THE SOURCE FOR AIRFREIGHT LOGISTICS International Edition • AirCargoWorld.com • February 2015 THE LION ROARS HOW ETHIOPIAN BECAME AFRICA’S LARGEST CARGO CARRIER p.20 KEEP COOL AND CARRY ON p.26 BOXED IN: THE E-COMMERCE CHALLENGE p.30 Contents Volume 18 • Number 1 • February 2015 THE LION ROARS HOW ETHIOPIAN BECAME AFRICA’S LARGEST CARGO CARRIER 20 News Inside: 6 UpFront 26 LAN’s new 787-9, holiday numbers from 2014, the great French-fry airlift and more KEEP COOL 8 Asia and Can the ANA-Lufthansa jv succeed where others have failed? CARRY ON Some modal shift may be inevitable, but a 10 Americas renewed commitment to quality can keep LATAM shifts focus from freighters to belly cargo high-value pharma cargo flying 12 Africa & Middle East Mideast carriers begin move to all-in pricing 14 Europe Brussels Airlines boldly goes where others fear to fly BOXED IN Departments Can transparency, predictability, and 4 Editorial reliability win the e-commerce game 18 Cargo Chat: Mohamed Ebrahim Al Qassimi against the integrators? 33 Marketplace 34 Bottom Line 36 People 30 37 Events / Advertiser’s Index 38 Forwarders’ Forum Air Cargo World (ISSN 1933-1614) is published monthly and owned by Royal Media. Air Cargo World is located at 1080 Holcomb Bridge Rd., Suite 255, Roswell, GA 30076. Production office is located at 2033 Sixth Avenue, Suite 830, Seattle WA 98121; telephone 206-587-6537. Air Cargo World is a registered trademark. Periodicals postage paid at New York, NY and at additional mailing offices. 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Authorization to photocopy items for internal or personal use is granted by Air Cargo World, provided the base fee of $3 per page is paid directly to Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, and provided the number of copies is less than 100. For authorization, contact CCC at (508) 750-8400. The Transactional Reporting Service fee code is: 0745-5100/96/$3.00. For those seeking 100 or more copies, please contact the magazine directly. Member of Audit Bureau of Circulations Ltd. POSTMASTER and subscriber services: Call or write to Air Cargo World, 80 Broad St., Suite 1701, New York, NY 10004; telephone 212.564.8972 x3. ACW FEBRUARY 2015 3 Editor’s Note Is confidence the ‘new normal’? THE SOURCE FOR AIRFREIGHT LOGISTICS As the afterglow of an honest-to-goodness peak season SENIOR EDITOR in 2014 lingers in the winter air, many businesses in the David Harris air cargo supply chain are experiencing something they’ve [email protected] rarely felt over the past five years – confidence. Perhaps EDITOR it’s time for the industry to start asking: Could this return Randy Woods [email protected] • (206)-801-8478 to modest, steady growth be the “new normal”? ASSOCIATE EDITOR In early January, a survey of IATA-member air cargo Linda Ball [email protected] • (206)-237-0799 execs and airfreight CFOs found that 71 percent said SPECIAL CORRESPONDENT they expected to see increased cargo demand for the Martin Roebuck next 12 months. An even larger group – 78 percent Randy Woods CONTRIBUTING EDITORS of those surveyed – said they expected an increase in Roger Turney, Ian Putzger profitability over the same time period, partially due to the historic drop in fuel COLUMNIST prices. It’s a refreshing change after the long years of stagnating volume, rising Brandon Fried fuel prices and excess capacity. PUBLISHER Change is, indeed, happening everywhere – even here at Air Cargo World. JJ Hornblass Alert readers have no doubt noticed our new graphic look since we joined Royal [email protected] VP OPERATIONS Media Group last year. Now we are adding some new faces to the magazine, Molly Stewart including my own. With more than a quarter-century of magazine editing experi- EDITORIAL DIRECTOR ence, covering such business topics as insurance, Lean Six Sigma, entrepreneur- Phil Ryan ism and solid waste management (yes, really), I joined this talented ACW team CREATIVE DIRECTOR in September and am excited to take on a new challenge, just as the industry ap- Alex Kwanten pears to be on an upswing. [email protected] CIRCULATION DIRECTOR I’d also like to introduce another addition to the ACW team, Linda Ball, our new Hattie Thomas associate editor. Linda joined Royal Media in December, bringing 13 years of solid [email protected] ASSOCIATE DESIGNER reporting experience to our permanent staff of writers. We’re thrilled to have Adnan Jusupovic her on board. Over the next few months and beyond, Linda and I hope to meet a lot of ACW readers at various industry events this year – specifically at AirCargo AIR CARGO WORLD HEADQUARTERS 2015 in New Orleans, the IATA World Cargo Symposium, as well as our Air Cargo 1080 Holcomb Bridge Rd., Roswell Summit Excellence Awards Dinner (aceawards.aircargoworld.com), in Shanghai, and the Building 200, Suite 255, Roswell, GA 30076 (770) 642-9170 • Fax: (770) 642-9982 CNS Partnership Conference in Orlando, Fla. WORLDWIDE SALES U.S. Sales & Emerging Markets Of course, without our loyal readers, this magazine could not exist. Air Cargo Sales Director World is as much your magazine as it is ours, so I invite you to join the dialogue. Tim Lord If you have any comments, questions or story ideas – or if you just want to chat [email protected] • (678) 775-3565 about air cargo – please contact me at [email protected]. Europe, United Kingdom, Middle East David Collison Our aim is to continuously improve this magazine as the number-one source for [email protected] • +44 192-381-7731 airfreight logistics information. We can only do that with your feedback. Together, Hong Kong, Malaysia, Singapore let’s make 2015 a year to remember. Joseph Yap [email protected] • +65-6-337-6996 India Faredoon Kuka RMA Media Randy Woods, [email protected] • +91 22 6570 3081 Editor, Air Cargo World Japan Mr. Mikio Tsuchiya [email protected] • +81-45-891-1852 Thailand Ms. Anchana Nararidh [email protected] • +66-26-412-6938 Korea Mr. Jung-Won Suh [email protected] • +82-2785-8222 Marketplace Alyssa Stebbins [email protected] • (212) 991-6735 Special photo credits: Ethiopian Airlines historical photos, p22: Convair 340: ©Bair175/wikimedia, DC-6: ©Ken Field- ing, 720B: ©Tim Rees/Wikimedia, 767: ©Aero Icarus/Flickr, 787: ©Alex Kwanten, 777F: ©Rainer Bexten. 4 FEBRUARY 2015 ACW Departs Gate 10:22 aM With you all the way. When you ship with us, we consider you our partner. Because, like you, an entrepreneurial spirit of change and growth guides everything we do. We’re in this together, and with our larger, expanding network, we’ll have even more opportunities in the future to give you the same exceptional service you’ve come to expect. That’s a great partnership. American Airlines Cargo and the Flight Symbol logo are marks of American Airlines, Inc. ©2014 American Airlines, Inc. All rights reserved. Find a solution that works for you at aacargo.com UpFront As we begin 2015, we’re introducing UpFront, a Photo: ©Alex Kwanten new one-page section reserved for late news items, photos, quotes and LAN’s biggest belly info-graphics – a quick-read LAN’s first Boeing 787-9 flew for the snapshot that lets you know first time on January 18 and delivery is expected in February. at a glance what’s happening The aircraft will give LAN the largest belly hold in its current fleet (though TAM has around the industry. a larger one - the 777-300ER). For more on LATAM’s belly plans, see page 10. UPS and FedEx survived the holidays FedEx and UPS can breathe a sigh of relief knowing that the investments made in facilities and a larger holiday workforce resulted in fewer last-minute shipping problems compared to Christmas 2013. UPS spent $500 million to make sure 2013 wasn’t repeated. Both companies built new facilities, added more holiday staff and coordinated with retailers for clarity on estimates and deadlines. Nonetheless, some retailers fell short on their promises, reflecting the difficulty of accurately calculating holiday demand as e-commerce becomes more popular. The great French-fry airlift The Japanese appetite for McDonald’s French fries was JFK builds an Ark satisfied thanks to many air cargo The ARK at JFK, a privately-owned ani- Centurion Cargo flies again companies that helped get an Photo: Martin Visser/Wikimedia mal handling facility, will soon become emergency shipment of approxi- a reality. ARK Development LLC signed After being grounded since September 2014 for non-payment to its debtors, mately 2,600 tonnes of French a 30-year lease with the Port Authority fries delivered to Japan’s golden of New York and New Jersey to develop, Miami-based Centurion Cargo is said to be back in the air again. Among the car- arches in late December 2014. finance, build, operate and manage the The shortage was due to the $48 million project. The facility will rier’s many legal hurdles, Chemoil Corp.