Aircargopedia Newsblast: September 2020!
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17th September 2020  
 


Dear Air Cargo Professional:

Read to find out how Air Cargo industry braces for global impact of COVID-19 vaccine.

Learn more about Freight Consolidation Economics with this informative article written by Peter Canellis, PhD, PE, Professor of Management.

In more World Air Cargo news, DHL launches air freight charter connecting Asia Pacific to Europe and the U.S.

Emirates SkyCargo marks 18 years of cargo flights to Shanghai. GTA dnata set to launch Vancouver operations.
  DJ Ghosh

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


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Air Canada Cargo

Air cargo industry braces for global impact of COVID-19 vaccine

Compiled by Aircargopedia 


First comes vaccine development. Then comes vaccine distribution. You can’t have one without the other, and for global transportation authorities, the COVID-19 vaccine development process is a crucial period to get a game plan together for how to distribute a drug to the entire world population. Providing just one dose to 7.8 billion people would fill 8,000 Boeing 747 cargo planes. Not only are there not enough of those cargo planes in existence, but a number of questions still remain unanswered: How many doses will one person require for effective preventative? Do the vaccines need to be kept cool or frozen when they travel? How will aid organization volunteers travel to begin vaccination programs?

It actually starts with questions prior to the vaccine, which is what will the vaccine look like? Will it be a single dose or double dose or a triple dose vaccine? Will it need to be transported in a cool environment or will it needs to be distributed in a frozen environment? The second question is, is there a global capacity to manufacture that, so at the very least there will need to be a significant controlled harmonized and aligned distribution of the vaccine over a relatively short period of time because of course, once a vaccine is actually approved and certified for use, it’s critical that it gets out there as quickly as possible.

Clearly, a lot of variables go into planning an operation like this. How do you plan for that? What kind of work goes into making a plan with governments aid organizations, drug manufacturers to make this all possible?

The world has never faced anything like this before. So there is no blueprint. There’s no handbook that somebody can pick up. This is where UNICEF, the World Food Program, the World Health Organization who has had significant experience in humanitarian planning, together with the logisticians, the freight forwarders of the planet, who are used to doing global distribution networks, together with the airlines and their partners who will actually carry the majority of this we will need to sit around not a table but a series of tables to make sure that all the parties are actually harmonized on what it will take to ensure that there is the vaccine distributed to those who need it when they need it in the condition that it has to be in.

Travel restrictions and the plunge in passenger traffic has forced airlines to reduce the number of flights and routes they offer. How does that impact the effort to deliver vaccines? It’s absolutely critical for global connectivity, sadly, cannot be provided by pure freighter aircraft on its own. We made a calculation that the total volume of vaccines will account for the equivalent of 8,000 747 freighters worth of commodity. Of course, there aren’t 1,000 747 freighters on the planet, so it’s going to require significant interconnectivity with passenger networks with cargo networks, sometimes with passenger planes as it’s happening now flying cargo. Even on the seats, even taking the seats out, so the industry will do what it can do to support. But it does need governments to harmonize and align on trying to safely open passenger transportation because that cargo capacity in the passenger planes will be crucial to help this global airlift when it actually commences.

Some regions will be easier than others to get vaccines to. And Africa will be one of the hardest places, what makes it so complicated?

Several factors, number one, the sheer size of the geographical continent, the lack of freighter capacity that goes into the region. Now, the potential high temperatures, which again makes moving something as sensitive as a vaccine, which needs to be in a temperature controlled environment, you have to make sure that there’s an uninterrupted power supply. You have to also make sure that you’ve actually got volunteers in country to help disperse the actual vaccine. And this is where again, a lot of the aid agencies since the beginning of the COVID outbreak, have had to say spend some of their planned vaccination programs, clearly because of the lack of ability to get the product there, but also the lack of ability to get volunteers there. It’s a significant number of factors which we would hope by raising this issue now to work with the African Union, individual states and all those that can actually help and influence the preparation phase.

For more news and information about the air cargo industry, please visit AIRCARGOPEDIA.COM.


Airbridge banner

A (Fairy) Tale of Two Factories: An Illustrated Story of Freight Consolidation Economics

Peter Canellis, PhD, PE, Professor of Management

A simple “example” taken from ocean shipping provides a clear explanation of how freight consolidation works. Whether we’re talking ocean containers, ULD’s or trucks, the principles are the same


Once upon a time, in an industrial park far, far away, there were two neighboring factories. One produced steel ingots, and the other processed cotton bales

Freight Economics img1

Every week, a container would be positioned at each factory. The ingot producer would fill its container to its maximum weight limit. The cotton bale processor would fill its container space entirely

Global Sourcing img2

One day the presidents of the two companies, Ms. Ingot and Mr. Cotton, were having lunch together. Inevitably, the conversation turned to the pressures of competing in a global environment.

“I’ve pretty well maximized my procurement and manufacturing efficiencies”, said Ms. Ingot, “but I still have to get my total delivered cost in line.”

Mr. Cotton easily commiserated, as these were precisely the same issues and challenges that he faced. “My carrier spots a container here every week and then takes it away after I load it”, he said. “But the way global commerce has evolved, I need to come up with ideas that will help me to be more competitive!”

As the discussion continued, Ms. Ingot and Mr. Cotton discovered that they both shipped to consignee locations that were very close to each other. After thinking over the situation for a while, Ms. Ingot and Mr. Cotton came up with a great idea!

Global Sourcing img3

"Maybe we could share a container”, said Ms. Ingot. I’m loading my containers to their full weight carrying capacity, but there’s a lot of empty space left over.

Global Sourcing img4

Mr. Cotton said, “Yes, and I’m filling the space in my containers completely, but there is still plenty of weight carrying capacity that I can’t use”

Global Sourcing img5

They figured out that if they loaded almost all of the ingots into a container but leave just a little bit of weight carrying capacity for the cotton bales (that will occupy most of the space), each will sacrifice only a small amount of weight or volume. But now, they could ship in one container rather than two.

“With this change to our operations, each of us will save close to 50% on shipping”, said Ms. Ingot. “Yes”, said Mr. Cotton, “but how will we know exactly how much cotton and exactly how much steel should be loaded?”

Global Sourcing img6

“That’s a good question”, replied Ms. Ingot. “But”, she went on, “my genius 19- year old nephew, Irving, has a master’s degree in Applied Mathematics and he can solve the problem for us.”

Irving solved the problem for his aunt after working on it for three days. Well, that’s what he told her so that she would continue to adore him. It really took him about five minutes by loading:
• the densities of steel and cotton and …
• the weight and volume capacities of the container …

… into Excel’s optimizer application known as “Solver”.

Global Sourcing img7

With the freight consolidation program under way, Ms. Ingot and Mr. Cotton were able to reduce their delivered costs and be more competitive. They were soon shipping two containers a week again, but now it was because their sales had doubled!

And so, a long strategic partnership was formed between the two company presidents, and they lived happily (and profitably) ever after.

Meanwhile, Irving began to ponder the question, “How can optimization be extended beyond two commodities?” He proceeded to develop a high-function computer application to do exactly that, and further customized it to accommodate all modes of freight transportation. He became a multimillionaire and now resides in Switzerland.

Peter Canellis



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

Southwestcargo

DHL Launches New Charter Flight To Connect Three Continents

September 15, 2020

To help meet demand from customers in the technology, manufacturing and life sciences and healthcare sectors.DHL Global Forwarding has launched an air freight charter connecting Asia Pacific to Europe and the U.S. The twice-weekly charter originates from Chongqing, China and flies to Amsterdam, Netherlands; Chicago, United States; Incheon, South Korea before returning to China.

Global Head of Air Freight DHL Global Forwarding, Thomas Mack, said, “While some passenger airlines have resumed operations, the situation in the air freight market remains volatile – especially as belly capacity is still tight As the leader in the air freight market, DHL Global Forwarding’s top priority is to provide our customers with sufficient and reliable air freight capacity. Not only are the resilient, agile and reliable supply chains of highest importance for an economic recovery, but also in preparation for the availability of vaccines and other essential medical supplies during the pandemic.”

DHL noted that South Korea has seen its export of healthcare products rise year-on-year by 26.7% in the first half of 2020, with pharmaceutical goods in particular increasing by 52.5%. In addition, China has exported 28.5% medical devices in the first five months of the year as compared to a year ago. Furthermore, in 2019 China, the Netherlands and the United States were among the top ten importers and exporters of medical goods.

“Over the years, DHL has built up its expertise from globally certified facilities and staff to technologies that track shipments in real-time in addition to ensuring the integrity of such products throughout their journey. Getting the much-needed air capacity is the last piece in the value chain puzzle, so to speak, that ensures temperature sensitive products such as life-saving vaccines reach the communities-in-need,” Mr. Mack added.

Peter Canellis
Kevin Pflug

Turkish Cargo

Emirates SkyCargo marks 18 years of cargo flights to Shanghai

Dubai, UAE, 15 September 2020

On 15 September 2002, Emirates SkyCargo crossed a historic milestone with its freighter flight touching down at Shanghai, which was the cargo carrier’s first scheduled cargo destination in the country and marked Emirates’ entry into the Chinese mainland.

Since 2002, Emirates SkyCargo has built its reputation in China by fostering a sense of reliability and by deploying capacity to cater to the growth in Chinese exports over the years. Emirates SkyCargo has been providing a continuous and robust trade link through its cargo flights for exports from Shanghai and other points in China with a better reach and faster time to the market connecting with primary, secondary and tertiary cities across the world.

More recently, during the COVID-19 pandemic, Emirates SkyCargo supported the uplift of thousands of tonnes of essential commodities including face masks, gloves, other protective gear and equipment such as ventilators manufactured in China to destinations across six continents. From the very early stages of the pandemic, the air cargo carrier reacted quickly and worked with various authorities to deploy adequate capacity to meet the surge in demand for the transport of PPE and other materials to combat COVID-19 from China. Over the next few months, hundreds of cargo flights were operated from Shanghai, Beijing and Guangzhou to cities in the Middle East, Europe, North America, Africa, Australasia and other parts of Asia.

Emirates

"Emirates SkyCargo is an important facilitator of trade between China and the rest of the world and this is a very special milestone for us. Shanghai has been one of our main gateways over nearly the last two decades. Just between 2012 and 2019, we helped connect close to half a million tonnes of goods as exports and imports between Shanghai and the rest of the network," said Michael Qu, Emirates Cargo Manager, China.

"During the pandemic, our teams in Dubai and China have worked around the clock to move essential commodities and we would also like to thank our partners and the authorities in China for their support. With our current extensive network of more than 120 destinations across six continents, including 56 cities from the Belt and Road initiative, we are able to provide a dependable and efficient trade link," continued Qu.

Prior to the COVID-19 pandemic, some of the main exports from Shanghai included electronic devices and equipment, pharmaceuticals and raw materials for other manufacturing and industrial application. On imports, Emirates SkyCargo helped bring in food items and flavours from around the world ranging from Norwegian salmon, lobsters from Boston and Chilean cherries.

Emirates SkyCargo now offers 11 scheduled weekly flights to the Chinese Mainland, including eight flights to Shanghai, and three flights to Guangzhou. From full freighters to dedicated cargo flights on passenger aircraft and loading of select cargo in aircraft cabins, Emirates SkyCargo offers a range of cargo capacity options to meet the exact requirements of customers from China.


South African Airways
GTA dnata set to launch Vancouver operations

Vancouver, Canada, 25 August 2020

GTA dnata, dnata's joint-venture company in Canada, has been awarded a 5-year ground handling license and will establish operations at Vancouver International Airport (YVR). The company will provide quality and safe ramp, passenger and cargo warehousing services to airlines with a team of highly trained, customer-oriented aviation professionals. GTA dnata will commence operations at YVR in the fourth quarter of 2020.

A trusted partner of 17 airlines in Toronto, GTA dnata's expansion into Vancouver cements the company's position as a leading air services provider in Canada. In 2019, GTA dnata assisted 1.2 million passengers and moved over 90,000 tons of cargo at Toronto Pearson International Airport (YYZ).

dnata

"We are thrilled to expand our network and launch operations in Vancouver," said Mario D'Urso, GTA dnata's chairman. "The time is right for us to make this move as our commitment to safety, quality and service excellence is now more important than ever. We thank the Vancouver Airport Authority for this opportunity and look forward to a successful start-up and much future success."

dnata entered the Canadian aviation market by establishing GTA dnata through the acquisition of a 50% stake in GTA Aviation's cargo and ground handling operations at Toronto Pearson International Airport in 2016. Since then, the company has consistently invested in its team, infrastructure and equipment and delivers reliable air services with a team of 700 dedicated employees.

This January dnata further expanded its footprint in Canada, commencing flight catering operations in Vancouver. The company's new, state-of-the art facility at Vancouver International Airport represents a multi-million dollar investment and has a capacity of up to 8,000 inflight meals a day.

A global air services provider, dnata provides ground handling, cargo and catering services to over 300 airlines at 126 airports in 19 countries. In the financial year 2019-20 dnata's dedicated teams handled 681,000 aircraft, moved 2.9 million tonnes of cargo and uplifted more than 93 million meals.


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