January, 2010 Volumeco 13 Number 1 Ntents
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INTERNATIONAL EDITION JANUARY 2010 Drug Money Boom Forecasting North America? New Leadership Series Make Plans to Attend Air Cargo World’s Air Cargo Excellence Awards 2010 Join us for the launch of this exciting new event. Held alongside the IATA World Cargo Symposium, the evening will provide valuable networking opportunities, whilst celebrating the very best in air cargo services. Tuesday March 9, 7.00pm Venue: Sheraton Vancouver Wall Centre, Vancouver, BC. To attend, or for further information, please contact Lesley Morris [email protected] For sponsorship opportunities, please contact Steve Prince, Publisher, Air Cargo World at [email protected] or call +1-770-642-9170. 3ODWLQXP6SRQVRU 6LOYHU6SRQVRU 6LOYHU6SRQVRU cargo January, 2010 Volumeco 13 Number 1 ntents EDITOR Simon Keeble [email protected] • (704) 237-3317 ASSOCIATE EDITOR North America Trish Williams [email protected]• (301) 312-6810 18 Can You Believe A Forecast? CONTRIBUTING EDITORS Roger Turney, Ian Putzger CONTRIBUTORS Phil Hastings, Peter Conway Pharmaceuticals COLUMNISTS Gabriel Weisskopf, Brandon Fried 28 Airlines Get A Gold Rush PRODUCTION DIRECTOR Ed Calahan [email protected] CIRCULATION MANAGER Leadership Nicola Stewart [email protected] 34 Inspiring Aspiring Entrepreneurs ART DIRECTOR CENTRAL COMMUNICATIONS GROUP [email protected] PUBLISHER Steve Prince [email protected] ASSISTANT TO PUBLISHER Susan Addy [email protected] • (770) 642-9170 WORLD NEWS DISPLAY ADVERTISING TRAFFIC COORDINATOR Linda Noga [email protected] 4 Europe AIR CARGO WORLD HEADQUARTERS 1080 Holcomb Bridge Rd., Roswell Summit 8 Middle East Building 200, Suite 255, Roswell, GA 30076 (770) 642-9170 • Fax: (770) 642-9982 12 Asia WORLDWIDE SALES U.S. Sales Thailand Associate Publisher Chower Narula 15 Americas Pam Latty [email protected] (678) 775-3565 +66-2-641-26938 [email protected] Taiwan 18 Europe, United Kingdom, Ye Chang Middle East [email protected] David Collison +886 2-2378-2471 +44 192-381-7731 [email protected] Australia, New Zealand Fergus Maclagan Hong Kong, Malaysia, [email protected] Singapore +61-2-9460-4560 Joseph Yap DEPARTMENTS +65-6-337-6996 Korea [email protected] Mr. Jung-Won Suh +82-2785-8222 2 Editorial 37 Opinion 40 Bottom Line Japan [email protected] Masami Shimazaki [email protected] 3 Viewpoint 38 People/Events +81-42-372-2769 ?? CUSTOMER SERVICE OR TO SUBSCRIBE: (866)624-4457 Air Cargo World (ISSN 1933-1614) is published monthly by UBM Aviation. Editorial and production offices are at 1270 National Press Building, Washington, DC, 20045. Telephone: (202) 355-1172. Air Cargo World is a registered trademark of UBM Avia- tion©2010. Periodicals postage paid at Downers Grove, IL and at additional mailing offices. Subscription rates: 1 year, $58; 2 year $92; outside USA surface mail/1 year $78; 2 year $132; outside US air mail/1 year $118; 2 year $212. Single copies $10. Express Delivery Guide, Carrier Guide, Freight Forwarder Directory and Airport Directory single copies $14.95 domestic; $21.95 overseas. Microfilm copies are available from University Microfilms, 300 North Zeeb Road, Ann Arbor, MI 48106. Opinions expressed by authors and contributors are not necessarily those of the editors or publisher. Articles may not be reproduced in whole or part without the express written permission of the publisher. 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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 ACW JANUARY 2010 1 editorial Go East s the air cargo industry starts to wonder more about the future than the present, it might take note of recent data from the U.S. Depart- ment of Labor (DOL). A Between 2008 and 2018, the U.S. manufacturing sector will lose 431,000 people in semiconductors, printing, car parts and clothing. During the same period the U.S. health care industry will add more than two million to its payrolls. So that might be a straw in the wind for forwarder, airline or integrator with pharmaceutical or medical supply customers. Not so great if you’re shipping U.S.-made car parts or semiconductors. However the health care industry is an economic cost rather than net benefit. Or to put it another way, if Americans were healthier, then there would be more Simon Keeble money to spend on something else. Assuming it wasn’t on another war, it could [email protected] be education — which in turn might lead to more higher-paying jobs. But looking at the Labor Department’s table of the 30 occupations with the largest employment growth to 2018, apart from post-secondary teaching that requires a PhD and physicians who need an MD, just about everybody else can apparently learn on the job. Seems education in these occupations is not a huge prerequisite. So who is going to pay for the increase in the health care industry payroll? Some of them will have to be the more than 1.5 million educated Americans added to the computer systems and professional business service sectors by 2018. The Department says U.S. employment is forecast to increase by 15.3 million or 10.1 percent in the next eight years. Assuming companies don’t re-hire the millions that have been laid off since 2007, the government numbers suggest it will take until 2018 to create the same amount of jobs that have been lost in the past 18 months. For the U.S. transport sector, employment growth is forecast to be less than one percent per year to 2018 — hardly an indicator of re-hiring due to economic expansion. So will the additions to the health care and professional services payrolls be enough to drive a resurgence of consumer-led U.S. economic growth? All the signs point to 2013 before the air cargo industry is back to where it was in 2007. However that’s a global figure. Without a big economic bounce-back, Americans are likely to save, not spend, money in the near future. So look to FedEx, UPS, DP/DHL, TNT, Lufthansa et al to expand within Asia, India, Latin America and the CIS sphere of influence in the next eight years. Despite what British Airways says about alliances, North America is not the future for air cargo. 2 JANUARY 2010 ACW viewpoint We Can Start Looking Up ccording to IATA airfreight volumes last year to manage their supply chain effectively and to preserve fell 13 percent overall compared to 2008. cash. So with some recovery of demand airfreight is the Cargolux however has been able to perform first to benefit. Awell given the market conditions and subse- We have seen demand, especially ex-Asia, rising in the quently saw its market share rise. Also our load last couple of months, resulting in a backlog in the market, factors have remained relatively stable. but also other regions have experienced the “traditional” Driven by the focus on customer needs throughout the high season. For the moment we are still able to cope with organization and adapting to market changes we have been this demand with our current and some leased capacity for able to maintain a high level of reliability and flexibility. short-term charter demand. Our flights are quite full and Our modern fuel-efficient fleet still enables our daily aircraft utilization is approaching 16 us to be to be cost-effective. In this increas- block-hours. ingly commoditized industry it is important Finally, we saw that in the last two months to be able to compete on a cost basis. capacity declined more than demand. If this Even without the economic crisis our in- trend will continue, the overall absolute over- dustry is already facing many challenges. We capacity will be reduced but it still may be a are bound by regulations. It is very difficult long time until we end up with similar market to get access to all markets, and moreover equilibrium as before the crisis. obtaining traffic rights can be a long and diffi- Currently Asia is the most balanced market cult process. Governments are also imposing since the demand/supply is almost the same security regulations. Even though the fact as in December 2008, caused mainly by in- that all cargo in passenger bellies will have to creasing demand and aggressive capacity cuts be checked in the U.S. will put pure freight- by some carriers. Africa and Latin America ers in some kind of an advantage. remain the most unbalanced markets because We have no influence over our biggest cost Ulrich Ogiermann capacity has not been taken out to match the element, which is fuel. And if we want to ac- reduced demand to date. Since yield is a re- quire a fuel-efficient aircraft at favorable terms, we have to sult of demand and supply, we hope that capacity will con- deal with a duopoly of aircraft manufacturers: Boeing and tinue to be cut.