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   Vol. 13 No. 99  
Tuesday December 9, 2014

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Finnair Cargo Center

Pasi NopanenIt was early in the morning last week, just a few days before Finland’s Independence Day (December 6th), when we sat with Pasi Nopanen in one of those vest pocket hotels that line Rockaway Boulevard. Like the dashed lines on a map, Rockaway Boulevard’s hotels draw the pathway to New York City’s John F. Kennedy Airport.
     Sales director Scandinavia & North America for Finnair Cargo, Pasi Nopanen was bright faced and ready for action. Now only two months into what he termed “the job of a lifetime,” Pasi sees the airline continuing the tradition of keeping itself alive and viable by being the fastest to recognize and build new markets. At the moment, Finnair Cargo is just about to launch winter schedules.
     Beginning December 14, AY goes into Miami from Helsinki on Tuesdays and Thursdays, with services that increase to thrice weekly (Saturdays) in January.
     Finnair also will launch non-stop services into Chicago twice weekly starting in June 2015.
     “Miami returns our seasonal A330 service providing excellent connections to and from Northern Europe and to our expansive flights into Asia and India Subcontinent,” Pasi said.
     “But we are looking at Chicago with special interest and hope, as that busy and vital city is a key element in our desire to grow our services into the Americas.”
Paul Umpleby and Pasi Nopanen      Finnair discontinues all freighter services systemwide on December 20, but those services were terminated earlier this year for North America when the carrier went to GSA representation in the Americas, naming Paul Umpleby of Network Cargo Services AY VP Sales and Operations.
     “Our moves have been met with positive results for both our client base and also for Finnair,” Pasi Nopanen said.
     “We are building a new aircraft fleet with the upcoming deliveries of Airbus A350 XWB aircraft which, rather than constrict our available lift, will actually more than double our ability to carry additional volumes of air cargo by 2020.
     “In fact, our project 2020 has set as its goal a revitalization of our entire air cargo product, with phased in deliveries of new aircraft.
     “So rather than shrink back from air cargo, Finnair actually moves boldly ahead, aware of our rich and colorful history leading up to celebrating 91 years of continual service.
     “Yes, there is ongoing change, including recognizing the economic realities of 2014 and beyond.
     “But Finnair is very much what we have always been: a niche layer with a highly developed culture for air cargo and customer service that goes above and beyond the norm, and never takes for granted or forgets how important our customers are.”

Finnair Historic Poster

     As Pasi spoke, we were thinking about Finnair and its long and colorful history.
     For all its 91 years, AY has been, in truth, quite unbeatable.
     We recall writing a plan that the carrier had in 1940 when we came upon a picture of AY staff at the 1939 World’s Fair in New York City.
     In the picture was a young lady from Finnair (at the time the airline was called Aero OY) holding a model of a Focke Wulf 200 “Condor” four-engine airplane, one of two that Aero OY had ordered so that it could commence non-stop service from Helsinki to European destinations and New York, as the 1940 Olympic Games were to be held in Helsinki.
     At the time the great airlines like Pan Am, British, and some others were utilizing huge, lumbering flying boats, and here came a European manufacturer in Germany with a pressurized, high altitude four-engine airplane that might have changed history.
     For as many years as we have known Finnair, that sense of pioneering and destiny has not slackened a bit.
     Today Finnair has built its future by adding to its America’s routes via Helsinki to China, India, and most recently into the red-hot markets of South East Asia.
     Pasi Nopanen brings to his post at Finnair Cargo a solid airline background having served in operations. He also offers freight forwarding experience and has become familiar with many of the shippers he now calls upon to do business with Finnair Cargo.
     “You gain a certain perspective of what is expected when you are on ‘the other side,’” Pasi smiles.
     “Today it cannot be emphasized enough how critical it is to stay very close to the customer whilst letting everyone up and down the line know what to expect.
     “We simply believe the market demand and reality underscore that nothing can be taken for granted and we must perform above expectation.”
     “I want to say to our major partners that we realize the role of the freight forwarders is a difficult one.
     “I can tell you, having worked on the other side, dealing with shippers is no walk in the park.
“Finnair is reliable and transparent.
     “We concentrate on doing some things in air cargo very well while at the same time not fielding an offering that is all over the lot.
     “Our strategy is to analyze and be decisive. That means less whining and more action,” Pasi said.
     “Helsinki is the natural and easy gateway between east and west and we want to bring the markets to our country.
     “The addition of new cargo-friendly aircraft, to double available lift for air cargo in just six years, and other enhancements point to an interesting future.
     “I recognize that in some quarters times are tough and uncertain, and we acknowledge the need for improvement all around.
     “But at the same time I am really looking forward to 2015.”
Geoffrey/Sabiha/Flossie

Antti Kuusenmäki Juha JarvinenAs We Go To Press . . .
   Juha Järvinen, Finnair SVP Commercial, and Managing Director of Finnair Cargo, (right) announced the appointment of Antti Kuusenmäki (left) as VP Finnair Cargo.
   Antti Kuusenmäki took over December 1 after having served as Vice President Revenue and Network Management, Finland.
   Mr. Järvinen said, "Antii has extensive airline experience in both cargo and passenger businesses, and now takes leadership of Finnair Cargo at a very intriguing time, as we are preparing for the A350 entry to Finnair fleet with additional cargo capacity, and continue the planning of our new cargo terminal project.
   "I am looking forward to continue working closely with the Finnair Cargo teams globally."


Delta Cargo In The Race Ad

Air Rates Up Through Chinese New Year
2015 may be the Year of the Sheep in the Chinese lunar calendar, but the bulls seem to be ruling the air cargo business—December continues with projections of demand driven by ocean slowdown continuing into the first quarter of next year.

     Strong air freight demand on key lanes could be sustained into 2015 as U.S. port chaos continues to drive Transpacific demand in the lead up to Chinese New Year in February.
     Led by a Transpacific surge, Drewry’s East-West Air Freight Price Index rose by 11.9 percentage points in October to a year-peak of 115.6 points, the second highest level since the data series started in May 2012, on the back of a strong peak season and conversion from ocean transport.
     “The U.S. West Coast port slowdown could not have been designed to have caused more disruption or extra cost,” said Drewry.
     Earlier last week IATA said that global demand was now back to levels not seen since the 2010 post recession bounce-back, fuelled by strong demand out of Asia especially on Transpacific lanes. This was reflected in the performance of Asia Pacific airlines in October, which saw a 6.4 percent increase in international demand on the back of “buoyant demand for electronic goods from manufacturing hubs in North Asia,” according to the Association of Asia Pacific Airlines.
     Port delays are now spilling over into the U.S. hinterland, a development that threatens to encourage further modal shift to air in the run-up to Chinese New Year, when most factories in China close down for an extended period, prompting a pre-holiday export rush, according to Cathy Roberson, senior analyst at Transport Intelligence.
     “These delays will likely continue for quite some time unless they are alleviated if a labor contract is agreed upon, but even then there are other issues, such as a shortage of truck drivers and backlogs needing to be cleared,” she added.
     “Combine this uncertainty with the need to replenish inventory from what is shaping up to be a busy holiday season and airfreight is looking to be the best option for shippers at least up to the Chinese New Year.”
     Indeed, Drewry Maritime Research said recent U.S. West Coast port congestion and labor issues had “temporarily” reversed the long-term modal shift from air to ocean as shippers sought out alternative ways to make sure their goods hit the stores in time for the U.S. holiday season.
     The analyst said multiple factors had prompted a long-term shift from air to ocean in recent years. But, although this trend will continue, supply chain issues in the container sector—poor reliability, rolled cargo, missed voyages in peak cargo months and port congestion—may slow its impact. “More recent numbers show that international air freight growth is starting to keep up with container traffic growth and even overtake it in certain months,” said Drewry.
     “Shippers converting to air freight [now] are doing so at a time when air rates are at their seasonal high point of the year.
     “The backlog at U.S. west coast ports has the potential to soften the traditional drop in Asia to U.S. rates in December, and depending on how long the issue remains unresolved could prop up air rates through Chinese New Year.”
SkyKing


Chuckles For December 9, 2014


Some leading international air cargo gateways were at Air Cargo Handling (ACH) Milano this past September.
Here we present Part Three of our exclusive series with a deeper look into the session content at ACH Milano. Part Three will be followed by in-depth analysis of TIACA Seoul held in October, and finally FIATA Istanbul held in November.

Giovanni Constantini, Sabine Petera and Nathan De Valck

     At ACH great thoughts were advanced detailing the role of airports in coordinating the cargo community.
     Participants included Sabine Petera, director cargo services, Vienna Airport; Nathan De Valck, cargo account manager, Brussels Airport Company; and Giovanni Constantini, cargo manager, SEA Milan Airports.
     Starting with Vienna, Sabine Petera told the audience that Vienna Airport had a throughput of 256,193 tons in 2013 with a mix of trucking and air cargo. There the focus is on speed with short acceptance deadlines for export cargo and competitive delivery times for import cargo. Vienna airport have built a computer system interface between Vienna Airport Cargo services and forwarding agents to enable the sharing of data.
     Vienna Airport allows direct access to apron for certain stakeholders, but strictly in accordance with EU directives. Meanwhile, projects include the development of infrastructure including Cargo City Sud (long term planning).
     The airport is ISO 9001 certified and has an internal system for monitoring quality and to support regular inspections by Austro control regarding dangerous goods.
     They hold regular coordination and information meetings with stakeholders, and topics include improvements, e-AWB, efficiency, flexible staff assignment, training (including security and safety) planning tools for cargo, and lean/simplified processes.
     Nathan then introduced Brussels Airport, voted cargo airport of the year in 2014.
     The objective is to develop BRUcargo as the preferred logistical hub with support for pharmaceuticals, time sensitive products, live animals, outsized cargo, perishables, valuables, and general cargo. Brussels airport acts as a facilitator and ensures stakeholders are more productive and able to contribute to the long-term future. 210 million euros is being spent on current infrastructure, including warehouse redevelopment and changes to office infrastructure. BRUcargo are able to bring stakeholders together to do business using neutral position. Furthermore, the secured gateway programme will make BRUcargo the most efficient and secure cargo area.
     BRUcargo are also developing a cloud solution to enable stakeholders to do business. They have also created a pharmaceutical certification programme with the objective of improving pharmaceutical handling. The programme will include audits of the stakeholders.
     Finally, Giovanni provided insight into Malpensa. Malpensa Airport takes on the role of coordinating the community, recognizing that this also includes engaging the public authorities and balancing different perspectives and needs. An investment of 70 million euros for urbanization works on the aircraft apron will help support the target to double freight handling from 500K tonnes to 1 million tonnes per year.      This will be further supported by an additional first line warehouse.
     Malpensa Airport has developed a cargo service charter with the aim to improve reliability and on time performance, e.g., cut off times for departing cargo times and for cargo availability after flight landing. They conduct quarterly meetings of the cargo-working group and canvass opinion through a customer satisfaction survey.
     In terms of facilitation, Malpensa Airport have lobbied Customs to activate single window procedure for customs and health procedures and are developing a common access platform for exchanging information aiming to simplify the access and information sharing between all parties.
     Additionally, a greater presence of Road Feeder Services in Northern Italy represents an opportunity to increase market share.
     It is great to see airports taking an active role in identifying and resolving issues, and even better to see them taking an active role in supplying solutions to unite the various stakeholders. If anyone can bring all parties together to do business, then the airport authorities can. We feel this level of participation benefits the entire supply chain and should be adopted elsewhere as well.
Geoffrey/Flossie

For Part I click here
For Part II click here



Enough Lawsuits Already

RE:  Enough Lawsuits Already

Dear Geoffrey,

   Thank you for bringing the report on the DB Schenker lawsuit, and Bill’s always simple and to the point comments.
   Honestly, this whole issue is just a big mess and the only winners, if we want to call it that, are the attorneys involved.
   I agree with Bill’s comments – it is getting too crazy. And at the end of the day, the actual “injured” (the shippers and beneficial cargo owners) will not get anything back. I expect that DB Schenker will keep the money for themselves: a note in Germany did comment that the ROI in such lawsuits is potentially 10x. Thus I think it is primarily a profit driven decision, and not one driven by doing the right thing for the customers and giving the money back to them.
   Thus the absolute majority of shippers still will never see a penny. On the one or two original class action lawsuits, where shippers could file a claim even if they did not pay the airline directly (which is probably 98% of the air freight business model), the ROI was pennies on the dollar – honestly a total waste of time for those shippers that tried. The other class action lawsuits that followed excluded all shippers, as it was a requirement that they had directly paid the airline.
   It will be interesting to see what some of the other big global air freight forwarders will do, as I am sure none will want to sit by the sidelines while their competitor collects free money to add to their bottom line and pay hefty bonuses as Bill suggests. Especially not those publicly held with immense pressures to produce returns for the stock holders.
   Now the right thing to do, if there is anything goof left to do, would be to donate settlements to global charities.
   And for all to agree to this without lengthy trials and expensive attorney bills.
   Anyone up to it?

Albert Saphir
ABS CONSULTING
E: abscon@wans.net or albert@abs-consulting.net


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Best In Show Closing In On 2015
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Tony Tyler's Uber Overspeak
More Chuckles For November 26
Letters
Hooray For The Pumpkin Pie
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Vol 13. No. 97
Enough Lawsuits Already
2020 On The Nose
Best In Show eAWB Reality Check
Chuckles For December 2, 2014
Santa Delivered
EMO Moves Hsu's Ginseng
Remembering Bing

Publisher-Geoffrey Arend • Managing Editor-Flossie Arend • Associate Publisher/European Bureau Chief-Ted Braun
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