Exclusive—Since taking over command at Lufthansa Cargo on January 1, the carrier’s new CEO, Karl Ulrich Garnadt, refrained from issuing any public statements or comments. However, this ended last Wednesday with the manager presenting his airlines’ 2010 financial figures. Air Cargo News/FlyingTypers was there to interview Lufthansa Cargo’s new chief.

FT:   Which three topics are most pressing on your to-do list for accomplishment this year?
KUG:   Highly important for us was the guarantee, now publicly declared and confirmed during a press conference by our parent company, that Lufthansa Cargo is and will continue to be a strong pillar of the Lufthansa Aviation Group. This commitment gives us the assurance to drive our business forward with utmost dedication in the years to come. For everyone present, this support was clearly demonstrated a week ago when Lufthansa ordered five Boeing freighters B777-200F. These highly modern and cost efficient aircraft will be delivered between 2013 and 2015 and secure our further growth.
     Having said this, an issue that needs to be dealt with that is of great importance is security in air freight. It is not only Lufthansa Cargo but our entire industry that faces severe challenges beginning in 2012 the latest, when USA’s TSA demands the screening of every single item to be flown into the United States. This exacerbates the current security regime anew. Besides all the technical, operational and financial consequences this will trigger, we question the exclusiveness of this approach. The European Union advocates securing air freight along the entire supply chain, including the regulated agents’, known shippers’ concept and the selected screening of some of the shipments at the airports. At Lufthansa we believe in a multiple security effort consisting of a combination of both the TSA’s objectives and solutions and the approach favored by the European Union. Both philosophies should be mutually accepted and if possible combined, leading to a workable worldwide security standard in air freight.
FT:   And your third most pressing theme?
KUG:   E-Freight. There, we want to speed up processes notably, together with a number of chosen industry players. This includes partnering airlines, but also forwarding agents and airports. To start with, we intend to evaluate the current situation expeditiously to ensure a sound foundation for initiating the next stage in E-Freight. We also intend to address and include IATA in this process.
FT:   What about plans to initiate close cooperation with other carriers?
KUG:   Airline alliances are, generally speaking, superior to stand-alone strategies. They are more efficient, save costs and improve revenues. Members of the Star Alliance demonstrate this daily on routes across the North Atlantic. However arrangements that work for passenger airlines do not necessarily apply to cargo carriers. Nevertheless, we believe that it is worth a try by utilizing the existing assets, namely the cargo compartments of passenger aircraft much more efficiently, especially on long-haul routes. A prerequisite and a must will be getting the green light for antitrust immunity from the state authorities. I can imagine that combining our capacity with that of United/Continental Cargo and Air Canada Cargo on flights between Europe and North America would make sense. I therefore, favor engaging in talks with these carriers.
FT:   Jade will get a capital injection. How much and who pays?
KUG:   After discussing this matter for a while we are happy to announce that all owners agreed on increasing Jade’s capital by 50 million U.S. dollars. Majority owner Shenzhen Airlines contributes 50 percent of the sum; Lufthansa and German bank DEG pay $12.5 million each. The step will assure the future of the carrier that, by the way, reported figures in the black for 2010.
     From a strategic point, through Jade’s existence and traffic, our investment can secure cargo flows to and from China and within Asia. Put it this way: if we didn’t have Jade as a valuable asset, we as Lufthansa Cargo would be cut off from this growing market.
Heiner Siegmund/Sabiha

     You want to get a forwarder really mad?
     As always, it depends on who is telling the joke and to whom, but it goes something like this:
     “Everyone seems to know what the world’s oldest profession is; can you guess what the second oldest is?”
     Well to hear FIATA tell of it—the time is long past for forwarders to get some respect.
     And if you ask the forwarders who were in Istanbul last month, it turns out that the Cargo Agency Conference barely had a quorum; about 25 airlines participated in its proceedings, a small percentage of the member airlines.
     Apparently enough was enough and FIATA drew a line in the sand with a deadline of 24 of months to achieve needed organized change.
     In a nutshell, the forwarders don’t want to be regulated by IATA and believe IATA accreditation for forwarders is no longer required.
     The IATA/FIATA training agreement was terminated.
     Upshot is during early 2011 the forwarders are mad as hell and not about to take it anymore as they boldly march on seeking and hoping for cooperation and the pursuit of mutual interest.
     IATA governance is an arcane and complicated matter handled with hordes of lawyers.
     Whether the organization can reform and widen its approach by providing a more inclusive tent, or remain the ossified body on display, is yet to be determined.
     Might be cool to be the proverbial fly on the wall at the upcoming TIACA AGM in Bangkok, April 17-19, to witness first hand a bit of interaction between FIATA and IATA representatives, following the new second FIATA press release within a couple of days, titled:
     “FIATA Gets Into The Driver’s Seat”.
     Do we detect some pent up frustration when the FIATA president is quoted as: “…the airline industry, represented by IATA, should finally face reality, and recognize forwarders as their most important customer group, and treat logistics services providers accordingly.”
     Is the quoted forwarders’ “anger” directed at the airlines or at the IATA bureaucracy? How does one differentiate between the two and does it really matter, or only the results count?
     Judging by the wording of the press releases, the target seems to be IATA.
     It will be fascinating to see how it evolves, whether this is reduced to a tempest in a teapot between members of the IATA/FIATA Consultative Council or if it manages to raise the temperature enough to get airline cargo executives to feel sufficiently inconvenienced to intervene.
      When pushed to come up with some answers, will they choose to hide behind the “it’s the IATA secretariat” excuse. Does the push back to the forwarders’ long standing efforts to gain some genuine say in agency affairs stem from the airlines?

      IATA and FIATA are two of the four legs of that newly formed GACAG that was announced in Amsterdam and showcased at a WCS Istanbul photo op last month.
     It is difficult to foresee how FIATA and IATA will cooperate successfully under the GACAG umbrella when the relationship is as tenuous as it is.
     Is the GACAG faced with what can be described as something of a test here, sanguine enough to compartmentalize their priorities and cooperate when it comes to dealing with compelling security issues while letting long simmering dissatisfaction in other areas, such as training programs, accreditation and CASS rest?
Will this affect the work of the group and divert energy and attention?
     A second GACAG focus other than security is e-commerce; is it a reasonable objective to want to cooperate in this area, given years of stalemate and stagnation with slow measurable progress being made worldwide by the parties?
     Finally is this truly an industry issue?
     Aren’t the big players, be it airlines or forwarders, already way ahead of the game? One argument to be made is to say that this is a new page, and let bygones be bygones and let’s see what we can do together. Fair enough.
     With strong leadership and commitment there is a way forward.
Ted Braun

Another First
New From FlyingTypers

Now In HD

Robbie Anderson
President United Cargo

Click Here
To View Video

India Air Cargo Working Group Building Future

     The special Working Group on Air Cargo/Express Service Industry under the Civil Aviation Economic Advisory Council (CAEAC) in India’s Ministry of Civil Aviation was set up sometime ago, but has just now started functioning. The group has been studying the present system of Air Cargo/Express Delivery Services in the country and will be identifying areas that require further improvements to seize the emerging opportunities in international trade in the context of faster pace of economic growth in India.
     Once the Working Group submits its report (sometime in the course of the next two months), things should get moving. Perhaps then the belief that India could become a major transshipment center for Asia would see fruition.
      Meanwhile, Air Cargo News FlyingTypers approached Airports Authority of India (AAI) Chairman, V. K. Agrawal, (left) to find out if there was any initiative regarding the establishment of a transshipment center in India.
     The Chairman pointed out that AAI had been prompted by the India growth story to launch an ambitious program to upgrade and enhance the cargo operations in its airports. With 125 airports—big and small—under its belt, the AAI was ideally suited to enhance cargo operations at its airports. As for the transshipment center, Agrawal said that India with geographical and technical support, coupled with the availability of skilled manpower, provided an opportunity to be a major cargo transshipment center.      “However, while planning an international cargo terminal at any Indian airport, the provision for storage and handling of transshipment cargo is the basic criteria,” he said.
     He mentioned that the Working Group under Economic Advisory Council that had been constituted by the ministry of civil aviation had on its agenda the matter of transshipment cargo. He said: “Initiatives have been taken by private airport operators, like Bangalore International Airport Limited, and the MIPL at Nagpur as well as few state (provincial) governments like Haryana (that adjoins Delhi) are proposing a dedicated Greenfield Cargo Airport.” Agrawal said that transshipment from one continent to another continent that entails inter-continental flights is now possible at airports like, Delhi, Mumbai, Hyderabad and Bangalore.
     According to the AAI, the growth rate of cargo in the last five years was 10.5 percent for international cargo and 25.1 percent for domestic cargo. The overall growth was 15.3 percent. Future growth for the coming decade has been envisaged with international at 9.6 percent and domestic at 11.7 percent. That puts the overall growth at 10.47 percent. “However, as regards to the development of hubs other than Nagpur,” said Agrawal, “AAI is in the process of developing regional airports in southern India so that Chennai airport may be developed as a cargo hub for the southern region. Once the Customs department permits handling transshipment at airports and ramp transfer of cargo, it will be possible to develop a hub at Chennai Airport,” he said.
     The AAI chairman also spoke about the much-needed establishment of cargo villages around the major airports in the country. Significantly, there is only one cargo village, and that too in Bangalore is set up by GVK, the private airport operator of Bangalore International Airport; India does not have any other cargo village. Agrawal said that the Working Group on Air Cargo, in which AAI is one of the constituents, has proposed the development of a cargo village in different regions of India so that the congestion at the major metro airports, i.e. Delhi, Mumbai, Chennai and Kolkata, may be reduced.
Tirthankar Ghosh/Flossie

Spring Up To The Cold Chain
Cool Answers To Hot Questions

     The concept of cold chain shipping is decades old, but it wasn’t until the last several years that industry has seen great advances in technology, processes and standards for moving temperature-sensitive products. This recent rise is due to a greater demand for these products, and much higher-value per shipment. In particular, increased international demand for pharmaceuticals (a $900 billion market) has driven the air cargo industry to refine and improve its cold-chain services.
     Yet not all supply chain stakeholders have invested the same amount of time, money and resources into the development of their services. This is especially true when shipments require more than one carrier or other transport.
     Shippers and forwarders are instinctively selective in choosing cold-chain partners to help move their cargo, but it is sometimes difficult to know the right questions to ask when evaluating potential partners.      There are several key elements that should be considered when selecting a cold-chain partner.
Breadth and Depth of Service: How wide is your network, and to how many locations can you safely ship my temperature-sensitive cargo?
     Certainly cost of shipping is a consideration when selecting a cold-chain partner. Yet, the real value offered is not necessarily all about the bottom line. More important is the quality and level of service—and this is often related to the size of a cold-chain provider’s network.
     A shipper should weigh the extent of a cold-chain partner’s network against their own market ambitions.      For instance, a shipper seeking to move temperature-sensitive cargo to more than one market may encounter challenges if their carrier has a limited network supporting cold-chain infrastructure. This can restrict the markets to which temperature-sensitive cargo can be shipped—and that does affect the bottom line.
     Another key consideration is the level of cold-chain competence throughout the network. Cold chain infrastructure may exist in multiple locations within a partner’s network, but unless employees are trained to work with temperature-controlled cargo, that infrastructure may not be sufficient to ensure the cargo is safely moved to the next segment of the cold chain. Cold chain partners should show low levels of wasted product due to supply chain errors. This is one way in which shippers and forwarders can determine the quality of a cold chain partner’s processes. A tested and refined process will result in lower levels of wasted product due to temperature fluctuations.
Qualification and Validation: What assurances do I have that my cargo will arrive safely?
     The cold-chain environment is changing rapidly, with new technologies coming to market and a growing global demand for increasingly delicate products requiring temperature-controlled shipping. While processes, technology and best practices change and improve, one critical constant is confidence in one’s cold-chain partner.
     “Cold-chain partnerships are still largely a matter of trust,” said Nick Basta, Editor-in-Chief of Pharmaceutical Commerce and an expert on cold chain logistics. “It is important to have some indicator that I have a trustworthy partner.”
     Reputation, past performance and professionalism are all indicators of cold-chain competence. These points of trust can be reinforced if a cold-chain provider attains accreditation from a reliable authority.
     For instance, Envirotainer, which pioneered the market for “active,” temperature-controlled containers that keep cargo at optimum levels, offers a qualification to carriers able to show training and employee competency when working with temperature-controlled cargo. This Qualified Envirotainer Provider (QEP) certification is given based on location. It is not a blanket certification for the entire company; each network location can receive certification if employees have undergone training and education. That is in part why QEP certification is valuable – it takes real investment on the part of the cold chain service provider to earn certification. Envirotainer remains one of the most respected temperature-controlled container providers. Another consideration is how closely a cold-chain partner follows the guidance issued by both government and industry bodies for cold-chain processes, packaging and technology. These include numerous reports and recommendations from the World Health Organization, United States Pharmacopeia’s General Chapter 1079 on Good Shipping and Storage Practices, and the International Air Transport Association’s Perishable Cargo Regulations.
Monitoring and Communication: How is my shipment monitored once it enters the cold-chain?
     Technologies for tracking and monitoring temperature-controlled cargo, such as sensors and GPS devices, are becoming more common. In the future, these kinds of devices may become more standard, allowing all shippers to monitor their cargo from end-to-end. Yet, more important than knowing location and temperature—sometimes only after the fact—is having confidence that one’s cold-chain partners are monitoring the cargo throughout its journey.
     “An airfreight forwarder’s job is to assume complete responsibility for what can be difficult to control,” said Fried. “The relationship between forwarder and airline must include effective communication.”
     One of the most effective methods of monitoring shipments is a truly collaborative approach, whereby all stakeholders charged with moving temperature-sensitive cargo work together to monitor location and temperature, consider challenges and collectively resolve them, and provide real-time, firsthand knowledge of the cargo to the customer. This kind of engagement allows shippers and forwarders to feel confident that their cargo is in safe hands, even if they are unable to validate that independently in real-time.
Joe Reedy
(Editors note: Joe is Vice President Sales & Marketing, AA Cargo. Article and others just a click away at American Cargo Business Advantage

Front row (left to right)— Ray Curtis, Noel Hill, Jack Maroney, Tsutomu Tatdhana, Linda Dionesotes, Maura Azzaoui and Alejandro M. Orden
Back Row (left to right)—Tony Bawden and Eric Wilson.

RE:  Here Comes Say Hey Ray
Greetings Geoffrey and Ted,

      I wanted to pass along a special thank you from Delta Cargo for the ‘Here Comes Say Hey Ray’ article. The feedback we’ve received from around the division has been tremendous. What was especially appreciated was the old picture of Ray from the New England Seafood Show. Both Ray and our current General Manager of Strategic Accounts, Eric Wilson, are featured in the picture. As a tribute to both April Fools day and the fabulous moustache Ray was sporting at the time, we reveled in the moustache glory this morning (see the attached picture). Ray loved it!

     Thanks again for your continued support of Delta Cargo!

Kind regards,
Dave
Dave Zaksheske
Program Manager - Customer Experience
Delta Cargo
david.zaksheske@delta.com

RE: Cochstedt Lost In Berlin

Dear Geoffrey,

     I liked the piece on the ex con, specially the headline.
     And I was amused to read the piece on Cochstedt Airport. Doesn't the same go for Frankfurt-Hahn?
     I had to go there recently to pick up my brother, returning from England and it took me an hour and a half from Frankfurt Airport to get there.
     No train connection here either and the bus takes forever just like going by car.
     So basically, Frankfurt-Hahn airport is almost as much 'off the beaten track' or 'in the middle of nowhere' as Cochstedt . . .

Sincerely,
Anya Schaefer

If You Missed Any Of The Previous 3 Issues Of FlyingTypers
Click On Image Below To Access

FT032811

FT040111