At Munich Airbridge Delivers The Goods

     Before many of the usual suspects on the world cargo scene kicked off their series of company statements masquerading as “discussion panels” as part of Transport Logistic ’07, Day One was a humdinger with a series of country presentations including The Baltic States, India, Romania and Russia.
     Each country sent in their experts to discuss various reasons why the world should beat a path to their respective doors.
     All were afforded two hours to parade a cadre of transportation experts in front of conferees to tell a story.
     After a while the non-stop pitch for business became a bit of a blur, best received by the truly baptized in the respective countries or by executives eager to specifically attend a destination of interest.
     That is exactly what happened at the Logistics India presentation and also Globalization of the Russian Transport Market.
     Curiously or maybe on purpose there were not direct air cargo industry types on the menu Tuesday, as country after country rolled out their logistics programs, with one exception.
     Operating outside the Air Cargo Europe format to come Wednesday, as part of the “Russian Day” presentation Stan Wraight, President of Air Bridge Cargo blew the doors off the place by delivering a smart, frank and forward looking touch of reality speech at 1700h as the last presentation of the day.
     Talk about saving the best for last.
     Stan Wraight for as long as we can remember has been the consummate air cargo professional.
     From his days as part of Jacques Ancher’s team at KLM Cargo, to his work at Mike Chowdry’s Atlas Air and now as top executive at Air Bridge Cargo the company set to take delivery of the advanced Boeing B747 freighters, Mr. Wraight was on message, just in time and a welcome voice at Munich Russia Day June 12, 2007 as Transport Logistic opened for business.
     “A recent survey by Deloitte, a well respected research organization, found that Russia like other countries with rapidly growing economies, is hampered by poor logistics, and the sheer size of the territory makes this particularly acute.
     “So this creates unique challenges for a start up Russian scheduled airline, and unique opportunities as well.
     “The Russian government has been clear and very transparent in its objective to have Russia join the WTO, and also to build on the existing infrastructure and create a new and dramatically improved air transportation infrastructure for the Russian Federation.
     “It also understands that to do so changes must be made, and changes will be made.
     “The first positive steps came about in the past year with a commitment for a massive investment to improve the country’s airport infrastructure and hubs.
     “This was followed up with initiatives to establish duty free zones and customs procedures which will assist all airlines, but especially Russian airlines, to grow and be in a competitive position in the years ahead.
     “This is a good first step, but other changes are also needed to make Russian airlines competitive and here I refer to outdated rules from the central bank, import duties on aircraft, VAT and electronic commerce among others. “These rules and regulations do not hamper our foreign competitors, and this must be taken into account before Russia really opens its skies to foreign airlines.
     “But something else is being done which will be of great significance for Russian all cargo airlines, and that is greater control on “Grey Cargo”, that for the most part moves through Scandinavian Airports but also via several EEC Gateways as well.
     “A recent report by the Bank of Finland’s Institute for Economies in Transition, confirmed results of an inspection by the customs services of Russia and Finland, that the discrepancy in trade statistics caused by “double invoicing” is over one third of the total.
     “This practice has but one purpose, to avoid the Russian tax system.
     “Over 25% of all imported goods entered Russia via Finland in 2005, so it is a significant issue according to this report and totally distorts the real reason air cargo moves via that gateway.
     “According to an article published in RBK Daily, the Russian government is involved in a “war” against this practice, and is making great progress.
     “The first target was very publicly the mobile phone market, and the result today is that over 90% of this traffic is now “white”.
     “The phone companies took control, did not want their reputations to suffer as a consequence of third parties, and moved to all white clearance.
    “They have not suffered at all in their sales; Russia is the third largest market in the world for this commodity.
    “The consequence of this was also a diversion of this traffic from road to air, and the resulting efficiencies this mode of transport offers to electronics companies became apparent.
    “It was welcome news for ABC and our competitors as well.
    “Other actions by the Russian Federation also sent a signal, that changes will come faster than many thought.
    “The Russian State Parliament is planning to discuss a draft on amendments to the Russian Customs Code, where Customs Brokers and Importers will share responsibility for violations in declarations.
    “This is a clear signal.
    “In another initiative, on March 26th the Russian and Chinese Customs officials signed a protocol on information exchange in the presence of President Putin and Chairman Hu.
    “This agreement “will shorten customs procedures at crossing points and reduce costs for law abiding trade participants.
    “It was also agreed that the information standard used will be benchmarking a data model recommended by the standards of the WTO.
    “Everything I have mentioned is just a small part of what is happening, but they are important steps for direct air cargo development in Russia.
    “As the attractiveness of schemes where the only game is customs duty avoidance are eliminated, the world of logistics and the fantastic opportunities brought to Russian importers will become increasing apparent and important.
    “Direct all cargo air services offered by ABC and others will cut days off the transit times for clients, and through a system of hubs in Russia open up direct air capabilities to these same importers no matter where they are located.
    “I can assure you, and this is through analysis with numerous importers we work with, it’s not just a time saving exercise.
    “Direct air is in most cases less expensive in total transportation costs than what is happening today which usually involves a stop in Moscow.
    Krasnoyarsk, St. Petersburg, Khabarovsk, both Moscow airports of Shermemetyevo 1 and 2, plus Moscow’s Domodedevo are served by direct 747 all cargo services by ABC, and we are just beginning.
    “Through a domestic service using Russian built palletized aircraft, we will continue to open up Russian cities to the advantages of direct air logistics.
    We invite our clients, logistics companies, freight forwarders and government officials to join us in creating this network, one that will truly benefit the Russian Federations economy and global competitiveness.”
Geoffrey