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   Vol. 13 No. 78  
Thursday September 18, 2014

Lufthansa Cargo Ad

 

eRuckus as FIATA vs IATA

While relations between IATA and FIATA have been strained for over a decade, tensions may have once again reached their boiling point.
     Case in point: IATA’s recent effort towards pushing not just the idea, but also the implementation of e-freight. A closer look reveals that IATA has apparently failed to get one of their most important stakeholders properly on board the e-freight bandwagon:
     In a special newsletter —e-flash 81 dated September 3rd, 2014—FIATA has reached out to their members to support FIATA’s stand against paper Air Waybill surcharges.
     While FIATA makes it clear that they “support e-Commerce and e-Air Waybill implementation in the air cargo supply chain (and subsequently) encourage implementation, through creating value for forwarders and carriers alike (as well as) recognizing the costs that the originator of the information incurs, to enter and transmit data,” they object to “the intention of air carriers to implement a Paper      Air Waybill Surcharge, for non e-AWB export shipments” and urge “the forwarding community to voice their objection to carriers who seek to apply yet another surcharge, and create yet another revenue stream, under the guise of supporting IATA’s e-Freight initiative.”
     In simple words, while FIATA supports the idea and implementation of e-freight, they have no qualms saying out loud to anyone who will listen that FIATA objects to introducing surcharges for paper documentation.
     FIATA points out that although e-freight is on the rise—in particular on trade lanes where support by the national governments is strong, such as the UAE (Emirates Airlines; EK), Singapore (Singapore Airlines Cargo; SQ), and Hongkong (Cathay Pacific Airlines; CX), it is far from being accepted everywhere.
     Thus, forwarders should not be penalized for not going electronic where electronic means of communication is either unavailable or not permitted.


Handicapping e-Feight Potential?
 
    Whether or not e-freight is possible mainly depends on the regulatory framework of the departure, transit, and destination states permitting it, as well as forwarders and airlines having the capability to carry out the required messaging.
     But as everyone now knows so far, e-freight implementation has seriously fallen behind the schedule IATA once envisioned.
     The e-AWB agreement enacted back in 2010 that was endorsed by FIATA and adopted by the IATA Cargo Service Conference as well as being approved by several governments—including the U.S. DOT—was forecasted for 100% e-AWB by the end of 2014 by IATA.
     IATA’s latest communications calls for 22 percent e-freight penetration by end of 2014, while current figures indicate falling significantly short of that modest goal.
     Right now e-freight implementation stands at slightly above 17 percent.
     Even at that 17 percent figure, the situation is not as clear as the figures seem to indicate.
     The FIATA position suggests that surcharges levied on paper documentation may not be the best way to increase the use of e-freight and that incentives are probably a better means of achieving a higher penetration of electronic documentation within the industry, such as providing a discount to those forwarders who indeed offer e-freight.


Who Benefits?

 
    Currently, e-freight is popular among the big forwarders who realize sizeable benefits, even on the limited number of trade lanes it is currently available, and even considering the required investment in IT equipment and staff training.
     But one issue among many that requires sorting from both sides is how the smaller and financially-stretched members of both IATA and FIATA can be expected to cover e-freight related investments.
     Here’s an idea: Why don’t IATA, FIATA, Global Air Cargo Advisory Group (GACAG), representatives of The International Air Cargo Association (TIACA), and the Global Shippers’ Forum (GSF) conduct a high level meeting somewhere to advance e-freight issues like surcharges instead of launching another battle royal in the media?
     A really good tension convention can lead to discovering how business partners can chart a better path forward.
     And yes, don’t forget the shippers.
     After all, surcharges levied by carriers, are paid by forwarders, who pass them on to shippers.
Jens/Geoffrey


 

Qatar A380 Era Begins

     Move over Emirates: Qatar Airways took delivery of its first A380 in Hamburg, Germany, on Tuesday.
     With 10 Airbus A380-800s on order, Qatar Airways has set its focus on providing several new amenities, including creating all new interiors with bigger, wider seats. Qatar will take delivery of four additional giant airplanes of the type in 2014.
     Speaking at the press conference, Group Chief Executive, His Excellency Mr. Akbar Al Baker pulled no punches: “This has been a moment more than a decade in the making.
     “The A380 that we are introducing is not just any A380; we have completely designed every element, giving it a signature touch that has never been seen on board before.
     “Additionally, the newly opened Hamad International Airport, the airline’s hub in Doha, has been specifically created with the A380 in mind, with five contact gates dedicated only for this aircraft, making the experience smooth and effortless for passengers,” Mr. Akbar said.
     Doha–London gets the first QR A380 service starting in October, followed by services into Paris Charles De Gaulle.


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Asia Pacirfic Biz Scaling Up

Cathy Roberson
The Asia Pacific and emerging regions including Africa, the Middle East and South America will win a larger slice of an improving global air freight forwarding market in the coming years, claim analysts at Transport Intelligence.

     According to research compiled by the specialist logistics consultancy firm in its new ‘Global Freight Forwarding 2014’ report, the Asia Pacific market commanded a 35.8% share of the global air freight market by region in 2013, ahead of Europe with 26.7% and North America with 26%. However, Cathy Morrow Roberson, the report’s author and Ti’s senior analyst, said North America and Europe would both see their shares fall in the years ahead.
     “It’s a reflection of the changing global economy,” she told Flying Typers. “The Asia Pacific market is the biggest for the overall freight forwarding market, and that is also true for air freight. This will not change through 2017. In fact, the region will increase its share to almost 40% by 2017 as it takes share from Europe and, to a lesser degree, North America.
     “Emerging markets in other regions–Africa, the Middle East and South America will also see some gains in market share by 2017.”
     Shippers continued to limit their use of pure air freight solutions in 2013 to reduce supply chain costs, instead opting for ocean or sea-air and only using air for high-valued and/or temperature sensitive goods such as pharmaceuticals and perishables. But Roberson said the rate of air freight market contraction slowed during 2013 and this would morph into market expansion in the period to 2017.
     “The global air freight forwarding market noted another year of decline in 2013,” she said. “However, the decline was less than that of 2012 at 3.4%, reflecting an improving, albeit struggling, market.
     “Improving signs were noted from the second quarter 2013 led by the Middle East and Europe.
     “For Europe, this was about the same time as economic conditions appeared to improve as well. For the Middle East, carriers based in this region noted increasing freight and as such expanded routes around the world.
     “For the period 2013-2017, airfreight forwarding is expected to improve with anticipated improving economic conditions. We forecast a CAGR of 5.8% for this time period with emerging markets in Africa, Asia Pacific, Middle East and South America accounting for much of this growth.”
John Manners-Bell      Surprisingly, given the consolidation in the sector over the last decade, Ti found that the world leading air freight forwarders lost market share in 2013, compared to 2012. In 2012 the world’s leading forwarders boasted a 44.7% share of the air freight forwarding market but this fell to 42.7% in 2013.
     “The decline is perhaps due to cargo shifts away from cargo air planes to those of passenger airlines,” said John Manners-Bell, (left) CEO of Ti. “Of the individual airfreight forwarders, DHL Global Forwarding has the largest market share with 8.2%. However, this share is down from last year’s estimated 8.8% probably due to the company’s efforts to not to focus on only tonnage gains, but rather profitable tonnage gains.
     “Meanwhile, Kuehne + Nagel increased their share from 7.5% to 7.7% for this year. Likewise, DBSchenker also increased its share from last year.
     “For the remaining top 10 airfreight forwarders, slight increases were noted from 2012.”
     Ti also found that the market became marginally more fragmented during 2013 in terms of tonnage handled. “This could be the result of various factors including the use of niche players that may specialize in a particular industry and/or trade lane as well as the possibility of shippers bringing this in-house to manage as the use of airfreight focuses more towards higher-valued goods,” said Roberson.
SkyKing


Chuckles For September 18, 2014

 


Christmas Uplifts UPS
   In 2013 UPS said “I’m sorry” more times than it cares to remember, as the standard last minute Christmas rush sparked by internet sales caught the company short. They are vowing 2014 will be different.
   UPS recently announced it might hire up to 95,000 seasonal workers in the USA alone—nearly double the number the company employed last season.
   “Seasonal workers have a foot in the door for permanent employment opportunities,” UPS said.
   Now if only Christmas lasted all year long…


 

German Highways To Heaven

     Visiting Germany for business or pleasure certainly offers rich and varied memories, including the places where history was made.
     Daily, giant lorries and automobile operators find the wide, flat, and even aspect of the Autobahn super highway (if not the speed associated with demand) quite useful in moving from point to point throughout the country and onto the EU.
     Aside from the pioneering aspect of the super-highways, there are a notable number of locations besides the Autobahn where history, fortunately has not been made and which are not all that obvious to the untrained eye:
     During the Cold War occupation, the “NLP-Str.” as they were abbreviated in German bureaucratese (Notlandeplatz-Strasse or Emergency Landing Strip-Road) were something commonly encountered on German highways both in Western Germany and Eastern Germany.
     These Emergency Landing Strips—ELSs—were something other than one might assume from the designator ELS, and not intended to be used for the purpose of aircraft emergencies but for military purposes.


There Is A Jet At My Rest Stop

 
    At the peak of the cold war between East and West, the most common threat scenario assumed Warsaw Pact troops rolling into the NATO territory bordering the Warsaw Pact states.
     In particular, Germany—both its Eastern and Western parts—was considered an expendable “buffer zone” where the first clash of the amassed forces was to take place.
     Under the allied forces agreement, a multitude of US, Canadian, French, and British troops were stationed in Western Germany, and Soviet forces in Eastern Germany, after WWII Germany.
     This situation lasted until Germany achieved full sovereignty in 1990 following reunification as a result of the Two-plus-four agreement, which settled the status of the reunified German state within Europe.
     Many German regional airports started their existence as military airfields of allied forces, including Hahn, which was a former U.S. military airbase; Baden-Baden, a Canadian air base; and Magdeburg-Cochstedt, a former Soviet base.

 
Germany Highways

Emergency Landing Strips 1938

     World War II proved that military airfields as well as other locations of prime military significance were primary targets for enemy air raids and options were limited to protect these targets by traditional military means.
     The Germans began in 1938 to convert parts of their prized new super highways, which were being built to connect the nation, to also allow military aircraft operations.
     This measure was adopted by postwar Germany and the NATO allies (as it was adopted in Eastern Germany) in order to provide sufficient hidden capacity for fighter aircraft.
     German law provided a legal framework for both the conversion of existing highway parts to such ELSs and for the construction of new ones.
     While to the unsuspecting observer these facilities were—and still are—not obvious, they are fairly easy to spot if you know what to look for:
     Specifications called for even strips of road not less than three lanes (all German highways are at least a four-lane blacktop) of no less than 2,500 meters (1.55 mi) with suitable aircraft parking and ground support facilities, as well as keeping the surrounding areas free of obstructions such as tall buildings, antennas, and trees.
     For this reason, ELSs were predominantly constructed near to or in conjunction with existing rest stations and parking facilities.
     The latter were equipped with power and water connections, connecting taxiways and sometimes, sheltered aircraft parking facilities.
     The area between the lanes was paved and the median crash barrier had glare protection installed as a plug-in solution, which could be removed in a matter of minutes.

German Highways Video


     Furthermore, detours that allowed bypassing the ELSs part of the Autobahn were planned so that the use of such ELSs would not cause a total breakdown of vehicular traffic.
     Since the construction of such ELSs was subject to strict specifications, the construction of new highways (or their reconstruction) was often carried out differently from initial specifications to allow for locations that were free of bridges, crossings, and obstructing buildings and landscape.


Last Hurrah

     The last time these facilities were subjected to a large-scale test was in 1984, when the NATO-exercise “Highway’84” took place: Click Here to view
     Although “Highway’84” proved the viability of the concept, in the years to follow it became clear that any military clash in Europe would likely not involve large fleets of aircraft and tanks; in other words, the threat scenario had changed, owing to a more unified and pan-European approach and the absorption of former Warsaw Pact states Poland, Czech Republic, Slovakia, Bulgaria, and Romania within the European Community and their integration into the NATO defense alliance.
     But still today there are traces of the past, the least of which are certainly not those long, straight ribbons of highway moving people and commerce from here to tomorrow all over Germany.
Jens


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