Make no mistake, 2017 will see air freight forwarding markets resurging, with much of the expansion likely due to heightened activity on lanes to and from Asia, according to a senior UPS executive.
      Big Brown’s Sebastian Chan, President of Global Freight Forwarding, UPS Asia Pacific Region, told FlyingTypers that after a difficult first three quarters of 2016 in international air freight markets, positive Q4 offered hope for long-term optimism.

Pick UPS

      “We are anticipating positive pick-up in air freight demand in 2017 with healthy growth in capacity, driven by several bright spots including e-commerce growth and demand for perishables and healthcare logistics,” he said. “E-commerce is continuing to drive growth in air, ocean, rail, ground, and express. As online retailers become bigger and more mature, UPS is able to support more complex supply chain models with our full portfolio of logistics services.”

Chow Down Perishables

      “We are also seeing a greater appetite for perishable goods and food products in Asia, which has become an important driver for global air freight growth in the past decade.”

Big Biz Gets Bigger

      Air freight constitutes a major chunk of UPS’s supply chain business as part of the integrator’s extensive portfolio of global freight forwarding solutions which covers air, ocean, ground, and rail services. However, although UPS’s Supply Chain and Freight division contributed $2.6bn in revenue in Q3, up 8.1 percent year-on-year, executives reported “soft” international air freight forwarding conditions.
      “Overall, global GDP forecasts were slightly down,” explained Chan. “We continued to see mixed economic signals across some industrial markets for the first three quarters of 2016. For example, air exports from Asia to the U.S. were seeing double-digit negative growth. Part of the reason is the higher base in volume set by last year’s supply chain disruptions as a result of the U.S. West Coast seaport congestion, but overall the market was weak for the first three quarters of the year.”

Asia To Europe A Poppin'

      “But there is indication of growth, with intra-Asia exports seeing low single-digit growth this year.
      “Asia to Europe also experienced positive growth at low double digits year-to-date August.
      Things are looking up and for Q4, we picked up from Asian exports, driven by end-of-year seasonality.”

Pax Surge Cuts Cargo Yields?

      Soaring passenger demand has seen large increases in bellyhold capacity on many lanes, hurting most carriers’ cargo yields and received rates with predictable, negative implications for forwarders.

Think Twice

      But according to Chan, UPS’s downturn in international air freight was primarily down to demand. “When you talk about increase of bellyhold capacity, it only means the capacity in the market was growing faster due to the increase in belly capacity, creating an imbalance of capacity and demand,” he said. “It is true that we have been seeing a general over-supply of capacity in the air freight market, however, this is not connected with the softening of the air freight demand.”

Going Forward

      Looking forward, he said Asia’s share of the global perishable market had grown from 23 percent in 2006 to 27 percent in 2015, driven by 6.8 percent annual import growth, and predicted this would drive freight demand in the future.
      “As Asia’s appetite for key imports such as fresh seafood, fresh fruits and vegetables, frozen foods, and flower and plants continue to evolve, we expect this to be a bright spot for air freight demand,” he said.
      Pharmaceuticals requiring cold-chain logistics services also presented opportunities for air freight demand.

The Pitch

      “UPS offers specialized services for healthcare and life science businesses, with over 100 healthcare-dedicated facilities globally and a portfolio that includes temperature-sensitive storage and transportation, 24-hour monitoring and security services,” Chan declared.

UPS Saves B747 Production Line

      UPS recently announced the acquisition of Marken, a global provider of supply chain solutions to the life sciences industry. This, said Chan, would further strengthen its healthcare portfolio and provide more delivery options, faster transit times, and earlier guaranteed deliveries for healthcare customers.
      “Our long-term strategy is to expand our presence in Asia, thus increasing our customers’ access to global markets, and we believe air cargo will play an important role in their supply chains and continue to be a growth opportunity for us,” he added.
      “That is why UPS recently ordered 14 new Boeing 747-8F cargo jets to meet increased demand in air capacity from our customers.”

Celebrates The Big Boeing

      “The new fleet purchase also demonstrates our confidence in UPS’s international trade growth. It provides UPS with greater flexibility in our air network, and the 747s will be deployed to UPS’s 12 strategic air hubs in the U.S., Asia, Europe, and Canada.”
Sky King

FIATA Pushes Future Of Air Cargo

      Saudia Cargo said it has renewed its agreement for highly specialized human organ transportation for the Saudi Center for Organ Transplantation.
      The Center’s Director General, Dr. Faisal Shaheen, and Saudia Cargo Chief Executive Officer Mr. Nabil Khojah recently concluded the new agreement, continuing a partnership of time-critical transportation for transplantaton in effect since January 2014.
      “Saudia Cargo seeks to enhance the role of our social responsibility through different activities,” Nabil Khojah said.
      “We offer extreme priority to shipments in terms of receipt and delivery via all cargo terminals in the Kingdom’s airports.
      “Additionally, for 2017 we are providing these cargo services throughout our system to the Arabian Gulf countries.”
      For the record, shipments delivered to the Saudi Center for Organ Transplantation totaled 217 in 2016.
      Founded in 2012, the Saudi Center for Organ Transplantation is a national, publicly-funded organization responsible for coordinating the organ donation process in Saudi Arabia.
      Dr. Faisal Shaheen noted that the expanded Saudia Cargo agreement will allow the Saudi Organ Center “to expand our effort to secure human organs from specialized centers and health bodies in the Arabian Gulf countries.”
Geoffrey

      It is not all that often one has the opportunity to speak to a leader charged with the responsibility and legacy of a legendary multi-modal company, but that is exactly what occurred when we spoke to Francesco Parisi in Zurich earlier this year.
      Mr. Parisi is CEO of Parisi Group, a freight forwarding and shipping agency founded in 1807 in Trieste by Francesco Parisi (1778-1813).
      “We had humble beginnings, ” Mr. Parisi said. “We expanded 50 years later when Parisi opened a branch in Vienna (1857), during the years of the Austro-Hungarian Empire.
      “Venice followed after when we set up business there in 1872, followed by Munich, Germany, in 1879,” Francesco Parisi declared.
      “Today the Parisi Family still operates the company, which is now in its eighth generation, and features 400 employees in 7 countries, including a global network of agents.

Italy To The World

      “Our Italian operation has always kept its original main focus on sea cargo, however we are truly multi-modal and air freight has always been a fundamental option for our customers.
      “Our airfreight business in Italy is managed by our Milan branch office with stations located at both the VCE and TRS aerial gateways.” 

The Parisi Group

      “Parisi Grand Smooth Logistics in Asia is a joint venture arrangement between two thriving business partners.
      The result is a freight forwarding and logistics company with extensive local knowledge of Asian shipping markets.
      “Today PGS Logistics employs more than 300 dedicated and experienced freight forwarding and logistics professionals at offices in Hong Kong (HQ) and branch offices in Greater China, Taiwan, and Vietnam.
      “PGS Logistics is a licensed Class A Forwarder in Mainland China, International Air Transport Association (IATA) and International Federation of Freight Forwarders Associations (FIATA) agent, and is equipped to work directly with air and shipping lines, process customs clearance for import and export, and act as a warehouse and trucking operator.”

Europe Multipurpose Terminals

      “EMT,” Francesco Parisi said, “is a company created by Parisi Group in 2010 that operates at Pier VI of the Port of Trieste, which it has rights to for 25 years.
      “Molo VI is located in the center of the Port of Trieste and features 70,000 square meters of space, 1,500 meters of quay, a RO-RO berth with a draft of 29-33 feet, four railroad tracks, and a 8,000 square meters of warehouse.
      “Our main activities consist in the RO-RO ships scheduled service departing from Molo VI to Istanbul.
      “Rail connections include the Molo VI intermodal service scheduled departures for Eifeltor Köln (DE), Luwigshafen (DE), Bettembourg (LUX), Ostrava (CZ), and Monaco (DE).” 

About FIATA

      Francesco Parisi served as President of FIATA during a two-year term from 2013 until 2015.
      “FIATA supports the proposition that no one is self sufficient in the supply chain; all depend on each other.
      “Instead of confrontation, collaboration can allow everyone to accelerate achievements on a grand scale.
      “As a member of FIATA, everyone has an opportunity to meet colleagues from every part of the world.
      “FIATA helps everyone understand what is going on and how to implement effective best case scenarios.
      “In terms of my commitment to FIATA, as a proud European, when I served as president I worked to develop FIATA into a less Eurocentric and more global association.
      “That meant a lot of travel, including showing up through my term at events all over the world, where among other things we advanced cooperation exponentially. 
      “Serving FIATA has been an unforgettable experience, especially in meeting so many people and having learned so much.
      “I am proud to report that because of an active dedicated membership, FIATA is heavily invested in training and education, an activity that is a cornerstone of Parisi Group.
      “In my view, education is the most valuable service FIATA can offer to its members.”

Cooperation Needed

      “Our industry is very fragmented compared to other industries in the transportation business.
      “The business models can be very different and the size of the companies as well.
      “There is one common denominator for sure: we all collaborate on a daily basis with people from different countries, diverse cultures, varying legal systems, and of course speaking different languages.
      “FIATA is a tremendous place where we can share experiences and learn from each other.”

A New York Connection

      You might think that moving into the family business would have been a slam-dunk sure-thing for Francesco Parisi.
      But au contraire, after high school studies in ancient Greek and Latin and an MBA from New York University (NYU) Law School in New York City, Francesco worked his way out to JFK International Airport.
      “Our U.S. subsidiary was established in 1948 by my grandfather when our family was doubtful if free economy would survive in Europe. We had just lost 14 branches in Eastern Europe—East Germany, Czechoslovakia, Hungary—because those counties ended up East of the ‘iron curtain’ and our business was taken over by government agencies.
      “Our first air freight manager in JFK was Charlie Rinka, a former Pan Am air freight pioneer who set up air freight in Istanbul for Pan Am. 
      “I joined the Parisi office at JFK to help my father, who never pushed me to join him.
      “But later after realizing that I just had no great talent for becoming an artist or a doctor, I realized that it was my time to work full-time for the company.
      “Thinking back, for myself and certainly my Dad, I am quite happy I joined the family business,” Francesco smiled.
Geoffrey

RE: CNS Takes Air Cargo Main Deck

Dear Geoffrey,

     Thanks for “CNS Takes Air Cargo Main Deck" coverage in Flying Typers last Friday.
     As CNS expands its effort in 2017 working for a better air cargo industry, we appreciate your help in getting the word out.
FYI, that effort has already paid dividends.
     I had a meeting scheduled with Joe Napoli (MIA) earlier today and his team brought your article, wanting to discuss their participation.
     We now have ORD and MIA onboard as we develop an Air Cargo Awareness initiative. I am also meeting with ATL this week.
     Hope to report even more partner airports for this effort real soon.

Regards,
Lionel van der Walt
President, Cargo Network Services Corp.

Vol. 16 No. 13
Hoon Over Moon As Changi Rebounds
Chuckles for February 7, 2017
Qatar Goes Long, Adds Pharma Flights
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