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    Vol. 13 No. 19                      THE AIR CARGO NEWS THOUGHT LEADER                                Monday February 24, 2014

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Always The Great Bill Duff

     The notice was brief:
     “Bill Duff, who served as Shaikh Rashid Bin Saeed Al Maktoum’s trusted financial expert during the early development of the emirate, passed away on Friday February 14, 2014, at his residence in Jumeirah .
     He was 92.
     Duff died of natural causes at 4:30 pm on Friday.
     He is survived by his wife, Irenka, two daughters, Diana and Sheila, and four grandchildren.”
     Here, friend and colleague Issa Baluch remembers William (Bill) R. Duff:

William Duff     The news about the death of Bill Duff on February 14 may be considered another chapter in the passing parade by many.
     In Dubai and elsewhere, to succeeding generations of those who have heard of him, Bill Duff may be recalled as just one of those expatriates who did his job for a salary and in the process, helped build Dubai under the former Ruler Sheikh Rashid Bin Saeed Al Maktoum.
     I hope this remembrance will personalize the many news articles about Bill recently, as well as recognize the integrity and magnitude of his work.
     Of the 52 years that Bill lived in Dubai, I knew him for about 40.
     My interaction with him started in the 1970s.
     Bill had unique responsibilities—one of which was being responsible for refugees in the Ruler’s office.
     But that’s a whole other story that maybe we will address here at some other time.
     Today, we can recall some experiences with Bill that made him my role model and hero in so many respects.

Via Dubai Had Humble Beginnings

     I met Bill when he served as Inspector General of the Dubai Ports and Customs.
     At the time I was looking for permission to get special dispensation to move exhibition goods in transit from the sea port of Dubai (Port Rashid) to Dubai International Airport for air-freighting to Cairo and Tripoli on chartered B707F owned and operated by IAS of UK.
     The goods, approximately 60 tons, were shipped from Australia by NYK lines and due to the delay on the voyage en-route, could not make it to Egypt and Libya for the scheduled exhibition.
     Together, we concluded that if the goods were redirected to their destination via Dubai, they would be able to make the transit connection and air charter, which in turn would allow us to meet the exhibition schedule.

Helpful Hands On At Once

     Bill understood clearly the dilemma we were in and got us a special dispensation in two days from the Ruler of Dubai allowing us carry out the transaction, which we did very successfully.
     Some months later, I came to learn of the congestion experienced throughout Indian airports and how difficult it was to move air cargo from India to Europe.
     The normal layover of cargo after booking with an airline was about seven days, with goods sitting out in the open area or in warehouses at the airports.
     The time lapse of airlifting goods to destinations in Europe was about 10 days in all.
     Once again, I approached Bill, who was immediately receptive and encouraging.
     Bill asked me to describe my ideas in writing.

The Dubai Sea Air Idea

     My report basically created a timeline showing sea freight from Indian ports to Dubai (5 days) then the transfer and airlifting the shipments via Dubai to final European destinations, and then using the return empty leg of passenger and freighter capacity from Dubai (2 days).
     The key in making such a combined multi-modal concept work was Dubai Customs waiving import duty of four percent assessed on CIF value.
     The Dubai Customs ordinance in those days was quite clear.
     Any goods that move by sea from Port Rashid were duty exempt.
     By road from Port Rashid, there was a need for payment of an import duty.
     The ordinance did not distinguish whether ultimately the goods would be air-lifted from Dubai, so there was no need for a duty imposition.
     The real challenge to this new scheme was that this all took place during an era before the customs seal had become such an important controlling tool for security, and containerization was still in its infancy stage.

Bill Duff

Critical Moves

     Bill was able to process the change in the Customs ordinance allowing us to transfer ocean freight to the airport without payment of customs duty.
     Subsequently, the Ruler of Dubai issued a Royal decree to this effect and we were off to the races.

Garlic From Sea To Air

     Our first commercial sea/air shipment was Indian manufactured garlic presses destined for London on Gulf Air.
     That year, 1978, we handled about 170 tons; the following year, it jumped to 2,000 tons and progressively, we reached levels of 45,000 to 60,000 tons.

First Container Station In Dubai

     The very first container freight station (CFS) at Port Rashid was established under a special dispensation organized by Bill Duff, allowing us to move aircraft pallets and palletize the goods at Port Rashid.
     This development then largely led the way to establishing more free zone concepts on distribution of freight from the Emirate of Dubai.

Working Man of The People

     Once, after a long day at work, I commented on the overwhelmingly large numbers of merchants, traders, or logistics service providers he must be accommodating in a day, and his response surprised me:
     “I actually don’t see enough,” Bill laughed.
     To Bill, his duty as a customs officer was to keep his doors open to as many people as he could possibly serve in order to keep the trade in Dubai moving and without interruption.
     Bill’s work ethic was the backbone of Dubai customs policies in those days.
     All of us who worked with him and followed in his footsteps admired and wanted to be like Bill.
     Undoubtedly, Bill contributed so much to the logistics industry of Dubai by taking the time to understand the intricacies of new ideas and concepts and converting them for legions of others to utilize.

Visionary Of Hub Dubai

     Bill Duff came to grips with the challenges of sea-air combined transport and focused instead on what it would mean to Dubai.
     He grabbed the opportunity to provide solutions and realign policies in order to place the Emirate firmly on the map, making it a preferred gateway point to traders worldwide.
     Bill was instrumental in doing all that—and he never claimed credit nor glory for himself.
     I know for a fact my success in Dubai was because of such business-minded government officials like Bill, who worked closely with the late Ruler who cared enough to help formulate the future of the industry at that time.
     I do not claim to know everything about Bill.
     In fact, now that details about his life are being published, I am amazed to realize how little I know of the man I have considered as closely as family.
     But one thing is for sure—no matter how small a portion I may have known about Bill’s personal life, I will always consider him a big part of mine.

Always The Great Bill Duff

     Bill’s passing is indeed a great loss to the industry.
     I hope that when you read or hear about Bill, you will think of these short stories that I had the liberty to share with all of you, and envision the many wonderful developments he contributed to Dubai and to the logistics industry in general.
     Since I am teaching in Boston now and was not able to be in Dubai to pay my respects to Bill and his family, I asked my daughter Sarah to attend services and extend our heartfelt condolences and good wishes.
      Sarah described the outpouring of love and respect for Bill as “amazing, including scores of friends from all over the world, with well wishers and people from many races and creeds who thought of Bill Duff as a friend.”
     When folks at the services wondered and asked Sarah who she was, my daughter said simply:
Issa Baluch      “Mr. Duff was the role model for my Dad.”
     Most understood those words, replying that in various ways, Bill was their inspiration as well.
     Something Bill’s daughter said sticks in my mind right now:
     “He dedicated his life to working with the Arabs—he treated Arabs as if they were his family.”
     I believe this with all my heart; Bill indeed made me feel like his own son.

Issa S. Baluch
Boston, Feb 20th 2014

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Air Cargo News For February 24, 2014
Air Cargo News For February 24, 2014

 



Michael Webber
Webber Air Cargo
Airport Consulting

Emirates SkyCargo Freight Switcheroo
Nabil Sultan, Emirates SkyCargo DSVPEmirates SkyCargo freighters will be based at Al Maktoum International Airport beginning May 1 just as belly cargo operations will continue to operate from Dubai International Airport.
   To get ready for the big shift of big lift, SkyCargo signed a five-year trucking contract with Dubai-based Allied Transport LLC and Nabil Sultan, Emirates Divisional Senior Vice President, Cargo couldn’t be happier.
   “Our freighter fleet today already accounts for 35% of Emirates SkyCargo’s revenue and the new terminal is at the core of our growth plans.
   “Looking at the bigger picture, the new infrastructure also has a positive multiplier impact on Dubai as it will create a cargo corridor that connects the Jebel Ali port, DWC and Dubai International Airport.
   “Emirates SkyCargo’s terminal at DWC will be ready to start operations soon.
   “At completion, the facility will be equipped to handle 700,000 tons per year and in a second phase DWC could handle one million,” Mr. Sultan said.


New Look Cargo & Logistics

     A veritable treasure trove of reports released in the second half of January unveiled a new look at the cargo and logistics industry, which is on the brink of positivity after two years of heavy slogging against structural and economic headwinds.
     First up was Danske Bank’s European Freight Forwarding Index, in which respondents said they were now expecting increasing volumes across all modes in the next two months. Although Danske’s airfreight sub-index dropped in December, demand expectations increased to 59 for February compared to 50 in January—any reading above 50 indicates expansion—as the survey’s European participants predicted accelerating volumes in the first quarter.
     IATA’s January Airline Business confidence Index gave a more global view than the Danske Index, and this was similarly upbeat. “More than 66 percent of respondents are expecting an increase in demand over the next 12 months,” the report found. “This is the biggest expected rate of increase since mid-2010, a very strong year for cargo.”
     According to IATA, the improved outlook is a reflection of “recent improvements in world trade growth and increases in business confidence.”
     The Stifel Logistics Confidence Index also entered 2014 on a positive note. The overall Index has remained above 50 for 12 months now, with expectations of further demand evident in the 56.6 logistics confidence reading recorded in January. The outlook for air freight is even more hopeful on some key lanes, mainly into Europe, which is finally showing signs of improved consumption and economic growth, suggesting rising imports.
     Even though the survey indicated a mixed picture by trade, with respondents forecasting improvements on the U.S. to Europe and Asia to Europe lanes, but declines on Europe to the U.S. and Europe to Asia, the forward outlook in the Air Freight Confidence Index was buoyant, with the ‘expected situation’ index up 1.3 points to 61.2 in January. “Three of the trade lanes that are monitored (see table below), Europe to the U.S., U.S. to Europe, and Asia to Europe all had good increases,” said the report. “However, Europe to Asia had a 2.1 point decline from December. The expected decline in the Europe to Asia trade lane may be the result of ongoing concerns over Asia’s economic condition.”

Stifel Air Freight Confidence Index: Present Situation

Air Freight Confidence Index

Present Situation

Expected Situation

January

Change from December

January

Change from December

Europe To Asia

50.1

-4.7

60.7

-2.1

Asia To Europe

61.6

1.0

65.3

2.5

Europe To U.S.

47.8

-2.1

56.5

2.7

U.S. To Europe

45.6

1.5

61.5

2.0

All Lanes

51.7

-1.1

61.2

1.3

     Perhaps of even more interest to our readers was a new survey outlining in detail which air cargo lanes grew and contracted most during 2013. The 2014 Agility Emerging Markets Logistics Index, developed with Transport Intelligence, also shed a fascinating light on air cargo trends via its survey of more than 800 industry executives.
     This revealed that logistics and trade professionals are far more optimistic about the global economy in 2014 than they were a year ago, with 72 percent forecasting “modest growth” in global economic output and trade volumes in the next 12 months, compared to less than half a year ago. More than half of respondents expect “modest growth” in the U.S. and EU economies, while 58 percent expect to see emerging markets countries in Asia producing the highest growth rates in 2014.
     Turning specifically to air freight, China dominated trade lanes in 2013. But although it was the major origin of cargo globally, its air freight volume to the United States fell 7.5 percent in 2013 compared to a year earlier. “Among the top 10 largest air lanes, the biggest volume gains were Colombia-U.S., Chile-U.S., and Bangladesh-EU,” said the report, with the latter lane growing 96 percent year-on-year in 2013.
     However, the fastest growing lanes in terms of CAGR over 2005-2013 originated in Ethiopia, not least because of heavy investment by Ethiopian Airlines in its network. Over the period this saw growth of 27 percent on the Ethiopia-U.S. lane and 30 percent from the African country to the UE. “Ethiopia has benefited from the African Growth and opportunity Act (AGOA), which was enacted in 2001 as a U.S. trade initiative to encourage trade with 39 Sub-Saharan African nations,” said the report, which also predicted that growth ex-Ethiopia might taper off as government pricing controls on coffee and other agricultural exports came into force.
     China was also the market leader as a destination for air cargo from the U.S. and EU last year. Among the top 10 busiest lanes from U.S./EU destinations to emerging markets, EU air cargo bound for India and South Africa declined sharply, according to the report. “In air cargo, the emerging markets with the fastest growing exports to the U.S./EU were Ethiopia, Cambodia, Ecuador, Chile, Bangladesh, and Kenya, although the increases come off of relatively low margins,” said the report. “Ethiopia, Ukraine, Oman, Bahrain, Libya, Qatar, and Vietnam were destinations for inbound air cargo on the fastest-growing lanes between the U.S./EU and emerging markets.”
     The outlook for 2014 looks set to see further growth in trade between OECD countries and emerging economies, boosting logistics demand across modes.
     “Not only does the majority of the world’s population reside in emerging markets, but these markets offer expanding middle classes and a younger average age compared to the more developed markets of the U.S. and Europe,” said John Manners-Bell, Chief Executive of Transport Intelligence. “The need to meet the rising needs of these markets is a great opportunity for logistics providers, but it will also prove a bumpy process as economic, political, and other risks will need to be navigated carefully.”
SkyKing

 

Chuckles for February 24, 2014

 

Southwest Europe Cargo Meets

     Stop the world—we want to get off!
     Somebody finally held an air cargo industry event without Gala Awards?
     IATA Cargo Aviation Day held recently in Zagreb heard a blitz of numbers (what else?) claiming that the annual turnover of goods transported across the globe is about US$ 6.4 trillion, or 35 percent of the global traffic share in all cargo transport.
     But air cargo is declining in relation to other forms of transport as passenger transport has been rising and global trade has increased by 12 percent since 2010, with cargo transport by air growing a mere 2 percent.
     Cargo transport accounted for 11.4 percent of airline revenue four years ago, but last year it was only 9 percent, IATA said.
     Whether this message of decline lit any fires under representatives from Croatia, Slovenia, Montenegro, Bosnia, Herzegovina, and Serbia is still unclear.
     According to (more) numbers, in 2013 Zagreb host carrier Croatia Airlines lifted 3,200 tons of cargo, or about 1 percent of the airlines annual revenues.

 

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Frankfurt Airport Strike

There was bad news for travellers at Frankfurt International Airport Saturday as thousands of passengers were delayed because of a lightning strike by private security company members of Union Verdi, petitioning for a pay raise.

 

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