Although from the seating arrangements pictured here some may have needed binoculars to see each other, Foreign Ministers from 10 Association of Southeast Asian Nations (ASEAN) met in Hanoi in July 2010. Right now the delayed launch of the ASEAN Economic Community is a blow to the region’s airlines, manufacturers, and 3PLs. But most remain optimistic that AEC can eventually deliver on its potential.

     January 1 was supposed to be the day when ten South East Asian nations with a combined population of over 600 million people and GDP of $2.5 trillion took their collective places among the heavyweights of world trade by creating the ASEAN Economic Community, Asia’s version of the European Union.
     But January 1 came and went. ASEAN’s members collectively shrugged their shoulders and simply announced a new deadline of December 31, although not many in the private sector or government expect this to be stuck to either. But the delays do not diminish the potential that AEC has to boost the economies of South East Asia and their place in the global trading system.
     The aims of AEC are much like those of the European Union: to create a single market for goods and services by opening borders, removing tariffs, and harmonizing regulations. As well as creating a single open skies aviation market, once implemented the facilitation of international truck movements offers the potential for integrators to create vast regional distribution centers linked globally by freighter services and offering rapid deliveries over large distances by truck and air, much like they already offer in Europe and North America.
     These networks would not only serve mushrooming domestic demand in places such as Vietnam, Indonesia, and Malaysia for foreign imports, they would also provide the crucial supply chain infrastructure needed for manufacturers attracted to AEC by its huge domestic market and—in many member states—low labor and land costs: the basic raw materials needed for mass production manufacturing aimed at export markets.
     The ASEAN secretariat claims that some 80 percent of AEC’s goals have been achieved already. Those in the transport world tell a different story. Although many tariffs have been removed, trading across borders remains difficult and bureaucratic—customs and regulatory regimes are far from harmonized. Where there have been improvements, many put this down to successful bilateral agreements rather than ASEAN reforms.
     Certainly, the pace of change is hugely variable, reflecting the vastly different social, political, and economic models and wealth of ASEAN’s members—Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.
     For many in the air cargo sector, the big opportunity of AEC is derived from its stated policy of open skies. In theory, the creation of a single aviation market will create huge new opportunities for airlines, service providers, and logistics planners. A pure open skies environment with no limits on slots and routings will likely remain elusive after 2015, but airports and airlines around the region are already investing in new terminals and planes in anticipation of accelerated demand for freight and passenger movements.
     Sou Ping Chee, (right) regional head of air freight Asia Pacific at Panalpina, said the AEC Open Skies policy was definitely a move in the right direction, although the impact in the short term would be minimal.
     “First, full implementation of AEC Open Skies will only happen by end-2015,” said the Singapore-based executive. “Second, AEC Open Skies has its limitations as it does not bring full liberalization. For example, it will not allow a third carrier to fly between two foreign countries or to operate on a domestic route in a foreign country.
     “So a certain level of protectionism is still there and consequently we have not seen any major production or planning shift in the ASEAN community so far ahead of the year-end.”
     But elsewhere optimism is running high. Richard Strollo, (left) managing director, South Asia, BDP International, said the gradual implementation of free trade policy via the creation of AEC would be of huge benefit economically to the region. “Certainly our customers are reviewing developments and we are also keeping them updated with information and consultations for their logistics needs,” he said.      “From an air freight perspective, Open Skies will be welcome, enabling more flexibly to offer our air freight customers improved transit times. All in all this is a step forward to help our customers grow in South East Asia.”
     Michael Drake, (rightt) managing director, TNT Asia, Middle East & Africa, said TNT was not expecting a “Big Bang” impact from an ASEAN single market at the end of this year, citing “challenges to full implementation.” But he claimed there were already real trading wins accruing from the reform process.
     TNT has been pro-active in lobbying ASEAN governments to accelerate the implementation of simpler customs documentation procedures via the ASEAN Single Window. The company is also pushing for adoption of electronic data interchange for customs declarations and risk assessment systems to speed up the quick clearance and delivery of goods across the region.
     However, in many parts of the ASEAN bloc these trade facilitation measures will take some time to implement. In the meantime Drake is looking at the positives. “We are excited by the potential possibilities that an ASEAN single market will bring,” he said. “We are seeing some of benefits and real improvements in achieving the goals of the AEC. For example, more than 70 percent of intra-ASEAN trade incurs no tariff, which is good news for our customers.”
SkyKing

     Today, February 19, 2015, is Chinese New Year (it’s also my birthday, so if you have some red envelopes lying around, their reception is much appreciated).
     FlyingTypers has previously written about the mass exodus of Chinese workers going back home to celebrate the New Year (a journey referred to as chun yun), but it can be difficult to imagine the enormity of scale involved. Chinese search engine Baidu has turned that abstract idea into a concrete image, detailing the number of people traveling and the direction in which they’re moving in wispy blue lines that form a structure not unlike a heavily caffeinated spider’s web. If your browser offers the option to translate from Chinese to English, do take the opportunity and hover over the lines to see the origins and destinations of individual trips, and if you’re interested in seeing who is traveling by plane or train, simply click the icons at the right. It’s a fascinating way to depict and visualize human travel as it is happening.
     Chinese New Year 2015 is the Year of the Goat, or as I like to think of it, the year of the sheep (I am a knitter, after all). In preparation for Chinese New Year, people tend to clean out their homes, as it is considered bad luck to “sweep away good luck” in the first few days of the year—so hope you got your house in order before Thursday, or you’ll either be living in a mess or fostering bad luck, whichever you prefer.
     The Goat is peaceful, a homebody, artistic. 2015 is specifically the Year of the Green Wooden Goat. It’s a sign representative of harmony—a feminine sign, it attunes to the moon but is a daytime creature that utilizes the power of the masculine sun. A Green Wooden Goat Year embodies balance, growth, and renewal.
     Because the sheep is an earthy homebody, this is the perfect time to reconnect with family over dinners. An artsy fellow, it’s also a good time to take in festivals, visit museums, or engage in those creative endeavors that bring personal satisfaction, whether that translates to photography, painting, gardening, or, of course, knitting.
     2015 is apparently a good year for love, but not for marriage—this is called a Widow Year, and the superstitious would do well to avoid it. Next year is also an unlucky wedding year, so new engagements should just aim for 2017, or claim ignorance. You can counteract harmful energies by placing something red in the center of your home.
     And since we’re all in the business of business, it is good to know that 2015 is a good year for business success and money—especially for “wood” industries like food, fashion, architecture, and publications (we’re hoping the latter does exceptionally well in this Green Wood Goat Year!).
     According to Fortune.com, “2015 will be a year dominated by the economy.” Feng shui expert Doris Ingber says “The energy of wood, which represents economy, is beginning to flower. Unemployment is down, wages are moving up, and costs have stabilized or lowered.”
     The bad news, if you choose to believe this stuff, is that “water” industries are not going to have the best year—and that includes transportation and tourism. According to Ms. Ingber, the best bet for water industries is to have long-term gains in mind; trying to accomplish something immediate in the year 2015 might not turn out well.
     Here are Ms. Ingber’s tips for a prosperous 2015, according to Fortune.com:
     •   Avoid direct confrontations, opting instead for compromise and negotiation
     •   Make creature comforts a priority—tend to your home, your meals, and surround yourself with beautiful, quality things
     •   Foster strong connections
     •   Become the shepherd of your own life, and be responsible and well-thought in your decision making
     •   Master the soft sell technique
     •   Engage in charitable and humanitarian acts

     As for us, we will be eating dim sum and celebrating a birthday with family and friends. I’m sure there will be great food, fantastic company, and a clean, warm house in which to enjoy the New Year, which sounds very in line with being a good Green Wood Goat.
     Kung Hei Fat Choy!
Flossie Arend

   "Saudia Cargo’s strong schedule On-Time-Performance (OTP) and continuous proven agility to deploy extra frequencies during seasonal peak periods has amplified our position as a leading carrier in the Kenyan airfreight market," said Regional Director Africa Ken Mbogo, as SV lifted its freighter capacity 25 percent from Nairobi to Amsterdam on February 18, 2015. SV said it is operating at least six extra seasonal B747F flights filled with Kenyan flowers into Europe .
   "This serves as yet another powerful testimony of our steady progressive support to the Kenyan floricultural industry over the recent years, as well as our dedication going forward," Mr. Mbogo said.

Not since “I Love New York” branded the world’s greatest city to the world has a campaign been so well received by so many people.
     The recent visit of President Barack Obama to India has suddenly witnessed a boost in the Indian Prime Minister’s ambitious ‘Make in India’ initiative.
     In fact, it was on August 15, 2014, India’s Independence Day, that Prime Minister Narendra Modi sent out the call.
     The PM declared:
     “Let’s resolve to steer the country to one destination. We have it in us to move in that direction.
     “Come, Make in India.
     “Come, manufacture in India.
     “Sell in any country of the world but manufacture here.
     “We have got skill, talent, discipline, and determination to do something.
     “We want to give the world a favorable opportunity.
     “Come, I am giving you an invitation.”
     The call came a day after India’s successful Mars Orbiter Mission and before he left for his first visit to the U.S. as Prime Minister. The ‘Make in India’ strategy is based on: enhancement and improvement of infrastructure, easing business through delicensing and deregulation, and, lastly, opening up Foreign Direct Investment (FDI) in construction, railways, and defense.

Challenges At Hand

     With the improvement in infrastructure, roads and railways, the logistics sector will benefit the most.
     Freight forwarders and air cargo stakeholders are hoping that the ‘Make in India’ campaign will bring in better times. But before it does, the air freight sector has to counter challenges at hand.
     These include the obvious infrastructure. Added to that are skill development, regulations, procedures, and mindsets.

Airport Edwards

     To begin with, as Sanjiv Edward, Head of Cargo at Delhi International Airport, who also serves on TIACA’s Board of Directors, put it, “We can't compliment the speed in the air with the product on the ground. That is why we are not able to make inroads. We need to get our act together.”
     The ‘act’ comprises good infrastructure and the manner in which multimodal can be brought in to create efficiency and ramp up the present air cargo business that is two percent of the country's total freight business.


Kale on The Menu

     Many in the air freight industry believe that the mindset of stakeholders is still in the 1980s.
     This was clearly evident when the Mumbai Airport introduced the GMAX community portal, which facilitated exchange of information digitally at a nominal charge of five dollars per transaction.
     The airport awarded Kale Logistics to run the portal from the airport from the end of last year.
According to airport sources, joining the portal was voluntary but there were a lot of protests.
     When questioned, Amar More, Kale Logistics vice president, said:
     “I would like to clarify that GMAX is a value-added optional service offered by Mumbai Airport to the trade, for which a lot of forwarders—who want to avoid queues and manual work and want progress—have already opted.”

Forwarders Have Their Say

     Top freight forwarder and immediate past President of Air Cargo Agents Association of India (ACAAI), Bharat Thakkar declares: “My understanding is that this has not been imposed as options are available and those who found merit have registered while the rest are still using the old methods…      “Technology is the only way forward and with that one can do business at the touch of a button, even from a remote location and any such development has costs.”

Other Challenges

     But there is even more India must do to insure “Make In India” and the country moves ahead.
     There are no proper regulations in place for cargo.
     There is not have enough emphasis on standardization for the activities at the cargo complexes at airports and what qualifications the people handling cargo possess.

     Harpreet A De Singh is Air India's head of Corporate Quality, Safety, and Environment system.
     She points out that, “there is as lack of training for employees resulting in following no structured processes.”
     Even so, air cargo stakeholders believe that the environment is encouraging, as the air cargo sector looks to the ‘Make in India’ formula, as well as the move to adopt e-commerce, to boost manufacturing.
     Amber Dubey, partner and head – Aviation, KPMG, notes that the proliferation of e-commerce will “see a boost to air cargo as India currently operates at a very low level of air cargo penetration.”
     With the growth in the market, there will be demand to expand air cargo connectivity.
     For its part the government is trying to ensure that things move smoothly.
     At a recent press conference Civil Aviation Minister Ashok Gajapathi Raju was candid enough to accept that “existing regulations are not helping the Indian aviation sector,” adding that they “are focusing on removing some of the bottlenecks that are affecting the sector.”
     He also said that the present regulations had curtailed airline operations and hampered the growth of the sector.
     “We have to focus on removing bottlenecks for the sector and make it sustainable again,” the Minister said.
Tirthankar Ghosh

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