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World Report Currency and fuel swings shift dynamics

Changing facilities Asia’s handlers adapt LCCs and cargo Handling rapid turnarounds

Cool chain Security technology Maintaining pharma integrity Progress and harmonisation

635,1*‡WWW.CAASINT.COM www.airbridgecargo.com

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AirBridgeCargo is a member of IATA, IOSA Cool Chain Association, Cargo 2000 and TAPA Russia +7 495 7862613 USA +1 773 800 2361 +49 6963 8097 100 +86 21 52080011 IOSA Operator The +31 20 654 9030 +81 3 5777 4025 World Airline PARVEEN RAJA Cargo Report Currency and fuel swings shift dynamics Publisher Changing facilities [email protected] Asia’s handlers adapt LCCs and cargo Handling rapid turnarounds

Cool chain Security technology Maintaining pharma integrity Progress and harmonisation

635,1*‡WWW.CAASINT.COM SIMON LANGSTON PROMISING SIGNS Business Development Manager here are some apparently very positive trends highlighted [email protected] and discussed in this issue of CAAS, which is refreshing for a sector that often goes round in circles expressing frustrations PAM LATTY T about its lack of progress in various areas. The World Airline US Sales Director Cargo Report (pages 4-14) discusses not just the volume [email protected] growth and changing patterns, but also the potential for improving SURÀWDELOLW\ IURP ORZHU IXHO SULFHV DQG WKH IRFXV RQ KLJKHU\LHOGLQJ BHAVI ATUL WUDIÀF7KDWLVDWKHPHDOVRUHÁHFWHGLQWKH$VLDUHJLRQDOIRFXV SDJHV Conference Coordinator 36-39), where several cargo handlers highlight their investments not just [email protected] EDITOR’S NOTE in cool-chain facilities but also in their express capabilities, where they SHOBHANA PATEL VHH JURZWK IURP HFRPPHUFHUHODWHG WUDIÀF EHFRPLQJ D VLJQLÀFDQW Head of Finance IDFWRU ,QGHHG RQH FKDOOHQJH LGHQWLÀHG WKHUH ZDV LQ FRSLQJ ZLWK fi [email protected] the current levels of growth and the innovative approaches taken to manage that within growth-restricted operating environments. CHARLOTTE WILLIS 7KH6HFXULW\DUWLFOH SDJHV KLJKOLJKWVWKHVLJQLÀFDQWSURJUHVV Events Administrator that has been made by technology companies and equipment [email protected] PDQXIDFWXUHUVLQWKLVÀHOGDVZHOODVWKHSRWHQWLDOIRUIXUWKHUSURJUHVV from greater global harmonisation and standardisation. That lack of SHELDON PINK Creative Director JOREDODOLJQPHQWLVDPDMRUIDFWRUFXUUHQWO\OLPLWLQJWKHFRQÀGHQFHRI [email protected] companies to make the major investments needed to move progress forward more quickly. The Low-cost carrier article (pages 16-18) highlights some setbacks and challenges faced by cargo handlers in this area, but also the potential to engage with this expanding section of the airline business as those airlines’ business models evolve. Address changes and subscription orders to: [email protected] The ULD article (pages 46-48) highlights how the latest generations of ISSN 2054-8958 lightweight containers are further encouraging airlines to outsource their control and management. In terms of technology to track containers EDITORIAL CONTRIBUTORS – and consequently the cargo inside them – ULD pooling companies Martin Roebuck, Mike Bryant now appear to be dismissing RFID as an option, but trials using GPS to and Michael Webber track containers are showing some positive signs. Interestingly, the sea PUBLISHED QUARTERLY BY freight business is also making progress with container tracking, with EVA International Media Ltd major global shipping line CMA CGM rolling out “smart” containers Boswell Cottage, 19 South End ZLWKLQLWVÁHHWRIER[HV$QGVRDLUIUHLJKWPD\QHHGWRÀQGDVROXWLRQ Croydon, , CR0 1BE, UK TXLFNO\ DV LWV VHD IUHLJKW FRXVLQ ÀQGV D ZD\ WR RIIHU FXVWRPHUV WKH Tel: + 44 (0) 20 8253 4000 visibility that they crave on their shipments’ progress. Fax: + 44 (0)20 8603 7369 So, taken as a whole, there seem to be some positive trends Website: www.evaint.com and genuine signs of progress in several areas of the air freight PRINTED BY EXVLQHVV LQFOXGLQJ GHPDQG SRWHQWLDO SURÀWDELOLW\ DQG RSHUDWLRQDO Headley Brothers HIIHFWLYHQHVV DQG HIÀFLHQF\ :LWK HIUHLJKW DOVR QRZ DSSDUHQWO\ The Invicta Press, Lower Queens Road PDNLQJ JHQXLQH SURJUHVV ² DQG JHQHUDWLQJ VLJQLÀFDQW RSHUDWLRQDO Ashford, Kent, TN24 8HH, UK HIÀFLHQFLHVDFFRUGLQJWRVRPHFDUJRKDQGOHUV²WKHVORZO\HYROYLQJ air freight business seems to be waking up to the potential that new DISTRIBUTED BY technologies can bring.Q Asendia WILL WATERS EVA INTERNATIONAL MEDIA LTD PUBLISHERS & EVENTS SPECIALISTS Editor [email protected] Issue 8 © 2015 | www.caasint.com & [email protected] Content may not be reproduced in any format without written permission from EVA International Media Ltd

6SULQJ‡ CARGO AIRLINE SERVICES 1 4

4 WORLD AIRLINE CARGO REPORT: Fueling air freight’s recovery Currency swings and cheaper oil bring new challenges and trends

14 LOW-COST CARRIERS: Hard to handle Cargo remains a diffi cult challenge for many LCCs

18 SECURITY: Seeking global alignment Further standardisation will speed up progress in scanning technology

26 NORTH AMERICA FOCUS: Integrated business US cargo airports are still dominated by integrator and hubs

36 ASIA FOCUS: Changing facilities Cargo handlers respond as pharma and e-commerce shipment demand grows

40 COOL CHAIN: Maintaining integrity As pharma continues to expand, so do its regulatory requirements

46 ULD UPDATE: Lightening the load Developments in materials are accelerating airlines’ decisions to outsource

2 CARGO AIRPORTS AIRLINE SERVICES ‡6SULQJ Origin Content FRA CARGO

Remarks WE HANDLE Cargo Services WITH www.fraport-cargo.de CARE

PLAYING BY THE RULES

Safety made in Germany. We work in compliance with strict German and European aviation regulations. Our continuous training programs and refresher training keeps us up-to-date in all safety matters. Your benefit: faster processing and a trouble-free service! Fuelingrecovery air freight’s Air cargo is conomic conditions of weakness in the air freight data as the showed considerable year closed in December, albeit boosted in

CARGO REPORT CARGO REPORT growing again, but variation globally in 2014, part by uncertainty and backlogs caused by WORLD AIRLINE WORLD AIRLINE global economic E but the environment for 86ZHVWFRDVWSRUWFRQJHVWLRQGULYLQJVRPH air freight demand was temporary conversion from sea to air. uncertainties and supportive overall, particularly for some The picture has also become complicated regions and trades. Global freight tonne in recent months by the rapid drop in oil YDULDWLRQVVLJQLÀFDQW kilometres (FTKs) expanded 4.5% in 2014 prices and currency swings, including the currency swings, FRPSDUHGWRDFFRUGLQJWR,$7$ÀJ drop in the value of the Euro, the Japanese XUHVDVLJQLÀFDQWLPSURYHPHQWRQJURZWK Yen, and the Russian Rouble against other and the oil price of just 1.4% in 2013, although average major currencies including the US Dollar, general cargo yields remain depressed. Sterling and the Swiss Franc. decline will bring &RQFHUQV KDYH UHHPHUJHG DERXW WKH further challenges, health of the global economy in early 2015 Yen weakening boosts exports DQG FHUWDLQ EXVLQHVV FRQÀGHQFH LQGLFHV 7KH ZHDNHQLQJ RI WKH

and new trends, $LUOLQHIRFXV&DWKD\3DFLÀF$LUZD\V writes Will Waters James Woodrow, director of cargo Main issues and trends over the last 12 months: The year started very slowly in Jan- uary and February 2014, but improved from March onwards and culminated in a good peak season in Q4. TPAC was assisted by the US west-coast port congestion DQGWKHLPSURYLQJ86HFRQRP\2YHUDOOFRPSHWLWLRQUHPDLQHGÀHUFHDQGRQO\ really in Q4 did demand outstrip supply and therefore drive up rates. Our belly capacity has continued to grow as we receive further B777-300ER and A330-300 aircraft. This has further strengthened our intra-Asia and longhaul QHWZRUNV:LWKDIXOOÁHHWRI%IUHLJKWHUVRXUWUDQVSDFLÀFIUHLJKWHUFRYHU age has continued to grow, with expansion into MEX, GDL and LCK and further capacity into key hubs such as ORD, LAX and JFK.

Main issues and trends for the coming 12 months: Competition is expected WRUHPDLQWRXJK7KH$VLD(XURSHWUDGHODQHUHPDLQVWKHPRVWGLIÀFXOWZLWKD multitude of players – some of which continue to expand aggressively – and JHQHUDOO\ZHDNGHPDQG/RZHUIXHOSULFHVZLOODVVLVWWKHSURÀWDELOLW\RIDOORSHUD tions, however, particularly freighters, where it makes up a large proportion of the overall costs. Security and safety issues will remain top of the agenda for cargo, be it lithium batteries, or TSA and other national bodies’ requirements, etc. ,QRXUPLOOLRQWRQQHFDSDFLW\&DWKD\3DFLÀF&DUJR7HUPLQDO &3&7  LQ+RQJ.RQJRSHUDWHGVPRRWKO\IRUWKHIXOO\HDU,Q-DQXDU\RXUÀUVWODUJH third-party customer, EVA Airways, started operations. CPCT is the most advanced cargo handling terminal in the world and we will continue to work hard to further improve service levels for our customers. Further third-party customers are expected to join over the coming years.

&DWKD\3DFLÀF'UDJRQDLUFRPELQHGWUDIÀF Cargo and mail carried:WRQQHV  Cargo and mail revenue tonne km (000):  $YDLODEOHFDUJRPDLOWRQQHNP    Cargo and mail load factor:DULVHRISHUFHQWDJHSRLQWV

4 CARGO AIRPORTS AIRLINE SERVICES ‡6SULQJ WORLD AIRLINE CARGO REPORT

INTERNATIONAL - Airline group focus: Air -KLM SCHEDULED FREIGHT Main issues and trends: Overcapacity is the main problem carriers are facing. *HQHUDWLQJÀHUFHFRPSHWLWLRQLWEULQJV\LHOGVGRZQDQGWKHHFRQRP\RIDLU TONNES CARRIED (2013) cargo transportation is therefore much affected. Overcapacity will remain a problem most probably for quite a few more years. Europe still suffers more RANK AIRLINE THOUSANDS than other regions in the world because the economical situation in Europe is 1 2146 weaker than elsewhere, and that directly affects the airlines’ cargo activity. %LJÁXFWXDWLRQVDOVRLQWKH(8586'UDWHRIH[FKDQJHDQGTXHVWLRQVDERXWWKH 2 FEDERAL EXPRESS 1970 ÁXFWXDWLRQVRIRLOFRVWVDUHDOVRQHZHOHPHQWVDSSHDULQJRQWKHPDUNHWPDNLQJ 3 UPS AIRLINES 1404 WKHVKRUWWRPHGLXPWHUPYLVLRQGLIÀFXOWWRSUHGLFWDQGWDFNOHLQVRIDUDVQRRQH 4 1365 knows presently how long time each phenomenon will last. 5  6 1197 Estimated cargo tonnage carried for full year 2014: There will be probably a 7 AIRLINES 1092 slight decrease in 2014 vs. 2013, all the more so due to the 15-day pilot strike in September 2014, with around 1.25 milion tonnes estimated for AFKLMP Cargo in  1002 2014 compared with 1.3 million tonnes in 2013. 9 991 10 ASIANA  Average cargo load factor:  HVWLPDWHG LQYVLQ 11 LAN AIRLINES  12 726 Main hub handling capacity: Maximum handling capacity of ‘G1XL’ AF Cargo 13 EVA AIR 714 warehouse at CDG is 1.4 million tonnes. 14  15 666 Main hub infrastructure and capacity changes in 2014 and 2015: CDG & SPL are 16 630 increasing their ‘cool chain’ capabilities, mainly for Pharma purposes, and also 17 600 WKHLU¶H[SUHVV·JURXQGHTXLSPHQWFDSDELOLWLHV IRUH[DPSOHWKH([SUHVV+XELQ   &'* LQRUGHUWRLQFUHDVHDQGLPSURYHWKHLUKDQGOLQJFDSDELOLWLHVRQERWKWKHVH two ‘products’. 19 565 20 495 21 KLM 449 Planned changes to products & services in 2015: We are focused on constantly improving Pharma solutions and Express & Mail solutions in both 22  our hubs, but also everywhere over our international network, where it is 23 AIR BRIDGE CARGO 426 locally technically possible - as we did for instance this year for Cairo by 24 DELTA AIRLINES 405 introducing new cooling equipment. 25 SAUDI ARABIAN AIRLINES 397 26 AIRLINES 362 theory the weakened Euro could stimulate second half of last year. This improvement 27 362 export growth from Europe, although equally in international trade has taken place while  319 it is likely to put a brake on European import GRPHVWLF LQGXVWULDO SURGXFWLRQ JURZWK UH 29 TNT AIRWAYS 312 demand. Lower oil prices may also stimulate mained relatively stable. 30 CHINA SOUTHERN 306 some economic activity, and if it translates The acceleration of world trade relative AIRLINES into lower air freight prices could also make to domestic production in the second half 31  32 MARTINAIR 290 DLUIUHLJKWPRUHDWWUDFWLYHWRPDUJLQDOÁRZV RIFRPHVDIWHUVHYHUDO\HDUVRILQWHU 33 265 such as perishables. But in the medium ruption to the previous upward trend. That 34 263 term, probably from late 2015 or early 2016, ÁDWOLQLQJRIWKHWUDGHSURGXFWLRQUDWLRKDG 35 SWISS 244 lower oil prices will also restrict oil and gas been bad news for demand for air freight 36 AIR 244 H[SORUDWLRQDVHFWRUWKDWKDVEHHQLQFUHDV in recent years, dampening the strength of 37 225 ingly important to the air freight sector, and the cyclical upturn in air freight last year. It   so the overall effect on air freight demand is is too soon to say whether the last half year 39 210 likely to be mixed. But it should reduce costs signals a diminution of the adverse impact 40 207 throughout the air logistics supply chain, and RI UHFHQW RQVKRULQJ DQG WUDGH SURWHFWLRQ 41 AEROLOGIC 204 42 171 thus offer the opportunity for better margins ism, but it certainly is a development worth 43 DRAGONAIR 161 – at least in theory! watching, IATA notes. 44  According to IATA, recent growth in air But there has been considerable variation 45  IUHLJKW YROXPHV UHÁHFWV FKDQJHV LQ ZRUOG LQWKHJURZWKLQWUDGHÁRZVDQGDLUIUHLJKW 46 145 WUDGHDFWLYLW\'XULQJWKHÀUVWKDOIRI demand across the different regions. Most 47 ABX AIR 142 air freight volumes and world trade overall of the improvement in air freight in 2014  TAM AIRLINES 137 went through a relatively weak patch, but KDVEHHQFDUULHGE\DLUOLQHVLQ$VLD3DFLÀF 49 132 there was a marked acceleration during the and the Middle East. 50 EGYPTAIR 120 Source: IATA World Air Statistics

6SULQJ‡ CARGO AIRPORTS AIRLINE SERVICES  WORLD AIRLINE CARGO REPORT

DOMESTIC - SCHEDULED Airline focus: China Airlines FREIGHT TONNES CARRIED (2013) Main issues and trends in 2014 and 2015:  )DOOLQJRLOSULFHV$LUOLQHLQGXVWU\SURÀWDELOLW\LPSURYHVZLWKIDOOLQJRLOSULFHV RANK AIRLINE THOUSANDS 2. Japanese Yen depreciation: A weak yen will deliver a helping hand in an 1 FEDERAL EXPRESS 5110 export boom, and it’s happening gradually. 2 UPS AIRLINES  3. US west-coast ports congestion: Our business was helped by the bottleneck in seaports on the west coast of the US, leading to more cargo being moved by air. 3 CHINA SOUTHERN  AIRLINES 4 AIR CHINA 666 Changes to products and services in 2014: Since joining the SkyTeam Cargo Alliance, CI has been complying with SkyTeam’s strategies, including promoting 5 CHINA EASTERN AIRLINES 526 high-yield express delivery, cool chain and healthcare products. In 2014, CI was 6 ALL NIPPON AIRWAYS 473 DFFUHGLWHGDVD4XDOLÀHG(QYLURWDLQHU3URYLGHU 4(3 LQÀYHVWDWLRQV7DLSHL7RN\R 7 JAPAN AIRLINES 337 San Francisco, and . With the accreditation, customers can   be assured of CI’s capability to offer reliable cool-chain services. CI targets to EHFRPHFHUWLÀHGDVDQ(QYLURQWDLQHU3DUWQHU &(3 DQGSODQVWRIXUWKHUH[SDQGLWV 9  network to provide temperature-controlled airfreight services. 10 AIRLINES 259 11 ABX AIR 230 Planned changes to products and services in 2015: Replacing aluminium containers with 12 217 lightweight containers, expected to achieve savings in fuel, emissions and maintenance. 13 AIRLINES 170 14 TAM AIRLINES 170 2014 2013 YoY 15 LION AIRLINES 167 16 TRIGANA AIR SERVICE 140 Chargeable weight (tonnes)    17 139 Freight revenue tonnes    FATK (millions)     121 Load factor    19 AIRLINES 115 Cargo revenue (US$ millions)    20 QANTAS AIRWAYS 104 21 AMERICAN AIRLINES 103 Asia’s rising imports exports also picked up strongly at the end 22 GOL AIRLINES 97 $LUOLQHV LQ $VLD 3DFLÀFZHUH RQO\ WKH WKLUG of the year, boosted by the weakened Yen, 23 AIRLINES 96 fastest growing region in FTKs carried in 24 AIRWAYS  ZKLOH WKH UHQHZHG VWUHQJWK LQ &KLQHVH H[ 25 KOREAN AIR  2014, expanding 5.4%, but that increase SRUWV UHÁHFWHG LPSURYHPHQWV LQ GHPDQG 26 POLAR AIR CARGO  over the year still represented over 46% of particularly from the revived US economy. 27 AIRLINES  WKHWRWDOH[SDQVLRQLQWKHPDUNHW$VLD3D The performance in 2014 was a marked  AIR  FLÀF·VLPSRUWDQFHIRUDLUIUHLJKWGHYHORSHG turnaround compared to 2013, when FTKs 29 UNITED AIRLINES 76 IXUWKHU LQ WZR ZD\V LQ  QRW MXVW EH IRUDLUOLQHVLQ$VLD3DFLÀFFRQWUDFWHGE\ 30 JET AIRWAYS 74 FDXVHDODUJHSDUWRIWKHZRUOG·VPDQXIDF overall. 31 65 WXULQJWDNHVSODFHLQWKLVUHJLRQEXWLQFUHDV were responsible for 32  ingly because there are growing numbers carrying 29% of the increase in industry 33 SAUDI ARABIAN AIRLINES 57 FTKs in 2014. Their growth rate in 2014 34 INDIGO 55 RI PLGGOHLQFRPH FRQVXPHUV (PHUJLQJ 35 55 Asian economies have seen a sharp rise of was 11% compared to 2013, the fastest of 36 54 imports in the past six months, which has the regions. Trade has been increasing with 37 AIRLINES 52 VXSSRUWHGWKHDLUIUHLJKWEXVLQHVVHVRIFDU Middle East countries, but the main reason  THAI AIRWAYS 52 riers in this region, IATA notes. is the network and capacity expansion of 39 AIR CANADA  7KH DFFHOHUDWLRQ LQ WUDGH KDV DOVR UH the region’s airlines, which contributed over 40 JUNEYAO AIRLINES 47 VXOWHGIURPEHWWHUSHUIRUPDQFHRIWKH-DSD 37% of the increase in worldwide air freight 41 TOTAL LINHAS AEREAS 46 nese economy, despite the adverse impacts capacity in 2014. As a result, load factors in 42 45 of the country’s consumption tax. Japan’s this region declined. 43 TURKISH AIRLINES 44 44 41 45 40 Airline focus: American Airlines 46 SPICEJET 39 American Airlines Cargo 2014 2013 % 47 WESTJET 39  36 System Cargo Ton Miles (000):    49 SOUTH AFRICAN AIRWAYS 34 System Cargo Tonne Km (000):    50 MALAYSIA AIRASIA 33 Source: IATA World Air Transport Statistics

6 CARGO AIRPORTS AIRLINE SERVICES ‡6SULQJ Discover more in our LUG fi lm

I am the POWER in your cargo.

Raffaele Arciuolo, Crew Chief of Cargo Handling

As a keen bicycle racer, Raffeale Arciuolo knows everything about cargo handling. He knows the meaning of good positioning, focused power and anticipatory actions. Patience and high motivation during 17 years of training and additional qualifi cations have brought him from a trainee to the top of the team. Now your cargo reaches its destination with the 45-years-plus experience of LUG and the power of a passionate bicycle racer. Challenge Raffaele Arciuolo. Dial: +49 (0) 69 698 19 - 500

We are closer WORLD AIRLINE CARGO REPORT

TOTAL - SCHEDULED Airline focus: Emirates FREIGHT TONNES CARRIED Projected cargo tonnage carried in 2014 and 2013: 2.32 million tonnes in 2014 (2013)  ,Q(PLUDWHV6N\&DUJRFDUULHGPLOOLRQWRQQHVRIFDUJR Average cargo load factor:DYHUDJHIRUERWKDQG RANK AIRLINE THOUSANDS $YHUDJHÁRZQDVERRNHGSHUIRUPDQFHLQ 1 FEDERAL EXPRESS  2 UPS AIRLINES  Main hub handling capacity in 2014 (and 2013): In 2014, the throughput 3 EMIRATES 2146 capability at DXB hub was 1.7 million tonnes and in 2013 at 1.5 million tonnes. 4 KOREAN AIR 1449 DWC handles an additional 700,000 tonnes of cargo per annum. 5 CATHAY PACIFIC AIRWAYS  6 CHINA AIRLINES 1197 Main hub infrastructure and capacity changes in 2014 and 2015: On 1 May, Emirates 7 CHINA EASTERN AIRLINES 1193 6N\&DUJRPRYHGLWVIUHLJKWHUÁHHWWRLWVQHZ¶KRPH·(PLUDWHV6N\&HQWUDODW'XEDL  CHINA SOUTHERN  World Central Airport following the completion of a new cargo terminal that has AIRLINES the capacity to handle 700,000 tonnes of cargo per annum. We also are currently CHINA 1095 expanding our cargo handling facilities at Dubai , which should be completed by May 2015. The expansion includes the refurbishment of facilities 10 1092 and equipment of an existing cargo building as well as the extension of Emirates 11 ALL NIPPON AIRWAYS 1061 SkyCargo’s Cargo Mega Terminal. We also received two new B777F aircraft. 12 LUFTHANSA 1003 13 QATAR AIRWAYS 1002 Planned capacity changes for 2015: This year we will receive another B777F freighter, 14 ASIANA AIRLINES  ZKLFKZLOOLQFUHDVHRXUIUHLJKWHUÁHHWWRDLUFUDIW²%)VDQGWZR%(5)V 15 LAN AIRLINES  Induction of more passenger aircraft will add additional capacity for 2015. 16 ETIHAD AIRWAYS 726 17 EVA AIR 714 Changes to products & services in 2014: Emirates launched an internally developed and cost effective LD3 container that keeps temperature sensitive cargo cool  BRITISH AIRWAYS 670 when transported on the ground and in the air. The ‘White Container’ is the latest 19 THAI AIRWAYS 651 addition to Emirates SkyCargo’s Cool Chain portfolio and has been designed 20 CARGOLUX 630 VSHFLÀFDOO\DVDQLQWHUPHGLDWHWHPSHUDWXUHFRQWUROVROXWLRQWKDWLVLGHDOIRUJHQHULF 21 JAPAN AIRLINES 600 healthcare products and food perishables. SkyCargo will continue to invest in assets and equipment to provide a robust unbreakable cool chain in 2015. 22 AIR FRANCE  23 TURKISH AIRLINES  24 DELTA AIRLINES 526 have seen some in 2014, a solid improvement compared with 25 SAUDI ARABIAN AIRLINES 454 EHQHÀWIURPWKHLPSURYLQJHFRQRPLFSHUIRU 2013 when volumes fell 0.4% for the year as 26 KLM 449 mance of the US during 2014, where growth D ZKROH +RZHYHU WKH 1RUWK $PHULFDQ DLU 27 AIR BRIDGE CARGO 426 has been strong for a mature region, and lines have been cutting back on capacity as  AMERICAN AIRLINES 401 WUDGH²ERWKH[SRUWVDQGLPSRUWV²KDVFRQ WKH\VHHNWRLPSURYHÀQDQFLDOSHUIRUPDQFH 29 MALAYSIA AIRLINES  tinued to show robust growth. Airlines in this boosting cargo load factors. 30 UNITED AIRLINES 395 region experienced a 2.4% expansion in FTKs Growth in air freight volumes carried by 31 ABX AIR 372 32 QANTAS AIRWAYS 369 Airline focus: 33 NIPPON CARGO AIRLINES 362 34 GARUDA INDONESIA 346 Cargo carried in 2014: Around 1.7 million tonnes of freight and mail carried – or ELOOLRQUHYHQXHWRQQHNP²FRPSDUHGZLWKPLOOLRQWRQQHVLQ   35 TNT AIRWAYS 312 Average cargo load factor: LQLQ SRLQWV  36 HAINAN AIRLINES 311

37 POLAR AIR CARGO  Capacity and network developments in 2014:  TAM AIRLINES 307 /XIWKDQVD&DUJRIRFXVHGRQDÁH[ ible and demand-driven management of its capacities with the aim of boosting 39 MARTINAIR 290 yields. At the same time, it added , Lagos and Tunis to its destinations. Since 40 265 1RYHPEHULWKDVEHHQRIIHULQJDQRQVWRSZHHNO\%)ÁLJKWIURP+RXVWRQ 86$  41 AIR CANADA 256 WR6WDYDQJHU 1RUZD\ OLQNLQJWZRRIWKHZRUOG·VPRVWLPSRUWDQWFHQWUHVRIWKHRLO 42 SWISS 247 and gas industry, as part of a focus on key sectors. 43 244 44 SICHUAN AIRLINES 220 Infrastructure and other developments:'HVSLWHWKHÀHUFHO\FRPSHWLWLYHFRQGL tions, Lufthansa Cargo continued to pursue its long-term modernisation pro- 45 HONG KONG AIRLINES  gramme Lufthansa Cargo 2020 in 2014. Among the initiatives, a new IT system 46 VIRGIN ATLANTIC 210 for cargo handling is being rolled out worldwide, marketing of lucrative express 47 JET AIRWAYS 206 products further reinforced, and preparations for the new air freight terminal in  AEROLOGIC 204 Frankfurt, LCCneo, are in full swing. Another milestone for Lufthansa Cargo in ZDVWKHODXQFKRIDVWUDWHJLFMRLQWYHQWXUHZLWK$OO1LSSRQ$LUZD\V $1$ RQ 49 SOUTH AFRICAN AIRWAYS  routes between Japan and Europe 50 177 Source: IATA World Air Transport Statistics

8 CARGO AIRPORTS AIRLINE SERVICES ‡6SULQJ WORLD AIRLINE CARGO REPORT

European airlines was relatively weak in 2014, at just 2%. The Eurozone is once more close to recession and worries are increasing about another Euro crisis, while in the east there are sanctions on Russia, which is already in recession, while the Ukraine crisis poses a variety of risks. The North Atlantic and markets to Asia remain sources of potential growth, but the nega tive impacts of weak home markets are large. As a result European airlines have seen very little growth in FTKs and face de clining load factors, IATA observes. In Latin America, there are major economic problems in Brazil and Argentina, as well as a number of the smaller economies. Air freight, UHJLRQDO WUDGH DFWLYLW\ KHOGXS VXSSRUWLQJ terms, dropped by 5.6%, although it points for the airlines in this region, increased only demand for air transport of goods. to two developments to put this into perspec 0.1% in 2014 overall. African airlines, al tive: overall yields were affected by a drop in though carrying a small part of worldwide Yield picture fuel surcharges; and the relative weakness )7.V VDZ WKH VHFRQGIDVWHVW H[SDQVLRQ LQ The picture in terms of yields also varies of the Euro against the US dollar contributed air freight volumes, 6.7% in 2014 overall. Al widely geographically, but is not particularly WRDQ86\LHOGGHFUHDVHIRUFDUJRRULJ though major economies Nigeria and South heartening to airlines as a whole. WorldACD inating in one of the largest markets, Europe. Africa underperformed during parts of 2014, notes that December yields, in US dollar Measured in Euros, they slightly increased.

Swissport International was voted Air Cargo Handling Agent of the Year at the 2014 ACW World Air Cargo Awards for the sixth year in a URZ7KLVPDJQL¿FHQWDFKLHYHPHQWZDVWHVWDPHQW WRWKHGHGLFDWLRQRIWKH6ZLVVSRUWWHDPVDFURVV WKHZRUOGDQGWKHLUFRPPLWPHQWWRWKHGHOLYHU\RI KLJKTXDOLW\VHUYLFHVLQDOODVSHFWVRIRXUEXVLQHVV SIX :HZLOOFRQWLQXHWRVWULYHIRUH[FHOOHQFH PACK OF QUALITY FOR YOUR GOODS

NO1 AIR CARGO HANDLING AGENT FOR SIX YEARS RUNNING

Visit us at stand 322 in hall B1 at the 7th Air Cargo Europe exhibition and conference in Munich – part of Transport Logistics.

Swissport International Ltd. *URXQG+DQGOLQJ&DUJR6HUYLFHV$LUFUDIW0DLQWHQDQFH )XHOLQJ([HFXWLYH$YLDWLRQ$YLDWLRQ6HFXULW\ WWW.SWISSPORT.COM cargo services

6SULQJ‡ CARGO AIRPORTS AIRLINE SERVICES 9 WORLD AIRLINE CARGO REPORT

Airline focus: IAG Cargo Steve Gunning, CEO Cargo tonnage carried for full year 2014:,$*&DUJRFDUULHGPLOOLRQFDUJRWRQQHNLORPHWUHV &7.V IRUWKH\HDUWRGDWH 'HFHPEHUDGHFUHDVHFRPSDUHGWR<7''HFHPEHU)ROORZLQJWKHFHVVDWLRQRIWKHORQJKDXOIUHLJKWHUOHDVLQJ FRQWUDFWZLWK*66RQ$SULO,$*&DUJRUDQDVLJQLÀFDQWO\UHGXFHGIUHLJKWHUSURJUDPPHZKLFKLVUHÁHFWHGLQWKHÀJXUHV

Main hub infrastructure and capacity changes in 2014:$VSDUWRIDFRPPLWPHQWWRRQJRLQJVLJQLÀFDQWLQYHVWPHQWVLQKXE and wider operations, 2014 featured a number of large infrastructure and capacity changes across the year in, with highlights including: Expanding Constant Climate network for the transport of temperature-sensitive pharmaceuticals to more than 100 VWDWLRQVLQZKDWLVQRZWKHOHDGLQJQHWZRUNRILWVNLQGJOREDOO\%RRVWLQJIUHTXHQF\RIÁLJKWVWRNH\GHVWLQDWLRQVSURYLGLQJ businesses with additional lift capacity to and from key destinations including Cape Town, City, and Colombia. This was in addition to new routes being opened into Austin, Montevideo, Santa Domingo and . 8SJUDGHVWRÁHHWWKURXJKRXWWKH\HDULQFOXGHGDQXPEHURIQH[WJHQHUDWLRQDLUFUDIWFRPLQJLQWRVHUYLFHRQEXV\URXWHV7KLV LQFOXGHGWKHXVHRI¶FDUJRIULHQGO\·%VURXWHVLQWR&KHQQDL+\GHUDEDG3KLODGHOSKLDDQG&DOJDU\

Changes to products & services in 2014: 2014 was also a highly productive year in terms of products and services. We ODXQFKHG(XUR&RQQHFWRUDQGDVLPSOHFRVWHIIHFWLYHDQGWLPHGHÀQLWHRSWLRQIRUVKLSSLQJIUHLJKWLQWRDURXQGDQG out of Europe. This innovative service will help us optimise capacity on our short-haul network. Our successful small freight collection service, Cargo Connector, launched in an additional four cities: , Seattle and San Francisco in the US and Frankfurt in Germany, providing customers with the easiest way possible to get their freight to the airport. ,Q'HFHPEHUZHDFKLHYHGDQLQGXVWU\ÀUVWIRURXU&RQVWDQW&OLPDWHSURGXFWEHLQJWKHÀUVWFDUULHUWREHDZDUGHGD*'3 *RRG'LVWULEXWLRQ3UDFWLFH FHUWLÀFDWLRQE\DQDWLRQDOJRYHUQPHQWKHDOWKDJHQF\LQZKDWLVZLGHO\UHFRJQLVHGDVPHHWLQJ the diamond standard for pharmaceutical transport. Following an inspection by the UK’s Medicines and Healthcare Products 5HJXODWRU\$JHQF\RXU+HDWKURZRSHUDWLRQVKDYHEHHQJUDQWHG:KROHVDOH'LVWULEXWLRQ$XWKRULVDWLRQ :'$ IRUPHGLFLQHV intended for both human and veterinary use. At the beginning of the year we rationalised our freighter strategy. We now focus on delivering wide-body capacity except LQDUHDVRIKLJKGHPDQGZKHUHZHZRUNZLWKSDUWQHUVWRGHOLYHUIUHLJKWHUFDSDFLW\ WKLVLVWKHFDVHRQRXU+RQJ.RQJURXWH ZKHUH4DWDU$LUZD\VSURYLGHVXVIUHLJKWHUFDSDFLW\ :HEHOLHYHWKDWWKLVLVWKHEHVWDSSURDFKWRVROYLQJWKHLQGXVWU\ZLGH H[FHVVRIFDSDFLW\)LQDOO\ZHKDYHVHHQVLJQLÀFDQWSURJUHVVLQRXUUROORXWRIH$:%V:LWKSHQHWUDWLRQ,$*&DUJRQRZ leads European carriers when it comes to e-AWB penetration and is fourth globally for volumes, as of November 2014. In total, we have made e-AWB available in more than 160 stations globally, amounting to nearly 100 per cent of its network where e-AWBs are legally recognised

Initiatives or investments in cargo handling capabilities or service quality in 2014: Ultimately the success of our business comes down to our handling capabilities and the service we can offer customers. We employ some of the most talented and dedicated people in the world, who work at the most advanced of cargo operations. Yet we are continually looking at how we can improve our operations: In 2014, we also took the opportunity to upgrade Premia, our premium product handling facility, at Heathrow. The upgrades led to a more than 50 per cent improvement in loose handling capability as well as enhanced operational procedures and optimised use of space for a more efficient and effective facility. We continued to focus on our training capability to ensure that employees can deliver the highest levels of service excellence. A highlight of the year in this respect was the launch of the Good Distribution Practice Academy in partnership with Exelsius. Students are able to witness the handling process at the Heathrow IAG Cargo ‘Constant Climate Centre’ and other international locations, meeting the operational team that handles pharmaceutical and life science shipments across the globe to Good Distribution Practice standards.

Although the December yield drop was 2014 as a good year for air cargo over all. Continuing the trend from previous years, VLJQLÀFDQWLQ$VLD3DFLÀFDVZHOO  LW With volume growth of 6.4% over 2013, and UHYHQXHV IURP SKDUPDFHXWLFDOV DQG SHU was limited in MESA (Middle East & South DPXFKVPDOOHUGURSLQ86\LHOGV   ishables outpaced the market, with growth of $VLD   DQG 1RUWK $PHULFD   compared with the declines in the previous 16.2% and 7.2% respectively, and this trend is adds WorldACD, which analyses more than few years, worldwide revenue increased by UHÁHFWHGE\DLUOLQHV·DFFHOHUDWLQJLQYHVWPHQWV RIWKHZRUOG·VODUJHVWFDUJRFDUU\LQJDLU 5% after two years of declining revenues, LQ WKHLU FRROFKDLQ SURGXFWV DQG IDFLOLWLHV lines and their transactions with more than WorldACD says. Pharmaceuticals grew in terms of average 15,000 forwarders. 7KHRULJLQUHJLRQ$VLD3DFLÀFZDVDERYH yields achieved too, with a global average rise Across 2014, global average monthly average, achieving a 6.2% US$ revenue of 2% (rising even more than this in Europe), yields decreased, year on year, in nine out LQFUHDVH 1RUWK $PHULFD ZDV WKH IDVWHVW building upon the 1.2% average pharma yield of 12 months, rising only in June, July and growing revenue destination, with a revenue increase in 2013, WorldACD observes. August, WorldACD notes, but describes the increase of 10.9%. But perishables yields dropped by about

 CARGO AIRPORTS AIRLINE SERVICES ‡6SULQJ To understand how the Maastricht Airport’s cargo product can give your supply chain a competitive edge in Europe, please contact Mr. Wiel Dohmen, Managing Director at +31-43-3589999 or by email: [email protected] WORLD AIRLINE CARGO REPORT

3%, double the average yield decline of all JURZWK H[(XURSH ZDV UHDOL]HG E\ 0LGGOH worldwide, WorldACD reports. air cargo taken together. Meanwhile, the (DVWHUQ   DQG 1RUWK $PHULFDQ FDUUL 7KH H[SHULHQFHV RI $VLD 3DFLÀFDLUOLQHV OHDGLQJRULJLQUHJLRQVLQERWKSURGXFWPDU HUV  ,QDOORWKHURULJLQDUHDV(XUR ZHUHPL[HGLQFOXGLQJODUJHSHUFHQWDJHUHY kets strengthened their position: Africa and SHDQ DLUOLQHV· SHUIRUPDQFH ZDV UDWKHU ÁDW enue decreases in the smaller markets of Latin America in perishables, Europe and as well. For the third year in a row, Middle $IULFD DQG 0(6$  DQG  UHVSHF MESA in pharmaceuticals. Eastern airlines performed best in revenue tively) that were offset by more than average Although Europe grew 5.1% in revenue as terms, with a YoY revenue growth of 13%. growth in North America and Europe, and a an origin region, the one group of airlines 7KH\ZHUHWKHIDVWHVWJURZLQJDLUOLQHVLQDOO slightly increasing share of the revenue in QRW SURÀWLQJ ZDV IURP (XURSH LWVHOI DF areas, while they were also the only group their home region. North American airlines cording to WorldACD. Most of the revenue with a slightly increased average yield joined the European airlines in performing below average in most markets, except their Europe business (+11%). On their home turf, Airline focus: LAN Cargo they registered a revenue decline of 1%. Cargo tonnage for full year 2014: Between 1.1 and 1.2 million tonnes, approximately. 'RZQVLGHULVNV Average cargo load factor in 2014: Looking at the outlook for air cargo, IATA Expected cargo revenues in 2014: Between US$1.5 billion and 1.6 billion, approximately. GLUHFWRUJHQHUDODQG&(27RQ\7\OHUVDLGUH $YHUDJHÁRZQDVERRNHGSHUIRUPDQFHLQFRPSDUHGZLWK cent concerns over the health of the global in 2013. HFRQRP\ DQG D FRUUHVSRQGLQJ IDOO LQ EXVL Main hub handling throughput in 2014: 395,000 tonnes processed at . QHVV FRQÀGHQFHKDG QRW \HW LPSDFWHG DLU Main hub handling capacity: Maximum storage capacity at MIA is 2,500 tonnes cargo, but noted that this was a downside ³VTIW VTP  risk that will need to be watched in 2015. He Main hub – planned infrastructure changes for 2015: In 2014, we started building a PDLQWHQDQFHKDQJDUDW0,$&RQVWUXFWLRQZLOOEHÀQLVKHGLQ said yields had declined for the third straight Third-party airlines handled at main hub: China Airlines year in 2014, with no immediate prospect of LPSURYHPHQW,$7$·VJOREDOFDUJRUHYHQXHHV Changes to products & services in 2014: Introduction of a premium online timates for 2014 are more pessimistic than VHUYLFHIRUSKDUPDSURGXFWVIURP(XURSH,QYHVWPHQWVLQRXULQIUDVWUXFWXUH those of WorldACD, with IATA reporting that and enhancement of our working processes as part of our continuous global improvement. FDUJRUHYHQXHVLQKDGUHPDLQHGEDVL cally unchanged at $62 billion, around $5 Service quality investments and projects developed in 2014: billion below their 2011 peak. 1. Connections: US$300,000 invested in the project. The objective was to Tyler highlights the need for the air increase connection reliability by improving current prioritization and freight sector to focus on providing a FRRUGLQDWLRQ FRPPHUFLDODQGRSHUDWLRQDO SURFHVVHV 2. Host to host: revamping of the messaging platform, with the goal of “stronger value proposition” to meet integrating LATAM Airlines Group cargo unit to the rest of the air community evolving customer needs, pointing to IUHLJKWIRUZDUGHUVFDUULHUV*+$DQGFXVWRPV LQDFFRUGDQFHZLWKQHZ efforts such as cutting shipping times, IATA standards. This will increase reliability and optimization, while improving business competitiveness. HQVXULQJKLJKTXDOLW\KDQGOLQJRIWHPSHU 3. Tracking projects: tracking technology was enhanced in domestic Brazil to DWXUHVHQVLWLYH JRRGV RU EHQFKPDUNLQJ improve customer service and minimize mistakes. quality to improve customer transparency. 4. Guarulhos warehouse: the construction of a warehouse at GRU continued (IUHLJKW DOVR PDGH VLJQLÀFDQWSURJUHVV during 2014. The project, which started in 2013, involved an investment of US$17 million. LQZLWKHOHFWURQLFDLUZD\ELOOSHQHWUD 5. Website: the objective was to generate a common website structure for all tion reaching its 22% target and airlines /$7$0$LUOLQHV*URXSFDUJRDIÀOLDWHV·VLWHVLQRUGHUWRRSWLPL]HUHVRXUFHVDQG now targeting 45% penetration by the end improve customer experience, in terms of content, access to information of 2015. and self-management. These are all worthy initiatives, although Initiatives planned for 2015: in the shorter term, there are some other 1. Products: a series of implementation projects related to the interesting factors at play – most notably, Products initiative. currency swings and the drop in oil prices 2. New operational cargo system: improvements to operations system in order that are having an immediate effect on WRGHÀQHDQHZRSHUDWLRQDOV\VWHPIRUWKH/$7$0$LUOLQHV*URXSFDUJRXQLW for the next 15 years. WKHPDUNHW7KHSULFHRIMHWIXHOLQ86GRO 3. Construction of a cooler at GRU. lar terms has fallen by more than 45% in the last year – indeed in seven months

 CARGO AIRPORTS AIRLINE SERVICES ‡6SULQJ WORLD AIRLINE CARGO REPORT

,$7$:25/'$,575$16325767$7,67,&6 7KH7RS&DUJR$LUOLQHWDEOHVDUHSXEOLVKHGFRXUWHV\RI,$7$H[WUDFWHGIURPWKHWKHGLWLRQRILWV,$7$:RUOG$LU7UDQVSRUW6WDWLVWLFV :$76  report and its top 100 airline rankings. Widely regarded as the air transport industry’s most comprehensive reference digest, it contains GDWDIURPDFURVVWKHDLUOLQHLQGXVWU\FRYHULQJSDVVHQJHUDQGIUHLJKWWUDIÀFIRULQWHUQDWLRQDOGRPHVWLFVFKHGXOHGDQGFKDUWHUVHUYLFHV HPSOR\HHVÁHHWDQGÀQDQFLDOV7KHWKHGLWLRQRI:$76ZLOOEHSXEOLVKHGLQ-XQHKWWSZZZLDWDRUJSXEOLFDWLRQV3DJHVZDWVDVS[

$LUOLQH,QWHJUDWRUIRFXV836 TURKISH AIRLINES Main hub handling capacity: UPS’s Worldport air hub at Louisville International Airport, can process more than 416,000 packages per hour. The MIGRATES TO NEW CARGO :RUOGSRUW)UHLJKW)DFLOLW\KDVDFDSDFLW\RIPLOOLRQSRXQGV WRQQHV SHU day with more than 300 forklifts operating in the building. UPS uses 237 of its TERMINAL own ‘browntail’ aircraft along with more than 300 chartered aircraft to serve Turkish Cargo in January completed the customers in 220 countries and territories. transition to its new cargo terminal at Istan- bul Atatürk Airport. The facility is expected Main hub handling throughput: Worldport is the largest fully automated package to more than double the airline’s handling handling facility in the world. The operation currently turns over approximately capacity and improve operational effec- 130 aircraft daily, processing an average of 1.6 million packages a day with a tiveness, although it is only intended to be record of nearly 5 million packages processed on Peak Day 2013. DÀYH\HDUVROXWLRQ²XQWLOWKHRSHQLQJRI the new Istanbul airport on the Black Sea coast northwest of the city. Main hub infrastructure and capacity changes in 2014: Worldport added 900 The new 42,500sqm cargo terminal WUDFWRUWUDLOHUSDUNLQJSRVLWLRQVDQGWUDFWRUWUDLOHUORDGXQORDGGRRUVLQDV has an estimated annual capacity of SDUWRIDFRPSDQ\ZLGHLQYHVWPHQWWRLQFUHDVHÁH[LELOLW\ZLWKLQRXUQHWZRUN around 1.2 million tonnes compared ZLWKWRQQHVDWWKHROGVTP Investments in cargo handling capabilities or service quality in 2014: Throughout IDFLOLW\ZLWKDWRWDOXVHDEOHÁRRUDUHD 836LQYHVWHGLQLQFUHDVLQJFDSDFLW\DQGÁH[LELOLW\DGGLQJQHZDQG DLUVLGHDQGODQGVLGH RIVTP,W H[SDQGHGIDFLOLWLHVDFURVVLWVQHWZRUNDQGLQFUHDVLQJLWVFDSDFLW\E\PRUHWKDQ has 3,700sqm of ‘special cargo area’ compared with 1,200sqm at the old fa- cility, including a 700sqm special cargo Planned changes to products & services in 2015: On January 15, UPS announced ULD storage area. Total special storage plans to extend UPS Worldwide Express Freight service in 12 new origin and nine capacity may be increased up to six new destination countries for urgent, time-sensitive and high-value international times through the racking systems. heavyweight shipments. The special storage area includes 39 separate storage rooms at four different – although the decline of the Euro against carriers – particularly freighter operators. temperature ranges and for nine different types of cargo such as medicines, food the Dollar means that the drop in jet fuel 0RYHVWRZDUGVDOOLQSULFLQJE\VRPHFDU VXSSOLHVDQGÁRZHUV,WDOVRLQFOXGHV/LYH SULFHVLQ(XURWHUPVLVVOLJKWO\PRUHPRG riers may obscure or confuse the pricing $QLPDOV $9, 6WRUDJH$UHDV'DQJHURXV HVWEXWVWLOOYHU\VLJQLÀFDQW SLFWXUHWRVRPHH[WHQWEXWWKHUHZLOOVXUH *RRGV '* 6WRUDJH$UHDV9XOQHUDEOH 981 &DUJR6WRUDJH$UHDV9DOXDEOH One would, therefore, expect to see at O\EHVRPHEHQHÀWVWRDOOVLGHVIURPWKH 9$/ &DUJR6WRUDJH$UHDVDQG5DGLR OHDVWVRPHRIWKHHIIHFWVRIWKLVÀOWHULQJ drop in fuel costs for the sector. Whether active Substances Storage Areas. through, probably both in lower air freight LWDOVROHDGVWRLQFUHDVHVLQYROXPHVUH 2WKHUEHQHÀWVLQFOXGHDELJJHU FDUJRDGPLVVLRQDUHDDFFHOHUDWLRQ SULFLQJ DQG LPSURYHG SURÀWDELOLW\ IRU mains to be seen. QQQ in cargo admission and operational SURFHVVHVJUHDWHUÁH[LELOLW\GXHWR $LUOLQH,QWHJUDWRUIRFXV717 the combination of import and export RSHUDWLRQDUHDVDQGDKLJKHUTXDOLW\ Reliability performance:*OREDOGHOLYHU\UHOLDELOLW\LQFUHDVHGE\LQ security system. compared with 2013. Total ULD capacity will be doubled Main hub handling throughput: /LHJH(XUR+XE %HOJLXP URXJKO\LWHPV to 1,200. Cargo admission and delivery or 450 tonnes of freight, every night is performed through 53 gates, with Main hub handling capacity:LWHPVKRXU several gates also dedicated to the company’s express product TK Plus and special cargo. The vehicle admission Main hub infrastructure and capacity changes in 2014: Start of €50 million, three- area has a width of 42 metres, allowing \HDULQYHVWPHQWLQ717·VFHQWUDOKXELQ/LHJHWRLQFUHDVHFDSDFLW\E\ DW YHKLFOHWUDIÀFDQGPDQRHXYULQJWREH FRPSOHWLRQLQ DQGSURGXFWLYLW\ WKURXJKDXWRPDWLRQDQGPHFKDQLVDWLRQ  managed more smoothly. Start of construction of a new facility in LGG. 1HZÁLJKWVWR+DQRYHUDQG9HQLFHLQ+5HSODFHPHQWRIIRXU%$H OPERATIONAL PROCESSES airplanes by B737s. Inbound-outbound capacity of ULDs KDYHEHHQLQFUHDVHGPRUHWKDQÀYH fold, thus eliminating one of the main Planned changes for 2015: inconveniences in the previous facility The investment in TNT’s main hub in Liege will continue. Completion is expected operation, while the connections within by the end of 2016. the warehouse and between landside Continued optimisation of the road and air networks to add new destinations DQGDLUVLGHKDYHEHHQVLPSOLÀHGDQG accelerated. The previous structural or increase speed on existing lanes. Introduction of new ‘industry service GHÀFLHQFLHVLQWKHLQIUDVWUXFWXUHKDYH SURSRVLWLRQV· VSHFLÀFVHUYLFHVIRUWKHDXWRPRWLYHKHDOWKFDUHLQGXVWULDODQGKLJK been eliminated and the operational WHFKLQGXVWULHV  processes have been redesigned and 717·V%$HÁHHW DLUFUDIW ZLOOEHUHWLUHGDQGUHSODFHGE\OHDVHG%DQG service quality has been maximized, B757 by end 2016. Turkish Cargo said.

6SULQJ‡ CARGO AIRPORTS AIRLINE SERVICES  www.bahrainairport.com CARRIERS AND CARGO

AIRLINE FOCUS: LOW-COST AIRLINE FOCUS: LOW-COST Hard to HANDLE Cargo remains off the ow-cost carriers’ competitive hour in some locations), plus any paperwork fare structures means they processing or security screening that may menu for most low- are always on the lookout for be required. The carrier mostly looks after cost carriers unless L ancillary revenue streams, its own cargo handling, using third-party from scratch cards to dis- handlers only at some smaller stations. they can scale up to counted car hire. Southwest recently completed its in- However, for most LCCs, especially in tegration of AirTran, a rival LCC that had longer-haul services, mature short-haul markets such as Eu- no cargo business. “But because of their upgrade to wide- rope and North America, cargo has proved route network, we have been able to open a step too far. With multiple rotations per in markets we didn’t serve such as , bodies, or lengthen day, time on the ground is too short. The and we have put on additional frequencies single-aisle jets favoured by these carriers to destinations such as Milwaukee and turnaround times, are not designed for unitised cargo and ,” Devereaux says. writes Martin Roebuck UDSLG ORDGLQJ PDNLQJ LW GLIÀFXOW WR RIIHU Atlanta is a good destination for retail freight forwarders a guaranteed service. commodities, diagnostic specimens and In principle, Southwest Airlines can some perishables, he comments. Because accommodate one tonne of volumetric goods move through the system so quickly, freight on its domestic US services, and Southwest customers can ship tempera- up to two tonnes of denser cargo such as ture-sensitive goods in insulated packaging. perishables. “But we are a high-frequency, High frequencies on thicker routes, for point-to-point carrier and are constrained example Los Angeles-, means on our -700s by a 30-minute that larger multi-tonne shipments can be turnaround,” says Wally Devereaux, senior VKDUHGEHWZHHQVHYHUDOÁLJKWVHLWKHUQRQ director for cargo and charters. “The larger stop and transiting via Phoenix, or -800s have a little longer turn time because Kansas City, Devereaux says. we’re up to 175 .” However, true to its low-cost philosophy, Southwest’s cargo cut-off is typically 30 Southwest uses secondary airports for minutes prior to departure (though up to an some big-city destinations, for example

16 CARGO AIRPORTS AIRLINE SERVICES ‡6SULQJ AIRLINE FOCUS: LOW-COST CARRIERS AND CARGO

destinations, Cancun, Mexico City, Puerto and Dubai World Central (DWC) airports. Vallarta, and San Jose del Cabo, plus Be- Bernd Struck, senior VP for UAE Cargo at lize City and the Costa Rican capital of San monopoly handler dnata, says most use Jose from this October. B737, A320, and A330 aircraft in high- Although processing of export freight will GHQVLW\FRQÀJXUDWLRQVRQWKHLUPHGLXPWR take longer than on domestic services, De- long haul routes. vereaux says aircraft will spend longer on “Passengers tend to carry more the ground with fewer daily rotations. checked luggage than on shorter routes, limiting cargo capacity. In addition, be- Handler’s cost penalty cause some of these aircraft are operat- US-based Consolidated Aviation Services ing towards the top end of their operating has handled cargo in the past for LCCs range, they will be carrying maximum fuel in both Canada and the US. The latter ar- load,” Struck says. rangement lasted only six months and both The guarantee of cargo capacity will contracts foundered for the same reasons, depend on each carrier’s contractual re- says Ray Jetha, senior VP for sales and lationship with the forwarding community. marketing. “Some airlines have contracts for express/ “You have tight turnaround times be- courier and mail carriage, which will have cause the carriers are so dependent on the highest priority and must as volumes, and you’re mainly dealing with booked,” he says. narrow-bodied aircraft that can’t carry con- The majority of LCCs serving Dubai are Ray Jetha, senior VP for sales and marketing, tainerised cargo,” Jetha says. obliged to make passenger their Consolidated Aviation Services ´:KDWWUDIÀFWKH\KDYHLVPRVWO\FRXULHU ÀUVW SULRULW\ EXW FRXULHU WUDIÀF H[SUHVV Chicago Midway instead of O’Hare and Dal- which is high yield for the airline, but there mail and perishables are attractive be- las Love Field rather than Dallas/Fort Worth. ZDVOLWWOHLQLWIRUPH

6SULQJ‡ CARGO AIRPORTS AIRLINE SERVICES 17 AIRLINE FOCUS: LOW-COST CARRIERS AND CARGO

/LPLWHG JURXQG WLPH EHWZHHQ ÁLJKWV “Every destination minutes on domestic services. does not impact on the ability to load cargo “The maximum weight and dimen- in markets such as Dubai. “Larger hubs country has its own sion per piece is limited to the aircraft’s mostly have longer ground times than loose-load weight specifications. Additionally, every des- smaller airports because of their sheer tination country has its own loose-load size and the longer travel distances. DXB is restriction” weight restriction,” Alpa says. “Avail- DVORWFRQWUROOHGDLUÀHOGDQGJURXQGWLPHV ability on each flight depends not only mainly depend on the allocation of slots Aydin Alpa, VP Pegasus Cargo on passenger baggage quantity but also from Dubai Airports,” Struck says. the amount of fuel required for the flight and weather conditions.” ‘Pit stops’ no handicap So, while some LCCs and their airport Cargo also represents a good revenue and handling suppliers can make cargo stream for Turkey’s , de- work and provide another useful ancillary spite the limited size of its aircraft. The cur- PXOWLFKDQQHOGLVWULEXWLRQDIUHTXHQWÁ\HU revenue stream, particularly for longer- UHQW3HJDVXVÁHHWFRQVLVWVDOPRVWHQWLUHO\ programme, and a hub-and-spoke network KDXO ÁLJKWV FKDUDFWHUL]HG E\ ODUJHU DLU of B737-800s with maximum cargo capac- that serves 30 domestic and 56 interna- craft and longer turnaround times, in ity of 45cu m. Over the next two years the tional destinations from Istanbul’s Sabiha mature pure short-haul LCC markets it carrier is set to take delivery of 75 *|NoHQDLUSRUW remains a tough challenge. As more hy- A320 and A321neo aircraft, which can ac- Flights to Europe, Russia, the Middle brid airline models emerge and legacy commodate slightly less cargo, at 37.4cu m. East, the Balkans and Central Asia oper- carriers migrate to trucking for intra-re- 2QH RI (XURSH·V PRVW SURÀWDEOH FDUUL ate at high frequency in most cases, com- gional freight, there may be more scope ers, Pegasus began life as a charter airline ments Aydin Alpa, VP Pegasus Cargo. He in future for cargo - provided would-be before converting to the low-cost model refers to time on the ground as “pit stops”, VKLSSHUVUHPHPEHUWKDQWKHÀUVWSULRULW\ under new ownership in 2005. Today it has with turnaround times typically 40 minutes in this cut-throat market is always going become more of a hybrid carrier, offering IRULQWHUQDWLRQDOÁLJKWVDQGDVOLWWOHDV to be the choosy traveller. QQQ

Southwest Airlines can accommodate one tonne of volumetric freight on its domestic US services, and up to two tonnes of denser cargo such as perishables

18 CARGO AIRPORTS AIRLINE SERVICES ‡6SULQJ A better tomorrow begins today

We won’t just turn around your aircraft We will turn around how you feel about cargo, passenger and ramp handling.

To find out about how we can help you email: [email protected]

Consolidated Aviation Services www.casusa.com Lets do something better Smiths Detection x-ray scanners are widely used in the air freight industry AIR CARGO SECURITY

hree issues in particular software across the global industry, as Equipment are attracting plenty of part of its wider objective to seek “securi- manufacturers are industry attention when it ty measures that are effective, workable, T comes to air cargo security and affordable, and that create minimal PDNLQJVLJQLÀFDQW and the equipment neces- GLVUXSWLRQ WR WKH YLWDO ÁRZ RI DLU FDUJR progress in scanning sary to help achieve it: the effectiveness which essentially relies on speed”. of screening technology; the high cost Standardisation of screening technol- technology, but more of some of that equipment; and the ogy is vital, Brittin insists, not only of the value that lies in standardising screening equipment or machines themselves but standardization is equipment across the world, given that the software that lies behind many of needed, including of the utility of screening technologies as them. Moreover, if the approved lists of well as associated security procedures freight screening equipment maintained the software behind it, currently differs widely across the globe. by the majority of national transport regu- writes Mike Bryant The International Air Cargo Associa- latory bodies could also be standardised tion (TIACA) has taken something of a (and publicised) to a greater degree, these lead on the subject of air freight security consistencies would allow manufacturers and achieving technological standardisa- to feel more secure in the general accept- tion in recent years, thanks in no small ance that their products will receive. Such part to its decision to recruit former US FRQÀGHQFH ZRXOG QRW RQO\ HQDEOH HFRQR Transportation Security Administration mies of scale to accrue as suppliers step (TSA) air cargo security manager Doug up production of approved product lines, it Brittin to lead the organisation as sec- could also translate into lessening the risk retary general. Brittin says TIACA has factor associated with investing in the de- worked closely with numerous national velopment of future models of sophisticat- regulatory agencies including the TSA, ed screening equipment, Brittin suggests. Transport Canada, and the UK’s Depart- Manufacturers support TIACA’s drive to ment for Transport (DfT) in its efforts see greater normalisation of regulations to see more uniform standards applied among the numerous associated agen- to air freight screening technology and cies around the world. Andrew Goldsmith,

20 CARGO AIRPORTS AIRLINE SERVICES ‡6SULQJ AIR CARGO SECURITY

vice president of global marketing at US like the European Organisation for Secu- security screening supplier Rapiscan rity (the EOS, which has a supply chain Systems, points to the large number of security working group) and the Interna- regulatory agency approvals that have tional Air Transport Association (IATA).” been sought – and won – by his company At the heart of the air logistics chain, for various equipment models. cargo handlers also have to make sure One of the ways that a manufacturer they are fully aware of any changes in such as Rapiscan can make it easier for the regulatory environment. Dubai-head- those screening cargo shipments is to quartered dnata says that it is not only build into x-ray equipment software a re- meeting but exceeding the rapidly chang- porting capability of what was screened, ing industry standards for cargo screen- what the operator saw and what the op- LQJ´:HZHUHRQHRIWKHÀUVWLQWKHUH erator did. That data can be useful not JLRQ FHUWLÀHG WR WKH 7$3$ 7UDQVSRUWHG only for the company itself, perhaps as a Asset Protection Association) process in WUDLQLQJDLGEXWDOVRWRIXOÀOOWKHLQFUHDV 2010 and recently achieved IATA’s RA3 ing number of reporting requirements be- standard for secure handling of cargo,” ing introduced by regulatory agencies in points out Bernd Struck, dnata’s senior an attempt to ensure that their mandated vice president UAE cargo. screening requirements are being met. The cargo-carrying airlines, too, are Vital for a supplier such as Rapiscan is doing their best to stay at the forefront to keep abreast of the latest regulatory of developments. Their focus is also on requirements. Given that any change in a Harald Zielinski, chief security securing the right equipment for their regulatory screening environment might RIÀFHUDW/XIWKDQVD&DUJR screening needs. Lufthansa Cargo, for make some of their machines obsolete is well aware of the need to maintain a example, has an employee dedicated overnight (though it might also open up strong dialogue with relevant parties. “We to seeking out new x-ray scanners and new possibilities for new equipment), keep in touch with government bodies other security-related technologies, while staying on top of any possible changes is and regulators mainly through our Pub- working with the suppliers of screening crucial. And Goldsmith believes that reg- lic Affairs organisation,” explains senior equipment to promote the needs of the ulators have – in general – become much product manager Joachim Petry. “We air cargo sector. Nevertheless, insists more open to dialogue with the industry, also keep up a regular dialogue with the /XIWKDQVD &DUJR·V FKLHI VHFXULW\ RIÀFHU both operators and manufacturers. industry, including forwarders and airport Harald Zielinski, those suppliers still Smiths Detection is another of the big operators,” he adds. “As an example, our don’t always fully realise the complex manufacturers offering sophisticated x- experts are involved in working groups, needs or the size of the air cargo security ray cargo screening equipment. It, too, conferences, etc., of the main agencies market segment.

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6SULQJ‡ CARGO AIRPORTS AIRLINE SERVICES  AIR CARGO SECURITY

Rapiscan’s equipment offers represents DQRWKHU VLJQLÀFDQW FDSDELOLW\ DGYDQFH Already used widely for screening pas- senger baggage because of the speed DQGHIÀFLHQF\RIWKHWHFKQRORJ\KHFRQ siders that it is ideal for checking large numbers of small shipments, typically mail and parcels. TIACA’s Brittin is delighted with the way that technology companies such as Smiths and Rapiscan have stepped up to the challenges facing the industry. He is of the opinion that it is vital these suppliers offer “a good menu” of alterna- tives in screening equipment and thus, 7KH(DJOH$DLUFDUJRVFDQQHUIURP5DSLVFDQ by extension, the way screening can be carried out by different operators. Not all these manufacturers’ custom- Rapiscan, too, is amongst the equip- HUV DUH FRPSOHWHO\ VDWLVÀHG KRZHYHU Technological advances ment suppliers looking to exploit new Lufthansa Cargo’s Zielinski is pleased The suppliers might disagree. They are technologies recently developed. One when the manufacturers come up with working hard, they say, to meet the primary focus for the company has been a screening breakthrough, but says that requirements of the sector. Smiths’ enabling automatic threat detection by real leaps forward are actually few and Petry points in particular to its HI-SCAN means of the latest software algorithms. IDUEHWZHHQ7KHUHKDYHEHHQVLJQLÀFDQW 180180-2is pro and IONSCAN 600 prod- For example, working on a development developments in sniffer screening, while ucts. The new ‘pro’ version of the former project hand-in-hand with the UK’s Civil the picture the operator sees generated meets the current global legal require- Aviation Authority (CAA), it has developed by modern x-ray scanners is much clear- ments for 100% inspection of air cargo an algorithm for the automatic detection er than it was a few years ago, but he still RQSDVVHQJHUÁLJKWVKHSRLQWVRXW,WDOVR of lithium batteries – much highlighted considers that there is much progress UHÁHFWVWKHLQFUHDVLQJQHHGIRU[UD\XQLWV of late as a potential danger to cargo and that still needs to be made capable of screening LD3 containers as the aircraft carrying them. The soft- with regard to screening well as the largest package size accepted ware recognises how x-rays react the larger pallets and by TSA. Thanks to the “high penetration when passed through lithium and containers (even the capabilities” of the HI-SCAN 180180-2is highlights their presence to the ubiquitous LD3). pro, it can screen large containers with no operator. The technology is there, There are many op- need to disassemble consolidated freight Goldsmith insists; Rapiscan is now erators, he consid- into individual packages. This cuts re-in- “commercialising” that technology. ers, who are reluc- spection times considerably and ensures Similar algorithms are also being tant to sign on the ERWKKLJKWKURXJKSXWDQGDIDVWHIÀFLHQW developed by the company to identi- dotted line to say that inspection process. fy contraband cigarettes, and metals there is absolutely no And the IONSCAN 600 explosives such as tungsten and lead that can be chance of a dangerous trace detector’s breakthrough feature used to shield nuclear materials. is its proprietary non-radioactive Ion Goldsmith also believes Mobility Spectrometry (IMS) source that that the sort of real- eliminates the need for special licens- time tomography ing, handling or disposal requirements, (RTT) screening Petry remarks. that some of

Goldsmith: Technology for automatic detection of lithium batteries is available

22 CARGO AIRPORTS AIRLINE SERVICES ‡6SULQJ

AIR CARGO SECURITY

material being hidden inside such a container, even after screening. “From a purely physics point of view, you’re not seeing the whole picture,” Zielinski warns.

Expense One of the ways that the manufacturers have tried to get round the problem mentioned by so many cargo screening operators, dnata included – the expense of the equipment – is to offer a wide range of products with very different price points. “Our broad prod- uct portfolio considers different price levels for customers,” says Petry. “Some smaller forwarders might be pleased with an x-ray system that is more suitable for screening smaller packages and is based on a smaller tunnel size that is less expensive.” Rapiscan believes that it offers the widest range of large tunnel screening Sniffer dogs are just one of the weapons in the /XIWKDQVD&DUJRVHFXULW\DUPRXU\ equipment on the market, and it too offers a wide choice of prices depend- ing on the equipment model. Moreover, says Goldsmith, it has attempted to add greater value for money through allowing for quick and reliable scans of offering the maximum possible cost- the shipment at a reasonable cost, he HIIHFWLYHQHVV DQG HIÀFLHQF\ LQ LWV SURG says, but – while the equipment is so ucts. Partly this is achieved through the expensive – many handlers may choose “integrated approach” it has taken to its to go with more labour-intensive but various models. For example, by offer- less cost-prohibitive options (in terms ing dual-screen output, the screening of initial capital outlay) of handheld operator can compare what he is seeing explosive trace detection and/or metal on the x-ray to what is supposed to be detection equipment. there – the second screen can display the relevant air waybill or other relevant Money no object documentation. While x-ray machines are undoubtedly ex- As another alternative to high capi- pensive, the risk involved in purchases on tal cost outlays, Rapiscan also offers a the part of a shipper, forwarder or carrier ‘screening as a service’ option, whereby FDQ EH HDVHG LI WKH EX\HU KDV FRQÀGHQFH it supplies x-ray equipment, any required that the regulatory standards to which that training, or even the x-ray opera- company is working will retain that machine tors to a customer. on its approved list for as long as possible. There are few specialised This has been another concern of TIACA, manufacturers involved in Brittin notes. producing modern air cargo He would like to see regulatory agen- screening equipment. As cies give their support to any approved such, the pace is bound to equipment throughout its entire product be slow and it will be some life-cycle “wherever possible” – though time before the options get Brittin admits that any leap forward in any cheaper, Struck warns. screening technology does have the po- %ULWWLQ$JHQFLHVQHHGWRVXSSRUWDSSURYHGHTXLSPHQW The focus needs to be on tential to make older equipment obsolete throughout its product life-cycle, wherever possible user-friendly technology, in fairly short order.

24 CARGO AIRPORTS AIRLINE SERVICES ‡6SULQJ AIR CARGO SECURITY

Moreover, the importance of security Europe as Remote Explosive Scent Trac- TIACA is certainly of the view that intel- is paramount. While, Zielinski is of the ing, or REST), which involves dogs sniff- ligence-led analysis is going to be vital. belief that air cargo screening is way ing samples of a cargo shipment rather Only a two-pronged strategy of intelligence- behind in comparison to the effort and than the consignment itself. The proce- based detection alongside physical screen- money that has been invested in passen- dure is already used by some European ing of potentially dangerous shipments will ger screening, when it comes to security, nations already as an alternative or as a allow the air cargo industry to remain ef- “money doesn’t matter,” he says. “Secu- supplement to x-ray screening. ÀFLHQWDQGWRUHWDLQLWVOHDGLQSURGXFWGH- rity is not negotiable.” livery time in the face of competition from Thus, not only in terms of equipment, Meeting the challenges ocean shipping, Brittin insists. but training and time, the German car- Cutting down on the amount of screening re- Further technological advances that fo- rier has invested heavily in securing its quired saves time and money. By means of cus on automated scanning, which could air freight supply chain. This takes in regulated or known (shipper) programmes, eliminate the need for human intervention machine-based screening and dog sniff- physical scanning could be a less frequently and ensure overall consistency and reliabili- ing. Lufthansa Cargo also assesses new used recourse, considers Struck, although ty, are also likely to be of critical importance. technologies and processes as they are he points out that this will depend on the Meanwhile, the need to provide reliable and made available, some of which may rep- security situation in a given region and the affordable technology that offers the high- UHVHQWVLJQLÀFDQWO\FKHDSHURSWLRQVWKDQ prevailing threat perception. Intelligence- est possible speed of screening throughput expensive large tunnel scanners – one led security and risk-based analysis are also is likely to remain a fundamental priority for such is the RASCargO (Remote Air Sam- likely to be vital if screening responsibilities the industry – a challenge that the suppliers pling for Canine Olfaction, regulated in are not to become overwhelming. are working hard to meet. QQQ

6SULQJ‡ CARGO AIRPORTS AIRLINE SERVICES 

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espite the market’s con- weighed down by the listless develop- Last year’s brief tinuing revival, analysis ment of the region’s domestic air cargo attempt by Amerijet of the top US cargo air- WUDIÀFZKLFKJUHZE\OLWWOHPRUHWKDQ D SRUWVFRQÀUPVWKDWLWLV +RZHYHULQWHUQDWLRQDOWUDIÀFWRDQGIURP to introduce a a market dominated by North America’s airports expanded by dedicated domestic integrator hubs and major international almost 6% in 2014, right up there with passenger airports, with few dedicated the global average for international traf- US freighter network GRPHVWLF86DOOFDUJRÁLJKWVWKHVHGD\V ÀFJURZWKODVW\HDU outside of the integrator systems. And Ranked by total tonnage reported underlines the the brief attempt last year by Amerijet to to Airports Council International North general dominance re-introduce non-integrator dedicated all- America (ACI-NA) for calendar year 2013, FDUJRGRPHVWLFÁLJKWVVXJJHVWVWKDWWKLV eight of the US top twenty cargo airports of integrator is likely to remain the case for the fore- were national and regional hubs for in- and international seeable future, even if the revival of the tegrated carriers FedEx and UPS, one is US economy continues to drive growth in DHL’s US hub in Cincinnati and another passenger the nation’s air freight market overall. LV D WUDQVSDFLÀF WHFKQLFDO VWRS $ODVND While total full-year air freight ton- The balance of major US cargo airports hubs within North nages grew by below the global average are U.S. passenger hubs with varying America, reports at just over 3% in 2014, this growth was degrees of international gateway service. Michael Webber Composition of Top Twenty U.S. Cargo Airports, ranked by 2013 Total Metric Tonnes FedEx Hubs UPS Hubs International Gateways Memphis (MEM) Louisville (SDF) Miami (MIA) San Francisco (SFO) Indianapolis (IND) Dallas/Ft. Worth (DFW) Los Angeles (LAX) Seattle (SEA) Newark (EWR) Ontario (ONT) Chicago (ORD) Phoenix (PHX) Oakland (OAK) (PHL) New York (JFK) Washington DC (IAD) DHL Hub 7UDQV3DFLÀF7HFK6WRS Atlanta (ATL) Houston (IAH) Cincinnati (CVG) Anchorage (ANC) Ranking: Airports Council International - North America

28 CARGO AIRPORTS AIRLINE SERVICES ‡6SULQJ AIRPORT FOCUS: NORTH AMERICA

2013 Total Air Cargo Tonnes at FedEx and UPS Hub Airports

5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 _ MEM SDF IND EWR DFW OAK ONT PHL RFD AFW GSO CAE

Data Source: Airports Council International - North America

hubs, Memphis and DHL hub Cincinnati integrator hub airports, DFW relies least - a former hub for wholly-owned Delta on integrators. These international gains subsidiary until its termination in KDYHEHHQSDUWLFXODUO\VLJQLÀFDQWWKURXJK late 2012 - are evidence. a period of widespread decreases in do- Operators of Indianapolis International mestic tonnages. Airport (IND) leveraged FedEx’s second- With superior economies of scale, Credit: Miami-Dade Aviation Dept ary hub in successful efforts to support proprietary air and ground networks, as international all-cargo service from Car- well as critical allied services like ground Three US airports - Dallas/Ft. Worth, JROX[ ZKLFK DGGHG ,1' RQ ÁLJKWV IURP handling and deicing, FedEx and UPS Newark and Philadelphia - host integra- Chicago O’Hare to Europe. Focusing on are able to support hubs at alternatives tors’ regional hubs and major passenger time-sensitive life science sectors for gateways. Examples include FedEx’s re- hubs. shipments in a region that experiences gional hubs at Fort Worth Alliance Airport a harsh winter, Cargolux recognized that (AFW) in the same metro as DFW and its Integrated Carrier Hubs the same 24-hour services (such as West Coast hub at Oakland International With more than 4.1 million metric tonnes in snow removal) supporting FedEx’s mas- Airport (OAK) - across the bay from San 2013, Memphis International Airport (MEM) sive hub operation would meet their own Francisco International Airport. Similarly, led all U.S. airports with nearly double the requirements. UPS’s regional hubs at LA/Ontario Inter- annual tonnage of UPS’ main hub in Lou- FedEx’s northeastern hub at Newark national Airport and Chicago Rockford In- isville. Globally, Memphis trails only Hong (EWR) gives the integrator an alternative ternational Airport provide uncongested Kong International Airport. Especially since to busier JFK International Airport and access to the massive Southern Califor- Delta Air Lines closed a passenger hub the airport is also a passenger hub for nia and Chicago-area markets, respec- long operated by , MEM’s United Airlines. Similarly, UPS’s south- tively. While OAK and ONT serve millions prominence has been almost entirely de- central hub is located at DFW - an Ameri- of passengers annually, AFW and RFD pendent upon a single US all-, can Airlines passenger hub - while its are almost entirely cargo and general while Hong Kong has a diverse portfolio of northeastern hub in Philadelphia (PHL) aviation airports. international passenger airlines supple- is a passenger hub and long-time largest Since 1996, UPS has operated its menting its freighters. Memphis’s reported international gateway of US Airways (ab- smallest regional hub at Columbia Met- 3% annual growth through November 2014 sorbed by American Airlines). The integra- ropolitan Airport (CAE) in South Carolina. will not overtake Hong Kong, which ended tor hubs contribute greatly to domestic Modest even at its peak annual level, 2014 with 6% annual growth for the year. tonnage while belly capacity offered by CAE ended 2013 with a little more than Like Memphis, UPS’s main hub Louis- passenger airlines at these gateways is 60,000 metric tonnes of total cargo. Fe- ville owes its cargo prominence to only invaluable to time-sensitive international dEx operates its Mid-Atlantic hub at Pied- one carrier. While theorists extol the shippers. While EWR and PHL are heav- mont Triad International Airport (GSO) in YLUWXH RI GLYHUVLÀHG SRUWIROLRV )HG([ ily dependent upon their integrator and Greensboro, North Carolina. Local and and UPS offer far more reliable balance passenger hubs, DFW has succeeded state governments provided FedEx with sheets than most US passenger airlines in diversifying its carrier base by adding generous incentives to attract the hub in many years. Having lost passenger multiple Asian freighter operators. Of the but its growth has been modest, with the

6SULQJ‡ CARGO AIRPORTS AIRLINE SERVICES 29 AIRPORT FOCUS: NORTH AMERICA

International Airport (ORD), and JFK Interna- Total Air Cargo Growth for Period 2000 - 2013 at FedEx and UPS Hub Airports tional Airport (JFK) trail MEM, SDF and ANC 100% in reported total tonnage but reign supreme in international cargo network connectivity 50% and carrier mixes. No other gateway so dominates a region 0% as MIA does Latin America. Many Latin -50% American markets have direct freighter service to no other US market but MIA, and 100% MEM SDF IND EWR DFW OAK ONT PHL RFD AFW GSO CAE Mexico is the only major market in the re- gion for which MIA is not the #1 gateway. Data Sources: Airports Council International - North America & FAA T-100 MIA’s share by market commonly exceeds 80%. Long targeted by the likes of Dallas/ airport’s total cargo having grown only $1&IRUVLJQLÀFDQWKXEVW\OHGLVWULEXWLRQ Ft. Worth and Atlanta, MIA experienced 18% 9% since the hub opened in 2009. Once a major integrated carrier in the growth in total tonnage between 2000 and Among US airports hosting FedEx and US, DHL no longer serves the domes- 2013 (inclusive) while most of its rivals en- UPS hubs, only Memphis, Louisville and tic door-to-door consumer market but dured double-digit decreases. The airport’s Greensboro enjoyed positive net growth focuses upon international shipments share of total cargo that is international between the peak year of 2000 and 2013 drawn from a network of U.S. feeder cit- (87%) is higher than any other US gateway. (inclusive). Other regional hub airports ies connected by truck, airline partners MIA has unique mixes of passenger and commonly suffered double-digit losses and contract carriers to its Cincinnati/ all-cargo carriers and is the Latin American - common to FedEx hubs Indianapolis Northern Kentucky International Airport gateway for DHL, FedEx and UPS. Perhaps (-15%), Newark (-40%), Oakland (-26%) (CVG) hub and its access to DHL’s unri- most impressively, its dominance was little and Alliance Fort Worth (-55%), as well as valled global network. While CVG experi- affected by the loss of its former largest car- UPS hubs Dallas/Ft Worth (-35%), LA/On- enced impressive 52% growth from 2000 go carrier in 2010 and a more re- tario (-10%), Philadelphia (-32%), Chica- through 2013, DHL acquired the former cent inactivity by . Other go/Rockford (-37%) and Columbia (-55%). $LUERUQH([SUHVVDQGÀUVWPRYHGLWVKXE FDUULHUVÀOOWKHYRLGDQGVHHPWRFRQVLGHUQR While the integrators are not the only to Airborne’s former base in Wilmington, other gateway in which to do so. cargo carriers at these airports, the inte- OH before restoring CVG as its US hub. The next three largest gateways - LAX, grators account for at least 90% of total ORD and JFK - jockey between them for annual cargo at most of these airports. US international gateways - the #1, 2 and 3 rankings for almost every The decreases coincided with huge mar- excluding integrator major Asian and European trading part- ket share gains by the integrated carri- hub airports ner. While these are larger trading part- ers but during a period of extreme modal Ranked #4 through 7 consecutively ners than the Latin American markets diversion from air to truck transport for among U.S. airports in total cargo, Miami that MIA dominates, some of the Asian purely domestic shipments, as well as for International Airport (MIA), Los Angeles and European trade lanes are served by the domestic segment of international International Airport (LAX), Chicago O’Hare a dozen or more US airports. shipments. While regional hubs have fared better since 2009, more years of 4 Largest U.S. International Cargo Gateways: 2013 Metric Tonnes of Total Cargo growth will be required just to return to 2000 levels. 2,500,000 Too dissimilar for easy inclusion among 2,000,000 the other integrator hubs, Anchorage In- DOM ternational Airport (ANC) has long been a 1,500,000 technical stop for refueling, crew changes INTL 1,000,000 DQG FDWHULQJ RI WUDQVSDFLÀF IUHLJKWHU RS- erators. Alaska’s airport operators and 500,000 economic developers have long pursued _ an expansion from these functions to sort- MEM SDF IND EWR ing and distribution operations by Asian carriers, but only DHL, FedEx and UPS use Data Sources: Airports Council International - North America & individual airport operators

 CARGO AIRPORTS AIRLINE SERVICES ‡6SULQJ AIRPORT FOCUS: NORTH AMERICA

Credit: Miami-Dade Aviation Dept LAX gains advantages from Asia-based a new 208,000 sq. ft. multi-use facility allied trade services (banks and forward- adjacent to its existing facility. HUV DVZHOODVVRPHH[FOXVLYHWUDQVSDFLÀF While JFK International Airport has capacity. LAX also hosts a unique FedEx completed a variety of cargo planning ‘Metro Hub’ serving Southern California exercises, the physical improvement (basically, Greater LA) that connects di- and development of new cargo facilities UHFWO\ZLWK0(0DQGKDQGOLQJWUDIÀFYRO- has lagged those of ORD. In 2014, New umes that are equivalent to more than York Governor Cuomo suggested mov- half the annual tonnage of FedEx’s re- ing freighters from JFK to other regional gional hub at OAK, which serves the entire United, domestic tonnage at ORD is lim- airports in order to relieve congestion. Western region except LA. As a result, LAX ited by the presence of two (IND and RFD) The backlash from many of JFK’s largest has more domestic tonnage than any of nearby integrator hubs. ORD has used the cargo users illuminated that while the its rival international gateways. relative slow growth of the last decade to cargo community is profoundly upset - an ORD has added several international initiate ambitious cargo facility improve- emotion for which New Yorkers have a carriers in recent years, helping the ments. DHL Global Forwarding opened a singular gift of expression - with the cur- airport to 4% growth during a period of new $35 million dedicated facility at ORD rent operating environment at JFK, they losses for many rivals. ORD passed JFK in in early 2015 and a $200 million North- are not inclined to go elsewhere. total tonnage but slightly trails in interna- east Cargo Facility is planned by private In the next tier of international - tional tonnes. About 72% of ORD’s total developer Aeroterm. Also in late January ZD\V +DUWVÀHOG-DFNVRQ $WODQWD ,QWHU- cargo is international. Even with two U.S. 2015, CEVA announced an expansion to QDWLRQDO $LUSRUW $7/  ÀQLVKHG  passenger hub carriers in American and its Chicago operation near ORD that adds with about half the total annual tonnage

6SULQJ‡ CARGO AIRPORTS AIRLINE SERVICES  AIRPORT FOCUS: NORTH AMERICA

U.S. rank Airport 2000 2013 Growth , BAX Global, DHL, Emery 10 Atlanta (ATL) 868,286 617,714 -29% Worldwide, FedEx and UPS, as well as a va- 14 Houston (IAH) 368,498 426,384 16% riety of belly cargo carriers in their own dedi- 17 San Francisco (SFO) 872,252 363,795 -58% cated cargo space. Now, FedEx and UPS are 18 Seattle (SEA) 456,920 293,210 -36% customarily the only freighter operators at 19 Phoenix (PHX) 375,250 277,009 -26% the majority of top 100 U.S. cargo airports 20 Washington DC (IAD) 383,852 252,483 -34% - especially outside the top twenty - and a Data Sources: Airports Council International - North America string of belly cargo facilities have been contracted into a single third-party cargo of JFK and one-third that of MIA. Apart Delta Air Lines’ seeming commitment as handler’s warehouse. from the UPS regional hub at DFW, ATL LWV UHJLRQDO WUDQVSDFLÀF JDWHZD\ ÀOOLQJ In spite of the demise of these carriers largely mirrors that airport’s recent cargo gaps for direct service to several major and even in spite of the tonnage losses successes and challenges. Anchored by Asian markets. Phoenix Sky Harbor In- documented among most of the integra- Delta Air Lines’ largest passenger hub, ternational Airport (PHX) continues to tor hubs and international gateways de- ATL has attracted enough foreign carriers rank just inside the US top twenty after tailed in the preceding sections, some that international cargo passed domestic a 26% decrease but airport operators US airports continue to target the imag- cargo in the airport’s total cargo mix in have mostly seemed dedicated to push- ined “runaway cargo growth” and “over- 2006. The international gains were not ing cargo operators to other alternatives. ÁRZµ IURP OHJDF\ JDWHZD\V WKDW IRU WKH enough to offset domestic losses that International cargo at Washington ÀUVWWLPHLQPHPRU\PD\KDYHDYDLODEOH left ATL with a 29% drop in total cargo 'XOOHV ,QWHUQDWLRQDO $LUSRUW ,$'  ÀUVW cargo facilities to lease. Perhaps most between 2000 and 2013 but have ce- exceeded domestic in 2006 but the telling was the 2014 experience of air- mented the airport’s focus as an interna- market’s international needs are entirely ports in Columbus, Ohio (Rickenbacker) tional gateway. met by belly capacity. IAD serves a region DQG5HQR1HYDGDWKDWEULHÁ\ZHUHKXEV Houston’s George Bush Interconti- stocked with businesses involved in life for an experiment by Ft. Lauderdale, nental Airport (IAH) achieved impressive sciences - a key growth area for the air FL-based , which growth during a period of losses for most cargo industry - but is presently more of sought to provide the kind of domestic of its presumptive benchmark US air- a research than production hub. all-cargo lift once offered by some of the ports. A former hub now-extinct carriers. After two months, now operated by United with extensive Beyond The Top Twenty Amerijet returned to its more traditional connections to Latin America, Houston Since 2000, US airports have witnessed Caribbean-focused business and the US enjoys symbiotic relationships with key the end or absorption of numerous once- airports had another cautionary tale on oil and natural gas-oriented markets powerful air cargo entities. In the 1990’s, their hands regarding the challenges of around the world. Not surprisingly, IAH even medium-sized cargo airports hosted air cargo development. QQQ is consistently an expansion priority for Middle Eastern carriers. IAH’s operators aggressively pursued expansion of its dedicated cargo apron and warehouse facilities, such that no other US gateway likely has as much surplus capacity of relatively new development. Michael Webber is the president of Webber Air $V/$;VROLGLÀHGLWVGRPLQDQFHDVWKH &DUJR,QFDFRQVXOWLQJÀUPSULPDULO\VHUYLQJFDUJR region’s international hub, San Francisco SODQQLQJQHHGVRIDLUSRUWRSHUDWRUVDQGFLYLODYLDWLRQ International Airport (SFO) suffered the authorities. Based in Austin, Texas, he has completed largest drop (58%) in total tonnage since multiple projects in the US, Asia, Africa, the Middle  EXW UHPDLQV D ÀUPO\ HVWDEOLVKHG (DVWDQG/DWLQ$PHULFDSURYLGLQJFRQVXOWLQJVHUYLFHV WUDQVSDFLÀF SDVVHQJHU JDWHZD\ ZLWK DW WRDYDULHW\RIDLUSRUWVLQWHUQDWLRQDODLUFDUULHUVDQG OHDVWWKHEHQHÀWRIEHOO\FDSDFLW\:KLOH their cargo handling units. Seattle-Tacoma International Airport

(SEA) also suffered a double-digit (36%) You can contact him at [email protected] cargo drop for the period, it has been on or by phone/fax on +1 913-660-0701 an upward trajectory since 2011, with

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HANDLING FOCUS: ASIA CHANGING FACILITIES As air freight demand Ronald Yeo, Senior Vice regions, as well as the country’s move to President, Cargo Services, SATS attract pharmaceutical and biotechnology to, from, and within Cargo volumes for SATS Group, including companies. our overseas joint ventures, declined 1.5% Given the high value and often extreme Asia rebounds, cargo for the nine months ended December 2014. temperature sensitivity of pharmaceu- handlers identify Cargo volumes for our Singapore operations ticals, demand for a more secure cold JUHZ  PRVWO\ UHÁHFWLQJ RXU PDUNHW chain by pharmaceutical companies has some of the key share gain at . Global trade prompted SATS Coolport to set up a Centre developments on ÁRZV ZKLFK WKH PDUNHW UHOLHV RQ KDYH of Excellence in pharmaceutical handling VWD\HGSHUVLVWHQWO\ZHDNZLWKJURZWKRIOHVV last year. The facility underwent upgrading, the ground, including WKDQLQZHOOEHORZWKHSUHÀQDQ including enhancements to its dedicated cial crisis average growth of 7% annually. pharmaceutical zone for acceptance and enhancing their $PLGVW WKH JHQHUDO ZHDN GHPDQG SHU delivery of pharma shipments. It was as- express and cool- ishables – including pharmaceuticals – sessed by IATA for its handling policies and DQG H[SUHVV FDUJR DUH WZR NH\ VHJPHQWV procedures, in particular its adherence chain capabilities supporting our cargo tonnage growth. Our to the IATA temperature control regula- as pharma and dedicated on-airport perishable handling tions. Furthermore, staff at SATS Coolport facility, SATS Coolport, handles 90% of have undergone a specialised training e-commerce shipment the premium perishables coming through programme for pharmaceutical handling Singapore Changi Airport. In 2014, SATS conducted by IATA. In November, SATS demand grows Coolport handled over 240,000 tonnes &RROSRUW EHFDPH WKH ZRUOG·V ÀUVW FHQWUH of perishables, representing more than of excellence for independent validators 14% growth from just two years ago. Asia’s (CEIV) in pharmaceutical handling, certi- ULVLQJ PLGGOH FODVV LV D NH\ GULYHU RI WKLV ÀHGE\,$7$ growth, with greater demand for fresher, Early this year, SATS signed an MOU with safer and more exotic food. Swiss WorldCargo and Cargologic to estab- Pharmaceuticals, a sub-segment of per- lish a quality alliance bridging Europe and ishable cargo, saw an impressive year-on- Asia. This alliance will focus on providing year growth of 30% in 2014. Part of this superior facilities and specialised handling growth comes from Singapore’s status as a solutions for premium, care-intensive air connecting hub between Europe and other cargo including pharmaceuticals.

36 CARGO AIRPORTS AIRLINE SERVICES ‡6SULQJ HANDLING FOCUS: ASIA

As the value of a cold chain lies in that WKLV SRWHQWLDO PDUNHW DQG FRPSHWLWLRQ DAVID AMBRIDGE, FKDLQ UHPDLQLQJ XQEURNHQ IURP HQGWR is growing. Appropriate, suitably located GENERAL MANAGER, HQG6$76LVORRNLQJWRDSSO\RXUFROGFKDLQ warehouse space to handle e-commerce FLIGHT handling competencies across our Asian will be a great challenge and opportunity.

SERVICES - CARGO QHWZRUN 2XU RYHUVHDV IDFLOLWLHV LQ +RQJ .RQJ DQG ,QGLD KDYH EHHQ *'3FHUWLÀHG What have you done to respond with those in Indonesia being next in line. to these developments? Main issues and trends over the last 12 Turning to express cargo, its demand +DFWO KDV LQYHVWHG LQ PRUH VWDWHRIWKH months has been fuelled by the recent growth in art scanning equipment to improve cargo The issue for us has been growth! We recorded 8% growth in BKK in 2014, e-commerce sales. Similar to perishables, ÁRZV ZKLOH HQVXULQJ LWV V\VWHPV DQG SUR- above the industry average. Some of the explosion in e-retail growth in Asia is cesses are fully compliant with all global this was due to 2013 being relatively weak, but we were happy to see this partly attributed to the rising middle class regulations, as a minimum. In mid-2014, we level of recovery. population in the region, with higher con- achieved EU ACC3 status, both to anticipate Our response to this was to auto- sumer spending and rising disposable possible future tightening of requirements, mate processes and become more income levels. As such, SATS sees oppor- and to ensure through external auditing that HIÀFLHQWUDWKHUWKDQDGGLQJDGGLWLRQDO manpower and costs. This has proved tunities to further capture this growth by +DFWOLVFDSDEOHRIVDWLVI\LQJWKHPRVWGH- to be very successful and we are now OLQNLQJ WKH FDUJR RSHUDWLRQV DFURVV RXU manding of security standards. working at over 18 tonnes/sqm, which is very high. UHJLRQDO QHWZRUN WR RIIHU YDOXHDGGHG H[- press handling services. Expected issues and trends Main issues and trends expected over for the coming 12 months the coming 12 months The current turmoil in the Eurozone has We expect to see further growth as we \HW WR EH UHVROYHG DOWKRXJK +DFWO·V ODUJH DWWUDFWQHZEXVLQHVVDQGÁLJKWIUHTXHQ- cies increase. We also expect political customer base and our carriers’ diversi- stability in during 2015, which ÀHGPDUNHWVZLOOUHGXFHWKHLPSDFWRIDQ\ should help recovery even further, tightening in European consumer demand. especially as we move towards AEC (Asean Economic Community) at the (PSOR\PHQWLQ+RQJ.RQJFRQWLQXHVWREH end of 2015. a challenge, with several major industries FRPSHWLQJIRUEOXHFROODUDQGPDQXDOZRUN- How well are airlines’ cargo needs be- HUV+DFWOKDVVXFFHVVIXOO\DYRLGHGUHOLDQFH ing served on the ground? on temporary agency manning (uniquely You should ask airlines, but we think BKK is either the highest-quality station among handlers here) by continuing its in their network, or at least in the Top 3. Mark Whitehead, CEO of : advanced staff retention programme – a We provide service of a far higher qual- ity than SLA or C2K requirements of any Main issues and trends over combination of fair remuneration, and fo- airline customer that we handle. the last 12 months FXV RQ ZRUNHU ZHOIDUH FDUHHU SURJUHVVLRQ Aviation security continues to evolve and be- and intensive company-funded vocational Development plans come more onerous, particularly at the han- WUDLQLQJ7KLVKDVPLQLPLVHGRXUZRUNIRUFH We have been trying to get additional dling level. We are entirely supportive of the churn. land from the for the last four years to build our second drive to maximise security, but it does add Should fuel prices remain at their cur- cargo terminal, but that has not been costs and introduce delays that could be rent low, and when this feeds through to forthcoming so far. Instead we have detrimental to the airfreight sector, and our forward buying, it will be interesting to invested heavily in automation and process improvement to keep ahead FKDOOHQJHLVLQFRQVWDQWO\ÀQGLQJQHZZD\V see what impact this has on freighter op- of our growth. to maintain service standards and pricing. erators. It could give a new lease of life to The e-commerce revolution is really be- DJHLQJ OHVV IXHOHIÀFLHQW HTXLSPHQW WKDW Quality-improvement initiatives ginning to re-shape the air cargo industry, would otherwise be retired. Our programme of continuous improve- particularly in Asia, with the growth of Ali- ment helps us to get better each year. We make fewer mistakes, we learn from EDEDDQGWKH&KLQHVHFRQVXPHUPDUNHW·V How well are airlines’ cargo needs being each mistake, and we become better burgeoning appetite for genuine western served on the ground as a result of what we learn. We will goods. There is a great opportunity here We have a 37-year tradition of innovation never be perfect because we have hu- man beings working for us, but we strive IRU +RQJ .RQJ ZLWK LWV XQSDUDOOHOHG FRQ- DQGLQYHVWPHQWGHVLJQHGWRNHHSXVDKHDG every day for service excellence. Q QHFWLRQVIURPHYHU\NH\JOREDORULJLQSRLQW RIWKHZRUOGLQHIÀFLHQF\DQGVHUYLFHVWDQG- but we are not alone in wanting to pursue ards; so, I would contend that our carriers are

6SULQJ‡ CARGO AIRPORTS AIRLINE SERVICES 37 HANDLING FOCUS: ASIA

LUTZ GRZEGORZ, VICE Development plans PRESIDENT OF PACTL: We are busy building a new end-to- HQGFRROFKDLQIDFLOLW\²WKHÀUVWRQH Main issues and trends over of its kind in mainland China – for the the last 12 months handling of temperature-sensitive We were able to exceed our positive goods such as perishables, phar- expectations with a record 1.5 million maceuticals and other healthcare tonnes of air freight handled in 2014, products. We not only see a rising de- growth of 16%, supported by the posi- mand from our customers; Shanghai tive development of our customers’ has also developed to be the most business, an ongoing increase of our important research and develop- RSHUDWLRQDOHIÀFLHQF\DQGZHZHUH ment centre for the Chinese pharma able to continuously expand our client industry. We therefore plan on estab- base by signing with several new cus- lishing a pharma gateway at PVG. tomers – further increasing our market throughout the last years, we decided Furthermore, we plan on developing share to 48% of the air cargo handled to build a new end-to-end perishable a joint e-platform for all stakehold- at Shanghai Pudong International centre at one of our terminals. ers at PVG including airlines, agents, Airport (PVG). customs, trucking companies and warehouse terminals. Main issues and trends expected Responses to these issues and trends over the coming 12 months Quality-improvement initiatives It is essential for us to ensure that PVG will remain the strongest air cargo VXIÀFLHQWFDSDFLWLHVDQGWKHKLJKHVW hub in mainland China. Generally, car- We permanently monitor and evalu- quality standards are in place in order go volumes are expected to continue ate relevant quality key performance to meet the increasing requirements to increase. This development will, for indicators and we emphasize extensive of our customers, supplementing their instance, be driven by the e-commerce staff training as well as direct feedback overall product portfolio as well as sector. The new e-AWB will take a big sessions with all customer airlines. In supporting any enhanced services. share as it is fully supported and pushed addition, we have a strong focus on )RUH[DPSOHDVZHVDZDVLJQLÀFDQW by all stakeholders. There’s a strong SURFHVVHIÀFLHQF\DQGFRQWLQXRXVO\ growth in temperature-sensitive freight focus from Chinese customs. push innovations. Q provided with the best possible service. We our AISATS locations. also try to anticipate their future needs and We have also implemented a commu- present them with added-value services and nity system, which serves as a platform for specialist facilities that will help them to capi- seamless electronic data interchange. This WDOLVHRQDOOPDUNHWRSSRUWXQLWLHV([DPSOHV is the digital foundation for AISATS’ e-freight DUHRXUJURZLQJ+DFLV5)6V\VWHPZKLFKHI- initiative, which will increase agility, cost ef- IHFWLYHO\H[SDQGVWKHPDUNHWIRURXUFDUULHUV· IHFWLYHQHVVHIÀFLHQF\DQGIXUWKHUVSHHGXS DLUVHUYLFHVWRDQGIURP+RQJ.RQJDQGRXU customs clearance in our cargo operations. recent investment in systems, equipment DQG FRPSOLDQFH WKH ÀUVW *'3 KDQGOHU LQ How well are airlines’ cargo needs being +RQJ.RQJ WRDFFRPPRGDWHSKDUPDWUDIÀF Willy Ko, CEO – AISATS served on the ground? ( SATS Airport Services): In 2013-14, all operational airports in India (IÀFLHQF\LPSURYHPHQWLQLWLDWLYHV Issues and trends in the last year WDNHQ WRJHWKHU KDQGOHG RYHU WZR PLOOLRQ 5HFHQWLQQRYDWLRQVLQFOXGHWKHLQWURGXFWLRQ AISATS has witnessed exponential growth metric tonnes of cargo (including domes- of mobile phone apps that enable visiting since its inception in 2008. We are com- tic and international cargo), registering a GULYHUVWRFKHFNWKHVWDWXVRIWKHLUFDUJRRQ mitted to continuously enhance our opera- 4% growth over the previous year. While LQERXQGÁLJKWVDQGSUHERRNGRRUVORWVDF- WLRQVDQGODVW\HDULQYHVWHGPRUHWKDQ,15 the growth rate is a positive trend and FRUGLQJO\+DFWOFDQDOVRSORWWKHSURJUHVVRI 430 million in ground support equipment service providers have been matching up incoming vehicles, and adjust handling pri- (GSE). In June, we inaugurated our Danger- WR JURZLQJ PDUNHW GHPDQGV LQDGHTXDWH orities; the aim is to minimise vehicle dwell RXV*RRGV5HJXODWLRQ '*5 WUDLQLQJIDFLO- LQIUDVWUXFWXUHUHPDLQVDPDMRUERWWOHQHFN time at our terminal. ity at Trivandrum, becoming one of the few LPSDFWLQJWKHHIÀFLHQWPRYHPHQWRIFDUJR airport service companies in India to be Although in recent times the sector has Development plans granted approval to provide training for staff witnessed increased investment, evolving +DFWOFXUUHQWO\KDVDPSOHVSDFHWRDFFRP- and for external customers. We also recent- regulatory policies, mega infrastructure modate growth from existing and new cus- O\REWDLQHG,62FHUWLÀFDWLRQIRU projects and several other initiatives, there WRPHUV$Q\H[SDQVLRQLVPRVWOLNHO\WREH our operations. We will progressively LVVWLOODQHHGWRVLJQLÀFDQWO\DFFHOHUDWHWKH seen in our product portfolio. REWDLQERWK,62DQG,6$*2FHUWLÀFDWLRQDW pace of such developments.

38 CARGO AIRPORTS AIRLINE SERVICES ‡6SULQJ AIR CARGO HANDLINGHANDLING’S FOCUS: ASIA PREMIUM GATHERING HITS ASIA

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What could be done to improve this? A targeted approach to improve infrastructure and appropriate regulatory policy will aid the predicted upturn in the air cargo in- dustry. It is clear that the Indian air cargo industry will witness exponential growth. Although this paints a positive picture, the SEPTEMBER scope for improvement in the Indian cargo handling sector is VW UG substantial, but is on the road to being on a par with global coun- terparts. The growth in the air cargo industry in India calls for   a more focused approach to improve infrastructure as well as 2015 an increase in the number of dedicated cargo terminals. Safe, secured and speedy delivery of cargo will be crucial to a smooth Shangri-La Hotel, Bangkok DQGHIÀFLHQWORJLVWLFVQHWZRUN MEET THE EXPERTS The air cargo industry in India was given an impetus with Conference Chairman Chief Moderator OLIVIER CHRIS the government’s renewed focus on increasing air connectivity BIJAOUI NOTTER DFURVVWKHFRXQWU\5HFHQWO\WKHJRYHUQPHQWLGHQWLÀHGDLU ports to develop dedicated air cargo terminals and create a na- President & VP Operations CEO, WFS Saudi Airlines WLRQDOORJLVWLFQHWZRUNIRUIDVWHUPRYHPHQWRIJRRGV,QDGGLWLRQ Cargo to this, policy measures to address the burden of high taxes on $7) DQG WKH LQFUHDVLQJ DLUSRUW UHODWHG OHYLHV ZLOO VLJQLÀFDQWO\ facilitate the viability of the industry.

4XDOLW\LPSURYHPHQWLQLWLDWLYHVDQGGHYHORSPHQWSODQV :LWK,QGLDZRUNLQJWREHFRPHWKHJOREDOSKDUPDFHXWLFDOPDQXIDF turing and processing hub, it is imperative to have the relevant in- frastructure and adopt complex logistical methods to maintain the shipment’s integrity. AISATS operates a 210,000-tonne capacity airfreight terminal in Bangalore that caters to general, perishable, EVENT transhipment, express courier and special cargo handling. There SPONSORS are cold room facilities with different temperature variations, and AISATS continually endeavours to enhance its infrastructure by PDNLQJ IXUWKHU LQYHVWPHQWV LQ FRRO FKDLQ IDFLOLWLHV WR VDIHJXDUG SURGXFWTXDOLW\DQGRSWLPL]HVKHOIOLIH5HFHQWO\WKH%DQJDORUHID FLOLW\UHFHLYHGLWV*RRG'LVWULEXWLRQ3UDFWLFHV *'3 FHUWLÀFDWLRQD system that ensures that the quality of a pharmaceutical product is PDLQWDLQHGWKURXJKRXWWKHGLVWULEXWLRQSURFHVV%\EHLQJWKHÀUVW DLUIUHLJKWWHUPLQDOLQWKHFRXQWU\WRJHWWKLVFHUWLÀFDWLRQ$,6$76 demonstrates its commitment towards providing world-class and JOINING FORCES AUG 31ST – industry-recognized quality standards in its facilities and services. WITH SEPT 3RD 2015 :HZHUHDOVRWKHÀUVWWRLQWURGXFH$XWRPDWHG6WRUDJHDQG For more information or to 5HWULHYDO6\VWHPV $656 9HU\1DUURZ$LVOH 91$ WUXFNVZLWK register please contact KLJKULVHUDFNLQJDQG&26<6VRIWZDUHLQRXURSHUDWLRQV$,6$76 Louise Ladouceur at [email protected] DOVRSLRQHHUHGWKHXVHRIWKHFDUWRQFODPSIRURXUIRUNOLIWVDW CONFERENCE the Bangalore air cargo terminal to minimize damage and im- SURYHHIÀFLHQF\LQWKHKDQGOLQJRIORRVHFDUJR *RLQJ IRUZDUG ZH SODQ WR XQGHUWDNH PRUH LQLWLDWLYHV WR www.uldcare.com/events.html build specialized perishable handling centres and automated WUDFNLQJVROXWLRQVWRRSWLPL]HVKLSPHQWSURFHVVHVDQGSURYLGH For sponsorship and exhibition opportunities contact: smooth and safe transportation services. [email protected] or call +44(0) 208 253 4000 $,6$76·DPELWLRQVDUHQRWOLPLWHGWRWKHÀYHDLUSRUWVWKDWLW US Representative - [email protected] or call +1 770 517 3952 LVFXUUHQWO\RSHUDWLQJLQ:HDUHNHHQRQH[SDQGLQJRXUORFDO IRRWSULQWLQQHZDQGHPHUJLQJPDUNHWVQQQ www.evaint.com

6SULQJ‡ CARGO AIRPORTS AIRLINE SERVICES 39 American Airlines Cargo is among the growing list of major airlines to develop a specialist temperature-controlled product – in its case, ExpediteTC COOL CHAIN

aintaining the integ- the move towards setting high cool-chain As the global rity of a shipment of shipping standards (of which more later) pharmaceutical fruit or vegetables – observes: “That is part of our life… We M that needs to move only see more regulations and legislative logistics market quickly to market and standards. This will not change. But it will DYRLGZLGHWHPSHUDWXUHÁXFWXDWLRQVLVHV be crucial to harmonise this as much as continues to grow, sential. But the value, effectiveness, and possible. To deal with more regulation is so do its regulatory safety of some pharmaceutical products manageable if we have the same regula- can be impaired or destroyed by even tion as much as possible.” requirements, reports comparatively small changes in tempera- The growing complexity of supply chains Mike Bryant ture, and the regulatory requirements is another reason why policy-makers world- surrounding their transport are getting in- wide are enforcing stricter regulations for creasingly strict at the same time as their importance to air freight grows. The global pharmaceutical logistics mar- ket was valued at US$64 billion by the In- ternational Air Transport Association (IATA) in 2013 and now forms a big part of the cool-chain market segment, particularly by air. But at the heart of the effort to ensure these valuable commodities – in human, DV ZHOO DV ÀQDQFLDO WHUPV ² UHDFK WKHLU destination in the same condition they left their point of origin, are a number of regu- latory programmes of required standards, national and supranational. Steven Polmans, head of cargo at Brus- Polmans: Expecting sels International Airport – a key player in more regulations

40 CARGO AIRPORTS AIRLINE SERVICES ‡6SULQJ COOL CHAIN

manufacturing and logistics. Alongside well-known and well- ANNOUNCING THE 1ST respected supranational regulatory standards such as the CONFERENCE 2015 EU’s Good Distribution Practice (GDP), governments and inter- national organisations such as the World Health Organization CONRAD, MIAMI :+2 KDYHLQFUHDVHGWKHLUUHTXLUHPHQWVLQWKLVÀHOG0RUHRYHU explains Renate de Walle, director for pharmaceutical logistics 18TH-19TH MAY 2015 DW$LU)UDQFH./00DUWLQDLU&DUJRRQHRIWKHPDQ\FDUULHUV that now offer a specialised temperature-controlled shipping SEBASTIAAN SCHOLTE CHAIRMAN product: “While the focus used to be on cool-chain manage- CEO, JAN DE RIJK LOGISTICS ment to reduce temperature excursions, the scope has now EDWIN KALISCHNIG expanded to include issues related to security and coun- SECRETARY GENERAL, COOL CHAIN ASSOCIATION terfeiting. I think that regulations will become only stricter, & CEO, XTREME TECHNOLOGIES BV fuelled by rising global demand and growing requirements for monitoring to assist in the proof of chain of custody and increasing questions from regulators related to monitoring FEATURED SPEAKERS: methodology, as well as more global regulations to monitor ROBERTO SCHIAVONE Senior Vice President Airfreight / humidity as well as temperature.” Americas Region at Panalpina High standards imposed on the pharmaceutical industry offer clear advantages to the patients who depend on their products. PIERGIORGIO CURCI Cargolux, “Enforcement of regulations and associated guidelines provides Vice President of the Americas assurance to the consumer that approved and acceptable qual- ity levels are met, and that similar products from different man- During the CCA conference in Miami we will XIDFWXUHUVDUHLQHVVHQFHHTXLYDOHQWLQVDIHW\DQGHIÀFDF\µ hear the view of the shipper, the forwarder she observes. and the airline on how we can improve the Pointing to that growing complexity of the logistics process, de Walle insists that it has become vital to “clarify mutual ex- perishable air cargo supply chain. pectations between the stakeholders involved. A supply chain is only a sum of its moving parts. Logistics partnerships are in- Since Miami is an important hub for creasingly the cornerstone of a successful, low-risk temperature perishables from Latin America we will also control supply chain,” she warns. have the views from different logistics service Another carrier that has developed a sophisticated cool-chain providers in this important growing market. SURGXFWLV,$*&DUJR*OREDOKHDGRISKDUPDFHXWLFDOVDQGOLIH sciences Alan Dorling agrees that having high standards is ab- We look forward to interesting discussions solutely essential, given the importance of these extraordinar- and great networking opportunities. ily valuable pharma products that are being moved. However, he points to the fact that not only are there large numbers of national and supranational bodies all offering standards and To attend, speak at or sponsor the event guidelines on pharma shipping – all suggesting something please contact: slightly different – but even the same protocols can be inter- SUHWHG GLIIHUHQWO\ 7KXV IRU H[DPSOH ,$* &DUJR IROORZV ,$7$·V Parveen Raja on [email protected] &KDSWHU  $LU 7UDQVSRUW /RJLVWLFV IRU 7LPH  7HPSHUDWXUH or call +44 (0) 208 253 4000 Sensitive Healthcare Products, which addresses the require- ments to transport time and temperature-sensitive healthcare US Representative - Pam Latty products, and sets standards that cold-chain stakeholders are [email protected] required to meet) overlaid with the EU’s GDP standards – while or call +1 770 517 3952 also answering to the UK’s own national competence author- LW\WKH0HGLFLQHVDQG+HDOWKFDUH3URGXFWV5HJXODWRU\$JHQF\ Rest of the World - Simon Langston 0+5$ 0RUHDQGPRUHRIWKHVHUYLFHOHYHODJUHHPHQWV 6/$V  [email protected] WKDW,$*&DUJRVLJQVXSWRQRZLQFRUSRUDWHTXDOLW\VWDQGDUGV vis-à-vis pharma shipping that incorporate the strictures laid out or call +44(0) 208 253 4000 by these bodies.

6SULQJ‡ CARGO AIRPORTS AIRLINE SERVICES  COOL CHAIN

CEIV Pharma has taken us another step forward”. Airline involvement One major effort to offer a global standard %XW LW VHHPV WKDW WKH &(,9 SURJUDPPH “To stay at the forefront of the industry for pharma shipping standards is being un- has been welcomed throughout the air car- takes strong commitment to continuous dertaken by IATA. Developed originally in go cool-chain, not just by those directly in- innovation by listening to customer needs, conjunction with Brussels Airport, the pro- YROYHGLQLW&HUWDLQO\WKH&RRO&KDLQ$VVR to keep building on our successful legacy of gramme offers a worldwide standard for the FLDWLRQ &&$ WKHQRWIRUSURÀWWUDGHERG\ shipping pharmaceuticals for more than 20 handling and transportation of pharmaceu- IRUPHG WR LPSURYH WKH TXDOLW\ HIÀFLHQF\ years and to boldly chart a new path when tical goods: all those taking what is known and value of the temperature-sensitive it makes sense to do so,” argues de Walle. DVWKH&(,9 &HUWLÀFDWHRI([FHOOHQFHIRU,Q supply chain, has welcomed the initiative. $LU )UDQFH./00DUWLQDLU &DUJR ,$* GHSHQGHQW9DOLGDWRUV 3KDUPDFHUWLÀFDWLRQ $FFRUGLQJ WR &&$ FKDLUPDQ 6HEDVWLDDQ &DUJRWKHELJ$PHULFDQDLUOLQHVDQGPDQ\ programme receive the same training and 6FKROWH &(,9 UHSUHVHQWV D ELJ DGYDQFH others have all developed specialised, guar- are audited against the same standards. Like Polmans, he sees it as a valuable anteed temperature-controlled products, The Belgian gateway’s cargo team had move towards the pharma air cargo ship- but they have also looked to work closely initially worked on developing the pro- ping business being able to look as one to with supply chain partners to perfect the gramme together with the pharma industry a single, common quality benchmark. process. For example, de Walle points out and some other stakeholders. Speaking in &HUWLÀFDWLRQE\,$7$RIDQ\FRPSRQHQWRI that to stay abreast with what is most impor- December last year, Polmans explained: the air freight supply chain – whether han- tant to pharmaceutical providers, her airline “By joining forces with IATA, the programme dler, airport, forwarder or trucker such as group has initiated informal discussion plat- FDPH XS WR IXOO VSHHGµ 7KH ÀUVW ZDYH RI forms in order to exchange views with phar- assessments and training, which involved ma shippers on what matters most. The 11 companies, has now been completed most recent conference was co-organised DQGWKHÀUVWFHUWLÀFDWHVZHUHKDQGHGRXW with Amsterdam Airport Schiphol (AAS) and towards the end of 2014. the Dutch Association of Research Quality The need for a single worldwide quality Assurance (DARQA) and was called ‘GDP standard is evident, Polmans insists. “Even Practice in the Aviation Industry’. those who are working against the Euro- The main action points to come out of SHDQ &RPPLVVLRQ·V *'3 VWDQGDUGV KDYH the conference, she says, were twofold. different set-ups, depending on which part First, the need to improve supply chain of the world they are in. Even in Europe we quality and thereby the product integrity of see differences. And only a limited number the pharmaceutical goods, alongside en- of players in the supply chain can really be Scholte: Wants CCQI to form part hanced communication between shippers, of Cargo 2000 quality standards FHUWLÀHGDFFRUGLQJWR*'3VWDQGDUGV7KLV forwarders and the airlines. Transparency is for me the most important reason for &(,93KDUPDDFFUHGLWHG-DQGH5LMN RIZKLFK and collaboration is key to further improv- the need of the programme: it will create 6FKROWH LV DOVR &(2  ² DOORZV VKLSSHUV WR ing the supply chain quality. Secondly, deci- trust within the industry that air cargo is a make informed choices as to whom they will sions on how exactly GDP should be imple- reliable solution for the transportation of WUXVW ZLWK WKHLU VKLSPHQWV 0RUHRYHU %UXV mented both by airlines and the air cargo pharma and reduce waste of products due sels is establishing itself as a true pharma industry more widely need to be based on to a deviation in the cold chain. The result FDUJRKXEWKHÀUVWRIPDQ\6FKROWHKRSHV a risk-based approach where the product will be more pharma shipments, and those 2IFRXUVH&(,93KDUPDLVQRWWKHRQO\ integrity of the transported goods should ZKRKDYHWKHFHUWLÀFDWHZLOOEHQHÀWPRUHµ industry standard for those shipping always be the goal, she says. 6'9 ZDV DPRQJ WKDW ÀUVW JURXS RI temperature-sensitive goods, but it has ,$*&DUJREHJDQLQYHVWLQJKHDYLO\LQLWV course participants to recently pass the the advantage of specialising in air cargo, pharma business about three years ago – ,$7$%UXVVHOV$LUSRUW&(,93KDUPDWUDLQLQJ unlike – for example – the aforementioned in both staff and facilities – and now boasts SURJUDPPH3HWHU&ODHVVHQVVDOHVGLUHF *'30RUHRYHUWKH&&$KDVLWVRZQTXDO pharma experts in every key trade lane, WRUIRU6'9%HQHOX[FRPPHQWHG´+HDOWK ity measurement for the logistics industry Dorling says, in the UK, in mainland Eu- FDUH DQG OLIH VFLHQFH LV RQH RI 6'9·V dealing with temperature-sensitive prod- URSHLQWKH86DQGLQ$VLD3DFLÀF,QGHHG fastest-growing business industry verti- XFWV LWV ¶&RRO &KDLQ 4XDOLW\ ,QGLFDWRUV· ,$*&DUJRWRRNRQLQGLYLGXDOVVXFKDV'RU cals, serving pharmaceutical companies, &&4, DVWDQGDUGWKDW6FKROWHZRXOGOLNH ling himself who come from a biochemical the nuclear medicine sector and medical to see form part of the International Air background to complement the existing device manufacturers. Participating in the 7UDQVSRUW$VVRFLDWLRQ·V&DUJR &.  cargo experts at the carrier. Working along- *'3 FHUWLÀFDWLRQ SURJUDPPH LQ %UXVVHOV quality standards. VLGH ,$* &DUJR·V  TXDOLW\DSSURYHG

 CARGO AIRPORTS AIRLINE SERVICES ‡6SULQJ COOL CHAIN

GDP-compliant stations, the carrier’s 32 to offer dedicated temperature-sensitive pharma specialists are able to work closely shipping capacity plus the infrastructure to IT’S NOT ALL with shippers and forwarders in a genuine- handle these delicate perishables, but the ABOUT PHARMA ly collaborative partnership to ensure safe small number of carriers who can genuine- There’s more to the perishables business and secure pharma shipping. ly offer such a facility is perhaps measur- than pharma, as important as life- Also at the heart of the effort is the state- able on two hands. saving medicines are, and things are changing in other parts of the cool- of-the art facility dedicated to IAG cargo’s chain air logistics business. “Moving &RQVWDQW &OLPDWH VHUYLFH DW WKH FDUULHU·V The right facilities perishable goods is indeed of growing importance for Kuehne + Nagel’s base at London Heathrow. Operating on a Of course, the airlines can do only so much. forwarding business and the amount dual-hub strategy, there is a similar capa- The right facilities must also be available of perishables moving by air is steadily bility and the same temperature-sensitive on the ground, hence IAG’s heavy invest- increasing,” says Dennis Verkooy, cor- porate head of perishables air logistics handling procedures at Iberia’s base at ments at Heathrow. As de Walle explains: for the global freight forwarder. 0DGULG3OXV,$*&DUJRLVDPRQJWKHJORE- “From an infrastructure perspective, any Moreover, he continues, for cer- al freight carriers to have invested in com- carrier wishing to support pharmaceutical tain perishables products, like fruit or vegetables, customer requirements for munications and track-and-trace technol- shipments must ensure that they have the K+N and other cargo agents to secure ogy that offers its customers near real-time right temperature-control technology and the cold chain over a longer period of access to not only the current condition of process in place to keep pharmaceuticals time are increasing. So it is not just in the area of pharmaceutical shipping that their pharma consignment but also its full at the correct temperature – from the the demands being placed on cool- shipment history, Dorling claims. moment they arrive at the airport, to the chain integrity are getting ever more intense – although the lessons learned $)./00DUWLQDLU &DUJR DQG ,$* &DUJR point at which they are handed over to the from pharma’s demanding require- might be only two of the more than 30 customer at the destination. This increas- ments may prove valuable throughout airlines based around the world that claim ingly requires the building of specialist cool-chain air logistics.

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6SULQJ‡ CARGO AIRPORTS AIRLINE SERVICES 43 Connecting Global Competence

LOGISTICS MAKES IT HAPPEN

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MAY 5 – 8, 2015 MESSE MÜNCHEN COOL CHAIN

KDQGOHUV RU DLUOLQHV QRW KDYLQJ VXIÀFLHQW Other changes in the nature of the incentive to build and maintain dedicated pharma shipping business Dorling has ob- cool-chain facilities themselves at their served include the global pharma industry FDUJR KXEV EHFDXVH WKH\ ODFN VXIÀFLHQW making a concerted effort to streamline economies of scale in relation to pharma inventories wherever possible. That means shipping, might be for airport operators to more urgent shipping requirements, step in and perform that role. though lower inventory costs. Dorling suggests just this, pointing to He also points to the rising number of Hyderabad’s pharma zone as evidence of worldwide requests for tender in relation to how this can work well. The airport opera- pharma contracts, also likely to lead to in- tor can charge users, whether handlers or creasing demands for temperature-sensitive airline self-handlers, for every tonne of Dorling: Even the same VKLSSLQJ$QGÀQDOO\'RUOLQJQRWHVWKHJURZ protocols can be temperature-sensitive cargo they move ing demand for certain pharma commodity interpreted differently from the facility. If the infrastructure is categories – vaccines, insulin to combat the warehouses with temperature control there, it may also encourage further phar- ever-more widespread obesity-related Type 2 zones kept at a variety of temperatures.” ma volumes through the airport. diabetes problem, blood plasma and onco- In Europe and the US, to which the vast logical cancer treatment drugs. PDMRULW\RISKDUPDLVÁRZQIDFLOLWLHVDUHJHQ A changing business As for de Walle: “One of the most ap- erally up to the job of maintaining the integ- The recent economic and air cargo industry parent changes of late resulted from the rity of temperature-sensitive cargo (the weak- crisis has forced everybody to re-examine implementation of GDP, which means that ness in the air freight cool-chain is when the their business processes, cost levels, part- ambient products need to be monitored consignment is on the tarmac, Scholte ob- nerships and way of working perhaps more EHWZHHQDQGƒ&7KLVKDVH[SDQGHG serves). Facilities are far less sophisticated than ever before. This has had an impact the market for temperature monitoring, beyond those two continents, where pharma in cool-chain shipping as in other areas of VLQFHQRWRQO\WKHƒ&SURGXFWVEXWHYH WUDGHÁRZVDUHOLJKWHUDQGDVDFRQVHTXHQFH the logistics business, as shippers seek ry medicine needs to be monitored. This investment in refrigerated rooms and related to minimise their outgoings and handlers, implies a rise of almost 600% in value and infrastructure is less attractive. Neverthe- carriers and forwarders look to maximise even more in quantity.” less, any handler or operator who does in- WKHLURSHUDWLRQDOHIÀFLHQF\ Other trends she has noticed include vest in such facilities on lighter pharma trade 0RUHRYHU WKRXJK WKH WRWDO YROXPH RI increasing demand for shipping pharma- routes is well placed to become the market pharma moving by air is increasing all the ceuticals with a combined temperature leader, in that way possibly making the nec- time, and this high-value, price-inelastic UDQJH HJ ƒƒ& DW RULJLQ DQG ƒ essary investment that much more of a sen- commodity business is being sought by all ƒ& VROXWLRQ DW GHVWLQDWLRQ  DV ZHOO DV VLEOHÀQDQFLDOSURSRVLWLRQ the big carriers and many of the hub air- more demand for solutions for shipping Trying to do the job on the cheap is not ports, there is no doubt that there is now pharmaceuticals either securely or ex- an option, Scholte considers. Effective a greater increase in ocean-going pharma tremely fast. QQQ cool-chain facilities and infrastructure are shipping – thanks to the technology im- by their nature expensive – lowering the provements in ship-based cool-chain trans- cost can only really come through econo- port and possibly to the cheaper price of mies of scale in pharma handling and the sea mode proving particularly appeal- shipping, he says. ing during the global economic downturn. But any improvement in one aspect Thus, says Scholte: “The air freight indus- of the cool-chain shipping process also try will have to maintain a clear focus on seems to have a consequential positive providing what the temperature-sensitive knock-on effect on other aspects of the supply chain requires if it is going to take process. For example: “Brussels always its share of the pie.” had a good number of GDP-standard ware- +RZHYHUZKLOH,$*&DUJRKDVZLWQHVVHG houses and temperature-controlled rooms, some modal shift for pharma transport but we have seen that by increasing stand- moving towards ocean cargo, Dorling be- ards and training, facilities and procedures lieves it is now seeing some reversal in De Walle: GDP has are also levelled up,” Polmans remarks. that trend. Not only is air freight quicker, it expanded the market for One possible way round the problem of is also more secure, he argues. temperature monitoring

6SULQJ‡ CARGO AIRPORTS AIRLINE SERVICES  Lightening

ULD UPDATE THE

CARGO OPERATIONS: CARGO OPERATIONS: load Developments in nitiatives by ULD and pallet man- composite walls that don’t need aluminium ufacturers to reduce the weight supporting struts, Hernig points out. lightweight ULD of their products have brought a A secondary commercial and environ- materials and I dividend for outsourcing special- mental advantage promoted by outsourc- ist Jettainer, which announced ing companies, alongside the weight construction are in January that it has been certified to savings achieved as they replenish client the ISO 14001 environmental manage- DLUOLQHV·8/'ÁHHWVLVDUHGXFWLRQLQ´GHDG continuing to ment standard. miles”. By guaranteeing the right quan- encourage airlines The company is among the world’s tity and mix of containers where and when ODUJHVW 8/' RZQHUV LWV ÁHHW JURZLQJ E\ they are required, they claim to eliminate to outsource their almost 20% to 86,500 last year thanks in repositioning costs with no need for safety part to new management contracts from stock. (Jettainer also points out that when management, writes American Airlines and Jet Airways. And aluminium ULDs are discarded, the mate- Martin Roebuck supporting efforts by carriers to reduce rial is easily recycled.) aircraft weight and fuel consumption has Both weight saving and a reduction in given Jettainer an opportunity to play a empty miles were factors in Cathay Pa- direct role in the development of new FLÀF·V GHFLVLRQ WR RXWVRXUFH VXSSO\ DQG products that can claim to be environmen- PDQDJHPHQW RI LWV FRQWDLQHU ÁHHW &+(3 tally sustainable as well as commercially $HURVSDFH 6ROXWLRQV VLJQHG D ÀYH\HDU EHQHÀFLDODOWKRXJK,62FHUWLÀFDWLRQDOVR agreement with the carrier in September, recognises the environmental awareness DPDMRUFRXSWKDWKDVVHHQ&+(3·VJOREDO of the company’s employees. ÁHHWLQFUHDVHIURPWRFRQ Jettainer MD Carsten Hernig says most tainers and pallets. of the lower-deck ULDs in current service Cathay stipulated a 58kg unit, right on weigh just under 70kg, where once they the limit of current technology. “Not many would have been 100kg. “The latest de- manufacturers can go below 60kg,” says signs are in the mid-50s and in the next /XGZLJ %HUWVFK SUHVLGHQW RI &+(3 $HUR two years we will get down to the mid-40s,” space Solutions. “Some carriers still con- he predicts. VLGHUNJWREHOLJKW,QRXUGHÀQLWLRQ Designers of aluminium containers have it’s 65kg or less.” found ways to reduce thickness of the ma- &+(3 DFTXLUHG &DWKD\·V H[LVWLQJ 8/' WHULDO ZLWKRXW VDFULÀFLQJ VWUHQJWK ZKLOH ÁHHW XQGHU WKH WHUPV RI WKH GHDO ZKLFK the ULDs with even lighter composite walls followed a one-year due-diligence process. WKDW KDYH HQWHUHG VHUYLFH LQ WKH ODVW ÀYH “They were already transitioning to lighter- years appear so far to be as reliable as the weight composite ULDs at 5-10% per year, longer-established units. but we have committed to a full switch in One manufacturer already offers units nine months,” Bertsch says. for narrow-body aircraft consisting of ´&DWKD\ SUHYLRXVO\ PDQDJHG WKHLU ÁHHW an aluminium base with self-supporting internally and carried out repairs only in

46 CARGO AIRPORTS AIRLINE SERVICES ‡6SULQJ CARGO OPERATIONS ULD UPDATE

Hong Kong in a traditional hub-and-spoke being deployed on long-haul routes to Hong their existing units are still serviceable. operation,” he says. “We have 29 owned Kong, and Brussels, Paris, London, %RWK &+(3 DQG -HWWDLQHU RIIHU VKRUW repair stations, and a total of 50 including 1HZDUN 86$ SOXVQHZZLGHERG\ÁLJKWV term lease options from their in-house FHUWLÀHG VXEFRQWUDFWRUV VR RXWVRXUFLQJ Jet Airways launches. 8/' ÁHHWV UXQQLQJ IURP WZR GD\V WR WZR PHDQVWKH\VKRXOGQHYHUKDYHWRÁ\DGDP Alongside these larger airlines, Hernig or three months. Where the companies aged unit for repair.” says smaller carriers, and those scaling up enter into a full outsourcing and manage- &+(3ZLOODOVRFRQYHUW7$33RUWXJDO·V WR ZLGHERGLHV FDQ HTXDOO\ EHQHÀW IURP ment contract, this is for a minimum three- 3,500 ULDs from aluminium to a com- the cost visibility and predictability that \HDUSHULRGEXWPRUHW\SLFDOO\ÀYHWRVHYHQ posite design within months after signing outsourcing gives them. years, Bertsch says. up with the Portuguese national airline -HWWDLQHUWRRNRQLWVÀUVW$IULFDQFXVWRP ULDs are usually depreciated over eight, LQ2FWREHU7$3LVWULPPLQJLWV8/'ÁHHW HUDWWKHVWDUWRIWKLV\HDUZKHQ(TXDWRULDO 10 or 12 years. “We do it at 10 years, but size by 15% thanks to reduced reposi- &RQJR$LUOLQHV (&$LU ZKLFKODXQFKHGLQ old Swissair aluminium models manufac- tioning, and expects to save several mil- 2011, decided to outsource its container tured in 1996 are still in service,” he says. lion euro in fuel costs over the four-year and pallet requirements. The carrier oper- “If you’re not changing for weight reasons, term of the agreement. ates seven Boeing 737s, 757s and 767s WKH\·UHVWLOOJRRGWRÁ\µ Singapore Airlines was looking for simi- to airports in Central and West Africa from The oldest Kevlar composite ULDs date ODUIXHOVDYLQJDQGHQYLURQPHQWDOEHQHÀWV Brazzaville and Pointe-Noire in Congo, and EDFN ÀYH RU VL[ \HDUV DQG DUH VWLOO EHLQJ ZKHQ LW DZDUGHG &+(3 D UHSDLURQO\ FRQ also serves Paris and Dubai. ÁRZQE\HDUO\DGRSWHUVVXFKDV./0DQG tract last year. Like Cathay, SIA had for- As new carriers emerge, others adopt Air Canada, he comments, although de- merly returned damaged ULDs to its hub. different business models. “There is great signs have since moved on. The curtains “Global repairs were the biggest ‘pain potential for low-cost carriers to expand were prone to damage on the earliest units point’ for them,” Bertsch says. their intercontinental services,” Hernig but are now supplied in a stronger, high- 7KH PDMRULW\ RI -HWWDLQHU·V 8/' ÁHHW LV says. “They have the strength of capital to performance polyethylene. contracted to larger carriers such as Luf- get into wide-bodies, but like to outsource Composite panels can also be holed thansa Cargo (its parent company) and as much as possible.” when handled carelessly but are straight- (WLKDG,Q6HSWHPEHULWDQQRXQFHGLWZDV forward for repair shops to hot patch. “The taking over global management and main- Damage rates falling cost per touch is lower than for alumin- tenance of American Airlines’ containers ULDs can easily last 10 ium containers,” Bertsch explains. and pallets. years, depending on The latter suffer damage less of- American became the world’s largest the number of weekly ten but cost more per workshop airline after acquiring US Airways, whose cycles the carrier visit, a trade-off that has to be ULDs Jettainer had previously managed puts them through. calculated over the entire lifes- for several years. Jettainer has established Historically, they are pan of the unit. a presence at AA’s main Dallas/Fort Worth taken out of service &+(3 ZDV LQYROYHG LQ KXEDQGLVDOVRRSHQLQJRIÀFHVLQ0LDPL when the repair cost the IATA working group that New York, Chicago and Los Angeles. exceeds the remain- drew up the new ULD han- Under the new agreement, AA is set to ing value of the unit, dling standards manual and replace a large proportion of its 15,000 Jettainer’s Hernig drafted new employee training cargo and baggage ULDs with new light- says. However, the guidelines. The company has weight containers by March, saving a pro- ‘lightweighting’ trend is VHHQ LPPHGLDWH EHQHÀWV KH jected 1.9 million litres of fuel per year. encouraging carriers to re- says. Jettainer also last year signed a equip even where Around 5-6% of ÀYH\HDUGHDOWRSURYLGH-HW Airways, &+(3·V 8/' India’s second largest car- rier, with ÁHHW LV almost 1,300 ULDs, almost half of them OLJKWZHLJKW $.( FRQWDLQHUV 7KHVH DUH

Carsten Hernig, managing director, Jettainer

6SULQJ‡ CARGO AIRPORTS AIRLINE SERVICES 47 CARGO OPERATIONS ULD UPDATE

out of service at any given time either be- limitations in the next year or two. cause their whereabouts are unrecorded “The technology is already in cargoes,” or, more usually, for repair. But the new he points out. “You can measure tempera- framework has put handling agents in a ture, shock, when it’s moved - it’s all there, better position to decide whether a unit but you don’t want to be taking the contain- is serviceable, for example if it has been er out of the transport cycle to monitor it.” KROHGEXWFDQVWLOOÁ\ Bertsch agrees. “We strongly believe “There is a lot more awareness and that RFID is not the right technology,” he we’ve seen an improvement in damage says. There are not enough readers at ap- rates,” Bertsch says. “New designs and propriate points to track a pallet’s location construction methods are helping. Some and ultimately recover it. types require only 0.5 repairs per year &+(3LVFXUUHQWO\WHVWLQJDQHQHUJ\KDU compared with a historic average of 1.5-2 vesting GPS-based tracking solution that repairs per year.” FDQZRUNWRWKH(XURSHDQGHYHORSHG*60 Ludwig Bertsch, president, However, this still depends to some ex- CHEP Aerospace Solutions mobile communications standard in cases WHQWRQWKHDUHDVZKHUHDLUOLQHVÁ\´$VLDQ where GPS is unavailable. The product handlers are more careful than in the US!” “If a fork-lift does was developed over the last two years in he comments. damage in the heat partnership with air cargo tracking special- &+(3 LV ZRUNLQJ KDUGHU WR SXUVXH VH ist OnAsset Intelligence and incorporates rial offenders, but cannot do so unilater- of operation, well it OnAsset’s Sentry FlightSafe real-time data ally and emphasises that a partnership happens. But if it has collection technology. approach is required. $ WUDFNLQJ GHYLFH ÀWWHG WR HDFK 8/' LV “Our contract is with the airline, which been pushed along while connected to a solar panel and a power in turn has a contract with the handler. Ac- loaded, that’s wilful” converter that uses sunlight to recharge cording to the standard IATA document, the the batteries, avoiding the need to call con- handler has to do serviceability checks and tainers in each week. take care of the equipment,” Bertsch says. Field trials involving 50 ULDs on board “We now have a sticker saying the ULD But a container tracking research pro- DLUFUDIW RSHUDWHG E\ &+(3 FOLHQW DLUOLQHV LV WKH SURSHUW\ RI &+(3 DQG \RX·UH OLDEOH ject showed that relying on RFID was go- initially Air Canada and Hawaiian Airlines for damage. If a fork-lift does damage in ing to be “expensive and complicated,” B767s, began at the end of November. the heat of operation, well it happens. But Hernig says. “It’s a question of who makes ,Q SDUDOOHO ZLWK WKLV &+(3 LV FDUU\LQJ RXW if it has been pushed along while loaded, the investment. Gates would have to be heat, shock and impact testing at its Inno- that’s wilful. installed in every warehouse and airport. vation Centre in Orlando, . “If we realise damage is due to negli- :KRPRYHVÀUVW"µ When the system goes live, carriers’ gence, we will - with the airline’s coopera- There were also challenges concerning freight customers could piggyback it to tion - go after the handler and charge out the tag position. Get it wrong, and there track their own shipments, Bertsch says. WKHUHSDLU%XWWKHXQLWPD\KDYHÁRZQDQ could be interference in the signal, he says. “In most cases you only have to know RWKHUWLPHVRLWFDQEHGLIÀFXOWWRNQRZH[ There appears to be more promise in once a day, not every hour, where the unit actly when the damage occurred,” he says. a GPS-based system, although limited is, and it can transmit many kinds of data, battery life would currently restrict ULDs giving the possibility of providing additional Tracking makes headway to clocking-in just once a day. Jettainer is LQIRUPDWLRQRQWKHÁRZRIKLJKYDOXHVKLS An app developed for mobile devices allows collaborating with universities and manu- ments such as pharmaceuticals. This is Jettainer customers to book units in and out facturers to investigate technologies such something we could market as an addi- and to determine container location. “Rotat- as “energy harvesting” from box move- tional service,” he says. ing container usage is improved. If someone ment or sunlight. If the device captured a shock of more signs at the airport, you know who to call to Under present aviation rules, this type of than a predetermined level, say 6G or get it back,” Hernig explains. location system in any case would have to 8G, it could provide a time stamp pin- JettAPP responds to barcodes and RFID be switched off during transit, or put into pointing what happened to the ULD and signals, and is claimed to simplify the work ÁLJKWPRGHOLNHSDVVHQJHUGHYLFHV+HUQLJ ZKHUH &+(3 VD\V WKLV FRXOG KHOS WKH of airline personnel, ground handlers and expects practical experience in day-to-day shipper file an insurance claim if the repair shops. usage to help the industry overcome these cargo was affected. QQQ

48 CARGO AIRPORTS AIRLINE SERVICES ‡6SULQJ THWORLD CARGO SHANGHAI 9SYMPOSIUM 10 – 12 MARCH 2015

Join us to discuss together on how can we transform our industry for the better of all?

The 9th edition of the World Cargo Last year the event attracted more than 1000 Symposium - your premier “must attend” event delegates from the entire value chain who in the cargo industry - is going to Shanghai. reported a satisfaction rate of 99%.

For more information: www.iata.org/events/wcs