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   Vol. 15  No. 46
Wednesday June 15, 2016

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Delta Up On Pharma

   “Expanding our Pharma 4 stations to include Rio de Janeiro echoes our commitment to globalization and is a direct response to customer feedback,” said Gareth Joyce, President Delta Cargo as Delta Cargo’s newest Variation Pharma 4 station opened on June 13.
   “Our vast network will connect Brazil to the world,” Mr. Joyce said.
   “Delta Cargo has 49 stations around the globe certified to handle one or more Variation Pharma products, 16 of which are certified for Pharma 4,” adds Miriam Altmann-Barry, General Manager, Cargo Commercial Operations.
   “With global reach, our Pharma desk works with all of our cargo stations to streamline a smooth operation.
   “Specialized Pharma agents are welcoming this opportunity to support our customers’ Pharma 4 business into Rio de Janeiro.
   “Pharma-specialized agents provide booking and support seven days a week, as well as 24/7 online tracking.”
More: www.deltacargo.com/pharma

Chuckles For June 15, 2016


With structural overcapacity the ‘new normal’ and airlines continuing to add point-to-point capacity to meet rising passenger demand, forwarders are understandably seeking out profits wherever they can find them.

Kuehner Panalpina End To End
     Panalpina takes a holistic approach to supply chain solution provision and, according to Lucas Kuehner, global head of air freight, this approach naturally lends itself to revenue generation at each stage of the transport and facilitation process, even when airport-to-airport freight rates are in the doldrums.
     “We are an end-to-end provider,” Kuehner told FlyingTypers. “Even our slogan makes this clear. As it says, we have ‘a passion for solutions.’
     “Whether it’s port to port or airport to airport, getting cargo from one continent to another is not the difficult part. Transit may be four days but the flying time is a minority of this. In other words, the real difference is made on the ground. We create added value for our customers by giving them access to the best people, processes, and technology so that quality is assured and time won on the ground.      “It’s about cargo handling, real-time visibility, organizing customs, pre-carriage documents, and doing everything possible to smooth clearance. That’s what forwarders do and that’s how they make a profit.
     “With so much overcapacity the airlines are struggling most, but they are also fuelling growth because of their passenger operations. They all treat cargo differently, but in general they try to fill their planes and that’s not easy in a market that’s not growing.”
““Panalpina takes a markedly different approach to many of its rivals, not least by operating its own charter network. But the forwarder is still predominantly non asset-based. “For a service company, it makes no sense to provide any service at a loss,” explained Kuehner. “Air freight margins are not huge. They are generated from consolidation of cargo at different points, so we strive for critical mass. We process shipments in a productive way, consolidate cargo on the ground before we move to gateways, then in the gateways we also consolidate cargo and hand it to airlines in the most cost effective way while also meeting the transit times of clients all along the way. Forwarders are experts at this. It’s the same at the other end of the chain when we deconsolidate—we make the process as smooth as possible.
     “The role of the freight forwarder and the value we bring to the industry often gets pushed to the wayside. We are the ones with the contacts. We route the cargo flows we control on behalf of shippers in a way that optimizes the space of carriers much better than they can do themselves. We take waste out of the supply chain.”
     Panalpina’s air freight operation incorporates an extensive charter network, which the company views as a major differentiator from its forwarding rivals. The network, which was first set-up in 1990, accounts for some 15 percent of company air freight volumes. Panalpina currently wet-leases a Boeing 747-8 freighter from Atlas Air that makes direct calls at five airports—Luxembourg (LUX), Huntsville (HSV), Mexico City (MEX), Guadalajara (GDL), and Stansted (STN)—chosen in part because they are congestion free and offer fast turnarounds and reduced risk of delay. Additional services using scheduled charter capacity offer links to Shanghai Pudong, Baku, Hong Kong, and Viracopos International Airport in São Paulo on a scheduled basis, and multiple other destination on an ad hoc basis.
     “We now operate more than 1,000 scheduled charter flights a year using several partners, and our ad hoc customers requiring a charter flight also benefit from this. They can often avoid paying higher ad hoc rates because we can offer them a part charter on one of our scheduled flights,” said Kuehner.
     He explained that using leased and chartered aircraft enabled Panalpina to offer customers guaranteed capacity, as well as better quality control when handling sensitive cargoes such as pharma or perishable products.
     “It’s a unique model,” he said. “In this market we are more like an integrated freight forwarder, so it’s different to the rest of our business. It gives us cargo overflow and allows us to optimize our capacity between our own long-term capacity and what’s available in the market. But the real benefit for the shipper is on the ground. We control the ground processes so we know exactly how quickly cargo can be moved into the aircraft, and for special cargoes, say for example if we see a temperature excursion, we can act immediately to protect the cargo. This cannot be done if the cargo is with a ground handling agent, or on a trolley going around the airport. We also typically do this in airports focused on cargo not passengers, so the distance between truck door and the plane is usually around 100 meters, compared with a major hub where it could be about 2-3 km. This gives us full control of the supply chain for our clients.”
     The Swiss forwarder’s first quarter results revealed its air freight strategy is proving effective. Volumes were up 5 percent year-on-year and Kuehner expects growth to continue at a similar rate for the rest of the year. “We expect increased tonnage throughout 2016,” he said. “We are quite encouraged. Last year was tough with the downturn in oil and gas but that’s looking better this year and we’ve also diversified into perishables, which has been successful.”
     However, although he expects to see Panalpina growing this year, he is fairly bearish over the future of the global economy and world trade.
     “The story of decreased demand and increased capacity has been constant for the last 2-3 years and I don’t see that changing this year or even in 2017,” he said. “There is an overhang of 5-10 percent capacity growth versus demand, and that puts pressure on margins for all in the industry. It’s a fact that we all have to live with.
     “I don’t see a huge uptake in economic growth and trade, so this is the new normal. There are no huge product launches that will transform the market this year and the world economy is not in great shape. Although it’s not terrible either, it’s humming along, so the challenge is finding a margin.
     “For shippers this is good news as they benefit from reduced costs. Reduced fuel prices last year also helped and the cost of air cargo fell significantly.
     “For the industry the current market is an incentive to work on the quality of the product in the eyes of the shipper so that we can meet their expectations.”

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Elliott Paige

   Elliott Paige, Head of Cargo and Passenger Air Service Development at Hartsfield Jackson International Airport, headlines the Air Cargo Association of Atlanta (AACA) Big Event Luncheon on June 21 to honor past presidents and announce scholarship winners.
   Mr. Paige will also offer some inside views of ATL’s cargo facility construction and innovative truck staging and import/export strategies featured in FlyingTypers earlier this week. Read here.
   Here you can hear some of the exciting things happening as the gateway takes the bull by the horns and builds for air cargo 2020 and beyond.
   Vital Statistitics: June 21, 12-2 pm, Holiday Inn Hotel & Suites, Atlanta Airport-North. Cost includes luncheon $35 for members, $45 for non- members.  www.atlantaaircargo.com

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Around The World

     It felt a bit like the fabled departure of “The Lone Eagle,” when Charles Lindbergh took off in the dark for Paris 89 years ago.

Solar Pilots
Swiss pilot Andre Borschberg (right), Co-founder, CEO and pilot of Solar Impulse, and fellow pilot Bertrand Piccard, Initiator and Chairman of Solar Impulse, celebrate after landing the sun-powered Solar Impulse 2 at JFK International Airport in New York, NY, on June 11, 2016.

     But this was 2016. The Swiss-made Solar Impulse 2 landed at John F. Kennedy International Airport on Saturday, June 11, at 4 a.m. It had just traveled for 4 hours and 41 minutes on a trip of 165 miles from Lehigh Valley International Airport in Pennsylvania.
     The aircraft reached a milestone last weekend. Its globe-circling voyage began more than a year ago in the United Arab Emirates, but last Saturday The Solar Impulse 2 completed a trip across the United States with a Statue of Liberty fly-by before landing in New York.
     “Si2 is now safe in New York, JFK airport . . . Our new home is Hangar 19 in John F. Kennedy International Airport!" the pilots' logbook read.
     Pilot Andre Borschberg, who flew the plane to New York, and pilot Bertrand Piccard, who will start the next leg of the journey, expect to leave "soon" to cross the Atlantic Ocean for Europe or South Africa. They are quickly on their way to completing an aviation engineering feat that will advance environmentally compatible technology.
     If they fly the northern Atlantic, the route will probably follow Lindbergh’s great circle route trail, hugging the landmasses and jumping from country to country before facing the stretch of the northern ocean until arrival on mainland Europe. The trip will begin early morning, moving very late into the night and the wee small hours of the morning.
     A South American attempt to cross the Atlantic would probably also mimic earlier pioneers of aviation by picking the shortest crossing, perhaps Natal Brazil to Dakar, for example.
     SI2 can store enough power to keep it going all night “but needs sun the next day,” the pilots quip.
     Solar Impulse 2’s wings, which stretch wider than those of a Boeing 747, are equipped with 17,000 solar cells that power propellers and charge batteries. The plane runs on stored energy at night. Ideal flight speed is about 28 mph, although that can double during the day when the sun’s rays are strongest.
     The plane’s schedule is understandably affected by the weather, so with a completely flexible schedule showers and thunderstorms caused it to be grounded.
     The trip began in March 2015 from Abu Dhabi, the capital of the United Arab Emirates, and made stops in Oman, Myanmar, China, and Japan. The plane had a five-day trip from Japan to Hawaii, where the crew “was forced to stay in Oahu” for nine months after the plane’s battery system sustained heat damage on its trip from Japan.
     Missing from all of this was the suggestion of a commercial (god forbid) air cargo value, which might be developed for these flights as technology advances lift and payload.
     What a thing it would be to receive a bag of mail or some flowers, or any air cargo delivered by solar power—flying low, slow, and cheap, but still faster than ocean.

Solar plane video

Air Cargo News 40th Anniversary Issue



Orlando Day After

   Orlando the next night.
   “We will gather in larger crowds. Some of us will be worried that it could happen again. But we will still gather. We win.”


If You Missed Any Of The Previous 3 Issues Of FlyingTypers
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See What The Bears In The Back Room Will Have
DIAL Up Ten Years
Chuckles For June 6, 2016

LIGHTBOX: Memorial Day 2016
Porta Estellar Summer
FT051816Vol 15. No. 44
Delta Joyce Is All About Choice

Sounds of Silence
Chuckles For June 8, 2016
Still A Thrill
One Roof Still At Home
The Champ Comes Home

Vol 15. No. 45
Mass Layoffs At Lufthansa
Airport Truck Queues Threaten Cargo Growth
Chuckles For June 13, 2016
Air Cargo News For June 13, 2016
Atlanta Activates Truck Staging
It's JFK Cargo Golf Day June 27

Publisher-Geoffrey Arend Managing Editor-Flossie Arend
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