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The weekly newspaper for air cargo professionals Volume: 18
Issue: 28
20 July 2015
May sees worldwide freight fall
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argo volumes in May fell year on year (YOY) at 15 of the world’s 30 busiest airports by total tonnage, according to the Airports Council International (ACI). The airport association revealed the figures in its FreightFlash statistics for May, which are based on preliminary data and cover 70 per cent of the total airfreight traffic across the globe. ACI says in May, total YOY cargo growth dipped to a one year low of 1.3 per cent. International tonnage was up YOY by 1.7 per cent and domestic was up YOY by 0.3 per cent. The year to date (YTD) total airfreight volumes from January to May is up YOY by 3.8 per cent. International YTD cargo is up so far this year by 4.6 per cent and domestic freight by two per cent. On a 12-month rolling basis, total volumes are up YOY by 4.7 per
cent. International cargo is up YOY by 5.5 per cent and domestic rose by 2.9 per cent. ACI explains that the weak growth in airfreight coupled with significant declines in major international airfreight hubs, “raises concerns,” about the second half of the year. “The weaker than expected economic performance of Europe and the slowdown of international exports from Asia signal ongoing trepidations,” ACI
adds. May’s performance is down on April, when volumes rose YOY by 3.3 per cent. In March, there was a YOY rise of 1.4 per cent. In February there was a YOY rise of 10.4 per cent as airfreight was boosted by the US West coast seaports slowdown. In January, volumes were up YOY by three per cent. ACI says airports showing the most substantial declines in May were Paris Charles de Gaulle Airport and Miami International
Airport, which saw falls of 7.6 per cent and 5.7 per cent, respectively. Other major freight hubs such as Frankfurt Airport, Taiwan Taoyuan International Airport, Tokyo Narita International Airport and Bangkok Suvarnabhumi International Airport saw 3.4 per cent, 2.9 per cent, 2.7 per cent and 2.7 per cent falls in volumes respectively. Africa had the strongest surge in volumes and saw an increase of 10.3 per cent in May, which ACI says was driven by 9.4 per cent and 15.9 per cent YOY rises at O. R. Tambo International Airport and Mohammed V International Airport. In May, domestic cargo within Africa rose significantly YOY by 21.6 per cent. The Middle East is outpacing Asia Pacific with 4.4 per cent versus 1.6 per cent growth in total airfreight volumes, while North America and Latin America each show 1.1 per cent YOY growth for the month.
Seaplane cargo drone offers free insurance
A seaplane cargo drone with a 100 tonne capacity able to use sea port facilities and carry ocean freight containers and unit load devices is being proposed by US company, Natilus Drones. Claiming double digit savings in operational costs and for freight forwarders, Natilus is aiming at what it says is an existing $100 billion a year Trans-Pacific airfreight market that will grow significantly due to e-commerce. Expecting to operate their seaplane cargo drone, called Natilus (see picture), but pronounced Nautilus, with an initial Trans-Pacific fleet of up to five, the company’s founders have been speaking to freight forwarders. The pitch to forwarders has included paying the cargo insurance for the first year, a 20 per cent profit margin increase and each route to be dedicated to one partner. “E-commerce is booming and we’ll expect that to improve and get larger. We are hedging on e-commerce will keep growing. In the US it’s everything. And
30 per cent of [US company] sales are international,” Natilus chief executive officer and chief aerodynamicist, Aleksey Matyushev, tells Air Cargo Week. The Natilus seaplane, which is made of carbon fibre and fibreglass composites, has an estimated $25 million production cost, compared to a Being 777 Freighter which has a list
price of about $300 million. The low production cost is because it has no pilots. Natilus would fly below passenger air traffic at 20,000 feet (6,096 metres) after using up to 6,000 feet to take-off in a sea state swell of up to eight feet and would fly across the Pacific in 30 hours. Natilus would be towed from a sea port to its take-off point outside of territorial waters, which often end at about 19 kilometres from a nation’s shoreline. After landing a tug would tow it to the sea port. The Natilus will use a Pratt & Whitney turbojet engine which the cargo drone firm says it knows is in development, but declines to identify. The company intends to build a scale model prototype with a six metre wing span to test the autopilot and water take-off and landing. The Boeing 747-400 wingspan is 64.4 metres. The plan is that the scale model will be flying in 18 months and a full scale commercial Natilus will be flying three years after that.
emerging marketS boost heathrow online aD hoc dock booking offers efficiencies new hub and routes for sovereign speed Cargo-XML is airfreight’s new frontier
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Japan aviation biofuel map MUNICIPAL waste, used food oil and natural oils are the leading contenders in a five year roadmap to develop biofuel by 2020 by The Initiatives for Next Generation Aviation Fuels (INAF). From 2020, Japanese production of biofuels is expected following the formulation of a business plan over the next 12 months, then the design and construction of a production plant until 2018 and then in 2019 the trial operation of the biofuel facility. The roadmap is described in an INAF report made public last week. Biofuel’s are expected to reduce aviation’s environmental footprint. INAF is a consortium of 46 organisations including Boeing, All Nippon Airways, Japan Airlines, Nippon Cargo Airlines, Japan’s government and the University of Tokyo. The INAF work in the years to come will also seek to reduce the costs of biofuels. Even with the high cost of oil in recent years, biofuels are still more expensive than conventional jet fuel, and can be twice the price. How biofuel can be mixed with jet fuel is another area of study for INAF.
NEWSWEEK
Cargo omitted from Gatwick’s response
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argo is not mentioned in Gatwick Airport’s official initial response to the UK government’s Airports Commission’s recommendation that Heathrow Airport get a third runway. Published on Tuesday 14 July, the response’s 12 pages do not mention cargo or freight, yet at the commission’s 1 July recommendation announcement airfreight was outlined as an important factor. On 15 July, a hearing of the UK’s upper legislative chamber, the House of Lords, about the Airports Commission’s recommendation, heard about airfreight’s importance from the commission’s chair, Sir Howard Davies (see story below). What Gatwick’s initial response, entitled, A second runway for Gatwick: Initial response to the Airports Commission’s recommendation report, does say is that the airport has concerns over some of the data,
analysis and findings used by the commission for traffic, the economic case, market competition, noise and air quality. Prior to the commission’s recommendation Gatwick had argued that it could handle up to 1.07 million tonnes per year by 2050 with a second runway. This growth is from more long haul services.
Under Gatwick’s expansion plans it would add a 65,000 square metre cargo facility. Gatwick does promise a future response that deals with freight. The airport tells Air Cargo Week (ACW): “Over the coming weeks we will continue to assess the Airports Commission’s documents further, and outline our views on broader parts of the report.” It adds that Gatwick’s expansion plans are about more competition among the UK’s airports and this includes cargo. “In our expansion plans we have made provision for ten times the amount of freight capacity that the airport handles today,” it says. Gatwick continues to see falls in cargo volumes and in June it saw a 45.1 per cent drop in tonnage to 4,028 tonnes. In May, cargo volumes fell by 24.3 per cent year on year (YOY) to 5,652 tonnes. In April, volumes were down 11.2 per cent YOY from 7,577 tonnes to 6,727.
Manston Airport decision ‘within weeks’ WITHIN weeks Thanet District Council (TDC) could decide to carry out a compulsory purchase order (CPO) on the former Manston Airport site once a review of an earlier decision not to revive the gateway is completed. The members of the TDC decision making body, the cabinet, agreed on Tuesday 14 July at an extraordinary meeting to review the December 2014 decision not to revive Manston. In December, the then Labour party controlled council dismissed US investment company RiverOak Investment’s CPO bid to turn Manston into a cargo hub. On 5 May, local elections saw the UK Independence Party take control of the TDC. UKIP had committed itself to overturning the December decision. UKIP council leader, councilor
Chris Wells, tells Air Cargo Week: “The decision made at cabinet last night means that the council will start reviewing previous decisions and I hope this is a process which will take weeks rather than months.” The council says the review will take account of all the surrounding circumstances relating to an indemnity partner for a possible CPO. As part of the decision, the council will seek specialist legal and finance advice to determine whether RiverOak is a, “suitable indemnity partner,” and to provide advice on the indemnity agreement and CPO process generally. The review will also explore the likelihood a move to take the site from its owners would succeed.
Freight, regions make Heathrow case UK government’s Airports Commission chairman Sir Howard Davies has highlighted the key role airfreight and the regions played in its recommendation that Heathrow Airport should get a third runway. Heathrow presents more opportunities for freight companies as many have facilities near the airport and would benefit the UK economy, Davies says. He adds that regional connectivity was vital in the decision to recommend Heathrow. He says a third runway will improve connectivity for UK regions and give businesses access to worldwide markets. Davies was speaking to the economic affairs committee of the UK’s upper legislative chamber, the House of Lords, on Wednesday 16 July. He says: “It’s all about the hub
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and access to Heathrow. Airlines want to get on routes to connect to their network.” At the hearing, Davies says the commission feels the economic case is, “decisively,“ in favour of Heathrow and the future benefits of expanding it are, “noticeably greater“. The commission chose Heathrow over Gatwick Airport for a new runway. Davies says of that decision: “Heathrow...has a network of freight forwarders, that does not exist at Gatwick.“ He also urges the UK government to make a decision soon, as says the country is losing business to other countries by delaying runway expansion. The government’s Department of Transport will decide on aviation capacity by the end of the year.
Booming Brussels’ growth driven by freighters
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russels Airport has seen volumes from January to June 2015 grow by 9.7 per cent year on year (YOY) fuelled by an increase in freighter traffic growth. The Belgian airport’s volumes have risen by nearly double-digit figures every month this year. In the first six months, it handled 244,982 tonnes, compared to the 223,310 tonnes for the same six months in 2014. That six month total is divided into three categories. Cargo moved on freighter carriers was 72,994 tonnes, an 18.1 per cent rise on the 61,826 from January to June 2014. Integrator cargo was 99,057, a YOY surge of 8.7 per cent. About 72,900 was bellyhold cargo, an increase of 3.6 per cent. In June alone, there was a 15.9 per cent YOY increase to total cargo of 43,187 tonnes, up from 37,262 that was registered in June 2014. Cargo on freighter carriers was 13,726 tonnes, a sub-
stantial YOY rise of 41.6 per cent on the 9,694 in June last year. Integrator cargo rose YOY by 12.4 per cent to 17,177 tonnes, up on the 15,283 in June 2014. In June, bellyhold cargo volumes were flat in June and almost the same as June last year at 12,284 tonnes, two tonnes less than June 2014. June’s total was the second busiest month for cargo volumes in 2015 at Brussels Airport, but
it was the biggest YOY monthly rise so far it has achieved this year. In May, cargo volumes grew 7.7 per cent YOY to 40,535 tonnes. In April, there was a six per cent YOY rise to 41,105. In March, there was an 8.2 per cent YOY growth to 43,785 tonnes. In February there was an 11.7 per cent YOY increase to 38,463 and in January there was a YOY uplift of 9.4 per cent to 37,869. Brussels Airport says the growth that it has seen in the first half of 2015 has been driven by the arrival in the past 12 months of new freighter airlines: Ethiopian Airlines Cargo, Qatar Airways Cargo, Yangtze River Express and KF Aerospace, which started operating in May. Brussels Airport Company chief executive officer, Arnaud Feist, explains: “The strong growth in cargo recorded over the first six months confirms the growing importance of Brussels Airport as a primary logistics hub in Europe.”
NEWS WEEK WorldNews SOUTHAMPTON FREIGHT has moved its headquarters to a larger facility with 19,000 square feet (1,765 metres) of handling space. The new facility allows for a 30 per cent increase in employees. The company operates an air and ocean bond allowing it to customs clear for clients and it offers warehouse consolidation facilities worldwide. DELTA CARGO has redesigned its website, which it says makes it easier for customers to ship a wide variety of products. The carrier says the deltacargo. com site is built with responsive design elements for self-service mobile and tablet usage. From the website, customers can track the temperature, light and humidity readings, as well as exact shipment locations. The website also makes it easy to submit electronic air waybills.
Emerging markets boost Heathrow HEATHROW AIRPORT saw a 2.1 per cent year on year (YOY) rise in cargo volumes in the first half of the year, driven by increases in freight from emerging markets. In the first six months of 2015 from January to June, the airport reports it handled 741,847 tonnes, a YOY surge of 2.1 per cent. Since July 2014, Heathrow has processed 1.5 million tonnes, a YOY uplift of 4.3 per cent. Over the past year volumes rose by 44 per cent to Mexico, 24.4 per cent to Turkey, 19.7 per cent to Brazil, 11.5 per cent to India, 6.9 per cent to North America and 2.8 per cent to China. Earlier this month, the UK government’s Airports Commission recommended that Heathrow should have a third runway built. The airport’s chief executive officer, John Holland-Kaye, says: “We either expand Heathrow...or we... retreat.”
Fall in June at Frankfurt FRANKFURT AIRPORT has seen cargo volumes for the first six months of 2015 fall by 1.8 per cent to one million tonnes, the airport’s operator Fraport reports. In June alone, Europe’s busiest airport by tonnage, saw a year on year (YOY) drop of 2.6 per cent to 171,030 tonnes. Frankfurt Airport has recorded inconsistent figures throughout 2015. January saw a YOY decline of 0.9 per cent to 157,252 tonnes, followed by a 1.2 per cent increase in February to 159,417 tonnes. March saw the highest cargo figure of the year, at 186,277 tonnes, but this was a YOY decline of 6.4 per cent. April saw a YOY increase of 0.6 per cent to 170,247 tonnes. May saw a YOY fall of 3.3 per cent to 176,889 tonnes. Other airports that Fraport owns have had variable results for the first half of the year. Fraport’s Ljubljana Joze Pucnik International Airport saw a YOY drop of 1.1 per cent to 4,790 tonnes. Jorge Chavez International Airport in Lima saw a slight rise in volumes of 0.3 per cent to 130,933 tonnes. Burgas Airport has seen a YOY rise of 88.4 per cent to 5,189 tonnes. Hannover Langenhagen Airport and Xi’an Xianyang International Airport saw rises of 17.3 per cent and 10.8 per cent, respectively.
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NEWSWEEK
Lufthansa freight up by 0.5 per cent
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irfreight volumes were stable at Lufthansa Cargo in the first half of 2015 and the carrier says it is a, “challenging market environment”. In the first six months of this year, the airline handled 811,000 tonnes of freight and post, which is a 0.5 per cent increase over the same period in the previous year. The cargo load factor was 67.6 per cent, a decline of 2.5 percentage points. Lufthansa saw freight growth on its Americas and African and Middle East routes in the first half of 2015, but sales in Europe and Asia were slightly down. In the Americas, volumes were up by 3.9 per cent to 258,000 tonnes and the cargo load factor was 67.2 per cent, a fall of 1.5 percentage points. In Africa and the Middle East, tonnage was up 4.7 per cent to 68,000 tonnes and the load factor was 54.6 per cent, down 0.4 percentage points. The carrier saw a fall in Europe of 2.2 per cent to 263,000 tonnes and the load factor fell by 1.8
percentage points to 48.7 per cent. In Asia Pacific, there was a drop of 1.3 per cent to 222,000 tonnes and the load factor fell by 4.2 percentage points to 74 per cent. Lufthansa Cargo says its half yearly results show it is, “holding its own in a challenging market environment,” and its chief executive officer and chairman of the executive board, Peter Gerber, explains: “After an exceptionally good start to 2015, we were aware of the challenging market situation again in the second quarter. We are monitoring the market very carefully and can react by adjusting our routes flexibly and quickly to changes in demand. This allows us to meet the needs of our customers while at the same time guaranteeing the profitability of the individual connections.” Last month, Lufthansa Cargo launched a route to Natal (Brazil) and it will offer an additional service to and from Vietnam later this month. The carrier will announce its financial results for the first six months of the year on 31 July.
June sees slight rise at Cathay CATHAY PACIFIC says it has seen a, “softening,” in cargo growth as the year has progressed and there was continuation of this trend in June. Combined cargo and mail volumes for Cathay Pacific and Dragonair was 141,136 tonnes, which was a slight YOY rise of 0.5 per cent compared to June 2014. Last month was the second slowest in 2015 and down on May when total tonnage was 147,034 tonnes, and there was a monthly YOY rise of 6.2 per cent. It was also below April, when the airlines handled 144,579 tonnes, a YOY increase of 5.2 per cent. March was the busiest month so far this year when 157,688 tonnes were handled and YOY growth of 1.5 per cent. In February tonnage rose YOY by 28.8 per cent to 130,467 tonnes. In January, the airlines handled 147,275 tonnes, which was a YOY surge of 12.5 per cent. In June, the cargo and mail load factor fell YOY by 2.2 percentage points to 62.7 per cent. Capacity, measured in available cargo/mail tonne kilometres, rose YOY by 5.9 per cent to 1.3 million. Cargo and mail revenue tonne kilometres (RTK) flown increased YOY by 2.2 per cent to 835,000. In the first six months of 2015, tonnage rose YOY by eight per cent to 868,000 tonnes against a YOY capacity increase of 8.9 per cent to 7.9 million and a 10.5 per cent YOY rise in RTK to 5.1 million.
Cathay Pacific general manager for cargo sales and marketing, Mark Sutch, explains: “Last month’s tonnage growth was almost flat year on year and fell well short of the increase in capacity in percentage terms. Traffic out of the home market was generally steady, but demand out of mainland China was more sporadic, and was again affected by strong competition.” Sutch says by leveraging its strong network in South East Asia it helped maintain traffic flows on transpacific services and Cathay Pacific did not trim capacity on these lanes. “Conversely, demand from Asia to Europe remained weak and we pared back freighter services on these routes, relying instead on our extensive passenger aircraft belly lift,” Sutch adds.
2015 gives 9% boost for United UNITED AIRLINES has reported in its latest operational results that cargo revenue tonnes in miles rose in the first half of the year by nine per cent. The carrier’s cargo revenue tonnes from January to June were 1.2 million, an increase on the 1.1 million achieved in the first six months of 2014. For the month of June, United says cargo revenue tonnes rose year on year (YOY) by 3.4 per cent to 209,431, an increase on the 202,624 in June last year. It was the slowest month since January. The monthly total was down on May when it was 211,109, which was a YOY uplift of 2.3 per cent on the 206,384 in May 2014. June was also below April when it was 212,483, itself a YOY rise of 9.3 per cent on the 194,386 registered in April last year. March remains the highest month for cargo revenue tonnes this year when it reached 239,959, an 8.1 per cent YOY increase on the 221,927 in March 2014. The second highest monthly total this year was in February, when it reached 221,575, a substantial YOY surge of 21.1 per cent on
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the 182,913 in February last year. June is the second quietest month in 2015, and only above January when cargo revenue tonnes was 200,621, a YOY rise of 11.2 per cent on the 180,335 in January 2014. United announced in April for the first quarter of this year that cargo revenue was $242 million, up YOY by 15.8 per cent. The airline is expected to announce its financial results for the first half of 2015 at the end of July. United operates nearly 700 aircraft, and this year the airline expects to take delivery of 34 aircraft, including Boeing 787-9 and Boeing 737-900 extended range.
DUBAI GATEWAY
Creating a world beating hub
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he ambitious plan to turn Al Maktoum International Airport at Dubai World Central (DWC) into the world’s biggest and most advanced airport is on track after five years of operations. It is now among the top 20 busiest international cargo hubs in the world. The 89,729 tonnes it processed in 2011 has surged to 824,932 for 2014, representing a compounded annual growth rate of
276 per cent. Dubai Airports, which owns and manages both of Dubai’s international airports, says Al Maktoum now has the capacity to handle more than a million tonnes of cargo a year and will expand this to 16 million tonnes over the next two decades. The rate of growth in cargo in the Middle East has been considerably higher than the global average in recent years and the trend looks set to continue into 2016. “As the preferred aviation, trade and logistics hub of the region and a top player in those sectors globally, Dubai will continue to see a steady growth in airfreight,” says Dubai Airports’ vice president of terminal and cargo operations, Jamal Zaal. In volume terms, the total handled at Dubai International Airport and Al Maktoum has continued to grow in 2015 at a moderate rate. Despite the shift of all pure cargo operations to
DWC (see picture) in May 2014, Dubai International continues to register only a small contraction in volumes thanks to belly hold shipments which constitute a substantial portion of total freight volumes. During the first five months of 2015, the latter handled cargo totalling 1,015,482 tonnes, which was down one per cent from the 1,025,526 tonnes during the same period last year. DWC, on the other hand, continues to experience a surge in freight following the shift of cargo operations and new carriers launching operations there. Freight volumes at DWC leaped by 177.3 per cent in the first quarter of 2015 to 213,006 tonnes, up from the 76,816 tonnes achieved in the same period last year. China Airlines has now joined more than 25 scheduled and charter cargo airlines, which includes home carrier Emirates SkyCargo,
that operate from the airport to more than 60 destinations around the globe. “The growth in cargo volumes at DWC has been very rapid in recent months with the airport already rising among the ranks of the world’s busiest cargo hubs to enter the list of top 20,” says Zaal. “Managing that growth, maintaining service quality for our customers and timing the expansion programme at both airports over the comings months and years will be our primary focus,” adds Zaal. Al Maktoum is beginning to make its presence felt as more and more cargo operators recognise what it offers to them in terms of flexible schedules, proximity to the Jebel Ali Port, the Jebel Ali Free Zone, as well as to Dubai International. Most importantly, carriers recognise the future prospects with the $32 billion earmarked for developing DWC into the world’s largest hub.
the Dubai World Central (DWC) complex at Al Maktoum International Airport.” Emirates is not averse to adding freighter services to its network either and last November launched a freighter service to Budapest, Hungary. It also introduced a weekly freight-
er service to Ouagadougou, Burkina Faso, in January and a weekly freighter service to Columbus in May 2015. “We view future growth in the long term and aim to position SkyCargo at the forefront of industry developments, be that biased toward e-freight, service standards, destinations or something more specific such as cool chain,” says Rawlings. “Our geographical location means that we have to maintain our lead in cutting edge technology and the investment made at DWC in our chilled and cool chain facilities is testament to our desire to be at the forefront of those specialist services.”
Emirates confident of more growth EMIRATES SKYCARGO expects to see continued growth through the remainder of 2015 and into 2016. The Dubai-based carrier reports carrying 2.4 million tonnes for its 2014-15 financial year compared with 2.3 million in 2013-14 and 2.1 million in 2012-13. Emirates SkyCargo’s UK cargo manager, Phil Rawlings, tells Air Cargo Week that revenues have grown from $2.8 billion in 2012-13 to $3.4 billion in 2014-15. “From our early indications in 2015-16 we can see this growth is expected to continue,” he says.
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“SkyCargo already provides belly hold cargo services to more than 140 destinations around the world using cargo hold capacity in our fleet of over 230 aircraft. Naturally this capacity will continue to grow as we add more destinations to our route map,” Rawlings explains. According to Rawlings, his firm has worked hard to, “capitalise on market growth,” and continue to expand the network from its hub in Dubai. Emirates has also relocated its freighter fleet from Dubai International Airport to Emirates SkyCentral, a facility within
DUBAI GATEWAY
Online ad hoc dock booking offers efficiencies
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ata released in the first quarter by the International Air Transport Association (IATA) shows the Middle East to be one of the few bright spots in a global airfreight market largely defined by slowing growth or contraction. In 2014, it registered the strongest cargo growth of any region with airlines increasing their capacity by over 11 per cent to facilitate a market expansion of 11 per cent. Calogi, an air cargo services portal and part of Dubai-based dnata, continues to support Dubai’s robust airfreight growth. Its first two months of 2015 brought a rise in transactions of over five per cent and a customer base increase of nearly 10 per cent. “We are re-focussing efforts on the United Arab Emirates (UAE) market,” says Calogi head, Patrick Murray (see picture). “Our objective is to make dnata an easier company to do business with and to identify new products that benefit the UAE market.” To combat capacity constraints in Dubai, Calogi has developed a dock booking module. “This feature allows the forwarder to book terminal docks for export delivery and import collection, enabling a more streamlined acceptance and delivery process. Off-peak, normal or peak rates for each acceptance and delivery dock workloads to be spread,” he tells Air Cargo Week (ACW). Dubai freight forwarders subscribing to Calogi automatically have the opportunity to book docks at the dnata freight gate facilities. Based on historical data and the type of dock, Calogi calculates the loading and unloading times required for one or more shipments and automatically allocates the time required to complete the acceptance or delivery process. “The Dubai cargo business is continuing to grow at a phenomenal rate and this is putting pressure on local stakeholders to do things smarter,” says Murray. “The Calogi dock booking feature is one of our many responses to the growth challenge. In the last month we processed over 10,500 export dock bookings for over 18,000 tonnes of cargo.”
Calogi’s ad hoc air waybill (AWB) release enables airlines and ground service agents (GSA) to do business with over 600 forwarders in Dubai without the need for the traditional stock release and associated payment delays and credit risks. “The airline makes a pool of air waybill stock available to the community and each forwarder has the option to assign an air waybill, from that pool, to a particular job,” explains Murray. “On execution of the air waybill, the monies are deducted from the forwarder’s Calogi credit account with guaranteed payment to the relevant airline every month end. The airline charges a fee, currently set at 50 per cent of the local AWB fee, for this type of flexible release, which is a source of income that did not exist prior to the Calogi implementation.” Airlines can use Calogi to set up their own credit accounts with forwarders or use the agent’s Calogi credit account for collection of the airfreight charges. The balance of the accounts is visible to both. Airlines can distribute air waybill stock in a secure environment to their customers and can make rack rates available to the entire community. Rapid market growth and ensuring innovative solutions are on offer to customers remain key challenges for
Calogi and others. “Our industry is very traditional and in many ways reluctant to embrace change,” says Murray. “Current [electronic air waybill] e-AWB penetration reached its highest ever level in May at 27.9 per cent, reversing two months of decline, but the growth rate is not enough to see it hit the IATA target for 2015. There is still much to be done if penetration is to reach the IATA target of 45 per cent by the end of the year. If growth continues at the rate it has since the start of the year, when the figure stood at 24.9 per cent, penetration will reach just over 32 per cent by the end of December.” According to Murray, in Dubai Calogi is working with some large airlines to increase the e-AWB penetration before the end of the year. Calogi is planning to develop a number of self-service modules which will be rolled out across the dnata cargo terminals in 2016 and target walk-in customers who deliver one-off shipments at Dubai. “The aim is to avoid the need for walk-in customers to visit the dnata counters which will reduce waiting times, increase the efficiency of the service and offer a variety of payment options,” says Murray. “We are also looking at how we can speed up the acceptance and delivery process.”
Real estate boosts Dubai FREIGHT forwarder Union National Air, Land, and Sea Shipping Company (UNASCO) is one of the oldest national freight companies in the United Arab Emirates, with an international agency network handling cargo worldwide. UNASCO’s airfreight division is based at Dubai International Airport’s cargo village. The airport, part of Dubai World Central, has been growing strongly (see page six) and this large real estate project, among others in the emirate, means building materials, hotel supplies, furniture and catering industry equipment, have all been in demand. “UNASCO’s airfreight growth is mainly focusing on luxury vehicle spare parts, medical equipment, hotel supplies and machinery for various factories, as well as all types of medical supplies,” says UNASCO managing director, Nadia Abdul Aziz. She adds that, like many businesses in many countries, late payments are a challenge, as it has become the market norm where clients insist on long term credit facilities. “We are planning for the World Expo in 2020 and there are many mega hotel and entertainment projects which will all be key drivers for both the air and sea cargo industries.” Aziz adds that UNASCO offers support to small and medium sized enterprises, and clients, in marketing their businesses across the region, working as partners not just suppliers.
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GERMANY Munich’s tonnage growth being driven by freighter carriers
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reighter traffic is on the rise at Munich Airport and in the first half of 2015 the airport saw a 33.1 per cent uplift in volumes. The airport’s director of traffic development for cargo, Markus Heinelt, tells Air Cargo Week (ACW) the increase in freighter capacity has been met with an enthusiastic response in the Munich market. “In the freighter only segment, carriers have increased services, and Munich has succeeded in attracting new cargo airlines like Yangtze River Express (pictured).” He says the Munich market has also welcomed gains in bellyhold capacity through more routes. The airport is also seeing strong growth in the express market, with UPS, DHL and FedEx reporting substantial surges in tonnage. The Bavarian gateway has seen strong tonnage growth this year and from January to June it handled 156,400 tonnes, a year on year (YOY) rise of 11.6 per cent. Bellyhold alone was up 8.1 per cent. Exports were up YOY 14.1 per cent and imports up YOY 7.9 per cent. Heinelt says Munich’s volumes performance is in contrast to the German airport average, of a 0.2 per cent increase. “Munich is benefiting from the large flows of cargo tonnage to and
from China and North America, especially automotive, machinery and high-tech products,” Heinelt explains. Logistics companies are investing in operations at Munich, according to Heinelt, and he says the Southern Germany region,
the country’s strongest economic region, is growing and creating, “enormous,” demand for additional bellyhold and freighter capacity.” Next week, Kuwait Airways will serve the Munich-Kuwait route for the first time, and space in the cargo hold will be in heavy demand, he says. “We are also picking up strong signals from freighter carriers indicating that they plan to bolster their services from Munich to Asia and North America,” Heinelt adds. Munich will develop its infrastructure to cope with increasing demand, Heinelt explains. He tells ACW the space requirements of cargo companies are growing just as fast as the tonnage. “We are currently planning further expansion, and wish to strengthen our position in terms of cargo products,” Heinelt adds. Despite good growth, there are challenges in Germany, and Heinelt says he is concerned about the bilateral air transportation treaties from an airport standpoint. “This is a key concern for the future of airfreight, I see the approach to major infrastructure projects and their implementation as vital for the future. In Munich, we are faced with a crucial issue, the expansion of our airport through the addition of a third runway,” he notes.
Liepzig looking good
LIEPZIG-HALLE AIRPORT sees competition from the sea freight industry as the principle challenge in Germany’s air cargo industry. Owner Mitteldeutsche Airport Holding’s head of business development for cargo and logistics, Mario Patyk, explains to Air Cargo Week (ACW) that rate pressure from sea freight is causing an, “issue”. Other challenges the airport is facing in Germany, he says, are the increase in foreign carriers operating, adding competition across Europe. But, growth continues and in the first half of 2015 tonnage volumes at Liepzig-Halle reached 480,377 tonnes, 8.7 per cent above the first half of 2014. According to Patyk, there has been ups and downs this year in markets to and from Germany. As for July, he notes: “There are currently bottlenecks in capacity on services to Shanghai Pudong, Hong Kong and Beijing as a result of the Dragon Boat Festival.” Patyk says express cargo is rising, driven by DHL. DHL is expanding its capacity by 50 per cent at the airport. The airport is targeting specialist cargo, Patyk says, and niche markets, like outsized freight and military logistics or freight charter services.” Leipzig-Halle is looking to grow in the charter traffic market. Patyk says its 24/7 operating permit for flights and access to the motorway and railway networks offer growth potential.
LUG implements real time system FRANKFURT AIRPORT cargo handling operator LUG has implemented a real time ramp service and time slot management system at its terminal in the airport’s Cargo City South. The company started the new system from 11 May and it says the software automates the allocation of loading bays for the delivery and collection of shipments, as well as for road feeder services. LUG explains that the system gives customers the opportunity to, “jump to the head of the line,” by planning their arrival and requesting time slots based on real time data. Users can also reserve slots at the ramp in advance by entering vehicle and consignment details into LUG’s web-based aiRSS software. LUG customer service manager and project manager for aiRSS, Philipp Wahlig, says that freight forwarders will benefit, “immensely,” from the new system due to the, “accelerated handling procedures and increased planning security”. LUG operates at Frankfurt Airport and Munich Airport. It also handles cargo for Cathay Pacific Cargo, Korean Air Cargo, IAG Cargo, Thai Cargo, Cargolux, South African Cargo and other carriers.
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GERMANY
Germany’s biggest carrier stable in tough market
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ufthansa Cargo says the night flight ban at Frankfurt Airport is proving difficult and it continues to see overcapacity on its freighter services. Despite a tough operating environment, in the first six months of 2015 the carrier handled 811,000 tonnes of cargo, a year on year increase of 0.5 per cent. Lufthansa Cargo vice president of area management for Germany, Florian Pfaff, tells Air Cargo Week (ACW): “The main challenge in the market is the overcapacity especially towards Asia, driven by the Bosporus and Gulf carriers, leading to significant pressure. The night flight ban in Frankfurt is also challenging.” For the first half of the year, the airline’s cargo load factor was 67.6 per cent, down 2.5 percentage points on the figure it posted in the same period in 2014 when it was 70.1 per cent. Pfaff explains after a good start this year, the carrier is seeing increased pressure in the market and he expects a tough second half of 2015. He says the German market situation has been harsh: “The market from January to May was rather difficult in Germany. Overall, export volumes are four per cent down compared to the
previous year.” On a positive note, Pfaff tells ACW cargo volumes to Africa and North America are rising and across its portfolio, it is seeing stable demand from standard to special products like
express and dangerous goods. The carrier is growing its network and added a weekly freighter service to Natal (Brazil) on 7 June. The freighter has a capacity of 90 tonnes and fits into the existing route via Viracopos (Brazil), Dakar and on to Frankfurt Airport. Brazilian exports are mainly fruit such as papayas, melons and bananas. Imports are supporting Brazil’s growing automotive sector by transporting parts needed from Europe. Lufthansa Cargo will also offer an additional service to and from Vietnam later this month. Pfaff tells ACW: “We continuously optimise and expand our freighter network. We benefit from the huge Lufthansa belly network, to which new destinations will be added. Both, freighters and belly, play important roles and contribute to our large and dense network.” In June, Lufthansa Cargo put back plans for its Lufthansa Cargo Centre Neo project by two years due to finances. Pfaff says the carrier is going to equip handling infrastructure with new technology over the next few years, which will lead to, “faster processes“. He adds the airline is striving to accelerate digitalisation across all processes: “We are striving to become even faster and, above all, cooperate even better with other companies.”
Frankfurt logistics centre opens JETTAINER started operating at a logistics centre at Frankfurt Airport in May, which was built to handle strong growth and demand. The unit load device (ULD) management company launched JettHub, which covers 17,000 square metres and around 750,000 units a year can be handled, with space for 9,000 containers and pallets. Jettainer managing director, Carsten Hernig, tells Air Cargo Week (ACW), JettHub creates a, “solid foundation,” to manage expected future growth. In 2014, the firm grew 10 per cent and Hernig, says he forecasts a similar rise in 2015. “We plan on doubling the number of managed ULDs in the next three to five years. [It is] now 90,000,” Hernig explains. The German company will manage and maintain ULDs from October for Thomas Cook Airlines UK and Thomas Cook Airlines Scandinavia within the Thomas Cook Group airlines. The company has also taken over ULD management for Equatorial Congo Airlines and KF Aerospace. Jettainer’s strategy is to gain business with huge airlines and those under cost pressures. “In addition, we take a close look at smaller carriers and low cost carriers starting widebody or long haul operations,” Hernig adds.
New hub and routes
SOVEREIGN SPEED opened a new main operating hub last month at Kelsterbach near Frankfurt Airport. The road feeder services company has moved into the facility so it can handle its growing order book. The new hub includes warehouse space of 1,450 square metres, and offices of 400 square metres. Sovereign explains the new facility equips it for the years to come when it plans to, “dynamically extend its independent timetable based route network”. Sovereign Speed chief executive officer, Karim ElSayegh, tells Air Cargo Week he forecasts a seven per cent rise in 2015. El-Sayegh says the strongest growth has been to and from the UK. The most in demand goods from Germany, are aircraft parts and high value products. Sovereign is targeting growth in Eastern Europe and seeing high demand to remote locations. It has launched daily routes from Munich (Germany) to Vienna (Austria), Munich to Milan (Italy), Frankfurt (Germany) to Milan, Vienna to Milan and Vienna to Frankfurt. El-Sayegh says the challenges are, “strong competition, and red tape”.
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TECHNOLOGY
Cargo-XML is airfreight’s new electronic frontier
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doption of the International Air Transport Association’s (IATA) e-freight initiative launched almost 10 years ago has proven to be slow, but CHAMP Cargosystems business development manager of eCargo, Bart Jan Haasbeek (see picture), says the industry is now beyond the point of no return. “It is no longer the issue of if stakeholders will participate, but a question of when,” he warns. “Companies who remain passive and ignore the benefits or are unwilling to invest in new technologies will eventually pay the price.” Electronic communication has been the catalyst for a host of benefits that have helped improve data quality and reduce irregularities and workload throughout the supply chain processes. “We are seeing an increasing demand to digi-
tise shipment information that was previously transmitted and shared in less effective ways,” he tells Air Cargo Week. “Further improvements in processes and standards such as IATA’s Cargo-XML (CXML) will accelerate this momentum.” CHAMP is part of IATA’s CXML task force and has incorporated support for the new standard in its distribution and integration services. “The adoption of the CXML has been slow so far,” says Haasbeek. “However, it’s clear that as the number of users increases there will be a need to have bridging and integration services between the industry standard Cargo-IMP and Cargo-XML, and the many variations of home grown XML exchanges.” He explains that, as the uptake of CXML progresses, the challenge remains as to how the stakeholders will consistently be able to imple-
ment these new protocols in their existing IT infrastructure. Haasbeek is pragmatic with his assessment that rolling out e-commerce across the airfreight supply chain will take significantly more time than it did for passenger flights or other modes of transport. “The air cargo process cannot be compared to ocean freight which is two thirds containerised and has one dominant portal and many less stakeholders,” he says. “This is not the case for the dynamic world of air cargo with its range of divergent processes and IT systems and the number of stakeholders.” For Haasbeek, the air cargo industry’s efforts to improve data quality by sharing data throughout the supply chain is a painstaking process which has proven to require time to implement. While IT may work at the speed of light, business cultures can slow its impact to a crawl.
Businesses must embrace data THE global air cargo industry is at a critical stage when it comes to embracing the latest digital technologies, according to the Unisys Cargo User Group (UCUG). The UCUG community reports a fast-growing gap between leaders embracing digital technologies and laggards, which it foresees losing the competitive race. “The air cargo industry is at a tipping point because transformational innovation enabled by modern technologies has become a reality,” says, Unisys logistics solutions vice president, Christopher Shawdon. He goes on: “The most innovative carriers are now data driven businesses responding dynamically to market changes, using cloud, sensors, analytics and digital business. Such organisations are differentiating themselves with speed, control and new value by re-thinking all aspects of their business.” Shawdon
identifies sensors, cloud based technology services and electronic supply chains as three of the key trends. “Sensors embedded throughout logistics supply chains feed data into rules based analytics engines provide insights and early warning of issues,” he explains. The example he gives is radio frequency identification sensors. These are placed on items within shipments and can quickly identify if part of a shipment is missing, exactly what is missing and where it is likely to be. “Access to up to date data throughout the supply chain provides air cargo carriers with insights to help ensure customer promises are fulfilled even when there is disruption along the route,” he adds. The latest cloud based technology services deliver speed and savings compared to traditional software and offer the benefit of quick implementation, according to Shawdon.
Mobile apps face conservative industry WORLDWIDE trends for mobile apps are a future that airfreight needs to adapt too, experts tell Air Cargo Week, as the technology’s capabilities are likely to expand significantly in the next few years based on advancements and lower cost computing devices. The momentum for change is coming from pressure on prices, a greater need to be more efficient and a growing world trend for information in real time and increased customer awareness of what technology allows in other sectors. The UK technology firm Hermes’ chief executive officer, Yuval Baruch, says: “We
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foresee smaller incumbents searching for cost savings being the first to adopt cloud based solutions, but system integration is likely to be an important hurdle to overcome in the process.” He adds that the air cargo industry is a traditional one which does not see rapid change. And that is a problem for him, as he explains: “The drive towards paper free cargo handling is probably the most important development in the airfreight business of recent times and is driving demand for IT systems such as Hermes, which was one of the first systems to be fully e-freight compliant.”
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NEWSWEEK Thai forwarder takes up E-freight THAI freight forwarder Triple i Asia Cargo has joined the EzyCustoms community operated by e-freight software provider, Global Logistics System. Triple i Asia Cargo will use EzyCustoms as a tool to submit shipment messages electronically from the departure stations to the terminal operators in Thailand ahead of the arrival of the Thai AirAsia flights. Triple i Asia Cargo is a general sales agent of Thai AirAsia. The shipment data will be sent to the cargo terminals in Bangkok Don Mueang International Airport, Chiang Mai International Airport, Hat Yai International Airport and Phuket International Airport. Triple i Asia Cargo chief executive officer (CEO), Tipp Dalal, says: “As the company continues to grow, we look forward to seeing a closer co-operation with GLS in upgrading
our capability in the adoption of the IATA [International Air Transport Association] e-AWB [electronic air waybill] initiatives.” According to GLS, the Thai Customs Authority has announced the requirements for all carriers to produce and submit shipment data electronically to its data system for all imports, transfers and transit cargo. The shipment data covers the master air cargo manifest and the house air cargo manifest. Global Logistics System CEO, Terry Lo, says: “We welcome Triple i Asia Cargo to the EzyCustoms family. We look forward to seeing EzyCustoms being deployed not only within Thailand but to many other airports of Thai AirAsia, and also serving its other handling carriers.” GLS’ e-freight products include, EzyCargo, EzyFreight, EzyCustoms, EzyPost, and EDMP. GLS has been certified by IATA’s Cargo 2000 group.
More offices at Mexico’s airports YUSEN LOGISTICS has opened two offices at Benito Juárez Mexico City International Airport, a customs office within the airport’s grounds and a cross dock office just outside. The freight forwarder has opened the offices to be able to manage its own operations. The company aims to achieve what it calls, “competitive freight procurement and detailed transportation management,” of imported and exported freight with its new offices. With the cross dock office, located outside the airport, Yusen says it is taking, in-house, tasks, “such as negotiating freight charges with airlines and issuing air waybills.” The customs office, within the airport grounds, will check the status of freight, carry out customs
clearance and supervise truck loading. Previously, Yusen’s customs tasks were carried out by an agency. The company also plans to improve the quality and marketing of its air cargo service for freight departing from and arriving in Mexico with similar office arrangements at Miguel Hidalgo y Costilla Guadalajara International Airport and General Mariano Escobedo Monterrey International Airport. Yusen Logistics in Mexico was established in 2008 and employs around 100 people, providing logistics services through five bases, including the headquarters in Mexico City, branches in Monterrey and Celaya, and the aforementioned airport offices.
Pegasus Airlines plans conference
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egasus Airlines Cargo is to hold an international transport logistics conference in conjunction with Bahcesehir University in Istanbul (Turkey) on 8 October. The carrier will hold the event at the university’s Besiktas campus in partnership with Bahcesehir University’s faculty of economics, administrative and social sciences. The conference will bring together national and international students. It will cover topics relevant to the logistics air, sea and road transportation sectors. Pegasus says the conference will be of particular interest to students looking
to make a career in these sectors, as it will combine both education and experience. Pegasus Airlines’ vice president for cargo, Aydin Alpa, says: “At Pegasus Cargo we believe that hands-on education when learning a profession is vital. Students who attend this conference will be able to meet with and benefit from the experience of some of the international logistic sector’s most seasoned professionals.” The dean of the university’s faculty of economics, administrative and social sciences, professor Necip Cakir, explains the importance of strong collaboration between universities and business. He says: “Universities are very important both from the point of view of the academic world and world of business. At Bahcesehir University we aim to be one of Turkey’s leading providers of a university level education. “We want to give our students a complete education which ranges from A to Z and we are working on achieving this. When Bahcesehir University’s faculty of economics, administrative and social sciences was founded our aim was to expose our students to strong collaborations between higher education and the business world in the best ways available.”
BCUBE aims for pharma CEIV in Europe BCUBE air cargo is implementing a temperature control system for its pharma dedicated good distribution practice (GDP) services for customers at the Italian airports of Rome Fiumicino, Milan-Malpensa, Milan-Linate and Venice. The Italian ground handling company also wants to be a part of a Center of Excellence for Independent Validators (CEIV) airport system. CEIV practices are more compre-
hensive than GDP. BCUBE will use CEIV for its pharma services. “We’re a dynamic and innovative Italian company”, says BCUBE air cargo general manager Mauro Grisafi. “And we’re aware that the Italian pharmaceutical market is asking for qualified airport logistic services to handle its products with the appropriate level of care. To meet these expectations, BCUBE air cargo is leading the way.”