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   Vol. 14  No. 58
Monday July 20, 2015

Air Cargo News For March 26,, 2015Air Cargo News For July 20, 2014

Taiwan Remains Tactically Flexible

Taiwan-headquartered China Airlines is optimistic about freight markets in 2015 but determined to remain tactically flexible in the face of stiff competition and fluctuating demand.
     Jeremy Chang, vice president Cargo Sales & Marketing Division, foresees a slow but steady upward recovery for CI’s air cargo division after suffering yearly declines in recent years.
     “Over the last five years, the volumes of China Airlines have been decreasing 1.7 percent on average each year due to the world economy struggling to recover after the eruption of the global financial crisis, but the outlook for air cargo is clearly getting better for the future,” he told FlyingTypers.
     “2015 is shaping up in line with a growth expectation of 4-5 percent, according to IATA’s forecast.

Jeremy Chang

     In early 2015, thanks to congestion at U.S. west coast ports, both the volume and the rates of global air freight showed a significant increase. There is no doubt the best growth lane is Transpacific.”
     CI operates 18 freighters alongside its 64 passenger aircraft, allowing it to maintain stable service and also giving it the flexibility to withstand periods of low demand and high supply across its cargo network, which now covers 93 destinations in 27 countries across Asia, Europe, and America.
     “Transpacific is our largest lane by volume and value for sure,” said Chang. “The outlook for air cargo is clearly getting better.
     “However, demand for air cargo exports from Taiwan is still growing more slowly than global economic activity and competitive pressure remains intense.
     “Electronic equipment, machines, medical and technical equipment, etc. are the main exports from Taiwan.”
     As the idling of three of its freighters in 2012 illustrated, CI prides itself on its flexible approach to capacity management. “We keep a close eye on the market and adjust our product mix, network, scheduling, and management of marketing channels and revenue periodically,” said Chang. “Our cargo division turned profit from deficit in Q4 2014 and it contributed 32.8 percent of revenue in Q1 2015.”
     He said CI was also continuing to develop and market its sea-air products. “By combining the economies of ocean freight with the speed of air freight service via TPE—our main transit hub and home base at Taiwan—China Airlines offers cost-effective and seamless sea-air products from Asia-Pacific areas to global destinations, especially to North America,” he explained.
     CI launched a new freighter service from Taipei to Shenzhen in March 2015, offering three flights per week. “The route will promote closer business and investment between Taiwan and Shenzhen. Shenzhen is our seventh destination in China,” he said.
     The new service took CI’s total cargo operations to 13 flights per week to and from China, where the carrier also offers services to Chongqing, Guangzhou, Nanjing, Shanghai, Xiamen, and Zhengzhou.
     “We expect to explore the cargo market and meet the growing demand for shipment of consumer electronics and express air parcels as Shenzhen is a major logistic hub for e-commerce and online shopping,” he said.
     China Airlines was the first airline from Taiwan to join SkyTeam air cargo alliance and continues to draw on the agreement to bolster its network and maximize throughput.
     “As a SkyTeam Cargo member, China Airlines has developed an extensive product line and enjoys joint purchasing and marketing benefits with other member airlines,” he said. “Not only does this simplify the shipping process but it also provides standard products across SkyTeam Cargo members.
     “All four of our global products, including Equation, Cohesion, Variation, and Dimension, are offered by all member carriers to facilitate the movement of cargo seamlessly across our entire combined network. It’s a customer friendly service, ‘Just pick and ship.’”
     As with its network and product portfolio, CI also examines the pros and cons of its global transit locations on a regular basis. This saw the carrier switch hubs in the Middle East earlier this year. “After carefully evaluating the market potential, operating flexibility, and airport facilities/capacity, Dubai World Central (DWC), the main hub connecting flights between Europe, Africa, and Asia, has been our new transit station to replace Abu Dhabi (AUH) in the Middle East. This started from April, 16, 2015.”
SkyKing

 

 

RMheader071915

Off To A Running Start

Pan American Cargo Ad     It is an historical caprice of fate that the closing of both world wars were witness in the earlier instance, to the carriage of newspapers and mail aboard the first scheduled airline flight; and in the later instance, the dawning of what came to be known as the Air Cargo Age (which gave way to the Jet Era about a quarter-century afterward).
     I’m inclined to liken the first five years of the Air Cargo Age (1945-50) to a line of steeds in a wild dash from the starting gate at the race park. It was an incredible burst of speed toward a broad spread of envisioned goals, but specifically the “romance” of a vital industry aborning.
     There were risks strewn like seeds; there also were those whose inner eye encouraged muscular activity. Imaginations were in full fling. Wasn’t it Napoleon who said that the world is ruled by imagination?
     The first half-decade of the Air Cargo Age set the stage. Imaginations were in full play: hordes of ex-Army and Navy flyers in air commerce; established airlines wakened to a rosier picture of the shipper as customer; the spurt in growth and development of intermediary services; the rapid expansion of new products to air distribution’ the swell of interest in all-cargo availability.
     With the explosive annual rises in air cargo tonnage and air cargo ton-miles, it became a popular sport for the trade press to ask airline officials, including air cargo managers, whether they believed cargo revenues would eventually equal passenger revenues. As one, the airlines declined to consider the question. There were, however, a small number of managers who privately expressed optimism in varying degree. And then there came the day when Pan Am broke the ice to become the first airline to predict officially that the shipper’s revenues would equal passenger revenues in 10 years. TWA soon followed, holding that the predicted event would happen no sooner than 25 years. There is no record that these venturesome journeys in prognostication never occurred again.
     What follows is a spectacular panorama of examples of activity in various areas and on distinct levels that underscored the mighty thrust by an infant industry’s first few years.
historic cargo loading photos      There is the classic case of the Four Wheel Drive Auto Co. of Clintonville, Wisconsin, with an order for a 7,000-pound truck to be delivered to a Cairo-based buyer. Per schedule, the vehicle was loaded into a railcar destined for Newark. But a cable from Cairo informed the shipper insisted on delivery no later than 10 days. Decision on a quantity order depended on it. Abrupt change of plan diverted, upon delivery in Newark, to a barge crossing the river and then the truck’s body was detached from the cab.
     The machine was trucked across Manhattan and Queens to Idlewild Airport. There a forklift operator took command and eased the units of the vehicle in to a DC-4 airfreighter in the service of Seaboard & Western Airlines (eventually rechristened Seaboard World Airlines). The time was Tuesday, three days before the inflexible deadline. With takeoff at dawn on Wednesday, the aircraft touched down at Gander and Shannon, changed crew at Luxembourg, and onto Rome and landed in Cairo. Pounding hearts in Clintonville and Cairo returned to an even beat. The result of the on-time delivery was an exceedingly pleasant one: an order for 619 standard FWTD trucks.
     Examples of heavy lift (and distant delivery) such as this took root in many minds, and the annual reports of the scheduled and nonscheduled air carriers underlined the fact. For a while it was fashionable for marketers to claim that any piece of freight that can fit into a plane can be safely flown. Among the aircraft manufacturers in the United States and Europe there was a spurt in all-cargo planning. With more cargoplanes on the way, there was a flow of predictions centering on a broader range of commodities available for airlift and a downward spiral of air freight rates. It was an auspicious moment for crystal-ball gazers.
     It’s true that the latter Forties saw a steadily increasing list of multiple-ton air shipments: a ship’s turbine to Calcutta; a planeload of tuna, Halifax to Chicago; the disassembled helicopter airfreighted from upper New York State to Juneau, Alaska. Examples such as these increased in number, but by far in most cases they were emergency movements.

Cargoloading
     The other side of the coin—routine commercial heavylift—was the exception, far below the norm. Yet, even in this budding period of opportunity there were a handful of cases that represented a promise of a great tomorrow. One massive air shipping event involved the building of the Caribe-Hilton hotel in San Juan, Puerto Rico.
Clipper Cargo     Construction of the luxury hotel began shortly after world War II’s end. Furniture, because of its bulk, value per pound, and other factors, was widely regarded as being among the low air freight candidates despite the industry “facts,” Eastern Airlines (from Newark and Chicago) and Pan Am (from Miami) were engaged to haul a total of approximately 200,000 pounds of furniture on some 30 flights. A glance at the airborne items is stunning even in the Jet Era: 600 bed frames, 304 dressers, 352 vanity tables, 3,000 chairs and sofas, and 355 floor lamps plus miscellaneous pieces.
     It is notable that this deal, planned years before the Total Cost Concept came to broad industry notice, employed the economics of TCC. Stacked against the lower surface transportation rates, contributing to a decision for airlift were: nearly 100 percent elimination of crating and packing, warehousing, insurance, documentation, and transfer expenses were either slashed or entirely dropped. Also vanished were damage and pilferage, many handling fees, and deterioration. There were zero expenses at the delivery point. An enlightening postscript stressed the fact that the working capital used in the transaction between the furniture production and use was eliminated by precise timing and scheduling. The task of the working capital reached completion in three weeks less time.
     Possibly the earliest of air freight’s cheerleaders were marketers in the field of agriculture. Theirs was a virtually spontaneous reaction to premature picking, substandard ventilation, troublesome refrigeration, boxcar diversion, and slow speeds. It was customary for growers to pick their produce at “green-ripe” stage—i.e., shortly, before full ripeness was attained by the time the produce went on display at destination. But hold!—there was a price to pay for this type of movement. The price: texture, juiciness, color, flavor, and full sugar and vitamin content.
     Food-shopper awareness of vitamin content was known to be a compelling level, and many retailers resorted to posting vitamin content along with the price of the product. Eighteen fresh tomatoes—six tomatoes in each of three groups designated Airborne, Railborne, and, Hothouse-Grown. These entered tests for vitamin C content via the Fisher Titrimeter. Vitamin C content of the airborne sample was nearly twice that of the railborne samples—25.45 versus 14.43, slightly higher than the hothouse-grown tomatoes, 13.18.
     As in a single voice, the scheduled and nonscheduled operators posed the following question at a meeting of the United Fresh Fruit & Vegetable Association: if the air carriers were to provide the capacity and weight, could shippers of produce accommodate heavy tonnages? In response, Claude N. Palmer, an official of the organization, came through with a loud Yes, “provided the charges for airborne perishables will have to command over the surfaceborne.” He described it as a “challenge to the ingenuity and fairmindedness” of the air cargo industry.
     Drugs and medicines are also veteran oldtimers, along with chemicals and pharmaceuticals. In emergency situations, their dispatch by air swiftly became a commonplace procedure. Just a few short months after the Japanese surrender, New York City—for the first time in decades—received the unwelcome visit of smallpox. Ill-prepared to combat the disease on the required all-out coverage of the city’s population, calls for medical aid went out to sources throughout the country. With the exception of local suppliers who utilized surface transportation modes for their deliveries, all other drug companies and chemical laboratories delivered their vaccination kits by air. The epidemic was halted in its tracks. It was a perfect example of the difference between haste and speed: promptness in placing order, and speed in delivering them.
     A report made public by the Department of Defense in 1950 revealed that the whole blood flown to Korea in the Defense Blood Program—it was implemented by the American Red Cross—depressed the mortality rate of the wounded to slightly above 1 percent as against World War II’s lowest level of 2.7 percent.
     Leave it to Herbert Spencer who advised that the tyranny of milady is tougher than any other tyranny we suffer under—in the instant case, applied to fashion.
     In the immediate postwar America, the thought of air travel was wreathed with a kind of unique fascination. More visibly in the field of women’s fashions, marketers discovered value in associating the product with the romance of air. Hence, dresses with labels reading Flown from Hollywood and Broadway Airborne. There were international variations drawn on London and Paris.
     If industry gossip was to be believed, retailers of fashion goods anticipated the major airlines’ cargo marketers in highlighting dollars-and-cents values in the careful use of air freight. Such as limited initial quantities of a range of styles to test buyers’ choices at the start of a new season; reliance on the speed of airborne reorders in precise quantities of style, color, and size in order to avoid full ranges; careful purchasing through the length of a season results in fewer markdowns at season’s end.
TWA Sky Merchants     TWA was authority for a case involving an import of angora sweaters from Rome. The sale and turnover of capital investment of $10,000 every four days air delivery time was four days, compared with 16 days surface time. Each turnover produced a profit of 8 percent, a reduction of 2 percent. However, the importer was able to effect turnover four times as fast. The original $1,000 net profit climbed to $3,200—healthy profits in the Forties.
     Early in 1946, without fanfare, International Air Freight, a so-called GI nonscheduled airline operating C-47 equipment, loaded a specially fitted cargoplane with six bulls and four heifers. The flight from New York to Medellin, Colombia, was technically unremarkable except for one solitary fact: it was the first recorded flight of a planeload of cattle.
     Records, as the old saying states, are meant to be broken, and the industry lost no time in proving the adage right: planeloads grew, tonnages increased, distances extended. A little more after the New York—Medellin record flight, a new high mark was established by Pan Am which transported a full load of pure-bred Holstein–Friesians arranged in stalls the entire length of a DC-4 freighter from Toronto to Buenos Aires, a distance of 2,800 miles. The flight was via Miami, San Juan, Port of Spain, Belem, Rio de Janeiro, and Porto Alegre.
     There was one problem at journey’s end: the count of cattle for the takeoff didn’t match the count on landing—easily explained by the birth of a calf on board.
     In direct contradiction of some published descriptions of the Air Cargo Age’s start-up years in terms of normal (on the whole) growth, the single purpose of this report is to dramatize a brand new industry’s shattering lunge past mediocrity. A case in point is the account of the Toronto–Buenos Aires cattlelift, which set a record that lasted many years.
     I recall vividly an SAS advertisement of that time, which portrayed an aircraft with the protruding neck of a giraffe. The Scandinavian airline claimed the ability to transport any kind of animal with the exception of the giraffe for the pictured reason. (Shipments of domestic pets stowed on all passenger flights are not considered in this article.)
     Postwar’s first half-decade was witness to a dizzying array of safe animal-transport feats.
     Argentine toads to combat infestation in the United States; a complete circus, Florida to several Latin American capitals; zoo animals of every description crossing the Atlantic and Pacific; hundreds of Indian monkeys for scientific research—all, and more, forming a category of shipment of increasing importance. According to BOAC, in the 18 months prior to 1950, every tenth passenger was an animal.

Cargo Loading
     Seven decades of postwar air freight history have slipped into the past, but I still cite a two-way international operation as a model for advancing service objectives. It began when a tanker owned by the Standard Vacuum Oil Co. broke down on a river near Palembane, Sumatra. Unable to continue–the layover cost Standard Vacuum $4,500 a day—Bethlehem Steel was wired for a rudderstock and several crates of replacement parts plus boiler tubes. At the airport in New York, the cargo was loaded aboard a Seaboard & Western DC-4 freighter. After touching down at Gander and Shannon, it flew on to Brussels, where a 3,600-pound motor was loaded intot he plane. Then on to Rome for refueling, Athens, Abadan, where the boiler tubes were offloaded, Karachi, New Delhi, Bangkok (where arrangements were made for a return planeload to New York), and Singapore.
     Two cranes were required to withdraw the 16-foot long rudderstock from the DC-4. The task was completed in a couple of hours, and after an interval the airline took aboard a 23-foot python and 100 java monkeys, only a portion of the return load. In Bangkok, the New York-bound load was completed by four gibbons, two leopards, and a pair of cobras, and—“wonder of wonders!”—six 1,350-pound elephants.
Richard Malkin

Editor's Note
   Richard Malkin allowed his envisioned first choice (fiction writing) of profession to lapse. At age 102, he is in his 72nd year as an air cargo journalist.
Malkin’s coverage of The Berlin Airlift (1948-49) invented modern air cargo journalism.
   For More on Richard click here.
   malkin101@aircargonews.com


Chuckles For July 20, 2015

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