INTERNATIONAL EDITION

JULY 2014 Reflecting on the first half of 2014 Europe still lags behind

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FMG_Anz_AirCargoWorld_e_203x275_140611_RZ.indd 1 11.06.14 13:59 Contents Volume 17 • Number 6 • July 2014 Features

18 22 28 Outsize cargo Midyear report Europe

Energy development equipment Airfreight companies take a look at the Air cargo activity in the region levels dominates heavyweight loads. first six months of 2014. off after a strong start to the year.

Around the World

6 Europe 12 DHL is on a mission to raise the bar. Haneda pushes for international role.

10 Middle East/Africa 16 Americas Cover photo courtesy of Hactl Oil keeps Astral Aviation busy. Rickenbacker Airport is in fashion.

Departments

4 Editorial 32 Bottom Line 36 People 26 Associations 34 Classifieds 38 Forwarders’ Forum

Air Cargo World (ISSN 1933-1614) is published monthly and owned by Axio Data Group. Air Cargo World is located at 1080 Holcomb Bridge Rd., Suite 255, Roswell, GA 30076. Production office is located at 3025 Highland Parkway Suite 200, Downers Grove, IL 60515; telephone 866-624-4457. Air Cargo World is a registered trademark. Periodicals 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 Directory single copies $14.95 domestic; $21.95 overseas. Microfilm copies are available from University Microfilms, 300 North Zeeb Road, Ann Arbor, MI 48106. Opinions expressed by authors and contributors are not necessarily those of the editors or publisher. Articles may not be reproduced in whole or part without the express written permission of the publisher. 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 Rosewood Drive, Danvers, MA 01923, and provided the number of copies is less than 100. For authorization, contact CCC at (508) 750-8400. The Transactional Reporting Service fee code is: 0745-5100/96/$3.00. For those seeking 100 or more copies, please contact the magazine directly. Member of Audit Bureau of Circulations Ltd. POSTMASTER and subscriber services: Call or write to Air Cargo World, 3025 Highland Parkway Suite 200, Downers Grove, IL 60515; telephone 866-624-4457.

ACW JULY 2014 3 Editorial

EDITOR John W. McCurry [email protected] • (678) 775-3567 ASSOCIATE EDITOR Summer of change Adina Solomon [email protected] • (678)-775-3568 The summer of 2014 is shaping up to be SPECIAL CORRESPONDENT one of change for air cargo, with a spate of Martin Roebuck leadership moves and a major cargo shakeup CONTRIBUTING EDITORS at Delta. Roger Turney, Ian Putzger Glyn Hughes, IATA’s new head of global CONTRIBUTING PHOTOGRAPHER cargo, seems to be a great pick to succeed Des Rob Finlayson Vertannes. Hughes, a 23-year IATA veteran, COLUMNIST assumed his new post on June 9 and provides Brandon Fried continuity in the role. He also brings a strong PRODUCTION DIRECTOR dose of passion for air cargo. For now, Hughes Ed Calahan will keep IATA’s cargo initiatives rolling down the same path his predecessor charted. He CIRCULATION MANAGER Nicola Mitcham says his mentors, which include Vertannes [email protected] and former cargo head Ram Menen, ART DIRECTOR passed along an infectious passion for the John W. McCurry Editor Central Communications Group industry. [email protected] “It’s more than a job,” Hughes says. “We talk PUBLISHER about getting jet kerosene in our blood.” Steve Prince Collaboration of the industry’s assorted segments will be the overriding theme [email protected] as Hughes pushes increased e-air waybill adoption and the trimming of the ASSISTANT TO PUBLISHER “magical 48 hours” from air cargo transit times. For more on Hughes’ industry Susan Addy [email protected] • (770) 642-9170 vision, please find his interview on p. 26. As our July issue went to press, we learned that Jan Krems, a long-time ex- DISPLAY ADVERTISING TRAFFIC COORDINATOR Cindy Fehland ecutive with /KLM/ Cargo, and before that, KLM Cargo, has [email protected] agreed to become the new president of United Cargo. Krems replaces Robbie AIR CARGO WORLD HEADQUARTERS Anderson, who left United in early June. Krems has nearly 30 years of experi- 1080 Holcomb Bridge Rd., Roswell Summit ence in air cargo and figures to be a great choice for the top spot at United. Building 200, Suite 255, Roswell, GA 30076 His most recent position with Air France/KLM/Martinair was as vice president (770) 642-9170 • Fax: (770) 642-9982 Americas, and he was based in Atlanta. WORLDWIDE SALES The major personnel changes notwithstanding, the biggest upheaval of the U.S. Sales summer of 2014 could be the re-organization of cargo at . Cargo is Director National Accounts Tim Lord no longer a stand-alone organization, and with the retirement of Tony Charaf on [email protected] • (678) 775-3565 Aug. 1, there will no longer be a head of cargo at the . The move comes at Europe, United Kingdom, Middle East a time when cargo volume is declining at Delta. Cargo dropped 5 percent during David Collison [email protected] • +44 192-381-7731 2013 and is down by 2.3 percent through May of this year. ,, Singapore Charaf, who embraced the nickname “Paperless” Tony Charaf during his lat- Joseph Yap est two-year stint at Delta, is credited with making the airline the U.S. leader in [email protected] • +65-6-337-6996 terms of adoption of the e-AWB. Charaf spent two terms as Delta’s head of cargo Faredoon Kuka RMA Media during his 18 years with the airline. [email protected] • +91 22 6570 3081 The changes at Delta put cargo under the passenger side. Delta President Ed Bastian announced the changes in a news release on June 11. The news release Mr. Mikio Tsuchiya offered few details and prompted considerable speculation about cargo’s future [email protected] • +81-45-891-1852 role at Delta. It will certainly be interesting to see how cargo evolves at Delta in Ms. Anchana Nararidh the coming months and years. [email protected] • +66-26-412-6938 Ms. Paula Liu [email protected] • +88-62-2377-9108 Korea Mr. Jung-Won Suh [email protected] • +82-2785-8222

4 JULY 2014 ACW MIA Air Cargo world 6 Dec 2013.pdf 2014/1/27 5:47:44 PM

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“With our new Strategy 2020, we are drawing on our past achievements and our strengths to seize new opportunities to generate additional organic growth in a changing marketplace.”

DHL hopes to expand its logistics business in emerging markets and capitalize on the — Frank Appel global e-commerce boom to grow its international express business.

But Deutsche Post DHL, as it is formally known, faces something of a problem in its sheer diversity. Not only is it a global forwarding, supply DHL set to raise the chain and express entity, it is also re- sponsible for delivering German do- stakes even higher mestic mail. Anyone listening in on the recent HL is mounting a concert- growth in a changing marketplace,” company annual general meeting in ed effort to establish itself CEO Frank Appel says. “We are ready Frankfurt, heard Appel giving seem- as the leading global logis- to take our next growth steps and ingly high priority to assuring its Dtics provider. have many initiatives planned for the mostly German shareholders that the It’s something of a bizarre chal- future.” local mail service was in good shape. lenge that it has set itself, given that The main focus of this strategy, he Appel himself appears to recognize the German mega forwarding, ex- says, will be the systematic growth that he is juggling with an eclectic press, supply chain and mail combine of the logistics business in emerging business mix, but outside of Germany already holds that lofty position. But, markets and the international expan- strikes a different tone. not to be dissuaded, it is intent on sion of its express business, taking “Deutsche Post DHL views itself embracing a future strategy which, advantage of the global e-commerce as a family of high-performance divi- it believes, will establish beyond all boom. sions,“ he says. “But logistics is and doubt that it is truly top dog. As much As in the recent past, it is antici- will remain our core business.” has been outlined with what the com- pated that the emphasis will remain With its new Strategy 2020, Appel pany describes as its Strategy 2020, on organic growth, rather than any says the company is expressing its as- the springboard for its recently post- further acquisitions. In particular, Ap- piration to become the clear industry ed strong annual results for 2013, pel is targeting emerging markets to leader. which saw the company generate rev- help stimulate revenue growth. “The future belongs to logistics, enues of more than US$75 billion (55 “By 2020, we want 30 percent of and we intend to set the standards in billion euros). our revenues to be generated by the industry,” he says. “In the future “With our new Strategy 2020, we these dynamic emerging countries,” when people think logistics, we want are drawing on our past achievements Appel says. “At the moment, our busi- them to think Deutsche Post DHL.” and our strengths to seize new oppor- ness activities in these countries gen- He left it until the end of his Frank- tunities to generate additional organic erate 22 percent of revenues.” furt AGM speech, but Appel also took

6 JULY 2014 ACW THE WORLD IS OUR BUSINESS LET US TAKE CARE OF YOURS

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So whether it’s auto-parts or computers, visit www.etihadcargo.com for more information, or contact your local Etihad Cargo representative and we’ll take it from there. a political side swipe at the limitations position as the market leader. hindering the growth of the logistics Indeed, its main rivals can barely industry. reach half these tonnages. “Logistics needs free trade, which But it has hardly been an inspiring means trade barriers must be re- start to the year. Results for the first moved,” Appel says. “In particular, quarter, recently posted by the com- trade barriers could be eliminated by pany, still show flat-lining airfreight a transatlantic trade and investment volumes. agreement between Europe and the Revenues generated by DHL Global United States.” Freight Forwarding fell away by 2.2 DHL, he added, stood ready to make percent during the three-month pe- a positive contribution to the debate. riod, although after adjusting for what The company says it has also set it- it describes as negative exchange self ambitious financial targets within rates, actually rose by 2.5 percent. Strategy 2020. From now until 2020, But even this does not disguise the Frank Appel DHL expects earnings growth of more fact that volumes and revenues in the than 8 percent per year on average, airfreight business remained at the and pharma sectors, where one would based on the US$3.9 billion (2.9 bil- previous year’s level, primarily due to expect only the major players being lion euros) earnings for 2013. weak demand from some major cus- capable of providing global solutions. DHL may have recorded a strong tomers in the high-tech, engineering As it is, DHL’s successful penetration year for 2013, but it fully admits that and manufacturing sectors. of this sector is reflected by the fact DHL Global Forwarding business did DHL recognizes its supply chain that its two closest rivals can only not share greatly in that glory. business and within that sector, con- account for a 3 percent share of the The airfreight market, it says, tract logistics, as a separate division, market. stagnated in 2013, despite a slight alongside its express, forwarding and Certainly, DHL remains undisputed volume increase in the second half mail counterparts. And yes, DHL is global leader in the express, airfreight of the year. Freight volumes were the also global market leader in con- forwarding and contract logistics mar- lower overall, it says, due to the de- tract logistics, with a market share of kets, but it still lags behind its rivals cline in output in some industry sec- 8.2 percent. such as Kuehne + Nagel in the ocean- tors. Moreover, customers throughout It is a seemingly low share, but one freight market and DB Schenker in the market increasingly chose other which reflects the highly fragmented the European road transport sector. modes of transport. nature of the sector, where the top 10 The world already recognizes DHL But even in a stagnating market, players only account for a 22 percent Deutsche Post as the leading global DHL Global Forwarding transported share of the overall market. logistics provider, but one senses that more than 2.3 million tonnes of ex- It is surprising perhaps, given that DHL may not think it is quite there port airfreight in 2013, assuring its contract logistics embraces the auto yet. ACW

Fraport cargo on the rise argo throughput at Fraport Aircraft movements also AG’s Frankfurt Airport in May steered a steady growth Cgrew by 6.9 percent year over path, increasing by 1 percent year to 185,626 tonnes. to 42,366 takeoffs and land- “The strong development in air ings year over year. cargo strengthens our position as As for Fraport’s interna- Europe’s largest cargo airport. Fur- tional portfolio, ’s thermore, this underscores FRA’s im- Airport saw cargo down 2.6 portance for Germany’s export-driven percent in May. Hanover Air- economy and the logistics industry, port in Germany had freight thus providing a concrete competitive increase by 5.7 percent. advantage for German business,” Ste- Xi’an Airport in northwest- fan Schulte, Fraport’s executive board ern China recorded 2.9 per- chairman, said. cent more cargo. ACW

8 JULY 2014 ACW Europenews

Lufthansa switches to fuel-saving containers ll of the LD3 containers used by Cargo are now Athe lightweight versions. The LD3 standard containers pro- duced using lighter composite mate- rials are helping to reduce fuel con- sumption and emissions at the airline. With some 500,000 container movements per year, the 14-kilogram (31-pound) difference over conven- tional containers amounts to a weight saving of 7 million kilograms (15.4 mil- lion pounds). Therefore, using these lightweight containers to transport cargo and luggage will reduce fuel con- Lufthansa’s new lightweight versions of LD3 containers help reduce fuel consumption. sumption by 2,000 tonnes and CO2 emissions by 7,000 tonnes per year. “The new, lighter containers are at . “Replacing all of We want to continue to fulfill our role still extremely robust and strong our LD3 standard containers brings as an industry leader in the future as in spite of being almost completely us a good deal closer to our goal of re- well and help make airfreight greener made of plastic,” said Karl-Rudolf ducing our specific CO2 emissions by through innovative and modern tech- Rupprecht, board member operations a quarter by 2020 compared to 2005. nologies.” ACW

ACW JULY 2014 9 Around the world

Astral has flown more than 200 humanitarian flights to and around Sudan in 2014. Sanjeev Gadhia

Kapese, Kenya; and Mwanza. Astral says the aircraft will also be available for ad-hoc charters within Eastern Relief flights, oil keep Africa. Gadhia says political instability in some of the countries that Astral op- By John W. McCurry Astral busy erates into, especially South Sudan and Central African Republic, are stral Aviation reports that on its Nairobi-London-Ostend-Lagos amongst the biggest challenges, but a high number of relief routes. they also present more opportunities cargo flights into South Su- Also driving Astral’s business has in accessibility. Adan kept the Nairobi-based been transport of mining equipment Astral recently began a scheduled cargo carrier busy during the first half into Tanzania and perishables into cargo service into Zanzibar, Tanzania of 2014. Astral performed more than Europe. and will introduce a new service into 200 flights to and within this region, “The second half of 2014 looks Lokichar, which is in the heart of the using a combination of DC9F, B727 promising with a similar trend of the oil producing region of Northern Ke- and DC8F aircraft, says company first half with a projected increase nya. Other routes will be introduced CEO Sanjeev Gadhia. in aid and relief cargoes into South once the B737-400F joins the fleet, In addition, Gadhia says Astral Sudan and Central African Republic, Gadhia says. has experienced high utilization on combined with higher volumes of oil Astral also plans to join the world its Pemba, Mozambique, service due and gas, and mining cargoes into Mo- of E-freight. Gadhia says the company to an increase of oil and gas ship- zambique and Tanzania respectively,” recently confirmed its participation ments into Mozambique. That service Gadhia says. to the International Air Transport recently observed its first anniver- In late June, Astral began operating Association for the e-air waybill, and sary. In early June, the company an- its newly acquired five-tonne Fokker “hence it is at an early stage of com- nounced it would increase its service 27. Gadhia says this will complement pliance.” to Pemba to twice a week. Gadhia its existing fleet in addition to its Astral signed a memorandum of says the main customers for this ser- B737-400F, which will join the fleet in understanding with China’s HNA vice are the energy companies oper- the third quarter to replace the aging Group in May. Gadhia says this will ating in the province of Cabo Delgado. DC9 fleet. Astral also operates two result in a “significant re-engineering He says other routes performing DC9Fs and two B727Fs in addition to of Astral’s business market in 2015, well in 2014 are Mogadishu, Somalia; its wet-leased B747-400F from Atlas which will enable it to diversify into Mwanza, Tanzania; Bangui, Central Air. the passenger market in Eastern Af- African Republic; and Dar es Salaam, The Fokker 27 will serve Astral’s rica. Astral will acquire five ERJ 145s Tanzania. Also, the Atlas-leased B747- existing oil and gas network into from its principals in China for the 400F has been operating consistently Pemba; Mtwara, Tanzania; Lokichar / passenger flights, he says. ACW

10 JULY 2014 ACW Middle East / Africanews

Qatar begins City freighter service

atar Airways Cargo began operating twice-weekly Qfreighter service to on June 11. This new route will mark the start of Cargo operations in Latin America. “The first Qatar Airways Cargo flight to Mexico will be a historic mo- ment for us, as it heralds the begin- ning of our operations in Latin Ameri- ca,” Ulrich Ogiermann, Qatar Airways chief officer cargo, said. “This is yet another important milestone for us, and it demonstrates that we are well on track towards becoming a world- Qatar Airways Cargo has ambitious plans for service to Latin America. class air cargo service provider with international reach.” Qatar Airways will operate the Mondays and Thursdays. of the most developed manufacturing service between Doha and Mexico Major exports from Mexico include sectors in Latin America,” Ian City’s Licenciado Benito Juarez cars and vehicle parts, consumer Morgan, Qatar Airways vice president International Airport, using the electronics, oil and oil-derived prod- cargo for Americas, said. “The new Boeing 777 freighter. Freighters ucts, silver, perishables and pharma- dedicated Qatar Airways Cargo will depart from Doha’s Hamad ceuticals. service will create new and exciting International Airport on Wednesdays “Mexico has one of the world’s opportunities for businesses in and Sundays, and from Mexico on largest economies, and it boasts one Mexico and beyond.”ACW

Etihad launches new freighter flight tihad Cargo started a new weekly freighter flight Monday Ebetween Abu Dhabi and Entebbe, Uganda. Situated on the shores of Lake Vic- toria and close to the capital Kampala, Entebbe is a major commercial center in central Uganda. The direct cargo service will op- erate every Monday using an -200F freighter, with a capacity of 64 tonnes. Etihad Cargo now has weekly freighter service between Abu Dhabi and Entebbe. “Uganda is an important market for Etihad Cargo, and the new Abu Dhabi- Entebbe freighter service will allow see strong onward trade flows over Etihad Cargo expects the service to us to capitalize on the strong import our Abu Dhabi cargo hub to destina- carry large quantities of electronics and export demand to and from East tions across the Middle East, subcon- and textiles to Entebbe, with Africa,” Kevin Knight, ’ tinent and Europe, ultimately this ser- primarily perishable goods destined chief strategy and planning officer, vice will further strengthen the trade for the Gulf region and Europe loaded said. “In addition, whilst we expect to ties between the UAE and Uganda.” for the return flight. ACW

ACW JULY 2014 11 Around the world

“Service quality at Haneda is not a problem, but cost is.” — Tomoyasu Fukuyama

manufacturing areas. “Within a 10-kilometer radius around Haneda, you have lots of fac- tories; 10 kilometers around Narita, it is all fields,” Mark Slade, president of DHL Global Forwarding Japan, says. The reason for this is the fact that most forwarders have established their infrastructure at Narita and find Japanese forwarder Logi-Rex is promoting perishables at Haneda, with ’s appetite it prohibitive to set up shop at Hane- for imported fresh food. The cooler at the airport can accomodate full ULDs. da, Shinya Nagayasu, manager of in- ternational route marketing at JAL Cargo, says. Fukuyama says land costs at Hane- da are about three or four times those Tokyo Haneda’s slow at Narita. Using the neutral infra- structure there is not cheap either. “Some companies do same-day ascent into freight clearance and delivery at Haneda, and their costs are about 30 percent ir Canada’s first B787 year, slots for international flights are higher than at Narita,” Fukuyama Dreamliner has been as- going up from 60,000 to 90,000, with says. “Service quality at Haneda is not signed to a brand new new services to London, Paris, Mu- a problem, but cost is.” Aroute for the Canadian nich, Frankfurt and Toronto. At the What makes this more daunting carrier. After some initial trips to fa- same time, links to , Jakarta, for small- and mid-sized forwarders miliarize crews with the new plane, and Singapore are (some of the large agents, such as the aircraft is going to enter sched- being ramped up. Nippon Express or DHL Global For- uled service in mid-July on the Toron- However, a lot of the freight head- warding, do have facilities at Haneda) to-Tokyo Haneda sector. ed to Haneda will end up on a truck is the relatively small volume that Vito Cerone, director of marketing to Narita for deconsolidation, Tokyo’s flows through the erstwhile domestic and sales for the Americas at Air Can- long-standing international airport. airport. In the past fiscal year, Haneda ada Cargo, is enthusiastic about the Japan Cargo is running al- handled about 150,000 tonnes, while new service, the airline’s first route most 10 trucks a day between the two some 1.9 million tonnes were pro- into Haneda. airports. For outbound traffic, most cessed at Narita. “We were one of the lucky few car- forwarders consolidate shipments at “The volume at Haneda is too small riers who were given slots at Haneda,” Narita and then truck them to Haneda to justify the investment in a ware- he says. for departures from there, says To- house and manpower,” Fukuyama Haneda, which languished in a do- moyasu Fukuyama, president of Japa- says. mestic role until 2010, when the au- nese forwarder Logi-Rex. There is also the matter of thorities first allowed a few interna- This is ironic, given Haneda’s freighters. At this point, all-cargo tional routes, is pushing for a stronger closer proximity to downtown aircraft are not eligible for daytime role in the international arena. This Tokyo, not to mention its reach to slots, which are necessary to make

12 JULY 2014 ACW Asianews

their presence there viable. JAL is targeting specific commodi- “A lot of perishables go to the city center, which ties for it Haneda traffic. Besides ex- opens up opportunities for a perishables service.” press and mail traffic, perishables are a key segment. — Vito Cerone “We try to promote Haneda more to carry perishables,” says Nagayasu, pointing to the proximity of a large traffic to and from other parts of Japan Over time, as more slots become avail- flower market and Tokyo’s appetite for like Kyushu or Hokkaido,” Nagayasi able for international flights there, the imported fresh food. He adds that the says. advantages of Haneda vis-a-vis Narita – cooler at the airport can accommodate Asian destinations, which spear- the proximity to downtown Tokyo, the full ULDs. headed the opening of Haneda to in- absence of a curfew and four runways “A lot of perishables go to the city ternational flights four years ago, are (versus two at Narita) – will push more center, which opens up opportunities another focus for operators serving the and more cargo activities over there, for a perishables service,” Cerone airport. “This opens markets like Singa- he predicts, leading to a diminished says. He has also moved to establish poe, Bangkok and for us. Before role for the old international gateway. trucking links to Osaka and Nagoya we were very restricted. This gives us “In five to 10 years, Narita will be- to connect to ’s Haneda a lot of opportunities to work on the come the low-cost airport,” he says, flights. interline component,” Cerone says. adding that the pace of this develop- Transit traffic is a significant as- DHL Global Forwarding is also us- ment will be dictated by the rate at pect of JAL’s strategy at Haneda. With ing Haneda for intra-Asian traffic, par- which Haneda allows more interna- its strong domestic network in place ticularly with flights that depart late at tional flights. “It all depends on the there, it can execute fast connections night to reach their destination early slots. If they keep adding slots like between domestic and international the following morning. they did this April, the shift will hap- departures. “We are focusing more on Slade is very upbeat on the airport. pen sooner.” ACW

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ACW JULY 2014 13 Asianews

Halifax sends live lobster to Asia orean Air Cargo launched a weekly Sunday service from KHalifax Stanfield International Airport to Incheon on a Boeing 777F. The carrier expects to uplift a mini- mum of 40,000 kilograms (88,184 kilo- grams) of live lobster, with an estimat- ed CA$580,000 (US$532,256) export value to the Canadian province. The service will continue every Sunday un- til the end of August. “This is the first same plane direct service to a major Asian hub, Cargo expects to uplift at least 40,000 kilograms of live lobster from Halifax. Incheon,” said Joyce Carter, Halifax International Airport Authority ties, the flight arrives in Halifax from companies,” said Geoff Irvine, execu- president and CEO. “It’s fast, Toronto and departs for Incheon. It tive director of the Lobster Council even with a tech stop for fuel in stops for fuel in Anchorage. The air- of Canada. “The runway extension at Anchorage. The total elapsed time line has operated cargo flights at Hali- Halifax Stanfield Airport was an im- from wheels up at Halifax to landing fax Stanfield in the past on a charter portant step in allowing this type of in Seoul is less than 14 hours. This basis, primarily in December. aircraft to call on Halifax, and we ap- is fantastic for fresh seafood and in “This type of increased lift capac- plaud the team at Korean Air Cargo particular for the ever increasing ity directly into Asia is good news for for making the decision to come and Asian appetite for live lobster.” all participants in the live lobster sec- hope that live shippers will use the Operating out of Gateway Facili- tor from harvesters to live shipping service.” ACW

Exports fuel Asia-Pacific air cargo demand nternational air cargo demand ing by 5.3 percent, the international grew in April for Asia-Pacific freight load factor averaged 64.3 per- Icarriers on the back of sustained cent in April, 0.4 percentage points demand for Asian exports, according lower than the same month last year. to preliminary traffic figures released Meanwhile, international passen- by the Association of Asia Pacific gers increased by 7.4 percent. Airlines (AAPA). “Air cargo demand for the region’s Airfreight demand in freight tonne carriers grew by 4.2 percent [during kilometers (FTK) increased by 4.7 the first four months of the year],

“The overall demand environment looks While air cargo demand increased by positive, underpinned by positive growth in the 4.7 percent in April, freight load factors global economy.” remained under pressure. — Andrew Herdman positive, underpinned by positive growth in the global economy. However, the region’s carriers percent in April year over year. But thanks to an improvement in global continue to face intense competition freight load factors remained under trade conditions,” Andrew Herdman, in the marketplace with signs of pressure due to capacity expansion. AAPA director general, said. “The overcapacity and the resulting yield With offered freight capacity expand- overall demand environment looks pressures.” ACW

14 JULY 2014 ACW SIAC-004-T14 Air Cargo [email protected] 1 12/6/14 4:58 pm Around the world

the operator of Rickenbacker. He says Rickenbacker must take on exports in order to succeed. The first step entails finding a neu- tral warehouse service provider that can handle multiple forwarders. “It’s one of the missing links at Rick- enbacker,” Whitaker says. The airport has an existing multi- tenant facility with 20,000 square feet (1,858 square meters) of warehouse space, but forwarders such as RCS need a service provider who can man- age all of that, Whitaker says. Colum- bus Regional Airport Authority is in talks with service providers about es- Rickenbacker International Airport in the U.S. has five weekly flights to Hong Kong. tablishing a Rickenbacker operation, and Whitaker feels confident the air- port will have a provider by the end of the summer. That means export service can start Staying fashionable in soon afterward. “Our thought process is we will start slowly and see how the market By Adina Solomon responds, so the next step then is to Columbus [email protected] ensure there’s enough space available ven the cargo community partial off-load of cargo in Columbus, for that to grow as large as the knows Rickenbacker Interna- the planes continue to either New market would like it to have happen,” tional Airport is in fashion. York or Chicago. Whitaker says. E In the last year or so, the Six years ago, RCS Logistics opened Future activity at Rickenbacker all-freight airport in Columbus, Ohio, its first office in Columbus. The for- will hinge on the development of the has gained five weekly flights to Hong warder operates charter flights out of export side, ’s Curci says. Kong – three Cargolux flights and two Hong Kong and , Brian He- “We’re happy to participate in any freighter flights. Ameri- aney, president of RCS, says. Look- future growth in Rickenbacker, but jet announced its development of an ing to replace its charter partner Ev- in terms of really what the growth is, air cargo hub at Rickenbacker, with ergreen International Airlines after it’s all going to depend on where the B767 freighter service starting July 7. it filed for bankruptcy in December exporters in the region find value for Much of the airfreight comes from 2013, RCS forged an agreement with it,” he says. Columbus-based L Brands, a major Cathay Pacific. In March, Cathay’s Curci declined to say how many fashion retailer whose brands include Rickenbacker flights launched. tonnes of freight Cargolux moves to Victoria’s Secret and Bath & Body RCS is among the companies look- Rickenbacker on its three weekly Works. ing to export cargo out of Columbus flights at the airport. But right now, Rickenbacker only and onto Asia. “I do apologize for being so vague, imports. Air cargo companies operat- “As we start to look at what the but basically, there’s been a lot of ing at the airport look forward to the globe will look like in five, 10, 15 years, buzz around Rickenbacker, and what day that it starts export service. costs rising in China, perhaps some I don’t want to do is lead into unre- “Some ground handling companies light manufacturing coming back to alistic expectations from the export are in the process of setting up appro- the U.S., I think the Midwest area is side, so we’re waiting to see if there’s priate export facilities to try ramp up some place that companies would look a tangible product that’s going to be export potential from Rickenbacker,” to possibly put some kind of opera- put together,” he says. Pier Curci, Cargolux vice president tions,” Heaney says. RCS, which has a 48,000-square- Americas, says. “At the moment, David Whitaker also has big hopes foot (4,459-square-meter) warehouse we’re not participating in any export for the airport. He serves as vice at Rickenbacker, expects to export service from Rickenbacker.” president business development for fashion, automotive and pharmaceuti- After the airline’s freighters do a Columbus Regional Airport Authority, cal products out of Columbus. Health

16 JULY 2014 ACW Americasnews care companies McKesson and Cardi- need the larger building? How will the Answers include its proximity to nal Health, the biggest Fortune 500 market respond to the opportunity to distribution centers, especially for company in Ohio, have large presenc- export out of here?” Whitaker asks. fashion products – a truck in Ricken- es in the state. “Some of those are unknown, and we backer can reach 60 percent of the Whitaker also says these industries, want to strike the right balance with U.S. within two days, Heaney says. along with electronics to a lesser not building too soon nor too late. Air- The airport’s lack of passenger flights degree, will contribute to Columbus’ ports get in trouble sometimes when means a lack of congestion. Operating export. they overbuild, and they get in trou- at Rickenbacker also costs less com- After locating a service provider, ble when they under-build a little bit. pared with nearby Chicago and JFK. Rickenbacker has initial plans for So it’s really an art to find the right “As we look outside of the tradi- larger, new warehouse facilities to ac- timing to construct a building.” tional airports, I think we could pos- commodate growth in export and im- With all of this freight activity going sibly have a blank canvas at Ricken- port activity. on, it begs the question: Why Ricken- backer and look to develop it in the “The art is timing. So when do you backer? coming future,” Heaney says. ACW

Delta, United make major cargo changesBy John W. McCurry and Adina Solomon

he top cargo executives at and Delta Air TLines are leaving. Robbie An- derson, president of United Cargo since 2010, is leaving the company while Tony Charaf, senior vice presi- dent and chief cargo officer at Delta, is retiring effective Aug 1., after 18 years with the company. Following Charaf’s retirement, Del- ta plans a major restructuring of its cargo operations. Cargo Sales will become part of the Global Sales team, and Cargo Opera- tions will be aligned with Airport Cus- Tony Charaf Robbie Anderson tomer Service, according to a Delta news release. will provide each group with the senior vice president, Global Sales, resources they need to meet our while the cargo operations team cargo-related goals,” Ed Bastian, under the leadership of Scott “With this new Delta’s president, said. Barkley, managing director–Global structure, Delta A United spokeswoman tells Air Cargo Operations, will report to Cargo World that Anderson decided Bill Lentsch, senior vice president– Cargo remains a to leave the company. Airport Customer Service. Prior to serving as United “It’s a great opportunity to align highly valued part Cargo president, Anderson was resources and execution around staff vice president of Continental the specific needs of the operation of our business.” Airlines’ hub in Cleveland, where and the same thing for us on the his responsibilities included cargo sales side,” Curtis tells Air Cargo — Ed Bastian operations. World. “We will have access to all the At Delta, Charaf’s position will resources, IT, everything. It’s actually be eliminated and Ray Curtis, vice very exciting. I have lived in it in my “With this new structure, Delta president, global cargo sales, will career, both at Northwest and at Cargo remains a highly valued part continue to oversee cargo sales. United, and I’ve seen it produce some of our business, and these changes Curtis will report to Steve Sear, successful business outcomes.” ACW

ACW JULY 2014 17 Ruslan International is seeing significant business from the energy exploration, aerospace and power generation sectors.

Energy development helps drive outsize market By John W. McCurry [email protected]

quipment used in hydro- is quite busy,” says Henrik Ambak, “steady stream” of very heavy or odd carbon exploration is the vice president, global logistics for dimension cargo. He says Cargolux’ current dominant heavy- Cargolux. “Oil equipment to the west service moves beyond the realm of weight load for many spe- coast of Africa or to Nigeria, or any- load managers and planners. cialists in outsize cargo. where you have offshore drilling. “We employ structural engineers Cargolux reports receiving a steady There is a steady stream of equipment to calculate how cargo should be streamE of cargo that can be consid- out of Houston and out of Singapore.” prepared and loaded into the aircraft ered outsize, much of it on behalf of Ambak says outsize cargo is a sig- without damaging aircraft and dam- companies in the oil and gas explo- nificant part of Cargolux’ business and aging itself. It’s a market segment we ration sector. Oil and gas equipment Cargolux has made an effort to be bet- would like to grow to make use of our flows in a steady stream from Houston ter than its competitors. He says out- competencies. Everyone can move and Singapore bound for final destina- size cargo, depending on what defini- T-shirts and boxes, no disrespect in- tions at offshore drilling sites in West tion is used, accounts for 5 to 10 per- tended, but the cargo we move re- Africa and other regions. cent of the company’s overall cargo. quires different competencies. It’s “The America-Europe trade lane Ambak says Cargolux transports a something that Cargolux has always

18 JULY 2014 ACW featurefocus Outsize Cargo

“We see a continuing growth in the satellite business as the satellites we were involved with launching 20 years ago start to reach the end of their useful lives.”

Saudia Cargo’s outsize business has gotten a recent boost from the construction industry. — Paul Furlonger but began bringing its own aircraft. their useful lives.” The carrier operates three 747s with Furlonger says thriving business at two more due to arrive in the next few Boeing and Airbus will also help fill up done with passion and is important for months. Ruslan’s Antonov 124s. us, therefore it’s something we spend Charter specialist Chapman Free- “The component parts of those air- time on.” born also sees considerable energy- planes are continuing to be made in Cathay Pacific refers to outsize related business. modular unit sizes all over the world cargo as “expert lift” and says it is of “It’s kind of hit and miss at the mo- and then shipped to various final as- varying importance throughout its ment, but it still pretty much focuses sembly points,” Furlonger says. “We networks. James Woodrow, director on oil and gas,” says Chris Fisher, se- don’t see a change in that model of cargo. It’s a critical service in markets nior account executive with Chapman production.” such as Houston, where it makes up a Freeborn. “We have seen a drop in the Over the past year, there has been large part of the carrier’s cargo base last few months or so.” increasing traffic between the Far for its five weekly flights. Several Eu- The pullback of U.S. military opera- East and South America and between ropean markets are also important, tions in Afghanistan and Iraq over the the Far East and Africa, Furlong ob- he says. past few years has contributed to the serves. A big gas project off the coast “Expert lift out of Houston is main- outsize cargo downturn, Fisher says. of also figures to benefit air ly oil and gas shipments whereas ex Paul Furlonger, sales director at cargo business. Europe can be anything from steel Ruslan International, the U.K. based “The slow, but stead exploitation plates to cars,” Woodrow says. “From company formed to market the fleet of opportunities in the South Atlan- Houston we recently carried a very of 17 Antonov 124 aircraft operated tic in the oil and gas industry off the large extension joint for a drilling rig.” by Antonov Airlines and Volga-Dnepr, coast of and off the coast of An- -based Centurion Air Cargo says his company is pleased with its gola are generating demand,” he says. sends a lot of outsize cargo to Latin utilization levels during the past few “There is a big project off the north- America for a variety of industries. years. He believes that industrial ship- west coast of Australia and they are “We handle shipments for the en- ments spurred by an improving global expecting gas production to last until ergy sector, including a lot of pipes economy will offset reductions in mili- 2070. Hopefully, we will get a small and generators,” says Luis Soto, Cen- tary transport. Hesays the market see- slice of that pie.” turion’s director of sales and market- ing the highest rates of growth for his The political turmoil in Ukraine ing. “We have a steady demand. You company are aerospace, oil and gas has not adversely affected Ruslan’s don’t fill airplanes with it, but there and power generation. operations, Furlonger says. are shipments about every day. It’s a “We are expecting production in “So far, the unfortunate situation big part of our business and we have these industries to continue that over in Ukraine has had no material the right aircraft to move this kind of the next four to five years,” Furlon- effect on the business. Unless the freight.” ger says. “We see a continuing growth situation deteriorates significantly, Soto says Centurion has been using in the satellite business as the satel- and I don’t see that happening, I don’t 747s since mid 2013. Centurion used lites we were involved with launching see any reason why there should be to wet lease 2 747s from , 20 years ago start to reach the end of interruption to the business. Ukraine

ACW JULY 2014 19 featurefocus Outsize Cargo

Chopper cargo steady biz for carriers

significant number of helicopters are shipped by air each year, including many bound for oil and gas Acompanies. “The business is much larger than people think, says Kurt Kapota, branch manager for the Houston operation of Heli- copters International Shipping Services (HISS), a freight for- warder that specializes in exactly what it’s name says. “Only a few companies do helicopters. It’s a niche business that re- Miami-based Centurion has a steady outsize business to Latin America. quires know-how.” HISS moves about 100 to 150 helicopters by air annually, Kapota says, with total shipments from all providers being and Russia may have disagreement of some issues but they somewhere between 300 and 400. continue to cooperate on others. We are operating as we Kapato says helicopters are shipped by air primarily for timing. were this time last year when no one expected there to be a “Say a company has a helicopter in the Gulf of Mexico and problem between Ukraine and Russia.” then they have a need for one in West Africa. They can’t wait Steve Manser, director of cargo charter sales for for days until a ship moves it. Time is of the essence for these Cargo, says his company is seeing an increasing number of people, even the additional cost of airfreight is not a big deal.” requests to carry outsized cargo for the oil and gas industry, HISS clients include the manufacturers of helicopters, op- both in its scheduled and charter markets. erators of offshore oil rigs, medical organizations and assorted “We are seeing increased demand from the oil and gas companies involved in the trade of used helicopters. Kapota says business has been on the rise for the past few years, largely due to increased oil and gas ex- ploration, but there has also been a big market in fleet replacement. “Some fleets are getting replaced. That’s become a big business as better, more fuel-efficient aircraft are built.” HISS works with a variety of airlines, including Cargolux, Cathay Pacific, Sing- spore Airlines, Quantas, Korean Airlines and Emirates. The company also does full charters with companies using the An- tonov 124 such as Volga-Dnepr. Ruslan International oversees a lot of helicopter transport. HISS is a freight forwarder specializing in the shipment of helicopters. “We are seeing a continuing flow of movement of helicopters from all of the big manufacturers,” industry,” Manser says. “This potentially is because of the says Paul Furlonger, director of sales. “It’s relatively expensive reduction in full freighter services being offered by scheduled to move them by air rather than ship, but it’s much safer in operators. We also have increased requests from the construc- terms of handling and packaging and they are in operation tion industry, especially into the growth areas of Africa and the much quicker. We see it as a good, long-term business.” Middle East.” All of the major helicopter builders use airfreight at times, Manser says a recent urgent request to move oil-drilling including Bell Helicopter. A Bell spokeswoman says the com- equipment from Jakarta to , , posed a challenge. pany ships about 25 percent of the helicopters produced at “South America was a little off our normal operations, so its customization facility in Piney Flats, Tenn. Air shipment is it required very close coordination by our operations and chosen based on a customer’s personal preference or on the ground handling departments to ensure smooth opera- urgency. Typically, shipping by air is faster, one to three days, tions. We linked the flight to our scheduled flights from compared to two to three weeks if shipped by ocean, she says. North America so we wereable to provide a cost effective solution to our client.” ACW

20 JULY 2014 ACW Managing the combined AN-124 fleets ofANTONOV AIRLINES and VOLGA-DNEPR AIRLINES

T: +44 (0) 1279 682100 F: +44 (0) 1279 681139 E: [email protected] W: www.ruslanint.com Worldwide Flight Services is working to build its air cargo business in North America, identifying stations it wants to strengthen. Halfway done, how does 2014 look for air cargo?

By Adina Solomon [email protected]

ooking back at the first half ing company Strategic Aviation Solu- everything else.” of 2014, a common com- tions International. He says while there In April, there was a 6.7 percent plaint exists among many may have been an uptick in load fac- increase in volume and a 2.3 percent airlines, ground handlers tor during the first four to five months decrease in yield, according to figures and forwarders around the of 2014, that is only compared to last from WorldACD, air cargo market data world: dismal load factors and yield. year’s “abysmal” performance. experts. L“That’s what keeps me up at night “It’s not something that we should “As we all know, yield remains under anyways,” Vito Losurdo, UPS vice pres- be happy about – not at all,” Wraight pressure,” Gerard de Wit, managing ident of global airfreight, says. says. “We still see a hell of a lot of emp- director of WorldACD, says. “In fact, The load factor on most flights is still ty capacity, and that’s a real problem we have seen 10 consecutive months running about 50 percent, says Stan for the airlines and also the airports of year-over-year USD yield decline in Wraight, executive director of consult- and ground handling companies and combination with volume increases.”

22 JULY 2014 ACW featurefocus Midyear Report

WorldACD Index — Moving average last 12 months

120 Chargeable weight Revenue (USD) 110 Yield (USD) 100

May ‘13 — Apr’14 90 Weight 110.0 80 Revenue 98.8 Yield 89.8 70

Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014

Source: WorldACD Market Data Juha Jarvinen This is a moving average index eliminating seasonal patters. “The long-term trend shows that air cargo volumes today are at their highest level since 2008,” Gerard de Wit, managing director of WorldACD, says. Regional growth also sees a pros- ed to increase than the same period A lot of air cargo activity during the perous future in China, starting its in 2013, thanks to the recovery of Ja- first half of 2014 seems centered on first services to Hong Kong and to pan economy and hurried purchases Asia. Shanghai on June 11. of products by the consumers ahead “Asia sort of bounced back, but During the first four months of the of the April 2014 introduction of con- we’re sort of watching it very careful- year, China Southern Cargo’s freight sumption tax hike,” Yang says. “JAL ly,” Lise-Marie Turpin, vice president tonne kilometers (FTKs) grew by 11 has been capturing the demand and of Air Canada Cargo, says. “I think it’s percent year over year. its air cargo traffic is expected to in- fairly fragile. There could be softening “Since the beginning of this year, crease far more than the same period there fairly quickly.” China Southern Cargo has intensified of last year.” Kerry Logistics’ area of strength is freighter operations between China Southeast Asia and China. So far this and Europe to strengthen market year, the Hong Kong-based forwarder presence, at the same time has been has seen significant volume growth in optimizing its freighter network to export products worldwide. improve performance on Sino-U.S. “We know that China is a huge con- routes and tap into the emerging mar- sumer market, and we’re actually fo- kets,” a China Southern spokesperson cusing now on the consumable mar- says. ket,” David Mallinson, development Cargo has found good for- manager for UK air product, says. tune in Japan. “We’re doing this in high-street fash- “Our four daily Japanese flights to ion stores that have identified China is Tokyo, Osaka and Nagoya have had a great big developing economy.” strong growth demand, and this trend The air cargo market in Hong Kong has not declined even after the sales has proven strong for Hong Kong Air tax increase implementation in Japan Cargo Terminals Limited (Hactl) dur- in April,” Juha Järvinen, Finnair Car- Pukhraj Singh Chug ing the first half of the year, Chief Ex- go’s managing director, says. ecutive Mark Whitehead says. The carrier, with its main hub at “The growth of tonnage through- Helsinki Airport in Finland, has seen India’s air cargo market did well put at Hactl has come from three main 10 percent growth in freight volumes in the first four month of 2014, says sources,” Whitehead says. “Firstly, during the first five months of 2014. Pukhraj Singh Chug, managing direc- we attracted some additional airlines, Meanwhile at , de- tor of Group Concorde. In fact, the who joined in the early part of the spite a decrease in airfreight in some -based forwarder isn’t griping of year; the Gulf carriers have continued regions during Chinese New Year, de- low load factors – during this period, to put capacity into the market and mand is on track to recovery, Spokes- its load factor reached 105 percent. the Hong Kong-based carrier, Hong man Jian Yang says. “All routes ex India have been do- Kong Airlines, has shown very strong “The total demand from and to Ja- ing well with special emphasis on growth in the first half of 2014.” pan in the first half of 2014 is expect- growth to European Union, Africa

ACW JULY 2014 23 featurefocus Midyear Report

Yield Monthly Change — Year-on-Year

Percent Change vs. Chargeable Weight Yield (USD) Same Month, Previous Year 10%

5%

0

-5% Apr 2014 Weight +6.3% Yield -1.5% -10% Apr May JunJul AugSep OctNov DecJan FebMar Apr 2013 2014 2014 Vito Losurdo Source: WorldACD Market Data

Yields remain under pressure. “For year-to-date April, our figures show a 6.7 percent Järvinen says JFK, Finnair Cargo’s volume increase, combined with 2.3 percent yield decrease, resulting in a revenue increase for the first four months of 2014 of 4.2 percent,” de Wit says. North American gateway, has had a good start in 2014, momentum that and Southeast Asia,” Chug says. but I think there are times when it the carrier plans to continue for the The Middle East and Africa cargo just goes very flat,” Coyne says. rest of the year. markets are a little spottier. Latin America has mixed results. Wraight says the American econ- One of Coyne Airways’ main mar- “Even though export markets are omy is one of the bright spots of air kets is centered on defense operations growing – especially air export of cargo. in the Middle East. For the past de- both Chilean salmon and the Peruvian “The unemployment fell,” he says. cade, Afghanistan and Iraq performed asparagus – the market situation in “Everyone seems to be in a more up- well, CEO Larry Coyne says. South America is quite challenging, beat mood and willing to spend a few “But as soon as the Americans driven by the slowdown in Brazil and dollars compared to Europe.” pulled out of Iraq, I think that mar- a stagnation of cargo imports in the Much cargo activity is also concen- ket became pretty much saturated by region, which has been affected by the trated in Europe, Wraight says. Middle Eastern carriers, so it hasn’t weakening of local currencies,” Cris- Air Canada and American Airlines been great,” Coyne says. tián Ureta, CEO of LAN Cargo, says. are seeing robust cargo business Afghanistan has been a good market Expected cargo volumes associated there, and Butler says AA’s merger so far this year for Coyne. Iraq is down, with the FIFA World Cup did not pan with US Airways greatly expanded but he believes it will slowly progress out in Brazil, Ureta says. LAN Cargo the carrier’s European network. as it develops its oil resources. also sees overall weakness with im- WFS has a historically strong cargo At Lufthansa, FTKs from the Mid- ports from the U.S. and Europe into network in Europe. dle East are rising in the double digits, Latin America. “Everything is relative, but com- Andreas Otto, board member product At UPS, Asia Pacific routes into Lat- pared to the downturn that we had and sales, says. in America are faring better than last seen over the recent years, the eco- “Lufthansa Cargo has to compete year, mainly due to high-tech activity nomic recoveries both in Europe and with Middle East carriers – with grow- into Latin America, Losurdo says. the U.S. have translated into gains in ing belly and freighter capacities as As of press time, Worldwide Flight traffic volumes,” Nassberg says. well as increasing freighter services via Services (WFS) is working on an ac- UPS is seeing stronger growth in the EU to the Americas – but of course quisition that will put the ground han- Europe, which Losurdo attributes to also with numerous other big players, dler into South America’s air cargo the automotive and industrial manu- like Cargolux, , Air- market, COO Barry Nassberg says. facturing segments. Bridge or Air France/KLM,” Otto says. WFS is also working to build the Järvinen speaks of great growth But he says cargo demand is lower business in North America, identify- for Finnair over the 12-month period on routes from Europe to Africa. ing stations it wants to strengthen. ending in May: a 252 percent increase The African market has also been JFK in New York is now becoming a in freight tonnage out of Belgium and disappointing for Coyne Airways. focal point for cargo activity, Nassberg a 20 percent increase in Germany. “I think a lot of people rushed into says. The company expects business Coyne says the Caspian Sea’s oil Africa thinking it was going to boom, to grow substantially there in the next and gas market is steady but not and it has grown and it will continue, few months. spectacular, though there has been an

24 JULY 2014 ACW influx of new competition as airlines Air Cargo Volume Change Year-on-Year (YtD Apr 2014) 15% search for profitable routes. 12.4% “If they perceive it to be a good Chargeable Weight VUN = Vulnerables market, then they come in,” Coyne 10% AVI = Live Animals says. “I just feel our Caspian area is 6.1% 6.1% 6.7% DGR = Dangerous Goods a little bit overcrowded at the present 4.6% 5% VAL = Valuables time.” 2.3% PHARMA = Pharma 0 PER = Perishables Looking ahead AVI DGR General VAL PHARMA PER “Things can change very quickly in this business,” Turpin says of predict- -5% ing the air cargo market for the rest of -7.1% VUN 2014. “For right now, from what we’re -10% Source: WorldACD Market Data hearing from shippers and forwarders, “Special products continue to grow at a faster pace than general cargo. Our product they feel that the same trend will con- data shows that in the first four months of 2014, this growth was driven by valuables, tinue through to the end of the year.” pharma and perishables,” de Wit says. She feels guardedly optimistic about the rest of 2014 for Air Canada. Butler has a similar feeling. He is half of the year has a bigger effect load factor of 2.6 percentage points on the results of the full year, but he “due to better control of capacity,” feels bullish. Ureta says. “There isn’t an awful lot we can do “Operation of cargo aircraft was about economic cycles and about traf- reduced and it was favored the use fic levels because in the end, we’re of capacity in passengers aircraft, re- not the ones selling the cargo. It’s the sulting in cost savings,” he says. “To airlines that are doing that,” he says. make this a permanent efficiency, we “But there is a lot that we can do are working on a restructuring of our about maintaining the geographic bal- long-term freighter fleet.” ance, about spreading risk to a great Group Concorde ties much of its extent and about making sure that cargo activity in the next six months we’re present in the key areas that to new Indian Prime Minister Naren- our customers would like to see us.” dra Modi, who took office May 26. Mallinson of Kerry Logistics feels “The demand will be steady and ex- certain of an upcoming peak in the pected to increase further especially Lise-Marie Turpin airfreight market this year. But wor- in last quarter as India’s political sce- ries of a capacity shortage linger. He nario is changed. The new govern- “thrilled” about AA Cargo’s perfor- says there is lack of direct capacity on ment has been formed with major- mance in the first four months of Shanghai-Europe and Beijing-Europe ity and expected to bring reforms for 2014, especially with its integration. routes as airlines pluck freighters out strengthening of the Indian rupee and “I’m never going to envision that of operation. more trade into India,” Chug says. “We we can keep that kind of growth go- “There is overcapacity, however feel that Indian economy is going to ing for an infinite amount of time, but the market is that volatile that it only grow exponentially and much more we certainly have the team focused in takes somebody like Foxconn or Ap- stable with the new government.” the right direction,” Butler says. ple to release a new model, and all Despite much hesitant cheering for De Wit of WorldACD says a number of the sudden you’ve got a spurt in the rest of 2014, Wraight has other ex- of the newer cargo centers continue activity there. The freighters are full,” pectations: The worst of the year is to climb the ladder, including Oslo, Mallinson says. yet to come, especially because of the , Ho Chi Minh City, Quito and Ureta of LAN hopes that once the currency-weakening Ukraine crisis. Karachi, Pakistan. World Cup ends, the Brazilian econ- “I’m not too optimistic that we’re “Business confidence remains on a omy will become active again, allow- on the right footing right now,” he stable to positive level, GDP and ex- ing for cargo traffic growth during says. “There’s too much uncertainty port growth are returning in 2014 and the second half of 2014. LAN Cargo politically and economically to do in many of our key markets, demand also expects improvements in imports anything more than stick your finger is developing into the right direction,” from some of the Andean countries, in the air and hope for the best – see Otto of Lufthansa says. especially , Peru and Chile. where the prevailing winds are going Nassberg of WFS says the second The airline boasts of an increase in to blow.” ACW

ACW JULY 2014 25 Associations

Hughes focuses on full plate of initiatives By John W. McCurry [email protected]

he International Air Transport Asso- Another major item on Hughes’ agenda is ciation’s newly minted head of car- the push for a 48-hour reduction in transit Tgo, Glyn Hughes, plans to focus on time, a notion put forth by Vertannes at the the many initiatives set underway by his World Cargo Symposium in March. Hughes now retired predecessor Des Vertannes. says the first stage toward reducing transit This includes an overflowing plate of is- time is to develop a full analytical assessment sues that include the e-air waybill agen- of the situation, and find the potential pain da, safety, security and the moderniza- points and where improvements can be done. tion of agency programs. Hughes joined He says there is no magical solution and it will IATA in 1991 and has served in a variety require everyone working together and doing of roles, most recently as head of cargo a combination of things differently. distribution. “I have been incredibly pleased, as was “I had the privilege of working closely Des, about the way the industry has em- with Des for the past four years, and I Glyn Hughes braced this notion,” Hughes says. “It is imper- want to continue the path he has put us ative if we wan to insert air cargo as a first- on,” Hughes says. “We know we can’t do it alone. The stron- class product of freight movement around the world. The gest message Des gave is the need to collaborate, and we first thing we need to do is refresh the current assessment. will continue to collaborate. Solutions by the industry, for Where are the potential blockages? We know that aircraft the industry have much greater impact and have the oppor- can’t fly any faster. Therefore, we at least know the accelera- tunity to create the changes we are looking for.” tion of the process has to come on the ground. We need to Hughes says he is confident the industry can achieve its figure out how we can pre-clear and pre-notify and get cargo latest goal of achieving 22 percent e-AWB penetration by the into and out of the warehouse and onto the ramp.” end of 2014. The rate was 14.3 percent through April. Industry workforce development presents another challenge. “We have missed the industry targets that have been set, IATA’s FACE (Future Air Cargo Executives) program takes this and the whole industry underestimated the magnitude re- issue on, but he believes more work needs to be done. quired to achieve this. It doesn’t just involve one component; “All industries want to attract the best talent available. it’s the entire supply chain. When you put in all the various We have to look at all the studies coming out about the next supply chain components, it was a much more sizeable task generation workforce. It will be motivated by different fac- than we initially anticipated.” tors, including self-development and how they can make a Hughes says the effort continues to be paced on the air- wide impact on the community. If we get the proposition line side by the “frontrunners,” which include Emirates, Ca- right, we can satisfy those demands. Almost every aspect of thay Pacific, Korean Airlines, and others. how we live is impacted positively by air cargo, so air cargo He says IAG Cargo has shown tremendous growth over the can provide them the impact they are looking for.” past few months. Another area getting attention will be the development “North America is starting to pick up, and Delta has led of IATA’s cargo team, including who will take over Hughes’ the way there,” Hughes says. “We are pleased with the former role. growth across the board.” “When Des retired, we didn’t just lose an inspirational Modal shift has been a catchphrase at recent industry leader – we lost a very experienced professional. We need gatherings with statistics showing a movement toward to shore up our internal resources that we need to replicate oceanfreight. Hughes prefers to use the term “modal choice” that experience. We inherited a great team from Des.” and says the airfreight industry has some work ahead of it Hughes says Vertannes’ greatest legacy might be his push to make sure that it retains its status as a premium product. for collaboration within the industry. “There is a choice to be made about every box that comes “If you look back 10 years ago, IATA produced standards out of a manufacturing plant as to how it gets to its destina- in our conferences developed by airlines-only groups and tion. We need to be sure that air cargo is in there selling itself. endorsed by airlines-only groups and we tried to get every- The shift is a consequence of air cargo not selling itself as one in the supply chain on board. Now, we bring in multiple well as it should have been. We live in a competitive sector. participants in the supply chain. The actual quality of stan- Ocean has innovated at a greater rate than air cargo, you can dards being produced has been enhanced and have been argue. We have to increase our competitiveness so that when more readily implemented. It goes back to the theme of for it comes to modal choice, air cargo gets a better shake.” the industry, by the industry.” ACW

26 JULY 2014 ACW MITALY’S INDUSTRIAL, I L LOGISTICS A N AND FASHION 2 CAPITAL 0 PLAYS 1 HOST 4 TO

SUPPORTED BY SUPPORTED BY

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Michael Kerkloh Air France/KLM is carrying increased volumes of pharmaceutical cargo. “Special” cargo accounts for 51 percent of its cargo. Europe hits doldrums By Martin Roebuck

uropean airlines saw air volumes of airfreight in May and June North America. cargo demand fall by 0.7 than they did in April, according to However, Lufthansa Cargo con- percent in April com- Danske Bank’s monthly survey. firms a slowing trend. pared with 2013, accord- This leveling off in activity will “We saw a good start into the year ing to the International come as a disappointment following in both directions across the Atlantic,” Air Transport Association, partly a a strong start to the year. London Achim Martinka, vice president Ameri- resultE of GDP growth of 0.2 percent in Heathrow recorded a 4.4 percent vol- cas, says. “This halted in April, with a the Eurozone in the first quarter. ume increase in the first quarter, and very low increase ex-U.S. to Europe Analyst WorldACD shows that Eu- cited China, Russia and Mexico as the and even a decline into the U.S. The rope recorded the lowest growth fastest-growing routes. market has been difficult especially on among the world’s major regions in Frankfurt, Europe’s largest cargo the East Coast, and we also see declin- terms of April export tonnage, just 2 airport, maintained its first-quarter ing numbers in Canada and .” percent higher year over year, although growth trend at 4.5 percent in April, Lufthansa has opened up Gua- it ranked better for import cargo with driven by increases in volumes to dalajara, Mexico, and Lima, Peru, growth of 9 percent. And forwarders in and from China, Hong Kong, the as freighter destinations in recent Europe were expecting to shift lower Middle East, eastern Europe and months, but has withdrawn its Detroit

28 JULY 2014 ACW regionfocus Europe

go,” Kerkloh says, pointing out that Average load factor softened by Munich is one of the few central Euro- 0.9 percentage points to 67.7 percent pean airports with space to develop its last year, though this partly reflected infrastructure. the three new B747-8Fs that joined ABC has certainly got the message, the Cargolux fleet. The carrier also introducing a weekly Moscow-Munich retained a 747-400F on a power-by- B747 freighter service in May to com- the-hour basis that it had originally plement Atran’s four-times-weekly planned to dispose of, and added a B737 feeder services on the route. 747-400ERF on the same basis. This Denis Ilin, ABC executive presi- brought its freighter complement to dent, says the eastbound B747 de- 20, against the 16 budgeted. parts Munich at midday Friday, giving Chris Nielen, regional commercial John Lloyd European exporters end-of-week con- manager Europe for IAG Cargo, says nectivity to Asian destinations such as freighter, though it still has a daily Shanghai, Beijing, Chengdu, Zheng- passenger service. zhou, Hong Kong, Seoul and Tokyo. Continuing moderate demand and Trade between Russia and the rest surplus capacity is keeping yields un- of Europe was worth US$567 billion der pressure, Martinka says. “Due to (418.3 billion euros) in 2013, with this unsatisfactory situation, we will the Netherlands, Germany and Italy continue to review freighter capacity.” leading the way. ABC flies almost 60 Harry Hohmeister, Lufthansa’s chief percent of the airfreight heading in officer group airlines and logistics, told and out of Russia, and in addition to a media briefing in May that future Munich has launched scheduled ser- freighter requirements are under re- vices this year to Leipzig, Germany, view as new cargo-friendly passenger and Malmö, Sweden. aircraft take a greater market share. Building on its Europe-Asia growth, The group is taking delivery of ABC has also begun a Dallas-Moscow five B777 freighters, with options for service via Amsterdam and has added five more. “Given the current cargo a weekly Frankfurt-Chicago service to Chris Nielen markets, it will be a stretch to reach its five-a-week Moscow-Chicago rota- midterm financial goals,” Hohmeister tion. Ilin sees the Frankfurt-Chicago the trans-Atlantic market, although says. “We have to consider how cargo route growing quickly to two or three meeting volume expectations, is “still markets are changing.” services per week. challenging” thanks to excess capac- Munich is Germany’s second-larg- Despite the weakness of the French ity. Cargolux’s expansion, Emirates’ est passenger airport after Frankfurt, economy, ABC is also targeting Paris new freighter service to Atlanta via but fails to attract its share of cargo, for an increase of at least one more Frankfurt and the seasonal increase in believes airport CEO Michael Kerk- freighter per week in addition to the passenger services by U.S. carriers are loh, despite a large catchment area present three. The carrier is closely all pressurizing rates. covering Switzerland, northern Italy, watching Air France-KLM’s cutbacks Germany has been the best-per- Austria, the Czech Republic and the to its freighter fleet and is keen to of- forming export market in mainland Balkan states. fer French exporters continued main- Europe so far this year, ahead of Major manufacturers including deck access to Asia. France and Italy, Nielen says. IAG BMW, Audi, Adidas, Siemens, MAN Cargolux’s full-year figures for is generating good loads for South and Airbus Helicopters are based 2013 show that maintaining yields is America, served from ’s Madrid close to Munich. Yet goods produced the primary challenge for all Europe- hub, and he says yields are healthier in this industrial heartland are an carriers. Although it returned to than on the north Atlantic. routinely trucked to Frankfurt, profit during the year, the company’s Iberia has increased its ser- Amsterdam or Paris, and the only revenue growth of 14.4 percent sig- vice to daily and is launching services freighter operators calling at Munich, nificantly trailed the increases of 16.7 four times a week to , Uru- aside from the integrators, are percent in tonnage uplifted and 18.7 guay, and five times a week to Santa AirBridgeCargo (ABC), its sister percent in FTKs. Cargolux president Domingo, Dominican Republic, from airline Atran and Cargolux. and CEO Dirk Reich said, “We don’t September, taking IAG Cargo’s Latin “We are determined to put more expect market conditions to improve America network to 16 stations. emphasis on the development of car- significantly in 2014.” The new routes will be served by

ACW JULY 2014 29 regionfocus Europe

mirates-owned , which entered the ground handling market in the U.K. only in E2010, handled 390,000 tonnes of cargo in the financial year to March 2014. Gary Morgan, CEO Russia’s Atran is among cargo carriers serving Munich. of dnata U.K, expects the company to expand beyond the half-million-tonne mark this year after investing more than $13 million in new and improved facilities. A330 and A340-300 aircraft, offer- to complete a new handling facility ts began moving into three new facilities at Lon- ing up to 12.7 tonnes of capacity on in Paris next year. don Heathrow’s “Dnata City” at the start of this year, the Santo Domingo route, and up to Like IAG Cargo, AF-KL is trying and Emirates transferred its operations there in early 11.7 tonnes to and from Montevideo. to exploit opportunities in Latin June. The 210,000 square feet of new units are in Main cargo is expected to be meat, America. It now operates a weekly addition to existing facilities for Cathay Pacific, Virgin fruit, vegetables and leather goods. freighter from Schiphol to Curi- Atlantic, and new client Turkish Airlines. IAG is promoting its Constant tiba, Brazil, and has added belly- Morgan says dnata picked up the cargo contracts Climate temperature-controlled hold capacity to Santiago, Panama in 2013-14 for two new U.K. startups, Philippine Air- service to pharmaceutical export- City and Brasilia, Brazil, in recent lines and Aeromexico, began handling Qatar Airways ers in Belgium, Switzerland and months. across the entire country, and successfully tendered Italy, with the U.S. East Coast the To help further its ambitions in for Bangladeshi national carrier Biman, , and major destination. Increased bel- the region, the group is intensify- AV Cargo. ly capacity out of Tel Aviv, Israel, ing its partnership with Delta Air Dnata has relocated to larger refurbished facili- which has gone up from an A320 Lines. “Not every Skyteam carri- ties at Manchester, and has opened new facilities at to a B777, has also been helpful in er has exactly the same range of London Gatwick, East Midlands, Birmingham, New- this regard, Nielen says. [cargo] products, but we want to castle, and Glasgow. Global airfreight yields were improve our interline capability on “We didn’t feel we could offer a full service with down by 5.7 percent in the first express and pharma, in line with a presence only at Heathrow and Manchester,” Mor- quarter compared with Q1 2013, ac- how the passenger alliances func- gan says. “So we decided to invest in warehouses cording to the Cass Freight Index. tion,” Varwijk says. across the country, backed by road feeder services, Air France-KLM suffered erosion of saw a 3 per- allowing us to serve local manufacturers.” “only” 3.5 percent, helped in part by cent increase in tonnage out of Around 25 percent of dnata’s work now involves a focus on higher-revenue express the EMEA region in “a challeng- inter-airport movement. The company runs its own and temperature-controlled prod- ing market,” John Lloyd, director in-house trucking operation from its Manchester and ucts, Erik Varwijk, executive vice of cargo, says. “So far this year, Heathrow hubs, currently extending to 14 tractors president of cargo, says. we have doubled our perishables and 18 trailers but “growing by the week,” Morgan Three years ago, AF-KL carried traffic from Amsterdam and seen says. 42 percent “special” cargo, which a healthy increase in general cargo Dnata moves some temperature-controlled prod- it categorizes as express, mail, from Frankfurt, Paris and Vienna. ucts, mainly perishables such as seafood that have to pharmaceuticals, perishables, live “Inbound from New York to be transported at below 8 degrees. Morgan says 15- animals, valuables and aerospace London, we are also carrying more 25 degree facilities will now be developed, initially products. That ratio is now up to cargo destined for markets such as at Heathrow, in response to client requests about 51 percent, largely because of in- Amsterdam and Brussels,” Lloyd pharmaceutical shipments. creased pharmaceutical volumes, says. “We expect the upwards An independent commission is currently consider- Varwijk says. trend on these routes to continue. ing options for meeting south-east England’s future The group has new pharma “Overall, our origin traffic from airport needs, including an all-new airport in the centers at its two home hubs Am- Europe to the U.S. and from the Thames estuary, but Morgan says there is only one sterdam Schiphol and Paris CDG. U.S. to Europe has increased viable solution. “Heathrow is best placed to build Meanwhile, international express considerably so far this year. an additional runway,” he insists. “It will be better operator Sodexi, majority-owned Yields, however, remain a concern value, better environmentally, and the road infra- by AF-KL with French post office given the amount of capacity in structure works well.” Geopost also holding a stake, is set the market.” ACW

30 JULY 2014 ACW AMERICA INVENTED AVIATION. WE’RE GOING TO KEEP REINVENTING IT.

As we continue to grow our diverse portfolio of cargo products, we are committed to investing in our premium product offering for customers worldwide.

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Carrying Europe Total Freight Carried Monthly year-over-year percent change in overall freight traffic Monthly year-over-year percent change in total scheduled freight traffic and Asia-Pacific freight traffic for European airlines. and capacity worldwide in freight-tonne kilometers and available-tonne kilometers.

6 8 Capacity 7 5 Traffic 6 4 5 3 4 3 2 Overall 2 1 Asia-Pacific 1 0 0 6/13 7/13 8/13 9/13 10/13 11/13 12/13 1/14 2/14 3/14 4/14 6/13 7/13 8/13 9/13 10/13 11/13 12/13 1/14 2/14 3/14 4/14

Source: Association of European Airlines. Source: IATA. Sales Distribution Carrying Asia Air cargo worldwide change Year-over-Year (April 2014) Monthly year-over-year percent change in capacity, in available-tonne Chargeable Weight Yield (USD) kilometers, and traffic, in freight-tonne kilometers, of Asia-Pacific airlines. 7.0

6.3% 6.3% 5.5 7 6 Capacity 4.0 5 Traffic 4 2.5 3 2 1.0 1 0 0 -1 -1.5 -1.3% -1.7% -2 -2.0 Global Top-20 Forwarders Total of all other Forwarders -3 6/13 7/13 8/13 9/13 10/13 11/13 12/13 1/14 2/14 3/14 4/14

Source: WorldACD Market Data. Source: Association of Asia Pacific Airlines. Yield Index Regions Air Cargo (USD) Yield Index (Jan 2008 = 100)

125

111

97 96.1 94.7 89.2

83

Middle East & South Asia to Europe 69 Europe to Middle East & South Asia Europe to North America

55 Jan Jan Jan Jan Jan Jan Jan Mar 2008 2009 2010 2011 2012 2013 2014 2014

Source: WorldACD Market Data.

32 JULY 2014 ACW bottomline

Fuel Cost For U.S. Carriers U.S. Airlines Monthly year-over-year percent change in domestic Cost per Gallon (Dollars) and international cargo traffic for U.S. airlines. 3.08 8 7 3.04 6 Domestic 5 International 2.99 4 3 2.96 2 1 0 2.92 -1 -2 2.89 6/13 7/13 8/13 9/13 10/13 11/13 12/13 1/14 2/14 3/14 4/14 -3 -4 6/13 7/13 8/13 9/13 10/13 11/13 12/13 1/14 2/14 3/14 4/14

Source: U.S. Bureau of Transportation Statistics. Source: Airlines for America. Growth Per Region Semiconductors Air Cargo Chargeable Weight Change Year-Over-Year Worldwide monthly year-over-year percent change in sales of semiconductors and month-to-month percent change. 10 Apr 2014 Year-to-Date Apr 2014 12 8 10

8 6 6 M-T-M Y-O-Y 4 4

2 2 0

-2 0 6/13 7/13 8/13 9/13 10/13 11/13 12/13 1/14 2/14 3/14 4/14 Asia Central & Middle East & North Worldwide Africa Pacific South America Europe South Asia America

Source: WorldACD Market Data. Source: Semiconductors for Industry Association.

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ACW JULY 2014 35 peopleevents

AIRLINES department. Throughout his years of Gary Lupinacci joined Consoli- WestJet appointed Rocky Wiggins service with the airline, he held vari- dated Aviation Services, a ground as executive vice president and chief ous positions including UK station handling company, as vice president information officer. manager, group head cargo and flight security and government compliance. Wiggins joins WestJet services and chief officer operations. Lupinacci will be responsible for com- from Minnesota-based MASkargo announced the resig- pliance with the U.S. Transportation Sun Country Air- nation of Mohd Yunus Idris as CEO. Security Administration, U.S. Customs lines, where he held His last day at the company was June and airport authority regulations. Lu- the position of chief 10. MASkargo gave no reason for Idris’ pinacci has been in the aviation indus- information officer resignation. He is a 30-year veteran of try for over 40 years and served with starting in 2012. Prior Group, having be- the TSA in Washington with the Of- WIGGINS to Sun Country, he gun his career as property controller fice of Security Policy & Indus- was senior vice president and chief in- based in . He was made try Engagement Division, where formation officer at AirTran Airways. acting CEO of MASkargo in November he helped develop the Certified Cargo Wiggins also held various positions 2011, and was officially announced as Screening Program. over a 20-year career with US Airways. MASkargo CEO in August 2012. Hakan Bicil was appointed as chief Michael Basoco joined South- commercial officer of CEVA Logistics, west Airlines as director of cargo AIRPORTS where he will be responsible for lead- sales. Basoco joins John Holland-Kaye has become ing the company’s global sales orga- from Saudi Arabian Airlines Car- the new CEO of London Heathrow nization. Bicil has more than 20 years go, where he spent the last three years Airport. Holland- of experience in supply chain and lo- leading its Americas region. Prior to Kaye was previously gistics managerial positions. He joins that, he served as director of global car- development director. CEVA from Panalpina, where he was go sales for Continental Airlines, where He joined the airport executive vice president, head of strate- he spent 18 years. as commercial direc- gic business development. Prior to this Tarik Parlak became regional tor in May 2009. Be- role, he worked at Toll Global For- cargo manager, Central and Southern fore coming to Heath- warding and Kuehne + Nagel. Europe at Turkish Cargo. Prior to row, Holland-Kaye Revere, Mass.-based freight for- HOLLAND-KAYE was divisional CEO warder OCEANAIR, Inc. and com- with Taylor Wimpey PLC, operations pany president Ed Kaplan were the director at Taylor Woodrow PLC and recipients of the transportation sup- divisional managing director at Bass plier of the year award from window Brewers Ltd. film manufacturer Madico in Woburn, Mass., during Madico’s customer appre- THIRD PARTIES ciation day. Maarten Jan de Vries joined TNT Purolator International Presi- PARLAK GURKAN Express as CFO and member of the dent John Costanzo was named by this, Parlak served as regional manager executive board. Jan de Vries has broad Long Island Business News as one of cargo, Africa. Mehmet Gürkan will international business experience and the 2014 Outstanding CEO Award win- succeed Parlak in that position. He was a strong background in finance. Jan de ners. Costanzo was honored for help- previously Turkish Cargo’s cargo mar- Vries, a Dutch national, was previously ing Purolator International grow its keting and sales supervisor at Sabiha CEO of TP Vision, a joint venture be- U.S. presence. He joined the company Gökçen International Airport in tween TPV and Royal Philips. Prior to in 2001. Istanbul. this, he held various roles in Royal Phil- Cargo Aircraft Management, Manuel Agius became ’s ips, including chief information officer, Inc., the aircraft leasing arm of Air chief officer cargo. Agius will be re- chief supply officer and divisional CFO. Transport Services sponsible for cargo sales and opera- SPARX logistics, an international Group, Inc. (ATSG), tions and is being entrusted with set- transportation and logistics company hired industry veter- ting up the division as an independent based in Hong Kong, hired Tony G. an W. David Bucher business unit. Air Malta intends to Bikhazi as chairman. Bikhazi brings as COO. Bucher will give added importance to the cargo over 45 years of experience in the glob- replace William Tar- division and strengthen it. Agius has al transportation industry, including 20 pley, who is leaving over 30 years of experience in the years with Globe Express Services, to pursue other op- BUCHER aviation industry. He was one of the from which he retired in 2011 as presi- portunities. Bucher very first Air Malta recruits in 1973, dent, the Americas. He began his lo- has over 30 years of experience in the joining the airline’s International gistics career in 1967 with an interna- commercial aviation industry. Prior to Air Transport Association Affairs tional air cargo company. joining Cargo Aircraft Management,

36 JULY 2014 ACW peopleevents

events

SEPTEMBER 16-18 al’s Annual Global Conference provides DECEMBER 10-13 Princeton, N.J.: LogiPharma is a supply chain industry information with New Delhi: With more than 11,000 supply chain conference for pharma- practitioners, academics and service visitors in 2013, CeMAT India is an in- ceutical companies in North America. providers. For more information, visit ternational trade fair covering materials Now in its 13th year, LogiPharma covers http://cscmp.org/annual-conferences/ handling, warehousing and logistic ser- a range of supply chain topics including annual-global. vices, and other fields. For more informa- risk management, emerging markets and tion, visit www.win-india.com. cold chain. For more information, visit OCTOBER 7-9 http://logipharmaus.wbresearch.com. Seoul: The 27th International Air FEBRUARY 10, 2015 Cargo Forum and Exposition will attract Enschede, The Netherlands: The SEPTEMBER 17-19 people from the airfreight industry in Unmanned Cargo Aircraft Conference Milan: The 2014 Air Cargo Handling one of the world’s fastest-growing air teaches participants about unmanned Conference will feature panel discussions, cargo hubs. For more information, visit cargo transport. For more information, workshops and presentations covering www.tiaca.org/tiaca/ACF.asp. visit www.ucaconference.com/. the most up-to-date developments in air- port cargo operations. For more informa- OCTOBER 12-14 MAY 5-8, 2015 tion, visit http://evaint.com/our-events/ Kuala Lumpur: The Freight Summit Messe Munchen, Germany: Air air-cargo-handling-conference. is about making it easier for independent Cargo Europe has more than 50,000 freight forwarders to network. For more visitors from 110 countries. For more SEPTEMBER 20-23 information, visit www.thefreightsum- information, visit www.aircargoeu- Chicago: 2014 will see World Routes mit.com/. return to the U.S. for the second year rope.com/. in a row after the Las Vegas event in OCTOBER 13-18 NOVEMBER 4-6, 2015 2013. For more information, visit www. Istanbul: Themed “Sustainable Miami: The Air Cargo Americas In- routesonline.com/events/170/world- Growth in Logistics,” the annual FIATA ternational Congress and Exhibition in routes-2014/. World Congress will feature regional 2013 was the largest air cargo exhibition meetings and an airfreight institute. in the Western Hemisphere. For more SEPTEMBER 21-24 For complete information, visit San Antonio, Texas: The Council of www. information, visit www.aircargoameri- Supply Chain Management Profession- fiata2014.org/Default.aspx. cas.com/.

he worked at Air Transport Inter- Logistics provider MNX appointed over the past decade and most re- national, Inc., an airline subsidiary Paul J. Martins as CEO. Martins is cently served as CEVA Logistics’ of ATSG. Bucher also has held roles a 29-year veteran in the international senior vice president of business with and FedEx. logistics industry. His career includes development, U.S. and Canada. Wil- Wendy Bateman became manag- leadership positions at UPS, Mer- son Lee was hired by AIT to serve ing sales director at Airport Termi- cury Air Cargo, Inc., Towne Air as vice president of Asia Pacific. In nal Services (ATS). Bateman will Freight and most recently at Pacific this newly created role, the 15-year lead the sales growth strategy focus- Logistics Corp. logistics veteran will spearhead con- ing on expanding the ATS ground Bill Fallon assumed AIT World- tinued expansion throughout China handling services portfolio. Prior to wide Logistics’ newly created po- and the surrounding region. Lee has joining ATS, she began her career sition of vice president, global and held many leadership positions, in- in the health services and property government strategic accounts. Fal- cluding prior executive roles as vice management industries. For the past lon has more than 20 years of global president of business development seven years, she has worked in the logistics operations experience. He and vice president of air procure- waste and recycling industry. has held numerous senior positions ment, Asia Pacific. ACW

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ACW JULY 2014 37 forwarders’forum

Every dog has its day

ver since the 9/11 Commission mandated that the U.S. Transportation Security Administration screen E 100 percent of all cargo on passenger flights, the air cargo industry has worked diligently to meet the govern- ment’s security objectives by spreading the screening re- sponsibility down the supply chain. As an example of what has been done, in the wake of the 9/11 Commission Act that was passed by Congress in 2007, TSA created the Certified Cargo Screening Program Brandon Fried is the executive (CCSP), which permitted certified freight companies to director of the U.S. Airforwarders Association screen cargo away from the airport. The legislation also al- lowed screening to be performed through a variety of meth- ods including physical inspection, X-ray and explosive trace detection technology. Use of specially trained dogs was also shelf, assuming its expense outweighs industry demand. deemed as an acceptable way to screen air cargo, but TSA I am not so sure they have it right. That cost estimate has permitted only the use of its own dogs, and only at the likely figures that each forwarder would have to purchase, airport, thereby denying forwarders and Certified Cargo shelter, care for and feed their pooches. But if this were Screening Facilities the ability to own and use dogs in their allowed to go forward, I suspect there would emerge a vi- own cargo-screening processes. able pooled solution with forwarders in specific geographic Technology suited for screening is highly effective and locations banding together to support a mobile provider continues to evolve with manufacturers frequently introduc- capable of bringing the canine to each facility one or more ing new forms of machinery accepted by TSA and purchased times a day. The shared cost and collective savings offered by CCSP screeners. But in addition to its cost and recertifi- to the forwarders, and the upside screening revenue po- cation requirements, the continuing challenge continues to tential, would make this a worthwhile business investment, be lack of TSA-approved devices capable of screening full provided TSA gives its permission. pallets containing multiple commodities. This means that Lest you think that canine screening is a static, old school boxes need to be individually scanned before being consoli- screening option, it appears that dogs are figuring into one dated onto shipping pallets. The process is time-consuming of the more interesting technologies to come down the pike. and labor-intensive for those doing the screening. There are licensed U.S. companies training detection ca- In May 2011, the University of California School of Policy, nines and in Europe, a process called Remote Air Sampling Planning and Development conducted a research analysis for Canine Olfaction, which can vastly increase the amount of TSA’s explosive detection canines. The study concluded of cargo that a single dog can screen in a brief period of that dogs are the most cost-effective option among a range time, has shown promising results in France and the UK. of explosive-screening methods, some of which can cost Known as REST or RASCO, the technique involves having twice as much as canine screening over a 10-year period. canines sniff air samples collected in special filters from car- The study also concluded that privately trained and certi- go, thereby saving the dog from having to visit each piece. fied canines are capable of being used as a primary screen- Regardless of the method used, private canines can ing method on a wide scale. play a vital role in providing an effective tool in the cargo- In 2011, TSA ran a pilot program to test the feasibility screening chest. TSA-owned canines are limited in number, of implementing a third-party private explosive detection busy at airport passenger terminals and are shared with canine program that would make explosive detection dogs airline freight facilities as time and availability permit. available to screen all cargo before it goes on passenger The U.S. Government Accountability Office recently re- and all-cargo aircraft. Objectives included a determination ported that the delay in implementing privately-owned dogs of the industry’s capability to use private canines to screen within the Certified Cargo Screening Program is leading to air cargo in accordance with TSA screening requirements, a missed opportunity to expand canine resources, create identification of standards for program implementation and private sector jobs and leverage the private sector toward an assessment of TSA resources to implement the program. better air cargo security. TSA needs to finalize its efforts The TSA canine pilot program provided all the informa- to develop a certification program for private companies to tion TSA needed to improve and implement a third-party enable them to use their own canines, certified to TSA stan- solution. Unfortunately, the annual cost for this has been dards, to meet federal air cargo screening mandates. Lever- pegged at US$5 million (3.6 million euros), and accordingly aging private sector resources will introduce much-needed the agency seems to have placed the private dog idea on the additional canines into the cargo screening system. ACW

38 JULY 2014 ACW

The Magazine international edition

Oct of Choice Ober 2013

INTERNATIONAL EDITION

MARCH 2014 Top 50 Cargo

New airport cargo Airports INTERNATIONAL EDITION facilities scarce

INTERNATIONAL EDITION

FEBRUARY 2014 APRIL 2014 ng trade and Balanci e sky security in th ACE Awards honor industry’s stars KEEPING COOL Biologic drugs driving ExpressConnectivity market propels growth of airfreight niche regains footingMiddle East Total e-AWB adoption still a hurdle

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