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   Vol. 13 No. 100  
Friday December 12, 2014

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Air Cargo News For December 12, 2014
Air Cargo News For December 11, 2014


Oliver Steps Down

   News that SWISS Chief Cargo Officer Oliver Evans will step down in September 2015—retiring in the same “long goodbye” manner we saw when Ram Menen packed it in from Emirates in 2013 and Des Vertannes left IATA in 2014—has been met with sadness as well as some measure of disbelief he has lasted this long, especially after the Lufthansa takeover of SWISS a few years back.
   In the time since the takeover happened, almost every other top executive at both carriers has changed.
   So now the bell tolls for one of the tallest men (6’7”) in air cargo, who may stand a bit taller without the burden of both his airline job and Chairmanship of TIACA. Evans is departing under his own power into some kind of transportation pursuit, as hinted at in a sentimental SWISS press release.
   Speaking of TIACA, with Evans gone and his successor, Enno Osinga, having decided to retire and not take the Chairman’s post, questions are swirling about what lies ahead for the troubled organization, especially after the traumatic, loss-driving, Seoul-based ACF in early November.
   “It is one thing not to have a Vice Chairman and another to know that two key board members who both have been in position of leadership for the organization will be moving on at a critical time,” a source told FlyingTypers.
Geoffrey
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Mr. Lee

Singapore’s Changi Airport is something of a mystery. Widely acknowledged as one of the world’s leading airports, a wander around its calming terminals reveals facilities designed to within an inch of perfection.
     Unlike most global hubs, it is rare to even see queues. A seat is always easy to find and the staff is polite, helpful, and well-trained.
     The Swiss may keep things ticking, but judging by Changi, Singapore has taken efficient reliability into the digital age. The entire experience is a pleasure rather than a chore.
     And Singapore has reaped the benefits of its excellence, handling 53.7 million passengers last year compared to just 42 million in 2010.

Changi Airport

     But there is one fly in Changi’s almost flawless ointment—cargo. To quote a famous Depeche Mode song, the awarding winning airport simply ‘just can’t get enough.’ Over the last decade annual freight tonnage has shown almost no growth even as many of its regional and global rivals have racked up major gains as Asia has flexed its economic muscles.
     This year most of Asia’s leading freight hubs have seen throughput expand rapidly, but Changi has again disappointed, with volumes in the first eight months of the year increasing just 0.7 percent to 1.22 million tons.
     In a bid to unravel the Changi conundrum, FlyingTypers caught up with Steven Lee, chairman of the Singapore Aircargo Agents Association.

FlyingTypers:  Why is Singapore not benefitting from the resurgence of Asia’s air freight industry this year?
Steven Lee:  It is partly due to the rising cost of operations. Manufacturers have a challenge in securing bids to manufacture certain products as they need to compete with developing countries. Singapore’s focus is to be a smart nation by concentrating on improving productivity. This means that manufacturers are trying to produce more high end products. Also, cargo flown as airfreight is more compact and lighter, which also doesn’t help volumes.

FT:  Do you believe Singapore is still competitive on price?
SL:  Yes, but unfortunately as mentioned earlier, the escalating operational costs are the hindrance.

FT:  How is the lack of volume growth impacting your members?
SL:  Most of our members are impacted by the lack of volume but due to the reduction of space the yield is still sustainable on certain routes. Some members also focus on niches. For example, oil and energy, pharmaceuticals etc.

FT:  Are you offering members advice to help them cope with this sustained period of under-performance at Changi?
SL:  Agents must be prepared to get automated and take every advantage of new technology to increase productivity to reduce cost. One of the areas is through the faster adoption of E Freight.

FT:  How has Singapore’s air cargo community been affected by cuts in capacity by SIA?
SL: The impact is not great as there are new freighter services, for example, from ANA and Hong Kong Airlines.

FT:  How have the incentives provided by CAG for freight, such as landing fees and rental rebates, helped the freight sector over the last year?
SL:  The incentives have helped and most initiatives have been fulfilled.

 FT:  Are you hopeful we’ll see a traditional peak season later in the year?
SL:  Yes, it goes without saying, the year-end peak is the only avenue to make up for any shortfalls.

FT:  Are Changi airport and operators based in Singapore suffering from competition from the Middle East?
SL:  I think we are reaching the same level field of play. The threats will continue, but in my opinion we are still ahead of the Middle East.
SkyKing

(Editor’s Note: Here’s one for all the Mr. Lees. But word of warning—if you listen to this tune it will rattle around inside your head all day long!

Chuckles For December 12, 2014

 

Samsung Same Song

Suggestions that Apple block-booked air capacity out of China to expedite the shipment of the iPhone 6 and prevent counter-product launches by competitors illustrate just what an important strategic tool (as well the means of reaching market) air freight has become for the world’s largest electronics providers.
     Taking a leaf out of Apple’s book, Samsung, its major rival in most electronics markets, now appears to be taking steps to secure its own long-term access to global markets from plants in Vietnam, which is now becoming a viable alternative for electronics OEMs keen to diversify production away from China.
     Samsung has now reportedly requested its own dedicated air cargo terminal at Noi Bai International Airport, located near the capital Hanoi and conveniently close to Samsung’s factories in Bac Ninh and Thai Nguyen provinces.
     Served by multiple freighters, Noi Bai has struggled with congestion in the past. With some 50 percent of throughput now reportedly generated by Samsung and its associated businesses and the airport operating some 30 percent over-capacity, local reports said the Civil Aviation Authority of Vietnam had deemed Samsung’s request for its own new terminal “legitimate.”
     Emphasizing Samsung’s heavy-hitter status in the South East Asian country, state media reported that approval was granted within days of the request and the company is now expected to take over a new terminal built by ALS Port Terminal Co., which is due to open this year.
     Samsung’s throughput via the airport is due to rise from around 80,000 tons per annum last year to over 130,000 tons in 2014, and then grow a further 20-30 percent per annum thereafter, according to local reports. Indeed, the same reports claim the South Korean electronic giant’s exports now account for 10 percent of Vietnam’s total export turnover and 90 percent of the exports generated by foreign-owned enterprises.
     When approached by FlyingTypers, Samsung would not confirm or deny the figures or its plans to route its exports through a dedicated terminal.
     Granting Samsung its request for its own terminal would, however, make sense for Vietnam, which is determined to attract more electronics companies to its enterprise zones and industrial parks. This is part of a national policy designed to move the country up the manufacturing value chain by offering a range of tax and other incentives, which is so far proceeding with no little success.
     Samsung is soon set to become a major player in the industrial regions around Ho Chi Minh in Vietnam’s south, where it is slated to build a new $1bn electronics factory. Microsoft is reportedly set to relocate its Nokia phone production lines from China into southern Vietnam. LG has built a $1.5bn factory in Hai Phong. Apple is also rumored to be looking at options in Vietnam. All of this is expected to prompt rapid increases in demand for cargo services at Vietnam’s airports if more capacity can be added.
     Air freight already represents 25 percent of Vietnam’s trade by value—around $29 billion. With phones and phone parts now overtaking textiles and apparel as the country’s biggest export earner, IATA believes that with more investment in aviation, the Vietnamese government will jump-start an economy that currently ranks just 82nd in the Infrastructure Index of the World Economic Forum’s Global Competitiveness Index.
     “Vietnam is a dynamic and rapidly growing aviation market,” said IATA’s Director General and CEO Tony Tyler. “The successful development of aviation will pay big dividends to the Vietnamese economy. It must be treated as a strategic asset and handled correctly.”
     Vietnam’s government is now addressing its poor performance via an aviation master plan, with the target of having 26 airports operational by 2020. Expansion programs are underway at Hanoi and Ho Chi Minh airports, with the new Long Thanh International Airport due to be ready by 2020.
     IATA claims adopting the latest e-freight stems could vastly improve the industry’s efficiency. “A key step to implementing e-freight is the adoption of the e-Air Waybill,” said Tyler. “While Vietnam Airlines has been able to use e-AWB for domestic freight, it is unable to do so internationally as Vietnam has yet to ratify the Montreal Convention 99. I urge Vietnam to ratify MC99 quickly so that greater efficiencies can be achieved in Vietnam’s air cargo sector.”
SkyKing

 

Molinelli Was Always Certain

Brendan Furlong, Pat Pignatelli and Gerry Molinelli     There are some people in air cargo who are certain to be where you expect them, despite the years and changing winds and circumstances.
     We were thinking about that when we heard long time JFK International Airport cargo man Gerald “Gerry” Molinelli has decided to pack it in. Molinelli will depart his current post as Senior Cargo Executive at Emirates Sky Cargo on December 31, after 42 years of continued service.
     Somehow, JFK Cargo will never be the same.
     Kudos to boss Ed Chism for bringing Gerry into Emirates, where he has shined for the past years by simply being Gerry.
Buz Whalen      But we’d like to take a moment to drift back to the mid 1970s, when every time we were at the airport it was certain Gerry was at work—he sat on one side, a secretary sat on the other, and inside the bigger office was Eugene T. “Buz” Whalen, (right) in a building at JFK called Japan Airlines (JAL) Cargo.
     If memory serves, down at the other end of this first generation automated cargo facility was Rudy Auslander, serving as operations chief for JAL Cargo USA.
     Rudy later went on to help design, and then for years operate, the mammoth JAL Cargo Building 151 at Hangar 14 JFK.
     Gerry created and maintained the post of an airport cargo sales guy; he was a steady, dependable, and certain force for first class, hands-on connection, serving the forwarders and many others for more than four decades at JFK—first at JAL and then at EK.
     You just don’t see that kind of longevity anymore.
     Gerry filled a vital function in air cargo and he did it well, and now he retires with our fullest appreciation and respect for a job well done.
     Here, his old boss Buz Whalen V.P Cargo (JAL Ret.) remembers:
     “I was a little surprised to hear about Gerry retiring, then it dawned on me that I've been retired from JAL for twenty of those years.
     “Time does fly, as the saying goes.
     “Gerry had something going for him that I'm sure helped him with his successful years in ‘The Business,’ air cargo.
     “He spent several years on the ramp crew at JAL/JFK, which helped him understand the actual ins and outs of processing and handling consignments.
     “The five and a half years that I spent on midnights with American Airlines Airfreight in Detroit was a big help for me in later years in sales & marketing with JAL and Seaboard World.
     “Gerry was dependable and could be trusted with projects that required good communication skills with his peers and clients.
Gerry and Linda Molinelli      “EK was the beneficiary of his experience with JAL, I'm sure.
     “Best wishes to Gerry and family in the future,” Buz Whalen said.
     Gerry’s friend and co-worker, long time air cargo pro and Cargo Business Development Manager-USA, Emirates SkyCargo Brendan Furlong said of Gerry:
     “I have known Gerry for 30 years. He is a consummate professional, outgoing and friendly. Always there when you need assistance. We are losing a valuable resource."
     They tell us Gerry and Linda are off to spend their years ahead in Arizona.
     Many happy landings, thanks for the memories, and to quote an endearment in the western U.S.A., ‘happy trails always,’ Gerry Mollinelli!
gerald.molinelli@yahoo.com
Geoffrey

 

Rockefeller tree

Jim Erickson      Our friend and air cargo great Jim Erickson (Amerijet) tells us The JFK Air Cargo Association and The JFK Cargo Sales Manager's Club Annual Holiday Luncheon is on for Tuesday, December 16 from 11:30 am–3:00 pm at Russo’s On The Bay, just off the main runways of JFK International Airport in Howard Beach, New York.
      This great networking event in a very friendly venue affords industry professionals some quiet moments to come together and celebrate the holiday season with the spirit of giving!
      Attendees are required to bring one (unwrapped) toy, which will be donated to the U.S. Marine Corps “Toys for Tots” charity.
      Attendees are also asked to bring a small gift for the raffles so that every attendee has the opportunity to go home with a prize (office giveaways, or whatever is affordable).
      “Due to limited seating and the importance of an accurate head count for our venue, this year’s holiday gathering will only be by means of online credit card or check prepayment no later than December 12, 2014,” Jim said.
      Checks ($75, no walk ups) should be mailed to P.O. Box 300887, JFK International Airport, Jamaica, NY 11430-0887 and made payable to JFK Air Cargo Association.
      More: http://www.jfkaircargo.org/
      It’s also worth mentioning that the always-important Air Cargo Expo will also be held at Russo’s and the date for 2015 is March 25th.
      We think that this event is among the best one-day gatherings on the planet.
      In the key cargo gateway for the world’s greatest city, JFK Air Cargo Day will celebrate its sweet 16 next year. For anybody in the business, it’s an air cargo must to attend.
Geoffrey

If You Missed Any Of The Previous 3 Issues Of FlyingTypers
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FT120214
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		 FT120514
Vol 13. No. 98
100 Days & Tomorrow
Hear India Singh
India Dreams Frankfurt On Nagpur
Chuckles For December 5, 2014
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Mail For December 5, 2014
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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