The razing of vast swathes of pristine Indonesian forest in Sumatra and Kalimantan by palm oil companies has left both locals and the city dwellers of Kuala Lumpur and Singapore smothered in smog clouds. At its worst, as your correspondent’s throttled lungs can testify, the air, even in afflicted city centers, is dangerously putrid, and vision can become so limited it is more reminiscent of a mountaintop snowstorm than midday on a major high street.

Nowhere To Run, Nowhere To Hide

     While caught in this tropical perfectly terrible storm, for no particular reason your correspondent thought of the air freight industry. Like the people of Singapore and KL, it has been beset over the last month by a welter of negative headwinds that it cannot dodge.
     Indeed, for much of the last year, the outlook has been almost relentlessly bleak. China’s ‘soft landing’, global share price and currency tumult, the recessionary look of some BRIC and European economies, war in the Middle East - all have left analysts scratching around for any signs of economic or trade positivity.
     U.S. growth is the exception, not least for Transpacific trades, but fears surround the potential impact of an income rate rise by the Federal Reserve later this year and the impact this might have on currencies and consumer demand from emerging markets.
     And elsewhere the optimism cupboard is decidedly bare.
     Speaking on the sidelines of the GLCS LogiSYM conference and expo in Malaysia in Kuala Lumpur last week, the logistics procurement manager for a major Europe-based electronics company said he thought rates would remain low into 2016 because there was little on the demand side to suggest a major rebound, except for the traditional end of year retailing peak. “Although even then,” he added, “most retailers already have inventory so at best I’d expect a smallish bump linked to new product launches.
     “We did use air more ahead of China’s Golden Week holiday [when factories close for at least a week] at the start of October as we needed to get product out, but it was a short-term thing. We use shipping as much as we possibly can just like everyone else.
     “The economic outlook in Europe is not good. The U.S. is better. China, is ‘wait and see’ for us.”
     Yet despite all the poor economic forecasts, the latest round of statistics on air freight rates and growth were surprisingly upbeat, at least in the context of a stricken global economy.
     IATA’s figures for August revealed a stabilization in global air freight markets after two months of contraction. Global air cargo volumes rose 0.2% compared to the same month a year ago. Although such modest growth is hardly a lightning rod for freight managers, it is a welcome crutch after the year-on-year declines recorded in June and July.
     As is becoming usual, most of the positivity came from carriers in the Middle East which saw collective growth of 10.4% in August. European carriers saw marginal 0.7% expansion, although this was offset by a 1% decline from Asia Pacific based airlines, a surprising 3.3% contraction in North America and a 7.3% decline in Latin America.
     Drewry’s East-West Air Freight Price Index also recovered in August, up 3.7 points to a reading of 93.7 after also recording a 2-point recovery in July. The index was lifted by strengthening rates on Asia origin trades into North America and Europe, despite notable declines in pricing on both legs of the Transatlantic.
     The analyst was upbeat for September. “Drewry expects air freight pricing to have strengthened - albeit low compared to the same period last year - through September, and for this to continue into October as new product launches boost short term demand,” reported Drewry Sea & Air Shipper Insight.
     August figures from the Association of Asia Pacific Airlines, however, offered only limited positivity as the Asian carriers most closely linked to the world’s leading export markets reported relatively weak demand.
     AAPA said the weakness in air cargo markets had extended through August, with demand in freight ton kilometers terms recording a slight 0.3% decline compared to the same month last year. Offered freight capacity grew by 3.3% and the average international cargo load factor of carriers fell by 2.2 percentage points to 61.0% for the month.
     Andrew Herdman, AAPA Director General, said that while passenger markets had seen high single-digit growth over the first eight months of the year, cargo markets had reflected a further slowdown in world trade.
     “Overall, however, after accounting for the initial growth spurt earlier this year, air cargo demand has still registered a 3.0% increase for the first eight months of the year,” he added.
     "Looking ahead, the outlook for air passenger markets remains positive, with competitively priced fares underpinning robust consumer demand. The outlook for air cargo markets is more uncertain, given signs of weakness in global trade activities, but should see some seasonal demand as we move towards the end of the year. "
     Tony Tyler, IATA's Director General and CEO, was also cautious about reading too much into the improvement in air freight indicators in August. "After declines in June and July, signs of a stabilization in air cargo are welcome,” he said. “But all is not well.
     “Total volumes are down 2% compared to the end of 2014. And some of the key reasons for the earlier weakness - for example , downgraded growth expectations in emerging Asia, and the rebalancing of the Chinese economy toward domestic consumption - are still there. Even though world trade volumes have picked up slightly, the industry will have to work hard to match the strong finish to 2014."
Sky King

   Berlin Tegel (TXL) and Hamburg (HAM) are now United Cargo TempControl addresses, bringing the number of certified locations worldwide to 55 and counting.
   United connects TXL with daily Boeing 767s from Newark Liberty (EWR).
   HAM is served daily from EWR via B757s, but will be revamped to B767 dailies on October 25.
   UA Control Tower plans, coordinates, and monitors each step of every TempControl shipment systemwide.
   An interesting look at UA Cool Chain operations from an airport tour at O’Hare a few years ago presents the growing importance and sophistication of the process.
More: unitedcargo.com
Flossie

Bob Crandall
Click To Read

     Dangerous Goods Regulations (DGR) (or hazardous materials regulations, as they are called in the U.S.), regardless of transport mode, are not easy to understand, and there is quite some background knowledge one must possess in order to correctly apply the regulations.
     One sure driver for correct background knowledge is typically achieved thorough training.
     That said, it must be noted here at the top that the language employed in DGR manuals is rather dry and of elaborate bureaucratese.
     Unfortunately in some cases, the way these manuals are presented does not aid all that much in the comprehension of the issues at hand.
     The IATA Dangerous Goods Regulations, IATA’s field manual for the transport of Dangerous Goods by air, comes in a different structure, with graphic examples, notes explaining particular issues, and a user-friendlier format.
     However the IMDG code (applicable to the maritime transport) and the ADR, the RID, and the ADN (applicable to the transport of dangerous goods by road, rail, and inland waterway in Europe) appear without such enhancements, illustrations, and examples. That can often leave the user looking for some clear direction in these matters, instead suspended in a regulatory “what if” limbo.

Enter Help-Mates For Manuals

     Today a multitude of publishers and publishing houses are in the business of “assisting” the user of these regulations by means of more or less comprehensive and useful publications aiming at clarifying particular issues.

Take Lithium For Example

     Guides for shipping Lithium batteries have become quite popular lately; apparently no publisher in the helpmate genre can do without at least one missive in the catalogue.
     A well-known publishing house in Europe has recently been promoting their “Lithium batteries shipped right—an illustrated guidance,” subtitled “in the regulatory context of 2015 and an indispensable basis for internal trainings and the drafting of standard operations procedures.”
     The booklet rightly explains the dangers of non-compliance and the considerable penalties involved.
     The example here cites the case of D & M Custom Injection Molding Corp., which the booklet explains was fined $168,000 for shipping undeclared Lithium batteries inside e-cigarettes that “did not meet the requirements of section II of Packing Instruction 970 IATA.” Click Here.

The Rub

     The problem here is that apparently the authors of this booklet did not further research the subject at hand.
     Had they done so, it would have revealed that likely the IATA DGR was not applicable since the transport in question was a U.S. domestic shipment.
     The small Lithium metal batteries installed in the equipment were then and still are exempt from the regulations, e.g. they could have been shipped undeclared, since 49 CFR (Rev. Oct 1, 2009) and SP 188 and SP A 101 permit such practice up to a net quantity of 5.0 kg of Lithium batteries installed in equipment per package.
     Only because D & M shipped a large quantity with five packages totaling 7.6 kg net battery mass per package, and because the packages also contained a flammable alcohol in Class 3 (also in an undeclared manner), was the entire shipment cited by the FAA.

D&M Beat The Rap . . . Sort Of

     And, by the way, D&M appealed the fine and whilst their appeal was rejected, the fine was reduced by almost one third to $110,000. More Here.


What Is Acceptable?

     At the time of the incident described here, the so-called “excepted” Lithium batteries were addressed by section 1 of Packing Instruction 970 in the IATA DGR 50th edition—but in 2010 that changed to section II.

Here Is The Point

     There are many other inconsistencies.
     So what’s the point here? It’s just another badly written book, so why bother?
     The issue at hand is that the booklet or any of these attempts to advance “expertise for a price in DGR” needs to be viewed carefully.
     Booklets and manuals directed toward the safe transport regimen in DGR—no matter who endorsed them—are about transmitting, in easily understood terms, correct rules & procedures. The omnipresent point here is that in a world hungry for clear-cut information, this self-proclaimed “intimate insight into how the regulations work” and pertinent changes is in many ways uninformed baloney.
     Following the outlined recommendations may result in fines or worse, since even basic facts are wrong.
     Uninformed, shoot-from-the-hip helpmates are nothing more than an attempt to make some money, whatever the cover letter promises.
     The publications also cast a dark shadow on the honest attempts to publish and really assist and help the shippers with their often-cumbersome task.


Some DGR Alternatives

     The IATA DGR is great, but for some may be too expensive.
     But if Lithium information is on your menu, try the IATA LBSG (Lithium Battery Shipping Guideline), which contains only the regulations applicable to Lithium batteries, or the Labelmaster Air Shipper might be money better spent to get the information needed.
     All three are excellent choices.
     But like anything else, getting through the minefield of less than helpful “helpmate” publications of DGR regulations can be dangerous all by itself.
Jens

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