#INTHEAIREVERYWHERE

Like a midsummer night’s dream, confidence in major air freight markets is surging and is now supported by evidence of pricing gains on lanes out of Asia.
     Drewry’s East-West Air Freight Price Index was up 2.3 points in June and is now considerably higher than a year earlier, although the analyst warned that more seasonal bellyhold capacity entering the market over the summer could exert downward pressure in the coming months.
     One leading handler in South East Asia told FlyingTypers that spot rates increases in recent weeks had been “encouraging,” while a leading forwarder said the unexpected spike in volumes over the last month had prompted “some interesting gains on rates which the industry desperately needs.”
     The latter added that capacity restrictions out of China linked to military exercises could further boost spot rates, although another forwarder countered that the impact of the air space restrictions was minimal so far, as the flights affected were mostly regional short-hauls.
     The Stifel Logistics Confidence Index has ebbed and flowed for much of 2014, but was up 0.9 points in July from 56.1 in June. Of more significance, the air freight segment of the survey jumped to 50.8 this month, a move indicative of “improving conditions with all but one lane above the 50-level, a situation not seen since November 2013,” according to analysis by Transport Intelligence.
     Stifel’s data revealed that the Asia to Europe trade lane noted the biggest month-on-month gain in July by climbing 3.3 points to 52.4, a jump Ti said was most likely due to improving economic conditions in Europe.
     IATA is also increasingly upbeat.
     Its quarterly survey of airline CFOs and heads of cargo in July revealed expectations of “further growth in profitability” bolstered by “confidence that air transport volumes will continue to expand over the next 12 months and support growth in yields, and that cost pressures will remain broadly stable.”
     IATA said a majority of respondent CFOs expected passenger and cargo volumes to expand over the year ahead due to the improvement in demand drivers.
     “Yields are expected to increase during the year ahead, supported by the outlook for growth in air transport demand and potentially also by capacity management,” said IATA in a statement.
     The most current handling figures available suggest such upbeat outlooks are built on solid foundations. Airports Council International’s latest Asia Pacific data revealed that the region’s airports recorded year-on-year freight growth of +5.6 percent in May and had handled 5 percent more cargo over the first five months of the year than in the same period of 2013.
     Hong Kong International Airport, the world’s leading international cargo hub, has also seen steady expansion in volumes. Over the first six months of 2014 cargo throughput rose by 6.3 percent year-on-year to 2.1 million tons, aided by a 7.3 percent surge in June when 361,000 tons were handled.
     “The growth in cargo throughput last month was driven mainly by transshipments and exports, which were up 17 percent and 6 percent respectively from a year ago,” said HKIA. “During the month, cargo throughput to and from Mainland China and North America recorded the most significant growth, compared to other key regions.”
     The Association of Asia Pacific Airlines also said its members had seen continued growth in demand in June, helped by positive consumer and business sentiment in major developed economies.
     Demand jumped 4.7 percent year-on-year, measured in freight ton kilometers (FTK), and with capacity up 3.4 percent this saw the average international freight load factor rise for the second consecutive month.
     Air freight demand was up 4.6 percent over the first half of the year “underpinned by a long awaited pick-up in global trade activities,” concluded AAPA Director General Andrew Herdman.
SkyKing

Einstein once said:
“The significant problems we face cannot be solved at the same level of thinking we were at when we created them.”

      As we pass the midway mark for 2014, FlyingTypers begins a multi-part summer reading series that looks back at issues published during the first half of the year.
      The idea is to offer a look back at various topics from just a few months ago so that we may reflect on what has happened and draw conclusions to better inform air cargo’s future.
      If you missed some news this “refresher” might prove useful.
      We know we serve some pretty smart, inventive, and engaging people in today’s air cargo business—people who are probably too busy to remember all the pressing—and constantly revolving—issues of the industry.
      In the case of our opening remarks by 101-year-old “super senior” and FlyingTypers Editor Richard Malkin, (left) what was said in January 2014 dates so far back in air cargo history that all the questions might already be answered.

"Pre-Jet Air Cargo"— January 6, 2014

Credit Air Express International (AEI) for being America’s (and possibly the world’s) first forwarding company wholly devoted to air transport.
The route to this development revealed a bit of a twist in history: Opportunity knocked at the door of 24-year old Chester Mayer, (right) a New York customs broker, when Pan American Airways which handled its own import clearances, found itself entangled in a serious customs problem. This led to a decision by Pan Am to farm out its customs clearances to an independent customs specialist.
     The offer was made to Mayer, and almost overnight AEI came into existence in Miami.
     The time was the nadir of a cheerless Depression—but the remembered counsel by some old Roman whose name he could not recall was to “let nothing pass that will advantage you.”
     Eventually AEI edged into shipping small packages by air via airplane, flying boat and even zeppelin.
     These shipments supplemented surface borne traffic.
     All-air was Chester Mayer’s close-held dream. It was fated to come true.
Richard Malkin

 

“Peak Portends Better”—January 13, 2014 After a 2013 of largely non-plussed market commentary, Stanley Hui Hon-chung was moved to enthuse that “fuelled by burgeoning demand from the traditional Christmas peak season, we expect this promising growth in cargo to continue throughout the rest of the year.”      Those are strong words indeed from the phlegmatic Chief Executive Officer of Airport Authority Hong Kong. SkyKing

“Did Cargo Report Earn Its Wings”—January 29, 2014

A joint press release by the industry triumvirate—TIACA/IATA/FIATA plus ICAO—reported that after “a two-year research project… the ‘higher-skills,’ which include leadership, team-building as well as market and financial analysis techniques…” concluded that the “availability of air cargo-focused programs that teach these higher-level skills is limited.”
     Officially titled "Air Cargo Industry Education and Training Task Force-“Identifying The Educational Needs For A Vibrant Air Cargo Industry In The Future,” the authors of the report “agreed that the industry as a whole must address this deficiency," and went on to list a number of dire consequences, should their ideas not be followed.
     These include “difficulty of attracting qualified talent to successfully lead the industry through future challenges” and “the loss of rising managers to other (unidentified) sectors of the logistics industry or to other industries.”
     Just as “Higher Skills’ came out Eric Schmidt, the chairman of Google, at the 2014 World Economic Forum in Davos warned the jobs problem will be “the defining one” for the next two to three decades.
     Given the constant development of new technology, Mr. Schmidt said that more and more middle class workers would lose their jobs and “it was not clear if workers have the right skills to be rehired.”
     He compared the situation to the industrial revolution, while calling for more industry-wide innovation: “it’s a race between computers and people – and people need to win.”
     Schmidt added, “as more routine tasks are automated, this will lead to much more part-time work in caring and creative industries; the classic 9-5 job will be redefined.”
Ted Braun

India Déjà Vu All Over Again—February 5, 2014

India’s only air cargo show—Air Cargo India 2014, the every other year event opened amidst hopes for a resurgent air cargo industry driven by an active India market coming back after a luke warm 2013.
Vinod Kaul, a senior tradesperson and business development manager described the action:
     "There was lots of positive energy, hope and air of expectation that the situation will get better.”
     While everyone at that event said that there was an urgent need for closer cooperation in the supply chain, Nabil Sultan, Divisional Senior Vice President Cargo of Emirates Airlines, took that thought one step further to highlight the fact that there were fundamentals that needed to be put in place to ensure that profits roll in: from fuel-efficient planes to yields and tonnage.
     Peter Scholten, Vice President Commercial, Saudia Cargo emphasized that India’s passenger carriers with cargo businesses should be encouraged.
Tirthankar Ghosh

Where Fruit Freshens February—January 27, 2014
Biggest most important event held in 2014 from February 5th until February 7th in the German Reichshauptstadt Berlin is Fruit Logistica.
All the players by the thousands locked into the event with great on the hoof opportunities for business development and learning.
     This yearly event is not to be missed.
     A core part of Fruit Logistica 2014 was “Future Lab” where the latest developments in the perishable trade and supply chain are presented, discussed, and thought through. “These projects can potentially have a significant impact on the medium-term development of the fresh produce sector," says Gérald Lamusse, Fruit Logistica Global Brand Manager.
     “In half-hour sessions, the ‘Future Lab’ covered topics such as ‘Quantum leap in lettuce breeding,’ to ‘Information superhighway for fruits & vegetables,’ ‘Customized Fruit – to your health!,’ ‘Water – scarce, valuable, indispensable’ and ‘Fighting Black Sigatoka,’” Lamusse declared.

     Watching a “leap in lettuce” is perhaps not your favorite kind of floorshow, but the message at least is clear.
     Today in most parts of the world, the times are long gone where farmers, fishermen, and other producers just needed to carry their products to the next town to reach market.
     In 2014, feeding seven billion people worldwide is one thing, but feeding them in quite different ways is likely the greatest challenge of modern times.
Jens

 

Letters—February 18, 2014

Dear Geoffrey,

     I noticed that the “Seaboard Way” sign guarding the main entrance of JFK International Airport is pitched over and lying half way down, making it unreadable for travelers.
     On behalf of the memory of Seaboard and its people, I ask if you could please help bring attention to this situation to the airport operator The Port Authority, to get this landmark fixed rapidly.
     Seaboard World Airways Cargo, now part of FedEx, was a major all-cargo carrier that was headquartered at JFK, dating back to the days when the airport was named Idlewild.
     The memory of the contribution that the carrier made to building—both the air cargo business and the airport—has to be honored and maintained decently.
     Thanks for your assistance.

Vincent Chabrol
V20100@ aol.com

Dear Vince,

      Thanks for writing.
     You are indeed the “Sentinel of Seaboard,” and anyone who thinks that after all these years there is no one at the airport that gives a damn, now knows better.
     That sign looks ill-placed, and we think it was probably bashed by a snowplow this winter.
     We cannot help but notice in the backdrop of your picture the now faded International Hotel, where once Jimmy Doolittle was honored and Ron Burrage held sway at the podium, and Ike Dornfeld, Dick Rowe, and Bob Aaronson gave speeches.
     Today the International Hotel sits closed and vacant at the very entranceway of the airport that features the almost tipped over SWA sign.
     The image brings to mind that empty town and its flickering movie house, and the hopes and dreams in the film The Last Picture Show.
     Recently David Z. Plavin, (right) who once served as Aviation Director for the airport operator Port Authority of New York & New Jersey and is now a well-respected aviation authority (dvz consult), suggested in a piece for Eno Center for Transportation, that it might finally be time for the agency to get out of the airport business.
     “There once was a time when the Port Authority of New York & New Jersey (PANYNJ) had an international reputation as ‘the gold standard’ of public enterprises for its independent professional staff, its facility management capabilities, and for the farsightedness of its investments in promoting the New York/New Jersey region,” Plavin wrote.
     “Unfortunately, this is no longer true.
     “Instead, today’s Port Authority (PA) has become the punchline of a bad joke.”
Geoffrey

To Access In Spotify Click Here

     The year 2014 is more than half over, and Phil Everly and Elaine Stritch—two people I listened to when I was still in school—have departed this dimension.
     But their music is always with me. Any time I listen to these artists, it reminds me that they work from a place where the music always sounds good.
     Maybe it is nostalgia, or perhaps it is the magic of summer, but thinking about Elaine I am glad we grabbed the chance to take our daughters to see her one woman show at Town Hall in Manhattan a few years ago.
     If you have some spare time, use it to listen to her treatment of “You Took Advantage Of Me.”
     Although all the Everly songs here are just outstanding, my absolute favorite is the Beach Boys reading of “Devoted To You”…just wonderful.
     The rest of it celebrates what we always hope will become, but know can never last—endless summer.
     Listen to the lyrical über-joy of “Summertime Summertime” or “I’ve Told Every Little Star,” but be careful.
     Both of these songs can get into your head and will pop up—without warning—again and again, even at the most inopportune times, and there you will be, at the beach or camping in the woods or in a popcorn queue at the movies, and people will wonder about the funny face you are making.
     But soon the puffy white, fair weather clouds that herald summer will become thin and high, as the wind takes over arranging the leaves of autumn.
     But none of that is in sight for a few weeks…
     For now, here are some old friends with great music, just for you.
Geoffrey