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IAG turns up the heat on the cool chain

bumpy flIGht for borIs

chApmAn sIGns on wIth swIss

fuchs on the new norms of AIrfreIGht

frAnkfurt selected for olympIcs

The weekly newspaper for air cargo professionals

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iag cargo has broken ground on its new Constant Climate Centre at its Lon-don Heathrow hub campus.

Due for completion in September, it will provide dedicated storage and han-dling for its Passive and Active Constant Climate products.

It will offer two temperature controlled zones at two to eight degrees and 15-25 degrees, with space for 28 pallets or 56 AKE containers. The carrier said it would build on the strong growth seen in 2012 for its pharmaceutical solution using both active heating and cooling contain-ers, and passive solutions for intact and loose shipments.

IAG’s Constant Climate service en-sures temperature sensitive shipments maintain a stable internal temperature regardless of changes in the ambient temperature. The solution supports temperatures from -20 degrees to +25 degrees.

Boeing’s troubled 787 ‘Dream-liner’ aircraft suffered two incidents in early July – although neither appeared to be linked to the battery fires that had led to the entire fleet being grounded early this year.

London’s Heathrow Airport had to be shut for nearly 90 minutes on 12 July after a fire broke out on an empty Ethiopian Airlines plane parked on a remote stand.

All runways were closed for nearly 90 minutes after the fire at 16:30 BST. No passengers were aboard the plane at the time.

However, early investigations suggest that the fire was caused by a faulty air conditioning system, not the lithium-ion bat-tery fires that led to the earlier grounding of over 50 planes in January while the batteries were

modified to throw out less heat and also enclosed in fireproof metal boxes.

Then, on 12 July, one of the first Dreamliner operated by a UK carrier was forced to return to Manchester shortly after taking off for Orlando, Florida (US), due to what was described as a tech-nical problem not related to the battery fires. It is understood that the Thomson plane dumped fuel before returning to Manchester.

Thomson, which had taken delivery of the first of eight planes, said the aborted flight was a precautionary measure.

In January, a fire broke out on a Japan Airlines 787 at Logan Inter-national Airport, Boston (US) and a few days later, an All Nip-pon Airways 787 had to make an emergency after a battery started

to smoke, leading to the order to ground the aircraft.

While the incidents have not damaged confidence among air-lines committed to buying large numbers of 787s, they did hit shares in the manufacturer, Boe-ing, which lost 4.7 per cent off its share value, or $3.8 billion of its market capitalisation in the immediate aftermath of the Heathrow incident.

The Dreamliner is the first commercial large aircraft to make extensive use of lightweight com-posite materials, enabling it to offer more cargo capacity than older, similarly-sized planes. But its heavy reliance on sophisti-cated electronic systems has led to numerous teething problems and the new plane was about three years late entering service.

A new proposal says a third runway at Heath-row will cost £14.3 billion to £17.6 billion and provide £50billion

to £156 billion in UK economic benefits after it is opened in 2025.

Heathrow Airport, partially

owned by China and Qatar sover-eign wealth funds, has suggested three runway location options to the UK government’s Davies Com-mission, any of which it says could produce a direct cargo benefit of £2 billion to £3 billion to operators.

London mayor Boris Johnson

has also submitted a proposal to the commission including a new four-runway hub on an artificial island in the Thames Estuary, a hub on the Isle of Grain in Kent or expanding Stansted Airport in Essex (see page two).

Johnson says his option will pro-

vide 375,000 new jobs by 2050 and add £742 billion to the value of goods and services produced in the UK.

Heathrow Airport claims a new Thames Estuary airport would not be operational before 2034 and could cost £70 billion to £80 bil-lion, including £25 billion from the taxpayer.

The operator, which also owns Southampton, Glasgow and Aber-deen airports, argues that the “current centre of UK economic gravity is to the west of London where highly productive clusters in industries like IT and phar-maceuticals have grown around Heathrow over the last 50 years.”

The company claims 202 of the UK’s top 300 corporations are headquartered within a 25-mile radius of Heathrow and expanding

CONTINUED ON PAGE TWO

boeing still losing sleep over dreamliner

Volume: 16 Issue: 29 22 July 2013

lhr expansion to benefit cargo

2 ACW 7 january 2013

NEWSWEEK“Best way to solve UK capacity conundrum”

mayor of London Boris Johnson has submitted three plans for developing London’s airport capacity to the Da-vies Aviation Commission. His schemes, all of which would involve closing the city’s existing main air hub at Heathrow and redeveloping the site for housing, include a four-run-way airport on an artificial island in the Thames Estuary and a similar development on the isle of Grain on the south side of the river in Kent. His other suggestion would be to expand the existing airport at Stansted, to the north-east of London.

The Government has hived off the difficult and often emotive question of the UK’s future airport needs to an independent commission chaired by Sir Howard Davies.

While Mr Johnson claims that his proposals would help London maintain its status as an international air hub, he has been roundly criticised by local politicians and envi-ronmentalists. Deputy leader of Hounslow Council, Colin Ellar was reported by the BBC as saying that the plan to close Heathrow was “sheer lunacy”. And environmental group Friends of the Earth described the Thames Estuary scheme as “pie-in-the-sky” and an attempt to pitch res-idents of west London against those of Essex and Kent.

Bumpy flight for London Mayor’s airport plans

CONTINUED FROM FRONT PAGE

the airport would protect 114,000 local jobs and create 70,000 to 150,000 more.

“By contrast, the impacts of closing or downsizing Heathrow would be significant for the local area – possibly resulting in 63,000 job losses locally, and potentially the loss of many more jobs indirectly reliant on Heathrow… the biggest mass redundancy in British history,” it says.

The UK’s Institute of Directors (IoD) supports the third runway proposal. Corin Taylor, a senior economic adviser for the group says: “Expanding Heathrow is the best way to solve Britain’s air-port capacity conundrum. It is quicker and cheaper than the other options... with quieter planes and steeper descents it can be done in a sensitive way. Britain will miss out on the trade we need with high growth parts of the world unless we urgently expand our hub capacity.” Last year the IoD proposed a third and fourth runway for Heathrow and a second runway at Gatwick.

Chris Welsh, secretary general of the Global Shippers’ Forum and general manager of Global and European Policy for the UK’s Freight Transport Association (FTA) says the FTA is open to the

possibility of a future airport elsewhere but: “Heathrow is our hub airport now, it is full now; and as things stand today Heathrow is the best case for a London hub airport.”

With Heathrow still the busiest airfreight airport in the coun-try, Welsh adds he’s disappointed that the importance of air cargo remains “underplayed”.

In its submission to the commission, Heathrow Airport notes “significant further work” needs to be done on who will pay for the new runway although “£4 billion to £6 billion might be more appropriately funded by government”.

While pointing out the benefits to the UK and itself through an increase in cargo and passenger traffic, the company’s latest pro-posal doesn’t suggest Heathrow Airport should finance the runway expansion from its own resources.

However, if the UK government decides against a runway expan-sion the airport’s backers, now divested of Gatwick and Stansted, could find themselves eventually forced to sell an increasingly non-competitive asset and invest in one of mayor Johnson’s options.

NEWSWEEK

3ACW 22 JUly 2013

Asiana crash points to improvements

Despite the images depicted in the world’s media, the Asiana Airlines crash at San Francisco International Airport (US) on 6 July highlights the advancements that have been made

in airline safety. Though three passengers onboard lost their

lives, the death toll could have been higher had the airline not implemented a number of new

safety initiatives. “This crash really shows

how the plane did its job. The fuselage stayed intact and kept almost everyone alive even after such a violent landing,” says Teal Group vice president of analysis, Richard Aboulafia.

According to aviation con-sulting firm Ascend, air safety saw a 20 per cent improvement

year-on-year in 2012, noting that for every 9.9 million air passengers carried only one lost his or her life.

“We took a very safe industry and made it even safer. The problem is when you get down to these vanishingly low accident rates, the space to improve decreases,” says consultant Robert Mann. ACW speAks to gross + fuChs

pArtner, viktor fuChs, on the stAte of the industry.

ACW: In recent years, shippers have used airfreight for expediency and ocean/road/rail for quantity. Do you believe this is the new norm or will it revert back to the old paradigm when the economy picks up? FuChs: ”A lot of highly paid economic advisors have failed [to predict the future]. I wouldn’t dare to try to foresee future streams. I can tell that the industry’s reac-tions on logistical demands have become more precise and quicker than any time in history before. I think that nowadays com-panies are able to do much more precise calculations on their logistical demands,

plus the exchange of data between the industry and logistics companies is more intense leading to the point where shipper and forwarder are really working hand-in-hand and not only next to one another”.

ACW: How has the industry changed in the last 12 months and where do you see it going in the next five years?FuChs: ”I think that economic instabili-ties have truly affected everyone. Still, we see that our members are making a good turnover but everyone’s fighting more and more on all fronts: keeping clients, finding new ones, getting paid.

ACW: How has and how will continuing uncertainty in the EU affect airfreight?FuChs: ”The EU is one of the world’s three big trading zones – the other two being North America and Asia. So the cur-rent situation will definitely show its effects (and already has) on airfreight as volumes are being shifted over to ocean freight wherever possible.

ACW: Some commentators have sug-gested new widebody passenger aircraft will result in a resurgence of cargo-only carriers. Do you agree?FuChs: ”I think that cargo-only aircraft will be of bigger interest in the future, but mainly due to rising security measures, as opposed to the decreasing bellyhold capacity offered by the new generation of passenger aircraft.”

Fuchs on new norms

Ugandan back from the dead?UganDan aIrlInES may be revived, according to local press reports. The state-owned carrier went into liquidation in 2001 after the failure of a number of abortive attempts by the government to sign part-nership deals with other carriers, including South African Airways, Kenya Airways and Sabena. The carrier itself emerged from the break-up of East African Airways.

Privately-owned Air Uganda was sub-sequently founded in 2007 and has since largely assumed the role of national carrier.

Many aspects of the mooted Uganda Air-lines remain unclear. One is to what extent the carrier still retains traffic rights on inter-national routes to and from Uganda; some reports suggest that these were sold to Kenya Airways, although the Ugandan gov-ernment denies this.

Another is whether it would once again take over cargo handling operations at En-tebbe Airport, now managed by Entebbe Handling Services, or indeed whether the new carrier would carry cargo.

Q&A

NEWSWEEK

4 ACW 22 JUly 2013

America delivers aid to Tashkent

Boeing and non-profit organisation AmeriCares have used an Uzbekistan Airways 767-300ER delivery flight to ship two tonnes of medical supplies to the Tashkent-based Soglom Avlod

Uchun (SAU) Foundation.The shipment is part of Boeing’s humanitar-

ian delivery flights programme and includes boxes of medicine that the SAU Foundation will distribute to hospitals and clinics for under-privileged people in Tashkent. In May Boeing shipped four tonnes of medical supplies to the SAU.

Liz Warman, Boeing’s global corporate citi-zenship northwest director says “Soglom Avlod Uchun translates to ‘for a healthy generation’ and through such efforts we can play a role in bringing healthcare to people in need.”

This is one of several humanitarian shipments by Boeing and Uzbekistan Airways. Last year, a delivery flight transported consignments of

medical supplies through Project Hope to hospi-tals in Tashkent while another carried scholarly books for the Tashkent-based International Library in association with the Seattle-Tashkent Sister City Association and the Academy of Sci-ences of Uzbekistan.

“Development of the community, especially the health and welfare of the people of this country, is part of our social responsibility mis-

sion,” adds Valeriy Tian, the director-general of Uzbekistan Airways.

To date, Boeing has completed more than 150 humanitarian delivery flights in partnership with nearly 50 airlines.

US trade with Uzbekistan in 2012 was $258 million according to the US Department of Commerce. For the first five months of 2013 it totaled $115.6 million.

WorldNews

volga-dnepr Airlines has launched its new SMS messaging service, allowing its customers to track their cargo shipments by text. The special-ist charter carrier will use the service to keep its customers updated as to the whereabouts of their shipments.

bdp international has been named as the global logistics partner of the American Chemistry Council (ACC), by the body’s board of directors. The logistics firm has been involved with the ACC since 2002 after becoming a partner in its Responsible Care programme, the chemistry industry’s global health, safety and environmental perfor-mance initiative.

ArrIVAlS ANd dEPArTUrES

ordErS ANd dElIVErIES

iag cargo has marked the beginning of its major fleet modernisation programme, with British Airways taking delivery of a Boeing 787 and an Airbus A380. The new arrivals mark the start of a ten-year fleet renewal programme that will see the group take on 78 widebody aircraft.

libyan airlines has taken delivery of its first Airbus A330. The national carrier of Libya currently operates a fleet of seven A320s, while it has three A330-200s and four A350-800s on order. The new A330 will be deployed on routes across the Middle East, around Dubai (UAE) and Jeddah (Saudi Arabia).

aeronautical engineers has received an order from Yangtze River Express for three Boeing 737-400SF 11 pallet conversions. The first of the aircraft are expected to undergo modification this month at AEI’s authorised conversion centre, Boeing Shanghai Aviation Services.

cargo 2000 has appointed Kuehne + Nagel’s global head of carrier and gateway logistics, Max Sauberschwarz, as its new chairman. Succeeding Mattijs ten Brink, the Air France-KLM Cargo vice president of sales and distribution who stepped down earlier this month, Sauberschwarz will hold the reins until the board of direc-tors elect a new chairman and vice chairman in March 2014.

swissport international has announced that Nil Pris Knudsen will take over responsibility for its global cargo services, retaining his current title: senior vice president of cargo. Knudsen took on the role of senior vice president of cargo when he joined Swissport in 2009 following a successful career, which spanned over 30 years at a number of companies, including SAS Cargo Group, DHL and Maersk.

NEWSWEEK

5ACW 22 JUly 2013

RAK promises planes and plans

RAK Airways, the national carrier of Ras Al Khaimah in the UAE has promised to add to its fleet to help it fulfill plans to become a fully-fledged international carrier. President and chief executive officer Engr. Murabit Al Sawaf says that “new aircraft will join the fleet before the end of this

year.”Currently, RAK Airways is operating its services with two leased

aircraft – a 757 and an A320 – to Cairo, Doha, Jeddah and six desti-nations on the Indian subcontinent.

Al Sawaf says: “In the first half of 2013, the airline increased its frequency to Dhaka, Peshawar and Lahore, from two weekly flights to three, in order to meet growing demand to these destinations. The weekly services to Jeddah will also rise to 10 from seven.”

But he also promises: “an ambitious growth plan and the strat-egy is being studied to roll out the plan effectively, in a short span of time.”

RAK Airways is seen as a spur to the growth and development of Ras Al Khaimah and also as a “roving ambassador” by showcasing investment opportunities available in the emirate.

RAK Airways is one of the youngest national carrier’s in the UAE, having been effectively relaunched in 2010 after the original car-rier of the same name – founded in 2006 – ceased operations in 2009.

On 1 May, RAK Airways signed a deal with Leisure Cargo to manage all aspects of its freight operations including sales and marketing, ground handling, cargo revenue accounting, ramp supervision and bonded truck arrangements within the UAE and Middle East.

Nordic dip in 2012

DESpitE itS reputation as an economic stronghold, air-freight in the Nordic region saw a dramatic dip in 2012. The region’s most stable country, Sweden, saw air cargo volumes decrease by nearly 20 per cent.

A major contributing factor to the decline has been the growing appeal of sea freight, coming at a time of contin-ued fiscal uncertainty.

Though the Swedish airfreight market crashed last year, Denmark is still posing an attractive opportunity.

Lufthansa Cargo director for Nordic and Baltic countries, Alexander Kohnen, says: “Copenhagen Airport sees seri-ous amounts of belly capacity but also regular calls from freighter operators.”

Chapman unites with Swiss WorldCargo

chartEr SpEcialiSt Chapman Freeborn has formed a new strategic partnership with Swiss WorldCargo.

The UK-based firm is seeking to in-crease its presence in the air cargo market. Chapman Freeborn will be responsible for supporting Swiss WorldCargo with all third-party char-

tering requirements.“We are delighted to sign this part-

nership agreement,” says Chapman Freeborn CEO Russi Batliwala, adding: “We welcome the opportunity to offer our cargo charter services to their international client base. Both com-panies share a reputation for focusing

on value-added services and opera-tional excellence, and their expertise in belly cargo and worldwide network of destinations make it an ideal fit.”

The agreement, signed in Zurich earlier this month followed the March launch of a strategic cooperation deal between Chapman Freeborn and Lufthansa Cargo, partner of Swiss In-ternational Air Lines.

Chief Cargo Officer of Swiss World-Cargo, Oliver Evans, says: “It is our strategic goal to strengthen and deepen customer relationships in our chosen markets and to offer a more complete solution set. We are con-vinced that in Chapman Freeborn we have found the perfect partner for charter and other related services.”

NEWSWEEK

6 ACW 22 july 2013

Cargo stuck in the doldrums says Cathay boss

Flatlining air cargo markets have prompted a lot of comment from within the industry. The latest to speak up about the difficulties being faced by air-lines in the airfreight sector is Cathay

Pacific CEO John Slosar.“I think the canary probably passed away a

long time ago. We are looking for a new one at the moment,” Slosar told reporters at a confer-ence in Cape Town, South Africa.

“Cargo is still, frankly, in the doldrums. We are now into our probably third year of month-on-month declines. Cargo, generally, responds to the world economy so that somehow suggests the global economy is not firing on all cylinders,” continued Slosar.

Airfreight’s classic role as an economic bell-wether may be coming to an end with shippers turning more and more to sea freight and other forms of transport.

“Not only is the [air cargo] market weak but

freighter utilisation continues to fall,” says Inter-national Air Transport Association (IATA) chief economist Brian Pearce.

“Load factors have stabilised but at low levels, this makes it very difficult for airlines to gen-erate profits from their cargo businesses,” he

continues.Despite the difficulties carriers may be facing

when it comes to airfreight – declining signifi-cantly since its peak in 2010 – passenger traffic is surging, growing by approximately five per cent year-on-year.

WorldNews

ch robinson has expanded its operation with the opening of a new office in Istanbul (Turkey). The US freight forwarder is hoping to capi-talise on one of the world’s fastest growing economies. Turkey is also experiencing a surge in demand for logistics services. The primary offer-ing will be road freight services.

kuehne + nagel has seen earn-ings before tax surge 8.1 per cent year-on-year in the second quarter of 2013. During the first six months of 2013, turnover increased 3.3 per cent to CHF 10,394 million, resulting in a gross profit increase of 2.6 per cent to CHF 3,112 million.

NeW routes

irish carrier Aer Lingus has announced a major expansion to its Transatlantic service offering. Included in the expansion will be a Dublin to San Francisco (US) to five flights a week routing, while its Shannon (Republic of Ireland) to Boston and New York (both US) services will see frequency almost double. In addition to the increase on existing routes, the carrier has also announced a new daily service from Dublin to Toronto (Canada).

the boom in South America has lured Ethiopian Airways to its shores, with the East African carrier announcing new services to Sao Paulo and Rio de Janeiro (both Brazil). The service operates three times a week.

china airlines has launched a twice weekly service from Taoyuan (Taiwan), to the Japanese island of Ishigaki. The Wednesday and Saturday service connects the two airports in less than an hour.

Kerry makes strides into Brazil

kerry logistics has expanded its opera-tion with the acquisition of a major stake in Brazil-based logistics and customs broker-age Braservice.

The acquisition provides Kerry Logistics with a solid base in a country in which it is seeking to develop its business.

“This is a significant step in the de-velopment of our strategic objectives to strengthen our capabilities in the Americas region. Trade between Asia and Latin Amer-ica has grown significantly during the last five years and we now have the platform to expand our network into this dynamic region,” says managing director of Kerry Lo-gistics William Ma.

Founded in 1991, Braservice has sev-enteen offices throughout the country, including major cities Sao Paulo, Rio de Ja-neiro and Brasilia.

President of Braservice, Vincenzo Carlo Grippo, adds: “We are thrilled to be joining the Kerry Logistics network and its unparal-leled Asia coverage.”

NEWSWEEK

7ACW 22 JUly 2013

DHL investsin Latin America’s future

DHL Express has opened its most modern facility in Latin America - a 10,000 square metre distribution centre five minutes from the Santiago de Chile international airport.

Deutsche Post DHL CEO, Frank Appel says ”Chile was the highest ranked Latin American country in DHL’s Global Con-nectedness Index last year, and a significant factor in this ranking was the breadth of its international trade flows. This relatively high level of global integration, alongside its well documented commit-ment to economic freedom, reinforces our view that Chile offers many long-term opportunities for our customers.”

The complex in the Enea Industrial Park features an automated sorting capability and a better work environment that incorpo-rates DHL’s GoGreen strategy, providing green spaces inside and outside, as well as using natural light where possible inside the facility.

During his visit to Chile, Appel also visited the Lo Aguirre cen-tre where he met with students of the Enseña Chile programme, a local partner of the Teach For All education organisation sup-ported by DHL.

The company has also renewed its Teach For All partnership with Enseña Peru and signed an agreement with SOS Children’s Villages in the country to provide access to internships and develop train-ing programmes and activities for Peruvian youth. DHL employees will also offer their time to serve as mentors.

Teach For All is a global network of independent national organi-sations which recruit university graduates and young professionals to commit to teach for at least two years in high-need schools and to work throughout their lives, both within and outside of educa-tion, to address the root causes of educational need.

“Improving opportunities on education and employability of youth around the globe is one of the major challenges nowadays – both for society as a whole and for corporate citizens like Deutsche Post DHL,” adds Appel.

Ethiopian adds Malawi stake

AS US and UK air accident investiga-tors continue to probe the cause of a fire aboard a parked Ethiopian Air-lines’ Boeing 787 at Heathrow airport, the airline has announced a 49 per cent stake in Malawi Airlines.

Ato Tewolde Gebremariam, Ethiopi-

an Airlines CEO, says the partnership is part of the company’s ‘Vi-sion 2025’ to set up multiple hubs in Africa to produce an annual turnover of $10 billion by 2025.

“Today, Africa is booming and, with the economic growth of our continent, demand for

air travel is also growing at a much faster pace than the global average. This growing demand and the uneven competition from foreign carriers, which currently dominate the African market, cannot be overcome by one single African airline.

“For indigenous African airlines to succeed and get their fair share of the market, partnerships between African airlines are a must.

Ethiopian Airlines is first and fore-most a Pan-African airline, which has been serving Africa in good and bad times for close to seven decades bringing Africa together and closer to the world. It is with a win-win and Pan-African spirit that we have en-tered into a strategic partnership with Malawi Airlines,” says Gebremariam.

The airline says the new agreement is a model for the type of cooperation Africa needs in the 21st century. The government of Malawi and local pri-vate investors will hold the remaining 51 per cent of the new airline.

logiSticS provider GEFCO Group is planning to expand its international network as it seeks to further its presence in Latin America.

As part of this toning up of its operation, the group opened a subsidiary in Mexico, GEFCO Mexico, earlier this year in March.

“Mexico is a hot spot of activity in general. Our extensive Latin American network, which now links the three main economies in the region – Argentina, Brazil and Mexico – combined with our overseas offering places us in a unique position to provide industrial customers with integrated door-to-door logistics solutions,” says GEFCO Mexico’s general manager Giles Cudia.

Originally French-owned, GEFCO Group was recently ac-quired by a Russian firm.

GEFCO expands into Mexico

ACW 1 JULY 2013

REVIEW

8

Germany’s air cargo market remained under pressure during the first half of this year, although there were signs of improvement as the period progressed and some variation in the performance of different sectors.

Frankfurt Airport, the largest air cargo gateway in Germany and Europe, reported a near one per cent upturn in cargo traffic compared with the first six months of 2012 to just over one million tonnes. The June increase was significantly more – 2.7 percent to 185,000 tonnes. However, another major German airport, Munich, experienced a 2 per cent drop in flown air freight traffic during the first half, to 134,000 tonnes.

German national carrier Lufthansa Cargo also experienced a drop in home market cargo during the first half of this year, of around 3 to 4 per cent, although the most recent figures suggest the rate of decline slowed to only around one per cent in June.

Those overall figures, though, conceal consid-erable fluctuations across different trades, says J. Florian Pfaff, Lufthansa Cargo’s vice president area management Germany.

“The South Atlantic remains strong for us with a further rise again this year – that is probably the number one market for us when it comes to increases. Hong Kong is also a strong market for us right now compared with last year and South Korea is developing quite well,” he states. “There are also some markets which have declined, though, like Japan. The biggest market, China, is pretty much flat, and the US is the same.”

A senior executive with the German air cargo market’s second largest carrier, Air France-KLM-Martinair (AF-KL-MP) Cargo, which trucks the vast majority of that traffic to/from its

home hubs at Paris CDG and Amsterdam Schiphol, agrees there are considerable variations between different major trade lanes out of Germany. He also says the market remains “volatile”.

“Some days you can have a lot of activity and then the next week things will be quieter,” says Stéphane Lemaire, regional market manager Germany and Austria for AF-KL-MP Cargo. “That makes it difficult to predict.”

Going into more detail on that point, he says that while the auto-motive industry, for example, remains a “very important engine” for the German economy and the country’s air cargo sector, some of that business has moved over to ocean transport. “But we also sometimes see automotive air cargo traffic pop up at short notice. Overall, automotive is still an important air cargo business in Ger-many but it is a bit more volatile than it used to be.”

One of the more stable air cargo traffics out of Germany, con-

tinues Lemaire, is pharmaceuticals. “In that context, the recent launch of our Variation Pharma Control 15-25°C option is quite important for us here in Germany because many of our customers are now really under regulatory pressure to achieve the required logistics solutions for this category of product.”

More generally, he adds, another recent significant develop-ment for AF-KL-MP Cargo in Germany has been the introduction of a single airwaybill for shipments being routed through Schiphol on either KLM or Martinair flights. “Germany is a market where you can have extremely large shipments so it is important to sim-plify things and give customers one solution.”

The current mixed picture in the different sectors of Germany’s overall export air cargo market is confirmed by Stefan Kohlmann, joint owner and managing director of independent cargo charter broker NEO Air Charter, which is based near Frankfurt.

“Total air cargo exports from Germany are still quite strong, but really, the picture varies across different trade lanes,” he says.

“In the normal scheduled service air freight market there is still a lot of cargo going out of Germany to Asia and to South America. There is also regular traffic to Africa although that is more char-ter business. But Europe and the US are quieter.”

Commenting specifically on the current state of German cargo charter business, Kohlmann says that the market remains strong. “With the strength of German exporters in industries like energy, oil and gas, mining, ship and aerospace parts and so on, there is always charter business around. We have not seen any decline in charter business from Germany.”

Mixed picture in German airfreight marketGERMANY

german forwarder Dachser has strengthened its home market air cargo service offering over the last year by installing its own X-ray equipment at several key branches.

Thomas Reuter, the company’s managing director air and sea logistics, claims that introducing that ca-pability at its locations in Frankfurt, Munich, Cologne and Kaufbeuren, reduces Dachser’s dependence on third party handling partners to security screen cargo and speeds up that process.

“Investing in our own X-ray equipment and decen-tralising that activity means we can screen our air cargo at the branches throughout the day rather than having to wait until it arrives on a truck at Frank-furt, so avoiding any possible bottlenecks there,” he states. “By doing that, we can avoid missing connec-tions if any queries or alarms are raised during the screening process.”

A second positive development for Dachser’s German air cargo business over the last year, con-tinues Reuter, has been the company’s general strengthening of its expertise in the pharmaceutical market through investment in additional staff and specialised equipment. Specifically, the company has signed a worldwide agreement with Envirotain-er, a leading supplier of temperature-controlled air cargo containers, and secured QEP (Qualified Enviro-tainer Provider) accreditation.

“Pharma is an important business for our German and Swiss organisations,” explains Reuter.

Dachser’s X-ray

9ACW 22 JULY 2013

REVIEW

Air Partner chooses Frankfurt for Olympics

GERMANY

German carrier Lufthansa Cargo is looking to buck a current negative trend in the general Europe-US air freight market with the planned introduction of a new freighter route

later this year.A senior executive agrees with other German

air cargo industry executives that total export traffic from that country and Europe as a whole to the US remains weak.

However, claims J. Florian Pfaff, Lufthansa Cargo’s vice presi-dent area management Germany, within that subdued trade, the carrier is increasing its market share.

“Based on CASS (Cargo Accounts Settlement System) figures, the overall Germany-US market is down but our figures for that sec-tor are basically flat and we believe there is an opportunity for us on the North Atlantic. Based on that, we will open up a new US route out of Frankfurt in the 2013/14 winter schedule,” he states.

Pfaff declined to give any further details about the US point involved or the flight frequency for the new service. Currently, Lufthansa Cargo operates MD11 freighter services out of Frank-

furt to seven US destinations – Atlanta, Chicago, Dallas, Detroit, Houston, Los Angeles and New York.

Asked how Lufthansa Cargo is managing to outperform the overall Germany-US air cargo market, Pfaff suggests that it is partly due to the carrier’s established “very solid” market share over many years. “We have a stable customer base and an extensive network in the US, both on the freighter side and the bellyhold side,” he claims.

Elsewhere in its network, Lufthansa Cargo’s other plans for the 2013/14 winter schedule include introducing new routes to both South America and China. Again, though, it is not say-ing exactly where yet.

Another significant development later this year is the scheduled arrival in the fourth quar-ter of the first two of five B777Fs due to join the fleet by the end of 2015.

Lufthansa Cargo to expand with new route

frankfurt airport’s dominant position on the Euro-pean air cargo scene helped its selection as the hub for an air cargo charter operation to service the 2014 Winter Olympic Games in Sochi, Russia.

UK-based air charter broker Air Partner announced last month (June) that it intends to offer weekly flights from Frankfurt to Sochi using B747-400F aircraft chartered from Russian airline AirBridgeCargo. Current plans envis-age 12 outbound flights from Frankfurt, starting November 18, and five return flights the following February.

The background to that service, which will be marketed under the name Sochi Express, is explained by Mike Hill, regional manager Europe for Air Partner Freight Group, based in Cologne, Germany.

“Sochi is quite remote and if you want to send any air cargo there you generally have to route it via Moscow, pay expensive terminal handling charges, and then truck it on which takes a further two days or more. With the Sochi Express service, cargo will be in Sochi four hours after de-parture from Frankfurt,” he says.

One of the key reasons for choosing Frankfurt as the Eu-ropean hub for that service, continues Hill, is that airport’s established leading European air cargo gateway role.

“We are selling this service worldwide and have already had a lot of interest in the US, for example. Cargo originat-ing there can be flown to Frankfurt on a scheduled carrier, transhipped into our warehouse facility at that airport and then put on a Sochi Express flight,” he says.

Another factor behind the decision to use Frankfurt, he adds, is that it enables aircraft provider AirBridgeCargo to fit the charter operation in with its own scheduled service network. “After arrival in Sochi, the aircraft can fly on to the Far East and then slot into AirBridgeCargo’s regular service schedule back to Frankfurt. That avoids reposition-ing costs,” adds Hill.

ACW 22 JULY 2013

AMERICA

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Grupo PFS has seen growth of 35 per cent year-on-year, with import and export loads in Chile and Peru prov-ing strong. The general sales and service agent (GSSA) has also been

busy with its charter operation.“We have had a boost in charter activity in

Chile,” says director Mark Thiermann.“We have operated a number of charter flights

with Korean Air for the transportation of seeds

to Miami during March and April, as well as a couple of charter flights from the US to Bolivia with Solar Air Cargo,” he continues.

With 2013 proving strong, Thiermann is look-ing ahead to 2014, with positive expectations and the achievements that Grupo PFS can make.

“We are confident that we will continue grow-ing in terms of revenue sold for our represented airlines, but maybe at a lower growth rate to what we have experienced this year – say in the area of 15 to 18 per cent,” he says.

The Chile-based GSSA’s US business is prov-ing prosperous, according to Thiermann, with exports of fresh salmon from Chile and aspar-agus from Peru behind this boom. Alongside this, Thiermann is excited about the prospects offered by another region.

“The bright spot for us is Asia, which is grow-ing at double-digit pace,” he says.

“Expected economic recovery in Europe is also good news. And with such a recovery we anticipate a rise in EU exports towards the fourth quarter.”

However, this growth comes at a time of change in South America, and the world’s, air-freight industry.

Lan’s take over of Brazilian airline Tam, last year, resulted in the formation of the region’s largest carrier Latam. Many speculate that this will provide a huge boost to South American aviation.

“It is too soon to say if there will be any ben-efits for the cargo sector in South America with the Latam merger. Although concentration has never been good for the air cargo market, for us the merger has been positive, as our clients are looking for alternatives through our rep-resented airlines that can offer direct service and good sales and customer support,” says Thiermann.

In addition to the merger, carriers are now taking delivery of the first of the next generation

of aircraft, with prominence visited upon the new, and much hyped, widebodies – Boeing’s troubled Dreamliner and its competitor from Airbus, the A380.

“I have heard some people say [in stark contrast to the views expressed by Champ Car-gosystems CEO John Johnston (see issue 29, 15 July) ] that the new generation of widebodies will kill the freighter business,” says Thiermann.

“But I believe that although in some parts of the world and for some commodities they are both competing in the same trade lanes, there are certainly and definitely always will be routes and commodities that will need freighter ser-vice. Interestingly, the new widebodies that have taken to the skies in the past months do not offer significant additional cargo space to the old air-craft. For instance, Boeing’s 787-8 appears to offer the same capacity as the 767-300ER, while Airbus’s A380 offers less than Boeing’s 747-400 on certain routes,” he continues.

When it comes to the much prophesised, and indeed apparent, emerging dominance of sea freight, Thiermann does not seem fazed.

“A large part of the freight industry will con-tinue to prefer ocean service for cost reasons, but airfreight has its niche, especially in perish-ables out of South America, which is our core business. So we do not see ocean freight impact-ing our airfreight business in the foreseeable future,” he says.

As for Grupo PFS’s plans, Thiermann is con-tent that the business knows what it is doing and where it is going.

“We are always looking for opportunities to put our experience and know-how to work. This year we commemorate 20 years in busi-ness. We are looking towards the prospects offered by other countries, and have already begun analysing a couple of territory expansion opportunities, as well as other airline represen-tations,” he concludes.

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