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BREXIT – Views from the Aviation Industry

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In our lead article in today’s CargoForwarder Global we reflect somewhat on what may be the short or long-term consequences for the European logistics community if Great Britain is going to vote for an exit from the EU in the referendum being held this Thursday.
There’s no answer deliverable by anyone so far as to what the future may bring.
We have gathered a few opinions and views from the aviation handling sector which we feel make interesting reading as they also differ considerably.

John Willis
John was Chairman & CEO of UK-based ground handler Servisair until his retirement and also Chairman of IAHA, the International Aviation Handlers Association as well as Board member of the IATA Ground Handling Council (IGHC). He comments as follows:

There is in the UK an overwhelming view that the EU is at best undemocratic and is more about regulation and red tape whilst at worst it has a different vision than that originally, at least publicly, envisaged by the UK public.
Where opposing sides differ is that the “Remain” supporters feel that the UK is better in the EU trying to influence it from within, whereas the “Leave” view feels the UK would be better to develop independently and evolve separately.
The UK is the second largest net contributor to the EU Budget and represents 12.5% of the EU population. The remain supporters are focusing their case on the economic problems “if the UK leaves rather than the advantages of staying.”
The EU and therefore the UK, does not have a Trade Agreement with the U.S. - the UK’s largest single country market, nor indeed with China or India.
The EU is responsible for all aviation bilateral negotiations for EU countries with non-EU states and if the UK were to leave, it would have to resume these itself. However, if anything, the UK may be stronger here than at present given the importance of London in traffic and yield terms to most long-haul airlines.
It is difficult to envisage any change to the Ground Handling scene in the UK given that all UK airports have adopted an ‘open market’ and no longer require to tender under EU rules. A few airports such as Heathrow require a certain level of volume in a particular Terminal to be approved, but these are local arrangements, and there is no restriction on non-EU companies operating in the EU.
Whatever happens, the UK will still be part of geographical Europe but whilst there is widespread support for trade relationships, there is absolutely no general support in the UK for either greater fiscal or political ties. One thing is certain however - turnout (for the referendum) will be high and therefore the result will reflect the view of the majority which has got to be a good thing.

Ben Radstaak
Managing Director at Air Cargo Netherlands
For Air Cargo Netherlands and for most companies active in the European air cargo industry, a Brexit would not be beneficial. Though most air cargo flies intercontinental, many European airlines fill their cargo holds with freight which is trucked to many European destinations. An external border between the UK and the rest of Europe would make this less economic, in particular for European carriers. The bigger economic picture shows that Europe as a whole will be less competitive when the UK leaves. Just the uncertainties caused by the negotiations in the years to come, will seriously affect economic growth on both sides of the Channel and the North Sea.
Therefore we kindly request all of you in Britain: please don’t leave us!
In addition, the consequences of the UK leaving the EU would mean the loss of a most valued ally when it comes to the modernization of Europe’s customs procedures and related regulations. The recent discussions about the changes in the transaction value of import goods caused by the delays in the decision making around the UCC (Union Customs Code), speak for themselves as a nasty example that more common sense is needed in Brussels. Over the years, the Dutch and British governments and industry representatives have consistently pushed for more effective and efficient ways of facilitating logistics processes at our external borders.

The disappearance of a strong and forward thinking member-state could shift Europe’s power balance in a Mediterranean direction, which all of us like when we’re on holidays, but which is less desirable for our economies.
So again, please don’t exit the EU, but stay to make it stronger!

 

Yvonne Ziegler
Professor Business Administration / Aviation at the Frankfurt University of Applied Sciences (translated from German),
I believe that what the Ifo-Institute termed in its 2015 report as a “soft exit“ may be the way for Britain to leave.
Great Britain would then get the same status as enjoyed by Switzerland and Norway, namely a preferential economic partnership and customs agreement.
However, mid-term, trade will be hampered as there will be deviations on rules and product standards. This will ensure much higher costs for both British and European companies. The effect on air freight will be less as these are generally goods of a much higher value and which can  better bear the extra cost.

Jonas van Stekelenburg
Head of Cargo Amsterdam Airport
Thinking about the Brexit - a few things come to mind.
We favour an open economy and the removal of as many barriers as possible. Therefore, we hope that the UK stays within the EU.
The way a Brexit is structured matters: the question is if there will be a favourable regime towards free movements of goods or rather not.
If so, as AMS we suffer since we distribute goods towards and from the UK.
Should this not happen, we benefit since Heathrow and Stansted are competitors and the Dutch economy is in a way a competitor of the UK economy. This would bring more business to Schiphol.

Ariaen Zimmerman
Executive Director Cargo IQ / IATA Geneva

We need more interoperability, not less.
A Brexit is a clear move in the wrong direction.
Realising that politicians have their own interests, the common interest is the one losing out. The agency issue is typical in economics. How do you make sure management serves their shareholders,  markets, society and the organization when they have their own interests?
In this sense, the Brexit isn’t different from the financial crisis. Management and politicians have short-term personal goals that don’t necessarily align with the long-time common interests.

Views gathered by: John Mc Donagh / Heiner Siegmund


Air Cargo China Sets New Record

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Last week's Shanghai-held trade show Air Cargo China, the seventh of its kind, seems to have established itself as a leading exhibition in the cargo industry in the Far East. This was shown by the record attendance of both visitors and exhibitors that's flocked Hall E1 at Shanghai's New International Expo Center where the ACC was held. During the 3 day event a number of interesting company announcements were made, which we present here in this overview.

Gerhard Gerritzen of ACC organizer Messe Muenchen  -  picture hs
Gerhard Gerritzen of ACC organizer Messe Muenchen - picture hs

The bi-annual held trade show reports an increase in exhibitors of 22 percent, totaling 600 companies that waved their flags at the show. Organized by Messe Muenchen, their management board member Gerhard Gerritzen outlined in his opening remarks the growing number of international firms stepping into the Chinese market and gaining a foothold there.
Companies that had booked stands include Turkish Airlines Cargo, Cargolux Airlines, AirBridgeCargo, Air Cargo China, Emirates Sky Cargo, Brussels Airport, Liege Airport, Frankfurt-Hahn Airport, ULD manager Jettainer, Air Asia, Maastricht Airport and many others. This was complemented by a remarkable number of international forwarding agents like DB Schenker for instance that presented their companies and products at booths set up in neighboring halls.

Remarkable news
At the show, Russian freight carrier AirBridgeCargo informed about the launch of twice weekly services to Chonqing in central China. The flights are linked with ABC's Shanghai services while returning from PVG to Moscow Sheremetyevo Airport. Chonqing has become ABC's sixth destination in mainland China.

Cargolux closed in on their goal to start operating their Zhengzhou, China-based offspring Cargolux China by the end of 2017, commencing services with 3 Boeing 747 freighters. The newcomer's network will span from China to North America and include flights to Australia (Melbourne) as well as intra Asian services in the first stage. Cargolux will hold 35 percent in the upcoming JV, costing them USD 77 million.  

Uli Ogiermann, helmsman at Qatar Airways Cargo announced the launch of their new product "QR Live" for animal transportation. The manager indicated that his carrier will further differentiate its product portfolio by introducing additional special services in the coming months, but did not deliver specifics. He also said that later this year, QR Cargo plans to add Guangzhou to the freighter network by serving the Chinese city three times a week.

ULD manager Jettainer and Leipzig/Halle Airport announced setting up a station at the East German airport where carriers can lease containers and other unit load devices on short notice from one day to various months. "Our new base location complements our current network of JettLease station in an ideal männer." By taking this step "we are responding to the growing demand for flexible loading equipment solutions at times of peak demand for ad hoc operation," explained Jettainer's MD Carsten Hernig at the Shanghai-held trade show. In addition, the manager presented Spanish airline Plus Ultra Lineas Aereas as a new customer, whose ULD business his company will take care of. The Madrid-headquartered carrier, which operates Airbus A340-300s, serves Lima, Peru and Santo Domingo in the Dominican Republic. Next on the agenda stand flights to Cuba, Panama and Costa Rica and in mid-term to some Asian destinations. Sales Director Thorsten Riekert of Jettainer said that the acquisition is fully in line with his company's strategy to support the growth of smaller airlines right from the start.

Finally, French general sales agent European Cargo Service (ECS) has won two new clients in the German market - Malaysia Airlines and DHL Aviation. COO Adrien Thominet told CargoForwarder Global that his group is already successfully cooperating with DHL in a number of other local markets, increasing the integrator's turnover this way. "We know each other already quite well which will help to achieving positive results in Germany fast, we expect."

Before the event ended last Thursday afternoon, we asked some ACC attendees if the show was worth coming and what their main impressions are they carry back home.

Halit Anlatan, VP Cargo, Turkish Airlines Cargo:
Compared with the previous shows back in 2010 or 2014, I personally believe Air Cargo China attracted less attendees this time. Nevertheless, the show offers us a stage to meet up with many Far Eastern clients of Turkish Airlines Cargo, because quite a number of them flocked to Shanghai to participate in the three-day trade show.
However, comparing Air Cargo China with the Munich-held Air Cargo Europe I notice quite some differences. This show here in China attracts predominantly regional players, whereas MUC is a truly international trade fare.
Given the opportunity, I would like to criticize one minor point that hopefully will be noticed by the organizers: To be able to get Internet access during the 3 days of the event we had to pay 500 dollars. This must be seen against the background that we already pay a lot for our TK stand. Therefore, I recommend for future shows to include the WiFi charges in the price or - even better - enable exhibitors Internet access without demanding any additional cash.

Ulrich Ogiermann, Head of Cargo, Qatar Airways Cargo:
I've never attended Air Cargo China before, so it's the first time for me to get a personal impression. Our main aim as Qatar Airways Cargo is to give our people the opportunity to meet managers of local forwarding agents. So we organized a get-together of agents and our people to deepen ties or establish new business relations.
I heard from some of the exhibitors that this year's Air Cargo China is a bit less frequented than similar shows in the past. But for us this is not so important because we are offered a platform to meet the industry.
You are asking if the trade show was worth its money. That's hard to say if measured solely on financial terms because this would be only a very limited interpretation that doesn't take into account the relations established with our clients which could become very beneficial one day.

Steven Polmans, Head of Cargo, Brussels Airport:
To me it was worth coming here. This year's Air Cargo China was an improvement in comparison to the shows held before. We've been meeting the people we wanted to see. That's often been a problem in the past. What's really different this time is that we've seen a very limited number of Chinese tourists at the show, whose only motive was to collect as many giveaways as possible.
Generally speaking, I find that we are too friendly to each other, circumventing in panels and conferences critical and controversial issues that need to be tabled to push our industry forward.
For future air freight shows I strongly recommend a more conflict driven style in order to realistically face the pressing problems of our industry.
Fact is that we more or less are working the same way we did 4 years ago.
Another issue worth to be critically mentioned is that the main Chinese cargo operators didn't attend the fair. In fact, Air China Cargo was the only major player running an own booth here at the Air Cargo China Hall. China Eastern and China Southern only took part in the SkyTeam Cargo group's stand, while others like the HNA group with all-cargo carrier Yangtse River Express obviously preferred to set up their stands at other halls at Pudong’s exhibition center.
For upcoming ACC shows it would be beneficial if organizer Messe Muenchen would copy-paste their successful MUC concept. The result would be that twice as many companies would show up here, particularly Chinese and Asian cargo carriers.

Heiner Siegmund

SHORT SHOTS

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Are Cargolux & Silk Way getting Cathay B747 Freighters?
A report in Skyliners has indicated that both Silk Way Airlines and Cargolux will each acquire a Boeing 747-400F from Cathay Pacific. The two aircraft, one of which until now was stored in the desert by the Hong Kong-based carrier are said to have been slotted for the two freighter airlines. Silk Way is to receive the aircraft sitting in the desert and Cargolux is meant to receive a B747-400F which is currently in service with Cathay.
The deal has however so far not been confirmed.

Boeing 777-300 passenger jet operated by TAAG
Boeing 777-300 passenger jet operated by TAAG

TAAG Angola Airlines to start B747 freighter flights
The Luanda-based Angolan national carrier is said to have signed a long-term contract with Network Airline Management (NAM) to acquire a B747-400F in order to start up regular cargo flights from Luanda to Liege (Belgium).
Planned is a weekly two-way service with the aircraft which is capable of carrying 120 tons of cargo. Flights to Luanda will carry oil related material as well as general cargo and flights from Luanda are expected to be sold to Angolan companies.
TAAG operates a fleet of 12 aircraft serving 28 destinations.

Martinair MD-11F operations will cease in July
Ruth press reports state that Friday, July the 8th, is the last day of operations for the Martinair MD-11F fleet.
The once proud passenger and cargo operator still has two MD-11Fs in its fleet. The rest of the six strong fleet have disappeared in the AF-KL decision to run down the airline.
One aircraft will leave on July 1, followed by the last one on 8 July. 
This, then leaves Martinair with just four B747-400Fs which will operate for AF-KL Cargo.

CAL adds a third B747 freighter
CAL Cargo Airlines which has its main base in Tel Aviv, will increase its freighter fleet to three aircraft by adding an additional B747-400F.
The addition is in line with CAL’s Growth Strategy planning aimed at increasing scheduled and charter flights from their European hub at Liege Airport.
Up until two years ago, CAL was still operating with old B747-200 series aircraft. These have been replaced by -400 series planes during the past eighteen months.

Alaska Airlines revamps cargo operations by adding freighters
Seattle-based Alaska Airlines is moving away from operating “combi aircraft“ to full freighters.
The airline is convinced that there are new business opportunities on hand which warrant introducing all cargo aircraft into their fleet.
Three Boeing 737-700 passenger aircraft have been sent to Tel Aviv for passenger-to-freighter (P2F) conversion.
The first converted aircraft is expected into service with Alaska Airlines by December of this year. The remaining two will join the freight department towards the end of the first quarter of 2017.
Five B737-400 Combi aircraft presently still in the fleet will be phased out by the end of 2017.

Cargolux flies flowers direct to Amsterdam
The Luxembourg based all cargo carrier has changed its destination airport to Amsterdam (AMS) for the carriage of flowers from South America.
The service which starts with immediate effect, previously operated through the other Dutch airport, Maastricht (MST).
The carrier states that this move will broaden their service to importers of which up to 90 percent are Dutch companies.
The move to leave MST for AMS was apparently at the wish of the clients from the Amsterdam flower market.
Using Amsterdam is said to reduce transport time considerably as there is no need to truck flowers anymore from Maastricht up to the Amsterdam markets.
Cargolux has been serving the South American perishable market with regular flights for the past seventeen years.

FRA Air Cargo Community (FACC) gets two new Executive Board members
Soeren Stark, Executive Board member operations at Lufthansa Cargo has taken the helm as Chairman of the FACC Board and succeeds Dr. Karl-Rudolf Rupprecht who has retired from active service at the German carrier.
Goetz Wendenburg, Branch manager of Kuhne+Nagel also joins the FACC Executive Board as spokesman for the freight forwarder members.
New member is the Airfreight Agents & Logistics Community of the German states of Hesse and Rhineland-Palatinate - in short - SLV.
The SLV represents more than 400 companies in air freight and logistics sectors and which employ more than 30,000 staff in the area.

Last part of Hahn Airport also to be sold
The German state of Hesse which holds a minority 17.5 percent share in Hahn Airport has said that it will also sell its share to a Shanghai-based investment company.
The deal is expected to cost the same investor who bought the 82.5 percent held by the state of Rhineland-Palatinate, around 1.4 million euros.
The actual sale price for the 82.5 percent was not revealed when the deal was made two weeks ago. However it was mentioned that the amount was in the low million figures and would amount to 6.6 million euros if taken on par to the amount paid for the 17.5 percent share.
A cheap deal amounting to around 8 million euros.

John Mc Donagh

Amazon Ups India Investment by US$3bn; Faces FAA fine

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Amazon will invest another US$3 billion in India, boosting its committed investment in the country to over US$5bn and placing additional pressure on local rivals Flipkart and Snapdeal to keep raising fresh funds and keep up with competition.

Amazon warehouse in Phoenix, Arizona
Amazon warehouse in Phoenix, Arizona

At a recent summit in Washington D.C., which was attended by Indian Prime Minister Narendra Modi, Amazon chief executive Jeff Bezos was quoted as saying by Reuters that the investment is based on exponential growth in the e-commerce sector in Asia’s third largest economy.
The US-based e-commerce giant intends to capitalise on new rules for foreign direct investment in online marketplaces, which have been introduced by the Modi government and which allow 100% foreign ownership.

Putting the focus on India
Bezos said that Amazon would open a Web Services Cloud Region in India this year, and also setup its largest software engineering and development centre outside of the U.S. in the Indian city of Hyderabad.
"We have already created some 45,000 jobs and continue to see huge potential in the Indian economy," Bezos said at the annual gala of U.S. India Business Council (USIBC).
In addition to seeking new customers, Amazon is also looking to India for new inventory to sell globally. Amazon is actively involved in efforts to educate small business owners in India about selling online.

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Amazon has violated hazardous materials regulations, FAA claims
In a separate development, U.S. aviation regulators are seeking a US$350,000 fine against Amazon for allegedly sending hazardous shipments as air cargo.
Amazon, which has made two deals this year in an attempt to create its own air-shipping network, was charged earlier this month with improperly sending a caustic chemical that leaked and came in contact with nine workers at a UPS facility, the Federal Aviation Administration said in a press release.
FAA stated that from February 2013 to September 2015, “Amazon was found to have violated the hazardous materials regulations 24 other times,” adding that it is “continuing to investigate Amazon’s compliance with the hazardous materials regulations applicable to air transportation.”
In May this year, Amazon agreed to take as much as a 30% stake in Atlas Air Worldwide Holdings Inc. As part of the deal, Atlas will acquire and operate 20 Boeing Co 767-300 freighters for Amazon. In March, Amazon announced it would work with Air Transport Services Group Inc to operate another 20 Boeing 767 freighters.

Nol van Fenema

Brussels Airport is Back on Track

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About 2.5 months after the horrendous attack by Islamic suicide bombers, Brussels Airport’s cargo business is definitely back on track. The airport’s dedicated pharma concept is gaining both momentum and new customers, like Etihad Cargo.

The Belgian Airports Brussels and Liege are the main European hubs of Ethiopian Cargo
The Belgian Airports Brussels and Liege are the main European hubs of Ethiopian Cargo

“Our strategy has not changed and we do not expect a large setback due to the tragic events,” says Head of Cargo Steven Polmans. “Within the first week after the attack we were back in business and we have not lost a single full cargo route, nor did we experience a lack of confidence.” As the airport has as yet not fully returned to the pre-attack passenger operation, belly cargo is still lagging behind, he admits. “We hope to be fully operational in this respect at the start of the summer season. There is, of course, Delta Air Lines, which has suspended its Atlanta flight till next March.” But it looks that all routes are going to be resumed rather sooner than later.

ET Cargo wants to expand its BRU services
At the same time, Ethiopian Cargo is back. Following the extended airline services agreement between Belgium and Ethiopia, ET Cargo is now able to sell, amongst other, Dubai, Shanghai and Hong Kong in its own right. In the former set-up as a charter operation, the airline acted as a subcontractor to StarBroker, which is still its largest customer. “Now they fly an average of 9 weekly flights, some direct, others via Addis Ababa,” says Steven. “They would also like to add new routes from Brussels in the near future, which they can do under the revised agreement”. Only a very limited number of cities are excluded.

Ethiopian Airlines Cargo was one out of four companies that brought new freighter services to the airport last year, the others being Emirates SkyCargo, Yangtze River Express and Canadian Kelowna. The latter, however, decided to withdraw and is now concentrating mainly on the North American charter market.

Only last week, Etihad  Cargo, which has been flying passenger aircraft to Brussels since 2006, introduced a bi-weekly freighter service.

Pharma triggers interest
Steven admits that the Pharma Gateway concept has acted as an important trigger to these airlines. “As for pharmaceuticals, Brussels is an important local market. The Pharma Gateway concept is disseminating a positive story on the marketing side. As at many dedicated cargo airports, freighter aircraft at Brussels can park right in front of the warehouses. We are also a passenger–driven airport and we feel that both are complementary. Together they can make up the offer needed by the logistical companies.”

Steven Polmans is heading BRUCargo
Steven Polmans is heading BRUCargo

MIA-BRU pharma pact
The growing importance of standardised and industry-supported pharma logistics was stressed again a few weeks ago when the airports of Brussels and Miami agreed in setting up the organisation pharma.aero. Today there are no direct air cargo links between the airports, but according to Steven that is not the point. “The aim is to improve pharmaceutical logistics by air worldwide and not necessarily between our two airports. We expect other airports, with some of which we are directly connected, to step in as well very soon. Even if Miami has a much larger cargo volume than Brussels, they admit that as for pharma we are ahead of them.” But most important is the fact that both places share the same vision and passion when it comes to the handling of pharma.

The airport’s innovative view toward pharma has also resulted in the design of the ‘airside pharmatransporter’, 5 of which are now being tested. “We expect the dolly’s to roll out officially in July or August. We have already completed tests in winter conditions and are now finishing testing summer conditions in Dubai. We want to carry out a complete mapping of the behaviour of the pharmatransporters under all circumstances before they can be put on the market. Something which is important for the pharma manufacturers.”

Expanding the geographical reach
South America has been the missing link at Brussels Airport for years. “We have a lot of cargo for South America. We have a lot of discussions in this respect and we may well get a connection in the 12 months to come.” On the other hand and thanks to Brussels Airlines, Africa remains important. “Even if Brussels Airlines accounts for  less than 10% of the total volume at the airport, it is important to have a home carrier. Especially on the long-haul and with their extensive African network. They have recently also introduced Toronto and are now studying Mumbai.”

The first and very welcome positive event after the attacks was the official foundation of the umbrella organisation Air Cargo Belgium. So far, two board meetings have been held and 11 working groups have been installed, studying different projects that will eventually benefit the air cargo community as a whole.

Life after 22/03
Understandably, the cargo volumes still suffer under the 22/03 attacks, merely due to the decrease of the belly segment. Last May the decrease was only 0.3%, which was mainly due to the move of Jet Airways to Amsterdam. “If Jet Airways is not taken into account, the upward trend we have experienced since the attacks is going on,” says Steven.

The airfreight village BRUcargo is currently undergoing a major renovation and expansion programme. The Swissport building - the former premises of Sabena Handing - is getting a complete make-over. At the most recent zone BRUcargo West a new 40,000 m² facility is under discussion for different users, with direct airside access, both for handlers as well as forwarders. It will be heavily secured, as will most of BRUcargo. “Instead of closing off the entire BRUcargo village, Brussels Airport has opted for individual fencing-off larger premises.”

The cargo team of Brussels Airport Company has recently welcomed a new member, who will concentrate on the implementation of the different Cloud solution, developed together with Nallian.

Marcel Schoeters in Brussels

Qatar Cargo Plans Major Push in Next Nine Months

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The cargo arm of the Qatar national carrier, Qatar Airways has made no secret of the fact that they plan to expand their cargo operations worldwide within the coming years.
Much has been put into motion in this direction during the past twelve to eighteen months with new cargo aircraft additions to the fleet and joint ventures with other carriers.

QR Cargo’s fleet increase goes hand in hand with growing tonnage
QR Cargo’s fleet increase goes hand in hand with growing tonnage

Transpacific, Australia and South America are new targets
At last week’s Air Cargo China 2016 show held in Shanghai, Ulrich Ogiermann, QR’s Chief Officer Cargo, informed his audience that the world’s third largest international cargo carrier is striving to be a leading market player in three new areas.
Namely - Transpacific, Australia and South America.
The aim is to have these new markets up and running within the next nine months.
This will be possible says Ogiermann due to the constant expansion of the Doha-based airline’s fleet of long-haul aircraft.

On the cargo side, Qatar Airways already operates nine Boeing 777 freighters as well as eight Airbus A330 freighters and two Boeing 747Fs which are leased in.
The carrier has also recently opened a new European hub in Luxembourg, right on the doorstep of one of its major competitors, Cargolux.

The aim is to grow the all-cargo fleet up to 22 aircraft by 2017.
It also offers considerable belly hold space on its large fleet of long-haul passenger aircraft.
QR Cargo are planning to double all freighter frequencies into Luxembourg and have also added New York (JFK) and Halifax as freighter destinations.

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Which cities will QR serve in Australia, South America?
In this respect, QR Cargo remains relatively silent until now.
Will they enter into another joint venture on the transpacific route? There is the possibility that QR Cargo will then look at their own round-the-world freighter service in 2017 when they receive the three new freighters.

Nothing has been said as to where and when QR cargo will start serving Australia.

It will be interesting to see what sector to South America may be chosen.
The eastern South American market is presently undergoing a tough time as Brazil, Argentina and Venezuela continuing on an economic downturn.
The western part of the continent however, looks a brighter possibility.

QR Live is born
At the Shanghai show, Qatar Airways Cargo introduced their new product named “QR Live.”
This is aimed at what QR cargo terms as providing stress-free and comfortable transport for horses, pets, livestock and exotic animals, which are carried from or transit through their main hub in Doha.
The QR Cargo Terminal in DOH has a fully equipped live animal facility run by their own dedicated team of ground and animal handling staff.
The facility, which has 4,200 square metres, is fully air conditioned and also boasts a large holding area and stalls for horses.

John Mc Donagh

Breaking News - Michael Goentgens Moves from  Planes to Cars

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Lufthansa Cargo’s Director of Communications, Michael Goentgens, has decided on a career change and will move from the airline to the German car manufacturer Opel as of October 2016.

Michael Goentgens moves from LH Cargo to car maker Opel  -  courtesy Opel
Michael Goentgens moves from LH Cargo to car maker Opel - courtesy Opel

Michael, who started his career with Lufthansa as a student way back in 2001 has decided to take up a new challenge and move from reporting on planes to cars.

He will take up the position of Group Manager Company Communication for the Adam Opel AG as of 1. October and will be based at the company headquarters in Ruesselsheim which is a stones throw away from his present working place at Frankfurt Airport.
He will report directly to Harald Hamprecht, Opel’s General Director Internal and Corporate Communications.

Fifteen years at Lufthansa
Michael Goentgens (35) has spent the past fifteen years with Germany’s national carrier.
After starting his apprenticeship there in 2001 and then moving into other internal positions, he changed over into Lufthansa Cargo’s press department in 2010.
It was in 2014 that he succeeded Mathias Eberle as Director Communications for Cargo.

It has been a busy couple of years for Michael since he took up the head of communications role at LH Cargo.
Restructuring plans, pilot strikes, new LH Cargo systems and marketing strategies - these, and many more were all issues that Mr Goentgens had to present to Lufthansa’s Cargo clients and the press.

The carrier’s cargo press and communications department has managed during the past few years to establish a reliable and practical information flow with its customers and the media.
This, we feel, is also largely attributable to the input and openness shown by Michael Goentgens in his role as head of cargo communications with the carrier.
We sincerely hope that this trend will continue with his successor.

We at CargoForwarder Global wish Michael all the best of good luck in his new role at Opel and look forward to his feedback on the difference of reporting on cars instead of planes.

John Mc Donagh / Heiner Siegmund

China's JD.com Eyes Drone Deliveries to Rural Areas

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China’s largest B2C online retailer, JD.com has launched the first operational pilot programme for drone deliveries in China using at least two types of UAVs to deliver packages between designated distribution centres in rural areas outside of Suqian city in northeast China’s Jiangsu province, China Daily reported.

JD-com drone delivery tests
JD-com drone delivery tests

The two drones, which are based at the Caoji township delivery depot, are capable of autonomously loading and unloading up to 200 packages in a single flight route each day. The drones can each carry 10 to 15 kg of weight and fly 15 to 20 km at a speed of up to 54 km per hour.

Flying on fixed routes
For the time being, the JD.com drones will fly on fixed routes to ensure the safety of drone delivery. That means the drones won’t be deployed to deliver goods directly to shoppers just yet. Instead, JD.com will use them to transport goods from rural distribution stations to deliverymen based in villages. The deliverymen will then distribute goods directly to online shoppers.
JD received a one-year license to fly drones in Suqian and the company is applying for licenses to fly drones in four other provinces in China in a bid to expand coverage to other rural areas in the future.

Nol van Fenema


Logistics: the Robots are Coming

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Robots are increasingly replacing unskilled workers in cargo terminals at airports and elsewhere in the logistics field. In their new study, the renowned consulting firm Roland Berger estimates 1.5 million logistics jobs within the EU will vanish and be taken over by robots by 2025. A grim outlook particularly for those that lack sufficient skills. Only qualification programs can protect them from becoming unemployed.

Robots in logistics should be considered as partners, not enemies, recommends consultant Roland Berger  -  courtesy RB
Robots in logistics should be considered as partners, not enemies, recommends consultant Roland Berger - courtesy RB

Currently, a single industry robot costing between 100,000 to 110,000 euros on average generates a positive return on investment within three years. However, thanks to productivity gains of 20 to 30 percent each year through robotization in mature markets the amortization of working machines will accelerate fast, coming down from three to two years by 2018. Seen from a microeconomic standpoint, replacing humans by machines pays off and spurs the use of robots even further. “Increased productivity, the lengthening in the lifespan of solutions and the drop in equipment prices all favour the move towards robotization, while labour costs continue to rise,” reads the Berger analysis, titled: “Of Robots and Men – in logistics: Towards a confident vision of logistics in 2025.”

Qualification programs are key to prevent redundancies
In their analysis, the Roland Berger experts take France as an example where at least 500,000 unskilled jobs are directly linked to logistics, like fork-lift operators, packers etc. Across the leading 15 countries in the Eurozone that figure rises to nearly 3.6 million workers. Their occupational future is at stake if they do not engage in qualification programs, encouraged and supported by their employers. In case they don’t, robots will replace them. 

Unstoppable technical revolution
In logistics, the operational scope of robots already includes the moving of pallets, stacking/unstacking activities, the palletizing of goods and the loading of shipments. This is just the beginning, with every new robot generation becoming capable of performing tasks that are more demanding. In their forecast, the Roland Berger experts predict that the mass arrival of robots in logistics is no longer a controversial point. They stress, that the much more important question is how soon this kind of automation will take place and what employers and employees should do to better prepare for this unstoppable technical evolution. This is not up for discussions, state the Roland Berger people in their study. Having said this, they strongly encourage logisticians to give up traditional thinking and outdated working processes and revamp their business models based on the new reality.   

Politicians together with industry bosses must take action fast
Regulatory authorities must become increasingly aware of the industrial changes and should conceive programs to manage the transition in order to prevent mass losses of jobs, recommends the study. In a 2014 conducted national consultation on logistics in France, two-thirds of the attendees said that the complexity of the country’s regulations is the main obstacle to develop a competitive logistics sector.

Not threat, but chance
The Roland Berger authors state: Attempts to overprotect employees from robotization processes in the logistics sector hardly succeed. Instead, they put the jobs in danger. The consultancy’s experts conclude: “Supporting and financing research and training into new robotics professions is essential and should be accelerated now. Otherwise, the robots will be Japanese, Korean or Chinese, they will operate all across Europe and lost jobs will be offset elsewhere.”
Their final advice: The management and staff of logistics companies shouldn’t perceive robotic automation as a threat but as tool to enhance the product range, thus upping the international competitiveness of their firm and safeguard jobs this way.

Heiner Siegmund

Parcel Locker Market to Reach US$918m by 2024

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The global automated parcel locker market, which accounted for US$335m in 2015, is expected to reach US$918m by 2024, according to the latest market intelligence report by Transparency Market Research. The report has forecast a compound annual growth rate (CAGR) of 12% throughout the nine-year period, due mainly to the booming e-commerce business around the world.

Singapore Post is a leading user of parcel locker systems  -  company courtesy.
Singapore Post is a leading user of parcel locker systems - company courtesy.

Automated parcel delivery terminals have been developed to simplify modern-day logistics operations, which are deployed in populous areas such as walkways, shopping malls, grocery outlets and railway stations. The terminals allow recipient to receive and return parcel as per their convenience 24/7.
In 2015, the global parcel locker market was 17,719 units, and is projected to reach 46,063 units in 2024, rising at a CAGR of 11.4%.
Europe led the automated parcel terminal market due to the prominence of e-retail businesses and established logistics ecosystems in countries such as Germany, the UK and the Netherlands, and it was followed by Asia Pacific in 2015.

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Europe dominates the automated parcel delivery terminals market
The early adoption of automated parcel terminals among retailers, logistics companies, and government organisations, such as postal services providers, was the key parameter. It led to the dominance of the automated parcel delivery terminals market in Europe, while countries such Australia, Japan, China, and Singapore are some of the frontrunners in terms of the adoption of automated parcel delivery terminals in Asia Pacific.
However, India, Thailand, South Korea and some countries in the Middle East region also offer significant growth opportunities for automated parcel delivery terminals.
At present, the automated parcel delivery terminal market is dominated by large European manufacturers, although new entrants, especially from emerging economies, are likely to mark their presence in the near term.

Nol van Fenema

Cargolux Enjoys Tailwind in Zhengzhou

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In early 2014, Luxembourg’s media, local unionists and even some of Cargolux’s staff had been outbidding each other in their aversion to Chinese investor HNCA taking over 35 percent in Cargolux Airlines (CV). Meanwhile, most of the former skeptics and naysayers are recognizing that the Cargolux-Henan pact was a wise move, resulting in plenty of business activities to mutual benefit. What both parties achieved meanwhile was presented last week at the Shanghai-held trade show Air Cargo China, followed by a press trip to Zhengzhou where participants got a wealth of first-hand information on the CV-HNCA joint venture.

 

When speaking with Cargolux exects Kevin Shek and his colleague Janet Jiang one can sense the pride of both managers. What the carrier and its entire staff have achieved in China since signing the pact with the Zhengzhou-headquartered investment group Henan Civil Aviation Development and Investment Company (HNCA) in January of 2014 is indeed impressive and of paramount importance for Cargolux’s further growth. “We have doubled our China volume and increased our market share over ten percent during the last two years,” lauds Kevin, CV’s Head of Asia and Pacific in an exclusive with CargoForwarder Global.

Cargolux executives Janet Jiang and Kevin Shek  -  pictures hs
Cargolux executives Janet Jiang and Kevin Shek - pictures hs

High tonnage vs poor yields
This upswing is mainly based on two factors: the rapid increase of flights and frequencies to/from China and the carrier’s dual hub strategy, with Zhengzhou (code: CGO) developing into a main gateway for Cargolux gradually. “We started at CGO with two flights a week back in 2014, but stand at 13 now,” Kevin tells. This led to a fast increase in tonnage, surpassing 100,000 tons from the very first flight until the end of last year. Since more services will be added, particularly after the offspring Cargolux China takes to the air in late 2017, annual volumes will fast grow, surpassing 200,000 tons in 2020, CV estimates.
The good news is that Cargolux enjoys an average load factor of 90 percent both ways on the EU-Zhengzhou sector, with U.S. flights reaching amazing 95 percent. However, the bad news is that the yields have gone south due to overcapacity in the market and aggressive cut-throat price competition.  “We hope to boost both turnover and profits during the upcoming peak season at the last quarter,” Kevin states.
The loads on the intercontinental routes are still not balanced. But they are getting there slowly, says Janet Jiang, Cargolux’s Regional Manager China. “Our society is getting richer which results in increased buying power.” So a growing number of local consumers can afford purchasing trademarked goods coming from European or U.S. producers, which ups the load factor of Cargolux’s incoming flights. “The export/import ratio of our loads stands currently at 2:1,” Janet says, which is a very satisfying situation, she adds, reminding that some years ago it was a revenue distorting ratio of only 4:1.

Cargolux China’s Head of Sales Eric Erbacher
Cargolux China’s Head of Sales Eric Erbacher

Cargolux China project is on target
CEO Dirk Reich of Cargolux confirmed at a press briefing in Shanghai, that all signs indicate that his carrier’s future offspring Cargolux China will be airborne before the end of 2017. Cargolux will hold a 35 percent stake in the newcomer, costing them US$ 77 million, with the HNCA Group (49%), Zhengzhou Airport Company (8%) and local industrial developer Xing Gang Investment Company (8%) possessing the remaining shares.
The carrier will take to the air with thee Boeing 747-400Fs, which will be either leased or purchased. It will serve transpacific routes and offer flights on intra-Asian routes, including round trips Zhengzhou-Melbourne. Manager Reich pointed out that two more freighters will be added to the fleet until 2020 latest. Once accomplished, destinations in Africa and Latin America will be served by Cargolux China. Widespread doubts echoed by Cargolux skeptics that the Chinese offspring will fly head to head to Cargolux on European routes, thus competing directly with its parent company, were dispelled by Eric Erbacher, Cargolux China’s future Head of Sales. “We will set up complementary networks without cannibalizing our businesses.” Manager Erbacher stresses that Cargolux is exclusive GSA for Cargolux China, thus running the newcomer’s entire sales business.

 

Might Cargolux China face the fate of former carrier Jade?
“In no way,” exclaims Wieger Ketellapper, Boeing 747-400F and -8F Captain and as Vice President of the CV-Henan Joint Venture responsible for getting Cargolux China off the ground. “Jade was an enticing plan Lufthansa Cargo came up with to capture parts of the local Chinese market and operate at lower costs than its parent Lufthansa Cargo. However, by running the show all by themselves and liaising with Shenzhen Airlines they chose a wrong partner that had little or no interest in jointly developing cargo matters.” The honeymoon was over after Shenzhen Airlines was taken over by Air China that had zero interest in supporting the Jade project.”
The Cargolux China project is based on different pillars, Wieger emphasizes. “We are the only stakeholder bringing in a wealth of operational and strategic expertise how to run an airline successfully.” Another important aspect calming him down is the fact that no JV partner can sell his or her stakes to another airline during the next 30 years. “This guarantees all participants a high planning reliability,” Ketellapper nods. 

Wieger Ketellapper, a Boeing 747-400F / -8F pilot himself, is responsible for setting Cargolux China on track.
Wieger Ketellapper, a Boeing 747-400F / -8F pilot himself, is responsible for setting Cargolux China on track.

Critical pilot issue
From day one, it will need as many as 75 pilots to operate the three Boeing freighters Cargolux China intends to obtain. However, cockpit personnel is a very rare species in mainland China, extremely hard to obtain. “When recruiting pilots in Europe or elsewhere, it should be of help that Cargolux China is managed by managers from the west,” Wieger says. He has little hope to get local Chinese pilots on board. “Local airlines got a tremendous demand themselves due to the fast growing aviation sector.” In case he decides to recruit local pilots, Cargolux China would have to pay high transfer fees that could amount to as much as US$920,000 for a 747 Captain. Just how far this scheme has gone is shown by the fact that even for contracting a Boeing 737 Captain flying for a local Chinese airline, a redemption sum of US$350,000 has to be payed to his former employer. That’s a main reason why Ketellapper is targeting a combined solution: recruiting foreign pilots, predominantly skilled Europeans and train applicants at flight academies in Australia or the USA. Wieger hints that a Captain would earn between €14,400 and 15,900 euros per month, with a First Officer getting between €7,000 and €8,000.
In case of Europeans or applicants from North America, it can be assumed that they don’t want to give up their individual lifestyle. To make their coming to Zhengzhou palatable to some extent, Cargolux China will offer their future cockpit staff different employment schemes.
First model consists of 18 days of work followed by 17 days off.
Model number two requires 14 days on duty and 12 days off. Optionally an applicant can apply for additional 10 days of freely selectable time-out period.
In the latter case, states manager Ketellapper, they get payed a little less compared to scheme one. 
Free flights between Zhengzhou and their domiciles might be included in the packages, Wieger indicates. However, the last words on this matter have not yet been spoken.

Heiner Siegmund

Comment: Quo Vadis Great Britain?

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Good Bye UK!? As CargoForwarder Global we deeply regret the outcome of the British referendum last Thursday, which saw Britain vote by 52% to 48% to leave Europe. The UK stepping out of the EU will harm both sides, but predominantly Great Britain itself that could fall apart and suffer severe economic declines. But there are slight hopes for a U-turn.

When German Finance Minister Wolfgang Schaeuble was asked days before the British Referendum how he would react if ‘Leave’ would succeed, he simply said: “I would cry.”
If he did last Friday, when the results were clear, is not documented. But we know that meanwhile a growing number of Brits are crying, even many that supported the Brexit campaign with their racist and dump slogans. It dawned upon them that the UK leaving the EU not only wouldn’t solve any of the country’s problems like unequal distribution of income, immigration or the growing social and economic gap between the ins and outs, populists such as Nigel Farage or Boris Johnson had repeatable blamed Brussel for having caused. Even worse, their Leave vote might rip the UK apart, turning Great Britain into Little Britain should the Scots and perhaps the people of Northern Ireland decide to quit their UK membership and apply to join the EU instead. A new Hadrian Wall would split up the UK.
We also note with deep regret how some of the UK press held a misleading campaign against Europe, which was spiced with many untruths. Not neutral reporting, and only led to misinformation.

The warnings were written on the wall long before the people flocked to the polling stations deciding in favour of ‘Leave’ or ‘Remain’.
Too late now - we have to get on with restructuring Europe and also ensuring that the remaining EU and the UK somehow remain close.

EADS Chief Tom Enders puts UK investments at stake  -  source: Airbus
EADS Chief Tom Enders puts UK investments at stake - source: Airbus

Warnings were written on the wall
Warnings which devastating consequences might a Brexit cause, predominantly for the UK itself, were thousand-fold echoed by industry associations, many companies engaged in trans-European trade, the transportation sector or the finance industry. Once out, there won’t be a way back nor any insurance paying for the damage caused, was the message repeatedly sent from continental Europe across the channel.
Now, the damage is there, with bitter consequences for all sides, but particularly the UK itself. Indicated by many voices, like the one from Tom Enders, Chief of the European Aeronautic Defence and Space Company – EADS. He indicated that Airbus is reconsidering its investments in the UK as result of the country’s upcoming EU departure. This sounds worrisome for the aircraft manufacturer’s future activities in the UK, particularly the production plant in Broughton, Wales, where the wings of all Airbus variants come from.
British carriers are impacted, too by the decision. In case they intend continuing serving EU airports, they’d have to apply for traffic rights. Mainly affected will be Britain registered Volga-Dnepr daughter CargoLogicAir that connects its home base London Stansted with Frankfurt on way to South Africa. Another candidate is LCC Easyjet, serving many point-point routes out of London to mainland Europe. No wonder that Easyjet’s CEO Carolyn McCall urged both London and Brussels right after the referendum’s outcome to “prioritize the UK remaining part of the single EU aviation market.”
 
Heathrow keeps cool
In a statement of 26 June, a spokesperson of Heathrow Airport said: “With today’s result, the case for expansion at Heathrow is stronger than ever before. Only Heathrow can help Britain be the great trading nation connecting all regions of the UK to the world. It is the keystone that connects businesses of every size to markets across the world as the UK’s only global hub airport”…“We are confident that the Government will make the right choice for the future of the UK, putting the interests of the country first. We look forward to working with the Government and its agencies on next steps.”
They got two years’ time, since any EU member state exiting the block is granted a 24 months lasting period to renegotiate its future relationship with Brussels, including air traffic matters. 

Quentin Lacoste of French logistics firm Clasquin warns of a domino effect triggered by the Brexit  -  company courtesy
Quentin Lacoste of French logistics firm Clasquin warns of a domino effect triggered by the Brexit - company courtesy

Forwarding Agent CLASQUIN reconsiders UK investments
Even prior to the UK voter’s decision, Quentin Lacoste, Group Chief Operating Officer, CLASQUIN GROUP Worldwide, based in Lyon, France warned in a statement given to CargoFrowarder Global a Brexit might trigger an EU exit process, “sending a very negative message, as well as setting a precedent, towards other global regions we all interact and compete with.” The manager went on to say: “We have dealings and opportunities in the UK which we want to strengthen and intensify towards our own presence and representation in the future, on a long-term basis. When prioritizing our plans of footprint extension, the fact that Britain is part of the EU gives us an additional level of comfort to invest. This is to be compared with unpredictable mid-term implications in case of an exit.” This comfort needed by investors like Airbus, CLASQUIN and others has vanished since last Friday.

Political paralysis
This all the more since the Brexit vote has led the country into political chaos with no new leadership in sight. Cameron will resign in October, the Conservative Party is completely divided in EU supporters and opponents, Leave propagandist Boris Johnson preferred to vanish into thin air since triumphing last Friday, so did UKIP boss Nigel Farage. In contrast, Scotland’s First Minister Nicola Sturgeon and leader of the Scottish National Party appeared before the press, announcing an initiative of her government for holding another vote on Scottish independence within the next two years. She stressed that in contrast to the Leave decision by a British majority, 62 percent of Scots voters supported Remain in the referendum.
 
Quo vadis Great Britain?
In view of this chaos, statements from EU politicians urging London to immediately file Great Britain’s withdrawal from EU membership are of limited help. So are initiatives of disappointed British Remain campaigners demanding a second referendum.
The only means to end the political confusion, offering a decent way out of this dead end situation are new elections. This way, a party or coalition supporting Great Britain’s ongoing EU membership could repair the damage done by the Leave referendum and make a political U-turn by keeping the UK on board the EU. This might also hamper any separatist initiatives within the United Kingdom and prevent Great Britain being dwarfed to Little Britain. Pushing the reset button by UK voters would surely be applauded by Europe’s politicians and the entire aviation industry.
A step that needs farsightedness and courage.
This is what we would wish for you, Great Britain!

Heiner Siegmund  /  John Mc Donagh

Is Cathay Pacific Moving Steadily Away from Freighters?

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Tough times at the moment for all cargo carriers who are operating on the Far  East routes.
Yields have been dropping considerably and tonnages are hard fought for as the influx of long-haul belly capacity continues to grow.

Cathay Pacific Cargo is scaling down its freighter fleet. Pictured here is one of their six Boeing 747-400Fs  - courtesy CX
Cathay Pacific Cargo is scaling down its freighter fleet. Pictured here is one of their six Boeing 747-400Fs - courtesy CX

Not a good first five months
At least, this is what Cathay Pacific’ cargo management has had to report.
The cargo traffic for the Hong Kong-based airline was down almost 4 percent in the first five months of this year.
May, was the worst month with a drop of 4.6 percent to 833 million Revenue Tonne Kilometers (RTK’s).
The actual (real-time) tonnage for May dropped by only 1.3 percent and this is attributed to a better cargo performance on the carrier’s short routes compared to the long haul.

In a statement issued by CX’s General Manager Cargo Sales & Marketing, Mark Sutch, it was said that although Cathay Pacific has seen somewhat of a stabilization in tonnages out of its key markets in the Far East, “the freighter yield has continued to remain under intense pressure in what continues to be a challenging and capacity-rich air cargo environment.”
 
The signs for a freighter pull-back?
It was recently announced that the carrier would hand over two of its B747 freighters to Cargolux and Silk Way Airlines. One of these was anyway parked in the desert.
Back some years ago CX was the dominating passenger and cargo airline in the Far East  from its Hong Kong base.
This has all changed with the massive growth of the mainland China-based airlines who now have an enormous capacity on offer and are in direct competition to CX

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The Cathay freighter fleet is made up of B747 aircraft, which, with their average 120 ton payload are in the meantime a pain in the neck to fill on some routes.
A total of 23 Boeing 747Fs are on CX’s books, including the two above mentioned planes which are slotted to leave the fleet.
An enormous freighter capacity in a continued hard fought market.
Cathay also has seventy Boeing 777 and 54 Airbus A330 passenger aircraft which have a lot of belly capacity. Eleven of the A330s are however operated by Hong Kong-based Dragonair.

Cathay - Lufthansa air freight JV - the start of a handover?
Lufthansa Cargo and Cathay Pacific Cargo have formed a cargo joint-venture which some say is aimed at trying to meet and combat the challenge from gulf carriers which are in their view siphoning off too much cargo between Europe and Asia.
This agreement follows shortly on last year’s Lufthansa - All Nippon Airways (ANA) cargo joint-venture.

A simple calculation maybe?
Will Cathay with their new alliance with LH Cargo now have plans to successively withdraw from their all freighter fleet and make better revenues in the J/V?
Considering the capacity on the main routes CX operates on - this may well be the case!
The Gulf carriers have the advantage of being able to operate cargo flights from outside hubs into their home base and then transfer the cargo into the bellies of their numerous passenger aircraft.
The Asian and European based passenger airlines don’t have that luxury and are presently stuck with flying freighters at high cost over the complete sector.

A re-think is in the process. The LH/CX cargo alliance is something very new in the sense that both carriers belong to different airline alliances.
Namely LH’s Star and CX’s oneworld.

John Mc Donagh

LATAM Cargo Fighting Against Headwind

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The lasting economic crises in Brazil, South America’s former powerhouse that resulted in a 4 percent drop in GDP with the consequent impact on cargo volumes lately, has LATAM Cargo forced cutting down its capacity. The carrier’s Head of Sales Álvaro Carril, while speaking at the German Air Cargo Club (ACD) last week, illustrated how grave the situation is and which steps his freight airline is taking to best weather the storm.

LATAM Cargo’s Álvaro Carril (center) was welcomed in Frankfurt by ACD leaders Winfried Hartmann (right) and Mathias Jakobi (standing left)  -  courtesy ACD
LATAM Cargo’s Álvaro Carril (center) was welcomed in Frankfurt by ACD leaders Winfried Hartmann (right) and Mathias Jakobi (standing left) - courtesy ACD

Alvaro is no man shying away from open words, demonstrated once again at the ACD meeting in Frankfurt, Germany. While declining fuel prices are a positive factor for any carrier, helping to save money, their current drop has been counterproductive in the case of Latin American freight traffic, he told the surprised audience.

Back to old metal
This, because “low fuel prices have motivated a number of suppliers to take older aircraft back into service,” Álvaro described. By doing so, they added to the already excessive capacity, sending the yields further south, criticized the manager. “This shortsighted strategy harms all of us,” he exclaimed.
LATAM Cargo’s options to seek their fortune elsewhere, circumventing crisis-hit Brazil and other ill performing South American sub-markets, are extremely limited due to their geographical position, operating mainly out of Santiago de Chile and Sao Paulo but also Lima and Bogotá. “We can’t just put our passenger aircraft or some of our freighters on alternative routes outside of our region that are more lucrative, serving other markets,” states Guido Henke, LATA Cargo’s European Chief.                  

Costs down, service up
In view of these rather limited options to adjust the network to changed economic circumstances, the entire LATAM Group including its freight unit LATAM Cargo have introduced a far-reaching austerity program. Besides job cuts and the strict control of expenditures, it includes the temporary suspension of aircraft receptions. Therefore, a substantial amount of the deliveries of Boeing and Airbus passenger variants scheduled for the period 2016 until 2018 were postponed,” explained Herr Henke. “Due to sluggish demand we don’t need additional capacity at this point of time,” Guido reasoned. 
Part of the program to drive costs down is a reduced flight program of freighter aircraft. Explains señor Carril: "To counteract the difficult market conditions, LATAM Cargo is currently primarily focusing on the optimum utilization of the belly hold capacities of our passenger fleet. All-cargo aircraft will be operated by us only in case of specific demand.”

Less freighter flights
In compliance with this decision, transatlantic operations to and from Europe were reduced by two weekly freighter flights, from formerly six services to meanwhile four. Since June 1, the Amsterdam flights to Curitiba and Viracopos, formerly operated by Boeing 777Fs, were taken off the itinerary. “However, we maintain our three weekly Frankfurt flights to Brazil and the once per week operated Amsterdam-Basel-Sao Paulo connection. That’s the only nonstop all-cargo flight linking Europe with Sao Paulo’s city airport Guarulhos,” states LATAM Cargo’s manager Henke. 

New product line will be revealed soon
On the sidelines of the ACD meeting both executives hinted, without delivering specifics that in September LATAM Cargo will launch a new product portfolio and push a campaign dubbed “we deliver consistently what we promise,” putting the service aspect in the forefront of the campaign.
“Some of our direct competitors might be cheaper, but when it comes to reliability and service rendered we keep standing in the pole position, knowing well that our customers have the right to choose,” stated Alvaro Carril.

Heiner Siegmund

Hyperloop Eager to Transport Cargo across Eurasia at the Speed of Sound

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What sounds like a bizarre vision could become reality within the next five to ten years: an ultra-fast Hyperloop vehicle transporting freight containers through airless tubes elevated on pillars all the way between China and Europe. The project pushed forward by Californian firm Hyperloop One was now presented by Co-Founder and Executive Chairman Sherwin Pishevar to Russian President Vladimir Putin on the sidelines of the St. Petersburg-held International Economic Forum (SPIEF).

Hyperloop’s Shervin Pishevar pushes a trans-Eurasian track forward  -  photos: courtesy company
Hyperloop’s Shervin Pishevar pushes a trans-Eurasian track forward - photos: courtesy company

Pishevar’s plan: setting up a high-speed transportation system bridging continents that would revolutionize and simplify cargo flows over long distances. The magnets propelled capsules, powered by solar or wind energy travel through vacuum pipes at a speed of up to 1,100 kilometers per hour. If operated nonstop, they connect the Chinese and European markets within a single day. However, intermediate stops at Moscow and probably more places along the road are part of the concept.
 
Endangering air freight
The entire project is still in its preliminary stage, making speculations about prices for transporting goods over distances of 10,000 to 11,000 kilometers across the vast Eurasian land bridge premature at this point of discussions.
Nevertheless, it’s becoming apparent that the 700 miles per hour train would endanger traditional air carriage on this sector when it comes to combining markets located far apart from one another. On the long run, it might also challenge traditional railway solutions, since cargo trains running between places in China and Europe need 2 weeks minimum between their origin and final destination. Their advantage over challenger Hyperloop: they can carry much higher loads at a presumably much cheaper price in comparison to their future high-speed competitor. 

The airless tubes and the magnetic drive allow velocities up to 800 mph  -  company courtesy
The airless tubes and the magnetic drive allow velocities up to 800 mph - company courtesy

Based on private financing
According to Pishevar, the entire project will be financed through multiple private channels, not needing any state money to put it on track.
Particularly this aspect was music in the ears of Kremlin Chief Putin who promised to support the Hyperloop plans politically and administratively where needed, his speaker Dmitry Peskov told local media.

 

Russian officials are mesmerized
The Eurasian “New Silk Road” future Hyperloop link is complemented by plans for connecting Moscow and St. Petersburg as well as linking Moscow’s major airports Sheremetyevo and Domodedovo. Plans have also been tabled to drastically cut down Moscow’s commuting times by having Hyperloops running between major suburbs and the city center.

Image of Hyperloop speeding through almost deserted landscapes.
Image of Hyperloop speeding through almost deserted landscapes.

 These Moscow plans are heavily supported by the city’s mayor Sergei Sobyanin. A further backer is Ziyayudin Magomedov, founder and major shareholder of the Summa Group, which engages in telecommunications, logistics, engineering, construction and the oil and gas business.
However, Hyperloop Technologies CEO Rob Lloyd remains skeptical about the Moscow ambitions echoed by Mayor Sobyanin and private investor Magomedov. “Building tracks between places in the Metropolitan area and downtown Moscow is a challenging and probably costly tasks that we cannot estimate yet.” Moreover he said that the vehicles can only carry a limited number of passengers, thus not really easing congestions and they might not be able to run at high speed because of the relatively short distances the’d have to cover.  
 
The ‘New Silk Road’ stands on top of Hyperloop’s agenda
A further suggestion for a Hyperloop train came from Russia’s Transport Minister Maxim Sokolov during the SPIEF trade show in St. Petersburg. The politician favors building a 70 km stretching airless pipe between the Russian port of Zarubino near Vladivostok and the neighboring Chinese Province Jilin, a center of car manufacturing and heavy industry. This way, China-built products could be brought extremely fast to the berths at Zarubino and steamed to Japan, the Philippines, Indonesia or other markets that border the Pacific Rim.
At the end of his meet with Putin, Shervin Pishevar pointed out that his firm’s main goal is to implement the ‘New Silk Road’ project, allowing moving cargo across the Eurasian land bridge at the speed of sound.

Heiner Siegmund


Cathay, Dragonair Axe Shark Fin Transport

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Cathay Pacific and sister airline Dragonair have decided to impose a ban on the carriage of shark fin with immediate effect, the South China Morning Post reported, adding that the airline did not impose an outright ban but instead set up a panel of experts to decide on a case-by-case basis whether each shipment was from a sustainable source.

Protests prompt Cathay to ban shark fin transport.
Protests prompt Cathay to ban shark fin transport.

Early reports said the ban extended to all shark products on cargo and passenger flights, but the airline told the BBC it currently applied to shark fin only.
With the ban, the carriers join budget airline HK Express, which became the first local airline to axe shark fin shipments last month. It leaves Hong Kong Airlines as the only Hong Kong-based carrier to establish a position on shark fins.

Cargo carriers react to growing protests against shark killing
Cathay in recent weeks had come under renewed pressure from conservationists over a policy of carrying "sustainable" fins, with protests at the airline's check-in desks at Hong Kong International Airport, to children petitioning airline executives.
More than 70 million sharks are killed every year, according to WWF figures. Large numbers are exported to Hong Kong, where they are consumed or further exported to mainland China.
According to government data, shark fin imports to Hong Kong dropped by 42% between 2010 and 2015 to 5,717 tonnes. During this period there was also a 72% drop in imports by air to 450 tonnes.
Cathay and Dragonair join the likes of British Airways, American Airlines, Qantas, Singapore Airlines and Emirates in banning shark fin.

Nol van Fenema

JD.com, Wal-Mart Ink Strategic China Pact

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China’s B2C online retailer JD.com and America's largest retailer Wal-Mart, have agreed to a strategic alliance across China through a combination of e-commerce and retail.

Wal-Mart operates 430 stores in China
Wal-Mart operates 430 stores in China

Under the agreement, Wal-Mart will sell its Chinese online e-commerce marketplace, Yihaodian, to JD.com, the country’s No. 2 e-commerce player, in an all-share deal. In exchange, JD.com will issue Wal-Mart stock amounting to about 5% of its total shares, worth roughly US$1.5 billion based on JD.com’s recent share price.
There are only about 430 Wal-Mart stores in China, a tiny presence compared to the 4,000+plus stores in the US, and the deal with JD.com, second only to Alibaba in China, is expected to greatly expand its opportunity in China e-commerce. It will provide its stores with potential traffic from JD.com’s base of online customers and same-day delivery network to serve its customers.

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China has become Wal-Mart’s fourth biggest marketplace
JD.com will leverage the Yihaodian’s brand and business in eastern and southern China and in key product categories such as high-quality grocery and household goods, both of which complement its own geographical and product strengths. In addition, JD.com’s customers will gain access to a wide range of new and imported items from Wal-Mart.
China is Wal-Mart’s fourth biggest international market by sales, though last month executives said there were significant challenges in that market and that its e-commerce performance in China and other markets had been a drag on the company’s overall online growth. In the first quarter, Wal-Mart’s global e-commerce rose a modest 7%.

Nol van Fenema

SHORT SHOTS

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IN BRIEF, THE LATEST AIR FREIGHT INDUSTRY NEWS.

ABC helmsman Denis Ilin
ABC helmsman Denis Ilin

AirBridgeCargo reports large tonnage increases
The Russian all cargo carrier continues unabated on its growth path.
AirBridgeCargo (ABC) has shown a 31 percent year-on-year increase in tonnage for both May and also the first five months.
May tonnage totaled 50.482 tons and January to May cumulative was 238.154 tons.
Freight Tonne Kilometers(FTK’s) were also way up with May showing a plus of 21% and cumulative to end of May of 24%.
The growth is largely attributed to AirBrideCargo’s forceful route expansion as well as upgrading and expanding present cargo routes.
Denis Ilin, ABC’s Executive President commented that “our figures for May are a good indicator of our performance as they demonstrate that our sales and business forces are targeted in the right direction.“

 

Cargolux reaches the 100,000 ton mark for Zhengzhou
Luxembourg’s all cargo carrier recently announced that after almost two years of operations between Luxembourg and Zhengzhou, more than 100,000 tonnes of cargo have been flown between the two cities. The 50,000 tonne mark was reached already in October last year and the reaming tonnage during the past eight months.
On June 20 the airline also announced a new product portfolio named ‘CV Select and CV Select+’  This new service offers CV’s customers guaranteed delivery times and real-time monitoring of their shipments.
The Select service is available as of today and can be booked alongside all other CV product lines

Sascha Hower has quit SingPost
Sascha Hower has quit SingPost

SingPost COO resigns
In the latest high-level departure from SingPost, its Chief Operating Officer, Sascha How-er, last week tendered his resignation from the country's postal provider amid an ongoing review on corporate governance.
In a filing, SingPost said Dr Hower would step down with effect from Aug. 26, to pursue new, unspecified opportunities overseas. Singapore Post has begun a search for a new COO, an official said. Hower joined SingPost in 2012.
Hower also resigned from his post as chief executive officer of Quantium Solutions, the international e-commerce logistics arm of the company, whose biggest shareholders are Singapore Telecommunications and China's Alibaba Group Holding Ltd.
Hower's departure follows the resignation of SingPost’s chief executive, Dr Wolfgang Baier last December, while last month, former executive director and president of Te-masek Holdings and current chairman of Singtel, Simon Israel took over from Lim Ho Kee as SingPost chairman, amid ongoing investigations by Singapore's Accounting and Cor-porate Regulatory Authority (Acra) over possible breaches of the Companies Act.

Jonas van Stekelenburg received the accolade
Jonas van Stekelenburg received the accolade

Schiphol Cargo gets Best Airport Europe Award in Shanghai
Amsterdam’s Schiphol Airport  cargo organization has for the second time being presented with the ‘Best Airport Europe Award’ at the recent Air Cargo China forum in Shanghai.
The award was presented to SPL’s Cargo helmsman, Jonas van Stekelenburg at a ceremony held on June 15th.
He commented that “we are honoured that the Schiphol cargo community’s commitment to quality and innovation has been recognized this way.”
The award is organized by Air Cargo News who’s readers voted for SPL Cargo.

Kerry Logistics receives ‘Best 3PL Award’
Another award was handed out at the Shanghai show. This time Hong Kong based Kerry Logistics.
Kerry were honoured with the Best 3PL Award at a ceremony held at the trade fair.
Kerry Logistics were also named as the so called Best Green Logistics Operator.
William Ma, Kerry’s Group Managing Director stated that “we are thrilled and humbled to be winning the Best 3PL Award for the very first time and see this as a milestone achievement for Kerry Logistics.”


Kalitta Air gets another B747-400BCF amid pilot strike worries
The US-based charter and ACMI airline, Kalitta Air has received another Boeing 747-400BCF freighter which they acquired from Boeing Capital.
The aircraft was originally converted to freighter by Boeing in 2010 and handed over to Korean Air which then parked it in the desert in 2014.
Kalitta now has a total of eleven B747’s in it’s freighter fleet, which are a mix of the 400BCF, 400F and 400ERF versions. Kalitta still has two old B747-200F’s and one B767-300BDSF in their fleet.
The carrier has been plagued recently with worries about an upcoming pilot strike due to unrest among the airline’s flight crews due to payments and working conditions.


Luxembourg’s Vallair odeurs B737-400 P2F
The aircraft management company Vallair which is based in Luxembourg has given an order to the aircraft conversion company Pemco World Air Services for a B737-400 passenger-to-freighter (P2F) aircraft. It seems that the aircraft was until recently operated by Indonesia’s Sriwijawa Air and is now stored at Jakarta International Airport.
Delivery is scheduled for September this year but so far it is not known which cargo operator will take it.

AA operates Boeing 787s between LAX and AKL  -  image AA
AA operates Boeing 787s between LAX and AKL - image AA

American Airlines Cargo adds Auckland to its network
Since last Thursday, AA Cargo offers the market lower deck capacity on their daily Boeing 787 nonstop flights between Los Angeles and Auckland. In a release, the airlines stress-es that this new route opens up a vast number of opportunities for customers connecting traffic through LAX to over 200 destinations in North and Latin America.
Auckland is part of the company’s commitment to expanding operations in the Pacific, including other new routes to Haneda (HND) and Sydney (SYD). Cargo on the inaugural flight out of LAX included a variety of perishables and other consolidated freight, which was followed by medical supplies and mining machinery on the first return flight from New Zealand.
Overall, some of the most commonly shipped commodities into and out of the region include e-commerce goods, perishables, horticulture products, edible fish and other chilled meats.
AA has appointed GSA Cargo Service as its sales agent in Auckland, complementing the compa-ny’s existing role for the airline in Australia. Menzies Aviation will undertake ground handling for the carrier with freight reception through its cargo central facility.

John Mc Donagh  /  Nol van Fenema  /  Heiner Siegmund

New Russian Cargo Carrier  /  Russian Post Gets Own Aircraft

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Are AirBridgeCargo Airlines going to get some undesired competition in the Russian air cargo market during the coming twelve months?
It may look that way when one reads the news coming out of Russia these past days.
If all were to be true, then two new freight carriers may be coming on the scene, one of them almost exclusively for the Russian Post.

Newcomer Sky Gates Airlines will start commercial flights this year, hubbing at Moskow Ramenskoye Airport.
Newcomer Sky Gates Airlines will start commercial flights this year, hubbing at Moskow Ramenskoye Airport.

Sky Gates Airlines and Aviastar TU
Both of the above named carriers are said to want to start operations this year already out of Moscow Ramenskoye Airport.

Sky Gates Airlines which is 80 percent owned by Alexander Khmelevskikh and 20 percent by Globus Distribution Management, has applied to the Russian aviation authorities for an Air Operators Certificate (AOC).
A firm called Sky Gates Rus. Company has been separately set up to run the airline.

Operations from Moscow’s Ramenskoye Airport serving the Russian domestic market and international markets, said to be mainly in the South East Asia region are initially planned with a single leased-in B747-400F aircraft.
The company states that once the new cargo terminal at Ramenskoye is completed, that the carrier may increase their fleet up to six aircraft.
This, all depends however on whether they’ll be successful in getting their AOC.

Aviastar TU already operates three Tupolev TU-204 freighters, one of which is an exclusive operation for DHL Express.
Sources say that they also want to start operations out of Ramenskoye.
It will it seems, take some time before the airport is suitable for all freighter operations as the new cargo terminal is not yet completed.
The airport has also so far not been able to attract very many passenger operators with only a few of them so far saying they wish to operate from there.

Russian Post signs up for two TU-204 freighters
On the 15th of June at the St. Petersburg Economic Forum, the Russian Post officially stated that they had purchased two TU204-100C freighters in what they see as a first step to set-up their own medium and long-haul freighter fleet.
Both aircraft belonged to the defunct Transaero Airlines which went bankrupt in 2015.
Sources inform CargoForwarder Global that these aircraft each have only 2,000 hours on the clock and that before being delivered to the Russian Post, will be thoroughly checked by Tupolev.
Operations are planned to start as of autumn this year for domestic postal delivery between Moscow and the Russian Far East as well as for the carriage of e-commerce goods between China and Moscow.
Sources state that there are plans to expand services of the Russian Post into Germany, Finland and Hong Kong once more aircraft are acquired.

John Mc Donagh

Breaking News – Reich Quits Cargolux

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Even for insiders this move comes unexpectedly: CEO Dirk Reich of Cargolux Airlines has resigned, and will leave the cargo carrier at the end of July. In a telephone conversation with CargoForwarder Global he said his stepping down from CV’s top deck is purely based on personal reasons. Richard Forson, Senior VP and CFO at Cargolux will replace Mr Reich.

Reich is leaving Cargolux  -  courtesy Guy Jallay
Reich is leaving Cargolux - courtesy Guy Jallay

The reason for his decision to depart Cargolux is quite simple, Dirk indicated: “From Mondays to Fridays I was living in Luxembourg, shuttling to Switzerland at weekends to spend my spare time with my family that lives there.” This suitcase-based relationship cannot be perpetuated eternally without risking the family going to pieces. He explicitly stressed that no alternative job offer has got anything to do with his decision. “I intend staying in the cargo business without having any precise plans yet, but precondition is that I am based in Switzerland,” the German-born top manager exclaimed. 

Helminger: “we lose an out-of-the-box thinking executive”
In an exclusive interview with CargoForwarder Global, Paul Helminger, Cargolux’s Chairman of the Supervisory Board regretted Reich’s impending departure. “We respect his decision although we are not happy about it.” Helminger went on to say that Reich has done an excellent job during his 2,5 year tenure at Cargolux. “He came on board at a time when there was great resistance against Chinese investor HNCA acquiring 35 percent in Cargolux. These fears and concerns he managed to overcome by advocating a policy of transparency.” Helminger reminded that the renewal of the collective work agreement after months of tough discussions particularly with pilots and representatives of the Grand Duchy’s conservative union Letzebuerger Chreschtleche Gewerkschaftsbond – LCGB was another major step forward that CEO Reich was ultimately responsible for, this way securing a climate of social calm within Cargolux.

Richard Forson will soon take command of the cargo carrier  -  picture: hs
Richard Forson will soon take command of the cargo carrier - picture: hs

“Because of his outstanding leadership and in view of the unlimited duration of his employment contract we would have loved to keep him on board for a longer time, but we respect his step based on personal grounds,” Mr Helminger stated.

 

Forson to follow Reich
He confirmed that Richard Forson will take Reich’s chair as of August 1. For the South Africa-born manager the new role is anything but unfamiliar. Before Dirk Reich was appointed Cargolux’s Chief Executive Officer, Forson was acting as the freight carrier’s interim CEO. “This time we have nominated him as permanent Cargolux Chief,” said Helminger.
As to who will replace Forson as Chief Financial Officer will be announced at the carrier’s press conference, starting at 4 p.m. today (30 June). On this occasion, Dirk Reich will also explain the reasons for his decision to exit Cargolux. 

Heiner Siegmund

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