INTERNATIONAL EDITION MARCH 2010 Asia Goes Regional Bijaoui Builds From Within What Price GSSA? March, 2010 Volumecontents 13, Number 3 EDITOR Simon Keeble [email protected] • (704) 237-3317 EUROPEAN EDITOR Leadership Martin Roebuck [email protected] WFS continuity inspires success +44.(0)20-865-70138 20 CONTRIBUTING EDITORS Roger Turney, Ian Putzger SE Asia CONTRIBUTORS Mindy Long, Peter Conway Growing closer to home COLUMNISTS 24 Brandon Fried, Gabriel Weisskopf PRODUCTION DIRECTOR GSSA Ed Calahan [email protected] Keeping the yield — and the customer CIRCULATION MANAGER 28 Nicola Stewart [email protected] IT ART DIRECTOR SIA Cargo becomes a CHAMP CENTRAL COMMUNICATIONS GROUP [email protected] 32 PUBLISHER Steve Prince [email protected] Nagpur ASSISTANT TO PUBLISHER Sweet or sour prospects? 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POSTMASTER and subscriber services: Call or write to Air Cargo World, 3025 Highland Parkway Suite 200, Downers Grove, IL 60515; telephone For more information visit our website at 866-624-4457. www.aircargoworld.com Cover photo by Neil Abt. ACW MARCH 2010 1 editorial It’s all Greek ufthansa’s planned pilot strike and the UPS furlough of 300 pilots suggest the Great Recession is not over. Just as German Chancellor Merkel’s administration doesn’t want her elec- torate to pay for Greece’s fiscal profligacy, Lufthansa pilots appear equally disinterested in being undermined by the company’s lower-cast subsidiaries. LMany years ago, a last marketing gasp of “Fly the Flag” by a jingoistic British Air- ways was meant to encourage the long-term loyalty of both employee and customer. Today, embroiled in debt, times have obviously changed for BA. Who cares about an airline unless it provides generous pensions and user incentives? So the latest moves by Lufthansa and UPS echo that of Air France-KLM in send- ing a warning signal to the industry: There aren’t any guarantees any more. Despite President Barack Obama’s export initiative designed to create two mil- lion jobs and “double exports over the next five years,” the Federal Reserve says US Simon Keeble [email protected] unemployment will be 9.7 percent in 2010 and remain between 7.5 and 6.6 percent by 2012. So good luck with that export-led growth. Obviously the two airlines are more re- alistic about a US economic turnaround. With a reported $13 trillion in debt and the possibility of a double-dip recession this year, the US is in no position to provide the economic demand to support the current level of air cargo supply. Currently the US government spends 29 percent of every tax dollar on military activity, 21 percent on health and 20 percent on debt interest. A mere three percent is spent on education and one percent on transportation. Since 2001 US taxpayers have wasted $1.05 trillion on wars in Iraq and Afghani- stan. Apart from the incalculable human misery caused by such behavior, it is money that could have been spent on improving the US economy and lowering unemploy- ment. Now, as some of the world’s leading cargo carriers have indicated, it’s time to reach for the “pull here in an emergency” lever. Unfortunately for Lufthansa’s pilots, their employer seems to have other options available in trying to balance long-term cost and revenue. Ironically, German workers now have to wait until aged 67 to qualify for full retire- ment benefits while Greeks can take their Euro-based pensions 10 years earlier. So Lufthansa management and Chancellor Merkel face respective prospects of laying off Germans while underwriting a further €20 billion ($27 billion) of Greek debt to pay that country’s youthful pensioners. Fortunately for UPS, the economic challenge of a Eurozone “social contract” is not their problem. They’ve just got an American one. 2 MARCH 2010 ACW viewpoint Haiti: a logistical Rubik’s Cube he aftermath of Haiti’s devastating earthquake Later, as the emphasis shifted from search and rescue, has presented aid organizations with one of food and blankets towards medicines and sanitation, their biggest and most logistically complex re- the freight forwarder networks became more involved. lief efforts in recent times. Chapman Freeborn’s Despite almost 40 years of experience, Haiti was a offices worldwide had chartered 106 flights as steep learning curve for us. Could we get the slots we Tat mid-February, 34 of them directly coordinated from wanted? Who was coordinating this? We were all highly our US headquarters in Fort Lauderdale, Florida. dependent on the US Air Force giving us slots in the be- Three criteria determined our choice of aircraft: what ginning, and we needed the shipper or the NGO to con- cargo did the client want carried, equipment was avail- firm what supplies were being carried and to emphasize able, and could that airplane type get the slot? On one what was most essential. Everything was desperate, but occasion we ran one of our own leased B747s, based of course the authorities had to prioritize. in Sharjah and normally deployed to Afghanistan, into We got the inevitable crank callers saying we should Port-au-Prince (PAP) with 100 tonnes of cargo on behalf be doing everything for free. We had to point out you’re of USAID. With the well-publicized difficulties at PAP, not charging the man in the street who has just lost we sometimes had to double up on two narrowbodied everything, but the aid organizations. You have to go in aircraft where a slot wasn’t available for a widebody. lean and mean to secure the flights. Clients are coming The US military came in for criticism for taking con- to you on the basis of your quality, service and reputa- trol of the airport and turning away relief flights. Our tion. Everything comes at a cost, but you’re not going to European offices experienced that. Flights coordinated abuse your rights. in Barcelona or Berlin might be halfway across the At- In all these emergencies you reach a bottleneck stage lantic, working on the assumption they would get into where so much relief is coming in that the ground in- PAP, before being diverted to Santo Domingo (SDQ) in frastructure can’t cope. The US military has cleared the the Dominican Republic. main roads now and aid is reaching the rural areas. Even aircraft transiting via the US were sometimes We’re still moving goods in on a couple of flights per affected. It seemed that US-originating and US-flagged week. As the risk of disease increases, typhoid and anti- planes were getting priority access, though I have a malarial drugs are becoming more important. A lot of degree of sympathy for those who were trying to im- these supplies are still being flown in, but this is getting pose some control. There was no ATC and no ground gradually easier as PAP resumes normal commercial handling — the equipment was antiquated and all the operation.