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Change When Change Is Needed MICA(P) 261/07/2012 PPS1220/07/2013(022977) The Trade Magazine for the Asia-Pacific & Middle East Regions Vol. 29, No. 5, May 2013 Change when change is needed Swissport keen on Asian expansion Seeds of economic recovery being sown Freighter Supplement www.payloadasia.com “Our cargo goes where no car goes.” The incredibly rugged terrain of Papua New Guinea makes it almost impossible to move cargo by road. They say that over the last 40 years, this amazing country has been built using our cargo aircraft and I’d say that’s about right. James Tira – Executive Manager, Cargo. Flying the flag for Papua New Guinea. www.airniugini.com.pg/cargo FROM THE EDITOR The Air Cargo Magazine for the Asia-Pacific Region ISSN 2010-4227 Vol. 29, No. 5, May 2013 Reality check Group Publisher Wai-Chun Chen Email: [email protected] fter putting this issue together I’ve come to the realisation EDITORIAL Editor-in-Chief that it’s actually a bit of downer issue. It wasn’t really Bob Gill intended to paint a downbeat mood, but really that seems Tel: +65 6521 9763 Email: [email protected] to be the underlying current in some of the pieces from the cover Editor A Donald Urquhart story to the economics pages to the supplement. Tel: +65 6521 9760 Email: [email protected] The issue kicks off with a cover story focusing on the thoughts Online Editor Syed Shah of FedEx Express’ Asia boss, David Cunningham, who delivered an entertaining and Tel: +65 6521 9750 Email: [email protected] indeed thought provoking talk on how the air express and general cargo industry has Contributors Wong Joon San in Hong Kong, Manfred Singh in India, Michael changed over the past three decades that he has been in the industry. Peppered with Mackey in Bangkok and Heiner Siegmund in Germany. interesting factoids, humorous anecdotes and delivered with a Southern charm that 20 SALES & AD ADMIN years in Hong Kong has obliviously failed to dent, he raised some very pertinent issues Account Manager Yullie Tan that the general air cargo sector would do well to heed. Tel: +65 6521 9749 Email: [email protected] The supplement in this issue focuses on freighter aircraft with a focus on discussions Marketing Executive Avery Li Email: [email protected] that came largely out of a recent conference in Hong Kong. While the market downturn Admin Executive is hardly news to anyone, its’ prolonged nature makes some topics inherently more Lim Yann Ming Email: [email protected] interesting than others. Take for example the topic of freighters. Whether newbuilds or PUBLISHING SUPPORT Production Manager conversions it’s almost a subject better left for another – hopefully better day. As Cathay’s Pauline Goh Email: [email protected] Nick Rhodes pointed out during the conference, the very idea of preparing a case for Design Manager Honess Ho Email: [email protected] the acquisition of new or even converted freighter capacity to take to an airline board, Database & Web Manager is inconceivable at this point in time. Getting a return on assets in this environment is Lim Keng Boon Email: [email protected] one tough, if not impossible task. Circulation Executive Of particular focus at the Hong Kong event was the issue of the rising belly capacity Levi Cheng Email: [email protected] in the market thanks to the massive influx of modern widebody aircraft that are in and of Web Operations Executive Franco Nelo M. Sevilleja Email: [email protected] themselves, mini, or in the words of Ram Menen, ‘invisible’ freighters. Is there a future Web Developer for big freighters, let alone all maindeck players and is the current combination carrier Roger Tan Email: [email protected] cargo model still valid? These were some of the questions thrown at the industry panel FINANCE Finance Manager and highlighted in the supplement. Lim Ai Ling Email: [email protected] And one interesting aspect, the issue of B747-400 P2F conversions was studiously CEO avoided during the two-day event. But having spoken to various delegates on the sidelines Raymond Wong Email: [email protected] of the event, including one who is involved in a 747 conversion operation, the programme is is pretty much dead as a dodo after the floor pretty much dropped out from under it. On the economic front, two pages of articles discussing the global economic situation and confidence of freight forwarders provide a somewhat contradictory picture of where we are headed. But then again, did anybody really expect anything else, other Contineo Media Pte Ltd than contradictory? 67 Ubi Avenue 1, #06-06 StarHub Green, North Wing, Singapore 408942 We hope you enjoy the read and don’t worry, it can (probably) only get better. Tel: +65 6521 9777 Fax: +65 6521 9788 Printer: KHL Printing Co Pte Ltd COVER Payload Asia has been appointed by the 18 member Federation of Asia Pacific Aircargo Associations as MICA(P) 261/07/2012 PPS1220/07/2013(022977) official publication for FAPAA news. Payload Asia is a controlled circulation publication available The Trade Magazine for the Asia-Pacific & Middle East Regions Vol. 29, No. 5, May 2013 free-of-charge on request to qualified subscribers. Qualified subscribers are buyers and sellers of air cargo/courier/express products and services plus government and trade officials Change when change dealing with airfreight who are based in the Asia-Pacific and is needed Middle East regions. Non-qualified readers can receivePayload on payment of a US$225 annual fee. Asia Facing a serious set of challenges, the general air cargo sector Payload Asia is published monthly by Contineo Media Pte Ltd, 67 Ubi Avenue 1, #06-06 StarHub Green, North Wing, Singapore needs to take a leaf out of FedEx’s playbook and change – and 408942. Material in Payload Asia is copyright and may not that change includes a rebalancing of capacity with less dedicated be reproduced in any form without the written permission Swissport keen on Asian expansion freighter capacity says David Cunningham, FedEx Express president Seeds of economic recovery being sown of the editor. for Asia Pacific. For this and more, please turn to page 26. Freighter Supplement www.payloadasia.com www.payloadasia.com | May 2013 1 GATEWAYS Consultancy firm Frost & Sullivan predict Indonesia’s transportation and logistics market will grow at a compound annual growth rate (CAGR) of 14.8 per cent for the forecast period 2013 to 2017, on the back of surging economic growth. INDONESIA mining sector at around $4.3 billion. He He expects airfreight volume to rise also said that the strong FDI flow into the 19.6 per cent to reach 1.16 million tonnes Frost & Sullivan predict mining industry will continue to boost from 970,000 tonnes in 2012. “There’s the industrial growth and offer business significant potential for air cargo from Indon logistics growth potential to transportation and logistics seasonal perishables, as well as time Frost & Sullivan is forecasting the industries. sensitive and high value components and Indonesian logistics industry to grow equipment,” he added. Gopal also said 14.5 per cent to IDR 1,634 trillion Growth constrained that Soekarno Hatta Airport contributed (US$170 billion) in 2013 as compared to Gopal predicts the transportation and approximately 36.7 per cent of the total an estimated IDR 1,427 trillion a year ago, logistics market in Indonesia to grow at air cargo volume in the country. fuelled by the Government initiatives and a compound annual growth rate (CAGR) development of the logistics industry of 14.8 per cent for the forecast period Outsourcing trends fueled by strong economic growth. 2013 to 2017. “However, underdeveloped Gopal said that there is a higher Frost & Sullivan’s global VP, infrastructure will slow down the growth inclination towards outsourcing a Transportation & Logistics Practice, if the bottleneck persists in the coming variety of value added services in the Gopal R, said that the relocation and years,” he said. Indonesian market. He added that strong flows of capital are also expected The problems of poor connectivity, logistics service providers need to work to drive manufacturing activities in processes and weak infrastructure is toward more value-added services while Indonesia and boost logistics demand. He evident in many price differentials and strengthening the intermediate services. added that external trade for Indonesia transport problems in Indonesia, Gopal He said that logistics end users are also is expected to see a moderate growth said. He added that trade facilitation is moving towards integrated supply chains of 16.7 per cent to reach $446 billion still mainly ‘paper-based systems’, which with professional service providers. He in 2013. increases the cost of logistics in addition added that Indonesia is determined “Import/export forwarding, shipping to reduced efficiency. to become an important player in and airfreight related businesses will ‘The Indonesian logistics market is international trade and markets with benefit from sustainable growth of highly fragmented with abundance of the government focusing particularly external trade activities,” he said. Gopal small- to mid-sized companies in the on six key areas with the objectives of said that the growth of foreign direct market, even the big players are facing ensuring the availability of strategic investment (FDI) is expected to continue stiff competition from these companies,” commodities, promoting low cost in 2013, with an estimated value of $42.7 Gopal said. He added that the fragmented economic activities and strengthening billion. He added that FDI realisation in market pushes smaller logistics service national competitiveness. transport & storage sector reached $ 2.8 providers to go for economic pricing The ASEAN Economic Community billion in 2012, which was the second strategy rather than focusing on service (AEC) in 2015 will amplify the export largest share out of overall FDI, after the quality and breadth of services offered.
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