Vol. 12 No. 81                        THE GLOBAL AIR CARGO PUBLICATION OF RECORD                    Friday September 20, 2013
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THE AIR CARGO NEWS LEADER  

     AirAsia has refused to comment on reports that a number of its cargo executives have been suspended.
     The low cost carrier, based in Kuala Lumpur, Malaysia, is understood to have embarked on an internal investigation over alleged mismanagement.
     The carrier did not respond to Flying Typers’ attempts to clarify local reports, which allege that at least five senior executives, including Sathis Manoharen, regional cargo head for AirAsia and AirAsia X, have been issued with suspension of up to two months.
     Manoharen claimed earlier this year that AirAsia’s cargo business had recorded growth of some 47% in the first quarter.
     According to The Sun Daily Online, "the cargo division of AirAsia and AirAsia X has won a number of accolades over the years – the most recent one in June this year from Air Cargo Week, which awarded it with the World's Best Customer Care Award 2013 for the third consecutive year.
     Last year, the division bagged the Rising Star Carrier of The Year Award 2012 from Payload Asia."
     Now it looks like Manoharen and some others at AirAsia Cargo are in the bag themselves.
Sky/Geoffrey

air cargo news for September 20 2013

he EU’s new air cargo security regime—due to be implemented next year—is in danger of choking supply chains due to the dearth of independent validators able to certify compliancy from airlines and other parties located outside Europe.
Starting July 1, the EU’s new rules required carriers transporting cargo or mail into the EU from a non-EU airport to have their operations independently validated at each non-EU airport.
     Once validated, carriers will be designated as 'Air Cargo or Mail Carrier operating into the Union from a Third Country Airport,’ the so-called ACC3 standard.
      Airlines without ACC3 validation before the end of June next year will not be able to transport mail or cargo into the EU.
     There are a multitude of certified independent Validators based in Europe available to airlines seeking verification (see here for a full list). However, non-EU companies will have to fly experts in as so far, only one Validator based outside Europe has achieved full certification.
     Doug Brittin, Secretary General of the International Air Cargo Association (TIACA), believes this could cause a logjam as the deadline approaches and airlines realize they need to act swiftly to achieve verification in time.
     “The lack of resources based outside the EU is the type of issue we have expressed concerns over,” he told Flying Typers. “Carriers may ask Validators to travel to perform the certifications, but this ultimately adds cost to the process.”
     The shortage of Validators will not only impact airlines—ground handling agents, forwarders, and shippers can also use certified Validators to demonstrate they are meeting the new security standards. The Validator can then issue a report the transport agent can submit to airlines so they can avoid 100 percent screening of EU-bound cargo, if this is in line with their country’s national security program.
     John Lu, chairman of the Asian Shippers’ Council, said the EU’s new approach to security was similar to failed U.S. efforts to introduce 100 percent scanning of ocean containers.
     “Instead of identifying supply chain risks, they take a catch-all approach and try and cover every eventuality without thinking about how this is going to be implemented practically on the ground,” he said.      “Shippers then usually have to pick up the cost or suffer the delays.”
     IATA is offering a number of courses at its Center of Excellence for Independent Validators to help the industry prepare. Although more Validators will gain qualification in the coming months, some believe the qualification process discriminates against applicants from non-European countries whose nationals often struggle to even get tourist visas to visit the EU or Switzerland. If applicants do get a visa, the EU also requires them to have adequate experience of aviation security for airlines and regulated agents, and of known shipper auditing. They must also then pass stringent background checks.
     “Validators can be from anywhere as long as they meet the requirements, but there are many people in the wait and see situation,” said one source close to IATA.
     “The difficulty is whether the potential interested candidate is able to get the endorsement from EU state members in order to be eligible to join the IATA CEIV training.
     “Even if the candidate gets the green light from EU member states to do the training, he or she must then go through extensive training by IATA and very tough examinations to prove his/her capabilities in regulation as well as validation exercises.”
     TIACA, which believes standards should be developed on a global basis rather than a regional or unilateral basis, warned earlier this month that much work still needs to be done before the industry is ready for the new rules.
     Oliver Evans, TIACA Chairman, said that airlines and cargo handling organizations should continue to take steps to obtain validation under the new rules, but should inform the EU immediately if they encounter significant impediments when trying to do so.
     “As airlines of different nationalities mostly operate out of multiple user facilities in foreign countries, validation and accreditation should be a matter of international recognition to avoid the huge cost and disruption of multiple audits,” he added.
     “With less than a year to go until the deadline, continued communication and openness from the European Commission on the availability of accredited validators, and their ability to accomplish this task on time, is absolutely vital.”
SkyKing

 


sk Tom Bayes, EMO Trans’ energetic Development Chief in China, where he will unearth new business and and the answer is remarkably uncomplicated.
“Our strategy is simple.” he assures.
“We do step-by-step quarterly visits on the ground in Asia and are engaged constantly with agents and EMO Trans employees in the region.
     “Everything happens with a step-by-step process and boots-on-the-ground market knowledge,” he insists.
     “My area of coverage is China, Philippines, Thailand, Indonesia, Vietnam, Indo China (Laos, Cambodia, Myanmar), Singapore, Malaysia, Taiwan, and Hong Kong,” Tom explains.
     As he celebrates his 20th anniversary working for EMO Trans this month of September 2013, it is worth noting that Tom played a key role in establishing EMO Trans in the Philippine market, as he worked and lived there for many years.
     “Gloria Legaste of Sky Freight Forwarders, Inc. (EMO Agent Philippines) and I have worked together for the past 14 years.
     “Gloria is key to our success with the Philippines/USA Trade Lane; she exhibits great market expertise whilst always delivering fabulous hands-on personal service,” Tom said.


     “Historically, most commerce has centered around the major port cities in China.
     “However, now we are seeing a push inland to some of the undeveloped parts of the mainland,” he says.
     “What were once largely agricultural communities now have a real opportunity to form a strong middle class.
     “The people are welcoming the chance to work for major multinational companies.”


     “Today,” Tom says, “Vietnam, Cambodia, and Indo-China are fast growing markets in terms of more cost effective labor.
     “Everything from garments and shoes to handicrafts and furniture are sourced from these countries, but also more high tech industries are seeing the benefits of conducting business here.
     “We’ve recently appointed a delegate specifically to develop the Vietnam/USA Trade lane along with our Partner SAFI,” Tom reports.
     “In addition, Melissa Lines of EMO Trans Cleveland and Ron Wahle of EMO Trans Atlanta have been able to secure two key accounts that support our development in Vietnam—a global manufacturer of wire/cable harnesses, thermal protectors, and sub-assemblies, and a global supplier of metal and plastic packaging to the beverage and food industries.”


     Among the keys to continued success in this very large and diverse part of the world, Tom rings a familiar bell insisting that success does not just fall into your lap, but is the result of “doing proper research, understanding what products are already sourced from the region, and navigating each country’s different ways of working and getting things done.”
     “Whatever you’re doing business-wise and whatever you need in this region, we can help you,” Tom Bayes declared.
Geoffrey


      “The Chinese market is very cautious on the expenditure side so it is not so easy to develop charter business there, but we plan to increase the share of our business in the South-Eastern region.”
      The Volga-Dnepr Group’s fleet of freighter aircraft currently consists of 10 Antonov 124-100s, the biggest single fleet of these giants of the skies currently in operation. The heavylift specialist also operates five of the new generation IL-76TD-90VDs, three An-12 aircraft, and eleven Boeing 747 freighters, including three new 747-8Fs.
      Earlier this year Volga-Dnepr reached an agreement with Paris-Vatry Airport to base its new IL-76TD-90VD freighter aircraft at the airport to meet growing demand for “quiet and environment-friendly air charter operations” in Europe, according to Gliznoutsa.
      The Group will use Vatry’s central location, within easy reach of major customers across Europe, to grow its business.
      “By committing to a visible presence at Vatry Airport, we can help deliver cost benefits for our customers,” he said. “The operating efficiency of the IL-76TD-90VD means it can compete strongly with the old IL-76 and, importantly, the aircraft meets all environmental standards for global operations.
      “We know customers recognize the value of moving cargo through Vatry because the airport has proven knowledge and expertise in supporting charter services and outsize and heavyweight air cargo flights. We are confident that basing aircraft at the airport and providing availability to customers will result in even more growth opportunities.”
      Volga-Dnepr is also pushing its end-to-end logistics packages though its Engineering & Logistics Centre (ELC).
      “With an ELC project we manage the clients operation from start to finish,” he said. “This means we can not only organize and oversee the flight but also advise on and arrange the most efficient logistical solution for the client`s operation. For example, depending on the customer`s requirements we could conduct route surveys and cargo inspections, design and manufacture special transport frames, as well as arrange trucking, mobile cranes, documentation, customs, security, and handling.”
      Gliznoutsa said competition from growing Middle East carriers and bearish general cargo rates was not proving a problem for Volga Dnepr because most of its assets are deployed in the specialized market for the transportation of bulky and super-heavy cargo that cannot be transported in the cargo holds of passenger aircraft or, more often than not, by standard freighter aircraft.
      “The pricing system of the charter market cannot be compared with regular cargo operations,” he said.       “We also operate to airports and airfields that are not always able to welcome other freighter aircraft because our An-124 and IL-76TD-90VD aircraft are very self-sufficient with their own onboard loading systems and so do not require the airport to have special equipment. However, growing traffic levels in aircraft bellyholds does have an impact on the market, especially for the IL-76TD-90VD.”
      The company would not comment on reports that it was being sued for breach of contract in the U.S for failing to pay its fuel bills, or comment on suggestions that its charter business saw a double-digit revenue decline in the first six months of 2013.
      Gliznoutsa did say that the company had seen growth in 2012, when some 46 percent of total flight hours and 45 percent of sales volume last year was generated from the commercial market, with the rest of the company’s capacity and income derived from defense contracts.
      “Despite the general market decline in demand for airfreight shipments in the second half of 2012, the sales volume of airfreight in comparison to 2011 was +5 percent,” he added.
      2012 was characterized by growth in demand for aerospace and satellite equipment transportation as well as stable demand for helicopter transportation.
      “The number of satellites launched in 2012 in the world was a record-high 24 compared to 23 in 2011,” he said. “The movement of helicopters and equipment has been booming in recent years and we expect the level of demand for Volga-Dnepr flights carrying these shipments to increase in the next few years, especially in the civil market segment.”
SkyKing


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     “A new opportunity for cargo operations to Afghanistan, particularly for the shipment of pharmaceuticals, perishable foodstuffs, and construction materials,” predicts Barry Brown, Emirates’ Divisional Senior Vice President, Commercial Operations as Kabul becomes the 138th destination on the Emirates route network with daily A340-500 service from Dubai starting December 4, 2013.
    “We expect the flight to be particularly popular with corporate business travelers, as well as Afghan nationals returning home to visit friends and family,” Brown said.

 



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     It has come as no surprise, as the war in Afghanistan slowly slips into history, that the US DoD has gone public, telling U.S. carriers what they already knew:
     The business of moving military air cargo and passengers via contracted commercial carriers is being reduced dramatically as the US military pulls out of Afghanistan. Certainly the cakewalk is over, as an overabundance of underutilized lift finds nowhere to go, dropping a negative effect on those carriers that for the past decade have relied heavily on military business as a license to print their own money.
     But, on the flip side, just like deregulation did for the scheduled airlines, this may strengthen the part of the U.S. airline industry that depended on military business for survival by causing them to operate their companies to win an increased share of the commercial global market.
     For years the U.S. cargo industry has, commercially, only focused on the integrators market, leaving the schedule cargo market to and from the U.S. to foreign flag cargo operators.
     It is hoped that this will change and we will again see scheduled U.S. cargo aircraft operated and marketed by U.S. carriers, with U..S freight forwarders returning to the U.S. market.
     But all of this is currently in sharp focus, as CRAF payments have dramatically fallen and Russian operators have also taken a big hit, as DoD must use U.S. airlines before sub-contracting.
     “U.S. CRAF dedicated airlines like World and Evergreen are hit hard and will really suffer in the next 12 months,” a source told Flying Typers.
     “Capacity is going to get dumped on the commercial market as they try and survive before eventually dying.
     “Should be ugly.”
Geoffrey

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