Dave Shepherd is rather upbeat given that he is speaking against the backdrop of an air cargo industry struggling with weak demand and rates on many lanes.
     The Global Head of Sales at IAG Cargo believes the merged operations of British Airways World Cargo and Iberia Cargo have left the company well placed to thrive in the future, irrespective of the current market’s travails

     IAG was formed in January 2011, creating Europe’s third largest airline and the world’s sixth largest carrier by revenue, joining together British Airways and Iberia to form a fleet of almost 350 aircraft.
     Shepherd points out that the combined operation gives the carrier a more extensive cargo network and more access, with widebody capacity to the world’s top 120 airfreight destinations—more than any other carrier.
     The addition of bmi to the IAG Group earlier this year further boosted the network. Shepherd said bmi Cargo added revenues in excess of €20 million per annum, while the addition of bmi’s route network enables IAG Cargo to serve new destinations such as Baku-Azerbaijan, Almaty-Kazakhstan, and Freetown-Sierra Leone, as well as his own home town of Belfast.
     IAG Cargo currently operates three Boeing 747-8 freighters under wet-lease from Atlas Air. “They offer us additional capacity across a number of emergent and resilient trade lanes including London Stansted, Hong Kong, Atlanta, Frankfurt, Houston, Chicago, Dhaka, Delhi, and Shanghai,” said Shepherd.
     “These freighters add depth to key aspects of our network and provide us with the capability to match our capacity and meet customer demand.
     “We have recently introduced the Boeing 747-8 freighter on new routes through Cologne and Madrid, to Nairobi and Johannesburg. As well as providing even more linkage between our hubs, this network change has provided more opportunity to link Central Europe with the Iberia line-haul network from Madrid, as well as linking Latin America with Africa.”
     “New freighter services into India at Chennai will soon be launched.
     “We have also recently changed the aircraft type used to connect our Milan and Frankfurt operations with our Madrid hub,” he added.
      “Our new A300 freighter operation thrice weekly on MAD-FRA-MAD and MAD-MIL-MAD allows customers the opportunity to route traffic between Latin America and some of Europe’s main freight markets.”
     The merger prompted a number of challenges in terms of guaranteeing consistency of service and network compatibility across the cargo network. This saw IAG Cargo align its processes by working with GHAs worldwide as well as within its own operation to ensure that, whether a customer deals with the airline in Lima or Tokyo, the service remains streamlined.
     “We have already aligned the majority of our product offering and will shortly have completed that task for even our most intricate products, so that customers enjoy consistency throughout the network,” said Shepherd.
     “In order to guaranteeing consistency, IAG Cargo provides widebody capacity between London and Madrid using Boeing 767s, Airbus A330s as well as a 757 freighter. Customers will also soon be able to choose their preferred method of distribution by booking online via our IAGCargo.com website, through a number of Global Distribution Systems or even by developing Host to Host platforms with us.”
     IAG has not, however, been immune from the ill winds that have buffeted airline’s cargo operations this year. Volumes and revenue both fell in the first half of the year compared to 1H 2011, despite an increase in capacity.
     “Clearly the market has been soft this year and, in particular, consumer demand in the Western world is dampening demand, with the Asia-Pacific region suffering more than most when it comes to exports,” said Shepherd.
     “European exports have remained relatively solid throughout the year, but with some carriers altering networks to run from low Asia-Pacific demand, the Trans-Atlantic market has suffered with even more over-capacity than usual.”
     He said in recent weeks there had been some improvement in demand in Asia, which has helped push yields, but admitted there was still a long way to go. “We anticipate this improvement to continue for the next two months, but predict it will retreat to former levels in the New Year,” he added.
     “The Trans-Atlantic market is not moving greatly, with only the increase in freighter capacity worthy of note. Yet demand from Germany, Italy, the UK, and Spain for our Trans-Atlantic services have been robust throughout the year and remains so.”
     The carrier’s domestic markets and Latin America are offering the most room for optimism in the current market, but he said remaining competitive on cost was a constant battle and he was cautious about future performance while so many macro-economic variables are in flux.
     “We believe our geographically diverse revenue base, further fortified by the Iberia operation, leaves us well positioned,” he added. “IAG Cargo sees Latin America as a great opportunity for increasing cargo demand. We see huge potential for growing our product service offering in this region, particularly with increasing pharmaceutical traffic to Latin America, which grows our customer proposition.
     “With Iberia as the leading European carrier to Latin America, we are able to serve the region and link it with Europe, Africa, and Asia, capitalizing on this growth opportunity.
     “The integration of the two brands into one single business unit has created an expanded global network and we will continuously work to build on our customer proposition, offering products to meet ever-changing requirements.”
SkyKing

FlyingTypers spoke with Vishal Bhatnagar, Lufthansa Cargo Head of Operations & Processes for the Americas, in their Buckhead head office in Atlanta.
     The focus was on e-freight, a subject in which every industry event has been awash, yet progress has been very slow. The latest hurrah was the IATA “first” e-Cargo conference last June 26-27 in Geneva.
     The premise is rather simple: in order to achieve efficiencies and manage costs, automation must be leveraged to its fullest capabilities by eliminating paper in the air cargo processing. Automation—or whatever acronym or buzzword that is in today—works well when it’s 100 percent, and it is only a drag that adds costs when a dual regime of automation and paper is required.
     The global legal framework has now been in place for years [Montreal Convention, May 1999] as have been the IT systems; therefore, it is that much more puzzling and frustrating that despite IATA, GACAG, and the entire alphabet soup push, it is nowhere near where it could be.
     FlyingTypers has repeatedly reported that, in our view, IATA bit off more than the air cargo stakeholders could chew, whatever the reasons. E-AWB paved the way for making the FWB and an executed EDI agreement between the parties (serving as Conditions of Contract) a total equivalent of the paper air waybill.
     Vishal started working for Lufthansa in Delhi in 1995, followed by a move to San Francisco and later Chicago, where for a period of six years he was the cargo station manager for one of LH’s heavy traffic gateways; therefore, he had the experience (having seen it all first hand) before moving to Atlanta and taking on his current position in 2010. Perhaps most importantly, Mr. Bhatnagar knows what it takes to get e-freight to take off.
     “The industry needs a complete paradigm shift. We need to go step-by-step, implement e-AWB first [it’s supposed to become mandatory by 2013], rather than the 20 documents in the e-freight Scope of Documents."
     Mr. Bhatnagar informed us that in the U.S., “The import side works well; however there are only three CBP approved stations for export – JFK, ORD and MIA,” and that “adds cost to the forwarders to be able to process all imports electronically, but be restricted to only these three airports for export.”
     As for why there are only three e-freight export approved airports, he is hard-pressed to find a reason.
     “There have been no real answers for this state-of-affairs. While it lasts, nothing much gets achieved in e-freight. CBP must open more stations fort export; the customers are ready.
     “The quality and quantity of FWB is the absolute key element for success. While some of the large forwarders have made good progress, smaller forwarders are way behind and the message quality is inconsistent. In cases where the airline system sends an FNA (error message) in response to an error in an FWB, it doesn’t go beyond the central server, back to the originating forwarder station. IT systems need to also be improved to validate critical data and ensure message quality.”
     As for message errors, Mr. Bhatnagar says the case is often that “the shipper has not provided the forwarder the (correct) information, such as a valid postal code.
     “The fundamentals of the Cargo-IMP message exchanges for the FWB (air waybill data message), which are essential for e-freight, are still too loose, with several basic procedural rules missing.
     “The postal code is still an optional data element; yet, the mandatory pre-arrival air cargo information required by the European Union under its Import Control System (ICS) requires it and errors could result in delays at destination or worst case, in penalties for the carrier."
     Ironically, CBP requires a postal code to process imports. Which begs the question – how can CBP enforce 100 percent compliance for imports with only three U.S. airports approved for e-freight?
     According to Mr. Bhatnagar, other countries are faring much the same as the U.S.
     “Canada is pretty much on par with the U.S., with the exception that a paper air waybill copy is still required. Argentina, Brazil, and Columbia all require paper air waybills for all imports and exports. It is a critical document there, with cargo being repeatedly re-weighed and updates recorded on the air waybill. Chile is the only South American country moving forward on e-freight, likely because of its national carrier LAN Cargo.”
Ted Braun/Flossie Arend

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     The greatest thing about New York City is its resilience.
     For the first time in almost 40 years, New York City may not be celebrating Halloween today with the annual Village Halloween Parade.
     Started in 1974, the Village Halloween Parade has become an iconic NYC affair, enticing visitors from around the globe to come play dress up regardless of age, color, or creed. And these are not your ordinary ghosts, witches, and pirates. Costumers go all-out creating elaborate, attention-grabbing pieces.
      Serra Hirsch, pictured here as a prisoner receiving Andy Warhol as a visitor, requires a month at the very least to construct and perfect her detailed costumes. If she looks familiar it is probably because her costumes are featured almost every year on U.S. Television's Live with Regis and Kelly (now Live with Kelly and Michael) for their Halloween costume contest.
     “I’ve been making these costumes and enjoying the parade for so long, I can’t tell you how heartbroken I am there might not be a parade this year,” said Serra.
     As of now, the parade has been postponed with most of lower Manhattan’s streets under water—anxious trick’or’treaters are still waiting to hear if the parade will be rescheduled.
     “I’ve got my costume all ready to go. I was hunkered down with my hot glue gun during the storm, praying the electricity would stay on so I could finish my costume.”
     “They even featured me in the New York Times this year. I will be very sad if it isn’t rescheduled.”
     Here’s hoping the parade just gets pushed out a week or two and takes place after the waters have receded. With much of Manhattan still groping in the dark without even the most basic of amenities, the promise of the annual Village Halloween Parade would serve as a bright light at the end of this dark tunnel.
Flossie Arend

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