Vol. 13 No. 8                                                                                                                                    Wednesday January 22, 2014
#INTHEAIREVERYWHERE 
THE AIR CARGO NEWS THOUGHT LEADER  



air cargo news for January 22, 2014

ometimes it’s tough to figure out how some people build success.
But not with Joachim “Jo” Frigger.
This transportation executive has been building a company called EMO Trans for most of his adult life and has successfully moved up in the transportation arts from apprentice to grand master.
     With all that Jo knows about logistics and managing a successful air cargo enterprise, he could easily make a very handsome living getting paid by people for the privilege of walking down the street with him.
     Not that Jo talks a lot or, for that matter, with even much volume.
     He is just the opposite, always speaking in a soft, easy tone, measuring his words and their impact, and always the gentleman.
     Today with Jo at the helm as Chairman and CEO, EMO is one the fastest growing multimodal logistics companies, and certainly listed among a small handful of logistics businesses that are the most exciting, diversified, and interesting.
     During 2014 we will track EMO in some detail, but it all begins with some up-close and personal observations on the year ahead, and a brief look back at the year that was.

In 2013 EMO Trans saw the implementation of a new IES IT system in the USA and Canada.
In Australia, our Brisbane office (now 100 percent EMO owned) moved into larger facilities with warehousing on premises.
     EMO Australia acquired majority shares in our partnership with EMO New Zealand, and also under Australian leadership, we opened an office in Papua, New Guinea.
     EMO Trans Canada expanded their services to now include brokerage as EMO North Customs Brokerage.
     Our representation in Chile grew with the opening of a new office in Antofagasta. We have strengthened our operation as well as our sales team in Santiago.
     The EMO office in Shanghai, China, moved to larger facilities, and now includes a team of five for sales and customer service.
     EMO Trans France grew, adding personnel to strengthen both administration and operations; the office is in the process of implementing the new IES IT system.
     Our German colleagues are strengthening their relationship with new partners in Asia and the Middle East.
     EMO Trans Korea has once again produced excellent results in 2013.
     Our Peru office welcomed a new Route Development Manager, who we anticipate will grow our business development in that country.
     EMO USA continues to expand with new domestic offices in Minneapolis, Raleigh, and soon in Charleston, South Carolina.
     A major driver at EMO Trans 2014, in addition to everyone’s hard work and excellent service, includes our well organized international network of partners. We continue to secure a growing customer base.
     The overall commitment of our company is a prime example of people taking pride in their job and company.
     EMO Trans will move to new heights in 2014.
Geoffrey/Flossie


Part I-Click To Read


Down In The Dumps?

   “We have reviewed our long-haul freighter program following the merger of British Airways and Iberia freight businesses to create IAG Cargo,” Steve Gunning, CEO of IAG Cargo, said.
   “We are delighted to reach an agreement with Qatar Airways.
   “This new partnership is an important step forward for us and enhances our relationship with Qatar.
   “It allows us to continue delivering significant capacity for our customers through the important gateway of Hong Kong,” said Wee Willie Walsh, CEO of IAG.
   IAG Cargo signed a long-term commercial agreement with Qatar Airways to purchase capacity on Qatar-operated freighters, effective May 1.
   The headline regarding that news that ran?
“British Airways Cargo Dumps Freighters!”

Saudia Cargo Donates Lift


   Saudia Airlines Cargo Co. signed an agreement with the Saudi Center for Organ Transplantation offering free movement of organs in and out of the Kingdom.
   Chief Executive Officer for Saudia Cargo, Mr. Nabil Khojah (above) said:
   “This decision acknowledges our support for the Saudi Center for Organ Transplantation, which provides humanitarian services toward those in need of human organs.
   “Saudia Cargo is aware of the importance of this step as it will contribute towards improving the general health of those in need,” said Khojah.

 

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     You can credit FIATA as a present and accounted voice for transport and commerce at The United Nations earlier this month, as the 7th UN Open Working Group on Sustainable Development (SDG) took place in New York City.
     FIATA underscored the common goal held by many that logistics and transport both need to listen and be heard when drafting SDGs for the post 2015 development agenda.
     “FIATA utilized the session to promote its view with reference to its recently published position paper: FIATA's Post 2015 for Sustainable Development Goals must include Logistics Connectivity,” reports FIATA Director General Marco Sorgetti.
     “FIATA met delegates who shared common goals and similar view points.
     “We utilized the session as an opportunity to collaborate with other stakeholders on how to achieve SDGs focused on logistics connectivity,” Mr. Sogetti said.
     “One particular stakeholder with similar view points as FIATA, the International Union of Railway, delivered a presentation at a side event which outlined the need for transport as a driver for economic growth.
     “Additionally, Lewis Fulton, Institute of Transportation Studies, University of California, Davis, described the work of the Partnership on Sustainable Low Carbon Transport (SLoCaT) and its proposal for five major transport targets for 2030.
     “FIATA was interested in Mr. Lewis Fulton’s presentation and met with members of major stakeholders who are part of the SLoCaT organization to expand on their targets and how SDG will help achieve those targets.
     “FIATA found that delegates were strong to lobby for stand-alone goals on transport and urbanization; however some were cautioned about the proliferation of proposals for potential SDGs.
     “One proposal which caught traction included urbanization as part of a poverty alleviation goal and sustainable transport as part of a sustainable energy goal.
     “FIATA will continue its work with the UN Open Working Group on Sustainable Development in collaboration with other stakeholders to ensure that logistics connectivity is at center stage when drafting SDGs,” Marco said.
     More: sorgetti@fiata.com, www.fiata.com
Geoffrey

 

vercapacity was the main blight for shipping lines last year. But with a huge number of ships due for delivery, there is likely to be little respite for managers trying to boost utilization rates in 2014 unless lay-ups become more fashionable or the various proposed super-alliances such as P3 between Maersk, MSC, and CMA-CGM lead to more efficient methods of managing capacity.
Rather, 2014 is likely to be more about cost control than service quality for shipping lines, with some carriers racking up major losses and others continuing the trend of 2013 by selling off disposable assets such as port terminals in a bid to remain solvent.
     Frank Hercksen, (left) global head of Ocean Freight at Swiss forwarder Panalpina, anticipates shipping demand to increase by a “maximum of 3 to 4 percent per annum” through 2014. But this growth will be offset by supply side expansion, which he expects to be aggressive. With the order book currently running at over a fifth of the operational fleet, he said supply growth would outstrip demand, forcing carriers to “focus on cost per unit.”
     Peter Orange, (right) GAC Regional Manager Freight Sales in the Asia Pacific & Indian Subcontinent, said there are some indications of “green shoots” in the liner market. However, he said any improvement in demand would “be very slow and steady and certainly not a surge, as consumers need to regain confidence, and in parts of the Eurozone this will take time.”
     He added: “The U.S. market is expected to pick up earlier and the recent strength of the US Dollar is perhaps an indicator of this. A lot of GAC’s growth for 2014 will be within the Middle East and Intra-Asia trade, which have remained steady and shown continued growth.”
     The ups and downs of 2013 are likely to prove as good a guide as any to the coming year.
     In 2013, the downturn in cargo volumes shipped from Asia to Northern Europe did finally come to an end in the third quarter, with Drewry reporting that volumes had increased 6 percent in the third quarter over the second. However, growth over the first three quarters was just 1.5 percent and fourth quarter demand offered little for those seeking crumbs of comfort.
     Hercksen, like other analysts, points out that in 2013 the traditional peak season—usually lasting from late summer to early autumn—was not significant in either Europe or the US. More of the same seems likely this year.
     David Goldberg, head of ocean freight in the Asia Pacific for DHL Global Forwarding, said the fluctuating pattern of rates over 2013 was a reflection of volume movements, with little in the way of a peak season evident in the second half of the year. “The huge peak season of old times has been gone for quite some years already,” he said. “While we do see a few weeks of increased volumes in the traditional peak season period, the buying patterns of major importers have very much flattened over the past years.”
     Liner efforts to boost income by introducing multiple General Rate Increases and Peak Season Surcharges are also expected to continue in 2014. Last year, as the fleet expanded, to boost spot rates lines used GRIs and PSSs, but with predictable regularity, short-term gains were then rapidly eroded. The latest of these artificial market hikes on Asia-Europe came on November 1 and December 15. Both did little to bring stability to the market or liner returns.
     Indeed, spot rates of around $1,500 per TEU from Asia-North Europe at the end of the year were at almost exactly the same level as in January 2013, with most of the year in between showing steady slumps followed by brief GRI-induced rallies. Spots rates from China to the US west coast were running at around the $1,800 per FEU level at the end of 2013, down from over $2,500 per FEU at the start of the year.
     On that basis, spot rate stability will remain an aspiration for shippers and more may turn to index-linked or long-term contracts to remove some of the risk from ocean freight, and to reduce the workload of managers.
     Goldberg said this year should see further marginal gains in ocean demand but no major change to overall market balance. “Despite fairly optimistic news in the media, economic improvement—while of course better than a few years ago—still seems to be quite flat,” he said. “My personal view is 2014 will be a slight improvement over 2013, but pretty similar.
     “I still fail to see the major catalysts which would drive a large growth rebound in the market.”
     So, expect more of the same over the next 12 months!
SkyKing


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