RAM Menen, divisional senior vice president cargo at Emirates Airline is to step down to enjoy a well-deserved retirement.
Regarded as one of the most influential and hard-working executives in and for the industry, his successor has big shoes to fill.
Menen began his aviation career in 1976 at Kuwait Airways. He later moved to British Airways to head its cargo operations in Kuwait. In 1984, he joined the Kuwaiti aviation group Alghanim Al Qutub Shipping Agencies and set up and managed its air freight-forwarding unit in Dubai. He moved again, to head the cargo division of Emirates, when that airline was launched in October 1985.
Trained as an engineer, he spearheaded the concept and development of the LD-36 (AMF) type of ULD (Unit Load Device), which increased usable space on each lower deck pallet base by 33 per cent.
He is one of the founding members of The International Air Cargo Association (TIACA), the premier organisation for the entire air logistics business, serving as vice president in 1993 and 1994, and as president, chief executive and chairman of the Board in 1995 and 1996.
He continues to be involved with TIACA as trustee and member of the chairman’s council. Menen also is a member of the IATA Cargo Committee and is also involved, in an advisory capacity, with several other organisations. He has been a strong champion of the air logistics industry and is actively involved in the development of various IT initiatives to address the needs of the industry, helping to focus attention on cargo as an integral part of the world trade process.
In November 2007, Menen was made Personality of the Year (Air Cargo industry) at the Second Annual Middle East Logistics Awards (MELA 2007). He was inducted into the Asia Hall of Fame at the Asian Logistics Awards in October 2006 and into TIACA’s Hall of Fame in April 2005, in recognition of his efforts and contributions to the air cargo industry and for his achievements as head of Emirates’ cargo division.
In April this year, Emirates Skycargo was awarded ‘Cargo Airline of the Year’ by the UK-based Air Cargo News, a fitting climax to a wonderful career. The award comes at a time of continuous growth for SkyCargo. Earlier this year, it significantly boosted its cargo capacity with the addition of three new Boeing 777F aircraft, taking its freighter fleet to 10 aircraft and its dedicated freighter network to 13 destinations. These are Taipei, Chittagong, Eldoret, Lilongwe, Kabul, Almaty, Gothenburg, Zaragoza, Viracopos, Tripoli, Djibouti, Hanoi and Liege. Emirates SkyCargo currently has a route network of more than 130 destinations in 77 countries, spanning six continents across the globe. Why leave now, when Emirates is one of the few airlines in the world to be making good profits from freight operations? Ram Menen: I have turned 60 and the company has a policy of mandatory retirement. I am actually looking forward to retiring. I have been working almost 18-hour days and have neglected my family and friends and now it’s time for them. Who has had the most influence on your career? I had some great mentors, including Geoff Bridges, Ward Johnson and Des Vertannes. Other great personalties also have influenced my life in some shape or form.
What can you tell us about your most likely successor? The selection process - which is very thorough - is still in progress. Fortunately I have a very strong, competent team so my leaving will not change the productivity levels and I expect a smooth transition for my successor.
You have said the industry is populated “by the same people moving jobs”. What can the industry do to encourage new blood? There are a lot of initiatives now. IATA has launched its Training and Development Institute (ITDI), which is the future air cargo executive program. FIATA also has taken this on board and we expect more action at the undergraduate/post graduate level. And I see Richard Branson has been active in promoting the logistics sector, suggesting it is a good industry for a career. Around nine out of 10 people come into this industry by accident, but fortunately this is changing through better understanding of the role of logistics in commerce and as new entrants identify worthwhile career paths.
What is your proudest career achievement at Emirates? The friendships I have made throughout the world while fulfilling the duties of my role. I have no regrets. It has been a wonderful 20-odd years where we have been able to influence a change in the industry itself. It has been very exciting. Getting the various sections of industry to start working together and understanding better how the supply chain works has been very rewarding. The multi-modality of the industry is now better understood.
Do you believe the global economy will improve for SkyCargo this year? Emirates SkyCargo will continue to grow. The first half of the year we had double-digit growth against a market scenario of general contraction. I believe the world economy will remain sluggish with little change for the year ahead and I see general market volatility for up to five years, though things could change if the oil price continues to come down and levels out at more sustainable levels.
What’s your expectation on fuel charge trends in the next two years? I have a better chance of predicting the jackpot numbers in Las Vegas. Oil prices are no longer supply driven, they are subject to speculative trading and therefore it remains extremely difficult to make forecasts. Today’s oil demand is pretty low, yet oil prices are above A$100 dollars. It won’t come down in a hurry because many parts of the global economy are in turmoil and investors are putting money into commodity markets and stock markets and this is distorting the market fundamentals of supply and demand.
Do you see a future for bio-fuels? Bio-fuels are still a long time away. At this time they are much more expensive than traditional fuel supplies and I believe it will be years before they offer a viable alternative.
Emirates SkyCargo’s growth over the last 15 years has been impressive. What are the main remaining markets to conquer? The world is our oyster and we are connecting the dots. We operate into six continents. We are completely market driven, take opportunities where they present themselves and we will continue to expand. Last year we added 15 new destinations and I see no reason why we would slow down. There is a lot to do in Latin America and in Africa. The advantage we have is our location - we are eight hours from 5.8 billion people. Two thirds of the global market is India and China, the fastest developing economies in the world.
Are you experiencing any hostility from rivals or countries such as Germany because of the clout you now have in the market? That’s part of life. We have found a few pockets of resistance, but it’s a competitive world and at the end of the day it’s the customer who decides who they want to go with.
How will the new Qantas alliance impact Emirates SkyCargo? It’s wonderful. It gives both carriers access to a larger network. In Emirates’ case we can draw from Australasia and feed our networks from Dubai. All up we have some 233 destinations that we actually cover. The chemistry is extremely good and so far it has been great working with Qantas.
Do you expect the new Qantas relationship to significantly impact SkyCargo yields? Inbound to Australia or outbound? We want to add value to our customers’ businesses. That’s the focus and once we have that focus everything else flows. Rates are very important and routes need to be viable but those are not always the overriding factors. One must take into account the state of the global economy. We also take pride in our service levels to the customer. Technology is a game-changer. Both Emirates SkyCargo and Qantas Freight Enterprises deliver exceptional levels of service to the customer and we are continually trying to raise the bar. Our customers are coming to realise the value in having good business partners.
Some emerging economies are increasing employee wages and improving living conditions. How does the UAE populace as a whole benefit financially from Emirates’ success? As a successful airline we have this catalytic effect and are proud to have played a part in Dubai’s success. Dubai is now a world-class global destination. Business has prospered and so have the people. Success breeds success. New companies are choosing to set up operations in Dubai. This in turn creates jobs and a wealthy economy. Instead of just being a dot on the map Dubai is now a brand.
At one stage, Etihad made noises about buying Emirates. Is Emirates now so big it makes a buyout almost unachievable? I don’t think it was Etihad making the noise, it was more like the media. Both airlines are independent and very successful and it’s the governments of Dubai and Abu Dhabi that make the aviation decisions.
The A380 has a poor cargo uplift but good passenger loads. Emirates has more than 100 A380s on order, will it need to buy more freighters? The A380 cargo uplift is much better than we expected. In fact the A380 does much better on a 14-hour sector than a B777. On shorter hauls the A380 is not as good but overall we are very happy with the performance. We are getting 12-14 tonnes payload on a 14 hour A380 sector which is good by any standard. The A380 does not compare to the B777 uplift on shorter hauls.
What is the best performing freighter in the fleet? Do you have an ideal cargo fleet mix? We love the B777 and the B747. Both of these aircraft in combination is our perfect solution. The B777 capacity is 100 tonnes with exceptional fuel efficiency. The B747 with its nose capability we use for the bigger type cargo. Using the two in combination enables us to effectively serve all markets. We have achieved the ideal mix with the B777 and B747 freighters. They serve us well as evidenced by our performance.
Why are other carriers seemingly unable to match Emirates’ expansion? I guess you will have to ask them. We believe we are very agile and reactive as well as very proactive. For us it was always about creating a viable global network and that’s what we have done.
You have opened more than 40 destinations in the past decade, but with Europe tipped to be in recession for the next few years and the US in slower than expected recovery mode, do you expect to see a move to consolidation and therefore lower annual growth? We have a good team of guys here at Emirates Skycargo and have met all our objectives to date in terms of expansion. We don’t bring destinations on line without completing a full market analysis backed up by a solid business case. Our bottom line each year shows we have got it right. I see no reason why my successor would change a winning formula.
What are your plans for the future (outside retirement)? Will you stay in the industry on a part-time basis, opt for a consultancy role or is there a ‘how to’ book or two in the mix? There’s nothing part time about me. It’s all or nothing. Why would I leave and then go into a consultancy role elsewhere? I do want to maintain my interest and friendships with the various associations such as IATA and TIACA. All the better if there is some small role I can fill or accomplish in retirement. I am very keen to see the Academy progress and fulfil the vision we have for training new industry management. The future for me is unchartered territory. A book maybe one day. As we speak my immediate target is to do nothing except spend time with my family.
THE AUSTRALIAN Federation of International Forwarders Ltd (AFIF) has made a submission to the government’s ‘Strengthening Australia’s Air Cargo Supply Chain’ discussion paper on behalf of the airfreight sub-committee of the Federation.
In the submission, it says AFIF is particularly interested in issues pertaining to the introduction of proposed Regulated Shipper Scheme (RSS) and Enhanced Air Cargo Examination (EACE) procedures as part of the Government’s wider Supply Chain Security and Counter Terrorism initiatives.
AFIF says that it accepts the need to ensure cargo is secure for export, but believes the proposal (as it stands) will reduce the capabilities of Freight Forwarders (‘forwarders’) to carry out their business; increase the costs of Australian exports in the market place and cause additional and possibly lengthy delays in the export process.
AFIF argues: “We do not believe all shippers will join the Regulated Shipper Scheme (RSS).
In the United Kingdom, for example, fewer than 300 shippers currently are members of that country’s scheme, mainly because shippers see themselves primarily as traders and rely on the forwarder to ensure all security regulations are met on their behalf.
“In Australia, in addition, most shippers sell either ’ex- works’ or ‘FCA’ and will not want the additional costs involved in joining the scheme and maintaining records for no real benefit to themselves.
“We believe many traders will feel that if they themselves do not participate, or facilitate in any way the securing of their own goods, they cannot thereafter be blamed if a device is subsequently found in one of their consignments. Yes, it could be considered to be ‘ignorance is bliss’ but anecdotally, that is what some believe.
“We also believe that allowing cargo from a Regulated Shipper onto an aircraft without further inspection during transit within the supply chain is fraught with danger. It will be necessary as part of the legislation to identify the origin of the cargo being released by a Regulated Shipper prior to it being considered ‘cleared’.
Validation of shippers
There also is a concern over how the government is going to conduct the validation of shippers and continue to regularly inspect them once they are in the scheme. With shippers likely to be located all over Australia, how many validators are going to be needed and at what annual cost?
“(We believe) this will put the onus on the forwarder and again, here we see issues. We believe that most forwarders will be forced to become AACA’s rather than RACA’s as they may not be able to afford to purchase the equipment, train and up-skill adequate numbers of staff and maintain the equipment needed to conduct the requisite enhanced screening of cargo in their warehouses. The geographical diversity of airport locations in Australia will not help the situation.”
AFIF also says that while in Europe most airfreight is exported through a single location in each country, such as London, Amsterdam or Frankfurt, in Australia there will be regular export cargo moving from at least seven locations including: Sydney, Melbourne, Brisbane, Coolangatta, Adelaide, Perth and Cairns – and that the cost of implementing enhanced screening technology in each location would be prohibitive to most forwarders and as such, is unlikely to happen.
This would then affect the forwarders’ ability to do business as they currently do.
For example, most ULDs lodged for export are built in forwarders’ premises off airport. Under the proposed new scheme, this process will be limited to the few (AFIF feels) that will become RACAs.
This will affect profit margins and put the handling of exports out of reach of a large number of forwarders.
It also will change the timing and requirements of when airline Master Air Waybill (MAWB) can be cut and when EDI messaging (FWBs/FHLs) are sent to terminals/carriers. It will no longer be able to be carried out prior to sending cargo to the terminals, thus affecting the acceptance of freight at the terminals. AFIF suggests this alone may be a breach of the Customs Act?
Enhanced screening
Based on the above, AFIF suggests most cargo will be lodged at the CTO for enhanced screening to take place there. This will lead to costs placed on the forwarder which will in turn have to be passed on to the shipper or consignee, because the CTO will of necessity charge for this service. In the United Kingdom, the charge is GBP 0.08kg which is around A$ 0.14kg. AFIF does not expect the figure to be less in Australia and in fact predicts it will be higher due to lower volumes and the high cost of staff and infrastructure.
Also, as most forwarders will not be able to build ULDs, this also will become the responsibility of the CTO, which will charge for assembling cargo into ULDs. When building ULDs, forwarders maximise the space and one concern is that CTOs may not look on the process in the same way and costs may increase if ULDs are not built as cost effectively.
AFIF continues: “We feel CTOs will not be able to cope with increased demand without increasing the lead times for lodgment of export cargo (currently the night before a flight leaves).
“Cargo will have to be lodged earlier to ensure it can be screened prior to departure, which will have a flow-on affect on shippers who currently plan their weekly export cargo to be ready at the end of the week. This may well mean shippers having to alter their procedures, which again will increase costs.
“(Also) we are still, as an industry, unclear on how these procedures will work for trans-shipment cargo, oversize cargo (cargo that does not fit in a x-ray machine) and in particular, perishable cargo which normally originates from a market in the early hours of the morning.
“Another example is that of a touring band that finishes a concert late on a Saturday night in Sydney and is due to perform the following evening in Auckland. How would the equipment make the concert under the proposed scheme? There will be no one around to x-ray cargo at 2.00am in the morning.
“Finally, cargo that originates from either 3PL or 4PL warehouses, run by forwarders or logistics providers on behalf of shippers for whom they pick and pack for export. What is the status of that cargo under this scheme? There are many 3PL providers that currently service the New Zealand market out of Australia and we feel that this business will be severely impacted and could result in companies moving 3PL services back off shore to New Zealand due to increased cost and transit times.”
AFIF summarises by saying it believes: - The scheme will increase the costs of Australian exports, possibly to the point where the consignee looks to buy elsewhere, or at least makes Australia a less competitive country to buy from. - It will slow down the movement of export goods by air, which again could have a detrimental effect on export sales. - It will seriously affect the ability of forwarders to conduct business as they currently do, which might result in more businesses closing down.
“We do not see how this scheme in its current form benefits shippers, forwarders, CTOs, airlines or overseas customers.
“We still firmly believe that the Federal Government has not only an international responsibility as a signatory to Annexe 17 of the ICAO agreement to implement a regulated air cargo security program in Australia, but also a responsibility to provide financial assistance to local industry to attain a viable and sustainable program here.
“We recognise that previously-touted funding assistance programs have been removed, but we believe that the Office of Transport, as the program manager, needs to engage with the relevant Federal Government and Treasury decision makers to bring this back onto the agenda to enable their objectives to be realised.”
References: 1. British Institute Freight Agents - BIFA 2. Incoterms 2010 trade terms - publication of ICC
THE OnCE-heated area of Australia’s designated air cargo routes is in a flux.
A few months ago, cargo movements were strong, both by freighter and belly-hold, but capacity allocation as a designated, scheduled operator on a week-by-week basis was languishing. There was plenty of unutilised tonnage in the register looking for someone to snap it up; the International Air Services Commission (IASC) was sufficiently on top of things to move ahead of schedule a little in passenger route renewals and no one had emailed through a cargo route request for yonks.
Former big player HeavyLift had lost its mojo, hit first by the noise restrictions which grounded its ageing 727s and then by difficulties with a leased new-era 737 freighter which sat on the ground for a lengthy period.
Qantas was doing heavy work on Tasman routes daily and Pacific Air Express was picking up good loads on its PNG and Vanuatu routes as well as the Solomon Islands.
Pionair, reborn as Skyforce Aviation, was working hard on a charters and made its move, seeking 28 tonnes on France Route 3/New Caledonia ex Brisbane and 18 tonnes PNG ex Cairns, using its existing Convair 580 freighters and two newly-acquired BAe 146-200QC aircraft.
Being QC variants, the aircraft have the potential for FIFO and other passenger duties as well as freight.
Next to move was global charter operator Chapman Freeborn, which handles some Australian defence and other government work.
Applying under its corporate name of Alltrans Management, it announced it was leasing a Safair Hercules L382 freighter which it planned to base in Brisbane.
It wanted 32 tonnes of capacity each way on the New Caledonia, PNG and Nauru routes. Michael Grant, general manager of Chapman Freeborn Australia, told the IASC the aircraft “is currently operating under an Australian FAOC and it is our intention to place this aircraft on an Australian AOC as soon as possible”. He pointed out that the Herc was “capable of uplifting out-of-gauge cargo via its ramp loading configuration; this is cargo that might not otherwise by airlifted”.
Grant said Chapman Freeborn had generated interest from the “oil and gas, construction and freight forwarding industries”.
Next to move was Qantas which told IASC it was again planning to introduce dedicated freight services to PNG and sought 27.5 tonnes per week.
Routings would be Melbourne-Brisbane-Port Moresby-Melbourne and Cairns-Brisbane-Port Moresby-Cairns.
Tony Wheelans, executive manager, government and international relations, said Qantas wanted to start operations almost immediately “and proposes to operate B737-300 aircraft from the fleet of our wholly owned subsidiary company Express Freighters Australia”.
It later bumped up the bid to 35 tonnes.
At one stage Qantas held 34 tonnes capacity on the PNG route, later reduced to 17.5 tonnes before deciding not to operate EFA freighters on the run.
Qantas found itself in the rather unusual situation of being supported by Skyforce, whose general manager Michael Lee wrote to IASC saying: “We respectfully submit that both Skyforce and Qantas are capable of operating the proposed services (for which capacity is available) and are bonafide Australian companies with valid and existing Australian Air Operators certificates, proven operational charter experience in and out of PNG and New Caledonia and are the operators of the aircraft that are put forward to provide the services.”
On the same day, Pacific Air Express (Australia) weighed in, saying it was keen to secure the three B737 slots for Nauru which the air services agreement allows for.
PAE already has the IASC big tick as an Australian carrier, along with a good track record for dependability on Pacific operations.
PAE managing director Gary Clifford told IASC the company was currently operating three B737F charter services weekly between Brisbane and Nauru, providing logistics support for the refugee processing centre.
“PAE proposes converting the three charter services each week into three scheduled services.” PAE also wanted a shared weekly B737 freighter service with Air Caledonie International on the Brisbane-Noumea-Vila-Brisbane routes.
Chapman Freeborn then said it was withdrawing its route allocation bids, but Skyforce kept up the pressure on IASC, noting that PAE was linking up with New Caledonia’s national carrier while Skyforce would be an all-Australian competitor to Aircalin’s operations.
France 3/New Caledonia allows only one Australian-designated cargo flight weekly, to a maximum of 28 tonnes. This was not utilised as at early May. And as at early May the PNG unallocated tonnage stood at 77.5 tonnes.
The global plan to have the International Civil Aviation Organization (ICAO) devise a system to regulate the airline industry’s greenhouse gas emissions is looking very shaky, commentators say.
Moves by the Australian government to restructure the Import Processing Charge (IPC) to recover the costs of all import-related cargo and trade functions undertaken by the Customs and Border Protection Service have been slammed by advocacy body Freight & Trade Alliance (FTA).
RAM Menen, divisional senior vice president cargo at Emirates Airline is to step down to enjoy a well-deserved retirement.
Regarded as one of the most influential and hard-working executives in and for the industry, his successor has big shoes to fill.
Menen began his aviation career in 1976 at Kuwait Airways. He later moved to British Airways to head its cargo operations in Kuwait. In 1984, he joined the Kuwaiti aviation group Alghanim Al Qutub Shipping Agencies and set up and managed its air freight-forwarding unit in Dubai. He moved again, to head the cargo division of Emirates, when that airline was launched in October 1985.
Trained as an engineer, he spearheaded the concept and development of the LD-36 (AMF) type of ULD (Unit Load Device), which increased usable space on each lower deck pallet base by 33 per cent.
He is one of the founding members of The International Air Cargo Association (TIACA), the premier organisation for the entire air logistics business, serving as vice president in 1993 and 1994, and as president, chief executive and chairman of the Board in 1995 and 1996.
He continues to be involved with TIACA as trustee and member of the chairman’s council. Menen also is a member of the IATA Cargo Committee and is also involved, in an advisory capacity, with several other organisations. He has been a strong champion of the air logistics industry and is actively involved in the development of various IT initiatives to address the needs of the industry, helping to focus attention on cargo as an integral part of the world trade process.
In November 2007, Menen was made Personality of the Year (Air Cargo industry) at the Second Annual Middle East Logistics Awards (MELA 2007). He was inducted into the Asia Hall of Fame at the Asian Logistics Awards in October 2006 and into TIACA’s Hall of Fame in April 2005, in recognition of his efforts and contributions to the air cargo industry and for his achievements as head of Emirates’ cargo division.
In April this year, Emirates Skycargo was awarded ‘Cargo Airline of the Year’ by the UK-based Air Cargo News, a fitting climax to a wonderful career. The award comes at a time of continuous growth for SkyCargo. Earlier this year, it significantly boosted its cargo capacity with the addition of three new Boeing 777F aircraft, taking its freighter fleet to 10 aircraft and its dedicated freighter network to 13 destinations. These are Taipei, Chittagong, Eldoret, Lilongwe, Kabul, Almaty, Gothenburg, Zaragoza, Viracopos, Tripoli, Djibouti, Hanoi and Liege. Emirates SkyCargo currently has a route network of more than 130 destinations in 77 countries, spanning six continents across the globe. Why leave now, when Emirates is one of the few airlines in the world to be making good profits from freight operations? Ram Menen: I have turned 60 and the company has a policy of mandatory retirement. I am actually looking forward to retiring. I have been working almost 18-hour days and have neglected my family and friends and now it’s time for them. Who has had the most influence on your career? I had some great mentors, including Geoff Bridges, Ward Johnson and Des Vertannes. Other great personalties also have influenced my life in some shape or form.
What can you tell us about your most likely successor? The selection process - which is very thorough - is still in progress. Fortunately I have a very strong, competent team so my leaving will not change the productivity levels and I expect a smooth transition for my successor.
You have said the industry is populated “by the same people moving jobs”. What can the industry do to encourage new blood? There are a lot of initiatives now. IATA has launched its Training and Development Institute (ITDI), which is the future air cargo executive program. FIATA also has taken this on board and we expect more action at the undergraduate/post graduate level. And I see Richard Branson has been active in promoting the logistics sector, suggesting it is a good industry for a career. Around nine out of 10 people come into this industry by accident, but fortunately this is changing through better understanding of the role of logistics in commerce and as new entrants identify worthwhile career paths.
What is your proudest career achievement at Emirates? The friendships I have made throughout the world while fulfilling the duties of my role. I have no regrets. It has been a wonderful 20-odd years where we have been able to influence a change in the industry itself. It has been very exciting. Getting the various sections of industry to start working together and understanding better how the supply chain works has been very rewarding. The multi-modality of the industry is now better understood.
Do you believe the global economy will improve for SkyCargo this year? Emirates SkyCargo will continue to grow. The first half of the year we had double-digit growth against a market scenario of general contraction. I believe the world economy will remain sluggish with little change for the year ahead and I see general market volatility for up to five years, though things could change if the oil price continues to come down and levels out at more sustainable levels.
What’s your expectation on fuel charge trends in the next two years? I have a better chance of predicting the jackpot numbers in Las Vegas. Oil prices are no longer supply driven, they are subject to speculative trading and therefore it remains extremely difficult to make forecasts. Today’s oil demand is pretty low, yet oil prices are above A$100 dollars. It won’t come down in a hurry because many parts of the global economy are in turmoil and investors are putting money into commodity markets and stock markets and this is distorting the market fundamentals of supply and demand.
Do you see a future for bio-fuels? Bio-fuels are still a long time away. At this time they are much more expensive than traditional fuel supplies and I believe it will be years before they offer a viable alternative.
Emirates SkyCargo’s growth over the last 15 years has been impressive. What are the main remaining markets to conquer? The world is our oyster and we are connecting the dots. We operate into six continents. We are completely market driven, take opportunities where they present themselves and we will continue to expand. Last year we added 15 new destinations and I see no reason why we would slow down. There is a lot to do in Latin America and in Africa. The advantage we have is our location - we are eight hours from 5.8 billion people. Two thirds of the global market is India and China, the fastest developing economies in the world.
Are you experiencing any hostility from rivals or countries such as Germany because of the clout you now have in the market? That’s part of life. We have found a few pockets of resistance, but it’s a competitive world and at the end of the day it’s the customer who decides who they want to go with.
How will the new Qantas alliance impact Emirates SkyCargo? It’s wonderful. It gives both carriers access to a larger network. In Emirates’ case we can draw from Australasia and feed our networks from Dubai. All up we have some 233 destinations that we actually cover. The chemistry is extremely good and so far it has been great working with Qantas.
Do you expect the new Qantas relationship to significantly impact SkyCargo yields? Inbound to Australia or outbound? We want to add value to our customers’ businesses. That’s the focus and once we have that focus everything else flows. Rates are very important and routes need to be viable but those are not always the overriding factors. One must take into account the state of the global economy. We also take pride in our service levels to the customer. Technology is a game-changer. Both Emirates SkyCargo and Qantas Freight Enterprises deliver exceptional levels of service to the customer and we are continually trying to raise the bar. Our customers are coming to realise the value in having good business partners.
Some emerging economies are increasing employee wages and improving living conditions. How does the UAE populace as a whole benefit financially from Emirates’ success? As a successful airline we have this catalytic effect and are proud to have played a part in Dubai’s success. Dubai is now a world-class global destination. Business has prospered and so have the people. Success breeds success. New companies are choosing to set up operations in Dubai. This in turn creates jobs and a wealthy economy. Instead of just being a dot on the map Dubai is now a brand.
At one stage, Etihad made noises about buying Emirates. Is Emirates now so big it makes a buyout almost unachievable? I don’t think it was Etihad making the noise, it was more like the media. Both airlines are independent and very successful and it’s the governments of Dubai and Abu Dhabi that make the aviation decisions.
The A380 has a poor cargo uplift but good passenger loads. Emirates has more than 100 A380s on order, will it need to buy more freighters? The A380 cargo uplift is much better than we expected. In fact the A380 does much better on a 14-hour sector than a B777. On shorter hauls the A380 is not as good but overall we are very happy with the performance. We are getting 12-14 tonnes payload on a 14 hour A380 sector which is good by any standard. The A380 does not compare to the B777 uplift on shorter hauls.
What is the best performing freighter in the fleet? Do you have an ideal cargo fleet mix? We love the B777 and the B747. Both of these aircraft in combination is our perfect solution. The B777 capacity is 100 tonnes with exceptional fuel efficiency. The B747 with its nose capability we use for the bigger type cargo. Using the two in combination enables us to effectively serve all markets. We have achieved the ideal mix with the B777 and B747 freighters. They serve us well as evidenced by our performance.
Why are other carriers seemingly unable to match Emirates’ expansion? I guess you will have to ask them. We believe we are very agile and reactive as well as very proactive. For us it was always about creating a viable global network and that’s what we have done.
You have opened more than 40 destinations in the past decade, but with Europe tipped to be in recession for the next few years and the US in slower than expected recovery mode, do you expect to see a move to consolidation and therefore lower annual growth? We have a good team of guys here at Emirates Skycargo and have met all our objectives to date in terms of expansion. We don’t bring destinations on line without completing a full market analysis backed up by a solid business case. Our bottom line each year shows we have got it right. I see no reason why my successor would change a winning formula.
What are your plans for the future (outside retirement)? Will you stay in the industry on a part-time basis, opt for a consultancy role or is there a ‘how to’ book or two in the mix? There’s nothing part time about me. It’s all or nothing. Why would I leave and then go into a consultancy role elsewhere? I do want to maintain my interest and friendships with the various associations such as IATA and TIACA. All the better if there is some small role I can fill or accomplish in retirement. I am very keen to see the Academy progress and fulfil the vision we have for training new industry management. The future for me is unchartered territory. A book maybe one day. As we speak my immediate target is to do nothing except spend time with my family.
THE AUSTRALIAN Federation of International Forwarders Ltd (AFIF) has made a submission to the government’s ‘Strengthening Australia’s Air Cargo Supply Chain’ discussion paper on behalf of the airfreight sub-committee of the Federation.
In the submission, it says AFIF is particularly interested in issues pertaining to the introduction of proposed Regulated Shipper Scheme (RSS) and Enhanced Air Cargo Examination (EACE) procedures as part of the Government’s wider Supply Chain Security and Counter Terrorism initiatives.
AFIF says that it accepts the need to ensure cargo is secure for export, but believes the proposal (as it stands) will reduce the capabilities of Freight Forwarders (‘forwarders’) to carry out their business; increase the costs of Australian exports in the market place and cause additional and possibly lengthy delays in the export process.
AFIF argues: “We do not believe all shippers will join the Regulated Shipper Scheme (RSS).
In the United Kingdom, for example, fewer than 300 shippers currently are members of that country’s scheme, mainly because shippers see themselves primarily as traders and rely on the forwarder to ensure all security regulations are met on their behalf.
“In Australia, in addition, most shippers sell either ’ex- works’ or ‘FCA’ and will not want the additional costs involved in joining the scheme and maintaining records for no real benefit to themselves.
“We believe many traders will feel that if they themselves do not participate, or facilitate in any way the securing of their own goods, they cannot thereafter be blamed if a device is subsequently found in one of their consignments. Yes, it could be considered to be ‘ignorance is bliss’ but anecdotally, that is what some believe.
“We also believe that allowing cargo from a Regulated Shipper onto an aircraft without further inspection during transit within the supply chain is fraught with danger. It will be necessary as part of the legislation to identify the origin of the cargo being released by a Regulated Shipper prior to it being considered ‘cleared’.
Validation of shippers
There also is a concern over how the government is going to conduct the validation of shippers and continue to regularly inspect them once they are in the scheme. With shippers likely to be located all over Australia, how many validators are going to be needed and at what annual cost?
“(We believe) this will put the onus on the forwarder and again, here we see issues. We believe that most forwarders will be forced to become AACA’s rather than RACA’s as they may not be able to afford to purchase the equipment, train and up-skill adequate numbers of staff and maintain the equipment needed to conduct the requisite enhanced screening of cargo in their warehouses. The geographical diversity of airport locations in Australia will not help the situation.”
AFIF also says that while in Europe most airfreight is exported through a single location in each country, such as London, Amsterdam or Frankfurt, in Australia there will be regular export cargo moving from at least seven locations including: Sydney, Melbourne, Brisbane, Coolangatta, Adelaide, Perth and Cairns – and that the cost of implementing enhanced screening technology in each location would be prohibitive to most forwarders and as such, is unlikely to happen.
This would then affect the forwarders’ ability to do business as they currently do.
For example, most ULDs lodged for export are built in forwarders’ premises off airport. Under the proposed new scheme, this process will be limited to the few (AFIF feels) that will become RACAs.
This will affect profit margins and put the handling of exports out of reach of a large number of forwarders.
It also will change the timing and requirements of when airline Master Air Waybill (MAWB) can be cut and when EDI messaging (FWBs/FHLs) are sent to terminals/carriers. It will no longer be able to be carried out prior to sending cargo to the terminals, thus affecting the acceptance of freight at the terminals. AFIF suggests this alone may be a breach of the Customs Act?
Enhanced screening
Based on the above, AFIF suggests most cargo will be lodged at the CTO for enhanced screening to take place there. This will lead to costs placed on the forwarder which will in turn have to be passed on to the shipper or consignee, because the CTO will of necessity charge for this service. In the United Kingdom, the charge is GBP 0.08kg which is around A$ 0.14kg. AFIF does not expect the figure to be less in Australia and in fact predicts it will be higher due to lower volumes and the high cost of staff and infrastructure.
Also, as most forwarders will not be able to build ULDs, this also will become the responsibility of the CTO, which will charge for assembling cargo into ULDs. When building ULDs, forwarders maximise the space and one concern is that CTOs may not look on the process in the same way and costs may increase if ULDs are not built as cost effectively.
AFIF continues: “We feel CTOs will not be able to cope with increased demand without increasing the lead times for lodgment of export cargo (currently the night before a flight leaves).
“Cargo will have to be lodged earlier to ensure it can be screened prior to departure, which will have a flow-on affect on shippers who currently plan their weekly export cargo to be ready at the end of the week. This may well mean shippers having to alter their procedures, which again will increase costs.
“(Also) we are still, as an industry, unclear on how these procedures will work for trans-shipment cargo, oversize cargo (cargo that does not fit in a x-ray machine) and in particular, perishable cargo which normally originates from a market in the early hours of the morning.
“Another example is that of a touring band that finishes a concert late on a Saturday night in Sydney and is due to perform the following evening in Auckland. How would the equipment make the concert under the proposed scheme? There will be no one around to x-ray cargo at 2.00am in the morning.
“Finally, cargo that originates from either 3PL or 4PL warehouses, run by forwarders or logistics providers on behalf of shippers for whom they pick and pack for export. What is the status of that cargo under this scheme? There are many 3PL providers that currently service the New Zealand market out of Australia and we feel that this business will be severely impacted and could result in companies moving 3PL services back off shore to New Zealand due to increased cost and transit times.”
AFIF summarises by saying it believes: - The scheme will increase the costs of Australian exports, possibly to the point where the consignee looks to buy elsewhere, or at least makes Australia a less competitive country to buy from. - It will slow down the movement of export goods by air, which again could have a detrimental effect on export sales. - It will seriously affect the ability of forwarders to conduct business as they currently do, which might result in more businesses closing down.
“We do not see how this scheme in its current form benefits shippers, forwarders, CTOs, airlines or overseas customers.
“We still firmly believe that the Federal Government has not only an international responsibility as a signatory to Annexe 17 of the ICAO agreement to implement a regulated air cargo security program in Australia, but also a responsibility to provide financial assistance to local industry to attain a viable and sustainable program here.
“We recognise that previously-touted funding assistance programs have been removed, but we believe that the Office of Transport, as the program manager, needs to engage with the relevant Federal Government and Treasury decision makers to bring this back onto the agenda to enable their objectives to be realised.”
References: 1. British Institute Freight Agents - BIFA 2. Incoterms 2010 trade terms - publication of ICC
THE OnCE-heated area of Australia’s designated air cargo routes is in a flux.
A few months ago, cargo movements were strong, both by freighter and belly-hold, but capacity allocation as a designated, scheduled operator on a week-by-week basis was languishing. There was plenty of unutilised tonnage in the register looking for someone to snap it up; the International Air Services Commission (IASC) was sufficiently on top of things to move ahead of schedule a little in passenger route renewals and no one had emailed through a cargo route request for yonks.
Former big player HeavyLift had lost its mojo, hit first by the noise restrictions which grounded its ageing 727s and then by difficulties with a leased new-era 737 freighter which sat on the ground for a lengthy period.
Qantas was doing heavy work on Tasman routes daily and Pacific Air Express was picking up good loads on its PNG and Vanuatu routes as well as the Solomon Islands.
Pionair, reborn as Skyforce Aviation, was working hard on a charters and made its move, seeking 28 tonnes on France Route 3/New Caledonia ex Brisbane and 18 tonnes PNG ex Cairns, using its existing Convair 580 freighters and two newly-acquired BAe 146-200QC aircraft.
Being QC variants, the aircraft have the potential for FIFO and other passenger duties as well as freight.
Next to move was global charter operator Chapman Freeborn, which handles some Australian defence and other government work.
Applying under its corporate name of Alltrans Management, it announced it was leasing a Safair Hercules L382 freighter which it planned to base in Brisbane.
It wanted 32 tonnes of capacity each way on the New Caledonia, PNG and Nauru routes. Michael Grant, general manager of Chapman Freeborn Australia, told the IASC the aircraft “is currently operating under an Australian FAOC and it is our intention to place this aircraft on an Australian AOC as soon as possible”. He pointed out that the Herc was “capable of uplifting out-of-gauge cargo via its ramp loading configuration; this is cargo that might not otherwise by airlifted”.
Grant said Chapman Freeborn had generated interest from the “oil and gas, construction and freight forwarding industries”.
Next to move was Qantas which told IASC it was again planning to introduce dedicated freight services to PNG and sought 27.5 tonnes per week.
Routings would be Melbourne-Brisbane-Port Moresby-Melbourne and Cairns-Brisbane-Port Moresby-Cairns.
Tony Wheelans, executive manager, government and international relations, said Qantas wanted to start operations almost immediately “and proposes to operate B737-300 aircraft from the fleet of our wholly owned subsidiary company Express Freighters Australia”.
It later bumped up the bid to 35 tonnes.
At one stage Qantas held 34 tonnes capacity on the PNG route, later reduced to 17.5 tonnes before deciding not to operate EFA freighters on the run.
Qantas found itself in the rather unusual situation of being supported by Skyforce, whose general manager Michael Lee wrote to IASC saying: “We respectfully submit that both Skyforce and Qantas are capable of operating the proposed services (for which capacity is available) and are bonafide Australian companies with valid and existing Australian Air Operators certificates, proven operational charter experience in and out of PNG and New Caledonia and are the operators of the aircraft that are put forward to provide the services.”
On the same day, Pacific Air Express (Australia) weighed in, saying it was keen to secure the three B737 slots for Nauru which the air services agreement allows for.
PAE already has the IASC big tick as an Australian carrier, along with a good track record for dependability on Pacific operations.
PAE managing director Gary Clifford told IASC the company was currently operating three B737F charter services weekly between Brisbane and Nauru, providing logistics support for the refugee processing centre.
“PAE proposes converting the three charter services each week into three scheduled services.” PAE also wanted a shared weekly B737 freighter service with Air Caledonie International on the Brisbane-Noumea-Vila-Brisbane routes.
Chapman Freeborn then said it was withdrawing its route allocation bids, but Skyforce kept up the pressure on IASC, noting that PAE was linking up with New Caledonia’s national carrier while Skyforce would be an all-Australian competitor to Aircalin’s operations.
France 3/New Caledonia allows only one Australian-designated cargo flight weekly, to a maximum of 28 tonnes. This was not utilised as at early May. And as at early May the PNG unallocated tonnage stood at 77.5 tonnes.
The global plan to have the International Civil Aviation Organization (ICAO) devise a system to regulate the airline industry’s greenhouse gas emissions is looking very shaky, commentators say.
Moves by the Australian government to restructure the Import Processing Charge (IPC) to recover the costs of all import-related cargo and trade functions undertaken by the Customs and Border Protection Service have been slammed by advocacy body Freight & Trade Alliance (FTA).
RAM Menen, divisional senior vice president cargo at Emirates Airline is to step down to enjoy a well-deserved retirement. 
