t the start of October, FedEx opened a brand spanking new regional hub at Singapore’s Changi airport, its third in Asia. But many in the industry were bewildered that the company chose Changi as the location. Although Singapore remains a key global logistics and business center, high costs and fierce regional competition have seen air freight volumes at Changi remain largely static for the last decade, while living expenses and wages have soared.
      FlyingTypers caught up with Karen Reddington, Regional Vice President, FedEx Express South Pacific, to see what the company’s rationale was in choosing one of the world’s most expensive cities as the location for its South Pacific Regional hub.
      She was straight to the point: “Singapore has physical connectivity and location, a high number of multinationals headquartered in the country, excellent transportation and regulatory infrastructure, and a long history of supporting free trade.
      “FedEx remains optimistic about Singapore over the long-term. Its geographical location allows it to be a gateway to markets in Southeast Asia, South Asia, and Oceania.”
      She also cited recent reports that indicate more U.S. companies will increasingly shift their investments or businesses from traditional manufacturing markets to the ASEAN region.
      “Singapore’s strategic location lends itself to being an important hub for such global trade.
      “According to the World Economic Forum Global Competitiveness Report 2012-2013, Singapore is the most competitive economy in Asia, and the second most competitive economy globally.
      “With a number of Free Trade Agreements to support trade growth, and a rapidly expanding network of bilateral trade agreements, Singapore remains an important hub for the South-East Asian region.”
      Reddington said operations at Changi would complement FedEx’s existing APAC and North Pacific hubs located in Guangzhou, China, and Osaka, Japan, respectively, as well as boost capacity for customers in South East Asia, which is set to become an economic powerhouse with the removal of many trade tariffs in 2015.

     The hub will not only improve the integrator’s service to the Singapore market, she added, but also act as a trans-shipment point for Asia Pacific shipments in and out of Australia, New Zealand, and Southeast Asian countries such as Laos and Cambodia.
      “The South Pacific Regional Hub is the only express hub in Singapore and the largest consolidated FedEx facility in the Asia Pacific region that houses air, clearance, and ground operations under one roof,” she said.
      Certainly the S$97 million facility is impressive. At 280,000 square feet, it includes airside infrastructure with two aircraft parking bays as well as a special on-site facilitation by the Immigration and Checkpoints Authority and Singapore Customs for efficient cargo shipment clearance.
      “FedEx is the only express transportation company to have this special in-house customs unit directly conducting shipment clearance on the premises, which translates to faster customs clearance for our customers,” said Reddington.
      The close proximity of the aircraft to FedEx’s operations means it takes less than four minutes for a container to be delivered to the sort belt gateway from the moment it is unloaded off the aircraft.
      “This means that we have enhanced end-to-end process control of the packages from aircraft arrival to the delivery truck,” she said. “It allows us to provide seamless one-stop package-handling from the loading and unloading of the aircraft, to the sorting and delivery of the packages to our customers.”
      The hub can house over 280 delivery vehicles and also features a high-speed, fully automated 12-output sorter belt system with the capacity to sort up to 12,000 packages per hour. The system uses a scan system that is able to read package labels on five visible surfaces and uses a ‘shoe sorter’ to direct packages.
      “Previously, we had three stations in Singapore including an operations facility at the airport with a combined size of around 140,000-square-foot,” she explained. “The South Pacific Regional Hub is twice the size of the old facilities and allows us to consolidate the three stations to house FedEx air, ground, and clearance operations under one roof.”
      This allows existing staff positions to be redesigned and better cater for higher value-added activities.
      “For example, duty operations managers used to be in-charge of individual station operations,” she explained. “In the new South Pacific Regional Hub, managers will be given opportunities to be trained and equipped with skills on a broader scope of express hub operations, including flight loading and unloading, automated sorting, and clearance process. This will allow flexibility of employees’ job scope and progression over time.”
SkyKing

he Indian air cargo sector is showing some positive signs of finally getting its act together.
To counter the challenges of the troubled times and to look ahead to a bright future, air cargo stakeholders in Delhi got together to launch Air Cargo Forum India (ACFI).
      This is, incidentally, the first time that a nationwide apex forum has been formed to bring the entire air cargo industry on a common platform. Said Cyrus Katgara, Secretary of ACFI, “This is the first consolidation initiative. We have been thinking about this for a long time but it has been achieved now.” He also said that the project took six months in the making and was an ambitious one, and all efforts have to be put in to make it succeed.

     The members of ACFI comprise all segments of the air cargo logistics chain: carriers, freight forwarders, cargo terminal operators, integrators, courier and express operators, airport operators, general sales agents, customs house agents, and several associations connected to the air logistics industry spanning the export-import trade, chambers of commerce, etc.
      As the first President of ACFI and the Chief Commercial Officer of the Delhi International Airport, Pradeep Panicker outlined on the sidelines of the launch show that the forum would work to bring innovation to achieve high standards in operational excellence. It would also seek best practices in handling, processes, and infrastructure facilities at all levels of the air cargo supply chain.
      With so many other bodies in the country —all related to air cargo—one wonders if there was any need for another new association. Panicker told FlyingTypers: “Yes, there was a need. ACFI,” he pointed out, “was an umbrella organization that would have a macro perspective of the industry. Perhaps, more important than anything else, the forum will be positioned as a catalyst between the trade and government and will sort out contentious issues.” The work of the forum is cut out: it will be a catalyst facilitating air cargo growth. It will also usher in economic efficiencies in the system while collaborating with the government’s bodies like Customs, the Ministries of Finance, Commerce and Civil Aviation, the Directorate General of Civil Aviation, the Bureau of Civil Aviation Safety, etc., for user-friendly policies and regulation.
      Importantly, the ACFI’s founding members are all key players from various segments of the entire air logistics industry. With the Delhi international airport–and the most important one at that–backing, supporting and promoting the initiative, the ACFI is on a solid footing. Said Delhi Airport CEO I. Prabhakar Rao: “Our aim is to make the Delhi Airport the cargo hub of India and the ACFI would convert that aim to action.”

     Among the founder members along with Delhi airport are: Lufthansa, DHL, the Cargo Service Center (CSC) and Celebi (both have new state-of the-art cargo terminals at the airport), top freight forwarder Cyrus Katgara, and founder-promoter of Blue Dart and present Chairman of CSC, Tushar Jani, left (he is also the Vice President of ACFI).
      One of the major initiatives that ACFI proposed to take up was the development of regular dialogues with the government agencies where the air cargo industry’s viewpoints on major developments and government policies that would affect the industry would be presented.
      The objectives of the ACFI include the promotion of cooperation among its members with regard to matters of mutual and common interest and to assist members in securing better facilities or improve the existing facilities at airports and elsewhere for the benefit of smooth and efficient handling operation at the airports. ACFI wants to promote and diffuse knowledge about air cargo business and air cargo handling/processing—a feature of which many new entrants in the business are still unaware.
      Whether ACFI would have the ability to bring about a change in the air cargo business—first from Delhi and later, hopefully, from all the important international and domestic airports across the nation—will be watched with interest. The fact that the forum has the blessings of the ministry of civil aviation (a senior bureaucrat was present at the launch) has already placed it on a growth trajectory.
Tirthankar Ghosh

Ralf-Rainer Auslaender
Managing Director
leisure Cargo

Leo Moreira
Regional Manager Florida
American Airlines Cargo

laudio Silva is President and CEO at GSA startup CargoEssence, which was launched almost one year ago in Miami in November 2011, after he served a decade with Fast Air and 17 years leading the growth of Lan Cargo in North America and Asia, Claudio launched CargoEssence.
     Today, busy with GSA activity in North, Central, and South America, Claudio surveys the current scene in air cargo and notes the “uncertainty and volatility in a widespread geographic area.”
     “The European and North American public debt situation and unemployment affect consumption and buying power of ordinary people, and also the drive and willingness of companies to invest.
     “Lack of demand has resulted in slow inventory rotation, which in turn has slowed the demand for air transportation of products.
     “In addition to the lack of demand, high fuel costs have impacted air cargo as a mode of transportation from the ground up.
     “So lack of demand, slow rotation of inventories, and high fuel costs (trifecta diablo) are driving many shippers to switch to ocean and only use air cargo for emergencies and marginal situations that do not occur very often.
     “There is no escaping that the air cargo market is forever linked to what happens with the world economic growth.
     “My view is that air cargo will continue being affected for at least the next two years, driven by not only the above mentioned factors but also the rising numbers in unemployment in Europe and the USA, high public debt in some developed countries, as well as the slow down of China.
     “Nevertheless there are some areas of interesting development and growth, such as Latin America and Africa.
     “South America has countries like Chile, Peru, Brazil, and Colombia among others with a very solid GDP growth, political stability, fiscal discipline, and low unemployment rates that invite investment and consumer demand.
     “For example, in Brazil one can expect a solid growth of air cargo transportation related to infrastructure investment, driven by the organization of the 2014 World Cup and the 2016 Olympic Games.
     “In the case of Africa, growth is also being driven in part by the natural evolution for developing infrastructure and other activity in a variety of sectors.
     “Fortunately CargoEssence, a GSA, is quite busy serving several airline clients including LAN Group, the leader in a healthy Latin America market—a part of the world that has only gotten stronger.
     “With new routes and combinations as part of the Latam Group, LAN and TAM are an exciting air cargo story unfolding.
     “We are quite busy promoting new destinations and products while investing in additional sales and service in order to be able to increase our territorial presence and coverage to better serve our freight forwarder clients, and to stay ahead of demand that is building at several South American destinations we serve.”
Geoffrey/Flossie

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