QUALITY AND BEST PRACTICE IN AIR LOGISTICS OPERATIONS Future forwarding The threat of disruption Preparing for take-off Amazon’s new air hub at CVG GOOD IN A CRISIS Charter market changes World Airline Cargo Report Recovery continues into 2017 Drivers of change Handling pharma Focus on automotive shippers A question of integrity 6800(5WWW.CAASINT.COM&$$6,17 Cover photo courtesy: Air Charter Service JAMES SHERIDAN QUALITY AND BEST PRACTICE IN AIR LOGISTICS OPERATIONS Chairman Future forwarding The threat of disruption Preparing for take-off [email protected] Amazon’s new air hub at CVG GOOD IN A CRISIS Charter market changes World Airline Cargo Report Recovery continues into 2017 Drivers of change Handling pharma PARVEEN RAJA Focus on automotive shippers A question of integrity 6800(5WWW.CAASINT.COM&$$6,17 Publisher Change in the air [email protected] MARTIN KINGWELL hange is in the air. And I don’t just mean the improvement International Sales Director in the air freight market – although that is obviously helpful, [email protected] and welcomed by many of the airlines featured in this C issue’s World Airline Cargo Report (pages 26-34). But also NOVA ABBOTT highlighted in that report and elsewhere in this magazine Sales Manager – Asia are other interesting trends and patterns that have been building for [email protected] some time. EDITOR’S NOTE YASMIN LYDON 2QH LV REYLRXVO\ WKH LQÁXHQFH RI HFRPPHUFH ZKLFK VHHPV QRZ WR Events Coordinator EH ÀQDOO\ WUDQVODWLQJ LQWR VLJQLÀFDQW QHZ EXVLQHVV YROXPHV IRU WKH DLU [email protected] cargo sector. And although we have been talking for some time about the importance of the pharma sector and offering services that meet its TOM WILLIS needs, there seems to be a real momentum in this area. Carriers, airports, Journalist [email protected] and other stakeholders are really investing in the infrastructure and processes to support it, as highlighted by the take-up of the CEIV Pharma SHOBHANA PATEL programme and the successful launch and build up of the Pharma.Aero Head of Finance initiative (see pages 36-40). fi [email protected] And that seems to be really bringing dividends. Although the volume of pharmaceuticals carried by air only grew by around 3% last year, SHELDON PINK Creative Director VRPHFDUULHUVDQGORJLVWLFVÀUPVZLWKVSHFLDOLVWSURGXFWVDQGFDSDELOLWLHV [email protected] saw growth as high as 30%. Indeed, MIA reported a 48% increase in the value of pharmaceutical shipments shipped last year, thanks presumably in large part to its investments in developing the airport into a specialist regional pharma hub. Several carriers in the World Airline Cargo Report spoke of customers Address changes and subscription becoming increasingly sophisticated in their demands, and not only with orders to: [email protected] regard to the shipment of pharmaceuticals. And this will accelerate and ISSN 2054-8958 potentially increase exponentially as e-commerce customers expand EDITORIAL CONTRIBUTORS WKHLULQÁXHQFHZLWKLQDLUIUHLJKW Megan Ramsay 7KDWJURZLQJLQÁXHQFHFDQEHVHHQLQSK\VLFDOIRUPZLWKWKHODXQFK of Amazon’s new air hub at CVG (pages 10-12). But it’s not just Amazon, RI FRXUVH $OLEDED·V ORJLVWLFV LQÁXHQFH LV JURZLQJ DQG IHOORZ &KLQHVH PUBLISHED QUARTERLY BY e-commerce giant JD.com has just set up a new logistics division that EVA International Media Ltd Boswell Cottage, 19 South End ZLOOPDUNHWVXSSO\FKDLQVHUYLFHVWRWKLUGSDUWLHVSURPLVLQJWRXVHDUWLÀFLDO Croydon, London, CR0 1BE, UK LQWHOOLJHQFH ELJ GDWD DQG DXWRPDWLRQ WR ´UHGHÀQHµ HFRPPHUFH Tel: + 44 (0) 20 8253 4000 logistics. And the major freight forwarders are investing heavily in digital Fax: + 44 (0)20 8603 7369 products, including setting up their own ‘virtual freight forwarding’ units – m{x{PD{wDy ©9yww disrupting themselves before external tech disruptors do. PRINTED BY And air freight is beginning to respond, including several examples in The MANSON Group Limited this issue of innovative initiatives to improve digitalization, tracking, speed, St Albans, Hertfordshire AL3 6PZ accountability, and transparency. I think change really is now coming.Q DISTRIBUTED BY: Air Business EVA INTERNATIONAL MEDIA LTD PUBLISHERS & EVENTS SPECIALISTS Issue 17 © 2017 | www.caasint.com WILL WATERS | Editor Content may not be reproduced in any format without written permission from EVA International Media Ltd [email protected] & [email protected] 6XPPHU CARGO AIRPORTS AIRLINE SERVICES 1 4 4 CHARTER MARKET REPORT: Good in a crisis A complex political environment is adding to the challenges 10 AIRPORT SPOTLIGHT: Amazon’s new hub at CVG Cincinnati prepares for a major cargo boost 14 CUSTOMER FOCUS: The future of forwarding Examining the threat from disruption 16 CUSTOMER FOCUS: Automotive shippers Product recall patterns are driving increased demand for air freight 20 AIRLINE INTERVIEW: Delta Cargo Gareth Joyce on operational reliability and customer focus 26 WORLD AIRLINE CARGO REPORT: Recovery continues Selected carriers review key developments in 2016 and 2017 36 PHARMA HANDLING: Integrity matters Trust, transparency, and compliance are key for shippers buying air freight 42 ULD FOCUS: Life aft er CHEP Unilode’s CEO discusses new technology and collapsible containers 46 REGIONAL REPORT: Africa A continent with great promise and major obstacles for air freight 53 GSA REPORT: Beyond general sales Agents raise their share of air cargo’s $50bn annual revenue 2 CARGO AIRPORTS AIRLINE SERVICES 6XPPHU Handled in good company. From arrival until departure your live stock will receive the best treatment in our state of the art hosting facility. The animal welfare is our priority. Quality first. Fli8M@Z\eki\#i\Zf^e`j\[<L<ekipGf`ekZfdgc`\jn`k_XcccfZXcXe[<Li\^lcXk`fej#]fiXcckpg\jf]Xe`dXcj% K_\g\idXe\ekZXgXZ`kp]fi_fij\j`j.,_fij\jg\ij_`gd\ek#jkXccjXmX`cXYc\]fi,'_fij\j% >iffd_fjk`e^Z\eki\XmX`cXYc\% ;\[`ZXk\[Z\eki\]fic`m\Y`i[j#[Xp$fc[Z_`Zbj#¶ Efe$?ldXe:fejldgk`feZ\eki\% KiX`e\[jkX]]#Zfekifcc\[Ypk_\<L@ejg\ZkfiXk\% For any request please call +352 2456 6001 or visit www.luxaircargo.lu CARGO Good in a crisis Air freight remains a key part of humanitarian aid operations, but the challenges include a lack of affordable ramp-loading aircraft coming onto the market and an increasingly complex political environment, writes Megan Ramsay CHARTER MARKET FOCUS n crisis situations such as the aftermath of agreements, audits and strict ethical rules. In the humanitarian disasters, air freight can be event of the code of conduct being violated, a suppli- the only way to ensure necessary aid reaches er can be suspended or removed from the approved I those who need it. But there are often a huge OLVWDGGV-RVFKD.UHPHUVRIÀFHULQFKDUJHRIWKHSUR variety of operational challenges affecting curement division of the United Nations (UN). those involved in this unpredictable business. Another concern these days is that the cargo charter Not least of these is the question of the integrity of aircraft often used in humanitarian relief efforts aren’t the various suppliers and partners in the chain – how getting any younger. “It’s true that parts of the global can aid agencies be sure that they are dealing with ÁHHWDUH$QWRQRYVDQG,O\XVKLQVWKDWDUHJHWWLQJWRD reputable providers? certain age,” Kremers acknowledges. “It’s a concern, According to Marjo Leppännen, logistics delegate but if they’re airworthy and well maintained, then for the International Federation of Red Cross and they’re OK. In the future, though, we will need new air- Red Crescent Societies Nairobi, a key element is the craft, and we need to look into this with the industry.” SUHTXDOLÀFDWLRQ RI VXSSOLHUV DORQJVLGH IUDPHZRUN Dan Morgan-Evans, group cargo director at charter 4 CARGO AIRPORTS AIRLINE SERVICES 6XPPHU Our destination: High efficiency in your intralogistics Individual turnkey solutions for your air cargo project Benefit from synergies: ACUNIS is a brand of AMOVA and Unitechnik. With combined know-how and experience in intralogistics, we offer you support at every stage of your air cargo project. Hall A5 – Booth 1158 Our destination: Your efficiency in intralogistics www.acunis.de CHARTER MARKET FOCUS broker Air Charter service, notes that there quickly, perhaps flying to a hub airport are some new Ilyushins out there that in the belly of passenger aircraft before comply with European Union ‘Stage IV’ cri- being chartered to its final destination. teria, but that newer aircraft will be more According to Steven Verhasselt, vice expensive. Plus, the entry of new aircraft president commercial at Liège airport, LQWRWKHJOREDOÁHHWZLOOEHDVORZJUDGXDO bottlenecks may be physical (such as a process, so capacity may be an issue. lack of infrastructure), technical (the ac- Shahe Ouzounian, chief operating of- tual unloading of an aircraft, for example) ÀFHU DW EURNHU &KDSPDQ )UHHERUQ VD\V or legal (pertaining to Customs or landing the ex-Soviet aircraft currently available rights, for instance). are “robust and cheap”, but adds: “The Of course, when it comes to Customs de- concern is the lack of affordable ramp- lays, it’s no good having aid sit at an airport loading aircraft coming onto the market. clogging up the gateway and not reaching :H QHHG D ÀYH WR WHQ\HDU LQYHVWPHQW those who need it. Therefore Customs plan, but most people are concerned with brokers are an essential part of the chain, short-term budgets,” he observes. says Michael Brown, programme manager Further problems arise with regard to international logistics and forwarding at distribution. “We need to have hubs in Airlink. He also raises the idea of humani- strategic locations for consolidation