GHY Tradelines

(Handy Shipping Guide)

Gold Vanishes in Air Cargo Heist Whilst Technology Aids Enforcement

With another massive air cargo crime this week comes good news for road haulage freight truck operators as Heavy Vehicle Electronic License Plate Inc (Help), a not-for-profit public-private partnership dedicated to advancing the safety and efficiency of the transportation industry, has announced that it is to bolster its support of stolen cargo recovery efforts by delivering CargoNet® theft alerts through the Automated Vehicle Identification (AVI) system, PrePass.

Firstly the story of a scheduled American Airlines flight from Guayaquil, Equador into Miami, Florida. The plane was disembarked in the early hours on Tuesday and five cargo handlers unloaded the freight carried aboard. Amongst the items was a single box containing – $625,000 worth of gold. Closed circuit TV has the freight moved to the far side of the aircraft and shortly after shows a cargo tug passing the area, stopping and proceeding out of shot. The tug was found later several gates away and sworn statements from the staff on the tarmac state none know who was driving and, with the gold still missing, the FBI is appealing for information. Read more here.
 

(Alex Lennane – The Loadstar)

The air freight market is currently in a weak yet stable condition, according to carriers and consultancies. Drewry’s east-west air freight price index for April revealed that all-in rates (for standard deferred airport-to-airport services), over 21 major routes, rose slightly to $3.21 from $3.15 in March, but were down year-on-year.

Interestingly, perhaps, one of the sharpest rebounds in pricing was on the Shanghai-Frankfurt route. Drewry’s index saw it rise 13.8% in April.

“China is recovering,” said a spokesman for Lufthansa Cargo. “We’ve increased the frequency to Shanghai, but the market is still unspectacular – we don’t expect a real recovery until the second half.” Read more here.
 

(AirCargo Asia-Pacific)

Multiple supplier import consignments are proving difficult for freight forwarders who are unsure of how to comply with cargo reporting regulations, according to industry advocate Paul Zalai of Freight and Trade Alliance (FTA).

It has been common practice ‘for decades’ for freight forwarders or buying agents to ‘assemble’ freight overseas (pack freight from various suppliers into a unit at a depot or one supplier’s premises) for the one Australian importer. This commercial practice usually involves the cutting of one commercial bill of lading or house air waybill.

Zalai said talking with many freight forwarders, it appears there is no consistent practice nor is there a clear understanding of Customs and Border Protection’s (CBP) compliance requirements in relation to ‘assemble order’ consignments. Read more here.
 

(PR Newswire)

American Airlines Cargo, a division of American Airlines, has been named the Best Cargo Airline of the Americas for the sixth consecutive year by readers of Air Cargo News, the world’s leading air cargo industry publication.

The award, which is considered one of the most important honors in the industry, is based on the voting results of more than 25,000 supply-chain professionals. Participants were asked to vote on the publication’s website for the airline that provided the best overall customer experience. The results for the 30th annual competition were audited by the U.K.-based British International Freight Association. Read more here.
 

(Alex Lennane – The Loadstar)

The air freight industry could prevent further modal shift – and even boost volumes – if it responded better to the needs of the shipper, delegates at TIACA’s Executive Summit in Dallas heard last week.

In a speech littered with the word unprofessional, Robert Mellin, head of distribution logistics for Ericsson, revealed that the air freight industry is failing to make itself attractive and failing to compete on service levels with other modes of transport.

Top of the shippers’ wish list, he said, is shipment visibility and electronic communication, something that other modes of transport have already put in place. Read more here.
 

(BBC News)

German airline Lufthansa has cancelled the majority of its flights scheduled for Monday due to a strike over pay. The airline said only 32 of its flights would run as planned, out of more than 1,700 originally scheduled.

Flights to and from London, Manchester, Birmingham, Newcastle, Glasgow, Dublin, Aberdeen and Edinburgh will be hit. German airports affected are Frankfurt, Munich, Dusseldorf and Hamburg. Read more here.
 

(Aircargo Asia-Pacific)

Airlines have warned forwarders to get behind e-freight or risk their businesses. [Last] week’s TIACA Executive Summit in Dallas, USA was told by Enno Osinga, head of cargo for Schiphol airport: “If they do not change, they may no longer be part of this industry.”

He added that the efficiencies in e-freight will present problems for some companies. “What is not often said is that some people in the current chain will no longer have a role.” Read more here.
 

(John McCurry – Air Cargo World)

An expanded Panama Canal will result in a smaller number of North American air cargo centers, according to the recently released North American Port Analysis by commercial real estate firm Colliers International. The report, titled “CapEx or Capsize,” says air cargo’s role in global trade will be defined by the tug-of-war between energy/infrastructure costs and e-commerce growth in the first post-Panamax decade (2015-2025).

“What we are trying to do is evolve the understanding of what’s going on,” K.C. Conway, the Colliers economist who authored the report, says. “The real story now is what is the inland story and from that who wins and who has the opportunity to participate the most. If we move a lot of cargo into ports, but we can’t move it inland because the airports don’t have the infrastructure, growth will be impeded in that particular region.”

The Colliers report states that within three to five years, there will be just a half dozen dominant U.S. air cargo markets. Candidates include Memphis, Louisville, Columbus, Ohio, Miami, New York, Miami, Los Angeles, Seattle and Denver. Because of the costs involved, air cargo in the U.S. will follow the same hub-and-spoke model adopted by passenger air carriers to maximize traffic. Airports that lack a port partnership won’t be a dominant air cargo market in five years. Read more here.
 

(Alex Lennane – The Loadstar)

Mid-sized forwarders are waiting for carriers or associations to propel them into e-freight as they remain uncertain about the benefits, The Loadstar has learned.

While the large multinationals are, for the most part, ready to send electronic documents, and many smaller forwarders, through the collaboration between WIN and Champ, now have a platform through which to enable e-cargo, there is some concern that medium-sized forwarders have yet to embrace an electronic future.

“Multinationals are taking care of themselves, and some of the mid-size ones are following that approach – but others are waiting,” said Felix Keck, managing director Champ Cargosystems, Germany. “Everyone who does something about e-freight does the right thing – but it is very, very slow.” Read more here.
 

(Reuters)

The global air cargo market is set to extend its slow recovery unless a fresh blow to confidence from the euro zone reverses the trend, the International Air Transport Association (IATA) said on Tuesday.

IATA said global freight demand grew by 2.0% year-on-year in February, after adjusting for calendar effects.

“This is welcome news after two consecutive years of contraction,” IATA chief executive Tony Tyler said in a statement. “It is even better news that this growth is expected to pick up moderately as the year progresses. But improvements cannot be taken for granted. Events in Cyprus have reminded us that the euro zone crisis is far from over.” Read more here.
 

(Forbes)

The Federal Aviation Administration announced on Friday, March 22 that it would shut down 149 of the 516 air traffic control towers across the U.S., beginning April 7, 2013. Here’s what it all means.

Why is the FAA doing this? Because of the sequester that took effect on March 1, 2013, resulting from a 2011 budget deal. The sequester mandates cuts of $85.4 billion from the federal budget this year and larger cuts in subsequent years.

Although cuts were widely publicized as “across the board,” some divisions of the Department of Transportation were exempted. “The FAA will take more than 60 percent of the sequester cuts for all of the DOT, even though our agency makes up only about 20 percent of the department’s budget,” FAA administrator Michael Huerta testified before the U.S. House of Representatives on February 27, 2013. The FAA’s share is $637 million. Read more here.
 

(eTravel Blackboard)

The seventh World Cargo Symposium (WCS) concluded in Doha with a renewed commitment to improve air cargo competitiveness across the supply chain. This includes industry consensus on moving e-freight forward and on pursuing a risk-based approach to supply chain security.

e-freight

A major milestone was reached on e-freight with the approval by the Cargo Services Conference of the Multilateral e-Air Waybill (e-AWB). This removes the need for individual bilateral e-AWB agreements between airlines and freight forwarders and will be a major boost to e-AWB penetration.

“The most important thing that we can do to improve the competitiveness of the air cargo industry is e-freight. It is a top focus for the Global Air Cargo Advisory Group (GACAG) which produced a roadmap to coordinate industry efforts. The IATA Board of Governors recognized the importance of the e-AWB to achieving e-freight and set ambitious targets. At the end of 2012 e-AWB penetration was 6.8%. By the end of 2013 the target is 20. And the big challenge is to reach 100% by the end of 2015,” said Des Vertannes, IATA’s Global Head of Cargo. Read more here.
 

(AirCargo World)

European commissioner for transport Siim Kallas announced Wednesday the postponement of the starting date of anti-terrorism rules for companies who use airfreight.

The tougher rules – known as the “known cosigner” status – will be implemented April 29 instead of March 25 due to the European Shippers’ Council (ESC) protesting against the original state date.

The rules dictate that companies who use airfreight must take specific security and employee-training measures in order to receive this status. They can apply for the known cosigner status at a domestic agency. If companies don’t follow these rules, their freight can’t be loaded on board an aircraft without prior extensive screening measures. Read more here.
 

(Stuart Todd – Lloyd’s Loading List)

Carrier group will restructure air freight operations and cut fleet in bid to reduce deficit

Air France-KLM has reported losses of €222 million from cargo last year, compared with €60 million in 2011.

Turnover totalled €3.06 billion, down 6.4% at constant exchange rates.

At the presentation of the group’s annual financial results, Air France-KLM’s Chief Financial Officer, Philippe Calavia, said the business had suffered “in a context of global economic slowdown, weak world trade – a very important indicator for air cargo activity – and continued overcapacity on major Asian routes.”

Traffic, expressed in revenue tonne-km (RTKs) fell 6.3% against capacity down by 3.5%. This produced a 1.9 percentage point decline in load factor to 64.5%.

In the second half of last year, Air France-KLM had reduced maindeck capacity by 8%, with its freighters’ share of the carrier’s global cargo capacity falling to 31%. Read more here.
 

(Alex Lennane – The Loadstar)

The aircraft parts supply chain could be disrupted if ICAO bans the transport of aircraft batteries on passenger planes. Media reports have stated that ICAO’s dangerous goods committee is in the process of revoking an exemption for lithium ion aircraft batteries which allowed them to be transported in the bellyhold, with immediate effect.

Aircraft batteries as heavy as 34kg were previously exempt from a ruling covering other types of lithium ion batteries on passenger aircraft.

However, concerns flagged by recent incidents on Boeing’s new 787 Dreamliner aircraft have forced ICAO to re-consider the exemption.

Other rules introduced with immediate effect have generally not been warmly welcomed by the industry. But Michael Steen, chairman of The International Air Cargo Association (Tiaca), told The Loadstar: “There has been a lot of dialogue between ICAO and the industry. Batteries have been on the agenda for some time. The dialogue has escalated because of the 787, but this only concerns one particular type of metal battery.”

The batteries will still be able to be transported on freighters, but there is some concern that any ruling will hit the aircraft parts market. “If that is the final decision then yes, it will impact the supply chain,” acknowledged Mr Steen. “The industry and suppliers will need to look at the best way of transporting the batteries, and make sure that the documentation is correct. Read more here.
 

(AP)

American Airlines and US Airways have agreed to merge in an $11 billion deal that would create the world’s biggest airline. The combined carrier will be called American Airlines, but US Airways CEO Doug Parker will run it.

The merger would reduce the number of major U.S. airlines to four: the new American, United, Delta and Southwest.

The deal is a coup for smaller US Airways Group Inc., which pushed for a merger almost as soon as American parent AMR Corp. filed for bankruptcy protection in November 2011. [...]

“The combined airline will have the scale, breadth and capabilities to compete more effectively and profitably in the global marketplace,” Parker said in a statement. “Our combined network will provide a significantly more attractive offering to customers, ensuring that we are always able to take them where they want to go.” Read more here.
 

(Alex Lennane – The Loadstar)

Gong xi fa cai! As we move into the year of the water snake, airlines and forwarders have reported a mini surge in demand – but later than usual.

James Woodrow, general manager cargo sales and marketing for Cathay Pacific, told The Loadstar: “The pre-Chinese new year rush came very late this year, starting around Friday 1 February. Since then the market ex-Hong Kong has been busy, with particularly good demand long haul to Europe and transpacific. This is expected to rollover until the third or fourth day of the New Year, after which volumes will die down.”

Factory production is expected to start again on Monday 18 February, but will take two weeks to return to full capacity, according to electronics shipper Daleba Printed Circuits.

Mr. Woodrow added that he’d been disappointed by the late rush. “We were hoping that demand would pick up from mid-January – however this year we will only have a 10-day pre-new year peak period. The key issue will be how quickly the factories come back to work.” Read more here.
 

(Alex Lennane – The Loadstar)

Forwarders could face charges for ‘low show’ or ‘no show’ cargo if airlines follow the example of Air France-KLM, which has successfully introduced penalty fees for unreliable bookings. In a bid to increase efficiency throughout the supply chain, the carrier took the bold decision last year to impose fines on customers that didn’t fly cargo as booked. As a result, it is now celebrating a 4 to 5% rise in booking reliability.

In a move that the nay-sayers insisted would send forwarders rushing to other airlines instead, the carrier has “put booking reliability on the agenda”.

“The threat of invoicing was not liked, but nobody is boycotting us and the topic is on every agenda,” said Mattijs ten Brink, SVP of sales and distribution. “We focused on the main problems and it was less than we anticipated. It’s a carrot and stick – they need to be done together. But we weren’t soft, and we didn’t go back on it, but dealt with it in a mature way. Most of our forwarder partners have embraced it and started to look at their own processes.”

The carrier, which last year said it would be “extremely happy if we never sent out an invoice for a no show or low show,” issued fines of about €1 million during the year. “It is completely irrelevant to our revenues. Where we did invoice, the case was so clear that everyone agreed.” Read more here.
 

(DCVelocity)

Current confidence in Europe-based activity; expectations for mid-year look better, survey finds

A monthly confidence index of international shippers and freight forwarders operating on European-based trade lanes increased in January for the third consecutive month. This increase indicates a faint trace of optimism among companies whose commerce touches the beleaguered continent.

The survey, conducted by U.S. investment firm Stifel, Nicolaus & Co. and British research and consulting firm Transport Intelligence Ltd., measures the monthly expectations of companies shipping by air and ocean between the U.S. and Europe and between Europe and Asia. According to the survey, the overall index in January stood at 48.8, a 0.8 index point increase over December. Read more here.
 

(David Badger – Lloyd’s Loading List)

For high-value goods air is a justifiable alternative when the reliability of the ocean supply chain is threatened, says analyst

Air freight rates slipped in December as the trade returned to business-as-usual following the volume boost of earlier hi-tech product launches, according to Drewry’s new monthly report, Sea & Air Shipper Insight.

Drewry’s recently launched East-West Air Freight Price Index, a weighted average of air freight rates across 21 east-west trades, fell by 1.4 points from November to reach 110.8 in December, bringing to an end four consecutive months of gains in the index.

“The waning effect of new hi-tech product launches on traffic demand was the primary contributor to declining rates from Asia into North America and Europe,” said Simon Heaney, research manager at Drewry. Read more here.