Last Friday (July 10) we ran some
numbers from Lufthansa Cargo about June business that should have included that
traffic numbers for the period were minus 14 plus percent as compared to June
’08.
Looking back (at times through a shot glass) we
recall that June 2008 was part of a mostly great year for air cargo.
Today almost everywhere it’s all about 2009
as a battle for survival.
All of this got us thinking.
Hero to zero aside, right now with just under
half of international trade (by value) shipped by air, everybody is looking
at cargo as a leading indicator of financial turnaround.
Little wonder that last week’s numbers that
were bad or worse depending on who you talked to, or what was read, were greeted
with a collective groan.
Sure, the market is weak but maybe June numbers
should be considered as compared to April when traffic was down more than 26%
year on year.
No
excuses or false optimism here but determination as some other including from
AEA suggesting that those slightly buoyant May air cargo numbers we all heard
about just 30 days ago, were not all that great after all.
So whose numbers are to be believed?
Our feeling is that the news will be the news
until it gets better, meaning how you are doing and feeling may be the best,
most believable indicator for some months ahead.
And while all cling to the hope that the sun will
come out tomorrow, it might not be a bad time as an industry, to otherwise busy
ourselves in obtaining the tools and skills that will empower us to effectively
continue both now and when things turn right again.
We look at IATA’s World Cargo Symposium
gathering in Vancouver next March 8-11 under the titled theme “Bounce
Back: Rebuild The Future,” with absolute certainty that we will be better
off and ready to get back to where we all belong.
Waiting for IATA Cargo and Aleks Popovich (right),
Head of Cargo and Giovanni Bisignani, (left) DG of the outfit to deliver their
tell-it-like-it-is reports makes us wish that the next WCS was taking place
this week instead of seven months from now next year.
“Our Fourth Annual World Cargo Symposium
is an event designed for all audiences,” said Aleks Popovich from his
base in Geneva.
“Economic uncertainty prevails, together
with increased safety, security, and environmental demands.
“In such challenging times we must address
what economic scenarios does the air cargo industry face and how best to respond.
“The
industry also needs to confront how can the air cargo supply chain bounce back
from the current recession to deliver a step change in efficiency and customer
value.”
Looking at it based on my 35 years of covering
air cargo I can assure you dear reader that IATA Cargo has taken the global
reins of leadership in what’s new and next in this industry.
Under the leadership of Aleks Popovich, the long
sought after collective voice of air cargo has finally found a home to advance
all aspects of the air cargo industry proposition on a case-by-case, best practices
basis into the 21st century.
Compared to IATA Cargo and its rich and hopeful
agenda, every other air cargo organization and gathering, no matter where it
is conducted, is a local or regional commercial show.
Aleks Popovich may be remembered as the guy who
just happened to come along at the right place and time in air cargo history
to make a crucial difference in the development of an entire global enterprise.
If the pressure to get things right is weighing
down upon him it doesn’t show.
Despite a recent and now recovered from illness,
Aleks continues with his typical low key and completely professional approach
to what has happened and what lies ahead.
“The big takeaways at the Third IATA WCS
in Bangkok this past March despite the dire economic news were the tremendous
positive feedback received from delegates and also the importance of delivering
on the industry promises made at the concluding plenary of the Symposium.
“From a total of 730 attendees, 28 percent
responded to our survey, the highest response rate so far from all our previous
meetings.
“Last year in Rome the response rate was
25 percent and Mexico City in 2007 was 19 percent at the first WCS.
“One of the key questions for us was how
the delegates rated our WCS event compared to any other cargo meetings. “There,
75 percent voted WCS as either best in class or much better than other industry
air freight meetings.
“Only 1 percent in our responses saw Bangkok
as a less important gathering.
“A very high rating was received for the
networking opportunities the WCS provide.
“Obviously there is great demand for business
meetings aside from the official agenda.
“We intend to offer more networking facilities
and tools during our Vancouver meet next year.
“In Vancouver we will be offering more half
day tracks at complementary times where we minimize overlaps on topics of common
interest.
“It’s great to know we now have so
much “talk to action” content competing for the precious time of
our delegates.
“The key lesson was learned from Bangkok
where many tracks ran parallel so the participants could only attend a relatively
small number of tracks.
“In other words we are putting ourselves
in the shoes of different types of cargo professional participating in future
events, and making sure we tailor the event to meet their needs.
“For example, take the CEOs that have little
time and might be interested only in the Opening Plenary, the Cargo Economic
Outlook, the Cargo Executive Summit and the Cargo 2000 AGM, before having to
take on other obligations.
“Another example is the Dangerous Goods
professionals who are likely to be mainly interested in a dedicated Dangerous
Goods track.
“We intend to offer a full day for this
topic as an exception.
“It’s about designing the most effective
journey for each type of cargo professional participating in the Symposium.
“It’s also about responding to demand
for new content.
“For example, for the first time in 2010
we intend to introduce a Customs track.
Also in Vancouver there will be much more visibility
of the key decision makers who are present, for example, members of the Cargo
Committee who are sponsoring the IATA Cargo agenda, as well as top forwarders
who are championing change in the air cargo supply chain.
“This is another lesson we learned from
the feedback at Bangkok earlier this year.
“Elsewhere I’m pleased to say the
CNS Partnership Conference already applies this lesson with our new CNS President
Michael Vorwerk and members of the CNS Customer Advisory Board playing active
roles within the event.
“The CNS Partnership Conference held after
WCS earlier this year in Carlsbad picked up a number of themes developed in
the Bangkok IATA World Cargo Symposium and applied them to the needs of the
total cargo supply chain in the USA.
“For instance: Focus on the customer, Battling
the Crisis and Building the Future, e-freight, Cargo 2000, Protecting the Cash,
and the Environment.
“In
Carlsbad, airline legend Bob Crandall gave us his “outside looking in”
views on lessons of leadership in how to battle the crisis and build the future.
“This onward theme progression will continue
between WCS and CNS Partnership Conference in the future.
“Both of these conferences are accountable
to being results-driven.
“At WCS ’09 we identified four main
areas for taking action along the entire supply chain: a) protect the cash,
b) improve efficiency and speed of cargo flows, c) deliver quality and product
reliability, and d) keep shipments secure.
“Two examples illustrate our efforts to
put this to action.
“First there is the CASS expansion with
at least ten additional CASS operations we are implementing in 2009.
“Pakistan is one major candidate we’ll
put on the map, thanks to tremendous support from the Pakistan Forwarder Association
and the carrier community. Mexico and its domestic market is also new to CASS,
followed by CASS imports to Canada, Australia and the Gulf area, just to name
a few.
“In addition to extending the reach of CASS
we take forwarder feedback very seriously.
“A current key issue is the time it takes
for an airline to respond to a billing error raised with them by the forwarder.
“We are taking on this issue and intend
to solve this matter once and for all.
“Therefore, by October ‘09 we plan
with the cooperation of the airline community to not only propose working practices
but also to implement them.
“A second example where we take action is
e-freight.
“Adding more locations and additional airports
have been identified for paper-free flows of goods during 2009.
“In addition we want to take action for
increasing the volumes of e-freight shipments.
“Finally, we will meet small and medium
sized forwarders at airports where e-freight already exists to listen and respond
to their views as to what are the remaining obstacles to their participation
in e-freight.
“On another important challenge IATA remains
committed to a global and effective approach on environmental issues.
“The economic crisis has not shifted our
vision in this regard.
“Indeed no other industry has been as proactive
as ours and we must keep it that way, continuing to be ahead of the curve in
influencing Environmental policies.
“That’s why environmental issues will
be placed prominently on Vancouver’s agenda.”
“The circumstances certainly remain concerning
harsh volume drops in the last months showing demand at -22% to -10% below the
previous year.
“We need to see if the industry has bottomed
out on this unprecedented fall off in demand.
“Although the global situation continues
to look gloomy, it’s clear based on previous crises (e.g. 9/11), that
now is actually the best time for forwarders and carriers to accelerate industry
transformation.”
So we are waiting for IATA Cargo although from
all appearances and the statements here, Professor Popovich has given us plenty
of homework.
We will be looking for Aleks in Miami at Air Cargo
Americas come November. CNS has a new office in that city, we hear.
Geoffrey
 If
you missed the Air Cargo News FlyingTypers
IATA 2009 World Cargo Symposium
Coverage
Please Click On Days Below To View
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IATA Coverage |
 Latin
Trade
Tale Of Two Countries
Amidst the big downturn of 2009,
some Latin/Central American and Caribbean economies are faring much
better than others.
Consider two stories, geographically not
too far from one another – but their stories could not be more
different.
Chile
The Chilean government is doing everything
it can, even during hard economic times, to get their air cargo house
in order. The country’s Ministry of Public Works received a $351,200
grant from the U.S. Trade and Development Agency. Not many have ever
heard of USTDA. But (among other things) USTDA provides the financing
for feasibility studies at the start-up phase of large-scale projects
that could – if and when fully developed – become major
business opportunities for U.S.-based providers of equipment, services,
financing and much more.
The entities are now seeking out proposals
from qualified U.S. firms to develop a feasibility study aimed at assessing
the technical and financial viability of expanding and modernizing the
country’s vitally important Balmaceda Airport. When
it’s finished, the study will provide an implementation plan to
expand existing infrastructure and redesign terminal areas to accommodate
current and forecasted passenger and cargo demand and allow the operation
of larger type aircraft.
Among the broad objectives of the new
Master Plan are:
•
a demand-capacity analysis to assess development requirements
based on projected air traffic demand;
•
a development plan that identifies and prioritizes investments
for the short, medium and long terms;
•
a financial plan to finance the proposed improvements and recommend
concession strategies/privatization options, if appropriate; and
•
an evaluation of environmental and developmental impacts associated
with recommended projects.
The Master Plan will also analyze the
objectives of: designing a new parallel taxiway that can also be used
as an alternate runway, expanding the current runway, relocating the
existing passenger terminal to a new facility, modernizing the cargo
terminal, installing new security and navigations systems, and upgrading
the airport to meet Chilean and international standards. In addition,
the Ministry wants to evaluate the potential for airport privatization.
Chile has privatized most of the airports in the country and the Ministry
is extremely interested in evaluating potential privatization options
for Balmaceda.
In addition, the Master Plan will serve
as an investment promotion tool to attract private sector participation
and create a roadmap of development for any potential future concessionaire.
The project will have significant social and economic impacts in the
Aisén Region by providing increased accessibility to isolated
areas and supporting trade.
Honduras
In Central America, the situation in
one country is quite grave. The murder rate in Honduras is rising fast,
a situation that no one close to the situation expects to improve in
2009. As a result, transport sector experts now increasingly caution
that security risk, combined with a deteriorating economic outlook,
could severely hamper air cargo activities of all kinds.
Air cargo carriers and the companies that
work with them are growing increasingly concerned about the spill-over
effects of Mexican drug gang violence into Central America, a trend
which we believe is driving up security risk in the region. In Honduras,
for example, we have already witnessed a notable uptick in homicide
cases, as security forces and Mexican drug traffickers engage in conflict
to gain control of key transit routes.
According to the United Nations Development
Program (UNDP), the number of homicides across the country shot up by
35.7% y-o-y in the first nine months of 2008 to 3,262. Consequently,
we estimate that the Honduran murder rate is currently around all-time
highs of 60 per 100,000 (from just 32 in 2005).
What is more, some now caution that the
security threat could get even worse in 2009. Firstly, with Mexican
President Felipe Calderón struggling to contain cartel activity,
the risks of a further spill-over of violence are high. Secondly, the
Honduran election campaign in 2009 (ahead of the ballot in 2010) could
become a bloody affair, if the November 2008 primaries were anything
to go by. To name just one example, masked gunmen killed Mario Fernando
Hernández, vice president of congress and member of the ruling
Partido Liberal (PL), during the primaries.
Finally, as the global economic crisis
continues to unravel, we are forecasting a marked slowdown in Honduran
real GDP growth (to an eight-year low of 2.9%). Rising unemployment
could stoke social tensions even further, in turn forcing more Hondurans
to look to the illegal narcotics trade for income.
As a result, air cargo industry executives are increasingly being
warned that the political risks, both in the short term and long term,
lie weighted to the downside. |
 Christmas
Carroll
United Airlines whose poor customer service prompted
Halifax musician Dave Carroll to post a music video online about how
UAL busted his guitar, got worldwide attention and 600,000 hits, is
donating $3000 to charity at Mr. Carroll’s request to make up
for its mistakes.
"United will donate $3,000 to the Thelonious Monk Institute of
Jazz for music education for kids," company spokeswoman Robin Urbanski
said.
Talk about greatest hits . . .
|
 Air
Cargo News FlyingTypers leads the way again as the world’s first
air cargo publication to connect the industry to the broadly expanding
and interactive base for social commentary—Twitter.
Here are updates from Twitter so far this
week. To be added to this 24/7/365 service at no-charge contact: acntwitter@aircargonews.com
July 12: On Sunday
new week jumped off with LHR & top EU air cargo hub FRA saying cargo
decline slowed in June. Is global air cargo stabilizing?
July 12: Happy 50th
Birthday to leisure Cargo's Ralf Riksen from 150 friends who gathered
on Saturday past to celebrate in Frankfurt
.
July 12: First numbers
for May 2009 looked better for air cargo. Now some others say May not
good.
What to believe?
If you feel good—it is good!
July 11: Pulp
Fiction? India subsidy mango by ocean vs. air to lower retail from $22
to $10 dz. Patel Bros NYC sells top mango $8-9 dz from Mexico.
July 11: "Myopic
policy," Star Alliance calls U.S. Justice city carve outs of antitrust
immunity attached to CO OK to join nine airline group.
July 11: U.S. nixes
Star Alliance setting prices and schedules JFK-CPH-GVA-ZYD-ARN-YOW.
IAH-YYZ -YYC & all US-PEK. If route competitor enters may OK setting
prices etc.
July 11: Continental
gets antitrust OK joins nine carriers acting as one on international
service. Exceptions are 8 cities in Europe & Canada & PEK. |
