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   Vol. 14 No. 10
Monday February 2, 2015

Hong Kong Tops Again
Art & Airports . . . “1,600 Pandas World Tour” brought several hundred of the 1,600 paper pandas created by French artist Paulo Grangeon to the Arrivals Hall of Hong Kong International Airport (HKIA) last June.
     Latest numbers confirm HKIA once again tops world cargo.

     Hong Kong International Airport looks set to retain its place as the world’s largest freight airport after racking up record volumes in 2014. Intense competition between its three ground handlers has underpinned its success.
     Last year HKIA handled 4.38 million tons, up 6 percent year-on-year. Although the final numbers have not yet been tallied, it looks like enough of an increase to ensure its status as the world’s largest international freight hub remains in place for another year, ahead of rival contenders such as Memphis, Shanghai, Incheon, and Dubai.
Cathay Terminal      HKIA’s enduring competitiveness is in no small part down to the high standards of freight handling it offers, not least since the phased opening of Cathay Pacific Cargo Terminal in 2013, which threw down a significant gauntlet to established handlers HACTL and AAT.
     Cathay’s new facility, operated by Cathay Pacific Services Limited (CPSL), handled 1.45 million tons of HKIA’s throughput in 2014, up from around 600,000 tons in 2013 when it was not fully operational.
HACTL ended 2014 with its strongest quarter of the year, handling 491,476 tons, up 4.9 percent on the same period of 2013. This helped the handler record full year tonnage of 1,814,726 tons, up 8.7 percent compared to a year earlier.
     HACTL remains HKIA’s leading handler by volume. But amid its upbeat PR about year-on-year gains it is worth noting that it continues to lose market share. And its tonnage figures remain more than one million tons lower than in 2012, when HACTL was still handling Cathay Pacific’s fleet—2012 was the second best performance in the firm’s history and just 4.2 percent short of the 2,899,603 tons recorded in 2010.
     The rivalry for airline business at HKIA is now placing all of its handlers under intense commercial pressure. Although airport handling rates are fixed, HACTL, AAT, and CPSL are free to negotiate rebates based on delivered tonnage on a commercial basis with airlines. “Handling rates are set by the authorities,” explained one Asia-based executive for a European airline. “What can change is the rebate that each handler offers. With more competition, there is clear pressure on these.”
     And that pressure seems certain to grow as CPSL looks to boost its market share. With capacity to handle up to 2.6 million tons per annum, CPSL has the ability to further expand and is promising customers extended cut-off times, last-minute cargo acceptance, and reduced connection times for transshipment cargoes.
Fred Lam      Certainly, volume growth is on an upward curve. CPSL saw an increase in volumes in Q4 over Q3 and expects further gains in 2015. Already this year it has announced a contract to handle EVA Air’s cargo handling and documentation services at HKIA. It was a major win—BR operates 60 scheduled passenger flights and 15 scheduled freighters a week and was formerly handled by HACTL.
     Apart from Eva and Cathay, CPSL’s 1,800-strong workforce currently also serves AirAsia, Air Hong Kong, Dragonair, Royal Brunei Airlines, and Thai AirAsia. But with around 100 airlines now using HKIA there are still plenty of potential customers at which managers can shoot.
     “It is very difficult to give you a projection for 2015 as our market share is also dependent on airlines' business performance,” a spokesperson told FlyingTypers. “However, what I can say is Cathay Pacific Services Limited is becoming more proactive in expanding its customer portfolio. We have made a good start to 2015 by securing EVA Air, one of the key air cargo players in Hong Kong.”
     Luckily for rival handlers they, like CPSL, are at least fighting for shares of an expanding market. “Air traffic demand continues to grow, and we expect 4-6 percent growth in passengers, cargo volumes, and flight movements this year,” said Fred Lam Tin-fuk, CEO of Airport Authority Hong Kong.
SkyKing


Wish We Said That

Bill Boesch
open quote
I noted your last issue talking about industry awards.
In air cargo when you talk of Emirates, one name comes to mind.
     How much of the value of that company was lost when Ram left?
     You don’t even have to say his last name to know of him.
     What he did with Dubai, a hub that had vertically no cargo, is truly
unbelievable.
close quote      He should win the air cargo award of the century.
Bill Boesch


Bill Boesch served as top management at American Airlines Cargo from 1988-1998 and during an amazing four decade-plus career on the front lines of air cargo went on to build logistics services and save troops’ lives in Iraq and Afghanistan.


 

Best In Show -FIATA

     There were three important and informative gatherings that capped off the air cargo trade show event year for 2014. To us, the content of these industry encounters can serve as a primer for things to come this year.
     First came The Air Cargo Handlers Conference (ACH) held in Milan. Next was The International Air Cargo Association (TIACA) Air Cargo Forum (ACF) held in Seoul, Korea. Finally, there was the FIATA annual world event that was held in Istanbul, Turkey.
     It occurs to us that in the rush and the overstuffed schedule of one trade show after another, quite a few worthwhile presentations may have become lost in the blur.      

     FlyingTypers editors have selected some outstanding sessions from all three events, which we have euphemistically titled “Best In Show.” If you missed any part of this series just select a highlighted issue and click to read. This series concludes with one additional episode after this.

For Part I click here
For Part II click here
For Part III click here
For Part IV click here

For Part V Click here

     We hope all this fine shared information effort from the best and brightest in transportation might enjoy some further reflection whilst advancing participation when viewed through the prism of time. We appreciate your comments.

FIATA Flying High In Istanbul

Talat Aydin and Adnan Yilidrim     Conference was launched with speeches by Talat Aydin, the Turkish Deputy Undersecretary of Transportation and Adnan Yilidrim, Deputy Minister of the Economy underlining the aggressive growth and investment planned for the Turkish economy over the coming years.
     Some important statistics were revealed: By 2023 Turkey aims to be one of the top 10 economies in the world and will be responsible for 1.5% of world trade. In 2023 the average income per capita will be 25000 USD per year.
     Positioned between Asia and Europe, Turkey is ideally situated as a hub for trade. Several ambitious projects will help grow the economy including a rapid train system. Rail transport is seen as an environmentally friendly way of transporting freight, Turkey currently moves 20 million tons of freight by rail, but by 2023 this is expected to jump to 125 million tons.
     An increasing number of port, road, and railway projects are expected to contribute to Turkey’s phenomenal growth,
     Furthermore an investment of 55 million dollars in infrastructure has enabled Turkey to boast over 24,000 kilometers of divided roads.
     In 2003, Turkey had one airline and 26 domestic airports. Now there are seven airlines with 53 airports.
     The aim is to have a network of airports within 100 kms of each other. Internationally, Turkey has grown from 60 overseas destinations served in 2003 to 336 today and is now 11th in the world in air travel and 5th in Europe.
     Meanwhile 1.2million people are employed in the Turkish logistics industry.
     Turkey is taking giant steps to become a logistics hub and this is underpinned by modern technology.
     For Turkey, growth will continue to be based on sustainable logistics.


Sustainable Growth in Logistics

Kunio Mikuriya     The first session's keynote speaker was Mr. Kunio Mikuriya, Secretary General, World Customs Organization with speakers: Mr. M. Mehmet Özal, ForwardingManager, Ekol Logistics; Mrs. Diane Arcas Aktas, Executive Vice President of the Arkas Holding Board of Directors; and Mr. Rayan Qutub, CEO, King Abdullah Economic City (KAEC).
     Mr. Kunio Mikuriya, (left) Secretary General, World Customs Organization, opened by explaining the aim of customs is to improve border processes and increase trade. The role of Customs is also to protect citizens from elicit trade that threaten society. Technology and risk management is increasingly used to facilitate trade.
     It is also becoming increasingly important that trade and customs understand each other’s needs. Customs needs quality data to be able to perform risk assessment and speed up the movement of goods through borders, trade need consistent standards and processes to be applied by customs authorities. Furthermore customs also need to identify ways to reduce interference and trade need to understand why the data is required. There also need to be incentives for compliant traders, such as being members of AEO programmes and in return be seen as low risk trusted trading partners, thus enjoying expedited clearance and transit of goods.
     It is also important for governments to recognize each other’s AEO programmes enabling compliant traders to connect. Synergy amongst other government agencies is also vital and the alignment of risk management strategies is crucial. Adoption of a standard data set will not only become the basis of a single window, but will help governments to exchange data in a consistent manner.
     Meanwhile, ICAO and WCO are working on a joint approach to align both sets of standards. It is also worth customs authorities noting that if they are instrumental in expanding business then tax revenues will also increase.
M. Mehmet Ozal     Mr. M. Mehmet Özal followed by explaining that EKOL’s decision to insource or outsource logistics is based on 4 influencing factors, control of the financial and physical supply chain, whether to reduce dependency on 3rd party suppliers, whether it will reduce costs and whether it will result in a better service to the customer.
     As well as controlling costs EKOL are also committed to reducing their CO2 footprint. Technology is increasingly being used to reduce congestion and pollution, and is leading to increased combinations of rail and sea for transporting goods.
     In terms of sustainability, EKOL identifies three issues need to be addressed by the supply chain:

Green Supply Chains
     How to develop transport corridors and logistics services that minimize the environmental footprint and greenhouse gases of delivered goods, allowing for sustainably building trade patterns and product value chains.
Agro-Logistics
     How to improve food security though reduction of food losses during transit, bolstering both global food availability and income for farmers.
Urban Logistics and Port-City Development
     How to reduce congestion and pollution through focus on the efficient distribution of goods in municipal areas.
     When it comes to Turkish foreign trade imports, 9% is transported by air, 15% travels by road, 59% by sea and 1% by rail with other modes accounting for the remaining 16%.
     Fifty five per cent of Turkish exports are transported by sea, 35% by road, 9% by air and 1% by rail.
     The conundrum remains how to balance growth with reducing emissions.
     When it comes to sustainable growth and the CO2 footprint of the transport modes, according to an ICCT study relating to the carbon intensity of different modes of freight, air contributes the highest CO2 intensity, followed by Heavy Duty Road Vehicles, Rail and Sea.
     Companies can reduce CO2 emissions by turning to an optimized mix of air, road, rail and sea. Using a combination of road and sea, shipments between Turkey and Germany can achieve average terminal-to-terminal times of 96 hours and 120 hours total transit time.
     For the technically minded, Mehmet explained that a truck carrying a full trailer consumes 0.34 litres of diesel per kilometer with one litre of diesel creating 2.7 kg of CO2. So for every 100 km travelled with a fully loaded trailer 91.8 kgs of CO2 are generated. EKOL have found that one single intermodal trip can save 823 litres of fuel and 2221 kgs of CO2. Furthermore by using multimodal transportation traffic congestion at borders can be reduced, driver-related problems can be eliminated, reliability is increased due to fixed Ro-Ro and train schedules and less documentation is required.
DianeArkasAktas     Mrs. Diane Arcas Aktas then took the stage and explained that the environment shapes the strategy of Arkas Holdings.
     Arkas focuses on the best return for their clients but realizes short-term strategies can have a long-term impact on the environment. Arcas also recognizes investment decisions are increasingly influenced by companies ‘green’ credentials.
     Transportation currently contributes 13.1% of greenhouse emissions with road transport responsible for most. To compensate Arkas plans to increase the per cent of rail and sea transportation.
     Sponsored by Arkas, the vessel Turmepa II began operations in August 2006 in cooperation with the DenizTemiz Association/TURMEPA for the purpose of gathering household waste and bilge from yachts and small tonnage vessels. Arkas paid for the construction and operating costs of this project in order to preserve the unique natural beauty of Turkey’s coves and seas and also to help prevent sea pollution, which is recognized as one of the primary reasons for global warming. Ever since it began operating, the Turmepa II has been plying Cesme’s coves to clean up the environment and make ship owners more aware of these issues.
Rayan Qutub     Mr. Rayan Qutub explained that the KAEC masterplan involves building an entire city from scratch on a piece of land that is roughly the size of Washington DC, with investment in the project estimated to be as much as $100bn by the time it is fully completed.
     The opening of King Abdullah Port is just part of the KAEC story. Encircling the port is the city’s Industrial Valley, while further afield are areas set aside for residential communities, tech clusters, universities, hospitals and so on. On the eastern side of the city will be its second major link to the outside world, the Haramain Station. When that is opened at the end of next year, the city will become one of four stops on Saudi Arabia’s latest high-speed rail network, linking the megaproject with Jeddah, Makkah and Madinah. Nearby is the King Abdullah University for Science and Technology (KAUST), while to the north lies the PetroRabigh petrochemicals plant — the largest of its type in the world.
     KAEC already has some 70 companies now in the process of setting-up bases onsite — including multinationals like Mars, Pfizer, and Danone, as well as local family giants such as Abdul Latif Jameel, and the Naghi Group — and is now working to attract mid-sized firms, as well as companies not in the specific sectors it has targeted before.
     KAEC will provide housing for every wage bracket — from labour to luxury — and that affordable housing will be launched shortly.

Geoffrey Comments:

      An interesting and diverse set of speakers, each with a different point of view.
     First, Mr. Kunio Mikuriya asked for more collaboration between traders and customs with traders recognizing customs need and customs recognizing the need for a common set of standards.
     From our own observations over the last few years, it has become apparent that Customs (and other regulatory authorities) have adopted a far more collaborative approach when developing and implementing standards.
     We think it’s fair to say that a common set of standards will result in much faster implementation.
     It has been reported that ICAO and WCO are joining forces to also ensure that common standards are developed, once again a positive move for the industry.
     It had also been suggested by some that advance security data for risk analysis purposes should be targeted at high risk countries, however, this would need to be carefully thought through.
     The messages from EKOL and Arkas had been quite clear in that moving from road and air to rails and sea is seen as a far more ecological method of transporting goods. That being said, it’s worth noting that air transport accounts for 2% of global manmade CO2 emissions and has a target to cut net CO2 emissions in half by 2050 compared to 2005.
Geoffrey

 

Cartoon For February 2, 2015

 

Now There Are ThreeEdward Saylor   Lt. Col. Edward Saylor one of four surviving Doolittle Raiders, died at his home in Washington State last Wednesday at the age of 94.
   Saylor enlisted in the Army Air Corps on Dec. 7, 1939, and served as an enlisted airman throughout World War II.
   On April 18, 1942, he joined 79 other volunteers led by Gen. Jimmy Doolittle on a top-secret mission to bomb targets in Japan.
   Saylor was an engineer in the 15th of 16 B-25 Army bombers, which launched from the USS Hornet aircraft carrier, something never attempted before.
   Though largely symbolic, the mission was a huge success in boosting American morale and wounding that of the Japanese—it proved Japan's home islands were not beyond the reach of US sea- and airpower.
   Three American heroes still alive from the original 79 Doolittle Raiders are Lt. Col. Richard Cole, co-pilot of crew 1, retired SSgt. David Thatcher, engineer-gunner of crew No. 7, and Lt. Col. Bob Hite, copilot crew 16.

Doolittle Raiders video

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If You Missed Any Of The Previous 3 Issues Of FlyingTypers
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Access specific articles by clicking on article title

FT012315
Vol 14. No. 7
Auto Show News
Dream And False Alarms
EMO Transitions
Chuckles For January 23, 2015
CAL To Larnaca
IAG Art Of The Move
FT012715
Vol 14. No. 8
Where We Are Right Now
Notes From Phnom Penh
Chuckles For January 27, 2015
Logistics Needs Help
Memories Of Joe Franklin

Publisher-Geoffrey Arend Managing Editor-Flossie Arend Associate Publisher/European Bureau Chief-Ted Braun
Film Editor-Ralph Arend Special Assignments-Sabiha Arend, Emily Arend Advertising Sales-Judy Miller

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