Vol. 10 No. 106                                                                                                                Friday October 28, 2011


Christoph Franz Addresses
Night Ban Crisis




     It seems that the news just cannot get worse for Lufthansa Cargo, especially after the FRA night flight ban set to start Sunday, October 30.
     And yet today in Germany, news reports say that the expected Federal Court final verdict on the locally imposed night flight ban, which everyone thought would come in January, will in fact not be coming until mid-March.
     What that means is that the entire winter timetable will be difficult as will planning for the 2012 summer timetable, which commences at the end of March.
     Insiders say Lufthansa Cargo will probably have to plan two Summer 2012 schedules, one with and the other without night flights.
     “It’s a complete disaster,” the source said.
     In the meantime, Lufthansa Group reported an operating profit of EUR 578m for the first nine months of 2011.
     Christoph Franz, DLH CEO addressed the current air cargo night ban crises:
     "To cut off Frankfurt, one of the biggest cargo airports in the world, from the global flow of 2/4 goods, night after night, is to deal a cruel blow to Germany as a business and export location.
     “Whether Germany can stay ahead of the game – and how – under these conditions is questionable at the moment.”
     Earlier this week on Tuesday, some 500 Frankfurt hub Lufthansa Cargo employees walked off the job in a 90-minute action to protest the night flight ban.
     As it stands now, beginning Sunday Lufthansa Cargo will not operate any night flights from FRA, but will operate from Cologne or Leipzig, resuming their normal flight patterns outbound Germany.
     Two weekly freighters to China have been cancelled.

Chris Mangos' Touts
Miami Cargo Advantages

     We buttonhole Chris Mangos, Marketing Division Director of the Miami International airport, to find out what is new on the horizon. With the Air Cargo Americas show just around the corner in Miami, an update on the airport that maintains the coveted number one spot for air cargo in the U.S. is timely.

FT:   Chris, what are your current priorities regarding cargo?
CM:   Clearly, maintaining the top spot for air freight in the U.S., continued air service development in view of our Latin America and Caribbean nexus and adding Asia airlines – the 2nd, 3rd and 4th on the heels of our 2006-2007 success. This will be managed in controlled growth fashion, targeting eastern Europe in 2012-2013, to be followed by the Middle East and the Gulf region.      We are more oriented towards markets than airlines, thus Africa remains the last frontier with one or two carriers from eastern Africa and from the west coast of Africa down the road.
FT:   And what is taking place on the ground?
CM:   We have the facilities to handle the business with 17 new warehouses adding 1.4 million and 2.8 million square feet respectively and within the next 30 days breaking ground for a 357,000 square foot building. Four of the seventeen have no apron area as they were designed for handling belly cargo. Aircraft parking has been enhanced to handle 8 more B747 freighters out of a total of some sixty mixed loading positions. The strong interline agreements in place work well with many tail-to-tail transfers.
FT:   What else makes the entire operation click smoothly?
CM:   Well, facilitation, ensuring that the staffing for critical government agencies such as CBP, FDA, USDA and so forth are at levels that fully support the scope of our airport customers’ needs. For example, the fumigation center, which processes many fruits and vegetables and has been upgraded to keep up with the high volumes of perishable trade-—14.6 million boxes of asparagus from Peru are processed there.
FT:   What is the typical mix of import and export for Miami?
CM:   In general we have about one third of the cargo outbound to Asia and two-thirds inbound.
FT:   What contributes to the growth of air freight in your view?
CM:   Relaxed regulations come to mind, such as 5th freedom that enhanced the ability of carriers to enter a market in which they would otherwise not necessarily be active. Another is from the standpoint of the value and variety of the commodities that move into and out of Miami.
FT:   Numbers usually tell the story—what are the numbers in terms of tonnage throughput and the key players?
CM:   As the official Miami-Dade Aviation Department—the owners of the airport—statistics indicate, a total of 82 carriers are listed for the first seven full months of 2011 [the excerpt below lists the top twenty] together with the prior year results and the year-to-year comparison.

To put it in perspective, the full picture is best interpreted by looking at the totals for the entire tonnage by all carriers:

     Interesting factoids:
          Only 16 percent of the entire cargo shown above is belly loaded
          American Airlines alone counted for 50 percent of the total belly cargo
     To keep these numbers steady, the airport has learned to reach out to the broader customer base in close cooperation with the Florida Customs Brokers & Forwarders Association (FCBF). We have a very active Miami Airport Affairs Committee (MAAC) and the Miami Airport Aviation Department is chairing the 2011 Air Cargo Americas steering committee, for which a budget of $50,000 has been recommended. The MAAC represents the airline community and is governed by a board of county commissioners. The airport is financially self-sufficient, managing and operating its enterprise fund.
FT:   What do you see as threats to the cargo business in general?
CM:   I think that the cost of fuel is the most volatile factor in the overall mix.
FT:   What does it look like when it comes to ground handling, which is often the Achilles heel of airport cargo operations?
CM:   The permit holders have increased during the fiscal year and we now have 10 cargo handling companies and 2 companies specializing in live animals, the latter of which includes the import and export of live horses and cattle.
FT:   Chris, thank you for this interview; we look forward to catching up with you at the Air Cargo Americas show next week!
Ted Braun


Lufthansa Cargo's Alison Ricker
Handles Global Partners

     Notebook open and pen poised, I am ready to ask Alison Ricker, Head of Global Account Management, the Americas, a few questions. Alison has another idea and soon I find myself being interviewed. It’s earnest, with many smiles in between, although assertiveness is not in short supply and her approach and personality give us a glimpse into why Alison is in charge of three of Lufthansa Cargo’s 12 global partners – Expeditors, which she handles personally, UPS and UTi, all headquartered in the U.S.. This elite group consists of Agility, CEVA, DHL Global Forwarding, DSV, Expeditors, Hellmann, Kühne+Nagel, Nippon Express, Panalpina, DB Schenker, UPS and Uti.
     Open, outgoing and building up on a decade-long career with the carrier, Alison manages the all-important key customer facing activities. With a degree in international relations from the University of British Columbia and having started out as a Lufthansa cargo sales rep in Vancouver, BC, after three years she became sales manager. Alison moved on and in 2002 was made global cargo account manager and subsequently Director Sales, US South.
     Family life convinced her to leave the airline and in 2006 she moved to California to spend a couple of years as stay-at-home mom. But the airline siren call came and the friends and colleagues she made in Atlanta kept tugging at her until on December 1, 2010, she returned to her former carrier and resumed her current position under the new VP the Americas, Achim Martinka.
     In addition to the global partners, Alison runs a U.S. business partners program. When asked what surprised her, she says that the e-bookings level having reached 50 percent of all shipments was a big surprise. She is a firm believer that customer education has played a big role and helped improve the turnaround.
     The global partners are serious business whose council, hosted by Dr. Andreas Otto, Lufthansa Cargo Executive Board Member Product & Sales, in a ceremony on the Greek island of Santorini held in June, 2011, recognized CEVA as its most successful major customer in 2010, presenting it with the prestigious 2010 Planet of Excellence award.
     Alison thinks that there is room for more female senior managers in the Atlanta office. We’ll keep a close watch on developments.
Ted Braun

Charlotte Gallogly's
Economic War Room

     What Is the Miami World Trade Center?
     Air cargo people know it mostly because it has been organizing the Air Cargo Americas show ad exhibition since 1991, an event that takes place every two years, alternating with the TIACA Air Cargo Forum. And it is running the 2011 Air Cargo Americas, which opens on November 2, 2011.
     Since 2009, the show has shifted its focus by adding the sea freight logistics industry. Its close association with the Port of Miami tells the story; it generated 32,000 jobs and is the 11th largest container port in the U.S. Its ambitious target is to double the cargo it currently handles by 2020. Both air and sea freight is up.
     The WTC is bullish on Latin America, looking at the pending Columbia and Panama Free Trade Agreements, which would eliminate the 35 percent duty. Federal and Florida state dollars are at work for the 50-foot dredging in preparation for the super-Panamax vessels due to come online in 2014, aiming to make Miami the first port of entry. Additional infrastructure measures are bringing the railroad back to the port and a tunnel to the port, which will remove traffic from the main highway system, bypassing the city.
     Miami operates what Charlotte Gallogly, its longtime president, terms an “economic war room,” bringing together all the organizations involved in trade for the city. The World Trade Center is set up as an independent, non-profit entity aimed squarely at conducting trade advocacy and staging and managing trade events. It also stages the largest food and beverage show in the northern hemisphere. Its mission is “to increase two way trade,” supported by its own staff in 13 countries in Latin America, plus Brazil and Argentina. In addition to three officers, which include the Port of Miami director, Mr. Bill Johnson, it has a fifteen-member board of directors covering the entire spectrum, from business to academia, state and the airport.
     The organization is looking for new opportunities and Ms. Gallogly cites AGOA (African Growth and Opportunity Act) as such an area where there are little to no contacts but significant promise.
     Air Cargo Americas is expected to host up to 5,000 attendees with more than 3,000 already signed up and 156 exhibition booths sold. This is seen as an event for developing world class connections, not just another run of the mill air show, but one that can boast a track record of deep involvement in this market and the high energy level it exudes. One gets the sense that “things are up” here!
     Several airlines regularly schedule corporate meetings for the days preceding Air Cargo Americas. Charlotte Gallogly notes that the issues she is working on going forward involve bringing back trans-shipments, even closer and increasing work with the customers and attracting more Asian airlines, as evidenced by the new services of the fourth such carrier, Asiana, in addition to Cathay Pacific, China Air and Korean Airlines. A new distribution center coming up near the airport can only help, as does the continued Latin America push where Brazil alone is expected to generate growth figures ranging in the 7-9 percent in conjunction with the Olympics.
     The Convention Center underwent improvements to the tune of about twelve million dollars, a welcome development we look forward to experiencing.
Ted Braun


Lufthansa Charter Adds
Aerodyne Cargo In Calgary

     Reto Hunziker, Managing Director for Lufthansa Cargo Charter Agency GmbH, reports on adding Calgary, Canada-based Aerodyne Cargo Services Inc. to its growing LCCA GSA network.
     Recently, LCCA announced Airline Network Service as a GSA partner for the Montreal area.
     “Aerodyne Cargo Services, with focus on the oil and gas industry, was chosen for its expertise and intensive contacts in that business,” he added.
     “Our partnering with Platinum Cargo in Texas earlier this year, which also has heavy contacts in the oil business, is part of our effort to expand our service offering beyond the sales reach of our partners in the Lufthansa Cargo Group,” Mr. Hunziker said.

Air Cargo Americas
Opens November 2

     We are looking at this picture of Ram Menen (left), Bill Boesch and Prakash Nair (right), taken at the high point of Air Cargo Americas (ACA) in 2003, as the event feted Mr. Boesch with the prestigious ACA Award for “Outstanding Contribution To Air Cargo.”_
     Each time we look at these three guys, (although they are not at ACA much anymore) we know that the reason we will be at ACA next week, November 2-4, 2011 as the show convenes once again in Miami, is because of the great people who are always a part of that show, which is the biggest event of its kind for Latin American air cargo.
     Air Cargo Americas is the grand wazoo of American industry events; a wide, open, lusty frenetic couple of days of warmth and Latin spirit, that can also be a bit wild and even rough around the edges.
     But the people that network there, old and young, are always larger than life and represent the heart and soul of this American air cargo industry.
     We have always thought that the ACA venue, just off the main runways of MIA, offered great access, although the place is kind of worn out.
     After TSA cargo security boss Jim Kelly died of Legionnaires Disease after attending the last ACA in 2009, there was even some talk that the ACA venue could be dangerous to one’s health.
     But there is some talk that the ACA venue has been fixed up.
     We will take a ‘wait and see’ attitude on that one.
     What makes ACA worthwhile is out there on the hoof, at the coffee breaks, inside the display stands and taking a microphone.
     Thinking about of all the things we do while employed in air cargo, making friends from all over the world is better than anything else.
     A curious thing occurs when we gather at air cargo events—sooner or later, our humanity takes over.
     The "mission" gets pushed back and we become much more than the voices and faces and thinking of what passes as air cargo today.
     This is our life, this career in air cargo. These are our friends who somehow appear and are there for us, like touchstones, whether in Atlanta, Dubai, Basel or Rangoon.
     What a great example of international relationships these air cargo trade shows can be.
     People from all over the world, connected by the desire to advance the air speed of international commerce in Miami, Florida for a couple of days in November.
     Don’t miss it.
Geoffrey Arend/Flossie


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