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   Vol. 17 No. 15
Tuesday March 13, 2018

Jan Krems (center) President, United Cargo with members of the ”best team in cargo” and a couple of friends, including “Wild Thing” Jan Meurer (back row third from left) and Jacques Heeremans (back row extreme left) of GSSA Inter Aviation Services B.V., ready for another opening, another show Monday at World Cargo Symposium, Dallas.

     “I’m very pleased and proud to be a part of the large United Cargo contingent in Dallas for the World Cargo Symposium this week.
     “Of course, we’re always eager for any opportunity to meet with our customers face-to-face to learn how we can better support their current business and what kind of creative strategies we need to develop for the new business they’re anticipating.

Covering Tracks

     “But equally important is the United Cargo team’s participation in the various WCS tracks, workshops and forums. We have a knowledgeable and innovative team committed to advancing the future of our industry. To elevate air cargo’s value to customers and meet the challenge of competing modes, it’s key that we collaborate as an industry on issues like security, border management and regulatory compliance.

What We Can Do Better

     “Also, to continue to grow, our industry also must ensure and enhance the speed, safety and quality of our transport of e-commerce, pharma and other life science material, live animals, perishables, dangerous goods – the list goes on. So I’m looking forward to what our team learns from and what they contribute to these sessions.

2018 Could Be A Very Good Year

     “2018 is shaping up to be an interesting year, and we’re encouraged by the way it’s unfolding thus far. At the turn of the year the trends looked positive, but other than knowing that demand would slacken from the impressive seasonal peaks, no one was certain which way and at which rate volumes would move.
     “For the first two months of the year, United Cargo volumes are up a favorable 9.4%, continuing to outpace the industry and our U.S. belly carrier competitors. A strong factor in these volume increases is United Cargo TempControl – the demand for our service for pharmaceuticals and other health care/life science material has continued its steady rise in 2018.

TempControl Heats Up

     “A noteworthy example of this growth is the use of personalized or precision medicine, with products tailored to an individual patient’s characteristics and health factors. Our global TempControl experts report a rapid rise in the need for quick and immediate transport of these patient-specific solutions. With their brief shelf-life, these medicines need the kind the speed that only air freight can deliver.

The Joint Is Jumping

     “One of this year’s highlights was the February 6 launch of the second phase of our cargo joint venture with All Nippon Airways. With this phase, we added westbound transpacific routes to the successful eastbound phase of the venture.
     “So customers with shipments from the U.S. or Canada to Japan are now utilizing the same benefits customers with eastbound transpacific shipments have enjoyed since July of 2016. We’re looking forward to providing the same kind and level of benefits to transatlantic customers when we launch the joint venture with Lufthansa Cargo later this year.

Houston Calls Sydney

     “Looking at network growth, a notable expansion happened on January 18, when United launched daily service between our Houston hub and Sydney. United operates this route with Boeing 787-9 equipment, and it’s our second longest flight after LAX-SIN. We’re also strengthening our 2018 trans-Atlantic summer service by making flights available earlier in the year and continuing to operate these routes later into October.

The Beat Goes On

     “Especially pertinent to United Cargo customers are three seasonal routes we’ll operate daily with Boeing 787s: service between DEN and London Heathrow from March 24 to October 26, service between SFO and Munich from May 4 to October 26 and service between SFO and Zurich from June 7 to October 26.

Taking The Bull By The Horns

     “But there’s always a strong possibility our plans will divert into uncharted territory. I expect that our team will see or hear something this week that will spark a new concept or a fresh approach to solving an old issue. Generating fresh ideas and enthusiasm is one of the reasons we bring our team to events like WCS!”

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     If you are looking for the action at Frankfurt Airport Cargo, a good place to start is the big Cool Center at Lufthansa Cargo. It has almost doubled in size during the last year, growing from 4,500 sq. m. to a mighty 8,000 sq. m.
     In fact, Cool Center is Europe’s largest fridge, claiming a capacity that is equal to the cooling space in more than 277,000 kitchen fridges. Coupled with the constant monitoring, that means no spoilage allowed!
     Lufthansa has also added state-of-the-art, exclusive capabilities to the process of monitoring and tracking perishables and other temperature sensitive shipments that are expanding to its stations worldwide.
     There are legions of people that make the Lufthansa Cool Center at Frankfurt Airport.
     We spoke to someone who has been too cool for school since he came on the scene a few years ago.
     Ali Önalan carries the title of Process Manager, Lufthansa Cargo Cool Center Frankfurt.
     We met Ali at Logitrans in Istanbul. He began his air cargo career at Lufthansa building pallets in 1990. He was upbeat and animated as he described the advanced and exclusive activity that has driven Cool Center as a fulcrum of cool chain shipping in the world today.

Foundations of Cool

     “The thing about cool shipping,” Ali says, "is avoiding mistakes.
     "It is also about more transparency across the supply chain.
     “We have built a system that constantly monitors temperatures for any deviation and a quick response ability for the bioscience and health industries—for example, guaranteeing the constant integrity of sensitive substances from airport to airport within set temperature ranges.”

More Digitalization

     “Our software program (Spot), exclusively ours, opens a window of information to both Lufthansa Cargo and our customers.
     "It is a one step at a time process to remove all paperwork as we move at warp speed toward digitalization,” Ali declares.
     “But now everyone is connected," Ali Önalan smiled.

     Normality began to return to air freight markets as factories in China reopened following the Asian Lunar New Year, popularly called Chinese New Year (CNY) holidays.

TAC Into The Wind

     The TAC Index covering average prices per kilo from Shanghai PVG to Europe fell 9 percent to CNY 17.40 (USD 2.76) on February 5, but by March 5, and even after falling 12.2 percent week-on-week, the average gateway price was CNY 15.91 per kg—not as low as some had feared.
     A similar trend was apparent on the Hong Kong-North America lane where the average price on March 5 was $3.63 per kg, down only marginally compared to the USD $3.68 per kg recorded by TAC Index on February 5.

No Woe Wu

     Brian Wu, Chairman of the Hong Kong Association of Freight Forwarding, told FlyingTypers last week that the air cargo market out of HKIA, the world’s biggest freight hub, had been steady since manufacturers resumed output post CNY.
     “The price of the air cargo market is still on the low side,” he added. “Demand is still steady and stable. We hope it will be picking up next week.”

Flex Ability

     Flexport reported “some capacity restraints” ex-China, adding that while rates were currently stable “we expect them to increase in the second half of March.”
     Ex-HKIA, the digital forwarder predicted demand would remain high leading up to the Easter holidays, while, ex-U.S., it reported that post-CNY freighters out of LAX were experiencing capacity restraints and shippers were suffering delayed shipments.
     “Chinese New Year was late this year, which helped prevent rates from rising too much before the holiday,” it added.
     “The market was slow for a couple of weeks after CNY as factories ramped back up to full production.
     “Now that we’re in March, the market is picking up steam—we’re seeing some capacity constraints, and rates will begin increasing soon.
     “Demand will remain high leading up to the Easter holiday, with rates and capacity expected to stabilize come April.”

Too Early To Call

     With year-on-year analysis difficult in the first months of each year because of the vagaries of the lunar calendar, World ACD said it was too early to tell if it had been a good start to the year for air cargo. In January, the latest month for which volumes figures were available as FlyingTypers went press, the analyst said worldwide air cargo yield fell to USD 1.89, 7.8 percent below December, but 16.8 percent higher than January 2017.
     “Taking the year-over-year (YoY) figures for January 2018 at face value, 2018 would seem to be off to a very good start,” it noted. “Virtually all airlines recorded a USD-revenue growth, more than one third of all reporting airlines realized volume increases from 10-50 percent, and worldwide volume was up by 8.5 percent.
     “Yet, it is too early to qualify this year's start.”
     The analyst noted that volume trends were difficult to interpret due to Chinese New Year (CNY)—a sizeable influencer of overall trade—which fell on January 28 last year and on February 16 this year.
     “CNY normally has two effects on trade: a spike in trade before, and trade diminishing afterwards,” said WorldACD.
     “And although the negative influence is usually felt during the two weeks following CNY, the first four days bear the brunt of the decrease.
     “Thus, with GDP-growth in the world continuing, one would expect January to be much better in 2018 than in 2017. But by how much? Based on FTK-data for the first three weeks of January, we believe that YoY volume growth in this ‘pre-CNY-period’ may well have been in the range of 4-6 percent. Serious growth, surely, but hinting at an overall growth pace lower than the increase shown in the full January-figures. Once February data is in, we will be able to judge how the start of 2018 has really been.”

IATA Warning Trump Affect

Alexandre de Juniac     Alexandre de Juniac, IATA’s Director General and CEO, warned that one potential headwind could be President’s Trump’s decision to impose import tariffs on aluminum and steel. “There is a very real risk of a trade war. Nobody wins when protectionist measures escalate,” he added.
     Despite the difficulties of judging trends based on volume analysis, IATA was quick to declare that 2018 was off to a “robust start,” noting that demand, measured in freight ton kilometers (FTKs), rose 8.0 percent in January 2018 compared to the year-earlier period. This was up from the 5.8 percent annual growth recorded in December 2017.
     “The continued positive momentum in freight growth into 2018 reflects the fact that demand drivers for air cargo remain supportive,” said its monthly report. “Global demand for manufacturing exports is buoyant and meeting this strong demand is leading to longer supply chain delivery times. Demand for air cargo may strengthen as a result, with companies seeking faster delivery times to make up for longer production times.”

FlyingTypers Travel Sponsor World Cargo Symposium

We always liked Air Berlin, especially when our friend Ralf Auslaender operated a company called leisure Cargo that he founded whilst working at LTU.
Here, on the façade of a Hangar at Tegel Airport, an eye-catching USA stylized image of a woman still does it for us, as we honor International Women’s Month all this March.
Today Ralf is retired, and leisure, from all indications, is still going strong as part of the Berliner Zeitfracht Group.

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. 17 No. 12
Fed Up With Guns
Chuckles for February 28, 2018
Orange The New Black In India
Taxing India Drives Cargo
Seeing Red
Vol. 17 No. 13
IATA FIATA Flies Into Turbulence
Chuckles for March 5, 2018
IATA CASS Associate Forwarders Watch
Making Forwarder Apprenticeships Work
Respect Framework For Future

Vol. 17 No. 14
Jet, IndiGo, SpiceJet In Price Fix
Why Qatar Cargo Accents Higher Priorities
Chuckles for March 13, 2018
JFK Tops March Agenda

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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