Aircargopedia Newsblast: November 2020!
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18th November 2020  
 


Dear Air Cargo Professional:

Learn more about the demand for aviation services with this informative article written by Peter Canellis, PhD, PE, Professor of Management.

Read this article by Samrat Barari, CEO, Sunflower Technologies to find out how the Pharmaceutical industry faces challenges for the delivery of COVID-19 vaccines.

In more World Air Cargo news, Baltic Exchange creates Air Freight Index, ushering in new era of hedging and derivatives trading for Air Cargo Sector. Emirates SkyCargo introduces Airbus A380 ‘mini-freighter’ charter operations.

dnata named ‘Ground Handler of the Year’ for the 6th year. Liege Airport received the ‘Best Cargo Hub of the Year’ Award
  DJ Ghosh

D.J. Ghosh
President & Publisher
AIRCARGOPEDIA
WWW.AIRCARGOPEDIA.COM
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Pharmaceutical industry challenges for the delivery of COVID-19 vaccines

When will a COVID-19 vaccine be ready, and how will it be distributed? That’s the question on everyone’s mind. The time and expertise involved in developing and testing the vaccine is one thing, but the logistical challenges of successfully distributing it worldwide is another.

The industry is gearing up to immunize at least 70% of the global population, and the supply chain process for this gargantuan task is complex, requiring properly functioning storage/packaging, cold chain transit, shipping and storage solutions. Given the high number of transfers from the manufacturer to the end customer, that means any kind of logistics or cold transport problems could be disastrous.

Not only this, we’ve seen complex issues with proper vaccine storage and handling—both at rest and in motion—as a result of COVID-19, such as condition requirements, counterfeits, theft and shipment diversions.

This process is much less complex than say the transport of PPE like medical gloves or masks. If a shipment of masks sits at an airport ramp for three days, it won’t be spoiled, but globally transporting a COVID-19 vaccine requires detailed operations planning, sophisticated transportation equipment and strict temperature controls. To remain viable, a vaccine needs to be maintained at 2-8 degree Celsius throughout the shipping process. Any kind of temperature excursion from this range could result in an entire shipment of spoiled vaccines. Unfortunately, this is much easier said than done.

Pre-COVID, cold chain failures cost biopharma $35 billion dollars every year from failures in temperature-controlled logistics. W.H.O reports that up to 50% of vaccines are wasted annually due to improper temperature management and a lack of logistics’ ability to support the end-to-end cold chain. This spoilage rate could mean a billion COVID-19 vaccines could be wasted if not properly handled.

A successful global vaccination will require a sophisticated approach. Fortunately, there are some supply chain strategies and new technologies that can be leveraged in doing so, including:

ACHIEVE END-TO-END VISIBILITY THROUGHOUT THE ENTIRE SUPPLY CHAIN

Real-time supply chain visibility is critical in mitigating cold chain risks during vaccine delivery. A holistic approach with IoT, analytics, AI and machine learning, plays an essential role in helping organizations establish ground truth in supply chain visibility. This can be used to collect real-time data such as location, dwell times, condition and history about the vaccine.

Without sensors, organizations will be clueless to the temperature of a vaccine once it departs the lab. While traditional data logger technology exists to passively collect data, it doesn’t proactively alert the logistics supplier if the temperature of the vaccine deviates a safe range.

There are several questions the pharmaceutical industry needs to ask itself when it comes time to distribute a COVID-19 vaccine, including:

Do you have insight into your entire end-to-end supply chain from manufacturer to patient?

How do you manage over/under provisioning inventory, obsolescence and expiration by location?

Are your end facilities set up for specific requirements such as cryogenic temperature storage?

How can you protect against security, counterfeits and diversion issues?

How can you minimize product loss from excursions?

The combination of track and trace technology with visibility software makes real-time visibility into the cold chain a reality, and it couldn’t come at a better time. Cold chains need to be able to provide the right vaccines in the right quantities, in the right condition, and at the right time, place and cost in order to be successful. Pharma companies will be well on their way to the successful distribution of a COVID-19 vaccine if they can achieve true visibility throughout their supply chains and collaborate with other companies to creatively solve cold logistics issues.

Samrat Barari

Samrat Barari,
CEO, Sunflower Technologies, US & Canada 
sunflower-technologies.com


Airbridge banner

Cause for Optimism?: History Says “YES” !!

While no one has a crystal ball, history tells us that commercial aviation is the “Comeback Kid” of the world economy.

As we continue to work our way through the psychological and economic uncertainties that have been presented to us by the pandemic, focusing on a very basic question – and an approach to its answer – will help us to develop reasonable expectations of where our industry – and the world economy at large - is going. That question is: how and why should we modify the optimistic projections for aviation industry (cargo and passenger) growth that were made pre-pandemic?

Teasing out an answer to this most vexing question can be developed by looking at the big takeaways from the excellent work that is done regularly by Boeing, Airbus, ICAO (the International Civil Aviation Organization), and other organizations that invest heavily in market research. Let’s take a look at what they projected from research done before the pandemic.

Demand for aviation services was projected to outpace the global economy over the next 20 years. Commercial services and cargo traffic were projected to grow at 4.2% annually. The number for passenger traffic was 4.6%. This growth, compared with projected growth for world GDP (Gross Domestic Product) at 2.7%, means that aviation will take a progressively larger piece of worldwide economic activity compared to other industries.

Optimism img1

The growth rate for air cargo means that RTK’s (Revenue Ton-Kilometers) will approximately double in 20 years. Air cargo will continue to be comprised of high- value products, amounting to 35% of all cargo value while only 1% of cargo volume!

Optimism img2

Okay, so from where is all this economic growth coming? It’s coming from the projected explosion in the number of middle-class people from the current 4 Billion, growing to 6 Billion in 20 years. This 50% increase in the worldwide middle-class population means that the percentage of world population that is middle class will grow to 66% in 20 years: good news for humanity!!

Optimism img3

The middle-class explosion will affect both cargo and passenger activity dramatically. As people become wealthier, they spend more; and one of the first things they want to do is get on a plane. They also buy more products from things they want to do is get on a plane. They also buy more products from outside their home country.

Asia will do a lot of the “heavy lifting” in growing world commerce because that’s where the growth capacity is. While annual per capita airplane trips will grow by a factor of 1.4 in the United States between now and 2038, these factors will be 5.0 and 3.5 for India and China, respectively.

Optimism img4

All of this projected demand means, of course, more planes. Projections for passenger aircraft were to more than double in 2038 compared to 2019 from just under 21,000 to just under 45,000.

More aircraft, of course, means more people to support the growing fleet. Using a rough rule-of-thumb that 100 people are needed to support each additional aircraft, the employment picture across all work categories looks healthy.

Optimism img5

Another rough-cut estimate of the employment picture is that approximately 5.5 total support jobs are required for each pilot. The 20-year projections for technicians and pilots are 640 thousand and 550 thousand, respectively. This yields a ratio of 1.16 Technicians per Pilot. Accordingly, we can estimate the number of jobs in all other support services to be (5.50 – 1.16) = 4.34 Support jobs per Pilot.

Optimism img6

That concludes the review of projections before the pandemic. But should we be optimistic about the future? Will the industry get its mojo back? If so why… and how?... and how soon?... and by how much??. This is the real question, isn’t it? Let’s take it from the top: Why? Because of that exploding middle-class that crave new, exciting experiences and new, exciting products. How? Through the relentless expansion of international trade, which historically has seen periods of contraction but ultimately exhibits a “ratcheting” pattern of continued growth. How soon, and by how much? These are the toughest questions to answer.

Where, then, is the good news? The good news is in history. Global airline earnings (i.e., operating profits) have bounced back quickly after major economic shocks.

After a long period of struggle from the Oil Crisis of 1973 and through deregulation in the United States, earnings were firming up only to be reduced again by the affects of the Gulf War in 1990. This time, the rebound took two years to begin and kept going with steadily increasing earnings up to the Asian financial crisis in 1997. This was followed by a contraction in earnings that turned to losses after the 9/11 terrorist attacks in 2001.

The rebound from 9/11 was particularly impressive. Losses turned to positive earnings after two years, blowing right through the SARS epidemic and continued to increase until the Financial Crisis of 2008. From that time forward, earnings rose steeply until 2016 when earnings experienced some decline.

Optimism img7

Cause for optimism, then, is justified by the wants and needs of a growing global middle-class that recognizes the societal benefits provided by aviation to the world community.

Optimism img8

So “chins-up” everybody! We have every reason not only to hope, but to expect, that the recovery will begin soon and ramp up quickly. Personally, I can’t wait to get to the airport and accept that most famous fellow’s invitation ……

Optimism img9


Peter Canellis

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


Southwestcargo

Baltic Exchange Creates Air Freight Index, Ushering in New Era of Hedging and Derivatives Trading for Air Cargo Sector

17th November 2020

Earlier this week, the Baltic Exchange announced the introduction of weekly air freight indices, similar to the Baltic Dry Index, which will allow air cargo companies to hedge against volatility in air cargo prices. Partnering with the already established Hong Kong based air cargo pricing publisher TAC Index, the new indices include six outbound indices and 17 individual destination baskets. These new financial products will be branded as the “Baltic Air Freight Index (BAI) - powered by TAC data.”

The Baltic Exchange Information Services Limited (BEISL) will control the indices, along with TAC Index acting as the calculating agent. Priced in US Dollars per kilogram, the indices reflect transacted rates from the key hubs of London, Frankfurt, Hong Kong, Chicago, Shanghai and Singapore to the main import regions globally.

Rates will be provided to the calculating agent by leading international freight forwarders and will be published each Monday by the Baltic Exchange. The indices are available on www.balticexchange.com to subscribers to the BAI data and a headline BAI index will be available to any current subscriber to the Baltic Exchange indices. A separate Air Freight Guide will be published as well.

The Baltic Exchange already provides benchmark assessments for the maritime markets that are used to settle billions of dollars worth of derivatives and physical trades every year. The initiative follows a rigorous review of the TAC Index’s methodology to ensure that it is compliant with the principles set out by the International Organization of Securities Commissions (“IOSCO”).

In announcing the new indices, Baltic Exchange Chief Executive Mark Jackson stated, “We’re delighted to be adding air freight assessments to our growing list of assessments, enabling freight risk management through trusted benchmarks. The Baltic Air Freight Index provides an independent, uncompromised view of the air freight market and our oversight will help ensure that the Index can become listed by financial clearing houses. This would provide the air cargo industry with new ways of managing its freight rate risk and potentially bring in new market participants.”

Originally launched in 2016, the TAC Index is widely referenced in the air cargo market and has established itself as a trusted and independent source for market freight rates. The global air freight market is estimated to be worth approximately $100 billion annually, with 65 million tonnes of general cargo moved by air each year. It is estimated that less than one percent of world trade by tonnage is carried by air, but because of the high value of these goods, they represent about 35 percent of the value of goods shipped globally.

Peter Canellis
Kevin Pflug


Air Canada Cargo

Emirates SkyCargo introduces Airbus A380 ‘mini-freighter’ charter operations

Dubai, UAE, 11 Nov 2020

Emirates SkyCargo has started utilising its Airbus A380 aircraft on select cargo charter operations to transport urgently required cargo across its network. The first dedicated Emirates A380 'mini-freighter' successfully transported medical supplies between Seoul and Amsterdam via Dubai.

Working collaboratively with the Engineering and Flight Operations teams within Emirates, the air cargo carrier has optimised the cargo capacity of the Airbus A380 to safely transport around 50 tonnes of cargo per flight in the bellyhold of the aircraft.

Emirates SkyCargo has introduced dedicated cargo operations on the A380 aircraft in response to the surge in the demand for air cargo capacity required for the urgent transportation of critical goods, including medical supplies for combatting COVID-19 in regions experiencing a second wave of the pandemic.

Emirates

Emirates SkyCargo is working on further optimising the capacity of its Airbus A380 aircraft through measures such as seat loading of cargo and has planned more dedicated cargo flights on aircraft for the month of November.

A leading player in the global air cargo industry with a destination network spread across six continents, Emirates SkyCargo has continued to introduce innovative cargo solutions in line with rapidly evolving market conditions since the start of the COVID-19 pandemic.

The freight division of Emirates offers a variety of options for cargo capacity and connectivity to best match its customers' requirements. Emirates SkyCargo operates dedicated cargo flights on its Boeing 777-F and its Boeing 777-300ER aircraft including 14 modified Boeing 777-300ER passenger aircraft with seats removed from Economy Class for additional cargo volume.

Through its responsiveness and agility, the air cargo carrier has been able to maintain the flow of essential goods and trade across international markets during the pandemic, often providing a much required helpline to communities around the world.

Taking a lead in the supply chain for the global distribution of a COVID-19 vaccine, Emirates SkyCargo announced recently that it set up the world's largest EU GDP compliant airside hub in Dubai dedicated for the COVID-19 vaccine. In addition to world-class fit for purpose infrastructure for the storage of the vaccine, the facility would also be able to offer value added services such as repackaging, re-icing and redistribution of the vaccine. The air cargo carrier has also set up a rapid response team to coordinate requests for the movement of the vaccine.

Emirates SkyCargo currently offers cargo capacity on scheduled flights to 135 destinations across the world.

South African Airways
dnata named ‘Ground Handler of the Year’ for the 6th year

Dubai, UAE, 2 November 2020

For the 6th consecutive year, dnata has been named ‘Ground Handler of the Year’ at the 2020 Air Cargo News Awards. The award, which has long been recognised as the preeminent accolade in the air cargo industry, was accepted by Ross Marino, dnata’s Regional CEO for Europe, at a digital event.

"We are honoured to receive this prestigious award for the sixth consecutive time," said Ross Marino. "This recognition is a testament to our teams’ relentless commitment to safety, innovation and service excellence in the industry’s most challenging year on record. We continue to go the extra mile to consistently deliver the promises our customers make at each dnata station in the world."

In 2020 dnata has continued to deliver reliable and safe air services to support and create value for airline customers and local communities amid COVID-19 challenges. Although passenger flights have been significantly reduced globally, air cargo demand has remained stable and dnata has been working closely with government authorities, customers and suppliers to maintain global trade and the flow of essential goods. In the first nine months of the calendar year the company’s dedicated teams handled over 90,000 tonnes of PPE, life-saving medical supplies and pharmaceuticals.

At each of its 46 cargo stations, dnata has been using cutting-edge technologies and global best practices to ensure that every pharma and vaccine shipment is handled in compliance with the highest international standards. The company's certified warehouses are capable of handling large volumes and can be further expanded to handle the COVID-19 vaccine when demand arises.


dnata

In response to the strong air cargo market demand for the rapid, reliable and efficient transportation of essential commodities, several airlines have introduced additional cargo capacity by using passenger aircraft with seats fully or partially removed from the cabin. To adapt to changing customer needs, dnata has also enhanced services, improved processes and trained employees to safely and efficiently handle passenger planes carrying cargo only.

dnata has also enhanced cargo capacities by opening state-of-the-art cargo centres in London, Manchester (UK) and Brussels (Belgium). All new facilities are equipped with the latest technologies and comply with the highest industry standards ensuring efficient and safe handling of a broad range of cargo.

dnata’s ability to provide reliable and safe cargo handling services has been underpinned globally by the achievement of industry accreditations, including the CEIV certification of its Amsterdam (The Netherlands) and Singapore facilities as well as the ISAGO certification of its Erbil (Iraq) and San Francisco (U.S.) operations.

In addition to its cargo services, dnata has launched innovative new products and services across its global operations to help airlines and passengers navigate the new normal. The company has added thermal screening, baggage disinfection and even home COVID-testing services to its offering at various locations around the world.

As one of the world’s leading air services providers, dnata provides quality and reliable ground handling and cargo services at 88 airports in 14 countries.


Turkish Cargo

Liege Airport received the ‘Best Cargo Hub of the Year’ Award

Thursday 29 October 2020

Liege Airport received the ‘Best Cargo Hub of the Year’ Award. This international recognition is the result of a successful bold strategy focussed on cargo, diversification and innovation.

This year, the 36th Air Cargo News Awards was held in London and, exceptionally, was broadcast as a video conference on account of the Covid-19 crisis. On this occasion, 13 companies received a trophy corresponding to the category in which they were competing.

In the category ‘Best Cargo Hub of the Year’, Liege Airport was nominated alongside major participants: Amsterdam Airport Schiphol, Anchorage International Airport (USA), Brussels Airport Company and Hong Kong International Airport.

“Liege Airport is very proud to be chosen as the best cargo airport in the world for 2020 ! This is an exceptional award in recognition of a year in which we had to face many challenges. Of course, these challenges are connected to our role as an essential link in the chain of managing the health crisis, to our position as a health airport, but also to the flexibility of our teams who have been able to respond to the expectations and concerns of our customers”, announces Luc Partoune, CEO of Liege Airport.

The quality of its operations, its unique #freightersfirst character, its spirit of continuous innovation and its ideal geographical situation were also the reasons for which the World Food Programme (WFP) of the United Nations chose Liege Airport as one of its worldwide logistics platforms. Since last April, Liege Airport has been operating the delivery of vital medical and humanitarian material to developing countries.

All these factors contribute to making Liege Airport the airport experiencing the fastest growth in Europe over the last few years. It is also the only freight airport among the top 30 to increase the flexibility of its offer by a rail link #integratedlogistics.

This prize, the Best Cargo Hub of the Year, is outstanding recognition for all the teams of Liege Airport and its customers who work together to succeed in the face of these significant challenges #weareliegeairport.

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