Performance Not Promises

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   Vol. 16 No. 19
Thursday February 23, 2017

United Cargo Saddles Up For The Long Ride

Jan Krems     “Unstoppable” United Cargo saddled up for the long ride as more than 300 United Cargo team members from 36 countries on five continents came together recently in sunny Houston for their annual Worldwide Meeting.
     This was a distinct change in climate – previously the team has gathered every February in cold, snowy Chicago.
     In homage to the new locale, United Cargo President Jan Krems and team combined the serious business of the conference with a celebration of the spirit of the legendary cowgirls and cowboys of Texas history.


Opens The Drive

     But it wasn’t all just hats, boots and spurs and barbecue.
     As Jan noted in his opening address:
     “There are strong similarities between what it took to lead the cattle drives from Texas in the 19th century and the qualities needed to lead in the cargo business.
     “Those men and women were pioneers in their industry, flexible and agile, and tough but fair.
     “There were also independent thinkers who knew how to work together as a team. And they weren’t afraid to get their hands dirty!”


Best Award Unstoppable United


      The title and theme of this year’s meeting was “United Cargo: Unstoppable.” Recognition of the team’s unstoppable spirit was a key component throughout: 26 team and individual Annual Achievement Awards and 11 individual Extra Mile Awards for extraordinary service to customers and co-workers were presented during the meeting. Attendees also participated in several breakout sessions detailing new programs and strategies for enhancing Cargo’s service to their customers and their contribution to United’s success.



building Hygiene kitsThe Charity Case

     The session focused on activities benefitting charitable causes is a highlight of each year’s United Cargo gathering.
     This year, team members partnered with innovative non-profit organization Clean the World to build over 5,000 hygiene kits that were donated to the Society of St. Vincent DePaul in Houston. Clean the World collects discarded hygiene products and distributes them to those in need, leading to prevention of hygiene-related deaths while reducing environmental waste.
     “Clean the World works with thousands of hotels around the globe, but United is the first airline to partner with them,” said Jan.
      “Our team members know we have many advantages in life others do not share, and the part of annual meeting where we ‘give back’ is just a part of our team’s efforts throughout the year to share our blessings.”



The Spirit of United

      Reflecting on the energy and attitude he experienced at the meeting, Jan said, “There’s a new spirit at United, and the strategic plan in progress to build the best airline in the world harmonizes perfectly with Cargo’s long-term aspiration to be the best belly carrier in the world. The United Cargo team is contributing to and inspired by the new spirit.
     “We feel we are unstoppable, so now our intention is to go out and prove that every day.”
Geoffrey


     Here is a lovely recollection and look ahead at airports.
     A quarter century ago, Geoffrey talked about airports in his book Great Airports Worldwide, an 800-page opus created for ACI that included complete histories of 131 global aerial gateways.
     Here, in less than an hour, is an inside look at the past and future. Start the video at 10 minutes in to hear Geoffrey expound on our history.
     Welcome to the airport.
     We appreciate your comments.
Geoffrey

 

Implications Of A Trump Trade War

     Wolfgang Lehmacher, Head of Supply Chain and Transport Industry at the World Economic Forum USA, told FlyingTypers that supply chain managers should hope for the best but prepare for the worst under the new Trump Administration.

FlyingTypers: What is your take on how the Trump administration’s policies (as far as they have been communicated at this stage) will affect trade and transport demand?

Wolfgang Lehmacher: So far, the cancelation of the Trans-Pacific Partnership (TPP) remains the only trade and supply chain-related measure of the new U.S. President. But a mooted 45 percent import tax on Chinese products is looming.

FT: What would new import taxes on Chinese products mean for the U.S.?

WL: The U.S. is the world’s largest importer—it’s a bit ahead of China. If the U.S. administration imposes high taxes on products imported from China, businesses and consumers would need to prepare for multiple consequences. Prices of Chinese products on the U.S. shelves would rise—taxes are costs usually passed on to consumers. Some products would vanish. Others would deteriorate in quality as replacements might not all meet the same standards.
      With the products, sourcing countries would also change. This would lead to major shifts in the product portfolio of manufacturers and retailers. Those shifts usually drive adjustments in the supply chain. The costs that come with these changes and the reduced set of options available for business would force cost optimization efforts, increased automation and layoffs, and would push some companies out of business.
      [This is] all if China itself does not choose to subsidize its exports to the U.S., which is an option too.

FT: How likely is a trade war between the U.S. and China?

WL: Although the option cannot be ruled out completely, I am not really anticipating a trade war. The consequences in the past have been too negative.
      For example, what was experienced after the U.S. government implemented the Smoot-Hawley Tariff act, which intensified global nationalism in the 1930s. Although large parts of the population seem to have lost memory and understanding about the broad range of benefits globalization and international trade has brought us all, governments will most probably try to avoid the severe negative consequences of a trade war.
      However, protectionism will continue to be part of our life as it has always been in the past. And healthy protective measures can help governments avoid sudden shocks. At the end, market realities should prevail to avoid the unnecessary burden and negative consequences of long-term protective measures for consumers, citizens, and the nation overall.

FT: Where does increase protectionism from the U.S. leave businesses and consumers?

WL: Well, the U.S. is dependent on imports. Electronic equipment ranks first, with close to 15 percent of total U.S. imports. In this category, mobile phones make up one third, followed by other electronic products such as integrated circuits, TV receivers, cables, and power units.
      The U.S. economy is integrated in the global production and value platform. This integration has brought lower prices and new business and job opportunities to the U.S. and other countries in the world. If companies are forced to set up specific U.S. operations they would globally and locally lose flexibility and scale advantages.
       
FT: What does this lack of flexibility mean for consumers?

WL: This disintegration and disaggregation of the U.S.-related supply and value chain would roll back the developments and advantages gained over the last decades and put manufacturers, and as a consequence, consumers, in particular U.S. consumers, at a model and price disadvantage.

FT: How should transport providers prepare for these potential changes in demand?

WL: The logistics coverage and high performance of transport networks in the U.S. are able to provide the necessary support for a potential economic restructuring, apart from pilot and truck driver shortages, which could hit the U.S. market anyway at a certain point in time.
      Protective measures might to some extent boost the growth of domestic intra-U.S. transportation, which would also mean additional growth for U.S. airlines and the domestic cargo business of airports. International transport costs on the China-U.S. lane might increase due to reduced volumes. Some lane specialists may struggle. Traffic from other origins could rise. But it is the U.S.-bound flow of goods that companies and governments need to watch closely.
      While China-U.S. traffic might slow, other lanes might see unexpected growth. In light of potential renegotiations of the North American Free Trade Agreement, the cargo volume development between the U.S., Canada, and Mexico remains a question mark.
      While the potential decline in U.S.-bound China traffic on the oceans and in the air might hurt certain logistics and transport companies, the remaining lanes and the other nations’ domestic markets might offer additional growth.
      Potentially, countries all over the world could see more cohesion, more connectivity, more growth, and more activity in production, transport, and logistics than they imagine today. But currently uncertainty prevails.

FT: Will people already be factoring this risk into future supply chain contingency plans, or should they be?

WL: At the end, we will need to see what is actually going to happen. As Donald Trump realizes (with the refugee and visa ban) that campaign promises cannot always be simply put in place, he might reconsider his position on trade.
      Significant taxes on imports from China would not only have a negative impact on respective air freight movements, but the prices of the products as well. People might show their strong disapproval if, for example, the prices of mobile phones suddenly rose significantly.
      Anyway, whatever we might think and hope for the future, companies need to develop different scenarios and assess various probabilities of alternative futures to drive their contingency planning and top-level decision-making. Cargo executives at airlines and airports for example need to watch the trend and behavior of their customers, too. Luckily, the cargo transport industry is one of the first to see potential shifts coming.
      Dependent on good predictive capabilities and the specific risk appetite of individual players, its leadership can drive operational and investment plans to counter such changes. Due diligence is also required by the leadership of governments and international organizations, which need to factor in new possibilities and risks into their policy roadmaps going forward—for the good or the bad.

FT: Where does protectionist sentiment in the U.S. and the UK leave the rest of the world?

WL: The current level of risk presents a great opportunity for European citizens and politicians to remind themselves of the values and basic idea of the European Union: ease of the movement of people, capital, goods, and labor to help economic growth, quality of life, and peace.
      Furthermore, there is a chance that the current situation in the U.S. and the U.K. might melt Asia, Africa, and continental Europe closer together, opening up unexpected opportunities for growth and stability. Trading between countries on the three continents could become easier, which would drive economic growth and benefit sea and air freight companies. The upcoming elections in France and in Germany in 2017 are critical events.
      The One Belt, One Road—the so-called OBOR initiative—which has the potential to become the largest area development project of all time, offers unprecedented opportunities across several continents and along the supply chain. More than 50 countries have signed up and more than 100 have declared interest in the project. The creation of over 70,000 jobs is expected. Fifty-one billion dollars has been pledged for development and fifty-two economic cooperation zones were established in eighteen countries to set up OBOR for success. Twenty-eight existing airports have already been expanded and fifteen new airports built. It’s a potential game-changer.
SkyKing


Chuckles for February 24, 2014

     This video shows the possible surface of TRAPPIST-1f, one of the newly discovered planets in the TRAPPIST-1 system.
     Scientists using the Spitzer Space Telescope and ground-based telescopes have discovered there are seven Earth-size planets in the system.
     What does this mean?
     Imagine, for a moment, how Christopher Columbus felt in 1492, finding a whole new world.
Geoffrey


Subscription Ad

     Monday, February 21, was President’s Day in the United States.
     President’s Day is a rebooted name for what Americans once celebrated as George Washington (February 22) and Abraham Lincoln’s (February 12) birthday.
     Here is a lovely undated picture of Abraham Lincoln.
     After Lincoln was assassinated in Ford’s Theater in Washington, DC, on April 15, 1864, at the age of 56, the great American poet Walt Whitman wrote these words:

When lilacs last in the dooryard bloom’d,
And the great star early droop’d in the western sky in the night,
I mourn’d, and yet shall mourn with ever-returning spring.
Ever-returning spring, trinity sure to me you bring,
Lilac blooming perennial and drooping star in the west,
And thought of him I love.

Geoffrey

Abraham Lincoln

If You Missed Any Of The Previous 3 Issues Of FlyingTypers
Access complete issue by clicking on issue icon or
Access specific articles by clicking on article title
FT120616Vol. 16 No. 16
Weekend On The Moon
First Chuckles for February 13, 2017
Second Chuckles for February 13, 2017
American Is Everyone's Valentine
Urge To Surge Bounceback 2017
Valentine's And Moonbeams
FT120616Vol. 16 No. 17
The Emirates Difference Takes Hold
Chuckles for February 15, 2017
The Trump Effect: India Walks Softly, Carries A Big Stick

FT120616Vol. 16 No. 18
FIATA Talks World Trade 2017
Chuckles for February 21, 2017
Africa Is A Multinational Opportunity
Delta Africa Begins Second Decade
Africa Rising

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