A multitude of voices, different lobbies, and rarely a coherent strategy: this sympathetic, basic, democratic but diverting, and therefore mostly inefficient approach is characteristic for the air cargo industry in Switzerland. At least, it was, until now, but for the inception of IGAC, which the players opted to slip under one roof in an effort to turn things for the better in the times ahead.
     IGAC – the acronym stands for ‘Interest Group Air Cargo,’ The club’s aim is to bundle the mutual interests of forwarders, cargo airlines, customs, integrators, trucking organizations, handling agents, GSAs, shippers, and other members of the air freight business in order to give the industry a distinctive and central voice.
     “Our main mission is to better the image and actively influence the future development of the air freight industry in Switzerland. Secondly, we intend to push pressing cargo related topics forward, especially at the country’s international airports,” states Peter Somaglia. The Managing Director of Switzerland-based ground handling agent Cargologic has been appointed the first President of IGAC by participants during the organization’s foundation meeting held recently in Zurich.
     How to harmonize security processes, which steps should be taken to push e-freight further forward and what must be done to improve the information flow within the cargo industry are the three major tasks IGAC has identified as important. One overlapping topic, however, sticks out on the lobby’s to-do list: securing the future growth of the air freight industry. This point is highly crucial because enlarging or modernizing the ground infrastructure has been neglected more than once. To insure preparedness, IGAC urged airports and authorities to allocate sufficient space for building additional warehouses in the inevitable event that increased tonnage demands it.
      Somaglia names Basel as an example where plans for constructing a modern warehouse were shelved for far too long because of conflicting Swiss and French laws. It’s a unique and bizarre situation due to the fact that the so-called “Euro Airport” is located on French soil, but operated jointly by the local authorities of bordering Switzerland, France, and Germany.
     “Contracts with construction firms failed to be signed and lay in the drawer ever since, all because of irreconcilable labor laws in France and Switzerland,” criticizes Somaglia. The result of this stalemate is a bottleneck situation, with all transactions being processed in a completely outdated warehouse at Basel airport.
     Furthermore, Somaglia points at Zurich, by far the country’s most important hub for passenger and cargo traffic. There, an ultra modern 8.300 sqm-warehouse was inaugurated in late June in a ceremony attended by a remarkable crowd of 1,500 invitees.
     “That, however, seems to be it concerning the capacity, since the airport operator hasn’t allocated any further space for building additional facilities when needed.” The manager emphasized that cargo flows are increasing constantly in Switzerland.
      “Although less than one percent of all goods leaving the country are transported by air, the shipments account for more than 35 percent of the export’s total value.”
     The problem, adds Somaglia, is that hardly anybody seems to know these hard facts except for the members of the air freight industry. By not knowing the tremendous importance of this business and how it relates to the well being of the entire country, consequently most people value air freight as of little value to them.
     IGAC wants to change this ignorance or lack of information by channeling pressing air freight topics to authorities, politicians, and the media.
     Thanks to IGAC, there is a slim chance Switzerland is on the brink of a small cargo revolution.
Heiner Siegmund/Flossie

     Swissport has landed a 7-year contract for airside handling at Brussels Airport.
     Until now the company was active at the airport as an offline handler only.
     Airside access for ground handling operations at Brussels Airport is limited to two companies.
     Moves to allow a third airside handler had been stalled as the legislation to allow it is a responsibility of the federal government, which has been outgoing for over a year. The background for this is the fact that the Belgian government still holds a 25% stake in the airport operator, 75% being controlled by Australian group Macquarrie. In the old days the seven-year licenses were granted to Sabena Handling, part of Belgium’s flag carrier Sabena and Belgavia, another Belgian-owned private enterprise.
     After the turmoil that hit the industry in the post 9/11 environment, Flightcare, part of the Spanish building contracting group FCC Group (Fomento de Construcciones y Contratas) bought out Sabena’s handling activity. Belgavia was eventually acquired by private equity group 3i and underwent a name change to Aviapartner in 1999.
     As the current licenses will expire on Ocober 30, their renewal had to be put out for tender.
Apart from Flightcare and Aviapartner, offers were received from Menzies, Swissport and Turkish group Celebi.
     The selection of Swissport over Aviapartner led to a one-day strike of the latter’s handling staff, including passenger check-in, which is a new activity for Swissport at Brussels Zaventem airport.
     A formal pledge by Swissport that it would hire redundant Aviapartner staff at the existing conditions, put an end to the social unrest.
     The first challenge Swissport will have to face is expanding its customer base.
     The company’s move to the limelight of airside ground handling at Brussels Airport will also force the company to move its activities to new premises.
Marcel Schoeters

Upgrades Link To India Future

     The initiatives taken by the Ministry of Civil Aviation to boost cargo operations at all the airports operated by the government-controlled Airports Authority of India (AAI) are gaining momentum. The Compound Growth Rate over the past five years indicates that international and domestic cargo have been increasing annually at the rate of 10.6 percent and 7.9 percent, respectively accounting for a 9.7 percent compound growth rate for total cargo traffic at all Indian Airports. Focusing on the vast potential for air cargo, the AAI has responded to the India growth story and launched an ambitious program to upgrade and enhance the cargo operations in its airports.
      AAI had other pressing reasons as well. With two of its major airports—Delhi and Mumbai—no longer under its belt, the Authority was bound to take stock of the changed ground realities and review the policy of cargo operations. A review was also necessitated due to the changing market forces: a number of industrial townships and regions within the country with surplus agricultural produce demanded the availability of air cargo facilities from the nearest airport to not only save transportation time, but also cut costs. This has opened up new vistas for the AAI.
      AAI Chairman V. P. Agrawal (right) told ACNFT that the growth rate of cargo in the last five years had been 10.5 percent for international cargo and 25.1 percent for domestic cargo. The overall growth was 15.3 percent. In the next ten years, the growth for international cargo would be around 9.6 percent while domestic cargo would be 11.7 percent. The overall growth has been forecast at 10.47 percent.
      In such circumstances, the country would need more than the one dedicated cargo hub that is under construction at Nagpur. The AAI Chairman said that other than Nagpur, the Authority was keen to develop regional airports in southern India. The airport at Chennai is undergoing major upgrades and will serve as a cargo hub for the southern region once all the construction activity is complete. Meanwhile, the Customs authorities have been approached for permission to handle transshipment at Chennai airport and the ramp transfer of cargo. The moves will make it possible to develop a hub at Chennai.
      Air cargo facilities need to take stock of the steady growth in the pharma sector in the country. According to a recent report by PricewaterhouseCoopers (PwC), India will be among the top 10 global pharmaceuticals markets in terms of sales by 2020, with the total value reaching $50 billion. The report mentioned that around $70 billion worth of drugs are expected to go off patent in the US over the next three years and India could manufacture a substantial share of those drugs. In addition, the country produces more than 20 percent of the world’s generic drugs and will become a competitor of global pharma in some key areas, and a potential partner in others.
      Looking at the prospects, the AAI has launched a program to set up centers for perishable cargo. While such centers exist at Kolkata and Chennai airports—both airports are under AAI—the government, too, has initiated a policy to encourage cold storage facilities at airports. Government bodies can set these up at nominal land license fees for the first seven years.
       Such perishable centers have been set up at a number of places like Amritsar, Coimbatore, Guwahati and Lucknow airports. A government organization under the Ministry of Commerce, APEDA (Agricultural & Processed Food Products Export Development Authority) has supported the initiative by establishing cold storage facilities on land provided by AAI at its airports.
      The AAI moves apart, the Ministry of Civil Aviation has chalked out plans to enhance air cargo volumes. One of the significant moves, said Agrawal, was to lessen the undue strain on existing terminal facilities created on scarce airport land. “The concept of setting up air freight city/city village was felt and the Export Promotion Board (EPB) directed the Ministry of Commerce to prepare a project for setting up one each at Delhi and Mumbai,” he said.
      Among the other measures to sustain and achieve the target of growth in the future, the AAI and the Ministry of Civil Aviation commissioned a study on the growth of air cargo in the country. The PricewaterhouseCoopers study suggested initiatives to support the growth of air cargo. Among these were:
•   Simplification of procedures through electronic enablement.
•   Provision for efficient handling infrastructure.
•   Supporting the growth of cargo hub operations.
•   Regulations of performance standards and provision of service.
Tirthankar Ghosh/Flossie

Rachel Humphrey

Jenni Frigger-Latham

RE:   IATA Stranger Than Fiction

Hi Geoffrey,

     Your "IATA Stranger than Fiction" piece deserves a bit of commentary.
     I for myself am not always in favor of all IATA initiatives, and I do have my own experiences with IATA.
     However, as far as the accreditation requirements imposed on forwarders are concerned, I'm all for it.
     One must understand that there is safety at stake.
     Now, of course, all stakeholders pay plenty of lip service to improving safety, but what is actually done?
     If you follow the arguments brought forward by FIATA and the forwarding community, a large majority of air cargo is tendered by the forwarders (after all, that's why FIATA understandably wants a higher recognition from IATA's side).
     The existing requirement from IATA is that two staff for each branch office the forwarder maintains must be in the possession of a "recognized" training certificate (e.g. IATA, IATA ATS or IATA ATC).
     Now, why is it that so many consignments of DG get rejected by operators, for very obvious reasons, despite being handled by the very same forwarders who claim they're better off on their own?
     Couldn't their oh-so-well trained and oh-so-safety conscious staff detect these irregularities and inform the shipper accordingly, BEFORE the item is—for a not inconsiderable cost—rejected by the operator?
     Also, have a look at the ongoing issue of State and operator variations.
     Let's say Shipper A wants to fly Paint, UN 1263, from Germany to Mumbai, India.
     The forwarder just says all right, no issue, but doesn't tell the shipper that his offer is based on carriage undertaken by an U.S. carrier, which mandates compliance with all U.S. state variations.
     Because of the non-compliance with U.S. regulations, the shipment gets rejected.
     So whose fault is it?
     Certainly NOT the shippers’ – it’s the forwarders’ job to communicate with both airline and shipper.
     More often than not, however, that isn't done.
     I train shippers, airport personnel and forwarder staff every day, and I see the rejections our shippers get from airlines. Quite a high number of these rejections are caused by mistakes or omissions on the forwarders’ side, not on the shippers’ side.
     Another thing that is often overlooked is that the IATA DGR is NOT identical with the ICAO TI.
     In some aspects the IATA DGR mandates further requirements, and for anyone wanting to ship with an IATA member carrier, a non-member who is party to the IATA Multilateral Traffic Agreement-Cargo or an IATA accredited forwarder compliance with these additional requirements of the IATA DGR is a must.
     Since obviously only IATA can mandate compliance with their own requirements on top and above the ICAO TI, it is quite clear that IATA's actions in this case, as old-fashioned as they may seem, still make good business sense.
     Let us also not forget that forwarders tend to make good money even in the worst of times, something which cannot be said about the majority of airlines.

Best Regards,
Jens
Jens-Thomas Rueckert
Manager Training & Projects
LOGAR Günther Hasel e.K.
Gefahrgutberatung/Gefahrgutausbildung
IATA accredited Dangerous Goods SchoolBaden Airpark / Airport Boulevard B 210D-77836 Rheinmünster / Germany
T.Rueckert@logar.de
http://www.logar.de

FT Responds:

Dear Jens,

     Thanks for writing - we always welcome feedback and another point of view.
     What your letter addresses is a complex issue which requires setting the scene for better understanding:
     1)  Over the years forwarders have been seeing fewer and fewer reasons to stay and participate in IATA accreditation because, in and of itself, in their view, it does no longer provide advantages commensurate with the cost.
     This is a business consideration, unrelated to the specific topic of DGR, and has more to do with the fact that they are primarily airline customers and expect to be treated as such.
     2)  In terms of DG shipments being rejected, I am certain you are very close to that. No doubt rejected shipments hardly help the business of the shipper and/or the forwarder. What needs to be taken into account is that the entire supply chain has a real stake in safety and there are viable and cost-effective alternatives for professional qualifications that support the multimodal requirements of shippers and forwarders, rather than the separate air specific aspect of the IATA version. What is "old-fashioned" is the basis of the airline forwarder framework in IATA, not the airline variations.
     Such programs include airline DG requirements on top of the ICAO TI.
     3)  Whether the forwarder or the airlines make "good money even in the worst of times" has nothing to do with the DG issue at hand. It's a topic as old as the entire airline/forwarder relationship and it is exactly what is not well handled in the Cargo Agency framework.
     Left alone, airlines and forwarders have found mutually beneficial models that have been successful by focusing on the needs of the customers.
Ted

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