. A high freight load factor has also helped to underpin a sustained recovery in cargo yields.”
Second route for CLA
CARGOLOGICAIR has launched its second scheduled service with weekly flights connecting London and Frankfurt with Dubai and Hong Kong. The Boeing 747-8 Freighter will depart London on Saturdays from Europe to the Middle East and Hong Kong, with a direct Hong Kong – Stansted service arriving in the UK every Monday. This is the second scheduled route after twice-weekly Boeing 747-400 flights from to Mexico City International Airport via Hartsfield-Jackson Atlanta International Airport commenced in August, operating every Wednesday and Saturday. The service incorporates stops in Houston, Frankfurt and Abu Dhabi, allowing for Europe – Mexico, Europe – Middle East and US – Middle East connections. CargoLogicAir chief commercial officer, Steve Harvey says: “Our UK-Mexico service has exceeded our expectations in terms of its operational and commercial performance to the extent that we are now looking to add a third weekly frequency on the route in early 2018 to support the level of business investment and market growth in Mexico.” CargoLogicAir chief executive officer, Dmitry Grishin adds: “Our strategy remains on track and we are now actively looking to add a fourth Boeing 747 freighter to our fleet early next year, in line with our business plan to be operating a fleet of five 747Fs by the end of our third year of operations.”
Strong month for Asia
PRELIMINARY traffic figures for the month of September released by the Association of Asia Pacific Airlines (AAPA) show international air cargo markets continued to enjoy double-digit growth in traffic volumes. International air cargo demand, in freight tonne kilometres (FTK) increased by a 11.4 per cent compared to the same month last year, reflecting the on-going pick-up in global trade across major advanced and emerging market economies. Offered freight capacity grew by 5.7 per cent, resulting in a 3.4 percentage point rise in the average international freight load factor to 66 per cent for the month. AAPA director general, Andrew Herdman says: “The global economy is in pretty good shape, with encouraging growth in both international air passenger and cargo demand seen this year.” In the first nine months of 2017, Asia Pacific airlines recorded a 10.7 per cent increase in international air cargo traffic volumes.
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NEWS WEEK Silk Way signs multi-year ULD contract with ACL Airshop
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ilk Way West Airlines has signed a multi-year unit load device (ULD) agreement with ACL Airshop, commencing on 1 November. The alliance extends the long-standing business relationship between the two companies; ACL has been a service partner with other units of Silk Way Holding for almost 10 years. Silk Way and ACL are working together to enhance the logistics efficiencies of Silk Way’s ULD fleet. ACL has started a worldwide strategic alliance with New Zealand IT company CORE Transport Technologies, and the introduction of Bluetooth innovations for real-time ULD tracking, which combined with ACL’s operations centre in Amsterdam and network-wide ULD control program will operate together for better utilisation rates and cost efficiencies for Silk Way. Silk Way West Airlines vice president of global operations, Emile Khasanshin says improved ULD logistics is a strategic focus as it pursues “a lean and agile business strategy”. He says: “We were looking for a company that could meet our rigorous cost expectations and flexibility requirements, demonstrate smart usage of the latest technologies as well as customer-oriented business processes.”
“These factors along with their substantial expansion plans have cemented our careful decision to stick with ACL Airshop. And we believe the new Bluetooth-enabled ULD tracing technology will be a game changer for us both, and for our end-customers.” ACL Airshop chairman and Ranger Aerospace chief executive officer, Steve Townes says: “We look forward to continuing our
large existing service partnership with Silk Way West Airlines, a successful and rapidly growing global cargo airline.” “We are proud and honoured that we are able to stand out from our competitors with an efficient, cost-effective, flexible solution. We are committed to helping Silk Way West Airlines grow their global cargo network.”
IOSA renewal for Cargolux
CARGOLUX Airlines International has passed its sixth IOSA audit designed to assess the operational management and control systems of an airline. The International Air Transport Association (IATA) Operational Safety Audit (IOSA) program renewal takes five days with five auditors checking Cargolux on 900 different standards. Cargolux vice president for quality & compliance monitoring, Graham Hirst says: “This fantastic result is the result of the efforts and endless commitment that the Cargolux staff has put into this ‘Enhanced IOSA’ renewal audit, even during some very stressful moments.” As an IATA member, Cargolux has to pass an initial IOSA audit and subsequent renewal audits every two years to ensure a constant enhancement of aviation safety. Cargolux passed its initial audit in 2007 and says IOSA underlines its commitment to the safety of its operations and the constant push for high safety standards within the airline industry.
Cargojet extends post deal CARGOJET has extended its agreement with the Canada Post Group of Companies (CPGOC) to 31 March 2025. The two companies signed an agreement in February 2014, initially running until 31 March 2022, with three additional 36 month renewal terms, and both parties have chosen to exercise the first renewal. Cargojet president and chief executive officer, Ajay Virmani says: “The business environment is changing rapidly especially with the growth of e-commerce. Cargojet is fully equipped to service the growing demands of the marketplace. “This early extension is also a testament to the confidence that CPGOC has in Cargojet’s teams capabilities and further secures our longer term commitment to providing a scalable and cost-effective service to our customers.” The airline has also renewed its International Air Transport Association (IATA) Operational Safety Audit (IOSA) programme. Virmani comments: “The audit is an in-depth look at the practices and standards of the airline with the end goal of meeting a common, worldwide standard for safety in everything we do, our audit team have once again done a tremendous job in working with the auditors to demonstrate conformance with IOSA standards.” Cargojet operates a fleet of Boeing 727-200AFs, 757200ERs, 767-200ERs and 767-300ERs.
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60 NEWSWEEK
Seconds with
Justin Burns, ACW: How has 2017 been? Stewart: Our two main customers operating scheduled cargo services are Cargolux Airlines operating a B747F five times a week and Air France KLM Cargo operating a B777F twice a week. We work closely with both, and as you’d expect there have been some ups and downs
MIKE STEWART
Glasgow Prestwick Airport is the only gateway in Scotland where the largest air cargo freighters can fly into and is looking to grow its traffic. The airport is also working towards becoming a Spaceport, which could give its freight activities a boost. Air Cargo Week spoke to Prestwick’s business development director, Mike Stewart who has been in the role for 18 months.
in terms of inbound and outbound balance. Cargolux has seen very strong performance so far this year, with their monthly volumes consistently up versus last year. AFKLMP Cargo have had some challenges, but are also still performing well and their volumes are up on last year overall. Both carriers are bringing
cargo in from others areas of the UK to fill their freighters, such as Aberdeen with O&G and are trucking it from Manchester and further south.
Justin Burns, ACW: How is charter doing? Stewart: Our charter business is primarily O&G serving the Aberdeen market. Despite the O&G downturn, large charter operators such as Air Charter Service continue to support Prestwick and we are focused on keeping these relationships going so we are able to support when the industry recovers. We have also been working with other charter customers from the entertainment industry to assist with various entertainment acts/concerts that perform in Glasgow. Last year, we handled the sound and stage equipment for Madonna, Beyonce and Adele, with a total of nine widebody freighters. We are in a good position to support this type of business and there is definitely an opportunity for growth there for us. We benefit from having a 3km long runway so can accept any size of aircraft, we have an huge amount of available warehouse space, and have many years of expertise in handling big movements.
Justin Burns, ACW: Are you aiming to add more freighters? Stewart: We are definitely looking for more freighter business. One area of opportunity is seafood, which is a high quality export from Scotland and a real potential growth area for us. Etihad and Emirates fill their belly capacity on flights from Glasgow and Edinburgh with Scottish salmon, but most of it is trucked down to Heathrow, or through the tunnel into Europe. It is a difficult commodity to handle and we are managing highly competitive rates out of London that have remained low for many years, which is why there has been no dedicated seafood carrying freighters operating in Scotland. However, yields for seafood are rising and fuel price is down, so it is becoming more cost effective to do something creative here. We have been working closely with the Scottish Government and the seafood export industry in Scotland. They are always looking for alternative, cost effective ways of getting their produce to market quickly. If we could fly the seafood directly out of Prestwick rather than truck it to Heathrow it would save 12 hours of transportation time, which would bring real
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MIKE STEWART benefits to the industry by bringing fresher products to the market at a premium. We are looking at if we can capitalise on this and establish a temp-controlled handling facility.
Justin Burns, ACW: Are you looking to handle belly cargo? Stewart: Yes, we are optimistic about securing belly capacity and this is one area where Prestwick can certainly grow in the future. We have a superb opportunity. It is really a blank canvas; we have this huge, efficient, well run and well equipped airport with the longest commercial runway north of Manchester. We have the capacity to handle many more passengers and tonnes of cargo than we currently do. Since I started at Prestwick around 18 months ago I have been working closely with various airlines and industry partners to showcase the excellent facilities we have here and we are very much open to handling more passenger and cargo business. Prestwick has a very bright future and will remain a key player in the UK air cargo market.
Justin Burns, ACW: Tell me about the Spaceport plans? Stewart: With the UK government’s aim to have the first launch into space from the UK from 2020 in mind, we have been looking at the possibility of horizontal space launches taking off from our runway at Prestwick for the past two years, and this venture is fast becoming an area of significant potential. Our location, 10,000 foot sea-facing runway, our size, and aerospace heritage with more than 4,500 people employed in the industry around the airport - all make us an ideal site for the UK’s, and Europe’s first commercial spaceport. The global demand for launching small payload satellites (up to 500 kilos) into low Earth orbit, quickly and cost effectively, is growing. It is one of the fastest growing industries, and Prestwick is well placed to serve demand. If satellite launches were to become a regular feature this would involve the movement of large quantities of highly specialised cargo, from small individual components, and satellites to entire launch vehicle systems. There will be a whole new infrastructure required to support this that does not anywhere in the UK. These are exciting times.
NEWS WEEK TIACA chief looks to raise profile of air cargo
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dvocacy as always been a central pillar and focus of The International Air Cargo Association (TIACA), and secretary general Vladimir Zubkov (pictured) says this is one of his top priorities moving forward. Speaking to Air Cargo Week at the Caspian Summit in Baku earlier this month, Zubkov says unmanned aircraft or drones, is an example of industry issues where TIACA is working, as many members have mentioned to him how they are unclear on regulations for their use. He believes TIACA can play a role in helping “mediate” between the regulators and provide clarity whether they unmanned aircraft can be used and of any future use. Zubkov adds: “Advocacy is one of the traditional roles of TIACA. I interpret advocacy in the traditional way when you represent the current interests of members and give them feedback and influence those who are to be influenced (such as unmanned aircraft) to bring air cargo on to the agenda to make sure when they develop regulations they don’t forget about the specifics of air cargo.” Speaking about the Caspian region, Zubkov says it is important for TIACA as it has a strong air cargo market. “Here we have members and Silk Way is a strong supporter. But we want to expand and it is not just about expanding TIACA but expand the provision of services maybe new service, which have not existed here. “This region is important because we want to be of help everywhere, especially to go into
the places where our specific market exists and where we can establish new contacts and offer new knowledge. I will continue exploring this region further,” he says. Zubkov says TIACA is working to grow across the globe, particularly in regions where it is not represented, or has few members, like in Africa, Latin America, the Middle East and Far East. One of his priorities since taking over in January has been to work closely with the International Civil Aviation Organization (ICAO), the International Air Transport Association, World Customs Orgaization (WCO), Global Shippers’ Forum, Airports Council International, and other partners. Zubkov says he has offered top brass at these organisations more knowledge on air cargo and explained to them where air cargo and TIACA can be useful for them to reach their objectives. He explains: “For example - ICAO has a program called ‘No country left behind’ which has the objective is bring knowledge, infrastructure and expertise into the countries not as fortunate as say Western European countries. “When I talk to ICAO people I am telling them on the air cargo side we can help your program in such and such a way. Another example is attended a WCO meeting on e-commerce and showed them how they can benefit from additional input from TIACA.” “It is not just to going an tell them to ‘listen to air cargo’ but to how their problems and objectives can be better achieved if they work with us,” Zubkov adds. He is also keen to continue to increase the profile of not only TIACA, but the air cargo industry. “We have our annual publication Friday Flyer and in this we walk about the latest news and conferences and what is important for us. I here on many occasions I read your Friday Flyer and our quarterly magazine the TIACA Times. “On a personal basis I use every opportunity to talk about the benefits that TIACA can offer and coming back to the relationships with international organisations – once you offer them solutions to their problems then they become more receptive and this is what increases TIACA and air cargo’s profile as we become invited to their events.“
Airports to pilot TIACA CSQ tool
THE International Air Cargo Association (TIACA) has developed a new online Cargo Service Quality (CSQ) tool to help improve visibility and facilitate global standards across the air cargo supply chain – a step towards providing shippers with the ability to view the quality of service delivered. The initiative was launched at TIACA’s 2017 Executive Summit in Miami on 19 October, and comes after a year of research undertaken by TIACA board members. This work was led by TIACA chairman Sanjiv Edward, who is also head of cargo business at Delhi International Airport, and Cheemeng Wong, senior vice president of cargo services at SATS. Other board members backing the CSQ measure include Steven Polmans, head of cargo and logistics at Brussels Airport Company, and Amar More, chief executive officer at Kale Logistics Solutions. Edward says: “In my interactions with shippers it has been reaffirmed that the lack of visibility and absence of uniform global standards results in airfreight business deals being limited by cost considerations, lack of product improvements, and perceived lack of value for money.” “The CSQ initiative is a logical step for an association like TIACA, that integrates all the players of the air cargo supply chain,”
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explains TIACA secretary general, Vladimir Zubkov. “This initiative will play a key role in standardising cargo quality assessment globally, establishing new benchmark parameters, identifying strength and improvement areas, optimising investments, and sharing best practice in the industry,” says Wong. Participants will be able to fill out an online ‘Cargo Quality Assessment Form’ either every quarter, or every six months, and will have access to a customised ‘Quality Dashboard’. Key benefits of taking part include gap analyses in order to identify strength and improvement areas, and best practice sharing. Polmans notes: “It will challenge companies that are underperforming and those that are overperforming.” The pilot phase of the program includes assessment tools for airports and cargo terminal operators. The CSQ will eventually be available to measure other segments of the air cargo supply chain. The program has received backing from players at leading airports including Hong Kong International Airport, Singapore Changi Airport, Delhi International Airport, Brussels Airport, and Beijing Capital Airport.
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NEWSWEEK GACAG outlines five key priorities Airport communities the future
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embers of the Global Air Cargo Advisory Group (GACAG) outlined five key priorities at The International Air Cargo Association’s (TIACA) Executive Summit in Miami from 18-20 October. GACAG is made up of TIACA, the International Air Transport Association (IATA), International Federation of Freight Forwarders Associations (FIATA) and the Global Shippers’ Forum (GSF), who met to thrash out the most pertinent industry issues. Summit delegates were told the main focus areas for GACAG moving forward are the safe transport of lithium batteries; effective border security and advance cargo information; efficient border management and trade facilitation; accelerating industry modernisation and minimising environmental impacts. In the opening plenary session ‘Future Proofing Air Cargo’ TIACA secretary general, Vladimir Zubkov who chaired the session, revealed the priorities and asked the chief of each association how they see their roles and plan to lead. IATA’s head of cargo, Glyn Hughes said: “We want to lead through the revolutionary things of the industry. No one stakeholder can promote
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what the industry needs and wants alone and it is about collaborative solutions. “For IATA it is more leading in the solutions to what the industry needs on a day-to-day basis.” FIATA secretary general, Robert Voltmann believed it is essential that all the associations emphasise the message that global trade is doing well. He also urged of the need for increased collaboration to make things move faster. GSF secretary general, Chris Welsh emphasised the need for associations to provide leadership in their prospective domains. He said: “The industry looks to us to take a lead and that why they are members of our trade associations. “They expect us to move things forward. It is also a lot to do with individuals as it is not just about organisations. We have a common responsibility as representatives of the supply chain to move that along. We have to do what is right for the industry.” All felt e-commerce can only be a plus for air cargo in the future, although Welsh warned the industry must not be complacent about winning business, explaining how he felt there will be a new level of dynamism from sea freight. He added: “It (e-commerce) is a big opportunity for air cargo if it gets it supply chain right and the right regulations in place, but we cannot expect it to land in our lap.” Voltmann also noted as the world’s population continues to focus more on the speed of goods, that bodes well for the air cargo industry as it is the fastest mode of transportation. In his summary, Zubkov said all the associations need to work together further to show that air cargo is a “facilitator of global trade”.
A growing trend in the air cargo industry is the forming of airport freight communities and key decision makers believe for industry to be a success in future then further development of them is essential. On the second day of The International Air Cargo Association’s (TIACA) Executive Summit the community approach was dis-
cussed at length in the session ‘Building Airport Communities’. TIACA chairman and Delhi International Airport head of cargo, Sanjiv Edward was behind the development of a community in Delhi back in 2012 and hailed the success of the initiative, telling delegates: “We realised there is loads you can do on your own, but unless you have people working together you will not get anywhere. All parts of the supply chain are part of it. Everyone is represented and we have got the voice of everyone.” “If you want to progress then airport communities are a necessity. The government listens because we come as one voice,” he added. Edward said Delhi is also sharing best practices with other gateways in India on how to develop air cargo airport communities. Frankfurt Airport’s (FRA) Air Cargo Community Frankfurt continues to go from
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strength to strength and improve efficiency at FRA. Senior vice president of cargo for operator, Fraport Felix Kreutel said communities are the “best way to fully optimise” airport freight businesses. The panel was chaired by Brussels Airport Company head of cargo, Steven Polmans, who then asked panelists what they see the role of the airport is in regards to the air cargo chain. Amsterdam Airport Schiphol head of cargo, Jonas Van Stekelenburg said he sees hubs as having a functionality role: “I think because of the all these that are different, we need somebody (airports) to oversee it all and have some kind of neutrality.” Kreutel felt airports have to facilitate and enable the best possible conditions for companies to do business and it is about creating efficiency, quality and optimising the whole business. Stekelenburg also added he thinks there is an even greater role for airports to play in the supply chain, citing how Schiphol is working with Dutch Customs on various projects. Kreutel agreed: “We as an airport can orchestrate the players and harmonise and sychronise the processes.” He added: “For shippers, airports are black holes and communities create new visibility.” And Edward said TIACA can in future play an important role, as it can help bring airport communities together to work together as its members come from across the supply chain.
NEWS WEEK Astral to start testing the Flyox drone
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frican carrier Astral Aviation is to start testing its two-tonne Flyox drone in Malawi next month as it looks to start operating regular flights. Speaking at The International Air Cargo Association’s (TIACA) Executive Summit in Miami in the ‘Unmanned aircraft and new airline technology’ session, chief executive officer, Sanjeev Gadhia (pictured) says it is full steam ahead. Gadhia says the plan is to run the petrol-powered Flyox drone on point-to-point routes for various sectors in Africa sometime in the next three to six months. He explains the drone, which was developed in Barcelona would carry a range of shipments including humanitarian aid (food and medical relief, vaccines etc), the O&G and mining sectors, agriculture and post and e-commerce. Gadhia says the advantages of using cargo drones over manned aircraft are they are more
cost-effective, provide more flexibility in flight scheduling, have the ability to land on unpaved runways, and there are fewer flight curfew requirements. The Flyox he explains will be operated from a separate control station and uses satellite technology. Plans are also in the pipeline to develop a five-tonne payload drone. Gadhia says the development of Flyox has been about $1 million and the drone will be offered as a service for last mile deliveries in Africa, where many locations are difficult to reach due to the lack of infrastructure and connectivity. Also speaking in the session was Boeing’s senior manager in commercial airplane product development, Mithra Sanrithi who says the US aircraft manufacturer is looking into the market, but is taking a “measured approach”. He adds that Boeing is also planning on testing new aircraft technology such as auto taxing in 2019 and auto take-off. “The only issue on autonomy is it has to deal with emergency situations. Boeing is taking it seriously, but in a systematic way,” Sanrithi says. Airships are also in development and Hybird Enterprises chief executive officer, Brian Bauer says plans are well advanced and a prototype LMH-1 Hybrid Airship built with Lockheed Martin – is on track to fly in 2019. LMH1 will have a payload of 23.5 tonnes and Bauer says the advantages over manned aircraft are it needs less fuel, is quieter and emits less carbon emissions. He notes plans are also afoot to one day develop a 90-tonne LMH-2 and 500-tonne LMH3. Bauer says the cost of developing LMH-1 is about $47 million.
Digital technology taking effect
DIGITAL technology is changing the freight forwarding marketplace and indeed much of the air cargo industry and those failing to invest and keep pace could well struggle. This was the basis of a discussion at The International Air Cargo Association’s (TIACA) Executive Summit in Miami on 19 October in the ‘Rise of the digital forwarder’ session. The moderator was the International Air Transport Association’s (IATA) head of cargo, Glyn Hughes who says shippers’ are increasingly demanding more sophisticated capabilities from the supply chain – and use of digital technology is a key part of their demands. Hughes notes the “new world” is coming, but feels the most encouraging thing is technology is coming into play and has taken a leap in forwarding, adding the airfreight industry will see some significant changes. A study by McKinsey & Company has found by 2025, 15-20 per cent of airfreight shipments will be booked directly with the airline due to the implementation and rise of digital technology, which has led to many asking if this will mean the death of the tra-
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ditional freight forwarder. The company’s associate partner, Ludwig Hausmann was a panellist and he says digital technology will help air cargo carriers a lot in the future, as it will help boost load factors and it can compensate for any rate declines and profitability. He says McKinsey’s study found it was 100 per cent profitable for airfreight forwarders to invest in digital technology. Hausmann says evidence was strong that 15-20 per cent of airfreight volumes will move back to the carrier where digital technology captures payloads directly, while airlines will approach customers directly, noting McKinsey is working with some that are doing so already. “Then there will be 10-15 per cent through technology that passes back to the shipper so less cargo will end up with the forwarder, but that also means at least 70 per cent will still remain with intermediaries and it is still a lot and the industry is growing,” he explains. Hausmann adds: “But 70 per cent will still be with traditional forwarders versus the digital model, but what that also shows is that in 10 years only 30 per cent of airfreight shipped, is not the destruction, we are talking about the gradual change of the industry and not the Uber-type of destruction.” He concludes traditional freight forwarders investing in and adopting digital technology will reap the rewards over the next 10 years.
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EAST COAST USA Flexport looking to grow its footprint
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lexport is evolving fast and has no plans to slow down. 2017 has been quite a year and in August the US-based freight forwarder opened its first warehouses in Hong Kong (HK) and Los Angeles (LAX). Speaking at TIACA’s Executive Summit in Miami on 18 October, Flexport’s global head of airfreight, Neel Jones Shah (pictured) says in 2018 it will open more offices, adding to the two in China, four in the US and one in Europe. “We have a pretty aggressive hiring plan and will continue to open more offices in 2018. We will target a couple in Asia, one in North America and possibly one or two in Europe. It will be responsible growth and we are not just going to open offices for the sake of it,” says Shah. The former chief cargo officer at Delta Cargo says operations at warehouses opened in HK and LAX are going well. Shah explains: “In HK we have already run out of space and reached capacity and last week we arranged to double our footprint, which we move into on Friday, 19 October. Our business is growing and we are filling up the footprint so that is an exciting problem to have. “Our LAX facility is doing quite well, and bringing in a lot of ocean freight. It is a little too far from the airport for airfreight, but we will look at having a separate airfreight facility in LAX .” More warehouses are on the agenda and Shah says it will likely open a couple more in 2018, although he is not sure where they will be and it will depend on operating and handling restrictions. He adds: “But where we need our own facilities we are definitely going to make investment in 2018, but I don’t know if that will be Chicago, Atlanta, or San Francisco or where, but I suspect we will open a few in the US.” Shah believes Flexport has been aided by the strong market,
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which is clearly helping the growth and the business is shaping up nicely. He says: “Over the past few weeks we have closed Series C fundraising and are very fortunate it only took a few weeks. We raised another $110 million, which brings our total funding to $204 million since we started, which is a pretty serious number and I think it is the most amount of money ever invested in this kind of start-up in the industry anywhere in the world. “We are very pleased with where we are at right now and pleased with the sort of investors we have – we brought some new investors in such as Wells Fargo, who very much believe in what we are trying to do.” People are an essential component of Flexport’s ethos and Shah says it is pleased with the work it is doing in hiring, as it is very challenging getting the kind of people that share the Flexport philosophy and passion. “We have been able to grow our team to well over 500 people – we started the year with about 150 people. We will probably be north of 550 by the end of the year,” he says. Shah adds: “We have a very specific culture we want to maintain as are focused on providing a unique user experience. A lot has to do with the software, but it is also the people and how they deliver service and the consistency they deliver it. We now have the delivery mechanism to continue rapid growth into 2018.” Shah says on the procurement side, it is focused on building a platform from a delivery perspective the sales team can sell. He adds you have to have the capacity, airline contracts, warehouse capacity and trucking partners in place to execute. “We are focused on doing that and growing at the same pace as the last few years and will face the challenges as they come. I am looking forward to 2018,” Shah concludes.
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WFS wins Qatar 777F handler contract in Pittsburgh
WORLDWIDE Flight Services (WFS) has been chosen by Qatar Airways Cargo to provide cargo handling services for its new twice-weekly Boeing 777 Freighter flights to Pittsburgh International Airport. The route was launched on 11 October, making Qatar Airways the first international airline to start scheduled freighter services to Pittsburgh, and becoming the airline’s fifth freighter destination in the Americas to be launched in 2017. The airline is adding 200 tonnes of cargo capacity a week to support customers in the state of Pennsylvania, complementing the 100 tonnes of belly-hold cargo capacity already offered on board daily Airbus A350 passenger flights to Philadelphia. WFS Group chief commercial officer, Barry Nassberg says: “We are delighted to be continuing to grow our international services for Qatar Airways and to be awarded this contract to support its latest new freighter route to and from the US. “The WFS team in Pittsburgh is committed to ensuring Qatar Airways and its cargo customers receive the highest standards of security, safety and quality of service.” The new Doha-Luxembourg-Atlanta-Pittsburgh-Luxembourg-Doha route will connect Pittsburgh with European markets via Qatar’s European hub in Luxembourg, and also help to connect businesses in Asia and the Middle East through its home base in Doha.
EAST COAST USA
Puerto Rico brought relief by LATAM Cargo 767F
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ATAM Cargo has carried more than 40 tonnes of humanitarian aid from Miami International Airport to disaster-stricken Puerto Rico. The Boeing 767 Freighter flight took off from Florida on 20 October, loaded with water, food, generators and medicine, and other relief items. Puerto Rico was pummelled by Hurricane Maria in September as 200 kilometre an hour winds hit the island, causing floods, tore apart homes and cut-off roads. More than a month after the event, large parts of the island remain without electricity and supplies. Given the magnitude of the disaster, LATAM Cargo activated its ‘Solidarity Plane’, an initiative that falls under the company’s social responsibility program whose goal is to carry emergency relief to areas struck by natural disasters. As an exception, and at the behest of the Another Joy Foundation - the company assigned a cargo 767F to carry the items collected by the foundation. DayGlow Relief, Jet Test and Transport and the Humanitarian Lift Project sponsored this shipment to ensure private aid actually reaches the more isolated parts of the country, thus benefitting more than 150,000 citizens. LATAM Cargo chief executive officer, Andrés Bianchi says: “We are an airfreight company. This fuels our commitment to assist in this type of situations by means of our Solidarity Plane. “Indeed, many of our collaborators’ relatives reside in Puerto Rico and have been affected, making this cooperation a symbolic endeavour for us.” To operate the flight through the Solidarity Plane, Latam Cargo had support of a large team made up of CCO Network, LANCO pilots, the warehouse team, Miami operations, Flight Control Cen-
ter Colombia and the legal area of the US and Colombia, and a mechanic to accompany the transfer of the donations. Another Joy Foundation president, Alden Crowley adds: “Not only did we carry donations to the island; we also delivered them in remote areas through the distribution networks set up by our partners. “This campaign has become one of the largest movements of non-government air assistance to Puerto Rico.” LATAM Cargo’s Solidarity Plane initiative is activated in the event of natural emergencies and disasters. Once the first request for donation is received, LATAM Cargo checks the routes and slots available to activate the logistic chain required to deliver the relief to those who need it most. The service has come into action before, for instance during the landslides that hit northern Chile in 2015, the big earthquake of Ecuador in 2016, the great fire of southern Chile in early 2017 and after the floods that struck Peru. Many humanitarian relief flights have been run over the past month from gateways on the US East Coast into Puerto Rico and other nearby islands to help people affected by the hurricanes.
DHL opens $10m airfreight facility at Chicago O’Hare
DHL has opened its new $10 million international air shipment facility at Chicago O’Hare International Airport in the presence of Chicago Mayor Rahm Emanuel. The facility on the Northeast cargo campus at O’Hare is on track to be the largest cargo development built at a US airport in more than a decade when completed in the next few years. The addition of the 54,000 square foot gateway will grow DHL’s presence in Chicago and create 75 new jobs, including import and export agents as well as training and office personnel. Emanuel says: “DHL’s expansion in Chicago, which brings new economic activity and jobs to our city, is a direct result of our investments to make O’Hare a top global gateway for air cargo operations.” “The world’s leading companies like DHL are investing in Chicago because O’Hare provides the best connectivity to markets around the globe and has the capacity to keep growing for many years to come.” DHL Express US chief executive officer, Greg Hewitt says: “Our new gateway is poised for this growth and will help us further serve customers as efficiently as possible. We are grateful to Mayor Emanuel for his leadership, and his city’s leadership, in recognising the strategic importance of O’Hare as a global leader in the air cargo business.” The new gateway, which expands DHL’s existing operations at O’Hare, features a unique onsite US Customs operation allowing for faster processing capabilities for inbound and outbound shipments for the Chicago area and other Midwest markets. The facility can process more than 4,500 pieces per hour, ranging from small parcels to palletised freight, and is LEED-certified and is on track for Transported Asset Protection Association certification in early 2018.
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PERISHABLES
Emirates helps Sri Lankan fish exports boom again
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ish exports from Sri Lanka are booming following the resumption of shipments to Europe, and Emirates SkyCargo is helping them capitalise on this opportunity. Emirates SkyCargo is transporting about 100 tonnes of edible fish a week from Colombo to markets in Europe and the USA, a major increase over export volumes before the suspension of exports to Europe in 2015. The airline transported more than 2,400 tonnes from Sri Lanka in the second half of 2016, double the volume of the same six months of the previous year. Cargo consisted of tuna, shrimp, prawns, crabs, lobster, fish maws, sea cucumbers, cuttlefish, squid and sprats to the UK, France, Italy, Japan, the Netherlands and the USA.
Sri Lankan fish exports to the European Union resumed in June 2016 and grew by 20 per cent in the year that followed. European markets account for more than 60 per cent of the country’s fish exports, valued at approximately $110 million. Emirates SkyCargo manager for Sri Lanka & Maldives, Kapila Santhapriya says: “The many innovative facilities developed by Emirates SkyCargo for the transport of perishables including temperature-sensitive seafood combined with our four daily flights from Colombo to Dubai and our global destination network of over 155 cities across 84 countries have made Emirates SkyCargo the market leader and most trusted service provider for perishable cargo in the country.” The airline has developed a suite of products called Emirates Fresh to help maintain freshness of perishables and fresh consumables during transportation. The product includes services such as prioritised ground handling as well as the use of the Emirates SkyFresh Ventilated Cool Dolly.
Extensive network
Emirates SkyCargo transported close to 400,000 tonnes of perishables across its global network of over 150 destinations with products including salmon from Norway, strawberries from California, flowers from Ecuador, meat from Australia, mangoes from the Indian subcontinent and wine and cheese from France. Emirates SkyCargo has a fleet of 260 widebody aircraft including 14 freighters – 13 Boeing 777Fs and one Boeing 747-400ERF. It operates state of the art cool chain facilities at its hubs at Dubai International Airport and Dubai World Central including over 25,000 square metres of dedicated temperature controlled storage space and reefer trucks operating 24/7 between the two hubs. The airline has been collaborating with partners to introduce new products to upgrade cool chain services. In August it rolled out a new white cover developed with DuPont called
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the White Cover Xtreme, a triple layered product acting as a shield reflecting solar heat in high temperatures and acting as a barrier for conduction preventing heat from escaping in low temperatures. It features DuPont’s Tyvek Xtreme W50 material, offering enhanced protection for temperature sensitive cargo in hot, cold and wet weather conditions. DuPont and Emirates SkyCargo have worked together over a number of years to build up a portfolio of lightweight thermal cargo covers. The ‘White Cover Advanced’ was introduced in April 2016 to build on the success of the ‘White Cover’, which is primarily used for protecting perishables such as fruit and vegetables, and the ‘White Cover Advanced’ used for pharmaceuticals. The new Xtreme product is designed to shield temperature sensitive shipments travelling through extreme and variable weather conditions. Emirates SkyCargo also renewed its European Union Good Distribution Practices (EU GDP) certification, an annual audit conducted by Bureau Veritas. The certificate was originally received in 2016 for operations across the Emirates SkyCargo terminals at Dubai International Airport and Dubai World Central, as well as the 24/7 bonded trucking service connecting the two hubs.
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PERISHABLES
Surge expected in 2018 as demand keeps growing
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ollowing 17 per cent growth so far in 2017, Qatar Airways senior vice president and acting chief officer for cargo, Guillaume Halleux is expecting a surge in demand in 2018. The airline has transported over 135,000 tonnes of perishables to date, 17 per cent growth in 2016-17 compared to 2015-16, and Qatar Airways is expecting numbers to increase for the remainder of the year as the peak season approaches. Halleux adds: “In 2018, we are expecting a surge in demand for fresh seasonal produce globally.” He also says: “We anticipate steady year-on-year growth in perishable cargo worldwide given our strategic expansion in our cargo network and fleet, we can offer the right capacity to serve the important fresh product producing regions. “Amongst our top five highest perishable uplift countries over the last 12 months are Turkey, Norway, Australia, Netherland and India.” Freight arm Qatar Airways Cargo handles all kinds of perishables such as fruits, flowers, seafood and meat, and its QR Fresh
solution provides reliable, on time transfers and ensure a seamless cool chain for perishables. Halleux says: “We provide customers with a swift and efficient, 90 minute transit time at our Doha hub while a dedicated Climate Control team proactively monitors every temperature controlled shipment from the beginning to the end of transportation.” Refrigerated trucks at its Doha hub are used to transfer and store shipments requiring cooling during transit between the aircraft and its Climate Control Centre (CCC). Halleux explains: “The trucks are also deployed for short connection that even at a distance of 200 metres, we will transfer goods in these trucks into the refrigerated area of the warehouse. “We have invested in these vehicles to make sure there’s never a gap in the cool chain for shipments transiting the Doha hub.” The 2,470 square metre CCC which opened earlier this year, is an airside transit facility with segregated temperature controlled sections for pharmaceuticals and perishables with two zones operating for 2-8°C and 15-25°C, with a capacity to hold 156 ULDs at a time, in addition to 64 temperature controlled cells
at the cargo terminal’s cold room. Six truck docks with inflated curtains seal around the truck when docked to ensure complete temperature integrity. Halleux says the facility enables Qatar Airways to handle an additional two million tonnes throughput per annum.
High standards for sensitive produce
Qatar Airways handles perishables around the world, and Halleux comments that handling capabilities can vary across stations and regions. The airline expects consistency in terms of safety, security, quality and operations. He explains: “We set high standards for these disciplines and the capabilities of our ground handling agents are rigorously assessed with each new route launched or expiry of handling contract at existing stations. “Our Network Handling Partner programme enables us to have an established framework with the global handling companies to ensure our specific requirements are met, irrespective of location.” Halleux also says: “Cool chain transportation is a challenge at airports that do not have dedicated facilities but still import perishables due to local demands and population growth. In such cases, we work with all parties involved to come up with the best solutions for our customers, ensuring the cool chain is seamless and unbroken.” The airline has introduced seven freighter destinations in 2017 and perishables are very important exports at most of these destinations. It is seeing exports of flowers from Quito, berries from Buenos Aires, fish from London, fruit and vegetables from Phnom Penh and flowers and fruit from Miami. Halleux says: “The expansion of our freighter and belly network provides businesses in the new destinations access to our global network of over 150 destinations via our hub in Doha and provides importers worldwide the fast and cost-effective option to directly transport perishables from these destinations.”
Charter services also available
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Charter services are also available, Halleux explains: “Customers can also opt for QR Charter services to transport huge loads of perishables, where we provide full, part or combination charter services to destinations not served by our scheduled flights. Qatar Airways Cargo has also been very flexible in providing additional capacity to our customers during the peak periods.” Charter flights have proved popular; last November it operated nine charters to transport over 850 tonnes of seasonal Chilean cherries from Santiago to Shanghai, Guangzhou and Hong Kong via its hub in Doha. Halleux says: “Demand for perishable product such as salmon, blueberries and cherries to be flown into China is high due to the needs of its growing local markets. We also see a huge surge in the exports of flowers each year leading up to Mother’s Day and Valentine’s Day, from Africa and South America.” Temperature sensitive cargo such as pharmaceuticals and perishables are a large and growing segment, and is expected to continue growing due to population growth, growing middle classes and rising incomes in developing countries. Halleux says: “We believe airfreight of fresh produce adds to the valuable shelf life and quick product availability in the market and these key benefits justify the cost of airfreight over sea which customers will continue to take advantage of and reap greater returns in their high turn-around consumable goods trade business.”
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AUSTRALIA
Chinese belly traffic boosts Brisbane cargo volumes
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elly traffic to and from China is driving cargo at Brisbane Airport (BNE) and more will follow as new services are operated. In the first half of 2017, the gateway handled more than 54,000 tonnes, an 11 per cent uplift on the same period last year with 24 per cent growth in imports and three per cent growth in exports. The first six months saw the number of widebody services increase by eight per cent and further growth will follow as new belly services will start to Shenzhen, Shanghai, Beijing and Taiwan in the second half of 2017. Despite the growth, Brisbane Airport Corporation (BAC) head of aviation business development, Jim Parashos says export growth in early 2017 was weaker than expected. “There was a drop in vegetable exports, with
a contributing factor cyclone damage to North Queensland crops in the first quarter. We expect this will bounce back quickly in the coming months,” he explains. BNE is served by 26 international belly airlines, while regular scheduled freighter services are operated to/from the South Pacific including to Nauru, Port Vila, Honiara, and Port Moresby. BNE will soon have more daily flights to Singapore, the UAE, China, Hong Kong, Los Angeles, and Auckland. Parashos says it is seeking growth in belly services to the US, Middle East, China and Southeast Asia, while direct services to Doha, Vietnam and Jakarta are targeted. He adds: “As a rule, due to significant belly capacity on passenger flights, regular scheduled freighters are unnecessary and unviable. Demand continues to warrant ad-hoc and seasonal freighters however.”
The strongest export lanes are Singapore, China, Hong Kong, New Zealand, and the UAE, while import lanes are the US, China, New Zealand, Germany, and India. Parashos notes: “What is pleasing from a freight perspective is that these main trading partners line up with BAC’s passenger market priorities, including increasing links with India and a focus on the US. We are also mindful of ensuring adequate links to tomorrow’s growth markets, such as Vietnam.” Key exports are chilled/frozen beef, fruit and vegetables (figs, dates, mangoes, avocadoes, pineapples), and seafood. Imports are mainly machinery parts, motor vehicle parts and accessories, transmission shafts, and insecticides. Parashos says the long-term goal is to increase the freight and logistics business and a new parallel runway (operational from mid-2020) will facilitate more aircraft movements. He adds efforts to grow cargo include increasing belly capacity and attracting more freighters; becoming a more active member of the Brisbane freight community; promoting the advantages of using BNE rather than other hubs; and encouraging exporters to capitalise on Free Trade Agreement (FTA) opportunities. As for infrastructure, plans are under consideration for common user cold storage facilities. Parashos says a consultation will occur during the refresh of the Brisbane Airport MasterPlan.
Future opportunities he says are securing more widebody aircraft on flights to Philippines and Malaysia, Queensland’s export drive and FTAs signed between Australia and Japan, Korea and Japan. He notes tariff reductions will apply to a number of commodities and FTAs are also under negotiation with the Gulf, India and Indonesia while expansion of the Known Consignor scheme reducing/removing the need to screen goods for more markets and exporters. There are challenges though: “Due to transactions occurring between third parties BNE has limited visibility with respect to the exact size of the freight industry, which operates on airport. Further, no industry or government body monitors this aspect of freight. Formalised information exchange is needed. “The growth of e-commerce has put pressure on available space on aircraft for perishables. Breakdowns in relationships with foreign governments have led to bans on exports/imports.”
FTAs give Wellcamp big opportunity
AUSTRALIAN Free Trade Agreements (FTA) with Asian countries provide an opportunity for Brisbane West Wellcamp Airport to expand. Airport officials believe, as it is located among the country’s leading agricultural regions and is close to both resources industries and advanced manufacturing, strong connectivity to Asia is a key part of the future. Cathay Pacific Cargo operates a weekly Boeing 747-8 service from Hong Kong to Wellcamp, but more are targeted as the gateway sees a strong future opportunity around positioning itself as an international air cargo hub. This, it is sure, will see it add other air cargo carriers, and in particular focusing on creating connections to global hubs. The main exports and imports are beef and other proteins, manufactured food products, peak season horticulture, oversize cargo, dangerous goods, military and
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aerospace, exhibitions, and advanced manufacturing (electronics and health care). The airport only commenced scheduled freight operations 12 months ago, but says it is getting good support from the forwarding community especially for the oversize shipments that the Cathay freighter specialises in. And as the variety of shipments broadens it is developing facilities to handle anything from produce shipments needing cool room facilities, or live animals to large mining shipments and aircraft engines. There are major infrastructure plans and Wellcamp plans on constructing a “world-class cargo terminal” in response to commercial pressures, in about year three of the business. The gateway says its current terminal creates “market leading” first mile efficiencies and ensures all forwarders and exporters are able to use the facility and air services, which operate. Moving forward, the plan is to focus on “adding value” to shipper’s businesses and ensuring it can meet their needs from oversize cargo, to high value, DGR, livestock, and perishables.
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