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   Vol. 16 No. 50
Wednesday May 31, 2017

CNS Panel

Of all the air cargo discussion panels at all the industry trade shows and events in the first half of 2017, we think this one is the best.
Peter Ulrich      Here’s why.

      The Boston Consulting Group’s Partner & Managing Director Peter Ulrich adroitly moderated “Improving Efficiency, Speed, and Quality at U.S. Airports” at the recent CNS Partnership Conference in Orlando, Florida.
      Setting the stage for the four-member panel, Ulrich observed that airport operators must be more than passive landlords, but must proactively manage on-airport capacity while smoothing linkages between on and off-airport environments. 


Lifting To Million Tons

Michael Webber      Occasional FlyingTypers contributor and a cargo consultant whose clients have included Los Angeles World Airports (LAWA), Michael Webber observed that LAX finished 2016 with just under 2 million metric tons of total cargo, just below its historical peak (calendar year 2000) annual air cargo tonnage. As with most U.S. international gateways, LAX has enjoyed double-digit growth in international cargo since 2000, but has been insufficient to cover larger double-digit domestic cargo losses.
      LAWA recently commissioned a study of its air cargo capacity and plans to release a Request for Proposals in 2017 for new facilities development, but must do so in a land-constrained environment in which any cargo improvements will require displacing some existing activity, thereby requiring a temporary “pivot position” where tenants waiting for new capacity could operate. Decades of development around one of America’s most historic aviation gateways have resulted in congestion that causes daily standstills on roadways in surrounding neighborhoods. Upon completion, the ongoing Landside Access Modernization Program (LAMP) should ease LAX’s congestion issues, but construction will cause additional challenges before improvements.


Chicago Broader Shoulders

Adam Rod      The Chicago Department of Aviation’s Chief Planning Official Adam Rod described Chicago O’Hare International Airport’s (ORD) cargo expansion previously detailed in FlyingTypers. He noted this expansion was not originally part of ORD’s most recent Master Plan, but ORD is one of the rare U.S. gateways with net positive cargo growth. Increasing congestion and decreasing available capacity necessitated completion of a new cargo campus on ORD’s northeast airfield (the old military area) in late 2016. The goal was to add 50 percent more capacity in warehouse and ramp.
      Today, ORD has a total of 2 million square feet of airside warehouse space with 40 parking positions for jumbo freighters. For future growth, ORD’s new cargo campus still has enough capacity to accommodate another phase when demand requires. Other new single-tenant facilities developed for FedEx and belly cargo carrier United on ORD’s south airfield complement the massive multi-tenant cargo facility on ORD’s northeast airfield. Several panelists noted that airport operators must manage brick-and-mortar developments with a planning horizon measured in decades, on behalf of tenants whose main assets are portable and whose planning is often measured in months. However, the Chicago Department of Aviation is confident that its cargo improvements should position ORD very well for the future. Still, Mr. Rod acknowledged such ongoing operational issues as maximizing connectivity between the terminals (belly) and north and south (freighter), better ramp control, and truck staging—a concern when a seaport strike in Southern California spiked freighter traffic at ORD.


Pineda Miami Presentation

Emin Pineda      Manager of Aviation Trade & Logistics for the Miami-Dade Aviation Department (MDAD), Emir Pineda represents Miami International Airport (MIA), where international cargo accounts for roughly 87 percent of total cargo. Contrasting with widespread deficits among other U.S. gateways, MIA has been relatively prosperous with more than 20 percent growth in total cargo since 2000. While LAX, ORD, and JFK split air cargo trade with Asia and Europe into relatively equal shares, MIA thoroughly dominates trade with Latin America and seeks to leverage that role to serve as Europe and Asia’s gateway to Latin America as well.
      MIA’s initial success with Latin America derived from favorable geography, but Pineda left no doubt that its continued dominance owes much to sustained effort. MDAD does “Perishable Road-Shows in key markets abroad for exporters who use MIA to access the U.S. market, as well as supports half day seminars for Miami’s international trade community (including regulators) highlighting proper clearance procedures, security, handling, and fumigation. Expanding beyond its traditional cut flowers, fruits, and vegetables among perishables, MIA became the first U.S. airport designated as a Pharma Hub in IATA’s Center of Excellence for Independent Validators (CEIV) program, with six local companies initially participating. MDAD has also worked with regulators and local seaports to initiate ocean-to-air transfers with the first transshipment from Port Everglades trucked to MIA and then carried to Amsterdam by Centurion Cargo.


And Then There Is Dallas

Milton De La Paz      Vice President of Airline Relations and Cargo Business Development for Dallas Fort Worth International Airport (DFW) Milton De La Paz represents an airport ranked among the top ten U.S. airports in annual cargo tonnage, but even higher (top five) in annual passengers and aircraft movements. DFW gets substantial contributions from the belly cargo operations of hub carrier American Airlines, as well as a regional hub for UPS, but has experienced much of its recent growth from new and expanded service of Asian, European, and Middle Eastern carriers. DFW seeks to serve as a bridge between Asia and Latin America.
      This coming summer, DFW will welcome a new cold chain facility operated by AirLogistix USA—just in time to accommodate growth anticipated from DFW’s participation in IATA’s CEIV program. American Airlines opened an improved temperature-controlled facility in recent years largely targeting the same sector for its own customers. Ultimately, DFW intends to establish a “Cargo Community” (based on the BRU Airport model) to efficiently provide stakeholder feedback both for ongoing operations and future improvements. DFW is also using a cloud-based data tool called Air Cargo Workbench to assist in cargo planning and marketing.
      This session was not only good for the attendees and also this reporter, it stands as a template for the endless event sessions yet to take place during 2017.

Q&A Short & Sweet

      During the Q&A period, the panelists observed that even at airports such as theirs, cargo must contend with competing priorities. Elucidating for airport directors and commissioners that contributions from cargo are critical to sustaining transcontinental flight schedule sustainability can elevate stature. Local events in which airport operators have worked with CNS and IATA, as well as with the Airforwarders Association, have been helpful in garnering greater interest in cargo from public agencies. Airport operators welcome the participation and cooperation of CNS in helping to refine cargo priorities.



airplane bullet   “We are experiencing consistent growth each year in the air freight of pharmaceuticals and healthcare products globally,” Qatar Airways’ Chief Cargo Officer, Mr. Ulrich Ogiermann said adding Colombo Sri Lanka, and Republic of Ireland to the carrier's pharma network that now accounts for 73 destinations under the QR Cargo pharma umbrella.
Uli Ogiermann    “We support expanding pharma businesses,”Uli points out:
   “Our partners get a seamless cool chain offering uncompromised attention to detail and service.
   “Also Irish shippers can skip trucking their freight from the Republic of Ireland to United Kingdom with door-to-door service. saving both time and money,” Uli beamed.

Daniel Muscatello and Elliott Paige
airplane bullet   In Session . . . Tuesday June 6 focus “Air Cargo & Airports” highlighted by Atlanta HJ Intl’s Elliott Paige and Landrum & Brown’s Dan Muscatello and others. Airforwarders Conference June 4-6, 2017 at Renaissance Orlando at SeaWorld. For more click here.

airplane bulletAbbas Haji   Emirates named Abbas Haji vice-president of hub operations for SkyCargo operations in Dubai at both Dubai International Airport and Al Maktoum International Airport.Haji joined Emirates Group in 1977, working for dnata cargo, having joined SkyCargo in 2008.

Institute of Procurement

airplane bullet   Brexit Looming . . . Chartered Institute of Procurement and Supply (CIPS) President Gerry Walsh declares:
   “The reshoring of British supply chains in advance of Brexit comes with significant challenges,”
   “Pessimism apparent when it comes to managing the financial costs of Brexit.
   “More than a third (36%) of UK supply chain managers plan to respond by pushing supplier costs lower, while 11% admit that part of their operations may no longer be viable.
   “Worldwide 67% of respondents felt that the uncertainty surrounding international trade agreements were making long-term plans difficult to confirm.
   “We have already seen high profile disputes between British retailers and their suppliers as a result of currency fluctuations.
   “We now know that this pattern is being replicated across the UK and is likely to escalate.”

airplane bullet   Really Big Show . . . Summer means air shows worldwide and one of the best EAA AirVenture Oshkosh 2017 takes place in Wisconsin USA.
   This time NASA Astronauts from most of the Apollo missions that put humans on the moon for the first time are expected to be at EAA AirVenture Oshkosh 2017 to commemorate the 50th anniversary of the Apollo program.
Frank Borman   Set to appear is Frank Borman who piloted Apollo 8 in the first flight around the moon.
   Later Frank would follow his hero WW1 USA fighter ace Eddie Rickenbacker as CEO of Eastern Airlines, during a time when that airline was amongst the biggest carriers in the world.
   Oshkosh for a pilot provides an ultimate thrill, as there are very few feelings like “rocking your wings,” and landing on one of the colored runway dots at EAA AirVenture Oshkosh.
   The event with aircrafts of every description, kids and dogs and campgrounds and memories by the bushel goes from July 24-30 and is open to all.
For more click here.

Jerry Schorr

airplane bullet   Thinking a moment about Eastern Airlines Cargo we recall inventive VP Cargo for the carrier Jerry Schorr (above) who, noting limitations of routes aircraft and resources, came up with a nifty one-way container branded “Costcutter” that invited shippers to “fill it up and we will ship it”.
   Jerry was always a thinking man’s air cargo pioneer. Authored “Logistics in Marketing” making the case way ahead of everybody in 1969.
   At EAL (same time as Frank Borman) Jerry moved to coordinate air cargo with a truck delivery system to compete with United Parcel Service for long-distance surface shipments weighing up to 70 pounds in 1987 . . .


Chuckles For May 21, 2014

 CNS 2017 Through The looking Glass

Lionel van der WaltIATA Cargo Network Services (CNS) President Lionel Van Der Walt had it all on the table earlier this month. He hosted the U.S. cargo universe and industry conferees from around the world in Orlando, Florida at the first CNS Partnership Conference of his own making since being named CNS President.
      Lionel earnestly wants to get things right for this venerable organization. He maintains his sharp sense and sensibility, delivering value for money. Now that he’s post-conference, he’s ready to address the event in detail.
      But more on that later.
      While FlyingTypers attended the CNS event, your editor was up and about at 0600 for a brisk walk around the golf course and beautifully manicured grounds, carefully ducking the early morning sprinklers that keep the place perennially green.
      By 0630 I was in the Starbucks just off the lobby to jumpstart the heart and read the morning papers.
      It wasn’t too early for Lionel, who ducked into the coffee shop for a chat before checking the CNS 0700 breakfast buffet set up for the trade show.
      I was immediately impressed that this new CNS President was up on his toes and taking nothing for granted.
      Lionel was the first voice that the delegates heard. He set the table for the new day after recapping the event “so far.”


So Far So Good

      In our coffee shop encounter, Lionel gave us insight into his first Partnership Conference.
      “Overall,” Lionel explains, “it appears that the vast majority of the record 603 attendees were very satisfied with the venue, the annual golf tournament, the meetings, the exhibition space, evening functions, and the many networking opportunities.
      “However,” he assures, “as always there is room for improvement.”


The Details Man

      “It’s the first year that we managed such a large exhibition space and more needs to be done to add value for the exhibitors, e.g. facilitating meetings with attendees.
      “It’s great to serve lunch in the exhibition area; however, there was very limited table space to enjoy the meals. It’s a small detail that makes a big difference. Standing around trying to network and eat with a plate of food and a drink in your hands just doesn’t work.
      “Another related point was the swift and efficient manner in which the hotel team cleared the food and refreshment stations after each break.
      “While this was very efficient, it isn’t very customer focused.
      “If you were running late there was a very real risk that you might miss a meal or a much needed refreshment during the breaks.
      “This has been noted and our team will be paying close attention to these details at our next Partnership in Palm Springs 2018.”
      With that comment Lionel moved out of the coffee shop to oversee another day of CNS Partnership.


Not Everyone Is An Early Bird

      Fast-forward seven days, and it is now post-CNS Partnership Conference. Lionel Van Der Walt has thought about the entire offering end to end. His observations are both candid and revealing.
      “One feature at CNS we keep getting wrong is our ambitious morning plenary sessions organized for both the first and the second day of the conference.
      “We thought it would be possible to lure attendees to these sessions by strengthening the content being presented. However, the message is crystal clear and we will not be making the same mistake again.”


First The Networking

      “The CNS Partnership Conference is first and foremost an opportunity to do business, develop partnerships, and network.
      “That is ultimately the reason why attendees are there—not to attend nice plenary sessions when they could be doing business.
      “However, in saying that, we also recognize that there is a group of attendees that value these sessions, but they typically only make up 20-25 percent of attendees.”


Good & Plenary Sessions For 2018

      “With the aforementioned in mind, and after much debate, we have agreed with the Advisory Board that in 2018, there will only be one main plenary session, from the start of the morning until the first coffee break on day one.
      “This two-hour slot will be the main plenary session of the conference and all attendees will be urged to be there.
      “Thereafter, CNS will host and support a number of smaller interactive sessions, panels, workshops, etc. the remainder of day one and on day two.”


Industry Input Welcome

      “We are open to suggestions as we work to get this right and I would love to hear industry thoughts on our new format.”


About Ryan Petersen

      “And now,” Lionel said, lowering his gaze with a faint smile, “for the “elephant in the room.”
      “We have received a lot of contrasting feedback after last week’s keynote speaker, Flexport CEO Ryan Petersen.
      “Some attendees found his session to be thought provoking, while others passionately expressed their displeasure at the session.
      “The one thing it did achieve without a doubt is to stimulate discussion.
      “I would dare to speculate that for good or bad, this was the most discussed topic at this year’s conference.”


Lionel On The Future

      “I don’t think there is anybody that can argue that the air cargo industry is in need of some much needed transformation.
      “We just have too much paper still present in the value chain.
      “However, this is a broader industry issue that reflects badly on all stakeholders, be it government, airlines, freight forwarders, ground handlers, etc.
      “We have not been very good as an industry when it comes to adopting seamless, transparent, electronic data driven processes and procedures.
      “With over 50 percent eAWB transactions now in the U.S., we are making progress, however, you just have to ask those working on the frontline as to how much paper they are still using and it becomes glaringly evident that we still have a significant way to go before getting rid of all the old outdated, paper-based processes and procedures.
      “It is not easy, and many times government regulation drives the need for paper. At the best of times [government] is very slow to adapt to the new modern world we live in.”


Always Room For Improvement

      “Also, it needs to be noted that most of the large forwarders, airlines, ground handlers, etc. have made significant investments to modernize their systems and procedures.
      “There is always room for improvement though in the fast paced and ever changing technological world we live in.
      “The biggest concern lies with the small to medium stakeholders who don’t always have the resources to make such changes and at such regular intervals.
      “This is where a significant proportion of our investment and attention should be focused.”


Flexport Taking Over The World

      The question is whether new companies, including Flexport, will take over the world from the so-called industry dinosaurs.
      “I don’t think so,” Lionel said, “well not quite yet, at least.”
      “I think these established stakeholders have much going for them in terms of experience, proven results, and yes, the all important aspect of customer service.
      “After all, this is a people-driven business that today depends on those all-important, one-to-one relationships in order to get things done.”


Time To Listen Is At Hand

      However, we all need to pay close attention and make sure that we are learning what we can from progressive startups such as Flexport.
      “Without a doubt, there are lessons to be learned.”


Looking For The Next Gen

      “This brings me to address one of my biggest concerns: attracting younger generations to our industry.
      “The lack of participation from this group was clearly evident at our conference.
      “We need them if we are to secure a sustainable future for the industry going forward.
      “Programs like Expeditors’ ‘Opportunity Knocks’ initiative is a bright spot in an effort to reach out to new generations.
      “Air cargo needs to mount a concerted effort here.
      “What concerns me equally though is the number of experienced people leaving the industry.
      “These are the very people we need to transfer skills and knowledge to the younger generations.
      “It’s a balancing act, which, if not managed correctly, could have disastrous results for the industry down the line.
      “It’s not just all about Millennials and Next Gens, but just as importantly our future as an industry must include protecting the vast amount of knowledge and skills that that will be exiting the industry in the next decade or so.”


About Legacy

      “The people that follow us in air cargo are going to demand new ways of doing things based on their view of the world, but this is no different to what we did with the generations that preceded us, who insisted that emails were no substitute for handwritten letters; who insisted that it will never be safe to transact over the internet, and the list goes on.
      “We are all going to have to face this humbling truth one day.”


Giving Thanks

      “Thanks to each and every one who joined us in Orlando at CNS 2017.
      “It was a privilege having the opportunity to spend time with you and I look forward to working even harder to deserve your trust and support and, of course, our continuing the great debate,” Lionel said.
      The next CNS Partnership Conference is at La Quinta Resort, Palm Springs, May 6-8, 2018.

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Emirates Group Posts Profits

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Ocean Mess Boosts Air Cargo
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