Aircargopedia Newsblast: February 2022!
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16th February 2022  
 


Dear Air Cargo Professional:

Understand COVID-19 impact on the air cargo industry by Pat from SUNTEC.

Read more about supply chain regressions, predictions, and disasters in this article by Peter Canellis, Professor of Management, Vaughn College.

In more World Air Cargo news, DHL purchases 33 million liters of sustainable aviation fuel from Air France KLM Martinair Cargo .

The top 5 Valentine’s Day gifts that fly on Emirates SkyCargo. dnata significantly enhances cargo offering in Erbil, Iraq.
  DJ Ghosh

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


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COVID-19 impact on the air cargo industry

Only diehard optimists would call the air cargo business a ‘bright spot’ for an aviation industry whose fortunes have been grounded by the global COVID-19 pandemic. Recent data from the International Air Transport Association (IATA) – even amidst small signs of recovery – revealed that global volumes fell 6.6% in November compared to 2019; and international cargo down a comparative 7.7%.

Yet, from an economic standpoint, it is safe to say airports and airlines with cargo-diversified revenue streams beyond traditional passenger-related income have largely managed to avoid the worst of the pandemic’s ravages.

With IATA indicating that global passenger demand and capacity had fallen 70.3% and 58.6%, respectively, over the same period (forward bookings are also off about 79% year-on-year) it is easy to see why cargo’s fortunes could be viewed favourably by observers searching for a silver lining, as the pandemic approaches a second year.

However, news of COVID-19 vaccines available for distribution round the world has buoyed industry practitioners both above and below deck. Cargo carriers with climate-controlled facilities have a business opportunity in the worldwide distribution of billions of doses of vaccines; while passenger airlines believe the vaccines will help to slow the spread of the virus and ultimately remove the current restraints on travel.

In the interim, there are opportunities to prepare for the future, the out-going head of IATA Cargo and the newly appointed director general of The International Air Cargo Association. “Although the COVID-19 crisis has brought a spotlight on air cargo… despite the global lockdown, the global pandemic has also highlighted the urgent need for air cargo to accelerate its digital and sustainable transformation, to develop collaborative business models and speak with a united voice to emerge from this unprecedented crisis more resilient,” he recently told the media. While broadly destructive for aviation, the pandemic has also hastened a global transition to ecommerce in a way that is destined to benefit all providers of cargo transportation. According to one recent estimate from IBM, the pandemic may have accelerated the global transition to ecommerce by five years.

Some freight-focussed aviation facilities, such as East Midlands Airport (EMA), are able to take advantage of the market shift; as ecommerce volumes accelerated during the pandemic, freighter movements through the airport were also boosted by the sudden decline of cargo space offered by far fewer passenger flights.

In a recent interview with the Head of Cargo at EMA, (part of the Manchester Airport Group), stated that EMA saw a 10% bump in freighter movements at the end of March 2020 as Britain and other EU countries scrambled for medical equipment. At the height of the pandemic’s first wave, it saw a 20% increase in the volume of goods being handled as weekly flights from China and Hong Kong - as well as via Moscow into UK – transformed the airport’s hub status.

EMA was previously seen as a cargo hub for the U.K., but COVID-19 has transformed it into a European cargo hub. EMA and the 90 other businesses that comprise its onsite cargo-related ecosystem employ about 9,500 people; global integrators such as DHL, UPS and FedEx, as well as the Royal Mail, all have a presence at the airport, making it the U.K.’s second largest air cargo operation behind London Heathrow Airport. The pandemic helped operators to grow the airport’s cargo ecosystem (there have been nights where they were handling over a million parcels) and prepare for the future. Outside its existing business cluster, new recognition for EMA’s cargo capabilities have grown amongst foreign manufacturers, which bodes well for a further expansion of its ecosystem.

EMA cargo managers already knew that online ordering would shape the industry’s future, but the pandemic provided a snapshot of what that meant for local freight transport providers, and that there is no turning back. In general, the air cargo business in Europe, which traditionally produces just under a quarter of the world’s total volume, has been significantly weakened by the pandemic; total demand was off 13.4% year on year in November 2020, according to IATA’s latest data.

A similar decline was found in the Asia Pacific region, the world’s biggest market, where demand fell a comparative 10.6% in November. The Middle East, which represents about 13% of the global market, faired somewhat better in November when volumes fell by just 2.3% year on year.

Pat Praveen
SUTEC LLC.
suntecrm.com

For any questions, please contact Pat at pat@suntecrm.com
For more info please visit www.suntecrm.com


Transport Logistics

Regressions, Predictions, and Disasters

Supply networks need to toughen up

In his superb book, “Antifragile” 1 , author Nassim Nicholas Taleb explains that systems which exhibit “antifragility” are different from those which are merely “resilient”. Resilient systems, after being stressed, get back to where they were before the various stressors were applied (think trees still standing after a hurricane). Antifragile systems, in contrast, actually improve after the stressors that affected their operations were removed (e.g., weak muscles, injured by trauma, come back stronger after exercise and more able to meet future stressors).

Supply networks, as designed today, are arguably the most fragile systems in human history. The figure below illustrates the point.

Peter Canellis


In a previous posting, I cited Professor Scott Page’s explanation of how “complex” systems must be distinguished from “complicated” systems. The most salient distinguishing factor is that complex systems consist of independent agents whose independent actions elicit some type of responsive action from the other agents.

Can you imagine a system with more complexity and, accordingly, more exposure to severe disruption that that depicted above?

Meanwhile, efforts continue to predict future scenarios based on historical economic behavior. 3 All well and good, but projections, based as they always are on regressions, (i.e., past events and behavior) can get us just so far. We need to protect against the outsized unexpected event or events that have outsized consequences.

A “healthy” person still gets sick. The difference between a healthy person and one who isn’t is that:
• Illnesses occur less frequently
• When illnesses do occur, they are less severe
• The recovery time for any illness episode is short, AND …
• The person is left in stronger shape than before the illness took hold

Most of current supply chain literature focuses on when and how the worldwide supply network will “get well”. Maybe it’s time to think about how it can “get tough” so that when disruptions of whatever kind occur they do so less frequently, are less severe, dissipate more rapidly, and leave us all stronger to face the next inevitable assault on worldwide prosperity.

As Drs.Taleb and Page explain, complex systems adapt heuristically (i.e., by trial-and- error from the bottom up) without theoretical macro “silver bullets” coming along to save the day

Yours in Supply Chain,
Peter Canellis

Peter Canellis

Regards,
Peter Canellis
Professor of Management
Vaughn College of Aeronautics and Technology


Air Canada Cargo

DHL purchases 33 million liters of sustainable aviation fuel from Air France KLM Martinair Cargo

DHL Global Forwarding, the air and ocean freight specialist of Deutsche Post DHL Group, has signed an agreement with Air France KLM Martinair Cargo (“AFKLMP”) for the purchase of 33 million liters of sustainable aviation fuel (“SAF”). The three-year cooperation represents one of the most significant SAF purchases in the air cargo industry. This initiative is part of DHL’s Sustainability Roadmap, which aims to spend €7 billion on environmentally friendly technologies by 2030 and reduce all logistics-related emissions to zero by the year 2050.

In announcing the agreement, Tim Scharwath, CEO DHL Global Forwarding Freight stated, “With our Sustainability Roadmap, we have set ourselves ambitious goals on our journey towards zero emissions. Sustainable fuels are a fundamental part of our efforts. That is why we have committed to covering at least 30 percent of air freight and ocean freight fuel requirements with sustainable fuels by 2030. Our partnership with AFKLMP will help us achieve that goal. At the same time, it serves as another example of the success of our ‘book & claim’ system, which ensures that reductions in Scope 3 emissions are attributed to our customers. We must all work together to accelerate the transition to a low-carbon – and ultimately zero-carbon – emissions transport sector. After all, we only have one planet.”

The collaboration underpins DHL’s efforts to support sustainability, recognizing the important role SAF serves in decarbonizing the air freight industry. The companys expect the partnership to save more than 80,000 tons of carbon dioxide emissions by blending SAF with regular aviation fuel in AFKLMP flights. The higher proportion of SAF, the lower the carbon emissions. DHL will allocate the environmental benefits to its customers, thereby helping them reduce their carbon footprint.

Adriaan den Heijer, Executive Vice President of Air France KLM Cargo and Managing Director Martinair stated, “The Air France KLM Martinair Cargo teams are strongly committed and feel responsible for creating a sustainable future for our industry. This deal is a great opportunity to accelerate our joint sustainability efforts. Sustainable aviation fuel (SAF) has a lot of potential to reduce CO2 emissions and we are delighted to collaborate with our strong, long-term partner DHL Global Forwarding on this journey to greener logistics and transportation in the coming years.”

DHL’s partnership with AFKLMP will work similarly to earlier collaborations, with customers benefiting from the partnership through a ‘book and claim’ system. When purchasing a DHL service, customers will be able to select the sustainable option. The related emissions reduction will be credited to their account. Since it is nearly impossible both technically and logistically to physically track SAF from production to the airplane, this “book and claim” method offers a digital accounting system to track and transfer emissions reductions from sustainable fuels across the value chains.

Peter Canellis
Kevin Pflug


Airbridge banner

Love is in the air: The top 5 Valentine’s Day gifts that fly on Emirates SkyCargo

Dubai, UAE, 11 February 2022

In the three seconds that it would take for you to read this sentence, approximately 10 pieces of cargo would have been processed through Emirates SkyCargo’s hub in Dubai. The air cargo carrier transports more than 250,000 pieces of cargo each day, including vital commodities that touch people’s lives – from life-saving medicines to tasty and fresh produce from across the world. Every year, during the weeks leading up to Valentine’s Day on 14 February, Emirates Skycargo also transports some of the most popular gifts offered for Valentine’s Day.

"Emirates SkyCargo is an important facilitator of cross-border trade and commerce across the world. However, on a more individual level, we also play a role in spreading joy in people’s lives. During the two or three weeks leading up to Valentine’s we always see a sharp increase in the transport of popular gifts for Valentine’s Day such as flowers, perfumes and chocolates. We take our commitment to delivering smiles around the world very seriously," said Dennis Lister, Emirates VP Cargo Commercial Development.

Emirates

Wondering what to buy your Valentine this year? Here are the top five commodities that are transported on Emirates SkyCargo for Valentine’s Day:

Flowers: Flowers and roses in particular are by far the most popular gifts for Valentine’s Day and in the month of January 2022 more than 3,000 tonnes of flowers were flown by Emirates SkyCargo freshly harvested from farms in Kenya, Ecuador, Colombia, Ethiopia and many other countries. A majority of the flowers are first flown to the Netherlands, home to the world’s largest flower auction market, and then redistributed to other global markets.

Chocolates: Another universal favourite, chocolates are popular gift options, not just for Valentine’s Day but for other celebrations as well. In 2021, Emirates SkyCargo transported more than 150 tonnes of premium chocolate around the world during the months of January and February with a sharp surge during the week before Valentine’s Day. Brussels, Zurich and Düsseldorf are the main European points where chocolates are loaded on Emirates’ flights ahead of Valentine’s Day. Closer to our home, Beirut is also a major exporter of chocolates catering to markets in the Middle East.

High-end perfumes: Perfumes are also in high demand as gifts in the weeks leading up to the big day. Over the last week of January alone, Emirates SkyCargo moved more than 200 tonnes of high-end perfumes from cities in France, Spain, Switzerland and the Netherlands to the rest of the world, just in time to stock retail shelves ahead of Valentine’s Day.

Watches, Jewellery: High-end watches, jewellery and accessories are also favoured gifting options for special occasions. Between mid-January and early- February there is a marked increase in the volume of high-end watches and other accessories that are shipped on Emirates’ flights. Zurich, Geneva and Hong Kong are the main points of origin for watches that are then distributed to the rest of the world. Last year, Emirates SkyCargo transported more than 1,200 tonnes of high end watches in January and February.

Electronic gadgets: Last but not the least electronic gadgets and especially items such as mobile phones are also in high demand as gift items for Valentine’s Day with shipments witnessing a rush in the last few days to Valentine’s Day. In the two week period leading up to Valentine’s Day, Emirates SkyCargo flew more than 1,500 tonnes of electronic gadgets from manufacturing destinations in Asia to consumer markets across the world.

Emirates SkyCargo is the air freight division of Emirates, offering cargo capacity to customers over a global network of more than 140 destinations across six continents.


Turkish Cargo

dnata significantly enhances cargo offering in Erbil, Iraq

Implementation of digital cargo management system ‘OneCargo’ to deliver significant benefits for partners

Erbil, Iraq, 8 February 2022


dnata, a leading global air and travel services provider, achieved an important milestone in Erbil. The company implemented the ‘OneCargo’ system, digitizing processes and maximizing efficiencies across its cargo operations in Iraq. The advanced tool, which dnata plans to launch globally, is expected to deliver significant commercial benefits for customers.

OneCargo automates key business and operational functions, including safety and quality monitoring, reporting and ULD management, with an integrated, cloud-based platform. AI-driven tools and analytics provide enhanced visibility on sales and business performance, allowing customers to match real-time demand with available capacity for maximum profitability. In addition, OneCargo eliminates all redundancies and manual check sheets, substantially improving operational efficiency.

dnata

Having launched the system in Iraq, dnata plans to gradually implement OneCargo at additional stations, including airports in Pakistan, Switzerland, UAE, USA and Zanzibar (Tanzania) across its extensive global cargo network. By 2023, OneCargo will have a user base of over 2,000 staff members across 10 stations in six countries, interfacing seamlessly with a host of other system applications within the IT landscape of the business.

David Barker, dnata’s Divisional Senior Vice President for Airport Operations, said: "The implementation of OneCargo in Erbil is a major milestone which paves the way for the global launch of this advanced digital solution. In addition to improving operational and commercial performance, OneCargo will help us drive synergies across our international network and ultimately offer more value to our customers.

"We continue to invest in cutting-edge technologies, advanced infrastructure, and process improvement to consistently deliver the same high level of safety and quality at every dnata station across the globe."

Over the past years, dnata has continued to make strategic investments in its operations to further enhance its cargo offering. This included the opening of new, state-of-the-art cargo facilities in Manchester (UK), Karachi and Lahore (Pakistan), and additional cargo capacity and infrastructure in Brussels (Belgium), Sydney (Australia) and Toronto (Canada). The company has also announced that it would invest over €200 million in its operations in Amsterdam (The Netherlands) and operate one of the world’s largest and most advanced cargo facility at Schiphol Airport. In addition, this March dnata will open the second phase of the dnata City East project at London Heathrow (UK).

As one of the world’s leading air services providers, dnata provides quality and reliable ground handling, cargo, catering and retail services at over 120 airports in 14 countries.


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