Vol. 12 No. 80                         THE GLOBAL AIR CARGO PUBLICATION OF RECORD                    Tuesday September 17, 2013
#INTHEAIREVERYWHERE 
THE AIR CARGO NEWS LEADER  


s you must already know from everywhere else the peak season for container shipments from Asia to the U.S. is now in full swing.
But read on for we include some meat and potatoes news you can use.
In recent years a combination of weak demand and careful forward planning by shippers to avoid supply chain blockages has lessened the impact of retailers restocking inventories over July-October in preparation for holidays later in the year. But 2013 seems set to mark a return to tradition, at least in terms of swelling volumes if not surging spot freight rates.
     China’s exports increased 7.1 percent year-on-year in August after also enjoying 5.1 percent growth in July with U.S. demand a key driver. Exports to the U.S. from the People’s Republic jumped from 5.3 percent year-on-year in July to 6.1 percent year-on-year in August. Retailers of items including clothes, toys and electronics showed renewed vitality on the back of improving consumer demand, even though U.S. consumer sentiment slipped slightly in August from the six year-high recorded in July.

     The macroeconomic headline figures are also being roughly matched by box numbers moving eastbound across the Pacific. According to the monthly Global Port Tracker report published by the National Retail Federation and Hackett Associates, U.S. containerized import volumes handled by leading ports increased year-on-year by 1.1 percent in July to 1.43 million TEU and by 4.1 percent in August to 1.48 million TEU. September throughput is forecast at 1.48 million TEU, up 5.1 percent from last year, while volumes are expected to jump over 9 percent year-on-year in October to 1.46 million TEU.
     “Retailers are making up for the slow imports seen earlier in the year,” said Jonathan Gold, NRF Vice President for Supply Chain and Customs Policy. “It’s too early to predict holiday sales, but merchants are clearly stocking up.”
     Indeed, U.S. inventories of finished goods have fallen dramatically in recent months and, although the inventory-to-sales ratio is relatively high, it is not showing any indications that it might rise further. According to Ben Hackett, founder of Hackett Associates, this suggests the peak season for container shipping hinted at thus far through July and August will continue into the fourth quarter.
     “We are continuing to project good growth for the remainder of this year, and stronger growth next year,” he said. “West coast growth will be stronger than the east coast and the national average remains around 2.4 percent growth for 2013 over 2012.”
     But container shipping’s long-term problem with excess capacity continues to hurt liner companies. After hitting year-long lows in June, spot rates from Shanghai to U.S. West coast ports did increase in July. But most analysts believe this was in anticipation of a peak season surcharge introduced by members of the Transpacific Stabilization Agreement on 1 August of $400 per-foot container from Asia to all U.S. destinations. The initial boost this gave the market was then gradually lost as spot rates subsided from around $2,100 per FEU in mid-July to less than $1950 per FEU at the start of September.
     What is clear is that the U.S. economy is shifting up a gear and this is being reflected in higher GDP growth both at home and abroad, with positive implications for trade.
     Analysts at RS Platou predict global GDP growth of 3 percent this year to be reflected in a 3.1 percent increase in world trade. Next year the world economy will grow at 3.6 percent and trade by 5.4 percent, with the U.S. expected to post GDP expansion of 1.6 percent this year and 2.7 percent in 2014.
     “Without any shadow of doubt, the U.S. economy is on the road to sustained growth with fewer hurdles - bar a war or two - on the way,” said Hackett.
     “Second-quarter GDP was well above expectations and surprised most forecasters, the unemployment picture is improving, and we believe consumer confidence will translate into increased sales during the fourth quarter.”
     He believes this will be reflected in U.S containerized imports into 2014. “Unlike this year, we expect the second quarter of 2014 to show a strong recovery in import volumes, up 5.3 percent versus -1.6 percent this year,” he added.
SkyKing




Cargo Pilots All?
     Reports confirm that Christoph Franz, Lufthansa Chairman of the Executive Board and CEO, will move to the top spot at pharma-company Hoffmann la Roche in Switzerland.
     With family and property in Switzerland, Mr. Franz has born the brunt of restructuring Lufthansa, including formation of subsidiary Germanwings.
     He departs DLH when his contract is up in May 2014.
     Der Spiegel reported Monday:
     “Franz, who travelled a rocky road with both employees and senior management, leaves LH at a most critical point of the ‘2020 Turnaround Program’ that he initiated.”
     Handicappers point to Carsten Spohr as odds on favorite to succeed Franz.
     A former pilot, Carsten came into the spotlight during his tenure as top executive at Lufthansa Cargo.
     He currently serves as Member of the Executive Board and Chief Officer of Lufthansa German Airlines.
     In a related development, the carrier said that after delivery of the first of five new B777F next month, in November Lufthansa Cargo will fly the aircraft from Frankfurt to New York, Chicago, and Atlanta.
Geoffrey/Jo/Jens







lying is the safest means of transport as proven by accident statistics, and that is what regulators and other stakeholders continuously emphasize, for a reason.
Indeed, chances are much higher to get run over in your supermarket’s parking lot than to be involved in an aircraft accident, even for those road warriors constantly travelling for business.
However, there are exceptions to this rule.
     The “IATA 2012 Safety Performance Statistics” indicate an all-time low of 0.20 hull losses (which is the euphemism for an aircraft totally wrecked) per million sectors for the airline industry in total.
     A “sector”, for those not familiar with the term, is a flight segment uninterrupted by landings from point A to point B. A flight from, say, Frankfurt to Los Angeles via New York would hence comprise of two sectors. But there is more.


     The IATA statistics (for good reason) are listing only western-built aircraft, so they’re not all encompassing.
     The simple reason for this is that would these statistics have included accidents involving Russian-built aircraft, a much less favorable picture would appear.
     Still, the statistics prove that flying in the U.S., Europe, and most parts of Asia has never been safer than at present.


     The numbers also prove that the safety map has two blind spots: Africa and the CIS States.
     There is a multitude of reasons for the lapse; the most important being lack of oversight by national authorities in some states; cash-strapped carriers operating old, obsolete, and badly maintained aircraft; the lack of a safety culture; and lack of training in all sectors of the aviation business.
     Indeed, a number of airlines from African and CIS states are on the EC “No Fly” list because the governments tasked with their oversight do not have the necessary means at their disposal.
     It is safe to say that all stakeholders in the aviation business have addressed these issues in the past 10 years (namely ICAO and IATA) and brought forward a number of safety initiatives that aim at improving safety records in these parts of the world.
     It must be kept in mind that the International Civil Aviation Organization (ICAO), headquartered in Montreal, is a United Nations Agency and thus counts the governments involved among their stakeholders.


     Subsequently, it is all the more surprising to look at the unusually high number of accidents and incidents involving UN-chartered aircraft.
     As much as the UN, ICAO, and other stakeholders call for exchange of information as a best business practice, information is not easily obtained concerning UN chartered aircraft.
     First of all, just looking at a list of accidents involving such UN charters will tell little. Yes, the figure is high, but it must also be kept in mind that many of these flights are operated under very adverse conditions, often in war-stricken areas or after the occurrence of natural disasters.
     Second, those flights often operate to remote areas where neither paved runways nor appropriate ground equipment exist. Western-built aircraft, in particular the cargo versions, have to rely on both in order to operate, while the sturdier Russian-built aircraft designed with a multi-purpose civil and military use require very little ground equipment and can operate on gravel strips.
     Given those adverse conditions and the remote locations, a higher accident rate than flights operating between well-equipped western airports seems reasonable—to a degree.
     But even when factoring in these circumstances, the accident rate involving UN-chartered aircraft remains unusually high.
     As for incidents (happenings which had the potential to endanger aircraft, crew, passengers, other people or property, and cargo, but fortunately did not result in any of these) there is simply no way of ascertaining these, since neither the UN nor the governments involved provide any insight.
     It is, however, safe to say that certain safety precautions required by ICAO and theoretically demanded by the UN by means of charter contracts are usually not implemented and that typically neither the UN or UN Mission in question nor the operator has sufficient operational control to guarantee a safety level as equivalent to ICAO SARPS (Standards and Recommended Practices) as circumstances would allow.


     A telling posting in a professional pilot’s forum reads:
     “There are two ways to get a UN contract. One is to broker cheap unsafe ex eastern bloc military aircraft or bribe.
     “Any combination of the above is also acceptable.
     “Sometimes you don’t even need to have the aircraft—just say you do.”
     While this statement may be overrated, exaggerated, or simply untrue, it is still telling; at least it was not challenged in any way from other pilots in that forum.


     The following facts have been established in regard to UN charters:
           Russian-built and partially technically obsolete aircraft such as the AN12, AN 24, AN70; Ilyushin IL62, older IL76 types, and IL-86 as well as Yakovlev YAK-40 and old western Boeing 727’s with questionable or no maintenance records are frequently in use, although these aircraft’s maintenance and registration records often do not hold up to even a cursory check.
           UN and UN mission’s personnel (including sub organizations such as the WFP) have not been briefed about elementary security and safety measures such as carriage of Dangerous Goods within baggage, aircraft emergency exits, etc.
           Aircraft crews are sometimes not properly licensed and at times filed flight plans make it obvious that crew duty times were exceeded on a scheduled basis.
           UN missions at times resort to questionable measures, such as proposing to airlift UXO (unexploded ordnance) from a crisis area, notwithstanding clear provisions in the UN’s own “UN Landmine Handbook”
           The prime criterion when selecting an operator seems to be the tender price. Safety records of the operator and the ability to exercise the required operational control (thus meeting applicable ICAO minimum safety standards to which the UN at least verbally commits itself) are apparently not taken all too much into consideration
           The reputation of an operator also does not seem to play a big role—various UN missions had contracted Kazakhstan-registered Irbis Air, owned by alleged arms dealer “Lord of War” Viktor Anatolyevich Bout, to supply airlift capacity, resulting in Bout profiting both from the supply of arms into war areas such as Liberia and Angola and from the relief mission supply following it.
     Maintaining the aforementioned “operational control” is far more important than it might seem.


     One factor that played a vital role in at least two accidents involving UN-chartered aircraft was inaccurate trim (weight and balance) and/or overweight of the aircraft resulting from inaccurate establishment of the loaded cargoes’ actual gross weight, and/or the crew accepting bribes to carry undocumented, private, or commercial cargoes of unknown nature, according to a source close to the matter who wishes to remain unnamed.
     However, the July 8th, 2011, crash of Hewa Bora Airlines flight 952 (which was not in any way affiliated with the UN or one of its missions) in Kisangani, DRC, might serve as an example of what to expect.
     The accident aircraft, an ex-Lufthansa 727-30, had no maintenance records to speak of, both the accident captain and the tower controller turned out not to have been licensed, the tower communication was not recorded since both recorders were broken, and the tower gave out a false weather report; altogether it resulted in the loss of 75 lives.
     The carriage of “undocumented” passengers aboard aircraft in Africa is also an issue for flights under UN charter, the source confirmed – either because the mostly African-based and underpaid crew was paid to turn a blind eye, or because people hide in the cargo holds.
     It is also safe to say that the UN and its missions apparently do not carry out the bare minimum of “due diligence” regarding the service providers of air transport capacity, which would be expected from any privately held company:
     An Airzena Georgian Airways CRJ-100, registration 4L-GAE, which was under charter for the UN as flight 834 from Kisangani to Kinshasa N'Djili, DRC, crashed after a missed approach in Kinshasa, resulting in the death of all four crew and 28 of the total 29 passengers in UN employ on April 4th, 2011.
     On November 18th, 2010, however, the CAA of Georgia communicated the following brief to all civil aviation authorities worldwide.

“Dear Colleagues,

     Georgian registered CL-600-2B19 Reg:4L-GAE operated in Republic of Congo by A/C ‘Georgian Airways’ flight operation has been prohibited from 18.11.2010 due to suspension of certificate of airworthiness. Please inform relevant Aviation Authorities to ground above-mentioned aircraft until additional official permission from the United Transport Administration of Georgia.

Shalva Kiknadze, Head of Flight Standards, Certification and Inspection Division"


     Given the risky circumstances of such operations, it would seem wise for certain safety precautions to be taken from the UN side. These, however, amount to not much more than limiting the liability of the UN towards the operator to $100,000 USD, subparagraph 3.1 of the UN standard short-term charter agreement reads:
“3.1 In consideration of the complete and satisfactory provision by the Carrier of all of the services under this Agreement, the UN shall pay the Carrier the sums, in the manner and at the times, provided for in the Payment Schedule set forth in Annex B, hereto. The foregoing notwithstanding, in no event shall the UN pay the Carrier for all the services to be provided hereunder a total price in excess of US DOLLARS -- HUNDRED THOUSAND HUNDRED AND (US$ --), which shall constitute the maximum monetary liability of the UN to the Carrier under this Agreement.
     Help, so it seems, is expensive, but covering the risks of help in developing nations comes cheap.
Jens




Exterior view of Delta’s new refrigerated storage unit at DTW as Mike Rizzo, Director-Delta Cargo Operations, speaks of cooler things to come at ribbon coming.

     “This new refrigerated storage unit will make it easier for our customers to do business in and through Detroit,” said Tony Charaf, Senior Vice President and Chief Cargo Officer at Delta, as the company opened a new, 3,000 square-foot refrigerated storage unit at Detroit-Wayne County International Airport for in-transit cooling and specialized handling of temperature-sensitive products such as pharmaceuticals and other perishables.
     “We have a fabulous team in Detroit,” Mr. Charaf said, “that works around the clock to ensure that our customers enjoy the best and most reliable service in the industry, and this latest investment allows them to apply their expertise to handle sensitive shipments.”
     Designed and built in about five months, the new cooler unit uses precise temperature settings and controls to store sensitive shipments including pharmaceuticals, flowers, fish and seafood, as well as fruits and vegetables in ideal climate conditions. With input from frontline Detroit Cargo employees, the unit features two drive-through doors and one rapid rollup door for easy access.
     The new unit is the latest in a series of investments to Delta Cargo’s Detroit operations that will provide additional storage and transfer capability for the “Fresh” product line.
     “Fresh,” which is available on the entire Delta mainline network, is specially designed for perishable shipments that are time-sensitive and require protection from extreme temperatures.
More: www.deltacargo.com.


   United Cargo said it completed transition of cargo handling services at George Bush Intercontinental Airport in Houston (IAH) to Staff Management | SMX.
   UA said the change is the culmination of a two-month process.
   Staff Management | SMX, in collaboration with local United Airport Operations leaders, directed a Lean Six Sigma initiative to ensure the most effective transition of all cargo service partner staffing and management in IAH while improving the station's customer service performance.
   "Our goal was to execute a seamless transition for our cargo customers, but we did better than that," said Ana Bendana, United's Senior Manager, IAH Cargo Operations.
   "Our success percentage in the critical ‘flown as planned’ metric has risen 14 points since the transition began.
   “With the changeover complete, we expect even more progress."
   For the convenience of United Cargo's customers, the IAH pickup and drop-off locations, phone, and fax contact numbers have not changed.
   United Cargo's IAH Cargo Facility remains open 24 hours a day, every day of the year.

   ATC Aviation Services AG launched a new office in Berlin.
   “Torsten Habich (39) has been named as ATC’s Berlin Station Manager, and comes to ATC with more than 10 years of experience in the air cargo industry, most recently in senior management with an international forwarding agent,” aid ATC President & CEO Ingo Zimmer (above).
   “Our new full service station in Berlin is in line with our strategy to expand and grow ATC’s international presence in and outside of Germany,” Mr. Zimmer added.
   “ATC’s new station in Berlin will focus on providing coverage for partner airlines throughout northern and eastern parts of Germany.
   “With the opening of our new Berlin station, we have also realized our goal of establishing network coverage for the ATC partners throughout Germany.
   “The Berlin operation will complement existing ATC stations in Munich and Dusseldorf, as well as our headquarters’ office in Frankfurt, to provide comprehensive GSA/GSSA services for our partner airlines in every region in Germany,” Ingo Zimmer said.
More: ATC Aviation Services AG AirCargo Center BER Georg-Wulf-Straße 1
12529 Schoenefeld
Tel.: 030 609156520 Fax: -21
ber@atc-aviation.com.


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     Independence Day (Día de la Independencia) is a Mexican holiday to celebrate the “cry of independence,” marking a revolt staked against the Spaniards on September 16, 1810.
     This event is known as El Grito de la Independencia.
     Mexicans celebrate with fireworks, parties (fiestas), food, dance, and music.
     Flags, flowers and decorations in the colors of the Mexican flag—red, white and green—are seen in public areas in Mexican cities and towns.
     Whistles and horns are blown and confetti is thrown to celebrate this festive occasion. "Viva Mexico" or "Viva la independencia” are the operative greetings amongst everyone “south of the border” on this day.
     Since so much of life is about the food, we share our absolute favorite, a traditional dish called 'Chiles en Nogada.'
     The preparation includes pomegranate seeds, a fruit available only during the rainy season (occurring as you read this).
     "Viva México!”



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     I woke up this morning and all of a sudden it was cold in New York City, and the change immediately invoked the appearance of Indian corn, pumpkins, and fresh-pressed apple cider at the corner store.
     It is still too early for bittersweet, but our backyard vine should yield a bumper crop after first frost, just in time for Thanksgiving on the last Thursday in November.
     This music is an echo that has traveled 72 years, going all the way back to the first time we sat in front of the old Magnavox in our living room in Toledo, Ohio. I was probably double wrapped in blankets in a basket near the door, as the cold wind blew off Lake Erie and the Packard was outside warming up for our ride over the river and through the woods to Gramp & Emily’s house.
     But the sounds of Larry Clinton on The Lucky Strike Radio Program are still there and I suppose, like the rest of this list, it will be out there orbiting and playing on forever.
     Too bad this time of year moves on to being so damn cold, without lingering much in this cool and sunny state, but at least we have seasons and, wherever we are, each other.
     And Frank, Jo, and Brian, and all the old (and new) favorites to play us into the next chapter.


     “September Song” features the great stage actor and movie star Walter Huston who was featured in The Treasure of The Sierra Madre.
     Walter, father of director John Huston (Casablanca), sings/speaks “September” in a immortal 1938 performance.
     Other great sing/speaking music examples are Audrey Hepburn’s “Moon River,” featured earlier in this series, Rex Harrison’s “I’ve Grown Accustomed To Her Face,” and Richard Burton’s “Camelot”.
     All of these artists were, strictly speaking, not singers, but in every case their performances became the definitive delivery of music that has never been done better by anyone else.
Geoffrey
Tuesday September 17, 2013



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