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   Vol. 15  No. 62
Monday August 15, 2016

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Express XLA Sets ACIA Summit
 


Reactions continue to come in from participants in the much-anticipated CNS initiative U.S. Air Cargo Industry Affairs (USACIA) Summit scheduled for October 4-5 at Capital Hilton in Washington, D.C.

      The associations involved in USACIA have collaborated to unite senior U.S. government officials that have important roles in the movement of air cargo, including representatives from Capitol Hill and regulators.
      Supporting and active in this effort are Airforwarders Association (AFA), Airlines for America (A4A), Cargo Airline Association (CAA), Express Association of America (EAA), Express Delivery & Logistics Association (XLA), International Air Transport Association (IATA), National Customs Broker and Forwarders Association of America (NCBFAA), and The International Air Cargo Association (TIACA).
      According to Lionel van der Walt, Cargo Network Services President and the individual responsible for spearheading this out-of-the-box initiative, “the time has come today to do something different.”
      “The air cargo industry is going through one of the most difficult periods in its history, which is being driven by factors such as weak global trade, overcapacity, currency fluctuations, the impact of unexpected external shocks such as terror attacks leading to additional costly systems and procedures, and the list goes on,” Lionel said.
      “Furthermore, competition is fierce and modal shift is a real threat. Ocean Freight rates are at all-time lows and the sector is embracing new technologies that provide it access to products that were traditionally moved by air, such as pharmaceuticals and perishables.
      “It is critical that the industry comes together, sooner rather than later, to address these concerns head on.
      “Furthermore, we are concerned that there is a fundamental lack of air cargo knowledge at the senior level in some government departments.
      “These key government officials need to hear our concerns and interact with our industry leaders to ensure that they understand the challenges we face.
      “We also need to make sure they understand the implications of their decisions on our industry and understand the value that air cargo adds to the U.S. economy and its citizens,” Lionel declared.

 

The Express Track In Washington

        Jim Conway, Executive Director of Express Delivery and Logistics Association (XLA), says he not only plans an appearance; he is also ready to roll up his sleeves to help drive air cargo reform into action.
      “Our association is focused on advocacy, particularly towards a thoughtful reform of air cargo compliance regulations.
      “Our goal is to support movement on existing compliance requirements towards more efficiency, particularly in terms of instituting technological improvements.
      “Make no mistake about it, air cargo security is the number one priority of our membership—it must be for any company or trade association in this dangerous world.
      “But it is imperative that industry and governmental authorities work closely and productively to optimize the opportunities of global express air cargo commerce while ensuring that this critical supply chain mode is as safe as possible.
      “These two overall goals are by no means mutually exclusive and a close industry/regulatory productive partnership can only bring positive results.”

Why USACIA?

      “The XLA is participating in the Washington Air Industry Affairs Summit because our membership values the opportunity to share perspectives on various aspects of our industry.
      “That value will be present not only from the stellar lineup of industry and governmental officials who will speak, but also from the chance to interact with attendees.
      “Often these types of informal discussions among cargo leaders are the most enlightening take away from such an event.”

Education Is Key

            “Equally important is the education aspect of the summit.
      “The air cargo industry is always evolving. However, at this particular time the speed of change—in technologies, markets, and global opportunities—has grown exponentially.
      “No one wants to be left behind.
      “The summit will provide an excellent opportunity for attendees to discover and explore cutting edge developments from every corner of the air cargo and logistics supply chain. And that is true value!”

USACIA Takeaway

      “The Express Delivery and Logistics Association (XLA) is proud to be a supporting organization of the Washington US Air Cargo Industry Affairs Summit in October.
      “We are excited about the opportunities the event will offer.
      “The summit will provide across-the-board perspectives of the entire air cargo supply chain.
      “Our membership, representing the expedited, high-value shipment global market, congratulates Cargo Network Services (CSN) on taking the initiative to bring all sectors of our industry together.
      “We anticipate a high value experience in hearing from both industry and governmental officials who shape the global cargo landscape.
      “Additionally, the summit offers a unique opportunity for discussion on the state of our industry, which is changing exponentially in terms of global markets, logistics, technologies, and regulatory compliance systems.
      “The XLA is eagerly anticipating the summit and looks forward to interacting with our colleagues in Washington at the summit,” Jim Conway said.

The Lionel Train

      New President of CNS Lionel van der Walt, the lightning rod for this expansive initiative, also had this to say:
      “I think it is critically important that we develop programs to attract the next generation of leaders to our industry. This is why we are working with educational institutions to develop awareness of our industry amongst their students.
      “The focus is on both high school and college students. Furthermore, we are busy developing a new framework for the CNS Scholarship Fund and plan to launch an industry internship program in 2017 where CNS facilitates the connection between industry opportunities and suitable high school and college students.
      “With this in mind, we will also be targeting educational institutions and will invite some of their brightest students to attend the Washington event so that they can experience first-hand what an important role air cargo plays in their lives and the broader U.S. and global economies.”
Geoffrey/Sabiha



Cargo Powerhouse Easy As ABC
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Cooling Their Brakes

     LAN Aircraft cool their brakes on the tarmac last month in Santiago, Chile, after LATAM agreed to pay more than $22 million in fines to the USA Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) for a violation of the accounting provisions of the Foreign Corrupt Practices Act.
     LATAM, while operating previously as LAN Airlines, made a $1.15 million consulting agreement with Argentina’s transportation ministry in 2006, supposedly to study airline routes, according to the Justice Department.
     The proposal came as the airline was attempting to enter the Argentine airline market by acquiring the defunct Aero 2000 airline and then employ workers from two other defunct airlines, LAFSA and Southern Winds.
     The airline made payments of $300,000 in October 2006, $300,000 in November 2006, and $550,000 in January 2007 to a consultant and his wife through a bank account in Virginia rather than the consulting company, the court summary said.
     “The LAN Cargo Executive knew and intended that Consultant would use some of the money he received under the draft agreement to bribe union officials to accept terms more favorable to LAN,” the court summary concluded.
     LATAM Airlines Group, which resulted from a 2010 merger of the former LAN and TAM airlines, said it “cooperated fully” with the investigation.
     “LATAM and its senior management reaffirm its commitment to complying with the laws of all of the countries where the group operates,” said the company, which boasts 53,000 workers flying to 140 destinations in 24 countries.
     LATAM agreed to pay $12.75 million, cooperate with the investigation, and retain an independent corporate compliance monitor for 27 months according to the agreement announced by Assistant Attorney General Leslie Caldwell and George Piro, special agent in charge of the FBI’s Miami office.
     LATAM also reached a settlement with the Securities and Exchange Commission by agreeing to pay $6.74 million to offset the value of benefits it received and $2.7 million in interest.
     Although LATAM didn’t voluntarily disclose the violations, the airline cooperated with the investigation after the bribery was revealed in the Argentine press, the Justice Department said.
     But LATAM failed to discipline its workers—including at least one high-level executive—for the criminal conduct, the Justice Department said.


Chuckles For August 15, 2016

 

Is Freightos The Next Big Thing?
  

     Headquartered in Hong Kong, Freightos, the new “online freight marketplace,” is making headlines as it claims to have the solution to revolutionizing the cargo market.
      If that sounds like a familiar tune, well, you’ll get no argument from an increasingly skeptical world.
      But like a Brothers Grimm fairytale, the fantasy that cargo will have a magical digital solution to bringing costs down, improving transparency and efficiency, and living happily ever is a common one.
      Whether or not Freightos will achieve their stated goals or even get within striking distance of them—let alone deliver on their promise to “make the process of moving goods around the world smooth” for everyone— will only be proved by time.
      Here’s a reality check to separate the wheat from the chaff, bring out the hard facts, and see what, if anything, is new about Freightos.

EasyDGR Redux?

      Remember IATA’s much-touted EasyDGR, the first electronic solution to digitalize Dangerous Goods documentation, which was aimed at the shipper?
      Easy DGR took off in 2010 and crashed in 2014 after IATA was unable or unwilling to incorporate the regulatory changes into its own software.
      Well, just like EasyDGR, the Freightos product is SaaS, or “Software as a Service.” In plain English, the advantage of SaaS is that one does not need to install servers or use a specific software platform; instead, the software functionality is provided by a server—or, in reality, multiple redundant servers ideally distributed over the globe so that any disrupted server is compensated by the others and the workload distributed by means of load-balancing algorithms.
      On the user side, SaaS requires nothing but a fairly recent web browser. It can run on anything from an Android-powered smartphone or tablet to a Linux or Windows workstation. Of course, like all SaaS solutions, its main strength is the ability to communicate, so by utilizing defined interfaces such SaaS solution, Freightos may be integrated into other IT solutions that already exist.
      In reality this means that AcceleRate, the SaaS database component behind Freightos, can link up with both legacy and distributed systems on the airline, forwarder, shipper, and ground handler side and check for and provide status updates or simply check for price and availability of cargo space for a certain shipment.
      Where such availability is given and the price is within defined parameters, Freightos can book the consignment automatically.

On The Track of TRAXON

      Does Freightos sound too good to be true?
      Actually, no. The Freightos functionalities described here (albeit in a simplified manner) were available in the late 1980s from no less an outfit than TRAXON, which in 2011 was purchased and subsequently integrated into the CHAMP software suite.
      Since in today’s connected and distributed business world, isolated software solutions on legacy (meaning defined) hardware platforms make little sense because any need for expansion, migration, or further connectivity comes with its own set of issues and at incalculable cost, most systems are either fully SaaS or at least interconnected by means of integration.
      A very simplified (although hardly simple) example for SaaS is the eBay website.
      eBay allows sellers on one side to offer their goods and indicate a price, price range, or just accept bids, allowing buyers on the other side to buy with confidence, sometimes even brokering or guaranteeing payments.

So Who Needs Freightos?

Zvi Schreiber Victor Ofstein     First, Freightos aims at all stakeholders in the supply chain.
      That means Freightos is not expressly limited to a specific mode of transport but works generally with all transport modes depending on a multitude of factors such as budgeted cost and available service parameters such as cooling, outsized dimensions, defined transit times, and others.
      Freightos works with “Forwarders/Carriers, Enterprise Shippers and Ecommerce.”
      And while their executive management team has an impressive record in terms of experience with digital solutions—CEO Zvi Schreiber founded Lightech, now GE; COO Victor Ofstein and VP Product Ruthie Amaru were with IBM; and Fareed Quaddaura was CTO with Amazon—Freightos appears to have a missing link in the chain that sticks out like a sore thumb.
      The Freightos Group as advertised does not appear to have anyone familiar with what is often called the “human touch” of cargo.

Will The Freightos Solution Work?

      In a word: certainly.
      But will Freightos succeed and realize a lofty position within the market?
      Maybe.
      Firstly, putting “Forwarders/Carriers” in one pot, divided by nothing but a slash, is a question mark.
      If there is anything IATA and FIATA would agree upon it is that they have different interests, and that is certainly true for NVOOCS as well as the big players in the maritime sector.
      We can only wonder what happens when the traditional system of shipper talking to forwarder and forwarder talking to airline or ocean carrier—which eventually books and prepares shipment for transport—is replaced by Freightos.
      It is reasonable to expect current stakeholders will naturally defend their interests and their business shares, so while transparency is something everyone claims to want, too much all at once may be more than stakeholders are prepared to handle in one fell swoop.
      Also, again, because of the way business is currently done—with shippers dealing with the actual provider of the transport, such as the airline—going direct via Freightos can be viewed as a vertical action in a horizontal shipping world where, among other things, worldwide cargo markets, payments of cargoes shipped by forwarders, etc., are secured by means of an IATA wholly-owned subsidiary, CASS (Cargo Accounts and Settlement System).
      If airlines or shipping lines have to factor in the risk of late or non-payment by shippers that would certainly drive up rates and make the services of forwarders largely superfluous.  
      Another issue is that the provision of transport services is usually integrated with customs clearance, issuance of certain paperwork (no matter whether in electronic or traditional form), and the securement, verification, and declaration of cargo contents. Most of these tasks cannot be carried out by shippers unless they are large multinationals with considerable cash to spend on retaining expertise, certifications, and technology.
      In fact, the highly diverse interests from the stakeholder might prove Freightos’ biggest hurdle. If they deliver what they claim—“frictionless trade”—then indicating a budget, certain service parameters, and transit time should be enough to get an offer for transportation. The more the SaaS learns, the better its software algorithms (predictions) will be. “Instantly Compare Freight Quotes, Forwarders and Modes” and “No hidden surcharges. Ever.” are good promises.
      The wonder is whether it will be feasible for Freightos to keep them.
      So here are options as to how the Freightos business model might play out:
      The first option is that Freightos fails to balance the diverse interests of the stakeholders they serve. In this case, Freightos becomes a niche provider, albeit an important one. But with Amazon embarking on securing a dedicated air transport fleet and retailers integrating with supply chain providers, in this scenario Freightos is outflanked and not dominant.
      Another option would be hammering a square peg into a round hole: Bringing interest groups such as FIATA, IATA, IMO, and ESC (European Shipper’s Council) aboard. This way the interests of stakeholders are balanced against one another, creating a true win-win situation for everyone while simultaneously avoiding the hammer of cartel activity fines and the always eager swarm of hovering lawyers ready to swoop down on everybody at the behest of regulators.
      Your move.
Rasmey Kampuchea




CNS Field Of Dreams Air Cargo News 40th Anniversary Issue


InstaClassic Chicago

An aerial view of Chicago, Lake Michigan, and Soldier Field are seen at sunrise through an Instagram filter from an airplane on final on Monday, April 8.


FlyingTypers Ad

Not Lion This Really Happend
Can I sit in the jump seat?

Cockpit with nettingDateline Brussels . . . Armed with only a hatchet, on July 16 a copilot of a chartered plane fought three angry lions midair while the pilot steered the aircraft to an emergency landing.
   When the plane landed, the terrified pilots smashed the cockpit window with the hatchet and jumped to the ground, leaving the lions snarling behind them.
   The lions, one of them a cub, were on their way from West Germany to London.
   They broke out of their cage while the Swiss-chartered cargo plane was over Belgium.
   Pilot Paul Wuhrman, 36, said: ‘‘We were at 14,000 feet above St. Nicholas (Belgium) when I turned around and saw the heads of two lions peering through the curtain between the cockpit and the fuselage.
   “A third was licking my boot.
   “Obviously they had broken out of their cages.’’
   When he saw the lions’ muzzles behind his back, the pilot yelled into the emergency radio frequency:
   ‘‘Brussels, Brussels, can I make an emergency landing, I have three lions in my cockpit.’’
   Thinking it was a joke, the Brussels operator replied:
   ‘‘Just stick them into your gasoline tank.’’
New York Herald Tribune, European Edition, July 17, 1966.


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
FT080116
Vol. 15 No. 59
LIGHTBOX for August 3, 2016
Lufthansa Cargo's Long Hot Summer
Chuckles For August 3, 2016
Repo Man Moves Customer Claims
FT080116
Vol. 15 No. 60
LIGHTBOX for August 8, 2016
Business Up Rates Challenged
Chuckles For August 8, 2016
Pride of the Nation
Letter to Lufthansa
Elevate Women Says DhankarSweet Summer Farewell

FT080116
Vol. 15 No. 61
Jet To Walmart
Surcharges And Rates In August
Chuckles For August 10, 2016
Upside Cargo Land Over Yonder
Art Of IAG
Singh A Song Of Mumbai CargoChicago Air And Water Show

Publisher-Geoffrey Arend Managing Editor-Flossie Arend
Film Editor-Ralph Arend Special Assignments-Sabiha Arend, Emily Arend Advertising Sales-Judy Miller

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