Vol. 9  No. 114                                                    WE COVER THE WORLD                          Thursday October21, 2010

 

 

CO Guy Tops New United Cargo

     Robbie Anderson has been named President of United Cargo, a combination of United and Continental Airlines.
     Anderson will be based in the company’s Chicago headquarters and will report to Scott Dolan.
     Mr. Anderson was previously stationed at Continental’s Cleveland hub, where he has served as Staff Vice President and chief operations leader since 2005.
     From 1996 to 2005, Anderson served as Continental Cargo’s Managing Director of Planning and Support. His responsibilities included cargo pricing and revenue management, capacity management, quality assurance, the Cargo Customer Service Center, cargo claims, trucking and ULD management, and cargo technology initiatives.
     Previous jobs with Continental include Division Controller for Cargo and significant managerial positions in Finance and Capital Planning.
     Robbie graduated magna cum laude with a bachelor of business administration in finance from Stephen F. Austin State University.
     Scott Dolan, United SVP Airport Operations and Cargo, said:
     "Robbie plans an aggressive schedule of customer visits and industry forums over the coming months.
     "We both look forward to working closely with our service partners and customers to learn how our combined company can best support them and their customers.
     "We are committed to building on the strengths of our two cargo organizations to create even higher levels of excellence in operational performance and customer service.
     "The integration process will not affect our strong relationship or level of engagement with our customers."
Geoffrey

 

     “We want your cargo” is the slogan of an international campaign now launched by Damco.
     The Danish forwarding agent, a subsidiary of logistics and shipping giant A.P. Moller-Maersk, is highly ambitious to push its global air freight business ahead.
      The company’s CEO, Rolf Habben Jansen (RHJ), below right, together with Damco’s VP Cargo, Remo Eigenmann (RE), below left, gave Air Cargo News FlyingTypers this exclusive interview.

ACNFT:  Rolf, what’s behind this “we want your cargo” campaign?
RHJ:   That’s only half of the sentence; the full message reads, “We want your cargo because we want to help reduce it.” Best way of doing this is to offer shippers a menu of different and attractive transport options that create value for them. This is the idea we are actually pushing ahead. Since we are very experienced in managing the entire supply chain from door to door, we can help lower logistics and transportation costs substantially, reduce inventories and increase the turnover of assets, just to name some advantages we offer our clients.
ACNFT:  Why haven’t you pushed the air freight biz much before?
RHJ:   You are right; our cargo business was somehow underdeveloped as shown by the roughly 60,000 tons being handled internationally last year. Comparing this segment with the contribution of our enterprise’s other service offerings, this portion seems fairly small. So our management team sat down and decided, in accordance with our parent company, A.P. Moller-Maersk, to fill this gap as quickly as possible by aggressively upping our market share.
     First visible result is the average tonnage growth of 30 percent from January until the end of September 2010. This means that we will handle an estimated total of 80,000 tons this year. Our ambitions, however, go much further. By 2014, we aim an annual throughput of roughly 300,000 tons, placing us among the worldwide leading twenty air freight agents.
ACNFT:  You want to achieve this by growing organically or acquiring local agents?
RHJ:   Our main focus is laid on organic growth but we are also looking beyond our fence, of course. If there are local companies that give us additional capabilities and add to our market share, we might purchase them if we see a fit. This could happen in Australia, for example, where we still are fairly unknown, but also in the central and western parts of China since things develop there quite fast.
ACNFT:  Does Damco have a unique selling point that differentiates your company from competitors?
RE: One such USP is our sea/air business concept that offers our clients highly competitive and cost efficient alternatives to the traditional 15 to 18 days required transporting via Dubai or other transfer points from boat to plane somewhere in the Emirates.
     For example, we can feed cargo by short sea shipping from Hong Kong, Shanghai, Incheon, and other ports in the Far East into our Malaysian hub, Tanjung Pelepas. There, we consolidate the goods, transfer them to Kuala Lumpur or Singapore and fly them out to Europe. This way, the entire journey of the shipments takes 12 days on average, which we consider an attractive option to Dubai or Sharjah. It is also an alternative to sending goods directly from the Far East to Europe by plane. This illustrates the second part of our slogan, “we want to reduce your cargo.”
ACNFT:  Is Damco profitable or losing money?
RHJ:   We will be profitable for the very first time in 2010. We consider this year a fundamental turning point for our company.
ACNFT:  Which product lines do you expect to foster your growth in cargo specifically?
RHJ:   We are traditionally strong in retail and apparel. Besides the short-sea segment that is very complementary to our parent, Maersk’s, shipping line’s ocean freight transports, we believe that relevant growth in air freight can be contributed by government and defense orders.
ACNFT:  You mentioned Maersk. Do they offer their subsidiary Damco any favorable conditions for carrying sea/air goods?
RHJ:   Negative. We don’t have better access to their ocean fleet’s capacity.
They do their biz and we concentrate on ours. However, we capitalize in some way from the positive image and their strong brand name. Behind us stands a mighty group and that’s good to know.

Damco Quick

Employees: 10,500 globally
Customers: 10,000 globally
Offices: 280+ globally
Net revenue 2009 (in 1000 USD): $ 2,000,000
Ebit 2009 (in 1000 USD): 45,300

Volumes split per activity (2009):
• Ocean freight - total volumes (in TEUs): 545,000
• Air freight (in tons): 60,000
• Supply chain mgmt - total (in 1000 cbm): 45,000
• Reefer logistics - total (in FFEs): 70,000

Logistics services offered:
•Ocean and air freight, trucking, documentation, cargo projects
•Supply chain mgmt
• Reefer logistics
• Warehousing and distribution
• Consultancy services

 

ACNFT:  Have you got preferred capacity providers you collaborate with or is the rate all that counts?
RE:   We work with a limited set of renowned key airlines like Emirates, Etihad, Lufthansa Cargo, Cargolux and Air France-KLM Cargo. Interestingly enough, some carriers are obviously eager to go on a longer journey with us by offering block space agreements. This we appreciate very much and it obviously shows that we are becoming increasingly attractive for the main capacity providers.
Heiner Siegmund

 

     Damco has expanded its operations in Thailand by starting operations at a new export freight hub in Bangkok and by launching a cross-border trucking service linking Thailand, Cambodia and Vietnam.
     The freight hub is connected to the main Thai Port of Laem Chabang through a daily container barge service and offers a variety of services, including barging, warehousing, import and export handling, customs clearance, and other value added services.
     The barge service will enable shippers to bypass Lad Kra Bang Terminal's Inland Container Depot in Bangkok.
     Damco believes the cross-border trucking service will allow it to capture a share of growing trilateral trade volumes between the three countries by providing a faster and more cost-efficient alternative to existing sea and air freight. The move supports the view that the increased trade integration in South East Asia will create opportunities for freight transport operators in the region.
     Damco said that it is attracted to the growing market, which is recovering after a 2009 downturn.
     Affected by the global recession, Thailand's total trade plummeted by an estimated 16.07 percent in real terms in 2009, and we saw a good 10.5 percent rebound in 2010, followed by 7.5 percent growth in 2011. In 2010, imports will grow more strongly than exports in real terms (13.0 percent vs. 8.5 percent).
Improvements in total trade will have a knock-on effect on Thai freight volumes.

 

     Happy birthday adi Consult!
     The consulting company just celebrated its 10th anniversary in a gathering attended by fifty leading members and representatives in Frankfurt. Established in October 2000 by former Schenker executive Klaus Geissler, it seems no wonder that ever since then, many Schenker managers jumped on board to become members or partners of adi Consult. Today, adi is a global player in the field of personnel sourcing and placement, management consulting and M&A assignments.
     “We run offices in 26 different countries, with 43 offices that cover roughly 100 countries,” states Managing Partner Klaus Geissler. This year, the group expects to turn over approximately nine million euros. The group has nearly 20,000 candidates globally on file and executed roughly 2,400 mandates during the last twelve months. After the global crisis caused a financial drought in the cash box last year, a flow of money is much appreciated.
     The pace of the sourcing business in logistics is accelerating more and more over the last few months. “On our application list stand, not only the names of CEOs and other top shots in air freight and logistics, but also the so-called high level but also somehow lower ranked candidates like regional sales executives, general managers, market analysts, or country managers,” explains Geissler.
      This middle ranked section “is an increasingly interesting sourcing field that we should concentrate and focus on much more,” recommended San Diego, California-based Helmut Berchtold, Managing Partner himself, and a major shareholder in adi’s U.S. branch, possessing 5 percent in adi Consult Germany. The meat and potatoes of the sourcing biz is confidentiality and providing a system for both the applicant and the enterprise that is looking out for experienced and talented candidates for a certain position.
      “Managers who have a secure job don’t normally risk changing employers. Only if an alternative assignment offers superior benefits in terms of salary, influence and decision making might they consider taking the risk,” Berchtold says.
      The best and most advisable practice for firms that want to find appropriate candidates is to look at their staff first and try to promote from within their own company. But if the personnel resources don’t provide a match, it is highly recommended that the company knocks at the door of a sourcing specialist, since “advertising, reviewing, and interviewing applicants is extremely time consuming and expensive.”
      According to Berchtold, bigger companies very often need a lot of time to decide whether they want to hire an applicant or not. Smaller firms are less complicated due to a much faster decision-making process. “In the U.S. we recently had a case where a leading sales person waited three months for a yes or no by a major logistics player. This process seemed to become endless, so we offered her an alternative at a smaller company. She had the job within three days,” recalls Berchtold.
     Further, he reports on a trend, especially in the U.S., where firms expect candidates to bring their customers with them when switching jobs. In that case, it becomes more and more customary that leading sales people in air freight and logistics are offered 60 percent of their income as base salary, with the remaining 40 percent consisting of provisions. “But if the newcomer fails to bring his clients with him, then he suddenly has a financial shortfall,” Berchtold says.
Today, most people still find new jobs just by knowing and talking to other influential people within the logistics industry. This accounts for roughly one quarter of the recruiting market. Sourcing specialists like adi Consult are next contributing 18 percent.
     Ads in print media have become of declining importance. Instead, the worldwide web is becoming increasingly important in the field of personnel sourcing. This is why at adi Consult they are currently implementing ‘Globs’ (Global Logistics Jobs), a newly created internet platform for candidates. Further, adi announced plans to convert the enterprise from a firm with limited liability (GmbH) into a joint stock company (Aktiengesellschaft – AG). The shares will not be available for public trading, but spread among the adi partners instead.
     “This step will bind our members even closer together,” states founder Klaus Geissler in his final remarks at Frankfurt’s birthday party for adi Consult.
Heiner Siegmund

 

 

Danger For Goose
That Laid Golden Egg

About 84,000 jobs are dependent upon aircraft movements at night in Germany, most of them in Frankfurt. A night flight ban for Rhine/Main would be a job killer, and a hard blow for the German export economy. Ewald Heim, managing director of the initiative “Cargo needs the night,” answers some of our questions below.


ACNFT:   If the "gold mine" Rhine/ Main dries up, should the lights go out there at night at the end of 2011?
EH:   You’re playing with the statement of the former Hessian head of government, Roland Koch, who has called the expansion of the Frankfurt airport, the “most important single project” in his term of office …
ACNFT:  … and in addition explained: “For an area which has no mineral resources, excellent infrastructure connections is the gold which we can mine.” Does a night flight ban mean a k.o. to the mining rights?
EH:   The comparison is a good one. We have no mineral resources; instead, however, we have a lot of know-how concerning logistics. Germany is the world champion in logistics and we must always remain so. In this country, it is the third most important economic sector, immediately behind trade and the car industry. About ten percent of the gross domestic product is contributed by the logistics, with a growing trend.
      Such a “ vein of gold" can not be allowed to be buried under too restrictive and not particularly well-balanced night flight regulations. New mines, staying with the same image, would quickly open up in Amsterdam, Paris or Liege, as well as in hubs with liberal operating hours.
      In regards to the international competitiveness of Germany and the jobs with cargo airlines, forwarding agents and exporters, this would be disastrous. What enormous significance air traffic has for the economy must have become clear to everybody when the Icelandic volcanic cinder immobilized air traffic in wide parts of Europe. Medication could not be flown; spare parts remained lying in the warehouses. The economical damage was immense.
ACNFT:  How many jobs would be eliminated in Frankfurt by a night flight ban?
EH:   With certainty, several thousand. Above all, simple tasks would be eliminated; for example, with the air cargo ground personel or with long-distance lorry drivers. It might become very difficult for these groups to find adequate employment on site.
      A capital destruction would also take place, because many companies in the air cargo industry have settled in the Cargo City South of the airport, confident of growing traffic and business. Relocation of flights would force these companies to invest in other locations if they want to remain in the business.
      FedEx’s move from Frankfurt on account of inadequate planning security regarding opening times of the airport resulting in the resettlement of this integrator to Cologne/Bonn is clear evidence of this.
ACNFT:  Your initiative was founded on the 24th of June in Frankfurt. How does your interim statement look?
EH:   We’re drilling through very thick boards with the subject night flights in Germany, so positive results are to be expected in the medium to long term. What has really surprised us positively is the great industrial interest in our efforts. We have widened our base by new memberships; for example, with the Automobile Industry Association (VDA) and the Cargo Handling Agents’ Association (VACAD).
      As the next step, we want to integrate the export industry even stronger; for example, the pharmaceutical industry, the manufacturers of equipment goods and the suppliers of components and spare parts. If Frankfurt is closed down at night, their global delivery chains will break down. Hence, they and their employees have great interest in liberal operating time regulations at German airports.
ACNFT:  Do you see the upcoming decision of the Leipzig Federal Administrative Court on the subject of Frankfurt and night flights as a precedence for Germany?
EH:   The decision is related only to Frankfurt. However, we look at it quite clearly as a precedence with effect on all German commercial airports.
ACNFT:  So a domino effect might occur, triggered by the court?
EH:   Precisely. This is also valid for the case, should the court decide (as we hope) on a rather liberal and well-balanced night flight agenda for Frankfurt.
ACNFT:  As a pensioner, you could sit in the rocking chair and enjoy a quiet life. Instead, you followed the call of the initiative and took over its directorship. Why?
EH:   Before my retirement, I was active for more than forty years in the air cargo industry. Hence, I believe I am able to estimate what disastrous economic damages a night flight ban would cause to Germany as a business location, especially in Frankfurt—the most important cargo airport, by far, in the entire country. So I have decided to renounce the hammock and instead throw myself fully in the job of the initiative. In this respect, I declare myself, since the 24th of June, in the state of “active unretirement.”
Heiner Siegmund

 


Gabriela Ahrens

Carine Zablit

Bettina Jansen

Karen Avestruz

 

 

 

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