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The weekly newspaper for air cargo professionals Volume: 21
Issue: 9
5 March 2018
UPS sues European Commission over TNT deal
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PS is seeking €1.7 billion of compensation from the European Commission (EC) for blocking its takeover bid of TNT in 2013. The EC blocked the deal in January 2013, saying it would restrict competition in 15 member states, stating that in many countries the only alternative would be DHL. Since then, FedEx has taken over TNT, a decision the European Commission did not oppose. UPS has appealed the decision of the European General Court, which ruled in UPS’s favour in 2017, overturning the European Commission’s 2013 decision saying that it had not given UPS the required opportunity to defend itself because the EC changed its economic analysis without telling UPS. The EC is appealing that ruling to the European Court of Justice, and a decision is expected from the court in the third quarter of 2018. In compensation, UPS is seeking €1.7 billion for damages and applicable interest; compensation for the taxes that will be imposed for the damages imposed; and for the EC to pay costs for the proceedings.
UPS says: “We can confirm that UPS is following the legal process in seeking compensation for the losses suffered as a result of the acquisition being unfairly prohibited by the European Commission. “We feel strongly that the proposed acquisition would have constituted a good deal for logistics customers as well as B2C consumers UPS continues to remain bullish on Europe. Today, our European business makes up a
REVENUE at IAG Cargo increased by eight per cent in 2017, helped by the market improving throughout the year, ending with a very strong fourth quarter. Commercial revenue grew from €1.02 billion in 2016 to €1.08 billion in 2017 helped by what IAG Cargo describes as an “unexpectedly buoyant market in 2017”, especially in the second half. Volumes measured in cargo tonne kilometres were up 5.6 per cent and capacity increased by 4.8 per cent. It reports that trading conditions were challenging in certain regions but Asia Pacific was stronger following a weak performance in the same period last year. IAG Cargo chief executive officer, Lynne Embleton (pictured) says that the airline group handled large volumes across each of its hubs and demand for premium products was particularly high. She says: “Our non-off-loadable Critical product saw sustained growth over the year and
was the preferred method of shipment for a huge variety of goods ranging from oil and gas equipment to spices and dried fruit in the run up to the festive period.” Embleton adds: “Building on the early success of Critical, we launched Constant Climate Critical in July, extending our most urgent, time-sensitive product to the pharmaceutical
half of our international volume and revenue. UPS began operating in Europe 40 years ago and have never left since those early days in Germany.” The company also states: “The compensation being sought corresponds to what we believe, through objective assessments verified by expert third parties, to be the value of the opportunity wrongly prohibited by the European Commission.”
ECS HELPS UIA CELEBRATE ITS QUARTER CENTURY
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AIR CARGO MUST APPEAL TO MILLENNIALS AIR CARGO INDIA REVIEW FROM OUR MAN IN MUMBAI PHARMA IN GOOD HEALTH AT IAG CARGO
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Spirit Handling gains CEIV in Copenhagen
Buoyant market helps IAG Cargo revenue grow 8% in 2017 sector. This has enabled thousands of emergency medical shipments, including vital vaccines and lifesaving medicines, to reach their destination in the swiftest and most secure way.” The FWD.Rewards programme, which was launched in May 2017 has also proved popular, with Embleton commenting: “The launch of FWD.Rewards in May 2017 saw us pioneer a loyalty programme that rewards small and medium sized freight forwarders through points that are redeemable against flights, hotels and cargo credit. “Nine months on from its launch, we have more than 1,000 customers participating in the scheme, which continues to go from strength to strength.” IAG (International Airline Group) comprises four major airlines: British Airways, Iberia, Aer Lingus and Vueling. Its single network offers freight customers access to over 350 destinations. IAG Cargo manages the cargo operations of the four carriers.
SPIRIT Air Cargo Handling, the brand name of SAS Ground Handling, has gained its CEIV Pharma certificate in Copenhagen, making it the first cargo handler in Scandinavia to do so. “We are very proud to be the first cargo handler in Scandinavia to receive the CEIV Pharma certificate and are convinced our efforts will become a great support to our customers,” says SAS Ground Handling Denmark CEO, Hans Henrik Spangenberg. “This is a working process and further improvements is one of our key focus areas to secure and support the needs of our customers where we can see potential opportunities for growth,” he adds. Specific processes and procedures for handling Time and Temperature Sensitive shipments have been implemented and internal training has been provided to all staff working in the Copenhagen warehouse. “By obtaining this certification, we are in full compliance with the expected handling standards for the pharmaceutical industry and are fully aware of our role as an important part in the cool chain of Time and Temperature Sensitive shipments,” says Spirit Air Cargo Denmark head of cargo, Ole Madsen. Spirit Air Cargo expects to have its locations in Oslo and Stockholm certified in the near future.
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K+N airfreight has an outstanding year
NEWS WEEK
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uehne + Nagel’s airfreight sector has had an outstanding year in 2017, growing at twice the market rate, helped by strong performances in sectors including pharmaceuticals. Airfreight tonnage increased by 20.4 per cent, twice the market rate of 10 per cent, which itself grow at the highest rate since 2010. Industry specific areas such as pharma and healthcare, and aerospace generated significant growth, and Kuehne + Nagel strengthened its position in the perishables business with the acquisition of two companies in Kenya and the USA. Airfreight revenue increased from 3.9 billion Swiss francs (CHF) in 2016 to CHF4.7 billion, and earnings before interest and tax (EBIT) were up five per cent to CHF313 million. Kuehne + Nagel International chief executive officer, Dr Detlef Trefzger says 2017 was a successful year, saying: “The consistent implementation of our business strategies resulted in strong volume growth and a clear increase in gross profit. Once again, our integrated business model has shown its strength: The effects of difficult market conditions in one business unit were more than compensated by increased profitability in the other divisions.
“With our digital solutions we further increased efficiency and improved customer value at the same time. Highlights from the past business year include the seamless integration of four acquisitions which strengthen our leading position in perishables as well as pharma and healthcare logistics.” Net turnover for the whole company was up 12.5 per cent to CHF18.6 billion and earnings for the year were up 2.8 per cent to CHF740 million.
ECS marks UIA’s 25 years of operations
UKRAINE International Airlines (UIA) is celebrating its 25th anniversary with new routes and fleet upgrades on the way for 2018. The airline, which operates out of Kiev-Boryspil Airport, operates 1,100 international and domestic flights per week and will further expand services and implement e-business and digitalisation strategies in 2018. In 2016, UIA Cargo carried 11,127 tonnes of cargo including food, seafood, flowers, medical products and equipment, animals, machine components, spare parts, clothes and valuables across its network. UIA director of cargo and mail, Peter Kukharchuk (pictured) says: “Currently, we are significantly expanding our capacities: In 2018, we will add four new B777-200ER aircraft to our fleet, which will operate the route to Israel and replace the B767-300 on routes to the US, China, and Thailand.” He says part of the ongoing success has been due to its long standing partnership with its GSSA, ECS Group. Kukharchuk says: “Our ongoing success is also partly due to our longstanding partnership with ECS Group, one of the largest integrated GSSAs worldwide. “With its competent and dynamic workforce and its large network of offices and subsidiaries in more than 47 countries, ECS Group has significantly contributed to the healthy growth of our international business.” The airline was one of the first Ukrainian joint ventures involving foreign investors, starting operations on 25 November 1992.
PEOPLENEWS
ACL Airshop has appointed Marc Terpstra to the role of board advisor, bringing over 25 years of experience in the air cargo industry with him. Previously its managing director – international for over 10 years, Terpstra has been with the company and its predecessors since the merger of Airshop and Airline Container Leasing. AIR Transport Services Group (ATSG) has hired Mike Berger as chief commercial officer (CCO). He will be responsible for the sales and marketing strategy for the ATSG family companies. Berger, will also take over as president of Airborne Global Solutions, and will report to ATSG chief operating officer, Rich Corrado. Berger says: “I am excited to help customers maximise the value ATSG companies have to offer.”
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NEWSWEEK UK exports suffer capacity squeeze
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xporters in the UK are being held back by the lack of capacity on key trading routes from Heathrow Airport, new data has revealed. The data shows that key routes to Shanghai, Delhi, Mumbai, Los Angeles, Tokyo Haneda and Dubai, which represent nearly 18 per cent of Heathrow’s total cargo volumes, are full and unable to accommodate further growth in trade. The airport is the UK’s largest port by value, handling over £106 billion of goods last year, with access to global markets proving very important for high-value goods and SME exporters with 33 per cent of non-European Union exports going through Heathrow. Heathrow says an additional runway would provide extra capacity for exports on key routes. The airport says expanding Heathrow would
double cargo capacity and support up to 40 new long haul trading links, helping British exporters reach new customers in fast growing markets around the world. Heathrow Airport’s executive director for expansion, Emma Gilthorpe says: “Expanding Heathrow couldn’t be more important for Britain’s future, as we’re already seeing some of our most critical trading routes reach capacity.
After Brexit
“If we want Britain to thrive as a global trading powerhouse after Brexit, we need to get on with expanding Heathrow now. With new capacity at our nation’s global gateway, we will unlock the trading opportunities that will underpin a prosperous future for all of Britain in the decades to come.”
Asia Pacific demand remains strong AFTER a very strong year in 2017, demand for air cargo across Asia Pacific continued to grow at a fast rate in January, the Association of Asia Pacific Airlines (AAPA) reports. The association says that air cargo measured in freight tonne kilometres (FTK) increased by 9.4 per cent to 5.7 billion, with capacity in available FTK up 5.4 per cent to 9.4 billion, and load factors increasing 2.2 percentage points to 60.8 per cent. AAPA director general, Andrew Herdman says: “The strength in the global economy has continued to benefit the air cargo business for Asian carriers, particularly as major manufacturing hubs are located in the region.” The January results follow on from the fastest full year growth since the post financial crisis rebound in 2010.
After years of what AAPA described as “tepid performance”, FTKs grew by 9.8 per cent in 2017, with capacity in AFTK up by 4.4 per cent, and load factors improving by 3.2 percentage points to 65.2 per cent.
Atlas Air’s positive 2018 outlook
ATLAS Air enjoyed record fourth-quarter and full-year 2017 revenue, record fourth-quarter earnings and robust full-year earnings growth, and a continued strong outlook in 2018, says the company. “[Last year] was an exciting year for Atlas and we expect that to continue in 2018,” says Atlas president and CEO William Flynn. Highlights of the year include a record 4Q reported income increased to $209.5 million from $28.7 million, full-year increased to $224.3 million from $42.6 million; record 4Q adjusted income of $66.6 million, up 13
per cent; Full-year climbed 17 per cent to $133.7 million. Mid-20 per cent earnings growth expected in 2018. “The initiatives that we have put in place over many years have transformed our company. Our focus on express, e-commerce and fast-growing Asian markets has broadened our customer base,” says Flynn. “As a result, we were well-positioned to capitalize on market dynamics and deliver fourth-quarter and full-year volumes, revenues and net income that grew sharply compared to the prior year. “In addition, our results benefited from the passage of the US Tax Cuts and Jobs Act in late December, which generated a significant gain related to the revaluation of our net deferred tax liabilities. On passage of the law, we were pleased to provide a one-time bonus of $1,000 to our global personnel in recognition of their hard work and commitment.”
Changi starts 2018 with double digit cargo growth in January FOLLOWING a record breaking year in 2017, cargo volumes at Singapore Changi airport continued to grow with a double digit increase in January. The airport experienced 7.9 per cent growth in 2017, passing the two million tonne mark for the first time by handling 2.13 million tonnes. It followed this up in January with 10.7 per cent growth to 175,590 tonnes, compared to handling 158,700 tonnes in the same month of 2017. The growth in January builds on strong results in 2017, with imports, exports and
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transhipments all growing, and a focus on premium cargo products. Changi Airport Group formalised the Pharma@Changi initiative in October 2017 to improve pharma handling, and the airport became the first community in Asia Pacific to attain IATA CEIV Pharma certification. SATS opened a new eCommerce AirHub in April, enhancing Changi’s e-commerce mail sorting capability to support the growing e-commerce market with its state-of-the-art automated airside e-commerce mail sorting facility.
NEWS WEEK
TIACA’s Vision has youth in its sights to take on disruptors
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he TIACA Vision, revealed at the start of February, is about attracting Millennials and young people to airfreight at a time when disruptors are beginning to make their moves on traditional airfreight activity. The association’s desire to pave the way for a modern air cargo industry is about attracting more youthful employment candidates and taking on the growing number of disruptors who are looking to take on established industry practices. That is the message from TIACA chairman Sebastiaan Scholte, who is also Jan de Rijk Logistics CEO in an exclusive interview with Air Cargo Week. He says: “The logistics landscape is rapidly evolving and disruptive business practices are challenging us to innovate; there has never been a more relevant time for TIACA to take the lead.” “This industry is conservative and resistant to change. We must engage with young people to come into air cargo. We have to have new ways of attracting young people. One might be internships thoughout the whole supply chain. “TIACA is the only association representing all parts of the air cargo supply chain, and we have a 28-year history of championing our industry and supporting talent and best practice.”
XLA Standard of Excellence award won by AA Cargo
The association must look to methods of making a career in airfreight an interesting prospects for Millenials. These could include collective learning, internships and an on-line platform to allow young professionals to gain knowledge from older, more experienced freight people. A cultural change that TIACA is also seeking through its Vision
project is the ending of the habit that many players have in not really communicating with others in the supply chain. Scholte says: “Too often, players are ‘afraid’ of sharing information. There is no incentive to share failures. But the industry can only improve if we inform each other of problems that arise and we can all work to solve. This culture should stop.” TIACA will set up clusters of members representing the different sectors of the industry, including, for example, airlines, airports, and ground handling agencies (GHAs). The clusters will concentrate on issues specific to their interests and challenges to develop solutions beneficial to the entire industry. One of the key challenges on the horizon for Scholte are the disruptors. Companies such as Amazon and Alibaba are no longer content simply to be users of the global supply chain but want to have a hand in how their products are moved around the globe. WHAT do you think? Are you trying to recruit Millenials to your organistaion? Will increased professionalism attract more professional candidates? Let us know your experience: contact the editor - james. graham@azurainternational.com
AMERICAN Airlines Cargo has received the 2017 Express Cargo Service Standard of Excellence award for the second year in a row from the Express Delivery & Logistics Association (XLA). The award recognises excellent performance servicing the express cargo industry. XLA, a trade association for companies providing and procuring services in the global air express mail and logistics industry, surveys its approximately 50 member companies annually about their experience of express cargo with various airlines. Members rate airlines on express cargo performance, services and products as well as on specific categories that include on-time performance and next flight out (NFO) availability, communications, customer service, recovery experience, web and technology, cold chain and other factors. “We are particularly proud of this award because it comes from XLA members who are an important part of our customer base,” says American Airlines Cargo VP sales Roger Samways. “Thank you to the XLA membership for recognising our hard work, and thank you to the entire American Airlines Cargo team.”
ACW REWIND
THE US was unprepared for mass inbound air cargo screening, warns head of the Airforwarders Association, Brandon Fried
US mass cargo screening Vol 17 Issue 22 9 June 2014 DISQUIET is growing in the US that a plan to screen inbound airfreight shipments may backfire. The Airforwarders Association the National Customs Brokers and Forwarders Association, the Express Delivery and Logistics Association and The International Air Cargo Association have written to the TSA and CBP to rasie their concerns that the impending Air Cargo Advance Screening Program (ACAS) has not been fully tested. The Airforwarders Association’s executive director Brandon Fried said that ACAS has been operating as a pilot programme with a very small number of forwarding companies working out of a limited number of locations. ACAS trials only included a couple of major carriers and seven forwarders out of some 4,300 in the US. Fried’s concern is how the US would cope during an enhanced threat period without trade coming to a halt.
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AIR CARGO INDIA REVIEW Infrastructure and bureaucracy continue to be issues
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hough airfreight in India will grow in the coming years, poor infrastructure and government bureaucracy are hurdles to overcome. During the first panel discussion at Air Cargo India 2018 on 20 February, speakers were in agreement that the Indian market had huge potential, but there were still issues impeding growth. During the session, ‘Charting a new flight path for Indian air cargo as a global destination’, problems such as poor infrastructure and inefficient bureaucracy were major talking points. Lufthansa Cargo member of the executive board and CCO, Alexis von Hoensbroech told delegates that he did not think India was ready for steady growth, though it would grow helped by a population of 1.3 billion people. He pointed
out that India and China were at the same level 25 years ago but now China’s GDP is five times bigger than India’s. It was also pointed out that China exports as much in six weeks as India does in a year. He said: “A lot of infrastructure still has a long way to go, certainly for production for products like pharmaceuticals. Infrastructure from the warehouse is something the country needs to develop. There is also not enough infrastructure for forwarders.” Von Hoensbroech also highlighted bureaucracy, saying: “Indian bureaucracy tops world ranks. The government is trying to improve matters but it slows down air cargo development.” He did, however, praise the government’s Make in India programme, though pointed out it will take time to see the benefits and requires
considerable investment in areas such as education. India is a very important market for Lufthansa Cargo, one it has been serving for almost 60 years. The airline operates 65 widebody passenger flights a week and 10 freighters, and intends to keep growing. Von Hoensbroech admitted 2015 and 2016 were challenging but 2017 saw significant growth, and the prospects for 2018 were looking good.
Long term improvements
Indian panellists were in agreement that improvements were needed, with AAI Cargo Logistics and Allied Services chief executive officer, Keku Gazder adding that improving infrastructure was a long term objective. He said: “Given the lack of land available for airports, we need to rationalise usable space and improve the ease of doing business. Dwell times need to be reduced so cargo is not sitting in the terminal waiting to be processed, it needs to be processed as quickly as possible.” Mumbai Airport senior vice president and head of cargo, Manoj Singh agreed there were issues but described them as “incidental” and “bound to happen when there is a supply and demand imbalance”. He called for greater efficiency, digitisation and collaboration but added that infrastructure is improving at metro airports helping cargo to move faster. Despite these problems, Indian airports are experiencing strong growth, with Gazdar pointing out that AAI is handling about 600,000 tonnes a year and expects to maintain increases of 18 – 20 per cent in the coming years. Singh said that recent growth has also been very strong, especially in areas such as pharmaceuticals. GMR Airport chief operating officer, Aerocommercial cargo & Asia Pacific Flying School, Hemanth DP said though India is not ready for 20 per cent growth yet, infrastructure is being improved, helping both the passenger and cargo
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divisions. Airports in India have masterplans and should be able to cater for growth in the future. Air India executive director for cargo, Abhay Pathak pointed out that the e-commerce market was set to boom from $35 billion to $200 billion in a matter of years. He said: “Business is about profits, the market is getting more mature and there is huge competition to transport goods from a to b quicker, the rest will follow in line.” He said Air India is feeling very positive, saying: “The growth is great, we need to look at how grow further, how to do more and more efficiently.”
Removing pain points
The session came after a presentation by economic advisor at the Indian government’s Ministry of Civil Aviation Vandana Aggarwal. She explained that the government is working on promoting digitisation and e-cargo platforms to improve data sharing among relevant parties. Aggarwal also said the government is working on helping to significantly reduce logistics costs in years to come and that India being rated an easier place to do business. She told delegates: “You could tell us we’re pipe dreaming but the message is we are working with you because we see gains for everybody and are not just targeting one segment. We are attempting to target pain points, tell us where the pain points are and we will do our best to remove them as soon as possible.” The International Air Transport Association’s global head of cargo, Glyn Hughes welcomed the comments, saying: “It’s always encouraging to hear a government with a plan.” He supported the challenge of 20 per cent growth per year, e-cargo, the Goods and Service Tax and other measures to improve efficiency. Hughes said: “It’s nice to see a leading economy having such great projects going forward.”
AIR CARGO INDIA REVIEW Industry needs to adapt to changing consumer demands
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he ever growing e-commerce sector is bringing a greater amount of choice to the consumer, and the air cargo industry needs to capitalise on this. How the air cargo industry will exploit the opportunities the e-commerce sector brings was the topic for the session ‘E-commerce retail – what air cargo can deliver’, which was moderated by e-Cargoware non-executive chairman and former International Air Transport Association (IATA) global head of cargo, Des Vertannes. Boeing regional director - airline market analysis - marketing & business development, Tom Crabtree said that Boeing studies e-commerce day in day out and though it has been around since the 1990s, it is only in recent years that enabling technology such as smartphones have really taken off. He said: “This has provided greater access to information and enabled a new breed of consumer that didn’t exist before. Our paycheques are not getting bigger but expectations have increased, this is a key driver for e-commerce. Consumers demand products faster and this is changing demand for capacity.” IBS Software Services vice president - global business head - airline cargo services, Ashok Rajan said that e-commerce was able to bring the catalogue that was only available in the major cities to other areas. He pointed out that even in far flung places, consumers want products quickly, and allowing this to happen is a major challenge that needs to be overcome. Liege Airport vice president - commercial, Steven Verhasselt explained that the airport builds the infrastructure, creating space for service providers to provide their services. E-commerce shipments are smaller than traditional cargo and so this requires
greater use of technology to move them through the warehouse. He said the traditional model of building extra warehouses is no longer the answer, as products need to either be on an aircraft or with the final consumer. Verhasselt believes that the speed of data exchange is as important as physically handling products.
He told delegates: “Land is scarce, especially first line warehousing. We need to manage it better, that’s where technology comes in. You can move products faster and do the physical break down faster but also in a data way, if you can clear customs then you can shift products through the warehouse without stopping.”
Blockchain is ideal for logistics industry
COLLABORATION and using new technology were the talking points of the final session at the conference, titled ‘Industry collaborations enable efficient, intelligent & profitable air cargo supply chains’. The session was moderated by Miami-Dade Aviation Department manager aviation trade & logistics, Emir Pineda who highlighted recent issues such as congestion at major airports, dwell times and infrastructure issues. Expeditors country head for India, Kapil Madhok said that demand for airfreight had been very high, causing congestion at a lot of airports. He said: “We need to look at how we work with ground handlers and airlines, to understand the customer experience with a shipment, whether its urgent, the price they pay, whether they are willing to wait at the terminal. We need to work with the customer to educate them.” The use of technology was a major talking point, with the efficient use of data promising to help the industry if it is used effectively. Brussels Airport Company head of cargo & logistics, Steven Polmans, who is also the vice chairman of The International Air Transport Association (TIACA), said that data sharing is the new oil but data is only useful if it is shared. He said: “It creates power and transparency for the shipper, it also creates transparency for your own organisation and for the industry. It should be about mindset.” Blockchain was used as an example of new technology, with Cargo Service Center chairman, Tushar Jani saying it is the right solution for data and the logistics industry should be the first vertical to be blockchained. Polmans added: “The biggest obstacle is people, even today so much is possible and we don’t do it, we don’t see the benefits. There is no reason why, but people prefer to continue as they did yesterday but they keep complaining. Why does no one take the first step? Ask what data is needed and then start doing it. We are waiting to see who will take the first step.”
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PHARMACEUTICALS
Pharma.Aero makes a stand in Mumbai
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harma.Aero chairman Nathan De Valck headed up team running the Pharma.Aero stand at the recent Air Cargo India conference to highlight air cargo life sciences. He says: “The initiative to bring our members together in one pavilion at Air Cargo India and our participation in the shippers forum underline Pharma.Aero’s ambition to shape the future of the air cargo industry. “Clustering pharma shippers together with airports and operators under our Pharma.Aero umbrella, creates strong synergies.” The Pharma.Aero pavilion was a cross-industry initiative, on which different operators are clustered together with airports and pharma shippers. On the pavilion, the participating strategic members of Pharma.Aero were Mumbai
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International Airport, Brussels Airport, Miami International Airport, Changi Airport Group and Sharjah Airport.
Also on the pavilion, full members Brussels Airlines Cargo, Singapore Airlines Cargo and Expeditors joined together with two of associate members, e-Cargoware and 4Advice. Amerijet, Pentafreight and Cargo Service Center officially signed their new full memberships at the event. Mumbai International Airport senior vice president and head of cargo, and Pharma.aero boafrd member, Manoj Singh says: “As a strate-
gic member of Pharma.Aero, Mumbai Airport hosted the Pharma Shippers Forum and we will further follow-up on this initiative. It is an opportunity for our cargo community to become the industry leader for life science air cargo products in India.” Brussels Airport took the lead in organising the pharma shippers forum, bringing many international pharma shippers together. The forum gave them a platform to discuss and share knowledge, ideas and concerns. Pharma.aero secretary general Frank Van Gelder, says: “Our membership is growing fast. The great interest shown for joining our organisation by our members convinces me that Pharma.Aero can set new standards and bring evidence-based analysis, something this industry desperately needs. A warm “welcome on board” to all our new members!”
EIGHTEEN months after China launched the “two-invoice” system in drug distribution on a trial basis, aiming to improve transparency in drug prices and eliminate excessive profit margins associated with multi-tier distribution models, a major pharmaceutical logistics exhibition is to be held in Shanghai. The 2018 summit will discuss pharmaceutical cold chain matters, market trends, policy interpretation, offer a comparison of overseas logistics regulations as well as promoting the implementation of standardisation of pharmaceutical cold chain and transportation industries. The content of the summit should help the pharmaceutical distribution industry achieve transformation and upgrading, further seeking conformity with international standards, say organisers. Being staged for the third time, the previous summit attracted over 200 professional audiences from Cardinal Health, Merck China, Sanofi, Yangtze River Pharmaceutical Group, Luye Pharma Group, Jiangsu Hengrui Medicine and Shenyang Sunshine Pharmaceutical. P-Logi 2018 International Pharmaceutical Cold Chain, Storage and Transport Exhibition as well as the fouth International Pharmaceutical Cold Chain Summit, are hosted by Shanghai UBM Sinoexpo International Exhibition Co and will be held at the Shanghai New International Expo Centre (SNIEC) in June. Professionals related to equipment, packaging and service of pharmaceutical cold chain, temperature control, international freight, transport of dangerous goods, storage will participate in the event. Companies in the cold chain, storage equipment and material in the medical transportation process
have joined in this pharmaceutical logistics summit to display their leading solutions. Chinese forwarders with pharma traffic exhibiting at P-Logi include Sinogain International Logistics. A close partner with domestic and foreign airlines, Sinogain is a major operator in providing import and export airfreight forwarder services. Shanghai YM Logistics, centring on the supply chain service of dangerous goods, covers shipping, air transportation, land transportation and multi-modal transportation of dangerous goods. Hong Kong Xinte specialises in international transport of chemicals, dangerous goods and lithium battery products and collaborates with express companies to provide door-to-door services of sensitive pharma goods. Emball’iso Cold Chain Technology (Shanghai) has 20 years of experience in development and is mainly involved in the design of packaging materials with thermal insulation and constant temperature. It also produces and processes production and processing as well as the transportation of heat-sensitive medicines (vaccine, biological product, fine chemical, and products centering on the health of humans and animals). Global Airfreight International, a logistics company based in Singapore, will demonstrate refrigerated containers, cold-chain circulating boxes and other products at the exhibition. Shanghai Telegroup Print-Equipment specialises in the sales and print agent services in high-speed printing involved in intelligent solutions for medicines and pharmaceutical products.
P-Logi 2018 phrama logistics exhibition and summit to be held in Shanghai
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PHARMACEUTICALS
Pharma at IAG Cargo remains in good health
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he growing investment and activity behind vaccine development and production around the globe will be a key driver for pharma airfreight activity in the next five years. That is the claim of IAG Cargo global head, pharmaceutical and life sciences, Alan Dorling (pictured). He says: “There will be significant growth in vaccines shipments in 2018 and ’19. Significantly, this will include vaccines for malaria, dengue fever, childhood diarrhoea and yellow fever. The growth of type 2 diabetes because of the spread of a Western lifestyle, is leading to growing worldwide volumes of insulin being transported.” There is also growing volumes of the penta 5-in-1 vaccine tackling diphtheria, tetanus, pertussis or whooping cough, polio and Hib disease. Pharma shipments play a critical role in a global supply chain covering packaging materials, active pharmaceutical ingredients, excipients, and final products such as clinical trial materials, pharmaceuticals, medical devices, combination products such as drug-eluting stents, and dietary supplements. Dorling, who spent 32 years as a applied bio-chemist before he joined the airline in 2011, is very confident about the future of pharma airfreight shipping. “It is becoming more and more professional,” he says. “The sector is now increasingly regulation-driven. Shippers are driving standards. They are demanding Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma) status and Good Distribution Practices (GDP) Certification for Pharmaceuticals from carriers.” Pharma shipments are an important traffic for the four airlines – British Airways, Aer Lingus, Iberia and vueling – in the IAG Group, says Dorling: “They make quite a significant contribution to the business.” A key indicator of the important of pharma traffic to IAG Cargo is the growth of the group’s personnel handling the traffic. “When I joined in 2011 there was only one other dedicated person in control of pharma. Now there are 36 team members,” he says. There are staff in every region of the group’s operations. The global growth in demand for pharma shipments, however, is not to be entirely welcomed because of one major manner in which it is impacting the business, notes Dorling. He says: “There are 34 competing airlines operating in pharma shipments. This is leading to an erosion in yields as rates are dropped. There is almost a race to the bottom by airlines with spare capacity. IAG Cargo will not go there. We refuse to reduce our margins.
Dorling says: “The nature of the product is very delicate. There are always danger on the tarmac from wind, sunshine, odours and fumes. That is why airlines have to consider tarmac exposure time. Middle Eastern airlines are investing in cool dollies.” Though packages of phials and pharma bottles may be
small in volume and weight, one aspect of the cargo that may surprise the observer is the sheer value of the products being handled by Dorling and his team. He says: “It’s not uncommon to have a pallet with cargo worth $10 million.”
Encourage customers
The investment, services and modern facilities to handle pharma do not come cheap. That is why airlines consider this a premium product. In turn, some shippers will try and bear down on the airline rates. This could be a reflection of the pressures many pharma manufacturers face on branded drug prices worldwide. However, Dorling says that IAG Cargo will not compromise on quality and will retain its rates. “Shippers can’t have it both ways,” he says. Quality always comes at a price. That is one reason behind the 55 million euro investment in pharma at London Heathrow. The group had a very good 2017 for pharma, says Dorling, and 2018 has gotten off to a robust level of business. While pharma is handled throughout the group’s network, key lanes include out of Europe as well as India to Latam; the US to India via the UK; and, from Ireland to the US and Asia Pacific. Key sources of pharma traffic are India and Mexico. One way in which Dorling emphases differences between IAG Cargo and its competition is his section’s willingness to allow shippers to see the pharma airfreight operation for themselves. He says: “We encourage customers to our facilities, to see for themselves the operation of loading their products on aircraft. Other airlines are ‘shy’ and unwilling to let their customers see the operation. I believe very much in that we should ‘walk the walk and talk the talk’ about our operations.” Pharma products are, by their nature, some of the most time-sensitive and delicate items shipped by air.
aircargoweek.com
ACW 5 MARCH 2018
9
BELGIUM
Brussels Airport looks at new ways of working
T
he downside of a newly invigorated air cargo market has become evident, according to Brussels Airport head of cargo and logistics Steven Polmans (pictured), writes Neil Madden. “Problems and congestion seen in Europe in recent months due to strong market growth have shown up once again,” he tells Air Cargo Week. “In order to make real changes and improve our industry, we have to work together in a complete different way. We can no longer play dumb and look at our own internal
operations and keep our eyes shut as to what is comes before or after us in the logistics chain,” he continues. As an example, he points to the launch early this year of the Brussels cargo community slot booking portal accessible via BRUcloud. This lets forwarders book times for pick-up and delivery at participating warehouses. In the first phase, two ground handling facilities, those of Aviapartner and WFS, were open for advance booking. Other participating companies in the first roll-out are Nippon Express Belgium, Kuehne + Nagel, Panalpina, Sky Fast, and DHL Global Forwarding, with the latter being the first company to book a slot using the portal. The aim is to cut queues and waiting times at the reserved gates allowing all participants to allocate resources more efficiently.
“This is proving to be very successful and showing immediate results,” adds Polmans. “We will invest more this year so additional features become available and we can really build a landside operational management tool to increase efficiency and cut waste in our way of working.” More generally, Brussels expects another strong year in 2018, “more or less in line with the growth we had in 2017 which was around 10 per cent” Polmans continues. Last year was especially good for exports, mainly to Asia and more specifically China, he says. But South America, too, saw “a huge recovery” in export volumes and Polmans expects this trend to continue. Pharma is very important to the Belgian hub and the cargo team is doing all it can to main-
tain its position as a leading gateway. “After the development and introduction of the CEIV certification programme, our airside pharma dollies (transporters), and the creation of pharma.aero, a lot of focus over the next few months will be on a project to increase visibility in the logistics chain,” Polmans goes on. “This is something most players in our industry are not actively supporting, but which is being asked for by pharma shippers and manufacturers.” Also in the pipeline is a €100 million real estate development plan, including renovating existing warehouse buildings as well as adding 50,000 square metres of new first line handling facilities and 10,000 square metres in second line facilities. “They will come into use between the end of this year and end 2019,” Polmans says.
RECENT years have been nerve-wracking for Belgium’s Liège Airport. One of Europe’s most cargo-friendly airports was heavily dependent on Dutch express operator TNT, at one point accounting for 2,000 of 3,500 jobs. But the takeover of TNT Express by Fedex and the acquisition of TNT Airways by ASL Aviation raised concerns over whether the American integrator would maintain Liège as a full hub given that it runs established hubs at Paris CDG and Cologne. However, some reassuring moves were made last year. In April Fedex began a flight linking Liège to the FedEx Express hub in Memphis on a round the world service that takes in Shanghai, Seattle and Anchorage. Prior to the takeover, TNT had planned a €70 million renovation of its sorting centre. Fedex has not just stuck with that investment, but boosted it with a further €30 million. While the commitment of Fedex to the hub has been the big news of the past year, Liege is not resting on its laurels. Tonnage handled at the airport set an all-time record of 717,000 tonnes in 2017, 8.5 percent up on the previous year.
Two new airlines – Air China Cargo and AirBridgeCargo – started services, while in February this year they were joined by a weekly Turkish Cargo A330-200F service flying between Istanbul and Liège. The main cargo is perishables destined for markets in Western Europe. The airport itself is investing to support the growth of forwarders and handlers. “One 6,000 square metres cargo hall is coming into operation, and more than 20,000 square metres will soon be built, as well as four new parking stands for large aircraft,” says airport CEO Luc Partoune. “It represents a major investment of more than €50 million creating, as a result, several hundred jobs.”
Liege boosted by FedEx commitment
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