Vol. 11 No. 4                                                                                                                 Tuesday January 17, 2012


Dr. Jahnke Profiles
Lufthansa Cargo Center

     Lufthansa today announced some changes in staff. Dr. Mohammad Ali Seiraffi (right) has taken over as Vice President Handling Frankfurt succeeding Dr. Andreas Jahnke who now will be Managing Director of Lufthansa Consulting.
     We sat with Andreas Jahnke in early December discussing the last four years at the helm of a critical cargo assignment at the very heart of a leading airline, an assignment that can be considered a departure given the fact that he arrived there after leaving an entirely different industry. But his background may have served him well, as he delivered a fresh pair of eyes and some new thinking to a critical task.
     The Lufthansa Cargo Center at Frankfurt International Airport handles more than 400,000 pieces per week, including the home carriers’ action plus a dozen other airlines.
     Consignments range from pieces as small as brochures to pieces as large as a 96-ton machine part, with live animals, high value items and time and temperature sensitive cargo sometimes numbering in the hundreds of thousands of units per week.

     But to look and listen to Dr. Andreas Jahnke, Lufthansa Cargo Vice President Handling, as he spoke of the impact of riding herd over four “Competence Centers” at Lufthansa Cargo, things appeared to be all good.
     Four of Lufthansa Cargo’s key products are steered at Frankfurt via separate Competence Centers including: Airmail, Animals, Temperature Control and Valuables.
     The Lufthansa Cargo Center at FRA was being dedicated as a new Perishables Center in December.
     “Our largest activity here is standard freight, but we also handle quite a large amount of our tdFlash branded express product.
     “Our Air Mail and Animal Lounge and, of course, temperature control business continue to grow as well.
     “The worst surprise in 2011 was the night flight curfew imposed by the local court in Hesse.
     “It was, to put it mildly, a shock to the system to have to deal with the loss of 30 percent of total flights that used to go at night.
     “Now we are not emptying the LCC as before, but rather allocating space and conducting storage activities for the shipments and pallets we build up.
     Of course, cargo is flown as booked and delivered on time, but the impact on our business model is palpable.
     “Air cargo operates with certain peaks of activity, so the night curfew has greatly added to our activities in the mornings, when we have to get out shipments whilst shipments arrive that need to be broken down.
     “The inability to fly at night has added even more of a critical nature to our daily operations here.
     “Cargo needs the night is quite valid, especially when considering that the new runway here, while increasing punctuality of airport operations, cannot handle our MD-11F operations.”
     Although he was not directly responsible for day-to-day operations of the new cool center Andreas Jahnke was animated about it on the eve of its opening.
     “As the pharmaceutical industry is developing, Lufthansa Cargo is expecting to see double-digit growth figures in the next few years ahead.
     “Where we previously handled our Cool/td consignments at Perishable Center Frankfurt (PCF), the necessity for the new pharma-zone, driven by capacity limits at PCF, are now handled in our new facility so Cool/td-Active and Cool/td-Passive consignments get the best possible conditions.
     “The new center is equipped with state-of-the-art cool storage rooms for four different temperature ranges, exclusive ramps for delivery and goods acceptance, an exclusive Competence Center Temperature Control (CCTC) supervision team on call 24/7 and an exclusive service provider, handling:counts.
     “Another advantage is that the pharma-zone is located within the security hub and has direct access to the apron.
     “This guarantees short distances and minimizes cross-transfer between different facilities.”
     Dr. Jahnke holds his Doctorate in Natural Science. He came to air cargo from the retail food business, where he purchased logistics services and was responsible for getting the goods from manufacturer to store shelves.
     He noted that compared to retail or others manufactured goods such as automobiles, he was surprised at how “ancient” the logistics efficiency curve in air cargo was (and in some respects still is), making the point:
     “In my retail food business experience in Germany, we would say our mission was to know ‘from which pig came the sausage,’ which may at first sound like overregulation, but in fact is an indication up and down the line of greater efficiencies, including logistics.
     “Moving into air cargo, I was amazed by the amount of paperwork, sometimes adding up several kilos per flight.”
     The industry is changing, Dr. Jahnke insists. Slowly, he adds.
     Dr. Jahnke admitted that operating a transportation hub that serves a fleet of aircraft with weight and width and length restrictions revealed a fascinating aspect of his job.
     “Building shipments and the loading of aircraft is quite like putting together the pieces of a puzzle.
     “The process is all about people and their experience.
     “What’s more, there are several different types of puzzles.
     “In each case the approach is three dimensional, with the size of the aircraft space accepting the cargo as paramount.
     “The buildup must consider how, for example, 100 pieces will be placed on a single pallet with heavy items on the bottom.
     “Also, the types of cargo must be taken into account, with dangerous goods, and foodstuffs and other items that cannot be included.
     “When it comes to bringing everything together for a single flight, the combination of pallets and outsized air cargo pieces, such as oil pipelines or pieces of machinery equipment, is loaded with the expert touch of some very experienced and remarkable people here at Lufthansa Cargo.
     “From our capacity management to load planning, right to the final buffer area where Fraport handling picks up the ULDs for loading aboard the aircraft, everything, including the exact position where the cargo will ride aloft has been determined.
     “During the loading process there is one Lufthansa Cargo employee, a loadmaster, for every flight making sure things go right.”
     Interestingly, loadmaster duties at Lufthansa include a higher percentage of women employees as compared to other Cargo Competence Center employments due to the less physical nature of the task and also because “some flights require a loadmaster to accompany the cargo, affording some interesting travel opportunities,” according to Dr. Jahnke.
     What appeared evident as Dr. Jahnke spoke is that the process is under constant scrutiny, with an eye toward improvement every step of the way.
     “Last week we held a meeting with Fraport (Lufthansa Cargo signed a contract with Fraport in 2010 that runs through 2018) around the subject of how to improve the loading process under certain weather conditions, such as rain and other situations.
     “One challenge with the MD-11 when it rains is that water can get into an electrical system through the open door and cause problems.
     “We utilize overwraps on the ULDs and blowers to eliminate moisture impacting our operations, but now our working group with Fraport came up with a wiper system that is installed above the door while loading to keep water outside the aircraft.
     “Very easy and very efficient, and a good example of cooperation for the common good that goes on around here all the time with our customers, suppliers, and employees.
     “Now if we could just do something about that night ban.”


Jim McKeon Strategizes
Southwest Airlines Cargo 2012

      Who knows what lies ahead?
     This is the time of year to set plans and get ready for 2012, so market conditions and prognostications are vey much on the mind of top air cargo executives.
     Jim McKeon, Strategic Advisor, Cargo Management Group-Southwest Airlines provides some thoughts gathered recently at Air Cargo Americas in Miami.
     “The culture at Southwest Airlines is just incredible, as it serves not only the customer but also the employees as well, so my view is that whatever the market conditions, the sky is no limit for Southwest Cargo to grow itself by leaps and bounds in 2012 and the year(s) ahead.
     “I spent ten very special years in Houston at Continental before retiring.
     “Now my job is to join the great culture that already exists at Southwest and take the cargo business to the next level.
     “That will include working on the AirTran acquisition as well as the integration of our new B737-800 standard aircraft, and what that equipment brings, with its additional capacity, to build the overall cargo product at the airline.
     “We are looking at building relationships now and next year (2012) and working with interline partners, plus expanding our product line offering.
     “As we move into the new year, we are also expanding areas, building success upon success whether in cool-chain-pharmaceuticals or new business partnerships.
     “I think for Southwest Airlines, the future is nothing but up.
     “The thing that has been a bit surprising to me is customer interest in Southwest Cargo.
     “Some may continue to think of us as a U.S. carrier with narrow bodies that has a limited range of air cargo products and services.
     “The facts however speak a bit differently.
     “Demand right now for our services has been overwhelming and that to me is quite gratifying.
     “People that don’t really know us just need to ask customers of Southwest Cargo about our service.”
     Jim McKeon admits that his office in Dallas where Southwest is based is a commute from his home in Houston (down south in Texas), but he says “actually my base is wherever I travel in the Southwest system,” indicating that life begins anew after Continental and will be anything but static.
     From the look on this guy’s face, he is right where he wants to be, smack dab in the middle of another grand adventure soon to appear at an airport near you.
     “We have a great story,” Jim McKeon smiles.   jim.mckeon@wnco.com



Jade Fleet Grounding Continues

     Originally, Jade Cargo International intended to suspend all operations only from the end of December until January 16th. Now, the carrier has announced it will continue the grounding of its fleet of six B747-400ERF until further notice. “Ongoing discussions concerning the financial restructuring” have led to this decision, reads Jade’s homepage. Currently, the carrier refuses to deliver a fix date that it will recommence its cargo flights.
     The move elucidates the failed efforts by the capacity provider to attract a new investor who would shoulder the 51 percent of Jade’s shares currently held by Air China, and who would also be willing and solvent enough to inject at least 25 million U.S. dollars for a much needed increase of capital.
     This step has long been demanded by Lufthansa Cargo, which holds 25 percent of Jade’s stakes with German investment bank DEG possessing the remaining 24 percent.
     So far, no names of potential candidates have been unveiled.
     But if this crucial task cannot be solved satisfactorily for all parties involved, analysts predict that it seems very unlikely that the fleet, which has been grounded at Shenzhen airport, will be airborne once again.
     The endeavor becomes even harder in view of shrinking demands and weak markets, which the entire logistics industry has been faced with since last summer.
     Declining tonnage, overcapacity and falling rates are the current three obstacles.
     Even a handling giant like Hong Kong Air Cargo Terminals Ltd (HACTL) was hit by poor traffic figures in 2011, reporting volumes that were down by 4.3 percent year-on-year with exports plummeting 9.3 percent.
     Those are the unfavorable circumstances with which Jade’s management has to cope. Indeed, a Herculean task. Stay tuned.


Dick Dougherty Excited About Life After Air Cargo

     Good guy Richard “Dick” Dougherty, Project Manager – EDI American Airlines Cargo eBusiness Strategy, has stepped down from his post at American Airlines Cargo.
     Aside from his responsibilities at AA Cargo, Dick was heavily involved with C2K in a very fundamental fashion; he was both a participant and a big thinker, as well as being the guy who meticulously took the minutes of each meeting.
     “After 68 years on earth, 47 years in the airline industry—17 years at Pacific Southwest Airlines (PSA), 3 years at Capitol Airlines, 4 years at Aspen Airways and 23 years at American Airlines, I am retiring,” Dick said simply… although it seems there’s no way to simplify the richness of that lengthy experience.
     “My wife Sharon (who retired from Lockheed Martin last month) and I plan to travel, annoy our granddaughters and generally enjoy life.
     “Both of us have been evaluating doing some contracting work in our respective fields to keep involved, but we have no immediate plans right now.
     “While I am looking forward to this next chapter, I am going to miss everyone I’ve worked with over the past decades,” Dick Dougherty concluded.

    Dave Brooks, President of American Airlines Cargo, had this to say:
     “I’ve worked with Dick for over 20 years, and he’s one of those guys who everybody wants on their project.
     “Even though his current expertise has been helping AA and the entire industry with the nuts and bolts of performance measurement, he brought to the table over 45 years of experience in all aspects of the commercial aviation industry.
     “We wish him the very best in his well-deserved retirement; we’ll probably need to hire 4 or 5 guys to replace him!”
     To that we add many happen returns and all good wishes.


Emirates Hot On Brazil

     “Emirates’ direct Brazil flights will not only boost trade ties with the UAE, but also with South America’s main partners in the Far East, such as China, Hong Kong and Japan, and numerous points throughout Europe,” said Robert Siegel, Manager Cargo Commercial – Europe & Americas, as the high flying carrier added Dubai-Rio de Janeiro-Buenos Aires service on January 3.
     “This new linked service to two of the most economically vibrant cities in South America will present many new business opportunities and reinforces Emirates SkyCargo’s commitment to the market and to the bustling UAE-South America trade route,” added Siegel.
     “We also expect to stimulate trade, mainly in pharmaceuticals and automotive parts, between Rio de Janeiro and Buenos Aires—and with Emirates being the only wide-body operator at both destinations, we are also bringing enhanced cargo solutions to the market.”
     In addition to the belly-hold capacity of the 14 passenger flights each week between Dubai and Rio de Janeiro-Buenos Aires, it also offers cargo space on the 14 passenger flights it operates each week between Dubai and South America’s largest city, Sao Paulo.
     “The capacity on these two routes—both served by Boeing 777-300ERs—is bolstered further by Emirates SkyCargo’s dedicated freighter service to Sao Paulo three times a week, which provides a further 620 tons of capacity on Boeing 777Fs,” Mr. Siegel added.


World Airways Allied Pleased

     World Airways has extended its cooperation with Allied Air Cargo for the lease of two MD-11Fs. Allied Air is a Nigerian all-cargo airline that operates four Boeing 727 freighters and a pair of MD-1Fs on scheduled flights and ad hoc charter services, moving more than 400 tons of fresh flowers and vegetables per week from both Kenya and Uganda to the major European markets in Holland and the United Kingdom.
     “Allied Air Cargo and World Airways have built up a strong commercial relationship over the last three years and I am pleased that we are extending this cooperation with a multiple-year agreement,” said Brian Bauer, Chief Commercial Officer for Global Aviation Holdings.


Galli To Cargolux Italia

     Cargolux’s Italian offspring, Cargolux Italia S.p.A., announced the appointment of Pierandrea Galli as new CEO. The manager has over 23 years of experience in the aviation industry with Rome’s Alitalia and Toronto-based Skylink Inc. Cargolux Italia says it will “draw on Galli’s extensive experience in the aviation and cargo business to consolidate its presence as the leading Italian all-cargo carrier.”
     The freight airline, headquartered in Northern Italy’s Vizzola Ticino near Milan, began in 2008 and was airborne one year later. Seven weekly flights are currently operated out of Milan Malpensa International, serving Hong Kong, Dubai, Osaka, Almaty, Sao Paulo and Luxembourg. The fleet consists of a single B747-400F with 40 staff standing on the payroll, including pilots and ground personnel.


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