Aircargopedia Newsblast: July 2022!
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18th July 2022  
 


Dear Air Cargo Professional:

Understand the fuel price effect on Logistics - by Pat from SUNTEC.

Read more about Supply Chain in this article by Peter Canellis, Professor of Management, Vaughn College.

In more World Air Cargo news, The transport logistic Americas & air cargo forum trade show will be held Nov. 8-10, 2022, in Miami.

Emirates SkyCargo takes delivery of new freighter to ramp up capacity and frequencies.
  DJ Ghosh

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


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Fuel Price Effect on Logistics

Price fluctuation in the market for fuel has a constantly evolving effect on the logistics industry. Rapid increases in the price for fuel can have a delayed and devastating effect on freight management companies, and a sudden fall could result in short-term boosts in profit and a surge of competition within the market to provide consumers with the lowest price.

When Oil Prices Rise
As the cost of fuel rises, carriers are forced to raise prices or take losses. In turn, the cost of fuel does not only effect the logistics company, but also the shipper and the profit source of the shipper as well. It is an outward domino effect: If it costs more for the freight carrier to transport the freight, the shipper is going to be charged more to make up for this. If the shipper is going to be charged more to transport the freight, the receiver is going to be charged more to make up for their added costs.

The preferred means for transportation shift as it becomes less and less economically viable to move freight using fuel inefficient methods relative to the market. For instance, if the cost of rail usage is low and fuel costs are high, a logistics company may ship more freight via intermodal carriers than over the road trucks.

This means the products are going to be sold to consumers at higher costs to make up for the higher transportation and fuel costs. Basically, higher fuel costs cause product inflation, and affect every aspect of production transportation along the way.

The bottom line: higher fuel costs mean a higher price passed on to the consumer.

When Fuel Prices Fall
When the cost of fuel falls, the reverse generally applies. The savings are passed on to the consumer in the form of lower prices, as expected. Demand for shipping services rises as the cost decreases. Sales and profitability get a boost and encourages growth. Logistics companies who provide the greatest cost savings can redirect efforts from mitigating the high costs of fuel to working to increase the speed of service and improve other aspects of their operations.

The bottom line: lower fuel costs mean a lower price passed on to the consumer.

3PL Companies Must Adapt to Fluctuations in Gas Prices
With the continual volatility in the price for crude oil, logistics companies are forced to restructure or strategize their operations to ensure continued profit and avoid any potential setbacks. The effects on the logistics industry and the rise in freight transportation costs have caused some companies to start keeping more inventories on hand, minimizing the amount of transportation necessary. Less often, larger bulk shipments can be more cost effective then frequent smaller shipments. This may save the shippers and receivers money but causes yet another negative impact on the logistics industry. Lack of shipment frequency increases the number of empty miles driven by a carrier. The more stops a carrier can make in a given route the more profitable the trip.

Fuel Costs Logistics Effects: Rapid Change
Another profit challenging effect of fuel costs is rapid change and price volatility. Generally, logistics companies generate fuel surcharges based on the fuel prices of the previous week. When the cost of fuel rises rapidly, there is a lag between the price of fuel and the fuel surcharge rate. This lag has a huge impact on the trucking company’s earnings. However, when the cost of fuel decreases rapidly the opposite is true, and a higher profit is made. Unfortunately, the latter occurs much less often.

Fuel costs and their effects are a permanent part of the logistics industry. It makes competition prominent among logistics companies. Everyone wants to have the lowest rates, while still making adequate profit.

Pat Praveen
SUTEC LLC.
suntecrm.com

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


Supply Chain: A “What’s That?” No Longer!

When we acknowledge Complexity and learn how to deal with it

Results of a recent poll taken by APQC (American Productivity & Quality Center) and published in the Supply Chain Management Review supported the not-at-all- surprising idea that events of the past two years have considerably increased awareness of supply chain issues among people who do not work in the industry . Supply chain disruptions, exacerbated by the pandemic, have affected the lives of just about everyone on the planet!

Equally unsurprising were results indicating that supply chain professionals have more concerns about the performance of global supply chains in the future than those people who do not work in the industry. The more of a process expert you are in any field, the more you know about what can go wrong, how that might happen, and how bad it can be.

What factors then, more specifically, do those in the industry appreciate more than then general public that create concerns about future supply chain performance? Do they include:

• Supplier relations?
• Customer relations?
• National and international legislation?
• Geopolitical disruptions?
• Labor relations?
• Environmental concerns?
• Financial markets?

To a greater or lesser extent, depending on specific circumstances, I think I’m on firm ground stating that the answer is “Yes” to all of the above.

I was once asked: “What’s so difficult about getting product from Point A to Point B?”

I just have a feeling that I’ll never be asked that question again.

Yours in Supply Chain,
Peter Canellis

Peter Canellis

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


Emerging as the largest logistics trade show in the USA

15 percent more space for more than 200 international exhibitors. The transport logistic Americas & air cargo forum trade show will be held Nov. 8-10, 2022, in Miami and is the largest logistics trade show in the world this year. Around four months before the start of the event, bookings with 75 percent are above plan. Messe München has therefore expanded the exhibition space together with cooperation partner TIACA (The International Air Cargo Association).

On the nearly 11,000 m² of exhibition space, from top 10 global players to startups, around 200 companies have booked or announced their presence at the show. Well-known logistics brands such as Ethiad Cargo, the Korean Air Cargo Hub Incheon, Miami Airport, FedEx or Rhenus Logistics are coming. Dr. Robert Schönberger, Head of transport logistic exhibitions at Messe München is satisfied: “This year we will have the largest logistics trade fair event—not only in the USA—but probably worldwide. Our cross-modal supply chain approach is working. Shippers, logistics and other service providers are offering the exhibition visitors building blocks they need for stable supply chains. In the long term, we see the new show as a supply chain platform for Americas.”

Intermodal supply chains
Suppliers from around the world will gather at the Miami Beach Convention Center. Exhibitors around the air cargo forum, founded by TIACA, form the foundation. Logistics service providers, logistics-related services and suppliers for IT and digitization complete the spectrum. The focus will be on intermodal links with Europe and Asia as well as the North-South axis from Canada to Latin America. The exhibition expects more than 5,000 participants. Partner organizations including Americas Alliance, Neutral Air Partner or Miami-Dade Beacon Council bring forwarders and shippers from the region and Central America to the show. A high-profile conference program is being planned.

International Air Cargo
As the world's largest hub for air cargo between North and South America, transport logistic Americas & air cargo forum are a homecoming for Miami International Airport (MIA). The hub imports fish, flowers, fruits and vegetables and exports pharmaceutical, engineering, automotive and ICT products. Like exhibitor Incheon International (ICN) of South Korea, MIA ranks among the top 10 cargo airports worldwide. Together with fourteen other airports in the U.S., Singapore, Canada and Europe to date, they are showcasing air cargo solutions. The strong north-south axis is equally evident in the airlines. Across the Americas, exhibitors from Canada to Brazil are on hand, including AerCaribe and Latam. Ethiad is one of the air cargo brands presenting cargo flight networks via Asia, Africa and Europe. From Germany, Eurocargo and Munich Airport have already booked their space.

Fast market access
“transport logistic Americas is a perfect platform for us to engage with potential clients and network with carrier partners throughout the Americas. With our regional headquarter in Miami we intensify and establish contacts for stable supply chains via the shortest routes across all modes of transportation. Participating in this trade fair is a great opportunity to showcase our world-class logistics services and our strong presence in the Americas,” explains Jörn Schmersahl, CEO of Rhenus Air & Ocean Americas. Many of the exhibiting logistics companies and service providers for logistics-related services, IT and equipment, as well as the trade fair visitors, come from Florida and the neighboring Central American countries. The firmly booked space is occupied in part by joint stands for international digital startups, pavilions for companies from Germany, Italy as well as various associations. "Stable supply chains are more important than ever. Miami is exactly the right place as a hub between North and South. From global players to startups, we see a lot of potential for companies from Central and South America. In the long term, the fair will occupy an important place in the global event landscape. We are confident that participating at the air cargo forum Miami and transport logistic Americas, will drive direct value to our members and worldwide customer base," says Christos Spyrou, CEO & Founder of Neutral Air Partner, a global network of leading air cargo architects and aviation specialists.

Emirates SkyCargo takes delivery of new freighter to ramp up capacity and frequencies

Dubai, UAE, 05 July 2022

Emirates SkyCargo, a leader in the global airfreight industry, took delivery of its latest Boeing 777-F to boost its fleet capacity and cater to the phenomenal growth in the industry.

Emirates’ freight division has seen significant increase in cargo loads across its products, including pharma and fresh produce. In 2021-22, annual tonnage carried crossed 2.1 million, an increase of 15 percent, with transport of perishables crossing 260,000 tonnes, and both pharma and valuable goods each growing by 17 percent.

Nabil Sultan, Divisional Senior Vice President Emirates SkyCargo said: "The new freighter will help increase our capacity and boost our ability to deliver vital goods, and facilitate trade globally. Despite the challenging headwinds this year, the air cargo industry is booming and we’ve been flat out since the pandemic began. Emirates SkyCargo will continue its journey as one of the world’s largest and best air cargo airlines by investing in our fleet, our global network, technology, and world-class logistics infrastructure at our Dubai hub and beyond."

Emirates

Most global markets are experiencing an increase in demand, including China. Emirates SkyCargo will now serve China with an additional four freighter flights every week. From this week, Shanghai will be served with six direct flights, Beijing with two and Guangzhou with four, adding more than 400 tonnes of cargo to and from China.

Plans are also afoot to increase frequencies to Hanoi and Sydney with direct services. Additional frequencies to Nairobi are also earmarked to be part of a freighter multi-stop route from DWC to Eldoret International Airport in Kenya. The flight then hops to Nairobi before heading north to Maastricht, Netherlands and then to Zaragoza, Spain before the 777F returns home to DWC. At each stop, the freighter unloads and reloads with various types of cargo including, flowers, textiles and pharma.

The brand new freighter, A6-EFU, will maintain the fleet total at 11 Boeing 777Fs because A6-EFG went back to its lessor last week.

Emirates SkyCargo’s Boeing 777-F and 777 Mini-Freighter aircraft have flown nearly 950 charter flights in the last 12 months, while continuing to serve the airline’s over 130 passenger and 11 dedicated freighter destinations. Emirates SkyCargo also offers shippers cargo belly-hold space in the airline’s passenger fleet of close to 210 wide-body Boeing 777s and Airbus A380s.

Plans are also already underway to convert 10 passenger 777s into freighters, boosting the cargo fleet to 21 by the end of 2026.

Emirates SkyCargo offers a portfolio of solutions designed for the unique requirements of its varied customers. Whether it is perishable cargo such as food items and flowers; certified cool-chain handling for pharma products; valuables and technology items; cars and industrial items; champion horses and domestic pets; mail and courier items; or general cargo, the freight division has the experience and capabilities with specialised solutions to meet the needs of shippers.

Emirates SkyCargo was the launch customer for the Boeing 777-F and the aircraft has been at the heart of the carrier’s operations since 2009. The aircraft’s range and payload capabilities allow time and temperature sensitive shipments to be transported rapidly and efficiently from origin to destination.


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