January, 2011 Volume 14, Number 1 Contents EDITOR Simon Keeble [email protected] • (770) 642-9170

INTERNATIONAL EDITION

JANUARY 2011

Africa grows two-way trade E-freight or else India pharma focus Diplomatic carriage

January, 2011 Volume 14, Number 1 contents EDITOR Simon Keeble [email protected] • (770) 642-9170

ASSOCIATE EDITOR/WEB EDITOR Jon Ross [email protected] • (770) 642-8036 Africa

SPECIAL CORRESPONDENT No shortage of two-way demand Martin Roebuck 20 [email protected] +44.(0)20-865-70138 Pharma CONTRIBUTING EDITORS Roger Turney, Ian Putzger The shifting pharmaceutical landscape

COLUMNISTS 26

Brandon Fried, Gabriel Weisskopf

PRODUCTION DIRECTOR E-freight Ed Calahan Customs key to paperless trading [email protected] 30 CIRCULATION MANAGER Nicola Mitcham [email protected] Diplomatic traffic ART DIRECTOR Full screening an issue for diplomatic CENTRAL COMMUNICATIONS GROUP couriers [email protected] 34 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 30 U.S. Sales Japan Associate Publisher Masami Shimazaki 16 Americas Pam Latty [email protected]. (678) 775-3565 ne.jp [email protected] +81-42-372-2769 Europe, Thailand United Kingdom, Chower Narula Middle East [email protected] David Collison +66-2-641-26938 +44 192-381-7731 [email protected] Taiwan DEPARTMENTS Ye Chang Hong Kong, [email protected] Malaysia, +886 2-2378-2471 2 Editorial 36 Classified 38 People/Events Singapore Joseph Yap Australia, +65-6-337-6996 New Zealand 3 Viewpoint 37 Bottom Line 40 Forwarders’ Forum [email protected] Fergus Maclagan [email protected] India +61-2-9460-4560 Faredoon Kuka RMA Media Korea +91 22 6570 3081 Mr.?? Jung-Won Suh [email protected] +82-2785-8222 [email protected] Air Cargo World (ISSN 1933-1614) is published monthly by UBM Aviation. Editorial and production offices are at 3025 Highland Parkway Suite 200, Downers Grove, IL 60515; telephone 866-624-4457. Air Cargo World is a registered trademark of UBM Aviation©2010. Periodicals CUSTOMER SERVICE OR TO SUBSCRIBE: (866)624-4457 postage paid at Downers Grove, IL and at additional mailing offices. Subscription rates: 1 year, $80; 2 year $128; outside USA surface mail/1 year $120; 2 year $216. Single copies $20. Express Delivery Guide, Carrier Guide, Freight Forwarder Directory and Airport Direc tory 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. Air Cargo World is not responsible for unsolicited manuscripts, photographs or artwork. Please enclose a self-addressed envelope to guarantee that materials will be returned. 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 Rose- POSTMASTER: Send address change to: wood Drive, Danvers, MA 01923, and provided the number of copies is less than 100. For authorization, contact CCC at (508) 750-8400. The Air Cargo World 3025 Highland Pky Ste 200 Transactional Reporting Service fee code is: 0745-5100/96/$3.00. For those seeking 100 or more copies, please contact the magazine directly. Downers Grove, IL 60515 Member of Audit Bureau of Circulations Ltd. For more information visit our website at POSTMASTER and subscriber services: Call or write to Air Cargo World, 3025 Highland Parkway Suite 200, Downers Grove, IL 60515; telephone www.aircargoworld.com 866-624-4457. ACW JANUARY 2011 1 editorial Britain’s awful airport

he British Airports Authority (BAA), created by Margaret Thatcher’s government by blithely turning a nationalized monopoly into a private one, could better be named Band-Aid Airports. Still owned by the Spanish, who appear to be favoring a profit-to- sell plan rather than an investment strategy, Heathrow continues to be a facility waiting for a climate change screw-up. At best, it just Tabout works for both cargo and passenger handling; but given the recent debacle of “snow days,” British Airways’ customers and investors should not be encour- aged by the airport management’s initial response. With impressive understatement, the BAA’s CEO Colin Mathews commented: “We were overly optimistic about how quickly we could clear the stands of snow. I regret that.” Simon Keeble Unimpressed by the modest mea culpa, the EU’s transport commissioner, [email protected] Siim Kallas, suggested he was going to force airports to be better prepared and added: “I have become increasingly concerned about the problems relating to the infrastructure available to airlines — airports and ground handling — during this severe period of snow.” Philip Hammond, Britain’s transport secretary, responded to the misery at Heathrow by saying the coalition government will consider whether the country is experiencing a “step change” to its weather that would justify “Continental- style” winter equipment to keep roads and airports open. As with many things British, the government will announce an enquiry into why thousands of tonnes of freight and many more passengers were stranded at the world’s largest international airport during some of the busiest few weeks of the year. Also, like many things in what Hammond describes as “Modern Brit- ain,” not much will change — unless it is to apply another aviation tax to pay for any improvements. Bowing to public and governmental pressure, the BAA will spend some of its pre-holiday profit forecast of £972 million ($1.5 billion) for 2010 on more snow clearing equipment — which will probably do double-duty as earth movers while a new passenger terminal is being built. A government enquiry will make recommendations for improvements at Heathrow, but will hardly suggest a change of ownership due to incompetence. BA will take a hit due to loss of revenue, while hoping that its future relationship with another Spanish company, Iberia, will be less costly. For the freight forwarder, Heathrow appears to be expensive real estate to handle UK imports and exports. While it is unlikely that any of the major logistics groups will decamp, some of the BAA’s less well-heeled tenants might decide to take their business elsewhere. According to IATA, world trade — i.e. the flow of air cargo — follows the business traveller. So if there’s one lesson that should be learned from this peculiarly British debacle, it must be to change ownership of the BAA — or learn Spanish.

2 january 2011 ACW viewpoint Deflating industry value

house in a London suburb for $6,000; a loaded the perceived value of air cargo and its rate levels. family car for $3,000; or a professional sales- A major factor in today’s under-priced market is the man for an annual salary of $3,000. These industry’s general failure to get its message across. One would be unbelievable bargains in 2011, symptom is the steady attrition of the media that serve wouldn’t they? That’s what you’d pay today if the industry and traditionally have helped underscore its theseA commodities had suffered the same degree of defla- importance in the wider commercial arena. The death of tion as air cargo prices since 1980. many periodicals and the thinning of those that remain is How is it that an industry that is just as good at doing its a direct result of the continual and unjustified reduction job today — despite all the complications of in airline advertising budgets for cargo. These compliance with heightened security measures always fall when times are tough, but never — has allowed its products to fall in value by recover when things get better. When you look up to 95 percent in real terms? at expenditure on cargo “marketing” against You could blame over-capacity and marginal passenger promotion, there is no comparison. pricing driven by passenger carriers for whom Cargo was always under-resourced relative to cargo space is just a by-product. And you’d be its revenue and profit contribution, but never partly right. It’s certainly not falling demand — more so than today. volumes on every route are vastly greater than Even those carriers that invest sensibly in they were 30 years ago. But I’d say that the air the external promotion of their products often cargo industry may simply have lost sight of its fail in the attempt through employing ill-suited true value when measured against the alterna- resources. Advertising agencies and media re- tives. Or maybe it’s just not getting its message lations firms that understand the passenger across. It’s all in the marketing. Or perhaps Derek Jones business and are attuned to spending huge more accurately, the lack of it. sums on mass media are not necessarily the Marketing is often defined as “the management pro- ideal custodians of the tight budgets typically found in the cess responsible for identifying, anticipating and satisfy- cargo side of the business. One result of such mismatches ing customer requirements profitably.” By that yardstick, is picking the wrong media and filling them with bland, ir- at least some elements of the industry have got it right. relevant creative work — or bombarding long-suffering air The integrators have done a slick job of spotting the wide- cargo journalists with ill-informed PR “puff.” spread need for speed, playing on the fear that an urgent This is bad news for the companies to which these ob- shipment won’t be delivered on time unless tracked every servations apply. But when you consider the cumulative inch of the way, then shouting about their services and effect of so many failures to convey messages of efficiency, commanding a premium rate for them. quality and innovation to the marketplace, is it surprising Some carriers, too, are now working with service part- the industry undervalues itself and that competition is too ners to imitate the seamless integrator chain, as modern often confined to rate-cutting? technology provides an opportunity to monitor and man- Getting a meaningful message across to the right age the end-to-end process competitively. Meanwhile, oth- audience — and so contributing to the collective image ers are successfully creating added-value products for sec- of the industry and the perceived value of its products — tors that will pay a premium for special handling. is neither difficult, nor costly. At a time when the media But the fact remains that air cargo rates are nowhere spotlight is on cargo security and its impact on global near where they need to be to sustain the industry and its trade, getting that message across has never been more future development. Competition seems always to be about important. ACW slashing rates — and spot rating predominates. Cost-cut- Derek Jones has spent more than 30 years in pub- ting can only play a limited part in preserving profits, and lishing and marketing in the air cargo industry. He is after a decade or more of vigorous outsourcing, there’s not a founder and partner of Pilot Marketing, a London- much wriggle room left. So we have to find ways to restore based agency.

ACW january 2011 3 europewo r ld asian e w middles east africa americas americasamericas africa africa middle middle east east asiaasia europe europe GACAG to provide platform for security harmonization he Global Air Cargo Advisory Group (GACAG), composed of Trepresentatives from TIACA, IATA, FIATA and the Global Shippers’ Forum (GSF), will focus on enhancing the security of the supply chain “in a manner that results in the minimum possible disruption to the vital flow of commerce.” Volga-Dnepr Airlines, the sister company to ABC, recently delivered two 37-tonne In a statement, the newly formed mining vehicles manufactured in County Tyrone, Northern Ireland, via truck, ferry and AN-124 from Prestwick, Scotland, to Ulan Bator, Mongolia organization said the International Civil Aviation Organization (ICAO) should be the focal point for collaboration on screening requirements, and both governments and industry should be part of the dialogue. Will Lufthansa ICAO also should set global definitions and standards for air cargo security, including the definition of what constitutes keep Africa experts “higher risk cargo,” and must do so on an expedited basis, said GACAG, adding that protocols for transferred cargo should take independent? into account screening performed prior to the original flight. The group, which has invited the World elgium’s resurrected-by- based, short-haul European carrier Customs Organization (WCO) to join Lufthansa flag-carrier Virgin Express in 2006 saw the name it, said industry Brussels Airlines is well change to Brussels Airlines. In Sep- and government on the way to fully restor- tember 2008, Lufthansa acquired a s h o u l d f o l l o w ing national pride and the 45 percent stake in the airline, paving the international formerB African route network of its the way for the Belgian flag carrier to standard set by the liquidated predecessor Sabena World join the Star Alliance. WCO on advance Airlines. But Brussels Airlines is still very cargo information Latest service additions mean 18 much about the ghost of Sabena and to facilitate risk- points are now served across West the legacy of its African network, assessment and Michael Steen, GACAG and Central Africa, with a fleet of with the new carrier even adopting chair and executive vice j o i n t l y d e v e l o p five A330-300 aircraft. Growth strat- the IATA code of its predecessor. At president of Atlas Air a n d e n d o r s e a egy in the long-haul market calls its inception, the new carrier was standard electronic for a further three to four African launched with about half of its staff cargo-security declaration process and its destinations and an extra A330-300 drawn from the ranks of Sabena, but associated paper layout. According to IATA, aircraft each year. At that rate, the importantly, this included many sta- a paper and electronic standard already airline is set to soon eclipse the 25 tion managers with vital knowledge exists and is currently being reviewed by destinations linked by Sabena before and expertise of the African mar- ICAO. its demise in 2001. ket. Guy Hardy, head of cargo sales GACAG added it will “engage with What was initially known as SN at Brussels Airlines, spent more relevant authorities as we address recent Brussels Airlines was created in 2002 than 30 years with Sabena, most of developments and seek to further our joint in the aftermath of Sabena’s bank- which time in Africa. “Today the goals of security and facilitation.” ACW ruptcy by a group of about 40 Belgian ratio of ex-Sabena staff is down to investors. A merger with Brussels- about 20 percent,” Hardy said. “But

4 January 2011 ACW Europe Asia middle east africa americas americasamericas africa africa middle middle east east AAsiasia E uropeEurope

the knowledge legacy of the African keting at ECS Group. market remains very high.” “We have found that we are mar- In some respects, that legacy has keting a very strong cargo product driven the cargo strategy of Brussels with Brussels Airlines, combined with Airlines. In what is described as a our deep knowledge of the African unique business model, it has chosen market.” The key to that success, he to entirely outsource southbound says, is maintaining a close watch on cargo capacity to all its African des- the fickle nature of the African mar- tinations. This is handled exclusively ket, which can see sharp upturns or by the French general sales agent, downturns to particular points in the ECS Group. The airline only markets space of one or two months. northbound capacity, enabling it to “The most telling point about Guy Hardy, head of cargo sales for draw on the local market knowledge the success Brussels Airlines has Brussels Airlines of many ex-Sabena staffers. achieved so far is that its cargo from the cargo side, virtually full But Brussels Airlines’ African business is solely concentrated on absorption into the Lufthansa Cargo network deliberately stretches no the African market,” Thominet ex- network? farther south than Rwanda and An- plained. “Unlike other major carri- “It is an interesting question,” gola. “We do not want to go beyond ers, it is not distracted by Asia or Hardy said. “Because a couple of these points, as this would stretch the North Atlantic, and that is be- years ago, all the talk coming from the network and require the addition ing recognized by many forwarder’s Lufthansa seemed to be about of more aircraft in order to retain in- shippers.” Hardy is equally expan- full integration. But now with the tensity of service to other points in sive and glowing about the contri- success we have enjoyed, I think Africa,” Hardy explained. bution being made by ECS Group. they recognize that Brussels Airlines Latest additions to the network “We have developed a very strong provides a very strong stand-alone include service to Ghana, Burkina relationship with ECS Group, which product, particularly in relation to Faso, Benin and Togo. Northbound, we want to see maintained over the our strength in the African market.” Hardy confirmed, there is but one longer term,” Hardy said. Hardy sees the opportunity to commodity out of all points — per- But there is a very large elephant build on the combined strengths ishables traffic, be it in the form of in the room of Brussels Airlines. of both players. “Obviously there fish, flowers or vegetables. “It has al- Lufthansa’s 45 percent foot-in- are a lot of synergies we can gain lowed us to focus very strongly on the-door stake carries with it from working more closely with this sector and provide a premium the provision for the German Lufthansa Cargo, which we are product service with all perishable carrier to acquire the remaining already achieving,” he said. “But for traffic moving out of Africa,” he said. 55 percent starting this year. our part, we see our role as being A “Fresh to Shelf” product enables With that prospect a very likely that of the African pillar for the the carrier to maintain year-round proposition, will Lufthansa follow Lufthansa Cargo Group.” load factors of 70 percent on all the business model it adopted with With retirement beckoning for northbound services. the acquisition of Swiss Airlines and Hardy, it will be up to his deputy Southbound, business is even bet- allow the Belgian carrier to retain its Herman Hoornaert, current head of ter, with load factors exceeding 90 full independence? Or will it go for cargo sales in Africa, to convince percent, according to Adrien Thomi- the policy it pursued with Austrian Lufthansa to keep Brussels Airlines net, vice president for sales and mar- Airlines, which has seen, certainly independent. ACW

Snowy Christmas season causes cargo delays

dverse weather conditions reached for comment during the in an e-mail to Air Cargo World on inundated European airports middle of the massive snow days, December 21, four days after the Aa week before the Christmas not all European industry officials snows hit Europe. “Most flights are holiday with snow and ice, forcing were under the same level of stress. at least 24-hours delayed, and we the cancellation or delay of many “We are dealing with the situa- are canceling a few flights later this cargo flights. This further compli- tion as best as we can,” Robert Van week, but always moving cargo that cated the delivery of goods during de Weg, senior vice-president, sales is booked.” a busy Christmas season, but when and marketing at Cargolux, wrote This snow business lead to a very

ACW January 2011 5 Europe Asia middle east africa americas

complicated situation, he explained. w as ex per ienci n g a Snow and ice had blocked the roads cargo backlog due to or made them extremely congested, delays in loading and so trucking cargo was a slow or im- offloading goods. Re- possible option. Likewise Luxem- stricted parking space bourg Airport was congested with was also at a premium backed up flights; Cargolux had even because of the mass been diverting planes to Prestwick of canceled passenger during the heaviest snow periods. flights (the carrier said To make things even worse, Van de hundreds had to be re- Weg said some airports ran out of scheduled). de-icing fluid. L u f t h a n s a C a r go The scene at Amsterdam Airport Schiphol on December 19 According to an airport state- halted cargo shipments ment, Heathrow experienced 5 on short- and medium- inches of snowfall in one hour on haul passenger flights between De- Bart Pouwels, director of business December 18, resulting in lengthy cember 19 and 22; it canceled pas- development at Schiphol Cargo, passenger and cargo delays. Of- senger cargo during that time on all was handling the Amsterdam snow ficials instituted a reduced flying long-haul flights coming into Frank- in his stride. He said that from schedule between December 20 and furt. The carrier also had to lay December 17 to 20, more than 75 December 22, meaning that only down some ground rules in order to percent of their scheduled cargo 1/3 of scheduled routes were flown. conserve warehousing space, refus- services were operating — 20 flights To further ease the burden, the UK ing to store export shipments more were on time, and 124 freighters ran government allowed increased night than 24 hours in advance. BUPs more than 15 minutes late. In all, flights. could only be delivered 12 hours in 47 cargo flights had to be cancelled At Frankfurt airport, Lufthansa advance. due to the weather. ACW

In the news...

AirBridgeCargo Airlines has become Traxon’s three, Schenker will have to measure all traffic Dussledorf International Airport-based cargo first customer in Russia. The agreement was lanes and stations worldwide… Impatex, the handler is projected to have processed more than signed by Tatyana Arslanova, executive president UK’s largest supplier of Customs and forwarding 100,000 tonnes of cargo last year. DUS’ Thomas of ABC and Felix Keck, managing director of Trax- software, has added messaging functionality to Schurmann credits the success to a surge in Ger- on Europe. “We are always looking to improve its NetFreight web-based forwarding system and man trade during the summer months and the communications with our customers and key sup- ICE, a new-technology successor to its Customs overall strength of the airport’s freighter activity… pliers. Traxon Europe will give us an EDI platform Manager product, in support of the UK Import The PIERS directories of 150,000 U.S. importers to communicate faster and more flexibly. Our deci- Control System (ICS), which went live on Janu- and 50,000 exporters, previously only available sion to work with Traxon is based on good feed- ary 1. ICS requires airlines and shipping lines, or in print format, is now online. Subscription is back from our customers and partners,” Arslanova agents authorized to act on their behalf, to pro- $670 per directory or $870 for both. The data is said… UK-based Air Charter Service said it is vide security information electronically in advance searchable by company name, location, SIC code seeing an increase in cargo bookings due to pro- of shipments arriving or transiting the EU from and commodity description. Every listing provides posed security measures being currently debated non-EU countries. Impatex will adapt ICE to work a detailed picture of the company’s trade activ- in the U.S. and Europe. The firm experienced a 16 with all other EU national Customs systems using ity and executive contact information… IATA has percent increase in business last month, accord- a community service provider, such as BT, Traxon released EasyDGR, an online application that ing to Justin Lancaster, Air Charter Service’s cargo or Descartes… Air France-KLM has reported a allows shippers of hazardous materials to create sales director. “Consignors decided that trans- 6.1 percent increase in cargo capacity and a 0.9 an electronically validated Dangerous Goods Dec- porting their cargo on aircraft charters was safer, percent bump in load factor in November 2010 laration (DGD). IATA says as much as 60 percent quicker and generally more efficient than sched- over November 2009. The biggest increase was of dangerous goods rejected by airlines are due uled flights,” Lancaster said in a statement… DB in the Americas, with 9.2 percent. Tonnage in the to mistakes in documentation. EasyDGR provides Schenker Logistics has reached phase two of Caribbean/Indian Ocean region increased by 9 a quick search to IATA’s dangerous goods regu- IATA Cargo 2000’s quality management process percent, and the Africa/Middle East market ben- lations and generates all required document out- for its airfreight business. To qualify, the company efited from a 5.2 percent bump… DUS Cargo puts, including XML. EasyDGR is developed and had to demonstrate its ability to create full trans- Logistics ended 2010 with its best figures since hosted by InfoTrustGroup. A single, one-year parency for air cargo door-to-door. To reach phase the company’s launch nearly 10 years ago. The license is $1,499. ACW

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oag.com Americas:US1-800-342-5624•OutsidetheUS1-630-515-5300•[email protected] Europe,MiddleEast,Africa:+44(0)1582695050•[email protected] AsiaPacific:+6563955868•[email protected] MiddLewo eastr ld n africae w s americas europe ASIA Corruption in Sub-Saharan Africa continues

lobal corruption has been on the rise during the past three years, according to a survey by Transparency International (TI). The Berlin-based watchdog said its recent Gallup poll of 91,000 people in 86 countries concluded that 60 percent think Emirates recognized its top UAE freight forwarder customers at a gala lunch recent- corruption is growing and 25 percent report ly. They included Swift Freight International, Dubai Express, Danzas AEI Emirates, paying bribes. Schenker Dubai, Barwil Unitor Ship Services, Aramex International, Bin Jassim More than one in two Sub-Saharan Af- Cargo and Forwarding, International Transport services FZCO, Kuehne and Nagel ricans report paying bribes in the past 12 Management, and Agility Logistics months. This compares to 36 percent in the Middle East and North Africa, 32 percent in the Newly Independent States, 23 percent in Latin America, 19 percent in the Western Balkans and Turkey, 11 percent in the Asia- Pacific region and just 5 percent in European Carbon offsets in Union countries and North America. The survey found that views on corruption are the highest in Europe and North Africa are a win-win America, where 73 percent and 67 percent, respectively, think corruption has increased. Despite these results, the survey also found for customers that 7 out of 10 people would be willing to report corruption. “The fallout of the financial crises continues to affect people’s opinions of cor- s the U.N.’s latest round consumption by 80 percent, the pro- ruption, particularly in Europe and North of climate talks finished gram will have the multiple effects of America. Institutions everywhere must be in Cancun last month halting deforestation and soil erosion resolute in their efforts to restore good without further environ- throughout the country, improving governance and trust,” said Huguette mental taxes on the air the lives of many inhabitants, and Labelle, chair of TI. “It is heartening that transportA industry, Deutsche Post providing DP-DHL and its customers so many people are ready to take a stand DHL (DP-DHL) began a novel way 20,000 tonnes of carbon offsets an- against corruption.” of earning carbon credits via its Go- nually beginning in 2012. The report also concluded that 80 per- Green C02 mitigation program. DHL Global Forwarding is respon- cent believe political parties are corrupt or In addition to offering custom- sible for the ocean shipment of the “extremely” corrupt. The civil service and ers shipment offsets, DP-DHL now stove plates made in Germany by parliament are considered the next most wants to finance and coordinate its Koch Anhängerwerke and assembled corrupt institutions. Half the people ques- own long-term, wide-ranging climate in Lesotho by Solar Lights. tioned said their government’s actions to protection projects. Together with “The stoves will reduce C02 emis- stop corruption are ineffective. This reflects atmosfair GmbH, a leading offsetting sions whilst also contributing to im- little change over time, said TI. However, agency, the logistics giant is funding proving people’s living conditions,” opinions have worsened slightly since 2007 a 10-year program to provide 10,000 explained Rainer Wend, head of cor- in the Asia-Pacific region, Latin America stainless steel, wood-burning stoves porate public policy and responsibil- and Sub-Saharan Africa — while they have to village communities throughout ity at DP-DHL. improved in the Newly Independent States Lesotho. “Every day, another part of Le- and North America. ACW Designed to produce the same sotho’s natural bush disappears be- level of heat while reducing wood cause its people have no other fuel

8 january 2011 ACW ASIA EUROPE AMERICAS AFRICA MIDDLE EAST

for cooking. The new stoves use 80 percent less wood; we can, there- fore, initiate a turning point, both for the families and for the benefit of the environment,” added Barbara Wagner, atmosfair’s Lesotho project manager. DP-DHL said it will continue to acquire carbon credits from external projects in order to offset its customers’ C02 emissions by 100 percent. In 2010, around 50,000 tonnes of C02 were offset, and the group continues to purchase credits via climate protection projects.

“Lesotho’s natural bush disappears because its people have no other fuel DHL takes the heat out of cooking supply chain [to be] more environ- or annually. In addition, they can use for cooking.” mentally friendly. An important first their data for their individual carbon step in this direction is a reliable reporting, reduction and offsetting calculation of their C02 emissions strategy. For the offset opportunity, Customers of its Global Forward- throughout the entire supply chain. DP-DHL calculates carbon emissions ing division can now get a carbon C02 will become a new currency, and at the shipment level. The generat- footprint report, which offers a de- we want to support our customers ed C02 emissions are then offset via tailed overview of the C02 emis- in creating their own balance sheet,” certified external climate protection sions generated by their shipments said Hermann Ude, DHL Global For- projects such as Lesotho using third- by trade lane. The shipper can then warding’s CEO. party verifiers including Société Gé- compensate for the emissions by The carbon footprint report ana- nérale de Surveillance. choosing a carbon-offsetting option. lyzes the individual shipment weight, In a related corporate social re- “We want to give our customers volume and route. Customers can responsibility move, DP-DHL has re- the opportunity to design their own ceive their report monthly, quarterly newed its partnership with the U.N.

ACW january 2011 9 MiddLe east africa americas europe ASIA

Office for the Coordination of Hu- Latin America/the Caribbean and ployed 20 times to Haiti, Guatemala, manitarian Affairs (UN OCHA) for the Middle East/Africa. Each team Chile, the Philippines, Indonesia, another three years. Rainer Wend, consists of 80 specially trained DHL Myanmar and Peru. In Pakistan last the group’s executive vice president employees who volunteer to be de- year, 30 employees from 10 coun- for corporate public policy and sus- ployed within 72 hours to a disaster- tries based at Chaklala airbase in Is- tainability commented: “Over the hit region. lamabad spent five weeks handling past five years, we have worked very “Their expertise, their profession- 4,500 tonnes of relief goods and successfully together in disaster alism and their dedication helped in packing 2,500 DHL special bags with management. The partnership with many circumstances to ensure the food and commodities for drop by U.N. OCHA enables us to contribute flow of incoming relief materials, to helicopter in remote and inaccessible our logistics know-how to help peo- decongest crowded or uncoordinat- areas. ple in need, and we are very much ed airports and to improve the flow The group’s social and environ- looking forward to continuing our co- of incoming in-kind contributions mental initiatives, GoHelp, GoTeach operation.” and unsolicited donations,” noted and GoGreen, are part of an overall On behalf of OCHA, DP-DHL oper- Rashid Khalikov, director of OCHA strategy for sustainable economic ates three disaster response teams in Geneva. activity, according to DP-DHL CEO covering the Asia-Pacific region, DP-DHL’s teams have been de- Frank Appel. ACW Qatar public offering after route expansion atar Airways is to launch an currently served daily, will increase robi since November 2005, and this initial public offering of its to 12 flights a week. Africa is 10 per- has proved one of our biggest suc- stock in 2012, according to cent of Qatar Airways’ network, with cess stories in Africa.” the airline’s CEO Akbar al-Baker. services to Alexandria, Algiers, Cai- During the next three months, al-Baker said the airline has always ro, Luxor, Casablanca, Cape Town, the airline will introduce new ser- promised an IPO after three years Johannesburg, Khartoum, Lagos, vices to Budapest and Bucharest on of consecutive profits. Meanwhile, Nairobi, Dar Es Salaam, Seychelles, January 17; Brussels on January 31; Qatar has expanded its East Africa Tripoli and Tunis. and Stuttgart on March 6. network with 12 more A320 flights to al-Baker noted: “As part of our By 2013, Qatar Airways plans to Nairobi and Dar Es Salaam. growth strategy, we continue to step serve 120 cities worldwide via Do- This month, the Nairobi frequen- up frequency on existing routes, ha’s new $14.5 billion airport, which cies increase to double daily after which is a strong lever to facilitate will include a 750,000-tonne capac- serving Kenya for five years. The growth in the business and tourism ity cargo terminal. The first phase is Tanzanian capital, Dar Es Salaam, sectors. We have been serving Nai- set to open in 2012. ACW

In the news.... Air Seychelles has become the 12th custom- today, DHL Global Forwarding handles more Abdulrahman al-Hamdi, has met with the Czech er for Jettainer, as the ULD outsource compa- than a third of all international forwarder-issued Ministry of Foreign Affairs in a bid to get an EU ny won a five-year management contract from e-freight shipments.” Ram Menen, Emirates ban lifted on air cargo shipments to and from January 1. “Air Seychelles has selected Jettainer divisional senior vice president, cargo, added: Yemen. Al-Hamdi said his country had taken for its future ULD Services requirements due to “Emirates is a huge advocate of e-freight and the necessary steps to improve air cargo secu- the unique combination of ULD pooling with air- is already one of the leaders in the industry in rity and Yemen’s airports now complied with line co-branding, which allows airlines and han- actual numbers of shipment carried on the e- international standards… Boeing partnered dling agents improved control over ULD stock freight lanes. The benefits it has brought our with Ethiopian Airlines to deliver more movements and location,” said Gerold Tumulka, business are enormous, which is why we are en- than 5 tonnes of medical supplies, including an- the carrier’s director of ground operations. Air couraging others to embrace it.” ... EADS, the aesthesia machines, monitors and books, from Seychelles operates five B767 aircraft on its in- parent company of Airbus, has begun a second Seattle, Wash., to Black Lion Hospital, Addis ternational network and has ordered the B787 freighter conversion of an A300-600 for Shar- Ababa. Black Lion is the largest teaching hos- Dreamliner… DHL Global Forwarding and jah, UAE-based Rus Aviation. The first aircraft pital in the country. The shipment leveraged an Emirates SkyCargo are partnering to further began the four-month conversion program in Ethiopian Airlines B777-200LR delivery flight. A encourage e-freight relationships with their cus- September. EADS has delivered more than 160 majority of the supplies were donated by Swed- tomers. Michael Schaecher, head of global air- converted freighter aircraft to 30 customers ish Medical Center, the largest non-profit health freight, DHL Global Forwarding said: “Already worldwide… Yemen’s ambassador to Prague, provider in the Seattle area. ACW

10 january 2011 ACW

woAsia r ld MiddLen eeast w s africa americas europe americas europe Asia middle east africa A strong year for the region leads to a muted 2011

hina lead the way in airline growth during 2010, a year defined by Asian prominenece and regional differences in profitability, said IATA Chairman Giovanni Bisiganni. While industry officials in the Asia- Pacific region did well independently, the industry as a whole struggled through last year. Bisiganni said year-end rev- enues for 2010 are projected to be $565 billon, which translates to a 2.7 percent FedEx is expanding its reach in the Asia-Pacific region. In November, the carrier profit margin of $15.1 billion. launched enhanced services to Vietnam. “If airlines were charity organizations, this would be a great result,” he said during a mid-December speech. “As a business, it clearly shows that we remain a sick industry. We are not Vietnam draws even recovering half the cost of capital, which is 7 to 8 percent. Even in a prof- itable period, the industry continues to electronics makers, destroy shareholder value.” IATA found that $7.7 billion of the profit mark for 2010 occured in the capacity Asia-Pacific region. “This is the largest absolute profit ever for this region,” he ovember saw the arrival more than other modes of transpor- said. “The power of China is driving of FedEx freighters in tation. The country’s export base is this forward.” Hanoi, as the integrator broadening, with a growing num- The organization predicts that 2011 launched four weekly ber of electronics manufacturers will see a continued fall of profits with flights to the Vietnam- grabbing a larger share of export a year-end total hovering in the $9.1 Nese capital. Coming on top of six volumes. According to economic billion range. The Asia-Pacific region’s flights a week to Ho Chi Minh City, research and forecasting firm IMA expected mark for 2011 is $4.6 bil- this brought FedEx’s footprint in Asia, exports of computers and elec- lion. This fall will be attributed to the Vietnam up to ten freighters a week. tronics soared 40.8 percent in the increasing price of oil, a fall in global The move reflects the country’s first four months of 2010, whereas GDP and a growth in capacity that out- buoyant growth last year. “Vietnam textiles/garments and footwear went paces demand. has been quite strong,” observed up 18.3 and 5.1 percent, respectively. “We end this year with better-than- Madhav Thapar, senior vice presi- The flagship investment in this sec- expected profits, but nothing for our dent of airfreight for the south Asia- tor has been Intel’s $1 billion wafer shareholders,” he said. “Profits will de- Pacific region at DHL Global For- facility in Ho Chi Minh City. teriorate in 2011.” warding. According to FedEx, ex- “We are seeing more electron- “The industry is fragile and balancing port turnover in Vietnam in the first ics and high-value stuff being pro- on a knife edge. Any shock could stunt nine months of 2010 was up 23.2 duced in Vietnam. These exporters the recovery, as we are seeing with the percent. are looking for more direct lift from results of new or increased taxation on Besides sheer momentum, it is a there. They don’t want to truck their airlines and travelers in Europe.” ACW shift in commodities exported from cargo to another gateway,” Thapar Vietnam that is benefiting air cargo remarked.

12 january 2011 ACW Asia MiddLe east africa americas europe americas europe Asia middle east africa

marked. Much will hinge There have been on how the first stirrings among quar ter of 2011 unfolds. If demand carriers from the conti nues to be stron g, a i rl i nes region toward are bound to boost lift into markets developing a in Southeast Asia, stronger profile in but they will not rush in with ample cargo, but much capacity. For one thing, markets like of this is still The rise in demand for lift out of Vietnam still pose a challenge in a Vietnam has created bottlenecks, as pronounced directional imbalance. shrouded in doubt. airlines have been slow to step up More important, though, the carriers capacity. Before the 2008 downturn have signaled that they are deter- erate growth, according to Thapar. set in, several carriers had been mined to protect yields and will keep There have been stirrings among poised to ramp up their presence capacity in check to avoid another carriers from the region toward de- in Vietnam, but those plans were round of yield erosion, Thapar ob- veloping a stronger profile in cargo, swept aside in the subsequent eco- served. but much of this is still shrouded in nomic slump. Forwarders and Thapar reckons that capacity will express operators increase in 2011. Disappointed with have been more ag- the strength of the fall/winter peak gressive i n thei r season, several carriers that had expansion in Viet- lined up freighters out of the north- nam. DHL Express eastern part of Asia in anticipation opened a $5 mil- of rampant demand will likely shift lion gateway at Ho some of their equipment to South- Chi Minh City’s Tan east Asia, which traditionally sees Son Nhat airport, a less pronounced peak than China and Agility opened and its neighbors. Vietnam is a prime its regional head- target for those freighters, given the quarters near the shortfall of capacity there at the mo- airport, while Kerry ment and the strength of the coun- Logistics opened a try’s recovery. Two other countries 9,000-square-meter branch in Dan- doubt. Thai Cargo has signaled am- in the region that have shown strong ang in central Vietnam. Elsewhere, bitions to add more freighters to the growth and need more capacity are forwarders have been expanding two 777s that it currently leases from India and Indonesia, Thapar re- their presence in Indonesia and, Southern Air under a block space ar- more recently, Sri rangement, but the carrier has been Lanka in anticipa- in some turmoil since cargo head tion of rising ex- Pruet Boobphakam was ousted after ports and strong investigations into alleged irregular- economic growth. ities involving the 777 lease. In Indo- Malaysia, wh ich nesia, flag carrier Garuda is report- was hit particu- edly thinking of fielding between larly severely by two and seven converted B737-400 t h e d o w n t u r n , cargo aircraft, but forwarders are h a s r e b o u n d e d not holding their breaths. Even if strongly this year, the plan did materialize, it would while Singapore not bring about a significant change and Thailand have in the carrier’s appeal, which is not shown more mod- among the highest, one forwarder

ACW january 2011 13 americas europe Asia middle east africa

executive said privately. September. The order indicates a Lumpur hub. Moreover, MAS has Of more substance and impact strong focus on the development of whittled down capacity severely on will be MASKargo’s order for four regional routes, notably into China. some regional sectors, and a regional A330-200 freighters, of which the Already Shanghai produces more freighter can compensate for the lost first is due to enter service next freight for MASKargo than its Kuala belly space on those routes. ACW

Group calls for third HKIA runway

Hong Kong-based think tank neighboring airports. Shang- is calling for a third runway at hai Pudong International Air- AHong Kong International Air- port will open runways four port (HKIA). and five in 2015, the report According to a recent report by states. By 2020, Incheon In- Hong Kong Ideas Centre, the airport’s ternational Airport will have two existing runways are expected four runways, and Kuala to reach capacity in the next decade. Lumpur International Airport The airport is now operating at 93 will boast five runways. Ex- percent capacity, and this number pansions are also slated for will rise to 100 percent by 2017. airports in Bangkok, Singa- The group says it takes 10 years to pore and Taipei. construct an extra runway, so if Asia is staring at huge development were to commence growth rates during the next in 2011, the airport would still be 10 years, and to compete operating at capacity from 2017 to for some of that traffic, Hong Kong International Airport will reach capacity 2021. officials at HKIA need to by 2017. Photo: HKIA By adding the new runway, officials start planning immediately. at HKIA would also be boosting the HKIA reports that passenger urgency, otherwise our competitive country’s GDP. It’s been reported that and cargo traffic in the Asia-Pacific advantage will be diminished,” adding the new runway would lead region is expected to grow by 7 Patrick Lau, head of the think to a 10 percent increase in air traffic. percent annually. Mainland China will tank’s airport study group, said in a This boost would result in a 1.9 per- see growth of 11 to 14 percent during statement. “In fact, the slow progress cent increase in GDP. that time period. and the controversial disputes over The report also found that HKIA’s “Given the intense competition developing a new runway at Tokyo’s status as the third busiest facility for now facing us, we contend that Narita Airport last century led to a cargo throughput is in jeopardy be- Hong Kong has to address the third rapid loss of its leading position as an cause of increased competition from runway issue with a sense of utmost aviation hub in the region.” ACW

In the news.... American Airlines will commence non-stop Transport said: “Rail is the backbone of our freight Airport Terminal Services’ (SATS) new perishables flights on January 20 from New York’s JFK Airport transport. We want to become even more efficient, handling center, is now open. Built at a cost of to Haneda in Tokyo using Boeing 777 aircraft... particularly on long hauls, and that will also help S$16.5 million ($12.5 million) within the airport’s Hawaiian Airlines continues its expansion into on transports to and from China.” German min- free trade zone, it can handle 250,000 tonnes a Asia January 12 with the launch of service to ister of transport Peter Ramsauer and his Chinese year. With multi-tiered temperature zones rang- Seoul-Incheon International Airport. Hawaiian counterpart Li Shenglin earlier signed an MoU to ing from -28C to 19C, the facility is designed to Airlines also recently secured an expanded credit exchange logistics expertise… Logistics provider handle a wide range of fresh produce including facility, allowing it to borrow an additional $75 Aramex has launched a new Sea-Air route from chilled meat, live seafood and fresh flowers… The million over four years… Deutsche Bahn (DB) China to Europe via Vancouver, Canada. Transit U.S.-based logistics company China Interocean has won a €30 million ($40 million) contract to time is 18 days. The company has secured avail- Transport has delivered 54 horses, worth more supervise the construction of nine high-speed rail able ocean capacity from China and airfreight than $1.6 million each, from Chicago to Hohhot, routes within China. Jan Mücke, Parliamentary slots from Canada into the UK, the Netherlands China. Special crates were manufactured to fit the state secretary at the German Federal Ministry of and France… Coolport@Changi, the Singapore horses, which came in a variety of sizes. ACW

14 january 2011 ACW World Cargo Symposium 2011 8 –10 March 2011, Ist anbul, Turkey

Informative presentations, inspirational speakers, valuable insights

The IATA World Cargo Symposium Our 700 delegates last year, more than 95% of is unique among air cargo events. whom were satisﬁed *, can’t be wrong. Don’t miss this chance to contribute with ideas, and Twenty industry governance meetings and a drive the industry to new heights. dozen topical tracks over three action-packed Register today! days promises to leave a lasting impact.

* based on survey responses from the IATA World Cargo Symposium 2010. www.iata.org/events/wcs2011 woamericasAMERICAS r ld E neuropeuropee w s Asia middle east africa africa middle east asia europe Americas Climate change tax put on hold proposal at the U.N. climate talks in Cancun, Mexico, to tax Athe industry $3 billion to pay for climate change mitigation has been avoided for the time being. Dubbed the “Cancun Agreements,” the delegates agreed industrialized countries should provide an initial $30 billion to support climate action for the developing world up to 2012 and raise $100 billion in long-term funds by 2020. Association of Asia Pacific Airlines (AAPA) director general Andrew Herdman, The U.S. Department of Justice has indicted a former executive from Florida West a delegate to the conference, commented: International Airways “The Cancun Agreements will be seen as a mildly positive outcome from a process that was in danger of collapsing under its own weight. “The real focus in Cancun was on Miami prosecution won’t rebuilding trust in the process and an attempt to put the talks on a new footing, with all countries accepting some share be a trip to the beach of responsibility for meaningful action on climate change. The establishment of a Green Climate Fund to help developing he ongoing investigation of operates,” attorney Michael S. Pasano countries to mitigate climate change price fixing in the air cargo of law firm Carlton Fields wrote in impacts was also significant, but doubts industry by the U.S. Depart- an e-mail exchange with Air Cargo remain as to how the pledge to raise ment of Justice (DOJ) has World. He is legal counsel to one of $100 billion by 2020 will be met.” headed south and landed the defendants, George Gonzalez, a Noting that the conference Ton more than a half-dozen individual former Miami-based cargo airline ex- acknowledged ICAO as the proper U.N. defendants, all of whom are under ecutive. “We look forward to fighting forum for aviation’s role and responsibility indictment for allegedly rigging the these allegations at trial and vindi- for C02 mitigation, Herdman said: “AAPA Miami market during various time pe- cating Mr. Gonzalez, who is an hon- will continue to support industry efforts, riods that ended in 2005 and 2006. est businessman with an impeccable working closely with other stakeholders The Miami crackdown won’t be a reputation.” ... to move the agenda forward and urges trip to the beach for federal prosecu- A Miami federal grand jury in Oc- governments to support the development tors, though. Some, if not all, of the tober indicted Gonzalez and three of a global framework of measures defendants in the Miami cases are former airline executives who alleg- working through ICAO.” likely to spurn settlement talks and edly entered price-fixing agreements Echoing IATA director general Giovanni press for trials. The defendants face while working for different carriers. Bisignani, Herdman added he was a maximum penalty of 10 years in They are charged with hatching a increasingly concerned that individual prison and a $1 million fine for their scheme in late 2005 to fix prices for governments, particularly in Europe, were alleged violations of the U.S. Sherman air cargo service from the U.S. to Cen- introducing unilateral measures to impose Act. tral America and South America fol- taxes or levies on air travel that were “We expect to show that the gov- lowing Hurricane Rita and Hurricane economically damaging and had no real ernment’s allegations of conspiracy Katrina. The other three defendants environmental benefit. ACW are overstated and mistaken and re- are Guillermo “Willy” Cabeza, George flect a misunderstanding of how the Gonzalez, Luis Juan Soto and Rodrigo air cargo industry in South Florida Hernan Hidalgo.

16 january 2011 ACW americasAMERICAS E europeurope Asia middle east africa africa middle east asia europe Americas

Hidalgo, former senior vice presi- other to discuss cargo rates and the Ogiermann, former president and dent of sales and marketing at Miami- elimination of route discounts, alleg- CEO of air cargo carrier Cargolux, based carrier Florida West Interna- edly occurred from January 2002 to who resigned his position in tional Airways, has been indicted February 2006. The co-conspirators November due to the indictment, twice. The DOJ in early December also allegedly talked about encourag- and Robert Van de Weg, the carrier’s returned a one-count indictment ing providers to increase certain ship- senior vice president of sales and naming Florida West and Hidalgo and ments and agreed upon not compet- marketing. They face charges of two executives of a competing cargo ing for certain customers. conspiring to fix prices for air cargo airline, Luis Augusto Afanador and “The government has charged service to and from the U.S. Cargolux Jaime Lara Rueda, Sr., as defendants. Rodrigo [Hidalgo] in two separate ranked 31st in tonnage among cargo Federal prosecutors charged them indictments hoping that something carriers at Miami International with conspiring to coordinate pricing will stick. The truth of the matter Airport from October 2009 to October for air cargo service between Miami is, Rodrigo is not guilty, and we’re 2010, with about 675 short tonnes of and Colombia. looking forward to a jury saying so,” volume. The DOJ alleges they imposed sur- said Miami attorney David O. Markus, A federal prosecutor familiar with charges on security and fuel before who represents Hidalgo. the Miami cases said privately that no Valentine’s Day and Mother’s Day, One high-level resignation already signs of a settlement were apparent times when flower shipments from has happened as a result of the as 2010 was drawing to a close: “I Colombia increase. The illegal activi- DOJ’s inquiries. In October, a federal think we’re definitely going to have a ties, which include meeting with each grand jury in Miami indicted Ulrich couple of trials.” ACW

California airports set for slow cargo growth

t the dawn of the new millen- “The optimistic forecasts of the early found that Californians are just start- nium, air cargo carriers and 2000s were not adequately ‘reset’ to ing to dig themselves out of this mess. Afreight forwarders in Califor- reflect the changes in the air cargo Statewide, airports can expect to ex- nia took stock of their position in the industry business models, as well as perience an annual growth rate of one United States and started forecast- the overall California economy.” to two percent during the next five ing immense growth in the industry. Due to the positive predictions, years, which, at the end of the time Analysts, who looked at the economic industry officials concentrated on period, will fill the capacity that was growth that occurred in the previous building the cargo capacity of smaller built during the last decade. decade, said throughput would be airports in California to handle the in- California’s top four airports — increased during the next five years evitable freight overflow from larger LAX, SFO, LA Ontario International and that the smart thing to do was to airports like Los Angeles International (ONT) and Metropolitan Oakland increase capacity in anticipation of (LAX) and San Francisco Interna- International (OAK) — deal with 88 this bump. tional (SFO). In turn, these smaller percent of the state’s cargo. But even According to a recently released airports embarked on big invest- though they account for the vast ma- report sponsored by Caltrans and ment projects, sure that future cargo jority of business, these airports still submitted to the State of California growth would justify speculative de- have problems that arose from past Department of Transportation, this velopment. overbuilding. anticipation promoted planning that When the air cargo market started LAX, which is a major Asian gate- was “at odds with a contraction in air to decline worldwide, Californians way, has excess capacity. By 2015, the cargo that was occurring throughout were caught in an extremely vulnera- airport will see 2.19 million tonnes of California during the past decade.” ble position. A section of the air cargo cargo annually, only a small increase “These forecasts embraced the as- market in California also evaporated over its annual total in 2000. By 2020, sumption that the future would mirror due to the introduction of longer- things should be back on track, with the recent past, and that the run-up range aircraft, which meant the state the airport projected to see 2.75 mil- in air cargo volume that characterized was no longer a must for the position- lion tonnes of freight that year. the 1990s would continue unabated ing of cargo gateways. According to the study, San Fran- into the future, based on the contin- By sending out survey question- cisco’s airport was hit with some of ued expansion of California’s popula- naires to 158 carriers, freight forward- the worst losses of any U.S. airport tion and economy,” the study found. ers, developers and truckers, Caltrans during the past decade. The cargo at

ACW january 2011 17 americasAMERICAS Eeuropeurope Asia middle east africa

SFO is dependent on belly aircraft because very few freighters operated in San Francisco. Caltran’s projec- tions for SFO mirror their findings; by 2015, the airport will still be far below its 2000 cargo traffic mark. In fact, the cargo throughput number in 2020 is predicted to be nearly 100,000 tonnes less than it was in 2000. For OAK and ONT, life is fine as a “spoke” in California’s larger wheel, and neither have been able to lure any international carriers to their facilities. These airports will likely keep the beat as regional integrator hubs, with UPS operating out of ONT and FedEx claiming Oakland as its The Los Angeles International Airport is slated to handle 2.75 million tonnes of cargo territory. Both airports are acutally annually by 2020. Photo: Ethan Landesman slated to regain momentum fairly soon, with ONT reaching a 550,000 tonnes-a-year plateau in 2015. Oak- All things considered, the cargo shouldn’t get over-excited by land will rebound to 681,000 tonnes market in California could certainly impressive cargo numbers and move by the same year, which is only a few be more vibrant, but things are still to expand too quickly, lest they be thousand tonnes removed from the moving along. If anything, Caltrans’ left with empty warehouses and a activity it was experiencing in 2000. study proves that industry officials lack of cargo. ACW

In the news...

Implementing sustainable fuels, strengthening the World Airways and North American Airlines will fice, said mid-Atlantic companies can now get their bond between airports and other transportation, move 43 employees to Tampa in the second quar- shipments to Canada faster by using its Raleigh- and developing predictive safety methods are just ter of 2011. Reports expect three to four wide- Durham processing facility that bypasses a distri- some of the recommendations U.S. Transporta- body aircraft on the ground daily… Gary Kelly, bution center. According to Purolator, unexpected tion Secretary Ray LaHood recently received Southwest Airlines‘ chairman, president, and delays and fees are an increasing source of frus- from the Future of Aviation Advisory Committee. CEO, has announced the company will substitute tration among Canadian consumers, and a reason In total, committee members presented 23 ideas, 20 of its 737-700 orders for -800s, with the first often cited for lost business. “There is no reason which include making sure science and technol- delivery scheduled for March 2012. “We are look- for Canadian consumers to have to experience de- ogy training is enhanced for the next generation ing to the future and the -800 sets the stage to lays or hidden fees,” said Jackie Avery, manager of of industry officials and proposing that the federal bring more destinations into the realm of possibili- Purolator’s Raleigh-Durham branch… American government provide funding for NextGen aircraft ties for Southwest, to operate a more economical Science and Engineering, manufacturer of X- equipment. The 19-person committee was created aircraft, and to offer better scheduling flexibility in ray detection technology, has been awarded a U.S. in April 2010 and is made up of officials from all high-demand, slot-controlled, or gate-restricted government contract worth $67 million for mul- corners of the industry as well as academia and markets,” he said. The aircraft will be delivered in tiple Z Portal vehicle screening systems for deploy- finance. The members were tasked with ensuring an ETOPS configuration for possible extended over- ment on America’s border crossings. The system is safety and improving the aviation workforce. Other water operation… FedEx Freight Canada has a multi-view, drive-through vehicle screening sys- key topics included confronting environmental is- reduced transit times by 24 hours on its five-, four- tem capable of scanning trucks, cars and vans for sues, finding stable aviation funding and ensuing and three-day LTL services linking Toronto and concealed explosives and drugs. According to the the competitiveness of the industry. Each recom- Montreal to 500 points in the United States. “In company, its detection system is the X-ray radia- mendation will now be reviewed, and the U.S. addition to these transit improvements, we have tion equivalent to flying in an airplane at cruising DOT will come up with a plan for implementing expanded our service center network in Canada altitude for one minute… LAN Cargo expects its the ideas… Global Aviation Holdings has in recent months and streamlined processes for cargo business to grow 13 to 15 percent in 2011. signed a decade-long lease with Tampa Interna- customs clearance,” said William Logue, president LAN is currently in a merger process with Brazilian tional Airport and will relocate its maintenance and CEO, FedEx Freight Corp… Purolator, the carrier TAM. When completed by mid-2012, the operations to the airport. The parent company of express and courier arm of the Canadian post of- group will be one of the largest in the world. ACW

18 january 2011 ACW Air Logistics Network

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ome airlines serving Despite AF-KL’s shift of focus away and Africa. “We’re the natural choice Ivory Coast’s commer- from dedicated freighters, its cargo to carry fresh seafood such as lob- cial capital of Abidjan ATK figure is growing faster than pas- ster, shrimp and bream eastward via suspended flights in De- senger capacity. This is the result of Dubai to Asia.” European and Medi- cember after a disputed upscaling from the A319 to the A330 terranean destinations such as Beirut, presidentialS election led to violent and on denser routes from the A330 Larnaca, Athens and Rome are also street clashes that threatened to tip to the B777, especially the high-ca- importing big tonnages of Senegalese the country back into civil war. The pacity B777-300 ER. The number of seafood, he says. issue underlined the volatility that is a direct passenger services has also Watson confesses he “learned in constant feature of West African poli- increased. For example, previously the first eight or 10 weeks that there’s tics, and it brought an uncertain end greater interest than we thought” in to a year of sustained strong growth. the new service from countries ad- “The African market was structur- joining Senegal. Dakar is acting as a ally less exposed than other regions Piracy in the Indian gateway to Bamako, Mali; Emirates during the economic crisis,” says has just finalized a trucking deal to Gilles Roche, area vice president for Ocean has reduced Mauritania, where he notes a “mining North and West Africa at Air France- the attractiveness boom” is underway. KLM/Martinair Cargo. MK Airlines’ bankruptcy and the “Manufactured goods that are of the ocean growth in Asia has led to loss of ca- quickly required at [African] destina- pacity out of Africa, believes Her- tions have to fly, as many countries freight option mann Zunker, director — Africa for do not have good sea access, and road Lufthansa Cargo (LC). Having so far and rail links are poor. The oil and resisted launching freighters into gas sector, medical supplies and ur- combined Niamey/Ouagadougou and West Africa, LC relies on those pas- gent spare parts dictate the use of air Douala/Yaounde flights are now sepa- transportation southbound,” Roche rate. Pure freighter capacity, mean- explains. while, has increased following AF- Tropical products — pineapples, KL’s absorption of Martinair Cargo, mangoes, green beans, fish and flow- which currently operates 10 services ers — that are much valued during per week to Africa. European winters, fuel the north- Emirates has opened up a new bound trade lane and account for eastward export route for Senega- about 90 percent of the shipments lese shippers, following its September out of Africa. Dakar, Bamako and launch of the first service between Ouagadougou are particularly promi- Dubai and Dakar. The direct flight, nent export hubs. To accommodate which avoids long detours via Europe demand, Air France operates B747- or other parts of Africa and Emirates, 400 ERF freighters to 10 West African is running five times a week with an locations in addition to its passenger A340-300. “The primary feeders into flights. “While some cargos are sea- that market are Air France and Brus- sonal, they can balance each other. sels Airlines, and that has driven the In Dakar, for instance, we have fish mindset of exporters. They look north when there are no beans and vice towards the French consumer mar- versa. On the other hand, we have ket,” says Duncan Watson, Emirates’ Gilles Roche, area vice president for flowers almost all the year long out of regional manager — cargo for com- North and West Africa at Air France- Nairobi,” Roche says. mercial operations in the Middle East KLM/Martinair Cargo

20 JANUARY 2011 ACW regionfocus Africa

No shortage of two-way demand

senger destinations served by significant capacity ex-Accra. widebodies such as Nigeria, which Cairo is a major export market saw a 40 percent increase in freight for the carrier, comprising perish- revenue inbound and a 30 percent ables and textiles for UK and U.S. outbound increase last year. With consumers. Its daily passenger daily A340 services to Lagos and B747-400s are running full with 15 Abuja, four flights a week to Port tonnes of belly cargo, but a recent Harcourt and three services to Ma- tightening of security procedures labo, the carrier has 18 flights a means that even known ship- week that offer 10 to 12 tonnes of pers are now unable to present capacity, despite Nigerian passen- pre-built pallets. Stubbings says gers’ traditionally large personal the handling operation runs right baggage. Angola also is showing through the night, under the eye strong economic growth, making of local police, ready for BA’s early Luanda a strong inbound market morning departures to London for consumer goods and spare Heathrow. parts, Zunker says. The security situation in Somalia LC serves 20 destinations in Af- and Yemen has been both an obsta- rica, but its Brussels Airlines (SN) cle and an opportunity for BAWC subsidiary adds another 14. Last in East Africa, Stubbings notes. year, SN added Accra, Lome, Coto- The upside is that piracy in the In- nou and Ouagadougou to its West dian Ocean has reduced the attrac- Africa network as well as increas- tiveness of the ocean freight option ing its Abidjan frequency from four ex-Kenya, and Stubbings believes to six flights per week, following the promise of greater security will the arrival of a fifth A330-300 into draw more commodity shipments the carrier’s fleet. towards air. While yields out of East Africa Uganda and Tanzania, Kenya’s have recovered well, “an influx of neighbors, represent growing airlines coming in” has impacted northbound trade lanes, although the West Africa market, according BA is capacity-constrained on its to Mark Stubbings, regional B767s. Entebbe was a “baby broth- commercial manager for Africa er” to Nairobi in the past, Stub- at British Airways World Cargo bings says, but significant volumes (BAWC). Ghanaian exports of of flowers are now grown in the mangoes and pineapples were hit Kampala area. Meanwhile, Dar es badly during last year’s volcanic Salaam is also “beginning to stand ash crisis in Europe because up on its own” with textiles and temperature-controlled storage perishables. Made up of stone fruit at Accra was inadequate, but and grapes in season and fish year- the airport is now investing in round, perishables account for up commodity handling. BA made to 65 percent of BA’s northbound a previously seasonal summer cargo out of South Africa, with the upgrade from a daily B767 addition of manufactured goods passenger service to a B777 such as catalytic converters. The permanent last year, adding strong rand is hitting South Af-

ACW JANUARY 2011 21 regionfocus Africa

rica’s exporters, and Stubbings says the 2010 peak season was “not of the same magnitude” as in 2009. Spotlight on freighter capacity Southbound is “extremely busy,” however. “Some customers want to use us in both directions, and we’re third MD-11 freighter, Harcourt in Nigeria, Ouagadougou experiencing heavy demand from wet-leased from World and Pointe Noire in the Republic of American shippers,” he adds. Airways, joined the fleet Congo, a gateway to Angola’s oil and of cargo airline Allied Air gas market. Ain October. Avient lost its first MD-11 freighter “We’ve been going flat out since in November 2009, just days after April,” says Andy Leslie, commercial delivery, in a fatal crash on takeoff director of the carrier’s worldwide from Shanghai Pudong airport. It sales agent, ANA Aviation Services. leased a replacement MD-11 start- The Nigerian-registered carrier op- ing in January 2010, but has been erates four times a week to Lagos, left short of capacity during the last with weekly flights to Port Harcourt. five busy months, Avient’s Samantha These flights service the oil industry Smith says. The carrier is now operat- and supply consumer goods to the ing only one of its former three DC10- country’s 150 million people. An- 30Fs. One was scrapped and another other weekly flight serves Abidjan. remains parked up. Smith says that Aircraft return to Europe via Nairobi although the company would have five times a week during the Octo- benefited from its planned additional Hermann Zunker, director — Africa for ber to May peak flower season, with MD-11 capacity last year, the higher Lufthansa Cargo (LC) two additional departures from En- maintenance and operating costs of tebbe. The northbound services are the DC10 meant it would not have flying full, and Leslie says an eighth been financially viable to return the South Africa remains the conti- frequency is likely soon. older aircraft to active service. nent’s number one airfreight market The third MD-11 was added fol- Avient operates two IL-76s locally in both directions for Lufthansa. “We lowing the demise of MK Airlines. around Africa and the Middle East, have outpaced the market by far, Allied has launched direct routes to and has interline access to a B727 growing 23 percent, compared with Libreville and Kinshasa from its Eu- and other, smaller aircraft. 10 percent for the market as a whole,” ropean hub in Ostend, plus a twice- Togo-based Africa West operates Zunker claims. He credits Europe’s weekly service to Lusaka and Johan- two weekly B747-200Fs from Amster- recovering auto industry and the lin- nesburg in combination with Euro- dam and one from Dubai to Lome, gering effect of the ash-cloud cancel- cargo. Four B727s operate a regional providing service to almost 40 desti- lations, which boosted the market for network from Lagos, and Allied will nations through a fleet of DC-9s. months afterward. Lufthansa operates supplement these with a B737-300F Intra-African traffic has driven re- five MD-11 freighters a week over Nai- in the next two months, Leslie adds. cent growth, but Africa West’s major- robi to Johannesburg and back on the Avient, the Zimbabwe-registered ity owner, the French GSA European same route to Frankfurt, sometimes freighter operator, hopes to base two Cargo Services, is developing an In- reducing to four in low season. But MD-11s, its second and third of the dia-Africa network consisting mainly last year there was no dip, so there type, at its European hub in Liege this of sea-air business transshipping over were few cancellations. year after its Belgian Air Operator Dubai. This taps into a market that Virgin Atlantic Cargo reports a 36 Certificate comes through. The car- DHL’s Global Forwarding division percent increase in tonnage on its rier applied for its second AOC last says increased almost fourfold to $39 African routings from Heathrow last June following its transfer to Liege billion between 2005 and 2009, fu- year against a capacity increase of in 2009, after seven years of being eled by the oil and gas, telecommu- only 18 percent, which included the based at Vatry near Paris. It special- nications and IT sectors. DHL expects launch of Accra in May 2010. izes in Africa, particularly destina- airfreight volumes between India and “With demand growth outstripping tions in the west and center of the Africa to grow at almost 10 percent a capacity growth, yields have grown continent, such as Lagos and Port year through to 2015. ACW in line with the market average,” says Nick Jones, regional vice president — cargo for Virgin’s EMEA region.

22 JANUARY 2011 ACW L^i]cZlbVg`ZihidXdcfjZgVcYcZl gdjiZhidYZa^kZgVgZndjgZVYnid\gdl ndjgV^gedgi^c'%&&VcYWZndcY4

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Freight forwarder and “Even through the G S A F r e i g h t - I n - T i m e (FIT), based in Nairobi, has recession, branch offices in Burundi, demand never Rwanda, southern Sudan, Tanzania and Uganda. really dropped These are limited airfreight export markets, shipping off for fruit and mainly minerals, tea and coffee. Maindeck capacity vegetables, but is lacking except at Nairo- flowers are a bi and Entebbe, says Amit Shah, CEO of FIT. Kenya, non-essential as the region’s main manufacturer, serves East Af- purchase.” rica with consumables and has 70 percent exports to — Amit Shah, CEO 30 percent imports, the re- of FIT verse trade flow to the sur- Nick Jones, regional vice president — cargo for Virgin’s rounding countries. EMEA region “The Kenyan airfreight industry had a reasonable 2010. We’re seeing the big- “Close to two-thirds of northbound loads have been better than expected, gest growth in intra-Africa business, shipments consist of fish, flowers and Jones says. The service complements but the big concern is the speed of other foodstuffs. There is a much a daily Lagos flight. Rotationally, Nai- Europe’s recovery. This could affect wider product mix on the southbound robi, also served daily by A340, is the our flower exports,” Shah says. “Even routings. A trade-lane imbalance of biggest of Virgin’s five African cargo through the recession, demand never demand towards northbound exports markets. But Jones says Johannes- really dropped off for fruit and vege- has long been an assumed feature of burg, served daily with a B747-400 in tables, but flowers are a non-essential African routings for European car- the peak November-February months purchase.” riers, but we’re also seeing the rate and by A340 at other times of year, Europe is still Kenya’s main of southbound demand growing sub- is “a significant and consistent car- airfreight market, accounting for stantially faster than capacity.” go market.” It is supplemented by a maybe 90 percent of exports, he adds. Virgin operates an A340 three daily Cape Town service through the “The U.S. hasn’t really opened up, times per week to Accra, and pay- northern winter. as we are in competition with South America for that market. The Middle East has developed strongly, but is a much smaller market.” FIT sells bellyhold space on Ethiopian Airlines’ B767s, which offer a 15-tonne payload from Nairobi to the carrier’s home hub of Addis Ababa. The service is twice daily, but Ethiopian is operating some B737s, offering limited cargo capacity, while it awaits new aircraft deliveries. There are large flows of pharmaceutical products and humanitarian supplies into Addis Ababa because Ethiopian has “by far the biggest pan-African network,” Shah adds. Despite pockets of volatility, the continent is beginning to show signs Tonnage on Virgin Atlantic flights from Heathrow to Africa has increased 36 percent of sustainable growth. ACW

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LATIN AMERICA & CARIBBEAN The shifting pharmaceutical landscape

his year is already mechanisms that cap spending could als. Discovering unsaturated markets shaping up to be a pe- chill the market. However, new treat- where new products can properly be riod of banner growth ment options and new drugs will keep researched can lead to some far-flung for emerging pharma- growth moving along. locales, and companies have tured to ceutical markets. The moral is that the pharmaceuti- air cargo. This is leading a shift to- TWhile a power shift isn’t in place cal industry is changing quickly. As ward the bulk air transport of phar- — the U.S. will remain the biggest growth from developing countries oc- maceutical materials. Historically, pharmaceutical market in the world curs and European and North Ameri- Nolde says, industry insiders shipped — by the end of 2011, countries that can markets stay relatively stagnant, small consignments; those same com- were given little thought in pharma the air cargo industry will adapt. “The panies are now asking for pallet-sized circles will become significant play- world is becoming a much smaller containers. ers. China heads the list, followed by place,” says Donald Nolde of Cold “Where I see a lot of interest in the Brazil, Russia and India. More than a Chain Technologies. “People are mov- market is moving much larger con- dozen other countries — Poland, Ar- ing more material around the globe tainers while still maintaining very gentina, Turkey, Vietnam and South than they ever have in the past.” tight temperature parameters around Africa, just to name a few — will also Companies are sending more ma- the products that they’re shipping,” make an impact. terial around the world partly in a Nolde explains. “Growth will be sig- In its annual market prognosis, quest to find new areas for clinical tri- nificant in clinical [studies] because of the research group IMS Health found that the pharmaceutical industry in these developing countries will grow at a rate of 15 to 17 percent, vastly outpacing the UK, Germany, France, Italy and Spain, all of which are expected to see rises of 1 to 3 percent. Asian markets are also poised for an exciting year. Japan is expecting a successful growth rate of 5 to 7 percent, but this figure is dwarfed by the 25 to 27 percent increase predicted for the Chinese market. For the U.S., the 2011 projection of 3 to 5 percent rise is close to the 2010 mark. Maintaining the same level of growth is good, but there remain significant barriers to increased prominence. Murray Aitken, IMS’ senior vice president, has warned that the expiration of patents and pay Lufthansa Cargo’s Opticoolers will soon be a familiar site at Hyderabad Airport

26 January 2011 ACW featurefocus Pharma

Menzies is developing a new pharma zone at Hyderabad International Airport in India

the number of products that are com- cials hope. The development, which ing to market for trials.” “We have a solid is a joint venture between Hyderabad Companies in the past have only Menzies Air Cargo Private and the air- called for pharmaceutical shipments history in India. port, will reportedly be able to handle kept in containers that maintain a 30,000 tonnes annually by 2015. The temperature range of 2 to 8 degrees We have a strong new development has temperature- Celsius. Nolde says that customers controlled facilities and easy access to are now asking for additional con- product, ... we road feeder services. trols, setting a demand for ambient have a growing Officials at Lufthansa Cargo (LC) temperatures or asking for a control also announced last year they were between 0 to 30 degrees or from be- market that we establishing a hub at the airport. The tween 2 to 25 degrees Celsius. These need to put a pharmaceutical hub in larger containers will increase the can serve, and we the region draws on projected growth movement of bulk freight. as well as a bit of tradition. Ten years Generics will also be a large part have a strong and ago, Lufthansa was flying 15 flights a of the market in the future. This is week into India; the total now is up to opening up lesser-known areas of the willing partner.” 56 and will expand in the future. world where pills can be manufac- “India will play an increasingly tured more cheaply. Some of these company broke container manufac- significant role in the production markets are also poised for a major turing records “several times.” He be- of generics and in development boom in pharmaceutical consump- lieves 2011 will only be better. “As we of new drugs,” says Chris Dehio of tion. “The consumption of medical have all-time high volumes [in 2010], Lufthansa Cargo. “India has a high drugs are rising in the BRIC coun- we are continuously manufacturing standard of education with very tries, so imports to them will grow,” more containers and adding them to capable scientists; more and more says Thomas Persson, CEO of Enviro- our fleet,” he says. “That will continue big pharma companies are joining tainer. “Outbound, I would say India in 2011.” forces with Indian pharmaceutical and Singapore will be rising stars at India is poised to become a power manufacturers and researchers. So least in 2012.” in the pharmaceutical industry if the a growing domestic pharma market Persson experienced a banner new pharma zone at Hyderabad In- is being complimented by a growing 2010 at Envirotainer, saying that the ternational Airport takes off as offi- global market for pharma products

ACW january 2011 27 featurefocus Pharma

produced in India.” Representatives from LC and the airport signed a memorandum Stopping counterfeit drugs of understanding and are now committed to improving the flow n November 1 of last year, U.S. Customs and Border Protection out of the region. The next step is to (CBP) launched a pilot aimed at developing standard processes for certify the airport as an official airline Opharmaceuticals being imported into the U.S. The goal of the pro- cooling station and bring a stock of gram, dubbed the Center of Excellence and Expertise, is to better regulate containers to the area, which will drugs destined for America and to crack down on shipments of counterfeit occur during the first quarter. pharmaceuticals. “We have a solid history in India. “It’s an opportunity to help seg- We have a strong product, we have ment risk in an industry where state-of-the-art facilities, we have a we can recognize who our trusted growing market that we can serve, partners are and work to facilitate and we have a strong and willing that trade and then really concen- partner,” Dehio says. “Those are the trate the resources within CBP on main ingredients for a very successful enhancing our enforcement efforts partnership.” for counterfeit and adulterated Accommodating a shifting mar- and unapproved drugs,” says Anne ket landscape isn’t the only change Maricich, assistant port director for those in the pharmaceutical industry trade at the Los Angeles Interna- will face in the coming year; a likely tional Airport and the director of the 100 percent screening mandate on project. all-cargo aircraft heading to the U.S. The program will run through is a more immediate concern. Inde- June 30, at which time Maricich will Anne Maricich pendent screening firms like Dallas- make a recommendation to imple- based ComSec International have ment some of the policies on a more wide-ranging basis. During the next popped up to help smaller companies few months, she will be working with the Federal Drug Administration deal with the impending policy. Judy and the pharmaceutical industry to develop working guidelines. While the Davis, ComSec’s principal security main goal is to figure out if a coordinated effort of this magnitude would coordinator, is no longer concerned ultimately be useful in the industry, Maricich will also focus on expanding about if a bill requiring full screening the organization’s knowledge base by connecting with pharmaceutical of all cargo shipments will pass, but experts around the country. how to deal with the policy when it’s The largest challenge, she says, is a lack of uniformity. The federal implemented. government has existing import laws on the books, but sometimes these “That’s going to pass at some policies don’t get enforced the same way across the board. This allows for point; it just has to,” Davis says of counterfeit drugs to creep into the system. the law. The biggest challenge, she “Some ports interpret laws in one fashion, where another port will not. adds, will be the elongation of ship- That creates some bottlenecks and facilitation challenges for some of our ping times, which could cause hic- importers,” she explains. “What we’re going to try to do is gain a better cups in the supply chain, especially understanding of what legitimate business practices are, so that we can in a temperature-sensitive environ- recognize that and facilitate it when it arrives.” ment. Advance filing will be the new The Center for Excellence and Expertise will rely on collaboration; this norm. But with a little preparation, requires the cooperation of the federal government and companies in the Cold Chain’s Nold says, this won’t be pharmaceutical industry, which may seem like a daunting proposition. So such a deterrent. far, though, Maricich says she’s been impressed by the level of interest “There needs to be planning now she’s received from all parties involved. that gets put into place to avoid the “I’ve had tremendous support from the industry,” she says. “It’s been a delays that could be experienced,” very positive reaction.” he says. “Providing that everyone This is the first step in maintaining better control of pharmaceutical gives it their forethought, I think imports. Though developing strategies and implementing core principals the market will get through this. It may be tough, Maricich says she thinks this is the best way to combat cor- won’t be the roadblock that we had ruption and maintain a sense of order in a growing industry. thought it was going to be six to nine months ago.” ACW

28 january 2011 ACW PFLIIGI<:@FLJ:8I>F% DFI<D<;@:@E<KFDFI<GC8:

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;F%:FD Customs key to paperless trading

ATA wants the air cargo indus- charge for it. This is a concept retail try to be paperless by 2015. At banks have not been slow to adopt. the moment, 1 percent of air If recent bonuses are any indica- waybills (AWB) are transmit- tion, clearly the cost sav- ted electronically worldwide. ings are huge. On the 80 major routes identified by The current hiccup the association, it’s up to 2.8 percent. in this beneficiary pay Apart from apathy, the key stum- approach is that India, Russia bling block is cost. Generally, airlines and Brazil are not Customs and their cargo community system in- harmonized. And given that these termediaries have adopted a sender- countries represent a significant pay philosophy to their customers. So percentage of IATA’s world the forwarder has to pay to send the growth forecast, until they are, AWB. IATA says a paperless regime the airlines can expect a huge will save the industry an estimated rise in paper transactions. This is $4.9 billion. Forwarders think much why IATA wants to add the World of that saving will be for the airlines, Customs Organization (WCO) to not them — hence the indifference the newly formed Global Air Cargo from most small- and medium-sized Advisory Group (GACAG), which forwarders and brokers. also includes FIATA, TIACA and the • Dangerous Goods Declaration The obvious answer is to adopt a Global Shippers Council. • CITES Certificate (for endan- beneficiary pay approach. The air- According to Des Vertannes, IA- gered plants and animals) lines pay to receive bookings and the TA’s head of cargo, GACAG has in- • Air Waybill and Status Message AWB, the forwarders pay to receive vited the Customs body to join them • House Waybill a timely status update. In reality, the with a goal to fill in the holes in the • House Manifest update is hardly worth charging for, global harmonization map. If the WCO • Export Goods Declaration given that they are often either not agrees, it will be a big step in fulfilling • Customs Release Export sent or sent late. IATA’s five-year timeline. However, • Security Declaration So the airlines should simply pay unlike the passenger business, cargo • Flight Manifest for everything that relates to them. requires as many as 20 paper(less) • Freight Booked List However, if the forwarder still wants transactions, according to Traxon. • Export Cargo Declaration to submit paper, then they should pay These include: • Import Cargo Declaration for it. The precedent has already been • Freight Forwarder Invoice • Transfer Manifest in existence for a number of years on • Packing List • Transit Declaration the passenger side: if the traveller • Certificate of Origin • Import Goods Declaration does the airline’s data entry, it won’t • Letter of Instruction • Customs Release Import

30 January 2011 ACW featurefocus E-freight

airline community, are still going to some of his members’ capitalization: pay for documents. These files will Air China ($20 billion), Singapore include IATA’s latest: the security Airlines ($14 billion), Cathay Pacific declaration available in both paper ($12 billion), China Southern ($11 and electronic (XML) formats, billion) and LATAM, the holding com- which is currently being con- pany of Chile’s LAN and Brazil’s TAM, sidered by the International ($11 billion). By comparison, Delta Civil Aviation Organization and Lufthansa each has a market cap- for global use. italization of $10 billion. IATA’s head of cargo security, Ken Dunlap, says MASKargo, together with Malaysia Air- ports, forwarder DGF and shipper Intel, has begun a six-month pilot program to test a secure ship- CONSTANT ment regime. CLIMATE FOR The object is to YOUR CARGO – provide a solu- WORLDWIDE: tion to countries that “don’t want to SWISS °CELSIUS start with a white piece of paper” – and where supply chain processes do not exist. Dunlap adds that ICAO has endorsed supply chain security as a standard beginning in July and has also agreed that IATA remains the clearing house for improvements currently being discussed with the UK, Traxon says EU, Canada, Australia and the United all these are avail- States. able electroni- While these countries may be driv- cally — either in ing the security debate, they’re not t h e IATA Cargo IMP standard or the air cargo markets of the future. XML. The company, which is 20 years A straw in the wind came from IATA old, exists to encourage the supply CEO and director general Giovanni and demand side to exchange paper- Bisignani recently when he cited less documents. Other leading paperless networks include CCN Singapore, Descartes (primarily for North Amer- ica), BT (for the UK) and Cargonaut in the Netherlands — the latter has a declared goal of paperless transactions by the end of 2012. Another stumbling block is that not all the documents go to the same organizations, and it is highly unlikely that any Customs body, with the possible exception of the UAE, will adopt a beneficiary pay approach for every SWISSWORLDCARGO.COM trade document. So intermediaries, Des Vertannes , IATA head of cargo, while they may get a break from the wants 100 percent e-freight by 2015

ACW january 2011 31 featurefocus E-freight

‘Reculer pour mieux sauter’ for e-freight Remo Eigenmann, head of airfreight at Damco, thinks security and omo sapiens have an unfortunate barcode on a mobile phone or on a piece of pa- the need for more information is be- knee-jerk reaction to failing strate- per printed by the lowest cost employee — the coming a substantial e-freight driver. Hgies. They tend to redouble the en- passenger — at his leisure, in his home and at “The airfreight community is rather ergy invested in applying the same flawed ap- his expense. conservative, and the level of pain proach. Let’s say sales in Southeast Asia are Readable with a $20 device at the airport, doesn’t seem big enough with all the disappointing; we prefer to fire the regional vice it made the entire complex, expensive and fail- stakeholders at the moment,” he says. president, hire three more sales staff and dou- ure-prone hardware instantly redundant while “But does the industry understand ble the advertising budget rather achieving the same objective that there is no alternative to this ini- than consider focusing all of our and improving customer service. tiative? efforts on expanding our leading Overnight, the tickets, which “In general, one can say that the position in Africa. had been precious documents shippers don’t care much about in- I strongly suspect that e- kept in airline vaults, became ternal processes of the air cargo in- freight, a project that clearly as valueless as a chewing gum dustry; they [just] want an efficient, makes sense, pardon the pun, wrapper. environmentally friendly and cheap “on paper,” may be a victim Passengers are self-loading service, and they trust their forward- of the same phenomenon. It cargo with a limited capability ers are taking the right measures to does not take a PhD in statis- of providing information “on de- strive for that goal.” tics to conclude that the project mand” — say at Immigration. Starting in May, Damco says its of- has hardly taken the industry Most cargo is mute and involves fices in Shanghai and Amsterdam will Gabriel Weisskopf by storm. Seven years after its many more parties with a need be fully e-freight compliant and will launch, an e-freight forwarder branch cre- to supply, modify and receive far more com- be able to transmit both the master ates an international e-AWB every nine days. plex information. This clearly mandates a switch air waybill (FWB) and the house bill E-freight carriers receive four international e- from a document-centric to a database-centric (FZB). By the end of 2011, the capa- AWB’s network-wide each day. approach, which entails re-engineering or elimi- bility will be extended throughout its Now, we could reinforce the Management nating the paperwork, i.e. the process, rather network and will include the addition by Hope and Confusion strategy by creating than focusing on offering an electronic docu- of electronic bookings. more task forces and bringing even more cooks ment as an alternative to the printed word. Markus Witte, head of Technol- into the kitchen, or we could search for an indi- Yes, it is true that we are increasing our re- ogy Development at Lufthansa Cargo rect and creative approach. liance on systems. So what? We entrust our (LC) agrees that Customs services in Lateral thinking is about applying reasoning lives to fly-by-wire aircraft with no mechanical many countries are not e-freight ca- that is not immediately obvious and about ideas alternative available, why not do the same for pable and that security requirements that may not be obtainable by using tradition- shipments? will force change on many stakehold- al step-by-step logic. Taking a leaf out of the Creating and operating such a global ers in the supply chain. Of the 20 doc- “How Not To” manual of the airline passenger system, building the critical mass and reaching uments listed by Traxon, LC says 12 business might prevent the air cargo industry the tipping point, can best be achieved by are the most important to kick-start from making the same mistakes — and allow an innovator from outside the industry, say e-freight conversion. These include us to make some new ones. Google, Microsoft or a yogurt factory with the invoice and packing list; the house For more than a decade, taskforces toiled spare IT capacity, a transparent agenda and manifest; the air waybill and house to agree on the data to be included on the no vested interests. Air cargo know-how can waybill; the flight manifest; the ex- solutions. magnetic stripes on the back of the Automated easily be in-sourced, and the participation port goods declaration and Customs Ticket Boarding Pass, a combination of just two should be driven by the individually release; the export cargo declara- documents — a fraction of what we have in air enlightened self-interest of members of the air tion and Customs release; the import cargo. The industry went on to spend gazillions cargo transport chain. cargo declaration; and the Customs installing ATB printers and readers at ticketing It seems high time to stop trying to jump release for imports. desks, check-in counters and boarding gates. across a three meter crevasse in three one Witte adds that the paper moun- Hardware providers were able go on subse- meter leaps and instead apply that wonderful tain that needs replacing is usually quent island-buying sprees in the Caribbean. French saying “Reculer pour mieux sauter” produced by the forwarder and ship- Once all the hardware had been acquired — loosely translated as taking a step back so per — not the airline. and installed, the industry had an epiphany you can take a bigger jump forward. For a clue to why the airlines are so — that “eureka” moment. It discovered that determined to pursue a paperless en- instead of all these systems, all you need is a Gabriel Weisskopf is the CEO of Switzerland- vironment, look no further than cost. based Softair AG. He is an expert on cargo simple “pointer” to the data, which should all According to IATA Chief Economist industry requirements for IT and software be stored electronically. The pointer could be a Brian Pearce, the combination of be-

32 January 2011 ACW ing a cash-cow target by governments and oil prices of more than $100 a barrel means airline margins will be little more than 2 percent for the next few years. This is a view confirmed by Bisignani, who expects a 40 percent drop in airline profits in 2011. While emerging economies are likely to grow from a high of 7 percent in Asia to 4 percent in Latin America to 2015, Europe and the United States will be fortunate to stay ahead of another recession next year. With EU member states’ debt levels ranging from 10 percent of GDP (Greece) to Remo Eigenmann, head of airfreight at Damco, thinks e-freight is inevitable 2 percent (Germany), Pearce thinks Europe “will be very challenged in rock and hard place, the airline indus- Steen and will meet at IATA’s World the next couple of years.” He notes try has little choice but to force its Cargo Symposium, to persuade that while German exports have ben- forwarder and shipper customers to all parties that paper, like money, efited from the weak Euro, imports reduce the cost of doing business: go doesn’t grow on trees anymore. ACW correspondingly have become more paperless or go away. expensive — a trend that is likely to Vertannes is counting on the Air Cargo World editor Simon continue with the uncertain future of GACAG, which has already had Keeble sold e-freight solutions to the beleaguered currency. several conference calls under the forwarders and other air cargo Caught between the proverbial chairmanship of Atlas Air’s Michael trading partners in the 1990s. take it easy www.coyneair.com

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ACW January 2011 33 Full screening an issue for diplomatic couriers

ecurity is one of the top The classified information in the benefit from sharing operational in- priorities in the chang- pouches must not be tampered with formation. To that end, the U.S. State ing world of air cargo, but in any way, according to a policy Department Bureau of Diplomatic a certain subset of the based on the Vienna Convention on Security hosted the 2010 version of industry is wary of any Diplomatic Relations of 1961. In the the International Conference of the sweepingS legislation. Top officials convention, nations agreed to extend Heads of Diplomatic Courier Services from diplomatic courier organizations this courtesy to one another, so they last fall. around the world have resisted calls could transmit materials to their em- It was not a large group: fewer from government agencies than a dozen people gathered that insist on peeking into in the small meeting room of a classified diplomatic pouches using X-rays or other means. With the advent of terrorist plots involving commercial air carriers, the U.S. Diplomatic Courier Service is now nego- tiating with other nations to balance the need to prevent terrorism and the need to maintain the integrity of diplomatic pouches. “The classified pouches are not to be inspected or tampered with or screened in any way,” insisted Jeff Meyer of the U.S. State Department. “The integrity of the pouch is to be maintained at all times.” The U.S. Diplomatic Cou- A shipment of U.S. State Departm ent classified diplomatic pouches arrives at Bahrain International Airport from Khartoum, Sudan rier Service alone ships millions of pounds of classified material each year. In fiscal hotel overlooking Washington, Brian Johnston discusses features of the U.S. unclassified year 2010, it shipped 11.47 diplomatic pouch with Unclassified Pouch Branch Chief Mark D.C. Yet together, they were re- million pounds; totals for Dedomenic sponsible for the global move- 2009 and 2008 reached 10.92 ment of classified diplomatic million and 11.26 million, respec- bassies and consulates worldwide. materials for the governments of the tively. Though the figures remain “In this post 9-11 world, in many U.S., Germany, Britain, Canada, New somewhat constant, the major des- cases, security is trumping the Vienna Zealand and Australia. That is a lot tinations shift with world events and Convention,” Meyer said. “We are suf- of secrets. the construction of U.S. embassies fering the differing interpretation of The group gathers every 18 months and consulates. the regulations among local govern- or so to discuss security and other Most material is shipped via com- ments, which borders on harassment weighty matters; still, no detail is too mercial air carriers. It travels in in some cases.” small for attention at the week-long pouches that are personally escorted Unlike commercial carriers jostling conference. During a tour of a U.S. by some of the 102 diplomatic couri- for marketshare, diplomatic courier State Department pouch and mail fa- ers based in hubs on six continents. services are not in competition and cility in Sterling, Virginia, Brian John-

34 January 2011 ACW featurefocus Diplomatic traffic

ston of New Zealand picked up one problems. One proposal is to adopt pouch is not to be X-rayed. of the gray unclassified diplomatic universally understandable labels. Whether the symbol is heeded is pouches and studied its clasps and For example, all of the nations at the the subject of future discussion. ACW the information on the cardboard tag. conference can use the same obvious “This is something the Australians symbol — as yet to be determined Kevin M. Casey works at the U.S. and I will take back. We’ll probably — to communicate pictorially to cus- State Department Bureau of Diplo- apply your system for joining up the toms officers in foreign lands that this matic Security in Washington, D.C. bags and labeling them. It will make it a lot more efficient,” Johnston said. “We pick up processes that others have tried and apply them in our own contexts.” Johnston went home from a past conference mulling something the British had talked about: retraining their diplomatic staff to think twice

A shipment of U.S. State Departm ent classified diplomatic pouches arrives at Bahrain International Airport from Khartoum, Sudan

ics. logist and cargo before shipping documents. Couldn’t t for air T ess even documents be transmitted much he world’s greatest busin faster and more efficiently electronically? “That required a change in thinking for many people,” Johnston said. “The default had been to just put it in a pouch and somebody would get it there.” Today, hard copies of New Zealand’s sensitive documents are rarely pouched, and Johnston has halved his diplomatic courier budget. The group also is working on stan- dardizing practices, which will result in a unified front in areas of the www.AirCargoEurope.com globe where they are experiencing

ACW january 2011 35

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36 JANUARY 2011 ACW bottomline

CARRYING EUROPE U.S. AIRLINES Monthly year-over-year percent change in overall Monthly year-over-year percent change in domestic freight traffic and Asia-Pacific freight traffic for and international cargo traffic for U.S. airlines. European airlines. 20 35 Overall 30 15 Asia-Paciﬁc 25

10 20 Domestic International 15 5 10 5 0 0 -5 -5 12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10

Source: Association of European Airlines Source: Air Transport Association of America

CARRYING ASIA SHARING MARKETS Monthly year-over-year percent change in capacity, in International air cargo year-to-date percent change for available tonne kilometers, and traffic, in freight tonne October 2009 vs. October 2010 kilometers, of Asia-Pacific airlines. 40 Middle East 35 30 North America 25 Capacity 20 Trafﬁc Europe 15 Asia/Paciﬁc 10 5 Latin America 0 -5 Africa -10 Total -15 12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 0 5 10 15 20 25 Source: Association of Asia Pacific Airlines Source: IATA

CARRYING INTERNATIONAL SEMI CONDUCTORS Monthly year-over-year percent change in total scheduled Worldwide monthly year-over-year percent change international freight traffic and capacity worldwide in sales of semiconductors and month-to-month in freight tonne-kilometers and available tonne-kilometers. percent change.

35 60

30 50

25 40

20 30 Capacity M-O-M 15 Trafﬁc 20 Y-O-Y 10 10

5 0

0 -10 12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 Source: IATA Source: Semiconductor Industry Association

ACW january 2011 37 peopleevents

AIRLINES eral manager of the Middle East and press Management Board. Mattijs ten Brink has been pro- India. He will be based in Dubai. Welani Widjaja is the new man- moted to senior vice president of Nicolas Ferri has joined Delta aging director of DHL’s global for- sales and distribution at Air France- Airlines in the new position of vice warding division in Indonesia. The 20- KLM Cargo/Martinair Cargo. He president — Latin American and Ca- year industry veteran joined DHL in s ucce e d s Je a n ribbean region. He will oversee Delta’s 2008 as general manager for the cus- Charles Fou - growth in the region from its Atlanta toms clearance and oil and gas busi- cault, who is re- offices. Ferri has worked for Pan Am ness divisions. ti r i n g f rom the and United Airlines. Delta has also i n d u s t r y. t e n promoted two company vice presi- THIRD PARTIES Brink has worked dents to senior positions. Neel Shah Air Menzies International has se- for KLM Cargo in is now senior vice president and cargo lected Jay Betz as regional manager various capacities TEN Brink officer, and Chris Collette has taken of its DFW airport branch. DFW’s pre- since 1996. over as senior vice president – sup- vious regional manager, Bryan Moog, Tom Nealon, group executive vice ply chain management. Shah moved has transferred into the same position president of JC Penney, has been ap- to Delta from United Airlines Cargo in Chicago. p oi nt e d t o t he in 2008. Collette previously worked at Bounce Logistics has promoted Southwest Air- Northwest Airlines. Lad Johnson to director of national lines board of di- Romaine Seguin, a 27-year UPS accounts. He’s worked for the past rectors. Members veteran, is the company’s new presi- two years as a territory representative of the board said dent of the Americas region. She for- with the company. Nealon’s exper- merly served as the COO of UPS’ Eu- Swissport International has tise in technology rope, Middle East promoted Dany Nasr to CFO of the will be an asset and Africa region. Americas. Nasr, who joined Swissport Nealon to Southwest. Ne- The company has in 2007, will report to Richard van alon’s first term a l s o p r o m o t e d Bruygom, executive vice president, will last until the company’s annual Stephen Flowers ground handling Americas. shareholders meeting in May. to a leadership po- CEVA Logistics has named Di- Karl Ulrich Garnadt has been sition in the UPS dier Chenneveau president of the appointed Chairman and CEO of Luf- Gl o b a l F r e i g h t Asia-Pacific re- thansa Cargo. Garnadt, who over- Seguin Forwarding unit. gion. Chenneveau saw hub management and passenger H e p r e v i o u s l y recently ser ved services for the Lufthansa board, will spent seven years leading operations a s e x e c u t i v e replace Carsten Spohr. The initial in the Americas region. v i c e p r e s i d e n t appointment is for three years. Spohr Coyne Airways has chosen John and chief sup - was promoted to CEO of Lufthansa Brown as director of sales, USA. The ply chain officer in September. Karl-Rudolf Ruppre- 23-year industry veteran served at at LG Electron- cht will replace Karl-Heinz Kopfle the company as regional director of ics. Chenneveau CheNNeVeau as board member, operations, at Luf- heavyweight express. Before working is taking over for thansa Cargo in April. Murray Gregg at Coyne, Brown worked for 17 years Vittorio Favati, who has been pro- has been named general manager of at Continental Airlines. moted to chief business development the Asia-Pacific region at Lufthansa Dave Andrew has been tapped as officer. Cargo Charter. Gregg, who spent 40 the managing director of Johannes- Nicholas E. Calio will succeed years at Air New Zealand, will work burg-based Safair. He will continue James C. May as the new president from Hong Kong. The company also his duties as group leasing director. and CEO of the Air Transport Asso- hired Lloyd Aubin D’souza as gen- Stephen Fenwick has been ap- ciation of America. Calio previously pointed CEO for was the head of Citigroup’s Global the A mericas at Government Affairs division, and he D e u t c h e Po s t has also served as a chief liaison to DHL . F e n w i c k Congress for presidents George W. m o s t r e c e n t l y Bush and George H.W. Bush. served on DHL’s The International Air Trans- Asia Pacific, East- port Association’s board of gover- er n Europe a nd nors has chosen Tony Tyler to suc- Gregg D’SOUZA Middle East Ex- fenwick ceed Giovanni Bisignani as director

38 january 2011 ACW general and CEO. Tyler, who has been March 8-10 CEO of Cathay Pacific Airways since events Hong Kong: The 2011 version of Air 2007, will take over in July. He served Freight Asia, a biennial conference on IATA’s board of governors from June JANUARY 31-FEBRUARY 2 and trade show, will be held at Asia- 2009 to June 2010. Amsterdam: Pharma IQ’s Cool Chain World Expo. The event will feature Michael Steen has been promoted Europe features solutions and services separate conferences on air cargo and for cool chain transport, packaging, logistics. A dedicated logistics pavilion to executive vice president of Atlas Air qualty assurance and management. will showcase the latest industry prod- Worldwide Holdings. Steen will con- For more information, visit www.cool- ucts and services. One-on-one meet- tinue acting as the company’s CCO. He chaineurope.com. ings can be set up during the Cargo joined Atlas in April 2007. Networking Day. For more informa- FEBRUARY 9-11 Chicago-based ALG Worldwide Lo- tion, e-mail airfreight@reedexpo. Berlin: Fruit Logistica 2011 will focus com.hk or visit www.airfreightasia. gistics has opened offices near George on current issues and breakthroughs com/en/Home. Bush Intercontinental Airport in Hous- in the fresh produce industry. Panels The 2011 Asian Aerospace Inter- ton and at Washington Dulles Airport in include “Logistics — the challenges national Expo and Congress will also for road transport” and “Sustainabil- Washington, D.C. Rex Brouillard will be held at the AsiaWorld Expo. It will ity — value for the long term.” An lead the Washington office. The 30-year feature a Congress with a slew of key- awards ceremony will close the event. note speeches and an Asian Pacific industry veteran has experience with For more information, visit www1. Training Symposium. For information, FEMA, the U.S. State Department messe-berlin.de/vip8_1/website/In- visit www.asianaerospace.com. and the U.S. Department of Defense. ternet/Internet/www.fruitlogistica/ . Liz Figueroa and Gerald Lopez will englisch/index.html Istanbul: Hilton Istanbul Hotel is the site for World Cargo Symposium 2011, lead the Houston team. February 13-15 which will bring together more than Santo Domingo, Dominican Re- Aircastle Advisor, an affiliate of 700 industry insiders for a three-day public: Routes Americas 2011, the Aircastle, has added J. Robert Peart conference full of meetings, plenary fourth event of its kind, it will be host- as chief investment officer. Peart has sessions and forums. Topics include ed by Aeropuertos Dominicanos Si- air mail, dangerous goods, e-supply worked at Guggenheim Aviation Part- glo XXI, S.A., which operates six area chain, revenue optimization, ground- ners and Southern Air Transport. airports. The event spans two days of handling agents and more. For ad- one-on-one meetings between airline The CEO of Norway Post, Dag ditional information and to register, and airport officials. Routes Tourism Mejdell, has been named chairman of visit www.iata.org/events/wcs2011/ Mediterranean will also be held on the the International Post Corporation. He’s Pages/default.aspx. same dates in Antalya, Turkey. This worked at Norway Post for five years year’s World Routes event will be held MAY 10-13 and previously served as CEO of Dyno in Berlin on October 2. For more infor- Munich: The 2011 version of Messe Industrier. mation on Routes events, go to http:// Munchen GmbH’s Exhibition and Con- The maintenance, repair and overhaul www.routesonline.com/events. ference for the Air Cargo Industry firm Constant Aviation has named will be held in the New Munich Trade FEBRUARY 22-24 Fair Centre. This is the fifth edition Nairobi, Kenya: Air Cargo Africa, Kevin Dillon vice president of opera- of the event, which is being held in the first conference and exhibition of tions at the company’s Birmingham, conjunction with a logistics exhibition. its kind, will be held at the Kenyatta Ala., branch. Dillon previously worked as According to a press release, 1,764 International Conference Centre. The exhibitors attended the conference managing director at Avantair. event is organized by the STAT Trade last year, and officials expect 48,000 Science Applications Internation- Times. For more information, visit visitors in 2011. For information, visit www.stattimes.com/ACA2011. al Corporation has chosen Andrew www.messe-muenchen.de/de/Home. Jazwick as its senior vice president of aviation security. Since 1999, Jazwick has worked as a liason between the com- ADVERTISER INDEX pany and the government and has as- sisted with legislative policy initiatives. 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ACW january 2011 39 forwarders’forum

Brandon Fried, Executive Director AfA No need for 100 percent screening

ecently ICAO, the United Nations agency that evaluation of security standards. Better intelligence and oversees aviation and creates standards for air- threat information-sharing is vital to ensuring a prompt, craft to fly easily from one country to another, effective and harmonized response in the face of future started pushing new guidelines for cargo securi- threats. ty to counter al-Qaida’s new mail-bomb strategy. The recent bombs were shipped from an area with a RThankfully, the organization is stopping short of calling for history of demonstrated hostility to those of the Jewish 100 percent screening of all packages, as pilots and some faith. The packages were addressed to Chicago synagogues US lawmakers are urging. probably not far from office supply stores that sell print- The concern is that such drastic proposals fail to con- ers and cartridges. The question of why the shippers were sider the cost and technological limitations of meeting such spending significant amounts of money to airfreight printer a challenge. cartridges and printers to Chicago was never raised. And This is not to say the airfreight industry is unaware of even more importantly, why were such red flags ignored? the seriousness of emerging terrorist threats. Shortly af- There is no question that future emphasis must be ter the Yemen-originating attempt in October, al-Qaida placed on receiving rudimentary shipping data elements, bragged about how its $4,200 minimal expense caused a such as shipper and receiver identification, and country crippling reaction that has already cost countries millions of shipment origin and shipment contents documents, all of dollars in shipping delays and has relegated printer car- in advance of flight departure. Assessing this information tridges to ocean shipping for the foreseeable future. after the aircraft has departed places both passengers and Screening every piece of cargo may sound reassuring, destination countries in danger. Realigning advanced mani- but it also brings up interesting questions. Do we have the fest information-sharing procedures to include submissions technology to screen 100 percent of all air shipments? How within a reasonable time before takeoff is essential. In the much does that cost? Can such screening be efficiently United States, an industry working group in coordination conducted without seriously disrupting the cargo supply with the Transportation Security Administration and Cus- chain? Finally, how do we enforce such requirements on tom and Border Protection is already devising a plan that other countries that disagree with or lack the resources to will accomplish this objective for industry and government perform the task? risk assessors. The recent Yemen bomb plot was foiled by good, old- Inspecting every piece of freight might appear to be a fashioned intelligence. Simply put, the Saudi Arabian gov- sound solution to emerging security issues, but it would ernment provided advance warning of what was about to really only serve to paralyze both the aviation industry and happen. No expensive screening technology, sophisticated the global economy, which relies on fast and reliable air computer programs or security devices were used in stop- cargo services. This approach would also make al-Qaida’s ping the plot. Because of this, lawmakers, regulators and $4,200 spent in rudimentary bomb parts a truly outstand- industry experts must always remember that collaboration ing investment — one that we should make sure never with friendly foreign intelligence agencies and an under- pays. standing of technological limitations should be factors in The airfreight forwarding community is 100 percent considering sound air cargo security policy. committed to safety, but that is the only time percentages The new EU action plan on air cargo security seems are appropriate in a discussion about cargo security. to be in agreement with ICAO. These recommendations Treating every package as if it has the same threat removes include implementing a risk-based approach and requiring our best weapon in the war on terror — our intelligence more advance shipment information. The first steps will be gathering and cooperation with other countries. This to define criteria for identifying cargo that is considered to weapon should always trump limited security technology be a high risk and to establish mechanisms to allow for the and poorly conceived, unfunded legislative mandates. ACW

40 january 2011 ACW The Magazine of Choice World Routes returns to Europe in 2011. The global meeting place for every airline and airport. Join the route development community in Berlin 2nd-4th October 2011 for the biggest ever global gathering of airline, airport and tourism decision- makers and their stakeholders. All are in attendance to meet and discuss the world’s future air services. Secure your place now, contact Katie Bland, Sales Director on: Tel: +44 (0)161 234 2730 Email: [email protected] www.routesonline.com

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