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CARGO No one said it was going to be easy. When 300 air cargo executives met for a summit in Geneva in November to discuss moving towards a paperless, e-freight environment, they discovered just how difficult it might be. TOM BALLANTYNE reports from Geneva. The International Air Transport Association’s (IATA) push to get paperless e-freight on the move by 2007 and full cargo industry implementation by 2010 – a move its says will save operators US$1.2 billion annually – will likely get off the ground with a pilot scheme involving Asia, possibly Singapore, according to the organization’s senior officials. While a survey of potential routes and participants will be nearing completion in December, IATA’s project director e- freight, Robert Ryan, told Orient Aviation likely routings could be a triangle linking Singapore, Dubai and London. Another possibility is Singapore-London-Toronto. Triangular routes, known as local clusters, have been chosen for the implementation test to ensure that if one destination is for any reason unable to proceed, the remaining two can continue with the e-freight pilot scheme. Involving cargo carriers, freight forwarders and customs departments from each country involved, the flights will not carry 100% e- documented freight, but a mix of paperless cargo and freight processed using paper documents. The industry action group leading discussion on the project includes six carriers; SIA Cargo, Emirates Airline, British Airways Cargo, Lufthansa Cargo, Cargolux and Federal Express, as well as Freight Forwarder International and the World Customs Organization (WCO). As reported in last month’s Orient Aviation, IATA has been meeting with Customs officials from 16 nations, including Australia, China, Hong Kong, Japan, South Korea, Malaysia and Singapore. Some 10 countries are expected to take part in the initial “smart pilot trials” in 2007. But while IATA is pulling out all the stops to drive the industry towards fully-electronic freight procedures, it is also becoming clear some sections of the cargo industry are extremely pessimistic about the deadlines the airline body has set. Speaking on the sidelines of IATA’s first Asia to feature in e-freight pilot scheme SIA Cargo: One of the six-airline action group working on the e-freight project major e-freight conference in Geneva in November, number of participants said the complexity of moving freight would make the task far more difficult than achieving 100% e-ticketing for air passengers. They are particularly concerned that while the industry is unanimous in wanting an e-freight environment, for Customs to change regulations in dozens of countries around the globe may be an impossible goal by 2010. To make it work, IATA has to get 15,000 freight forwarders, 265 airlines and 200 customs authorities working in unison with standardised systems. Ray McDonagh, deputy director facilitation and procedures at the WCO said the body’s council has adopted a framework of standards for e-commerce, but this has yet to be implemented. Letters of Intent to adopt the framework have been signed by 120 member countries. McDonagh is making no predictions about when customs departments will all be ready to fully adopt an e- freight system. Jim Friedel, president of Northwest Airlines Cargo, questioned IATA’s estimate of cost savings, and said the airline’s assessment was that savings might only be around 50% of the $1.2 billion suggested by the airline body. He also said some aspects of the e-freight project should be “fast-tracked” to get things underway next year, rather than by late 2007. One difficulty is that many nations will have to sign new protocols to allow for electronic waybills. Under the original Warsaw Convention a paper document is required. There have since been two amendments, the Montreal Protocol No 4 (MP4) in 1975 and the Montreal Convention 1999 (MC99) that allow for electronic waybills, but they have not been universally adopted. Australia and Singapore have signed MP4. China has signed MC99. Japan has signed both. But Hong Kong, Malaysia and South Korea have signed neither and still operate under the original convention requiring paper. Despite these difficulties, IATA director general, Giovanni Bisignani, told conference delegates the industry simply could not delay any longer. He said IATA is working with the United Nations and the WCO to get states on board quickly. “I have already started that process in South Africa and India. We are making progress. But an enormous amount of work is still ahead of us,” he conceded. 40 ORIENT AVIATION DECEMBER 2005-JANUARY 2006
ANA to set up new carrier All Nippon Airways (ANA) signed two major deals last month that signalled its intent to increase its own freight business after selling its minority stake in Nippon Cargo Airlines (NCA), write Charles Anderson. One, with Japan Post, will create a new cargo carrier specialising in international express courier services. The other, with Boeing, will see ANA become the launch customer for the B767-300 Converted Freighter (BCF) programme. ANA has traditionally carried on its freight operations largely through NCA, a joint venture with the Nippon Yusen shipping company, which is buying ANA’s 27% holding. NCA operates 11 B747 freighters while ANA has a sole B767 freighter of its own, with two more on order. It also offers belly-carrying services. Now Japan’s second carrier is starting a separate joint venture carrier, as yet unnamed, through the agreement with Japan Post, which will come into effect on April 1, 2006. Japan Post is currently being privatised and will be allowed to invest in international logistics from that date on. ANA’s new partner is also linking with express giant TNT as a way to move into the international express courier business. ANA will hold two-thirds of the new carrier and Japan Post one-third. Operations are to start in the first half of fiscal 2006 with Japan Post having first call on carrying space. Fleet numbers have yet to be announced, but an unspecified number of the B767 passenger-to-freighter conversions will be used. ANA has three firm orders with Boeing along with four options. Some of the original aircraft will likely come from the carrier’s own passenger fleet. The converted aircraft will fly on short and medium-haul intra- All Nippon Cargo Airlines: All Nippon Airways is selling its 27% holding in the carrier Asian routes. “The projected growth of Asian cargo traffic provides an outstanding opportunity for us, and this new model will be very important in the development of our cargo operation and in our new joint venture with Japan Post,” said ANA president and chief executive, Mineo Yamamoto. Deliveries of the converted aircraft, which will have a similar, 54-tonne structural payload as the production freighter, will begin in December 2007. Boeing has yet to announce a modification site for the prototype. IN BRIEF EVA, Shanghai Airlines JV close to take-off Taiwan’s EVA Air is close to clinching a deal to set up a joint venture cargo company with Shanghai Airlines based in the northern Chinese city. “We are looking forward to reaching an agreement by the end of this year, or early next year,” an EVA spokeswoman told Orient Aviation. Approval is needed from both the Civil Aviation Administration of China (CAAC), among other Chinese authorities, and the Investment Commission at Taiwan’s Ministry of Economic Affairs. EVA is attracted by increases in manufacturing in China by Taiwanese electronics companies and also by Shanghai’s position as a northern Chinese cargo hub. EVA’s parent, the Evergreen Group, will invest US$11 million in the venture, giving EVA itself a 25% stake, Reuters news agency has reported. Other firms in the group will take 20%. The new cargo operation will go outside both airlines to establish its fleet. “If EVA is successful in launching the joint venture, aircraft will need to be sourced externally, most probably in the form of wet-lease contracts,” the spokeswoman said. No other details were available from the airline. IATA forecasts cargo boom The Asia-Pacific is tipped to lead a return to healthy growth rates in the cargo sector over the next five years. The International Air Transport Association’s (IATA’s) 2005 to 2009 forecast expects current sluggish expansion to give way to a global average annual growth rate of 6.3%. “Tremendous expansion in trade flows already in evidence” will drive the Asia-Pacific figure to 8.5%, IATA said. China’s total, estimated at 14.4%, will be the fastest growth rate worldwide. Freight traffic between the Middle East and the Asia-Pacific will increase 8.8% annually. DECEMBER 2005-JANUARY 2006 ORIENT AVIATION 41
Page 4 and 5: December 2005-January 2006 CONTENTS
Page 7 and 8: COMMENT A year to remember, but...
Page 9 and 10: Fleet spree continues across the re
Page 12 and 13: 49TH ASSEMBLY OF PRESIDENTS Delegat
Page 14: 49TH ASSEMBLY OF PRESIDENTS Assembl
Page 18: 49TH ASSEMBLY OF PRESIDENTS The Asi
Page 22 and 23: COVER STORY Geoff Dixon, managing d
Page 24: COVER STORY in some areas, less peo
Page 28 and 29: LCC FOCUS If industry observers tho
Page 32: CHINA Consolidation: so far so good
Page 36 and 37: CARGO By Charles Anderson Korean Ai
Page 38: CARGO BIG future for Incheon By Cha
Page 44: AIRPORTS the Kansai region needed a
Page 47 and 48: By Charles Anderson giving the Inte
Page 49 and 50: change his high-flying aviation car
Page 51 and 52: to methods used to licence his long
Page 53 and 54: CARGO China calls the shots SIA and
Page 55 and 56: MAINTENANCE, REPAIR & OVERHAUL Conv
Page 57 and 58: FTK Growth by Carrier Freight Load

geoff dixon - Orient Aviation

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