Jürgen Weber, Chairman of Lufthansa's supervisory board, got stuck in a TSA queue recently and was none too pleased, saying that the security line for a morning flight to Washington from New York's LaGuardia airport was hundreds of yards long.
      Weber belongs to Global Entry, a U.S. background-check program to speed up Customs and Border Protection processing from overseas.
      But Lufthansa reports U.S. Customs queues at New York's JFK airport are more than two hours for its passengers.
      "It's unbelievable that this nation at the helm of technology thinks about reducing the number of air-traffic controllers, the number of security people at the airport," Mr. Weber said.
      Most industry observers note that as the U.S. Sequester takes hold and staffing is cut back further, security lines will certainly get even longer.
      See United Cargo President Robbie Anderson’s comments next story.
      Get ready for summer.
Geoffrey

sk Robbie Anderson, President of United Airlines Cargo, what is on his mind as March 2013 is ending and his answer is immediate:
“The sequester is a huge issue right now for air cargo in the U.S.
     “We are already feeling some impact of U.S. government cutbacks, as waiting times for clearing inbound cargo are lengthening. Unless an agreement is reached to stop the sequester’s automatic spending cuts, delays are certain to get worse as the year goes on and rolling furloughs of inspectors are implemented.
     “Government employees will be forced to take up to 14 unpaid furlough days this year.
     “International inbound cargo will feel the pinch as wait times for customs clearance get even longer.
     “The sequester is expected to have less of an impact on APHIS (Animal and Plant Health Inspection Service) and other smaller regulatory agencies. The largest impact will be felt by TSA & CBP,” Mr. Anderson said.
     “But it is vital that the major push for industry-wide implementation of ACAS (Air Cargo Advanced Screening) must continue unabated.
     “Sequester is not just an issue for air cargo but also for the passenger business. Lines through customs are lengthening on some inbound international flights to three and four hours,” Robbie said.
     “We are staying very close to our customers as this issue develops. Communication and elevated customer services are vital as everybody wants to know what to expect.”

     So U.S. Customs wants to make a statement about the sequester by taking it to the consumer, and for air cargo a brightening business cycle is muted with slower clearances and other yet to be discovered nasties, including, perhaps, pulling resources from cargo to support passenger operations once the howling begins.
     But for United Airlines Cargo, integration initiatives of the past few years seem to be fading in the rear view mirror as a recharged and very clearly marked avenue to the future emerges.
     Robbie Anderson’s office is on the 17th floor of the distinctive downtown Chicago skyscraper once called “The Sears Tower” and now branded “The Willis Tower.”
     Getting next to Robbie these days is like being up close and personal with a dynamo—the guy is a complete powerhouse executive with what might be the most exciting job anywhere in the air cargo business, if not the most challenging.
     By his words and the way he carries himself, Robbie Anderson appears not only up to the job, but enjoying every second of the ride.
     Good energy swirls around the 17th floor cargo headquarters as one great airline steps out into this next era: United Cargo for the new age.
     Maybe part of it is the move from Elk Grove, the big former UA headquarters complex near O’Hare Airport that was spread over acres of land so vast, people could occasionally be seen roller-skating to meetings between offices in the giant complex.
     Whatever the drivers, putting together two airlines’ cargo businesses with their own distinctive cultures was no walk in the park, and Robbie admits right at the top that “our quality suffered.”


     “But we are confident that we turned the corner by integrating both airlines on a single AWB last December. And we’re very excited that later this year, our technology will take a giant leap forward with a sensational advanced IT system, branded ‘UC360’.
     “UC360 is United’s adaptation of the Mercator SkyChain solution that we are currently testing and customizing to our particular needs.
     “We think the system is the best anywhere, and we need to make sure it’s ready and right before we deploy it. The training phase is in full swing, and we’re getting ready to train over 4,500 warehouse agents worldwide.
     “Interestingly,” Robbie pointed out, “prior to the merger, both Continental and United Cargo were studying the Mercator SkyChain solution.
     “If you look at the data from the recent WCS in Doha, the top three airlines in the world from a technology perspective—Emirates, Swiss, and Virgin—are all utilizing a version of Mercator SkyChain.
     “To deliver the best service, our team needs the best tools. UC360 will make United Cargo very easy to do business with.
     “The name UC360 was chosen because our adaptation of the system delivers complete visibility to every step of the shipping process.
     “As an example, UC360 will reduce billing errors up front so there are fewer discrepancies. When there is an issue, UC360 will generate an electronic CCA. This streamlined resolution is not available in our systems today.
     “Another aspect to our business that will have immediate and continued impact is resuming the integration of Boeing 787s into our fleet. Now that the battery issues are resolved, we’re preparing to get that aircraft back into the skies.”
     Robbie says that the battery issue, while grounding a half dozen of the 50 B787s UA ordered (with options for more), “was never a problem for us.”
     In any case, with everything else going on he is obviously relieved that the much-anticipated airplane will finally get into service, with Denver to Tokyo scheduled to commence May 12, offering an immediate and interesting new avenue to stream air cargo.
     “We are also looking at B787 to further energize our service to markets like Latin America where we do very well, but are constrained because of available lift.”


     “We know we need to address the remnants of last year’s shift in market share.
     “We realize that during this integration we have not been easy to do business with.
     “Before we went to ‘Cargo Day One’ last December, with a single AWB and all our capacity in one system, just being able to take advantage of our vast network on six continents was complicated as schedules were difficult to decipher.
     “It was a real tough sell for our sales team as moving between Continental metal and United metal was a pain for our operations—in some cases more difficult than interline transactions.
     “It was tough on our customers and our people, so we lost some market share.
     “But I don’t blame our customers.
     “When a route is under construction, you take a detour.
     “The hope, and our message, is: the construction is finished, so please come back.
     “We need to get back our fair share of the market, especially in North America. But we feel with the quality of our team and the major investments we’re making in our service, we are on our way to doing just that.”
     Speaking of market share, mentioning that the AA & USAir merger may result in similar metal route swap issues provokes a flickering smile and the remark: “We wish them good luck.
     “The AA/US merger will be good for the industry long term,” Robbie said.
     “We have seen consolidation of capacity bring much more rationale into the marketplace.
     “But at the beginning and end of the day, our people and our products drive our business and ultimately, our profit.
     “We continue to build our ranks with the best and brightest, advancing our employees and bringing new people into United Cargo.
     “It’s all about the future here and from this point forward we expect to meet and exceed our customers’ expectations, and our own as well.”
Geoffrey/Sabiha/Flossie

     Jeddah – March 26, 2013. Saudi Airlines Cargo Co. has added two 747-8F aircraft to its current fleet, bringing the total number of freighters operated by the company to fifteen.
     “We are extremely excited to be taking delivery of our first two Boeing 747-8F aircraft,” commented Mohammed Linjawi, VP Operations of Saudia Cargo.
     The first 747-8F was delivered in March and is expected to be operational by May 2013. The second aircraft is scheduled for delivery in mid-June 2013. Both aircraft will serve the Asia to Europe markets.

hen it comes to air cargo pallets and containers, historically non-airline ULD owners could use IATA two-character designators for their ULDs as long as they were members of the IULDUG.
But IULDUG separated from IATA in 2011 and now operates as ULD Care, and that has changed everything.
     The cost per code was $500USD annually.
     But now that IATA and ILDUG have gone their separate ways, IATA wants the industry to pay USD$5,000.00 per airline code annually.
     By way of background, IATA manages the two-character designators that at one time were thought to be near depletion.
     Industry consolidation and the economic downturn have largely resolved that problem.
     In any case, the two-character codes are the purview of IATA by means of resolution 762 under the PSC (Passenger Services Conference).
     A letter IATA wrote recently spells the change out:
     “PSC has adopted an amendment to the airline designators assignment criteria, where the participation in the ULD area of the IATA Strategic Partnership Program (SPP) from now on will be required for the assignment of the unique or controlled duplicate code.
     “IATA has decided to grant a one-year grace period to non-airline ULD owners who currently hold an IATA two-character designator but have not yet joined the ULD area of the IATA Strategic Partnership program.”
     “To ensure that your two-character designator remains reserved for your usage from 2014 onwards, we would encourage you sign up for the ULD area of the IATA Strategic Partnership Program as soon as possible and no later than December 2013.”
     In other words unless something changes, get ready after December 31, 2013 to pay $5,000 per airline code annually.
     While there is more than a small amount of angst amongst many in the airline industry who have to deal with this newest monetary assault, most are reluctant to go public; thankfully, there are some sources.
      ”IATA is back to strong arm tactics and money rules,” was one sentiment we heard.
     “Just when you think the tone may have started to change,” another source says, “then whammo! Reality check—it’s the same old, same old.” “In the end everything is about the money,” said another.
     For the record, IATA started the initial Registered Suppliers program in 1990, subsequently expanding it to the higher end Strategic Partners version.
     Strategic Partners was formed as a tradeoff between IATA and its member airlines, which had started to complain about the level of membership fees.
     It was a simple concept, facilitating access for non-airline vendors to IATA meetings against annual fees, lowering airline membership fees and in return gaining the freedom to branch out into commercial activities that earn revenue.
     As a nominally non-profit organization, “surplus” amounts were to be channeled back to the member airlines.
     This opened the door to a host of initiatives, all neatly tucked under the “…mission to represent, lead, and serve the airline industry.”
     FlyingTypers has regularly reported over the years about instances in which we felt the members’ interests were not necessarily well served as IATA focused more on making money at all costs, and sometimes as job one.
     Recent examples included the lawsuit in 2011 against FIATA.
     A look at the record underscores that just like most well-intentioned actions, which sometimes pave the road to hell for others, IATA too can do a lot of good when it stays true to its charter.
     The mystery has always been how much of this has been happening because of direction from the very top or because of an overzealous mid-level executive taking license or looking for a way to polish credentials.
     Either way, at IATA it seems the right hand doesn’t always know what the left hand is doing.


     ULD CARE is the independent non-profit private company that in January 2011 separated from IATA, where it had operated as the IULDUG–ULD User Group, a special interest group dealing mainly with interline transfers of ULDs and demurrage.
     Since its inception, ULD CARE describes itself as having “bent over backwards“ to cooperate and emphasize its clear intention to promote asset management using IATA standards, essentially implementing IATA established procedures.
     Additionally, companies that were provided a code via IULDUG before the resolution amendment was passed are granted grandfather rights by IATA; they will be treated as in the past via IULDUG and will not have to comply with the new rules.
     All of this was taken for granted as done and done… until IATA changed its mind.
     ULD CARE membership consists of airlines and ULD management and pooling companies, OEM (original equipment manufacturers) or ULD with a common vested interest and those who could not gain parity or vote under IATA governance.
     ULDs are a funny animal – indispensable for wide body flight operations, whether passenger or cargo and for all cargo aircraft, yet basically low profile inside the airline and always fighting for funds and recognition and not getting much love.


     IATA takes a very market-oriented approach and uses a detailed laundry list when pricing what is for sale in its Strategic Partnership program.
     Something “hot” like e-freight costs $20,000 annually while cargo standards are a bargain at $7,000. If enacted ULD will “only” cost $5,000 a year.
     It goes without saying that whatever additional costs the non-airlines companies that use two character ULD designators will incur, it will ultimately be borne by their airline customers.
     Maybe it’s not too late to reconsider some intended or unintended consequences . . . there is still time until December.
Ted

Just prior to IATA WCS, we sent IATA questions pertaining to the above issue. We thank Des Vertannes, IATA Head of Cargo for his responses.

  Who in IATA prompted putting agenda item P4.1 on the JPSC/31/ PSC/33 agenda in October 2011 as a Secretariat proposal and how did it come about?

  The agenda item was tabled by IATA Secretariat and the agenda item was approved by the PSC, following a change in the status of the IULDUG Interest Group (known as ULD Care), which had ceased to be formally connected with IATA.

  What was the rationale behind its proposed solution, namely “it is suggested that the participation in the ULD area of the IATA Strategic Partnership Program be the criteria” for “controlling the assignment of IATA designators”?

   In order to control the assignment of IATA designators, it was necessary to establish the criteria for non-airline ULD owners to apply for IATA designators. IATA therefore suggested that participation in the ULD area of the IATA Strategic Partnership Program be the criteria for unique or duplicate code assignment however Non-Strategic Partners could still be assigned a code upon request.. In addition, the previous resolution, which referred to IULDUG, now a private company, could have been legally challenged under anti-competitive laws.

  How does this serve and benefit the airline members?

  IATA members need the reassurance that the criteria for 2-letter code designation are consistent. SPP membership also offers a chance to engage and influence decision-making so this is a mutual benefit for the whole industry.

  Was the IATA cargo organization consulted and what recommendation did it have?

   The IATA Cargo team was fully involved in submitting this proposal which was subsequently adopted by the carrier delegates within the Conference.

Was ULD CARE made aware of this decision?

   Members of the ULD Care (previously IULDUG) include IATA member airlines, who would therefore have been advised that the proposal was on the PSC agenda.
Finally just a point in general in context of ULDs and this critical asset of all airlines. We are delighted to witness closer collaboration between all ULD owners and operators that are delivering enhanced safety, loading, handling, transportation and maintenance, all of which helps to reduce costs and bring greater efficiency to its value and usage.

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