Vol. 11 No. 69                                                                                                            Friday July 20, 2012





     Now that we’ve all taken a cold shower this summer as the hot news that DHL went ahead with the super-mega hub despite the fact that China business in 2012 leaves much to be expected, managers at Shanghai’s Pudong airport are either caught in the moment or know something everybody else missed as they set their sights high.
     To hear the talk, Pudong not only wants to knock Hong Kong and Memphis off the top of the global cargo airport throughput perch, but PVG now says the gateway will be number one in the world within the next five years.

     That was the bullish message delivered by Li Derun, the President of Shanghai Airport Authority, as he welcomed yet another huge investment in airside distribution capacity at Pudong—this time from DHL a couple weeks ago.
     Pudong was the third largest cargo hub in the world by tonnage last year, when some 3.1 million tons of cargo were handled. HKIA again secured the top place with 3.97 million tons, followed by MEM with 3.92 million tons.
     However, Li believes that with huge scope for expansion at Shanghai, and the gradual migration of more and more hi-tech manufacturing to the airport’s hinterland both in the Yangtze River Delta and further inland, volumes will continue to increase.
     “Pudong wants to be the number one cargo hub in terms of quality and quantity. This is the government target,” he said.
     “In quantity, we are third after Hong Kong and Memphis. In the next five years we hope Pudong will become the number one.”
     The key to achieving the aim will be more focus on transshipment operations, both by attracting more North Asia cargo and by feeding more cargo in from interior areas of China, where manufacturers are increasingly migrating in search of lower land and labor costs now available in coastal areas.
     “If we want to be number one we need to focus more on transshipment in the west of the airport,” said Li.
Pudong, he added, already has ample capacity to handle some 4.6 million tons of cargo each year, but this would be increased to at least five million tons per annum by 2020.
     DHL launched its North Asia Hub in the western area of the airport in mid July. The $175 million investment will enable the 3PL to handle some 20,000 parcels an hour on the 88,000 sq. meter site and will be supplemented by a $132m investment in eight aircraft over the next two years. These will be deployed on routes to and from Shanghai connecting to destinations in Asia, the U.S. and Europe.
     The DHL facility sits alongside an equally impressive UPS facility, which was opened in 2008 at a cost of $125 million on a 96,000 sq. meter site. The hub features 117 conveyor belts and 47 docking bays and has a package sorting capacity of 17,000 pieces per hour.
     Li said FedEx planned to build its own hub at Pudong, although the company itself refused to either confirm or deny the claim.
     FedEx is ramping up its services at Shanghai, however. The company launched a five times per week B777 freighter service linking Shanghai to its European hub earlier this month and has offered a B777F service to Memphis from Pudong since 2010.
     Li said the three global logistic giants currently account for 10 percent of Pudong’s freight by volume, but around 40 percent by value.
     "The turnover capacity and throughput of Pudong airport will be largely enhanced with the opening of the logistics centers," said Li. “Domestic providers also want to be in this area.
     “The presence of the top express companies in the world is a fine example of the importance of Shanghai and we need to provide the best services we can to these companies.”
     He said Pudong’s airport stakeholders understood that to win more transshipment and integrator traffic, better flight times and more efficient customs and quarantine services were required.
     “We are very confident that Shanghai Pudong will be a world class cargo transport hub,” he added. “The quality of our service is the most important factor. We have the capacity and we can create more for cargo exclusive operations by moving commercial private jet operations away from the west of the airport.
     "Despite a 7 percent drop in the freight turnover at [Pudong] airport this year amid the global economic turmoil, the volume may rebound soon as DHL and FedEx open their hubs at the airport.
     “In the second quarter, domestic shipments decreased significantly but international shipments are not so bad.
     “Express is developing very quickly and this is irreversible.”
SkyKing

 

Endless Summer . . . UTi team members (from left) Seth Walker, Irfan Erdim, Tuna Gursoy, and Hugo Duchemin take a break between news media interviews at the 2012 Bosphorus Cross-Continental swimming competition.
     They joined more than 1,000 participants in the July 15 event to promote UTi’s charitable foundation, Delivering Better Lives.
     Hugo again led the way for UTi, completing the 4-mile (6.5-km) swim in 63 minutes, six minutes faster than his time last year.
     The team’s average completion time improved nearly 10 minutes.
     Most importantly, they had fun and raised awareness for DBL. Executive Director Glenn Mills thanked the team for its “passion and commitment.”
     “Not only the swimmers, but all of those who supported them and made the day so much fun.
     “These events lift the profile of DBL and always assist in fundraising, whether directly or indirectly!” Mills proclaimed.
     Well done, gentlemen, and good luck next year!
www.deliveringbetterlives.org

 

 

     In case you were wondering, at age 84 Maurice Flanagan can still be found at work in his office, just as he has always been since the airline went into business more than 25 years ago.
     Today we find him atop the Emirates Airline headquarters building at Dubai International Airport.
     Sir Maurice (he was knighted by Queen Elizabeth II in Abu Dhabi three years ago) was present at the creation of Emirates Airline and is quite responsible for launching the global air giant in 1985—and with just two leased planes.
     In 2012 he remains at the helm as Emirates' executive vice chairman, having recently tackled an old soccer injury that led to the rebuilding of his right knee.
     Flanagan, a native of the U.K. and a graduate of Liverpool University, served in the Royal Air Force in 1951 with some dreams of a career as an international soccer player, until he stepped in a pothole at an air force base on Prince Edward Island and badly damaged his knee.
     Having finally addressed his old sports injury four square, he remains on the mend with his right leg in a brace, moving about via a mobile support device.
     Ever proud, he dismisses his ordeal, simply saying:
     “It’s embarrassing.”
     Maurice Flanagan is remarkable for many reasons, including the fact that age and a knee problem have taken nothing of his determination, drive and quick mind, as he surveys the global airline industry in general and Emirates’ future in particular.
     He has put his stamp on an air carrier that is the match and promise of the dynamic city it serves, moving towards a tomorrow that seems limitless.
     Building an empire of the air whilst flying from an airport in a small country is nothing new.
     From KLM, British Imperial Airways, Pan Am, and others that started right after Lindbergh flew the Atlantic and changed everything in 1927, great airlines have grown from Amsterdam to Singapore.
     But none of them had the daring and the plan of Emirates and the incredible geographic positioning at a true crossroads of the world: the United Arab Emirates.
     Maurice Flanagan does not blink when asked if Emirates is out to become the top airline in the world.
     “Absolutely,” he says with no hesitation.
     “We are already there in many categories.”
     Maybe even more remarkable is that while other airline builders were in decline or had even seen their life’s work diminished as they reached their senior years, here is an airline builder octogenarian realizing his dream of growing a great world airline, which in 2012 continues to sprout routes all over the world, adding more than a dozen new destinations this year alone including three new, daily, nonstop cities in the USA alone.
     “I think every once in a while that maybe I’ll back up a bit,” Maurice says.
     “But the Prince says he needs me,” so the saga continues.
     It is also worth mentioning that the senior management team at EK (many recruited by Mr. Flanagan), including Emirates President Tim Clark, a veteran of British Caledonian, who Maurice regards as "the best planner in the business by miles," remains in place despite the ups and downs of an ever turbulent airline business.
     But Maurice Flanagan admits that so far, 2012 has been a big challenge driven by fuel prices and softness in premium travel.
     “We are suffering because of the cost of fuel and also the state of the world economy.
     “Last year we made quite bit of money and paid our employees a bonus.
     “This year when we report in a few weeks I’m afraid that, while still profitable, there will be no bonus.
     “We will continue to expand our global presence and have ordered 100 A380s to do just that, as well as Boeing B777s and also the yet to come A350s that we chose over the Boeing B787.
     “A very interesting aircraft worth thinking about is the next version B777, which will combine today’s jet with composites and other features of the B787; among other attributes, it will make the B777 lighter and even more fuel efficient.
     “We expect to know more about the next B777 during 2013.
     “So we remain bullish and in a growth mode.
     “We expect things to calm down and the business will come back as it always does.
     “Our view is that forecasts of the airline business doubling during the next 20 years are spot on.
     “To that end, Emirates is perfectly positioned to be a major transportation resource, with Dubai and its new airport capable of moving 170 million passengers annually as our partner.
     “But everyone has to play fair and allow free access to markets.
     “Right now we have a problem with Canada and cannot access their markets properly.
     “So while Dubai is open to anyone to serve, Emirates continues to expand in the USA and also South America but is thwarted by Air Canada, a financial basket case of an airline supported by its partner, Lufthansa.
     “We have flights to Toronto and are siphoning off traffic from Vancouver with our new Seattle flights that all make money, but there is little else in Canada.
     “Everybody in Vancouver wants us there, but Air Canada has us blocked.
     “Interestingly, despite Lufthansa’s actions elsewhere, we can fly anywhere in Germany and expect to add Stuttgart and also Berlin soon.
     “It’s very simple: we provide good service and value for money anywhere we fly.
     “Emirates makes money and city politicians understand that we enhance local economies and build business connections wherever we fly.
     “For example, we now serve Buenos Aires and have traffic rights between BA and Rio, creating new business connections and lifting local economies all around as a result.
     “It simply makes no sense at all that protectionism in international air service continues anywhere in the world in 2012.”
     As we take our leave while walking through the outer office and out into the main hallway, we cannot imagine Emirates without Maurice Flanagan.
     Without a doubt he will be here at this airline as long as he wants to, preferring to conduct his life well lived doing something he truly loves.
     His legacy puts this unique, one-of-a-kind gentleman at the top for anyone who has ever dreamed of building a great, international airline.
     While Maurice is quick to extoll the praises of Emirates Chairman and CEO Sheik Ahmed bin Saeed Al      Maktoum as a visionary and extremely well qualified airline builder who is without peer in modern aviation today, and lauds the rest of the team at EK “as exceptional,” Mr. Flanagan’s presence at Emirates Airline can no doubt be best exemplified by the airline's success and the adamant feelings HH has regarding Sir Maurice's influence.
     We think the Prince is right.
Geoffrey/Flossie

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     The first time I met Sylvia Woods, the great lady that founded and operated Sylvia’s Soul Food Restaurant in Harlem, New York, and died at age 86 this Thursday in upstate New York, was in 1971.
     I was covering the Wednesday Night Amateur Program at the Apollo Theater on 125th street for The Hollywood Reporter, and I had just left the show to discover that my VW Beetle had been ransacked, the contents of the glove compartment scattered over the sidewalk.
     Of course, since we all went over to Sylvia’s on 127th after the show, I left the car where it was, figuring the damage had been done.
     Ms. Sylvia was a kind, gracious lady, so she asked me right away what had been stolen and as I thought about it, I realized that nothing had actually been taken.
     “I guess my Beach Boys cassette tapes were of no interest to my uninvited visitors,” I told her.
     At that, the “Queen of Soul Food” looked at me with those wonderful eyes and sweet smile and, as the chicken, biscuits, and collard greens arrived, said:
     “Well, it can’t be all wrong.”
     We both laughed about that one.
 
Great restaurants work as timepieces in our lives, marking lasting memories of family and friends. Here is a favorite family photo of our kids taken at Sylvia’s in 1992.    
     Today, tourists and politicians make up Sylvia’s frequent clientele, but the last time we were there with the children, we made some memories that are still talked about when we get together. My daughter Flossie still holds every catfish she eats against Sylvia’s, and so far, no other catfish has come even close.
     I have often thought about the place. This year marks Sylvia’s 50th Anniversary Golden Jubilee. Sylvia opened her restaurant in 1962, a revolutionary act for an African American woman of that era; her mother mortgaged the farm so she could do it.
     Ms. Sylvia said, “When you come alone to my place, you are not alone.” Now that she is gone, we can’t help but feel that we are.
Geoffrey/Flossie

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