United

PPG to meet in Corpus Christi

Magazine Stories January Issue 2009
Thursday, 28 January 2016

THE WORLD’s largest dedicated project freight forwarding organisation has agreed to hold its annual conference in Corpus Christi from July 29 to August 1 next year.

Members of the Project Professionals Group (PPG), with 116 members in 86 countries worldwide, plumped for the Texas venue, after a vote at this year’s conference held in Aarhus in Denmark.

PPG general manager, Brisbane-based Kevin Stephens, said group members were impressed with a detailed briefing regarding the growth of the Port of Corpus Christi, and hotel and conference facilities in the area. “Members are looking forward to holding their conference for the first time in the United States - and we expect over 100 attendees from more than 50 countries.”

The four-day conference will be held at the Solomon Oritz International Centre, a converted cotton warehouse with significant historical links to the port. It will include presentations by major transport solution providers and project cargo experts.

The Port of Corpus Christi, ranked sixth in US ports in terms of total tonnage, handled more than 445 tonnes of break bulk cargo in 2007.

Research tips 275 airports will go out of business as airlines cut 60m seats

Magazine Stories January Issue 2009
Thursday, 28 January 2016

NEW research has shown that 275 airports worldwide will lose air services completely this year, including 116 in the Asia-Pacific region and 32 in the United States, writes John Newton.

And, according to OAG (official Airline Guide), the world’s airlines will offer 59.7 million fewer seats in the fourth quarter of 2008 than they did a year ago.

In its 10-year view of the global aviation industry, OAG’s consolidated database reveals a seven per cent drop both in the number of flights and seat capacity for the last three months of 2008 compared with the same period last year.

It says the US domestic market will account for just under 20 million of that figure, or 33 per cent of the global decline in capacity, in what could potentially be the most widespread crisis to hit the aviation industry in recent memory.

The OAG analysis takes into account all future schedules filed by the airlines to date.

In the fourth quarter of 2007, seat supply in intra-Asia markets outpaced the US for the first time. However, OAG says Asia is currently showing a 13 per cent drop in capacity for this year’s fourth quarter (equivalent to a three-year setback in growth) although this may not be quite as severe as it looks because at the time of release a number of Chinese carriers had not filed their full winter schedules.

“The data speaks for itself. It took a good three years for the industry to recover from the downturn in 2001, when it had a five per cent drop in capacity and a seven per cent decrease in flights. Steady annual growth since 2002 looks set to plummet in the fourth quarter this year, with an unprecedented global decline of seven per cent,” said Steve Casley, OAG’s chief operating officer.

“Commercial aviation marches in lock-step with the global economy, closely reflecting growth and declines in GDP, with on average a steady three to four per cent growth year over year,” he said.

“In the last 10 years, this steady growth has been interrupted twice: first, by the melt-down of the global economy in 2001 following the burst of the Internet bubble, which was compounded by a year of crises with the traumatic events of 9/11, the Gulf War and the SARS epidemic within Asia; and second — on the immediate horizon — by the extraordinary impact that the rising cost of oil is having on the global economy. We tend to focus so much attention on the growth of Asian markets, but the projected 13 per cent drop in Asian seat capacity is a significant metric that may have wider impact.”

And Casley added: “From OAG’s statistics, it looks quite possible that we may be facing a far more severe global downturn than we have ever experienced before. The industry’s resilience will be pushed to its limits in the coming months, with carriers, airports and passengers alike all waiting and watching for a glimmer of light at the end of the tunnel.”

Other notable findings in the OAG analysis show:

• Transatlantic routes bucked the trend, with two per cent year-on-year growth;
• OAG adjusts its fleet forecast for 2017 - down by more than 3500 aircraft; and
• OAG forecasts a drop in Maintenance, Repair & Overhaul (MRO) spend from 2009-2011 that could be as high as 15 per cent based on 2001 historical data and potential future schedule reductions.

Saudi Arabian on track for privatisation

Magazine Stories January Issue 2009
Thursday, 28 January 2016

SAUDI Arabian Airlines is accelerating expansion of its fleet and enhancement of its operating systems in a strategy designed to improve the group’s value as its privatisation strategy progresses. 

In September last year, Saudi Arabian sold 49 per cent of the shares in its highly profitable catering division to private investors.

The sale of shares in the airline’s cargo operations is the next step in this program, followed by ground services and then maintenance.

Flight operation will be the final sale.

Expansion of the carrier’s fleet will boost the value of the cargo division.  At Farnborough this year, Saudi Arabian announced a firm order for eight A330-300 aircraft and last year it placed total orders for 52 A320s.
As an interim measure while it awaits the A320s, it has 10 A320s apiece from General Electric and Gulf One Investment Bank.

It is currently taking delivery of a 15-strong fleet of E-170 aircraft for lower density routes.

Schenker sends first e-freight shipment to Korea — early

Magazine Stories January Issue 2009
Thursday, 28 January 2016

DB SCHENKER, has despatched the first paperless airfreight shipment from the German market. On schedule at 17.55 hrs. local time, the item of freight on board Lufthansa  flight LH712 left Frankfurt heading for the South Korean capital of Seoul. As a result, the first e-freight transport started a month earlier than originally planned.

After the successful maiden flight, which was prepared in close cooperation with German authorities and customs, the use of e-freight is planned to be gradually increased on the route between Germany and Korea. Furthermore, in the next few months the carrier wants to extend e-freight to further German stations and markets in Asia like Singapore and Hong Kong.

The freight subsidiary of German Lufthansa has made a major contribution to the introduction of e-freight during the last months as the “Lead Carrier” and project coordinator of the IATA e-freight project for Germany, which involves a number of leading forwarders and airlines.

Thanks to this successful Go Live shipment other  airlines and forwarding agencies are expected to launch paperless freight transport to and from Germany in the coming weeks and months.

Swissport adds to security portfolio

Magazine Stories January Issue 2009
Thursday, 28 January 2016

THE RECENT purchase of US-based New Age Security Solutions (NASS) has given Swissport International further scope for offering air cargo security solutions to clients around the world.

Swissport, which is owned by the Spanish-based Ferrovial group, has also strengthened its cargo operations by appointing industry veteran John Batten as its executive vice president responsible for cargo.

NASS has developed a variety of airport security concepts, including the BPR (behaviour pattern recognition) program which has earned it an international reputation.  Its clients include major airports in the United States and Britain.

Swissport executive Erich Bodenmann said the company had been eager to expand its knowledge and expertise in the rapidly-growing cargo security market, as well as other aspects of airline and aviation security.  “NASS is the partner to provide them,” he said.

In turn, NASS is pleased to have the economic power of Swissport underwriting its own expansion plans.  “With its worldwide network of more than 180 stations and more than 600 airline customers, Swissport offers tremendous potential for substantially increasing the scope of our activities,” said Rafi Ron, NASS’s chief executive.

Batten, Swissport’s new cargo boss, was most recently senior vice president cargo for the fast-expanding Qatar Airways group, based in Doha.  Previously he had spent some 25 years with TNT Express Worldwide, including senior positions at company headquarters and in various parts of its far-flung network.

Sydney Airport Master Plan ‘still more plan than master’

Magazine Stories January Issue 2009
Thursday, 28 January 2016

SYDNEY Airport’s new draft master plan 2009 has proposed the development of an aviation logistics precinct north of the airport to cater for predicted strong air freight growth in bellyhold and dedicated freighters.

If the draft plan is adopted unchanged, it will mean Sydney airport locks itself in to 40 per cent more dedicated cargo flights (10,400 a year) and double the freight throughput – from 471,000 tonnes to 1,077,000 tonnes --compared to 2007.

Aircraft movements will rise from 286,101 in 2007 to 402,000 in 2029, including larger freighters and passenger aircraft.

It also assumes that other Australian airports are prepared to concede Sydney’s current dominance – it handles almost half of all international airfreight and 30 per cent of domestic totals – either will continue unchallenged or that Australia’s overall freight growth through other airports including Melbourne and Brisbane will dwarf Sydney alone.

For an airport where airfreight handling already is said to be straining the envelope, the Sydney plan will require development of new freight facilities, bypass and staging facilities and road and services infrastructure to enable the efficient transfer of freight between the airfield and off-airport operations.

The Northern Precinct freight facility, boasting a 20-hectare site, has been talked about for years and work was at one stage mooted to start in 2007 with a fully operational facility in service by 2012/13. The precinct will be developed on Sydney Airport Corporation-owned land to the north of Qantas /Airport Drive and Alexandra Canal. Freight operations and a number of associated aviation support functions will be relocated to the new area.

No firm time-frame for the planned move to the Northern Precinct has been scheduled according to Nigel Fanning, airline commercial manager, Sydney Airport Corporation Limited. He said it will depend on actual traffic growth and passenger demand.  Currently, five major operators use the on-airport freight facilities at Sydney Airport. Qantas is the major tenant others include Toll Danata, Menzies, Australian air Express, DHL/Asia Express airlines. Air express carriers serving Sydney include UPS, FedEx, TNT, Martinair and Cargolux. Fanning said SACL would respect existing leases.

The release of the latest Sydney Airport Master Plan still leaves many questions unanswered especially on the contentious Northern Precinct (previously known as the Northern Lands project) proposal.

Sydney Airport Corporation favours a user-pays policy for the development, leaving doubts on who will pay for ancillary works such as access roads and bridges (if required) as it is not spelt out in the Master Plan. In fact the plan comes up very short on just how future freight arrangements will work and is mainly devoted to passenger development.  Key anchor tenants for the Northern Precinct such as Qantas Freight Enterprises — which is expected to be floated within the next 12 months — may not be in a position to spend large sums (estimated at between (A$40-50 million) to get the project underway.

Stephen Cleary, group general manager Qantas Freight commenting on the release of the Master Plan said: "There is really nothing new in this.  Until we are provided with further information about costs and the size of land available, it is hard to take a firm position."

Qantas still holds long-term leases over existing facilities at Sydney Airport and may elect to see those leases out rather than take on significant start-up costs by moving to the Northern Precinct.

Based on no changes to the existing airport curfew, capped aircraft movements and flight paths, the Master Plan outlines the initiatives for the airport’s operation and development for the next 20 years based on annualised freight growth of around five per cent.

Running parallel to freight, the airport is expected to handle around 79 million passengers in 2029, more than double the 32 million seen in 2007.

The airport’s ceo Russell Balding said: “Airport facilities including terminals, hangars, aprons, freight facilities, car parking and airport roads all will be progressively upgraded over the next 20 years.

“Technological innovation across the aviation industry will also help to drive environmental improvement. The global fleet of commercial aircraft is undergoing significant technological innovation and environmental improvements.”

Welcoming the release of the Sydney Airport Master Plan, Paul Zalai, manager - Freight and Business Operations, Customs Brokers and Forwarders Council of Australia (CBFCA) said the Sydney Airport plan provides a catalyst to review conventional freight logistics models. "The successful implementation of an “off-airport” terminal by Qantas Freight in August 2007 was an innovative measure to reduce import freight congestion at its existing Sydney terminal," said Zalai. "Longer term opportunities exist to extend beyond this model to take full advantage of by-pass facilities and streamline the movement of consolidated freight direct to forwarders’ premises. In order to meet the projected growth in the freight movements, it is essential that airport, industry and government stakeholders maintain a collaborative working relationship in order to meet the challenges faced within the Sydney operational environment.”

Public comment on the master plan can be submitted by December 16.

After considering the feedback, the airport will submit the plan to the minister for Infrastructure, Transport, Regional Development and Local Government for his consideration.

TNT takes next step in Vietnam expansion plan

Magazine Stories January Issue 2009
Thursday, 28 January 2016

TNT EXPRESS has opened a key network link in Vietnam’s high tech hub in Hanoi.

Its new TNT International and Domestic Operations Centre is designed to handle heavy freight and is part of the company’s strategy to leverage the soaring demand for freight express services between Vietnam, the rest of South East Asia, China and Europe in order to grow its business in the region.

Located in the ICD My Dinh, Tue Liem district, the facility spans 1200 square metres and employs 90 full-time staff who manage the operations 24/7.

It’s part of TNT’s South East Asia-wide investment of EUR100 million over the next five years to build a leadership position in the region.

The investment took off last April, when TNT’s B747-400 ER freighter was re-routed to stop in Singapore en route to Shanghai from its air hub in Liege, Belgium.

“As Vietnam is strategically located as the link between China and South East Asia on our ‘Asia Road Network’ — the completion of the new centre is an integral part of TNT’s growth strategy in the region,” said Onno Boots, regional managing director, TNT South East Asia. “More than 40 per cent of volumes to and from TNT Vietnam will pass through the new centre, while growth is expected to be in the high double digit range for the next five years as it facilitates seamless integration between our air and road networks.”

Shipments passing through Vietnam will be consolidated and processed at the Hanoi centre before making their way north to China and south to Singapore via the Asia Road Network for subsequent airlift to Europe and China respectively, using TNT’s B747-400 ER freighter that flies between Singapore, Shanghai and Liege three times a week. According to TNT, these enhancements to the company’s infrastructure in the region are set to provide customers with the widest range of multi-modal freight services between South East Asia, China and Europe and within South East Asia — and seamless, one-stop-shop solutions that meet all their needs, regardless of the type and scale of the shipment. They are also part of TNT’s plan to establish a leadership position by strengthening its network coverage, connectivity and infrastructure.

“We will now have the capacity to handle four times our current load of both international and domestic freight under one roof, while leveraging the Asia Road Network,” said Boots. “This timely development will also ensure that TNT is well-placed and equipped to support the growth of Hanoi that is fast attracting big investments from global brand names - and its development as a high-tech hub in the region. It is the first in a series of upcoming developments we have lined up for Vietnam to gear up for the future.”

The Hanoi centre is the third facility to be opened in the past three months, following TNT’s new international and domestic road hub in Bangkok and the Singapore Country Depot.

To integrate and align both key stakeholders and TNT’s operations with these targets, the company has appointed Mariken Kruijff as director of strategy implementation. Kruijff will focus on translating TNT’s identified growth drivers into plans that will increase volumes and fuel the company’s growth in a sustainable way over the next five years.

US cartel case claims first overseas scalp as BA executive cops a guilty plea

Magazine Stories January Issue 2009
Thursday, 28 January 2016

A FORMER executive of British Airways World Cargo (BAWC) has agreed to plead guilty, serve eight months in jail and pay a criminal fine for participating in a conspiracy to fix rates for international air cargo shipments, says the US Department of Justice.

According to the charges filed in the US District Court in the District of Columbia, Keith Packer, former commercial general manager for BAWC and his co-conspirators engaged in a conspiracy to fix the air cargo rates charged to customers for international air shipments, including to and from the US, in violation of the Sherman Act. Under the plea agreement, which is subject to court approval, Packer has agreed to serve eight months in jail, pay a US$20,000 criminal fine and cooperate with the Department’s ongoing investigation.

Packer is the first foreign national and third individual charged as part of the Antitrust Division’s ongoing investigation into price fixing in the air transportation industry. Additionally, nine companies have been charged.

According to the charges, from at least as early as March 2002 and continuing until at least February 14, 2006, Packer and his co-conspirators carried out the price-fixing conspiracy by:

• Participating in meetings, conversations and communications to discuss the cargo rates to be charged on shipments to and from the United States;

• Agreeing during those meetings, conversations and communications on certain components of cargo rates to charge on shipments to and from the United States;

• Levying cargo rates in the United States and elsewhere in accordance with the agreements reached and

• Engaging in meetings, conversations and communications in the United States and elsewhere for the purpose of monitoring and enforcing adherence to the agreed-upon cargo rates.

In August 2007, British Airways pleaded guilty and was sentenced to pay a US$300 million criminal fine for conspiring to fix cargo rates for international air shipments, including to and from the United States, and conspiring to fix passenger fuel surcharges for long-haul international air transportation, including between the United States and United Kingdom. The same day, Korean Air Lines pleaded guilty and was sentenced to pay a $300 million criminal fine for conspiring to fix cargo rates charged to customers in the United States and elsewhere for international air shipments and conspiring to fix wholesale and passenger fares for flights from the United States to Korea.

In January 2008, Qantas Airways Limited pleaded guilty and was sentenced to pay a $61 million criminal fine for its role in a conspiracy to fix cargo rates to customers in the United States and elsewhere for international air shipments.

In May 2008, Japan Airlines pleaded guilty and was sentenced to pay a US$110 million criminal fine for conspiring to fix rates for international cargo shipments.

In July 2008, Bruce McCaffrey, Qantas’ former highest-ranking executive employed in the United States, pleaded guilty and was sentenced to serve six months in jail and pay a US$20,000 criminal fine for fixing cargo rates to customers in the United States and elsewhere for international air shipments.

Also in July 2008, SAS Cargo Group A/S (SAS), Cathay Pacific Airways Limited (Cathay), Martinair Holland NV (Martinair), Société Air France (Air France) and Koninklijke Luchtvaart Maatschappij N.V. (KLM Royal Dutch Airlines) pleaded guilty to conspiring to fix prices on air cargo rates. SAS was sentenced to pay a US$52 million criminal fine, Cathay was sentenced to pay a $60 million criminal fine, Martinair was sentenced to pay a US$42 million criminal fine, and Air France-KLM, which now operates under common ownership by a single holding company, was sentenced to pay a US$350 million criminal fine.

In August 2008, Timothy Pfeil, the former highest-ranking cargo executive in the US for SAS, pleaded guilty to conspiring to fix the rates charged to US and international customers on air cargo shipments.

Packer is charged with price fixing in violation of the Sherman Act, which carries a maximum fine of US$1 million and up to 10 years in prison for an individual. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Air freight will post positive figures this year — Keeling

Magazine Stories January Issue 2009
Thursday, 28 January 2016
AIR FREIGHT, particularly its international segment, is "surprisingly resilient" in the face of mayhem in financial markets and a general worsening of US and world economies according to Julian Keeling.

Keeling, head of Los Angeles-based wholesaling air freight company Consolidators International (CII), says while the heady growth of air cargo in the eight to 10 per cent range predicted at the beginning of the year now is seen as much too optimistic, he expects a modest rise in volume of about two to three per cent.

He bases his prediction on the types of cargo carried by air internationally.  "Much of our freight consists of high value industrial items and hi-tech components and finished products," said Keeling.

"These are continuing to sell reasonably well in US and world markets," he claimed. 

He contrasted the comparative strength of air freight with ocean shipping, particularly on the US import side, which has seen declines in volume for the first time in the 21st century.

"Imports into west coast ports are very weak while in a tandem development, fewer ships are dropping anchor along the east coast," he said. 

"Importers selling consumer items like toys, apparel, home furnishings and furniture who use sea transport almost exclusively have become far more cautious in judging consumer intentions this holiday season. With consumers reluctant to open their pocketbooks, importers have pared loads quite drastically."

Keeling agrees that whilst air remains in a comparatively healthier position than sea, it is hardly escaping the effects of a slowing economy.

He pointed to the US-Asia market, where currently an enormous oversupply of lift exists.  "Airlines are cutting cargo space as fast as they can, but overcapacity continues to grow," he said. 

"As overcapacity rises, yields decline. Neither airlines nor forwarders are making much money serving the Asian market," he claimed. 

Keeling believes a number of Asia-based all-cargo carriers will be forced to merge "or declare bankruptcy in 2009”.
The overcapacity on many international routes has one beneficial effect for CII - no shortage of equipment to move cargo.

"We are moving freight as booked with no delays or hassles.  The once often-arrogant attitude of airlines has changed to a friendlier ‘please use us as your carrier’," he said.

Keeling pointed to another sign of strength and confidence in the air freight market. "While a number of airlines have cancelled or delayed some of their passenger jet orders, not one single all-freighter aircraft at either Boeing or Airbus has been cancelled."

Commenting on the situation at CII, Keeling said: "Volume has been running at record levels for the year with more forwarder customers than ever before in CII's 15 year history.  International air freight has shown real strength in very difficult times. I am a bull on air freight," added Keeling.
HACTL
Cathay Cargo
United

PPG to meet in Corpus Christi

Magazine Stories January Issue 2009
Thursday, 28 January 2016

THE WORLD’s largest dedicated project freight forwarding organisation has agreed to hold its annual conference in Corpus Christi from July 29 to August 1 next year.

Members of the Project Professionals Group (PPG), with 116 members in 86 countries worldwide, plumped for the Texas venue, after a vote at this year’s conference held in Aarhus in Denmark.

PPG general manager, Brisbane-based Kevin Stephens, said group members were impressed with a detailed briefing regarding the growth of the Port of Corpus Christi, and hotel and conference facilities in the area. “Members are looking forward to holding their conference for the first time in the United States - and we expect over 100 attendees from more than 50 countries.”

The four-day conference will be held at the Solomon Oritz International Centre, a converted cotton warehouse with significant historical links to the port. It will include presentations by major transport solution providers and project cargo experts.

The Port of Corpus Christi, ranked sixth in US ports in terms of total tonnage, handled more than 445 tonnes of break bulk cargo in 2007.

Research tips 275 airports will go out of business as airlines cut 60m seats

Magazine Stories January Issue 2009
Thursday, 28 January 2016

NEW research has shown that 275 airports worldwide will lose air services completely this year, including 116 in the Asia-Pacific region and 32 in the United States, writes John Newton.

And, according to OAG (official Airline Guide), the world’s airlines will offer 59.7 million fewer seats in the fourth quarter of 2008 than they did a year ago.

In its 10-year view of the global aviation industry, OAG’s consolidated database reveals a seven per cent drop both in the number of flights and seat capacity for the last three months of 2008 compared with the same period last year.

It says the US domestic market will account for just under 20 million of that figure, or 33 per cent of the global decline in capacity, in what could potentially be the most widespread crisis to hit the aviation industry in recent memory.

The OAG analysis takes into account all future schedules filed by the airlines to date.

In the fourth quarter of 2007, seat supply in intra-Asia markets outpaced the US for the first time. However, OAG says Asia is currently showing a 13 per cent drop in capacity for this year’s fourth quarter (equivalent to a three-year setback in growth) although this may not be quite as severe as it looks because at the time of release a number of Chinese carriers had not filed their full winter schedules.

“The data speaks for itself. It took a good three years for the industry to recover from the downturn in 2001, when it had a five per cent drop in capacity and a seven per cent decrease in flights. Steady annual growth since 2002 looks set to plummet in the fourth quarter this year, with an unprecedented global decline of seven per cent,” said Steve Casley, OAG’s chief operating officer.

“Commercial aviation marches in lock-step with the global economy, closely reflecting growth and declines in GDP, with on average a steady three to four per cent growth year over year,” he said.

“In the last 10 years, this steady growth has been interrupted twice: first, by the melt-down of the global economy in 2001 following the burst of the Internet bubble, which was compounded by a year of crises with the traumatic events of 9/11, the Gulf War and the SARS epidemic within Asia; and second — on the immediate horizon — by the extraordinary impact that the rising cost of oil is having on the global economy. We tend to focus so much attention on the growth of Asian markets, but the projected 13 per cent drop in Asian seat capacity is a significant metric that may have wider impact.”

And Casley added: “From OAG’s statistics, it looks quite possible that we may be facing a far more severe global downturn than we have ever experienced before. The industry’s resilience will be pushed to its limits in the coming months, with carriers, airports and passengers alike all waiting and watching for a glimmer of light at the end of the tunnel.”

Other notable findings in the OAG analysis show:

• Transatlantic routes bucked the trend, with two per cent year-on-year growth;
• OAG adjusts its fleet forecast for 2017 - down by more than 3500 aircraft; and
• OAG forecasts a drop in Maintenance, Repair & Overhaul (MRO) spend from 2009-2011 that could be as high as 15 per cent based on 2001 historical data and potential future schedule reductions.

Saudi Arabian on track for privatisation

Magazine Stories January Issue 2009
Thursday, 28 January 2016

SAUDI Arabian Airlines is accelerating expansion of its fleet and enhancement of its operating systems in a strategy designed to improve the group’s value as its privatisation strategy progresses. 

In September last year, Saudi Arabian sold 49 per cent of the shares in its highly profitable catering division to private investors.

The sale of shares in the airline’s cargo operations is the next step in this program, followed by ground services and then maintenance.

Flight operation will be the final sale.

Expansion of the carrier’s fleet will boost the value of the cargo division.  At Farnborough this year, Saudi Arabian announced a firm order for eight A330-300 aircraft and last year it placed total orders for 52 A320s.
As an interim measure while it awaits the A320s, it has 10 A320s apiece from General Electric and Gulf One Investment Bank.

It is currently taking delivery of a 15-strong fleet of E-170 aircraft for lower density routes.

Schenker sends first e-freight shipment to Korea — early

Magazine Stories January Issue 2009
Thursday, 28 January 2016

DB SCHENKER, has despatched the first paperless airfreight shipment from the German market. On schedule at 17.55 hrs. local time, the item of freight on board Lufthansa  flight LH712 left Frankfurt heading for the South Korean capital of Seoul. As a result, the first e-freight transport started a month earlier than originally planned.

After the successful maiden flight, which was prepared in close cooperation with German authorities and customs, the use of e-freight is planned to be gradually increased on the route between Germany and Korea. Furthermore, in the next few months the carrier wants to extend e-freight to further German stations and markets in Asia like Singapore and Hong Kong.

The freight subsidiary of German Lufthansa has made a major contribution to the introduction of e-freight during the last months as the “Lead Carrier” and project coordinator of the IATA e-freight project for Germany, which involves a number of leading forwarders and airlines.

Thanks to this successful Go Live shipment other  airlines and forwarding agencies are expected to launch paperless freight transport to and from Germany in the coming weeks and months.

Swissport adds to security portfolio

Magazine Stories January Issue 2009
Thursday, 28 January 2016

THE RECENT purchase of US-based New Age Security Solutions (NASS) has given Swissport International further scope for offering air cargo security solutions to clients around the world.

Swissport, which is owned by the Spanish-based Ferrovial group, has also strengthened its cargo operations by appointing industry veteran John Batten as its executive vice president responsible for cargo.

NASS has developed a variety of airport security concepts, including the BPR (behaviour pattern recognition) program which has earned it an international reputation.  Its clients include major airports in the United States and Britain.

Swissport executive Erich Bodenmann said the company had been eager to expand its knowledge and expertise in the rapidly-growing cargo security market, as well as other aspects of airline and aviation security.  “NASS is the partner to provide them,” he said.

In turn, NASS is pleased to have the economic power of Swissport underwriting its own expansion plans.  “With its worldwide network of more than 180 stations and more than 600 airline customers, Swissport offers tremendous potential for substantially increasing the scope of our activities,” said Rafi Ron, NASS’s chief executive.

Batten, Swissport’s new cargo boss, was most recently senior vice president cargo for the fast-expanding Qatar Airways group, based in Doha.  Previously he had spent some 25 years with TNT Express Worldwide, including senior positions at company headquarters and in various parts of its far-flung network.

Sydney Airport Master Plan ‘still more plan than master’

Magazine Stories January Issue 2009
Thursday, 28 January 2016

SYDNEY Airport’s new draft master plan 2009 has proposed the development of an aviation logistics precinct north of the airport to cater for predicted strong air freight growth in bellyhold and dedicated freighters.

If the draft plan is adopted unchanged, it will mean Sydney airport locks itself in to 40 per cent more dedicated cargo flights (10,400 a year) and double the freight throughput – from 471,000 tonnes to 1,077,000 tonnes --compared to 2007.

Aircraft movements will rise from 286,101 in 2007 to 402,000 in 2029, including larger freighters and passenger aircraft.

It also assumes that other Australian airports are prepared to concede Sydney’s current dominance – it handles almost half of all international airfreight and 30 per cent of domestic totals – either will continue unchallenged or that Australia’s overall freight growth through other airports including Melbourne and Brisbane will dwarf Sydney alone.

For an airport where airfreight handling already is said to be straining the envelope, the Sydney plan will require development of new freight facilities, bypass and staging facilities and road and services infrastructure to enable the efficient transfer of freight between the airfield and off-airport operations.

The Northern Precinct freight facility, boasting a 20-hectare site, has been talked about for years and work was at one stage mooted to start in 2007 with a fully operational facility in service by 2012/13. The precinct will be developed on Sydney Airport Corporation-owned land to the north of Qantas /Airport Drive and Alexandra Canal. Freight operations and a number of associated aviation support functions will be relocated to the new area.

No firm time-frame for the planned move to the Northern Precinct has been scheduled according to Nigel Fanning, airline commercial manager, Sydney Airport Corporation Limited. He said it will depend on actual traffic growth and passenger demand.  Currently, five major operators use the on-airport freight facilities at Sydney Airport. Qantas is the major tenant others include Toll Danata, Menzies, Australian air Express, DHL/Asia Express airlines. Air express carriers serving Sydney include UPS, FedEx, TNT, Martinair and Cargolux. Fanning said SACL would respect existing leases.

The release of the latest Sydney Airport Master Plan still leaves many questions unanswered especially on the contentious Northern Precinct (previously known as the Northern Lands project) proposal.

Sydney Airport Corporation favours a user-pays policy for the development, leaving doubts on who will pay for ancillary works such as access roads and bridges (if required) as it is not spelt out in the Master Plan. In fact the plan comes up very short on just how future freight arrangements will work and is mainly devoted to passenger development.  Key anchor tenants for the Northern Precinct such as Qantas Freight Enterprises — which is expected to be floated within the next 12 months — may not be in a position to spend large sums (estimated at between (A$40-50 million) to get the project underway.

Stephen Cleary, group general manager Qantas Freight commenting on the release of the Master Plan said: "There is really nothing new in this.  Until we are provided with further information about costs and the size of land available, it is hard to take a firm position."

Qantas still holds long-term leases over existing facilities at Sydney Airport and may elect to see those leases out rather than take on significant start-up costs by moving to the Northern Precinct.

Based on no changes to the existing airport curfew, capped aircraft movements and flight paths, the Master Plan outlines the initiatives for the airport’s operation and development for the next 20 years based on annualised freight growth of around five per cent.

Running parallel to freight, the airport is expected to handle around 79 million passengers in 2029, more than double the 32 million seen in 2007.

The airport’s ceo Russell Balding said: “Airport facilities including terminals, hangars, aprons, freight facilities, car parking and airport roads all will be progressively upgraded over the next 20 years.

“Technological innovation across the aviation industry will also help to drive environmental improvement. The global fleet of commercial aircraft is undergoing significant technological innovation and environmental improvements.”

Welcoming the release of the Sydney Airport Master Plan, Paul Zalai, manager - Freight and Business Operations, Customs Brokers and Forwarders Council of Australia (CBFCA) said the Sydney Airport plan provides a catalyst to review conventional freight logistics models. "The successful implementation of an “off-airport” terminal by Qantas Freight in August 2007 was an innovative measure to reduce import freight congestion at its existing Sydney terminal," said Zalai. "Longer term opportunities exist to extend beyond this model to take full advantage of by-pass facilities and streamline the movement of consolidated freight direct to forwarders’ premises. In order to meet the projected growth in the freight movements, it is essential that airport, industry and government stakeholders maintain a collaborative working relationship in order to meet the challenges faced within the Sydney operational environment.”

Public comment on the master plan can be submitted by December 16.

After considering the feedback, the airport will submit the plan to the minister for Infrastructure, Transport, Regional Development and Local Government for his consideration.

TNT takes next step in Vietnam expansion plan

Magazine Stories January Issue 2009
Thursday, 28 January 2016

TNT EXPRESS has opened a key network link in Vietnam’s high tech hub in Hanoi.

Its new TNT International and Domestic Operations Centre is designed to handle heavy freight and is part of the company’s strategy to leverage the soaring demand for freight express services between Vietnam, the rest of South East Asia, China and Europe in order to grow its business in the region.

Located in the ICD My Dinh, Tue Liem district, the facility spans 1200 square metres and employs 90 full-time staff who manage the operations 24/7.

It’s part of TNT’s South East Asia-wide investment of EUR100 million over the next five years to build a leadership position in the region.

The investment took off last April, when TNT’s B747-400 ER freighter was re-routed to stop in Singapore en route to Shanghai from its air hub in Liege, Belgium.

“As Vietnam is strategically located as the link between China and South East Asia on our ‘Asia Road Network’ — the completion of the new centre is an integral part of TNT’s growth strategy in the region,” said Onno Boots, regional managing director, TNT South East Asia. “More than 40 per cent of volumes to and from TNT Vietnam will pass through the new centre, while growth is expected to be in the high double digit range for the next five years as it facilitates seamless integration between our air and road networks.”

Shipments passing through Vietnam will be consolidated and processed at the Hanoi centre before making their way north to China and south to Singapore via the Asia Road Network for subsequent airlift to Europe and China respectively, using TNT’s B747-400 ER freighter that flies between Singapore, Shanghai and Liege three times a week. According to TNT, these enhancements to the company’s infrastructure in the region are set to provide customers with the widest range of multi-modal freight services between South East Asia, China and Europe and within South East Asia — and seamless, one-stop-shop solutions that meet all their needs, regardless of the type and scale of the shipment. They are also part of TNT’s plan to establish a leadership position by strengthening its network coverage, connectivity and infrastructure.

“We will now have the capacity to handle four times our current load of both international and domestic freight under one roof, while leveraging the Asia Road Network,” said Boots. “This timely development will also ensure that TNT is well-placed and equipped to support the growth of Hanoi that is fast attracting big investments from global brand names - and its development as a high-tech hub in the region. It is the first in a series of upcoming developments we have lined up for Vietnam to gear up for the future.”

The Hanoi centre is the third facility to be opened in the past three months, following TNT’s new international and domestic road hub in Bangkok and the Singapore Country Depot.

To integrate and align both key stakeholders and TNT’s operations with these targets, the company has appointed Mariken Kruijff as director of strategy implementation. Kruijff will focus on translating TNT’s identified growth drivers into plans that will increase volumes and fuel the company’s growth in a sustainable way over the next five years.

US cartel case claims first overseas scalp as BA executive cops a guilty plea

Magazine Stories January Issue 2009
Thursday, 28 January 2016

A FORMER executive of British Airways World Cargo (BAWC) has agreed to plead guilty, serve eight months in jail and pay a criminal fine for participating in a conspiracy to fix rates for international air cargo shipments, says the US Department of Justice.

According to the charges filed in the US District Court in the District of Columbia, Keith Packer, former commercial general manager for BAWC and his co-conspirators engaged in a conspiracy to fix the air cargo rates charged to customers for international air shipments, including to and from the US, in violation of the Sherman Act. Under the plea agreement, which is subject to court approval, Packer has agreed to serve eight months in jail, pay a US$20,000 criminal fine and cooperate with the Department’s ongoing investigation.

Packer is the first foreign national and third individual charged as part of the Antitrust Division’s ongoing investigation into price fixing in the air transportation industry. Additionally, nine companies have been charged.

According to the charges, from at least as early as March 2002 and continuing until at least February 14, 2006, Packer and his co-conspirators carried out the price-fixing conspiracy by:

• Participating in meetings, conversations and communications to discuss the cargo rates to be charged on shipments to and from the United States;

• Agreeing during those meetings, conversations and communications on certain components of cargo rates to charge on shipments to and from the United States;

• Levying cargo rates in the United States and elsewhere in accordance with the agreements reached and

• Engaging in meetings, conversations and communications in the United States and elsewhere for the purpose of monitoring and enforcing adherence to the agreed-upon cargo rates.

In August 2007, British Airways pleaded guilty and was sentenced to pay a US$300 million criminal fine for conspiring to fix cargo rates for international air shipments, including to and from the United States, and conspiring to fix passenger fuel surcharges for long-haul international air transportation, including between the United States and United Kingdom. The same day, Korean Air Lines pleaded guilty and was sentenced to pay a $300 million criminal fine for conspiring to fix cargo rates charged to customers in the United States and elsewhere for international air shipments and conspiring to fix wholesale and passenger fares for flights from the United States to Korea.

In January 2008, Qantas Airways Limited pleaded guilty and was sentenced to pay a $61 million criminal fine for its role in a conspiracy to fix cargo rates to customers in the United States and elsewhere for international air shipments.

In May 2008, Japan Airlines pleaded guilty and was sentenced to pay a US$110 million criminal fine for conspiring to fix rates for international cargo shipments.

In July 2008, Bruce McCaffrey, Qantas’ former highest-ranking executive employed in the United States, pleaded guilty and was sentenced to serve six months in jail and pay a US$20,000 criminal fine for fixing cargo rates to customers in the United States and elsewhere for international air shipments.

Also in July 2008, SAS Cargo Group A/S (SAS), Cathay Pacific Airways Limited (Cathay), Martinair Holland NV (Martinair), Société Air France (Air France) and Koninklijke Luchtvaart Maatschappij N.V. (KLM Royal Dutch Airlines) pleaded guilty to conspiring to fix prices on air cargo rates. SAS was sentenced to pay a US$52 million criminal fine, Cathay was sentenced to pay a $60 million criminal fine, Martinair was sentenced to pay a US$42 million criminal fine, and Air France-KLM, which now operates under common ownership by a single holding company, was sentenced to pay a US$350 million criminal fine.

In August 2008, Timothy Pfeil, the former highest-ranking cargo executive in the US for SAS, pleaded guilty to conspiring to fix the rates charged to US and international customers on air cargo shipments.

Packer is charged with price fixing in violation of the Sherman Act, which carries a maximum fine of US$1 million and up to 10 years in prison for an individual. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Air freight will post positive figures this year — Keeling

Magazine Stories January Issue 2009
Thursday, 28 January 2016
AIR FREIGHT, particularly its international segment, is "surprisingly resilient" in the face of mayhem in financial markets and a general worsening of US and world economies according to Julian Keeling.

Keeling, head of Los Angeles-based wholesaling air freight company Consolidators International (CII), says while the heady growth of air cargo in the eight to 10 per cent range predicted at the beginning of the year now is seen as much too optimistic, he expects a modest rise in volume of about two to three per cent.

He bases his prediction on the types of cargo carried by air internationally.  "Much of our freight consists of high value industrial items and hi-tech components and finished products," said Keeling.

"These are continuing to sell reasonably well in US and world markets," he claimed. 

He contrasted the comparative strength of air freight with ocean shipping, particularly on the US import side, which has seen declines in volume for the first time in the 21st century.

"Imports into west coast ports are very weak while in a tandem development, fewer ships are dropping anchor along the east coast," he said. 

"Importers selling consumer items like toys, apparel, home furnishings and furniture who use sea transport almost exclusively have become far more cautious in judging consumer intentions this holiday season. With consumers reluctant to open their pocketbooks, importers have pared loads quite drastically."

Keeling agrees that whilst air remains in a comparatively healthier position than sea, it is hardly escaping the effects of a slowing economy.

He pointed to the US-Asia market, where currently an enormous oversupply of lift exists.  "Airlines are cutting cargo space as fast as they can, but overcapacity continues to grow," he said. 

"As overcapacity rises, yields decline. Neither airlines nor forwarders are making much money serving the Asian market," he claimed. 

Keeling believes a number of Asia-based all-cargo carriers will be forced to merge "or declare bankruptcy in 2009”.
The overcapacity on many international routes has one beneficial effect for CII - no shortage of equipment to move cargo.

"We are moving freight as booked with no delays or hassles.  The once often-arrogant attitude of airlines has changed to a friendlier ‘please use us as your carrier’," he said.

Keeling pointed to another sign of strength and confidence in the air freight market. "While a number of airlines have cancelled or delayed some of their passenger jet orders, not one single all-freighter aircraft at either Boeing or Airbus has been cancelled."

Commenting on the situation at CII, Keeling said: "Volume has been running at record levels for the year with more forwarder customers than ever before in CII's 15 year history.  International air freight has shown real strength in very difficult times. I am a bull on air freight," added Keeling.
HACTL
Cathay Cargo
HACTL
Cathay Cargo