Vol. 10 No. 71                       THE GLOBAL AIR CARGO PUBLICATION OF RECORD SINCE 2001               Monday July 25, 2011

     Patrick Murray talks about innovation and building fast growing Calogi with great enthusiasm and hope.
     Murray is no stranger to IT having been involved with various systems from British Airways to IATA to Mercator.
     But as we learned during a conversation in Dubai recently, Calogi is building from the ground up for the world air cargo community.
     Amidst a growing number of IT companies Dubai-based Calogi is rising quickly offering a secure internet service portal “that offers a one-stop platform for a range of air cargo businesses from around the world to negotiate and sell products and services online”.
     “Calogi is 24/7 business-to-business and business-to-consumer cargo logistics network that was developed jointly by Calogi and Mercator, the IT division of Emirates Group.
     “Calogi offers a multitude of services, including flight schedules and space availability, shipment tracking and stock and rate management.
     “Calogi also provides an instant link to customs authorities, via the airlines, meaning the time spent processing import, export and transit shipments can be reduced considerably.
     “Since its Dubai launch in July 2008, the number of Calogi subscribers and transactions have experienced phenomenal growth,” Patrick Murray says.

   You are starting an international rollout plan for Calogi – tell us about it.
  We’ve reached a level of maturity in Dubai where we feel we are now ready to engage the international community, so we put up a full import/export package for the forwarders, but of course while we are selling in Dubai, we are already making use of the Dubai-based functionality.
     So a Dubai forwarder can now do business with international partners, and we now want to leverage on that. What we’ve been doing is looking at some communities where we feel Calogi would really make a difference.
     For the moment, recently we visited Bangladesh, which is ripe for automation – there’s not much there at the moment.
     We met with the Freight Forwarder’s Association, Bangladesh GSAs and we met with a few of the big airlines.
     There was very positive feedback – they know they have to do something, they all want to enter into the e-freight arena – they just don’t have the capability.
     So here we’ve come along and we’re offering a pilot program in Bangladesh. “We’ve got two GSAs and about half a dozen forwarders, and we are underway with a program study that eventually can benefit the rest of the communities.
   How long will that go on? How long does a test period take?
  Well, it’s very quick to start up a community – we can have a community up and running within a couple of weeks. The training for a forwarder is three days; for a GSA and GHA, it’s one day. So it’s five days worth of training and then they’re ready to go.
     The pilot itself takes about two months, and then we use those studies to engage the entire community.
     We would want to do a proper roadshow where we can talk about experiences, what we can offer, and really, how we raise the bar.
   What do you actually put in to their operation – i.e., what technology or hardware do you bring? How do you impact their operations?
  Some of the larger forwarders have their own systems, but there are 400 forwarders in Bangladesh currently and probably about 360 of them have nothing at the moment.
     So we go in there and we’re fresh, we’re inexpensive, we help them compete with Dubai.
     They do a lot of trade with Dubai as well, so it’s good to have that type of partnership going between the forwarders here and the forwarders there. And it works.
     We’ve had previous success with Dubai, and we feel confident we can roll it out to other communities as well.
     The other communities we’re looking at are in the GCC, Sri Lanka, Malaysia Indonesia and the Philippines.
     These are very up-and-coming, forward-thinking communities that would like to do something in the e-freight arena, and what better solution than Calogi?
   How did you come upon this change and decision to expand? Do you think it’s a natural progression from where you have been?
  We had always planned to roll out international – we’d always built for the international community. We wanted to get a working model up and running in Dubai, as a reference site. One of the things we do is we invited people to come and look at the operation in Dubai to see what we’ve done with it. We’ve got nothing to hide. We’re more than happy to talk to the forwarders and the airlines to really see how we made a difference.
   Why should a company use Calogi and where is it available right now? How do you implement putting someone new into your system?
  I think first of all, you can exchange information. Secondly, you can share documents. We offer full compliance; we offer full messaging with the airlines, so you can do online bookings, FWB exchange – many of the airlines now give discounts to forwarders who can do automated business with them.
     There are a number of instances where they are trying to get the information for EU and American customs, and they’ll offer an incentive for the forwarders to get that. So there can be financial incentives when you use Calogi.
     It also simplifies the business; for instance, our credit control engine in Dubai handles all manner of financial matters. We want to exploit that model and we’re not sure if we can offer every feature in every community, but we can certainly do it for the import and export forwarder.
   Where is Calogi right now?
  We have communities in Amman, Muscat, Sharjah and we’re about to start a community in Abu Dhabi.
  How did you come up with the name Calogi?
  It came from Cargo Logistics International.
   What do you say to people that say there you have a monopoly on the data exchange in Dubai?
  We’ve improved the data flow in Dubai, and we linked all the partners so they can exchange data through one system.
     We’ve reduced the need for expensive messaging costs and if we are being criticized for being a monopoly by improving the way communities do business, then we are guilty as charged.
   Are trade shows a boost to your business? Do they help you?
  Yes, it’s amazing; we’ve found that most people in the industry have actually heard of us, even though we haven’t done much on the international front in terms of marketing. I think because this has never been tried before, there’s an incredible amount of interest that’s being generated – much of it by word-of-mouth. We have 90 airlines represented on the portal, and we’ve dealt mostly with their head offices in terms of signing the contracts, so they know who we are. We’ve been very close to IATA in terms of developing the e-airway bill, so they know who we are. We’ve got most of the large forwarders on board in Dubai, so they know we are. So it’s kind of a viral network, and it’s spreading. When we go in to a community, we find that people know who we are.
   Where do you hope to take Calogi in the future? Do you see it in the U.S., throughout Europe – are you head to head with the big IT providers, CHAMP, etc.?
  We’re not actually head to head with the big providers – in fact, CHAMP would be a great partner for us.      We don’t compete with CHAMP, TRAXON – we built a solution for the small community, forwarder and airline. That was our primary target, and nothing really existed for that before us. We’re finding the niche of working with the smaller guy, and figuring out how we can bring them up to compete with the larger guy.
   Where does Calogi see itself in the future?
   Calogi hopes to be global. We hope to be in the United States, Europe, Asia and South America.
   What resistance do you face?
   As with anything, the resistance is change – bringing the air cargo industry into the 21st century.
   What is your background in the business?
   I started my airline life in British Caledonian, moved to British Airways, Galileo, Mercator and then IATA. I have been in Cargo for most of my working life.
   How do you identify a new market?
  Somewhere that is low on automation. They have to have a good internet connection, a willingness for change and they have to be on the map for e-freight. We score it based on a set of criteria – will this be a good market for us? Who are our competitors? Are they ready for change? If we feel after evaluations that it’s right, we will approach the Air Forwarders Association, the Airline Operators Committee, and some of the big players, like the largest GSAs, and we will set up meetings with them. We will then explain what Calogi is, maybe show a little demo, and gauge their interest. What we’ve found is whenever we go in to a market, they say we definitely expected this or something like this because at the moment, we have nothing! We can’t do e-freight, we can’t do many functions that we know are important to our industry: please; help us!
   How many companies do the communities involve?
  Well the communities can be as small as one GSA and one forwarder, or it can be as large as Dubai, which encompasses the entire forwarding and airline community.
   What do you tell a new location like Bangladesh in terms of what they will be able to do with Calogi?
  First of all, they will be able to do business with import and export forwarders. The stock and rates will be available online – all of that is automated, and they’ll have access to the airline’s stock. They have full control; from the moment they execute an airway bill, the information appears on the airline’s sales report, which is visible to both – there’s no dispute.
     You can share documents with your import forwarder, your shipper, etc and can also see what the status is in the dashboard through the status messages received from the airline.
   Does the Calogi system have a friendly user interface for those who have not yet caught up with the 21st century?
  If you can type an airway bill, you can use Calogi.
     With a subscription, you get full training on the system, and the system is quite intuitive and user friendly; it’s quite difficult to make a mistake. Certainly on the ratings side, if the airlines set up their rates correctly, once you hit the execute button, it’s all calculated automatically.
     One interesting challenge is in the way the airlines do business. In many of these communities, they are still issuing the big boxes of manual stock, and they are actually giving those boxes to the forwarder, and the forwarder is taking them, putting them in his typewriter and typing quite happily, and then delivering it to the airline.
     As example one of the things they asked for in Bangladesh was the ability to get rid of the manual stock, and we said, well, who is demanding the manual stock?
     The forwarder says it is the airline; the airline says it is Customs and Customs says it is the banks.
   So basically we’re drowning in paperwork and as the well-worn story says air cargo can fill eighty 747s a year with all this paperwork.
  Well, we’re working with the community in Bangladesh to remove the need for manual stock – it’s a huge cost. We want to move to the A4 airway bill, that way you can just print the airway bill and get rid of all this stock.
   What are your more immediate plans for Calogi?
   We’d certainly like three reference sites in each of the major continents: three in America, three in South America, three in Europe and three in Asia.
   Where would you go in America?
   We’d have to look at that. There are some large airports there that are looking to compete with their neighbors.
   Understand that Calogi has a rewards program
   We designed a loyalty program so it can be run by anyone on the portal. Currently, Calogi is running it’s own loyalty program and we’re basing that on transactions – we give the forwarders points for every transaction that they commit to Calogi.
     Dnata started a loyalty program as of April 1st, and they will be basing that on revenue.
     The program is flexible enough that it can be based on tonnage, revenue, transactions – it’s entirely up to you. What we’re now doing is we’re going to be marketing this to airlines. For instance, an airline will be able to offer loyalty points and target specific customers with those points; it can set up a loyalty program for everyone on the portal, or specific targeted agents.
     And it can do it based on rates, revenue, transactions, routing – we built that flexibility in.
   What are the points good for?
   Well, you can either get a credit to your account, or you can ask for a cash voucher.
   We’ll pay you to do business with us! When did the loyalty program start?
   Our loyalty program started February 27th, so we had a big function in Dubai to celebrate.
   What can Calogi do to help make air cargo ‘greener?’
  Well, we’ve got an online CCA, all the invoices are online, the statement of accounts is online, the airline sales report is online, the stock reports are online, absolutely everything is online.
     So if you get a Calogi subscription everything is made available to you online.
     There’s no need to print anything anymore.
   Have you ever estimated how much of the environment is being saved using the online system in terms of paper and a carbon footprint?
   Calogi estimates that on a yearly basis, if no one prints the documents, we save 22-acres of rainforest in Dubai alone.


     It was 1994 in a darkened hall in Seattle, Washington when an airline most Americans had never heard of called Emirates participated in The International Air Cargo Association’s (TIACA) second Air Cargo Forum.
     Sheikh Ahmed bin Saeed Al Maktoum spoke in a quiet, yet determined manner about Emirates Airline with particular focus on air cargo.
     Almost no one saw Emirates one day emerging as the biggest airline in the Middle East and one of a handful of leading airlines of the world, but Sheikh Ahmed saw it.
     Later, with others, we would join Sheikh Ahmed in his suite at the host hotel for a relaxed evening party with more conversation.
     Thinking back on that time, I guess the Sheikh was on a voyage of discovery, studying us in air cargo as much as we were studying him.
     He accepted a copy of our “Great Airports Worldwide,” an eight-pound book we created for ACI that included 137 airport histories.
     The Prince said with a smile:
     “Next time that you do this book, my hope is you will include Dubai.”
     When presented a small silver Dhow in an elegant red velvet box, I remember thinking that this airline really had its act together – that it knew full well where it had come from and where it was going.
     During a couple of brief encounters 17 years ago, Sheikh Ahmed was gracious, smart, inquisitive and definitely living and building a dream into reality.
     Today, Emirates is the sixth-largest airline in the world in terms of international passengers and largest in the world in terms of scheduled international passenger kilometers flown.
     EK is also the seventh largest in terms of scheduled freight ton-kilometers flown.
     In February 2011, continuing a string of non-stop awards earned over the years, Air Transport World recognized Emirates Airlines as Airline of the Year for 2011 based on recognition of its “commitment to safety and operational excellence, customer service trendsetters, and financial condition including a 22-year consecutive annual profit.”
     With scores of new aircraft on order and plans to expand beyond every horizon, the Emirates saga continues.
Sheikh Ahmed is still at the helm, with the added title of airline CEO.
     Sometimes, nice guys finish first.


     Down is not out and it ain’t over ‘til it’s over may be over used phrases but in the case of the on-again, off-again St. Louis plan to get some China flights by saddling Missouri taxpayers with a $360 million dollar subsidy to do it –what looked dead on Monday of last week found a new life on Thursday.
     In an abrupt turnaround despite growing local and editorial uproar Missouri Governor Jay Nixon said Thursday that he would call a special session of the legislature in September to pass a jobs bill endorsing all key elements including up to $360 million in tax credits for the “Aerotropolis” freight hub at Lambert-St. Louis International Airport.
     The apparent ram-rodding of the much debated and already killed once bill at Missouri taxpayer expense by insider politicians has one Missouri taxpayer seeing red.
     An air freight consultant, Michael Webber, who wrote here last month that the Missouri project is doomed to failure reiterated yesterday that Missouri taxpayers shouldn’t help a project that private investors wouldn’t undertake on their own.
     “These guys are a bunch of lying bastards, and I have no use for them,” he said of promoters who seek to profit at taxpayer expense.
     “These people (supporters of the project & Missouri politicians) have delusions of grandeur that Chicago worries about them.”
     “Given how much events have conspired to make St. Louis look poorer as a prospect every week, it is even less wonder that these proponents would like to rush this through without any independent analysis.
     “St. Louis was the last airport to get excited about air cargo & that is the reason that proponents are able to retain this naive notion that nobody else has recognized what a great opportunity China is when in fact other, superior airports have been mining that territory for decades while Lambert's management was sleep-walking."


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RE: Cartoon

Dear Mr. Arend,

    We refer to the cartoon in your 19 July issue.
    Good editorial cartoons provide humorous commentary on an issue of relevance.
    There is normally a grain of truth in them, exaggerated for comic effect.
    As the ground and cargo handling industry's trade group, we fail to see how this cartoon was meaningful or even marginally funny. Airport ground and cargo handlers are a key component in the supply chain,
providing an essential service to the airlines and forwarders that make up much of your readership.
    They do so in an environment so highly competitive, as to make the notion of a "rip off" ludicrous.
    The obvious comparison to an armed robber makes the suggestion even more offensive.
    Most airlines regard their handlers as trusted partners in providing secure and efficient service to their customers, whether shippers, forwarders or passengers.
    We'd welcome your own reconsideration of the appropriateness of the cartoon.

Yours sincerely,
Samim Aydin, Chairman
Martin Meyer, Secretary General
International Aviation Handlers Association

Esteemed Mr. Aydin and Mr. Meyer,

     Thanks for writing.
     We understand your concerns with the cartoon on behalf of your members.
     We report and write articles and "import" cartoons which it seems have a tendency to sometimes get people up in arms occasionally.
     Danish cartoons come to mind.
      Seriously, we obviously do not imply any untoward business practices on the part of ground handlers and hope that the readers' focus remains on our stories.
     The next ground handlers story in Flying Typers will be sans cartoon or a more carefully selected one.

Best wishes,

RE:  Ditch Belly Lift Sez DJ

Hi Geoffrey

     I agree with Stan Wraight—ditching belly cargo is a luxury most carriers could not afford.
     There are plenty of examples where on certain routes it is often the cargo contribution that makes the route viable.
     On the other hand there are also carriers that carry cargo at a loss – since they have no clue what the net contribution really is.
     Of course the integrators have the upper hand since they control the entire supply chain.
     But there is a role for the mixed carriers.
     KLM more than proved that.
     The letter from Don Palmer – brought back many happy memories of my KLM days in Canada in the seventies and early eighties.
     I was based in Toronto and Stan was based in Montreal.
     We used to argue over space allocation on a regular basis.
     KLM operated a 19 pallet B747 combi with 12 pallets on the main deck and 7 below.
     I remember when we dispatched one combi full of cargo and pax just a few kilos below the max take off weight.
     The KLM animal grooms were the best trained and most professional in the industry.
     Always a pleasure to work with.
     We used to bring in many live horses – sadly we also shipped many tons of horse meat to Belgium and France via Amsterdam every week.
     As a lover of horses I was never too happy about that.
     I have met D.J Ghosh several times during the many shows—we have both attended over the years.
     He is a very intelligent and well informed gentleman but perhaps a little too far removed from the sharp end of the business. It’s tough out there but there is money to be made for shrewd operators like KLM and Martinair. I wish them well.
      Keep up the good work Geoffrey.
     Flying Typers remains a must read.

Best regards
Peter Walter
Marketing Manager
CHAMP Cargosystems


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