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Asia Pacific sees weak growth in 2015

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AIRLINES in Asia Pacific saw cargo vol-umes grow 1.6 per cent in 2015, with a strong start of 2015 being followed by weakness in the second half, according to the Association of Asia Pacific Airlines (AAPA).

Freight tonne kilometres (FTK) increased from 63.9 billion in 2014 to 64.9 billion in 2015.

In 2015, capacity in available FTK (AFTK) increased by 3.5 per cent to 101.8 billion, while the load factor fell by 1.3 percentage points to 63.7 per cent.

AAPA director general, Andrew Herdman says this cargo weakness comes despite passenger travel proving strong.

He says: “Asian regional travel demand grew solidly, despite slowing economic growth and regional currency weakness. Less optimistically, air cargo markets saw only marginal growth for the year 2015, a reflection of the slowdown in global trade.”

Herdman says airlines benefitted from falling oil prices but profitability will remain an issue in 2016.

In December, AAPA says FTK fall by 0.3 per cent to just under 5.6 billion, while AFTK 2.1 per cent rose 2.1 per cent to 8.7 billion. The load factor fell by 1.6 percent-age points in December to 63.8 per cent.

Iran is set to give the air cargo industry a boost as it opens up, presenting significant opportunities for operators as the coun-try came out of the wilderness when the United Nations (UN) removed economic sanctions last month.

International sanctions have been lifted after it complied with a deal designed to prevent it developing nuclear weapons. The landmark deal between Iran and world powers was agreed last July.

And the UN forecast’s in its World Economic Situation and Prospects 2016 report, published on 25 January, the Persian country’s economy will grow in 2016 and 2017 by 4.8 per cent and 5.4 per cent, respectively, and airfreight vol-umes are set to grow as markets open up.

Iran is considering buying 100 aircraft from US manufacturer Boeing as it moves to upgrade its fleet following the removal of sanctions.

Iran’s deputy transport minister, Asghar Fakhrieh Kashan was reported in media outlets as saying it was looking to buy the aircraft from Boeing, which comes after it negotiated with Airbus a deal to sell 114 aircraft to Iran.

US trade sanctions on Iran remain in place, but Boeing could apply for a special waiver.

However, last week Boeing said there are “many steps” before it decides to sell aircraft to Iran.

The average age of Iran’s com-mercial airliners is is almost 27

years, and European regulators have banned all but 12 of Iran Air’s (pictured) fleet from using European Union airspace, because the carrier has failed to show its aircraft meet interna-tional safety standards.

Iran Air has a fleet of 43 aircraft, which includes two Airbus A300 Freighters and one Boeing 747 Freighter.

Cargo market impacting Boeing as it cuts 747-8 production

Boeing has reacted to the ongoing weakness in the cargo market by slowing production of the 747-8 to 0.5 aircraft

per month in September 2016 - in another sign it will be a tough year for the industry.

The US aircraft manufacturer had already announced it would cut production from 1.3 747-8s per month to one from March 2016, but now explains that a lack of freight recovery has slowed demand for the 747-8 Freighter.

Boeing vice chairman and president and Boeing Commer-cial Airplanes chief executive officer, Ray Conner (pictured)

says: “Global air passenger traf-fic growth and airplane demand remain strong, but the air cargo market recovery that began in late 2013 has stalled in recent months and slowed demand for the 747-8 Freighter.”

He continues: “While we remain confident in the 747-8’s unique value proposition and an upcoming replacement cycle for late-model 747-400 Freight-ers, we’re taking the prudent step to further align production with current market requirements.”

Boeing executive vice president of business development & strat-egy and chief financial officer, Greg Smith says it is closely monitoring the air cargo market as it works to win additional orders to support future production. “At the same time, we continue to aggressively drive productivity to lower costs across our production system to offset the current market chal-lenges,” Smith adds.

Meanwhile, Boeing has seen its 2015 profit drop by five per cent to $5.17 billion as says earnings from its Commercial Airplanes division

fell by 20 per cent to $5.15 billion, which it says was

again due to weakness in the cargo market.

Boeing saw profits for the year drop by five per cent from $5.4 billion in 2014

to $5.17 billion in 2015, with the fourth

quarter proving par-ticularly weak. In the

fourth quarter, profits fell by 30 per cent from $1.4 billion in 2014 to $1 billion in 2015.

Commercial Airplanes revenue

fell by four per cent in the fourth quarter to $16.1 billion though it was up by 10 per cent to $66 bil-lion for 2015 as a whole. In the fourth quarter, profits fell by 64 per cent to $566 million.

Despite the weak end to the year, Boeing president and chief executive officer, Dennis Muilen-burg remains optimistic saying: “With clear strategies and strong positions in our markets, a large and diverse order backlog worth nearly $500 billion, and multi-ple additional production rate increases planned yet this decade, we are well positioned for profit-able growth and higher cash flow as we move into our second cen-tury of business.”

Muilenburg does have high hopes for 2016: “Our priorities for 2016 and beyond are to build on our existing strengths to deliver on current plans and commit-ments, and to stretch beyond them by accelerating progress on key enterprise growth and produc-tivity initiatives, investing in our team, and creating more value and opportunity for our customers, shareholders and employees.”

Operators set to benefit as Iran comes in from the cold

Volume: 19 Issue: 4 1 February 2016

aircargoweek.com

NEWSWEEK

Fifteen airlines are to switch to the electronic air waybill (eAWB) from 1 March this year as the preferred method for shipping airfreight, but there remains bar-

riers to adoption from freight forwarders, according to IT firm Descartes.

Air Canada, Air France-KLM, Amer-ican Airlines, British Airways/Iberia (IAG), Cathay Pacific, Delta Air Lines, Etihad Airways, Finnair, Lufthansa Cargo, Qatar Airways, Saudi Arabian Airlines, Swiss and United Airlines are making the move.

Descartes vice president of its global logistics network, Scott Sangster says this is a significant milestone in the air cargo industry and “creates a new level of urgency for forwarders to move toward the eAWB”.

He continues: “On the carrier side, the benefits of the eAWB are clear - airlines

need the information to populate security filings and to streamline a high volume of airfreight shipments. On the forwarder side, the advantages are less defined. For-warders must have business value to make the transition.

“Some carriers are meeting the chal-lenge of forwarder eAWB adoption by utilising the stick portion of the “carrot or the stick” motivational practice by

charging for paper documentation at the house and master bill level.

“While this helps push the discussion forward, the overall value to the industry will be reached when additional forwarder objections or barriers to participation are addressed.”

He says one of the major objections to forwarder eAWB participation has been the difficulty to manage and maintain the specific requirements within each trade lane and to determine what shipments are eAWB eligible.

And in order to mitigate this barrier to entry, he says many airlines are adopting an innovate method to boost forwarder participation called the Single Process approach.

Sangster feels the Single Process approach is beneficial to the air cargo industry, but still does not address all for-warder concerns.

2 ACW 1 february 2016

Airlines switching to eAWB creates urgency for forwarders

THE Manchester Airports Group (MAG) saw strong cargo growth in 2015 across its UK gateways, handling an additional 27,720 tonnes compared with 2014, which was a 4.3 per cent increase.

Volumes rose 4.5 per cent at East Mid-lands Airport and 2.4 per cent at London Stansted Airport. MAG says East Midlands and London Stansted are benefitting from their ample spare runway capacity as other London airports reach capacity. Manchester Airport also saw growth in long-haul bellyhold cargo, taking the airport past the 100,000 tonnes mark as traffic increased 9.6 per cent YOY.

MAG business development manager for cargo, Conan Busby (pictured) says: “We’re seeing strong growth in cargo volumes at MAG airports, driven by a variety of factors. While the growth in express cargo was driven by the increasing popularity of internet shopping and e-commerce among con-sumers, we have also seen operators join us for the first time and also won mode share from ground transport as freight got diverted to us because of the Channel Tunnel disruption over the summer.

“We are also seeing a lack of capacity at other London air-ports especially in long haul bellyhold – something our airports are taking advantage of with their spare runway capacity, good onward transport infrastructure and competitive offers.”

”

Cargo chiefs not optimistic

CONFIDENCE among airline chief financial officers and heads of cargo has fallen in January, with only 45.7 per cent expect profits to improve over the next 12 months, according to the International Air Transport Association (IATA).

In the association’s Airline Business Confidence Index Jan-uary 2016, it says profit expectations for the next 12 months have fallen over the past two quarters, which IATA says sug-gests improvements peaked earlier in 2015. In the January 2015 survey, 78 per cent expected profits to improve over the next 12 months.

IATA says: “The growth outlook is positive for both pas-senger and cargo businesses, but the share of respondents expecting improvements has decreased compared to a year ago. This likely reflects concerns over weakness in the global business environment and emerging market economies.”

Volume growth is expected to be slow, with 45.2 per cent predicting an improvement over the next 12 months and 41.9 per cent expecting no change. The respondents are not so optimistic about yields, with only 12.9 per cent anticipating improvements.

in

aircargoweek.com

Good times for cargo at MAG

NEWSWEEK

3ACW 1 FEBRUARY 2016

Miami International Airport (MIA) (pictured) has seen total cargo volumes increase by 0.3 per cent to 2.2 million tonnes in 2015 with domestic rising and interna-

tional seeing a slight dip.Freight at Miami fell marginally in 2015 to

2.1 million tonnes while mail increased by 29 per cent to 38,100 tonnes. Total domestic cargo, which covers freight, express and mail, rose by 2.7 per cent in 2015 to 280,976 tonnes with mail up 43.8 per cent to 24,085 tonnes while freight stagnated at 256,891 tonnes. International cargo dipped slightly to 1.9 million tonnes, with freight falling marginally to 1.9 million tonnes and mail rising by 9.7 per cent to 14,015 tonnes.

Miami-Dade county mayor, Carlos Gimenez says: “I cannot say enough about how pleased I am with the growth at MIA in 2015. In addi-tion to being our county’s top economic engine and one of Florida’s most valued assets, MIA is

fast-becoming one of the busiest airports in the nation and in the world.”

In 2015, Miami welcomed a number of new airlines including Turkish Airlines and Austrian Airlines, British Airways and Air France both started using Airbus A380s. Other airlines including airberlin, Lufthansa, Qatar Airways, SWISS International Airlines, Vir-gin Atlantic and WestJet increased services.

Miami-Dade Aviation director, Emilio Gon-

zalez says: “With the most airlines of any US airport, and the continued expansion of hub carrier American Airlines and other existing carriers, MIA is poised to reach greater heights in 2016.”

Edmonton International Airport (EIA) saw its cargo volumes growth climb for the sixth consecutive year in 2015 and is set to see a fur-ther rise in 2016.

The Canadian gateway has not yet revealed how many tonnes of freight it handled, but pres-ident and chief executive officer, Tom Ruth says: “2015 was a year of wins in the context of some challenging economic times.”

EIA saw freighter services upped in 2015 included Air China Cargo, which began a direct service to Shanghai Pudong International Airport and Dallas/Fort Worth International Airport, three times a week each direction. This new service is forecasted to generate $31 mil-lion in GDP for the Edmonton Metro region.

Miami tonnage up in 2015, Edmonton also grows WorldNEwsVOLGA-DNEPR AIRLINES has appoint-ed three global directors to spearhead growth of its transport and logistics solu-tions with customers in the aerospace, humanitarian, and oil and gas sectors.Axel Kaldschmidt has been appointed global director for aerospace. Fayçal Boumerkhoufa has been made global director for oil and gas and Colon Miller is global director of humanitarian, gov-ernment and defence programmes.

SWISSPORT is to create 100 new jobs at Belfast International Airport in a num-ber of areas including cargo handling. The airport is having a major recruit-ment drive to raise its workforce to 350 employees. The expansion should be worth about £1.6 million ($2.3 million) in annual wages to Northern Ireland’s economy.

4.2% rise at lUXCARGO continues the upward trend at Lux-embourg Airport and it handled 738,000 tonnes in 2015, rise of 4.2 per cent com-pared to 2014.

The gateway says when the road freight transported under an airway bill is added, the tonnage amounts to 747,000.

“This is testimony to the fact that ship-pers, freight forwarders and airlines recognise the excellent location of Lux-embourg in the heart of Europe and its closeness to the major consumer markets in the European Union,” he adds

QATAR AIRWAYS CARGO is to start Airbus A330 Freighter (pictured) services to Bu-dapest, Prague and Ho Chi Minh City from March 2016 as the airline continues to ex-pand its network.

The Ho Chi Minh service will fly on Thurs-days and Saturdays, providing 120 tonnes of capacity in addition to 72 tonnes of bellyhold capacity on daily passenger flights. Qatar Airways says Vietnam is an increasingly im-portant exporter of garments, footwear and handicrafts.

The Doha – Budapest – Prague service will also operate on Thursdays and Satur-days with 120 tonnes of capacity a week. It says the route will provide access from Asia to Eastern Europe for electronics and automotive parts as well as textiles, pharma-ceuticals and biotech products.

Qatar Airways chief officer cargo, Ulrich Ogiermann says: “We are delighted to an-nounce our network expansion in Asia/Pacific and Eastern Europe. We have identified a definite gap in the market in these regions

and we look forward to supporting local businesses in the areas with a more robust service connecting them to our wider global network.”

Qatar grows freighter network

aircargoweek.com

ACW 1 february 2016 4

Kuehne + Nagel has signed a contract with GlaxoSmithKline (GSK) to transport products from the raw material suppliers

to trade customers until 2021.The companies say the contract officially

marks the commencement of a relationship between the two firms, with Kuehne + Nagel providing skills, expertise and strategic capa-bility across GSK’s global operations.

Kuehne + Nagel says it was selected as a part-ner due to its existing track record with GSK, and its investments in pharmaceutical and con-sumer products logistics.

Kuehne + Nagel chief executive officer, Detlef Trefzger says: “We are very excited about this long term collaboration with GSK. Our focus is to leverage existing experience and industry-specific solutions serving the pharma-ceutical and consumer sector which will deliver incremental benefits to GSK.”

“Our integrated logistics approach, com-prising air, sea, overland services and logistics control centres in four regional hubs will enable GSK’s global supply chains to move to the next level of performance,” Trefzger adds.

GSK contract win for K+NPHARMA NEWS ROUND-UP

ETIHAD CARGO has jointly launched a new design for a cool dolly for temperature sensi-tive cargo which includes for the movement of pharmaceuticals.

The carrier has developed it with the Mas-dar Institute of Science and Technology.

The hybrid cool dolly uses thermoelectric module technologies, modified compressor units and a power bank attached to solar panels for sustainable recharging, which it says will ensure temperature is regulated while minimising power usage.

The cool dolly is designed for temperature sensitive cargo including pharma, but also for livestock and perishable products that need to be transferred between aircraft and storage compartments.

Etihad says the hybrid cool dolly will provide advantages over traditional diesel powered units, with an energy intensive cooling unit, which it says are expensive to operate and struggle to meet all perfor-

mance requirements.Etihad Cargo vice president, David Kerr

says: “We are committed to providing our customers with innovative and sustain-ably-designed cargo solutions, and working with Masdar Institute has helped enormous-ly in developing a specialised temperature controlled dolly that protects sensitive products from the heat and harsh weather conditions we sometimes face here in the UAE.”

Masdar Institute vice president of re-search, Dr Steve Griffiths explains: “Our research platform integrates energy and system engineering in a manner that we be-lieve can make a meaningful contribution in transport and logistics operations in the UAE and overseas.”

The announcement was made during the World Future Energy Summit which took place in Abu Dhabi between 18 and 21 Jan-uary 2016.

CARGOLOGIC has obtained International Air Transport Association (IATA) Center of Excellence for Independent Validators (CEIV) certification for pharmaceutical handling at Zurich Airport.

The Swiss WorldCargo ground handling partner says the certification assures cool chain integrity throughout the airline’s network.

Pharmaceuticals are very important for the Swiss economy, with pharmaceutical and biotech shipments being transported via Zurich Airport increasing.

Swiss WorldCargo vertical industry manag-

er pharma & healthcare, Susanne Wellauer says: “With Cargologic completing the CEIV process, we can now offer pharmaceutical handling excellence at Zurich hub and meet our customers’ needs for more safety, secu-rity, compliance and efficiency.”

Before receiving CEIV certification, Cargo-logic was awarded Good Distribution Practice compliance from the Swiss drug registration institution, Swissmedic in 2014.

In April 2015, Cargologic’s cold storage facilities were expanded to meet capacity requirements for the storage of temperature sensitive shipments.

aircargoweek.com

Cool dolly for pharma

IATA pharma certificate for Cargologic

Tabloid page unbled.indd 1 22/01/2016 11:13

ACW 1 february 2016 6

C hina Airlines (CAL) has signed a memorandum of understanding with Taiwan-based shipper Yang Ming Marine Transport and the state-owned Chunghwa Post to set up a

strategic alliance.The move is unusual not just for bringing

three different types of businesses together, but

in their goal of growing e-commerce.According to the China News Agency (CNA)

the three aim to integrate the air and marine shipping resources of CAL and Yang Ming with the postal services of Chunghwa Post to provide door-to-door delivery of goods shipped to Tai-wan from abroad.

“The alliance is mainly aimed at developing a cross-border e-commerce business platform to boost Taiwan’s global competi-tive edge, according to the three companies,” the news agency explains in a report.

Chunghwa Post chair-man, Philip Wen-chyi Ong acknowledges the alliance was initiated by the Minis-try of Transportation and Communications (MOTC)

in the hope that cooperation between the three leading companies will help them all thrive, especially in cross border e-commerce.

According to the MOTC, CAL ranks as the world’s sixth largest air cargo carrier with 35 destinations around the globe, Yang Ming Transport is the world’s 13th largest shipping company, and Chunghwa Post has more than 1,000 outlets across Taiwan.

Vice minister of transportation, Wu Meng-fen says he has faith the strategic alliance will create synergies for the three partners. One way this can happen is the alliance shortening delivery times for goods sent to Taiwan from overseas, lowering logistics costs and helping the three penetrate the e-commerce business.

The agency reported the three partners as being in talks to set up a website as a platform for developing the joint e-commerce business, with the platform expected to be ready for a trial

run by April 2016.This was tacitly confirmed by an official

within the triumvirate.“We cannot provide a definite time it operates

but I think it won’t be long,” Yang Ming tells Air Cargo Week. China Airlines was contacted but unavailable for a comment.

“The issues about how to develop our e-busi-ness market and increase the economic benefit from the joint venture are still under evaluation.

“We will announce how it works and our expectation from this after formal operation,” Yang Ming adds.

Chunghwa Post rakes in $300 million New Taiwan dollars (NT) ($9.09 million) in revenue a year from its own e-commerce business, which has 300,000 members.

CAL posts annual sales of about NT$1.8 bil-lion a year from e-commerce and duty-free businesses.

Strategic alliance in Taiwan for e-commerceASIA PACIFIC

AIR cargo operators are working their way round new rules imposed by the Australian government on air cargo from some coun-tries including Bangladesh.

Australia imposed prohibitions on the car-riage of cargo originating from, or transiting through, Syria, Egypt, Bangladesh, Yemen and Somalia in December 2015.

“Airlines are prevented from carry-ing any air cargo that has originated from, or transited through Syria, Yemen or Somalia,” the Australian department of infrastructure and regional development says.

Air cargo originating from, or transit-ing through, Egypt and Bangladesh, was granted an exemption for a limited range of items. This includes letter products and small items of cargo.

A letter product is defined as weighing less than 500 grammes and is no longer than 360 millemetres (mm) on it longest side with a shortest of 20mm. A small cargo item weighs less than 250 grammes and is 5mm or less on its shortest side.

“If the cargo meets these requirements, then it can be sent to Australia as air cargo,” the department explains.

Whilst the air cargo industry is under-standing on the grounds of security and acknowledges groups in Yemen, Somalia, Syria and Egypt have been known to use air cargo as bomb opportunities, the inclu-sion of Bangladesh rankles both with the air cargo community and business groups in the South Asian country.

“In the case of Bangladesh, this is a new prohibition and the issue is not so clear and has greater impact due to the volume of inbound aircargo trade of, particularly, man-ufactured items of clothing,” the Australian

Federation of International Forwarders (AFIF) tells Air Cargo Week.

“In terms of volume, we do not have such stats to hand but we would estimate around 10 million kilos of such air cargo is affect-ed,” the AFIF adds.

Already the industry is adapting itself with an increased use of other airports – made easier by the fact that there are no direct flights from Bangladesh to Australia.

“For urgent consignments, the best solu-tion found to date is airfreighting the goods as normal from Bangladesh to either Hong Kong or Singapore, then importing and customs clearing the goods at those inter-mediate airports, followed by re-exporting by air to Australia, having undergone approved security screening at the intermediate air-port,” the AFIF says.

No time lines for amending, or lifting the ban has yet emerged, although the AFIF has made its position clear to the Australian government.

Another group doing the same although via the Australian Embassy in Dhaka is the Bangladesh Garment Manufacturers and Exporters Association. Neither side chose to speak to ACW directly but used their web-sites to say dialogue is ongoing.

Australia imposes rules on Bangladesh cargo

aircargoweek.com

T he Association of South East Asian Nations (ASE-AN)’s Single Aviation Market (SAM) has some way to go before airfreight can move freely across the region’s skies, a senior legal source tells Air Cargo Week (ACW).

The problem is not with freighters, but the passenger fleet which carries much of the ASEAN’s cargo, Alan Tan, Law Pro-fessor at the National University of Singapore tells ACW. Tan specialises in aviation and transport law.

“First, we have to make a distinction between passengers and cargo. For all-cargo flights, all 10 ASEAN states have signed up, so all cargo flights (third, fourth and fifth freedoms) are available,” Tan explains.

The basic problem is three countries, including ASEAN’s larg-est economy, Indonesia, have kept certain cities effectively closed to foreign competition. The Philippines has not opened up its capital, Manila, and neither Indonesia nor Laos have opened up non-capital cities.

“There is no way they can be made to accept the relevant ASEAN agreements. ASEAN is not like the European Union where there are organs like the European Commission and the European

Court of Justice that can compel member states to adhere to Com-munity laws,” Tan adds.

That said Tan does not think this is likely to be a multi-year sticking point and could be resolved in one, possibly two years.

“What is a bigger issue is what comes next - seventh freedom rights are not even on the table, and will need to be discussed if the Single Market is going to make sense,” he said acknowledg-

ing the third, fourth and fifth freedom rights, which are relatively uncontentious, are still being dragged out, as he put it, by Indone-sia, Laos and the Philippines.

The other great problem Tan and others have defined as limit-ing the agreement’s scope is the poor infrastructure.

“At Jakarta airport, which is now technically open for third, fourth and fifth freedom flights, airlines cannot get landing slots because of the congestion. So the rights don’t mean anything without the slots,” he says.

Indonesia for its part has welcomed the SAM with one pub-lished account saying it could increase air cargo volumes by 50 per cent this year, according to the Indonesia National Air Carriers Association’s (INACA) head of cargo division, Boyke P. Soebroto.

Indonesia’s international air cargo shipping volume stood at around 80,000 tonnes in 2014, just one-fifth of domestic air cargo shipping, which booked 400,000 tonnes during the same year, Soebroto says. Much of this is moved by Garuda Indonesia.

“But for this year, as we will have direct flights, I think it [vol-ume] will increase by 40,000 tonnes,” he adds.

Single Aviation Market in SE Asia still some way off

7ACW 1 FEBRUARY 2016

ASIA PACIFIC

SOUTH East Asian countries have improved their position in the 2015 Agility Emerging Markets Logistics Index, in part because of dynamic air cargo sectors.

The Index, now in its sixth year, is an annual data-driv-en ranking of 45 emerging economies accompanied by a separate survey of nearly 1,000 global logistics and supply chain executives.

Of the South East Asian countries Indonesia rose one place to fourth whilst Vietnam moved up two to 19th a smaller rise than that of the Philippines which rose three to 16th. Malaysia was unchanged at eighth in the Index as was Thailand at 14th.

Boosting Vietnam’s, and to a lesser extent the Phil-ippines, position was their involvement in two of the fastest growing airfreight trade lanes from the US and the European Union (EU), although the Index considers a range of factors.

In a report on the Index, Agility reports volume from America to Vietnam rose a staggering 42.7 per cent to 20,397 tonnes in 2014 over the year before.

Airfreight from the EU rose by the lesser but still im-pressive 17 per cent to 29,237 tonnes.

The Philippines also saw a similar pattern. Airfreight volumes from the US rose 11 per cent to 20,953 tonnes and the EU by 8.2 per cent to 17,111 tonnes. By con-trast Malaysia saw a modest increase of 2.7 per cent to 39,738 tonnes on its EU air cargo volumes.

Also helping the Philippines was growth up by nearly a quarter on outbound trade lanes to the US and a fifth to EU. Vietnam saw its outbound, to the US rise by a much smaller 7.1 per cent to the US and 5.1 per cent to the EU but remains in a clear winner.

“The attraction of lower wages compared to increas-ingly unfavourable labour market conditions in China has seen numerous multinationals invest heavily in Vietnam, particularly in the airfreight intensive electronics sector,” Agility explains in a report accompanying the Index.

“Samsung, Intel and LG are investing billions in new factories, with Samsung alone importing and exporting $11.3 billion and $12.5 billion of goods in and out of Vietnam in 2012 respectively. It is worth noting that Viet-namese growth is a long term trend, with air imports from the US and EU growing at an average rate of 19.2 per cent and 12.2 per cent per year respectively from 2005- 20,” it adds.

SE Asian countries on the up

aircargoweek.com

ACW 1 february 2016 8

G lobal Airline Services saw its ton-nage and yield up to November increase by 18.5 per cent in 2015, its managing director, Jasper de Bruijne (pictured) tells Air Cargo Week (ACW).

De Bruijne says Dutch export tonnage grew by 9.5 per cent due to growth to the US, which sur-prised him as he says the US is not one of Global Airline Services’ strongest lanes.

He says: “Global Airline Services Netherlands currently is closing the books for 2015 and con-cludes it was a very good year. Growth in both total tonnage and yield was realised, in the period January – November 2015, of 18.5 per cent compared to 2014.”

He continues: “While the total export ton-nage in the Dutch market grew with around 9.5 per cent, mainly due to the enormous growth in exports to the USA. Considering that the USA destinations are not Global Airline Services’

strongest lanes, the company’s growth is even more remarkable.”

The general sales agent (GSA) represented 42 million kilogrammes for airlines due to increased flight schedules to both Amsterdam Airport Schiphol and Maastricht Aachen Airport. De Bruijne says: “One of the reasons for the out-standing figures in 2015 is the increased capacity we had to sell on behalf of a few large airlines in our portfolio last year.”

Two commodities to China that are booming are e-commerce and milk powder, making up for what de Bruijne calls ‘normal exports’, including car parts, electronics and semi-finished products decreasing. “We have seen volumes of car parts, electronics and semi-finished products decreas-ing in 2015 but milk powder volumes were just incredible.

“After the poisoned milk powder incidents in China the Chinese consumer lost its confidence

in Chinese milk powder and our country [The Netherlands] of course is famous for cheese and milk.”

He says this is despite the Netherlands export market proving difficult due to the flag carrier, KLM, struggling. “With the flag carrier not doing too well and many of the world’s biggest airlines trying to increase their market shares. In the past few years we have seen a capacity explosion to Amsterdam with airlines like Qatar Airways, Etihad, Saudi Arabia Airlines, Emirates and Cargolux.”

Global Airline Services invested in extra staff for operations and sales, and in its marketing and IT for better market awareness and improved quality of service.

De Bruijne tells ACW: “Global Airline Services still is very strong in the ‘old fashioned’ way of airline representation, but we have to do more nowadays than just selling and booking ship-ments we are convinced to give the extra added

value to the product.”He says in addition to ser-

vices such as dedicated sales and operations teams, telephone line and office space for the airline, GSAs shares risks with the airline by buying capacity or decid-ing where to fly. De Bruijne says: “In 2014 we formed a think tank with people from inside and outside our company to develop a new strategy for the coming years.”

“Our industry is changing, so we had to ask ourselves the question … will GSA’s still exist in 10 years from now? The conclusion was yes but more/other services should be added,” he adds.

He says this is why Global Airline Services has become the first GSA to operate an airport, taking over Maastricht Aachen (see below). De Bruijne comments: “Guaranteed … 2016 [will be] another exciting year.”

Seeing growth in remarkable locationsTHE NETHERLANDS

Capacity explosion

Trade Centre Global Investments (TCGI), the parent company of Global airline Services is to operate Maastricht aachen airport until 2026, after a provisional contract was awarded.

The contract will be finalised on or around 1 March, running until 2026 with an extension option. If all conditions are satisfied then TCGI will be operating Maastricht by the middle of the year.

TCGI managing director, Ismail Durmaz (pictured second right), who is also the chief executive officer of Global GSa Group, which Global Airline Services is part of, says: “We have every confidence in the future of Maas-tricht Aachen Airport and will do our utmost to put the airport on the map.”

Maastricht had been privatised and sold to UK investment firm; Omniport and Dutch construction company, dura Vermeer in 2004 but the Province of Limburg took it over in May 2014 when the airport was threatened by bankruptcy. The Province and four South

Limburg municipalities provided funds for overdue maintenance and to pay the costs of airport facilities, including security and the fire service.

Province of Limburg executive councillor, Twan Beurskens says: “The airport’s reputa-tion and image have a positive impact on the dynamics of Limburg’s business community. What is more, our airport is a unique regional hub, combining airfreight, passenger services, maintenance firms and a training facility for aircraft mechanics.”

Maastricht Aachen Airport chairman of the supervisory board, Ype de Haan says: “The airport and its staff can face the future with confidence. It’s great that, thanks to a suc-cessful concession process, Limburg’s airport can develop into a major infrastructural asset.

“TCGI considers itself to be a company with sufficient drive to make the concession a suc-cess. Working with the stakeholders is one of its top priorities. The supervisory board is look-ing forward to TCGI’s arrival at Maastricht.”

TCGI to run Maastricht Aachen

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A msterdam Airport Schiphol saw cargo volumes fall by 0.7 per cent in 2015, but its director of cargo, Jonas van Stekelen-burg (pictured) says this was better than expected considering the slowdown in

China.Schiphol handled 1.6 million tonnes of cargo

in 2015, down slightly from 2014, which was a record-breaking year. The first half of 2015 had been weak but things picked up later in the year. North America and South America both registered growth of over five per cent, while Africa was up marginally. The Middle East saw a marginal decrease while Asia and Europe both saw declines.

Van Stekelenburg tells Air Cargo Week: “Schiphol ended 2015 0.7 per cent down on 2014, but this is a compari-son with our all-time record year. Given that our largest market, China, continues to show weakness, this is a better result than we expected. Schiphol continues to out-perform its closest rivals, but we are not complacent.”

He says the nervousness in the global financial markets is slowing world trade, something airfreight always notices. “China continues to be a concern to us, simply because it represents such a large proportion of our business, and small reductions in traffic have an exaggerated effect on our volumes.”

China and the US remain Schiphol’s largest markets, but it is trying to cover all markets. “We are deliberately spreading our emphasis across all markets in order to spread our risk.”

“We would like to increase business with all regions, of course. Some countries are already big import and export airfreight part-ners, but we think they can be further developed.”

He says Amsterdam already has a large amount of Chinese cargo and combination carriers but says the rise of e-commerce has seen more players and smaller shipments. “This could rep-resent the opportunity for further expansion of the business we

do with China. We would very much like to facilitate this trade.”

There are other regions of the world to be devel-oped, such as India’s pharmaceutical market. “Our work with India’s pharma sector and Delhi Airport is one example. There is already air trade between our countries and we will actively encourage the provision of additional direct airfreight capacity between us, supported by streamlining of processes such as greater e-freight adoption.”

E-freight and improving IT infrastructure is something Schiphol is working on upgrading. Its community data platform, Cargo-naut, is to receive two million euros ($2.1 million) over the

next two years to renew and upgrade it. Van Stekelenburg comments: “Cargonaut, our community data platform, is under-taking major enhancement of its hardware and software systems, using investment from both public and private sectors. The whole airport community will benefit.”

Smaller than expected fall in 2015 for Amsterdam

9ACW 1 february 2016

THE NETHERLANDS

Volumes at Maastricht Aachen Airport fell in the first three quarters of 2015, but the arrival of Ethiopian Cargo means managing director, Wiel Dohmen is optimistic about 2016.

Dohmen tells Air Cargo Week: “In 2014 maastricht Aachen Airport handled 80,000 tonnes of airfreight, volumes in 2015 were somewhat down [in] the first three quarters of last year. The last three months however showed a positive surge in handled cargo volumes, mainly due to the arrival of Ethiopian Cargo.”

He continues: “We are optimistic for 2016; the fact that ethiopian Cargo started operations to/from maastricht Aachen Airport as from November last year will boost our growth figures in the high double digits in 2016.”

maastricht will be expanding facilities with its 9,000 square metre cargo terminal becoming operational in Jan-uary and in early this year, extra parking positions for code F aircraft including Boeing 747-800s will be constructed. Dohmen says: “We plan to construct a further two positions in 2017 and to expand our warehouse facilities with another 9,000 square metres, including cooling facilities.”

maastricht’s main imports continue to be perishables including flowers, fruit and vegetables, and high tech. ex-ports are mainly general cargo, automotive and med-tech. Dohmen comments: “med-tech is a growing segment, the perishable market to maastricht has only grown stronger over the years.”

He says perishable imports continue to originate from Af-rica and south America though imports from ethiopia have risen. “High-tech originates of course from the Far east. And with Royal Jordanian Cargo and Turkish Cargo having their main Western european hub at maastricht Aachen Airport, Turkey and the middle east are very important markets for us.”

maastricht and Amsterdam Airport schiphol are the only Dutch airports to handle air cargo but Dohmen says maas-tricht is closer to both high-tech and med-tech distribution centres.

Continuing concerns about China

Maastricht hopeful for 2016

aircargoweek.com

ACW 1 february 2016 10

Major changes are set to come into effect in air cargo security as states look to make the supply chain more secure to counter the increasing threat of ter-rorism, which remains as high as ever.

The US, European Union (EU) and Canada are at various stages of advance data pilot programmes started fol-lowing the Yemen terrorist incident in 2010, when two US-bound packages contained explosives and highlighted the need for a security overhaul. The incident involved two cargo aircraft and brought more focus on in-bound cargo, highlighting the impor-tance of data, particularly cooperation between customs and aviation security authorities.

The International Air Cargo Association’s (TIACA) secretary general, Doug Brittin (pic-

tured) tells Air Cargo Week there is still much work to be done, and more testing needs to be done, while getting various programmes aligned is of paramount importance especially as more states look

to run projects.In January, Brittin attended a Joint Work-

ing Group of the International Civil Aviation Organization (ICAO) and World Customs Organization (WCO) on Advance Cargo data in Geneva (Switzerland), the fifth meeting in 18 months. He says: “The group is trying to get to a framework document as three countries are starting advanced data and we as industry, feel it is important that those align to the greatest degree as possible.

“But even more broadly than that, if other countries are look-ing at that in the future it is extremely important they take the

lessons learnt out of the pilot work and testing from these pro-grammes, so you do not just have a multitude of programmes not working together (along the same lines).”

Brittin says the working group’s goal was to move towards a high-level framework document for future states considering similar programmes to the US, EU and Canada. He feels good progress was made: “We were able to get the 7+1 element into the WCO safe document and formalise that, which was good as there was discussion of ‘is that enough’ and should it be a mini-mum of 7+1, but we felt from an industry stand-point you cannot go there, and keep asking for more and more.”

However, he notes there remain significant challenges on data transmission, message streams, processes, security screening protocols and compliance related issues. “For us and particu-larly regulators to write a basic framework document, we put it into perspective of a prescription would not be written without understanding the condition of a patient, and speaking with peo-ple running the pilots more testing needs to be done.

“What we have ended up with which is a good thing, we have done some good things, but there is an extensive laundry list of other things that need to be tested. The goal is to set a priority of those issues and what can be tackled in the time frame, which TIACA is heading up through a working group with industry (people running pilots).”

Brittin says issues that need to be resolved include on auto-mated systems and data exchange, response protocols, routing and transfer (moving shipments through regions), and opera-tions and compliance (who does what, where and what has to be inspected and reported) and other sub-sets he could not reveal.

Brittin says: “We set a time frame of a month and a half that we along with regulators and pilots will set joint priorities and work towards time frames to test those. It is important everyone is involved in testing and that information is shared from that.”

He observes it leaves the message out there to anybody con-sidering a Pre-Loading Advance Cargo Information (PLACI) type regime, there is more than meets the eye and it should not be jumped into too soon and must be fully assessed.

The US is running an Air Cargo Advance Screening (ACAS) pilot project, a joint initiative between the US Customs and Border Pro-tection (CBP) and Transportation Security Administration (TSA).

The programme screens shipments before they make it onto aircraft and utilises the 7+1 data set, which includes the number of pieces, weight, general cargo description, shipper name and address, consignee name and address and the airway bill number. This enables carriers and freight forwarders to send and receive advance security filing data and related action messages for all air cargo through CBP’s Automated Targeting System.

Brittin says 300 million shipments have been moved through the ACAS pilot in five years and from 193 different countries. He feels positive and negative things have come out of the pro-gramme: “Good things have come out such as someone in industry can transmit the data early in the supply chain, but there is a limited data set and fewer than 30 participants are in the pilot and although it is a lot of shipments, the express sector has con-tributed 95 per cent.

“But when you get involved with the freight forwarding com-munity trying to communicate the information directly into the systems or moving it even through their airline to get the right data in time for them to submit it, these have not be tested in real detail and there are connectivity issues because of the sys-tem, which take time to resolve and money, so rather than jump too quickly we decided it was best to further test those type of things.”

Brittin says TIACA would also like to see more use by operators of a more traditional air cargo security screening method - canines. “When you look at high-volume large shipments, canines are much more effective and cost effective in both cases but effi-cient in screening those configurations than technology, but we understand from the regulators stand-point there is a need to make sure they are doing the job they trained to do, which costs money too.” He adds canines are very effective in multi-configu-ration consolidations.

Brittin concludes that improving air cargo security across the supply chain through accurate advanced data was not a quick fix and it is important to get it right.

In order to get to the eventual goal of enhanced security, sub-stantial testing still needs be done before regulators bring in new industry legislation.

More testing needed on advanced data programmes,TIACA boss says

AIR CARGO SECURITY

More than meets the eye

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