Vol. 13 No. 13                                                                                                                                    Wednesday February 5, 2014

air cargo news for January 22, 2014
Lunar New Year Worldwide

Trade Picks Up At Horse LatitudesFor many of us who were there for the Tet Offensive in 1968, Tet meant something completely different from what it means to the generation of today, where Tet marks the beginning of the Vietnamese Lunar New Year.
Members of the gay and lesbian group Viet Rainbow of Orange County, in Westminster, California, marched under their banner at the annual Tet parade in Little Saigon.

Gong Hei Fat Choi Happy Chinese New  Year wherever you are, as Chinese Lunar New Year, the “Year of the Horse” begins in China and is celebrated around the world.
As you read this, many in Taiwan and Hong Kong have reopened for work, but the “big soup dumpling” of Mainland China remains almost entirely on holiday until next week.
     China’s outsized influence on international trade always throws the transport industry and its analysts into a state of flux in the first quarter. The reason, of course, is the Chinese New Year celebration that prompts a vast shutdown of business both in China and in many other parts of Asia.
     China’s official New Year holiday lasts for a week and starts at the turn of the Chinese calendar.
     But the long journeys migrant workers make back to their villages mean that millions of workers remain on holiday for far longer than the official holiday. Indeed, with many coastal factories already suffering labor shortages, workers increasingly leave and return whenever they like, at little risk of being unable to find employment.
     This year —the Year of the Horse—many factories were slowing output from the week starting January 20th, and the slowdown was in full swing from January 24th, even though New Year did not fall until January 31st. The official holiday is scheduled to last until February 6th, but there is little expectation that full factory output will resume until at least mid-February, and in many cases production won’t return to full steam until the end of the month.
     The factory shutdown affects transport trades in a number of ways. In the build-up to New Year, there is usually a surge in demand for shipping slots and freighter and bellyhold space. This is then followed by a long lull as exports from China dry up. Once factories ramp up output again, another surge in demand follows.
     This means freighter operators get as much capacity out of China as they can once exports dry up, but move it back once demand recovers.
     “Generally speaking the first week of Chinese New Year will be ok as most carriers and forwarders will have a backlog to clear,” said one European airline executive. “After that, things are very quiet and flights will go practically empty. Most freighter operators will either ground aircraft or redeploy them.
     “We used to either cancel or turn the aircraft around in India rather than send them all the way to the Far East.”
     Many importers of Chinese goods started shipping by sea long in advance of this year’s cessation of production, in some cases as long ago as early December to avoid missed deliveries, lines rolling cargo bookings, and/or the introduction on January 15 of rate increases.
     “We moved everything we could before Christmas and we don’t expect inventory to start properly moving again until early March,” said one retail executive for a company that produces mobile phone accessories in factories near Shenzhen in southern China.
     This is understandable, since mid-January ocean spot rates have been eroding on the main trade lanes out of Asia. Container lines hope that more general rate increases—usually tagged “rate restorations”—in March will find some friction and help steady their less than solid balance sheets. In the meantime, most are relying on blank sailings out of Asia to reduce capacity over the Lunar New Year to stem the decline of spot rates during the trading lull.
     Another complication that comes with Chinese New Year and its changing annual date is that year-on-year trade data comparisons in January and February are often rendered meaningless. In 2013—the Year of the Snake—New Year fell on February 10th, but next year it does not start until February 19th. Indeed, analysts often lump January and February figures together to gain a more accurate comparison, although when New Year occurs late in February, this can mean the output slowdown of factories lasts into March, adding to the confusion.
     But while China’s major industrial centers may have fallen eerily quiet, parties are raging across the country. On that note . . . Gong Hei Fat Choi!
Sky King

Trading Places Best In Show  WCS CNS Fruit Logistica

Time to to once again be active on the conference circuit, but make sure to pick the events that hold the most promise of furthering the industry agenda while at the same time allowing for ample opportunity to network and develop new business opportunities.
     Currently, my plan is to attend IATA in LA and also CNS in San Antonio (given my involvement with Able Freight, I am also attending the Berlin Fruit Logistica Conference and a similar conference in Hong Kong in early September).
     Getting back to IATA Cargo Week and CNS, I must admit that I always commit myself to these two conferences without even reviewing the agenda, because they consistently draw the best minds in the industry to one place and for a few days we can all hope that the industry will make some progress towards securing its long-term viability.
     More often than not, we have grand ideas as we head into these conferences only to lose momentum after the event, as we get drawn back to the reality of how tough the day-to-day grind of the industry has become.
     That being said, I am really looking forward to getting together with old friends and making new ones and believe that with energetic leadership from the likes of Des Vertannes and Warren Jones we will have a good old time, so we hope to see everyone there.



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Air Cargo Show India Elefanta Caves Mumbai

ndia’s only air cargo show -- Air Cargo India 2014 – took off on its fifth foray yesterday (February 4, 2014) at the country’s commercial capital of Mumbai.
The event opened amidst a lot of expectations and hopes for a resurgent air cargo industry driven by an active India market after a Luke warm 2013.
As Vinod Kaul, a senior tradesperson and actually a business development manager who has been visiting the show regularly put it:
     “There was lots of positive energy, hope and air of expectation that the situation will get better.”

Déjà Vu All Over Again 

     Even so, the pervading feeling among those attending the show – at least those from the industry in the country – is one that can clearly be described as ‘déjà vu’, best described as a double negative by the great American baseball layer Yogi Berra who once described losing the tenth of ten games in a row like this:
     “It was like déjà vu –all over again,” opined the great Yogi.
     But In Mumbai an event with almost a license to print its own money, considering the fact that it is the only show of its kind held in the country, and without actually knowing how many shippers were here in halls filled with air cargo people, Air Cargo India looks like it can say attendance was good.

Round Up The Usual Suspects

     Stat Times, the organizers of the event spoke of a ‘record turnout of trade visitors’ -- but with hardly any representation from the government, there were no major announcements that might affect the air cargo industry.

India Show Callout

     The reason: no one from the government – from the minister to the bureaucrats in the civil aviation ministry or those related to the industry – is willing to put his neck out in this election year (the elections are scheduled to take place in a couple of months and if opinion polls are any indication the present set of leaders will not be voted to power).
     And the sense of déjà vu comes from the usual list of exhibitors who are keen to make the most from India.

Conferees & Familiar Topics

     The conference that takes place with the show, however, is more forward-looking: it peeks into the future of air cargo to carve out long-term solutions.
     Perhaps, more important is the fact that the show brought together experts for interactive forums.
     Once such was the Pharma Shippers’ Forum that included forwarders, logistics providers, airlines, and handling agents together to discuss the special needs of the sector.
     With a number of carriers at Mumbai for the show, the major problem of limited airfreight capacity – most of the capacity is belly hold – could probably be overcome. Perhaps, most important is the fact that the infrastructure in Mumbai is now improved. The Cargo Service Center at Mumbai has developed dedicated pharma handling facilities that handles needs of lifesciences and healthcare shipments.

FIEO Likes The Show

Rafeeque Ahmed     One of the major speakers at the show Rafeeque Ahmed, President, Federation of Indian Export Organizations (FIEO) who incidentally led a number of pharma shippers to the meet, was optimistic and went on to point out that the event “would provide a platform for all the players in the national economic growth such as airlines, airports, freight forwarders and shippers to come face to face with each other and pave way for the growth of the international trade”.
     The air cargo industry, he emphasized, was “a vital component paving way for the nation’s economic growth”.
     He held out hope for 2014.
     He said that exports would grow at a level of 15 to 20 per cent in 2014 – he had got that impression after interacting with exporters of all types.
     But he was quick to add that India had seen a slowdown in the manufacturing sector that continued to have its effect on exports. Squarely blaming the government, Ahmed pointed out that frequent changes in policies were affecting Indian exports.

Mumbai Business High

     The optimism around from some was infectious.
Nabil Sultan Emirates SVP Cargo   Peter Scholten Saudia Cargo   Shailendra Seth, Director of Chapman Freeborn India, said that the show provides the perfect opportunity to meet with logistics professionals to discuss new business generating opportunities and strategic partnerships.”
     Desmond Vertannes, Global Head of IATA moderated a session on the challenges facing the Indian air cargo sector.
     While everyone at that event said that there was an urgent need for closer cooperation in the supply chain, Nabil Sultan, Divisional Senior Vice President Cargo of Emirates Airlines, (left) took it a step further to highlight the fact that there were fundamentals that needed to be put in place to ensure that profits roll in: from fuel-efficient planes to yields and tonnage.
     Peter Scholten, Vice President Commercial, Saudia Cargo (right) emphasized that India’s passenger carriers with cargo businesses should be encouraged.
Tirthankar Ghosh


chuckles for February 5, 2014

Air Malta's Valentine

     ‘The Air Malta Love Plane’ is back following last year’s resounding success, offering couples a round trip over the Sicilian coastline and Mount Etna by night.
     The airline said that the flight “includes a romantic dinner tailored to your tastes at an altitude of 14,000 feet, as well as club seating for maximum comfort – one couple per row.”
     Live music will serenade couples on board and guests will also be given a Love Bag that includes a gift from Classic Jewellers and some other great surprises.
     “Last year’s event was an incredible success.
     “The couples on board were really impressed with the unique treat they were given and the attention to detail shown by our crew to make Valentine’s Day really special.
     Take a look at what happened last year on the ‘Air Malta Love Plane’ by clicking here or on the image above.

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Always Year Of The Dog

Flossie Arend Mr. Chips     You don't have to convince us that cocker spaniels are smart. We've had cocker spaniels in our house for over a decade and know from first-hand experience—if there's some treat or toy they want to get their paws on, no matter how hidden, they will find a way.
     So it comes as no surprise to us that little Bobby, a buff cocker spaniel living in Changchun, the capital of Jilin Province in north-east China, gets by with a little bit of the classic cocker sad-sack eyes routine, begging customer's in his owner's lottery station for spare change. But it doesn't just end there.
     Bobby acts the impeccable cutie for spare yuan notes, which he promptly delivers to the nearby snack shop for sausages and chicken wings. The brilliant eight-year-old pup knows the difference between regular paper and money, and will even nose out the larger notes in favor of the lesser ones. He's been playing the snack game for the last half decade and shows no sign of slowing down. Just ask our Mr. Chips and he'll tell you—that's a lot of sausage.
     It may be the Year of the Horse elsewhere around the world, but for a little pup in Changchun, China, it's certainly the Year of the Dog.
Flossie Arend (pictured with our Mr. Chips).

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