Vol. 11 No. 53                                                                                                                      Monday June 4, 2012

 


Dateline Jeddah—We are in Jeddah about to visit Fahad Hammad, CEO Saudia Cargo. His offices are located on the ground floor of Saudi Arabian Airlines Company, which began a major rebranding program to become simply “Saudia” last week.
     Actually, the name Saudia is a triumphant return to a name currently on the lips of people the world over when speaking of the airline of Saudi Arabia.
     It is probably prophetic (and maybe more than just a coincidence) that air cargo at Saudia, having existed as a separate division and profit center at the airline since September 1, 2008, is immediately apparent upon entering the impressive headquarters complex.
     No doubt that wherever this giant, legacy middle eastern airline wants to go in the future, it will be driven in no small measure by the success of its revitalized air cargo enterprise.
     Mr. Hammad waves us into his office with a warm smile, and after we exchange pleasantries, he gets right down to business.
     “There are a number of top priorities for the airline in 2012.
     “We need to establish a dynamic schedule that will enable us to expand within our available resources by penetrating new markets with our current fleet.
     “We must also strengthen our position in markets where Saudia Cargo’s presence is strong by increasing frequencies to HKG and CAN.
     “We must actively respond to market situations of over capacity by delivering new products such as BellyFlex to suit the requirements of clients where competition is stiff.
     “Additionally, it is important that we strengthen the IT infrastructure implementing CargoSpot, and that we improve our services to clients by investing in our major operational sites (JED/RUH/DMM).
     “Finally, we must rationalize our entire operation by deploying the right aircraft to the right destination.”
     Fahad Hammad is a 37-year veteran of the Saudi Arabian national carrier; he has been responsible for the fortunes of Saudia Cargo—from day one, as a separate division, and today as a highly profitable venture. The airline tapped the executive for his extensive, on-the-job expertise and a legacy of superior service-based results at several top management posts, like in New York, when he was based in Manhattan and spent six years with responsibilities for the passenger and cargo fortunes of 21 states.
     Later in London and then to Paris, Mr. Hammad guided the fortunes of the European activities of Saudia for an additional 16 years.

     “Being called back home to lead the privatization of cargo has been quite an assignment, made all the better by our increased business platform and movement to new products and destinations.
     “I can say without reservation that the air cargo business today is quite dynamic and exciting.
     “Air cargo is a community with people that you deal with every day, including freight forwarders and others, that tend to become friends for a long time.
     “This is an aspect unique to air cargo that I very much enjoy.
     “Looking at a time table for our move toward branding our product, it has commenced already with the airline and very soon will continue as our name becomes Saudia Cargo.”
     “Elsewhere we have made a few changes in our approach to the market this year.
     “Firstly, and in order to meet the SkyTeam membership requirements, we are working hard on the full implementation of e-freight and Cargo 2000.
     “We are also developing our current products as well as additional services, such as those based on the Envirotainer concept.
     “Finally, we are strengthening our partnership with clients who deliver courier services by assisting them—not only airside but also on the ground.
     “Global cargo volumes were very volatile in the first five months of 2012 due to the economic crisis in Europe; volumes from the Far East remain soft.
     “Air cargo continues to live up to its reputation as a leading indicator of the global business situation.
     “Hopefully we can see a positive trend during the second half of the year.
     “On the other hand, we have seen strong growth in volumes to Africa and the Middle East, particularly to Saudi Arabia and the UAE from Europe, the USA, and Asia.
     “Most forecasts for the cargo industry predict a flat market growth with pressure on rates due to over capacity.
     “Looking at our own results, we see a different picture.
     “In the first 5 months we saw a growth of 27 percent in our volumes.
     “The major contributors to growth were exports from Africa and Europe.
     “We expect this growth trend to continue throughout the year.
     “The underpinnings of our success and revitalization is the strength of our network, which is fast growing and now includes 225 destinations with a fleet of 145 passenger aircraft and 13 freighters.
     “Also, the proximity of KSA connects the emerging markets of Asia and Africa with the shortest possible routes.
     “The air cargo business needs to rationalize itself a bit, I think.
     “For example, we shouldn’t provide the market with a capacity more than it requires.
     “Air cargo should endeavor to maintain the balance between supply and demand and we need to adopt the latest IT solutions that provide better service to our clients.
     “Looking ahead to new frontiers, we are looking to expand our network in South America and China, and also modernize Saudia Cargo Fleet to improve our On Time Performance (OTP).
     “We are looking at both Airbus and Boeing aircraft—the B777-200F and the B747-800F and the Airbus 330 as we advance toward fleet renewal and modernization.
     “The environment is very much on our mind as well.
     “Saudia Cargo is leasing in freighters that are modern and compliant with the emissions and noise regulations, and we strive to further improve by leasing or purchasing the latest modern freighter aircraft available.
     “A major agenda item right now is Saudia Cargo investing in new facilities at KSA with advanced systems designed to handle all types of air cargo with the latest technologies, but also in an environment based on sustainability.
     “We are looking at energy-saving lighting systems, free cooling when outdoor conditions permit, and Saudia Cargo is investigating sun and wind energy and rainwater collection.
     “We have also adopted security measures and procedures to meet or exceed requirements of GACA and the different National Civil Aviation Authorities of the countries to which we operate.
     “This includes screening the cargo, safe keeping it in a secured area, escorting cargo to and from the AC, and guarding the aircraft at certain stations.
     “On the other hand, access control to the cargo terminal is enforced, certain passes are required to access different areas of the terminal, frequent patrols to the facility are performed, and the movement of people & equipment is monitored.
     “We are also upgrading and implementing paperless cargo, or eFreight, and call on all customs worldwide to accept eFreight with one online global standard for all-customs clearance.
     “A universal customs standard for efreight in wide use could speed up air cargo by days and make our industry more competitive.
     “Looking ahead, we intend to leverage every advantage, including our traditional strengths of location and fleet and a growing network, with our highly competitive revitalized outlook, including enhanced cargo terminals and a vastly improved customer service delivery discipline to put our customers and a growing Saudia Cargo up where it belongs.”
     With its enviable location in the Middle East, possession of the most advanced systems, and the finances and strength to explore further green-technology adaptations and IT systems, Saudia Cargo is positioned as one of the strongest cargo players in the game.
Geoffrey/Flossie   

 

     As expected, the United States and the European Union finalized a deal last Friday to end wasteful air cargo security duplication by ditching the crazy quilt of different rules and procedures that have existed since 911.
     In some quarters the move is seen as indication that critical security may be exiting the hysterical era and will now be driven a bit more by common sense.
     The U.S. Transportation Security Administration (TSA) finally accepted European rules on the screening of cargo and the maintenance of a secure supply chain for all airlines and freight shippers flying cargo and mail into or through the European Union.
     John S. Pistole, (above left) TSA Administrator, is hopeful that at least air cargo can look forward to some better security days ahead, with inspectors on both sides of the Atlantic closer than ever to being on the same page.
     The agreement will “ease the burden on industry and strengthen security by ensuring that we share information and work together toward our common interests,” Pistole said.
     In what sounds like an understatement, Siim Kallas, (right) EU Transport Commissioner, proclaimed:
     “Airfreight is by definition naturally urgent.
     “Cutting out the duplication of security procedures will mean huge savings for cargo operators in terms of time and money.
     “We are getting rid of duplication of security controls, while preserving high levels of security.”
     According to the TSA, more than 80 percent of cargo on international passenger flights into the United States is screened, up from around 65 percent two years ago.
     FlyingTypers
spoke to Harald Zielinski, Lufthansa Cargo Head of Security in Frankfurt, Germany.
     Mr. Zielinski is widely regarded as the foremost security expert in air cargo for his advocacy in expanding the sweeping, total security measures pioneered at hub FRA.

     Last year Mr. Zielinski supplied key testimony in front of the U.S. House of Representatives Sub-Committee looking into air cargo security.
     “We are pleased that there will finally be mutual recognition between the U.S. and EU for greater security cooperation.
     “But I can only caution that this new atmosphere of ‘security gemütlichkeit’ is only a long overdue first step.
     “What air cargo needs is to harmonize its security procedures up and down the line, with standardization that moves away from the patchwork approach of different security measures.
     “Unfortunately there is no silver bullet for change.
     “Real progress for true air cargo security harmonization must be borne by the airlines and all industry stakeholders working in concert.
     “So in plain language, the next step is up to all of us, as air cargo industry stakeholders and authorities get their act together and accelerate effort to work and bring global, benchmarked security from theory to practice.
     “In partnership I believe anything is possible.
     “Air cargo has not reached that point yet but the target has become visible.”
     The cargo security breakthrough has been a long time coming and probably was accelerated (at least in some part) by widely held dissatisfaction with TSA; according to a recent poll, airport customer satisfaction with TSA was at 38 percent among travelers.
     “The negative perception is 43 percent with respondents,” said The Wall Street Journal, mentioning a perception of “TSA incompetence and overstepping its authority.”
     The Journal reported that, in New York, “two female passengers in their 80s recently were required to drop their pants so screeners could check their medical devices.”
     That incident caused TSA to say that the agency will in future stress efficiency, professionalism, judgment, and good manners.
     Now a kinder, gentler TSA has finally shown some common sense, as air cargo operators between EU and USA can stop losing their shirts over needless procedural redundancies.
     As U.S. & EU announced their cargo security accord, the U.S.& Canada also announced a new mutual recognition initiative: cargo shipped on passenger aircraft will be screened at the point of origin and will not need to be rescreened at the border or prior to upload in the other country.
     “With the two countries mutually recognizing each other’s air cargo security programs, the efficiency of screening is improved and the burden on the industry is reduced, TSA said.
Geoffrey/Flossie

 



 


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RE:  Boesch Saved Lives

Geoff

     What a great article. It is nice to see recognition of the logistics industry and those who helped lead it. Bill has certainly made a number of interesting things happen over many years—not mentioned was the Saudi distribution efforts started when he was still with Seaboard and I was in Europe with Emery. As a fast-forward to today, you have helped remember not just Bill, but I am sure many of us are also remembering those surrounding him, and those that insured the success of his ventures. They were timely efforts that changed the airlines, freight forwarders, consolidators, charter companies, and the list goes on. Thanks for a great job! BTW, who is that skinny kid in those ODs?!!

Jeff

Jeffrey A. Lehman
President & CEO
Greeley Pond Technologies, Inc.
www.greeleypond.com


Geoff,

    Great story on Bill. It puts logistics in perspective.

Barry
blhansen@mindspring.com

 

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