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   Vol. 16 No. 83
Monday October 16, 2017

Peak Peek Into Octember

When Apple unveiled its new iPhone X among a bevy of launches in September, it was easy to see air freight’s Indian summer through the prism of the electronic behemoth’s pre-launch shipments. Yet that was not the only factor boosting demand on key lanes.

Will Bridget Fidget?

     Take fidget spinners, for example.
     The kids craze has taken the world by storm this year. By May, all 20 of the top-selling toys on Amazon were fidget spinners or fidget cubes. One estimate suggests that during the first six months of the year, 50m units of the product were sold – mostly to consumers in Europe and the U.S.

Lucas KuehnerFocus Lucas Keuhner

     Lucas Kuehner, Panalpina’s global head of air freight, told FlyingTypers that new products had contributed to keeping air freight markets buoyant in 2017. But he insisted demand was strong across most verticals.
     “We are not engaged with Apple, but what we see is strong demand for electronics, industrial consumables, auto and manufacturing, telecoms and, especially on the Transpac, a lot of consumer goods,” he said. “There is growth across the board. There’s no single market that’s not growing.

Spins A Tale

     “Earlier in the summer, we had the opportunity to fly these spinners, for example. This is dense cargo when shipped in bulk. When it’s on the shelf and it’s hot it has to go by air. This is an example of what leads to sudden capacity crunches - two charters flown with this stuff eats into the market.”

No Slow Down In Sight

     Kuehner said demand had remained strong on major lanes outbound-Asia through Q3, especially on the Transpacific trade. “Demand from Asia has never really subsided since Q4 2016,” he added. “The Far East to Europe lane dropped a little in Q3 compared to Q1 this year and Q4 2016, but not to the levels of previous years – in fact it wasn’t really even a dip, it just wasn’t as strong as the Transpacific. And recently we have seen a bit of an uptick.”

Boosting Markets Into Octember

     “Export lanes out of Asia are not the only ones enjoying heavy traffic,” Kuehner said “there was currently significant volumes flowing from Europe in “all directions”, while the Transatlantic and Latin American markets were also performing strongly.”
     At the end of September there was an expected boost to markets. “It’s the end of the quarter so that drives some additional volume and, with the Golden Week holidays and factories closed at the start of October,” he explained. “expected shipments right up to the start of the holidays further amplified demand.”
     Indeed, Kuehner sees no sign of demand slowing over the rest of the year. “As soon as business resumed post Golden Week we headed into the peak season,” he said. “I don’t expect another dip in demand out of Asia this year. We’re looking at a long and deep peak season this year, similar to 2016.
     “Carriers are also managing capacity so we are expecting a crunch. Rates will likely spike in parallel to this high Q4 demand leading into Q1 next year.”
     However, he cautioned that year-on-year volumes would probably not be as starkly higher in Q4 as during much of 2017 simply because Q4 2016 was so spritely.
     “Relative growth rate might not be as huge in Q4, because it’s against a much higher base, so it will be down from the 10% year-on-year growth we’ve seen for much of this year,” he added.

Grab Capacity Not Just Blowing Smoke

     Panalpina is warning customers they should secure capacity now to avoid higher rates later in the year, albeit Keuhner added the proviso that, this being the air cargo market, there were always downside risks.
     “What I explain to customers is this is a prediction, but all the indicators I have including many, many conversations with customers and carriers, is that with more product launches to come, which also boosts component traffic, plus e-commerce performing strongly, it all points to a strong peak,” he said.
     “But it’s also unpredictable. We are working intensively with customers so they can put aside capacity with carriers so they have pre-procured capacity on different lanes.”

Busting Out Charters Everywhere

     Panalpina has already contracted more than 100 ad hoc full charter aircraft outbound from Asia ahead of Q4. “We are prepared, but we will also buy capacity on the open spot market,” he added. “We’re doing it early as rates might go to crazy levels like we saw last year.”

Can It Get Worse?

     He also said there were already shortages of capacity on key lanes such as HKIA to LA. “That’s one where I expect it to get worse,” he said. “As soon as we see the crunch starting, we will implement our peak season plan arranged with customers and carriers.
     “Carriers are trying to drive the rates up and the market is trying to establish new price points, which is fair because fuel is higher than last year.
     “The consequence for the client is that they need to take this into consideration and shift their focus in terms of how they procure capacity and the key to this is early engagement. They need to secure capacity first and foremost so they can get products on shelves on time.”

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TIACA’s appointment of Ramesh Mamidala, Chief Executive Officer of Celebi Delhi Cargo Terminal Management to the TIACA Board of Directors along with Sanjeev Gadhia, founder and CEO of Kenya-based Astral Aviation is being viewed as another recognition of India’s growing importance in the world.

Ramesh To The Rescue

     TIACA Secretary General Vladimir Zubkov declares Ramesh Mamidala and Sanjeev Gadhia will help to expand global links to the air cargo supply chain, especially via developing regions of India.
FlyingTypers met Mamidala recently to find out his course of action as a director in TIACA.

The India Footprint

     “There is a lot of great work that TIACA has been doing since its inception,” said Mamidala, “and that is what has benefitted many countries.
     “I hope to bring all the good work that would benefit our nation, to several trade bodies and organizations across the nation.
     “My immediate focus will be to look for these opportunities and bring them to the country as soon as possible.
     “We are at work right now improving the TIACA footprint in India.”

The Professional

     An air cargo veteran, Mamidala has had stints in the Gulf and Dubai, when he was senior manager with Qatar Aviation Services (QAS) Cargo for Qatar Airways.
     He has also served as Manager Cargo Hub and Product Development at Emirates SkyCargo.
     Mr. Mamidala is a close associate of Delhi Airport Head of Cargo Business Sanjiv Edward, the current Chairman of TIACA.
     “Sanjiv (Edward),” said Mamidala, “has been doing a great job at TIACA in his current role.
     “He has represented our challenges and opportunities globally and I intend to continue doing the same.
     “Both India and Africa require serious efforts to improve trade processes and practices that need involvement of various government and trade bodies.”

The Quality Standard

     These moves aside, Mr. Mamidala said he believed there were some serious opportunities to implement and improve technology applications and global quality standards.
     “Fortunately, TIACA has been doing some good work on most of these improvement areas,” he said.
     As for integrating the Indian air freight industry with the global market through TIACA, the CEO said that there were some “fantastic and dynamic home-grown organizations such as ACAAI (Air Cargo Agents Association of India), ACFI (Air Cargo Forum India), FFFAI (Federation of Freight Forwarders' Associations in India), etc. that have been doing a great job in representing and resolving trade issues over the last several years, and some for decades.
     “These organizations have become icons over the years.
     “I believe both TIACA and our organizations will mutually benefit if we improve our association and partnership.”
     On the question of co-operation between the various air cargo bodies in India and the world, Mr. Mamidala mentioned that TIACA has an “excellent workgroups-based structure that works across several layers of the air freight supply chain with the intention to integrate them for better efficiency and transparency.”

Innovation Meets Challenge

     “India can benefit from the innovations and enhancements that have been successfully implemented in other countries while continuing to participate in the current and active workgroups for continuous improvement,” he said.
     “The India air cargo industry has been facing challenges largely due to the lack of infrastructure and the fact that the economy has slowed down considerably due to, among other drivers, the implementation of the Goods and Services Tax.”

Optimists As Winners

     “I remain an optimist,” he emphasized
     “In my experience, optimism always wins.
     “That is something I began believing very strongly while working for Celebi.
     “We all understand that India’s airfreight infrastructure, both international and domestic, needs tremendous improvement.
     “Many of us see this as an opportunity and have committed investments across several airports in the country,” he said.
     “The way I see it, growth will happen where there are efficiencies.
     “Some airports that have developed cargo infrastructure have demonstrated this well in the last decade.
     “The current and expected growth in domestic and international exports across several commodities (both pharma and non-pharma) are the opportunities that airports should plan for when developing infrastructure,” the new ‘TIACA Builder of India’ declared.
Tirthankar Ghosh


Green Means Go
  The red, green, yellow system Philippine Bureau of Customs implemented for X-ray shipment checks is now back to normal after long queues of trucks choked ports. The green lane was recently suspended after a Chinese drug shipment sailed through unchecked.
  Now shipments bound for economic zones and perishables and reefers will no longer require mandatory X-ray examination.
  Customs Commissioner Isidro Lapeña told reporters:
“Given time, we will come up with a more effective and efficient system that will balance border protection and trade facilitation.”

Atlanta 17/17 Golf Tuesday
Adriana Trueba  The Atlanta Air Cargo Association (AACA) 2017 Golf Outing takes place Tuesday, October 17th at Eagle’s Brook Country Club.
  An Awards Dinner at 17:00 caps the all-day event.
  “Every year scholarships are awarded to students attending an accredited Georgia college or university and studying in the logistics, transportation, or international business fields,” said AACA Chairwoman Adriana Trueba.
For details: contact Adriana.

TIACA Hails Des
Des Vertannes  Desmond (Des) Vertannes has been inducted into TIACA’s Hall of Fame.
  He served as Head of Cargo for the International Air Transport Association (IATA) between 2010 and 2014.
  “The Chairman’s Council selected Des for his unwavering commitment to the development and recognition of the air cargo industry and its impact on global trade,” said Oliver Evans, Chair of TIACA’s Chairman’s Council.
  “His dedication, perseverance, visionary thinking, and inspiring leadership have made a profound and lasting impact on our industry.”

Qatar Cargo Pittsburgh
Pittsburgh Lands Qatar Cargo
  Qatar Airways Cargo's inaugural B777 freighter arrived at Pittsburgh International Airport on October 12.
Christina Cassotis  Pittsburgh International Airport Chief Executive Officer, Ms. Christina Cassotis, said:   "We are thrilled that Qatar Airways Cargo has selected Pittsburgh as its next North American cargo destination.   Known for its world-class service, we are excited to welcome them as the first international cargo service to fly from Pittsburgh International Airport."


Dear Geoffrey,

   Just to let you know that I have decided to leave QR.
   My mother is not well and I should take better care of her now.
   It was a tough decision as things are extremely good at the moment and we see the benefits of the long hard work of my entire team.
   I will stay around until mid December and then do some consultancy for QR and some other projects are waiting.
   It has been my real privilege to have been working with you for quite some time now and I thank you for everything you have done for us.
   We will surely stay in touch !!

Kind regards,
Uli Ogiermann
Head of Cargo
Qatar Airways

Peter WalterRE: Letters

Hi Geoffrey,

  Thanks for publishing my recent note to you.
  Just one question who is Peter George?? :-)
  Must send you a better stock picture - than the mad one you used too :-)

Peter Walter
Champ Cargo Systems

Dear Peter,

  This reminds me of the ironic comment:
  “I’ll never forget what’s his name!”
  Peter George is another person with two first names who like “The Shadow” of 1930s radio fame “clouded the mind” of this 76-year-old. I had just deplaned from a 30-hour flight from KUL after having spent 7 days in a time zone that traded day for night.
  It’s interesting to live the results of a 30-hour flight at our age.
  I got up the day after arriving back to New York and had a glass of Porto for breakfast.
  But it was 2100 in KL, so it’s not my fault!
  Actually, Peter Walter, it all comes back to me now.
  Peter George was a leading air cargo pioneer at Seaboard World Airways in the 1960s. He was a good friend of Bill Boesch as I recall.
  “Our Man in Havana” (picture) . . . Peter Walter retired the way people should as he reads about Peter George and wonders: “who is this Peter?”

Good wishes,

If You Missed Any Of The Previous 3 Issues Of FlyingTypers
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Vol. 16 No. 80
CNS President Quits Air Cargo
Chuckles for October 6, 2017
Malaysia Heats Up FIATA 2017
Air Cargo Aid Hangs Tough As Need Expands
Vol. 16 No. 81
Babar of Pakistan Leads FIATA To India
Chuckles for October 10, 2017
October Event Like Silk In Baku
Hurricane Relief Continues

Vol. 16. No. 82
IATA Loses India Agents Beef Again
Chuckles for October 12, 2017
Donna Is Her Name
Something For The Kids
Letters for October 12, 2017

Publisher-Geoffrey Arend • Managing Editor-Flossie Arend
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