As IATA World Cargo Symposium met in Shanghai, big financial rumblings were heard when China's main stock indexes fell nearly 1 percent on Thursday, March 5, 2015, as investors dumped blue-chip shares (such as banks and real estate firms), driven by concerns about the slowing economy.
     Chinese Premier Li Keqiang told the National People's Congress (NPC) at the opening of the annual parliamentary meeting that China would target growth this year of around 7 percent, down from 7.4 percent in 2014, signaling the lowest expansion for a quarter of a century.
     Last week China's stock market edged up again, led by signs that fresh money is flowing into blue chips.

While day one of the WCS was about the overall situation of the air cargo business (and its importance for the Chinese market), day two is traditionally split into different tracks, catering to the specific needs and specializations within the industry.
    One of the tracks catered to e-cargo and was delivered in Mandarin, and was aimed at boosting the understanding on both sides about what needs to be done to get e-cargo fully on track in the Chinese mainland. Truth be told, China has homework to do, but on balance has shown much further progress than other important markets, owing to both the importance of air export trade for the Chinese economy and the ease with which regulations can be changed on command in China.
    Another track, titled “Pushing Technology Boundaries” delivered updates about the current obstacles and cost drivers relating to legacy software being used, inefficient interfaces between the stakeholders in the air transport chain, and what the cargo section might learn from already streamlined processes on the passenger side.
    As a reminder, the industry seemed to have much less trouble implementing e-ticketing before 2007 than e-cargo, which, according to IATA forecasts in 2010, was scheduled to be at 100 percent by the end of 2014 but currently stands at slightly less than 25 percent worldwide penetration.
    We learned that Cargo self-service—much like the CUSS (Common Use Self Service) kiosks on the passenger side—is an option currently pursued, as this will give shippers and forwarders more control of their shipment, the progress of transport, and other relevant data.

Big Data Analytic

    While IATA’s update on “Big Data Analytic – How Technology can be applied today for measurable benefit in the real world” clearly showed some interesting options for synergies, there is consensus that there’s still a long and bumpy road ahead in terms of creating standards and making things happen throughout the industry.
    Smart sensing ULDs on the other side are currently becoming a reality, and since these involve only airlines and handlers while delivering obvious benefits, this technology is easier to implement.

Social Media

    A look at “Social Media – How/Why does the Air Cargo Industry become part of the Conversation” saw some good questions asked, but little in the way of answers.
    NDC for Air Cargo actually delivered a rather heretic thought—at least seen from the view of FIATA:
NDC, or “New Distribution Capability” has gradually become a reality on the passenger side during the last decade.
    While traditionally air tickets were booked involving travel agents (like cargo these days is typically shipped by means of a forwarder), the last few years have seen passenger booking their tickets directly with airlines, predominantly by means of the Internet.
    What NDC represents to cargo is the elimination of the middleman. This could cut down cost, increase efficiency, and strengthen the shipper’s control over his – direct – shipment through removal of issues related to the consolidation of shipments by forwarders.
    Last but not least, a session, “Putting the I-Pad on the forklift,” an analysis of operational paradoxes, “Standardization versus Empowerment, Control versus Innovation, Supervision versus unleashing.” Wrap up on this one, we think: a nice head game with little practical relevance.

Pharma Connects

    The Pharmaceutical track was one of the tracks that actually delivered measurable benefit—for those who ship, handle, produce, or transport pharma goods. Although even some pharma goods have shifted to the maritime transport sector, air transport is still the predominant and indispensable means of transporting vaccines and other perishable pharmaceuticals over longer distances, simply because the risks increase with increased duration of shipment time.
    Chaired by LifeConEx DHL Global Head of Quality Nina Heinz, the various aspects of risks and obstacles stakeholders in the time-and-temperature critical supply chain were thoroughly analyzed.

Security Track Value For Money

    Another track that delivered measurable value-for-money was the security track chaired by Jim Marriott, deputy director Aviation Security and Facilitation of ICAO.
    A provocative headline, “Terrorism is a failed brand,” saw Enno Osinga, SVP Cargo SPL as interviewer and Doug Brittin, director general TIACA as interviewee, discussing the not-so obvious aspects of terrorism and its impact on global trade. Highlight of that exchange was that security measures had received considerations rather late after the crash of Pan Am flight 103 in Lockerbie, Scotland in 1988 and specifically after 9/11.
    Although these measures certainly added measurable safety to aviation as such, the framework still shows considerable gaps proven by the recent MH17 disaster over the Ukraine, as obviously neither all airlines nor all regulators were aware of the unsafe Ukraine airspace.
    An important message certainly was that the heightened air security measures contribute to the modal shift from air transport to surface-based transport.
    The no less provocative question whether the air transport industry should employ their own terrorists was—quite clearly—answered with no, but nevertheless indicated that sometimes finding the appropriate measures to combat terrorism also have moral implications.
    The outlook delivered by Wolfgang Lehmacher, (left) head of Supply Chain and Transport Industries of the World Economic Forum, was definitely the highlight of this above-average track
    Elaborating about the “internet of things” and its commercial applications as well as the intelligence of cargo, Mr. Lehmacher explained in a most comprehensive manner the detrimental effect of (trade) barriers and the fact that these barriers, although negatively impacting trade, are driven by the needs of nation states to protect these states’ varying interests.
    Lehmacher concluded that since an e-Bay pilot program suggested a significant upside in reducing those barriers, governments as well as businesses should aim at reducing such trade barriers instead of creating new ones and called for the creation of national mechanisms as well as single national agencies tasked with the oversight of relevant areas. In summary, his message was that a decrease in border challenges would increase trade and thus GDP of nation states.
    Still, in a balanced approach Mr. Lehmacher also explained that the global risk landscape is having a considerable impact on business operations citing as examples for global supply chain disruptors, the Ebola outbreak in West Africa, the tensions in the Middle East, and the Ukraine/Russian Federation border dispute, and that with such interconnected risk factors driven by global trends, recent trends in supply chains have changed risk distribution.
    He recommended that governments and businesses build trusted networks and improve the collaboration between the various governmental agencies and other stakeholders as well as making risk a key element in procurement, management, and governance.
    His conclusions were deepened with a panel discussion “Imagine Global Security Driven by Communication – why Security of the Future should build Bridges rather than Walls.” A major point here was the importance of customs information as an additional indispensable layer of security, while identifying as one main obstacle the fact that each nation state has its own security regime and its own approach to sharing such valid information.
    Stating the organic nature of terrorism, it was summarized that terror can and must be fought but probably can never be eliminated altogether, emphasizing the importance of the vial 3 C elements of security: Cooperation, Coordination, and Consultation.

Supply Chain Management Track

    The Supply Chain Management Track focused on multi-modal solutions and the trend to move away from the outdated trend analysis to real-time asset tracking and information as well as modern-time options generated by means of IT solutions to connect supply and demand.
    Connecting China and Europe by means of rail links was one important topic and the “optimal transport mix”—where such a thing exists—another. The envisioned reopening of the Silk Road for road transport of goods from the Far East, proposed by the International Road Transport Union IRU, here must be called a rather crude byline, given distance and obstacles involved.
    Again, the focus was on improving information and transparency in transportation throughout the supply chain. Robert Mellin, Head of Distribution Logistics at Ericsson was at the center of the discussion.

Highlighting Regulations

    The regulations track must be called another highlight of this year’s WCS, since it summarized important regulatory updates in one comprehensive track.
    Chaired by Dough Brittin, the cost impact of regulatory measures on airlines was identified, followed by a short recap of the essential regulatory background on pharma EU Good Distribution Practices (GDB), delivered again by Nina Heinz who delivered a clear message: The patient comes first, which makes all the difference for life science customers and makes SISPQ (Safety, Integrity, Strength, Purity and Quality) an indispensable prerequisite for the distribution of such goods.

Going Postal Surprises

    “Why are regulators removing security exemptions for mail – consequences for airlines and other stakeholders” at first glance looked to be a rather dry subject but actually showed some significant insight.
    Delivered by Antonis Kastrissianakis, (left) director Safety And Security at the European Commission, and Bilal Ahmad Khan, program manager Customs and Transport at the Universal Postal Union (UPU), the news is that the European Commission had decided to introduce an advance data submission scheme for postal consignments, which will necessitate an amendment to Article 9 of the UPU Convention. The EU draft calls for data submission for pre-loading and is subject to a phased implementation, starting in 2018 with postal EMS express consignments and later for small parcels.
    In return, airlines will be required to provide receptacle and conveyance data on the consignments, which will also necessitate an adaption of the airline’s cargo systems and considerable IT upgrades at DPO’s (Designated Postal Operators).
    For the latter, the technical research and feasibility studies are still ongoing to gain a maximum from the expected benefits for electronic data submission in terms of security and facilitation.
    While the EDI messaging standards should adequately assist the stakeholders in their attempt to go paperless, the CN 23 postal custom declaration form will also serve as a basis to levy taxes and dues at destination and provide key elements for risk analysis.

The launch of the first commercial 747 flights 45 years ago and the beginnings of the ULD era forever changed the way in which airfreight and baggage was handled. In 2010, Air Canada customized a container to commemorate the 40 anniversary of the ULD.

ULD Contains Itself

    Bob Rogers, VP Industry affairs at Nordisk, kept his important brief about “Regulatory requirements for Safe ULD Operations – a Global and local challenge” much shorter than was desirable—probably because the relevance of this topic is regrettably, even to supply chain stakeholders, not self-evident. For the latter reason, Thus Mr. Rogers spoke to a smaller, but highly attentive audience.
    Mr. Rogers identified the ULDs as what they were—underrated integral components of an aircraft—while explaining the regulatory gaps in regard to their use and handling by shippers, forwarders, and handlers.
    Using the example of the 1998 Fine Air flight 101 crash in MIA, (which was attributed to improper cargo handling and loading), Mr. Rogers explained the implications of the US-FAA’s AC (Advisory Circular) 120-85 to the cargo industry and how AC 120-85 simply translates the abstract language of the FAR (Federal Aviation Regulations) into cargo and ULD-specific actions and requirements.
    He emphasized that this will put all stakeholders under pressure to drastically improve compliance in regard to ULD use. It is expected that there will be further clamping down by the FAA and other regulators on non-compliant stakeholders in the near future. He identified the key elements contributing to non-compliant practices: the recent growth in cargo tonnage and volume, and the expanded footprint, with no corresponding increase in spending on training, compliance and infrastructure.

Going South At The Border

    An update on “Single Windows/One Stop Border/Mutual Recognition Security Agreements” provided some valuable insight into how difficult it is for stakeholders in the airline industry to take advantage of integrated border regulations and the complexity of solutions and tools applicable.

Update Bali WTO Agreement

    Another update on “How will the WTO Bali Trade Facilitation Agreement impact States from a regulatory perspective” was delivered by Tom Butterly, deputy director Economic Cooperation, UN ECE.
In a nutshell, full implementation of the Bali agreement should remove trade barriers and create a level playing field for international trade as well as stakeholders in the transport chain, thus doing away with a multitude of obsolete protectionist measures.
Don Vito

Dear Geoffrey,

   I was very disappointed to read in your latest FlyingTypers a reference to the IATA Economist, Julie Perovic, as a "money honey". Flying Typers has made a point of showcasing the variety and range of women working in air cargo at all levels, for which it deserves credit. It is a shame that you couldn't extend the same courtesy to Ms. Perovic who, as an experienced and skilled economist, should be judged on the quality of her analysis and on no other factor.

Yours truly,
Lise-Marie Turpin
Vice President
Air Canada Cargo

Dear Lise-Marie,

    We truly regret that our use of "money honey" has offended you—that was certainly not our intention, and we are mortified to think we may have caused offense.
    While the term “Money Honey” has been used in a derogatory sense before—most famously in the Bay City Rollers song by the same name—to indicate a woman only interested in money; i.e., a gold digger, the term has enjoyed an about-face in recent years due to the reclamation and reinvention by Maria Bartiromo (pictured here).
    In the late 90s, Bartiromo became the first woman to broadcast from the floor of the New York Stock Exchange. It’s undeniable that her financial contemporaries nicknamed her “Money Honey” in a sexist attempt to undermine her efforts, but Bartiromo took the slight and did something bold and revolutionary with it—she owned it, reclaiming it for her own and turning it into a positive.
    In 2007, the “Money Honey” and “Econo Babe” (as she was also dubbed) essentially gave her critics the bird when she used “Money Honey” as a brand name to market children’s toys that teach children financial responsibility. Like many of her female contemporaries throughout time, Bartiromo took something that was meant to hold her down and used it to elevate herself and change the world around her for the better.
    Again, we sincerely apologize to you and Ms. Perovic if the term offended you in any way, and we also send our sincerest apologies to all of our FlyingTypers readers and those in the cargo community who felt slighted, hurt, or upset by the term. We used it in the spirit of venerating, not denigrating, an incredibly successful woman in her field.

Every good wish,
Geoffrey

At first blush, it appears that Jim W. Butler 42-year-old president of American Airlines Cargo is not much of a desk man. In his first year as the airline’s top cargo officer, he logged close to 200,000 miles touching base throughout its domestic and international systems, which he acknowledged left him somewhat “terrified”.

Click To Read

     Words & Music—While Miros, the hurdy-gurdy man, plays in spring-like weather in front of the Brandenburg Gate in Berlin, Germany, delegates at IATA World Cargo Symposium in Shanghai learned that WCS would be held in Berlin next year.
     After several sessions were presented in Mandarin this week, some wonder whether the same will hold true for a 2016 event spoken in German . . .

     IATA World Cargo Symposium (at least the public portion) concluded Thursday, with the morning dedicated to further “subject matter tracks,” while the afternoon belonged to the closing plenary.
     The “China International – Entering Chinese Market” track—in the English language—was all about entering, accessing, and competing in the Chinese air transport market.
     China as the current world’s largest economy is a market forwarders, integrators, and airlines cannot do without.
     Ulrich Ogiermann, (left) chief officer cargo at Qatar, provided invaluable insights about the challenges foreign enterprises face when seeking access to the vibrant Chinese market and the strategies to employ in order to cover the specific needs of this market as well as making Chinese business a sustainable and lasting one.
     Carlos Tornero, IATA legal counsel, briefed the audience about freedoms of the air and current developments in regard to Open Sky agreements as well as multilateral agreements.
     Gert-Jan Jansen, (right) managing director, Seabury Group provided some background about future trends and developments in China’s air cargo market while Liao Zhi Yong, IATA manager Business Process and Standards, outlined the entry requirements for foreign forwarders into the Chinese Market, the requirements for incorporating in China as well as obtaining a Cargo agencyship.
     The subject of partnering with existing Chinese forwarding companies and thus expanding one’s reach into China without setting up branches was explained by David Yokeum, CEO of the WCA forwarding network of independent forwarders.

Action DGR & Cargo Ops Standout

     Topping the list of important tracks were “Cargo Operations and Handling” and the “Dangerous Goods” tracks.
     The Cargo Operations and Handling track featured some high-caliber industry expertise from Emirates Manager Cargo Global Operations Pichuyer Balasubramanian, BFS GM Cargo David Ambridge, Air Canada VP Cargo Lise-Marie Turpin, and Nordisk VP Industry Affairs Bob Rogers.
     This was all about handling—best practices to be employed, industry and customer expectations, legal and operational challenges, as well as how to deal with and properly streamline the increasingly complex processes of handling.
     Chaired by David Ambridge, COAG (IATA Cargo Operations Advisory Group) delivered an update and benchmarked the progress and achievements since WCS 2014 in LAX, which included detailed outlines regarding the implementation of IGOM (IATA Ground Operations Manual), the adaption of the SGHA (IATA Standard Ground Handling Agreement) to a much needed modernization, and the Facility Capability Matrix.
     Briefly touched were the subjects of air mail and its future in the times of e-commerce as well as an update about the most neglected part in airline operations: The ULD. Delivered by Bob Rogers of Nordisk, this was essentially an expanded version of the update delivered during Wednesday’s “Regulations” track.
     A panel discussion covered “Supply Chain Optimization” and drove a lively exchange of arguments and down-to-the roots work on how to achieve the 48 hours reduction in transit time IATA had proposed.
     The Dangerous Goods Track was dedicated to the most controversial and disputed issue in air transport currently: The transport of Lithium batteries by air.
     Teun Muller from the Dutch Ministry of Infrastructure provided a state-of-the industry runabout, focusing on the switch to “Competency Based Training” (CBT) currently underway; the recommendations made by the multidisciplinary Working Group on Lithium batteries by air and the changes that took place in the multimodal UN Recommendations.
     Competency Based Training or CBT is one of the industry’s high hopes in order to improve compliance with the regulations and avoid accidents: A combination of knowledge, skills and attitude will, at least in theory, result in a (more) superior job performance. As Mr. Muller explained, CBT is function driven—main benefits are the support of SMS (Safety management Systems) and improved on-the-job performance, and is designed to ensure that trainees can perform the job at hand.
     Further restrictions loom on the horizon for shippers of Lithium batteries. For the time being, while further restrictions applicable to Lithium batteries packed with or installed in equipment are still disputed at the UN level, the exemption from having equipment with so-called excepted batteries installed to be marked and documented will be further restricted as no more than two packages per consignment will be permitted to be shipped without the Lithium Battery handling label identifying the nature of the cargo to the carrier.
     Jason Abbott, director Engineering at AmSafe Bridport answered what was probably the most pressing question of the audience and industry: What can be done to mitigate the risks of shipping Lithium batteries by air? In a detailed and knowledgeable presentation, Mr. Abbott provided insight about the efficiency of both passive and active fire containment systems—passive containments, such as thermal covers (FCC), and active containments such as fire resistant cargo Containers (FRC), are able to contain a fire for up to six hours—likely sufficient time to divert the aircraft and make a safe landing, thus avoiding fatalities as in the case of UPS006 in 2010.
     Peter Hunt, (left) Airline Ground Safety manager for Cathay Pacific Airlines delivered a likewise knowledgeable presentation about Risk Mitigation Strategies. He did not fail to emphasize at the very beginning of his presentation that “Lithium batteries are everywhere”—and, especially in the case of Hong Kong, this means they’re also in the mail, mostly undeclared, and often counterfeit.
     The issue of intentionally undeclared or misdeclared shipments by willfully non-compliant shippers was addressed by Mr. Hunt in no unclear words.
     Last but not least, Dave Brennan, assistant director Special Cargo Standards, explained the options regarding “Automation to improve customer experience, taking the paper out of the (DG Shipping) process.”

e-cargo & other final tracks

     The e-cargo track was, naturally, all about e-cargo. Speakers and panelists represented the drivers of IT development throughout the industry such as Uwe Glaser, Cargomind; Scott Sangster and Jos Nuijten from Descartes; Sandeep Fernandes, Mercator; and Thilo Schaefer, Lufthansa.
     Whether it was “Behavior of the digital customer,” “e-link: delivering great customer experience,” or the “Role of Cargo 2000 in building a Digital Industry”: No digital stone was left unturned.
     A panel discussion “What is the next step in e-Cargo transformation” identified the current state of digital processes within the industry and provided a look at what is to come and how it will affect the cost base, interaction with the customers and other stakeholders, as well as streamline efficiency.
     Subtitled “Thriving in the Digital Age: Elevated Experiences, Interactions and Analytics,” this track was about opportunities and chances as well as synergies, cost reductions, and efficiency gains created by modern software solutions in the cargo industry.


Exit Doors To The Left

     The overabundance of compressed subject matter information may have worn out the delegates—attention to mobile devices went up again during the closing plenary—among those who participated, at least, since many delegates had either already left or were quietly conducting business in the corners.
     James Woodrow, director Cargo at CX and chairman of the IATA Cargo Committee, provided a brief update about the major results from the executive meetings, which took place during the WCS—the CES Cargo Executive Summit, the Cargo Committee meeting, and the C2K Board meeting.
     Again, the most notable message Mr. Woodrow sent was about the omnipresent Lithium batteries.
     Stating “IATA can’t do it alone,” Mr. Woodrow called for greater efforts and diligence all throughout the supply chain and involving all stakeholders; another major result of the executive meetings were resolutions to further push e-freight and in particular the e-AWB.
     While obviously many attendees found the lengthy FACES session about “Identifying and nurturing the future leaders of air cargo” overly long, attention went up when it was time for the “innovation awards.” These were, who would have thought, presented by Des Vertannes, former IATA Head of Cargo and currently un-retired from his retirement just a year ago.
     A rather unintended consequence of Mr. Vertannes presentation might have been that Mr. Hughes, IATA’s current head of cargo, looked rather dull compared to the much more lively Des Vertannes.
FACES finally kicked off and miraculously, all three finalists (out of 25 candidates in total) who had been invited to Shanghai came from the Netherlands—something which prompted Mr. Vertannes to underscore that IATA had no hand in that.
     The three finalists were:
          CANTrack by Floris Kleijn, CHEP Aerospace Solutions;
          CLIVE by Niall Van de Wouw, CLIVE;
          Cargo Claims by Kiona van de Burg, Cargo Hub
     The 1st prize award of $20,000 USD was won by CANTrack of Chep Aerospace Solutions, featuring a ULD Tracking solution powered by small solar panels generating the power for OnAsset ULD tracking devices, which will avoid the cumbersome process of recharging batteries or replacing them frequently.
     IATA announced the location of the next WCS in March 2016; this time, it will be in Berlin, Germany, and we are eager to see whether IATA will continue the practice of providing tracks in the local language.
     Another update came after WCS 2015 had already been wrapped up: The WCS app (which most delegates seem to have installed on their mobile devices) provided the following announcement:
     “As a WCS delegate, you may have received a mobile charging device as a giveaway. Please be sure to pack this device in your carry-on.
     “In accordance with rules, do not place in your checked luggage.
     “Have a safe flight!”
     FlyingTypers must categorically deny that our report of the WCS Power bank giveaway two days ago had anything to do with this announcement.
Don Vito

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