FlyingTypers Logo
   Vol. 17 No. 78
Thursday November 15, 2018

Swiss WorldCargo Ad

Peek At Peak

Now in air freight’s peak season, airlines and analysts have mixed expectations about the likely state of European demand after a mostly disappointing year after the highs experienced in 2017.

     The National Retail Federation, which represents many of the U.S. leading importers, predicted last week that U.S. retail sales for 2018 would be up 4.5% over 2017, with imports set to spike in the coming weeks, ahead of tariff hikes on Chinese imports scheduled for January 1.
     By contrast, the picture in Europe looks rather less buoyant, at least from an air freight demand perspective. GDP growth has been sluggish across the EU, with economic expansion hindered by deteriorating consumer and investor sentiment, while the geopolitical and economic headwinds emanating from Turkey and the UK, both key trading partners for the Eurozone area, have added to uncertainty.

By The Numbers

     Growth in the Eurozone area hit 2.7% in 2017, the highest since 2006.
Claude Picciotto      However, the European Commission expects GDP growth in 2018 to slow to 2.1%, followed by 1.9% in 2019 and 1.7% in 2020.
     The rise in oil prices has also made air freight more expensive and, combined with concerns about more restrictive trade regulations and slow economic growth in some regions, this proved a drag on activity in Q3.
     "The situation remains positive but is quiet for all that, with volumes still pretty weak as we wait for the normal surge in demand which comes with the peak season," revealed Bolloré Logistics’ air freight procurement director, Claude Picciotto.
     "Europe is idling and activity in and out of China is soft. Meanwhile, the growth boost in recent quarters from booming e-commerce doesn’t provide the same lift now that it’s become a fixed and expected part of the mix."

The Lux View

     The state of play now compared to a year ago illustrates the point. According to Mimmo Ceci, Executive Vice-President Sales & Marketing at Cargolux, market conditions were particularly favorable in 2017 and this resulted in an outstanding European import peak season.
     “Buoyed by this momentum, we experienced strong Q1 and Q2 in 2018 but the demand has since significantly softened,“ she told FlyingTypers.
     “In Q3 2018, demand was not as strong as initially anticipated and the demand for the peak season is definitely less substantial than it was at the same period last year.”
     Cargolux still expects a solid increase in demand for capacity this peak but is sanguine about its strength vis-à-vis the 2017 iteration. “The market has already began to soften and it is highly likely that the demand recorded in 2017 will remain unmatched, at least this year,” added Ceci.

Pauker Talker

     Lufthansa Cargo is more upbeat on the European import market. Spokesman Andreas Pauker told FlyingTypers that air freight demand into Europe so far this year had been “rather positive”, citing ongoing growth from Asia, solid volume increases from North America and comparably strong growth from South America.
     “We assume that there will also be a year-end rally in 2018,” he added. “However, it remains to be seen how strong the peak in the fourth quarter will be this year.”

Taiwan On

     A spokesperson for Taiwan-based China Airlines told FlyingTypers that in the first half this year demand into Europe was “pretty much in line with what we saw last year in terms of cargo volume.”
     He added: “In the third quarter, we managed to collect Europe-bound traffic from neighboring countries to support our load ex Taipei. As a result, China Airlines has enjoyed an increase of our European production by 5% in the 3rd quarter.”
     However, the outlook for peak season was less optimistic. “There is no any exciting news being heard so far as to the demand into Europe in the coming peak,” he added. “We are therefore not really sure if demand is going to be as strong as last year – the 2017 peak was an exceptional one after all in the recent years.”

Yamaguchi Strong

     The Japanese export market, it would seem, is more bullish. “The freight demand between Japan and Europe is steady and strong for us,” said ANA Cargo’s Fumika Yamaguchi.
     “Especially, exports of automobile parts from Japan is growing and we expect this trend will last until the beginning of December.”

Nicola HughesHere Comes Black Friday

     Nicola Hughes, air freight analyst with Freight Investor Services, said that although there had been subdued consumer expenditure in Europe during 2018, “the fact that Single’s Day, Black Friday, Thanksgiving and Christmas are seeing a yearly increase in e-commerce sales means that Q4 might still see a peak in air freight as e-commerce sites fulfill last minute delivers from Asia to the West."

Wait 'Til Next Year

     As for next year, there are no major game-changers as far as European demand is concerned, not least with the UK set to officially leave the EU in the first quarter. “The economic temperature in the Eurozone remains distinctly cool,” noted recent analysis from MSI.
     “While labor markets continue to improve, and recent industrial production measures have seen upward revision, the overall picture is underwhelming and can no longer be attributed to seasonal or one-off factors.
     “The slowdown in activity this year caught many observers by surprise, but there are two primary drivers: a slowdown in exports due to weaker global trade growth and weaker consumer expenditure growth as a result of prices - above all fuel prices - rising faster than incomes. Given both stalling world trade growth and still-high crude prices, a rebound in activity is highly unlikely in the near-term.”

Alex Nieuwpoort
  The old joke is that at an air cargo trade show usually the only shipper that you see out walking near the display stands is a meeting session guest speaker looking for the bathroom.
  We are sitting inside the host hotel at TIACA Toronto taking a quick lunch break in a soaring glass ceiling room with a view of the sky above.
  Although it is cloudy, the room is beautiful while a few of us enjoy a break. We note two businessmen from the TIACA event also on a break each seated at a table for one, while talking to each other.
  Some words lifted into the air land in our ears about one of them being a shipper.
  As the two diners ready to leave, we identify ourselves and ask the shipper named Alex Nieuwpoort who is Vice President, Supply Chain SMS & Managing Director, Santrade Ltd., based in Lucerne, Switzerland, what is his take on TIACA 2018?
  “Our company Sandvik ships industrial tools to companies that are active in the metal cutting industry, including aerospace.
  “I am a member of the TIACA Shippers Advisory Committee, attending sessions here.
  “Took a meeting with the Board of TIACA yesterday evening,” Alex said.
  “Good meetings all around.
  “I attended a total of four sessions,” Alex added, “and thought, looking ahead we might all benefit getting more in depth into content by limiting these very worthwhile discussions to less people on stage.
Jan Krems  “A panel with five people and a moderator sitting on stage creates a buzz of information for sure, but it also delivers a fragmented, scattered message with shorter impact for including the audience.
  “I just think it would be much more beneficial conducting these panels on a more targeted approach, with no more than one or two people discussing issues.
  “That circumstance might allow more time to get deeper into topics and also aid the audience to interact fully with the speakers,” Mr. Nieuwpoort said.
  “Another point is that I am a shipper, and a rare species at this conference.
  “My take is that there should be more emphasis to get the views of shippers out at a conference like this one.
  “As example, there was a discussion yesterday that invited the shippers’ perspective.
  “But of the five people on stage, only one panelist was an actual commercial user shipper, although two others were representatives of shippers.
  “My take is if you are bannering a topic and calling it a shippers’ perspective, that’s what the discussion needs to deliver.”
  After we spoke to this bright, engaging, and most interesting shipper, we could not help but wonder if TIACA might create one or two panels at a future event staffed by shippers only?
  As we read it, there are nine shippers that serve as part of the TIACA Shippers Advisory Council.
Shouldn’t be too hard to pair a couple of them up with a moderator so that all of us might benefit from hearing the needs, hopes and desires of the target audience.


The Right Hotel Chemistry

     The old part of town in Istanbul is called Sultanahmet.
      The area is a trip back from modern to ancient times. Even today old Roman walls and obelisks still partially ring the area.
      Other remnants of this city date back ten thousand years from Istanbul to Constantinople.
      Landmarks seem to be everywhere—important Christian and Muslim places of worship dot the city, including the world-famous Blue Mosque.
      Being in town to do business and not to visit this part of Turkey is no less a shame for not stopping to smell the flowers as you are passing though.

Dr. Dogan and Havva SumengenAn Opportunity

      Considering the location and history plus the daily opening bell start (1100 hours) of Logitrans at convenient Ataturk Airport this week, we opted out of a high rise-fashionable show venue hotel and stayed in Sultanahmet.
      While a big trade show like Logitrans understandably seldom leads attendees very far from the traditional big hotel venues, we like to balance work and pleasure when we are on the road by discovering all we can about things around us.


The Sultanahmet

      The small family-run inns and restaurants that punctuate the ancient winding stone roads and narrow passageways are an endearing feature of this area of Istanbul.
      Learning about logistics in Istanbul takes on special meaning when you stay amidst the inns, shops, and bazaars of the Istanbul Sultanahmet, where all roads of civilization once came together.


Ada Excellence

      We discovered the Ada Hotel in Sultanahmet a couple years ago whilst admiring a 1,600-year-old minaret, which still stands just across the street from the hotel.
      Smallish, with limited rooms, travellers from around the world consistently rate Ada as a top hotel.
      The immaculately clean, individually decorated rooms make the Ada endlessly attractive. Bed to bathroom, the place is just perfect.
      No cookie cutter design here. The rooms have that hard-to-achieve, homey feel, with crocheted lace on antique and period chairs and tables.
      Ada, it should be mentioned, features all the bells and whistles of a modern hotel, too, with contemporary showers and whirlpool baths.
      There is a buffet and home cooked-to-order breakfast on the roof every day and a view of the Bosporus with its busy ship lane traffic and pleasure boats.
      Ada is located in a part of the city where calls to prayer are broadcast in the streets five times a day, giving the ancient space a distinct voice.


Dr. Dogan Makes A House Call

      Ada and companion hotel Ada 2 just down the road are owned and operated by Dr. Dogan Sumengen and his wife, Havva.
      Dr. Dogan, who earned a PhD in chemistry from Istanbul University in 1966, taught Chemistry at The Black Sea University and Uldag in Bursa.
      Born in Kayseri, Dr. Dogan (he retired in 1998 after teaching for 33 years) and his wife Havva (she taught math in Istanbul for 30 years) both decided that they would open a small hotel to stay in touch and continue working.
      Both have been going strong in the hotel business since 1998.
      “It’s a great life.
      “We purchased two buildings and have enjoyed every minute of operating a business, but the best part is meeting people from all over the world,” Dr. Dogan said.


Baris and Dr. DoganUp Against The Wall

      We are sitting upstairs in the garden rooftop enjoying breakfast. On the wall above our table, smiling down on the scene below, is the Sumengen’s son, Baris, pictured here with Dr. Dogan.
      The picture adds the feel of home to a breakfast of freshly prepared foods and piquant Turkish coffee.
      “Business has been challenging, but as always we look forward to the future with hope and imagination.
      “Turkey is a place of many cultures, where education and multiculturalism is basic to our way of life.
      “Sharing our values and greeting the world is a great way to spend your time,” Dr. Dogan smiled.


Ada Means Island

      “Ada in Turkish means island, and we consider our hotel as a place that can be reached from anywhere around the world as a sanctuary of comfort when in Istanbul.”
      As our favorite oasis when traveling to Turkey, it makes sense to us.

FlyingTypers Ad
Click To Subscribe Today

Turkish Cargo Sponsor ad

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. 75
Fokko Captain Of The Clouds
Chuckles for November 6, 2018
The Arend Men
Letter To The Editor
FT111118Vol. 17 No. 76
Remembrance Sunday
Chuckles for November 11, 2018
Atlanta Brokers Thanksgiving

Vol. 17 No. 77
The World@Logitrans Istanbul
Chuckles for November 13, 2018
UTIKAD Open House@Logitrans
Nadia & A Big Hunk Of Love

Publisher-Geoffrey Arend • Managing Editor-Flossie Arend • Editor Emeritus-Richard Malkin
Film Editor-Ralph Arend • Special Assignments-Sabiha Arend, Emily Arend

fblogoSend comments and news to
Opinions and comments expressed herein do not necessarily reflect the views of the publisher but remain solely those of the author(s).
Air Cargo News FlyingTypers reserves the right to edit all submissions for length and content. All photos and written material submitted to this publication become the property of All Cargo Media.
All Cargo Media, Publishers of Air Cargo News Digital and FlyingTypers. Copyright ©2018 ACM, Inc. All Rights Reserved.

recycle100% Green