Aircargopedia Newsblast: December 2019!
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15th December 2019  
 


Dear Air Cargo Professional:

Air Cargo will enjoy a modest uptick next year, as per global forecasts. Read more about Air cargo growth in 2020.

This newsletter also features coalition of Air Cargo Trade Associations efforts to crack down on rogue Lithium Battery shipments and how the IoT is expected to reshape aviation industry.

Learn more about Logistics Management from the process perspective by Peter Canellis.
  DJ Ghosh
Attend AIR CARGO INDIA 2020 conference for an exclusive Air Shipper Forum on Automotive to track the trends and address the concerns shaping the automobile industry.

We would like to thank all our subcribers, partners, customers, colleagues and contributors for their continued support without which Aircargopedia wouldn't have been so successful and we wish you all an exciting year ahead!

D.J. Ghosh
President & Publisher
AIRCARGOPEDIA
WWW.AIRCARGOPEDIA.COM
”The Complete Encyclopedia for the Air Cargo Professional & Investor”


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GIAS

AIR CARGO GROWTH IN 2020

Compiled by Aircargopedia

Air Cargo will enjoy a modest uptick next year, as per global forecasts. Cargo traffic is expected to rebound moderately by two per cent in 2020, with tonnes forecast to reach 62.4 million, which is still below the 2018 result.

The rebound will be a welcome relief from 2019, yields will continue to slide with a three per cent decline forecast for next year, albeit an improvement from the five per cent decline in 2019. Cargo revenues will slip for the third year in 2020, with income expected to total US$101.2 billion, down by 1.1 per cent from 2019, per global outlook report for 2020.

Regional carriers in the Asia- Pac region will be helped by a modest recovery in the global trade, with the air cargo business showing a $6.0 billion net profit in 2020 – up from the $4.9 billion of 2019 – a 2.2 per cent net margin.

Despite local difficulties, Asia remains the manufacturing center of the world and revenues from transporting many of those goods are a significant proportion of sales for many of the region’s airlines. But the trade war is assumed to be just on hold; trade tariffs are not being reversed. Consequently, the forecast rise in trade and cargo volumes is moderate.

The 3.3 per cent annual decline in demand was the steepest drop since 2009’s global financial crisis. Freight carriage, meanwhile, slipped to 61.2 million tonnes from 63.3 million in 2018.

For more news and information about the air cargo industry, please visit AIRCARGOPEDIA.COM.



Air Cargo India

Coalition of Air Cargo Trade Associations Announce New Efforts to Crack Down on Rogue Lithium Battery Shipments

Kevin Pflug, Geneva 13th December 2019

The International Air Transport Association (“IATA) has partnered with the Global Shippers Forum, the International Federation of Freight Forwarders Associations, and the International Air Cargo Association to announce that they are increasing their efforts to ensure the safe air transport of lithium batteries.

The organizations are also renewing calls for government authorities and regulatory bodies to take appropriate enforcement actions against manufacturers of counterfeit batteries, as well as mislabeled and noncompliant shipments.

The number of incidents involving mis-declared or undeclared lithium batteries has also risen as consumer demand for lithium batteries is growing at an annual rate seventeen (17) percent, thanks in large part to increasing sales of electric vehicles across the globe.

Nick Careen, IATA's Senior Vice President, Airport, Passenger, Cargo and Security stated, "Dangerous goods, including lithium batteries, are safe to transport if managed according to international regulations and standards. But we are seeing an increase in the number of incidents in which rogue shippers are not complying. The industry is uniting to raise awareness of the need to comply. This includes the launching of an incident reporting tool so that information on rogue shippers is shared. And we are asking governments to get much tougher with fines and penalties."

The campaign includes three specific initiatives. First, the organizations will roll out a new incident reporting and alert system for airlines. An industry information sharing platform has been launched to target misdeclared consignments of lithium batteries. This new reporting system will allow real-time information about dangerous goods incidents to be reported so that acts of deliberate or intentional concealment and misdeclaration can be identified and eradicated.

Second, the coalition aims to increase industry awareness on the dangers of shipping undeclared and misdeclared lithium batteries and will be conducting a series of dangerous goods awareness seminars across the world targeting countries and regions where compliance has been less than perfect. Moreover, an education and awareness program for customs authorities has been developed in collaboration with the World Customs Organization.

Third, the coalition will facilitate an industry-wide approach to solving the problem of rogue lithium batteries. The coalition has put its support behind an initiative presented by the United Kingdom, New Zealand, France, and the Netherlands at the recent Assembly of the UN's International Civil Aviation Organization that calls for the adoption of a cross-domain approach, including aviation security, manufacturing standards, customs and consumer protection agencies. Currently, air cargo is scanned for items that pose a risk to security such as explosives, but not safety such as lithium batteries.

The coalition of air cargo organizations also strongly believes that governments have a role to play in furtherance of these goals through the stricter enforcement of international regulations to ensure the safe transport of lithium batteries. As such, the four trade associations are urging regulators to impose significant fines and penalties for those who attempt to circumvent regulations with regard to air shipments of lithium batteries.

Glyn Hughes, IATA's Global Head of Cargo stated, "Safety is aviation's top priority. Airlines, shippers and manufacturers have worked hard to establish rules that ensure lithium batteries can be carried safely. But the rules are only effective if they are enforced and backed-up by significant penalties. Government authorities must step up and take responsibility for stopping rogue producers and exporters. Abuses of dangerous goods shipping regulations, which place aircraft and passenger safety at risk, must be criminalized."

Vladimir Zubkov, Secretary General of the International Air Cargo Association stated, "We have seen high interest from the regulators on the issue of lithium batteries not that long ago, and it did help to improve the situation. We are asking governments to put this problem again on the top of their agendas."

"Responsible shippers rely on government enforcement of standards to protect their investment in training and safe operating procedures. Air freight remains a vital link in international supply chains and it is essential that the rules for ensuring the safe movement of all cargoes are understood and acted on by all parties involved," said James Hookham, Secretary General of the Global Shippers Forum.

"The increasing use of lithium batteries coupled with the growth of e-commerce supply and demand is exposing the air cargo supply chain to greater risk of un-declared or mis-declared goods. We support regulators imposing strict adherence to established compliance standards," said Mr. Keshav Tanner, Chairman of FIATA's Airfreight Institute.

Peter Canellis
Kevin Pflug



Air Canada Cargo

Making it Look Easy: Logistics Management from the Process Perspective

Peter Canellis, PhD, PE, Professor of Management

Does it really take that much knowledge and effort to move goods through the supply chain? It’s not a big deal, really. I wonder why so much has been written about it in the last fifteen years or so.

It’s like that with a lot of things. For example, when I was watching the World Series this past October, I noticed that the outfielders caught most of the fly balls hit in their direction without much fanfare. They trot over to where the ball will ultimately descend, open their glove, and the ball falls in. Yet look at those astronomical salaries! Either they are grossly overpaid, or there’s more here than meets the eye – or perhaps to put it more accurately, the untrained eye
The supply chain is composed of a series of nodes that are connected by links. These nodes, ranging from extraction of raw material (or agricultural activity for food products) through to consumption and ultimate disposal and possible reclamation, represent the stages at which various processes are applied that add value to goods. The links that connect the nodes represent the transportation process.

Regardless of the specific nature of a particular move, there is always a minimum of five participants:
• Shipper
• Carrier
• Consignee
• Bank
• Insurer

Other entities may or may not participate depending upon whether the move is foreign (involving customs) or domestic, or if the nature of the commodity to be moved requires the involvement of special government agencies (e.g., the Food and Drug Administration).

The figure below illustrates the supply chain and its participants. Even a high- level description such as this provides some insight into the supply chain’s complexity. There are numerous ‘hand-offs’ of product and information within each node and between the nodes and links among the many participants.

Logistics Management

Leaving aside the considerable supply chain complexities that occur within the ‘four walls’ of a manufacturing facility, we’ll examine some of the issues that arise at and between the other nodes. The following figure illustrates the general physical processes that are applied to moving freight. Cargo must first be packaged and secured. It may also be consolidated with other freight to benefitfrom economies of scale in shipping. It must then be transported and suitably protected by insurance for that shipment. If it is an international shipment, it must be cleared through customs. Upon arrival at its destination, it will be unloaded and stored prior to applying other value-added activities and distribution.

Logistics Management


Each of these ‘hand-offs’ has two things in common: they present a possibility for something to go wrong, and they all cost money. How, then, do we go about making sure that things go right?

We make sure that things go right by applying tactical and strategic processes to the planning and scheduling of cargo movement prior to physical execution. Each of the physical processes has corresponding tactical and strategic processes that render the physical move timely and cost effective. Some examples follow.

Transportation

The physical movement of cargo from one point to another will be supported by:
• Establishment of least cost routings
• Evaluation of merge-in-transit opportunities to take advantage of the best locations for applying value-added processes to components and subassemblies
• Selection of transport service levels to ensure that freight is not moving at premium rates for fast delivery, only to be stored for many weeks!

Cargo Handling

A lot has to happen before cargo can be physically handled:
• Package designs must be developed and tested to ensure productintegrity
• Pallet and container loadings need to be optimized for safety and cost- effectiveness
• Inventory levels and their locations must be established to balance carrying costs with customer service levels
• Distribution center operations must be constantly reviewed and improved to ensure that cargo is not lost, stolen, or damaged.

Export / Import Compliance

An international move must, of course, clear customs. In order to do this as cost- effectively as possible, it is necessary to investigate and identify

• Duty reductions and reclassifications
• Fine reduction opportunities
• Duty drawback opportunities
• Import entry consolidations
• Quota pre-processing opportunities to minimize the time that cargo is held for clearance

Risk Management

Risk management goes well beyond writing cargo insurance. In order to keep insurance costs to a minimum, we must aggressively move to reduce cargo claims by:
• Designing proper packaging
• Create handling and storage protection measures against mishandling, fire and water damage, and excursions from acceptable temperature ranges for certain types of cargo.

We must also reduce cargo theft exposure by evaluating facility layouts, assessing personnel security measures, and taking corrective action when required.


Product Sourcing

If we are to provide products as cost effectively as possible, we must consider how and where goods are sourced, and the effect on the supply chain of a change in sourcing or, alternatively, the decision to make rather than buy a component, subassembly, or product.

If this weren’t enough to convince the casual observer that good logistics practice is harder than it looks, consider also that most of these tactical and strategic processes are interdependent. For example, a change in sourcing a product will affect the cost of transportation and customs clearance. It might also affect packaging requirements and opportunities for total cost reduction through merge- in-transit.

As illustrated in the figure below, what you don’t see has a huge impact on what you do see.

Logistics Management

It has been said that those who have all the answers don’t even know what the questions are. This is certainly true of those who think that there’s nothing easier than moving cargo in the supply chain.

A process perspective of logistics management gives us insights into what is really happening in the supply chain and how it is accomplished. It focuses on the planning, scheduling, physical execution, and evaluation of the activities required to ‘deliver the goods’. It provides the basis for incremental continuous improvements as well as for major breakthroughs in process redesign.

But this is not the end of the story: processes require effective and efficient information systems to support their execution. Accordingly, viewing the supply chain from an information systems perspective will be the subject of the next article in this series.

Oh, by the way: about those outfielders who make catching fly balls look easy? Well, it happens that, in order to judge a fly ball properly, they must adjust their running speed to reach the position where the angular velocity of the head remains constant as eye contact is maintained with the ball as it rises and falls. You might call this planning and scheduling backed up by operations management.

So maybe catching a fly ball is harder to do than it seems. It’s like that with a lot of things

Peter Canellis


Peter Canellis, PhD, PE
Professor of Management
Vaughn College of Aeronautics and Technology
peter.canellis@vaughn.edu

Southwestcargo

IoT expected to reshape aviation industry

Dubai, 14 December 2019

Global spending on the Internet of Things (IoT) is predicted to reach $745 billion in 2019, and like other industries aviation sector is also weighing upon to adopt smart technology to improve passenger experience to airport maintenance and cockpit connectivity.

Furthermore, airport facility automation is one of the benefits of use of IoT, that is expected to deliver the fastest growth in worldwide spending over the 2017-2022 period. Transport is ranked third among the industries that will spend the most on IoT solutions, after manufacturing.

The General Civil Aviation Authority (GCAA) is all set to organise the second edition of Global Investment in Aviation Summit (GIAS) under the theme ‘Enabling global aviation growth through fundraising and key partnership’ at Madinat Jumeirah on 27- 29 January 2020, these topics will be highlighted by experts and professionals attending various segments of the summit.

“Worldwide investment in the aviation sector is very profitable, witnessing an accelerated growth rate of 5% annually. The Global Investment in Aviation Summit will showcase potential investment opportunities as it connects key industry leaders, experts and investors to build new partnerships.” said Saif Mohammed Al Suwaidi, Director-General of the GCAA.

Peter Canellis
Saif Mohammed Al Suwaidi

He also added “The workshops and sessions organized during the summit will represent a great opportunity to raise awareness among international investors and professionals on the latest developments and available investment opportunities in the sector. The details and updates related to IOT applications on most of the operations procedures, the raising of the efficiency of airport management while using the existing capacities and capabilities and avoiding the increase of personnel and ground equipment will be key highlight points discussed by the experts during the summit.”

Smart technology is also used in aircraft maintenance nowadays to rein in costs associated with it and for efficiency besides helping aircraft engineers and maintenance technicians diagnose problems sooner and prescribe the right course of maintenance. Some of the smart maintenance technologies and aviation mechanics trends innovative airlines are adopting include drone maintenance, wearable technology, and predictive maintenance.

Other important area where smart solutions are widely used in the aviation industry is cockpit connectivity, a term used to describe the communication between what’s going on in the cockpit and how the team on the ground is affected by it.

Having aircraft set up with cockpit connectivity helps ground operators know in advance what types of decisions they’ll have to make when the aircraft lands. Decisions made through cockpit connectivity could end up saving the aviation industry an estimated $15 billion annually, not to mention reduce CO2 emissions by 21.3 million tonness annually by 2035.

Drones can improve inspection efficiency by allowing technicians to get a closer, more accurate look at aircraft, reducing maintenance costs while improving aircraft safety. In the future, drones won’t just be used for inspections — they’ll also be used for parts delivery and performing scheduled and automated maintenance.

The future of aircraft maintenance also might leverage wearable technology. For example, Japan Airlines had its engineers wear Google Glass glasses as they worked on the aircraft. The Google Glass sent live images to maintenance specialists who could, in real-time, advise the engineers of what maintenance to perform based on issues they saw from the Google Glass images.

The recently concluded Airport IT conference in Munich also outlined the importance of disruptive technology in the future of airport management and said that aviation hubs will witness more use of wearables, IoT applications and predictive analysis in the future.

At GIAS, participants get the opportunity to listen and learn from experts and professionals what are the latest trends and smart solutions that would determine the future course of aviation industry.

To attend the summit, register on https://www.gias.ae/


Airbridge banner

Air Shipper Forum on Automotive – AIR CARGO INDIA 2020 platform to find solutions amidst downturn challenges.

December 5, 2019

The three-day AIR CARGO INDIA 2020 conference will host an exclusive Air Shipper Forum on Automotive to track the trends and address the concerns shaping the automobile industry. Topics relevant to industry stakeholders will be discussed in great detail at AIR CARGO INDIA 2020, to be held from 25 to 27 February 2020 at Grand Hyatt in Mumbai.

According to the Society of Indian Automobile Manufacturers (SIAM), in the fiscal 2018-2019, over 4.6 million units of vehicles (passenger vehicles, commercial vehicles, three wheelers, two wheelers and quadricycle) have been exported. This is a rise from the nearly 4 million units exported in the previous fiscal.

While the automobile industry in India is currently facing a slowdown, it is an apt time for retrospection of business ideas and policies so as to rev up the profits in the future.

The Air Shipper Forum on Automotive is supported by Frankfurt Airport and will be held on Day 2 (26 February).

Commenting on coming onboard as a supporting partner for the Forum, Max Conrady, senior vice president for cargo, Fraport said: "India is an extremely important cargo market for us, especially when it comes to the automotive sector. We attach great importance to further develop our partnership with India. Therefore, we are very pleased that Air India provides a new flight connection between Mumbai and Frankfurt since 2018 and we are looking to a possible frequency increase in 2020. AIR CARGO INDIA is a considerable event for us, not only to establish and strengthen trade contacts, but also to encourage the exchange with major representatives of the Indian air cargo sector."

Apart from the Forum on Automotive, AIR CARGO INDIA 2020 will also give delegates a chance to engage in discussions on forums in other sectors including Perishables, Pharma and eCommerce.

For Conrady, the conference offers versatile benefits. "Of course, our focus is on the automotive sector, but temperature controlled shipments play an important role, too. Frankfurt is Europe’s leading pharma hub and we are seeing a strong growth in the Indian pharma sector over the last few years. We are convinced that there will be a strong focus on the Indian pharma sector in the next years."

Frankfurt Airport views the Forums as one providing opportunities for future cooperation and growth which will benefit both ends of the trade lane - India and Germany.

The growth in exports coupled with concrete initiatives by the Government of India and the major automobile players in the Indian market are set to cement India's position as a leader in the two-wheeler and four-wheeler market in the world by 2020. AIR CARGO INDIA 2020 will tap into this optimism to pave the way for leaders to meet and deliberate on the overall growth of the industry.

"The Air Shipper Forum is a great opportunity for us not only to present the strengths of our airport as Europe’s leading cargo hub, but also to establish important business contacts, strengthen partnerships and learn more about the latest developments and trends of the Indian cargo sector," concludes Conrady. The last edition of AIR CARGO INDIA witnessed participation from 2,354 visitors, 74 exhibitors and 478 delegates. The 2020 edition is expected to be bigger and better in terms of networking opportunities and knowledge exchange.

AIR CARGO INDIA has onboard Zeal Global Group as the Platinum Sponsor, GMR Cargo as the Gold Partner, Atlas Air as the Exhibitor Lanyard Partner, Skyways Group as the Visitor Lanyard Partner, CargoFlash as the Delegate Bag sponsor and Cathay Pacific Cargo as the sponsor for Cafeteria & Visitor Bags. IBS Software and Unisys have come onboard as Track Sponsors.


South African Airways

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