Vol. 11 No. 15                                                                                                                  Friday February 17, 2012

 

 

     It should come as no surprise that the first out of the gate to project any kind of air cargo comeback in 2012 is an aircraft maker, as Boeing told Dow Jones Newswires on Monday:
     "We do believe that there will be an upturn in the second half of the year and that the air-cargo market will be particularly well positioned, because the maritime industry has mothballed a lot of their ships," said James Edgar, regional director for marketing at Boeing Commercial Airplanes, at the Singapore Air Show, a mostly military event being held in the shadow of China this week.
     "They can't bring those ships back into service as fast, in response to the market, as we can on the freighters' side," he said.
     "If there's an upturn, the demand for capacity will go to the freighters first."
     Meanwhile, in the what-have-you-done-for-me-lately department, despite even more slow downs in expected delivery, Boeing’s B787 (the airplane that cannot seem to get its act together) is now under some pressure from Air India, which is asking for $1 billion for Boeing’s over three year delay in delivering 27 B787s, ordered in 2006.

     For the record, Boeing delivered the first of five B787s (now in service) to All Nippon Airways last September, but otherwise has been forced to pay huge compensation to customers whilst taking cancellations for non-delivery as well.
     The B787 order book has actually shrunk as a result of delays in production—from well over 1,000 previously to just 870 aircraft.
     For its part, Boeing says deliveries of its premier 787 and 747-8s will be in the range of 70 to 85, of which half are supposedly for Boeing 787 in 2012.
     No doubt Boeing staff are on full damage control after earlier this month, when troubled airliner Japan Airlines said that the first of its 35 B787s is no longer expected by the end of this month because of yet another delay from Boeing.
     While JAL hopes for a possible delivery in March, the world's second-largest commercial plane-maker is putting out that it can fix the latest problem, which was described as "incorrect shimming" in support structures in the aft fuselage of some B787s in service.
     Shims are used to close tiny gaps in joints along the fuselage.
     Elsewhere, in Singapore this week Boeing confirmed a 230-plane B737 order worth $22.4 billion (at list prices) from Indonesian budget carrier PT Lion Mentari Airlines, setting a record for the plane maker.



    If the presence of big names in the air cargo industry were any criteria to judge the success of a trade show like the three-day February Air Cargo India (ACI) in Mumbai, it surpassed all expectations. This should be considered no small feat, considering the city’s traffic “reputation” and the difficulty inherent in reaching the Bombay Exhibition Center. Even so, while most air cargo stakeholders who visited the show were generally pleased with what they got, there were a number of others who felt that the discussions could have been juggled around a fair bit.
    Now in its fourth edition, the event came at a crucial juncture: almost all the domestic carriers are in a financial mess, with the country’s national airline, Air India, leading the list; not one domestic freight carrier—Captain G. R. Gopinath’s Deccan 360 and Captain Mukut Pathak’s ACE—exists today, among other things.
     These conditions notwithstanding, ACI was supposed to emphasize India as the land of opportunities for the air cargo industry; hence the theme “Air Cargo in India – Building sustainability and prosperity,” and it served its purpose adequately. Said Dr, Naseem Zaidi, Secretary, Civil Aviation, “If growth potential of the air cargo segment is appropriately harnessed, Indian airports could become cargo hubs in the region.” He was referring to the new national air cargo policy that is looking at the projected air cargo growth in the next 20 years, which stands at five times the present rate. At the conference Dr. Zaidi announced to the world that while a roadmap was being chalked out keeping in mind the future, the working group on air cargo that had been set up by the Civil Aviation Economic Advisory Council was in the process of finalizing its report and a framework to tackle air cargo issues. “That,” said Dr Zaidi, “will form the basis of the national air cargo policy.”
    Indeed one of the speakers, M. Kannan, Economic Advisor to the Ministry of Civil Aviation, enunciated the government initiatives undertaken for the civil aviation industry in the immediate future that will have a beneficial effect on both the air cargo industry as well as its sustained economy. He also explained the changes that have been taking place in the Indian air cargo industry—the country is now the ninth largest aviation market in the world—and the main challenges to the air cargo industry’s growth: inadequate infrastructure, slow adoption of technology, and unskilled manpower. The country needs to match its supply chain efficiency with global air cargo supply chains to bring in profitability and stimulate growth.
    It must be mentioned that India has aroused the interest of airports around the world. According to D. P. Hemanth, (right) Chief Operations Officer (COO) for Hub Development at GMR Airports, the presence of a number of airports at ACI was proof enough that the country’s air cargo infrastructure was being noticed. He put it simply: “Airport infrastructure is as critical to the supply chain as it is to the airlines and freight forwarders and we (from the GMR Airports) were able to showcase our Pharma Zone facilities, which Lufthansa has certified as ‘world-class’ anywhere outside Germany.”
    Among the airports that attended was Leipzig/Halle Airport, which was in Mumbai to showcase its capabilities as a distribution center for exports from India. According to Markus Kopp, (left) CEO, Mitteldeutsche Flughafen AG, the aim was to expand Leipzig/Halle Airport—Germany’s second-largest freight hub—and turn it into a gateway for Indian manufacturers. In fact, the airport wanted to build on the cargo flights that operate from Delhi and Bengaluru to Leipzig/Halle. The airport’s stand at Air Cargo India not only underlined the benefits of the airport but also included Leipzig/Halle’s partner airport, Dresden International.
    “The attractiveness of our airports for Indian partners lies in the quality and speed of our handling operations and the value added services that we can provide – for example, picking goods. The whole package is rounded off by trucking services, which now cover every part of Europe,” said Kopp.
    Others, like Mohamed Parkar, (right) Vice President Commercial and acting Chief Operating Officer, Maximus Air, echoed Kopp. Banking on Indians, the largest group of investors in the UAE, Maximus displayed its international ambitions at ACI—this was its first ever appearance at a major show under its new avatar as Maximus Air—focusing on the Indian sub-continent as one of the key regions for the growth of its business outside the Gulf. The show, according to Parkar, presented an opportunity to showcase how the carrier had grown to become a key player providing end-to-end solutions. He also made it clear that Maximus’ presence along with other carriers from the Gulf attested the “strong position of the UAE and its role as an important hub for servicing the neighboring economies. “Our expanding operations out of the UAE capital of Abu Dhabi mean we are well placed to service the needs of those businesses into the wider Arab world countries,” he said.
Tirthankar Ghosh



     On February 7th, Metro Atlanta Chamber’s (MAC) Supply Chain Leadership Council in partnership with the CSCMP (Council of Supply Chain Management Professionals) Atlanta roundtable, held its annual awards luncheon at the Georgia World Congress Center, the same venue where the International Air Cargo Forum & Exposition will take place on October 2-4, 2012. This year, MAC's Supply Chain Forum and Awards Luncheon was co-located to be a part of MODEX 2012, the industry's newest expo for the manufacturing, distribution and supply chain industries.
     This was somewhat of a dry run as the CSCMP is co-locating with TIACA, except that the Air Cargo Forum event is booked in building ‘A,’ closer to the area hotels, and according to one official, no less important is its proximity to the bars. Cargo people are a thirsty sort.
     The chamber’s Bob Pertierra, vice president supply chain development, moderated a panel discussion with three panelists, Mark Holifield, senior vice president of supply chain at The Home Depot, Mike Orr, senior vice president of logistics operations at Genuine Parts Company and Neel Shah, senior vice president and chief cargo officer Delta Air Lines.
     As befits a wired society, an instant poll for real time display was taken via text messaging regarding the economic outlook, something on everyone’s mind these days. And the winner is… of the roughly 1,500 in attendance, 56 percent voted for a better, positive outlook, 36 percent thought the economy will remain flat and 8 percent expected it to get worse.
     Emphasizing the global perspective of Delta’s business, Neel Shah used the example of successful fuel management, which netted savings of 800 million dollars in the 4th quarter of 2011 alone. Constant adjustment of capacity to demand while keeping flight profitability in sharp focus separates Delta from some of its competitors. The specific reference was to American’s flight Chicago to Delhi, India, soon to be cut after allegedly losing 40 million annually for a couple of years.
     Neel said that business and government working together remained a critical issue when it comes to security matters, pursuing a layered approach and building on successful programs such as C-TPAT in order to ensure that the truck driver backing up to the dock is who he says he is.
     The panelists were asked to express their views concerning the pace of change in technology and its impact on business. Mike Orr felt it was both good and bad because it erodes competitive advantage while also providing the ability to enhance such an advantage. Mark Holifield stated that technology was key for retail at a time when customers are used to having more transparency to product offerings and enabling The Home Depot to lower inventory costs and ensure a fast product flow.
Neel Shah commented that today’s supply chain is built for speed, and technology allows Delta to become smarter and give more power to customers and consumers. Despite the economic uncertainty, he felt Delta must keep up and invest in technology.
     Bob Perteirra’s next question dealt with resources, and Neel explained that Delta believed in sharing rewards and will see 264 million dollars distributed to its labor force on Valentine’s Day. Mike Orr remarked that despite the present unemployment levels, there has been a consistent gap in a qualified work force that is lacking the skills the business required and all agreed that retraining the work force was needed. Mark Holifield said that for The Home Depot, social media has played an increasing role in recruitment for both job seekers and the company.
     Bob talked about the upcoming metro Atlanta regional transportation referendum slated for July 31 this year, and its importance in ensuring Atlanta remains competitive and helping it thrive. If metro Atlanta votes approve the July 31, 2012, Transportation Referendum, over 7.2 billion dollars in sales taxes will be generated over 10 years, to be spent on transportation improvements within the 10-county region.
     Metro Atlanta is home to 274 companies creating more than 26,000 jobs, including being the 4th largest poultry producing region in the world. At the same time, Metro Atlanta was selected as the location for a GE Smart Grid Center of Excellence and created 400 new clean-tech jobs in 2010. A few more stats—the aerospace industry employs more than 8,200 people in Metro Atlanta and 80,000 in Georgia. Since the 1996 Olympics, Atlanta has seen 134 percent growth in international cargo.
     The ceremonial part continued with the election of supply chain winner of the year, which went to Insight Sourcing Group, a management consulting firm focused on strategic sourcing, spend analysis, and process transformation. Again, the winner was voted by text messages with the results in real time.
     The Metro Atlanta Chamber awarded the Supply Chain Professional of the Year to John J. Mascaritolo, director of logistics practices and assistant professor of supply chain management, Clayton State University.
Ted Braun/Flossie



     Warren Jones, Cargo Marketing Manager at Hartsfield Jackson International Airport, is a most happy fellow as October 2012 approaches.
     You see, for almost as long as he has held his job at the big airport, Warren and some others have dreamed of the day that the entire air cargo universe, which includes people like Ram Menen, Michael Steen, Oliver Evans and Neel Shah (to mention just a few for flavor here) would come a-knocking at ATL’s door to see what it has to offer, and, for a few days, take in a most progressive and interesting southern U.S. city.
     Now, the time for beer and skittles or biscuits and gravy or whatever you fancy is almost at hand, as October 2012 arrives in about six months, when the International Air Cargo Association (TIACA) returns to the USA—the land of its founding—to host Air Cargo Forum & Exhibition 2012 in Atlanta, Georgia.
     Warren Jones is animated, never at a loss for words, and not a moment passes when he isn’t thinking of his countdown to destiny clock as ACF 2012 Atlanta is scheduled for October 2-4, 2012.
     “TIACA will bring about 4,500 people to Atlanta.
     “In addition, CSCMP, which is the Council for Supply Chain Management Professionals, will bring some 4,000 shippers to the conference.
     “We are also working with several major groups including the Air Forwarders Association and the Atlanta Air Cargo Association and others around the world.
     “We expect to achieve an audience of nine to ten thousand people at ACF Atlanta 2012.”
     As we spoke to Warren, we learned the good news; he had just been married prior to Air Cargo Americas trade show in Miami last November, but with the big show upcoming and other duties, the couple elected to honeymoon after ACF 2012 event.
     We wondered where the happy couple would be October 5, 2012, the day after ACF Atlanta 2012 closes.
     “We will be on an airplane to the Dominican Republic for our honeymoon,” Warren Jones smiled.
     Good to plan ahead! We hope they got a good airfare…
Geoffrey/Flossie


RE: The Oliver Decade
Dear Geoffrey,

     Bravo on your article on Oliver Evans and the great team at Swiss Cargo.
     My partners and I had the great pleasure of handling Swiss at ORD (Catamount Cargo) until they relocated into LH's facility.
     The Swiss Cargo team from top to bottom was one of a seamless true partnership and equality between customer and service provider.
     This, along with hands on support throughout, created an environment where all went the extra mile with a smile of satisfaction, knowing their efforts were truly appreciated.
     One of those great and humbling moments was at ACA when Benno Forster stopped to say hello and commented with such great warmth on the team spirit and service delivery from 'our' team.
     Every continued success to Oliver and all at Swiss in North America in their niche market, which is the envy of many.

Ross Jacobs
VP Business Development
Alliance Ground International


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