ACW 4th september 17 by Azura International

The weekly newspaper for air cargo professionals Volume: 20

Issue: 35

4 September 2017

Industry swings into action following Hurricane Harvey

he aviation industry has swung into action to support relief efforts following Hurricane Harvey, which has caused widespread damage across Texas and Louisiana. Harvey is the most powerful hurricane to hit Texas in more than 50 years with significant amounts of rain being dumped on the state, with Houston being heavily affected by flooding (pictured above). It is the largest storm to make landfall in Texas since 1961 and millions of people across the region have been impacted. Commercial services to and from George Bush Interconti-

nental Airport and William P. Hobby Airport were suspended due to the weather but operator Houston Airports was preparing to resume some domestic flights as Air Cargo Week went to press. Global rapid response disaster and humanitarian relief organisation Airlink has been working with the airlines, United Airlines, Alaska Airlines and American Airlines to move relief workers and volunteers into the most heavily impacted areas. It is working with partner organisations Empact Northwest, Heart to Heart International and All Hands among other charities supported by the effort.

Airlink executive director, Steve Smith says: “Having the support of our airline partners is enabling us to take quick action and bring relief to those impacted by Hurricane Harvey. With specialisations in search and rescue, providing medical assistance and conducting volunteer coordination, Airlink’s charity partners are addressing the most critical needs of the affected communities.” The Boeing Company donated $1 million from the Boeing Charitable Trust to assist with recovery and relief efforts, directed through the American Red Cross. It employs around 4,000 people in Texas and supports an estimated 39,000 direct and indirect jobs in the state. UPS has pledged more than $1 million through the UPS Foundation to support recovery efforts in Texas and Louisiana through a combination of cash grants, in-kind transportation movements and technical expertise, as well as support for long-term needs ranging from rebuilding to personal and financial recovery assistance. FedEx has also committed $1 million in cash and transportation support to deliver medical aid and supplies through its relationships with American Red Cross, Direct Relief, Heart to Heart International, Salvation Army and Team Rubicon.

Frankfurt-Hahn welcomes Suparna Airlines services to Xi’an

Frankfurt-Hahn Airport has welcomed its first service operated by Suparna Airlines operating a Boeing 747-400 Freighter on a Xi’an – Hahn – Erdos route. The route will operate once a week carrying 100 tonnes of goods including electronic and mechanical products to and from Xi’an Xianyang International Airport. On 9 August 2017, HNA Group formally purchased 82.5 per cent of the

stock right of Frankfurt-Hahn and plans to convince more freight airlines to fly to the hub in Rhineland-Palatinate, located 125 kilometres from Frankfurt am Main. Suparna is a subsidiary of HNA Modern Logistics and the airline is designed to further expand the China – Europe cargo airline network, promote economic and trade cooperation and cargo exchanges between Xi’an and Europe, and help develop Xi’an as the “Memphis of China”. HNA Group has been actively practicing the national ‘the Belt and Road’ strategy and making globalised investments by focusing on aviation travel, modern logistics and modern financial services. The HNA Modern Logistics Group focuses on airline logistics as a development key point and is devoted to constructing an air ‘Silk Road’. Xi’an, the historical and cultural capital of China, was the starting point for the ancient Silk Road in China and Erdos has abundant products and resources, and opening the new route will promote imports and exports and economic cooperation, as well as improve relations between China and Germany. Frankfurt-Hahn handles around 80,000 tonnes of cargo a year, has a 24-hour operating licence and a 3,800 metre long runway.

CARGOLUX EXPANDS AFRICAN NETWORK ASIA PACIFIC DRIVES 16% GROWTH AT ABC AGGRESSIVE BUT DELIBERATELY PACED GROWTH UNILODE SEES OUTSOURCING OPPORTUNITIES

Charter Store opens office in Guadalajara

THE Charter Store has expanded its footprint in the Americas and opened a new office in Guadalajara, Mexico. The air charter firm says it is termed the ‘Silicone Valley’ of Mexico, and the region encompasses the country’s third largest economy and its 4.9 million inhabitants make it a robust economic engine that embraces technology, manufacturing and other sectors. The Charter Store notes that locating a local sales and operations outlet in Guadalajara was a “natural fit”. Steering the new venture is air charter veteran Istvan Lorincz who will be the new country manager for Mexico. He brings his 24 years of aviation and logistics experience with him and the company says he is “well regarded” in the Mexican airfreight community. The Charter Store president, Harry Steiner says: “Our NAFTA business has realised a noteworthy expansion in the last three years and consequently customers are demanding more than just the usual airport-to-airport solutions. “With the addition of our Mexico office we can now offer our customers a true door-to-door product for many of the small ‘go now’ charters crossing the border or domestically within Mexico.

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NEWSWEEK

Cargolux expands its African network

argolux Airlines International is expanding its African network with flights to Cameroon and the Democratic Republic of Congo (DRC). Services to Lubumbashi in the DRC will start on 15 September, leaving Luxembourg on Friday evening and arriving on Saturday at 05.25h, with the return flight routed via Johannesburg, Nairobi and also serves London Stansted Airport, before landing back in Luxembourg on Sunday at 13.25h. Lubumbashi, the second largest city of the DRC after Kinshasa acts as a hub for the country’s mining industry, and is an important commercial and industrial centre which also produces textiles, food, beverages and copper smelting. It is the home of the DRC’s largest bank. The second new flight will serve Douala from 3 October, Cameroon’s largest city and home to Central Africa’s biggest port. It is Cameroon’s economic and commercial capital, handling most of its exports including

oil, cocoa, coffee, fruits, metal and timber. Cargolux regional director for Africa, Jonathan Clark (pictured) says: “Africa has always been and will always be an important market for Cargolux and we are happy to be able to support the continent’s trade lanes to Europe, the United States and Asia as well as across the Cargolux network worldwide.” Douala and Lubumbashi are added to Cargolux’s 33 existing destinations in Africa, where the carrier has a long history of transporting perishables, fruit and flowers, heavy machinery and other products to and from the continent.

Asia Pacific forging ahead

AIRLINES in Asia Pacific are forging ahead with cargo growing 10.9 per cent in July, the Association of Asia Pacific Airlines (AAPA) reports. Freight tonne kilometres (FTK) were up 10.9 per cent in July to 6.2 billion, with capacity growing at 4.4 per cent to 9.5 billion available FTKs, and load factors improving by 3.8 percentage points to 66 per cent. Growth was also strong on a year-to-date basis, with FTKs rising 10.4 per cent between January and July to 40 billion, with capacity increasing 3.9 per cent to 62.2 billion, and load factors up 3.8 percentage points to 64.3 per cent. AAPA director general, Andrew Herdman says: “Air cargo markets experienced a firm 10.4% increase in volumes during the January – July period, on the back of positive global business conditions.” “Further expansion in manufacturing output and new business orders helped boost air shipment volumes of both intermediate and finished goods.”

Volumes surge at Changi CHANGI Airport has shot back into double-digit year-on-year growth with an 11.2 per cent increase in cargo volumes in July. The Singapore airport handled 179,550 tonnes in July, compared to 161,400 tonnes in the same month last year, with all months of 2017 registering year-on-year growth. July saw the second strongest year-on-year increase after May, which was up 12.6 per cent, while January saw the smallest rise, up 0.5 per cent. March also posted a 10.2 per cent improvement, with all other months registering single digit increases. Year-to-date cargo volumes are up by 7.5 per cent to just under 1.2 million tonnes. Changi did not welcome any new airlines or routes but Singapore Airlines increased weekly frequencies to Melbourne to 31 and Dhaka to 10. More than 100 airlines operate at Changi, connecting Singapore with 380 cities in 90 countries and territories worldwide. It has more than 7,000 weekly scheduled flights and an aircraft takes off or lands at Changi around every 90 seconds.

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NEWS WEEK Vietnam and Garuda Indonesia sign MoU DB Schenker to acquire SB Global

ietnam Airlines and Garuda Indonesia have signed a memorandum of understanding (MoU) to strengthen cooperation in the areas of cargo, as well as codeshare partnerships, services and MRO. The airlines seek to expand their codeshare partnership on various routes, and both airlines agreed to seek opportunities to enhance other areas of cooperation. The partnership is supposed to strengthen their cooperation within and contribute to the development of the SkyTeam Alliance. The MoU was signed by Vietnam Airlines president and chief executive officer (CEO), Duong Tri Thanh and Garuda Indonesia president and CEO, Pahala Mansury, in a signing ceremony on the sideline of Vietnam Communist Party general secretary, Nguyen Phu Trong’s visit to Indonesia. Thanh comments: “Since 2006, Vietnam Airlines and Garuda Indonesia have effectively

cooperated with tangible results. This MOU today takes our cooperation further in the direction of a solid and mutually beneficial partnership, helping both airlines achieve the vast potential of the market.” Mansury says Vietnam is an important market for Indonesia, saying: “We are pleased to announce this partnership with Vietnam Airlines which extends our network even further within Southeast Asia.” In the six months up to 30 June 2017 Vietnam Airlines had a net revenue of 30.2 trillion Vietnamese dong and a net profit after tax of 621.6 billion dong. It also welcomed the 11th Boeing 787-9 Dreamliner to its fleet in May, and 787-10s will be added in coming years. Operating profits at Garuda increased to $1.8 billion in the first half of 2017 but total comprehensive losses for the period increased from $34.1 million in 2016 to $292 million.

DB Schenker has entered a definitive agreement to acquire SB Global Logistics from 24 September 2017. The two companies have a longstanding relationship as network partners in New Zealand dating back more than two decades. DB Schenker NZ will extend its presence into the South Island, making a national operation. It will now service both the North and South Islands, supplemented by SB Logistics’ local strength adding an additional 50 staff to the New Zealand operation along with a state of the art facility in Christchurch which opened in 2014. DB Schenker AU/NZ director of New Zealand, Mark Harrison says: “DB Schenker NZ has enjoyed a 20 year relationship with SB

Logistics, from which we have seen both companies grow together off the back of mutual respect and confidence in service.” Operations of SB Global Logistics Christchurch will continue ‘business as usual’ under new owners, and the management team will remain the same.

Aeroflot cargo revenue grows 37.7% in H1 CARGO revenue at Aeroflot increased by 37.7 per cent in the first half of 2017 with volumes growing 44.3 per cent. It was up from 5.2 billion roubles ($88.6 million) in 2016 to 7.1 billion roubles this year as the group added widebody aircraft to its fleet, helping cargo and mail volumes grow 44.3 per cent to 122,349 tonnes. Total revenue grew 4.9 per cent to 234.8 billion roubles, and though operating profits were down 66.9 per cent to 7.7 billion roubles, net profits were up 17.1 per cent to 2.9 billion roubles. Net profit margins were up 0.1 percentage points to 1.2 per cent.

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Aeroflot deputy chief executive officer for commerce and finance, Shamil Kurmashov says: “Despite the reduction in operating profitability, Aeroflot Group’s net income for the reporting period was on a par with last year’s result, at RUB 2.9 billion.” “This was mainly due to a significant reduction in debt through repayment of loans and borrowings ahead of schedule, as well as savings on non-operating costs.” Net debt was reduced by 59.8 per cent to 42.6 billion roubles, with net debt being reduced to 0.7 times EBITDA, compared to 1.4 at the end of 2016.

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NEWSWEEK Asia Pacific drives 16% volume growth at AirBridgeCargo

irBridgeCargo Airlines (ABC) continues to grow strongly with a 16 per cent increase in volumes in the first half of 2017 to 335,000 tonnes, with Asia Pacific driving demand. The airline has doubled its online network in Asia Pacific in the last two years to 12 destinations, with flights to Tokyo, Seoul, Singapore, Hanoi, Phnom Penh, Hong Kong, Shanghai, Beijing, Chengdu, Chongqing, Zhengzhou and most recently Taipei. The Taipei route has seen strong demand, particularly for hi-tech products, and is now carrying 1,000 tonnes a month

on the route, and ABC’s business to and from Asia Pacific rose by over 20 per cent in the six months ending 30 June 2017. Freight tonne kilometres rose 13 per cent and load factors were up four percentage points to 71 per cent, while the airline welcomed its 10th Boeing 747-8 Freighter, bringing the fleet to 17 747s. AirBridgeCargo general director, Sergey Lazarev (pictured) says: “We have a very clear strategy that is all about listening to the needs of our customers in terms of the routes and products they want us to offer.” “This is reflected in their support of our growing network in Asia Pacific as well as their increasing use of our special products for pharma and off-size cargoes.” The airline’s pharma product, AbcPHARMA, which offers Active and Passive solutions registered strong growth, and ABC became the first

airline in Russia and the seventh in the world to gain International Air Transport Association (IATA) Center of Excellence for Independent Validators (CEIV) in Pharmaceutical Logistics certification in 2016. ABC has also developed Moscow Sheremetyevo International Airport into its global pharma hub. ABC joined the Pharma Gateway Amster-

dam project at Amsterdam Airport Schiphol in June, the second airline to join the initiative. PGA was formed in March 2016 to provide transparency and quality within the pharma air cargo supply chain. IATA CEIV certification is one of the requirements of joining PGA, and ABC operates 22 flights a week from Amsterdam to pharma destinations in Europe, Asia and the USA.

MIAMI International Airport has welcomed another new cargo airline, with Trans American Airlines (TACA Peru) launching four weekly freighter flights to five South American cities. The airline, part of Avianca Holdings, will operate four weekly scheduled flights using an Airbus A330-200F between Miami and the South American cities of Lima in Peru, Santiago in Chile, the Colombian cities of Bogota and Medellin, and Argentina’s capital, Buenos Aires. Miami-Dade aviation director, Emilio T. Gonzalez says: “TACA Peru’s Miami launch will add to the significant growth trend we are experiencing in both international and domestic cargo traffic.”

“With more all-cargo airlines expected to begin service in 2017, we look forward to shattering our record from last year and strengthening our position as America’s busiest international freight airport.” TACA is the second airline to launch cargo services to Miami this year, following Qatar Airways beginning two weekly flights to Doha with stops in Luxembourg, Sao Paulo, Buenos Aires, Quito and Liege.

Miami welcomes TACA Peru flights

Sharks fly to new home with American AMERICAN AIRLINES CARGO recently moved two sand tiger sharks and three bonnethead sharks for transport from the US to South America. The sand tiger sharks were flown from New York JFK Airport while the bonnethead sharks flew from Miami International Airport, all moving to Rio de Janeiro. All five sharks were headed to their new home at an aquarium in Nova Iguazu, Brazil via two different Boeing 777-200s. American worked with Four Star Cargo to ensure the sharks arrived safely and on time. While bonnethead sharks are usually only about three to four feet (0.9 to 1.2 metres) long, sand tiger sharks can range in size from 6.5 to more than 10 feet in length (2 to 3 metres). The American team worked with the forwarder to ensure the animals had enough

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space and oxygenated water throughout the shipping process. After the tanks were sealed by the customer, the American team placed and strapped them securely onto PMC units, which ensure stability of the tanks during flight and handling.

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PHARMACEUTICALS

Addressing the gaps in the pharma logistics chain key to

here is no disputing the substantial growth of high-yield pharmaceutical traffic, but as more and more players join the bandwagon, are pharma shippers getting all they bargained for? With an estimated $12 billion currently being spent on cold chain biopharma logistics, the International Air Transport Association (IATA) forecasts this figure will rise to a substantial $16.7 billion by 2020. And as this demand grows, more and more of it moves through specialist services rather than as general cargo. But

while this market is an attractive proposition for air cargo players it is a challenging vertical. That there have been a rapidly growing number of pharma handling certifications speaks not only to the increasing traffic and the sharply rising shipper expectations, but indeed the recognition from the air cargo supply chain of the need to up its game. The two main certification routes are the European Union’s Good Distribution Practices (GDP) and the IATA Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma). “There is a steady move towards IATA CEIV Pharma accreditation as the accepted standard required by carriers,” says Hong Kong Air Cargo Terminal Ltd (Hactl) chief executive Mark Whitehead (pictured). “This is why Hactl was keen to join and support the Airport Authority’s initiative to

establish Hong Kong as a CEIV Pharma hub. Success in pharma requires a single universal standard, and CEIV is the best prospect of achieving it,” Whitehead adds. Indeed Hactl has been an early mover in this area, being the first handler in Hong Kong to achieve WHO GDP accreditation in 2014, and one of the first worldwide. “And having over-specified for GDP – we then found it relatively simple to become Hong Kong’s first CEIV Pharma-accredited handler,” he explains. For now, pharma is fairly consolidated to a few origins - in Europe that means just four countries represent 57 per cent of the total origin markets. “There has been a certain amount of consolidation in global product manufacturing and guidelines from international and national regulatory authorities have driven this change, says Emirates SkyCargo manager of global cargo accounts, Julian Sutch.

Europe remains a major source

Two huge markets that drive a lot of business are India and Israel, in addition to the obvious pharmaceutical companies in the US and Europe notes Strategic Aviation Solutions president, CEO and co-founder, Stan Wraight. “These countries have a tremendous need for a direct airline, shipper relationship where total logistics chains are discussed and agreed as to quality standards and KPI’s,” he says. While Europe has been a major source of pharmaceutical exports, Singapore Airlines Cargo (SIA) senior manager of key accounts of verticals, Adrian Goh notes the volume continues to grow and that brings new opportunities. “The expectations for additional value-added services have also increased with this growth,” Goh says adding that Asia-Pacific volumes are also growing. In general, says Lufthansa Cargo senior product manager for temperature sensitive logistics, Chris Dehio markets where generic pharmaceuticals are produced generally have a stronger growth, such as India and China, than countries that produce original pharmaceuticals. “As patents run out and blockbuster medication become more rare the pharmaceuti-

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cal industry is developing in countries with low labour costs,” he says. The biggest hurdle to a quality air cargo product for pharma is the disjointed relationship between airlines and ground handling agents (GHA), highlights Wraight.

Disjointed relationship

“GHA’s must be treated as strategic partners in the value proposition,” he says. For GHA’s to invest, they need commitment and a proper return on investment for ramp and warehouse processes and equipment. “If you think they should handle specialties for the same price as consolidations, you miss the mark.” And indeed as Whitehead notes: “If an airline wants a substantial share, they need to actually talk to the shippers, and work together in each trade corridor to meet expectations and requirements for a safe and efficient product.” Cathay Pacific manager for cargo customer solutions & airline partnerships, Clifford Kwok also highlights the gap on the ground, where there is “limited infrastructure in terms of both ramp protection and cool facilities offered by ground handlers at many airports.” From a ground handler’s point of view, Whitehead agrees the biggest obstacle to further progress is the lack of adequate pharma handling provision - including certification - at many airports worldwide and the continuing slow progress of integrated supply chain information flows. “Pharma manufacturers produce high-value goods which are prime targets for theft or forgery, and some of which become useless if they suffer temperature excursions. They quite rightly demand the necessary end-to-end controls, monitoring, security and (in the case of temperature-sensitive product) maintenance of consistent temperatures,” says Whitehead. “The more forward-thinking carriers, handlers, RFS operators and forwarders have been putting the required infrastructure and procedures in place, and evidencing this with accreditations, but this is not happening on the global scene,” he cautions. But the realisation of the importance of closing these gaps is slowly spreading in the

PHARMACEUTICALS

ey to unlocking growth but improvements need to be made industry according to Wraight who says, “solutions are being provided now especially in bio medicals by global carriers that recognise that it is not what happens in the air that makes the difference, it is what happens on the ramp and warehouses.” But this is taking time and in the meantime “there is a lot moving by sea that is simply there due to very bad experiences by air. The funds tied up in medicals by sea (other than generic drugs) very often justifies air. But, when the product arrives in bad or poor condition, any advantages on delivery time are irrelevant,” Wraight adds.

Premium service must go with price tag

While noting that ocean and other forms of transport have some advantages from a cost perspective United Cargo president, Jan Krems says from their perspective their customers are looking to benefit from “greater speed, safety, security and control that air freight provides for their very sensitive commodities.” “We have experienced exceptional growth in our TempControl product, and we continue to win awards for the quality of our service for pharmaceuticals and other temperature-sensitive commodities,” he says. “Airfreight is a premium-priced transport option, so we must understand and accept that its role has always been to help open up new markets for new commodities and products, and then inevitably certain volumes will transfer to other transport modes as supply chains mature and transport savings are sought,” adds Whitehead. “Pharma volumes are growing strongly, and therefore so are airfreighted volumes; but there is some evidence that our market share has reduced slightly in the process. In a similar vein AirBridgeCargo Airlines deputy general director for pharma, Fedor Novikov says with the increasing number of new, innovative service providers, shippers are still mainly looking for “the most reliable and stable partners which can demonstrate that written procedures work and are being applied in real life, and that they don’t only exist on paper.” He adds: “Transparency in transportation at all stages, as well as traceability are probably the most important pain points for the whole pharma supply chain, apart from, of course, execution of an unbroken temperature control logistics chain. In agreement that much of the industry is working in the right direction Wraight says that those who suggest the slippage in market share to ocean is through airfreight’s reluctance to satisfy shipper demands for visibility and control are providing a distorted view.

automation and the cargo management system will provide improved reporting capabilities in response to customers’ expectations of supply chain transparency,” Tarvainen (pictured) says. Temperature data is a crucial tool, but it is not an easy proposition, nor is it cheap if you are supporting a very large global network. Dehio said: “Even though many pharmaceutical companies don’t require the data themselves and avoid to build up infrastructure and resources to monitor the data, these companies will want to be convinced that the carrier and / or agent has access to this information – preferably in real time.” He adds that Lufthansa’s Cool/td product is in continuous improvement and while it is already highly developed after being in the market for 10 years, the aim is to take it a step higher in dealing with some of the “more difficult issues to implement”. One of which is the provisioning of temperature data in real time while another is to dramatically increase the level of protection during tarmac transportation. In a global network of 300+ stations, infrastructure then becomes an issue. “We are investing in developing this infrastructure but at some destinations it’s not possible, at others it boils

down to commercial considerations” Dehio explains. At the end of the day any investments need to be recovered. “In an environment of declining yields a sharp pencil needs to be put to exactly where investments are call for and where they make no commercial sense.”

Airfreight is moving in the right direction

“The reality is that airfreight is moving in the right direction, albeit perhaps not fast enough. Meanwhile, it should not be ignored that ocean has its own considerable service challenges to overcome: Slow-steaming, deliberate reduction in capacity, increasing container rates, and port congestion. Accurate and timely temperature information is key, and this is an area Dehio thinks that many carriers “still have room for improvement” but he adds that generally speaking there is an increasing drive amongst the health care industry to close gaps in temperature controlled, cool chain logistics. But this requires immediate and reliable access to information such as position, temperature and other transportation parameters. But this requires temperature monitoring throughout the entire transport chain and this is the next step in the industry says Finnair Cargo’s managing director, Janne Tarvainen. Finnair Cargo has been ramping up its pharma capability over the years and was in fact the first airline in the world to be certified under the IATA CEIV Pharma programme. Included in this was a new cargo management system, SkyChain, back in December 2016 to improve shipment related data quality and once its brand new terminal, the COOL Nordic Cargo Hub at Helsinki Airport opens, SkyChain will be connected to the warehouse automation systems of the new 3,000 sqm stateof-the-art terminal. “The integration of these systems will provide us with a whole new ecosystem that will enable proactive planning and steering of cargo flows and our resources. In addition the new warehouse

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ULDs

Aggressive but deliberately paced growth at ACL

mbitious ACL Airshop is ahead of growth plans for 2017 and says business has “never been better”. The US global unit load device (ULD) firm’s parent is Ranger Airshop Holdings and its chief executive officer, Steve Townes (pictured), who is chairman of ACL, explains the board recently approved a mid-year increase in internal investments for additional ULD inventory, software systems upgrades, key staff additions, and other areas. Townes adds: “Our efforts and results are more or less tracking to the resurgence of air cargo, amplified even

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further by the burgeoning impact of e-commerce. Our business has truly never been better. “We have more ULD’s in operation during the off-peak season than ever before and due to growth of our global footprint, our net and strap sales have also followed suit growing year-overyear from 2016.” ACL has added ULD stations in Hong Kong, Bogota and Tokyo Narita and Townes says ACL is growing at a “somewhat aggressive, though deliberate pace.” He explains: “We are creating a more robust, widespread service network of locations because that is what our customers have asked us to do. Narita is a great example. “We have a terrific team of people and our conversations with local airlines’ executives there have provided positive feedback. It’s an exemplary repair station with plenty of ULD parts inventory.”

Global opportunities

Townes says ACL sees more opportunities in Asia-Pacific and in Latin America, and teams in both have opened more sites either directly, or through handling partners and this is why the board approved additional internal investments. He says “customers’ voices” guide ACL to invest in new locations. ACL is eyeing another station, possibly one in Central Western Europe. ACL is set to add seven stations in 2017 and is targeting nine more in 2018, but detailed planning for next year is just underway. At present it services more than 200 global airlines and some of the best growth is from expanding on behalf of existing customers, and while it is looking to add new clients, that is not the primary focus. Townes says from the parent company perspective, the first goal is to make sure existing customers are getting its best efforts and secondly, it loves it when an airline switches to ACL. “We solve problems for airline customers, we’re there when and where they need those extra ULDs, especially ‘in a pinch’. Nobody can fully predict the inbound chaos on any given day and that’s where we help solve problems. We want to be more than a vendor. We want to be a partner who solves short-term issues and also offers long-term solutions,” he adds. ACL has around 40,000 ULDs at 40 stations and is at 40 of the world’s top 50 air cargo hubs, and is aiming to at least double in the next four to five years to 80,000 or more ULDs, at 75 to 80 of the top 100 cargo gateways. “We are improving various internal processes and client offerings to support that growth, not solely investing in ULD inventory and more repair stations. It is a steady transformational effort, taking a long view on how we will keep growing and improving for our customers.” ACL is in the process of upgrading facilities at New York JFK and is soon completing a site selection to have a newer and better ULD facility closer to the hub. At Amsterdam Airport Schiphol it will have an improved configuration of its multi-building facilities near Schiphol - ACL’s largest international management office.

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Townes says: “We are consolidating all of our Amsterdam technical, logistical, and repair operations into one very large work structure and co-located storage facility there, while beefing up our existing international management head office there with new technology and more staff, to include a full ‘Operations Center’. It is expected to go live by the end of September and should be fully online as a global hub for ACL’s logistics systems in early 2018.

Careful expansion

There are challenges and Townes says the biggest is ACL must make sure it paces expansion carefully, because the large-scale growth and improvement efforts since early 2016 take time, and should not be “forced so quickly that missteps occur” and “steady growth is what to expect” from ACL. Another challenge will always be people and it is always looking for “exceptional people”, adding: “A famous industrialist once said ‘Eagles don’t flock, you find them one at a time’ - that is how we are recruiting and building organisational strength.” The takeover by Ranger Aerospace in 2016 has boosted business, mainly from capital availability via new majority owner Ranger Airshop Holdings. Townes says ACL will have “more than ample growth capital at each stage along the way, plain and simple”. He is confident it will close 2017 ahead of original forecasts, and go into 2018 with new momentum, better systems, more stations, staff, inventory of ULDs, plus broader manufacturing and supply chain capabilities, and predicts 2018 will be the strongest in the 35-year history of ACL. He concludes: “We will at least double the worldwide network of ACL in the next 4-5 years for our airlines customers. But not just growth - also improved support systems, upgraded logistics management tools, and exceptionally well qualified staff additions. “Our airlines customers will know what we’re doing to expand and improve, because in many ways, they have written our growth strategy for us.”

ULDs

Unilode sees vast potential as airlines look to outsource

nilode Aviation Solutions sees vast potential growth opportunities in the unit load device (ULD) market and is also eyeing up joint ventures. The company is evolving since being acquired by EQT Infrastructure and rebranded from CHEP Aerospace Solutions in November 2016, while Benoît Dumont took over from Ludwig Bertsch as chief executive officer from 1 September. Unilode chief commercial officer, Don Jacobs (pictured) says it has some “very promising opportunities” in the sales pipeline and is also working on the renewal of a few ULD management and ULD and/or galley cart MRO agreements. “We are in negotiations in regards to the potential establishment of joint ventures to complement our global repair network, but at this stage we cannot disclose any detail yet,” he adds. After the acquisition of the ULD fleet of Saudia Cargo in March, Unilode now operates over 120,000 containers and pallets, the largest outsourced ULD fleet in the world and has ULD management agreements with 40 airlines, including Cathay Pacific, LATAM, Air Canada, SAS, Cargolux and AirBridgeCargo.

Optimal flexibility for the customer

Jacobs says: “Our ULD management business model provides optimal flexibility for our customers and our goal is to always find the best possible solution for the customer. “Most airlines choose our fully pooled ULD model while some prefer a hybrid stock in which the containers are exclusively used by the airline and the pallets are supplied from the Unilode pool. He sees opportunities for growth as it is estimated that only around 25 per cent of the ULD management market

Global Operations Centre in Bangkok and an office in Hong Kong to assist with Cathay Pacific’s ULD management operations and will establish additional physical presence in the region. “There still is significant potential in the Middle East where the airlines will continue to grow at an impressive rate and we also see good business development opportunities in Latin America, not only for our ULD management, but also for our ULD and galley cart MRO business.”

has been outsourced. Jacobs says: “The fact several reputable airlines who have a large and complex ULD operation recently have decided to take the outsourcing step has definitely created positive momentum in the marketplace. We expect the outsourced share will double within the next five years as airlines continue to be under pressure to cut costs and outsourcing ULD management operations is one of their options to achieve operational efficiency and customer satisfaction at a lower cost.” He expects Unilode to sign a few ULD management agreements this year and in 2018, which will automatically add new airports to its network if none of its other airline customers fly to these destinations. Jacobs says: “The synergies provided by pooling are even more relevant if several carriers serve the same airport, which improves the efficiency of our ULD pooling business model. “In terms of MRO stations, two new repair centres have been added to our network, one in Santiago de Chile and one in Cincinnati, which are now fully operational and FAA Part 145 certified to repair containers, pallets and galley carts. We also plan to open repair stations in Brazil and in other key hubs in Asia.” Asia provides the highest potential for ULD management contracts and Unilode has intensified its business and network development activities. Jacobs says: “We already have our 24/7

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Smart ULDs offer significant benefits

As for the future of ULDs, he says ‘Smart ULDs’ will offer significant benefits mainly for the air cargo industry, but also for passenger divisions as they can enable timely and accurately track ULDs and their contents. Jacobs says additional sensor-based data for temperature, impact, humidity and other items will provide valuable information, which is not available today. He explains it has started development of CanTrack, and also works with galley carts while its tracking app developed for galley carts, which is similar to ULDs, intends to turn the assets into ‘smart’ units: “For this we use long-range Bluetooth technology and the app includes the same sensor capabilities present in the technology of smart ULDs.” Future forecasting is difficult, he says as the industry has always been subject to highs and lows and he notes historic patterns are no longer a measure to predict future demand, making it challenging for Unilode to service its customers. He adds: “Unilode continues to invest in Smart ULD technology, which is aimed at providing even more transparency and predictability of ULD movements and availability throughout our network. To this effect Unilode is working closely together with some of its prime customers, to ensure that the technology developed is fit for purpose and provides a true added value to their operations.”

ACW 4 SEPTEMBER 2017

AUSTRIA Profit growth and new cool handling concept for Vienna

et profits at Vienna Airport have increased by 4.4 per cent in the first half of 2017 to €60.1 million ($71 million). The result compared to a profit of €57.6 million in the same period of 2016, and revenue was up by 3.4 per cent to €357.5 million. Net debt was also reduced by 8.9 per cent to €323.7 million. Airport operator Flughafen Wien member of the management board, Gunther Ofner says the company is very happy with the results, and facilities are being expanded. He says: “The expansion of the Air Cargo Center featuring one of Austria’s largest photovoltaic facilities will be concluded by the end of 2017. Moreover, three new business sites are being established, with makita, Cargo Partner and DHL creating hundreds of jobs in the region.” Vienna has also released its July figures, with cargo volumes, which include air cargo and trucking, were up 3.4 per cent to 24,235 tonnes and down 0.1 per cent to 161,514 tonnes between January and July. Vienna Airport is offering the use of four new customised reefer trailers for transporting temperature sensitive cargo as part of its

‘VIE Cool Handling’ concept. The trailers will enable improved transportation of temperature sensitive cargo on the airport apron, allowing goods to be handled at consistent temperatures between -20 and +29C without interruption, even in the case of extreme weather conditions. The trailers were developed by Vienna Airport together with a renowned Austrian automotive engineering company.

Each reefer trailer has a volume of 22 cubic metres and is designed to ensure problem-free loading with standard containers, pallets and loose cargo. The integrated refrigeration unit can be operated both electronically or with diesel fuel, ensuring a secure temperature level during provisioning and transport on the airport apron. The temperature can be adjusted and adapted to each product, with popular cargo transported via Vienna is primarily food, plants and medical supplies. Cargo handling and shipments at Vienna Airport are in the hands of the Cargo Handling Services Department. More than 280,000 tonnes of freight was handled at the Air Cargo Center in 2016, a four per cent year-on-year rise. The Air Cargo Center is being expanded by 15,000 square metres, with the project scheduled for completion for the end of 2017. Vienna Airport is planning a third runway, and a court decision to ban the expansion because of climate protection was annulled in June. Flughafen Wien welcomed the decision made in June, with board members Gunther Ofner and Julian Jager jointly stating: “This is a good day for Austria as a business location as well as for Vienna Airport.”

Gebruder Weiss takes over Kapeller Spedition

GEBRUDER Weiss has taken over Kapeller Internationale Spedition, which operates in two locations and employs around 40 members of staff. The Tyrolean freight forwarder has two locations in Innsbruck and Worgl, and will be integrated into the Gebruder Weiss network as a wholly owned subsidiary. The purchase price remains confidential and the company will continue to operate under the Kapeller name, while appearing on the market independently with the previous service portfolio. Company owner Gerhard Kapeller has handed the management to Hannes Mayr, who has run the Gebruder Weiss branch in Tyrol for 11 years. Gerhard’s son, David will manage the Innsbruck branch office. Mayr says Kapeller has been a reliable partner for many years and is an expert in events, moving, warehouse and furniture logistics as well as art transportation since its foundation in 1958. He says: “Kapeller has already been a reliable partner to Gebrüder Weiss for many years. The company is well-established on the market and finds itself in an economically sound position.” Gebruder Weiss opened its first office in Innsbruck/Tyrol in the 1950s, and the logistics expert is represented with about 300 employees at three locations in Hall, Worgl and Innsbruck following the take over. Its portfolio comprises of land transport, air and sea freight, as well as individual logistics solutions and automotive logistics.

Positive first half for Austrian AUSTRIAN Airlines made a profit in the first half of 2017, with adjusted earnings before interest and tax (EBIT) of €3 million ($3.5 million). This compares to an adjusted EBIT loss of €0.1 million in the same period of 2016 helped by stable jet fuel prices and a significant expansion of European business, with revenue rising by 12 per cent to just under €1.1 billion. Second quarter revenue increased by 13 per cent to €650 million and adjusted EBIT was up 117 per cent to €63 million. Chief financial officer, Heinz Lachinger is happy with the progress but more work needs to be done. He says: “All in all, we are well on track from an economic perspective, but have not reached our objective yet. We will have to further improve our financial strength as the basis for the necessary modernisation of our long-haul aircraft.”

ACW 4 SEPTEMBER 2017

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ACW 4 september 2017

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07/08/2017 13:03