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Aircargopedia Newsblast: October 2022! |
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| 17th October 2022 |
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Dear Air Cargo Professional:
Ukraine invasion adds to pandemic challenges - by Pat from SUNTEC.
Read more about Supply Chain Management in this article by Peter Canellis, Professor of Management, Vaughn College.
In more World Air Cargo news, dnata goes pink to support Breast Cancer Awareness Month at DXB.
TIACA announces Launch Customers for ground breaking BlueSky sustainability verification program. Emirates SkyCargo and United Cargo announce landmark agreement. |
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D.J. Ghosh
President & Publisher
AIRCARGOPEDIA
WWW.AIRCARGOPEDIA.COM
”The Complete Encyclopedia for the Air Cargo Professional & Investor”
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Ukraine invasion adds to pandemic challenges
The war has caused widespread disruption to global shipping, and is likely to exacerbate ongoing supply chain disruption, port congestion and crew crises caused by the Covid-19 pandemic.
The shipping industry has been affected on multiple fronts, with the loss of life and vessels in the Black Sea, disruption to trade with Russia and Ukraine, and the growing burden of sanctions. The industry also faces challenges to day-to-day operations, with knock-on effects for crew, the cost and availability of bunker fuel, and the growing threat posed by cyber risk.
“Despite the tragic situation in Ukraine, and the threat to seafarers caught up in the conflict, the direct impact on shipping from the war in Ukraine has so far been largely contained to the Black Sea,” says Captain Rahul Khanna, Global Head of Marine Risk Consulting at AGCS. “However, the war is creating an additional burden on the maritime industry, which is already dealing with ongoing supply chain disruption, port congestion and a crew crisis caused by the pandemic.”
The International Monetary Fund warned that the war in Ukraine will exacerbate already high shipping costs this year and could keep them – and their inflationary effects – higher for longer. The cost of shipping a container on the world’s transoceanic trade routes increased seven-fold in the 18 months following March 2020, while the cost of shipping bulk commodities spiked even more.
“Trade with Russia and Ukraine will suffer, adding to already strained global supply chains. Longer term, sanctions and a reduction in trade with Russia, could result in the redrawing of some supply chains and trade routes, but this all takes time and comes at a cost,” says Khanna.
The biggest impact of the war so far has been on vessels operating in the Black Sea and/ or trading with Russia. Ukraine’s major ports, including that of Odessa, were closed due to the conflict and a Russian naval blockade of Ukraine. The country ships over 70% of its exports, including 99% of its corn exports. Hundreds of vessels were trapped in ports or at anchor while thousands of Russian and Ukrainian crews faced an uncertain future, unable to leave vessels or return home.
Russian vessels were also banned from entering UK and EU ports and have been detained due to suspected sanctions breaches: in February 2022, French warships detained Russian roll-on/roll-off cargo ship Baltic Leader en route to St Petersburg while more than a dozen Russian-owned superyachts have been seized.
The Russian fleet has also been denied access to vital maritime services. A number of ports have withdrawn bunkering services for Russian-owned or flagged vessels, while engine manufacturers, maintenance companies, classification societies and insurers have said they will no longer serve Russian vessels.
The conflict is also having a knock-on effect for shipping outside the conflict zone. US and EU sanctions, in particular, pose a significant compliance challenge for shipping companies and insurers. Many western companies have voluntarily opted to cease trade with Russia, creating a complex and uncertain legal situation for contracts, including insurance.
A prolonged conflict is also likely to have deeper economic and political consequences, potentially reshaping global trade in energy and other commodities. An expanded ban on Russian oil could push up the cost and availability of bunker fuel and potentially push shipowners to use alternative fuels.
“We have already seen requests from ship owners who are considering using non-compliant bunker fuel that has a lower explosive temperature,” says Justus Heinrich, Global Product Leader Marine Hull at AGCS. “Longer term, we may see a shortage of bunker fuel with more and more vessels having to turn to non-compliant or substandard fuels, which could result in machinery breakdown claims in the future.”
A large part of the shipping sector will in some way be touched by the conflict, says Khanna. “In addition to the physical threats to shipping in and around the Black Sea from mines and rocket attacks, which is affecting trade, the availability and cost of bunker fuel, and the safety and welfare of crew, many container companies have already pulled out of Russia while the tanker sector faces huge restrictions and disruption, as do bulk and general cargo operators shipping Russian coal, wood and grain."
Coinciding with Covid-19 outbreaks in China, the war in Ukraine is compounding ongoing supply/ demand pressures for shipping, which have resulted in port congestion, higher freight fees and longer transit times. According to Clarksons Research container and car carrier congestion at ports is trending towards previous highs, while the impacts of the war are likely to create further inefficiencies across the maritime transport system.
Pat Praveen
SUTEC LLC.
suntecrm.com
For any questions, please contact Pat at pat@suntecrm.com
For more info please visit www.suntecrm.com
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Supply Chain Management gets Tougher Every Day!
Yes, and that’s always been true
U.S President Harry S. Truman once said: “News is just history that you didn’t know”.
In a recent article on supply chain effectiveness, McKinsey tells us that additional strategic components of supply chain management must be considered by organizations who wish to be successful. Traditional focus on service levels, quality, and financial controls must be broadened to include resilience, agility, and sustainability.
If you’re reading this, you might be inclined to quote Harry’s sagacious observation to the authors of that article. After all, you already know this!
In an earlier article in this series, I wrote:
“In an ever-changing global market, shippers’ supply chains must be agile and flexible enough to meet their business objectives. Each company has specific risks associated with moving product around the globe. How do they protect against those risks? How do they help mitigate their losses?
Prudent companies will take steps to keep their supply chains from “breaking”. This has come to be known as developing “resiliency”. But what does resiliency mean exactly, and can it be quantified?”
The article went on to address the questions posed in the above quotations.
Supply disruptions will continue to occur as they always have. We have learned that they can be mitigated by constructing supply networks featuring more options for sourcing, manufacturing, and distribution. In addition, advances in cybersecurity are helping to address the challenges posed by high-tech bad actors and rogue governments.
It’s cliché but true: “The more things change, the more they remain the same.”
Yours in Supply Chain,
Peter Canellis
Regards,
Peter Canellis
Professor of Management
Vaughn College of Aeronautics and Technology
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dnata goes pink to support Breast Cancer Awareness Month at DXB
Dubai, UAE, 4 October 2022
dnata, a leading global air and travel services provider, has taken a unique initiative to support Breast Cancer Awareness Month this October. The company has repainted one of its pushback tractors to pink to increase awareness and promote regular screening and early detection of breast cancer.
For the next weeks, travellers at Dubai International (DXB) airport might be able to spot dnata’s eye-catching pink equipment while waiting for their flight.
Steve Allen, CEO of dnata Group, said: "Each October, our teams come together and collaborate with local charities to increase awareness of breast cancer and raise funds for research into a cure for the disease. This year we will continue our efforts to support this important cause and make a difference in the fight against breast cancer."
dnata’s high-powered pushback tractors play a crucial role in making sure aircraft are positioned precisely on the taxiway for taxi and take-off. The most powerful of this ground support equipment (GSE) type can push back a fully loaded Airbus A380 aircraft. dnata currently employs around 170 licenced operators to handle the pushback tractors whose engine capacity ranges from 100 to 750 horse power. The pushback tractor is connected to the aircraft either directly or through a tow bar. Every day, dnata handles over 450 push backs at DXB.
Breast Cancer Awareness Month, held in October every year, was created to promote screening and prevention of the disease. Since 1985, individuals, businesses, and communities have come together to show their support for the many people affected by breast cancer.
dnata offers ground handling, cargo, travel, catering and retail services in 37 countries across six continents. In the financial year 2021-22, dnata’s customer-oriented teams handled over 527,000 aircraft turns, moved 3 million tonnes of cargo, uplifted 39.9 million meals, and recorded a total transaction value (TTV) of travel services of US$632 million.
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TIACA Announces Launch Customers for Ground Breaking BlueSky Sustainability Verification Program
Miami, 09/22/20222
The International Air Cargo Association (TIACA) announces the pioneering launch customers for the air cargo industry’s first multi-sector sustainability verification program.
Following the announcement of the launch of the BlueSky Program at the March Executive Summit, a successful pilot program was run with airline and ground handling companies.
The TIACA BlueSky program, open to the entire industry, not just TIACA members, is now ready to launch live operations with the first wave of participants representing organizations from the airline, airport, freight forwarder, ground handler and GSSA sectors
The TIACA BlueSky launch participants:
• Amsterdam Airport Schiphol
• Astral Aviation
• Brussels Airport
• CHI (Cargo Handling International)
• Edmonton International Airport
• Etihad Cargo
• Flexport
• HACTL (Hong Kong Air Cargo Terminals Limited)
• Strike Aviation
• Swissport
“We are very pleased to see such strong launch support from some world class innovative organizations. This program will enable all participants to assess where they are on their sustainability transformation journey which will collectively demonstrate the leadership of the air cargo industry in tackling this important topic.” Steven Polmans, TIACA Chair
Phase 1 of the program is an evidence-based desktop verification process designed to assess the applicants’ progress against a number of critical sustainability criteria.
The 8 areas of assessment criteria include;
• Decarbonization
• Waste elimination
• Biodiversity protection
• Support for local economies and communities
• Impact on society improvement (lives and well-being)
• Efficiency and profitability (digitalization)
• Employee engagement, retention and development
• Partnership building
The assessment process is tailored to each industry sector to ensure peer assessments and progress tracking provide maximized value. Upon completion of the assessment by an independent organization the participants receive a personalized dashboard highlighting where they currently are against the assessed criteria. A subsequent phase will include a full onsite audit option with an in-depth report describing areas of improvement.
“Sustainability is an increasingly important topic for businesses globally and as an industry which connects the world it is critical that we all have strategic plans in place to ensure our sustainability credentials are demonstrated in an evidenced and neutral fashion. The TIACA BlueSky program aims to provide that solution. We are excited to see the program launch and invite all industry stakeholders to take a look.” Glyn Hughes, TIACA Director General
The BlueSky Program is a tool that the entire air cargo industry can use to track their sustainability progress, benchmark against peers and accelerate the industry transformation.
More information can be found on the TIACA website.
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Emirates SkyCargo and United Cargo announce landmark agreement
Emirates SkyCargo and United Cargo signed a Memorandum of Understanding (MoU) that follows on the heels of the new broader historic commercial agreement between two of the largest global airlines. This coordination will deliver benefits to air freight customers of both Emirates Skycargo and United Cargo around the world.
The MoU was signed at the World Cargo Symposium (WCS) – IATA event in London, UK by Nabil Sultan, Emirates Divisional Senior Vice President, Cargo and Jan Krems, President, United Cargo.
Under the terms of the MoU, Emirates SkyCargo and United Cargo will work closely on a number of aspects, which include expanding cargo interline options and blocked space agreements, pending regulatory approvals. This will build on existing cargo interline arrangements between both air cargo operators and offer freight customers access to more capacity on a larger combined global network.
"Emirates SkyCargo is committed to being the leading player in the global air cargo industry providing our customers with the highest standards of products and services. Cooperating with United, who is a leading airline in its own right with strengths and a network that are complementary to our own, will allow us to add value for our customers and help them reach new markets more speedily," said Nabil Sultan, Emirates Divisional Senior Vice President, Cargo.
"United is pleased to work with Emirates SkyCargo on this MoU. As one of the leading carriers worldwide, Emirates SkyCargo is an important player in the industry, and our supplementary capabilities allow us to provide new service offerings to our customers worldwide. We share a common commitment to providing industry-leading solutions for our customers and we look forward to working together in the future." said Jan Krems, President, United Cargo.
United Cargo will have access to Emirates SkyCargo’s high frequency distribution network through the belly-hold of passenger flights to over 100 global destinations and 11 freighters, whilst Emirates SkyCargo will have access to over 200 cities in the US and 300 cities across five continents through United Cargo.
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