Weathering Fat Tuesday At WCS

     (Exclusive Istanbul)—Yesterday March 8 was “Fat Tuesday” in large parts of the world with celebrations including Mardi Gras in New Orleans as closer to the last day before The Lenten Season that leads up to Eastertide.
    While there may have been some of that in Istanbul, to most conferees who ventured outside the host Hilton Hotel venue at IATA’s Fifth Annual World Cargo Symposium—Tuesday can be described as the day weather took over.
    “You must be kidding,” was a comment.
    “Temperatures of 2°C before midnight that according to AccuWeather feel like -5°C, with gusting winds with rain and snow in Istanbul?”
    “The mezze could freeze on the mezzanine,” was one comment we heard.
    How much the weather paralleled the IATA World Cargo Symposium Opening Plenary yesterday and may have been a reflection on Giovanni Bisignani the keynote speaker’s remarks, we will never know.
    One more time, correction – one last time, IATA (Bisignani) falls back on touting all that it does for the industry, namely “keeping your money safe”; One can’t fully appreciate the degree of self-delusion when it is presented as if it was IATA’s money or money it had earned, rather than the airlines’.
    Self-aggrandizement and a self-centered worldview on this scale is what people who work in the airline business in general, and in cargo in particular don’t want to hear any more about!
    “It’s like driving a car with two steering wheels,” is what we heard one conferee note.
    So then after the keynote warm up as the big wind howled at WCS, it was off to the races with “safety” atop the issues addressed, highlighting IOSA that fulfills a useful role but could actually be provided to the airlines at cost, minus the IATA markup.
    Security was not far behind on the opening agenda, except that topic is actually being pushed by government agencies.
    E-freight is being brought up in this context, as “the 20 documents that we have converted to electronic format give a clear picture of who is shipping what and where.” Except when it doesn’t, which is the reason TSA is working on obtaining a subset of the data, but at a much earlier point in time, before it is in airline custody.
    So the best IATA can come up with is to request that “governments must make e-freight a customs and intelligence requirement”?
    The best part of Tuesday WCS was the “Global Air Cargo Advisory Group [GACAG – a real catchy acronym] – “is an example of the cooperative leadership we need”; and it’s absolutely true, since IATA didn’t rise to the occasion to respond to the need in the first place and someone else finally picked up the ball.
    The Opening Plenary was followed by three tracks – Economic Outlook, Air Cargo Security and Air Mail.
    We posed some questions to IATA head of Cargo Des Vertannes, who was busy as you might guess, but got some straight to the point answers from Anthony Concil, Director IATA Corporate Communications.

FT:   What is IATA's top priority in world cargo right now?
IATA:   The top priority is competitiveness. That means building a more efficient and reliable supply chain that is capable of delivering sustainable profits. That is a priority that is not limited to air cargo.
     The global airline industry produces pathetic margins-2.9% last year falling to 1.4% this year. We are not even coming close to the 7-8% needed to cover the cost of capital. Air cargo generates $68 billion in revenues-11% of the industry's total. Its contribution to industry profitability is critical. Many issues chip away at air cargo's competitiveness-inefficient old processes, lack of global quality standards, piecemeal and often knee-jerk security measures and so on. Improving competitiveness is one priority, but the "to do" list is long.
FT:   Are you reassessing your view of what 2011 holds in store for our industry? Explain.
IATA:   Yes. On March 2, IATA released its revised economic outlook, downgrading forecast net profits from US$9.1 billion to US$8.6 billion this year. That is a 46% drop on what the industry made in 2010. The high price of oil is driving the downgraded outlook. We had thought that 2010 would see an average of $84 per barrel. We revised that up to $96. Considering the impact of hedging that is a $10 billion added cost that airlines will need to recover.
      There is some good news on the economic front. GDP growth forecasts have been revised upwards to 3.1%—a full half a percentage point higher than even a few months ago. With stronger demand and continued careful capacity management, we see the possibility for a 1.9% yield increase this year. The industry is fragile and there are risks, particularly with fuel. If speculation pushes the price to the point where it slows economic growth, the situation could change dramatically and quickly.
FT:   What is IATA doing for air cargo that you were not before Des assumed command?
IATA:   We are adding emphasis in two areas where a solid foundation already existed. First we are focusing on partnerships across the supply chain to bolster industry competitiveness. The formation of the Global Air Cargo Advisory Group (GACAG) in November last year was a major step forward. Under the GACAG umbrella, IATA, FIATA, TIACA and the Global Shippers Forum will develop common positions on issues including security, e-commerce and facilitation.
      Second, IATA is working with its supply chain partners to raise the profile of air cargo. It is important that people understand and recognize air cargo's critical role in transporting 35% by value of all goods traded internationally. It will help governments to deliver policies to support the industry's vital role. And it will help to attract talent to the industry today that will grow into our leadership for tomorrow.
FT:   This is the 5th World Cargo Symposium. What has been the traceable tangible result takeaway of each of the four former gatherings and what are you hoping to deliver from number five in Istanbul?
IATA:   The trail of achievement is clear. The 2009 World Cargo Symposium challenged IATA to start 10 new CASS operations, re-write the standard Ground Handling Agreement to provide adequate protection for ULDs and to engage 10 of the top air cargo shippers to promote e-freight. This was delivered.
      In 2010 the challenges were to roll out that e-air waybill, define 5 new XML standards to replace paper documents and to deliver a six-month Secure Freight pilot in Malaysia. We will report these as being achieved at this year's Symposium. And this year we will agree to make progress that will be reported to next year's Symposium.
     We should also keep in mind that the IATA Board of Governors keeps track of our progress. They have challenged IATA to increase e-freight volumes to 10% this year and to 100% by 2015. And they want to see Secure Freight rolled out in at least two locations by year-end. These will be important topics at this year's Symposium.
FT:   What do you say to somebody who says that they hate IATA?
IATA:   Come and see us, engage us and challenge us. We have a record attendance of over 900 signed-up for the Symposium [including a sizeable IATA staff]. We are committed to making air cargo even more successful. And we are eager to work with all partners who share that same goal. That is what the Symposium is all about and it is at the heart of GACAG's important mission.
FT:   We are hearing from ground handlers that they want a greater voice in the shaping of industry guidelines. What do you say to these industry stakeholders and others who are actively calling for a voice?
IATA:   Air cargo is an integrated supply chain. To improve competitiveness, we must all work together. We have ensured at this conference that all industry stakeholders and partners - including ground handling agents - can be more visible and vocal. With respect to ground handlers, we look forward to them playing an increasingly more active role in the various taskforces, such as Cargo 2000 and the e-freight Central Action Group (e-CAG).
     And, through Cargo 2000, we are engaging ground handlers to develop global common quality standards.”

      But back to the Director General’s remarks.
     Giovanni Bisgnani noted that the figures indicating where things stand – “…a pathetic 1.4% margin”, “but it could have been much worse”.
     “He might be also describing the weather,” somebody said.
     “Oil prices were still rising above $100 a barrel, but at least OPEC has started discussing an increase in output,” another chimed in.
     “How comes the DoJ doesn’t launch some price fixing against big oil and give airlines a break?” drew nods of approval all around.
Ted Braun/Sabiha

WCS Takeaway

The first day Of IATA WCS went very well.
     First of all, IATA Head of Cargo Des Vertannes is doing an exceptional job and has managed to keep the panels and the audience focused on the key subject matters and have a good dialogue going.
     Main Takeaways were:
     Good attendance with industry leaders from all regions and segments of the industry.
     Industry panels ranked their top priorities/concerns for the industry being security, air cargo collaboration and e-commerce as their top priorities...which fits perfectly with the GACAG priorities.
     Solid and content based discussions with industry stakeholders and regulators (including TSA), boding well for continued dialogue and action.

Michael Addresses Atlanta Air Cargo Association
     On March 15th, close enough to St. Patrick’s Day for a traditional boiled dinner of corned beef and cabbage (although FT learned that chicken is on the menu), the Atlanta air cargo community will get an up close, personal view of the upcoming TIACA 2012. Michael Steen will address The Atlanta Air Cargo Association at that group’s regular monthly meeting.
     Time/location is 12-2pm at Hilton Atlanta Airport (new location), 1031 Virginia Avenue, Atlanta, GA 30354.
     $35 members/$45 non-members.
     To R.S.V.P contact Lisa Christy at lisa@acceleratedcourier.com

     The recent CNS Air Cargo Compliance Mini Conference held in Arlington, Virginia tackled topics that were diverse, and while the underlying theme was always security, some of the related topics definitely merit attention.
     Gregg Borgeson (left) of Ex Works, Inc. presented “Changing Trucking Requirements Compliance for Air Cargo” and although he did a fine job stating the facts, the general reaction of the audience was the repeated, audible “this is insanity” comment, not pertaining to the speaker, but rather the looming August 1, 2011 ‘Trucker Air Cargo Security Responsibilities’ deadline and what it entails.
     If it weren’t so serious, it would be almost comical to see forwarders chafing at TSA regulations targeting IAC (indirect air carriers) for a change, not airlines, which are the usual recipients of much unwelcome ‘love.’
      Absurdly enough, 49 CFR in its various subsections makes the forwarder responsible for the security of the truckers it contracts when moving air cargo. We could suggest an intra-governmental knocking of heads, but folks, we are dealing with a bureaucracy, so let’s keep expectations in check.
     The DOT regulates the trucking industry and its CSA2010 (compliance-safety-accountability) rules would be best suited for the implementation and enforcement of the respective safety regulations, rather than the leap to the forwarders who are in absolutely no position to ensure the truckers, as their ‘agents’ comply with TSA air cargo security regulations when handling cargo that will subsequently be tendered to a commercial air carrier (49 CFR 1548.5(c)).
     You can see the forwarders squirm and throw up their hands in despair because they must now guarantee that trucking companies’ personnel have each passed a TSA Security Threat Assessment (STA) or have another TSA-approved security credential before being given unescorted access to cargo that such person knows or has reason to believe will subsequently be tendered to a commercial airline. The airlines can feel your pain and muster a collective sigh of “welcome to my world.”
     In practice, this means drivers require an STA number – the exception: “an STA is not required if a person already has a Customs FAST card, airport SIDA badge, TWIC or HAZMAT endorsement to a CDL issued after June 2005.” This is exactly what makes this so maddeningly incomprehensible – DOT manages and enforces truckers’ HAZMAT regulations; U.S. Customs and Border Protection manages and enforces the Customs FAST card program, therefore why not utilize what’s in place instead of putting forwarders in charge of trucking companies’ affairs and holding their feet to the fire, not to mention the overall impact this will have on the air cargo business?
     If you think it’s illogical and shouldn’t be done, you just witnessed another, but not the latest chapter in Washington’s imagination, example of questionable answers; the outcome be damned, we can make them do it!
     Gregg illustrated successfully what these regulations meant using the example of a single average size trucking company composed of 100 trucks, 3.5 locations, 52 drivers and a turnover ratio of 27 percent, which corresponds to approximately 1,400 driver terminations annually. Assume an average rejection rate of 17 percent would require 526 hours annually to maintain. Multiply that by 2,000 trucking companies nationwide and you get a staggering 120 person days a year!
     While none of those present in the conference thought this should go forward, reality bites, and CNS has teamed up with Gregg’s company, Ex Works, Inc., and launched the “Listed Trucking Company” online solution on its web site. Ex Works has a number of truckers already in its database and Gregg urged the audience to encourage their respective truckers to become CNS Trucker Listed as a means to providing required TSA driver data, insurance and CSA2010 safety rating. While fully operational, participation has been very low.
     CNS charges “a small annual fee” of $45 per trucker locations for the annual administration of the program and additional details are available on the CNS home page. The listing will not eliminate the administrative overhead but it can potentially cut it in half or less according to Ex Works.
     It remains to be seen how this plays out with only five and a half months left before the deadline.
Ted Braun

     If you look at Turkish Airlines up close and personal as delegates to IATA’s World Cargo Symposium undoubtedly are doing this week in Istanbul, what emerges is an exciting, fast growing airline that moved 29.4 million passengers and 313,000 tons of cargo in 2010.
     Operating from “The Natural Bridge between Asia and Europe” as Istanbul is called and backed by the Turkish Government’s proactive foreign policy, the future bodes well as THY has bold plans in place as it steps forward in the new century.
     “Our main focus for 2011 is to have it be the year of operational productivity and quality, in addition to increasing global brand awareness for Turkish Airlines,” said Senior Vice President Cargo, Abdullah Soner Akkurt who was named cargo manager earlier this year.
     New aircraft are going to join the fleet, new destinations will be opening, (Istanbul to Los Angeles non stops were launched earlier this month) and renewal of facilities and frequency increases are all in the works.
     “We expect to achieve our 2011 target of 35 million passengers and 380,000 tons of cargo.”
     Right now Turkish Airlines is 154 Airbus and Boeing airplanes plus five Airbus freighters and is one of the youngest fleets in Europe, with an average age of 6.5 years.
     The freighter fleet consists of four A310s with 36 tons of capacity and one A330-200 with 70 tons of capacity.
     On tap to arrive in Turkish Cargo livery by mid-year is an additional A330F bringing the total number of freighters to six.
     “We want to expand our services globally and to position our brand across one of the largest networks within the airline business sector, thus creating a global footprint.
     “Turkish currently operates in 26 scheduled cargo destinations with our freighters: Beirut, Cairo, Dubai, Cologne, Tbilisi, Damascus, Amman, Tel Aviv, Almaty, New Delhi, Frankfurt, Maastricht, Zurich, Paris, Madrid, Pristina, Milan, Algeria, Tripoli, Casablanca, Tiran, London, Shanghai, Hong Kong, Tashkent, and Bishkek,” Mr. Akkurt declared.
     “During 2011, we are planning to operate our A310F to Munich, Jeddah, Bucharest and Addis Ababa, and with our second A330-200F to Dhaka, New York and Singapore.”
     Turkish Airlines currently serves 172 destinations, such as Los Angeles, Shiraz, Manila, Atlanta, Malaga, Valencia, Toulouse, Kabul, Naples, Turin, Genoa, and Basra.
     “The primary focus of Turkish Cargo is to have a 'customer-oriented approach’; to meet customer needs and to make our shipment process clear and fast.
     “We also have also recently renovated our website www.turkishcargo.com.tr in order to meet customer demands, and also to offer the easiest way to monitor their shipment at every step.
     “Turkish Cargo has also endorsed and participated in the Cargo 2000 project to increase its performance operationally and to meet customer expectations for higher service.
     “In terms of business in 2010 cargo carried from the Middle East rose 13 percent for the same period, while cargo moved from the North African region doubled in volume compared to the previous year.
     “So this area called MENA is a very important air cargo market and at the same time it is an emerging market.
     “Turkish Airlines, paralleling Turkish Cargo, expanded its network capability in 2009 and currently operates in 26 cities in the region.
     “As mentioned before, Turkish Cargo also has a robust network of scheduled freighter service to Casablanca, Algiers, Tripoli, Cairo, Tel-Aviv, Dubai, Amman, Damascus and Beirut.
     “The market affords many opportunities truly making Turkish Cargo a global business resource.”
     Taking an industry view Abdullah Soner Akkurt says that he is well aware that there remain challenges to successful air cargo operations, such as low yields, volatile fuel prices and matching capacity to demand.
     “Being aware that our industry is fragile, more fragile than every other service industry, we must take intelligent steps for the future.
     “Air cargo companies must be leaner, more cost-efficient and wiser after having experienced the economic downturn.
     “The industry must exploit its advantages, such as security, speed and reliability.
     “Air cargo must be seen as a total supply chain, together with the shipper, consignee, customs, freight forwarder and carrier.
     “Comprehensive cargo screening programs must be used industry wide, and in a cost-efficient way, supported by new technologies and causing little disruption to customers and operators.
     “In terms of customs, there is still need for drastic changes—to reduce origin-destinations timing and to pair more commonly applied customs requirements with widely used electronic data transfers.
     “All this must be done in order to make air cargo more secure, simple and reliable in the future.
     “ Security will remain a main issue for coming years.
     “It’s obvious (after Yemen late last year) that the air cargo industry is vulnerable toterrorist attacks, so there must be a common vision in the industry in order to have reliable security standards.”
Geoffrey

RE: Ground Handlers Get No Respect

Geoffrey:

DISCLAIMER:
     It’s after 5 and I’m trying to just finish existing and piled up work, but the subject line belies my feeling.
      
      In Chicago, the ground handlers who have been increasingly employed by carriers as a cost-cutting and outsourcing measure err on several fronts.
      •  They don’t seem to understand that air freight is expensive and people PAY for that service.
     As such, they expect SERVICE and hiring labor that cannot communicate and is not motivated to match the expeditious nature of air freight is to their detriment.
      •  Their employees are comfortable treating truckers as second-class citizens, when in fact they are the daily face that the end users of their service see constantly.
     Treat them poorly and the attitude flows over to the dock when the cargo is delivered; jeopardizing the relationship that the forwarder has with their client or creates a disinclination to work with them.
      •  Intractable, by and large, profit driven, unquestionably, and those two things are a powerfully negative connotation for their clients.
     I’m willing to read and flush it out and discuss in greater detail, but the service has gone away as the outsourcing has grown and the only ones who have gained are those ground handlers and the carriers who are increasingly reliant upon them as their “face” to their customers.

Scott Alan Case
The Camelot Company
Vice President
s.case@camelotcompany.com

RE: Air Cargo San Diego Meet

Hello Geoffrey,

     As always I find your Flying Typers interesting and informative.
     Thank you for providing a professional service for the industry.
     Your interview last Friday with Brandon Fried, Executive Director of the AfA was of particular interest to me as I was the Executive Director of the organization when Jim Foster retired at the end of 1998.
     The AfA was then headquartered in California where Jim and a few other industry titans founded the organization.
     When Jim retired, the board of directors and I believed that we could better serve our membership by relocating headquarters to Washington, D..C which I did early in 1999.
     Jim’s health was failing in 2005 and the board of directors and I renamed our annual achievement award in the name of James Foster.
     We flew Jim and his immediate family to Florida for the 2006 air cargo conference and he presented the award with his name on it.
     Jim said, that was one of his proudest achievements.
     He passed away shortly after that.
     I served as ED through the Gore Commission, the events of September 11th and cemented AfA’s involvement in transitioning aviation security from the FAA to the TSA.
     AfA was subsequently an influential voice in the development of air cargo security processes.
     I passed the baton to Brandon Fried a year after Jim’s passing with a sense of pride in the accomplishments of the organization.
     Thank you for allowing me to clarify the record.

Best regards,
David Wirsing
(Excerpt from FT March 4, 2011)
FT: Brandon you have been heading up AfA since Jim Foster died which is how many years? Brandon, what accomplishment are you most proud of having brought to the group?
BF: “Jim Foster was the founder of the Airforwarders Association and the industry suffered a huge loss with his passing in 2006. I learned much from the great man whose wisdom and insight continue to guide my passion for the industry and its people. Jim taught me that we get much more accomplished when working with others in a cooperative fashion,”

RE: Celebrating International Women's Day

Dear Geoffrey,

    Flying Typers is a great publication, even when some times just concentrating on the women with cargo airlines against the aviation news :-)
    I am missing the news for example of the Asian carriers like Cathay Pacific, Singapore Airlines, Malaysian Airlines, Korean Air, China Southern . . . etc.
    You should know that Europe is experiencing a large number of freighter cancellations ex Asia, due to the low tonnage ex China to Europe, which means EU is challenged to uplift freight on time as should be.
    It would be great to talk to these airlines or at least to get more information from them of their future planning within your cargo news.
    Appreciate your help and support.
    DHL is happy to have its own fleet & B 777 freighters into Asia.

Kind regards,
Ahmad
Ahmad.Mahmud@dhl.com

Dear Ahmad,

     Am somewhat certain that you are jesting with that opening comment but always feel that somebody in air cargo needs to lift the lot of women and that is exactly what we have done from 1975 when we began Air Cargo News in New York until today with our global, thrice-weekly publication FlyingTypers.
     There is an old saying in the news business:
     ”If you don’t like what you are reading—wait a minute”
     In the case of FlyingTypers with 140 issues a year we eventually run several stories about almost everybody.
     But you are right about Singapore Airlines Cargo.
     We have been publishing FT for a decade now and have not heard a word or even a scrap of a press release from SIA, not even once.
     Will pass along your sentiment to Singapore Airlines at once and see if that works.

Good wishes,
Geoffrey

Celebrated Return

     As all of Germany celebrates 100 years of Air Cargo during 2011—a year long event that will really fly into the headlines come this August at a grand party in Frankfurt—Air Cargo News FlyingTypers Editor Emeritus Günter Mosler returns and heightens the remembrance of days gone by, joining the celebration of Fat Tuesday around the world (yesterday) that augers the beginning of Lent leading up to Eastertide.
     Here Herr Mosler replicates in style and countenance a once upon a time visit to the Berlin-Johannistal Airfield by the Publisher of “Die Berliner Morgenpost" on August 19, 1911 to witness first hand this new fangled transportation called flight—and to shepherd into the air a consignment of newspapers ready to move by something called “Air Cargo”.
     After the pilot Siegfried Hoffmann readied his aircraft the papers flew from Berlin-Johannisthal to Frankfurt on the Oder.
     Everything is the way it was except as we tell this history during 2011:
     “You Are There.”
     Join us for this year-long ride looking back and to the future right up until that big summertime party.
     Just for the fun of it!
     Series continues next week.
Geoffrey

If You Missed Any Of The Previous 3 Issues Of FlyingTypers
Click On Image Below To Access

FT030411

FT030811