Vol. 12 No. 74                         THE GLOBAL AIR CARGO PUBLICATION OF RECORD                     Wednesday August 21, 2013
#INTHEAIREVERYWHERE 
THE AIR CARGO NEWS LEADER  


     There is hope that the recently released accident report regarding UPS flight 006, which crashed on September 3rd, 2010, in DXB and cost the lives of two U.S. aviators, might serve as a wake-up call to the industry, and to all Stakeholders to push for tighter regulatory reins on the issue of shipping lithium batteries.
     In all fairness it must be said that by and large both the regulatory authorities have failed to address the surge in retail shipping and reverse logistics involving consumers and sparked by Internet-based distribution in recent years.
     The exception is the recently introduced ANPRM HM-253 by US-PHMSA and the liberalization of DG within UK domestic mail.


     However, shippers have failed to implement existing standards and logistic providers have decided to turn a blind eye to what they know about the merchandise to be shipped.
     Sure enough, any retail merchandise shipper striving for full compliance with existing national and international dangerous goods requirements would find himself at a considerable commercial disadvantage which would, more likely than not, put them out of business soon, meaning this is mainly a regulatory issue that should be addressed by industry outreach programs, education, training, and, last but not least, enforcement.


     Firstly, have you heard about reBuy?
     In Germany you can sell off your electronic gadget, or you can buy a semi-new gadget online via reBuy for less than it costs new.
     Still, the issue is that shipping (both from reBuy to you, and also when you ship merchandise back to reBuy) must be in compliance with dangerous goods requirements.
     That, however, is usually not the case.
     When selling gadgets to reBuy, you go through an identification and self-appraisal process of your used gadget on their website, at the end of which you’re given a preliminary purchase price.
     If you agree, you can print the shipping labels and get the parcel picked up either at your home or business address or drop it off at any German post office or Hermes Logistics Depot.
     However, although reBuy has an extensive FAQ section on their website, the search terms “Dangerous Goods” or “Lithium Batteries” yield no results.
     There is not even the basic advice to protect gadgets against accidental activation, protect loose batteries against short circuits, or avoid shipping obviously malfunctioning batteries.


     The simple truth is that owing to PRBA’s successful initiatives at removing regulatory burdens in commerce, most gadgets shipped do not require bearing the so-called “Lithium – Battery Handling Label” or any indicator on the shipping documents, as long as there are no more than four cells or two batteries of the “excepted” type (batteries 100Wh or less, cells 20Wh or less) contained within the gadget.
     It seems to be largely ignored that they must still conform to the so-called “General Requirements” (which are all based on the “UN Model Regulations” in the current 17th Edition) under all international and European modal regulations; also, for the U.S., 49 CFR has to a great extent been harmonized with the UN Model Regulations.


     General Requirements” (which are all based on the “UN Model Regulations” in the current 17th Edition) under all international and European modal regulations:
     The following requirements apply to all lithium ion or lithium polymer cells and batteries:
          (a) each cell and battery is of the type proven to meet the requirements of each test in the UN Manual of Tests and Criteria, Part III, subsection 38.3.
          (b) However, batteries and cells manufactured before 1 January 2014 conforming to a design type tested according to the requirements of the 5th revised edition of the UN Manual of Tests and Criteria, Part III, subsection 38.3 may continue to be transported;
     Note: Batteries, including those that have been refurbished or otherwise altered, are subject to these tests irrespective of whether the cells of which they are composed have been so tested.
          (c) cells and batteries must be manufactured under a quality management program as described in 3.9.2.6(e);
          (d) cells and batteries identified by the manufacturer as being defective for safety reasons, or that have been damaged, that have the potential of producing a dangerous evolution of heat, fire, or short circuit are forbidden for transport (e.g. those being returned to the manufacturer for safety reasons).
          (e) waste lithium batteries and lithium batteries being shipped for recycling or disposal are forbidden from air transport unless approved by the appropriate national authority of the State of origin and the State of the operator;
          (f) cells and batteries must be protected so as to prevent short circuits. This includes protection against contact with conductive materials within the same packaging that could lead to a short circuit.
Where a gadget or other device is shipped with the battery not installed but contained in the same outer packaging, the “Lithium Battery handling label” is always mandated.


     Now how does all of this work in practice?
     From a consumer’s point of view, it works just fine. From a regulatory point of view, it couldn’t be worse.


     To test all of this out in real time and regular practice, FlyingTypers Germany ordered a Samsung Galaxy IV mobile phone from reBuy that arrived active (on) when received. No instructions in regard to dangerous goods related requirements were made available in case of reshipping.
     We then tried eBay and ordered a Blackberry Bold 9700 Li-Ion battery and a Samsung Galaxy IV Li-Ion battery from two different professional sellers. In both cases the devices arrived via eBay in simple envelopes bearing stamps, which means first, the required sturdy outer packaging was not supplied for the shipment as required, secondly, the mandatory Lithium – Battery handling label was missing (always required when batteries are shipped as such) and thirdly, the shipping of Lithium batteries by mail is not permitted in Germany.


     Do not assume the above are exceptions to the rule.
     There are hundreds of professional sellers for these commodities, and most of them offer “free shipping by German post,” both nationally and internationally.
     Also, do not assume this is a German problem. It’s definitely not. As said above, very few regulators have tackled this issue, and even in the U.S. regulatory guidance addressing these issues is still in the stage of an ANPRM.
     As for shipping any form of Lithium battery by airmail, the shipping of batteries “as is” is always illegal, to say it clearly. Not being in compliance would sure sound better, but given the present regulatory framework, it’s just plain illegal, period.
     Shipping so-called “excepted” batteries installed in consumer electronics in the mail is possible only where all the postal organizations involved in such transport have gotten authorization from their respective national competent authorities. This means that shipping such items domestically within the U.S. is legal, or shipping it from Hongkong directly to the U.S. is legal, but neither from the U.S. to Germany nor from Hongkong to Germany, since DPWN – Deutsche Post neither holds such approval nor have they applied for it.
     Since within Europe, regulations aiming at international trade and transport tend to be harmonized (for road transport the ADR framework must be applied while rail falls under RID and inland waterway under the ADN), it is fair to say that this problem exists in most EC states where unspecific regulations permit otherwise. However, such specific regulation—as in the UK—can address domestic shipping only.
     This means a UK citizen may use the UK’s Royal Mail to ship certain DG items domestically in compliance, but the very same items may not be shipped to other European (or non-European) states.
     This somehow contradicts the idea of free trade and borderless provision of services within Europe, but non-enforcement of existing regulations can hardly be the answer.


     Some professional sellers seem to make a good living by selling used car spares, namely steering wheels with airbags.
     While the verbiage employed on their eBay sites suggest they’ve at least heard about dangerous goods (“all return shipments must be made using the original performance-tested packaging materials”) they’re utterly on the wrong track.
     Where professional sellers specialize in the sales of certain commodities, such as paint-related products, cellphone batteries, or car spares and have ratings in excess of several thousands, sometimes hundreds of thousands, this can hardly be seen as an exception but rather as willful non-compliance as a business model:
     First of all, airbags contain explosives and in Germany are subject to Paragraph 20 of the German Explosives Act, which requires personnel background checks and subject matter training for anyone handling or using explosives.
     Second, DG training would be required for any shipper or re-shipper of such merchandise, and a performance tested packaging, once opened, is usually unfit for re-use—it definitely is where an outer fibreboard box had been used since these are not reusable as a means of dangerous packaging by definition.
     Since DG classification of explosives also depends on packaging, any modification or reuse of packaging materials will result in something the authorities will see as illegal handling of explosives, which may make your new bargain steering wheel way more expensive than you anticipated.


     Sulphuric Acid (Battery Acid), Ammonium Nitrate-based fertilizer (the stuff which, together with engine oil, makes an explosive stronger than TNT and was used by Timothy McVeigh in the Oklahoma City bombing in 1995), disposable lighters, lighter refills—anything which, according to subsection 2.2 of the IATA Dangerous Goods Regulations, should trigger a “potential hidden dangerous goods” inquiry—can be conveniently found on eBay.
     In Germany most auctions from professional sellers come with that handy DPWN/DHL app which calculates your shipping costs. Hard to believe, then, that logistics providers really have no knowledge about the dangerous nature of the merchandise being transported moving through their channels.


     Still, there is the proverbial silver lining on the horizon. Speaking of consumer electronics, a big problem are gadgets which do not allow the removal of the battery, since this basically renders illegal any transport of a non-functioning device for the purpose of repair. Just recently a large manufacturer of such devices has decided to contract with a compliance provider to obtain the required special permits to transport such “defective” items within certain European states, so obviously, the industry is catching on slowly but steadily.
     On the other hand, a European manufacturer of large Lithium – Ion batteries (~ 2.5 kWh) was unable to provide a test certificate when asked to produce such documentation by a competent European authority. It turned out that they had tested the cells only, but not the batteries, so think twice before pointing fingers at shippers whose cargoes with Lithium batteries got investigated in the UPS006 crash.


     So what does German law have to say?
     Paragraph 328 of the German penal code reads:
     “Prison up to five years or monetary fines will be imposed where a person, under gross violation of administrative duties, engages in the transport, shipping, packing, unpacking, loading, or unloading or receiving of dangerous goods or makes such dangerous goods available to others and by such action endangers another person’s health, animals not belonging to him or someone else’s possessions of not insignificant value.”
     According to the law, even an attempt is punishable.
     In the case where an offender is acting in negligence, the sentence is up to three years of incarceration or monetary fine.


     The way we see things, since everybody has a stake in ensuring that no more airplanes are brought down because of mishandled lithium batteries, getting the word out and forging alliances with industry, government, and all stakeholders—including manufacturers—is job one from now on.
     FlyingTypers thinks DG needs to position itself front and center as these issues are discussed and brought into sharp focus at every industry event.
     We have learned quite a bit about the way things work just by shipping some electronics to ourselves.
     That experience was a real eye opener.
     Just imagine what we can do to advance better understanding of safer DG shipping practices if we worked together.
Geoffrey/Jens

t is difficult to discern exactly what is happening in the Asia Pacific air cargo markets, at least from an initial glance at the latest tranche of figures released by airlines, airports, and industry bodies. While there is no clear trend to suggest the market is in any way pulling out of recession—even where growth is apparent, it's mostly low single digit, and freight rates remain bearish—there are now some bright spots.
     Airports Council International reports that overall cargo in the Asia Pacific fell 0.5 percent on a 12-month rolling year to the end of May. However, this disguises a number of performance discrepancies.
     In May the leading cargo airports in the region in terms of throughput were the usual suspects—Hong Kong, Shanghai Pudong, and Seoul Incheon. But Jakarta recorded the highest growth rate, handling 18.3 percent more freight than a year earlier as its huge domestic market and the expanding bellyhold capacity of carriers such as Garuda and Lion Air boosted volumes and pushed national airport capacity to the limit.
     HKIA also bucked the market, even though China's export growth is less than robust, especially from Hong Kong's key Pearl River Delta hinterland. Freight at HKIA increased two percent to reach 2 million tons in the first six months of 2013 after growth of one percent in June. HKIA said the gain last month was primarily due to 3 percent year-on-year growth in exports, with cargo throughput to and from North America a key driver.
     By contrast, Cathay Pacific Airways, the leading carrier at HKIA, saw another drop in cargo throughput in June. Volumes contracted 4.3 percent year-on-year last month and tonnage was down 1.8 percent in the first half of 2013 despite a 1.8 percent boost of capacity.
     “The airfreight markets remained soft in June and we saw both tonnage and load factor falling despite a slight increase in capacity,” said James Woodrow, Cathay Pacific General Manager Cargo Sales & Marketing. “There was no change in the overall situation in either of our key markets, Hong Kong and Mainland China. On the long-haul routes, demand to North America continued to be better than to Europe, which remained weak.”
     A mixed picture is also apparent in South Korea. The Ministry of Land, Transport and Maritime Affairs reported declining volumes for the first half of the year, but international freight handled at the country’s airports increased 0.5 percent to 1.5 million tons. Improving uplift to the Americas, South East Asia, China, and the Middle East helped partially offset declines to Japan and Europe.
     But the marginal slowdown in overall cargo volumes has had a disproportional impact on Korean Air. The airline refused to comment, but the Centre for Aviation reports that its domestic cargo volume fell 31 percent in the first six months of this year, and international volumes were down 6.8 percent to 687,000 tons. KA's dismal performance has clearly left room for its rivals—Asiana Airlines saw 36 percent and 10 percent increases in domestic and international traffic, respectively, out of South Korea over the first half year.
     Elsewhere, key hubs reported further losses in June after a tough first half. Singapore’s Changi airport saw volumes drop 1.8 percent year-on-year in June and throughput in the first half of 2013 was 2.3 percent lower than in the same period of 2012. Shanghai Pudong airport also saw a cargo decline in June of 3.5 percent to 240,900 tons, as international uplift fell some 3.2 percent to 184,600 tons.
     The downward trend apparent at Changi and Shanghai was reflected in the latest traffic figures from the Association of Asia Pacific Airlines. After noting a 0.5 percent gain in international cargo demand in May, June saw losses of 2.2 percent year-on-year, which the Association attributed to continued weakness in key export regions.
     "Air cargo markets remain depressed, with Asian airlines reporting a 2.4 percent decline in freight traffic for the first six months of the year, reflecting persistent weakness in global trade conditions," said Director General Andrew Herdman.
     Martin Dixon, an analyst with Drewry Supply China Advisors, echoed Herdman’s bearish comments. He notes that average air freight rates are now down to the same levels witnessed during the 2009 recession, with pricing hit hardest on Asian origin trades.
     "While several main airport hubs in Asia are reporting stronger export traffic figures than last year, several others are not, such as Tokyo, which saw a 6 percent year-on-year decline over the same period," he said in a briefing. "The net effect is that exports from the Asia Pacific region, by far the largest in airfreight terms, have fallen 2.5 percent so far this year.
     Drewry expects airfreight pricing to remain under pressure until the end of the holiday season, after which carriers are expected to rein in capacity that should buoy rates.
     "Drewry still expects some recovery in air cargo volumes in the second half of the year, though this view is being tempered by slowing economic growth in developing countries," said Dixon.
SkyKing



     ACNFT has learned that the Air Cargo Agents Association of India (ACAAI) filed a complaint with the Competition Commission of India (CCI) about the IATA for anti-competitive actions.
     We tried talking to Bharat Thakkar, ACAAI President, about the petition but he would not say a word.
     All that he would say was that the ACAAI board had decided to keep the matter under wraps and that a decision had been taken not to publicize the matter.
     The move follows a directive from IATA that has made it mandatory for air cargo agents to be accredited to provide air cargo services to IATA members.
     According to ACAAI, the directive from IATA was unjustified and was without any authority of law.
The Competition Commission has replied to ACAAI saying “the decisions/resolution prescribing the rate of commission to be paid to the intermediaries or similar other decisions pertaining to prices/charges were prima facie in contravention of Section 3(3) of the Competition) Act.”
     The act mentioned states that any agreement that determined purchase or sale price, directly or indirectly, had an effect on competition.
     Incidentally, the move by the Commission is the first of its kind since it is against IATA, a foreign organization.
     However, what has provided the justification to Commission to go against IATA is the fact that the directive directly affected the Indian air cargo businesses and Indian carriers.
     Albert Tjoeng, IATA’s Assistant Director, Corporate Communications Asia Pacific, was reported as saying IATA was informed ACAAI had filed a complaint with the Competition Commission of India regarding the Cargo Agency Program. However, the Association had not received any formal notification from the CCI. 
Tirthankar Ghosh               


NINTH DANIEL FERRANTE
GOLF CLASSIC

August 22, 2013
Stonebridge Golf Links & Country Club

Registration: 7.00 - 09.00 am. Breakfast: 7.30 - 09.00 am
Meet outside 09.15 am, Club House: Shotgun Start: 09.30 am.
Cocktails: 5.00 pm. Gala Dinner: 6.00 pm
Reggie@platinumaircargo.net. Tel:718-917-8827 Mobile: 917-940-6972.





 

ith general cargo freighter operators struggling for business as bellyhold capacity floods the market, the niche project market for oversized and heavy lift freighters is one of the few sectors not suffering from an excess of supply. That, at least, is the view of Michael Goodisman, Business Development Manager Ruslan International, which markets the combined 17-strong fleet of An-124-100s owned by Antonov Airlines and Volga-Dnepr Airlines.
     He told FlyingTypers that a reduction in defense work over the last year had freed up more of the fleet for commercial customers.
     “We are fortunate our business model is one of the most flexible in the airline industry,” he said. “We do not offer scheduled services on fixed routes. We benefit from offering charter flights world-wide on an ad-hoc basis.”
     The monumental size of the Antonov 124, with its maximum payload of 120,000 kilograms, makes the idea that it can be part of a ‘flexible’ business plan somehow disconcerting, but Goodisman is persuasive.
     “We have the flexibility to move our fleet globally to react to opportunities world-wide. Operating in the project cargo niche market means we are somewhat shielded from the very intense competition of the general cargo market.
     “The main change for us [due to the overall market downturn] is that we very rarely pick up general cargo now even as backload cargo. However, we are fortunate in that the effects stop there. There is a clear divide between bellyhold cargo and out-sized cargo.
     “We continue to focus on our strengths pursuing outsized and heavy pieces. This market continues to provide sufficient opportunities for us.”
     Oil & Gas remains a key component of demand for heavylift freighters with the Middle East, and also now the U.S. strongly to the fore, with the development of shale gas boosting demand from the latter.
     “The U.S. oil and gas market tends to generate significantly more exports than imports for the An-124,” said Goodisman. “We do not really know how much of the equipment we move is related to shale gas, but we would expect this to be increasing given the increased interest and activity in shale gas of the largest oil and gas companies.”
     Other commercial sectors of importance to Ruslan are aerospace (satellites, helicopters, and aircraft parts), power generation, and mining. “It is not uncommon for us to see sudden demand, which we are well placed to respond to, given our fleet size,” he said.
     “We recently completed a series of flights carrying power generation equipment into Africa. We have also recently performed flights carrying ships’ parts to Korea and a series of flights was performed into Sierra Leone carrying rail-related equipment for a mining company.”
     One major project that Ruslan and its owner airlines Volga Dnepr and Antonov have been involved in almost since inception is on Papua New Guinea. There, a new, major LNG export project led by Exxon Mobil has create quite some unique logistics challenges due to PNG’s harsh overland terrain, with the site of the project in the highlands. A new airfield has now been built at Komo that is able to receive An-124s delivering support to a gas conditioning plant being built by CB&I on behalf of Exxon Mobil.
     “The LNG project in PNG is the sort of project that comes around very rarely, but draws upon every discipline within an airline,” said Goodisman. “This ranges from advice on airport design, detailed load studies on a wide variety of out-sized pieces, development of new loading systems, aircraft simulator analysis for landing in a challenging environment, and much more.
     “All this has come to fruition and An-124-100 flights have commenced from Port Moresby into a newly completed airport in Komo.”
     The company is also seeing demand evolve from China as manufacturing and economic development spreads away from the coast to interior provinces as OEMs seek lower costs. Goodisman said the An-124 was already cleared to fly to many airports in China, including inland airports such as Urumqi, Chengdu, Chongqing, Kunming, Xian, and Xichang.
     “We do fairly regular flights inland carrying satellite equipment, oil and gas equipment, and other cargo types,” he said. “We would expect some link to the new production centers inland. However, the real increases to inland-related air cargo flows appear to be for general cargo, rather than project cargo.”
     Looking forward, Goodisman is confident about the viability of the An-124 fleet and Ruslan’s continued success. “In the long term, the An-124-100 market continues to grow,” he said. “This does provide us some assurances that our business will remain strong.”
SkyKing


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RE:  letter re WCS Needs Action Plan

Geoff…

     Ms. Schmeling has stated in accurate yet simple terms, a significant truth.
     Sadly, the aircraft are jet; the thinking and action are piston.
     The technology exists . . . has existed. The will continues to be missing.

BRGDS….
Lou Borok


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