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   Vol. 16 No. 53
Tuesday June 13, 2017

HaffA Board
The principal officers and committee members of the Hong Kong Association of Freight Forwarding and Logistics.

    Hong Kong air freight forwarders have a full-plate year, but long-term competitiveness will depend on infrastructure investment at HKIA and supportive government policies.
      Those thoughts were among the key points made by Brian Wu, the affable and insightful chairman of the Hong Kong Association of Freight Forwarding and Logistics, the non-profit organization which represents the autonomous territory at FIATA as well as pushing forwarder interests closer to home.

Years Two Wu

      Wu, elected chairman for two years in April, was previously vice chairman of Haffa and has served on the organization’s executive committee since 2009.
      His first steps in his new role have been to push Hong Kong’s administrators for more support.

Brian Wu
Wu Would Like

      First and foremost, Mr. Wu would like further deregulation of policies governing transshipment of cargo at HKIA arriving by land, sea, or air, mostly from mainland China.
      At present, he said licensing for particular products such as telecommunication products was bureaucratically time-consuming for forwarders.
      Mr. Wu would also like to see air-air transshipment rules extended to air-sea and air-land movements via HKIA, and he thinks arrangements at Singapore’s Changi Airport Free Trade Zone can be used as a performance benchmark for through and non-through airside transshipment cargoes.

Wu Rejects Tedium

      For example, Mr. Wu said administrators should allow value-added services such as reassembling, repackaging, and sorting and packing to be performed on transshipment goods at HKIA before the goods are further shipped to final destinations.
      “The existing arrangements for transshipment are operationally tedious,” he said.
      “Hong Kong is a small city with very few factories and most of the products are made in China and transshipped through Hong Kong for export overseas.
      “The government imposed most of the rules for this 20-30 years ago.
      “We forwarders want the rules to be updated to reduce the workload, which adds to our costs and hinders the competitiveness of the air industry here by all modes.
      “We need more deregulation of these rules from the top down to make operations simpler.”

Forwarders Have A Voice

      He also said stakeholders would like more input into the government’s strategic decisions:
      “The Hong Kong government encourages industry to do more business with high value cargo such as frozen food, but they need to listen to us,” he explained.
      “We need to set up suitable facilities and we need more land for this and these cargoes, otherwise customers will do this business in Mainland China.”

Bridging The Future

      “We are very glad infrastructure is being upgraded, especially the bridge to Macao, which is due for completion soon, and the third runway at HKIA, which we hope opens in 2023, although this might be optimistic.
      “Once open, the new runway will give us more timeslots for landings and increase frequencies.
      “And more capacity will help us better serve customers. But we would like more input on infrastructure decisions in future.”

WU On The Stakes

      Mr. Brian Wu also issued a stark warning about what could happen if Hong Kong does not keep supporting its air freight stakeholders.
      “Hong Kong’s port was number one in the world; now it is ranked number 5 behind Shanghai, Singapore, Shenzhen, and Ningbo-Zhoushan.
      “But we are number one for air freight and we want to stay there. Airports in Mainland China are catching up a lot and we need the infrastructure to support us.”

Business Is Rising

      As reported in FlyingTypers, throughput at HKIA surged 17.8 percent year-on-year in March to 433,000 tons, while in the first quarter volumes were 11.5 percent higher than a year earlier at 1.1 million tons.
      Wu said the market had been unexpectedly positive since September 2016, while the first quarter of this year was much better than a year earlier when the market was largely stagnant.
      “It’s hard to anticipate the future,” he explained.
      “We didn’t know Q4 of 2016 would be as good as it was and it accelerated so quickly from September that airlines and terminals ran short of equipment such as ULDs, although they did a great job of handling a very unexpected market pick-up. It carried on being busy right up to Chinese New Year. It was then quiet in February and bounced back in March.
      “Now we are very optimistic for 2017 and there are lots of big product launches later in the year, such as the new iPhone, which the big multinationals are already shipping. Chinese companies such as Xiaomi and Oppo also have launches and these will boost demand to Asia and especially India, which has been hot for second tier mobile phone producers for some time.
      “A lot depends on how sales go and whether inventories need replenishing.”

Middle Class Expands Market

      Wu said Asian demand growth had outstripped Europe and the U.S. in percentage terms over the last year. “Asia and particularly India are the rising stars of the future,” he added.
      Asia is also importing a lot more cargo by air.
      “We are seeing a lot of import shipments, but those are not limited to IT products,” he explained.
      “The Chinese population is buying a lot of foodstuffs and wine from Europe and the U.S.
      “The middle class is rising in China and want to enjoy life and are buying luxury items from overseas.
      “Also, e-commerce has also been booming for the last 3 years.
      “The Chinese government is encouraging more trading and imports to Mainland China to facilitate demand from the population, and this will continue in future.
      “This is giving more balance to the market, which is traditionally export led. I don’t know how long it will last, but the air market is hot so we are very positive for 2017 and ahead,” Mr. Brain Wu declared.



airplane bullet   The Latin American and Caribbean Air Transport Association (ALTA) said that April 2017 cargo business of Aerolíneas Argentinas (includes Austral), Aeromar, Aeromexico, Aeromexico Connect, Avianca, Avianca Brasil, Copa Airlines, Copa Airlines Colombia, Insel Air, LATAM Airlines Group, Sky Airline and Volaris declined 7.9% intra and extra Lat Am.
   FTKs for the year through April remain down 5.9% as compared to 2016.

Cargolux Logo   
airplane bulletCargolux follows its joint venture agreement last month with Emirates with the announcement it is forming a new carrier, Henan Cargo Airlines, to operate out of Zhenzhou in eastern China beginning in 2018.    Under a shareholders' agreement, the Luxembourg company will own 25 percent of the new firm. The Henan Civil Aviation and Investment Company, the Henan Airport Group and the Xinggang Investment Group Company will own the remaining shares.

airplane bulletEric Wilson    Delta Cargo named Eric Wilson managing director, cargo global sales.
    Wilson joined Delta Cargo in 2008 as general manager –strategic partner programs and national accounts.
    In 2014 Mr. Wilson relocated to Tokyo to assume the position of director–APAC cargo sales

Western Global

airplane bullet  U.S. Department of Transportation (DOT) granted Western Global Airlines permission to begin scheduled weekly wide body cargo services between the United States and China to both Hong Kong Chek Lap Kok as well as unspecified points on the Chinese mainland on behalf of a specific client. With headquarters in Estero, Florida, Western Global with a fleet of 16 MD11Fs had specialized in ACMI operations.

Air New England Cargo Club

airplane bullet   Nice picture of the folks that make Air Cargo Club of New England a vital force for good in Boston Massachusetts and all of the northeast area of USA known as New England.
  These people will dress sportif and be ready for action as ACC hosts its annual Golf Outing on Wednesday June 21st at Gannon Golf Course in nearby Lynn Massachusetts.
  Register from 0800 and ready a Shotgun Start at 0900. Members 150./Foursome therefore $600. Tariff is twenty bucks more each for non-members.
  Not a golfer? Save up some stories about something else and show up for dinner, sure to treat and only $45.00.
Save the date!!
For more click here.


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Chuckles for June 13, 2017

U.S. Pilots Short Suply

     My last article on the Trump Effect was a discussion on the U.S. Pilot Shortage that is being labeled a National Crisis.
      I recently attended a meeting in Washington, D.C., hosted by the Chief of the U.S. Air Force with the major airlines, regional airlines, civil air patrol, the airline unions, A4A, an airline training university, industry experts, congressional staffers, and leaders of the other military services. 
      All agreed that this is a serious problem that must be solved.

Ideas On The Table

      The airline industry attendees came up with many useful suggestions on ways to mitigate the problem, including getting more young people interested in flying, ways to help pay for the very high cost of U.S. commercial airline pilot training, and suggestions on changes in the existing requirements. 
      They suggested forming industry committees to research the various suggested methods and come up with a plan to minimize this problem.

Why Crisis

      You may ask why this is being called a National Crisis.  In my view, it is because of the effect this shortage is having and will have on the U.S. commercial airline industry. It may put the U.S. airline industry again in the decline, which we saw just a few years ago and resulted in flight crew and other staff layoffs, bankruptcies, and consolidation.
      Almost every carrier reported that pilot costs were growing by a large percentage due to this situation.

Mechanics Pinched As Well

      A similar shortage of licensed aircraft mechanics was also noted at the gathering. As these two labor groups get contract pay increases, the flight attendants as well as the other unionized airline employees will also demand increases. 
      This will no doubt result in a large cost increase to the U.S. carriers. In addition, as the dollar increases its value because of the Trump Effect, it will result in the U.S. carriers having an even higher cost compared to their foreign competition.

Losses Loom

      U.S. open skies and airline pooling agreements could accelerate this negative effect. 
      The end results may be that the large U.S. international carriers may not be able to compete profitably with their foreign competition. 
      This could lead, once again, into a loss situation with airline layoffs and possible further consolidation of the U.S. airline industry.
      You may say this is very unlikely, but can our industry afford to take the chance? 
      Put simply, to grow the airlines need more competitive cost trained flight crews. 
      To achieve this, the U.S. industry needs to work together with the U.S. government to solve what is emerging as a national crisis for our vital airline industry.

Bill Boesch

Bill BoeschMr. Boesch started his career in global transportation and logistics in 1965 working for Seaboard World Airlines. He later joined Flying Tiger Airlines and Emery Worldwide. Mr. Boesch then left Emery to become Pan American World Airways’ Senior Vice President where he headed both Passenger and Cargo Sales and Operations. He left Pan Am to lead American Airlines’ Cargo operation and retired from AA in 1998. Under his direction American became a world leader in the air cargo and logistics business.
     Mr. Boesch was part of the extensive on site planning and support of the Iraq drawdown, involvement with the Afghanistan operations, and has worked on all aspects of the Civil Reserve Air Fleet (CRAF) from both an airline and government standpoint.
     Mr. Boesch has also served as Chairman of the International Air Transport Association (IATA) Cargo Executive Subcommittee in 1996 and 1997, Vice Chairman of IATA’s Cargo Committee. Mr. Boesch served on the Board of Directors of Air Cargo Incorporated, Air Cargo International, The International Air Cargo Association (TIACA), Envirotainer, Cargo Logistics Solutions, Deutsche Post/DHL Global Mail, al Seqir and consulted for major U.S. companies including Flight Safety.
     Mr. Boesch is the recipient of numerous awards including the Lifetime Air Cargo Achievement Award, the Ellis Island Medal of Honor and various awards from the U.S. Department of Defense.
     Mr. Boesch is presently continuing his work for the U.S. Government and heads up The Council For Logistics Research.

To Read Part 1 of This Series, Click Here
To Read Part 2 of This Series, Click Here
To Read Part 3 of This Series, Click Here
To Read Part 4 of This Series, Click Here

To Read Part 5 of This Series, Click Here
To Read Trump Effect—India Walks Softly Carries Big Stick, Click Here
To Read Trump Effect—Implications Of A Trump Trade War, Click Here

To Read Trump Effect—Trump Across The Pacific, Click Here

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Grosz, Geoffrey and Atamanuik

     The art of the parody. Now in its eighth week on air, The President Show stars Anthony Atamanuik (our son-in-law) as President Trump and Pete Grosz as Vice President Pence. The duo is pictured with FT publisher Geoffrey Arend on location in Queens, New York, last Friday. “Normally, you have to go to a bowling alley to see that kind of action,” said Geoffrey. The Donald retorted: “Stick to publishing fake news.”
     The President Show airs Thursday nights at 11:30pm on Comedy Central and has been renewed for an additional seven episodes.  


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
Vol. 16 No. 50
Top Panel Discussion So Far in 2017 @ CNS
Chuckles for May 31, 2017
CNS 2017 Through The Looking Glass

Vol. 16 No. 51
Bodacious Bellinder Moves Forward
Chuckles for June 5, 2017
Indicate Strong Cargo Rules 2017

Letter for June 5, 2017

Vol. 16 No. 52
Kersten Is The Next FIATA General
Chuckles for June 8, 2017
Afghan India Deal Leapfrogs Pakistan + Pumping Traffic

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