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   Vol. 13 No. 93  
Thursday November 13, 2014

Delta Cargo In The Race Ad

New FedEx COO Recaps Pacific StanzaFedEx serves as regional hub at Baiyun International Airport in Guangzhou, China.


In a final interview conducted before yesterday’s announcement of his promotion from his current role as president of FedEx Express Asia Pacific to company chief operating officer, David L. Cunningham, Jr., explained to FlyingTypers his view of the company’s APAC strategy…

     Exactly 30 years ago, FedEx started laying the foundations of its Asia Pacific business when it bought the courier company Gelco and opened its own operations in China and Japan. From small beginnings come great things.
     Since then the Memphis-headquartered express and logistics goliath's searing ambition has built a powerful AP footprint. Managed from regional headquarters in Tokyo, Shanghai, and Singapore and with operations centered on its APAC hub at Guangzhou Baiyun International Airport in China, FedEx Asia Pacific offers 400 flights per week, runs 3,900+ vehicles, and employs over 18,000 people in more than 30 territories and countries.
David L. Cunningham, Jr.     Last year FedEx expanded its facility at Beijing Capital International Airport to increase its handling capacity for international shipments, and in April this year the company commenced operations at its new North Pacific Regional Hub at Kansai International Airport in Osaka, Japan.
     According to David Cunningham, Jr., president of FedEx Express Asia-Pacific, APAC will continue to be central to the company’s ambitious global growth plans in the years ahead. “If you look at Boeing’s forecasts, Asian air freight lanes to major markets are expected to be the fastest growing lanes and that’s expected to continue for the next 20 years,” he told FlyingTypers. “For example, China’s trade with the ASEAN bloc is now up to 37 percent of ASEAN’s overall trade, from 26 percent in 2000. And trade within Asia accounts for 25 percent of Asia’s total US$6 trillion annual exports.
     “So, of course, Asia is very important. We expect it to be one of the fastest growing markets. Outside of the region, Mexico is expected to grow rapidly, but India should be a good market. China will stay on track and in South East Asia we see a lot of potential in Vietnam, Thailand, and the Philippines.”
     Tapping into this growth, the company plans to expand its footprint across the region, most notably by opening a new FedEx Shanghai International Express and Cargo Hub in China, a development slated for completion in early 2017. The Hub will be able to process up to 36,000 documents and parcels per hour and meet expansion requirements for the next 20 years and beyond.
     According to Cunningham, strategizing how to serve Asia is about understanding how and why the region and its component parts are rapidly evolving. For example, he sees rising costs and the rapid urbanization of China creating new markets and challenges and also opportunities—both in inland provinces of China and also in manufacturing centers in locations outside the country.
     “The Chinese economy is moving towards one led by domestic growth, so that’s a tremendous and healthy shift. Part of that is because of the need to move manufacturing and services more inland and away from the coast.
     “We’ve been in these inland markets such as Chengdu and Zhengzhou for a long time so we have the ability to meet those needs. We will continue to see as China urbanizes that this creates more and more inland markets.
     “We now serve 400 cities there through our domestic express service and operate aircraft around the country as well as deferred trucking options for economy business. So we are well positioned to expand domestically and internationally.
     “But China is also a more expensive place to do business and distribute than it was, so countries like Vietnam and other places in the South East are benefitting from this.”
     Cunningham sees huge potential in India and also encourages the new President of Indonesia, Joko Widodo, to embrace policies that promote trade and investment rather than discourage it.
     “I’ve been in the APEC [Asia Pacific Economic Cooperation] conference for the last few days and a big part of this is about trade facilitation and promotion,” he explained. “There are a number of agreements under discussion and they are all about making it easier for goods and services to flow across borders, which facilitates job and wealth creation.
     “With around 300 million people, Indonesia has tremendous resources, great natural resources, etc. But it lacks infrastructure, which makes it difficult to manufacture or distribute there.
     “They have also rolled back on plans to open markets so companies like FedEx can come in.”
     Cunningham, like so many others, believes Indonesia lacks the roads, airports, and policies that will enable the country to truly take its rightful place on the global trading map. “Infrastructure is important, but it takes a long time,” he added.      “Policy restructuring can create a lot of capacity within what’s already available so what you have is more efficient and automated.
     “Indonesia still only represents a small part of Asian trade and this is mainly linked to natural resources. So that’s a missed opportunity for the country. It’s harder to invest there for foreign companies. FedEx and other companies would love to see progress on this front.
     “By all accounts, President Joko Widodo is a dynamic young leader, so I hope he reverses this pattern. Indonesia needs new legislation and laws to reduce protectionism and create transparency.
     “There’s a lot that can be done with a few strokes of a pen.”

SkyKing

 

Hapag-Lloyd
Looking Better

Rolf Habben Jansen

   Hapag-Lloyd looks ahead says there is new strength from the planned combination with CSAV, pointing to positive operating result in the third quarter
   Transport volume increased by around 6% / Average freight rate down 4.9%.
   Hapag-Lloyd ended the third quarter of 2014 with a positive operating result of EUR 33.1 million.
   “Although it is a first step in the right direction, we are not satisfied with the result. We are, however, on a good path,” said Rolf Habben Jansen, Chief Executive Officer of Hapag-Lloyd.




 

Air Options As ILWU Go Slow
     Shippers and forwarders are now turning to air freight options to avoid lengthy delays at U.S. west coast ports. Indeed, some logistics executives believe the ocean capacity crunch could see the Transpacific air freight peak season continue through the first quarter of next year.
     ‘Go-slows’ by members of the International Longshore and Warehouse Union (ILWU) allied to high demand and a lack of trucking capacity have seen delays at west coast ports increase in recent weeks, prompting logistics planners to find alternative options. While some have been shipping into U.S. east coast ports, many others are now looking at air freight solutions, according to Li Wenjun, head of Air Freight, DHL Global Forwarding Asia Pacific.
     “With the current situation, in Asia Pacific, we have experienced an increased volume shift from sea freight to air freight due to U.S. port delays,” he said. “In addition, this is also typically the high season for technology goods.
     “Given the increased demand for air freight and the stable airfreight situation in terms of capacity supply, we see this peak period lasting until the end of March if nothing is done to resolve the situation.”
     An Asia-based executive for a European airline active in U.S. markets who wished to remain anonymous said demand on transpacific lanes was already high, even before port delays became a factor in shippers’ modal strategies.
     “We are seeing a reasonable peak and increased demand in the run up to Thanksgiving,” he said. “It is difficult to say if it is related to the port disruption as we have seen demand into the U.S. relatively strong for some time.”

Rubber Duck
Happier Times: A giant, yellow vinyl duck created by artist Florentijn Hofman joined a Tall Ships Festival in the Port of Los Angeles this past August. Right now, slowdown by port workers has left many scrambling as the Christmas rush continues.

     Cathy Roberson, senior analyst at Transport Intelligence, told FlyingTypers that many retailers were now becoming concerned with stock levels. “As the holiday season approaches, air freight is becoming more of an option for shippers,” she said.
     “The National Retail Federation is forecasting a 4.1 percent rise in holiday spend and an 8-11 percent rise in online sales, so for this to be a successful season for shippers they will need to be ready to quickly replenish inventory.”
     She said air freight demand would also be boosted by new retail trends. “It’s expected that airfreight will see a peak season this year as a result of not only the congestion problems at the ports, but also because of the growing influence of online and omnichannel retail sales,” she said.
     “UPS and FedEx have been working with retailers to avoid issues from last holiday season. Among the issues that UPS faced last year was that the company found it difficult to obtain necessary air cargo space to help with last minute shipments prior to Christmas Day. I imagine this year UPS will have adequate air cargo space on hand.”
SkyKing



Best Cargo Area Hotel On Earth
      
The place began its life as a crew hotel for the pilots of the Berlin Airlift.
     Frankfurt International Airport’s InterCity Hotel, located in Cargo City Süd, is a compact place steeped in character, with every corner echoing a time long since gone.
     Of course the hotel is completely updated, but it still retains a rich history that sets it apart from other local stays.


Breakfast of Champions

     Everything about this experience is stellar, including the “hackfleisch,” which is served daily as an elegant, piquant combination of bratwurst and spices, with beef and raw sweet onion served as a tartar (mett).
     The hackfleisch sits innocently enough near the cold cuts on the breakfast buffet.
     But I promise, one bite will tell you why you have taste buds.
     Restaurant Fluggi is bright and cheerful, in classic “good morning” colors, and it is usually filled with Asiana crew who bring a certain feeling of the excitement and expectation of flight.
     And oh! The food . . .
     Eggs any way you like them, always hot and fresh, and coffee freshly brewed from several machines in any configuration you can imagine.
     Crepes, pancakes, waffles, and stewed tomatoes, rice, bacon, sausages, and oatmeal, a dozen cheeses, cold cuts, and breads winding around and half way up a column centered in the middle of everything.
     Broad windows offer a super view outside while you are dining; one of the most important aviation artifacts of the world is on display for the public, sustained by this lovely, small hotel.
     In the center of an outdoor garden sits a column with a stylized globe of the world, bands of aircraft encircling it, atop which a bird of peace holds a gilded olive branch in its beak.
     The view is both beautiful and inspirational.
     Once upon a time in 1933, until the redevelopment of Frankfurt International Airport, the column was situated in the center of all the action at the FRA outdoor restaurant. It was a bit higher then.
     Credit Anton Wüstefeld for both building a better breakfast than many people have ever seen in a public place and creating a dreamlike atmosphere of relaxation and enjoyment.
     Herr Wüstefeld is general manager of Intercity Frankfurt in Cargo City Süd.
     He is in every sense an “olde world innkeeper,” keeping his eye on every detail and taking nothing for granted.
     InterCity not only permits their guest to pack up a snack from the breakfast buffet, but also provides the bags and wrapping paper—a rather endearing touch.
     “Families with a stopover night in Frankfurt especially appreciate the opportunity to pack a snack, which their little ones can munch on while going through security or waiting at the gate,” Anton confides.
     But as you might guess, he is no pushover either.
     This place sings, from its spotless rooms (small, compact, and efficient) and corridors to the aforementioned restaurant Fluggi, to the airport’s most inviting and cozy saloon, The JU52, with its old airline pictures and artifacts and Harry, JU52’s legendary bartender.
     Last time we were there, Intercity Cargo City Süd was packed, with meetings occurring everywhere.
     It seems word is getting out.
     So can a Berlin Airlift-era USAF hotel find a spot in the hearts and minds of the 21st century world?
InterCity has done just that and in the rubber-stamped era, this place looks better every day.
     Typically downplaying himself, Mr. Anton confides:
     “It’s all about the location.”
     But we say it is also about knowing what to do wherever you are, and on that score the big hostels up and down the strip could learn a lesson from InterCity.
     InterCity is conveniently located 500 meters off highway exit “Cargo City Süd/Moerfelden” of the German Autobahn A7. You simply can’t miss it.
     InterCity is also just a few 100 meters walking distance (or a few minutes by airport bus) away from the offices and warehouses that form the Cargo City South of Frankfurt Airport—the part of the airport where 75 percent of its cargo is not just handled, but also administrated.
     Handlers Fraport Cargo Services, LUG, Celebi, and WfS as well as the major airlines, trucking companies, and other cargo-related businesses reside there.


More than just location

     But of course, while the location is important, there are a multitude of other factors attracting more than cargo-related businessmen on a regular basis, to which a considerable number of semi-permanent and long-term guests bear witness:


InterCity RoomRooms With A View

     The rooms are small, bright, cheerful, and nicely furnished (with a desk, office chair, and equipment that actually make productive work possible).
     A huge business center as well as laundry rooms much appreciated by longstay guests ease the burden on those deployed for considerable lengths of time.


Bring Your Ciggies

     About 30 percent of the hotel’s 360 rooms are smoking rooms.
Unlike what you find in some other parts of the world, these rooms are as well appointed, immaculately clean, and cozy as those for non-smoking guests.
     “Less and less people smoke,” Mr. Wüstefeld points out, “but those who still do really stick to it. I can’t see any reason to make the stay for any of our guests inconvenient or miserable, as long as the non-smoking guests are not inconvenienced,”—which they aren’t.


More Upgrades

     Unlike most other hotels, the InterCity Frankfurt is just four stories high, which means that all windows can be fully opened, allowing the smoking rooms to be aired out.
     InterCity Cargo City Süd, with utilization in excess of 80 percent and 120,000 guests annually, proves that Mr. Wüstefeld and his team must be doing something right.
     Intercity will complete further upgrades of the rooms and facilities effective February 1st, 2015, for about 5.5 million Euros (US $7.29 million).
     And in case you haven’t heard, the thumbs-up has been given to go ahead with the expansion of the airport and begin construction of terminal 3.
     The hotel has already planned to expand by another 400 rooms and 800 beds, having acquired the necessary property rights adjacent to the existing hotel back in 1999.

Hotel Roof and Sculpture
Sustainability & Goofing With The Bees

      Speaking another politically incorrect truth, more than a few airline professionals (and not only those from the cargo section) may have grown a bit weary of hearing about carbon footprints while gladly supporting another sustainable and environmentally friendly mandate.
     True sustainability, to our mind, is when you can’t see and won’t notice the changes: things simply work.
     For example, the roof of the InterCity Hotel is covered with green moss that filters, rainwater and channels it into tanks where it is used for anything but tap water (toilets and alike).
     You may encounter another nice touch on the breakfast table:
     House-made honey is available, produced by hundreds of thousands of honey bees who occupy the hotel’s roof, producing enough of a crop that travellers can even purchase a bottle for carry away.
     Both the honeybees and the green space farm on the InterCity roof have existed since 1995, way before the go-green mantra reached deeply into the airline business.
     Suspend disbelief: there really is a lovable, enjoyable airport-adjacent hotel!
     In fact, we feel confident saying InterCity Cargo City Süd Frankurt is the best cargo area hotel on earth.
     Here’s hoping we see you there.
Geoffrey/Jens/Flossie


Chuckles For November 13, 2014

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Publisher-Geoffrey Arend • Managing Editor-Flossie Arend • Associate Publisher/European Bureau Chief-Ted Braun
Film Editor-Ralph Arend • Special Assignments-Sabiha Arend, Emily Arend • Advertising Sales-Judy Miller

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