INTERNATIONAL EDITION

MARCH 2011

Turkey’s economic ascension

Focus on shippers The GSSA advantage Security update

March, 2011 Volume 14, Number 2 contents MANAGING EDITOR Jon Ross [email protected] • (770) 642-8036

SPECIAL CORRESPONDENT Martin Roebuck [email protected] +44.(0)20-865-70138 Turkey Istanbul fuels Turkey’s economic ascension CONTRIBUTING EDITORS 28 Roger Turney, Ian Putzger

COLUMNIST Brandon Fried Shippers CONTRIBUTING PHOTOGRAPHER Shippers weigh benefits of air versus sea Rob Finlayson 38

PRODUCTION DIRECTOR Ed Calahan [email protected] GSSA Outsourcing cargo sales CIRCULATION MANAGER 46 Nicola Mitcham [email protected] ART DIRECTOR Security CENTRAL COMMUNICATIONS GROUP [email protected] 54 FIATA’s Jean-Claude Delen speaks out PUBLISHER Steve Prince [email protected]

ASSISTANT TO PUBLISHER Susan Addy [email protected] • (770) 642-9170

DISPLAY ADVERTISING TRAFFIC COORDINATOR Linda Noga [email protected] WORLD NEWS

AIR CARGO WORLD HEADQUARTERS 1080 Holcomb Bridge Rd., Roswell Summit 6 Europe Building 200, Suite 255, Roswell, GA 30076 (770) 642-9170 • Fax: (770) 642-9982 12 Middle East

WORLDWIDE SALES U.S. Sales Japan 17 Asia Associate Publisher Masami Shimazaki Pam Latty [email protected]. (678) 775-3565 ne.jp 22 Americas [email protected] +81-42-372-2769 Europe, Thailand United Kingdom, Chower Narula Middle East [email protected] David Collison +66-2-641-26938 +44 192-381-7731 [email protected] Taiwan DEPARTMENTS Ye Chang Hong Kong, [email protected] Malaysia, +886 2-2378-2471 4 Editorial 56 People/Events 62 Forwarders’ Forum Singapore Joseph Yap Australia, +65-6-337-6996 New Zealand 5 Viewpoint 58 Classifieds [email protected] Fergus Maclagan [email protected] India +61-2-9460-4560 55 Bottom Line 61 Opinion Faredoon Kuka RMA Media Korea +91 22 6570 3081 Mr.?? Jung-Won Suh [email protected] +82-2785-8222 [email protected] Air Cargo World (ISSN 1933-1614) is published monthly by UBM Aviation. Editorial and production offices are at 3025 Highland Parkway Suite 200, Downers Grove, IL 60515; telephone 866-624-4457. Air Cargo World is a registered trademark of UBM Aviation©2011. Periodi- CUSTOMER SERVICE OR TO SUBSCRIBE: (866)624-4457 cals postage paid at Downers Grove, IL and at additional mailing offices. Subscription rates: 1 year, $80; 2 year $128; outside USA surface mail/1 year $120; 2 year $216. Single copies $20. Express Delivery Guide, Carrier Guide, Freight Forwarder Directory and Airport Direc tory single copies $14.95 domestic; $21.95 overseas. Microfilm copies are available from University Microfilms, 300 North Zeeb Road, Ann Arbor, MI 48106. Opinions expressed by authors and contributors are not necessarily those of the editors or publisher. Articles may not be reproduced in whole or part without the express written permission of the publisher. Air Cargo World is not responsible for unsolicited manuscripts, photographs or artwork. Please enclose a self-addressed envelope to guarantee that materials will be returned. Authorization to photocopy items for internal or personal use is granted by Air Cargo World, provided the base fee of $3 per page is paid POSTMASTER: Send address change to: directly to Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, and provided the number of copies is less than 100. For Air Cargo World 3025 Highland Pky Ste 200 authorization, contact CCC at (508) 750-8400. The Transactional Reporting Service fee code is: 0745-5100/96/$3.00. For those seeking Downers Grove, IL 60515 100 or more copies, please contact the magazine directly. Member of Audit Bureau of Circulations Ltd. For more information visit our website at POSTMASTER and subscriber services: Call or write to Air Cargo World, 3025 Highland Parkway Suite 200, Downers Grove, IL 60515; www.aircargoworld.com telephone 866-624-4457. ACW MARCH 2011 3 editorial Air cargo by the numbers

umbers and air cargo go hand in hand. By now, almost every carri- er, airport and other organization has released its 2010 results, and statisticians have begun pouring through the heaps of data looking for some clue to where air cargo is heading in 2011. Knowing how this industry is so enamored with statistics, I thought you might enjoy looking at some numbers that have popped up in the news in the past few weeks.

20.6. IATA’s reported airfreight growth rate, in percent, for 2010. Air- freight exceeded pre-recession highs last year by 1 percent. It is still too early and too risky to say the industry is back to flying in blue skies, but visibility is Steve Prince clearly improving. Publisher €800 million. Total price of fines levied by the European Commission (EC) on 11 carriers for their alleged role in the price-fixing scandal. Will the string of punishments over the price-fixing scandal ever end? Who’s next in line to file for a piece of this fine pie? 10. Number of months the EC investigated the merger of Olympic Air and Aegean Airlines before deciding it would be monopolistic. Monopolistic is my choice of word because it sounds more Greek than anti-competitive. 17.05. The percentage of cargo tonnage growth in 2010 at Atlanta Harts- field-Jackson International Airport. Nice job ATL! OK, so I’m a bit of a “hom- er,” but hats off to them, they are cargo serious. The recent additions of Asiana Airlines and Cargoitalia should only help improve growth even more. 18.9. The percentage of cargo traffic growth year over year, according to the International Civil Aviation Organization. This is a very interesting statistic. For some reason, we always think in terms of tonnage and not traffic. 3,443. The total number of orders Boeing has on its books. It will be nice to see that number decrease when Cargolux receives the first 747-8 Freighter in a few months. 100. The expected number of AN12’s to be replaced by B737’s of the con- version kind for domestic use in Russia in the next few years. Ah-h, at last — from America, with love. 25. The percent increase in fleet size during the next four years recently announced by Lufthansa Cargo. That’s an impressive number! I’ll take a 25 percent increase anytime.

These numbers can tell us much about the industry’s health, but the interpre- tation is strictly up to you. So, what’s in these numbers? You be the judge.

4 March 2011 ACW viewpoint Is 2011 the year for air cargo?

ir cargo is expected to contribute to a second protected from tampering. The approach is based on the consecutive year of industry profits in 2011 premise that everyone in the supply chain should have a due to strong demand from emerging econo- responsibility for maintaining the security of air cargo. mies and export-led growth in the U.S. and Most important, it allows the flexibility for cargo to be Europe on the back of weaker currencies. screened at an appropriate point on its journey and then AThis is good news for an industry that has lost more transported securely. than $50 billion in the last decade. The harsh reality The Secure Freight program is based on this approach. is that these profits are nowhere near sustainable lev- Malaysia was the first country to implement Secure els. The $15.1 billion return recorded in 2010 Freight in November 2010. Egypt is expected will shrink to $9.1 billion in 2011. With that, to go live this year. At its December meeting, margins will also fall from 2.7 percent to 1.5 the IATA Board of Governors made Secure percent. We would need 7 to 8 percent growth Freight a priority, setting a target of two ad- just to cover the cost of capital. ditional country memberships by the end of Challenges ranging from inconsistent secu- 2011. rity regulations to low government adoption of 100 percent e-freight by 2015 e-business standards threaten the long-term Today, the e-freight network is in place. health of air cargo. In 2011, the International More than 40 countries are using paper-free Air Transport Association (IATA) will work air cargo, representing 80 percent of interna- hand-in-hand with freight forwarders, ground tional air cargo volumes. The next phase of handlers, shippers and government customs Des Vertannes the project will look at increasing e-freight vol- authorities to deliver a more secure, efficient, umes on the existing trade lanes. As of Decem- reliable and profitable supply chain. ber 2010, 2.8 percent of all shipments on these Security that makes sense trade lanes were e-freight shipments. In five years, IATA IATA is working closely with global security regulators and its industry partners hope to make that 100 percent, (the Transport Security Administration, the Department beginning with a 10 percent target this year. of Homeland Security, the European Commission and the In order to meet that target, the industry will focus on ICAO) to provide an industry perspective on this impor- securing government support for a favorable regulatory tant issue. environment and creating a taskforce to facilitate local Effective cargo security must be based on a combina- adoption. Maintaining active governance structures at a tion of three measures. IATA is advocating the use of global and local level to make sure e-freight continues to electronic data to help identify risk levels of cargo. One be industry-led and that e-freight solutions make sense of the e-freight message standards, the security decla- for everyone involved also is very important. ration, can be used by states to evaluate cargo passing New year, new partnership through their borders. ICAO has endorsed this standard IATA must work closely with all supply-chain partners beginning in July 2011. to maintain the industry’s competitiveness and its cru- Screening technology also is important. Screening cial role in global trade. One step in this direction was can complement effective intelligence and supply-chain the formation of the Global Air Cargo Advisory Group. solutions. However, governments have to certify the tech- Another such opportunity is the annual World Cargo nology that can screen pallets and oversize items. Inter- Symposium, which is being held this month in Istanbul. governmental cooperation is needed so that screening More than 700 delegates are expected to participate. systems and security programs can work on together. IATA hopes to see you there. ACW We also need a secure supply-chain approach — a layered approach, whereby from the moment a box is Des Vertannes is the global head of cargo at the Inter- packed until the moment it arrives at the aircraft, it is national Air Transport Association.

ACW march 2011 5 Europwoe r ld Asian e w middlse east africa americas

To boost Euro reach, carriers try RFS

Wallenborn is the largest European provider of RFS capacity

urope’s roadmap of airline service levels they demanded.” trucking services has effec- Almost overnight, in the wake of tively been redrawn. Road the downturn, virtually every cargo feeder service (RFS) provid- carrier has switched to serving a sin- ers are becoming an integral gle European gateway. This places part of the operations of the major greater reliance on road feeder ser- A new hub cargo carriers serving European gate- vices on the ground. “It all happened ways. It has reached the point, par- very suddenly, and I don’t think these is born ticularly among Asian cargo carriers, carriers will ever return to the con- Be part of the flow that in some instances, road feeder cept of serving multiple gateways in of the region’s new center services are now literally driving their Europe,” Breakwell said. “But when business. you consider it, all the major Europe- Someone who has witnessed the an carriers, with their home hubs, only transformation is Jason Breakwell, serve a single European gateway.” manager, commercial and key ac- It has put increased pressure on Where everything counts, at the Wallenborn Group. “I the RFS operators to raise their game, takes off would not have believed it if I had not but in some respects, Wallenborn was seen it myself,” he said. “Prior to the already ahead of the curve. In August downturn, most of the major cargo 2009 the Luxembourg-based compa- carriers, but particularly the Asian ny acquired two of Europe’s premier operators, were resolute in serv- airline truckers, Holland’s Rutges Car- ing at least two or three European go and Scandinavia-based Haugsted gateways. They had a mindset that AirCargo Services. trucking services could not provide (Continued on page 8) the reach and effective and reliable

6 march 2011 ACW BUD Launch11aviation ACW 54x187.indd 1 2/15/11 5:00 PM More capacity to move your cargo around the globe.

Now we have room for every size, shape and quantity to connect Asia, Europe and USA. For more information, please access www.thaicargo.com/what’s new.

T H A I C a r g o , A LW A Y S D E L I V E R S T H E B E S T. www.thaicargo.com Europe Asia middle east africa americas americas africa middle east Asia Europe

(Continued from page 6) tomers, and the focus is on how we While service reach is one demand The deals made Wallenborn the sin- can build and develop long-term rela- being made of the airline truckers, gle largest provider of RFS capacity in tionships, rather than just looking to just as much emphasis is being placed Europe, with the ability to be able to drive down costs.” on the safe and secure transit of ship- put more than 500 units on the road. Wallenborn, he said, will often take ments on the ground. This is especial- Wallenborn has retained the brand the initiative in approaching its main ly true for premium products, such as names of its two buy-outs. customers with new products and pharmaceuticals. “There was a lot of customer loy- service additions. “We just don’t wait “We are particularly proud of ser- alty and brand recognition attached for them to tell us what they want,” vice levels we are able to guarantee to both these operations,” Breakwell he said. “We go to them and suggest for the handling of pharmaceutical said. “The three names remain, but ways we can improve the relationship products,” Breakwell said. “It is an el- every other aspect of our operation and build the business for them.” ement of the supply chain which we has been integrated, particularly vital Breakwell cited the example of have worked together, not with the elements like our IT platform.” an Asian carrier that has actually in- carriers, but with the pharmaceutical creased frequencies to Frankfurt manufacturers themselves.” purely because of the high service lev- The key demand in transporting “I don’t think els it has been able to receive from pharmaceuticals is maintaining con- these carriers will Wallenborn. “Small things can make a stant temperature throughout transit, big difference. For instance, we now whether the shipment be in a cargo ever return ... to employ Chinese speakers in both our hold, on a truck or in a warehouse. Frankfurt and Amsterdam offices.” “Typically, we work within tem- serving multiple Breaking into the German market perature ranges of 3-8 C and 15-25 was a high priority for the newly-ex- C,” Breakwell said. “In the past, this gateways in panded Wallenborn Group, and it has has been difficult to achieve for part Europe” achieved that goal by establishing op- loads, for which we have had to dedi- erations at Frankfurt and Munich air- cate a single truck.” Today, Wallen- ports. “The next priority is to develop born has overcome that challenge — Jason Breakwell our services in Southern Europe and with a fleet of new vehicles fitted with to further enhance our Scandinavian separate compartments dedicated to With the switch to single-hub op- operation,” Breakwell said. different temperature zones. erations in Europe and the greater Pushing into Eastern Europe, he Security is never far from the mind focus on road feeder services, casual said has less of a priority for the com- of any operator of road feeder servic- observers might think Wallenborn is pany. “We operate into Eastern Eu- es, and as Breakwell confirmed, it is under even more pressure to help the rope, but mostly on behalf of shippers an issue that will never go away. carriers reduce costs. and forwarders, with no real call from “We are a member of the Trans- “It does not work like that any the airlines for service addition.” But ported Asset Protection Association more, and I think we can be can be with most cargo carriers now serving (TAPA) and fully support its efforts to credited with turning that concept a single European point, the demand secure the supply chain. But constant around,” Breakwell said. “Today, we is for a single supplier for all their in- vigilance and the securing of your ele- work closer than ever with our cus- tra-European trucking requirements. ment of the supply chain is vital.” ACW

8 march 2011 ACW Europe Asia middle east africa americas americas africa middle east Asia Europe

Providers prepare for 2012 Olympics Carriers begin o better position itself as a ma- pected to grow to 4.7 million by 2033. jor hub for the 2012 Olympic Roger Gale, the region’s parliament long fight against TGames in London, Manston Air- member, has been working since early port in Kent has broken ground on a 2009 to secure Manston Airport as cartel fines £250,000 ($396,674) Equine Border one of the key transport facilities for Inspection Post. Completion is ex- the games. His argument is that by ir Canada, KLM, Japan Airlines, pected in April. building up Manston, traffic to London Cathay Pacific and Cargolux Air- “With no slot restrictions and Gatwick and London Heathrow will be Alines International have all ap- no congestion in the air or on the relaxed and a logistical nightmare will pealed fines levied to the carriers last ground, we can offer customers a be avoided. “Manston has the capacity November by the European Commission, fast, professional and efficient ser- to provide, for 2012, a one-stop shop according to the Court of Justice of the Eu- vice, ensuring the least amount of for the reception, processing and ac- ropean Union. A total of 11 carriers were stress for their animals, which have creditation of incoming athletes from fined nearly €800 million for their alleged already had a long flight,” Allan Mc- around the world,” he has said. roles in an airfreight cartel. Quarrie, Manston’s group manager UPS is also getting in on the act The court also has pending cases for freight development, said in a in advance of the 2012 games, an- brought by LAN Airlines/LAN Cargo, Sin- statement. “From the aircraft to the nouncing that it has deployed an gapore Airlines/Singapore Airlines Cargo, BIP, the distance is less than 300 me- expanded fleet of electric vehicles Lufthansa and British Airways, but these ters, and it is sheltered from aircraft to serve Olympic host venues. The cases may be for matters unrelated to the noise by other buildings.” company seems focused on not only cartel charges. McQuarrie also said the BIP will providing extra logistical force for Since these airlines have just filed ap- play into the airport’s plans to play the games, but also making sure peals, hearings are likely to be 12 to 18 a large role during the Olympics. He those added vehicles are environ- months down the road. According to the has already offered use of the facility mentally friendly. court spokesman, judgments are passed to the Olympic Committee because it “With the London 2012 Olympic down somewhere between six to 12 is only located 58 miles from where and Paralympic Games only eigh- months after the hearing, but the wait is some equestrian events will be held, teen months away, we are very fo- longer for more complicated cases. he said. The event’s official airport is cused on reducing the carbon foot- The Commission alleged that the fines London Heathrow; officials there ex- print of our delivery network in the were a result of the carriers’ imposing a pect to see 125,000 passengers dur- capital,” Cindy Miller, managing di- flat-rate fuel surcharge for all shipments, ing the games. rector of UPS UK, Ireland and Nor- introducing a security surcharge and refus- The Kent airport has been in ex- dics, said in a statement. “Over the ing to pay freight forwarders. At €127.16 panding for years, something that will past few years, we have invested in million, KLM’s fine is the largest among only be ramped up by the presence technological improvements allow- the five carriers now appealing the deci- of athletes and cargo for the London ing us to expand our electric fleet, sion. Cargolux was hit with a €79.9 million Olympics. In the development’s mas- such as installing extra charging fine, and Cathay Pacific was fined €57.1 ter plan, future passenger figures units at our London facilities. This is million. Japan Airways and Air Canada were outlined: By 2018, the airport an important step in our continued were fined €35.7 million and €21 million, is expected to see 2.2 million annual commitment to making our opera- respectively. passengers, and the number is ex- tions more sustainable.” ACW The remaining carriers are Air France, British Airways, LAN Chile, Martinair, SAS, Singapore Airlines and Qantas. Lufthansa Budapest nearly back and SWISS received immunity, as they were the first airlines to provide informa- to pre-recession levels tion about the cartel. When the fines were announced, udapest’s Ferihegy Airport completion in late 2012, is being built Joaquín Almunia, the EC’s vice president (BUD) will more than double alongside passenger terminal 2. It for competition, called the alleged actions Bits cargo-handling capacity forms part the BUD Future project, “deplorable” and said the organization “is when it opens its new 250,000-tonne which aims to turn Budapest into the sending a clear message that it will not Cargo City. major aviation hub for Central and tolerate cartel behavior.” ACW The development, scheduled for (Continued on page 10)

ACW march 2011 9 Europe Asia middle east africa americas

(Continued from page 9) conditions elsewhere. Eastern Europe (CEE). This was “testimony to years of Currently, Ferihegy has capacity experience in operating under ex- for 120,000 tonnes. It handled 82,600 treme winter conditions and having tonnes of flown cargo in 2010, a 32 invested in the right equipment,” percent increase, and saw more than said Christa Soltau, vice president, 5,800 freighter movements, 23 per- cargo and logistics. cent up on 2009. The figures brought “The result was satisfying in what ly B747-400 freighter service from Budapest back close to its record has been a turbulent year,” Soltau Hong Kong. Additional bellyhold pre-recession performance achieved added. “Budapest has access to a capacity this year comes via Qatar in 2007. catchment area of 20 European mar- Airways’ three-times-weekly A320 Budapest is the base for Malev, kets within 1,000 kilometers, and we flights to Doha, launched in Janu- Hungary’s national airline, and more are playing an increasingly important ary, which accommodate up to eight than 20 other carriers, serving more role for logistics and distribution in tonnes of cargo. than 90 destinations. The airport suf- the CEE market and beyond.” American Airlines starts a passen- fered very few weather diversions last A strengthening cargo market in ger service to New York in April and year and accepted a number of air- 2010 was led by Asia and the U.S., Delta Airlines will reinstate its servic- craft diversions itself because of poor with Cargolux adding a fifth week- es from June. ACW

In the news...

German air cargo volume will increase by 6 than air cargo. The firm indicates that total vol- tic prospects that a new airline of a sufficient percent in 2011 following a 0.8 percent growth ume transported by road will creep up 0.4 per- size would enter the routes and restrain the last year, according to the firm Research and cent this year, an increase that is dwarfed by the merged entity’s pricing,” the Commission said in Markets. Tonnage this year is anticipated to 10 percent drop the industry saw in 2009. Ger- a statement. Olympic and Aegean had offered reach the 3.567 million mark. Not everything is man shipping lines are experiencing a bit better to relinquish takeoff and landing slots, but this rosy, however. The report indicated that, after outlook, as most of them are now operating in had limited value, according to the EC, because a steady 2010, “a slowdown is in the cards for the black, the study finds… The European Greek airports “do not suffer from the conges- 2011, which will affect the operating environ- Commission (EC) has vetoed the merger of tion observed at other European airports.” A ment for freight transport companies. Research Greek carriers Olympic Air and Aegean Airlines combined Aegean and Olympic would have and Markets anticipates an overall economic on competition grounds following a 10-month dominated the Greek domestic market, with growth of 1.6 percent this year and 1.8 percent investigation. The shareholders of Aegean and a fleet of 64 aircraft… The International in 2012. Between 2010 and 2015, economic Marfin Investment Group, owner of Olympic, Air Transport Association (IATA), The growth will average out to an annual total of 1.7 had agreed on a merger in principle in Febru- International Civil Aviation Organization (ICAO) percent. According to the report, this number ary. The EC said it blocked the deal because it and OAG Cargo have launched DG Online, a means “Germany will perform rather solidly but would have created a “quasi-monopoly” in the database of regulations and information regard- unexcitingly. Like other mature economies in the Greek air transport market. “Together the two ing the air transport of dangerous goods. The euro zone, Germany will struggle with a defacto carriers control more than 90 percent of the online resource is a combination of The IATA 2 percent annual growth ceiling.” It’s not as if Greek domestic air transport market, and the Dangerous Goods Regulation Manual, the Tech- other German industries are faring any better Commission’s investigation showed no realis- nical Instructions and the Emergency Response Guidance manual, both of which are produced by the ICAO… A Dutch airfreight forwarder spe- cializing in perishables, J. van de Put Fresh Cargo Handling, has achieved Authorized Economic Operator (AEO) status. The company’s AEC certification, presented by the deputy direc- tor of Customs Cargo Schiphol, brings van de Put a range of benefits including fewer physical and administrative checks, prior notification of inspections, a reduction in the amount of data required for declaration, and faster clearance. AEO, a European Customs initiative, stream- lines the supply chain with its focus on creating “green” rather than “red” trade flows. Director TIME TO SWISS YOUR CARGO Moniek van de Put said her company had to – meet strict criteria on solvency, reputation, safe- SWISSWORLDCARGO.COM ty and quality of administration in an assessment by the Dutch Customs authorities before winning AEO accreditation. ACW

10 march 2011 ACW

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Emirates begins service to Iraq

mirates, the most recent in a number of carriers exploring Escheduled services to Iraq, has commenced passenger and cargo services from Dubai to Basra. The carrier plans to fly A330 aircraft to Iraq each Monday, Wednesday, Thursday and Saturday. “Iraq is experiencing a surge in growth, and it is our goal to help the country prosper and flourish,” Tim Clark, Emirates’ president, said in a statement. “The potential for this destination is Emirates has added a scheduled service from Dubai to Basra, Iraq. The carrier will significant, and Emirates is committed to fly an A330 aircraft to the city every Monday, Wednesday, Thursday and Saturday working alongside the Iraqi authorities to make Basra a success.” The carrier estimates it will transport 130 tonnes of cargo a week into the country. Imported freight will likely include oil-industry equipment as well Middle-East protests as food, car parts, medical products, electronics and textiles. Goods traveling to the U.S., UK and other destinations cause massive cargo will consist of dates and grains, wool, and petroleum products. Carriers have been re-establishing delays, re-routings scheduled flights to Iraq for the past couple of years. Iraqi Airways began regular cargo flights out of the country in September 2009. Etihad began flights he 18-day protests by Egyp- (This inkling, for the most part, has to Baghdad in April 2010 and added the tian citizens calling for the since come true.) northern city of Erbil later that June. overthrow of President Long-standing, non-democratically Low-cost carrier Flydubai now lists Hosni Mubarak now appear elected administrations have become Erbil and Sulaimaniyah among its to be over, but the picture the target of citizens disaffected by services, and Expo Aviation flies from forT Egyptians and airline industry offi- unemployment, low incomes and Dubai to Baghdad, Balad, Erbil and cials working in Egypt remains murky. soaring prices. As Yemen flared up Sulaimaniyah. As Egypt’s anti-government dem- briefly, industry observers asked: Gulf Air, Lufthansa, Qatar Airways onstrations entered their third week, where next? and Turkish Airlines all announced the Air Cargo World sought out com- During the protests, Emirates op- resumption of flights into the country, ments from airlines and shippers; erated reduced passenger schedules but have either pushed back start dates employees at these companies re- to both Tunis and Cairo. Duncan Wat- or are still trying to get services off the mained optimistic that a transfer son, the carrier’s regional cargo com- ground. Gulf Air was to begin Basra of power could be achieved peace- mercial operations manager for the services in October 2010 and then fully. The aviation sector remained Middle East and Africa, said there had again in December, and Lufthansa had concerned, however, at the prospect been only “very short-term disrup- targeted a start date of April 2010 for its that regional unrest, which began in tion” at Tunis after the mid-January flights to Erbil. ACW Tunisia in January, could escalate riots. The situation now seemed more across Middle East and North Africa. stable, but the carrier has reduced its

12 march 2011 ACW ASIA EUROPE AMERICAS AFRICA MIDDLE EAST

daily A330 service to Tunis via Tripoli to three times a week, reflecting an ongoing slowdown in tourist traffic. Meanwhile, Cairo frequency was cut from 13 flights a week to seven. “Things are working relatively nor- mally at Cairo Airport,” Watson said when reached by ACW. “Our facilities are operating as normal, and we are refueling OK. There isn’t a 100 per- cent staff turnout, but our handlers at Egyptair are managing well.” The night curfew that was first im- posed between 6 p.m. and 7 a.m., had been relaxed slightly to 8 p.m. to 6 a.m. by early February, Watson said. “We had to reschedule departures and were loading cargo on only one of our two daily flights, but we’re now running only the one anyway.” Cargo processing had not changed, though truck drivers as well as airport and airline staff were faced with military checkpoints on arrival at the airport, Watson said. After protests in Tunisia, Egyptian citizens took to the streets with their own grievances. Egyptians demonstrated until President Hosni Mubarak reluctantly stepped down Outbound cargo was struggling to reach the airport, however. “Dubai was importing a lot of Egyptian World Cargo (BAWC). morning departure. To manage the strawberries, but is now sourcing Before the disturbances, BAWC curfew and change of schedule, Stub- elsewhere. Import demand [in Egypt] was screening its freight for export bings said freight had to be delivered has also been impacted as a result of out of Cairo through the night to en- during the day, screened and kept in reduced consumption,” he said. sure shipments could meet the early chillers overnight until departure. He British Airways officials said the anticipated service returning to nor- Cairo airport remained operational mal “when the curfew is lifted and we throughout the protests, although “Dubai was are 100 percent certain that there are it was very busy on some days. Dur- importing a no safety issues.” BAWC’s Tunis ser- ing the curfew, BA’s daily flight from vice has returned to normal. Heathrow was rescheduled from its lot of Egyptian Egypt’s international aviation mar- usual 5 p.m. departure time to 11 ket remains highly fragmented, and p.m. and was diverted via Athens to strawberries, but Egyptair, the biggest player, accounts pick up fresh crew and fuel overnight for just 37 percent of capacity. Most before continuing to Cairo and land- is now sourcing foreign carriers had reduced or with- ing mid-morning. The plane had a elsewhere. Import drawn services during the protests, shorter turnaround time before re- including Delta Airlines, which has turning to Heathrow. demand [in Egypt] suspended flights from New York to BA put in place a cargo embargo to Cairo until the end of March. protect its staff that lasted 10 days. It has also been Thousands of foreign visitors ran lifted this on February 5 and cleared the gauntlet of roadblocks and violent backlogs in London and Cairo within impacted as a crowds as they tried to fly out of Cai- three days. “Cargo demand has slowly result of reduced ro. Governments and foreign airlines come back as people return to their had problems securing landing rights work. Getting cargo on and off the consumption” for non-scheduled aircraft as they airport is now back to normal,” said made efforts to repatriate nationals. Mark Stubbings, regional commercial — Duncan Watson, Some planes stopped mid-runway as manager for Africa at British Airways Emirates passengers walked out to board.

ACW march 2011 13 MiddLe east africa americas europe ASIA

Air Partner arranged 14 flights 2010, Middle East-based on behalf of clients such as oil and logistics provider Aramex telecom companies, financial institu- said it was monitoring the tions and retailers, evacuating 800 situation closely. CEO Fadi people to safe havens in Dubai, the Ghandour said operations Since its founding in 1982, AmeriCares U.S. and Europe. But the charter in Egypt had been inter- has provided more broker’s CEO, Mark Briffa, said the rupted, but were set to logjam of people and aircraft briefly resume as soon as practi- meant Cairo airport was in a state of cable. “Our employees, who pandemonium. are our highest priority, re- Airport officials told outbound main safe, and our facilities passengers that some pilots, crews have not suffered any dam- and ground personnel couldn’t get age,” he said. to work because of the curfew, while Leoni, a German-owned some local staff were believed to have manufacturer of automo- During much of the protests, British Airways put in either stayed home with their families tive wiring, optical fibers place a cargo embargo to protect its staff or were taking part in the demonstra- and cable systems that tions. Fears at one stage that the Suez employs 4,000 people in Egypt and curfew and organized its own bus ser- Canal would be forced closed helped 12,000 in Tunisia, said it had been vices to take employees to and from nudge oil prices to more than $100 able to restore production at a wiring their homes. per barrel, but the markets were reas- harness manufacturing facility in Cai- If seaports were blocked or re- sured as the key shipping lane contin- ro to near-normal levels after a brief stricted, Leoni officials said it would ued to operate as normal. interruption. The company adjusted make additional use of airfreight to Reporting its financial results for its shift patterns to work around the maintain supplies to customers. Leoni said its four Tunisian facilities were suffering no backlog, but had experi- enced some transport delays. The situation in Egypt is fluid even now, but carriers are once again pur- suing normal routings. That’s not to say airline officials aren’t keeping an eye on things. “We are monitoring the situation very closely and are in con- stant contact with local management Mr. Maverick’s as well as the crews. Most important is that all staff are safe,” a spokesman First Law of Poker: from Lufthansa Cargo said. “There have been minor implica- tions for our business, such as the “Never bet more than you can afford to lose.” rerouting of a few freighters that are scheduled from Frankfurt via Cairo to You know us as a fast, reliable source for TL, intermodal, the Middle East, but instead are fly- hotshots and heavy haul, where mistakes can be very, very expensive. ing direct to Sharjah,” the spokesman said. “In the first week of February, we had to introduce an embargo for Since weʼre the “safe and legal, every load, every time” choice, temperature-sensitive shipments.” and the “best market rate” choice, youʼve got pocket aces. To lessen the impact of the pro- tests on cargo movement, Lufthansa put freight on passenger services to and from Cairo out of Frankfurt and Munich. “We have seen some impact on demand,” the spokesman added, “but with the adjusted curfew, busi- 877.677.5623 www.bouncelogistics.com ness and production in Egypt is cur- rently becoming more stable.” ACW

14 march 2011 ACW ASIA EUROPE AMERICAS AFRICA MIDDLE EAST

In the news.... UPS has added Israel as a hub for its express In order to strengthen its presence in the Middle freight service. According to a statement by the East, Toll Group has acquired Dubai-based sea/ IONSCAN 500DT IS ONLY company, “Israel is a key destination in the high- air provider SAT Albatros. “Building our business EXPLOSIVES TRACE DETECTOR TO tech sector with major players in the industry with a niche sea/air provider gives us further OFFER INTEGRATED OPERATION maintaining operations in the country. While scope to offer our customers the opportunity nearly half of Israel’s exports come from this to match speed to market with a cost-effective WITH BARCODE SCANNERS sector, UPS Express® Freight also is prepared to service," said Paul Little AO of Toll Group in a import and export everything from airplane and statement. “The integration of SAT will allow us automobile parts to jewelry and precious gems, to secure a blue-chip well-established customer T he popular IONSCAN 500DT Ex- which also are manufactured in the country.”.. base principally consisting of European fashion plosives Trace Detector (ETD), a TSA- Aramex, the Jordan-based global logistics and apparel, electronics, and consumer goods qualified technology for air cargo transportation solutions provider, saw significant conglomerates sourcing products from Asia… screening on passenger planes in the expansion in emerging markets in 2010. The .. Israel’s airports handled 302,900 tonnes of United States, now offers the ability for company strengthened its presence in Turkey, air cargo in 2010, an increase of 10.4 percent. integration with most USB or wireless Malaysia, Bangladesh and Vietnam through a The main domestic carrier, El Al, achieved a 19.6 commercial, off-the-shelf (COTS) bar- series of strategic acquisitions and partnerships. percent increase to 57,650 tonnes of cargo. Israeli code scanners. Fadi Ghandour, founder and CEO, said that freighter operator CAL saw a 6.7 percent reduction This new feature gives freight for- Aramex will continue pursuing expansion in volumes to 49,000 tonnes for the full year. Tel warders, air carriers and shippers the opportunities in Southeast Asia this year, and he Aviv’s Ben Gurion International Airport handled ability match package barcode scans expects to announce acquisitions in East Africa 26,200 tonnes of cargo in December, down 8.4 with their associated ETD analysis re- during the first quarter. Net profits for Aramex’s percent on a year earlier, according to the Israel sults for a streamlined record-keeping fourth quarter, ending December 31, increased Airports Authority... UAE-based Maximus Air and reporting capability. All saved data 11 percent to Dhs55 million ($15 million) on Cargo has purchased three JAL A300-600 aircraft references the barcode scanner, sample revenues of Dhs580 million ($158 million), a 10 for $95.3 million, including conversion by EADS ID, analysis result, user, date and time. percent increase on the fourth quarter of 2009. EFW from a passenger to freight configuration to XML reports can be generated directly Full-year net profits, at Dhs204 million ($55.5 deliver a payload of 48 tonnes. The aircraft will be from the IONSCAN 500DT and then up- million), were also 11 percent up on 2009. The delivered in July, September and November this loaded to a client FTP server or down- company’s revenues increased 13 percent on year. Maximus Air Cargo president and CEO Fathi loaded from the system via the USB the previous year to reach Dhs2.21 billion ($601 Buhazza said his airline increased turnover by 16 connection. million). The fourth-quarter result was “solid” percent to $117 million in 2010… Lebanon’s The IONSCAN 500DT is the only sys- and in line with growth rates during the previous Air Liban will become a member of SkyTeam tem to offer this capability for air cargo quarters, Ghandour said. “We recorded high net in 2012. A signing ceremony took place Feb. 28. screening and the only unit that offers income margins, an increased operating profit SkyTeam is continuing its focus on strengthening dual detector tubes for an expanded and revenue growth in key services across all its presence in the Middle East. Earlier this month, range of explosives detection, including the markets we serve.” Aramex reported a cash Sadui Arabia Airlines announced its membership “home-grown” explosives. balance of Dhs555 million ($151 million) at in the alliance. Last year, SkyTeam added China In addition to the IONSCAN 500DT, year-end. Coupled with an extremely low debt- Eastern, Shanghai Airlines, China Airlines, Garuda Smiths Detection has 16 X-ray inspec- to-equity ratio, this would support the company’s Indonesia and Aerolíneas Argentinasto its future tion systems included on the TSA quali- strategic development plans, Ghandour added… membership. ACW fied technology list for air cargo screen- ing for passenger aircraft. The X-ray system configurations range from large systems for screening pallets; medium systems for screening smaller pallets and large break bulk items; small systems for break bulk screening; and advanced technology X- ray systems that provide dual views of cargo in a single pass. Smiths Detection inspection and threat detection systems are deployed at airports worldwide for passenger, baggage and air cargo screening. UPS has added Israel as a hub

ACW march 2011 15

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American Airlines CargoSM mark is owned by American Airlines Inc. Terms and conditions apply. Source: IMS Health Market Prognosis Aeuropesia M iddamericasLe east africa africawo middle ramericasld eastn e w europe Asias Air express hub coming to Changi Airport

he International Air Transport Association (IATA) is fixing its T eye on Singapore, pledging to work with the country’s government to strengthen its presence in the Asia-Pa- cific region and at the same time work toward creating a new generation of in- dustry officials. “The support that we will receive from Cathay Pacific’s cargo division had a successful year in 2010. This year, airline offi- the Singapore government under today’s cials foresee more modest gains (Photo: Rob Finlayson) agreement will enhance Singapore’s role as a regional hub and position IATA well to deliver its leadership priorities in the region,” said Giovanni Bisignani, IATA’s Director General and CEO. Busy Cathay looks to IATA will further develop its Regional Office for Asia-Pacific, a sector that in- cludes New Zealand, South Korea, Japan, more modest 2011 Pakistan and India. The organization has had a part in Singapore’s aviation struc- ture since 1969, when it opened an office in the country. Today, that office staffs 80 athay Pacific has been fir- Nick Rhodes, who took over the workers and is the organization’s regional ing on all cylinders, but its reins of the cargo division last sum- financial hub, processing more than $45 booming business may mer in the midst of this sharp accel- billion in annual settlements. start to slow down in the eration, is bracing for slower growth Previously, IATA had joined together year ahead. in 2011. Shippers and forwarders are with the country’s Nanyang Technologi- After a painful contraction in 2009, treading warily, but overall signals cal University and agreed on supporting the airline’s cargo business rebound- are pointing to further growth in the air transport management programs at ed sharply as the world was emerging coming months, albeit at a slower rate the university. Continuing the partnership, from the recession in 2010, carrying than last year, he observed. IATA has also established scholarships to the Hong Kong-based carrier to re- “We are reasonably optimistic send up to 12 students to the programs. cord levels. Cathay Pacific clocked about consumer demand in 2011,” he “Our vision is to make Singapore the up 10.18 billion RTKs and 1.8 million said. platform for the development of a new tonnes of cargo, numbers that had It helps that Cathay has been en- generation of aviation executives leading shot up more than 18 percent over joying strong growth in several Asian Asia’s aviation growth. The two scholar- the previous year. markets, which supplement its inter- ships will have an important role in devel- In the process, Cathay overtook continental sectors. India and Bangla- oping the future leaders of our industry,” Korean Air, which had claimed the desh have been producing good vol- said Bisignani. crown of the largest carrier of inter- umes, and so has Vietnam, which has Singapore is important to IATA be- national cargo in previous years. emerged as an alternative to China for cause it is located “between two of our In response to buoyant demand, IT production, Rhodes noted. fastest growing markets,” Bisingani said, management brought the five 747- Nevertheless, China continues to adding that “the government has a long 400BCFs it had sidelined in 2009 back generate the lion’s share of Cathay’s history of understanding the economic into action and resumed the con- volumes. While exports to the Ameri- benefits of aviation and supporting its struction of its cargo terminal at its cas and Europe dominate this market, profitable development.” ACW home base, which had been delayed inbound traffic has been rising, fueled in the downturn. by a growing Chinese appetite for

ACW march 2011 17 americas europe Asia middle east africa

cars, luxury goods and French wine, Other points are which has alleviated the imbalance in coming into the pic- cargo flows. ture courtesy of the Cathay’s launch of a twice-weekly, airline’s passenger round-the-world freighter service last business. Having July (from Hong Kong via Anchorage added Moscow to the to Chicago and back to base over network last year, Amsterdam and Dubai) was partly Cathay is mounting an effort to address the imbalance flights to Chicago and in flows. It has worked well so far, Abu Dhabi this year. and management is looking at other Its passenger bellies opportunities along these lines, generate almost as Rhodes hinted. much tonnage as the He also is considering network freighters, although expansion to new destinations in the latter flights pro- Cathay has overtaken Korean as the largest Asian carrier of Latin America and Eastern Europe, duce more revenue, international cargo (Photo: Rob Finlayson) citing inquiries from forwarders about owing to their de- lift to those markets. While it is open ployment on intercontinental routes; 777 and the A350 offer good cargo at this stage where in Eastern Europe a lot of Cathay’s passenger sectors capabilities, Rhodes remarked. Cathay may go with freighters, are within Asia. Its belly capacity is The freighter fleet was set to Mexico is the most likely candidate in poised to grow considerably, with 30 grow significantly this year, with six the other targeted region. A350s on order. 747-8Fs scheduled to enter service “We’re looking at Guadalajara. Recently, Cathay signed up for six (followed by four more in 2012), but There is a lot of IT business there,” more B777s, which will bring its tally the delays in the aircraft’s production RhodesAIR CARGO said. WORD • Visuel Trapèze : 178 x 124of mm that FU •type Départ to le 36 10/02/11 aircraft. • Parution Both thele 07/03/11 (ContinuedALC • onBAT page • SG 20)

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18 march 2011 ACW ALLI_1101078_Trapeze_178x124.indd 1 10/02/11 15:39:25 April 19 – 21, 2011 BANGKOK2011 at Shangri-La Hotel, TIACA’s EXECUTIVE SUMMIT & AGM Bangkok, Thailand

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Tuesday, April 19, 2011 7:00pm Welcome Reception Wednesday, April 20, 2011 ES/AGM Registration 9:00am - 9:45am Welcome Registration includes the Executive Summit, all 9:45am-10:30am Economic Overview of Asia: Key Issues and Directions catered events, Networking Meetings and the Hall 11:00am-12:30pm Custom’s Innovation: Progress and Challenges in Asia of Fame Awards Dinner 1:30pm-6:00pm ALN Meetings 7:00pm Hall of Fame Awards Dinner TIACA members: Complimentary Thursday, April 21, 2011 Non-members: $975.00 9:00am-9:30am Global Air Cargo Advisory Group (GACAG) Update To register for the Executive Summit go to (TIACA, FIATA, IATA, GSF) www.tiaca.org 9:30am-10:30am 100% Screening Mandate for U.S. Inbound Cargo by December 31, 2011: Status and Challenges Part l: Organized by The International Air Cargo Association The TSA Perspective’ www.tiaca.org 11:00-12:30pm Part ll: The Regional View from the Air Cargo Industry phone +1 786-265-7011 1:30pm-3:30pm Annual General Meeting (AGM) Fax +1 786-265-7012

organizer: ´,W·VDQKRQRUIRU:)6WRVHUYHDVRIÀFLDOKRVWRIWKH(6$*0$VWKHZRUOG·VODUJHVWDLUFDUJR host: KDQGOHUZH·UHGHOLJKWHGWKDW7,$&$VHOHFWHG%DQJNRNDVWKHYHQXHIRUWKLVSUHVWLJLRXVHYHQW7KDLODQG LVKRPHWRDQDWLRQWKDWLVWKHYHU\HVVHQFHRIKRVSLWDOLW\DQG%DQJNRNLVKRPHWRRQHRI:)6·VODUJHVW FDUJRKDQGOLQJRSHUDWLRQV,ORRNIRUZDUGWRVKDULQJWKHVHZLWK\RXDQGWRSHUVRQDOO\ZHOFRPLQJ\RX WKHUHµ2OLYLHU%LMDRXL([HFXWLYH&KDLUPDQ&KLHI([HFXWLYH2IÀFHUDQG3UHVLGHQWRI:)6 americas europe Asia middle east africa

(Continued from page 18) is going through the final rounds of have pushed the delivery dates back “The overall the regulatory approval process and to October — only just in time for is expected to take off by the end of the peak season. Moreover, three of signals are March. the airline’s 747-400BCFs are likely Besides contributing four freighters going to be moved to Air Hong Kong, pointing to further and some spare engines, Cathay the joint venture with DHL in which growth in the has also seconded nine managers to Cathay holds a 60 percent stake. the new outfit. Unlike international The carrier is looking to upgrade coming months, carriers with joint venture freighter capacity on Asian trunk routes offshoots in China, such as Lufthansa from the A300-600Fs currently in albeit at a slower or Singapore Airlines, Cathay is not operation, and the -400BCFs would planning to develop tight synergies be perfect for this role, Rhodes said. pace” with the new player. He hopes that lease negotiations with “We have to treat them as a Air Hong Kong can be concluded by the first 747-8s are in place, Cathay competitor,” Rhodes commented. the end of the first quarter, with a is delaying the transfer of two 747- “We have interline agreements with view to shifting the first aircraft in 400BCFs to the joint venture cargo a number of other airlines. Maybe we mid-year. operation with Air China until the will have some with them, but there is To maintain capacity levels until end of the year. The fledgling carrier no plan at the moment for that.” ACW

In the news.... The Chinese transport company Cosco and officials According to the Ministry of Civil Aviation, the 15th consecutive month, with airfreight handled at the Athens International Airport have singed an 19-member panel includes officials from Air India, in December 2010 rising 4.1 percent year-on-year agreement linking the airport with Cosco’s Piraeus Jet Airways, Singapore Airlines and Lufthansa to 155,800 tonnes,” according to a statement. Container Terminal SA. The airport’s Alexis Sioris Cargo as well as representatives from Airbus and Citing Airports Council International data, for the said, “The arrival upon the transport infrastructure Boeing. The panel is tasked with painting a picture 12 months ending Oct. 2010, the airport claimed of this powerful Chinese operator and new facility of air cargo as it currently exists in India and the it was the world’s seventh busiest in terms of will open the door to steady flows of inbound sea/ potential for growth. They also will study the current international freight traffic. Japan Airlines will air traffic. Much of this cargo is destined for the handling and security systems that are in operation unveil a new logo featuring a “soaring Japanese USA, for which we have excellent frequent wide- and suggest improvements. Recommending policy red-crown crane with its wings extended in full body capacity.” The agreement will help jumpstart initiatives is another goal of the group. The body flight” on April 1, the company said in a statement. the airport’s sea/air initiative, which has seen will first report its findings to the Ministry of A Boeing 767-300ER will be the first plane to modest success since being started in 2007... Civil Aviation on March 17... Changi Airport, model the new signage... Boeing has received India’s Civil Aviation Economic Advisory Singapore, reported an 11 percent increase in final approval from the Chinese government for a Council has set up a working group to study freight handled in 2010 over 2009 to total 1.8 $19 billion, 200-plane order. The aircraft — mostly the country’s air cargo industry and recommend million tonnes. “After a very difficult 2008/09, the 737s and 777s — will be delivered during the next the best way to handle expected future growth. cargo sector continued its return to growth for the three years. ACW

20 march 2011 ACW Global Logistics Solutions

20110109 woamericasAMERICAS r ld Eneuropeuropee w s Asia middle east africa WTO rules Boeing takes subsidies

ccording to Airbus, a report by the World Trade Organization A(WTO) shows that Boeing alleg- edly received $7 billion in illegal subsidies from the U.S. government. Spokesmen for the manufacturer say the WTO ruling will find that Boeing re- ceived federal, state and local subsidies that “distorted competition within the aviation industry, directly resulting in sig- nificant harm to the European aerospace The Caribbean carrier LIAT has begun offering scheduled freighter flights, a industry.” The subsidies allegedly came development that has been in the works for quite some time from the U.S. Department of Defense, NASA, the state of Washington and the city of Everett. According to Airbus’s fig- ures, these subsidies cost the manufac- turer $45 billion in lost sales. Initially, the European Commission Carribbean airline had claimed Boeing received more than $15 billion in illegal subsidies. Boeing officials said the WTO ruling is a partial begins freighter service victory, even as Airbus chose to view the ruling as proof of Boeing’s illegal acts. “The WTO report is still confidential, but news stories citing government of- IAT (Leewards Islands Air the availability of space on scheduled ficials have given us a glimpse into its Transport) has officially passenger planes. This was particu- conclusions. It appears the WTO has launched its intra-Caribbean larly risky for perishables.” rejected the vast amount of European cargo service at an event in Before joining LIAT, Challenger claims against the United States,” said Barbados. said he had been involved in shipping Ted Austell of Boeing. “There is nothing LThis follows the carrier’s conver- high-value agricultural produce such on the U.S. side that comes even close to sion last year of a Dash 8-100 aircraft as cut flowers from St. Lucia to the the billions of taxpayer dollars that Airbus to full cargo configuration, with the U.S. Virgin Islands, but he recalled gets to develop new airplanes.” aim of providing regional farmers “many shipments being aborted due Boeing had previously alleged that and exporters with a more reliable to lack of adequate airfreight capac- Airbus was taking illegal subsidies from air bridge for supplying produce to ity.” He hoped the new service would European nations. The WTO ruled in neighboring islands. serve as a springboard for the devel- June that this money was given to the “While the transport of various opment of productive export capacity company under a Reimbursable Launch forms of cargo is nothing new to LIAT, across the Caribbean. Agreement. this signals an important milestone in In a speech during the freighter “We expect the WTO dispute to carry the evolution of the company’s air car- launch, Wilbur Edwards, the carri- on for several more years, and as in all go business as we move towards the er’s director of cargo and QuikPak, trade conflicts, a resolution will only be formal introduction of an aircraft ded- said: “This is a launch of our new and reached through negotiations,” Airbus’ icated exclusively to the movement efficient way of doing cargo business Rainer Oher said in a statement. “The of air cargo throughout our islands as by offering a booked service on the myth that Boeing doesn’t receive govern- well as into Guyana,” said LIAT CEO freighter aircraft, of selling char- ment aid is over, and we hope this sets Brian Challenger. “Prior to the start of ters and expertly linking our regu- the tone for balanced and productive ne- this service, persons and businesses lar line flights with the Freighter on gotiations going forward.” ACW wishing to move airfreight through thin routes to provide a high quality our islands were largely dependent on (Continued on page 24)

22 March 2011 ACW Incheon 2011 Routes Asia. South Korea. 27-29 March 2011

The route development forum for Asia

“ For us Routes Asia was certainly Incheon International Airport is the world’s very productive as we came into contact face to face with existing fourth biggest in terms of cargo and freight. and new airports and government organizations. It was very good to Routes Asia is the route development forum for Asia. know of their interest in our services 2011 event highlights include: and the proposals they had for us. All this was achieved in a couple of • Over 100 airlines and cargo carriers expected days which certainly saves a lot of time in the future.” • Over 300 airports from all over Asia expected Prekshak Gour, • Two full days of One-to-One Meetings International Business Analyst, Network Planning, Virgin Blue Airlines • Routes Asia Strategy Forum • Airline Requirement Briefings For more information and to book please contact: • Airport Marketing Awards China • Dynamic, fast growing host market E [email protected] T +86 10 6597 4921/22/27 Asia Pacific E [email protected] T +65 6395 5890

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(Continued from page 22) ber 2009, but due to manufacturing to feed [wider] markets.” cargo service to our 22 destinations.” delays, the date was pushed back to Challenger said outdated practic- Officials at LIAT started looking March 2010. Finally, LIAT unveiled es, such as the need for overtime and into a dedicated freighter service in the freighter service last month. other payments to Customs officers September 2003, but the carrier faced “We had to push back our planned for operating outside a rigid work huge financial obstacles. It was deter- startup on a few occasions,” Edwards schedule, had acted as a barrier to mined that adding a freighter service said. “We had operated combi ser- the growth of regional cargo services would boost revenues and help LIAT vices … but this is a different matter. and had significantly increased costs. achieve more than simply a break- It is not just about taking out seats “We hope that our regional policy even financial position, but the mon- and repositioning the bulkhead; this makers will work to eliminate these etary barriers to entry were too high. is a fully converted cargo aircraft with outdated bureaucratic leftovers and “The cost of the cargo conversion special flooring, special side panels, allow the consumer to benefit from kit alone was prohibitive, even though new electrical wiring, etc.” a streamlined and efficient Customs it was less than 100,000 U.S. dollars,” LIAT’s shareholders include the service,” he urged. Edwards said. governments of Barbados, Antigua “We are ready to provide the fin- Five years later, LIAT called in and Barbuda, and St. Vincent and the est cargo service in the Caribbean,” an independent consultant to asses Grenadines. Edwards added: “A cen- Edwards said, going on to thank the the viability of starting a cargo ser- tral element of our plan is to not only freight forwarders, sales agents and vice. The carrier’s board approved extend our reach regionally but also cargo handlers that work with the the project a year later. Even though extra-regionally via our three major airline. “We have found the perfect LIAT employees had the go-ahead, hubs — Antigua, Barbados and Trini- formula in working our dedicated creating a freighter service from dad — through our relationships with freighter in tandem with the line scratch was no easy task. The origi- international carriers. Important op- flights to operate efficiently and cost nal launch date was set for Decem- portunities exist with these carriers consciously. ACW Three carriers now under one roof ir France-KLM Cargo and home. In November, employees who States began the process of mov- Martinair Cargo’s Americas had been spread throughout the ing into a Delta building in Atlanta, Aarea organization has a new Southern and Mideastern United just down the road from its cargo of- fice. By the end of this year, the Air France-KLM Cargo and Martinair Cargo’s Atlanta office will house “99 percent of the management team and the core units,” said Jan Krems, vice president, Americas, during a phone conversation with Air Cargo World from his new office. The new digs are representative of the organization’s “one roof” con- cept, which aims to fuse the disparate operations of each carrier into a co- hesive unit, which increases produc- tivity and customer-service reaction times. To bring everyone together Meet your flight attendant. into one building, KLM employees Well, actually, your specially trained station attendant. Air Canada Cargo is introducing had to make the long trek south from a whole new class of service. Whether it’s live lobster or precious stones, our dedicated station attendants handle every shipment with the utmost care and professionalism. Chicago, and Martinair officials drove With more direct destinations, more scheduled departures, an unmatched level of north from Miami. attention and our Priority1 service, you can rest assured that Air Canada Cargo will keep Atlanta was chosen as the new your business moving – efficiently.Think of us as business class for your commodities. Priority1 headquarters for the organization’s Americas operations because of its AC Expedair | AC Live | AC Secure | AC DGR Air Canada Cargo | Going further. AC General Cargo | AC Compassion | AC Cool chain | AC Post aircanadacargo.com central location and its proximity to Delta, a major operational ally,

24 march 2011 ACW ACC-ACW2020_ACWorld_attendant.indd 1 1/11/11 11:23:34 AM AMERICAS Europe Asia middle east africa americas africa africa middle middle europe east east A sia asia asia middle europe europe east A A mericas mericasafrica

Krems said. ident, Americas. Winkeler formerly “If you look at the pros and cons served as vice president for Martinair financially, it may have been cheaper Cargo in Asia. He said that the pro- to have an office in Florida,” he ad- gram is all about establishing a bet- eam Worldwide provides global lo- mitted. He then added that logisti- ter workflow among new colleagues. Tgistics solutions to its customers as a fully cally, moving the company to Atlanta “Communication lines are much bet- certified IAC and freight forwarder. Estab- just made better sense. ter — quicker and shorter,” Winkel- lished in 1979, Team is a privately held U.S. er said. “Under one roof just means company of over 40 independently owned learning from each other and better and operated small businesses across the communication.” nation and TIGA, Team International Global This educational aspect benefits Alliance with representation in over 220 the company as well as their custom- countries. These businesses operate as a di- ers. “It’s crucial to learn from each verse network of transportation specialists other. We are all three different com- organized under four operating companies: panies and have three different ways • Team Air Express, Inc of working, but if you do the right Team Air Express transports commercial thing, we are very complimentary to or government product throughout the each other,” Krems said. “After a few U.S. and among international destina- months of being together, we really tions quickly, safely, and reliably. Cus- see the benefits of this integration.” tomers gain increased flexibility for de- While the concept is helping Air liveries, through the customized air solu- France-KLM Cargo and Martinair Car- tions offered by our freight specialists. go achieve a symmetry not seen be- • Team Transportation, Inc Jan Krems fore, the end result is geared toward Truck fleet exclusive to the Team system, the customer. The move to Atlanta is standing by to move goods reliably and The togetherness concept is being the start of streamlining operations, on time throughout the country. Loads implemented company-wide, but the which will lead to an eventual goal of are tracked by satellite so you always Americas region is a textbook exam- improved customer service. stay in touch with their location. Trucks ple of the theory behind the program. “Customers are really looking for- are equipped with Air-Ride to minimize/ Employees from the different com- ward to it and are positive about it,” eliminate damage. panies are now working together to Krems said, “but they also see that it’s • Team Ocean Services, Inc present “one face to the customer,” a process and not something that can Licensed Ocean Transportation Interme- said Harm Winkeler, deputy vice pres- change over night.” ACW diary shipping products by sea in full and partial loads, and break-bulk cargo, as individual items out-of-box. • Team Customs Brokerage, Inc Processes your customs needs and pa- perwork to ensure your carefully shipped products are admitted into and out of international boundaries safely and quickly as you expect. Each of these operating companies is supported by the company’s specialty divisions of: • Team Defense and Government Services For the specialized needs of local, state and federal shippers • Team International Trade Services Transportation and logistics compliance and consulting Atlanta mayor Kasim Reed and Cargoitalia’s commercial director, Roberto Gilar- • TeamNav doni, eye cargo transported on the carrier’s maiden voyage to Atlanta. Cargoita- Customer technology at its best for com- lia is now flying twice a week to the city from its hub in Milan on MD-11 aircraft munications, tracking and billing.

ACW march 2011 25 americasAMERICAS Eeuropeurope Asia middle east africa

In the news... DHL has broken ground on a 19-acre, $22.5 mil- is currently underway. The carrier’s plan is to offer hi-tech makeover of the nation’s airline tracking lion expansion to its hub at the Cincinnati/North- the passenger flights in addition to services using systems. “NextGen is a critical investment in the ern Kentucky International Airport. The project its fleet of DC-8 aircraft, freighter operations us- future of our transportation system, one that uses includes expanding its parking apron and adding ing 747-400s and 757-200 Combi services. “This the latest technology to transform our airspace to nine aircraft gates. The company has already spent authority represents a very significant milestone make aviation safer, more efficient and more en- $12.5 million on upgrades to its auto-sort system in National’s two-track strategy to augment and vironmentally friendly,” Transportation Secretary at the airport. The new construction is the second modernize our already substantial international Ray LaHood said in a statement. JetBlue also will phase of this $40 million project, which started cargo-carrying capacity with market-leading in- use the Jacksonville International Airport as its in October 2010. “As businesses increasingly go ternational passenger charter operations,” said newest inbound and outbound cargo station. The global to capitalize on emerging trends in inter- National’s president, Steven Harrison, in a state- location will help JetBlue’s transfers to Boston and national trade, the expansion at our CVG hub will ment… Up to 35 A320s operated by JetBlue will New York as well as its daily service to San Juan, position DHL to accommodate the growing needs be outfitted with the Federal Aviation Administra- Puerto Rico, which will begin in May… LAN Air- of our importing and exporting customers,” said tion’s (FAA) Automatic Dependent Surveillance- lines of Chile expects to finalize its merger with Ian Clough, CEO for DHL Express U.S... The U.S. Broadcast, according to a NextGen agreement Brazilian carrier TAM in the next six to nine months. Department of Transportation has granted singed by two parties. JetBlue paid $4.2 million for The merger will create a world top 15 airline, with Michigan-based National Airlines international the service and will also fund crew training and more than 280 planes serving destinations in 23 passenger charter authority, allowing National to simulation time. The satellite-based system will al- countries. LAN said it would focus in the first half transport people, property and mail for 25 years. low pilots to fly routes even when traditional radar of 2011 on “recovering profitability” at Aires, Previously, National Airlines had only offered all- coverage is not available because the new surveil- Colombia’s second largest airline and expected cargo service. National is planning to offer pas- lance devices pinpoint the exact location of each its Colombian operations to break even by 2012. senger operations using a Boeing 757-200. Cer- aircraft. JetBlue’s announcement is just the first LAN, which also has domestic operations in Chile, tification by the Federal Aviation Administration step in what the FAA hopes will be a complete, Argentina, Ecuador and Peru, saw fourth-quarter net income increase 49.9 percent to $164.6 mil- lion as passenger and cargo business continued to expand… The firm Quiport has signed a $684 million deal to manage the international airport Looking for an e-freight currently under construction in Quito, Ecuador. In- tended to replace the city’s Mariscal Sucre Airport, solution to optimize your the development is slated to open during the sum- air cargo shipments? mer of 2012. The facility will feature longer run- ways than those at the existing airport; the project also is being built at a lower altitude… Officials have opened the $13.9 million Airport Response Coordination Center at the Los Angeles Inter-

The Trademark TRAXON is used with the consent of owner. national Airport (LAX). The development, which was constructed from June to December of last year, will help airport officials efficiently manage emergencies. Employees from the airport’s airside

 Meet us during and landside divisions, airport police and members

IATA World Cargo Symposium 2011 of governmental agencies will staff the center. A March 8-10, Istanbul, Turkey grant from the state of California and a portion of the airport’s general operating revenues funded the project. The new center opens at a time when LAX has started digging out of the hit it took dur- Make paperfree global cargo a reality. ing the recession. The airport experienced a 15.8 Find out more about eCargo Pouch, the central document and message manage- percent increase in cargo tonnage in 2010 year- ment system. eCargo Pouch offers fast and reliable cargo communication across over-year from 2009. Air mail tonnage for 2010 the entire supply chain. totaled 74,034, and freight tonnage rose to 1.85 million tonnes. Gina Marie Lindsey, executive direc- tor of Los Angeles World Airports, which owns LAX, attributed the rise in tonnage to the improvement in the economy. New routes and the addition of www.traxon.com new airlines also helped fuel the growth. ACW

26 march 2011 ACW

28 march 2011 ACW regionfocus Turkey

Istanbul fuels Turkey’s economic ascension

he city of Istanbul, setting for IATA’s 2011 World Cargo will be among the top three countries, Turkey’s commercial Symposium, and Turkish Cargo is host behind China and India, in terms of capital, uniquely strad- sponsor of the event. The opening international freight growth. Last year, dles two continents, with one conference address from Temel Kotil, we carried 313,000 tonnes of cargo foot in Asia and the other in CEO of Turkish Airlines, is expected compared with 230,000 tonnes in Europe. Turkey is beginning to emphasize how Turkey today not 2009, a record increase of 32 percent.” to exploit its position as a only links traditional Asian and Euro- Significantly, transhipment cargo trading crossroads of the pean markets — symbolized by two accounted for 52 percent of the car- world in the same way that busy bridges over the Bosporus strait rier’s volume in 2010. “The geogra- Dubai has done so energetically dur- that join the two halves of Istanbul pic position of Istanbul, offering the ing the last decade, with the bonus — but is increasingly looking toward shortest connections to important for its national airline that the country North America and Africa, too. trade lanes, underpins this growth, also is a diversifying manufacturer. “In five years, Turkey will be one of making transit traffic the most aspect Turkey’s central geographic loca- the world’s top-10 economies, growth for Atatürk Airport,” Akkurt adds. tion has powered its recent trade that gives us obvious momentum,” Turkish Cargo has directors sta- growth and has helped shaped Turk- says Soner Akkurt, senior vice presi- tioned at the country’s five key freight ish Airlines’ ambitious development dent of Turkish Cargo. “According to centers of Istanbul, Ankara, Izmir, strategy. Istanbul is the appropriate IATA’s traffic forcast to 2012, Turkey Adana and Antalya. THY serves more

ACW march 2011 29 regionfocus Turkey

than 40 domestic destinations, but this growth trend to be maintained developed its cargo facilities, and it mostly with narrowbody aircraft, so through 2011. badly needs to upgrade to accommo- import and export cargo, especially “High-tech products, machin- date new airlines and volume growth. larger shipments, usually are trans- ery parts, and minerals of various Akkurt says a new cargo city, across ported by truck to and from Istan- types are driving imports. Textiles, the airport from the current facilities, bul. Atatürk’s cargo throughput grew machinery parts, and iron and steel is on track for completion by the end dramatically in 2010 from less than products are the main airfreight ex- of 2012. Other airport users are less 400,000 tonnes to more than 500,000 ports,” he says. confident about this. Airmark, a lead- tonnes as Turkey’s foreign trade con- After a major warehouse fire in ing local GSA, claims the cargo village tinued to thrive, and Akkurt expects 2004, Atatürk has only partially re- has not yet moved beyond the project study stage. Istanbul’s second airport, Sabiha Gökçen, which is on the Asian side of the Bosporus, is absorbing some of the overspill. It has catered primarily to passenger airlines and tour opera- tors since it opened in 2001, but is be- ginning to play a more important role in cargo transportation. “The larger cargo operators are still based at Atatürk, so Sabiha Gökçen is more restricted in terms of network availability, transit connections and so on,” Akkurt says. “But as airfreight markets grow, the airport will attract more attention in the future, especial- ly with its more attractive cost struc- ture for shippers.” The airports may be stretched, but Turkish Cargo was well placed to ab- sorb 2010’s volume growth, adding almost 41 percent of new capacity. New-generation A330-200F freight- ers joined the fleet in September, and nine passenger widebodies (five B777s and four A330s) were added last year. Despite so much additional space to fill, THY recorded a cargo load factor of 72 percent. Another 29 aircraft will be delivered in 2011, sup- plementing the carrier’s existing fleet of 153. The new deliveries will include one additional A330-200 freighter, but passenger widebodies, which will make up more than 30 percent of the fleet by 2012, will make a major con- tribution to cargo capacity. Akkurt says European services still account for the lion’s share of cargo traffic, which is “the natural result of the long-term economic relation- ships, geographic closeness and our network structure.” But he notes an interesting shift as Turkey moves up the global economic ladder.

30 march 2011 ACW

CEIA-EMIS_Ad_210K0003v1us.indd 2 14/02/2011 11.46.41 “For 2010, the fastest growing cargo routes were South America, especially Brazil; the Far East (Hong Kong, China, Korea, Thailand and Bangladesh); East European countries (Czech Republic, Serbia, Romania, Bulgaria and Ukraine); and African destinations such as Kenya and Ethopia,” Akkurt says. He is optimistic about the recently launched route to Accra, Ghana. “We expect growing interest in 2011. We have faith in the future for African air cargo, as these markets are newly open to the industry, the yields are quite high and the lack of logistics infrastructure favors air cargo over other modes of transport.” Newly announced passenger routes such as Ho Chi Minh (Vietnam), Guang- zhou (China) and Los Angeles, and an expanded service to Jakarta via Singa- pore, all provide better links from indus- TAV Istanbul Ataturk Airport experienced a 2010 cargo throughput of more than 500,000 tonnes trial centers to Turkey. “This means great potential, especially for outbound cargo, from these locations. The flow of com-

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ACW march 2011 31 Now open for business. The new Airbus A330-200F is the freighter your aircargo business needs. Based on the continuously improved and updated Airbus A330, the A330-200F has profi tability, reliability, versatility and eco-effi ciency designed-in. With a payload of 70 tonnes and a range of up to 4,000 nautical miles, it can redraw your bottom line. You’ll see 15% Cash Operating Cost savings per tonne of revenue payload

over the 767-300ERF. And with the lowest noise levels and CO2 emissions on the market today, you’ll have an assured platform for growth. The A330-200F. The right aircraft, right now. airbus.com es are registered trademarks. Airbus, its logo and the product nam regionfocus Turkey

modities ensures transit opportuni- Turkish carrier soars on ties for carriers based between Asia, Europe, America and Africa,” Akkurt increased volumes says. Other new passenger destina- tions this year will include Atlanta, NG airlines ments to full responsi- Manila, Kabul, Shiraz (Iran) and, in s a w i t s bility transport con- Europe, Malaga, Valencia, Toulouse, e x p o r t tract management. Naples, Turin and Genoa. THY will volumes “We can operate as a augment its current 26 scheduled increase co-branded subcontrac- freighter destinations with Jeddah, bM y 1 2 p e r c e n t a n d tor or under the customer’s Addis Ababa, Bucharest and Munich, imports by 17 percent in call sign, providing maximum served by A310F equipment, and New 2010, a fact that has spurred flexibility against our competi- York, Singapore and Dhaka using its additional growth for the Turkish tion,” Özkazanç says. second A330-200F. all-cargo operator. mNG opened an import ware- One of Turkey’s main independent In line with a strategic fleet renew- house 12 kilometers from Istanbul ground handlers, Çelebi, is present al program decided in 2007, mNG atatürk airport in 2000 and has built in both Istanbul airports, opening a ordered four a330 freighters, with two new facilities in the last two new import warehouse at Atatürk the first due for delivery in the third years, one of them on-airport. all op- in 2009 and starting up at Sabiha quarter of 2012 and the remainder erate to EU standards and open to Gökçen the same year. The Atatürk by 2016. Scheduled services to the third parties as well as mNG custom- facility can handle 35,000 tonnes of Far East and to additional European ers. more development is planned. freight a year and includes two cold destinations will be launched in the “We are investing in increas- rooms, a deep-freeze chamber and a second and third quarters. The ad- ing our service quality and plan to precious cargo vault. dition of the longer-range a330s convert our hub into a sophisticated Airmark, whose major existing on- from next year will enable mNG to transit and distribution center, im- line clients include Egyptair and Ko- increase its coverage of destinations proving the interface between our rean Air Cargo, added Air China to its in North africa and the Far East, ac- airside and landside operations,” Öz- offline list in August, and this year, it cording to managing director Sedat kazanç says. has picked up a new online customer, Özkazanç. Özkazanç agrees with his compet- Moldavian Airlines. Sevde Ipek, the all the evidence suggests that the itors that Turkey is well positioned to company’s business development Turkish airfreight market will contin- act as a bridge between the middle manager, says Airmark is working on ue to grow in 2011, but competition East and Europe. It can thus build ef- two new contracts and aims to grow is fierce, forcing operators to increase ficient airfreight networks, especially 20 percent this year. The GSA has tar- efficiency and to differentiate their reducing transit time to african and geted a 15 percent share of the Turk- services. Far Eastern destinations. ish airfreight market. In addition to its scheduled “The biggest challenge,” he “With its experience from a local routes and ad hoc charters, mNG emphasizes, “is to establish Turkey, banking crisis in 2001, Turkey was has a range of other servic- e s particularly Istanbul, as a logistics one of the countries that suffered from long-term wet-lease agree- hub.” (Continued on page 36)

MNG has two A300-600 freighters and will start adding longer-range A330s from next year

34 march 2011 ACW AIR CARGO WORLD _ RESEAU GB • SP PP • 203 x 276 mm _ Remise le 10/02/2011_Parution du 28/02/2011 HRU_BAT _SG

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AIRF_1102046_RESEAU_203x276.indd 1 10/02/11 15:26:27 regionfocus Turkey

(Continued from page 34) While agriculture still accounts least through the global economic cri- for about 30 percent of employ- sis of 2009,” Ipek says. “As the IATA ment, Turkey’s industrial expansion, statistics show, our air cargo figures especially in auto parts, textiles and are still below the level of 2007. But household goods, is responsible for we expect national economic growth much of the country’s recent eco- of around 7 percent in 2011, based on nomic and airfreight growth. Adana EU and OECD sources, and our ex- and Antalya are Turkey’s principal air pectation is 6.7 percent for the next export hubs behind Istanbul, while six years.” the national capital, Ankara, is a net Year-over-year figures slowed importer, though it has a distribution sharply in the last quarter of 2010 role to Central and Eastern Turkey. across most of the world, but Ipek Of Turkey’s smaller airports, Çorlu says the Turkish airfreight industry and Bursa are the most used for ad kept pushing forward. “The business hoc charter operations. Long-term in- went well in the final quarter, so the vestment as a logistics center is on outlook is optimistic. Cargo yields im- the table for Çorlu, west of Istanbul, proved in the final quarter compared exploiting its good location close to to 2009; the increase is quite slow but motorways to Europe and to the port volumes are high. A surplus of ca- area in Tekirdag. pacity to the Far East and southeast Due to slot problems at IST, all Asian destinations, however, means cargo charters are permitted to call yields there have not improved in line at Sabiha Gökçen. “The airport has Soner Akkurt, senior vice president of with other regions.” improved a lot in the last three years Turkish Cargo

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36ACW-House-AD.indd march 2011 A CW 1 3/19/2010 2:20:13 PM and now has good cargo handling fa- hopes for increased frequency to cilities,” Ipek says, “but to develop Istanbul, maximizing his tranship- further, the number of freight for- “Turkey ... ment opportunity over Kuwait to warders has to increase.” destinations such as Sharjah, Dubai, Demir Ozerman, managing di- suffered the Cairo, Beirut and Vienna. rector of rival GSA Kargo Sistem, Kargo Sistem has also picked up agrees that Sabiha Gökçen’s cargo least through the the Avient account. Istanbul is offline, facilities are adequate in them- global economic but it will give Ozerman the opportu- selves, but points to infrastructure nity to sell West Africa over Avient’s issues including terrible traffic on crisis of 2009” — Liege hub in Belgium. The carrier also the Asian side of Istanbul, which is planning more services to South Af- Sevde Ipek, Airmark makes it difficult to move shipments rica and South America. in and out, and the lack of a good Turkey’s stronger economic ties airport service road. The runway 400 flights, but its Turkish GSA’s al- with the Far East, Asia and Africa lies between the cargo acceptance location is only 40 tonnes a month. “give us leverage,” Ozerman says, area and the warehouse, which can “We could sell 250 tonnes!” says with the relative weakness of the lead to delays of two to four hours, Ozerman, who will welcome a larg- lira benefiting exporters. Textiles Ozerman says. Business grew by 10 er Airbus or B737 coming in for the are still important but automotive percent in the second half of 2010 summer season. shipments moved to the top of the for Kargo Sistem, despite capacity A new client is Kuwaiti airline table in 2010, reflecting the increas- restrictions as carriers recovered Wataniya, which launched flights ing diversification of the Turk- faster than expected from the eco- into Sabiha Gökçen in May 2010, but ish economy. Machinery parts and nomic crisis. is now calling Atatürk with three pharmaceuticals are also on the in- DHL operates six weekly A300- A320 services a week. Ozerman crease, he adds. ACW

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ACW march 2011 37 ppe Shi rs weigh cost of air versus sea transport

our years ago this month, Giovanni Bisignani, the director general and CEO of the International Air Transport Association (IATA), sounded the alarm to airfreight experts assembled at the IATA World Cargo Symposium in Mexico City.

38 march 2011 ACW featurefocus Shippers ppe Shi rs weigh

Container Ship at port, Heraklion, Crete, Greece

ACW march 2011 39 featurefocus Shippers

The air cargo industry was seeing a growing number of shippers defect to ocean transport. Even though ocean vessels decreased the speed of cargo travel, shippers of every stripe were embracing the cost savings experienced at sea and heading to the oceans for a variety of reasons. “Ocean container shipping is becoming more competitive and taking business away,” Bisignani told the audience during his opening address. He then rattled off some startling numbers. Growth in the ocean sector from 2000 to 2005 more than doubled airfreight growth, and from 2006 to 2010, ocean freight was to outpace annual air cargo growth by nearly 2 percent. “New container ships are faster and cheaper to operate,” he Anastasios Vamvakidis, commercial director of Piraeus Container Terminal (left), signs a sea-air agreement with Alexis Sioris, head of development at Athens International continued. “2006 ocean container Airport

40 march 2011 ACW “As air cargo plan for the future. It’s been reported happening in the shipping industry, that shippers who once operated only and it’s difficult to say how many yields and fuel in the sky and had gone to the water shippers are returning to the skies, are making the shift back to air cargo, just as it can’t be said that some surcharges go but there isn’t enough evidence to shippers will remain sea-bound up, there is that suggest a trend is underway. A lot is forever. As with most things, the momentum for shippers to find other modes of transport.” — Neel Shah freight rates were 20 percent in real terms below 2000 levels. Airfreight rates were only 8 percent lower. … We can expect more intense price competition.” Of course, what Bisignani didn’t know is that soon after his speech, the worldwide economy would plummet to depths that were previously unthinkable. This sent shippers scrambling to the ocean at a fast clip in order to save money on fuel and elongate supply timelines, which helped to reduce warehouse inventories. To make things even more economical, ocean liners started slow steaming and super- slow steaming; for the most part, ics. their customers didn't care because logist o and air carg their time frames were flexible, and ent for The w business ev they were saving a lot of money on orld’s greatest fuel. “Typically, as air cargo yields and fuel surcharges go up, there is that momentum for shippers to find other modes of transport. Often times, clearly for international cargo, the only alternate mode of transport is by sea,” says Neel Shah, senior vice president and chief cargo officer for Delta Air Lines. Now that a resurgence is taking place in both the ocean and air cargo www.AirCargoEurope.com industries, shippers are starting to

ACW march 2011 41

ACE11_Ausst_114x187_E.indd 1 08.12.10 12:07 featurefocus Shippers

depends on the industry.” He points ally a hybrid to begin with — sea- out that automotive parts are a likely air moves,” Ritchie says. “To get it candidate for airfreight because of there by airfreight in four days was the number of recalls and the time- completely prohibitive, so this mar- definite nature of the services. ket was created as a good in-between Some shippers have since moved — half the transit time and about half to a combination of sea and air de- the total cost. That dried up by the livery. During the recession, retailers were decreasing the amount of stock in ware- houses and needed increased transit times, says Steve Ritchie, director of airfreight at Geodis Wilson. Timelines issue isn’t clear cut. may have increased in some “I have seen some conversion of cases from a 22-day transit sea to air, and we certainly saw it time to a 45- or 50-day tran- for a lot of 2010,” Shah says. “I don’t sit time. know if that trend is still continu- “If there was one place ing. It probably is, but it probably where we saw a migration to Officials at Athens International Airport recently depends and the commodity, and it an ocean product, it was actu- launched a sea/air program

42 march 2011 ACW end of 2008. It was all on the water, Shippers are starting to and it almost disappeared on the wa- react positively to the market. ter for about nine months.” Even if air cargo growth Geodis Wilson took a huge hit dur- isn't outpacing growth in the ing the fourth quarter of 2008. Busi- ocean, at least shippers are ness dropped 30 to 40 percent in all making decisions. Capacity markets; whatever movement ship- in both sectors that was cut pers made from air cargo to ocean in order to save money is transport stopped as well. Activity starting to come back on ramped up about a year later, when the market. “Overall, ocean Ritchie started tracking growth rates and airfreight rates are rates in the 20- to 25-percent range. creeping back up to the point Those percentages remained steady where both ocean carriers through the end of 2010. and air carriers will start “We’re certainly anticipating adding capacity enough to 2011 to show again a similar level of satisfy demand,” Ritchie says. growth. It probably is not sustainable Athens International to have 2011 grow at 2010 rates of Airport also is getting in on the sea/ Greek shipping terminal facility. 20 to 25 percent, but we think, Why air game. In November, the airport Alexis Sioris, head of development be shy?” he says. “Why not expect launched a program in conjunction at Athens International Airport, says miracles?” with the Chinese company Cosco’s the goal is to develop traffic coming

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ACW march 2011 43 featurefocus Shippers

from the Middle East. Cargo would be play it safe,” he says. shipped to the seaports, trucked to Sioris hopes his sea/air link opens the airport and flown out to Northern up a new level of business for an Europe or the U.S. “An increasing airport that has seen some airfreight “We set up a scenario or a concept losses. These mostly domestic … that’s all we can do,” he says. “The number [of customers had flown cargo in the next step is for the forwarders — be past but are now sticking to the it local or international forwarders — shippers] are water. “We still keep losing cargo to to drive this business. Right now, we the ships, but it’s cargo that travels are in a state where we try to make looking to reduce in a radius of 300 to 500 km or even people, even in the local markets, less,” Sioris says. “In regards to regain their optimism.” the amount of international traffic, we never lost It’s not going to be an easy sell cargo to shipping.” with the sour taste of the downturn airfreight they One of the main changes to come still in shippers mouths. Sioris out of the downturn, according is talking about developing a new have to use.” to Andrew Traill of the European trade flow, and anything new, right Shippers’ Council, is that his now, is risky. “In the last years, — Andrew Traill members are now taking a close look business has been hit, and people at their supply chains. This could

Shippers dealing in pharmaceuticals and other high-value goods may want to develop their own security screening processes to limit the likelihood of tampering

44 march 2011 ACW either mean going entirely with value at risk for contamination," don’t “We need a lot more screening ocean transport and lengthening want anyone else handling their to happen at the shipper level and supply-chain timelines or deciding merchandise, Shah says. not only at the airline level or at the to bleed inventories down only to However it happens, though, forwarder level,” Shah says. “We rush in with extra supplies by air at shippers need to have security on need shippers really engaging in the last minute. “The whole crisis their brains. that program to a high degree.” ACW put a focus for almost all shippers on all their costs. Of course the biggest cost is inventory, so there’s a huge pressure on reducing inventories,” Traill says. While the cost of gas and the spending habits of consumers are June 8-9 2011 | Washington D.C. USA major factors that weigh into a shipper’s decision to choose ocean Building partnerships for Relief over air, Traill said environmental and development pressures also play a role. Consumers are voting for a more environmentally friendly supply chain with their wallets, and shippers may even be feeling some pressure from governmental bodies who are demanding that companies reduce their carbon footprints. “An increasing number [of shippers] are looking to reduce the amount of airfreight that they have to use,” Traill says. “It’s not uncommon to hear of shippers all over the place that have switched to ocean and plan to stay.” Of course, one of the main shipping issues in both the air and the ocean world this year is security. Shippers must embrace the reality of 100 percent scanning, and Shah says they have to get working now. He’d like to see more shippers in the screening programs. While every shipper needs their goods screened, where that ultimately happens depends on the cargo. Manufacturers of general cargo including heavy machinery and auto parts are less picky about how their freight is screened, but shippers of high-value goods may start brining screening services in house. Any The Aid & International Development Forum (AIDF) provides a leading global platform for those involved in the delivery of humanitarian aid, relief and development. shippers dealing in pharmaceuticals, high-tech goods or other cargo The Aid & International Development Forum is a FREE to attend event. "where the look of the product is Register online today at: www.aidforumonline.org/register very important or it’s incredibly high

ACW march 2011 45

AIDF 2011_House_114x187.indd 1 09/02/2011 15:30:47 Out- sourcing cargo sales

46 march 2011 ACW featurefocus GSSa Out- sourcing cargo sales

here is a new dynamic in the GSSA business. he call from the airlines is for significant in- the company has made in IT resources. “In the last five vestment in IT platforms and the requirement years alone, we have invested over $1.5 million in our IT for global reach from a single partner. In re- systems,” he says, adding that this is the kind our commit- turn, and in the wake of the still painful down- ment the modern-day GSSA needs to make in the business. turn, many mainstream carriers are seeking to “This means we can handle any aspect of an airline’s cargo outsource their cargo business in its entirety. The level and business, be it booking and reservations or accounting and intensity of investment now taking place in general sales sales, with the option to provide an individual element and service agent cargo (GSSA) management systems also within that framework.” is providing the opportunity for low-cost carriers to enter This template, Dawkins says, is particularly suited to the cargo business for the first time at virtually no cost and encouraging low-cost carriers to enter the cargo business. at no risk. “We can provide a total cargo management system for Typical of the new dynamic in the marketplace is the these carriers at no cost to the airline and with us taking all growth of global players like Air Logistics Group. What the risk,” he says. started as a UK-based operation in 1994 has expanded to a Air Logistics currently works with two low-cost carri- network of more than 50 offices in 30 countries around the ers in Europe and a third in North Africa. But Dawkins globe. This year, the company is predicting cargo sales of confirms that, particularly since the downturn, more and $675 million. more mainstream carriers are looking to outsource their According to Stephen Dawkins, Air Logistics’ founder entire cargo business and, if possible, work with a single and COO, the key to success lies in the huge investment GSSA partner. “These carriers are now desperate to take

ACW march 2011 47 featurefocus GSSA

costs out of their business in any way they can and are looking to people like us to provide solutions for them,” he says. Dawkins recognizes that in order to offer the airlines the benefit of work- ing with a single GSSA partner, Air Logistics needs to continue with its current rate of expansion, which it aims to achieve with its existing strat- egy of growth through acquisition. “We are looking to acquire the top- end players in individual markets,” says Dawkins. “Quite often we do not have to go looking, but are instead ap- proach by potential suitors.” ovosibirsk International N Dawkins has his sights firmly set Airport Tolmachevo (OVB) on growth in Asia this year with Viet- is uniquely located on the nam, Singapore, South Korea and Ma- crossroads of a trade route that laysia prime targets for investment. The company opened its own office Stephen Dawkins, COO, Air Logistics stretches from South-Eastern Group in Japan last year; currently, however, Asia to Europe and from North Dawkins has his hands full managing America to India and Asia - one the company’s North American op- handle their flights out of Amsterdam, of the most important corridors erations, which span the seven ma- which gives us the opportunity to tap in the world. The airport is in jor gateways, with a central customer into their entire European route net- an optimal position for both service center located in Houston. work.” He gives the example of an Air commercial and technical stops. “Right now we are experiencing a Berlin flight out of Amsterdam that significant spike in business growth in flies to the carrier’s Spanish sub hub the U.S. market,” says Dawkins. in Palma, where tail-to-tail apron Tolmachevo is the leader of It has long been recognized in the transfer allows cargo to be loaded the Siberian region in terms of GSSA market that there is a huge and onto an onward Air Berlin flight to passenger and cargo traffic. The still largely untapped capacity poten- Alicante in Spain. “We send live bum- airport is a full member of the tial among the low-cost carriers. It is blebees on this route, so that gives an area Ton Smulders, managing direc- some indication of the reliability of world transport system and is the tor of Amsterdam-based Active Airline the service,” he says. biggest transit hub located on Representatives, is keen to exploit. Smulders may be jesting slightly in the major routes from Asia “The greatest fear among these suggesting that low-cost carriers can to Europe. carriers is the belief that handling always leave cargo behind if it is felt cargo will impact their short turn- critical to turnaround times. But he Novosibirsk International around times,” Smulders says. “We has an important point to make. “A have a simple answer and solution typical low-cost carrier operation may Airport Tolmachevo offers to that problem. We tell these carri- offer up to two tonnes of capacity,” he modern airport infrastructure, ers that if you think your turnaround says. “The secret is not to try and fill state-of-the-art ground support time is going to be impacted, then you all that capacity, but to try and strike equipment and highly trained can always leave the cargo behind.” a balance between payload and load- personnel for superior ground The message finally appears to be ing time. In this instance, we would suggest that a 700- to 800-kilo limit be handling services for a wide getting across, particularly with what Smulders describes as the perfect set for the flight, which can quite eas- range of aircraft. business model for low-cost carriers ily be handled in the time available.” www.tolmachevo.ru in the European market. Not that Active Airline Represen- “The German low-cost operator tatives is purely focused on the low- Air Berlin incorporated cargo into its cost end of the market. “At the other business strategy at the outset and end of the scale, we represent Saudia has never looked back,” he says. “We (Continued on page 50)

48 march 2011 ACW featurefocus GSSA

(Continued from page 48) smaller passenger airline, which may, Cargo, which requires us to fill three because of aircraft type or service fre- MD-11 freighters each week out of quency, have relatively little bellyhold Amsterdam.” capacity to offer to the market. It is hardly critical to the carrier’s revenue stream. It is a bold move then, for an “A local GSSA all-cargo carrier to entrust the busi- ness of filling the main decks of its with a strong freighters to local GSSAs. customer base Italian all-cargo carrier Cargoitalia has done just that, since its re-launch and good market just more than a year ago. Outside of its Italian home market, commercial expertise is a director Roberto Gilardoni says the carrier has reaped considerable suc- very competitive cess from a business model relying on the support of a global network option. ” of GSSAs. “Of course, you have to be very careful in your selection crite- — Anders Jepsen, ria in choosing which GSSA to handle Roberto Gilardoni of Cargoitalia Cargo Care International your business,” Gilardoni says. “It is a huge step change between acting for The airline now serves both Shang- The role of the GSSA is more often a passenger airline and a cargo car- hai and Hong Kong with its MD-11 than not seen as one of acting as an rier, particularly in important markets freighters from its Milan base. In the online or offline sales agent for the like China and the USA.” U.S., it has just added Atlanta to its

“You have to be very careful in choosing which GSSA to handle your business,” says Roberto Gilardoni of Cargoitalia.

50 march 2011 ACW existing schedule of service to New the current GSSA strategy we have York and Chicago. The new Atlanta adopted has proved very successful, service is being marketed by GSSA and we see no reason to change a Heavyweight Air Express, which winning formula.” represents the airline throughout As one of the largest global GSSA the country. But Cargoitalia believes operations, Paris-based ECS Group very much in a hands-on approach to can probably claim the greatest net- ensure it gets the best results from work reach, particularly in the U.S., its frontline GSSA support. “We do through its Globe Air Cargo subsid- not just let them sell capacity as they iary. But it is its penetration of the wish,” Gilardoni says. “Each GSSA is Africa market which has proved that given clear sales targets which can be local knowledge and expertise will al- based on density of the business, rev- ways be at the forefront of any suc- enue per cubic meter or per kilo, or cessful GSSA operation. we suggest the specific market sec- ECS’ success is made more ap- tors we want them to approach.” parent with the decision by Brussels As the business of most carriers Airlines to entirely outsource the car- grows and matures, it usually switch- rier’s ex-Europe capacity on its Afri- es from a local GSSA operation to can network. “Since we started han- establishing its own in-house cargo dling Brussels Airlines, we have built ECS Vice President Adrien Thominet sales operation. Gilardoni says that up traffic on their African network to Cargoitalia will likely stick with the the point that average load factors are ing, says. “It has proved to be a very GSSA option. “We may place our own now 93 percent,” Adrien Thominet, good combination of airline product key personnel in certain markets, but ECS vice president, sales and market- on behalf of the carrier and market 3718 HAE half page advert:Layout 1 16/2/11 13:01 Page 1

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ACW march 2011 51 featurefocus GSSA

expertise on behalf of the GSSA.” To that expertise, ECS has also been able to offer the Belgium car- rier vital reach in the African market through its 60 percent stake in Africa ounded in 1992, Panther West, a Togo-registered carrier based FExpedited Services is the largest in West Africa. “Africa West provides independent provider of Premium us with local lift to provide connec- Logistics TM services. With on-demand, e are best known for being the tion to more than a dozen beyond single source solutions, Panther Wpremier provider of expedited 3-Day destinations in Central and West Af- offers dedicated service to and from direct service departing daily from Los rica,” Thominet says. “It enables us to anywhere in the world. Angeles and Miami, but we offer so more directly respond to the fluctuat- Our technology, network strength, much more! ing demands of local markets.” It also and world class customer service have We also provide airport-to-airport, serves to illustrate the ever-expand- resulted in industry leading on-time door-to-door, local pick up and delivery, ing role of the GSSA. In the case of service levels, millions of dollars in cost- ocean container loading and off-load- ECS, that even extends to operating savings, and numerous industry awards. ing, drayage, de-van, warehouse consol- its own freighter services between Our easy to use web-based quoting, idation services, as well as a full service Europe and West Africa. booking, and tracking platform works Container Freight Station (CFS).** Is there still a future for the small- in conjunction with our 24/7/365 Our Goal: er, independent GSSA that offers lo- customer service centers to provide cal expertise and access in today’s To provide you and your company real-time visibility into your supply- market? Anders Jepsen, managing with unparalleled service in a challeng- chain. You can track your shipment director of Copenhagen-based Cargo ing and evolving transportation environ- online down to the street level to give Care International, believes so. ment. Here’s how… you piece of mind that your shipment is “We have never been busier than en route and on-time. Trust, we are right now,” he says. “What is A provider of world-class logistics Teamwork and important for us is that we have a re- solutions for companies looking ally good airline client mix.” to reduce transportation costs, ExcepƟ onal Service Jepsen confirms that the GSSA increase operational efficiency and We work hard to develop and now handles China Cargo Airlines, improve customer service. Our fully maintain quality relationships with our British Airways World Cargo, Finnair, integrated turn-key system provides clients. We understand our clients are Coyne Airways and South African affordable transportation management the key to our success and work every Airways in the Danish market. “That solutions that guarantee supply chain day to ensure they feel that way. gives us the challenge of directly sell- integration, visibility, and optimization At Sterling Transportation we pride ing four B777 freighters services a contributing to improved bottom line ourselves on being the service you can week on behalf of China Airlines, or at results. Our global transportation trust to transport your products. Our the other end of the spectrum, selling platform allows for complete inbound extensive network of qualified and reli- BA World Cargo’s Prioritize Express and outbound logistics management able driving teams ensure we meet the product. Then again, in complete con- and is designed to support all modes of firm deadlines necessary to move your trast, we are marketing services to Af- transportation. business forward. ghanistan with Coyne Airways.” With Premium Logistics TM services on For added protection and peace of BA World Cargo’s presence in the six continents, Panther offers world- mind, advanced GPS systems are avail- Danish market perhaps best illus- class shipping solutions, superior able and can be tracked anywhere in trates how a mainstream carrier has technology, and global forwarding the United States with up-to-the-minute tried various sales options in a given expertise. Access the world with location information. market. confidence and unparalleled visibility. Here at Sterling, we don’t want to “BA World Cargo has previously Let Panther provide a single source simply meet your expectations, we want gone the GSSA route, then switched solution for all your shipping needs. to exceed them. For more information to its own representation, then Over the road, through the air, or please contact us via email at Sales@ moved to a call center-style opera- across the ocean SterlingTransportation.com or call us at tion, before switching back to the Panther Delivers On Time. On Target. (310) 338-9333. GSSA option,” Jepsen says. “I think No Exceptions. *U.S. Customs Bonded it proves the point that a local GSSA www.pantherexpedite.com **Airport deliveries available 7 days a week with a strong customer base and good market expertise is a very com- petitive option.” ACW

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

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World Routes 2011 Host Official Alliance Event Supporters security

Jean-Claude Delen is the president of FIATA

TSA’s new deadline clouds the security picture

ast month, the U.S. Transportation Security Ad- ministration (TSA) announced that it is bringing “We are all facing a changing forward its deadline for all-cargo screening in- picture where different bound to the U.S. by two years. It goes without saying that this will impact the industry, primarily alternative scenarios may the airlines. But this will also reflect on the freight for- warding and logistics community, whose members are develop.” right in the middle of the chain. My immediate reaction was to think the TSA decided to bring the date forward because they had understood are already at or close to 100 percent screening of air that the industry was running ahead of the deadlines, and cargo inbound to the U.S.” therefore, it was pointless to wait. However, my feeling We must not lose sight of fact that a large percentage of now is that the closer we get to the 100 percent screening cargo into the U.S. comes from countries where cargo is level, the more difficult it becomes to actually get there. screened already, and that an important volume of cargo Further complicating the picture is the fact that more is now exempt from screening. Despite all efforts, if a countries will seriously tighten their airfreight security carrier is unable to comply with the mandate because the measures, and this will have additional impact on the in- origin country cannot undertake the 100 percent screen- dustry, in particular on the express and postal services. ing, there will be few alternatives to denial of service. Cer- However, I am not sure the statement, “The TSA is bring- tainly, there could be a move to all cargo transport which ing forward its deadline for all-cargo screening inbound to is not destined for 100 percent inspection until 2013 at the the U.S. by two years,” is entirely correct. earliest. The Implementing Recommendations of the 9/11 Act We also know that there are projects to screen cargo of 2007 required the TSA to develop a system to screen off airports. In other words, we are all facing a changing 100 percent of all cargo transported on passenger aircraft. picture where different alternative scenarios may develop. The goal was to provide a level of security commensurate Cargo movement is a complex machine, and it thrives on with the level of security for passenger checked baggage facilitation. I am in no doubt that robust cargo trends will no later than August 3, 2010. With the help of the airlines, take the route that best combines security and facilitation and through the Certified Cargo Screening Program, the and will shun all the fetters that may come from decisions TSA successfully completed the mission for cargo loaded that have not resolved all the issues on the table. on passenger aircraft inside the U.S. This is the spirit with which FIATA, in conjunction with The notion of “inside the U.S.” is, in fact, relatively new. IATA, TIACA and the GSF, recently produced a decla- Nevertheless, the push for security screening inside the ration of principle that we hope will shine as a guiding country is very present, and this earlier screening date light for the legislators. Whether in the U.S., the EU or is seemingly justified. The reasoning includes arguments anywhere else in the world, this new group will help of- such as, “there is a compelling need to attain the 100 per- ficials in their laudable efforts to provide security to citi- cent goal sooner than originally suggested” and “many air zens without cutting the benefits of efficient international carriers, including a high number of wide-body operators, trade. ACW

54 march 2011 ACW bottomline

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

10 20 15 5 10 5 0 0 -5 -5 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 11/10 12/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 11/10 12/10

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

CARRYING ASIA SHARING MARKETS Monthly year-over-year percent change in capacity, in International air cargo year-to-date percent change for available tonne kilometers, and traffic, in freight tonne December 2009 vs. December 2010 kilometers, of Asia-Pacific airlines. 40 Middle East

35 North America Capacity 30 Traffic Europe 25 Asia/Pacific 20 Latin America 15 Africa 10 Total 5 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 11/10 12/10 0 3 6 9 12 15

Source: Association of Asia Pacific Airlines Source: IATA

CARRYING INTERNATIONAL SEMICONDUCTORS Monthly year-over-year percent change in total scheduled Worldwide monthly year-over-year percent change international freight traffic and capacity worldwide in sales of semiconductors and month-to-month in freight tonne-kilometers and available tonne-kilometers. percent change. 35 60

30 50 M-O-M Y-O-Y Capacity 25 Traffic 40 20 30

15 20 10 10

5 0

0 -10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 11/10 12/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 11/10 12/10

Source: IATA Source: Semiconductor Industry Association

ACW march 2011 55 peopleevents

Airlines man and CEO in 1985. Crandall cur- executive vice president, general coun- Ivan Chu has been named Cahthay rently chairs the board of directors at cil and corporate secretary for Mesa Pacific Airways’ director and COO. Celestica and is a director of Aircell. Group, and he also held a similar posi- Chu, who previously served as director, Phoenix International Freight tion at Vanguard Airlines. service delivery, succeeds John Slo- Services has promoted Andy Wang Michael Steen, executive vice sar, who will become the airline’s chief from managing director to president. In president and COO of Atlas Air executive. The role of chief executive 1995, Wang helped Phoenix form a se- Worldwide Holdings, has taken up was previously filled by Tony Tyler, ries of joint ventures in Asia. Under his his post as chair- who has been named the Interna- direction, the company will continue to man of The Inter- tional Air Transport Association’s expand its presence in the region. national Air Car- director-general and CEO. Simon Joslin has joined Damco go Association Stephen D. Flowers is replac- as director of strategic development. (TIACA). Oliver ing Ken Torok as president of global Joslin, who has Evans, chief cargo freight forwarding worked in the in- officer atSwiss In- at UPS. Flowers, a dustry for more ternational Air StEen 30-year company than 20 years, pre- Lines, and Jason veteran, will over- viously worked as Foote, UPS’ vice president of inter- see global strategy, global account di- national air operations, have been ap- performance and rector at APL Lo- pointed to the TIACA board. revenue growth. He gistics. The com- Roger Franklin has joined Dy- Joslin previously served pany also has hired namic Aviation as CFO. Merle Zook, Flowers as president of the John McKail as the former CFO, has been named exec- Americas region. head of field sales, utive vice president. Franklin previous- Etihad Airways has named two Northern UK. McK- ly worked as CFO at Quest Aircraft new country managers. Mohamed ail formerly worked Company. El Noman, a former sales manager at as national sales Jean Medina has been named vice Emirates, is the director at Agil- president, communications, at the Air carrier’s country ity. The 25-year Transport Association. She most manager for Sudan. industry veteran recently oversaw communications for McKail Etihad’s former also worked for La United Airlines and was responsible country manager Poste and UPS. for public relations during the carrier’s for Kuwait, Magdi Replacing acting president and CEO merger with Continental Airlines. Labib, has been John Dueholm, Rickard Gustafson Niklas Prager has taken his posi- appointed country has been appointed the head of SAS tion as the new CEO of Environtainer. Labib manager of Egypt. Group. Dueholm returns to his previ- He replaces Thom- DHL Express has selected Phil ous position of deputy president, where as Persson, who is Couchman as managing director of UK he is responsible for the operations and now a special advi- and Ireland. He formerly worked as the commercial divisions. sor to the company. managing director of Sub Saharan Af- Mesa Air Group has promoted Andy Faes has also rica. Couchman has worked for DHL for Christopher J. Pappaioanou to gen- been appointed a more than 30 years. eral counsel and corporate secretary. global partner man- Jan Ernst de Groot has decided He has worked as the company since ager at the compa- Prager to resign as managing director of KLM 2001. ny, joining partners on July 1. He has been a member of the Members of the US Airways Ex- Bourji Mourad carrier’s board of managing directors press Pilots Alliance have elected and Don Harrison. since 2007. Marcin Kolodziejczyk and Richard Faes’ responsibili- Swindell to serve as chairman and ties include devel- Third Parties vice-chairman, respectively. Mark oping accounts and Robert Crandall has been appoint- Hinczynski was named the alliance’s clients in Europe, ed to the board of directors at South- secretary-treasurer. the Middle East and ern Air. Crandall is the former chair- Brian S. Gillman is the new se- Asia. He previously Faes man and CEO of AMR Corporation nior vice president, general council worked in cargo and American Airlines. He started and corporate secretary at Peachtree sales at American Airlines. at American in 1972, rising through the City, Georgia-based Global Aviation David Ashwell has been pro- ranks to president in 1982 and chair- Holdings. He most recently worked as moted to vice president, sales, at Ze-

56 march 2011 ACW nith Global Logistics. He previously May 9-10 worked as director of sales for North events Atlanta: The Center of Innovation America. for Logistics will hold its third annual Gary W. Cummings has been pro- March 8-10 Georgia Logistics Summit at the Cobb moted to president and COO of Fleet- Hong Kong: The 2011 version of Air Energy Performing Arts Centre and Net America. Formerly executive Freight Asia, a biennial conference the Cobb Galleria Centre. Officials expect more than 1,500 industry par- vice president, Cummings replaces and trade show, will be held at Asia- World Expo. The event will feature ticipants to attend. This year’s theme Oren Summer, who is retiring on separate conferences on air cargo and is “Thriving in a Changing Ecosys- June 30. logistics. A dedicated logistics pavil- tem,” and the agribusiness, airfreight, Howard Hoffman is the new CEO ion will showcase the latest industry energy, life sciences, manufacturing of United Vision Logistics. He has products and services. One-on-one and ocean freight industries will all be discussed. To register, visit http:// been working as CEO in an interim meetings can be set up during the Cargo Networking Day. For more in- summit.georgialogistics.org. role since January and previously formation, e-mail airfreight@reedex- MAY 10-13 worked as the company’s chief inte- po.com.hk or visit www.airfreighta- Munich: The 2011 version of Messe gration officer. sia.com/en/Home. Munchen GmbH’s Exhibition and The 2011 Asian Aerospace Inter- Arturo Horton is the new vice Conference for the Air Cargo Industry national Expo and Congress will also president, marketing — Americas, at will be held in the New Munich Trade be held at the AsiaWorld Expo. It will Fair Centre. This is the fifth edition of Cargo Data Management. He has feature a Congress with a slew of key- the event, which is being held in con- worked at Aerolineas Argentinas, note speeches and an Asian Pacific junction with a logistics exhibition. TACA Group and Hermes Aviation. Training Symposium. For information, According to a press release, 1,764 visit www.asianaerospace.com. The International Post Corpora- exhibitors attended the conference tion has selected Alan Barrie as its Istanbul: Hilton Istanbul Hotel is the last year, and officials expect 48,000 director of operations and technology, site for World Cargo Symposium 2011, visitors in 2011. For information, visit replacing Ross Hinds, who will retire which will bring together more than www.messe-muenchen.de/de/Home. 700 industry insiders for a three-day in September. Barrie previously was op- June 21-23 conference full of meetings, plenary Atlanta: The eyefortransport group erations strategy and design director at sessions and forums. Topics include will hold its ninth anuual 3PL Sum- Royal Mail. air mail, dangerous goods, e-supply mit and its second-ever Chief Sup- Stephanie Kopelousos has ac- chain, revenue optimization, ground- ply Chain Officer Forum at Atlanta’s handling agents and more. For ad- cepted a position as a senior advisor at Hilton Hotel. For information on the ditional information and to register, the U.S. House Committee on Trans- 3PL Summit, visit www.3plsummit. visit www.iata.org/events/wcs2011/ com. To learn more abotu the Sup- portation and Infrastructure. She Pages/default.aspx. last served as the secretary of Florida’s ply Chief Supply Chain Officer Forum, visit www.CSCOforum.com. Department of Transportation. May 1-3 Phoenix: The 2011 CNS Partnership November 19-20 Richard Edrington, who had been Conference, held Phoenix’s Horse London: Project Cargo Network will president of the Sterling Aviation Pass Resort, will feature an array of hold its inaugural summit at the Park Group since 2003, has died. The 30- industry veterans speaking about top- Plaza Riverbank Hotel. The two-day ics including emerging markets, new year industry veteran spent much of his conference will include pre-arranged technologies and security. To register, career at FedEx before joining Ster- business meetings and a workshop visit www.cnsc.net/events/Pages/201 session. For more information, visit ling Courier, a division of Sterling 1CNSPartnershipConference.aspx. Aviation, in 1987. ACW www.projectcargonetwork.com.

ADVERTISER INDEX Aid and Int’l Development...... 45 CEIA-USA...... 30 Panther Expedited...... 52 AirBridgeCargo Airlines...... 42 Coyne Aviation...... 43 Routes ...... 23 53 Airbus...... 32 Fujairah Airport ...... 8 Skyteam...... 18 Air Canada...... 24 Global Aviation Holdings...... 11 Smith’s Detection ...... 15 Air Charter Services...... 64 Heavyweight Air Express...... 51 Sterling Transportation...... 52 Airdex...... 31 JSC Airport ...... 27, 48 Swiss WorldCargo...... 10 Air France/KLM...... 35 Macau International Airport ...... 2 Team Worldwide ...... 21, 25 Air Logistics Group...... 37 Messe Muenchen...... 41 Thai Airways...... 7 American Airlines...... 16 Microsilver...... 40 TIACA...... 19 Bounce Logistics ...... 14 National Air Cargo ...... 20 Traxon...... 26 Budapest Airport ...... 6 OAG Cargo...... 63 Turkish Airlines...... 49

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60 MARCH 2011 ACW opinion

Andy Booth is the director of London-based Circle Research. He can be reached at [email protected]

Cost doesn’t drive the air cargo industry

ou may or may not subscribe to the popular Money well spent. Which of our products and services view that the air cargo business is a male-ori- are valued most highly by the customer? Are we invest- ented, macho world where the principal de- ing too heavily in products and services that are not cision-making criteria are rates and discount contributing to the bottom line? levels. This bar-room myth is self-perpetuating andY has a significant head of steam. Yet, if this truly were In the eye of the beholder. We must know what our the case, would not the lowest bid always walk away with customers and potential customers think of us in or- the business? Wouldn’t all of our shipping be accomplished der to manage and control our reputation and image. via at least one remote transhipment point? Wouldn’t pro- How effective have our advertising and communications curement departments call all the shots? been? Where are we vulnerable to competitive action? First-tier carriers and not transhipment specialists still carry the lion’s share of air cargo volume, and those that Singing from the same lead sheet. The key issue seem to succeed are the ones that experiment and inno- here is the extent to which we have succeeded in en- vate on the basis of customer insight. Leading carriers are gaging our own team. Are our employees good ambassa- differentiated from others on many more dimensions than dors for the brand? How do we enthuse and encourage cost alone; not all of these considerations are tangible, while minimizing the risk posed by saboteurs? product-focused or commercial — many are based on rela- tional considerations. It’s perhaps heresy to suggest it, but Are we on the leading or trailing edge? Innovation it seems there is at least a degree of emotion involved in is key, but it also is tough to sustain. How can we stay air-cargo decision making. one step ahead of the game and of the competition? There is, of course, no better way to learn what the How can we assess the potential of new products and customer wants than to ask. Here are some key customer- services and direct product development teams in the driven insights and priorities: right direction?

Some customers are more equal than others. Di- Performing actuality audits. Research tells us how vide and conquer is sound advice if we can divide our customers think we perform, but it’s important to know customer base into marketable groups on the basis of how the company is actually doing. There is often a their requirements and preferences. It is much more difference, of course. valuable to identify and relate to our customers accord- ing to known priorities and ways of working than to al- Great oaks from little acorns grow. How big is the locate them to conventional categories. market (and what does it comprise)? What is our share, and are we growing or in decline? Which carriers pose Getting gold from base metals. We must mold and the biggest threat and where is the greatest potential? refine the base metal of our product and service port- folio, mixing specialisms and core offerings until the We should know the answers to all of these questions. optimal configuration is achieved. After all, if the customers’ opinion isn’t worth listening to, then what is? ACW

ACW march 2011 61 forwarders’forum

Brandon Fried is Executive Director of the U.S. Airforwarders Association Taking the long view on cargo security

he air cargo industry has a strong safety and se- and baggage shipped as cargo. curity record, but recent events have increased The accord is a significant and bold first step, but it the importance of security protocols based on should not be seen as an end unto itself. The group is a risk assessment. The October attempted bomb- great forum for the exchange of ideas and sharing of com- ings of cargo planes demonstrates the need for mon interests, but it may be limited by its inability to act a harmonized approach to security that would on local issues. This is where other organizations that are bringT countries together to meet this global challenge. focused on the more specific requirements of local markets A group of significant air cargo organizations recently should be included as the GACAC begins to mature. formed in accord. The meeting may prove to be one of the The logical next step for the GACAC is to invite highly most significant steps in achieving complete cargo security recognized airfreight-forwarding organizations to partici- to date. The members of the newly formed Global Air Car- pate. Organizations like the Airforwarders Association, go Advisory Group (GACAC) include The International Air the British International Forwarding Association and the Cargo Association, the International Federation of Freight German Forwarding Association would be able to provide Forwarding Associations, the International Air Transport insight to local markets. These organizations would also Association and the Global Shippers Forum. bring their knowledge of local market intelligence, includ- Overall, the GACAC will focus its efforts on enhancing ing emerging trends, challenges and opportunities for the security of the supply chain. The group believes that freight forwarders. Another organization that should be such an effort must involve all components of the trans- invited is the Air Transport Association due to the key role portation system — from shipper to consignee — with it has played in keeping cargo flying on U.S. flights. minimal disruption to the vital flow of commerce. This The newly formed GACAC should tackle other signifi- will require a global push by the air cargo industry and the cant issues in addition to security. For instance, its exper- relevant authorities to improve risk assessment, tighten tise could be used in dealing with local customs eccentrici- supply chain processes, develop viable technology for the ties and numerous government regulatory challenges, such environment and improve compliance. as airport curfews, fees, taxes and local ordinances. These The GACAC also believes that recommendations issues slow the flow of airfreight commerce and as a result, should be consistent with the International Civil Aviation create bottlenecks in the supply chain. Organization (ICAO) Annex 17. Furthermore, the group The upcoming year promises to have no shortage of agrees that member states should introduce security challenges for the air cargo industry worldwide. The newly programs established on common principles and platforms, formed GACAC will be a vital tool needed to increase such as those contained within regulated-agent and known- awareness of the benefits that air cargo brings to national consignor programs. To facilitate integrated supply chain and global economies. Its primary mission will be to fight transportation, member states must recognize effective for the interests of the air cargo industry across the globe, security programs introduced by partner member states. challenging unreasonable rules and charges, while holding Most important, enhancing data intelligence, regulators and governments responsible for sensible leveraging standard electronic advance cargo information regulation that heightens security through unimpeded and ensuring consistency with the World Customs commerce. Organization’s Safe Framework of Standards should be Including local forwarding interests will not only expand the foundation of secure supply chain solutions to target its expertise but also its effectiveness. The phrase, “Think high-risk cargo. globally, act locally” came into vogue as the world began to Cargo security should be viewed on a holistic basis, en- understand the impacts of globalization and may be passé compassing both freighter and combination aircraft. This today, but for the global world of air freight it remains a would incorporate general cargo, express shipments, mail valuable lesson.ACW

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