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Thursday, 20 September 2018
A report commissioned by the Federal Government to ‘unlock’ the potential for trade with India has identified 10 sectors where Australia’s advantages match India’s needs and 10 states in India where Australian traders could best focus their efforts.
Key recommendations for these sectors and markets are detailed in the report.
Titled An India Economic Strategy to 2035: Navigating from Potential to Delivery, it was researched and written by Peter Varghese AO, chancellor of the University of Queensland and former secretary of the Department of Foreign Affairs and Trade.
A copy can be found at indiaeconomicstrategy.dfat.gov.au.
The brief instructed Varghese to look beyond the immediate horizon and provide a roadmap for unlocking the opportunities that would help India and Australia grow together.
It is been described as being about cementing India in as a priority economic partner.
Australia has enjoyed 27 years of consecutive annual economic growth, but government policy – and common sense – is to continue seeking out new markets and opportunity.
This strategy is directly aligned with the continuing well-being of international air cargo and the Australian transport and logistics sector.
The report judges that no single market over the next 20 years will offer more growth opportunities for Australia than India. By 2035, India will overtake China as the world’s most populous country. It also is poised to become the third-largest economy after China and the United States.
India’s scale alone encourages ambition, but it is the is the complementary areas between Australia’s and India’s economies that will determine success.
The foundations for an enhanced economic partnership with India are strong, underpinned by people-to-people ties and shared values.
The Government is now consulting with Australian and Indian stakeholders on how best to progress the report’s recommendations.
The report identifies 10 sectors where Australia’s competitive advantages match India’s needs, and 10 states in India where Australia should focus efforts. Key recommendations for these sectors and markets are detailed in the report.
The Government will consider its response to Varghese’s report following consultation with Australian and Indian stakeholders.
The Foreign Policy White Paper places India in the front rank of Australia’s international partnerships, recognising converging strategic interests. Implementation of the report’s findings will give similar priority to the economic dimension of the relationship.
A copy of the report can be found at indiaeconomicstrategy.dfat.gov.au.
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Thursday, 20 September 2018
Australia’s New South Wales government has released plans for Sydney Gateway, a new toll-free motorway connection between the new M5 interchange at St Peters and the airport that will cut travel times from Parramatta to Sydney Airport by up to 40 minutes and from Campbelltown to Sydney Airport by up to 20 minutes.
The Sydney Gateway will also include:
• Relocation and reconfiguration of Airport Drive, connecting to the International Terminal.
• Major upgrades to Qantas Drive and Joyce Drive around the Domestic Terminal, including a redesigned intersection into the Terminal.
• Duplication of the Port Botany freight rail line, to increase freight rail capacity to Australia’s largest container port.
The new toll free M12 motorway will service Western Sydney Airport at Badgerys Creek.
Sydney Gateway will be subject to comprehensive environmental assessment to secure planning approvals, with the community invited to provide feedback at key stages.
The NSW government says it will work closely with Sydney Airport Corporation, the Australian Rail Track Corporation and other key stakeholders to progress Sydney Gateway and minimise impacts on the community during delivery.
Subject to planning approvals, the road components of Sydney Gateway are expected to be complete in 2023, with an estimated cost between A$2.2 and A$2.6 billion.
However, the Sydney Gateway project is welcome but does not go far enough to reduce heavy container freight truck volumes, according to the Australian Federation of International Forwarders (AFIF).
Brian Lovell, chief executive of AFIF says more needs to be done to alleviate worsening traffic bottlenecks that could impact Australia’s key import /export trading sector.
“AFIF supports infrastructure development to improve traffic flows and reduce congestion around the airport and port freight precincts. However, this project does little to serve the best interests of the road and air freight industry,” said Lovell.
“The Port Botany Rail Duplication is long overdue and will assist with the flow of containers by rail to and from Port Botany.
But: “The Sydney Gateway road extension stops at the domestic passenger terminal and does not connect to Port Botany, so the truck congestion around the local roads in the Mascot and Botany port precinct will continue to grow - especially during the construction phase until 2023.
“Widening Joyce Drive to three lanes each way and replacing the rail level-crossing at General Holmes Drive with a new railway underpass at Wentworth Avenue will assist road traffic flow to the airport, however Foreshore Drive and Botany Road will continue to carry heavy container truck volumes into the future.
“Sydney Airport Corp’s granting of an easement to the NSW Government on the Northern Lands area for A$170 million, to enable Sydney Gateway to be built there, effectively removes another location for the CTOs to develop their on-airport operations.
“It appears the priorities of the road and air freight industry are bypassed in the planning process, again,” Lovell concluded.
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Thursday, 12 July 2018
DOMINIC Kennedy was appointed managing director of Virgin Atlantic Cargo in August 2017, bringing a wealth of cargo knowledge and experience to the role as a key member of the airline’s cargo leadership team since 2008.
In his previous post of director, Commercial Planning, Dominic was responsible for the commercial planning of Virgin Atlantic’s cargo division, leading its commercial activities to achieve agreed targets and standards for financial and trading performance as well as service quality.
This role incorporated functional responsibility for revenue management, capacity control, pricing, commercial insight, revenue integrity and joint venture activities - helping the airline to maximise the business potential of its global network.
Dominic joined Virgin Atlantic in March 2005 in the airline’s Fleet and Network planning team, providing revenue analysis on all business propositions affecting Virgin Atlantic’s capacity and revenue, including aircraft acquisition, new route studies, configuration changes and product investment.
He moved to the airline’s Cargo division in 2008 to create and manage a centralised Price and Product team to focus on all aspects of pricing as well as management of internal and external incentive programs, the development of sales intelligence capabilities, commercial contracting, product strategy and interline agreements.
In November 2010, he was given responsibility for Virgin Atlantic Cargo’s Revenue Management and Capacity Control function, accountable for optimising the return on its global cargo capacity. This included route management, capacity control, operational research and ULD control.
In this interview, Kennedy explains his global vision and priorities for the airline and the greater role digitisation is playing in cargo logistics.
You’ve been in your role for nearly 12 months. How has it gone and what are your priorities?
Dominic Kennedy: We had a great year in 2017 which saw our volumes grow six per cent to a five-year high and our revenues increase nine per cent year-on-year.
We’ve seen a continuation of that growth in 2018 and although we set a fairly ambitious target for this year, our latest figures show we’re on track to achieve our goal.
More recently, we’ve seen a slight softening of the ex-UK market versus last year but this was expected given the change in sterling/dollar exchange rates year-on-year. Our business overall from the UK still remains very strong, we’re starting to see more demand for our capacity out of the US, and we’re also getting a positive contribution from the rest of our network serving other important cargo markets including China, India, South Africa, Nigeria and of course Australia.
In terms of priorities, we have three clear areas of focus: Greater simplicity to make Virgin Atlantic easier to do business with; digitisation through new technologies – our hope is to offer full self-service capability during 2019 and leveraging our partnerships with Delta and Virgin Australia.
In terms of those priorities, where are you today?
We are making some very positive progress. We see some clear linkages between simplicity and digitisation, using new and emerging technologies to drive benefit for our customers when they do business with Virgin Atlantic Cargo. But simplicity is also about us looking at every aspect of our business, to ensure that at all our touch points, we are delivering our product as efficiently as possible.
One clear objective we have is to develop a self-service platform that will enable customers to interact with us in a different way. This will be driven by a recently-advertised role that I introduced to our leadership team, ‘head of Digital and Distribution’, and I expect to make this appointment very soon. It’s a challenge and an opportunity but technology and how we can better-embrace innovation is very exciting in terms of the ability to remove paper, modernise and automate warehouses and deliver self-service for our customers.
If you look at the way the air cargo industry works today, there is so much we can work on together. I think as an industry we’ve seen some positive initial steps in terms of taking paper out of the equation but you only have to walk through a warehouse operation to see how far we still need to go. I have no doubt that new technology will help us further enhance our operational capability.
As consumers, we can all see how the world is changing because we live in an online society where everything moves faster and we have visibility of our purchases from the moment we place an order until the point of delivery. I want our customers to have the option of being able to do everything they do today through telephone and email via a digital platform: Requesting pricing, creating waybills, ordering AWB stock, accounting, tracking, raising queries.
We’ve got lots of great ideas and now our focus is on working with our partners, handling agents and a soon-to-be-announced technology provider to ensure we can deliver a seamless experience for our customers.
This will also support the business in terms of leveraging our partnerships. As we more closely align with our JV partner, Delta Cargo, we are excited by the shared journey we are embarking upon. I’ve had customers tell me they love working with Virgin but they wish we were the size of Delta. Customers increasingly are demanding scale and reach, and partnering with Delta gives us and our customers much more choice than before. We’re into the implementation stage of our Winning Together strategy with Delta, and we’re learning a lot from each other. We’re excited about our teams coming together and collectively pooling ideas and experiences. This is certainly helped by the fact that our JV partner is also a shareholder so has a clear interest in the success of Virgin Atlantic. The main thing is that we want to build a JV that offers clear and meaningful benefits for our customers but which still enables them to express their airline of choice to work with.
You’ve worked with Virgin Australia for a long time. How is that relationship performing?
It will be 10 years in 2019. We really enjoy working with the Virgin Australia Cargo team and supporting the airline’s long-haul international route expansion. Its services from Sydney, Brisbane and Melbourne to Los Angeles are well established and the launch of Melbourne-Hong Kong and now Sydney-Hong Kong have added a very positive new dimension. Customers in Asia and Australia are extremely positive about additional capacity on such prime routes to and from Greater China. The e-commerce market in the region alone is among the fastest-growing in the world.
Our team in Australia are especially happy to be marketing Sydney-Hong Kong again. It’s a route we know well, having operated it ourselves until mid-2014, so we’re expecting it to get off to a very positive start.
IATA says international airfreight market growth is slowing after customer stock levels largely were replenished in Q1. Do you see room for strong growth in 2018-19?
Absolutely. Our pharma product is going from strength to strength, we are being inundated with two-pallet car bookings, the perishable season relies on speed to market and our reliability for offering a simple but effective service will put us in a strong position for this year and next.
Brexit keeps dragging on, with sceptics concerned about trucking delays at ferry terminals and the issue of the Irish border. Is there a bright side to Brexit for VA Cargo or is it all ‘wait and see’?
We are actively engaged in a number of external groups and industry bodies to understand the implications of Brexit, the risks and opportunities, and trying to ensure the UK government hears the voice of the cargo industry. We meet regularly with the Department for Transport and will continue to do so as the government sets out its plans.
We want to see positive progress as quickly as possible, and we will explore any opportunities that emerge from the final deal. The frictionless movement of goods between the UK and EU is essential, as a significant proportion of air freight arrives from the EU by road, rail, or sea, before boarding our aircraft. We need to ensure that goods can continue to flow seamlessly across borders as they do today.
What is Virgin Atlantic Cargo’s take on blockchain? Are you going to adopt it in any way?
I’m excited by the potential of blockchain but we still have a lot to do and learn. We are actively exploring how blockchain can support our digital ambitions and the modernisation of our business. A secure ledger that removes paper from the point a purchase order is raised through to the receipt of goods by the consumer, for example, will represent a big step forward.
Virgin Atlantic has enjoyed success with specialist cargo programs such as pharma and high value freight. Other airlines seem focused on the same segments – are you diversifying and targeting any other potentially-lucrative verticals?
Pharma is a real success story for us. Our volumes in the first five months of 2018 were around 50 per cent higher year-on-year and we’re building a very solid reputation. The opening of our Pharma Zone with Delta Cargo at Heathrow in October 2017 was a sign of our intent and we’ve now confirmed our GDP compliance for both the Pharma Zone and our global headquarters. We expect our best-ever year for pharma in this fast-growing, very specialist and highly-regulated part of the air cargo market.
We’re also seeing the benefit of being a big player on the transatlantic market, which is the world’s biggest pharma trade lane. Alongside our JV partner, Delta Cargo, we now offer around a quarter of all transatlantic cargo capacity. We’re also seeing our pharma volumes increase on our China and India routes. Similarly, our network is ideal to support the growth of e-commerce volumes, again to and from the US as well as major markets in China and Australia, the latter through our partnership with Virgin Australia.
Moving high value cargo has been a specialisation of ours for a long time, including two-pallet prestige car shipments. Overall, we remain committed to selling a simple product portfolio, one that’s easy to understand and delivers what we promise. That’s what our customers tell us they want and it is going to give us the best financial return.
There have been recent reports claiming pharma airfreight consignments are prone to mishandling, leading to high losses for those customers. Is the situation as bad as it’s painted?
I would completely challenge that. We’ve had a lot of focus on pharmaceuticals and the strict regulatory environment and compliance approval process. The level of rigour that is required to achieve and maintain GDP (Good Distribution Practice) status leaves no room for any level of mishandling by carriers that have been awarded accreditations like GDP or IATA CEIV Pharma.
Obviously, if there are any companies still choosing to place high value, temperature-sensitive pharma shipments with carriers that are not able to demonstrate the processes required to achieve those statuses, then they may be open to the possibility of mishandling.
However, our experience of pharma companies and their forwarding partners is that they are very professional and knowledgeable, and they can easily identify the ‘haves’ from the ‘have nots’. Pharma business is making a really important contribution to our growth, but we clearly understand we have to earn that, based on our performance for every single shipment.
Why have you changed cargo handling in Australia to Menzies?
As we develop our services across Australia, we believe that Menzies Aviation is the right partner to help us achieve our goals in this market. The new three-year cargo handling contract is already under way. Menzies took over our handling operation in Melbourne on June 8, Brisbane followed 9 July and Sydney is 7 August.
Are there likely to be any staff changes at VA?
We recently announced that our chief executive Craig Kreeger will retire in January 2019. Craig will be replaced by an internal appointment, Shai Weiss. Shai is currently chief commercial officer and has been with the airline since July 2014, having previously worked with a number of Virgin businesses. Cargo reported to Shai when he was chief financial officer back in 2016 and he’s a great champion of the contribution the team make to the overall business.
What is your view on gender equality and how would it affect the air cargo business?
Our people are at the heart of everything we do and are our greatest strength. I am pleased that within cargo our balance on gender equality is in fact that - balanced, with the proportion of males to females within the majority of roles at all levels being equal. There is always more we can do to and we’re committed to making a positive difference to create an even more inclusive culture at Virgin Atlantic.
With the new VA/Air France Group/Delta jv moving ahead, what changes are your customers likely to see?
It is too early to say as we’re working through the agreement, but we are excited at the prospect of what the extended JV could offer our cargo customers.
TAPA has published all three levels of its Parking Security Requirements (PSR) certification program for industry review and the signing of an MoU with Snap Account, the cashless payment system for the haulage industry, which works with more than 3,000 transport operators.
David Littleproud, the minister responsible for biosecurity under his agriculture and water resources portfolio, recently announced a further A$137.8 million allocation over five years.
The revised Australian regime to meet US requirements also introduced concepts such as the Known Consignor (KC) program, which allowed certain exporters to securely screen their own cargo to go directly, without further examination, to a CTO at an airport, as well as the Enhanced Air Cargo Examination (EACE) program which applied to RACAs to examine and scan all other exporters cargo for the US before heading to the CTO. (A CTO can also be a RACA and examine air cargo it receives.)
Michael Outram, ABF’s commissioner, told a Senate select committee in late May he was pretty happy with the way things were.
