“All in all, a decent turnout and a great opportunity to visit with our business partners, friends, and colleagues in one place over a couple of days in a nice hotel,” Marco said.
     “EMO Trans just had a great first quarter with new business, the West Coast impasse winding down, increased imports as a result of the strengthening dollar, and a new office in Japan.
     “EMO is celebrating 50 years in 2015 and will establish subsidiaries in Mainland China and Hong Kong later this year,” Mr. Rohrer said.
     Tilo and Uwe revealed that EMO canvassed their offices across the USA to ascertain the mood in each office, challenges, and other concerns, and also positives that they might share with their service partners at CNS this week.
     The results were interesting.

     “There is a huge disconnect going on at the ground handling level, resulting in long lines of trucker queues awaiting pick up, including delays of many hours at major and even minor gateways,” Tilo said.
     “It seems to us that there are some procedural applications that might be brought to bear, including better usage of cell-phone and computer technologies for communications and to get things moving,” Tilo added.
     “As an example, at some gateways where we need to get express shipments through quickly, because there are no express acceptance docks, we end up in the queue with all other traffic,” he noted.
     “Some terminals are outdated, including operations that are multi-door, but just one or two are open,” Marco said.
     “Gateway issues in Chicago include construction that in some cases has had the net result of a flight taking less time city-to-city than it takes to unload the plane and make the cargo available for pick up by our truckers,” he added.
     “We spoke to the point that the result of massive third party handling has created a situation that needs closer examination of how it is impacting our business as forwarders,” Marco said.
     “One look at the daily delays and huge line up of trucks big and small at O’Hare speaks volumes about the need for change,” Uwe said.
     Tilo Weger makes the case with a practical scenario involving the CNS host hotel:
     “This Orlando hotel is the perfect example of the real world of today and where air cargo should be.
     “I don’t know if you have seen that you can check in your bags for eight different airlines in the hotel lobby, instead of standing in line at the airport.
     “That is 2015.
     “Here is another example that is even more interesting.
     “I had my car parked by the valet service and received a receipt ticket.
     “When we were ready to leave I sent a text to the valet with my number and immediately received the following reply: ‘Flash Valet has received your request for ticket 146901. We will notify you when your vehicle will be ready.’
     “A few minutes later, I received the following text: ‘Your car will be ready in approximately 5 minutes. Please make your way to the valet stand.’
     “If you compare this simple, web-based solution to, say, waiting with 50 trucks lined up along the road to the airport, waiting for hours, the differences are startling.
     “After the queue on the road, the trucker must again stand in line at a little window to drop off paperwork, then go back and forth and wait some more until the cargo is finally located.
     “It is past time as an industry that we find a way to change things,” Tilo Weger said.
     Asked how their statements at CNS were received, Marco said, “All were fairly responsive and our conversations were quite cordial.
     “We were told that the airlines are aware of the situation and all promised to work even harder toward some intermediate and long-term solutions.”
     “We can only hope,” Tilo smiled.
Geoffrey/Sabiha/Flossie

The U.S. West Coast slowdown continued to benefit the air cargo sector through the first quarter, with cargo moving in increasingly diverse routings from Asia to the U.S. as logisticians, airlines, and shippers adapted to a fast-changing market, according to one leading forwarder.
     Richard Zablocki, vice president of CEVA Logistics Trade Lane Management division with responsibility for the Transatlantic market, told FlyingTypers that first quarter demand for airfreight was exceptional and peaked in the mid to third week of March.

     “That has to be largely attributable to the U.S. West Coast port slowdown driving more air exports out of Asia for the Transpacific,” he added.
     “We saw Asia Pacific freight flow for North America by way of Europe as an alternative routing causing peaking conditions out of the major airports for a short period of time.”
     He said the port situation was now improving and air volumes had slowed on the Transpacific, but he still predicted growth in demand for the year—albeit at a slower pace compared to the first quarter—due to positive economic confidence and consumption reports out of Europe and North America.
     “CEVA is projecting better than market growth expectations for some of these regions, and the global market to grow by some 3.6-4.0 percent year-on-year in 2015,” he added.
     “Port congestion is not the sole demand growth driver, which is why air freight demand growth will still continue even without port congestion.”
     However, a tailing off of peak demand has now seen rates soften. “While we prefer not to speculate about rates we do see that—with the decline in demand out of the AP’s major ports at the end of March and the beginning of April—peak rates have dropped as would be expected,” said Zablocki.
     On the supply side, the market could be thrown off balance by low fuel prices and the healthy passenger demand environment, which could lead to a significant increase in air freight capacity.
     “However,” he noted, “in February demand grew by 11.7 percent according to IATA, whereas air freight supply in ATK only grew by 4 percent year-on-year based on Seabury figures.
     “The freighter share increased only slightly from 37.1 percent in January 2015 to 37.3 percent in February and fell back to 37.0 percent in March.
     “For the full year 2015, we expect an increase in capacity of around +7.5 percent, of which the majority of that growth results from massive belly capacity injection from Asia Pacific carriers.”
     Ceva is now boosting its own service portfolio to better serve the needs of its air freight forwarding customers. The company will launch a Sea-Air product between Asia and Europe in 2015 combining the advantages of cost-efficient ocean and fast air freight transportation. Ceva will also roll out Cargo2000 implementation around Q3 2015.
     Moving forward, Zablocki expects China to generate some of the most positive growth rates by lanes. He forecasts Germany-China eastbound and westbound to expand by 7.7 percent and 5.6 percent this year, respectively. China to South Korea is expected to see growth rates of 6.0 percent eastbound and 7.3 percent westbound, while China-Saudi Arabia and China-UAE westbound are expected to expand by 11.9 percent and 9.1 percent, respectively.
     Other interesting air freight trades in 2015 will be Vietnam exports, imports to the Netherlands, and China-Latin America, where the emphasis will be on that region’s logistics and manufacturing powerhouses, Brazil and Mexico.
     Turning to intra-Asia air freight demand, he said this increased slightly above average in 2014 at +4.8 percent compared to global market expansion of +4.5 percent, despite the big China export lanes to Japan (+1.1 percent), South Korea (+1.5 percent) and Hong Kong (+0.3 percent) growing below global average.
     “Interesting lanes were especially intra-Asia lanes to India, for example from China, which increased by +9.5 percent year-on-year in 2014 or Japan (+15.3 percent) and South Korea (+9.8 percent).”
SkyKing

     While regulatory changes pertinent to the shipping of Lithium batteries are winding their way through the regulatory process in the United Nations (UN) and International Civil Aviation Organizations bureaucracy slowly but surely, a sizable number of leading airlines have decided to take matters into their own hands and take unilateral action by outlawing transportation of Lithium batteries either partially or altogether.

Bans In The Sky

     UPS updated their policies effective April 1st, following a longtime FedEx policy requiring pre-approval of shippers of Lithium commodities. FedEx additionally requires shippers’ training records as well as proof that the batteries to be shipped have been successfully tested in accordance with part III of sub-section 38.3 of the UN Manual of Tests and Criteria.
     The idea is to prevent shippers of counterfeit batteries from using their services in a legit manner.
     Qantas Airlines (QF), Delta Airlines (DL), American Airlines (AA), Royal Brunei Airlines (BI), Cathay Pacific Airways (CX), Emirates Airlines (EK), Etihad Airways (EY), Singapore Airlines (SQ), Qatar Airways (QR), United Airlines (UA) as well as many others have either banned the transport of batteries in total, or partially restricted fully regulated batteries from carriage.
     Others, including Lufthansa Cargo (LH), for example, evaluate the shippers and their commodities and require further assurances prior to accepting battery shipments.
     It should be noted that such bans typically do not affect batteries of either type installed in or packed with equipment.

Demands Ramped Up

     Increasingly unhappy with the relaxed regime instituted, based in part on assurances by a Washington, DC-based lobby group, The Rechargeable Battery Association (PRBA), and Arlington, Virginia-based National Electrical Manufacturers Association (NEMA) that a requirement for formal training would be unbearable for smaller shippers and that excepted batteries installed in equipment pose virtually no risk, Cathay Pacific (CX) is demanding that even where no more than four excepted cells or two excepted batteries are installed in equipment, these shipments are to be declared on the Air Waybill, and the Lithium battery handling label applied.
     So far, equipment containing no more than four excepted cells or two excepted batteries may be shipped undeclared in full accordance with the regulations.

FAA test shocked the industry

     The drastic results of tests undertaken at the FAA’s William J. Hughes Test Center in February 2014 drove ICAO to ban the carriage of Lithium metal batteries (UN 3090) aboard passenger aircraft, completely effective January 1st, 2015, even as discussions continue toward development of further measures and restrictions.

Aircraft Manufacturer’s Speak Out

     In the meantime, the International Coordination Council of Aerospace Industry Associations (ICCAIA), which represents aircraft manufacturers such as Airbus, Boeing, and Bombardier, has published guidance materials calling into question the carriage of Lithium batteries in its present form altogether, naming the threat of Lithium battery fires an “unacceptable risk.”
     In essence, the aircraft manufacturer’s position is that the airframes of current aircraft are not designed to withstand a Lithium battery fire, at least without further measures such as fire-retardant covers, cargo units, or specific containers made from intumescent materials, which obviously caught the airline watchdog and interest group IATA cold.
     The issue is further fueled by demands from the pilot’s union, IFALPA, representing in excess of 100,000 pilots worldwide joining the aircraft manufacturers in their call for action.

Going After The Undeclared

     Although it can be rightfully said IATA has been late to the party, all of that seems in the past as discussions seem poised to move ahead.
     The presence of Lithium battery-related issues outside the closed circles of the Dangerous Goods Community at the IATA World Cargo Symposium earlier this year in Shanghai sent a clear signal of engagement.

IATA Speaks Out

     David Brennan, IATA’s Assistant Director Special Cargoes, emphasized that IATA “will reach out and engage with e-commerce sites to impress upon them the need to implement robust checks and controls to limit the selling of dangerous goods other than in accordance with the regulations.
     “This needs to include clear and concise information for both buyers and sellers about dangerous goods, specifically lithium batteries,” Mr. Brennan stated.
     “For governments we need to engage to promote better oversight, surveillance, and enforcement of shippers.” http://www.iata.org/publications/tracker/apr-2015/Pages/lithium-batteries.aspx
     Now following initiatives of ICAO, UPU (Universal Postal Union) and IATA, regulators are going after shippers of both counterfeit and legit batteries shipped undeclared and moved by means of (air) mail and courier, and users of auction platforms.

Issues & Battery Lobby Groups

     Even PRBA—usually quick in downplaying issues and blaming incidents and accidents on non-compliance by a few non-legit shippers—in a recent letter to ICAO's Secretary General, admitted that “disregard” of regulatory requirements on the side of some battery manufacturers and distributors “was both revealing and worrisome.”
     The letter, signed by PRBA’s Executive Director, George Kerchner, said:
     “Some who have their products shipped out of Hong Kong continue to offer their batteries for transport without complying with ICAO's dangerous goods requirements,” actually admitting that "in many of these cases, circumstances suggest that they may have knowingly violated ICAO requirements.“

Action Today & Tomorrow

     In a nutshell, the trust of airlines in the assurances given by industry watchdogs and battery manufacturers are now viewed with dubious distinction, so individual airlines are moving ahead with total or partial bans on Lithium batteries. Interestingly, some bans also include bulk shipments of rechargeable Lithium-Ion batteries, which in the past were seen as not that much of an issue as Lithium-Metal batteries.
     Also, in the face of mounting reports about accidents and incidents , stakeholders seem inclined to protect their own interests in regard to possible claims of negligence on their side should an accident occur—this clearly is the key motivation for aircraft manufacturers as well as airlines to reduce risks which, they feel, are hardly properly compensated.

Naïveté a part of the problem

     While it was oft stated that exemption from formal training requirements applicable to shippers of ‘excepted‘ Lithium battery types was a necessary measure to protect small-and medium-sized businesses, stakeholders were ‘surprised’ to learn that these exemptions were mainly used by large-scale shippers who combined hundreds of packages with ‘excepted’ batteries into overpacks and tendered these to airlines.
     Although some of these overpacks contain thousands of batteries, the flight crew is usually not informed about their presence by means of a NOTOC (Notification-To-Captain) or NOPIC (Notification-To-Pilot-In-Command)—another thing many airlines have changed now, and as of late a measure supported by IATA as a best industry practice.
     The point that “the overwhelming majority of shippers are law-abiding,” as a recent ICAO working document stated, may just be wishful thinking.
     Regulators and training professionals have long been cautioning against these exceptions of any relaxation of the regulations.
     The argument most often heard is that in the rough and tumble world of commerce, shippers fight vigorously to achieve cost reductions by fractions of cents and will use any opportunity to cut down on expenses.

U.S. Regulators Leading The Way

     While U.S. regulators, namely FAA and U.S. DOT-PHMSA, have drawn criticism from industry stakeholders, in particular in regard to their approach to Lithium batteries (PRBA accused PHMSA of ‘regulatory overreach’ and ‘making no sense’ when the initial version of HM-224F was published in 2010), the recent chain of accidents and incidents seem to justify the conservative and safety-centered approach initially taken by U.S. regulators.
     In fact, despite claims to the contrary, PHMSA, in a recent NPRM (HM-253), is tackling the issue of ‘reverse logistics,’ something stakeholders worldwide so far have largely ignored.
     While shipments of consumer goods (including Lithium batteries and devices containing these batteries) may be in full compliance when shipped from the retailer to the consumer, compliance is at least questionable when the consumer ships merchandise back for reason of warranty repair, dissatisfaction, or any other notion. While HM-253 covers transport via land vehicles only, it is at least addressing an issue that is pressing worldwide, and not covered by regulations.

Can ICAO DGP Help Sort Baseline Solutions?

     ICAO’s Dangerous Goods Panel (DGP) will decide on the motion of ICCAIA and IFALPA (Agenda Five) during their meeting, taking place between this week between April 27th and May 1st in Montreal; if approved, their decision would still require ratification by the ICAO Council.
     The Agenda Item 5 reads:
     “Development of mitigating measures to address risks associated with the transport of lithium batteries including measures that address recommendations from the Second International Multidisciplinary Lithium Battery Transport Coordination Meeting.”
      The meeting is scheduled to address issues in detail such as “bulk” shipments of excepted lithium batteries and cells, performance-based provisions, limitation on state of charge, simplified provisions, guidance material to assist States with oversight and awareness programs, and miscellaneous lithium battery issues. It is hoped it will help set forth clear and transparent guidelines for the future.
Jens

     As aid agencies launch a global relief effort after the horrible Nepal earthquake, victims continue to descend upon Tribhuvan International Airport in Katmandu.
     Amidst reports of more than 3,700 killed and the destruction of homes and some of the most revered temples on earth, airport buildings are jammed and roads and almost all available spaces at the gateway are filled with travellers eager to either get out of the country or go home.
     But in the face of the death and destruction, the airport seemed the safest place to be, FlyingTypers learned.
     “There were men in monk's robes and business suits, women in hiking gear and Indian saris.
     “There were also scores of locals whose homes had been damaged or destroyed in the massive earthquake,” reported Associated Press.
     “Soldiers in green fatigues scurried to unload supplies from an Indian air force C-17 Globemaster as the new traffic rolled in: a Sri Lankan military plane, a private jet, passenger planes from China, Saudi Arabia, Turkey, and India.
     “The plane traffic became so backed up that numerous flights were turned away Sunday and forced to return later.” (Associated Press)

     The massive earthquake in Nepal and its aftershocks have triggered an international relief effort involving governments, charity groups, and private volunteers from all corners of the globe.
     The nation of 27.8 million people face shortages of shelter, electricity, food and clean drinking water after Saturday's magnitude 7.8 earthquake, according to United Nations relief workers on the ground.
     "The number of flights has been severely restricted, so that’s been a challenge in getting people over there," said Garrett Ingoglia, vice president of emergency response for AmeriCares, a nonprofit that delivers medical and humanitarian aid.
     “Hospitals were trying to accommodate a huge influx of patients and were running short of supplies like bandages and trauma kits,” said Jamie McGoldrick, U.N. resident coordinator in Nepal.
     “Water supplies, a problem under normal circumstances in this fast-growing city [Kathmandu], will almost certainly run short."
     The U.S. sent a military plane with a U.S. Agency for International Development disaster assistance response team, a search-and-rescue team, and 45 tons of cargo, the Pentagon reported.
     But people who know Nepal will attest that getting help where it is needed will be a logistical nightmare—infrastructure that was challenging before the disaster now poses monumental problems.
     At the same time, people who want to help by contributing to the relief effort are being warned to beware of organizations claiming to be first responders.
     The Federation of Red Cross and Red Crescent Societies are working on the ground to bring aid to Nepal. https://www.redcross.org
     Also, The Salvation Army, where I have personally served as Senior Advisor in Queens, New York, for many years, is accepting contributions toward the relief effort in Nepal.
http://www.salvationarmyusa.org/
Geoffrey

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