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AF-KLM CEO to succeed Tyler

60 secondswithleif rasmussen

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The weekly newspaper for air cargo professionals

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THE International Air Transport Asso-ciation (IATA) board of governors has recommended Alexandre de Juniac to succeed Tony Tyler as its director gen-eral and chief executive officer (CEO).

The board unanimously approved recommending de Juniac, who is Air France-KLM chairman and CEO, to suc-ceed Tyler running IATA when he retires in June. The decision will be confirmed at the IATA annual general meeting to be held in Dublin from 1-3 June 2016, with de Juniac taking up duties after a short handover period.

Commenting on the news, de Juniac says: “I am honoured by the confidence of my industry colleagues and mindful of the heavy responsibilities that the director general and CEO bears. Tony Tyler has done a great job at the helm of IATA and I am excited to succeed him.”

Tyler adds: “Alexan-dre will be a great leader for IATA. He knows the business well and brings valu-able experience from both government and industry.”

Worldwide freight tonne kilometres (FTK) fell by 5.6 per cent in February, though the 2015 result was skewed by the US West Coast seaport strikes, the International Air Transport Association (IATA) says.

The association says all regions of the world saw FTK plunge except Latin America, which was up 2.7 per cent despite Brazil suffering its worst recession for 25 years, and the Mid-dle East expansion slowing to 3.7 per cent.

Elsewhere in the world, Africa declined 1.7 per cent as large economies such as Nigeria and South Africa continue to struggle from the commodity slump. Asia Pacific had particularly benefitted from the US West Coast seaport strikes of 2015, but this year saw the largest drop worldwide, down 12.4 per cent, also being

hit by weak trading conditions and factory clo-sures for Lunar New Year Celebrations.

European freight fell by 2.4 per cent in Feb-ruary and IATA comments volumes are barely higher than in 2008. North America saw FTKs drop by four per cent with future growth dependent on import growth with the strong US dollar hitting exports.

IATA director general and chief executive officer, Tony Tyler says: “The airfreight business remains a difficult one. February’s perfor-mance continues a weak trend. And there are few factors on the horizon that would see this change substantially.

“In the absence of an immi-nent resurgence of demand, the importance of improving the value proposition with modernised processes – the e-freight vision –

remains a top priority.”Worldwide load factors keep falling, with

a 5.7 percentage point fall to 41 per cent. By region Africa’s load factors are the worst, falling 7.1 percentage points to 25 per cent, and Asia Pacific’s are highest, but even those are down 8.5 percentage points to 46.2 per cent.

aci reveals top 20 busiest cargo hubs of 2015

Hong Kong Interna-tional Airport has maintained its top ranking as the world’s busiest cargo airport by

volumes, but Memphis Interna-tional Airport edged ever closer, according to the Airports Council International (ACI).

ACI released the figures in its preliminary world airport traf-fic rankings and says most of the globe’s top 20 airports saw at least small amounts of growth in 2015, while total cargo volumes including mail grew by 2.4 per cent among the top 20 airports.

Hong Kong retained its number one position, with a 0.4 per cent increase to 4.46 million tonnes, fol-lowed by Memphis, the main hub of FedEx, which was up 0.8 per cent to 4.3 million tonnes.

Rounding up the top five were Shanghai Pudong Interna-tional Airport up 2.9 per cent to 3.27 million tonnes, Ted Stevens Anchorage International Air-

port, up 5.5 per cent to 2.63 million tonnes and Incheon International Airport, up 1.5 per cent to 2.59 million tonnes.

Notable movers in the top 20 were Chicago O’Hare Interna-tional Airport to 17th place from 19th in 2014. The hub’s volumes rose 15.6 per cent rise to 1.59 mil-lion tonnes.

Meanwhile, Doha’s Hamad International Airport entered

the top 20 for the first time at 20th place, as it saw volumes surge a substantial 46 per cent to 1.45 million tonnes, driven by the expansion of resident national car-rier, Qatar Airways Cargo.

ACI says in Europe, Paris Charles de Gaulle Airport was the busiest cargo hub in 2015, taking over from Frankfurt Airport. The French hub handled 2.09 million tonnes, up 0.2 per cent on last year and up

to ninth from 11th in the top 20.Only four gateways of the top 20

saw a fall in 2015, Tokyo’s Narita International Airport dipped by 0.6 per cent to 2.1 million tonnes, Frankfurt was down by 2.6 per cent to two million tonnes and Taipei’s Taoyuan International Airport saw the biggest fall of 3.2 per cent to two million tonnes. Amsterdam Airport Schiphol also saw a dip of 0.9 per cent to 1.6 million tonnes.

ACI World director general, Angela Gittens says: “It’s impres-sive to witness the dynamic character of the aviation industry and its evolution over time. In cer-tain markets, we see both airlines and airport operators expanding and optimising their capacity in order to accommodate the growing demand for air transport.”

She adds airport capacity con-siderations on the supply side within major city markets will remain paramount to the issue of “accommodating the surge in demand for air travel”.

global ftk and load factors plunge in february - iata

Volume: 19 Issue: 14 11 April 2016

aircargoweek.com

NEWSWEEK

A ir cargo’s difficult start to 2016 was extended into February, according to industry data ana-lyst WorldACD.

Global volumes dropped by 3.8 per cent year-over-year (YoY), which is the largest YoY volume drop in three years, WorldACD says.

The regions of Asia Pacific and North America were the big losers in January and February and their YoY volume decrease now stands at more than seven per cent. Africa, Europe and Middle East and South Asia each saw around five per cent growth for the same period.

WorldACD says the weak YoY figures for Asia Pacific and North America should be viewed against the backdrop of last year’s windfall due to the West coast seaport strike in the US.

Also, the negative impact of Chinese

New Year on the February totals was big-ger this year as it took place much earlier in the month than last year.

WorldACD says: “Contrary to what other sources have reported, the more positive news is that worldwide yields, measured

in USD [US dollars], remained basically stable between January and February.

“Even so, we noted considerable differ-ences between the various origin regions: Africa and Europe were also leading in this category, with a 7.6 per cent jump in Afri-can yields (in USD) and one of 2.2 per cent in European yields (in euros).”

WorldACD says there were buoyant mar-kets and revenues in USD increased YoY by 38 per cent from Morocco, 23 per cent from Chile, 13 per cent from Sri Lanka and 10 per cent from Bangladesh.

Perishables performed much better than general cargo, WorldACD notes: “Does this trend weigh in on the much discussed modal shift from air to sea? Although cer-tain perishables look immune to that shift so far, whether or not a modal shift may take place differs from country to country and from one commodity to another.”

2 ACW 11 april 2016

WorldACD: tough start to the year continues

SHIPPERS utilising the air cargo industry will be given a voice at The International Air Cargo Association’s (TIACA) Executive Summit, which takes place from 24-26 May in Hollywood Beach, Florida, USA.

Lars J.T. Droog, who was recently appointed to chair TI-ACA’s new Shippers’ Advisory Committee, will be leading a panel on shippers’ air cargo challenges as part of the three-day conference.

Online registration has opened for the event, which also features sessions on the latest security regulations as well as innovation in the pharma sector and an update on the Air Automated Manifest System.

TIACA secretary general, Doug Brittin says the Executive Summit is the perfect platform for industry to come to-gether and “discuss the issues that matter”.

Brittin will chair the opening panel, which explores the latest updates on

global Pre-Loading Advance Cargo In-formation Programs.

Supply chain security, a look at the Air Automated Manifest System, and the impact of e-commerce will also

feature in the Summit program.

Shippers get voice at TIACA summit

Mobile app launched by Qatar

QATAR AIRWAYS CARGO has launched its first mobile app QR Cargo, available for both Android and iOS devices via Google Play Store and Apple App Store.

The app gives customers detailed status of their ship-ments, and they can use the app for various enquiries such as Qatar Airways passenger flight and freighter schedules, office contact details, product descriptions and more.

Qatar Airways Cargo chief officer for cargo, Ulrich Ogiermann says the app is linked the in-house Cargo Reservations, Operations, Accounting and Management Information System, which provides real-time data and up-dates for each logistic milestone achieved, direct to our customers.

He adds: “We are excited about the launch of our first mobile app that provides more convenience and value to our customers, giving them the freedom to manage and access to their global business anywhere and anytime on their schedule.”Key features include instant shipment tracking, weekly flight schedule search, recent search history, charter ser-vice request, location and navigation services.

aircargoweek.com

NEWSWEEK

3ACW 11 APRIL 2016

India is the second fastest growing air cargo market around the globe and Hyderabad is one of the gateways reaping the benefits.

GMR Hyderabad International Airport is the operator and chief executive officer,

SGK Kishore says Hyderabad is performing well and growing above the average of the rest of the country. He notes growth is currently at around 10 per cent for this financial year.

The airport is focusing on specific cargo sec-tors, Kishore explains: “The pharma market has shown a steady growth and we see future growth potential in perishable exports. Key sectors for us are perishables, electronics, aero-space, e-commerce and other high-value goods with a continued focus on the pharma sector.”

A market growing extensively is e-commerce, which is playing a major role in the growth of air cargo in India and the government’s ‘Digitial India’ initiative is forecast to boost the e-com-merce industry further.

Kishore explains “At Hyderabad we are already

handling large volumes of e-commerce cargo. We are also planning to expand facilities at our domestic terminal to cater to future growth in this segment.”

Investing in infrastructure is a key part of the strategy to grow and he feels Hyderabad is well positioned as a major logistics hub in India for air cargo, adding: “With several segments of cargo showing growth potential - perishables, tem-perature-controlled, e-commerce, and express, we will enhance our facilities to cater to growth in each of these segments and strengthen our position.”

But Kishore says there are many challenges in India such as inadequate good quality infra-structure in roads, reefer trucks, and storage facilities for temperature-controlled goods such

as pharma and perishables.He also thinks 24x7 activities need to be fully

utilised by trade bodies, procedures for trans-shipment need to be “simplified” and various state and central taxes need to be streamlined under one common tax regime.

Kishore feels improvements are needed to customs and other regulatory agencies and the implementation of an Indian Customs Sin-gle Window Project to facilitate trade needs to take place, along with the interlinking of all regulatory agencies on a Common EDI platform.

Technology and IT will play a major role in driving growth and Kishore says adoption of e-freight must take place to “reduce paper and increase the speed of doing business”.

E-commerce and pharma driving Hyderabad growth

SEATTLE-TACOMA (SEA-TAC) INTERNATIONAL AIRPORT has welcomed a new cargo carrier in the shape of Aero-Logic – a joint venture between Lufthansa Cargo and DHL Express.

The weekly freighter service begins started on Friday, and connects Sea-Tac with Frankfurt Airport.

The aircraft is a Boeing 777 Freighter operated by Aero-Logic, whose fleet is composed of eight 777Fs.

Port of Seattle Commissioner, Tom Albro says: “This is about getting the stuff we make, grow and catch to con-sumers around the world.

“Air cargo growth brings jobs to Northwest factories, money to Washington farms, and profit to Seattle’s fishing fleet and that is the mission of the Port.”

Sea-Tac handled 332,636 tonnes of airfreight in 2015. The Port of Seattle has a goal to triple that number to 750,000 tonnes by 2036.

An estimated $12.7 billion worth of airfreight is export-ed to domestic and international markets through Sea-Tac yearly, while another $13.6 billion is imported.

Air cargo between Sea-Tac and Western Europe includes components for automotive, aerospace and hi-tech manu-facturing; medical instruments and consumer goods.

WorldNewsAIRBRIDGECARGO AIRLINES (ABC) started a third weekly Boeing 747 Freighter service to Changi Airport, on 1 April 2016. The new Friday frequency is to satisfy growing customer demand in Singapore and will offer onward con-nections to Hong Kong and to points across ABC’s global route network.The airline launched twice-weekly services to and from Singapore in Sep-tember 2015.

QATAR AIRWAYS has started a daily bellyhold service between Boston’s Logan International Airport and Hamad International Airport on an Air-bus A350. The carrier expects to carry 40 tonnes per week to Boston, and 90 tonnes per week to Doha. Most exports will be lobsters, mainly to major Asian markets.

Cambodia Md-11 service for EmiratesEMIRATES SKYCARGO has launched its 13th Far East-ern route with weekly Boeing MD-11 Freighter services to Phnom Penh in Cambodia on 6 April.

The outbound flight will leave Dubai World Central’s Al Maktoum International Airport on Wednesdays and arrive in Phnom Penh the next day. The return flight will leave Phnom Penh on Thursdays, arriving back in Dubai the next day. The outsourced MD-11F will provide 80 tonnes of capacity, with imports expected to consist of fabric and leather, with Cambodia exporting textiles and garments.

Emirates SkyCargo senior vice president, Hiran Perera says: “Cambodia’s air cargo market is growing at a robust rate with Europe and the United States being key export markets. Establishing a presence in this market will posi-tion Emirates SkyCargo to benefit from the healthy growth potential.

“Our strong route network and Dubai’s location as a glob-al cargo hub mean that we can connect our customers in Asia to 150 destinations, including 42 gateways in Europe, 14 gateways in North America and 27 gateways in Africa.”

Aerologic landsat Sea-Tac

aircargoweek.com

4 ACW 11 APRIL 2016

NEWSWEEK

Justin Burns, ACW: How have the first few months of 2016 been for SAS Cargo and has business performance met your management targets?Rasmussen: The first quarter met our expectations and we reached our targets although yields are pressured due to the increasing overcapacity.

Justin Burns, ACW: What routes and cargo trade lanes have performed the best for you in the last 12 months?Rasmussen: All our Intercontinental routes (the US) carry quite a lot of cargo. Most of our Intercontinental routes are performing well taking into consideration that tonnage development to and from Europe is quite limited.

Justin Burns, ACW: What are your plans to grow your cargo business in 2016?Rasmussen: Our plan for growth is to increase customer experience by providing quality in service and to differentiate by being able to provide flexible and customised solutions within pharmaceuticals and other high yield products.In addition we are developing our business model in order to take advantage of the digitalisation.

Justin Burns, ACW: How is the air cargo market in the Nordics region at the moment?Rasmussen: The market to and from the Nordics is very competitive on all levels. There is a huge imbalance between demand and capacity.Capacity is primarily affected by the Middle Eastern carriers adding frequencies to their hubs in the Middle East.Exports are developing positively but imports are challenged by the strong US dollar and the [slowdown in the] Chinese economy.

Justin Burns, ACW: Does SAS Cargo have any plans to increase the number of routes you operate and to other regions?Rasmussen: In 2015 we launched a service to Hong Kong as a new Intercontinental destination and we also increased frequencies into the cities of New York, Chicago, San Francisco, Washington and Shanghai.This month we introduced a Stockholm Arlanda - Los Angeles - Stockholm Arlanda route and we will also in 2016 open routes to both Boston and Miami.

Justin Burns, ACW: How do you see the air cargo marketplace as a whole globally at the moment?Rasmussen: The market is weak and there are no signs of a quick recovery. I expect very limited increase in demand and yields to be under strong pressure.Yields are primarily affected by the imbalance between capacity and demand, the decrease in oil prices and the strong US dollar.

Justin Burns, ACW: What are the principal business and operating challenges for SAS Cargo at the moment?Rasmussen: The overcapacity and in my opinion the lack of innovation focusing on automation and the cost efficiencies are the biggest challenges within the industry.

Justin Burns, ACW: Where do you see the air cargo industry in 10 years time?Rasmussen: The industry will change towards a much more digitalised industry adding new ways of doing business with new possibilities for those who understand to change their business model accordingly.I think, that you will also see more customised solutions for shippers in order for them to save time and money and to satisfy their needs for quality processes.

SAS Cargo is the Nordic region’s principle air cargo carrier moving freight on its wide bellyhold network to and from Sweden, Denmark and Norway and through its partner airlines, but is facing intense competition from other market entrants.Air Cargo Week spoke to SAS Cargo’s president and chief executive officer, Leif Rasmussen about business.60 withLEIF RASMUSSEN

Seconds

LEIF RASMUSSEN

aircargoweek.com

NEWSWEEK

E xperts from the industry will descend on Stockholm (pictured) to talk about the Northern European market for the Nordic Air Cargo Symposium from 12-13 April.

The theme of this year’s event is ‘Innovating Air Freight’, and will bring together people from the cargo

operator, forwarding, integrator, shipping, airline and airport communities, as well as investors, entrepreneurs and others.

Euroavia International is arranging the event and Sweden’s airport operator, Swedavia will be the host sponsor.

The action will kick off on Wednesday 13 April with delegate registration at 08.30h before welcome key notes from Swedavia’s Stockholm-Arlanda Airport airport director, Kjell-Ake Westin, Swedavia head of property, Mikael Henning and Lufthansa Cargo director of Nordic & Baltic countries, Alexander Kohnen at 09.00h. This will be followed by a key note address from Panal-pina global head of airfreight, Lucas Kuehner at 09.30h.

From 09.50h, Ericsson’s strategy development manager industry and society, Robert Mellin, and global service innovation manager, Gaspar Wosa will present a case study titled ‘Logistics Backbone’, giving an insight into the firm’s airfreight activities.

Next will be a session titled ‘The role of airfreight in the future – Shipper presentations’, with Astra Zeneca global category leader for freight and logistics, Julian Wann and Ericsson global category lead for international freight, Tomas Fornell.

This will be followed by ‘Enhancing quality in the air freight supply chain’ at 11.45h where delegates will hear the views of Cargolux regional director West and North Europe, Gerard Ter Bruggen, Sandvik Machining Solutions order to delivery director, Alex Nieuwpoort, ECS Group senior vice president com-

mercial, Jonas Drewsen and Agility director airfreight Europe, Serge Tripet.

Turkish Airlines Cargo will sponsor lunch at 13.00h, before the next session at 14.15, ‘(Re)New(ed) collaboration in the air cargo chain with Tosoh Europe manager supply chain and gen-eral affairs, Lars J.T. Droog, who is also The International Air Transport Association shipper advisory council chairman. Advokatfirman Lindahl partner, David Frydlinger in the ‘Win-ning business relationships – working towards mutual success’ session at 14.45h, will follow Droog.

The final session, ‘The future of air cargo handling’ will take place at 15.40h with Emirates senior vice president cargo oper-ations, Henrik Ambak, Finnair Cargo head of sales, Fredrik Wildtgrube, Amsterdam Airport Schiphol head of cargo, Jonas van Stekelenburg and Airis International Holdings senior vice president business development for Europe, Middle East and North Africa, Henric Nauckhoff, detailing what they think cargo handling will look like in years to come.

The Nordic air cargo market will come under the spotlight with the challenges and opportunities at the forefront of discussions.

5ACW 11 APRIL 2016

NORWEGIAN CARGO has transported 10 electric Buddy cars and six Buddy bikes to be used in the upcoming Holly-wood blockbuster, Downsizing, starring Matt Damon.

The cars and bikes were shipped from Oslo to New York using the bellyhold of a Boeing 787-8 Dreamliner before being trucked to Toronto for filming. The electric vehicles will be used in the Paramount Pictures movie, Downsizing, starring Matt Damon and directed by Alexander Payne. It is due to be released in late 2017.

Norwegian head of cargo, Bjorn Erik Barman-Jenssen says: “As we continue expanding our network and widebody capacity with four new 787-9 Dreamliners coming into our fleet this year, forwarders and shippers can depend on Nor-wegian to deliver freight efficiently with care in mind.”

FINNAIR CARGO is to increase Japanese services with three flights a week to Fukuoka from 7 May.

Fukuoka will be Finnair Cargo’s fourth destination in Japan after Tokyo, Osaka and Nagoya and will be served by an Airbus A330. A number of Japan’s famous companies including Sony, Toshiba, Matsushita, Toyota and Mitsubishi have a strong presence in Fukuoka on Kyushu Island.

Finnair Cargo sales director for Asia, Tomi Asikainen says: “We have plans to target all industries and commodities via forwarders in the area. Fukuoka and Kyushu Island have plen-ty of pharmaceutical traffic, which Finnair Cargo is very well equipped to handle.

“Finnair aircraft bellies on the route will be loaded with robotics and automotive products, medical equipment, perish-ables, tyres, semi-conductors and all kinds of general cargo.”

Meanwhile, Finnair and Swissport International have signed an extension of their existing contract for ramp handling ser-vices in Helsinki Airport until 31 October 2020.

The new agreement is effective immediately, and the com-panies say it builds a strong basis for future joint growth and further increased quality at the growing hub in Helsinki.

Nordic air cargo to come under the spotlight in Stockholm

Fukuoka service for Finnair Cargo

Hollywood mission for Norwegian

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ACW 11 APRIL 2016 6

T he expansion of a new runway capac-ity at Heathrow Airport is essential to the future success of UK exporters, in the view of most freight forwarders.

Priority Freight general manager at Heathrow, Kevin O’Shea (pictured) explains that a third runway is vital for the business so it can grow its airfreight sector.

“The expansion of the airport [Heathrow] is vital if we are to maintain our position as a leading contingency logistics and compete with European airports for new routes and services and also to maintain existing ones,” O’Shea tells Air Cargo Week.

The Priority Freight site is located in close proximity to London’s Heathrow Airport and the forwarder moves more than 80 per cent of the cargo it processes through airfreight.

O’Shea says after a slow start to the year, the air cargo segment is “starting to come alive” and

he adds: “Customer confidence is high, coupled with ever increasing competition between the carriers, creating the right conditions for air-freight to thrive.”

He explains that the most buoyant trade lane is the Far East, which is booming due to over-capacity and ‘all in’ rates are now becoming the

norm on imports as well as exports.As for the types of cargo which are performing

strongly for Priority Freight, O’Shea says: “Even with low rates and plenty of capacity there is still high demand for time-definite guaran-teed products, for which a premium can still be attracted.”

There are challenges for the for-warders using air to transport goods, which are becoming greater as global security issues become tighter, in the view of O’Shea.

He says: “More and more controls are being added and only those com-panies who can demonstrate security integrity within their entire supply chain will continue to prosper.”

On the whole, O’Shea speaks positively about the air cargo supply chain and he feels in the main, freight forwarders needs are being met such as through online bookings and elec-tronic air waybills. He says the move by airlines towards a paperless environment can only be a good thing for his firm in terms of both costs and resourcing.

But he adds: “More needs to be done to address the age-old problem of driver waiting time and response-to-damage claims.

“Carriers should refund freight companies for any excess waiting time and have a charter for customer complaints and claims.”

The mode battle with sea freight continues, and the air cargo industry has to focus on some

areas where sea has stolen a march.O’Shea agrees, but is happy with air cargo: “Quality of airfreight is good

overall, but sea freight compa-nies have taken massive strides in recent years, notably with technological developments including [services like] online tracking and rate options avail-

able at the click of a button.”There are clearly some areas

where the air cargo supply chain needs to focus on to boost relationships in

the future with freight forwarders.

Heathrow needs a new runway, Priority Freight urgeFREIGHT FORWARDERS

THE British International Freight Associa-tion (BIFA), says that there was “little” in last month’s UK Budget that was of specific rel-evance to the freight and logistics services undertaken by its members in support of the UK’s international trade.

BIFA’s director general, Robert Keen, says association members will be “concerned” by UK Government Chancellor of the Exchequer George Osborne’s warning storm clouds are gathering over the global economy, with an outlook that is materially weaker.

He adds: “Any softening in the global econo-my is likely to have a material impact on visible trade, which is the lifeblood of our members.”

BIFA also says it welcomes the news that the freeze in fuel duty would remain, but Keen says it doesn’t mean the trade association will stop asking for an outright cut, the introduc-

tion of an essential user rebate and some form of fuel duty stabilisation mechanism.

BIFA was also disappointed that Osborne did not expand upon the transport capital spend-ing increase that was announced in last year’s Autumn statement.

Keen says: “Back in November 2015, BIFA welcomed the news funding would be provid-ed for the largest road investment programme since the 1970s, but it would have been good to hear more good news on this front given that a lack of spending has caused the country’s network of A-roads and motorways to become congested, undermining the UK’s competitive-ness in comparison to its international peers.

“The earmarking of £230 million ($322 mil-lion) for road improvements in the north of England, including upgrades to M62, feels like a drop in the ocean compared to last year.”

aircargoweek.com

BIFA: not much in last month’s UK Budget

F reight forwarders in the US feel the air cargo industry is a bit “lacklustre” at present according to Airforwarders Association (AfA) executive director, Brandon Fried.

He explains to Air Cargo Week that is the term mem-bers of AfA sum it up best while they have seen better,

but have also seen worse.Fried says AfA makes sure the needs and voice of airfreight

forwarders is heard, but as for heeded, he feels that is often a dif-ferent question entirely and it is a “never ending process”.

As for what are the major concerns for AfA members at the moment, he is quite clear: “The economy of course has to rank number one. Strong revenue growth always makes everything else a lot easier.”

US freight forwarders face a number of challenges as new regulations are set to come into play, while security is set to be ramped up adding to the already unstable economic outlook. Fried explains: “Aside from global economic growth, regulatory overload. It is akin to being nibbled to death by ducks.”

Despite challenges there are opportunities for US freight for-warders, and Fried says firms must do what they “always done

best” – staying nimble, rapidly adjusting to shifting markets, and being aware of our customers evolving needs and challenges.

As for how AfA members see the Cuban market, which will soon open up to US freight forwarders, he says: “The jury is still out on that one. Will there be opportunity? You bet. How quickly and how extensive remains to be seen but it is being watched very carefully.

“As the US Department of Transportation awards routes to Cuba, the Airforwarders Association hopes

the selection includes only those air-lines with active cargo divisions since

the next chapter is not only about uniting people, but trade as well.”

New cargo screening security regulations in the US are in the pipeline, but Fried says the AfA is “cautiously optimistic” and adds:

“We’ve made a strong case for areas of improvement. Guess we’ll know

soon enough how well they were

listening.”Other potential disruptions in the US cargo airspace are

potential changes to Open Skies agreements as big US carriers fight to limit competition from the Middle East. Fried says the AfA is keeping a close eye on the situation and making its “voice heard” on the issue, but it is too soon to draw any conclusions.

As for the future and what needs to be done to enhance the air cargo industry supply chain for freight forwarders and win busi-ness from other modes of transport, Fried is positive: “Mode shift is quite simply a shipper response to their own cost containment strategies. Historically low rates on some ocean routes, unheard of low interest rates lowering the carrying costs of goods in tran-sit, and air’s inherently more complex regulatory hurdles have all played a part.

“As markets improve and volumes return, we’ll see modal balance return. In the meantime, we have seen the for-warding community broaden their portfolio of services to encompass all modes thus being ideally suited to react to shifts in market demand.”

Fried: regulatory overload akin to being nibbled to death by ducks

7ACW 11 APRIL 2016

FREIGHT FORWARDERS

AGILITY saw net profit rise by five per cent in 2015 to 53 million Kuwaiti dinar (KD) ($175 million) compared to the previous year, as its business strategy pays off.

The Kuwaiti firm’s revenues for the year were 1.3 billion KD, a fall of four per cent on 2014, while EBITDA (earnings before interest, taxes, depreciation and amortisation) was unchanged at 100 million KD.

Agility chief executive officer, Tarek Sultan says: “Agility made good progress in 2015 but still has a demanding road ahead to make it the leading company we all desire. In 2015, we were able to generate KD 105 million cash from operations, a 68 per cent improvement from last year.

“We improved our free cash flow by 6 million KD to reach 31 million KD in 2015, despite challenging econom-ic times. Our longer-term target is to reach an EBITDA of $800 million by 2020.

“Our efforts to define a clearer strategy and improve exe-cution are paying off in stronger customer relationships, an expanding emerging market footprint, a sharper focus, and a more disciplined management approach.”

Sultan adds for 2016, AgilIty sees a mixed picture clouded by slower growth in emerging markets, ongoing sluggish-ness in the Eurozone, geopolitical instability in various parts of the world, and the continuation of low oil prices. He adds Agility must “stay focused and disciplined”.

Profit surge in 2015 for Agility

THE freight networking industry is well populated and there are thousands of forwarders throughout the world, and they have a great choice of networks.

World Freight Network and Specialist Freight Networks founder, Kelly Bunyan explains: “My approach was not to try to compete with the giant of the industry, but rather to be impressed by their achievement and carve my own unique path. My network management is of a different style, in the way that we limit the number of members per country. This helps us to maintain a family feel.

“In an era where businesses demand the best, most ef-ficient service for the lowest price, it’s imperative freight forwarders associate themselves with dependable, vetted companies, with a proven track record of providing compet-itive rates. It is possible to exist in the forwarding industry without a network association, however what if things go wrong? A good network will step in and arbitrate. An expan-sive network can help you win new business.”

Networks boost business

aircargoweek.com

ACW 11 april 2016 8

F lorida based The Charter Store had a record breaking 2015 with the first quarter receiving a large boost thanks to the US West Coast seaport strike, and an exceptionally strong end to the

year.Co-founder and managing partner, Harry

Steiner (pictured) says: “We had a record break-ing fourth quarter on top of a stellar first quarter

(thanks in part to the port congestion problems on

the US West Coast) and steady growth through-out the second and third quarters.

“This follows growth number aver-

aging about 30 per cent every year over the

last three years, so we are

very pleased with the results.“We have performed really well over all ver-

ticals and geography,” Steiner continues. “The port strike of early 2015 was certainly a con-tributing factor to the record-breaking year, but we’ve had very good growth in all sectors.”

There have been challenges to overcome. The amount of dedicated air charter carriers has decreased steadily over the years and this hasn’t helped business, but on the other hand new opportunities have arisen from the commercial cargo airlines “stepping up their game” in the charter business and providing both charter and part charter services, he informs.

Even though these legacy carriers are well known by most the broker’s customers, The Charter Store has proven “time and time again that we add value to the service with our experi-ence, know-how and worldwide resources.”

Internally, The Charter Store recently

launched a web-based charter quote and oper-ations system that it uses for certain customers. Development of the system continues. The bro-ker has also strengthened its sales force and added more operational staff to cope with the growing number of charters it’s handling. The Charter Store offers what Steiner describes as a genuine 24-hour service, with dedicated staff working three shifts around the clock. More-over: “We are in the market for adding more cargo charter brokers to our team because we expect to further grow the business this year.”

The Charter Store is part of a collaborative team of brokers called the Global Charter Alli-ance (GCA). The GCA provides its members

with sales and operations support worldwide. “We help each other out with local carrier and operations resources and co-ordination, and we provide each other with sales leads that are best covered locally,” Steiner observes.

“This gives us a competitive edge over smaller and equal-sized competitors, and puts us on a level playing field with the multinational char-ter brokers. All GCA members have pledged to only offer their services to freight forwarders and logistics providers and we are not deal-ing directly with shippers. This definitely sets us apart from the multinationals that end up competing with their own freight forwarder customers over some shippers.”

AIR CHARTER

AircontAct is a Norwegian charter broker active across the passenger as well as cargo businesses. Its cargo charter business has been a little slower than usual, in large part due to a slowdown in oil and fast-related charters caused by the slump in oil prices, explains Aircontact’s branch manager in Stavanger (pictured above), Kristoffer Smith (pictured).

However, other types of freight charter demand are holding up well, he notes, in-cluding military charters, Aircontact has handled flights to Afghanistan, Leb-anon, Mali and Kuwait for military customers in recent times, for example. Likewise, Aircontact has handled a number of hu-manitarian and relief charter flights, such as ones for the United nation’s (UN) World Food Programme, as well as the recent movement of two Mi-8 and

two Mi-24 helicopters on behalf of the UN from Ukraine to Kisangani in the Democrat-ic Republic of Congo.

Away from the oil and gas sector, other commercial demand has held up well. Air-contact has chartered capacity for seafood out of Scandinavia, via Oslo, Stockholm, Helsinki and Copenhagen, mainly to South Korea. It has also met demand from Norwe-gian manufacturers such as Kongsberg for cargo charter capacity.

Within the company, Aircontact is also making changes. It has broadened

its service offering by collabo-rating with freight forwarder partners in order to provide a one-stop, door-to-door service for its customers. By means of such co-operation, it has begun offering road feeder services,

capacity on scheduled flights and even sea freight capacity.

aircargoweek.com

Aircontact looks beyond oil charters

Charter Store soaring after record breaker

A tlas Air transported 97 tonnes to Havana for The Roll-ing Stones’ historic free concert in the Cuban capital.

The aircraft outsourcer used a Boeing 747-400 Freighter to carry 97 tonnes of staging and musical equipment from Mexico City to Havana via Miami

International Airport. The concert, performed on 25 March, was the first open air per-

formance by a British rock band in Cuba.Atlas Air Worldwide executive vice president and chief com-

mercial officer, Michael Steen says: “With our global reach and flexible scale, our customers depend on Atlas Air for reliable service anywhere in the world. As the first US freighter operator chosen to operate into Cuba we were delighted to support this one-of-a-kind event.”

The company says concert producers and other big acts rely on Atlas Air for charters with its fleet of 747-400s and 747-8, with their nose and side loading capabilities, which are capable of accommodating outsized, unusual and sensitive cargo.

Steen continues: “Working with partners in the concert indus-try, we’re able to provide a full-scale solution to fly tonnes of equipment anywhere, from one-off missions for The Rolling Stones on tour.

“When there’s a lot at stake, our customers rely on Atlas Air for routine shipments or one-of-a-kind charters, like this one to Cuba, that require detailed planning and execution.”

In 2015, Atlas Air’s charter division saw revenue increase from $906.6 million to $908.7 million despite

falling in the fourth quarter to $228.1 million from $251.2 million in 2014.

9ACW 11 april 2016

AIR CHARTER

aircargoweek.com

Urgent medicine shipment to Brasilia

Urgent shipments require cooperation and organisation of a number of partners, something Panalpina had to contend with when moving a large quantity of blood clotting medicine to Brazil.

Brazil’s ministry of health put in an urgent shipment for blood clotting medicine for patients with haemophilia and the pharmaceuticals manufacturer contacted Panalpina, ex-plaining it needed to be delivered at short notice. the original plan had been transport it over two months on aircraft from Paris but the urgency of the order meant it needed to be done much sooner. the order was consolidated into one ship-ment and sent within four working days.

Panalpina’s customer account team in Switzerland worked closely with Panalpina’s Charter network team in Luxem-bourg and local teams in France, germany and Brazil, who worked with a trucking subcontractor, Lufthansa and Enviro-tainer to make the mission a success. the cargo had to be kept between two and eight degrees centigrade so Panalpina chartered a Boeing MD-11 Freighter holding 35 Envirotainer temperature controlled containers to keep it at the tempera-tures required by the Brazilian authorities.

Lufthansa Cargo’s Cool Centre at Frankfurt Airport was chosen because of its ability to handle large quantities and its strict temperature controls. Despite the challenges of moving the temperature sensitive medicine from Paris to Frankfurt by road, Panalpina was able to organise this with a quali-fied trucking company in less than 12 hours. the 187 pallets of cargo were transported on temperature-controlled trucks from France to germany over a weekend, which gave enough time to secure a transatlantic flight for the envirotainers.

the original request was made on a Wednesday evening and the valuable cargo was leaving Frankfurt Airport head-ing to Brasilia International Airport (city of Brasilia pictured below) the following tuesday morning. throughout the entire operation, Panalpina staff oversaw the loading until it was ready for uplift. A local team in Brazil handled operations on the ground and checked the containers before the pharma-ceuticals were distributed across the different federal states.

Atlas helps Rolling Stones rock Havana in historic concert

ACW 11 april 2016 10

Shannon Airport says the large pro-portion of Irish export air cargo leaving by road to British or continen-tal European airports presents both a challenge and an opportunity.

Shannon Airport Authority group strategy director, Patrick Edmond explains to Air Cargo Week: “Today there is no statistical data to quan-tify the scale of this surface leakage, but informal estimates put it between 50-80 per cent of all Irish air export air cargo. That reflects the level of competition on some of the key ex-Europe trade lanes, but also the opportunity for direct services.”

Edmond says the gateway is seeing strong performance by exporters, which is driving overall cargo demand.

Last year, the Irish National Aviation Policy published proposals to designate Shannon as a national hub for air cargo development, which Edmond says is to draw on its national accessi-bility, its uncongested facilities and long runway.

He notes: “As well as nightly air links to the FedEx, UPS and DHL hubs we also welcome a growing range of services by Turkish Airlines Cargo and an increasing number of ad-hoc flights from Emirates, Cathay Pacific, Atlas Air, Volga-Dnepr Group and other major carriers.”

Shannon’s main export trade lanes are to the US and increasingly to Asia, while most of the cargo is pharmaceuticals, medical devices and ICT clusters to the South and West of Ireland.

Edmond says: “Particular demand is from high-value exporters that are keen to shorten their supply chains to reduce the costs of inven-tory tied up in transit.

“Shannon is also the airport of choice for ship-ping Irish thoroughbred horses: it’s convenient to many of the major studs and avoids hassle and congestion for shippers and horses.”

The movement of horses is an important sec-tor and the gateway provides access to one of the top enquine breeding destinations. Earlier this year it received its first batch of valuable

enquine cargo. Edmond explains: “These were also the first horses in many years to arrive in Shannon on a regular scheduled cargo flight.”

Last year, the airport welcomed Turkish, who introduced it as a stop on their Airbus A330 Freighter Istanbul-Chicago route. The airline has since added weekly services via Shannon to Atlanta and to New York.

“We look forward to developing our direct route network further, as well as developing our facilities to ensure we keep pace with demand,” Edmond says.

“Six thoroughbred mares were brought to a leading Irish stud in the south of Ireland, in what

was also the first scheduled horse transport into Shannon with Turkish. Turkish tells us this valu-able equine cargo will be a regular at occurrence at Shannon,” he adds.

Edmond notes Shannon is looking to grow this year, while playing a key role in Ireland’s international trading performance.

Last year, it handled 11,547 tonnes of cargo, a rise of 10.9 per cent on 2014.

Edmond adds: “The significant clusters of export-oriented industry in the West, Mid-West and South of Ireland in particular depend on Shannon’s cargo services and facilities for timely access to their major markets.”

IRELAND

DUBLIN AIRPORT could be set to build a second runway due to a surge in cargo and passenger traffic.

The Dublin Airport Authority (DAA) board has reportedly agreed to proceed with the new runway based on planning permission that was secured back in 2007, just before the economic bust. The decision is set to be announced in the coming weeks.

In January, the gateway saw cargo rise 0.8 per cent to 10,033 tonnes and in 2015, traffic surged by 12.8 per cent compared to 2014, reaching 135,505 tonnes.

Dublin Airport’s airline customers launched 22 new routes in 2015.

Cargo at Dublin Airport is set

to grow further after American Airlines announced it was to resume seasonal belly-hold services to Chicago and Charlotte (both US).

American Airlines summer service to Chi-cago and Charlotte will operate from May until September and will complement the airline’s additional seasonal service from Dublin to New York’s John F. Kennedy Inter-national Airport.

Dublin Airport managing director, Vincent Harrison says: “We are delighted to see American Airlines service to Chicago and Charlotte return for the summer season, of-fering further choice and flexibility.

“This summer Dublin Airport will have over 290 flights per week to and from nine desti-nations in the US with five airlines.”

American Airlines director of sales for the UK and Ireland, David Thomas adds having three daily A330s operating from Dublin this summer is great news for the carrier’s Irish

customers.American Airlines cur-

rently operate a year-round ser-vice from Dublin to Philadelphia.

Dublin Airport now has direct

bellyhold flights to over 180 destinations in

40 countries on four continents.

Dublin set to expand as traffic booms

Ireland’s ‘designated’ cargo hub looking to keep growing

aircargoweek.com

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