acw 19 october 15
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4
MH17 was shot down by warhead
BHAT UP FORTHE SWISSCHALLENGE
THE ROUTE TOPHARMASUCCESS
AIR MENZIESLOOKING TOE-COMMERCE
AIR CARGOBOOSTED BYONLINE SALES
The weekly newspaper for air cargo professionals
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MALAYSIA AIRLINES flight MH17 was shot down by a warhead launched from a Buk missile system in eastern Ukraine where airspace should have been closed, the Dutch Safety Board report concludes.
The Boeing 777-200 was shot down on 17 July 2014 near the village of Hrabove in a conflict zone of eastern Ukraine.
The report says Ukraine had sufficient reason to close airspace in the region as a precaution.
Despite this, it explains Malaysia Air-lines received no information suggesting the aircraft was at risk and 160 commer-cial airlines flew over the area before the accident.
The report explains: “In the case of flying over conflict zones, one cannot simply rely on an unrestricted airspace being safe, other parties in the sys-tem also bear a major responsibility: airline operators, other states and in-ternational organisations such as ICAO [International Civil Aviation Organi-zation] and IATA [International Air Transport Association].”
ICAO says it welcomes the Dutch re-port and notes that it will be reviewing it to ensure safety of future air travel.
Airline profits have doubled in the second quarter of 2015 to $8.9 billion, with Asia Pacific and North America seeing increases but Latin America is struggling, according to the Inter-national Air Transport Association (IATA) Airlines Financial Monitor report for September 2015.
The association says North American and Asia Pacific airlines were helped by lower fuel prices compared to the same period of 2014 while Asian carriers have also cut costs. Latin American carriers have struggled with falling yields and an economic recession in Brazil.
IATA says: “The financial performance of the airline industry has been mostly solid up to the middle of the year, with Q2 results showing large profit improvements in the US and Asia
Pacific, but down in Latin America.”IATA sampled 82 airlines around the world
in the report, including Aer Lingus, Air New Zealand (pictured), Cathay Pacific Airways, Juneyao Airlines and Qantas Airways.
The report says North American carriers saw net post-tax profit rise from $4 billion in the second quarter of 2014 to $5.9 billion in the same period of 2015. Asia Pacific carriers made a profit of $2.2 billion in the second quarter compared to a loss of $439 million during the same period of last year. European airlines saw an improvement from $859 million in 2014 to $901 million this year. Latin America saw losses increase to $105 million compared to $57 mil-lion in 2014. Other airlines saw profits remain at $7 million.
IATA notes that carriers have been boosted by lower crude oil prices, which have averaged $57 a barrel so far this year.
The association explains oil prices have fallen below $50 a barrel because of increased supply in Iran and the US while demand weakened in economies including China.
Lithium battery forces emergency landing
Alithium battery forced an Alaska Airlines flight to make an emer-gency landing days after the US Federal
Aviation Administration (FAA) issued a warning about the risk of fires from the cargo.
The Boeing 737-900ER, Flight 17, was flying from New-ark International Airport to Seattle-Tacoma International Airport on 12 October when it was diverted at 08.00h to Buffalo Niagara International Airport.
A credit card reader which is used as the point-of-sale for onboard purchases of food and beverages, began to smoke in the cabin of the aircraft.
Reports in the US claim the phablet-based GuestLogix card reader was powered by a lithium ion (li-ion) battery. It was a new device just introduced on Alaska Airlines aircraft.
The carrier says while there were no flames at any point during the flight, the crew did use a fire extinguisher to stop the device
from smoking while the captain made arrangements for the emer-gency landing in Buffalo, in the US state of New York.
Media reports in the US claim in response to the incident Alaska Airlines has now removed all of its electronic credit card read-ing machines from its fleet for inspection.
This again highlights the safety concerns from the risk lithium bat-teries pose on aircraft.
The incident took place two days after the FAA issued a Safety Alert for Operators (SAFO) warning on 10 October on the carriage of spare lithium batteries in carry-on
and checked baggage – including baggage checked at the gate or onboard the aircraft.
“Lithium batteries present a risk of both igniting and fuelling fires in aircraft cargo and baggage com-partments,” the FAA explains in the SAFO.
The FAA also backs an interna-tional ban of the batteries as cargo on all bellyhold airlines entering or leaving the US.
It wants carriers to prohibit the batteries from checked bags and remind passengers at check-in and when buying tickets not to pack them.
In July this year, Boeing advised
airlines not to carry large quanti-ties of li-ion batteries as bellyhold cargo until improved packaging is developed.
The aircraft manufacturer sent guidance to carriers urging them not move the batteries as cargo “until safer methods of packaging and transport are established and implemented”.
This year, Cathay Pacific Cargo, Qantas Freight and Emirates SkyCargo were among carriers banning the carrying of batteries on freighters.
From 1 January, lithium metal batteries were restricted to freighters when by themselves.
Airline profits have doubled in Q2 - IATA report finds
Volume: 18 Issue: 41 19 October 2015
NEWSWEEK
Kuehne + Nagel has seen profits for the first nine months of 2015 rise by 6.7 per cent to 512 mil-lion Swiss francs ($532.8 million),
helped by improvements in its airfreight business.
The profit was up from 480 million Swiss francs in the same period of 2014 despite turnover falling by 4.4 per cent from 13 billion Swiss francs to 12.4 billion Swiss francs. In the third quarter, turnover fell by 6.7 per cent to 4.2 billion Swiss francs but profit increased by 11.4 per cent to 186 million Swiss francs.
Kuehne + Nagel chief executive offi-cer, Dr Detlef Trefzger, says: “In the third quarter we further improved our results, especially in seafreight and airfreight … Our strong focus on innovative logis-tics services and strict cost management enabled growth in profits in a demanding market environment.”
The airfreight division saw its earnings before interest and tax (EBIT) increase to 202 million Swiss francs in the first nine months of 2015 from 182 million Swiss francs in the same period of 2014.
This comes despite revenue falling to 4.1 billion Swiss francs from 4.3 billion Swiss francs. Kuehne + Nagel says that airfreight volumes increased by 5.1 per cent because of strong demand it has seen across the automotive, pharmaceutical, aerospace
and perishable industries.For the company as a whole, EBIT in
Europe, the Middle East and Africa fell slightly in the first nine months from 350 million Swiss francs in 2014 to 341 million Swiss francs in 2015.
In the Americas, EBIT was up to 147 mil-lion Swiss francs from 121 million Swiss francs while Asia Pacific saw EBIT increase to 152 million Swiss francs from 136 mil-lion Swiss francs.
2 ACW 19 OCTOBER 2015
Profits rise of 6.7% for Kuehne + Nagel
FREIGHT volumes at European airports grew by 0.4 per cent year-on-year in August, with Istanbul Atatürk Airport and Am-sterdam Airport Schiphol (pictured) the only top five busiest hubs to see growth during the month, according to Airports Council International (ACI) Europe.
Frankfurt Airport saw volumes fall by 4.7 per cent to 162,904 tonnes, while Paris Charles de Gaulle Airport, dropped by 2.9 per cent to 146,000 tonnes. Schiphol saw volumes rise by 0.7 per cent in August to 137,638 tonnes and Heathrow Airport saw a dip of 0.2 per cent to 122,540 tonnes. Atatürk saw a 16.4 per cent rise to 66,229 tonnes.
ACI Europe director general, Olivier Jankovec, says the slug-gish Eurozone economic recovery and slowdown in China is a concern but he hopes oversupply of oil will keep costs down.So far this year freight volumes across Europe have increased by 0.9 per cent.
Slight volumes rise in Europe
Freighters boosting Brussels
BRUSSELS AIRPORT has seen cargo volumes increase by 1.6 per cent in September to 39,533 tonnes, with rises in freight-er cargo making up for falls in bellyhold.
Freighter cargo rose by 6.5 per cent in September to 28,273 tonnes with full freighter volumes increasing by 8.2 per cent to 11,169 tonnes, helped by Ethiopian Airlines services. Integrator volumes rose by 5.5 per cent to 17,104 tonnes. Bellyhold volumes fell by 8.9 per cent to 11,261 tonnes.
Brussels Airport says: “Same as most other European air-ports, belly transport at Brussels Airport saw a 8.9 per cent fall by comparison with September 2014. For the full-cargo seg-ment, we are seeing a sharp 8.2 per cent rise year-on-year.”
It continues: “This sees Brussels Airport as an exception to the general downward trend of air cargo traffic in Europe. Around half of this growth is to be attributed to the new cargo of Ethiopian Airlines.”
Japanese carrier, All Nippon Airways will start daily services between Brussels and Tokyo’s Narita International Airport on 25 October. The airline will use a Boeing 787-8 Dreamliner.
NEWSWEEK
3ACW 19 OCTOBER 2015
The potential of the Turkish logistics industry and the market’s growth opportunities were hotly debated at a conference in Istanbul on 8 October.
Air, sea and road industry players and university students gathered at the Inter-national Transport and Logistics Conference, co-hosted by Pegasus Airlines Cargo and Bahcesehir University, at the university’s Besiktas Campus.
Delegates heard that Turkish exports are worth around $150 billion a year with air cargo making up 10 per cent of this figure, while the economy is set to grow three per cent in 2015 and 2.9 per cent in 2016.
Pegasus Cargo vice president, Aydin Alpa, explains to delegates: “Turkey is a vital logis-tics hub in the region due to its geographical location, hence we anticipate further growth and expansion in the sector in the near future.”
Among the speakers was Etihad Cargo vice president, David Kerr, who says the carrier has seen a seven per cent growth in volumes into Turkey.
But he says expansion of infrastructure is vital for Etihad in order to grow in Turkey and in the global marketplace. He highlights that investment in its hub at Abu Dhabi Interna-tional Airport and construction of Istanbul’s third airport are fundamental for further growth.
Kerr also spoke about the global market-place, and says China remains a key market for
the carrier: “China is Etihad’s biggest market. We have seen the peak in the market, but have to think about how we tap into it as it changes.We are focusing on the market and looking for alternatives and how we can support it.” India is also a country, which Etihad is targeting, Kerr adds. As for the future, he feels there needs to be investment in digitization, which is lacking in the airfreight industry and wants increased electronic air waybill (eAWB) usage.
Lufthansa Cargo general manager for Tur-key, Hasan Hatipoglu, echoed his views. He notes in Turkey there is huge potential for more eAWB penetration as the take-up has been slow.
Dusseldorf Airport Cargo managing direc-tor, Gerton Hulsman, also told delegates of his desire to see freighters at the German gateway. He says the airport wants to expand its inter-continental routes to economic production centres.
Turkey primed for future cargo growth
FREIGHT volumes fell by 0.2 per cent worldwide in August with both North America and Latin America – Caribbean de-clining while most other regions saw little growth, according to Airports Council International (ACI).
Airports in North America reported a fall of 1.7 per cent year-on-year (YOY) in August while Latin America – Caribbe-an declined by 2.8 per cent in the same month. Asia Pacific saw no growth while the Middle East was up 0.9 per cent. Europe saw an increase of 1.1 per cent and Africa was up 11.2 per cent.
ACI says the Asia Pacific region has been affected by economic growth slowing in China with the region’s largest hub, Hong Kong International Airport (HKIA) (pictured) re-porting a YOY decline of 1.4 per cent. ACI says: “With a high concentration of the world’s major airfreight hubs located in the region, this has an impact on global growth in vol-umes, which has remained flat as compared to last year.”
ACI says in North America, Memphis International Airport, a major FedEx hub, declined 1.4 per cent while Louisville International Airport, a UPS base, fell by 0.8 per cent.
So far this year global volumes are up 2.6 per cent. Eu-rope is up 0.5 per cent, Africa 11.4 per cent, Latin America – Caribbean 1.3 per cent, Asia Pacific 2.2 per cent, North America 3.5 per cent and the Middle East 6.3 per cent.
Global freight volumes fall 0.2%
WorldNewsFINNAIR’s vice president head of cargo, Antti Kuusenmaki, will leave Finnair Cargo in November to pursue other ca-reer opportunities.He has been heading Finnair Cargo since December 2014 and will be re-placed in the role by head of Finnair’s operations control center, Janne Tar-vainen, who will take on the position from 1 November 2015.
ATLAS AIR WORLDWIDE HOLDINGS has appointed Chung Mak as vice pres-ident for sales and marketing in Asia Pacific for Atlas Air.Mak will have responsibility for commer-cial activities, customer relations and general management. He will report to executive vice president and chief com-mercial officer, Michael Steen.
New long range A350 for SingaporeSINGAPORE AIRLINES is to be the launch customer of the Airbus A350-900 Ultra Long Range (ULR), so the airline can fly non-stop to New York (US) from Singapore.
The carrier has increased its order of A350-900s from 63 to 67, of which seven will be the ULRs, with a claimed ca-pability of up to 19 hours. If Singapore Airlines operates the New York service, at a distance of 8,700 nautical miles, it would be the longest commercial flight, at 19 hours.
Singapore Airlines will start taking delivery of A350s in the first quarter of 2016 with ULRs set to arrive from 2018. Chief executive officer, Goh Choon Phong says: “Our custom-ers have been asking us to restart non-stop Singapore-US flights and we are pleased that Airbus was able to offer the right aircraft to do so in a commercially viable manner.”
Airbus says the A350-900ULR’s fuel capacity will be 165,000 litres compared to 141,000 litres in the standard A350-900. The A350 eXtraWideBody (XWB) offers a 25 per cent reduction in fuel burn and emissions as well as lower maintenance costs through aerodynamic designs, carbon fibre fuselage and wings and Rolls Royce Trent XWB engines.
NEWSWEEK
4 ACW 19 octoBER 2015
Bhat up for the Swiss challengeSWISS WORLDCARGO’s new head of cargo, Ashwin Bhat (pictured) has set his sights on enhancing the carrier’s strengths and is not looking to make any drastic changes.
Bhat took over from Oliver Evans on 1 Oc-tober, who was at the helm for 13 years, and is relishing his new role.
He tells Air Cargo Week: “I have been meet-ing with customers and the one thing they have been telling me is we should not change too many things and must continue the im-provements, and working with customers. I do not believe in changing things for the sake of it. I have certain areas I would like to focus on. One is I would like to develop the skills of our staff by improving their competencies.”
He says he is keen to focus on increasing electronic air waybill usage, specialist cargo services and care intensive freight.
Bhat says the carrier would also like to im-prove infrastructure at stations making more facilities good distribution practice compliant and create “quality corridors” with different cargo handlers through alliances.
Swiss will focus on market segments where there is growth potential, Bhat says, adding: “We would like to look at pharmaceuticals more and at the e-commerce segment as
there is a niche we can tap into.”
He says Swiss are performing well in most regions notably South America and Africa, but the slow-down in China and Asia is putting pres-sure on.
In the first nine months of 2015, the carrier’s load factor fell 3.7 percentage points to 75.2 per cent compared to the same period last year. Revenue cargo tonnes kilometres were down 3.3 per cent.
Swiss International Air Lines will have opened 20 new routes by the end of 2015. Bhat says in 2016 it will focus on increasing cargo capacity on long-haul routes through fleet upgrades: “We are looking at a 15 per cent in capacity growth.”The carrier will operate six Boeing 777-300 Extended Range aircraft from February. Bhat says next year it will receive three more 777s - further growing capacity.As for the drone trial with Swiss Post, he says a second proof of concept will take place at the end of this year and drones could be use-ful for the “last mile of cargo.”Bhat is expecting a tough end to 2015: “The market is soft and sluggish and pressure is on the yields. It is a perfect storm happen-ing. Nobody is talking about the high season, there is not going to be one, just a few days. It is going to be a tough winter.”
Frankfurt Airport has seen cargo vol-umes fall by 4.7 per cent in September to 170,217 tonnes while fellow German hub Munich Airport (pictured) was up by
2.8 per cent to 27,369 tonnes during the same month.
Frankfurt says tonnage to the Far East and the Americas have been weak. So far in 2015, the gateway has seen year-on-year (YOY) falls in every month except February, when it rose by 1.8 per cent to 162,088 tonnes and April, when it was up by 0.8 per cent to 173,274 tonnes. Between January and September, cargo volumes fell by 2.4 per cent to 1.5 million tonnes.
Frankfurt Airport’s operator, Fraport says: “Weak global trade continued to affect cargo traffic at Frankfurt, resulting in a 4.7 per cent slide to 170,217 tonnes. Cargo tonnage to and from the Far East – with the exception of Japan – as well as on North and Latin American routes registered a strong decline.”
Munich Airport has seen YOY growth in every month of 2015 so far, varying from 2.8 per cent in September to 27,369 tonnes to 24.1 per cent
in April to 28,914 tonnes.Bellyhold freight fell by 0.4 per cent in
September to 21,119 tonnes while freighter ser-vices increased by 24 per cent to 4,764 tonnes.
Between January and September, airfreight increased by 9.6 per cent to 235,760 tonnes, of which 195,101 tonnes was bellyhold, a YOY rise of 5.8 per cent and 40,659 tonnes was freighter services, up 32.3 per cent YOY. Airmail was up 7.7 per cent to 13,377 tonnes during the nine months, meaning the airport handled 249,137 tonnes, up 9.5 per cent on 2014.
Munich Airport says a major factor behind the strong gains is the increased use of cargo air-craft at the hub.
Heathrow’s volumes edging up
CARGO volumes at Heathrow Airport have grown 1.6 per cent over the past 12 months - fuelled by rises to emerging markets.
The airport says freight to Mexico has risen 36 per cent, to Turkey 25 per cent, to Brazil 13 per cent and to India five per cent.
In September, Heathrow saw a fall and handled 119,091 tonnes, which was a year-on-year (YOY) drop of 4.4 per cent
on the same month last year. For the first nine months of 2015 it has processed 1.1 million tonnes, which is a 0.2 per cent rise on the same nine months in 2014. For the past 12 months, cargo volumes have risen 1.6 per cent with the airport handling just over 1.5 million tonnes.
Heathrow says if it builds a third runway, it will be a “driving force in rebalancing the UK’s economy by creating more export links to fast-growing markets.”
Cargo volumes continue a steep decline at Gatwick Airport, which is also looking to build an additional runway. In September, the gateway handled 5,627 tonnes, a 21.5 per cent fall on the same month last year. Over the past 12 months, Gatwick has han-dled 76,476 tonnes, a 14.5 per cent YOY drop.
German airports seeing mixed results
Justin Burns, ACW: What is your role in the IATA CEIV programme?Schaefer: My role is to develop and promote the CEIV Pharma certification programme whose main objective is to improve the industry’s overall levels of competency, as well as technical and operational preparedness via industry and regulator backed training and validation.However, the programme’s vision is more than simply filling current industry gaps or reducing costs. Rather it is to protect the end users of the various pharma goods shipped by air, for whom swift and unaltered accessibility to vaccines and medications could prove to be a matter of life and death.
Justin Burns, ACW: Why was the CEIV certification set-up?Schaefer: CEIV Pharma was set up as a response to the industry’s need
for a network of certified pharma trade lanes that meet globally consistent standards and assure the product integrity of the valuable, time and temperature-sensitive pharma products being shipped via air.
Justin Burns, ACW: Who can qualify for this certificate?Schaefer: All industry stakeholders in the pharma air transport value chain can qualify for CEIV Pharma. Airlines, airports, freight forwarders, ground handlers, and trucking companies, as long as you handle pharma being shipped by air and are committed to provide quality services, you can qualify.
Justin Burns, ACW: What processes do companies have to go through to become certified?Schaefer: In order to achieve certification, companies must undergo a rigorous training and assessment programme. The path to CEIV certification
begins with an assessment by our independent
validators of cool chain/pharma processes and facilities against international standards, guidelines and regulations. The training consists
of two multiple day courses, which cover
a variety of topics regarding temperature
controlled cargo operations
as
well as the audit, quality and risk management of temperature controlled cargo.The final stage, the validation phase, ensures all requirements established during the assessment phase are in compliance and all the gaps and recommendations have been implemented.
Justin Burns, ACW: How many firms are now certified?Schaefer: There are 16 companies certified and 65 are estimated to complete assessment by the end of the year, with approximately 15 more expected to meet requirements.
Justin Burns, ACW: What difference can CEIV certification make to pharma business?Schaefer: CEIV Pharma helps firms properly train their personnel, develop adequately equipped facilities, attain compliance with globally recognised standards and benefit from a marketable common audit format that minimises disruption of operations and increases an entity’s probabilities to effectively meet the growing number of governmental regulations and pharma company audits.CEIV Pharma helps reduce annual product losses (estimated at $12.5 billion worldwide), and mitigates the growing mode shift taking place from air to sea for pharma shipments and the safety benefits that follow from a significant reduction in temperature excursions.
Justin Burns, ACW: Does IATA think that CEIV will help attract more pharma business to the air cargo industry?Schaefer: Yes. Definitely.
CEIV Pharma certification was created alongside both industry stakeholders and regulators in order to keep a fine balance between regulations for the public good and ensuring the sector’s long-term sustainable growth.
Justin Burns, ACW: What feedback has been given by pharma shippers about CEIV certified facilities?Schaefer: Beginning with our pilot project with SATS in Singapore to the latest certifications completed by BCUBE Cargo and CAL Cargo Airlines, the feedback has been extremely positive.Even companies who had
already been good distribution practice compliant, mentioned that the programme gave them another push towards improving their standards.The most important feedback is that the programme achieves what is designed for, which is to uncover, and eventually solve, industry wide communication gaps through the application of mutual cooperation, honest sharing of data and a strong emphasis on stakeholder teamwork.
Visit www.aircargoweek.com to read the Q&A online and to read other news and features from the airfreight industry.
5ACW 19 OctOber 2015
The International Air Transport Association’s (IATA) Center of Excellence for Independent Validators (CEIV) Pharmaceutical certification is raising the standards of the handling of pharma air cargo. Air Cargo Week spoke to the project’s lead, Ronald Schaefer, about his role and how successful the programme has been.60 withRONALD SCHAEFER
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ACW 19 OCTOBER 2015 6
A ir Menzies International (AMI) says rising demand for e-commerce is helping make up for difficulties faced in Australia’s mining states.
AMI vice president for the South Pacific, Geoff Young (pictured) tells Air Cargo Week (ACW): “The mining states have faced dif-ficult markets throughout 2015 to date, and this has knocked on to their freight activity. We have been working hard to counteract the challenges in our market by opening up new revenue streams.”
Young explains to ACW the company has seen an eight per cent growth in tonnage across the region while express jobs are up by 95 per cent, helped by its online click2Ship service.
Young notes: “The latter provides all-inclusive online quotes, which are then easily converted to bookings. This is very new for the Australian
market, and proving very successful as it saves our agents customers time, and enables them to give their own customers fast quotes to secure business.”
He has high expectations for click2ship. Young says: “We expected continued strength in our online express platform click2ship, particularly as we plan to expand it into domestic freight services.”
AMI has doubled the size of its Sydney facility
and opened operations in Darwin and Adelaide. Young says: “We have just doubled the size of our Sydney operation to accommodate pent up demand, and pave the way for our growing e-commerce support activity.”
Young continues: “Our new state-of-the-art Sydney facility provides over double the capacity of the former base, necessary to accommodate the pace of growth we are experiencing in this market. We have invested in additional handling equipment, and this expands our capabilities into accepting heavy and outsize shipments.”
The capabilities in Sydney meant within days of the facility opening, AMI arranged the trans-port of an executive helicopter to London.
He adds: “We have also opened operations in Darwin and Adelaide, which give us important local presence in these markets, and they are stimulating additional business.”
Young says now AMI has facilities in Darwin and Adelaide, it has facilities at every major air-port in Australia and New Zealand. He tells ACW: “Our next phase is to consolidate our position and grow from these bases, both by additional market penetration and also through the provi-sion of added-value services.”
Young says Melbourne has been doing well. “Melbourne has enjoyed significant momen-tum, welcoming new customers to the AMI experience of highly competitive rates, service quality, solid reliability and absolute commer-cial neutrality.”
The bar for agents operating their own bond in Australia is very high because of rigorous border controls, designed for safety, economic and environmental reasons. Young says it took five months to launch its Adelaide operation, despite AMI having had a presence in Australia for a number of years. He adds: “Fortunately for our customers, as we had done all the compli-ance spade work, they can now benefit from a branch network that spans the country, and from our trade-only neutrality to help them set up shop in places such as Darwin, Perth, Adelaide and Brisbane.”
Air Menzies looking to e-commerce growthAUSTRALASIA
New Sydney facility
DHL has doubled capacity at Melbourne Airport with 20 million Australian dollar ($14.7 million) DHL Express Melbourne Gateway facility, which can handle 5,000 packages an hour.
The facility employs about 100 people and covers 14,800 square metres, of which 5,300 square metres is warehouses space, 915 square metres is offices and 8,600 square metres is open areas. DHL says it is the only express company at Melbourne Airport with airside access.
The facility is TAPA ‘A’ rated includes two x-ray scanning machines, three telescopic conveyors, onsite LED panels to monitor flight information. DHL says it has customs and quarantine offices onsite and 100 closed circuit televisions for security rea-sons. The company says it has halved its carbon emissions with measures including LED sensor lights.
When the facility opened in August, DHL Express Asia Pacific chief executive of-ficer, Jerry Hsu, said: “The newly minted China-Australia Free Trade Agreement and other established Free Trade Agreements (FTAs) have enabled Australian exports with greater access to international markets.”
Hsu added: “China is Australia’s largest export market for both goods and services, accounting for nearly a third of Australia’s total exports, and a growing source of for-eign investment.”
He said going by the evidence of previous FTAs, Australia can expect to see increases in dairy, horticulture, mining and services sectors.
At the time, Victorian minister for indus-try, Lily D’Ambrosio said: “The Victorian government recognises that companies like DHL Express, and the Victorian businesses who use the Melbourne Gateway facility, are the driving force of our economy.”
“The DHL Express Melbourne Gateway facility is one of Victoria’s gateways to the world, enabling local businesses to export and trade with customers globally.”
DHL Express Oceania senior vice pres-ident, Gary Edstein said: “We’re seeing strong growth in exports from Melbourne, hence the need to more than double our previous facility. Almost 30 per cent of our Australian volume currently passes through the Melbourne Gateway, highlighting the trade requirements the Victorian state demands.”
DHL doubles capacity in Melbourne
Air New Zealand says it has had a good year in 2015, particularly with Commonwealth countries, but is expecting Pacific countries to see slow growth in 2016.
The carrier’s regional manager for UK and Europe, Finlay McArthur (pictured) tells Air Cargo Week (ACW) that volumes in New Zealand
have been steady throughout 2015, with growth pat-terns matching UK trade.
McArthur says: “Trade between C o m m o n w e a l t h countries is strong and with investment oppor-tunities in New Zealand around
food manufacturing, oil and gas and high value manufacturing industries, I am expecting a steady albeit slow growth to the Pacific Rim through to early 2016.”
As for the rest of 2015, McArthur is opti-mistic. He notes: “For New Zealand the market looks good and set to continue in the growth we have seen so far through 2015. As manufactur-ing to the Pacific Rim gains momentum for the Christmas period, I am expecting to see volumes remain stable especially in the express/mail sectors.”
As for 2016, McArthur tells ACW: “Like the rest of the world, 2016 will bring new chal-lenges such as the high [UK pound] sterling and cheaper manufacturing from Asia but we relish a challenge and are looking forward to the New Year.”
McArthur says Air New Zealand transports a variety of goods from perishables to car parts to animals. He explains to ACW: “We really do
transport such a huge variety of things – we even had meerkats on board recently!”
McArthur says Air New Zealand has expan-sion plans services expected soon in Houston (US) and Buenos Aires. He says: “The UK/Europe will still have the same capacity as last year, but with the use of strategic partnerships
from the region to connect into the Air New Zea-land network we can offer more capacity and service to our customers.”
In the 2015 financial year, Air New Zealand saw its cargo revenue increased to 317 million New Zealand dollars ($212 million) from 287 million New Zealand dollars in 2014.
Air New Zealand sees growth in the Commonwealth
7ACW 19 OCTObeR 2015
AUSTRALASIA
Qantas signs joint venturesQantas has had its joint ventures with China Eastern Air-lines and American Airlines authorised by the Australian Competition and Consumer Commission (ACCC).
The partnership with China Eastern was announced in No-vember 2014 alongside the signing of the Australia-China Free Trade Agreement and was approved by the ACCC in August this year.
Qantas received interim authorisation from the ACCC for the American Airlines partnership in July and the first flight under the agreement will be on 18 December to San Francisco.
When the joint venture with China Eastern was approved, Qantas chief executive officer, Alan Joyce commented: “Greater connectivity and improved customer benefits will also help boost trade relations between the two countries as a result of the Australia-China Free Trade Agreement signed last year.”
Commenting on the American Airlines partnership in June, Joyce said: “American Airlines is one of our most important alliance partners, and this deal strengthens the long-stand-ing ties between us to provide a platform for future growth across the Pacific.” American Airlines will use Boeing 777-300 Extended Ranges on routes, Qantas both Airbus A380s and a Boeing 747.
ThE QAnTAs Group made a full year earnings before in-terest and tax (EBIT) result of over 600 million Australian dollars ($441 million), its best result since 2008.
The cargo division, Qantas Freight, saw its EBIT rise to 114 million Australian dollars from 24 million Australian dollars in the 2014 financial year, helped by higher load factors. Qantas Freight renewed its contract with Australia Post until 2020 and gained business from Toll Group.
Qantas International saw its EBIT increase to 267 million Australian dollars compared to a loss of 497 million Austra-lian dollars the previous year due to reducing costs.
When announcing the results in August, Qantas chief executive officer, Alan Joyce said: “Every segment is now making a healthy profit, with returns exceeding cost of cap-ital, including record results for Jetstar, Qantas Loyalty and Qantas Freight.”
Qantas will be adding five Boeing 787-9s to its Interna-tional fleet from 2017 to replacing five of its Boeing 747s.
Qantas’ best results in years
ACW 19 OCTOBER 2015 8
O nline retail stores are propelling the growth of the global air cargo market according to a just released ‘Global Air Cargo Market 2015-2019’ report from TechNavio which
predicts there will be steady growth of six per cent in the five years to the end of 2019.
It reveals online retail stores, especially those selling fashion items, are a major source of rev-enue for the airfreight market, but warns that other methods of transportation, such as bullet trains, will provide significant challenges and competition.
A major emerging trend in the air cargo mar-ket is an increase in airline research, which is resulting in the identification of new transpor-tation routes and strategies in the market.
ECS Group chief operating officer, Adrien Thominet (pictured), tells Air Cargo Week that the ‘one model fits all approach’ is no longer rel-
evant to meeting the needs of airlines in today’s world.
“ECS is witnessing a shift in focus to products like pharma, horses, special freight require-ments and project cargo,” he says. “These are the growth niche markets of air cargo in gen-eral and we are using our expertise to focus on them.
“We recognise fundamental changes are tak-ing place in the airfreight industry, especially in emerging markets, and we are witnessing the rapid emergence of low cost airlines as ‘agents of change’.”
As a significant global logistics player and general sales and service agent, ECS has been able to weather tough market conditions and says it is continuing to maintain growth.
“Markets react differently and there are shifts and differences in the developments in and between Asia, South America and the European
market, as well as vast differences in individual market conditions,” Thominet states.
“Emerging markets have been an important area for us for a few years and we are continu-ing to expand in them, particularly in India and Africa,” he says.
“Though Asia is constantly growing, we are pleased that business in Europe has been
stable, especially as the largest sector of our business lies within the continent.
“In general ECS sees itself as a partner work-ing alongside clients, through both good and bad times. We see our role as a close and seam-lessly integrated partner one can always rely on - tailor-made to each individual client yet scalable to global service, which helps both, the client and us to grow with each other.
“For us global deals with selected airlines are key to meeting the latest trends and develop-ments in the airfreight markets,” says Thominet. “Luckily we show growth in all markets and, whilst obviously holding up a good market shares, it needs as much of a detailed focus to fully satisfy loyal clients as it takes to build up a new market.
“In a digital world, we have understood that offering great services is very important and we are working with IATA [International Air Transport Associa-tion] to implement eAWB in France and Germany first and then all over Europe.”
Air cargo boosted by online retail sales growthFREIGHT FORWARDERS
Emerging markets
LOGISTICS traffic is taking off for the Moscow based Volga-Dnepr Group - better known for its airline division which ships project car-goes and heavy lift items around the world.
Like other freight providers keen to ex-pand market share the company established its own logistics division in 2014 as part of its evolving ‘cargo supermarket’ strategy and service offering.
The division is charged with providing in-house ground logistics support for Vol-ga-Dnepr Airlines and AirBridgeCargo Airlines as well as offering direct third party logistics services to outside organisations using all modes of ground transport along-side air transport services contracted from other airlines.
This summer it organised the delivery of over 190 tonnes of shipments for project engineering company Telekom-Zapad, which started with a 230 kilogrammes shipment of cable samples to Yakutsk in the Russian Far East, some 450 kilometres south of the Arc-tic Circle, using the belly hold cargo capacity of a passenger aircraft.
Transportation of further shipments was then completed by road and rail and Vol-ga-Dnepr has since also provided cargo warehousing, packing and insurance services.
Volga-Dnepr head of logistics, Georgiy
Shklyanik, says: “The customer was satisfied with our service performance for the first shipment and returned to us with a require-ment for a series of cable shipments for the Yakutsk Fuel and Energy Company.
“Some 190 tonnes of cable were carried by road and rail from Moscow to Kysyl-Syr and Bolshaya Markha in the Yakutsk region,” he explains.
“Most recently we have arranged the trucking of a five tonne, outsize, low-voltage switchboard from Minsk to Yakutsk. We are now seeing a growing level of enquiries for our logistics services,” Shklyanik adds.
With a burgeoning logistics and freight forwarding business, Volga-Dnepr currently has a portfolio of more than 100 customers and draws on the experience of over 120 sub-contractors in Russia and the Com-monwealth of Independent States to satisfy demand for its services.
Volga logistics division on the up
Freight forwarders are increasingly looking to increase market share and profitability by delivering greater expertise in niche areas of air cargo transportation - and one such area is the booming production of satellites.
Forwarders and logistics specialists like SDV are already exploiting significantly expanded business opportunities in the transport and delivery of satellites between manufacturers and launch sites around the world.
SDV’s project director at its Toulouse (France) unit, Marc Yor-ann, conservatively describes the opportunities for specialised ‘Earth-to-space’ traffic transport and logistics as “considerable”.
SDV coordinates the preparation, transportation and delivery of satellites for European manufacturers like Airbus Defence and Space or Thales Alenia Space.
Amid rising demand for global telecom and broadcast coverage, the satellite construction and launch sector has itself undergone spectacular growth in recent years.
According to the Washington-based Satellite Industry Associ-ation, business across the satellite sector rose from $144 billion in 2008 to $195 billion in 2013 - and is set to continue upwards.
Consulting group Euroconsult estimates an average of 115 new satellites will be launched each year between now and 2023, representing $248 billion in manufacturing revenues alone.
Airbus Defence and Space, service level agreement manager, Michaël Uhlmann, describes partnerships as like being married. “You need a partner who interacts with you and is fully aware of your needs, knowing how you operate and think, and being there for you when you need them, especially in unexpected or unplanned situations,” he says.
“Price is always a factor but given the cost of transport and logistics compared to the value of a satellite, choosing a partner is based foremost on quality of service provided and reliability. SDV fills that role extremely well,” adds Uhlmann.
Such strict demands exist across the entire logistics and transport chain means companies moving the giant yet fragile
cargo half way around the world with precision timing must be extremely adaptable.
“Clients need to know they can rely on partners with lots of experience in the very technical, precise work of transporting
satellites,” says Yorann. “Any freight forwarder thinking of enter-ing this side of the business must be fully capable of meeting the challenges involved. Scheduling snags of even an hour create serious trouble and transporters have to imagine every feasi-ble setback or delay, and prepare detailed contingency plans for those beforehand.”
SDV provides door-to-door handling of satellites from high-tech manufacturing centres to launch sites at Cape Canaveral in Florida (US), Kourou in French Guiana, and newer pads in China and India. Air hauling is done by Antonov 124 aircraft.
Payload value varies from $100 million to $300 million for a typical commercial telecom or broadcast satellite, to government scientific or military satellites that can cost $1 billion or more.
Companies in the competitive sector are themselves having to become increasingly adaptable and innovative. “It takes years of hard work and proven excellence to win a contract with satellite clients but it doesn’t take much to lose it,” Yorann adds. “Once it’s gone, you won’t get it back.”
According to Yorann, the defining factors in this niche air cargo market will remain the same.
“They are still incredibly sophisticated and extremely delicate gems of hi-tech expertise,” he says.Satellites taking off
Niche cargo goods like satellites attracting forwarders
9ACW 19 OCTObeR 2015
FREIGHT FORWARDERS
TOLL GLOBAL FORWARDING has expanded its global foot-print with franchise partners.
The first phase of the growth programme includes six countries – Bahrain, Egypt, Jordan, Kenya, Lebanon and Qatar – and brings its total number of owned and affiliated operations across the world to more than 150.
Toll Global Forwarding, part of the Toll Group, says the franchise appointments will enhance its presence in the Middle East and North Africa and support existing opera-tions in Turkey and the United Arab Emirates.
Toll Global Forwarding chief executive officer, Paul Coutts, says Toll has chosen to partner with established organisations in their markets to enable Toll to better ser-vice its customers.
“Establishing a franchise relationship with these key ser-vice providers means that we now have an even stronger global network to serve our customers. Many have been our partners through an agency relationship for several years,” Coutts says.
Coutts says with exception of Toll’s Kenya office that started operating in June and will function as a regional office for East Africa, the remaining five locations com-menced operations in September, under the Toll name.
Last month, Toll Express, also part of the Toll Group, opened the doors on a 20 million Australian dollar ($14 million) renovation of its depot at Perth Airport.
The upgrade is part of more than $80 million Toll has spent on major property investments and upgrades to re-inforce its capabilities in Western Australia.
Toll expands footprint
ACW 19 OCTOBER 2015 10
T he express services cargo market represents an important growth area for Turkish Cargo as the returns are higher than other segments.
The carrier has invested in facilities to meet demand for express products, where there is a need for speedy, on-time and efficient handling of cargo.
Turkish Cargo opened a new cargo facility at Istanbul Ataturk Airport in January this year with capacity to handle 1.2 million tonnes to boost the quality of its cargo handling. The cen-tre has a 43,000 square metre warehouse area and the facility spans a total of 71,000 square metres.
Turkish Cargo vice president for sales and marketing, Halit Anlatan, explains to Air Cargo Week that the market is “highly important and valuable” for the airline.
“Due to the speed of express service is much
faster than other products. Revenue per unit for express service is higher than other types of service. That is why express service leaves more revenue to our corporation in comparison with other special cargo products,” Anlatan says.
He says express cargo shipments represent five per cent of the carrier’s total tonnage, and this is on the rise, and returns in the market are better than other cargo segments.
Turkish Cargo’s express service cargo ship-ments are mainly diplomatic freight, aircraft on ground urgent spare parts, blood sam-ples, human organs, and urgent medicine pharmaceuticals.
Anlatan says the carrier’s TK Plus express service combines speed, top quality and guaran-teed access to capacity at short notice and the most important aspect is that there is guaran-
teed capacity from other areas.Anlatan continues: “Express service provides
expedited delivery, and performance guarantee. Our staff also ensure that you (the customer) are kept informed and give the peace of mind that your (customer) freight will arrive at its destination within the specified time scale.”
He says the advantage of using the carrier’s express service is access to Turkish Airlines’ vast network, now covering more than 200 routes to more than 100 countries.
As for the future of the market, he is is opti-mistic it will continue to grow and believes it will obtain a high percentage of growth and returns compared to other cargo products.
Turkish Cargo will also expand its express ser-vices and invest in the sector, Anlatan says: “We are planning to increase the number of qualified staff and make more investment in equipment (to handle cargo) at Istanbul Ataturk Airport.”
Returns good for Turkish in express marketEXPRESS SERVICES
FEDEX EXPRESS is to triple its presence at Milan Malpensa Airport with a 100 mil-lion euro ($112 million) expansion covering 35,000 square metres.
The development will be completed in mid 2016, and offer the first daily courier con-nection from Italy to the US.
The expansion will consist of 15,000 square metres of warehouses, 20,000 square metres for vehicle manoeuvring and parking and 1,000 square metres of office space.
FedEx says it is expecting to handle 20,000 daily shipments, there will be 44 weekly flights to and from Malpensa and 480 connections by land and the facility will employee 200 members of staff.
Malpensa Airport handles about 500,000 tonnes of cargo a year and hopes to in-crease its capacity to one million tonnes within the next two years. SEA Group, which operates Malpensa and also Milan Linate Airport, will invest 15 million euros in the project.
SEA chief operating officer, Giulio De Me-trio, says that Malpensa is showing strong growth and this is expected to continue.
He says: “Malpensa is the first cargo air-
port in Italy and it handles 55 per cent of total Italian goods traffic. It is also register-ing the fastest growth in Europe … in the first eight months [of 2015] [cargo] got a further increase of 8.5 per cent compared to the same period of 2014.”
De Metrio continues: “FedEx … is the first courier directly connected with the United States thanks to the direct flight [from] Milan Malpensa [to] Memphis, the only express courier direct flight on this route that provides most fast transit times from Northern Italy to the entire North American market.”
FedEx managing director for properties and fleet for Europe, Middle East and Af-rica, Vito Bernardi says FedEx has opened more than 100 new branches in three years across Europe, the Middle East, Indian Sub-continent and Africa and hired 6,400 new members of staff.
Bernardi explains: “The recent invest-ments of the company in Italy fall within the same strategy, with 24 new branches opened in less than three years, 300 jobs created, and the introduction of the first and only direct flight from Italy to the FedEx global hub in Memphis, Tennessee.”
Expansion at Milan Malpensa for FedEx
Freight Forwarders
11ACW 19 OCTOBER 2015
TRADEFINDER
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Airlines
USAIraq
Freight Forwarders
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Hong Kong
Industry Events
JamaicaUnited Arab Emirates
Charter Brokers
Italy
Freight Forwarders
China
United Arab Emirates
NEWSWEEK
Jettainer has relaunched its in-house IT system, JettWare.
The unit load device (ULD) manage-ment firm says new functions and a
modernised user interface make it even simpler to pinpoint both serviceable and unserviceable units at airports.
Jettainer says the new version, provides information in a much clearer, intuitive way and therefore boosts ULD management to a new level, making management of airline pal-lets and containers even more efficient and transparent.
The software allows users to individually summarise all relevant ULD movements, both those on board an aircraft and those in tran-sit on a road feeder service, and presents this information in a revamped visual layout.
Stations can also benefit from a variety of new functions, which for example ease up the handling of pallet stacks.
JettWare 2.0 also introduces new features
to manage messages generated for exchanged units between fleets of different airlines. This allows users to easily search for individual units and air waybills.
Jettainer’s head of marketing and PR, Mar-tin Kraemer, says: “The new version of our in-house IT system JettWare is not only more technically sophisticated, but also a lot more user-friendly and intuitive.”
The new functions are also mirrored in the mobile application, JettApp.
Efficiency move by AF-KL-MPAIR FRANCE-KLM-MARTINAIR (AF-KL-MP) CARGO has worked with Accenture to im-prove efficiency and make bookings quicker.The carrier has implemented the Accenture Air Cargo Reservations software, part of the Accenture Freight & Logistics Software (AFLS) suite.
AFLS supports optimising freight capacity over the entire network, offering customers complete coverage and booking efficiency.
AF-KL-MP is using AFLS software to create a single view of booking options across its
network and partner networks.The software is used for flight profiling
activities in addition to allocation manage-ment, entry conditions and restrictions. This helps improve booking efficiency and revenue management execution to further increase both customer satisfaction and profitability.
AF-KL-MP vice president for customer services, Wijnand de Groot, says: “With Accenture’s software we further improve our capability to offer fast and complete solutions to our customers. After extensive preparations and testing, we are pleased to announce that we can book all options in our joint network in one system.”
The carrier says AFLS automates capacity checks, reduces manual intervention by rev-enue managers, and provides better insight into space availability.
Solar car mission for TNT
TNT has transported a prototype solar car from the Nether-lands to Australia for the World Solar Challenge between 18 and 25 October.
The car, called Stella Lux, built by students at Eindhoven University of Technology, was transported by road from Eind-hoven (the Netherlands) to Liege (Belgium), before flying to Singapore then Melbourne (Australia).
The lithium batteries were sent by boat due to not having ready made documentation but TNT say the car and batter-ies arrived within a week of each other.
TNT Benelux managing director, Erik Uljee, says: “We are happy to support Solar Team Eindhoven, a great team of stu-dent engineers, in winning the World Solar Challenge for the second time. Automotive is a priority industry sector for TNT and we’re glad to support research and innovation to make road transport safer and sustainable.”
Stella Lux is a wedged shaped electric car which charges itself with solar cells on its roof. The students claim the car can travel 1,000 kilometres (621 miles) on a single charge and has a top speed of 77 miles per hour.
IT system upgrade for Jettainer
Asia Airfreight Terminal (AAT) has established a ser-vice partnership with low-cost airline, Jetstar Pacific Airlines, a carrier based in Vietnam.
AAT explains it secured a multi-year cargo handling contract from Jetstar Pacific in September 2015 and commenced the provision of cargo handling services to Jetstar Pacific at Hong Kong International Airport from 7 September 2015.
Jetstar Pacific operates four-times weekly services between Hanoi (Vietnam) and Hong Kong with an Airbus A320 aircraft.
The inaugural flight of Jetstar Pacific between Hanoi and Hong Kong took place on 7 September.
AAT general manager, Khaw Hock, says that AAT values the partnership and is committed to providing excellent services to the airline.
The terminal is now serving more than 60 carriers.
Jetstar Pacific partners with AAT