air freight asia update

AIR FREIGHT ASIANovember-December 2008UPDATEAirbus A320 family final assemblyplant in China marks official startVolume 1, Number 3.MICA (P) 269/05/2008Airbus production in China expected to reachfour aircraft a month by 2011.Airbus has officially opened the Airbus Tianjin final assembly plant – the first Airbus finalassembly plant outside of Europe. The Chinese A320 Family Final Assembly Line was officiallyinaugurated by Chinese Premier, Wen Jiabao, Airbus President and CEO, Tom Enders andTianjin Party Secretary, Zhang Gaoli. Airbus has a 51% stake in the business, with the otherpartners, the Tianjin Free Trade Zone, and China Aviation Industry Corp I and II. Airbus said itplans to increase production to achieve a target of four aircraft per month by 2011.Asian Aerospace 2009 launches AA Club Chinaconcept to benefit both buyers and sellersReed Exhibitions, the organisers of AsianAerospace 2009 (AA 2009), has launched adedicated community building programme– “Asian Aerospace Club China” (AA ClubChina) – for global suppliers to engagewith buyers from the Chinese industry.The exclusive AA Club China is abusiness to business (B2B) initiative; ayear-round membership community setup to create a networking and knowledgebuildingplatform for commercial aviationprofessionals in China to engage with likemindedindividuals and suppliers keen toshare information regarding their products,services and technologies.While membership is complimentary,the programme is only available to qualifiedprofessionals and contracted exhibitors atAA 2009.The AA Club China charts newmilestones for Asian Aerospace andits customers. First, there will be evengreater focus on the China marketplace,given the emergence of China as a globalcommercial aerospace and civil aviationindustry stakeholder.There will be a swathe of marketand industry intelligence on the buyingneeds of China. There will be even moreopportunities for worldwide suppliers tocontinually engage with Chinese buyersincluding at scheduled AA 2009 roadshows to key Chinese aviation hubs likeChengdu, Xi’an, Shenyang and Ha’erbin.Hong Kong serves as a gateway to thegrowing China market – with its need by2026 for over 3,500 commercial and civilaircraft units and equipment required for the97 new airports to be built. The AA Clubcontinued on Page 3Date: 8-10 September, 2009Location: Hong Kong SARVenue: AsiaWorld-Expo @Hong Kong Int’l AirportExhibitionhours: 10.00am - 5.00pmAdmission: Trade visitors onlyConference: 8-9 September, 2009 atAsiaWorld-ExpoConference HallHotel Accommodation:Visit www.asianaerospace.com and click “Hotels”Air Travel:Official airline: Cathay Pacific Airways; visitwww.cathaypacific.com for eligible discountedrates.Co-located with:INSIDE:INDUSTRY FACTS• DHL doubles central Asia hub• Agility continues aggressiveChina expansion• Wal-mart sets up regional HQ• Cargo screening technologygoes under focusPublished AIR FREIGHT by Air ASIA Freight UPDATE Asia, NOVEMBER-DECEMBER 51 Changi Business Park 2008 Central 2, The Signature #07-01, Singapore 486066 - www.airfreightasia.com

Building the cargo supply chain togetherBangkok, Thailand | 2-5 MarchPrincipal Media Sponsor:Focus on the customer: delivering in turbulent timesIATA’s annual World Cargo Symposium is the only industryevent to bring customers and the entire air cargo supplychain together to take concrete action in building a safe,secure, efficient and quality air cargo industry.Find out more www.iata.org/events/wcs09

AA Club China launchfrom Page 1China offers a 24/7, online opportunity toengage with qualified professionals fromChina’s commercial aerospace and civilaviation industry.Preecha S. Chen, President of ReedExhibitions Greater China, observed:“We have long understood the importanceof the Chinese market, especially froma long-term perspective, which is whyThe Club China initiative will help to Deliver BusinessContacts; bringing together key industry professionalsthroughout the year, as well as during the show.we have focused on presenting China’smarket opportunities and potential to theworld. To create further awareness ofChina’s emerging commercial aerospaceand civil aviation industry, as well asthe ever-growing importance of Asianeconomies, Reed Exhibitions has decidedto launch the AA Club China initiative afull year ahead of the show. In so doing,we are effectively helping our customersto prepare and communicate better withtheir targeted audience in China.”The inception of the dedicatedcommunity is marked with thesoft launch of AA Club China’swebsite (www.airclubchina.com),which also coincides with thepre-registration of visitors to AA2009.With the support of variousleading international and localindustry media partners, as well asindustry bodies, the website aimsto deliver highly engaging contentto its members and empowerthe Chinese civil aviationprofessionals. The website is alsoable to facilitate online informationexchange and discussions throughblogs and forums.High flyers to meet at Latin America eventAirline Business, the monthly boardroommagazine for the aviation industry, hasannounced this year’s date for its secondNetwork Latin America, the prestigiousnetworking event that brings together routeplanners from airlines and airports.The exhibition and conference will behosted by Aruba Airport in the Caribbeanon the 7th, 8th and 9th December 2008,and follows last year’s successful launchevent in Monterrey, Mexico.To find out more about the event, logon to www.networklatinamerica.com orcontact event manager Jane Cartwrighton Tel: +44 208652 3659 Email: jane.cartwright@flightglobal.comSPECIAL EVENTS ATAIR FREIGHT ASIA 2009AFA09 Golf TournamentTee off on September 7 with the traditionalAir Freight Asia Golf Tournament at theSKYCITY NINE EAGLES GOLF COURSE– a perfect place to start your networkingactivities during AFA09.Conveniently located to the east of theexisting passenger terminal, the SKYCITYNINE EAGLES GOLF COURSE is set withinan aesthetically attractive environment witha landscape of undulating greens, artificiallake and extensive sand bunkers. It is alsoHong Kong’s first nine-hole golf coursefeaturing an “Island Green”.The golf course provides acomprehensive range of facilities includingequipment rental, luggage storage,restaurant, a club house, and pro-shop, aswell as lighting for night-time golfing.For further information, go to website:www.airfreightasia.comNetworking is the name of the game atAFA - Sponsorship packages on Page 5.Welcome receptionThe organisers of AFA09 and the AsianAerospace International Expo and Congress2009, will invite exhibitors and delegates to awelcome reception from 6pm - 10.30pm onSeptember 7 at the 1,000-room Hong KongSkyCity Marriott Hotel, which is connectedto AsiaWorld-Expo by a walkway.To receive the Air Freight AsiaUpdate newsletter free-of-charge,please complete this form and senda copy to Ms Rosie Chan at faxnumber +65 6588 3341.Yes! I wish to receive a FREEsubscription to Air Freight AsiaUpdate.Digital formatPrint formatEnglish versionChinese versionPlease tick one box for publication format andone box for language version.AIR FREIGHT ASIAUPDATESubscription FormReader Information:Name: (Mr/Ms)Job title:Company name:Type of Business:Street address (or PO Box):City:Country:Email address:Phone:Postal code:Fax:AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 20083

AIR FREIGHT ASIA 2009 SPACE RATESShell Scheme Early Bird Regular Rate9-20 sqm HK$3945/sqm HK$4095/sqm21-50 sqm HK$3865/sqm HK$4056/sqmRaw Space Early Bird Regular Rate25-50 sqm HK$3430/sqm HK$ 3585/sqm51-100 sqm HK$3365/sqm HK$ 3545/sqm101-150 sqm HK$3290/sqm HK$ 3465/sqmDesign Plus Early Bird Regular Rate9-20 sqm HK$4925/sqm HK$5350/sqm21-50 sqm HK$4845/sqm HK$5310/sqmEarly Bird Package for 9 sqm is charged at HK$52,540 which includesone 9 sqm shell scheme booth, one delegate pass and one halfpage full colour advertisement in Air Freight Asia Update.Early Bird Package for 18 sqm is charged at HK$94,180 which includesone 18 sqm shell scheme booth, two delegate passes, one full pagefull colour advertisement in Air Freight Asia Update.Early Bird rate is valid strictly until 30 November 2008.Name:Title:Company Name:Tel:Email:AIR FREIGHT ASIA 2009 SPACE RESERVATION FORMYES, I want to reserve space at Air Freight Asia 2009Signature:Shell SchemeRaw SpaceDesign PlusFax:Date:sqmsqmsqmFor more than one booking, please photocopy this form.Please return the form by fax to +65 6588 3341 or send via email torosie.chan@reedexpo.com.sg.AFA 2009ExhibitiorsAeroflot CargoAeromexico CargoAgilityAir Astana CargoAir Bridge Cargo AirlinesAir France-KLM CargoAir Logistics GroupAlitalia CargoALS Advanced Logistic SystemsAmSafe BridportAtlas AirBahrain International AirportCathay Pacific CargoCargoitaliaCargoluxCargo Village NewsCHAMP Cargo SystemsCologne/Bonn AirportCSA CargoDelhi International AirportDelta CargoDNATA CargoDubai AirportsDubai Logistics CityDüsseldorf AirportEmirates SkycargoEtihad Crystal CargoFreightscanHongkong Air Cargo Terminals LtdHong Kong International AirportHouston AirportKorean Air CargoLeipzig-Halle AirportManchester Airport GroupMaximus Air CargoMiami AirportNordisk AviationNorthwest Airlines CargoPolar Air CargoSaudi Arabian AirlinesSharjah AirportSkyTeam Cargo AllianceTHAI CargoTNTUnited Airlines CargoVRR Asia Pte LtdWorldwide Flight ServicesWorld Airways6AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 2008

BuffetAreaBuffetAreaBuffetAreaBuffetArea Air Freight Asia will beconveniently locatedimmediately on the leftof the main entrance tothe AsiaWorld-Expo Halls,which will be the venuefor the largest dedicatedcommercial aviationshowcase.Get in touch with thecontacts on adjacent pageto confirm your preferredexhibition location at AFA2009.AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 2008

AIRLINESAustrian all-cargo carrier is the launchcustomer for Quiet Trader programmeAmerer Air, Austria’s privateall-cargo carrier, has becomethe launch customer for BAESystems Regional Aircraft’s BAe146 QT (Quiet Trader) freighterprogramme.The aircraft was converted atAerostar in Bacau, Romania anddelivered to Amerer Air’s baseat Linz, where it is scheduled tobe operated on behalf of majorintegrators, as well as on ad hocfreight charter work.Amerer Air has created aThe Amerer Air BAe 146 QT with the new livery.logistics centre in Linz, where the airlinecurrently operates a Fokker F27-500six-tonne freighter that is used to servemajor freight forwarders, express cargocompanies, private shippers, integratorsand governments.In addition, Amerer Air has built up,since 1999, a substantial long-distanceinternational truck transportation businessas a supplement to the air freight sectorand has a fleet of trucks and large containervehicles centre.AAPA lashes out at EU ETS decisionThe decision by the European Parliament toinclude aviation in the European EmissionsTrading Scheme (ETS), has been blastedby Andrew Herdman, the director generalof the Association of Asia Pacific Airlines(AAPA).“European legislators have again overreachedtheir authority in seeking to imposethis scheme on international airlinesoperating outside European airspace,”Herdman said.More than 130 non-EU governmentsmade their opposition abundantly clearat the ICAO Assembly in September2007, when the EU proposals were firmlyrejected as incompatible with the ChicagoConvention governing internationalaviation.Herdman said: “One of the mostoffensive aspects of the scheme is thatEurope is, in effect, appointing itself astax collector-in-chief for internationalaviation.Like a number of other purported greentaxes and levies, there is absolutely noassurance that such funds will be directedtowards meeting genuine environmentalobjectives.”The commercial aviation industry isalready strongly committed to a range ofmeasures to further improve fuel efficiency,and reduce emissions, with a medium termgoal of achieving carbon-neutral growthand long term sustainability, he said.According to Herdman: “Aviationis more than willing to play its part incontributing to wider efforts to addressclimate change. We support emissionstrading, but as far as international aviationis concerned, we need a consensus on aglobally harmonised solution. Consistentwith Article 2 of the Kyoto Protocol, ICAOis the only forum in which all 190 Statescan reach such an agreement. We lookto the recently formed ICAO Group onInternational Aviation and Climate Change(GIACC), which includes representativesfrom Europe, as the key to resolving thecurrent political impasse, and urge them tomake every effort to move the internationaldebate forward.”Meanwhile, IATA warned thatEurope’s unilateral and extra-territorialapproach will spark international legalbattles. “What right does Europe haveto impose ETS charges on, for example,an Australian carrier flying from Asia toEurope for emissions over the MiddleEast?” director general and CEO GiovanniBisignani asked.Delay plan for new AA China route gets OKFederal regulators have approved a requestby American Airlines to delay launch ofa new non-stop service between Chicagoand Beijing for a year, because of high fuelcosts and problems in the airline industry.The brief order from the TransportationDepartment approved the request to delayservice, until no later than April 4, 2010.Air France freighterdeal is confirmedWorld Airways has signed a contract withAir France to operate one MD-11F on afull-time basis for service from France toa variety of destinations in North Africa,and a weekly flight to Brazil. This isthe second consecutive year that WorldAirways has provided a freighter aircraftto help Air France meet its African marketrequirements.See interview with outgoing AirFrance cargo chief on page 23.Qantas starts itsA380 serviceQantas has inaugurated its Airbus A380commercial services with the delivery ofthe first of 20 aircraft its has on order.The first of the Qantas A380s, configuredin a four-class cabin format, was handedover to the airline in Toulouse in midSeptember, prior to service entry onthe Melbourne to Los Angles route onOctober 20. Pictured is the aircraft in thenew livery on its first flight from Hamburgin August.Singapore Saudialliance agreedSaudi Arabian Airlines and SingaporeAirlines have signed a Memorandum ofUnderstanding (MOU) for marketingco-operation, establishing a frameworkfocused on developing routes between theKingdom of Saudi Arabia and Singapore.The non-binding MOU outlines theareas in which the two parties will cooperateto seek new business opportunities,improve airline efficiency and ultimatelydeliver an enhanced customer experience.These areas include marketing cooperation,code-share arrangements, schedulecoordination, and cargo facilitation.The MOU excludes co-operation insetting cargo rates, or any other activitynot exempted under competition laws.8AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 2008

AIRLINESAbu Dhabi heavylift specialist startsoverhaul plan for Russian freightersFleet overhaul will extend life of Abu Dhabiheadquartered Maximus’ heavy-lifter Ilyushin fleet.Maximus Air Cargo, the Abu Dhabiheadquarteredspecialist ‘heavy-lifter’, isundertaking a $10 million overhaul of itsIlyushin fleet – extending the operatinglifespan initially by seven years.The three IL76TD freighters wereproduced in 1992 and acquired byMaximus in 2005. The carrier bought threeadditional D-130 KP-2 enginesfrom NPO Saturn, Russia, a yearlater.The overhaul and upgradeprogramme is being undertakenwith Aviazapchast, in conjunctionwith the Ilyushin Design Bureau.One aircraft has already beencompleted at the Ryazan Plant 360in the Russian Federation, work onthe second is under way, and thethird will fly to Russia in January.Each comprehensive overhaul takessix months to complete.“Safety is the first issue,” saidMaximus president and chief executiveFathi Hilal Buhazza. “More restrictionshave been placed by EU legislation onageing aircraft on the grounds of safety andsecurity. Given our substantial investment inlife extending major overhaul programme,this only benefits the Maximus Air Cargofleet and will continue to do so in the nextseven years and beyond,” he said.JAL cancels its JFK freighter serviceJapan Airlines cancelled its freighterservice between Tokyo Narita and NewYork JFK on Oct. 1, as part of a reductionin cargo services for the second half of itsfiscal year ending March 31.JAL plans to operate a fleet of seven747-400Fs by the end of its fiscal year,one fewer than originally planned. It iscancelling the conversion of a 747-400into a freighter. By the end of Novemberit will retire its last two 747-200Fs. It alsooperates three 767-300Fs.The carrier will continue to operatecargo flights to Chicago O’Hare and LosAngeles but will reduce from six to fivethe number of weekly 747-400F flights toLAX from Oct. 1.JAL will continue to operate twicedailypassenger flights to JFK and utilisebelly space to move cargo, followed bytruck services from New York to Chicago,its main US freight gateway.Qatar Airways launches new Spain routeQatar Airways Cargo has introduced anew non-stop freighter service linkingthe airline’s operational hub of Doha withZaragoza in northern Spain. The serviceoperates every Saturday using an AirbusA300-600 freighter. The return flight fromZaragoza stops in Dubai, which increasesQatar Airways’ freighter services to theemirate to three times per week.Qatar Airways Cargo’s freighternetwork covers eighteen destinationsworldwide.According to Qatar Airways CEO,Akbar Al Baker, the airline’s cargovolumes have increased, due largely tothe huge growth in the number of routes,aircraft and increased frequency to manydestinations.Chadian cargo airline starts Al Ain routeToumaï Air Tchad, the national carrier ofthe central African republic of Chad, is thelatest airline to operate services to Al AinInternational Airport (AAN) in the UnitedArab Emirates.Abu Dhabi Airports Company (ADAC),announced the airline will operate a weeklyservice to Al Ain from its main home baseat N’Djamena International Airport, inconjunction with Cargolux.AIRPORTDusseldorf roleattracts carriersDUS CargoLogistics, themain cargohandler atDusseldorfairport, saidit continuesto fulfil ani n c r e a s i n grole as a maindistributioncentre formuch ofN o r t h e r nGermany andis attractingseveral new carriers.Gerton Hulsman: Alert tocustomer needs.Lufthansa has started A340-300 serviceto the USA and Canada, while Egypt Airhas launched twice weekly full freighteroperations with A300-600Fs. Armavia,which started operations at Dusseldorf inMay, operates A320 passenger flights fromYerevan in Armenia.This allows the weekly import of fish,especially fresh crayfish that is muchsought after in the region.Managing Director of DUS Logistics,Gerton Hulsman, has clear objectives forfuture cargo traffic at Germany's thirdlargest airport.“Our company is one of seven profitcentres of Dusseldorf Airport and handlesthe major slice of the cargo throughput.With so many other airports within afew hours drive, we have to keep on ourtoes to maintain our traffic, which meanslooking after our forwarders and attractingnew customers,” he said.He added: “We are ideal for aircraftsuch as B767, A300, A310 and A330s,which feed cargo to the region and onoutbound, export locally sourced highvalue goods.”Incheon Airportstake up for saleSouth Korea will put a significant stake instate-owned Incheon International Airportup for sale, as part of a drive to reformstate-run companies.The government will sell a 49 percentstake in Incheon International Airport,which includes a strategic tie-up witha foreign airport operator to secureinternational competitiveness, an officialstatement said, without specifying a timeframe.AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 2008 9

BUSINESSACP worldwide wins Kingfisher cargobusiness in both UK and Ireland marketsACP Worldwide has been appointedGSSA for Bangalore-headquarteredKingfisher Airlines cargo servicesin both the United Kingdom andIreland.ACP is now responsible for sellingthe carrier’s cargo services, not onlybetween London and Dublin and thesouthern Indian city, but also onwardsto destinations across India.Services commenced fromLondon in September, using an AirbusA330-200 aircraft offering up to 12tonnes cargo capacity per flight.Onward flights will offer multiple dailyfrequencies, depending on destination,on the airline’s narrow-bodied domesticnetwork, and include cities such asHyderabad, Chennai, Goa, Cochin andTrivandrum.“The Indian air cargo market isextremely buoyant and sustainable doubledigit growth is predicted for the foreseeablefuture,” says Kingfisher’s UK and IrelandCargo Manager, Stephen James.Steve James (left) and Rod Entwistle: Market supportsambitious plans for further Kingfisher flights.The carrier already has plans to expandits direct ex-UK services this winter withthe addition of Mumbai to its internationalnetwork and other destinations to SouthEast Asia are expected to follow soonafter.Says ACP Worldwide’s Director, RodEntwistle. “We have already planned anexciting range of tariffs and service supportinformation and are looking forward to theexpansion of the service portfolio later thiswinter following a successful launch.”DHL doubles Central Asia Hub capacityDHL’s US$110 million Central Asia Hub(CAH) expansion has been completed fiveyears ahead of schedule.With a total investment of US$210million, the facility, which is located atHong Kong International Airport, is thefirst large-scale automated Express hubin Asia Pacific and significantly boostsDHL’s operational capability in Asia, saidthe company.The Central Asia Hub has doubledin size to 35,000 m2, and is expected tohandle 40 million shipments this year. Theautomated facility has a throughput of75,000 pieces per hour, 114% more thanthe pre-expansion capacity.According to Dan McHugh, CEO ofDHL Express Asia Pacific, the expansionof the CAH is testament to the continuedgrowth of intra-Asia trade and the Asia-Europe trade lane. Currently, more than60% of express cargo processed by theCentral Asia Hub is intra-Asia Pacificshipments, a figure DHL expects willcontinue to grow alongside rising intraregionaltrade.Hong Kong SAR’s Transport &Housing secretary, Eva Cheng, said thatthe government will support furtherdevelopment of the express cargo industryby improving the airport’s links to nearbymarkets, and plans to increase the runwaycapacity gradually, reaching 58 movementsper hour next year and 68 movements perhour by 2015.Cheng added that runway capacitycould be substantially increased to morethan 100 movements per hour with theaddition of a third runway.With more than 40% market shareand US$2.2 billion already invested inthe region, DHL will boost its networkcapability with its North Asia Hub atPudong, International Airport in Shanghai,which is scheduled for completion in2010.Middle East cargo screen contractAmerican Science and Engineering, Inc.,has been awarded a multi-year $12.5million contract from an unidentifiedMiddle East government to provideservice, maintenance, training, and spareparts for multiple cargo screening systems,including the OmniView GantryInspection System, the Z® Portalscreening system, and the Z® BackscatterVan (ZBV).Virgin Atlanticselects SkychainVirgin Atlantic has selected Mercator’sSkyChain IT cargo management system asits next generation cargo solution.Mercator, the Dubai-based EmiratesGroup subsidiary, plans to completeimplementation by the end of April 2009.The solution will be implemented inVirgin Atlantic Cargo headquarters inCrawley, England. Duncan Alexander,vice president, Mercator, said: “The teamat Virgin Atlantic put our team and oursolution through an extremely rigorousselection process.”The British carrier becomes the fifthairline customer for Mercator’s SkyChainsolution, joining Emirates Airline,Swiss WorldCargo, Midex Airlines, andSriLankan.Mercator said its centralised cargoreservation and business managementsolution, offers a number of advantages overexisting systems, including compatibilitywith a wide host of customer systems,capacity to accommodate upgrades andchanges through Java architecture, andreal-time access and updates, all designedto address the current needs of today’scargo customer.From its launch in April 2004, SkyChainwas built in less than two-and-a-half yearsand was implemented successfully inAugust 2006.SriLankan alsosigns up for systemSriLankan Airlines has signed up forMercator’s SkyChain cargo IT system.Patrick Naef, Head of Mercator said:“The timing of this partnership is significant– coming as it does when skyrocketing fuelprices are having a tremendous economicimpact on the airline industry. Thispartnership clearly demonstrates that majorplayers have confidence in our IT solutionsto reduce costs and increase revenue.”Mercator plans to completeimplementation by the second quarter of2009. The solution will be hosted out ofMercator’s data centres in Dubai and usedby authorised SriLankan cargo users out ofColombo and other outstation cargo officesglobally.Johann Wijesinghe, head of WorldwideCargo, SriLankan Airlines, said: “SriLankanCargo is recognised today as one of themost energetic, technologically-advancedand cost efficient freight operators in SouthAsia.”10AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 2008

BUSINESSAgility continues aggressive Chinaexpansion with new acquisitionAgility has agreed to acquire Baisui UnitedLogistics (Shanghai) Co., Ltd (Baisui),a Shanghai-based domestic logisticscompany that focuses on providing arange of logistics services, including intracity,regional and long-haul transport andwarehousing, mainly to the chemicals,automotive, and fast moving consumergoods (FMCG) sectors.With over 15 years of experience, thecompany has more than 300 employees in15 locations throughout China, includingShanghai, Shenzhen, Tianjin, Wuhan,Nanjing and Chongqing, and manageseight logistics centres with more than130,000 sq. m of warehouse floor space.In addition the company has its ownfleet of trucks and works with over 75trucking companies on a regular basis forits regional distribution needs.“The company has an excellentreputation in providing a range of specialistservices in the chemicals, automotive, andFMCG sectors, which are growing stronglyin China. The company also strengthensDescartes delivers more channel optionsDescartes Systems Group, a global ondemandsoftware-as-a-service (SaaS)logistics solutions provider, announcedthat its long-time customer, SAS Cargo,has joined Descartes’ GF-X Exchange.“Descartes has been our preferredprovider for air messaging for almost 20years so joining Descartes’ Global GF-XAgility’s domestic transportationcapabilities both in eastern coastal Chinaand inland China along the Yangtze River,”said Wolfgang Hollermann, Agility, chiefexecutive officer, Asia Pacific.“Baisui Logistics complements ourgrowing service offering in China, bothvertically in specialist sectors and byproviding improved connectivity throughthe company’s extensive domestic transportnetwork.“We will continue to grow organicallyand through acquisition in order to provideour customers with an integrated logisticssolution throughout China,” said JamesGagne, chief executive officer, GreaterChina Area, Agility.“We are very excited to be joiningAgility at this stage of its expansion. Wesee Baisui’s provision of value-addedservices and road transportation as anexcellent fit to Agility’s supply chain andforwarding capabilities, commented YanShiping, general manager & president ofthe board, Baisui.IBS Software Services joins Cargo 2000IBS Software Services of Indiahas joined Cargo 2000, theindustry quality managementinitiative.Over the past 11 years IBShas grown into a multinationalorganisation with 2,000 staffbased at 14 locations aroundthe world, as well as sevensoftware development centresin Atlanta, Boston, Bangalore,Cochin, London, Trivandrum,and Washington DC.The company providessoftware solutions for anumber of airline customers, includingEmirates, Cathay Pacific, South AfricanAirways, Air New Zealand, Oman Air,Iberia, KLM, Kingfisher Airlines, ChinaSouthern Airlines, Copa Airlines andAkshay Shrivastava:Imperative to join theindustry initiative.Qantas Airways.Akshay Shrivastava,global head, Cargo Lineof Business, IBS SoftwareServices, said: “Cargo 2000is designed to improveservice levels while reducingthe time spent and resourcesburnt to handle irregularitiesin the management of thecargo lifecycle.IBS’ suite of newgenerationcargo managementsolutions are being used bysome of the best air cargocarriers in the world who are very qualityconscious, making it imperative for us tojoin Cargo 2000 and to underscore ourcommitment to provide the best to theindustry. “Exchange is a natural progression in oursuccessful relationship and complementsour use of existing Descartes services,” saidNils Pries Knudsen, vice president, GlobalSales at SAS Cargo. “We are responding tothe interest from freight forwarders in beingable to book cargo shipments electronicallythrough this channel as well.”CEVA chooses HacisPictured at the signing are, from left: WarrenBishop, MD Hacis; Anthony Wong, chairmanHacis; Chris Pollard, MD South China,CEVA; and Michael Yuen, country managerfreight management South China, CEVA.Hong Kong Air Cargo Industry ServicesLimited (Hacis) confirmed CEVA Logistics(Hong Kong) Limited is a new customerfor its airport direct export service.The service includes physical cargohandling, warehousing of export cargoand tendering of export cargo to cargoterminals.* CEVA Group Plc has reported revenueof €1.7bn for the quarter, helped by a strongperformance in its Contract Logistics andFreight Forwarding business.First airport dealfor Cargo 2000From left: Dr. Wilhelm Bender, Fraport AG,Executive Board Chairman; Lothar Möhle,Cargo 2000 Managing Director; Karl-HeinzKöpfle, Lufthansa Cargo AG, Executive BoardMember Operations; Peter Schmitz, FraportAG, Fraport Ground Services division, SeniorExecutive Vice President.Fraport AG is the first airport operator tojoin the IATA Cargo 2000 quality system.“This initiative opens up possibilitiesfor Fraport as an airport operator andground-handling provider to apply itsextensive know-how actively and to helpdefine standards within the frameworkof the Cargo 2000 quality managementsystem,” said Fraport executive boardchairman Dr. Wilhelm Bender.AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 2008 11

BUSINESSGerman agent for RJRoyal Jordanian (RJ) has selectedCargoworks Europe to be its general salesand services agent (GSSA) in Germany, aspart of the airline’s cargo sales outsourcingstrategy.RJ President and CEO, Samer Majali,said: “Cargoworks is a strong partner toRJ, with a commitment to excellence inservice. They are also using Cargospot, thesame IT solution that RJ is installing.”New CEVA divisionCEVA Logistics has launched a newdivision – Vehicle Logistics – in Thailand,to complement its Contract Logistics andFreight Management operations in theregion. CEVA Vehicle Logistics (Thailand)is aimed at car dealers, automotivemanufacturers, auction houses and financecompanies. The new division can move upto 880 cars at one time, and has a storagecapacity of up to 20,000 cars.Cool deal concludedPanalpina has signed a global MasterLease Agreement with Envirotainerto provide temperature-controlled aircargo containers for its new cold chainmanagement solutions for the healthcareindustry.Panalpina has also agreed to participatein Envirotainer’s quality and trainingprogramme – the Qualified EnvirotainerProvider (QEP) programme. The twocompanies have worked together for morethan six years in various markets aroundthe world, but this is the first time theyhave agreed to a global cooperation.Hanjin hub leaderKorean global logistics group, Hanjin,the Korean Air parent company, hasannounced further details of a project it isleading to create a Central Asian logisticshub in Uzbekistan.Hanjin group chairman, Yang Ho Cho,along with Uzbekistan first deputy primeminister, Rustam Azimov, and UzbekistanAirways director general and head ofthe Uzbekistan Aviation Administration,Valeriy Tyan, attended a ceremony at NavoiInternational Airport to announce a newKorean Air cargo flight operation to theUzbekistan airport and to sign the ‘NavoiInternational Airport Joint DevelopmentProject’ contract.12Wal-Mart sets up Asia regionalheadquarters in Hong KongDirector-General of Investment Promotion atInvestHK, Mike Rowse (middle) and Wal-MartAsia’s management team. (From left) vice president,People, Brian Walker; vice president Real Estate &Development, Brent Seay; senior director, Strategy,Tony Taylor; president and chief executive officer,Vicente Trius; senior vice president, Development,Peter Sharp; and CFO, senior vice president, Financeand Strategy, Andreas Schulmeyer.Wal-Mart Stores, Inc. has set up its newAsia regional headquarters in Hong Kong.President and chief executive officerfor Wal-Mart Asia, Vicente Trius, said:“Just as the Wal-Mart America’s regionaloffice in Miami oversees the company’soperations in Canada, Central and SouthNordisk Aviation Products is highlightinghow lighter-weight unit load devices(ULDs) can support airline carriersactively engaged in weight-reductionprogrammes to reduce greenhouse gasesand fuel consumption.Nordisk provides two of the lightestcargo containers on the market – theNordisk WeightSaver and the NordiskUltralite®. Both of these containers canhelp reduce both total cost of ownership(TCO) and greenhouse gases. At the sametime, they can contribute to airlines’ weightreductionprogrammes, as illustrated bytwo examples, said the company.America, the new Wal-Mart officein Hong Kong will oversee thecompany’s operations in mainlandChina, India and Japan, as well asidentify new business opportunitiesfor the company throughout Asia.”Mike Rowse, Director-General ofInvestment Promotion at InvestHKcommented: “The establishment ofWal-Mart’s regional headquartershere represents a powerful voteof confidence in Hong Kong asthe preferred location for globalcompanies to manage business inChina and elsewhere in Asia.”Some 3,900 overseas andmainland companies operateregional headquarters or regionaloffices in Hong Kong.Wal-Mart Asia’s vice president,People, Brian Walker, said: “With anabundant pool of talent and professionals inthe city, Wal-Mart is able to recruit the rightlocal staff for our regional headquarters.In addition, Hong Kong is equipped withexcellent transportation, communicationsand technology infrastructure, which areessential tools for our regional managementteam.”Light touch for gas and fuel challengesA UPS survey of top pharmaceutical,medical and biotech supply chain decisionmakers put cost management top of theirlist of concerns. The survey, entitled ‘Painin the (Supply) Chain’ reported that 60%of the companies said they were “veryconcerned” or “extremely concerned”about the potential impact of supply chaincosts on their business.Representatives of one major carriercalculated that it can reduce its TCO by$2.8 million by using the Ultralite alone.Additionally, a variety of organisationsstated that every kilogram of fuel savedreduces CO2 emissions by 3.2 kg.Nordisk estimates that a B747-400using the WeightSaver and Ultralitecontainers would be able to save its ownermore than $84,000 per year on average.This calculation is based on using 14Nordisk’s lower-weight containers, versusthose of standard weight, for an average250 flights per year (each flight of eighthours or more).Pharma survey reveals cost concernsAccording to the survey, 25%identified managing supply chain costs asthe issue they had been most successfulat addressing. Among the companieswith more than $1bn revenue, 74% ofrespondents estimated that costs relatedto product expirations, returns and recallshad cost them hundreds of thousands tomillions of dollars every year.AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 2008

BUSINESSCurrent turmoil is a two edged sword forcargo security screening specialistKintetsu inks adeal with OAGAndre Johnson, president of FreightScan,finds the current turmoil in the air cargoindustry both a blessing and a curse.On the one hand, it takes more timeto identify prospects. “A lot of freightershave been scrapped. There’s no point incalling people who are going to cancel alot of flights tomorrow,” he said.On the other hand, he has found moreinterest in the industry. “We’re gettingmore attention because people see theycan’t go on with the statusquo,” Johnson commented.C a l i f o r n i a - b a s e dFreightScan is trying to drumup interest in its FS100, anautomatic dimming system.Using Defined Imagingand Multiple MeasurementTechnology, the set-up cancalculate the dimensions ofa single shipment in fourseconds – much faster thana manual measuring process,according to the developer.Over and beyond thesavings associated with afaster dimming process, thesystem has ramifications forcargo security. The data captured abouta shipment build up a profile that can beused to monitor the integrity of the cargoas it moves through the supply chain,Johnson said. The FS100 captures adigital and laser image for the freight andincorporates that visual record with theair waybill. The data from the scanningprocess form a “shipment DNA”, whichcan be checked along the supply chain forevidence of tampering.In a second development, FreightScanhas come up with an imaging system called‘CargoVizion’ that scans full pallets withradio waves, which create a 3D image ofthe contents of all boxes on the skid. The3D image shows in which box a securityrisk is located, so if an airline comesacross a suspicious shipment, it knowsright away where exactly to conduct acloser inspection.Johnson has been trying to obtain thestamp of approval for this product fromthe US Transportation Security Agencyto get it on the TSA’s list of certifiedtechnology for cargo screening, butnavigating through the bureaucracy hastaken six months already.“They’re looking at all these differentthings, so I haven’t got them to tell meyet what I need to do to get this certified.We’re not asking the government formoney,” Johnson said.Much of the technology presented tothe authorities for cargo security is basedon luggage screening systems or otherwisedesigned by good engineers who havelittle insight into the needs and processesof the air cargo industry, he added.In the long run he intends to marketthe dimming system and the screeningtechnology as a package, but for now he isconcentrating solely on the FS100 in hismarketing efforts. Withoutofficial approval, there isno point in marketing theCargoVizion technology,he said. Tests with theFS100 have been runfor a number of carriers,including Martinair,United Airlines andDHL, yielding promisingresults and significantcost savings, Johnsonclaimed. One carrier andan integrator are closeto signing up for thetechnology, he added.Since this summer,FreightScan has movedaggressively into the Asian market,forming strategic partnerships withregional players to install, service andsupport the technology.FreightScan completed a series ofsystem evaluations, including with amajor US air carrier in Japan and largescalehandlers in Bangkok and Shenzhen,with additional evaluations for air carriersin Singapore and Japan scheduled.FreightScan has signed agreementswith Cargo Engineering Japan to dedicatea local business development team toworking with customers in Japan. Inaddition, a regional manager based inSingapore will work throughout the restof Asia, with field application servicesbeing provided to the Asia-Pacific marketby Certosa Express International, a HongKong-based logistics support company.Certosa will work with FreightScan toservice and install FS100 dimensioningsystems, providing 24/7 swap replacementservices throughout China and Asia througha network of 11 stocking locations.Having initially dealt with a marketwhere rates are typically below one dollar,Johnson is optimistic about the Asianmarkets, where transpacific rates aresignificantly higher. “The dollar amount isso high that it only takes one air waybill aday to pay for the system,” he said.– Ian YauAndre Johnson: We are notasking for federal funds.Pictured from left to right: John H.DeibertManager Business Development Europe &Africa, Kintetsu World Express (EA) BV, BartJan Haasbeek, Global Key Accounts Manager,OAG Cargo Solutions, Thomas Weppelmann,Director Business Development EA Region,Kintetsu World Express (EA) BV and KurtNobbe, Manager Business DevelopmentEurope & Africa, Kintetsu World Express(EA) BV.Kintetsu World Express (KWE) has signeda contract to use OAG Cargo’s AirfreightRates (AFRA) application to distribute andsearch for real-time worldwide cargo ratesat its offices in 10 countries in Europe andSouth Africa.This latest development comes as thetotal number of airfreight rates publishedby AFRA exceeds eight million for the firsttime. In total, 650 airlines have publishedtariffs on the site (www.oagcargo.com).This information is accessed regularlyby over 10,400 users from 1,265 officesworldwide.Thomas Weppelmann, director businessdevelopment EA Region, Kintetsu WorldExpress, said: “Expanding our usage ofAFRA will enable us to build excellentworking relationships within our KWEgroup and our customers as a globallogistics partner”.Agility DGS winsCorps contractAgility Defense & Government Services(Agility DGS) subsidiary company, TaosIndustries, has won a contract to store,distribute and maintain equipment for theUS Marine Corps at 15 bases in the US andfive others around the world.Agility DGS, headquartered inAlexandria, Virginia, said the one-yearcontract included six one-year options andwas worth up to $140m over seven years.AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 2008 13

NEWSAMB enters Beijing logistics propertymarket following building acquisitionsUS-based global developer and industrialreal estate owner, AMB PropertyCorporation, has entered the China marketwith the acquisition of three buildings,covering around 28,400 sq.m. in the BeijingAirport Logistics Park, adjacent to BeijingCapital International Airport (PEK).“China’s continued increase in bothproduction levels and demand for consumergoods creates sustained requirements forlogistics space: industrial output was up16% over last year ending June and retailsales were up 23% over the same period,”said Hamid Moghadam, AMB’s chairmanand CEO.“With rapid access to transportationnetworks and proximity to industrialparks and the city centre, AMB BeijingCapital Airport Distribution Center 1 isin a preferred location for third-partydistributors,” commented Guy Jaquier,AMB’s president, Europe and Asia.“Demand for space in this strategicairport submarket has exceeded ourexpectations, as evidenced by leasestotalling 8,300 sq.m. to two logisticssubsidiaries of Fortune Global 500companies, signed before we closed on theacquisition.These leases are in addition to anexisting customer occupying 11,600 sq.m.of space.”In addition to Beijing CapitalInternational Airport, AMB owns andoperates air cargo facilities in Asia atTokyo’s Narita International Airport,Singapore’s Changi International Airport,and Seoul’s Incheon International Airport.WWPC team breaks cargo lift record againThe 40 tonne consignment eclipses an earlier record.WWPC/Finland, Procargo Ltd, hasfollowed up its record single cargo loadoperation, to transport a 39 tonne metallicroll for a paper machine from Finland tothe USA, with another record transport of a40 tonne similar piece of equipmentfrom Germany to Japan.The historic load on a Volga-Dnepr Cargo Airlines Ilyushin76TD last year was exceeded in thelatest operation on a similar aircraftcarried out with WWPC members,LS International Cargo Gmbh inGermany and Allfort Inc. in Japan.The 13-metre long metallic rollwas loaded at Frankfurt-Hahnairport and offloaded two days laterin Osaka International Airport, withonward shipment to a paper plantin Tokushima, on the Island ofShikoku.WWPC, the Worldwide ProjectConsortium Ltd, is the only existing globalfranchise-network for Project CargoSpecialists with representation in morethan 70 countries.Cargo crime threatens Dutch roleGovernment officials, manufacturers, lawenforcement agencies and transport andlogistics providers have met in Amsterdamto develop a strategy to fight rising cargocrime in The Netherlands that currentlyresults in annual losses in excess of €330million, and threaten its position as adistribution centre for high value cargo.The Transported Asset ProtectionAssociation (TAPA), organisers of theevent, said the manufacturers of highvalue, high risk products may be forcedto alter their supply chains to avoid TheNetherlands unless the trend is reversed.David Reid, Acting Chairman of TAPAEMEA, said: “We urgently need to debatethe increasingly costly and violent impactof cargo crime through The Netherlands.”With annual supply chain lossesof €8.5 billion across Europe, theone-day conference was aimed atidentifying practical ways to safeguardThe Netherlands’ position as a primarydistribution centre for high value cargo.TAPA has initiated similar action inGermany, South Africa and the UK.SEKO unit opensHong Kong officeSEKO, a global provider of supply chainsolutions, including transportation,logistics and IT solutions, recentlyannounced that its Hong Kong operation,SEKO Hong Kong, has joined forces withthe UK arm of SEKO, SEKO Synergy Ltd,to form a new Hong Kong-based companydedicated to increasing its market share inthe EMEA region.The new company, named SEKOSynergy Greater China (SSGC) Ltd, islocated in the same building as SEKOHong Kong and is exclusively dedicatedto handling all supply chain activity andpricing to and from China (including HongKong) and Europe, the Middle East andAfrica.Ian Richardson has been appointedmanaging director of SEKO SynergyGreater China Ltd.Evergreen getsChina approvalThe US Department of Transportationhas tentatively granted Oregon-basedEvergreen International Airlines authorityto operate six weekly roundtrip cargo flightsbetween New York JFK and Shanghai.Flights would make stops at ChicagoO’Hare, Dallas/Fort Worth and Columbus.Evergreen is scheduled to take deliveryof three 747-400BCFs next year. FedEx,Northwest Airlines, Polar Air Cargo andUPS are the four US carriers that currentlyhave US-China freighter rights.Champion choicefor CathayCathay Pacific Airways has selectedCHAMP Cargosystems’ ULD Manager tomanage its inventory of Unit Load Devices(ULDs) distributed across 118 destinationsin 37 countries. Cathay Pacific and itssister airline, Dragonair, along with thejoint venture all-cargo carrier, Air HongKong, will be using the new-generationweb-based CHAMP ULD Manager.Y.H. Huen, Cargo Service Manager– ULD, Cathay Pacific Airways, said:“After considering multiple options, wehave decided to choose CHAMP’s ULDManager to replace our in-house legacysystem to further enhance operating andcost efficiency.”14AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 2008

NEWSCool cover up for Emirates SkyCargo’stemperature sensitive shipmentsEmirates SkyCargo has teamed upwith a leading US research instituteto develop a new product for theshipment of temperature sensitivecargo.The low-cost, light weight,breathable and reusable protective‘White Cover’ is designed to shieldthese shipments from heat duringdoor to door transport.Emirates SkyCargo, togetherwith perishables and pharmaceuticalshippers trading throughout itsworldwide network, conducted apilot programme during the northernhemisphere’s summer months.“This is the first time this uniquetype of protection, which completelyencloses the shipment, has been used forthe air freight of temperature sensitivegoods,” said Therese Puetz, managerCargo Business Development & Projects.One of the ‘White Cover’s distinctproperties is its breathability – it resistsair and water penetration while enablingtrapped moisture to escape – making itNew index ranks Hong Kong andSingapore best economies for tradeTwo Asian economies – Hong Kong andSingapore – occupy the top two positionsin the World Economic Forum’s EnablingTrade Index ranking, published as part ofits Global Enabling Trade Report 2008.According to the report, the results bearwitness to these two countries’ openness tointernational trade and investment as partof their successful economic developmentstrategy.Covering 118 economies worldwide,the report aims to present a crosscountryanalysis of the large number ofmeasures facilitating trade. The indexcovers four key areas: market access,border administration, transport andcommunications infrastructure and theAOT invests in Bangkok airport expansionAirports of Thailand (AOT) will investUS$2.3 billion to develop the second phaseof Bangkok’s Suvarnabhumi Airport from2009 – 2014.The investment, including tax andinterest charges, would help increase thecapacity of the airport to meet rising airtraffic volume and maintain Thailand as aWeighing no more than 3kg, Emirates SkyCargo’snew low-cost White Cover has proved popular withshippers on the pilot programme.ideal for ‘living’ food and flower products,while its low cost has made it popular withshippers of pharmaceuticals, especiallyroom temperature pharmaceuticals.As well as being environmentallyfriendly – the cover is 100 per cent recyclable– its application is straightforward, takingtwo people a maximum of eight minutesfor application on a pallet.business environment.Hong Kong and Singapore werefollowed by the Nordic countries, Swedenand Norway. Canada, Denmark, Finland,Germany, Switzerland and New Zealandcomplete the top 10 list.The report’s authors commented thatHong Kong’s success has been based onthe country’s very open market, mirroringa pro-trade attitude and a high dependenceon exports and imports, as well as itssecure and open business environment.Singapore also boasts a highly efficientand transparent border administration,an open business environment, and welldeveloped transport and communicationsinfrastructure.southeast Asian hub, the airport operatorsaid in a statement.The plan is subject to approval from,among others, the Transport Ministry andthe cabinet.AOT, 70 percent owned by the FinanceMinistry, operates six airports throughoutthe country.Blue Dart sees 20%profit increaseIndian air express and integratedtransportation, distribution and logisticscompany, Blue Dart Express Limited, partof the DHL group, has declared its financialresults for the quarter and half year endedJune 30, 2008.Profit after tax for the latest quarter wasRs 206.69m, an increase of just 20% overthe corresponding period of the previousyear.Income from operations was up 31%to Rs 2,456m. Profit after tax for the firsthalf was up 53% to Rs 514m, with incomefrom operations 31% ahead at Rs 4,863m.Mumbai-headquartered Blue Dartsaid reinforcement of its ground expressproduct ‘Dart Surfaceline’ last year hadnow expanded its reach to over 20,955locations across India.Blue Dart currently operates sixfreighter aircraft (three B737Fs and threeB757Fs) across 62 air routes with a payloadcapacity of 300 tonnes per night.Boeing bullish onfuel alternativesBoeing remains bullish on the scientificprogress of biofuel development, withdirector-Environmental Performance, BillyGlover, commenting that the manufactureris confident commercially viable biofuelwill be available to partially power aircraftby 2013.Speaking in Seattle at an Air NewZealand (ANZ) environmental briefing,Glover noted that some algae-based fuelsbeing studied are showing “better potentialperformance qualities than current jet fuel”,and he dubbed algae the "Holy Grail" ofalternative fuel offerings.Later this year ANZ will fly a 747partially powered by jatropha oil, whichemits one-third the CO2 of current jet fuel.Jatropha has an oil yield of around 250 gal.per acre, and is the most advanced of thebiofuels currently being explored for useby the airline industry.NACIL plan startsThe state-owned National AviationCompany of India (NACIL), theorganisation formed after the merger of thenational flag carrier Air India and IndianAirlines, is converting nine of its passengeraircraft, four Airbus A310s and five Boeing737-200s, into freight carriers.AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 2008 15

NEWSWoodland launchespublishing productWoodland International Transport Co haslaunched a new business – Woodland MediaLogistics – to serve the distribution needsof the international magazine industry.Woodland offers complete sorting andonward distribution services, as well asfinishing, including re-packaging productsand removing any promotional items,when necessary, before sending on tothe country of destination. The companyrecently opened a facility in Colchesterin the UK, dedicated to Woodland MediaLogistics.According to Paul Almeroth,commercial director of Woodland MediaLogistics, providing transport servicesfor the magazine industry is a highlyspecialised business, and claims thatWoodland already controls a significantshare of the market for magazine exportsto the US.Woodland has been unanimouslyaccepted as an associate member ofDistripress, the Swiss-based associationthat seeks to promote the internationaldistribution of printed materials.Swiss Post acquiresdistribution houseSwiss Post International (SPI), theinternational group unit of Swiss Post, hastaken over Global Press Distribution GmbH(GPD) in Germany for an undisclosedsum.SPI said the acquisition, which tookeffect retroactively to January 1 this year,consolidated its position in the Germanexport press market, the largest in Europe.GPD provides services for theinternational and national dispatch ofmagazines.Its customers in Germany includepublishers, printers, letter shops andother service providers in the publishingindustry.With a workforce of 31, GPD generatedsales of 4.9m Euros in 2007.Swiss Post said it already generated20% of its sales abroad and in its crossborderbusiness.SPI is a wholly-owned subsidiary ofSwiss Post and currently employs 1,200people in 11 European countries, fivemajor cities in Asia and in the US.SPI claims it is now number five in thecross-border letters market after DeutschePost, United States Postal Service, theUK’s Royal Mail and France’s La Poste.16TNT boosts regional operations in Vietnamand Singapore as part of five-year planTNT Express has launched a new operationscentre in Vietnam and a country depot inSingapore, as part of the company’s 100million Euro five-year regional investmentprogramme.The International and DomesticOperations Centre, North in Hanoi isdesigned to handle heavy freight, and ispart of TNT’s strategy to leverage thesoaring demand for freight express servicesbetween Vietnam, the rest of SoutheastAsia, China and Europe.Onno Boots, regional managingdirector, TNT Southeast Asia, said,“Vietnam is strategically located as thelink between China and Southeast Asia onour Asia Road Network.More than 40 per cent of volumes toand from TNT Vietnam will pass throughthe new centre while growth is expected tobe in the high double digit range for thenext five years.”The new Singapore country depot andcustomer contact centre is located withinthe company’s existing 180,000 sq.ft.complex on Changi South Lane.TNT said the expansion of the Singaporecountry depot and customer contact centrefollowed the launch of the company’sfreight services for time-sensitive heavyshipments. Both operations occupy anarea four times the size of the previouspremises.TNT said the Singapore country depotwould serve as a model for the rest of itsoperations in the Asia Pacific region.It pointed out that the integratedfacility at Changi South Lane, which wasestablished in 2007 to meet increasedbusiness growth in Singapore, housedTNT’s life sciences express hub, “thecompany’s largest dedicated life sciencesfacility in the world”, and other regionaldistribution centre operations.Chapman Freeborn charter for Libyanpetrochemical plant blaze challengestorage tank at the Ras Lanufplant.Chapman Freeborn’sUK office co-ordinated sixflights to Libya, using DC10-30F aircraft to carry around45,000 kg of retardant perrotation. Four flights leftDoncaster Sheffield in the UKfor Benghazi, and another twoflights were routed from ParisVatry and Barcelona.Chapman FreebornDC10-30F aircraft loaded for the Libyan air charter. representatives were at theairports to help oversee theChapman Freeborn Airchartering coordinatedthe movement of more than 250tons of fire fighting foam from Europe toBenghazi, Libya, to help tackle a blaze at apetrochemical and refining complex.x-ray, loading and dispatch of the cargodestined for the Libyan refining complex.Chapman Freeborn’s cargo departmentspecialises in moving urgent air cargo,heavy and outsize pieces, high valueOil Spill Response and East Asia commodities, dangerous goods andResponse chartered the urgent flights tohelp deal with a fire in a 450,000 barrel oilaround-the-clock aircraft on the ground(AOG) parts.Aramex opens Bahrain logistics centreMiddle East-based forwarder and logisticsprovider, Aramex, has opened a 4,000sq.m. logistics centre in Bahrain; designedto support the company’s expanding supplychain solutions network across the GCC(Gulf Co-operation Council) region.Aramex said the new facility, locatedin the Bahrain International AirportFree Zone, combines sea, air and landfreight capabilities for a diverse range ofindustries, including telecommunications,electronics and textiles.AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 2008

NEWSCX breaks ground on new cargo terminalAt the groundbreaking ceremony for the new Cathay Pacific Cargo Terminal are (from left) RupertHogg, Cathay Pacific Director Cargo, Stanley Hui, Chief Executive of Airport Authority HongKong, John Slosar, Cathay Pacific Chief Operating Officer, Eva Cheng, Secretary for Transportand Housing, Tony Tyler, Cathay Pacific Chief Executive, Marvin Cheung, Chairman of AirportAuthority Hong Kong, Y K Leung, Deputy Director-General of Civil Aviation and Ron Mathison,Cathay Pacific Director & General Manager Cargo.Cathay Pacific Airways marked thegroundbreaking for its new home hubcargo terminal with an official ceremony atHong Kong International Airport (HKIA).The Hong Kong airport authorityawarded the airline’s wholly-ownedsubsidiary, Cathay Pacific ServicesLtd (CPSL), a franchise to invest in,design, construct and operate the new aircargo terminal at HKIA under a 20-yearFormer BA World Cargo manager to bejailed in US for rate-fixing conspiracyA former senior manager withBritish Airways World Cargois set to become the next airlineexecutive to go to jail in the USfor participating in a conspiracyto fix air cargo shipment rates.The US Department of Justice(DoJ) said according to chargesfiled in the US District Courtin the District of Columbia,Keith Packer, former commercial generalmanager for BA World Cargo, and his coconspiratorshad engaged in a conspiracy tofix the air cargo rates charged to customersfor international air shipments, in violationof the Sherman Act.It said that under a plea agreement,which was subject to court approval,Packer had agreed to serve eight monthsin jail, pay a $20,000 criminal fine, andKeith Packer.agreement. The airline will invest aroundUS$615m in the facility, which will occupya site of around 10 hectares in the airport’scargo area.“The new terminal will be completedby the second half of 2011 with a designedannual air cargo throughput capacity of2.6m tonnes,” said the airline.The terminal will be a common-usefacility open to all airline customers.cooperate with the DoJ’s ongoinginvestigation.The DoJ said Packer, a Britishcitizen, was the first foreignnational and third individualcharged as part of the AntitrustDivision’s ongoing investigationinto price fixing in the airtransportation industry.In July 2008, Bruce McCaffrey,the former highest-ranking executiveemployed in the US by Australian airlineQantas, had pleaded guilty and beensentenced to serve six months in jail andpay a $20,000 criminal fine for fixing cargorates. Then in August 2008, Timothy Pfeil,the former highest-ranking cargo executivein the US for Scandinavian carrier SAS,had pleaded guilty to conspiring to fix therates charged to customers.Perishable centrefor HyderabadGMR Hyderabad International AirportLimited (GHIAL) in south India plans to setup a world-class centre for perishable cargo(CPC) at the Rajiv Gandhi InternationalAirport (RGIA) at Hyderabad.The centre will be designed to handle13,000 tonnes per annum of perishablecargo under phase-I (up to 2011) and thecapacity will be raised to 25,000 tonnesper year under phase-II (2013-14).The phase-I of the project will have aninvestment of INR 400 million, includinga subsidy of INR 200 million from theAgricultural and Processed Food ProductsExport Development Authority (Apeda).Andhra Pradesh annually producesabout 10.5 million tonnes of fruits andvegetables, with an export potential of5,000 tonnes.The CPC will also serve thepharmaceutical and biological sectors,with import and export volume of about3,000 tonnes per year in these sectors.Progress for pioneerloading systemThe new main deck loading system reducesmanpower requirements.Telair International GmbH has completedits FAA STC and JCAB STC SystemConformity Inspection for the world’s firstMain Deck Powered Cargo Loading Systeminstallation of the B767-300BCF specialfreighter. All Nippon Airways (ANA), thecustomer for this conversion, has orderedseven firm systems from Telair.The loading system enables a one-manoperation for A-Code, B-Code or M-CodeULD’s and a two-man operation for itsindustry wide novelty R-Code (16 ft.) andG-Code (20 ft.) pallets. Besides standardcommercial pallets and containers, theTelair system also is capable of loading463L/HCU-6E military pallets throughoutthe main deck.AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 2008 17

PEOPLEHughes returns to Hong KongGreg Hughes has been appointedgeneral manager South West Pacific forCathay Pacific Airways, replacing IvanChu, who will leave Sydney in Augustto return to Hong Kong to take up therole of director – service delivery, for thecarrier.Hughes, currently general managerpurchasing and aircraft trading, will alsobe appointed as director of John Swire& Sons Pty Ltd, parent company of theAustralian arm of Swire Group.Hughes joined the Swire group in 1987. Initially, he workedin the shipping division and was transferred to Cathay Pacific in1990. He has previously worked with the airline in Japan, Koreaand Indonesia in commercial and sales related positions as wellas in Hong Kong in airport operations, business improvementand marketing.Homayoun to head up marketingat Dubai AirportsAnita Mehra Homayoun has been namedvice president Marketing & CorporateCommunications, Dubai Airports.Homayoun graduated from the AmericanUniversity of Beirut with a BA in MiddleEastern History in 1975 and in 1977 received amaster’s degree in Education from Bank StreetCollege of Education, New York.She started her career in Iran with Time-Life Books in1978. In 1983 she moved to Dubai and started her career in anadvertising agency, and handled Dubai Duty Free as a majoraccount. In 1986 she was invited by the Dubai Duty Free team toset up their marketing division.She headed the Dubai Duty Free Marketing & MediaRelations department for 10 years.In 1996 she set up the Marketing & Corporate CommunicationsDivision for the Department of Civil Aviation in Dubai, thegoverning body that owns Dubai International Airport and theCargo Village.Swissport names new UK CEOSwissport International, has namedMark Faulkner as CEO of its Britishground handling business, Swissport/Groundstar UK.During the tenure of previous CEO,Tina Barbour, Swissport/GroundstarUK has been particularly successful indeveloping strong relationships withseveral leading UK carriers, includingthose in the rapidly growing low-costsector.Mark Faulkner has previously servedin a number of executive capacities including several years asdirector of business development at Ferrovial subsidiary AmeyUK, where he played a key role in turning the company around.New VP of Sales and Marketingfor CHAMP CargosystemsLuxembourg-based CHAMP Cargosystemshas appointed James Fernandez as vicepresident, sales and marketing. He isresponsible for worldwide sales andmarketing of CHAMP Cargosystems’portfolio of new generation cargo systemsand leading-edge ERP applications andservices.A British national, Fernandez joinsCHAMP from SITA, the aviation ITspecialists, where he managed the dual roles of global head ofcargo and logistics and general manager of SITA’s Chinese jointventure headquartered in Beijing.He has a successful track record in consulting and systemsintegration with organisations including LogicaCMG and BTSyntegra (now BT Global Services), working in a variety ofroles and vertical markets around the world.ABC boosts EMEA managementAirBridgeCargo Airlines (ABC), the scheduled cargo airlineof Volga-Dnepr Group, has appointed Ludwig Hamburgeras Regional Director for Europe, the Middle East and Africa(EMEA).Hamburger has more than 25 years of experience in theairline cargo industry, and prior to joining ABC was RegionalManager Europe for Air New Zealand.TNT’s strategic moveTNT has appointed MarikenKruijff as director of strategyimplementation. She will focuson translating TNT’s identifiedgrowth drivers into plans thatwill increase volumes and fuelTNT’s growth in a sustainableway over the next five years.DHL appoints a new SVPDHL has appointed Richard Owensas senior vice president of its GlobalCustomer Solutions (GCS) organisationin the Asia Pacific region. Based inSingapore, Owens reports to Hans Hickler,who was appointed chief executive officerof that unit last month.Owens’ 25 years’ of experience inthe logistics industry began with JardineAir Cargo. He has held a number ofleadership positions in the Asia Pacificregion, including his most recent position as senior vice presidentfor DHL Global Forwarding, Asia Pacific. Prior to that he washead of integration for the Logistics division in Asia Pacific, andbefore that he served as commercial director in Asia Pacific forthe former Exel organisation.18AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 2008

PEOPLEBoisen leaves ContinentalContinental Airlines’ well-respectedvice president cargo, Jack Boisen, hasannounced his retirement from theairline.“Jack’s been a real asset for the cargodivisions of passenger airlines and wewill all miss him,” said Steve Alterman,president of the Air Cargo CarriersAssociation.“Jack’s tireless efforts have led usthrough some very trying times recentlyexperienced in this industry,” said BrandonFried, executive director of the Air Forwarders Association. “Hisknowledge, understanding and ability to see the security issueclearly have helped the industry as a whole.”Peter Lam joins Trans GlobalHong Kong-based regional logisticscompany, Trans Global Logistics (TGL), hasnamed Peter Lam corporate director of airfreight. Lam joins Trans Global from VirginAtlantic Cargo, where he was regional salesmanager for Hong Kong and China.Lam brings more than 24 years of airfreight sales and management experience toTGL. He has held senior positions with StarAirfreight and the Star Group of Companies, and also with BAXGlobal.“Air freight is one of our core competencies and we are verypleased to name Peter Lam to head our global air freight productline,” says Donald Woo, CEO of Trans Global Logistics. “Peterwill drive, develop and market our air freight services across ourentire global network. He will be responsible for sales, operationsand product development related to all corporate accounts.”Singh joins Qatar Airways CargoVikram Singh has joined the Cargo Departmentof Qatar Airways as vice president Cargo Sales.Singh has 15 years of airline experience invarious roles in the Middle East, Europe andIndian Subcontinent, a significant amount of thistime having been spent at KLM.Schiphol Airport names new CEOAmsterdam airport operator Schiphol Group has named a newchief executive, Jos Nijhuis, with effect from January 1, 2009,replacing its current head, Gerlach Cerfontaine, who will retire.Strodel joins AirBridgeAustria-born Robert Strodel has departed fledglingIndian cargo carrier Flyington Freighters andjoined Moscow-based AirBridge Cargo Airlines(ABC) where he is expected to take on a topmanagement position. Strodel could replace thestill vacant position of managing director, sinceStan Wraight's departure.AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 2008Paul Lee named as AsianAerospace Vice PresidentPaul Lee has been appointed Reed Exhibitions China’s VicePresident Asian Aerospace. He has had close links with thecompany’s flagship aerospace industry event since joining thecompany in 2002.Emirates SkyCargo welcomesnew cargo Vice PresidentAbbas A. Haji has joined the EmiratesSkyCargo team in Dubai as vicepresident Cargo – CommercialDevelopment, reporting directly to RamMenen, divisional senior vice presidentCargo.In his new role Abbas is responsiblefor driving the development of EmiratesSkyCargo’s “Priority” portfolio,including Courier, Express and Mail.The three Priority products experiencedan average of 30 per cent growth in the 2007-08 financial year.Abbas joined the Emirates Group in 1977, working for DnataCargo. Over the last 30 years, he has held a variety of managementpositions within the group including at Dnata Airport Services,the Dnata/Safiran project in Tehran, Dnata ground handlingDoha, Gerry’s Dnata in Karachi, Emirates Manager Iran andArea Manager Bahrain.Tubbesing resigns from CNSCargo Network Services Corp (CNS), an IATAcompany based in the US, has announced thatJens Tubbesing, president of CNS, has tenderedhis resignation in order to devote time to familymatters. Tubbesing has held the position ofpresident since 2006, when he took over fromAnthony Calabrese.CNS said that a decision on a successor wouldbe taken this fall and that in the interim, AleksPopovich, global head of cargo of IATA, has been appointedacting president of CNS.DHL Express names EEMEA CEODHL Express has appointed John Pearson as CEO for its EEMEA(Eastern Europe, Middle East and Africa) area.As the largest region in the DHL Express network, EEMEAcomprises 86 countries, 14 time zones, and employs over10,000 people, serving customers in over 850 languages,” said acompany statement.Pearson, who has over 20 years experience within DHLExpress, was previously located at that company’s globaloffice where he held the position of executive vice presidentcommercial. His career with the company began in the MiddleEast and comprises a number of functions in the commercial,sales, and marketing areas.19

INTERVIEWNew partnership between developer and forwarderpaves the way for airport development projectsParchim Airport in Germany will be the scene for a pioneer joint venture developmentproject for an Australian industrial property developer and the airport owner, a veryforward-looking forwarding company from China.Goodman European Logistics andforwarder LinkGlobal have teamed upin a unique partnership that will developlogistics infrastructure at airports andports worldwide, starting with a showcaseproject at the northern German airport.Goodman International will investmore than 100 million euros in thelogistics infrastructure of Parchim Airport,as part of a worldwide collaboration withLinkGlobal, which operates cargo flightsfrom China to Parchim and beyond.Werner Knan, managing directorGermany of Goodman European Logisticssaid: “This traffic is part of the deal wehave mutually agreed, and it will beaccelerated in the coming months. Webelieve this will be a prosperous businessas LinkGlobal is not only generating cargovolumes, but is opening the door for otherChinese enterprises that are interested inEuropean consumer markets. By settingup production plants at Parchim they canobtain the much valued ‘made in Germany’label.”Goodman’s initial efforts will focuson construction of warehouses, terminals,office buildings and similar facilities.Industrial projects are also in the pipeline,which Knan said will depend on thenumber of Chinese companies that willset up subsidiaries at the site or sign jointventures with local German firms. Aseparate fund will be set up to finance thisaspect of the overall development.Knan sees opportunities in severalsectors, including fashion, hi-tech,domestic appliances, pharmaceuticals, andWerner Knan: “This will open the door forother Chinese enterprises eyeing Europeanconsumer markets.”the food industry.He added: “We also believe thatParchim is an attractive location forChinese firms that want to collaborate withGerman providers of water purification andtreatment for removing contamination, asGermany is a technological leader in thisfield.”Such joint ventures offer the idealisedwin-win scenario said Knan. By settingup joint ventures the Chinese get access toST Aerospace plans China expansionSingapore Technologies Aerospace Ltd.,said it plans to open a new base in theregion and raise investments in Chinaas economic growth boosts air travel.The company is considering “at leasttwo or three” countries for the new base,president Tay Kok Khiang said in aninterview on Bloomberg TV. It may alsospend as much as US$200 million overthe next three to five years to expand inChina, the world’s second-largest aviationmarket, he added.The company has boosted revenueby increasing its engine-servicingPhoto by Heiner Siegmundand components business, which nowaccounts for about 50 percent of sales,Tay said.The conversion of passenger planesinto freighters will also help counter aslowdown in maintenance and repairrevenue, he added.In China, the company has formed amaintenance venture with China EasternAirlines Corp., the country’s third-largestcarrier, in Shanghai.The pair will open a hangar, capableof handling the double-decker AirbusA380, at Pudong airport next year.feasible solutions for improvement of theirdomestic water supply and the Germansdon’t lose their technological advantageas the physical production of technologyremains in their own country.Knan cites several advantages forselecting Parchim.He said: “The airport is operated 24hours as there is no night flight curfew– a rare situation in Germany’s airportlandscape. Secondly there is plenty ofavailable industrial land within the airportperimeter and adjacent to the facility. It islocated right in between Germany’s largestcities, Hamburg and Berlin, and thereis good access via the nearby Autobahnsystem. But the most important advantagefor producers and manufacturers will be thebonded area at the site. Foreign investorswill be exempt from taxes and still get touse the ‘made in Germany’ brand. We thinkthis is a unique opportunity for Chineseand Asian enterprises.”Knan said that a number of investmentroad shows have been held with LinkGlobalin a number of Chinese cities, includingNanjing, Shenzhen, Shengzhou, Urumchiand Yinchuan.He reports overwhelming interestfrom local producers, eager to expandtheir businesses to Europe. A number ofMOUs have been signed, reported Knan,with some German investors also willingto open up plants in Parchim.Knan said: “Parchim is a start, withothers to follow soon. We are alreadyconsidering some other opportunities;in Chinese airports such as Zhengzhou,Nanjing and Urumchi, or places in Africaand even Latin America. Our basic conceptis to support LinkGlobal’s internationalexpansion wherever this creates a win-winsituation for both partners.”Cargo traffic from China to Parchimhas picked up with current B747-200operations by British MK Airlines andMD-11s of World Airways that have beenchartered by Etihad Airways on behalf ofLinkGlobal.The ground works for buildingwarehouses and other logisticsinfrastructure at the airport on behalf ofGoodman are due to commence either latesummer or early fall, announced managingdirector, Werner Knan.– Heiner Siegmund20AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 2008

INTERVIEWCall for cargo carriers to take along term view of the marketFreighter operators are facing challengingtimes, but Robert Song is somewhatbemused by lamentations from his peersabout being hit by a perfect storm.Pointing to the cyclical nature ofthis industry, the Commercial Director –Global AirBridgeCargo Airlines, arguesthat operators should plan from the outsetfor high operating costs and a slowdownin markets.A great number of players appearto have adopted a different approach,though.According to Song, the flurry of ordersfor freighters placed in recent years waslargely based on the assumption thatgrowth patterns at the time would continue.“We need a robust long-term view of themarket,” he declares. “We need to be a lotmore careful and not jump to conclusionsbased on a snapshot of the market.”Song illustrates this with manyoperators’ hangover from the Chinamarket. In his analysis, the market isstill going up; it is just yields that havedeclined – and rightly so.When it comes to electronics,consumer expect prices to go down, hesays. Why shouldn’t the same happen withairfreight yields? AirBridge’s own coursehas not been entirely unruffled. Originallymanagement had planned to launch NorthAmerica service from Siberia on a transpolarrouting once it received the firstB747-400 ER freighter.The aircraft dulyarrived last November,followed by two more, butUS service is still sometime away. US exportshave actually performedrather well, but the drop inthe value of the US dollarhas created a situationwhere AirBridge finds itcan achieve better resultsdeploying the aircraftelsewhere for the timebeing, Song says.F u n d a m e n t a l l y ,AirBridge’s network isdetermined by the needsof its customers, Song claims. He stressesthe importance of long-term agreementswith block space deals, adding that theairline is in the process of extending thismodel across Europe. “The majority ofour partners work with us on a long-termbasis with block space agreements.Unlike some other carriers, we don’thave just one customer but several. ThisRobert Song: Consumerdemand for lower costs.AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 2008In for the long haul - AirBridge Cargo B747-400ERF.gives us a good balance,” he comments.AirBridge has also striven to developlong-term alignments on the airline side.The Russian cargo airline has built uppartnerships with Nippon Cargo Airlinesand Singapore-based Jett8; arrangementsthat give it access to new markets. Jett8can feed traffic from Southeast Asia – aregion with growing demand for capacityto Russia – to AirBridge, which has nopresence in that market.Song sees room fordeepening the partnershipswith those two carriers, notso much along the lines ofjoint marketing or productalignment as in the realmof curbing costs by poolingresources and buying leverage.Even with a long-termperspective, AirBridge shouldhave reason to feel under theweather at the moment, givenits contingent of B747-200freighters in action. However,Song argues that there is stillroom for the “Classics” in themarket.“747-400ERFs are very good butextremely expensive to finance, -200sare very cheap. If you need to operatelonghaul, your best bet is going to bethe –400. We have a mix of destinations,some long, some medium stage length.For most of our routes from Europe toRussia and from Russia to Asia, the –200is more economical,” he states.– Ian YaoDHL sees Chinarevenue slowdownDHL has seen revenue growth in its Chinabusiness slow to around 15 percent duringthe first seven months of the year froma recent average of over 20 percent, anexecutive said.Dan McHugh, chief executive ofDeutsche Post’s DHL Express AsiaPacific, attributed the slowdown primarilyto a decline in shipments abroad over thepast 12 to 18 months as US and Europeandemand in particular has dwindled.DHL has enjoyed 20-23 percent annualgrowth in China over the last five years.“Import volumes are actually stillrelatively healthy, with economicsubstitution and investment substitution,”McHugh said. “We’ve definitely seen aslowdown in air freight out of China.”China’s exports were hit by a strongercurrency and weaker overseas demand.Export growth slowed to 17.6 percent inJune, compared with a year earlier, from25.7 percent in allof 2007.M c H u g hdeclined commenton how muchrevenue DHLearned in China,but said itaccounted for asignificant chunkof its Asia-Pacificbusiness. He saidit was difficult tosay whether theDan McHugh: Chinabusiness a big chunk.Olympics wouldbe a net positive or negative for revenue.The Chinese government put in placea number of restrictions to ensure securityat the Olympics and curb air pollution inBeijing, including banning some itemsfrom being shipped nationwide, morecustoms inspections and curbs on vehiclesentering the capital. That has created newhurdles for DHL and its rivals.McHugh said the measures were nothaving a “material” impact on DHL’sChina business.But he said the company was spendingabout US$2 million to deal with them,including increasing its fleet aroundBeijing and buying extra X-ray machinesand hiring more staff to facilitate customsinspections.“This is not an onerous number. It’s justa cost-of-doing-business type of number atthis point,” he said. “I think the net benefitof it is that we improve our processesacross the country.”DHL partners with Sinotrans in China.21

INTERVIEWAir Freight Indices talks still on-goingGFI Nittan, a leading inter-dealer broker specialising in over-the-counter derivativesproducts and related securities, is still in talks with a potential neutral body with astrong reputation in the air freight industry to develop Air Freight Indices.When the Indices are established, itwill help the industry to use Air FreightDerivatives – tools to manage risk fromfluctuating freightage price and/or fuelcost surcharges of owning/buying airfreight capacity – in the Hong Kong aircargo industry.“Each index will be a composite figureof freightage, density, level of service,aiming to reflect the performance of eachrouting in terms of revenue per flight,” GFINittan Managing Director Leslie Lu said.Basically the data required to developthe indices are available but separatelyowned by different parties – IATA’s CASShas the settlement price between airlinesand freight forwarders as well as servicetype and carrier information while air cargoterminals have the weight, volume andcontour type of each individual pallets.These databases can linked up througha single identifier – Air Way Bill Numberfor index construction. Thus, the index willnot reveal pricing of individual carrier norpurchasing price of individual forwardersbut the overall performance in terms ofpricing, density and service of the routingconcerned.“We have also got initial consensusfrom an academic institution to help studythe appropriate model for the indices. Theonly thing to be done is to get consensusfrom industry players to release thesedata to neutral bodies and provide inputsregarding industry practice and concernsto academic institutions for them tostart modeling,” he said, adding that thisobviously will happen if the market cansee the risk management benefits viaderivative products.Asked how big and volatile is theair freight market compared with othermarkets, particularly during the peakseason, Lu said actually, there has been nodata in historical freightage for GFI Nittanto draw on for benchmarking, unlikethe seafreight markets where derivativeproducts have existed for the last eightto nine years. Despite the lack of properdata, some educated estimates can still bemade.“And that’s why we see room forhigher market efficiency/transparency withthe availability of market data to compileindices,” he said.“Hong Kong’s air freight exportmarket alone is estimated to have anannual turnover over US$6 billion (takingLeslie Lu: Room for more market efficiencywith increased availability of data.into account only export tonnage fromtwo major terminals in the territory –Hong Kong Air Cargo Terminals and AsiaAirfreight Terminal (AAT) – multipliedby assumed market yield),” Lu said.“Therefore, although we do not have dataon actual market yield and tonnage dataof other markets we can see that globalspending on air freight is quite sizeable.”In addition, Lu agreed that the HongKong air freight market is very volatilegiven that freightage can vary more than50 percent across a year due to marketseasonality and that with volatile oil price,the fuel surcharge, which used to be onlyaround 4 percent of total shipping cost hasnow more than doubled since last year.With such volatility in freightage,density of shipment and the fact thatmost bookings are only confirmed withairlines on the day before the flight, justcompare this with an aircraft order thathas to be placed years in advance in mostcases, reflecting the market risk borne byoperators.However, when the indices areestablished for different routings, there willbe several improvements in the industry.Firstly, they will provide hedgingopportunities for different stakeholdersto manage their risk or secure longerterm pricing (for user) / revenue (foroperators) stability. They can enter intoindices contracts (SWAP) where theycan mimic return on freightage changeswithout having to own the capacity and beconcerned with any operational issues.Secondly, they will enable reliableforecasting. Every change in future demand(e.g. new product launch in say Q3) andsupply (e.g. addition of flight schedule)will be duly reflected in the change inindices level with direct participation ofshippers, providing more accurate changeof demand forecast or capacity supply.Asked how the market had respondedto the airfreight derivatives concept sofar, Lu said over 20 industry players areparticipating in physical capacity tradingvia GFI Nittan through entering intoforward space agreements.On the indices side, Lu thinks thatsimilar to other commodity markets, theindustry will need some time to understandthe mechanism and benefits of suchinitiatives.GFI Nittan is optimistic that airfreightderivatives will become a reality in the nottoo distant future. – Wong Joon SanMarket OutlookBoeing good onlong-term growthBoeing has confirmed its previouslyannounced projection that the global aircargo market will continue to exhibitstrong, long-term growth. Duringthe 20-year forecast period, Boeingprojects that the industry will grow at anannualised average of 5.8% – with thefreighter fleet increasing from 1,948 to3,892 aircraft.This growth requires a total of 3,358aircraft joining the fleet by 2027, takinginto account retirements of 1,414 aircraft.The fleet additions will include 863 newproduction freighters, with a value ofabout $206 billion in current US dollars,and 2,495 aircraft from conversions.Wide-body freighters will dominate thenew production freighter total and 641will be of the large freighter segment(more than 80 tons (72.6 tonnes)capacity).The Boeing World Air Cargo Forecast2008/2009, a more detailed study, willbe issued at the 2008 International AirCargo Forum and Exposition in KualaLumpur, Malaysia, in November.22AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 2008

INTERVIEWBoudier leaves enough challenges for successorDelivery delay on B777F and Delta’s role in US JV are major issuesMarc Boudier once famously described his Middle East competitors as “predators”. As heretires from his post as executive vice president Air France Cargo, his successor, FlorenceParly, will no doubt draw on her background in French politics, and latterly in investmentstrategy with the airline, to take a diplomatic and pragmatic approach to the competition andmany issues besetting the industry in turbulent economic times; which Boudier outlined in aninterview prior to his departure with Air Freight Asia founder and organiser, Nol van Fenema.In the eight years since Marc Boudierheaded up the Air France Cargo businessand became a board member of the airline,the air cargo industry encountered aseries of dramatic events, whose historicsignificance lives on in immediatelyidentifiable alphanumeric abbreviations– Y2K, 9/11, and SARS; which all havebeen major tests of industry resilience.Compared with the passengerside of the airline industry “aircargo activities have been bumpy,because the development of trafficis directly linked to GDP,” he said.Consequently the cargo industrymight have been a reasonablyreliable “economic indicator”, butaccording to Boudier, that roleended at a turning point in 2006.While the industry managedto survive each of the calamities,2006 was “a tempest in a blue sky”,because all the macro-economicswere good, with one of the bestyears for the world economy in 40years. However, 2006 also saw anunexpected and sudden move ofthe traditional high-value freightproducts from air to sea freight.Boudier said: “I remember mycolleague Ken Choi of Korean Air Cargosaying that in 2005 he still had 96 percentof the LCD market to the US and Europe,while in 2006 this dropped to 45 percent.”Boudier acknowledges the shift tosea freight was prompted by improvedshipping times, better containers and lowerlogistics costs compared with air freight.He said another factor to thegeneral malaise in the industry is “moreuncertainty” about the further growth inChina.Boudier cites lower fuel prices as acounter to the effects of the broad economicglobal slowdown, but admitted it will taketime to recover business lost.But he was positive about significantfleet realignments as part of airline attemptsto cut costs in the current conditions.The gradual integration of KLM’soperations and fleet into Air France hasallowed the airline to minimise the impactof the fuel hikes in the past 12 months. AirFrance decided to scrap its three remaining747-200Fs late last year instead of keepingthem to tide it over until the introduction ofthe B777-200ER freighter.It dry-leased a 747-400 conversion andtook over a new 747-400ERF that wasdelivered to KLM in October to cover thecapacity shortfall. Even so Boudier saidthe result was a five percent cut in mainMarc Boudier brings Florence Parly up to date on the intricaciesof the air cargo industry, and some of the pressing challenges.deck capacity for the carrier.However, the plan for a smoothreplacement has not worked out entirelysatisfactory, because the strike at Boeinghas not only affected delivery dates of the787 Dreamliner, but also of the B777F,which launch customer Air France Cargohad planned to introduce before the end ofthis year.In the interim, Air France Cargo hasleased additional capacity from WorldAirways, which is operating one MD-11F on a full time basis from France todestinations in Africa and weekly rotationto Brazil on behalf of the French flagcarrier.The 777 freighter delay is not ‘ablessing in disguise’ stressed Boudier,because the deliveries of the first three777Fs were scheduled to take place beforethe peak season at end of the year.Asked about the progress of theSkyTeam Cargo Alliance, Boudierenthusiastically mentions the areas wherethe members are fully co-operating, forinstance in the product portfolio whichrepresents a common service offering byall partners, or co-operation in the “toolkit”, which, among other things, includesthe “under-one-roof” concept allowingthe SkyTeam Cargo partners to use theirrespective facilities for third party handling,or for the common use of ULD’s.Then there is the joint marketingand sales approach, including theUS Cargo Sales Joint Venture basedin Atlanta. As for the latter, Boudierpointed out that in June this yearAir France KLM Cargo receivedanti trust immunity (ATI) from theUS authorities.“Now there is possibility toenlarge the JV by letting KLMCargo join the JV in Atlanta,” hesaid.He said that discussions betweenthe partners are ongoing and thatboth KLM Cargo and NorthwestCargo could join the JV. “If thesetalks are successful, it will be abig step forward for the SkyTeamCargo Alliance.”He scoffed at the suggestion thatwith declining economies everywhere inthe world, this doesn’t seem the right timeto enlarge the JV, by saying that “the onlymarket which is growing at the moment isoutbound US, which is stimulated by thelow dollar. At the moment, the JV is overperforming.It’s as simple as that.”The big question is what role DeltaAirlines Cargo, headed by Neel Shah, isgoing to play in the JV. Boudier said thatthe US carrier, which recently receivedapproval from the US authorities to mergewith Northwest Airlines, has decided togo back to their own system, rather thancontinuing with the SkyTeam Cargosystem.“One thing is for sure,” said Boudier,“Next summer we will have a single salesstructure for Air France-KLM Cargo inthe US. However, our first option firmlyremains an expanded JV with Korean Air,Delta, Northwest and KLM.”He hands over a portfolio to hissuccessor in ‘interesting times’.AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 200823

AIR FREIGHT ASIA UPDATE NOVEMBER-DECEMBER 2008