On September 11, 2001, Jamaican-American artist Michael Richards was working in his World's View studio, courtesy of the Lower Manhattan Cultural Council (LMCC), on the 92nd floor of the World Trade Center's Tower One.
  One of his final sculptures, Tar Baby vs. St. Sebastian (1999), depicts a Tuskegee airman (cast from his own body) being pierced by several toy airplanes, an eery and prescient statement piece given the circumstances of his passing.
  Richards was avidly exploring themes of aviation and flight at the time of his death at 38 years old.
  The LMCC's 2016 summer exhibition at the Arts Center at Governor's Island in New York City has been dedicated to the memory of Richards. Featuring a selection of his drawings and sculptures, including Tar Baby, the exhibition will close the summer season, ending on September 25th.
  Richards famously said, “The idea of flight relates to my use of pilots and planes, but it also references… the idea of being lifted up, enraptured, or taken up to a safe place—to a better world.”
  Now at home in the stars, we hope that Richards has found his safe place.
Flossie Arend

      Cargo executives might be concerned about low yields and poor pricing on key cargo lanes, but the shipping industry is in many ways struggling even more.
      Without the panacea of surging passenger demands to balance revenues, the world’s container lines are coming to terms with bearish demand and a long-term downturn in freight rates. The results for most bottom lines have been disastrous.
      Take global leader Maersk Line, for example. The shipping behemoth racked up a whopping loss of USD $151m in the second quarter. Compare that to the profit of $507m recorded a year earlier. The reasons for the downturn in its fortunes were clear—despite increased loadings, Maersk’s average freight rate decreased by almost a quarter year-on-year.
      Maersk said container shipping demand growth was running at 2 percent, but the global container fleet was expanding at some 6 percent. “Consequently, the market conditions continue to be very challenging,” said the Line. “Unit costs reached an all-time low of USD$1,911 per FFE in the second quarter of 2016 due to a clear cost focus and very tightly managed capacity.”
      The average freight rate continued to fall throughout the second quarter of 2016 due to lower bunker prices, weak demand, and overcapacity. “Compared to Q2 2015, Maersk Line’s average rate declined by 24 percent to USD $1,716, which is the lowest average freight rate ever reported by Maersk Line,” read a statement.
      Maersk has a global network but its bread and butter market is Asia-Europe and the prolonged sluggishness of the European economy has understandably had an effect. But Europe is not the only depressed market.
      Hong Kong-based OOCL focuses more on intra-Asia and Transpacific markets and, there too, performance has been dire. The line saw revenue fall 15.3 percent and 14.7 percent year-on-year on Transpacific and Intra-Asia/Australasia services, respectively, in Q2. This despite liftings rising 14 percent on the Transpacific and 4.5 percent on Intra-Asia/Australasia trades.
      According to leading shipping analyst Drewry, container volumes on key lanes grew by just 2.6 percent on average in the first half of the year. This followed the measly 0.8 percent growth recorded last year, the second slowest growth on record (2016 is on course to be the third lowest, after the height of the financial crisis in 2009).
     The entry into receivership of Hanjin Shipping—the world’s seventh largest line by capacity—in late August served as warning to shippers and forwarders that the biggest global container players can no longer be depended on to cope with steady losses by cutting costs, reducing capacity, or relying on government support. FlyingTypers will look more closely at the fallout of Hanjin’s demise in an upcoming issue, but its plight starkly illustrated the fragile finances of many shipping lines.
      The problem for carriers is that they are unable to deal with costs as quickly as revenues have declined due to slower than anticipated demand. And capacity continues to expand.
      With first half revenues down by some 18 percent on average, liner incomes are due to shrink by around $29bn this year compared to 2015 sparking further consolidation, according to Drewry. “In the current declining revenue era for box carriers, the pressure to find cost savings is mounting,” said Drewry. “Prolonged losses will increase the likelihood of more container M&A or industry consolidation among carriers.”
      Maersk is seeking cost cuts totaling $250m per year in 2016 and 2017, a program that will include reducing its personnel by some 4,000. “We believe that freight spot rates have bottomed out and we anticipate that they will increase in the third quarter due to seasonal factors,” said Søren Skou, CEO of Maersk Line.
      “However, rates will remain under pressure due to overcapacity and low demand. And while we see improvements in, for example, European imports, we maintain our expectation that the demand for container shipping will only grow by 1-3 percent in 2016.”
      Ironically, Hanjin’s struggles gave rates an early September boost, which may help its rivals recoup some of their 2016 losses during Q3 and the Korean carriers customers urgently seek alternative slots ahead of the holiday season. But any upturn is likely to be short term given the market’s fundamental imbalance.
      The message for airline cargo executives? It could be worse…
SkyKing

   Turkish Cargo gained its IATA CEIV Pharma Certificate last month and also went “Hands Across Africa in late August with face-to-face meetings. Regional management visited the top 10 agencies in South Africa to gain a sense about Turkish Cargo services via JNB, which launched in May.
   The team thanked customers with commemorative plates and assured that the flag carrier is operating all services normally, connecting the world via Istanbul.

John Lloyd
Director of Cargo
Virgin Atlantic Airways Ltd.

(On September 11, 2011) I was playing golf! We were hosting some Japanese customers in London and we were being soundly beaten. We took a break after 9 for drinks and that’s when the barman said “a plane has flown into the World Trade Center.”
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