Vol. 10  No. 12                    WORLD'S MOST LOVED AIR CARGO PUBLICATION SINCE 2001                          Tuesday February 8, 2011

Closely Watched Planes

Crowds at the entrance to Cairo's International Airport with more people leaving or being evacuated as Egyptian political unrest entered its 13th day on Sunday, February 6.

      Air cargo is keeping a close eye on the unrest in Egypt.
      Trade partners around the world rely on continued movement of goods by air and also the smooth operation of oil and heavy goods dependent on the Suez Canal, which is controlled by Egypt.
      Reports continue to circulate that companies such as ARINC that are involved in airport operations, security, etc. have pulled non-essential employees from the country.
      Air cargo people we spoke to say that operations are being conducted amidst hope that this latest challenge to world trade is resolved soon and the 2011 comeback year continues.
      FlyingTypers spoke to Ralf R. Ausländer, Managing Director of Leisure Cargo, who reports:
      “After the outbreak of the current situation in Egypt we lost contact to our agent for some days.
      “But now flights have been rescheduled and are operating.
      “Currently no cargo uplift for us, but our approach is to be flexible while the situation gets back to normal.
      “Leisure Cargo has operations to CAI as well as to LXR and to the airports of the resorts at the Red Sea, SSH and HRG,” (although SSH and HRG cannot carry cargo ex Egypt due to insufficient airport infrastructure).
      “We remain hopeful and are staying close at hand to inform and support our customers and business partners,” Herr Ausländer said.
      “The recent unrest in Tunisia and Egypt is certainly an issue and we have seen an impact in increased fuel prices as a result of the concern over whether this unrest will spread into more Middle Eastern nations,” Michael Steen, (right) Chief Commercial Officer for Atlas Air Worldwide Holdings, Inc. told FlyingTypers.
      Neel Shah, (left) President, Delta Cargo reports that the Atlanta, Georgia based carrier “operated ferry flights last week via FCO to help evacuate folks who wanted to leave, but effective last Friday (February 4) we have cancelled all flying into CAI until March 26th when we plan to resume our daily flight.
      “The demand to CAI has obviously dried up completely on the passenger side so this was a very prudent business decision.
      “On the cargo side we will do our best to route freight to CAI over CDG with our partner carrier AFKL so we can continue to keep the flow of goods moving.”
      As political unrest enters its second week in Egypt, Ram Menen sums up Emirates Sky Cargo position there:
      “Our flights are still operating normally and we are keeping the supply lines open.
      “However, the inbound Cairo cargo loads are restricted because of challenges in customers ability to clear cargo, and creating congestion at the import warehouses.
      “The export loads are still moving, but at reduced volumes.
      “We are monitoring the situation closely and aim to afford our customers as much notice as possible should there be any changes to our operations.”
      Lufthansa Cargo spokesman Michael Goentgens sums up the situation:
      “Most importantly all Lufthansa Cargo staff are safe.
      “Lufthansa and Lufthansa Cargo are monitoring the situation very closely and are in constant contact with local management as well as the crews.
      “There has been some minor impact on our business, such as the rerouting of a few freighters that were scheduled from Frankfurt via Cairo to the Middle East and then flew to Sharjah directly.
      “Lufthansa passenger flights continue to and from Cairo out of Frankfurt and Munich and we are also able to transport cargo on these flights.”
      Meantime, Oliver Evans, Chief Cargo Officer, Swiss WorldCargo notes:
      “The impact of the unrest in Egypt has been relatively limited.
      “Our flights continue to operate, albeit with changed timings, routings and shortened ground time due to the locally imposed curfew and security restrictions.
      “We have heightened security arrangements in place onboard and on the ground.
      “Cargo was specifically affected as we placed a full embargo due to the short ground time.
      “This was partially lifted on Friday so that we can now accept certain commodities although the payload remains limited.
      “The more serious issue is the possible wider impact of the crisis: what kind of regime will emerge to replace Mubarak's?
      “How long will the crisis continue and will there be further bloodshed?
      “Is it likely that other countries will follow suit in seeing popular uprisings against the regime?
      “While I remain personally optimistic that Egypt can sort its problems out and emerge as a free and democratic state, there are no answers to the above questions, and we airlines have to remain vigilant and ready to adapt to any evolving scenario.
      “We can all be proud of this adaptability, which is our common heritage and strength.”


Conversation With
Grand Master Issa

      Issa Baluch may know as much about logistics as anybody you will ever meet.
He possesses the chops and know-how gained over a career that spans 37-plus years, and he has used these things to gather some of his thoughts and put them down in black in white for all the rest of us to study and ponder.
      The Baluch book “Transport Logistics - Past, Present and Predictions” (available on Amazon for $65USD) is a 300-page barn burner that Prof. Issa created in 2005, and it still fascinates.
      Who else sets the table for modern logistics study with detailed examples of historical projects that demanded careful transport logistics management; for example, he explores what it took to build the Great Pyramid in Egypt, the transport logistics practiced in the Berlin Airlift, and the Battle of Stalingrad?
      A second volume, “The Wheels of Commerce” (Amazon $36.50USD) was created last October (with Charles Edwards) and follows the thread with another 340 pages on the topic.
      Best known as the founder of Dubai-based Swift Freight, which was a medium-sized multi-national that he eventually sold to Barloworld, one of Issa’s lasting contributions is that he is the guy that launched sea-air in Dubai.
      These days we find him in some kind of “retirement” (as if he ever could); Issa is now at Harvard in the U.S.A., where he is undoubtedly continuing to think big thoughts about logistics.
      He has also started a major farming initiative in Ghana.
      It is our incredibly good fortune that we have this interesting and, as his friend Ram Menen describes, “nice guy” in our pages.
      Expect us to beat a hasty trail up to Beantown as 2011 rolls along, not only to watch our Yankees whomp the Red Sox, but also to take our new best friend to the game.
      Here in advance of the summer, Issa shares some ideas with us.

FT:   What will be new and exciting about air cargo in 2011?
IB:   The most exciting thing that ever happened to the industry is the formation of Global Air Cargo Advisory Group “GACAG” (TIACA, IATA, FIATA and GSF).
     I believe this is the perfect time for such a collaboration in order to have a unified voice in the industry that will not only tackle pressing issues with regulatory authorities worldwide, but also bring out the best practices from the respective organizations that should encourage everyone to advocate a joint agenda moving forward.
FT:   Recap 2010. Did the year perform up to expectation? What stood out?
IB:   I think 2010 brought about pleasantly surprising results, which is a great deal after almost 2 years of just plain bad business. What stood out was the impressive recovery of industrial activity in Asia that I believe propelled air cargo to rebound. And Boeing’s latest World Air Cargo Forecast supports my theory that several industrial shippers have actually turned to air cargo because of constraints in containership capacity.
FT:   Detail key appointments (industrywide, IATA, your area of interest, and any other new people you would like to introduce)
IB:   The National Association of Freight and Logistics (NAFL) of Dubai, UAE held its General Elections in mid-2010, where I was re-elected president. It can be recalled that I served as the first president of the association in 1992, when it was still known as NCFF or the National Committee of Freight Forwarders.
The General Elections were conducted under the directives of H.H. Sheikh Ahmed Bin Saeed Al Maktoum, Chairman of Emirates and the Patron of NAFL, who delegated Mr. Ali Al Jallaf, Vice President, Cargo Unit, Dubai Airports, to supervise the election procedures.
     NAFL now has 250 members, and I am fortunate to have a board comprised of very competent individuals. You will hear more of the NAFL in the coming months as we are about to re-launch our website, which will be more interactive, visitor-friendly and, most importantly, informative.
FT:   What is the biggest challenge to our business looking ahead?
IB:   I’ve always believed that the transport logistics industry is the most resilient of all the business sectors – that includes both air and sea freight industries. Having said that, these industries are also the ones most susceptible to the biggest challenge of all time – security.
     Following the recent attempt to blow up cargo planes, we can expect to see further security restrictions on international shipments. Governments around the world have pledged to tackle the problem, and lawmakers are calling for much tougher inspections of cargo.
     However, for an industry that is accountable for approximately 40 percent of global trade, screening of cargo and categorizing fragmented areas of the industry is undoubtedly the biggest challenge the industry has to face this year and beyond – this is why I believe the formation of GACAG is monumental in these times.
     We clearly have a lot of areas to take into consideration, but I think with GACAG the industry can now come up with a unified approach in tackling this longstanding issue on cargo security, and finally have the impact that would require the attention of worldwide regulatory authorities.
FT:   Name some trade shows that you might attend. Why?
IB:   Because of my prior commitments (I have been invited by Harvard University to take part in the Advanced Leadership Initiative Program, which will eventually make me a fully fledged fellow), I’ve only selected to attend a few conferences this year, principally because I am a Board Member. I will attend FIATA HQ Session in March, TIACA AGM in April, and FIATA World Congress in September.
FT:   Which segment of Air Cargo Trade is performing best and which holds the most promise?
IB:   According to the latest Boeing Forecast, it is still express shipments – primarily document and small-parcel traffic – that lead air cargo trading; world air mail is expected to grow consistently at 1.4 percent per year.
     One of the leading air trade commodities is pharmaceuticals, and will continue to be one of the most traded commodities, particularly toward eastbound air routes.


Cargo Stems From Valentines

     Play me Hearts and Flowers as the saying goes, but have no doubt that about a week from now the order of the day will be romance as an early indicator (along with pitchers and catchers showing up for Spring Training in Baseball) that a new season of romance and hope is tipping off.
     So what does the season of love mean to air cargo?
     Ram Menen loves just about everything air cargo, which would include thinking about it and sharing his thoughts on it.
     Witness the SkyCargo Divisional Vice President as a guiding force, ramping up both capabilities and sales for all manner of perishables that now account for an ever growing amount of business for the Dubai logistics powerhouse.
     So what about Valentine’s Day?

FT:   How important is Valentine’s Day to SkyCargo?
RM:   The Valentine’s Day, for all cargo operators, is very important.
     For Emirates SkyCargo, the volume of flowers, especially roses, that we are shipping all over the place has risen exponentially.
     So much so that we have ended up operating extra charters during this period.
FT:   OK, so maybe we can say: “The folks at Emirates Cargo have a rose between their toes while racing to get huge consignments of flowers in good shape all over the globe for next week.” Describe the movement of flowers in terms of markets – where are they coming from? Where are they going?
RM:   Kenya and other flower producing areas tend to be the largest for us. Large amounts of traffic tend to move to the auction markets in Amsterdam and then on to all over the world from there.
     We do also tend to get air amount of direct to market flowers too.
FT:   Describe DXB support for the Perishables business.
RM:   Perishables and cargo requiring temperature control have all been a big part of our business right from the start of the airline.
     We have invested quite heavily in technology, ranging from ULDs, cool dollies and special covers to cool/cold storage facilities to ensure the integrity of cool chain throughout the time that the cargo is in custody.
     We have storage (cool cells) for about 218 for ULDs in our PCHS (pallets and container handling system) in addition to the 5000 sq. meters of floor space for cool/cold storage inside our cargo mega terminal.


  Here is a deep-dish virtual tour of Emirates Mega Air Cargo Terminal in Dubai, with a tasty look inside the facilities cool area.
  Just click here or on image

FT:   What moves have been made to put SkyCargo into the Perishables business?
RM:   We work with the customer to better understand the requirement for specific commodities and tailor a solution for the same.
     Slightly over 25 percent of our business cargo falls into the temperature sensitive category.
     At Emirates SkyCargo we have empowered an entire dedicated section that is involved in research and development, working with various experts/equipment manufacturers etc., to help create equipment/processes that will cater to our current and future requirements to support this type of traffic.
FT:   What are some aspects of the products and services offered?
RM:   Emirates has different solutions for different temperature ranges.
     We encourage/facilitate the Envirotainers for commodities requiring transportation below the 8 to 10 degree C, and white covers for 15-25 degree C range.
     Cool Dollies on the ground are utilized for highly perishable commodities.
     The Emirates freighter fleet has four different zones, which can be individually set for maintaining different temperatures, and many other initiatives are deployed for customizing the tailored processes.
FT:   Which markets are being served and which show the greatest growth potential?
RM:   India is obviously a large market leading the world market with its pharma industry. India is also a key player in production/export of fruits and vegetables.
     Africa/Far East/Australia and Latin America all are growing markets for our advanced temperature controlled transportation services.
     In fact, this is true for every market, including right here in the Gulf and Middle-Eastern region
FT:   Looking ahead, how important (is) will Perishables be by percentage in SkyCargo product mix?
RM:   I expect perishables growth to continue unabated, to amount in size and technologies to about 30 percent of SkyCargo business.


Finnair And Neff
Eye Cargo Joint Venture

     Helsinki-based Finnair has revealed plans to liaise with U.S. private equity investor Neff Capital Management in order to form a start-up freight airline.
     As plans stand, the Finnish airline will be the minority capital holder but responsible for all operational and technical issues.
     The Joint Venture is rapidly taking shape with Finnair announcing an agreement with Neff Capital to sell two MD-11 freighters to the investor.
     Both aircraft will be the backbone of the upcoming Nordic cargo carrier, which is expected to form its headquarters in Helsinki.
     The plans for establishing a freight airline were prompted by the growing capacity demand for intercontinental transports of pallets and containers.
     Favored by the relative geographical closeness between Finland and East Asia in comparison to central or southern Europe, the Finnish airline is a traditional strong player on routes via northern Siberia or the Barents Sea to China, Japan and Korea.
     Miami-based Neff Capital Management LLC focuses on the aviation and retail industries.
     The enterprise seeks active control investments within these industry sectors.
     Owner is Brian Neff, the former president of U.S. cargo carrier Southern Air.
Heiner Siegmund/Flossie


Channel Watching

     As the Super Bowl football game played out on television Sunday and the snows finally started to retreat in New York City, we learned not everybody thought watching the big game was all that important.
     During half time we took Chips here over for an early evening walk and social encounter at the dog run in the park. Apparently one of his pals told him that The Animal Planet channel was broadcasting The Puppy Bowl.
     So during the second half while we watched our game, he just sat and watched us.
     Been a long time since the last TV fight in our house but we are checking the listings for Animal Planet reruns. (Geoffrey)


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