Vol. 8 No. 42                                            WE COVER THE WORLD                                                Wednesday  April 15, 2009

 

Emo Trans Delivers Global Network

     “We are not talking about a crisis but there are opportunities the present global economic situation is offering us.”
     A statement delivered by Jo Frigger, (left, click to view video) Chairman and CEO of the logistics provider EMO Trans USA at the latest Dresden, Germany gathering of the worldwide EMO Network Group. Indeed there are a number of opportunities in different corners of this globe emphasized by some of the attendees.
     Take small Djibouti at the horn of Africa, a relatively stable and tranquil isle in the middle of a weird surrounding of surging pirate attacks at the Gulf of Aden, civil wars and military actions.      “Indeed Djibouti is a very active spot but a very stable country,” confirmed General Manager Reuben Ahronee (right) of local EMO Trans partner Massida Logistics. Which obviously stimulates business since “both Djibouti and neighboring Ethiopia are presently having a growth rate of three to five percent,” stated the manager. Djibouti’s crown jewel is the harbor which has developed into a big transshipment hub in recent times.
     “Nearly 80 percent of goods that arrived by ship are sent to the Ethiopian market,” Reuben illustrated the flow of goods. Things are even improving due to enhanced infrastructure built by terminal operator DP World that runs the harbor.
     “Ever since the new container terminal has opened, the gate’s volumes are steadily increasing,” said manager Reuben. Therefore, referring to Jo Frigger’s opening remarks, his message to Dresden’s 125 EMO Trans attendees was clear: Djibouti channels ocean freight right into Northeast Africa.
     “Our qualified professionals at Massida Logistics take care of your shipments,” he encouraged the managers of the EMO Trans global network to consider sending their goods for this region via Djibouti.
     Another region with signs of economic recovery is the South Pacific.
     “New Zealand is a comparatively small market that obviously is returning to growth,” said Ian Ahern, Managing Director of EMO Trans Australia and New Zealand. This applies for some parts of Australia too like Queensland, which has maintained a stable growth rate of 2 percent over the last couple of years mainly because of its extensive mining and tourism industry. The region is becoming a hot spot for EMO Trans as well, confirmed Ian.
     “Eighteen months ago we started with two offices offering full forwarding brokerage and logistics services. In addition to Sydney and Melbourne we meanwhile are running stations at Brisbane, Adelaide and Perth plus Auckland in New Zealand,” Ahern told the audience.
     “Strong going imports” despite the crisis were also reported for the Russian market and those of some of the CIS countries like Kazakhstan, Azerbaijan or Moldova by Natalia Titova, Managing Director of Moscow-based agent STS Logistics. Especially Russia offers plenty of opportunities for both air and ocean freight.
     “International producers have invested much money there and established manufacturing sites,” she said. And more business is to come with Russia’s upcoming WTO membership. However, there are still major obstacles for trade like the lack of warehouse space that complies with European standards, the miserable road conditions in many parts of the huge state, poor security standards and complicated customs regulations, Natalia warned.
     “Therefore, it’s a valid asset to have a professional partner right on the spot that knows all about the local business condition,” Jo Frigger lauded the ties of his EMO group with STS Logistics. By adding that EMO Trans is also rolling up the sleeves in the U.S. with three more stations to come in 2009, making it 31 offices in total.
      “This enhances our local reach and gives us an even better access to the market,” said Olen Wood, (pictured right with Jo Frigger, left) President of EMO Trans USA. Further, Olen confirmed that a number of route managers had been hired lately to push business on trade lanes between North America and Africa, Asia, France, Germany, India, Latin America, Middle East and some more.
     “Naturally we reduce our costs as anybody else in logistics does but at the same time we keep investing in people to intensify sales and keep knitting our partnering network closer to enhance our global reach,” CEO Jo Frigger emphasized.
     With encouraging outcome so far.
      “We are not unhappy with the results of this year’s first quarter,” he remarked. Although the air freight volumes went down by small margins ocean freight keeps running strong. As to the balance of 2009, “we remain cautiously optimistic. Being a financially strong independent company we are well prepared to weather the global downturn in business,” Jo stated in Dresden.
     Despite much uncertainty and conflicting instructions, EMO Trans is also ready for the ongoing cargo screening issues. A number of EMO Trans run terminals in the U.S. have already been certified as cargo screening stations and others will follow.
Heiner Siegmund

Up Close & Personal
Click On Image Below To View Video


The revolutionary Emirates Sky Cargo office complex in Frankfurt Cargo City South is barely ready but was officially put into operation by a line of prominent actors on the ribbon with charming company from Emirates ground staff here. Pictured are – from left: Wilfried Hartmann, managing director of Fraport Cargo Services, Henry Hasselbarth, vice president Emirates Central and Northern Europe, Ram Menen, Dr. Stefan Schulte and Reinhard Coldewe, Cargo Manager North- and Central Europe.      

     On one of its very first commercial operations Emirates SkyCargo’s brand new B 777-200-F touched ground at Frankfurt. Reason enough for the incoming chairman of the board of Fraport, the airport operator, Dr. Stefan Schulte to welcome not only the most economical all cargo aircraft in the world but also Ram Menen, Divisional Senior Vice President Cargo, Emirates Airlines.
     Both cut the ribbon at the entrance of the new home of “SkyCargo” here; another “first” at FRA. Commonly the colour of airport cargo facilities around the world is grey. It is so in Frankfurt as well - Emirates new office building is bright red and no other carrier has had this privilege of an individual complex so far in Cargo City South.
     The two key speakers during the event reassured each other after 22 years of fruitful cooperation to continue and to always carefully observe the needs of shippers, consignees and the agency community in order to provide what the market requires. Frankfurt remains key hub for Emirates SkyCargo in Europe and will see this new freighter quite frequently.
     On the side—the audience had the opportunity to congratulate Ram Menen for his birthday; coincidently Dr.Stefan Schulte celebrated his the day after. So astrologically the two key players are pretty close too.
     Since October 2008, all other major player are lamenting and screaming about the low demand—Emirates is not.      Ram Menen did mention in his speech that the market is in the worst shape these days since the Jet-age began. But he pointed to the future and proclaimed that Emirates would be prepared.. The cargo division “SkyCargo” has posted excellent resuls for 2008 – in line with the group´s overall performance.
     Emirates carried 1.3 million tons of freight in 2008 (1.2 in 2007). Revenues generated by the entire Emirates Group went up from US$ 8.5 billion to US$ 11.2 and profit from US$ 942 million to US$ 1.45 billion. A very interesting aspekt with a steadily growing network and fleet – plus higher capacities on new generation passenger aircraft seems to be the load-factor, rising from 76.2 % in 2007 to 79.8 % in 2008.
     A tour on the tarmac including a visit on the B 777-freighter main deck was a highlight for many of the attendants, agents, shippers, business-friends and the press – Sky Cargo brings airfreight out of the shade of the formerly glamorous travel business, well done!
Guenter Mosler

 


Fourth In A Series
     Here we continue our exclusive wider view of the world we operate in and what that means to air cargo.
    In case you missed any part of the series:
Part 1—click here.
Part 2—click here.
Part 3—click here.
    Gordon Feller, who’s been watching and worrying about Asian cargo in particular and industry developments in general for more than 25 years, has created this MegaTrends series exclusively for Air Cargo News FlyingTypers.
    Gordon did his formal academic training at Columbia University in New York City, where he was a Wallach Fellow and a Lehman Fellow, and completed graduate work in international affairs.
    But as he likes to say—his real-world training has come from the "school of hard knocks. "
    Gordon Feller has written analysis and commentary for the FT of London, Reuters, Thomson, Informa, Journal of Commerce, McGraw Hill—and many others.
    We welcome your comments and suggestions.
Geoffrey

     Energy supply and demand is likely to represent the biggest challenge of the 21st century. More than any other issue, it is at the mercy of global economics, geopolitics, war, fiscal policy, and the battle between growth and sustainability.      Beyond financial services, energy is probably the most global of industries and the industry with the broadest impact on others. All of these factors result in an uncertain and changeable future.
     Oil may be at the center of these challenges, but it is, of course, not the only resource. Global demand is driving us into a long-term transition away from oil toward natural gas, coal and other alternatives, including nuclear power — despite the political minefields. China’s formidable growth also drives demand for other basic commodities; it accounts for 27% of the world consumption of steel, and almost half of the world consumption of cement.
     As the global population continues to grow, demand for natural capital resources (such as water, fertile land and clean air) will also become more important, economically and geopolitically. Meeting the world’s growing food needs (demand is predicted to rise by 50% by 2020) is just one of these challenges — with wide-reaching impacts.
     For instance, a third of all the milk produced worldwide is now being transported to China to keep pace with its rapidly growing demand (at a rate of 25% a year) with significant impacts on supply and prices across the globe.      Meeting the world’s freshwater demands will be just as challenging: by 2025, the combined population of the countries likely to face water stress or scarcity will be nearing 3 billion.
     In the short term, it is oil that has the most wide-reaching implications. Demand for oil is likely to remain strong with the emerging economies leading the growth. In fact, if governments around the world stick with their current policies, the world’s energy needs are likely to be over 50% higher in 2030 than today, with oil making up 32% of total demand. As pressure on supply increases, geopolitical factors take on greater significance and resource nationalism increases. It is little coincidence that questions of Arctic sovereignty came to a head at the same time as oil prices were ascending. A further cause for concern is that the 5 day war in August 2008 between Russia and Georgia forced BP to shut down a pipeline exporting oil from Azerbaijan to the Black Sea — and there is an increasing tendency toward countries shutting the door to big oil to cultivate their home-grown companies. Geopolitical maneuverings like this have the potential to cause huge disruption to supply, yet little can be done to mitigate the risk.
     The fluctuating prices of commodities represent another challenge with wide- ranging impacts — again with oil at the center. Any commodity fluctuating so wildly in such a short period (from USD$70 a barrel to USD$145 and back in the 12 months from October 2007 to 2008) would have an impact. The fact that oil is so widely required, by industry and consumers alike, makes this impact all the more important, hindering businesses’ and governments’ ability to plan.      Indeed, Mexico’s oil income stabilization fund has hedged the country’s entire oil output for 2009 to manage the risk associated with this volatility.
     Both rising and falling prices have impacts. Rising prices put pressure on developed and emerging economies — with some industries’ profitability (or even ability to exist) fundamentally challenged, as evidenced by the collapse of numerous airlines in 2008. Supply chain economics also comes to the fore; signifi cant rises in the cost of transporting goods can override other factors, making it cheaper overall to produce goods locally, even at a higher unit price.      However, low oil prices are not a solve-all solution and can impact plans to diversify supply. Some projects to find more oil (requiring long-term planning and investment) may no longer be worth doing: prices below USD$90 challenge the economics of projects in the Canadian oil sands; prices below USD$70 challenge those of offshore projects in Angola.
     Considering the alternatives Freeing the world from its dependency on traditional energy sources would help counter many of these issues — as well as solve some environmental ones — but this will not be an instant solution. The current contribution of renewable energy sources is relatively low (representing 3.4% of global power generation), and the speed of a transition from a global economy based on fossil fuels to one based on alternative energy is likely to be slow in the absence of a major technological breakthrough.
     Uncertainty over government subsidies and regulation could hamper efforts further. However, the future remains promising. Global investment in renewable energy surged to USD$148 billion in 2007, and there are some significant success stories: wind power, for instance, is growing at 30% per annum globally, already provides 20% of Denmark’s electricity needs and is likely to provide up to 15% of the U.S. electricity needs by 2020. The role of new energy technologies (cleantech) is expected to be critical. The financial crisis and fluctuating price of oil will put pressure on the economics of cleantech and its high capital costs in the short term. However, the necessary and fundamental shift away from oil will drive more corporate, private and government capital and foster innovation to ensure cleantech’s increasing contribution to overall global energy production in the next decades.
     Of course, the most effective way to reduce demand for energy is to use less of it — a strategy that also results in reduced costs. The impacts of energy efficiency are most obvious in heavy industry; for instance, the steel industry accounts for 10% and 27% of total electricity and coal consumed respectively in India, so any efficiencies made there would be substantial.
     However, the cost reduction impact can be seen across all types of business — it is estimated that up to 80% of the USD$10 billion annual energy bill for commercial food service in the U.S., for example, could be saved by using more efficient equipment. As global recession drives industry to cut costs wherever possible, the scale of the savings possible will encourage businesses to act. It should also drive investment in new technologies that promote and enable efficiencies, a significant part of the cleantech agenda.
Gordon Feller

 

     Numbers from hell continue . . . Seven months in a row as USA air cargo dropped 21.2 % in February to 1.62 billion revenue ton-miles. Domestic air cargo was minus 18.4% with international down 23.6 % for the month. In case you are keeping track, January at minus 25.4 % was the worst since these kind of records began being kept in 1989 . . . MASkargo reportedly is offering discounts, reducing capacity as cargo volume has tanked more than 28% since the start of 2009 . . . Meanwhile Cathay Pacific Airways and Dragonair numbers were down 13.7% during March 2008, while capacity, measured in available cargo/mail ton kilos, fell by 10%.Year to date, tonnage has fallen by 18.7 percent compared to a capacity drop of 14.1 percent. Cathay Pacific General Manager Cargo Sales & Marketing Titus Diu said: “The sharp drop in tonnage compared to the previous year highlights the continued weakness of the global airfreight business, and the fierce competition in shrinking markets is putting tremendous pressure on our cargo yield” . . . Japan Airlines Corp. (JAL) said its international cargo volume declined for the seventh consecutive month in February on a year-on-year basis, plunging 38.9 percent. Decline slowed from 41.5 percent in January . . . All Nippon Airways Co. (ANA) said that its international cargo volume in February was down 26.1 percent . . . Elsewhere Boeing reportedly will cut production on its 777 jetliners from seven to five a month . . . Naverus will provide Sichuan Airlines its Performance-Based Navigation (PBN) procedures for Lhasa Airport, one of four gateways PBN serves in the Tibet Autonomous Region. Sichuan Airlines is the fourth airline in China (Air China, China Southern and China Eastern) utilizing Naverus PBN. The Naverus-designed procedures incorporate Required Navigation Performance (RNP), an enhanced form of PBN. PBN allows aircraft to fly precisely-defined paths without relying on ground-based radio-navigation signals. RNP ensures the aircraft does not stray from the path and provides additional navigational flexibility, such as custom-tailored, curved paths through mountainous terrain or in congested airspace and can be deployed at any airport, allowing aircraft to fly precise paths with an accuracy of less than half a wingspan so aircraft can land in almost any weather conditions. RNP also shortens distances that reduces noise, fuel burn and exhaust emissions . . .