Vol. 10  No. 22                    WORLD'S MOST LOVED AIR CARGO PUBLICATION SINCE 2001                              Tuesday March 8, 2011

 

(Istanbul Exclusive)—This great city is still a destination on the classic Orient Express, which alas now runs only once a year: Paris-Budapest-Bucharest-Istanbul.
     You will be relieved that airfare is actually far less expensive than the fabled Venice Simplon-Orient-Express… and you don’t have to wait until September.
     On the other hand, business class doesn’t feature Lalique glass panels and wood-burning stoves, not to mention veneered, inlaid wood panels.
     Turkey’s first five star hotel, the Hilton Istanbul is centrally located near the Taksim district with commanding views over the city, so swank it is.
     Thus the backdrop for this year’s “World Cargo Symposium” by IATA is all set and ready to roll.
     This is the first event under new management; that is Des Vertannes’ show and imprimatur.
     Next year will be a first under a new IATA director general.
     There is the very first World Cargo Symposium with an—optional—annual golf tournament, to be had for a paltry $210. Otherwise, the traditional format is basically the same; the annual industry meetings accompanied by twelve commercial “tracks” running in parallel, and the egalitarian opening plenary.
     The industry meetings are for IATA members only. That means the delegates, with a separate ‘business class,’ higher tier executive level set of meetings.
     All is outsourced for full event management by WorldTEK.
     The packaging effort earns a nod.
     “Showcasing your solutions” to the air cargo community is offered in a professional manner, but there is the small matter of the price.
     Sponsoring a track, the gala dinner or a lunch “networking opportunities,” in marketing speak, ranges from $6,500 to $50,000 with branding “opportunities” – eco-friendly water bottles for example, between $2,000 and $12,500, nothing for the faint of heart yet, nonprofit or not, one has to feed the voracious money machine somehow!
     To be fair and all-inclusive, there are also exhibiting “opportunities” for $5,000 a stand.
     The WCS registration fee is $1,595 (it is $1,395 for members and strategic partners) and ‘noblesse oblige’ – EUR 140 a night for the hotel room, $118 for the symposium dinner, not to mention the cost of airfare; taken all together, it virtually guarantees the right audience and suitable decorum.
     The industry meetings and the tracks are almost a one-to-one match, i.e., air mail, dangerous goods, e-freight, and ULD management, just to name a few.
     One could almost forget the setting and the times – the one thing that will not be addressed are fuel prices and the turmoil in the Middle East, lest someone gets an overdose of reality.
     Now to the meat and potatoes: it will be interesting to see some of the subject matter experts IATA cargo employs in the meetings and tracks, especially when it comes to disciplines such as ULD management and Live Animals and Perishables.
     It looks like expertise in these areas has been traded and sacrificed in the course of routine, across the board personnel cuts. This has also been reflected in some outdated manuals – the ULD Technical Manual has been cited as one such case, although the issue is actually more complicated.
     New B777 and B748 data would have been made available by the manufacturer, but would also be subject to U.S. government Export Administration Regulations, thus potentially limiting IATA’s ability to disseminate it to all takers, and possibly into hostile hands. This is a conflict that ideally shouldn’t exist for an organization whose purpose is to serve its members and promote aviation in general and safety in particular.
     Whether the gap between marketing façade and deliverables narrows any time soon remains to be seen.
     Not updating manuals such as the ULD Technical Manual, Perishable Cargo Regulations, and Live Animals Regulations regularly and in a timely fashion, and retaining the industry’s institutional expertise and memory is not a good practice.
     There is the orphan Airport Handling Manual (which is not under the Cargo Services Conference purview, but rather the Airport Services Committee) and includes highly pertinent procedures, including, for example, how to secure an automobile (certainly not by running a strap through the open car doors).
     Some of this internal dysfunctional structure and state of affairs is self-inflicted and has been recognized, as documented in the IATA 2010-2012 ULD Roadmap which set specific milestones after concluding ULD matters must be aligned across these silos.
     Additional concerns have been voiced regarding the ‘EasyDGR’ IATA apparently launched without a beta testing period, which was allegedly redolent with more bugs than should be the case. In the value for money category, this product comes with a one year, single user license of $1,499.
     The flagship IATA publication, the Dangerous Goods Regulations, had a sizeable corrigendum event before it became effective and some of the translated versions are rather poor, to put it charitably.
     While an e-freight Handbook and eShipper’s Declaration are keeping with times, it’s much more difficult to find some basic information, such as air waybill completion, examples that illustrate whether Other Charges ought to be calculated based on actual or chargeable weight.
     There has always been enormous potential to do right in IATA and this should be possible once its priorities are set correctly.

"When you think about it, whilst IATA preaches paperless freight, in practice many of their paper offerings (including rules, regulations and other guideline disciplines) are hopelessly out of date.
‘Updating needed,’ goes back at IATA, which should practice what it preaches."


     The organizers have succeeded in attracting a truly impressive array of speakers for which they deserve credit; it’s a veritable who’s who of this global industry.
     Several major airline heads of cargo and CEOs are on the program – Cathay Pacific, Delta Airlines, Emirates, Global Cargo (UPS), Jet Airways, Lufthansa Cargo, MASkargo, Swiss, Turkish Airlines, and Atlas Air.
     The FIATA president, the executive VP global cargo at Swissport, the World Customs Organization deputy secretary general, UPU, ACI, and a number of government representatives from the US DHS/TSA, USPS, the EC, the Malaysian department of civil aviation, a deputy under-secretary from the Turkish ministry of transport – all are on hand.
     Freight forwarders are also on the program – DHL, K+N, OHL, A number of leading vendors are well represented – Unisys, Traxon, Mercator, JDA, Descartes, CHAMP, Airbus and so forth.
     Rounding off the list are several airports and shippers. All these executives and decision makers obviously consider the IATA WCS significant enough to take the time to participate and contribute.
     It goes without saying that the least IATA can do is rise to the occasion and respond in kind, beyond its internal goals.
     This year’s event has been dubbed “air cargo connecting the world “ and meetings started Monday morning according to the official World Cargo Symposium ‘roadmap,’ followed by the opening plenary Tuesday morning, with the ‘program tracks’ starting Tuesday afternoon, running alongside the obligatory industry meetings. This pattern continues on Wednesday and Thursday.
     Each track has one or more keynote speakers and a panel.
     This format essentially separates the delegates participating in meetings from tracks’ speakers, moderators, panelists and attendees.
     It may be a dichotomy that an event labeled as the prime forum for bringing together industry experts and stakeholders has settled on a format which de facto guarantees this cannot happen, except after hours.
     The show is the show, and then there are the other 360 days of the year and we have the same question this year as in previous ones – what happens after the doors close and the delegates go home to their everyday work? Beyond a high level, networking sojourn, how will the time and money spent to attend make a real, measurable difference?
     More shall be revealed!
Ted Braun

 

     As air cargo gathers this week in Turkey, the TRAXON team has set a presence at WCS underscoring the importance of this market.
     “Our view is that even if progress for some initiatives such as e-freight is rather slow, IATA World Cargo Symposium provides a common platform to push the topic,” says Felix Keck, President of TRAXON.
     “We are well aware that managing changes in the air cargo industry requires a lot of patience, which IATA seems to have, slowly but surely driving the e-freight topic ahead.
     “What we want to achieve this year is of course meeting our customers and potential customers and learning about their needs.
     “Through our sponsoring/ activities, we hope to help drive the e-freight, e-customs and e-AWB initiatives forward.
     “TRAXON Europe has been actively offering electronic communication solutions that simplify global trade and air logistics in Turkey since the 1990s.
     “Nine of the top 15 IATA air cargo agents in Turkey as well as Turkish Airlines and MNG Airlines use TRAXON EDI.
     “TRAXON Line is popular with SME in Turkey.
     “Turkey is one of the most challenging and dynamic emerging air cargo markets.
     “At WCS we have organized a small get together for our local air cargo contacts.
     Oliver Evans, Chief Cargo Officer at SWISS World Cargo:
     “The quality of past WCSs has been very uneven, with a very good one happening before the last one, followed by the last which was insufficiently prepared and followed-up.
     “I am indeed looking forward to meeting old and new faces and learning much, but my priority in going to Istanbul is to join the effort to advance understanding that the top priority for all of us is security.
     “There are many other issues that rightfully command our attention (profitability, efficiency, e-freight, environment, etc.), but securing a common field of action for all stakeholders concerned in security and ensuring a sensible, business-oriented and yet fully secure regulatory environment is not only very important but very urgent as the various administrations continue to pull in conflicting directions.
     “We are, in effect, at a historical crossroads.
     “In one direction lies an uneven playing field, with different rules for different types of capacity (freighter or passenger belly), preventing the shipper or forwarder from benefiting from maximum choice based upon purely commercial criteria.
     “In that direction there is also mushrooming complexity, reduced service, and extra costs for the end users.
     “Fortunately there is another path leading ahead towards open and fair competition, streamlined processes, mutual recognition of national security programs by the various nations, full usage of all the many barriers to unlawful acts and optimal costs.
     “Not only is this road wide open to the industry, we have found a vehicle in the recently-formed GACAG, including global representation of the various industry stakeholders, IATA, FIATA, GSF, TIACA.
     “But we have to get this vehicle in gear fast.
     “SWISS has double daily flights from Zurich, and our own cargo set-up in Istanbul.
     “We are delighted this week to welcome our new manager, Metin Selcuk, joining us with ample experience in general management in airline-related businesses.
     “I wish him and his team every success.
     “Turkey is a very exciting country, with a rapidly growing economy and ambition.
     “Hosting the WCS is just one sign of the desire to position the gateway, and the country, on the world stage.
     “I am especially fascinated by Turkey because of its position on the border of Europe and as a gateway to the Middle East.
     “Historically the country benefited hugely from the rich mixture and peaceful co-existence of various races and people, Turks, Greeks, Armenians, Jews, Kurds, and many more, so that Byzantium as it was then called was perhaps the greatest city in the world of its time.
     “Although history has inevitably left its marks, and cultural clashes have taken place, I think Turkey can play a key role in helping to bring about a global reconciliation of the Western and Middle-Eastern worlds.
     “It is to be hoped that the current events in North Africa will be part of a renewal of mutual understanding and respect throughout the region, and leaders of the Egyptian revolution are quoting Turkey as an example of secular self-determination.”
     Giovanni Bisignani, IATA’s Director General and CEO, who is on his last round of the rubber chicken circuit engagements (he speaks at Wings Club in New York later this month before retiring at mid-year), now says oil prices driven by political unrest in Middle East & Africa are throwing a big wet towel on earlier predictions.
     “The spikes in oil this year lower our estimates of industry profits to $8.6 billion from the $9.1 billion we estimated in December 2011.
     “That represents a 46 percent fall in net profits, versus the industry’s $16 billion earnings in 2010 or a paltry net profit margin of 1.4 percent.
     “Our current forecast is based on an average annual oil price of $84 per barrel (Brent).
     “Today the price is over $104.
     “For each dollar that oil increases, the industry is challenged to recover $1.6 billion in additional costs.
     “The global economy is now forecast to grow by 3.1 percent this year, a full 0.5 percentage point better than predicted just three months ago.
     “However, stronger revenues will provide only a partial offset to an estimated 20 percent rise in the cost of fuel.”
     “Overall, Asia-Pacific carriers are expected to deliver the largest collective profit of $3.7 billion and the highest operating margins of 4.6 percent.”
     Patrik Tschirch, Head of Key Account, Marketing and Business Development LUG aircargo handling GmbH Frankfurt, thinks the Istanbul IATA WCS should get in tune with the coming Spring season, wake up and take a reality check:
     "Security matters in air freight are shifting step by step from forwarders, shippers and truckers on to us, the handling agents of cargo.
     “This is an ongoing process that's speeding up.
     “What's missing, however, are lucid guidelines from the regulators.
     “Instead, they charge handling agents big money for getting licensed as regulated agents.
     “I'm asking myself what service exactly we've got to pay for?
     “Handling agents have increasingly become a link by connecting forwarders and carriers shouldering the major security burden in air freight.
     “To my understanding, IATA should play a much more active role by demanding clear security guidelines from state authorities that enable us to do our daily job properly.
     “Unfortunately, IATA Cargo seems to prefer a rather hesitant policy so far, a topic I recommend the organization think over in order to change things immediately.
     “To my understanding, it's their duty to put pressing topics right on the table and negotiate with state authorities to remedy shortcomings.
     “The same accounts for E-Freight, since the data quality demanded by the U.S. is still not fully in accordance with EU parameters.
     “That's another field which should be put on Istanbul's WCS agenda for fast resolving a forward driving strategy.
     “We are all still waiting.”
     Issa Baluch, the founder of Dubai based Swift Freight and now as Professor sharing his knowledge with undergraduates and academia at Harvard University, may know as much about logistics as anybody you ever met.
     At least he has had the chops and knowhow gained over a career that spans 37 plus years to gather some of his thoughts and put them down in black in white for all the rest of us to study and ponder.
     The Baluch book “Transport Logistics - Past, Present and Predictions,” (available on Amazon for $65.US (http://www.amazon.com/Transport-Logistics-Past-Present-Predictions/dp/9948031393) is a 300 plus page barn burner that Prof. Issa created in 2005 and it still fascinates.
     Here he shares some thoughts and common goals for air cargo this week in Istanbul.
     “In terms of topics of unique common interest at WCS political unrest forms the greatest challenge ahead in 2011 and should not be downplayed at industry meetings:
     “Depending on the scale of escalation of this unrest in parts of ME + North Africa we will continue to see some volatility of fuel costs rising.
     “Clearly from the signals we may not be seeing the end of this situation so seat belts should be tightened some more.... and get used to more fuel surcharges, loss of revenue, reduction in freight lifts and reduction is capacity and a bumpy economic performance.
     “Assuming that the affected countries gain momentum in restructuring I think we may get back to normality fairly quickly.
     “The reason here is the oil tap may be turned on quite fast since any newcomers will want some income badly. “This should help us regain lost ground and get back to normality.
     “As to the speed of these events, this is up for any guesses...
     “IATA Symposium discussion would be best centered upon surrounding assistance to get these affected countries back (once normality kicks in) on their feet and towards recovery to normality as far as air cargo is concerned.
     “IATA should take a lead to come up with a program to assist such countries. Their re-entry back to the fold can be very helpful.
     “What do these countries need?
     Lots of lost technological assistance and perhaps professional support.”
Geoffrey/Flossie

 

Cargo Handlers Get No Respect

     Like many of his global colleagues, John Batten, EVP Cargo at Swissport the giant global handling company based in Zürich, Switzerland is in beautiful Istanbul for the Fifth World Cargo Symposium (WCS) March 8-10.
     Mr. Batten who has held top executive posts at several companies is among the most respected and seasoned transportation executives in the world.
     So he is in IST to push forward a mission and says if successful—could be a game changer for all air cargo handlers.
     “What I am looking for at WCS and for the rest of 2011 is real change and engagement from IATA that includes and enhances the cargo handlers role and input into the process similar to what they have done with TIACA creating GECAG.
     "The handlers are important to the overall objectives of IATA in terms of C2K and e-freight but we are not in a position to contribute and move these projects forward in the way they deserve or for that matter need to.
     "Swissport has undertaken an initiative in late 2010 to create Customer Relationship Management (CRM) into its undertaking with airlines which is benchmarked on C2K and then includes other drivers relative to each individual customer.
     "We have to get closer to our customers and also ensure that we have consistent quality across our business.
     "This process once rolled out will go a long way to improving the quality and identify areas of improvement that are managed and corrected together with our partners.
     "In short, cargo handlers want change and to be heard by everyone as part of that process.
     "For example Cargo 2000 began way back in 1997, yet we are still struggling to get it implemented and incorporated into the system by all parties.
     "Why?
     "Well, maybe we missed the boat (or the plane for that matter).
     "C2Kwas originally set up by airlines and forwarders to improve quality and measure the different aspects of the business that mattered. Well that’s what I was told, way back then.
     "The reality is that someone got to the Cargo 2000 (C2K) planners and tried to recreate the shipment tracking systems of the integrators. Unfortunately, they missed some of the real drivers that allow quality and process improvements to be made. So is it time to create a new C2K master plan; re-specify Phase 3; or even take it out completely, and concentrate on fully
     "Implementing Phases 1 and 2? Whatever the outcome, we have a lot more work to do, and this must involve the right people. I would like to see cargo ground handlers included in the decision making. That way we can tackle some of the shortcomings in the process chain, so that quality can be improved to reach an entirely new level."
Geoffrey

 

     Michael Steen, who has been in the news quite a bit lately as the 2011 Chairman guiding The International Air Cargo Association (TIACA), also balances that great service to air cargo with his daytime job as Executive Vice President and Chief Commercial Officer at Atlas Air World Holdings, which happens to be the biggest, most important ACMI operation on the planet.
     Because of the job and the public service, Michael is up in the air a lot as he jets across time zones at a furious pace all around the world.
     Thankfully for Atlas, located in Purchase, New York, the man is right down on the ground amongst rolling green hills when he talks about the future.
     “In 2011 we are looking forward to taking delivery of the first of our brand new 747-8 Freighters, which will be the best performing and most capable wide body freighters in the industry with the lowest unit operating cost,” reports Michael Steen.
     “We also expect to expand the fleet portfolio of our dry leasing subsidiary, Titan Aviation Ltd, and expect to see several new interesting customers being brought on board in this segment.
     “In addition to an exciting 2011, we are looking forward to further growth over the next few years as we expand our fleet.
     “2010 was a very good year for AAWW and its subsidiaries and all business segments performed very well.
     “The global charter demand, which was exceptionally high in the first and second quarters, was strong all year as a result of global inventory replenishment and increased consumer demand.
     “In addition, all of our ACMI customers performed better than expectation.
     “Looking ahead, there are still some troubled economies in Europe which need to stabilize and strengthen in order not to affect the confidence in global growth in 2011 and beyond.
     “It will obviously be very important to work with authorities around the globe in order to ensure that the new Security rules and regulations will support global airfreight and not hinder growth.
     “A matter deserving some attention is the ongoing unrest in North Africa and the Middle East, which is a great concern for our industry as it already has had a negative impact in the form of an increase in the price of oil.
     “But so far in 2011, all our business segments (ACMI, CMI, Charter and Dry-leasing) are performing as expected.
     “Atlas is looking beyond 2011 as well, particularly as we introduce the remainder of 747-8Fs into service and grow our fleet, and especially as we grow our new CMI operations with Boeing, SonAir and other potential new customers."
Geoffrey

 

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