Aircargopedia Newsblast: May 2021!
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18th May 2021  
 


Dear Air Cargo Professional:

How Artificial Intelligence and remote work is helping shape the T&L sector. Read this article by Pat from SUNTEC.

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

In more World Air Cargo news, Emirates SkyCargo completes one year of transporting urgently required cargo on passenger seats and in overhead bins.

Liege Airport bolsters its environmental strategy. ATSG reports first quarter 2021 results.
  DJ Ghosh

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


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How Artificial Intelligence and remote work is helping shape the T&L sector

“Artificial intelligence and remote work are helping to reshape the transportation logistics sector”, said Pat Praveen of Suntec, an AI company in North America.

“I think we are going to get back to traveling again,” Pat said. “I think it’s human nature to want to have that interaction with people. We want relationships, and we all operate in an industry where relationships are king.

“I think that’s true across the board and in my experience related to the transportation logistics business. It’s a very people-oriented operation; a lot of small businesses, self-made businesses, and these are not relationships that can flourish in a Zoom window.”

Pat noted that while there ultimately will be a shift back to normalcy, many workers who can stay home are likely to. “I don’t think that’s going to reverse easily,” Pat said. “I think for that component of our work life, all of us as business owners, managers, leaders are going to have to accept. I don’t think the workers are coming back in huge numbers like the pre-COVID times. I think this is going to be a huge trend.”

He noted that one area in which in-person work is essential is how businesses deal with customers and business partners. While certain workers can be productive working from home, he doesn’t believe a company can properly build relationships with customers through just teleconferences.

“That, I think we have to get back to,” Pat said. “I look forward to it. I know in the trucking industry, there’s a few of the big trade organizations that are already starting to say, we’re going live again. So we’re seeing some of this happening, like a timeline around fall of 2021.”

Pat believes that when it is possible for in-person workplace communication to return, it will come roaring back. He thinks people are eager to get back to normal and interact.

Artificial Intelligence is another trend that has massive implications for the transportation sector as well as the greater economy. Pat explained it’s mainly about software analyzing volumes of data and discovering better ways to use it.

“Here’s a short list of the categories where AI is and will continue to be highly effective,” Pat said. “Think about automation. That’s the first one. Automating tasks that are repetitive. Humans are not good at that.

“We get distracted easily. We get bored doing almost anything that’s an ongoing, repetitive, over-and-over again task. AI owns that and will continue to.”

He said another area is risk reduction. AI’s ability to look at huge patterns of data will help people mitigate risk by removing human error from the equation as much as possible.

Pat contends this will benefit the transportation sector.

“It’s especially relevant in the trucking industry, for example, as we look at the ongoing and growing trends for crashes and fatalities,” he said. “I think AI is going to play a big role in that area of risk reduction, human errors and other categories.”

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


Transport Logistics

“How does Paris Get Fed?” and “Do we Have Enough Microchips for New Car Production?”

The 19th -century French economist, Claude-Frédéric Bastiat, askedd the first question 1 . His answer could be found in the concepts developed and articulated by Adam Smith, the Scottish economist and philosopher who spoke of an “Invisible Hand” that orchestrates the forces of supply and demand for all goods and services to “make it happen”.

Some 150 years later, the second question has undoubtedly been asked by probably more than one senior executive of a car manufacturing operation.

We may be tempted to say that both objectives (i.e., putting food in people and components in cars) are essentially the same and that, after all this time, Smith’s explanation, based on theory (Economics) and practice (Supply Chain Management) has withstood the test of time. While this is largely correct, there are three major factors that require Smith’s model to be modified in order to explain the current situation. Those factors are:

• Nature of Risk,
• Supply Chain Complexity, and …
• Cross-Industry Supply Chain Competition

Nature of Risk
The pandemic certainly changed our world; even in ways that we may not yet fully understand. While the consequences of a similar future event are (as we have seen) enormous, the probability of such an event occurring is very small. When this is the nature of risk for a type of event, (i.e., high consequence / low probability), the political will to invest in its mitigation tends to be weak.

Supply Chain Complexity
It has been estimated that 2.5 (two-and-one-half) million cars that would have been built will not be built.

New car production scaled down in response to the health concerns brought about by the pandemic, and was mirrored by the drop in demand resulting from providing the limited number of buyers for new cars a limited opportunity to evaluate them because of social distancing.

The drop in demand for new cars drove up demand (and cost) for used cars. However, the supply of used cars provided by those who were trading them in for new cars was evaporating. This resulted in yet higher prices for used cars.

Meanwhile, computer chips were being channeled into consumer electronics where demand was exploding. As demand for new cars began to regenerate, the shortage of chips for automobiles has become a critical factor in meeting that demand.

With automotive supply chains already highly globalized, it’s no surprise that the high- consequence pandemic destabilized an inherently complex supply chain.

Cross-Industry Supply Chain Competition
The “driver” of a particular industry’s supply chain characteristics are the “manufacturers” (or “assemblers” as in the automotive industry). For example, despite broad supply chain commonalities across industries, it’s obvious that supply chains are structured very differently depending upon whether you are a General Motors (Automotive), The Gap (Fashion), Merck (Pharmaceuticals), or Samsung (Consumer Electronics). These very different supply chains reflect the very different inputs and processes that contribute to the creation of very different products.

The various “driver” companies within each industry compete with each other via quality, cost, and time-to-market for new products. Competitive focus for each “driver” company is supported by its respective supply chain. This “intra-industry” competition is what we expect in the normal course of business competition.

In contrast, the current shortage of new automobiles is partly a result of cross-industry supply chain competition: specifically competition between the automotive and consumer electronics sectors for computer chips that are provided to both industries from common suppliers.

The More Things Change …
…The More They Remain the Same”, or so the saying goes.

In 1961, Jay Forrester posited the now famous “Bullwhip Effect” to explain misalignment between supply and demand 3 . We could say that Smith explained the supply-demand balance, Bastiat confirmed it, Forrester demonstrated how it could be destabilized, and we now live in a time that has shown us all too clearly how it could be further destabilized by extraordinary events


Peter Canellis

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


Airbridge banner

Emirates SkyCargo completes one year of transporting urgently required cargo on passenger seats and in overhead bins*

Dubai, UAE, 6 May 2021

Emirates SkyCargo is marking the first anniversary of loading urgently required PPE, related supplies and other vital cargo on the seats and inside the overhead bins of its Boeing 777-300ER passenger aircraft.

Responding to the pressing demand for transporting PPE during the first wave of the COVID-19 pandemic in late April 2020, the freight division of Emirates adjusted its operating model to load select goods inside the aircraft cabin on passenger seats and in overhead bins to make additional room for urgent cargo on its flights.

Over the course of one year, the air cargo carrier has now operated more than 3,100 flights with cargo on seats and in the overhead bins transporting more than 11,000 tonnes of vital cargo, equivalent to cargo transported on 800,000 aircraft seats. Emirates SkyCargo continues to witness a significant demand for the transportation of PPE and other cargo inside the aircraft cabin.

emirates

In order to safely load cargo on the seats and inside overhead bins in a passenger aircraft, Emirates SkyCargo had to rapidly conduct a safety risk assessment and develop a set of processes and procedures to instruct both the team in Dubai as well as ground handling partners across Emirates SkyCargo's network outstations on the most efficient and safe way to load and secure cargo inside the passenger cabins. The team also developed a smart calculator application that allowed global teams to calculate optimal loading capacity inside the cabin of the aircraft.

The procedures developed also specified the maximum weight and dimensions of individual packages as well as the types of cargo that could be permitted inside the cabin and additional safety instructions. For example, all perishable cargo packaging for loading on seats and in bins have to include an adequate internal absorbent layer.

Emirates SkyCargo also introduced a special covering for the passenger seats in its Boeing 777-300ER aircraft in order to prevent any accidental damage to the interiors of the aircraft, such as personal entertainment screens.

PPE and other medical supplies tend to be the most common cargo transported on aircraft seats and inside the bins. The nature of these items allow for smaller individual boxes facilitating easier handling and loading inside the aircraft. Other general cargo including garments and clothing, dry food, dental supplies and sporting goods have also been transported on seats.

Emirates SkyCargo has continued to serve as an important global connector of urgently required goods and supplies during the COVID-19 pandemic through its rapid and flexible approach and by working closely with its customers. Currently the cargo carrier connects more than 135 cities across six continents with its weekly scheduled cargo flights.

*not including cargo loaded on the floor of modified Boeing 777-300ER passenger aircraft.

Air Canada Cargo

Liege Airport Bolsters Its Environmental Strategy

Grâce-Hollogne, 4 May 2021

On 4 May 2021, Liege Airport, Sowaer, and Skeyes signed, with the presence of Mister Jean-Luc Crucke, Minister of Walloon Airports, a cooperation agreement with FEDEX, ASL Airlines Belgium, CAL Cargo Airlines, and Challenge Airlines with a view to reducing the environmental impact of airline operations effectively and sustainably.

As part of its environmental strategy, Liege Airport is committed to a Collaborative Environmental Management (CEM) partnership.

This concept, initiated by Eurocontrol with the support of ACI Europe, allows those involved in an airport’s operations to work together to find collaborative environmental solutions.

“Stakeholders have been meeting quarterly since September 2020 to come up with joint solutions to environmental challenges in and around the airport”, said Frédéric Jacquet, CEO a.i. of Liege Airport. “This collaboration will allow us to take a broader range of measures to limit the impact on the environment. As a Health Airport, we take our environmental responsibilities very seriously, and this is why integrating the environmental dimension is a key element in our development strategy.”

The main objectives of this working agreement are to:
• develop a common environmental strategy and joint action plans to minimise environmental impacts (noise, local air quality, and greenhouse-gas emissions);
• promote a better understanding of the “airport - airlines - air navigation service provider” network;
• support the sustainable growth of the airport;
• support the airport's ISO 14001:2015 certification and its participation in the Airport Carbon Accreditation programme.

"These changes are essential for the future of our airports, which will no longer be able, tomorrow, to continue to develop in the same way as yesterday”, explained Minister Jean-Luc Crucke. “Minimizing impacts while maximizing performance is a wonderful challenge! Wallonia, with its airports, must continue to develop innovative projects in order to meet everyone's legitimate expectations, which are more respectful of the environment and the quality of life".

This initiative is fully in line with Liege Airport’s environmental policy, in particular its approach to reducing noise pollution and its strategy for cutting CO2 emissions. Liege Airport is committed to reducing its own CO2 emissions to zero by 2050—without resorting to a compensation system.

South African Airways
ATSG Reports First Quarter 2021 Results

WILMINGTON, OH, May 5, 2021

Fifteen More Boeing 767-300 Freighter Leases Since March 2020, including Five in 1Q 2021


Air Transport Services Group, Inc. (Nasdaq: ATSG), the leading provider of medium wide-body aircraft leasing, contracted air transportation and related services, today reported consolidated financial results for the quarter ended March 31, 2021.

ATSG's first quarter 2021 results, as compared with the first quarter of 2020 include:

• Customer revenues down $13.2 million to $376.1 million. First-quarter ACMI Services revenues were down $37.0 million due primarily to reduced operations for passenger and combi services, including fewer special charter operations, versus the early stages of the pandemic last year. Aircraft leasing revenues from external customers for the quarter increased $14.1 million from fifteen new leases of Boeing 767-300 freighters since March 2020, including five in the first quarter this year.

• GAAP Earnings from Continuing Operations were $42.3 million, or $0.71 per share basic, versus $133.7 million, or $2.27 per share basic. The unrealized effect of the quarterly re-measurement of the values of financial instruments, including warrants, increased ATSG's first-quarter after-tax earnings by $7.3 million and $108.1 million for 2021 and 2020, respectively. Warrant gains stemmed primarily from a decrease in the traded value of ATSG shares during the quarter. Government grants intended to mitigate pandemic effects on ATSG's passenger airline operations added $21.6 million, or $0.29 per share, to ATSG's first-quarter 2021 net income

. • Adjusted Earnings from Continuing Operations (non-GAAP) decreased $14.1 million to $15.2 million. Adjusted Earnings Per Share (non-GAAP) were $0.19 diluted, down $0.21. Adjusted Earnings from Continuing Operations and Adjusted EPS exclude $21.6 million of government grants recognized in 2021 and other elements from GAAP results that differ distinctly in predictability among periods or are not closely related to operations. Adjusted EPS for both periods are based on share counts that reflect Amazon's decision in March 2021 to exercise a portion of its ATSG warrants.

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