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cargovision

HUNTINGHEADS

QUARTERLY MAGAZINE AIR FRANCE CARGO-KLM CARGO VOLUME 22 ˆ NUMBER 31 ˆ DECEMBER 2007

Venus RisingProtect Your Assets

Pie in the Sky

2 cargovision | DECEMBER 07

■ For the fourth consecutive year, Air France Cargo-KLM Cargo flew the Nuon Solar Car to Australia for itsfourth consecutive victory. What we have learned from this team – eleven students from the Delft University ofTechnology, coached by former astronaut Wubbo Ockels – is that people do make a difference. They havebeen are clever enough to think differently, and make intelligent use of nature’s resources and brought togetherall their individual knowledge into one sound working team, they elevate our spirit. Which is fantastic!

Good people and how to find them is an important theme in this issue of Cargovision. Fierce global competi-tion has all sectors of our business scrambling to find people who can assure customers of a higher standardof service. Our lead feature examines the challenges of recruiting qualified staff. Also, in Egypt, we meet SamiaSayed, who built a forwarding operation that has contributed significantly to developing that country’s perish-able exports. And in Lima, Clara de Luque, AF-KL Cargo’s sales manager, not only helped facilitate thatnation’s booming asparagus exports, but also oversaw a huge relief effort following the devastating earthquakein Peru last summer.

We admire these examples of poise. A balanced life is increasingly difficult to achieve as our world growssmaller and faster. Business demands decisions on previously unthinkable choices. We face rapid populationgrowth and imperatives for social responsibility. They force us to consider uncomfortable changes to our waysof living and working. We are off balance until we learn to adapt to a new trend.

Here’s an example: our natural resources are limited, yet we produce more than we need: poorly manufacturedgoods are wrapped in plastic and foam, and then placed box that is wrapped in nice paper to make it all lookattractive. Fortunately, more and more airfreight customers now see that our volume charges save them mon-ey when they containerize their shipments and repackage the contents downstream. One customer, GerardKleisterlee, CEO of Philips, goes even further, saying that while it is nice to produce goods in China, if theymust still be shipped halfway around the world, why not make them closer to the consumer, thus reducingimpact from packaging and transportation?

Balance can also be brought to an entire nation. Nigeria is a special country and one that could outshine therest of Africa based solely on its abundant natural resources. The nation‘s new president, Umaru Yar’Adua,may be able to loosen the shackles that have hobbled Nigeria since it gained independence in 1960: the wasteand corruption that flow from its huge oil wealth. Michael Westlake profiles this country in transition and speakswith local air cargo officials for a sense of its business potential.

Romance, as we consider these ideas, let‘s spend more time over coffee and less over email when test eachothers creativity and innovation. Otherwise the more romantic parts of our wonderful life will simply disappearbehind an emotionless computer screen. Like the Nuon solar team proved that a perfect personal interaction is key in making new ideas the winning success and paves the way for an even more innovative future!

Sincerely,

Chong ChoyVice President - All iancesAir France Cargo-KLM Cargo

BALANCE AND ROMANCE

cargovision editorial

4 HUNTING HEADSMounting global competition, pressure on freight rates, and stronger demand for high service levels all require a knowledgeable, experienced, customer-friendly workforce. But how do freight companies find good, skilledstaff?

14 VENUS RISINGSamia Sayed heads Cairo-based Venus International Transport that has become a key player in Egypt’sairfreight industry. An outspoken innovator, Ms. Sayed continues to champion the development of perishablesexport in Egypt – a sector that remains vital to the country’s economy.

16 THE FUTURE OF AIRMAILAirlines and postal organizations are testing a concept for shipping mail on air waybills as part of their generalcargo traffic, with a view to enhancing international airmail operations and reducing costs.

19 PEOPLE MAKE A DIFFERENCEClara de Luque, AF-KL Cargo’s sales manager in Lima, has a long record of facilitating trade in her country. She was also one of the first to jump into action when a devastating earthquake struck Peru in August this year.

20 PIE IN THE SKYThe new open skies treaty between the US and the EU that will take effect in March 2008 could have majorimplications for the air cargo market. The biggest change is that European airlines will be able to fly from anypoint in Europe to any point in the US.

24 PROTECT YOUR ASSETSThe Technology Asset Protection Association is now known as the Transported Asset Protection Association,reflecting TAPA’s growing influence in transportation security, as it expands beyond its original mission toprotect high-tech shipments.

08 NEWS & DATELINES22 JAN KREMS26 COUNTRY FILE: NIGERIA28 MARKET MONITOR30 POSTSCRIPT31 INFORMATION AND COLOPHON

COVER IMAGE Graduation ceremony at Western Oregon University© D. Hurst/Alamy

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Samia Sayed, page 14

Industry news, page 9

US-EU Treaty, page 20

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■ “There aren’t enough qualified logistics people toserve our industry,” says Sjoerd van Loon, CEO ofEMEA and board member of the logistics companyIJS Global. “There is always a long list of vacancies.With airfreight growth forecast to triple in the next 20years, we must do something today to get the rightpeople for tomorrow. If we don’t, who is going to shipour cargo?”Not only are skilled logisticians in short supplythroughout our industry, but every company also hasits own special requirements and recruitment criteria.Manufacturers and retailers need logistics profes-sionals with a broad understanding of supply chainmanagement, from procurement through productionand sales. Their skills typically include warehouse andinventory management, transport planning, and tradefinance. A third-party logistics provider needs staff with similarabilities, although they may also run their customers’supply chains and therefore need practical operationalknowledge. Forwarders require even broader knowl-edge. They need to understand the world’s geo-graphy, trade lanes, and transport modes, in additionto the customs procedures in many countries.“Recruiting people for the forwarding business is achallenge in the logistics sector,” says Eelco Dijkstra,MD of Europhia Consulting, a global recruitment andemployment research consultancy in the Netherlands.

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Mounting global competition, pressure on freightrates, and stronger demand for high service levels allrequire a knowledgeable, experienced, customer-friendly workforce. But logistics is known for longhours and low pay. So how do freight companiesfind good, skilled staff?

BY MARCIA MACLEOD

HUNTINGHEADS

“Supply chain opportunities are more clearly defined;forwarding is more specialized.”Yet it can be just as hard to find people for contractlogistics, says Graeme Taylor, group HR director atCEVA Logistics. “We need to find people who under-stand the entire supply chain.” “Contract logistics is our largest search area,” saysMonique Gerrits, a senior partner and owner of theNetherlands subsidiary of global executive searchcompany Ray & Berndtson. “It pays better than otherareas of logistics and offers more international careergrowth opportunities.”

WHEREFORE ART THOUEmployers face problems in finding potentialemployees, so where should they seek applicants?Traditional advertising is not always sufficient to landthe best people. Using a specialist recruitment agencyor an executive search company can help, althoughemployers must be clear on what they are looking for.A company like Ray & Berndtson or IJS Global usuallyconcentrates on managers or potential managersexpecting to earn a minimum of £80,000 (€100,000) ayear. An ordinary recruitment company may be happyto target staff at a lower level, but is not likely to havethe same contacts book.“I’m in a privileged position when it comes to filling©

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vacancies,” Mr. van Loon says. “With 30 years inlogistics, I know a lot of people. I know who islooking for a job, who is unhappy and mightwelcome a new opportunity, and which companiesare merging or closing and will create redundancies.”Some companies work with universities and schoolsto attract and train potential workers. “It is stillpossible to recruit people for the operational side ofthe business,” says Daan Nijssen, VP - HR at KLMCargo. “But the quality of people will be a problem inthe future. To counter this problem, a consortium ofairlines has been formed at Schiphol to work withlocal schools, so that they understand the industry’sneeds.”Both Air France and KLM enjoy reputations as goodemployers, which helps attract young people.“Although AF-KL Cargo works as a single entitywhen recruiting managerial staff, we recruit sepa-rately at the lower levels,” says Olivier Kudlikowski.“Every year, Air France Cargo recruits four or fivegraduates with two or more years’ experience.”

STUDY HALLSA few universities in Europe offer a Master of Sciencedegree in logistics and supply chain management.Institutions in Germany, Holland, Switzerland, andAustria offer courses in forwarding, but there are onlya few undergraduate options available, says HarmOtten, SVP - Corporate HR at Schenker.Most post-graduate courses emphasize the busi-ness of supply chain management – trade financeand inventory management – rather than its opera-tional skills. “There is a greater need for people withbroad experience and skills, including languages,”says Alan Smart, course director of the mastersprogram for supply chain management at Britain’sCranfield University. “Although we do have graduatesgoing into logistics companies, many more work atmanufacturers or retailers.”“If universities would engage more with employers,they could prepare their students better for jobs inlogistics,” says Dorothea Carvalho, director ofprofessional development at the UK’s CharteredInstitute of Logistics and Transport. This involvementwould ensure that the industry had a supply ofpeople with appropriate skills, and could avoid theneed for young forwarders to supplement on-the-jobtraining with courses run by their trade associations.The British and Canadian freight forwarding associa-tions offer training in everything from basicforwarding to handling dangerous goods. The USforwarder association runs a foundation course to

cargovision Hunting heads

train instructors for work in developing countries.Many forwarders prefer internal training schemes.For example, Schenker runs an apprentice schemefor youths aged 16-17, as well as an internationalprogram for potential managers to develop leader-ship, networking, and personality skills. “Inforwarding, it’s experience and success – next toeducation – that count,” says Mr. Otten. “We movepeople around the company to familiarize them withdifferent areas of the business.”Kuehne+Nagel has also developed in-house training.In the UK, it launched three programs for apprentice-ship, management, and sales. To attract potentialmanagers, Kuehne+Nagel sends its youngemployees to career events, schools, and universi-ties, where they promote the industry and company. The apprenticeship program, run in conjunction withlocal government, offers its 16-year-old participantsa practical knowledge of forwarding, includingcustoms clearance. The sales program identifiesemployees and external applicants who have acommercial focus and may wish to move into sales.

ON-THE-JOB-TRAININGFor smaller forwarders, an internal program may bethe only way to find staff. In 2005, Woodland Interna-tional Transport began training two local schoolgraduates per year. The program moved themaround several of the head office departments for sixmonths to give them a broad understanding of thebusiness before sending them to work in one of theirUS or UK branches.Phoenix Aircargo in the UK found that internshipsprovided an excellent source of new recruits. “Fifteenyears ago, The French Centre in London asked if wewould accept French university students who werestudying international business,” explains directorTony Woodward. “Many have come back to us afterthey graduate and are valued members of our staff.”The logistics industry has had more difficultyattracting young people than in finding the right skills,says recruiter Ms. Gerrits. “There are some brightyoung people out there, but logistics has onlybecome an important career option in the lastdecade.”Many young people do not know what logistics andforwarding involve, let alone what career opportuni-ties they offer. “We can improve the way we promotelogistics and forwarding,” says Schenker’s Mr. Otten.“It is a sexy career: it’s international, informal andpeople get a lot of responsibility very quickly. Wemust get this message across.”

Sjoerd van Loon

Olivier Kudlikowski

Daan Nijssen

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NEW CHINA, NEW RULES To find the cause of staff shortages, youneed to look beyond the symptoms BY MICHAEL WESTLAKE

There has been a major change inhow staff recruitment takes placein China. Finding skilled labor isbecoming harder, and it is neces-sary to pay more to attract theright people. At face value, thecause seems to be that staffs areno longer assigned to companiesby the equivalent of a govern-ment-controlled Central Castingwork unit. People can thus job-hop for better terms and condi-tions, better work experience, andtraining and higher qualifications.This is true, but it’s not the wholestory.What’s happening is that China isoutsourcing within its ownborders. This vast nationproduces about 94% or its foreigntrade goods within 250 km of thelong coastline. According toconsultant Bob Char in Beijing,when you look at gross domesticproduct, the nation’s capital,Beijing, and major business andfinance centre, Shanghai, registerabout US$8,000 per capita GDP,while the inland province ofSichuan’s capital, Chengdu,shows US$4,000. And furtherafield, the city of Chongqing earnsless than US$2,000. The rest ofthe underdeveloped country earnseven less.The government’s mantra for thepast five years has been “GoWest,” to develop the huge areasof the nation beyond the pros-perous coastal regions, away fromthe major manufacturing andexporting centers of Beijing in thenorth, Shanghai to the east, andGuangzhou in the south. It’s a sort of build-it-and-they-will-

come approach, says Char: “Theywant to move the factories to theworkers.” The plan to redistributewealth means changing the traditionaldrift of people from the countryside tomajor centers and building hugequantities of new infrastructure: roads,schools, hospitals, factories, andairports. Traffic will come with amixture of carrot and stick: slot restric-tions at the major hubs will forceairlines to fly elsewhere to helpmarkets develop.Even then, it’s more complex. Thecountry is growing so fast that jobopportunities are opening up fasterthan the labor pool can be increased –particularly skilled labor. Plus, unevenlevels of education across the countrylimit the top jobs available for gradu-ates from outside the coastal cities,where top companies are based. Theresult is a dearth of talent for topcompanies, while the lower-end firmsshift to the west seeking to cut costs.Therefore, people already on the jobladder can rise up the value-addedchain, while those not yet on theladder have trouble getting onto it.There are also political restrictions onemploying people from outside theiroriginal region, limiting companies’hiring options. As Char points out, the direction of theeconomy has changed: “It’s going tobe different for companies in coastalregions, but not for China as a whole.Now survival is not the problem, it is toeven out the prosperity. So how doyou find good staff? Steal from otherpeople.” In short, the shift in coastalcities to staffing shortages and esca-lating costs is increasing and isunlikely to level off.

Two graduates in Beijing

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INDUSTRY

SeattleSpeakers at the Cargofacts annual aircraft symposium in October gave atantalizing peek at the role that financial institutions play in the air cargoindustry. At the time of the conference, fuel had topped US$86 billion andwas said to represent 50% of direct operating costs for most airlines. Hereare some of the other points.

Interest in leasing freighters is on the rise, according to Stephen Rimmer ofGuggenheim Aviation Partners. Financiers that preferred not to deal witholder aircraft or had difficulty understanding a cargo airline’s creditworthi-ness and the value of its assets have changed their outlook. Carriers likeKorean Air, Singapore, Emirates. and Cathay are now able to financefreighters at rates equivalent to their passenger aircraft leases.

However, many airlines lack the financial portfolio to purchase aircraft. Toaccommodate them, leasing companies base lease rates on the aircraft’sintrinsic value rather than the carrier’s creditworthiness. Aircraft with highintrinsic value are those that airlines want to and can incorporate into theirfleets. An aircraft with a standardized configuration that fits into manyairline fleets retains its value, and thus its earning power, longer than acustomized model. Aircraft that can fly for 20 years in passenger serviceand another 10 years as converted freighters retain the highest values.Because aircraft lessors now buy most of the aircraft from the manufac-turers, they are better able to standardize the configurations of new planes.

Still, the airfreight capacity paradox continues. Too many freighters fly inmany markets yet airlines cannot find enough of these aircraft to fulfilldemand. Manufacturers are not building new freighters fast enough andairlines are not retiring a sufficient number of the older passenger planesused for conversions.

On the supply side, perceptive operators of low-cost passenger airlinesknow they can make money from cargo. Some CEO’s, like Stephen Millerof Oasis and William Stockbridge of Maxjet, are former cargo execs andhave been quick to outsource the selling and handling of their belly freight.Some of these nimble airlines will also use new open skies agreements toexpand their networks quickly and be the first to offer cargo capacity intonew markets.

Airlines are learning to sell a la carte to passengers inthe same cabin. The sophisticated software thatenables flyers to buy or modify different services at anytime, from booking to departure, can add revenue andreduce unit costs by 12%, according to Scott Dicksonof Midwest Airlines. These revenue managementprograms have just become available to passengercarriers and it is only a matter of time before cargooperators will have them and be able to offer differentservices in the same allotment.

The new A330-200 freighter looks to be a strongperformer, according to Ronald Anderson of IntrepidAviation Management, the largest customer for thismodel. First, its capacity and range, 64 tonne and4,000 nmi, are suited to the mixture of small packagesand general commodities that comprise the typicaltraffic mix today. Second, the lack of available aircraftfor conversion combined with delays in A380 and B787deliveries mean that the market will be short 100 wide-body and medium-body freighters between now and2012. Third, imbalanced flows favor new and fuel-effi-cient aircraft. With manufacturing moving to the MiddleEast, Africa and China, carriers are flying with fullrevenue out of China, but only 20% on the backhaul.

OPEN SKIES

TokyoJapan and the US signed a bilateral air services agree-ment in September that provides unlimited cargoaccess between the US and Nagoya and Osakaairports. UPS said it won permission to operate sixdaily services between the US and Nagoya. Delta Air Lines and Northwest are also expected toexpand operations.

cargovision news around the world

Our quarterly review ofindustry news keeps youabreast of developments in key sectors around the world.

ONLINE

CambridgeThe expanding use of RFID tags on animals, food, and farming could meanthat forwarders and carriers will need to incorporate tracking for thesecommodities as they are shipped by air. According to IDTechEx, this willbecome the largest market for RFID systems and tags, because it will helpparticipants in the food supply chain monitor livestock disease andprepared foods. They also improve tracking, condition monitoring, crimereduction, and error prevention. A report on RFID for Animals, Food andFarming 2007-2017 released in October cites lessons learned fromAustralia to Canada, including keeping tabs on pistachio nuts in California,ostrich farming in South Africa, ham retailing in Spain, and the food tracingin China. The report is available athttp://www.idtechex.com/products/en/articles/00000729.asp

INTERMEDIARIES

IrvineBAX Global is giving manufactures in the Bajio region of Mexico an alterna-tive to trucking their freight to airports in Guadalajara or Mexico City. A newcargo flight to Querétaro airport, roughly halfway between the two cities willhelp shippers in this developing industrial area connect with customers inthe US and Canada.

EssenSchenker has completed its takeover of TIR, the Spanish logistics group itbought in August, saying that it will now be possible for the Deutsche Bahnsubsidiary to offer its European land network to customers in the IberianPeninsula. Schenker will also integrate TIR’s 1,500 employees and its 72offices into its worldwide network.

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KaliningradKuehne+Nagel opened a branch office in Kaliningrad.The Swiss forwarder believes that the ice-free portoffers year-round logistics potential.

BaltimoreTarget Logistics of the US said in September that itwould merge with Mainfreight Limited of New Zealand.In October, a Target shareholder filed suit in Maryland,claiming that the US$2.50/share offering was inade-quate. The issue had not been resolved at press time,but Target management expects the deal to conclude.If it does, Target would be absorbed by Mainfreight’sUS subsidiary, Saleyards Corp., and continue to existunder the Target name.

AIRCRAFT

MoscowAeroflot Cargo has asked Boeing to convert two MD-11 passenger planes into freighters and update theirflight decks and cargo handling systems. AeroflotCargo operates four DC-10 freighters. It has agreed tolease three more MD-11 freighters from Boeing CapitalCorp by 2008. Before the end of the year, thecompany will also consider acquiring ten Boeing 777cargo planes. It will add these aircraft to its fleet in2012-2015 and write off the five leased MD-11s.Aeroflot Cargo is looking to finance the deal throughRussian banks and western financial organizations.

New Central Japan International Airport in Nagoya


11 new students take over the project every 2 years.

“You do a 3,000-km sprint across the remote areas ofAustralia,” Professor Ockels says. “This demonstratestechnologies that show hope and optimism for thefuture. People are proud to see something like this inthe same way they are happy to see an Olympicathlete perform well. It represents an achievement ofmankind.”Professor Ockels, a former astronaut, is chairman ofthe Aerospace for Sustainable Engineering and Tech-nology program in Delft’s faculty of Aerospace Engi-neering. His students affectionately call him the godfa-ther of the Nuon team.

“The Delft students actually initiated the Solar Chal-lenge,” Professor Ockels says. While the team was


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ENVIRONMENT

AdelaideOne day, you may look out of the airplane window and see solar panelsembedded in the upper surface of wing. The jet engines will still be underthe wing, but the power for cruising above the clouds during daylight willcome from the sun in the sky, not from oil in the earth.

The idea is not new, but progress is now being made towards its realiza-tion. In October, 38 teams from 21 countries tested the latest technologiesin design and propulsion during a five-day car race in the Australianoutback known as the Panasonic World Solar Challenge.

The real objective of the race is to tell people that you can drive on solarenergy, says Wubbo Ockels, the coach-advisor to the Nuon Solar Team,11 students from Delft University of Technology in the Netherlands whobuilt and raced this year’s winning entry, Nuna4. Nuon teams also won theprevious three contests and their success is even more amazing because

Wubbo Ockels

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building its first car, the professor introduced them tothe seven factors he said would make their entry awinner: ■ The solar generator must be the best available;■ Aerodynamics must be unsurpassed in low drag and

good behavior in side winds;■ Construction must be lightweight with low draft and

low rolling resistance;■ Manufacturing must be rigorous and create high reli-

ability;■ The team must have high spirits and quality

members;■ Their strategy should make use of advanced soft-

ware planning tools;■ They needed to attract good sponsors.

“I lifted the project from a purely student initiative, withstudent funding, to one using space-quality solar cellsalong with other advanced technologies,” ProfessorOckels explains. “I helped them get sponsors, makethe project more visible, and create an opportunity forsuccess.” Among the teams sponsors are NuonCorp., Delft University of Technology, KLM, ABN Amroand more than 30 suppliers, who all contributed tobuilding the best solar-powered racecars in the world. Your vacuum cleaner uses about the same energy asthe 190-kg Nuna4 when it is running at 100 km/h. Thethree-wheeled car’s 6-m2 upper surface contains2,318 photovoltaic cells. They charge a 30-kg lithium-polymer battery pack that powers the rear wheelthrough a 5.6-kw direct-drive electric motor. Advancedstructural design methods use the latest fabric andresins to create a featherweight hull. The car glidesover the road on aramid-fiber tires turning on ceramichub bearings. Chase vehicles cannot keep up whenNuna4 swings into the passing lane, and its rollingresistance is so low that they must continue to accel-erate even as it is slowing to a stop.

The nature of university life also adds an element ofstrength to the project, Professor Ockels says. “It isquite a draw on the student’s energy and time. Theywork for a year and then continue on to other things.This brings 11 sets of fresh eyes to scrutinize and testthe design every two years. It is important that thestudents have an association around this work so theycan transfer knowledge to new members.”

GATEWAYS

BeijingAirlines will not be able to apply for landing rights in China before 2010unless they use Chinese made regional jets or are cargo airlines and othercarriers that promise to fly at night or to the country’s underserved regionsin the west and north east.

GuangzhouNorthwest Airlines will move 20% of its transshipments to GuangzhouBaiyun from Hong Kong, because it has a new electronic customs clear-ance system.

LiegeDevelopment began in October for Cargo City Nord, the dedicated freightarea at Liege airport. During the first phase, the builders plan to finish a6,250-m2 terminal by January 2008. When the airport completes thesecond phase in 2010, it expects to handle 800,000 tonnes per year.

CologneFedEx is investing in a 50,000 m2 sorting facility in Cologne in order tohandle Central and Eastern European traffic. It plans to relocate its facilitiesfrom Frankfurt/Main by 2010, in part because of Frankfurt’s ban on nightflights.


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MOVING ON World

Ringo ChaoMr. Chao became chairman of China Airlines inOctober. Mr. Chao was president of Eva Air for 14years before returning to China Airlines as president in2005. Before joining Eva, Mr. Chao had been presi-dent of Mandarin Airlines, a subsidiary of ChinaAirlines.

Tony RyanDr. Ryan, co-founder of Guinness Peat Aviation andfounder of Ryanair, passed away after a long illness inOctober. He was 71. Dr. Ryan built GPA into one of theworld’s largest aircraft lessor with a portfolio of 393aircraft to over 100 airlines before the economic down-turn after the 1991 Gulf War eventually forced the saleof the company to General Electric and Texas PacificGroup.

John AllenMr. Allen became chief financial officer for DeutschePost World Network in October. Previously, Mr. Allenled DHL Logistics, a position he assumed in 2005when DPWN bought Exel, which Mr. Allen washeading at the time.

Scott DavisMr. Davis will become UPS chairman and CEO inJanuary. Mr. Davis has been with the company since1986 and was named vice chairman and boardmember in 2006.

ALTERNATIVE FUEL

Auckland In September, Air New Zealand said it would test-fly a 747-400 during thesecond half of 2008 using a mixture of biofuels and jet fuel in one its fourengines. Boeing and Rolls Royce are partners in this program, which ispart of a wider research program to understand renewable fuels and theirpotential future applications in aviation. The team will announce the exactfuel mixture nearer to test time.

VillarocheLast June, CFM International, a joint venture of Snecma and GeneralElectric, began testing biofuel performance in a CFM56 engine atSnecma’s Villaroche facility near Paris. The test used a biofuel of 30%vegetable oil methyl ester blended with 70% conventional Jet-A1 fuel. Itwas designed to check the operation of a jet engine using a fuel madefrom biomass, without making any technical changes to the engine.CFM’s target is to reduce CO2 emissions by 20% over current fuels.

LondonIn April, Richard Branson became the first industry leader to say he wouldtest biofuels in a commercial jet. Virgin Atlantic is now scheduled to fly a747 using several alternative fuels during 2008. The most promisingamong them is a 60% biofuel-kerosene blend.

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Reinhard LangeMr. Lange will become CEO of Kuehne+Nagel whenKlause Herms retires from the position in June 2009after 40 years of service. Mr. Lange has been amember of K+N’s management board since 1999 andbegan his career with the company in 1971.

John PattulloMr. Pattullo joined CEVA as the company’s CEO inAugust and will oversee its contract logistics andfreight management divisions. Mr. Pattullo previouslyled the European and Middle Eastern contract logisticsbusiness of Deutsche Post-DHL.

Stan Wraight Mr. Wraight became chairman of the board ofCargoitalia in September and in October leased two747-200 freighters to begin new services from Italy toAtlanta, New York, Chicago, Houston, and Mexico.Cargoitalia’s own DC-10 will operate to India and theMiddle East, while its leased MD-11 will continue to flyto India and Shanghai.

Alexey IsaikinIn October, Mr. Isaikin added the responsibility of presi-dent of AirBridgeCargo Airlines to his role as presidentof Volga-Dnepr Group. Mr. Isaikin emphasized thatAirBridgeCaro will continue to pursue internationalcargo markets and Volga-Dnepr will look at restruc-turing in connection with a possible public offering.

cargovision datelines

January 29-306th Annual Global RFID-ROISummitM,O,C, Munich GermanyT: +44 (0) 207 202 7558E: [email protected]

January 23-25Air Cargo India 2008World Trade CentreWTC Complex, Cuffe Parade, MumbaiIndiaT: +91 22 2757 0550www.stattimes.com/aci2008/

February 10-12Regional AmericasHilton Cancun Hotel & Golf ResortBoulevard Kukulcan, CancunMexicoT: +44 (0) 161 234 2713F: +44 (0) 161 234 2703www.routesregionalevents.com/americas/

February 12-14Bahrain 2008Bahrain International Exhibition CentreBahrainE: [email protected]

February 25-26World Mail & Express Americas2008Sheraton Buganvilias Resort, Puerto Vallarta, Mexico T: +44 (0) 870 950 7900 F: +44 (0) 870 950 7910www.triangle.eu.com/conferences/worldexpressamericas/default.htm

March 2-6IATA World Air Cargo SymposiumMarriott Park Hotel Centre, RomeItalywww.iata.org/events/wcs08/index.htm

March 3-4CSCMP Southern Africa 2008ConferenceEmperors Palace Hotel Casino ConventionResort, Kempton ParkSouth AfricaT: +1 630 574 0985F: +1 630 574 0989www.cscmp.org

March 11-13ACT Global 2008Amsterdam RAI Convention CenterNetherlandsT: +44 (0) 20 7921 8544F: +44 (0) 20 7921 8549E: [email protected]

March 16-18AirCargo 2008Omni ChampionsGate, Orlando, Fla.T: +1 703 361-5208www.airforwarders.org/events.php

What is Venus International Transport?

We are a forwarding agent. The export of freshproduce from Egypt accounts for some 80% of ourbusiness. I started the company on my own 22 yearsago and it remains a family business. I have a 50%share of the company, while my two sons hold theother 50%. The big difference is that we now have42 employees.

How did you get involved in this business?

I actually worked as a teacher in an English MissionCollege in Cairo for eight years, which I liked verymuch. I got into airfreight by chance. It started whena friend’s father, a cargo agent, asked my help intranslating an IATA application and talking to theairlines.

Did your teaching experience shape yourbusiness outlook?

I believe the most important characteristics of ateacher are devotion, honesty, and an understanding


of one’s role. We apply the same thinking as part ofan airline and a representative of the shipper.

How did Venus help develop Egypt’sperishables sector

We play a major role in shipping fresh produce by airfrom Cairo to Europe. As such, our aim has alwaysbeen for the cool chain to be complete, with goodsarriving fresh and transported at a competitive rate.This is important as we face strong competition fromother modes of transport.We have helped solve many problems in the industryhere in Egypt. In particular, we played an essentialrole in establishing a perishables terminal at Cairo - afacility that has helped maintain the cool chain in away that was just not possible before.

Is your export market doing well?

The Egyptian export market is very healthy and full ofpromise thanks to major developments in agriculture.The area between Cairo and Alexandria, for instance,

VENUS RISINGSamia Sayed heads Venus International Transport, a Cairo-basedforwarding agent that has grown from humble beginnings to become akey player in Egypt’s airfreight industry. An outspoken innovator, Ms. Sayed continues to champion the development of perishables export in Egypt - a sector that remains vital to the country’s economy.

BY RICHARD ROWE

© Lil Lang/AlamySamia Sayed

cargovision 15

used to be desert, but it is now green with agricul-ture. Today, around 90% of our exports comply withthe requirements of European supermarkets. Mean-while, the government-run airport authority andnational carriers are doing their best to encourageexport and are now working hand-in-hand to solveproblems facing exporters.

Does the airline industry serve your marketas well as other modes of transport?

Yes, although sadly I see little change in airfreighttoday from when I first started 22 years ago - andcertainly nothing comparable with sea transport. Seatransport is now going door-to-door and better ableto maintain the cool chain than airfreight. I keepsaying to airlines that they should look at what ishappening. Airlines should calculate carefully thepercentage of revenue that could be gained fromfresh produce and decide if they need it. If it counts,they must work hard to keep it. A lot of goods arenow going by sea and still the airlines stay quiet.

PROMOTINGPERISHABLESSamia Sayed has built a for-warding operation that hascontributed substantially todeveloping Egypt’s perishablesexport business. Today, VenusInternational Transport collabo-rates with more than 30 airlinesas an IATA/FIATA agent andcontinues to work closely withEgyptian shippers and govern-ment on increasing exports andsolving related problems.

In addition to her position asChairman of VenusInternational Transport, Ms.Sayed works to bring aboutchange through her position onthe boards of Egypt’s influentialHorticulture Export Improve-ment Association and the AirCargo Association Cairo.

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What would you have airlines do exactly?

We need airlines to think and give us better results.Take the loading of containers, for instance. Ashipper pays for a tonne, but a container only takes600 kilos of produce. That’s 400 kilos the shipper isnot getting, which is one reason why shippers arenow exploring sending strawberries by sea. Blanket fuel surcharges are also not helpful. Freshproduce is very sensitive to price, so I think airlinescould cover their fuel surcharge by differentiatingbetween items. Airlines can find different solutions,but they must have the will to think and change.

Has your business philosophy changed over the past two decades?

My philosophy is the same as the day I first started: itis about developing the export of fresh produce, whichis so essential for our country. In doing so, we give firstand then we take. But we look only for reasonableprofit, as it is important to think not just of ourselves,but all other concerned parties in our business.


Airlines and postal organisations are testing a conceptfor shipping mail on air waybills as part of theirgeneral cargo traffic. This joint effort aims to

enhance international airmail operations andreduce costs.

BY PHILLIP HASTINGSAIRTHE FUTURE OF

■ A project to develop a postal air waybill (PAWB) andseveral related activities could enable airlines to manage mailtraffic as part of their general cargo systems very soon, withsignificant cost and service benefits to their postal servicecustomers.Air cargo and airmail must now travel internationally withdifferent documents: the air waybill and postal delivery bill-consignment note. Separate processes are required to trackthe two traffic categories, a problem compounded by the factthat airlines use air waybills to track whole consignments,whereas postal organisations want to be able to track indi-vidual bags or trays.To bring these systems together, airlines and the postalauthorities will have to work together to integrate the functionsof their cargo and mail system, explains Jörgen van Mook,manager of Operations Planning for the International PostCorporation. “Then the airlines can manage mail in their cargosystems and, over time, do away with the stand-alonesystems they use only for mail.” That objective is a central element in a joint initiative called theFuture of Mail by Air established in early 2006 by members ofthe IPC and a group of mail-carrying airlines, including AF-KLCargo. The postal authorities want airlines to improve the quality ofservice they provide, particularly for tracking mail consign-ments, and at the same time charge them less. However, inaligning the processes and systems required to do this, theywant to avoid changing the legal status of mail, says Mr. vanMook. “Mail has to remain mail and not become cargo.”Mail and cargo are ruled by different conventions, Mr. vanMook explains. “Mail is ruled by the Universal Postal UnionConvention and carried under postal delivery bills. It also hasseparate procedures for customs clearance.”

THE PATCHPostal authorities and airlines have come up with the cleveridea of creating a postal air waybill number, a referencenumber that enables airline cargo systems to track mail

cargovision 17

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without the legal status it would have travelling with anair waybill. “Manifesting mail in a cargo system under a postal airwaybill number does not mean creating an electronicair waybill,” Mr. van Mook says. “Mail would continueto travel with a postal delivery bill. However, it wouldhave a special handling code, MAL, in the airlinetracking system. IATA recently approved this designa-tion specifically to enable mail tracking. Using a PAWBnumber, carriers can identify traffic as mail in theircargo systems and identify it for customs.”Stéphane Bocquet, AF-KL Cargo’s director of Airmail,says the PAWB development is significant. “We will beable to add more value for our customers in the postalsector by providing enhanced tracking and tracing ata reasonable cost. The mail situation today is similarto the time when carriers and forwarders agreed todevelop Cargo 2000 in order to ensure better visibilityof their shipments.”Moreover, the continuing development of Cargo 2000could also play a role in the airmail sector, addsMarloeke Werst, AF-KL Cargo’s sales director ofAirmail Services. “Cargo 2000 provides the statusmessages required for tracking cargo based on theuse of air waybill numbers. If we introduce postal airwaybill numbers for airmail, then it opens the possi-bility of using Cargo 2000 to generate the messagesfor that traffic as well.”

IN PRACTICE“The idea now is to let individual airlines and postalauthorities decide how they want to number their mailshipments,” says Christophe Eggers, internationalnetworks manager for La Poste. The process startswhen the post enters the airline booking system andcreates a profile for tracking. Then, either the airlineissues a PAWB number or the post provides the airlinewith a number.In one case, the airline could send an allotment ofPAWB’s to the post, which could allocate them toshipments as it sees fit and inform the carrier accord-ingly. Alternatively, the post could send the airline anEDI message, a Carrier/Document International Trans-port message that contains information about aconsignment of mail given to a carrier. It is the equiva-lent of an FWB air waybill data message. The carrierwould then respond with another EDI message, theCarrier/Confirmation of Receipt or Current Exceptionmessage that contains information about the consign-ment of mail as it is processed by the carrier, includinga PAWB number for use by both parties.The airline uses the PAWB number to track the mail

shipment through its cargo system. Meanwhile, thepost attaches information about the individual bagsand trays comprising the shipment to the PAWBnumber and sends it to the carrier. The postal organi-sation at the destination scans the items from eachshipment and matches the details to the PAWBtracking information. “The airline tracks the PAWB andthe post tracks the individual items,” Mr. Eggers says.“The trick is not to add to the airline’s workload andcosts.”

THE PILOTFor a recent pilot test, the French postal organisationLa Poste and AF-KL Cargo moved daily mail betweenParis and Montreal using PAWB’s linked to postalconsignment numbers.The project went very well, Mr. Eggers says, with LaPoste being able to access AF-KL Cargo’s trackingsystem manually via the Internet and find deliveryinformation for each shipment. However, before theyexpand to other routes, the parties involved want toautomate these exchanges in their respective trackingsystems.“With the pilot project, we managed the processmanually through the use of email communications,”Mr. Eggers says, “Now we need to see how we canget the systems to do that and implement the latestrelease of the CARDIT-RESDIT EDI message, M39,which was approved recently as a standard.”“We will probably also need to do some work in thearea of customs,” Mr. Eggers continues. “For the pilotshipments, we had good cooperation from AF-KLCargo, Canada Post, and Canadian customs. If wewant to run such systems on a regular basis interna-tionally, we will need to make arrangements withcustoms and border security agencies.”The airline and postal people close to this projectbelieve that the PAWB will become an everyday realityin the international airmail business fairly soon.“It appears we are not far away now,” says WijnandAalberts, manager of Operations Support for TNTPost’s international mail unit. “If the posts and theairlines are able to add the use of PAWB’s to theirsystems fairly quickly and both industries put effortinto achieving this, then we could see the start ofimplementation in the first half of 2008.”

cargovision The future of airmail

Stéphane Bocquet: ‘The mailsituation today is similar to thetime when carriers and for-warders agreed to developCargo 2000’

The devastating earthquake that struck Peru earlier this year caused over 150 deaths and widespreadinjuries, and left several thousand people in need of shelter and relief supplies. Clara de Luque, Air FranceCargo-KLM Cargo’s sales manager in Lima, was among the first to leap into action. She also has a longrecord of facilitating trade in her country.

BY TONY CARDING

cargovision 19

■ “It was August 15 – we will never forget that date,”says Clara de Luque, as she recalls the earthquakelast summer. In the local AF-KL Cargo office, thestaff’s first reaction to the quake was to donate oneday’s salary to the relief effort, according to Ms. deLuque, who joined KLM in Peru 40 years ago and hasbeen in cargo sales ever since.By August 23, 20,745 kg of relief goods from Europehad been flown in aboard scheduled KLM passengerflights from Amsterdam to Curacao, where it waspicked up for transport to Lima by a B727-200freighter arranged by AF-KL Cargo’s offices in Brus-sels, Schiphol, and Miami.“The cargo came into Curacao from the Netherlandsbecause there was more capacity on that route,” Ms.de Luque explains. “The direct flights from Amsterdamto Lima did not have enough capacity, but there wasspace available on passenger flights from Amsterdamto Curacao.”Even so, the relief effort successfully used the littlecapacity available on the Amsterdam to Lima route,Ms. de Luque adds: “Shipments totalling 53,395 kgwere flown in on our direct flights.”During an earlier crisis in Peru, at the end of the 1980s,the country suffered a huge devaluation of its currency,Ms. de Luque recalls. “It was very difficult for exportersto do anything and many other European airlinesstopped serving Peru.”At that time, Ms. de Luque knew the general managerof Royal Philips Electronics. The company neededdollars urgently to buy supplies for its Peruvian branchfrom the Netherlands and other parts of the world andshe was able to introduce him to a producer ofasparagus in Peru.“Philips contacted a local export company and westarted shipping asparagus to Holland,” Ms. De Luquecontinues. “Philips paid for the asparagus in localcurrency here and used the dollars they received fromthe importers in Holland to purchase and ship thespare parts for Philips in Lima.” So, thanks to Ms. De Luque, began the boom inasparagus trade from Peru, which now ranks secondin the global producers’ league, in terms of exportsworldwide. As Ms. de Luque says. “Asparagus havebeen a boon to our country.”

cargovision people make a difference Clara de Luque

© Courtesy to AF-KL Cargo in Lima

TO THE RESCUE

The new open skies treaty between the US and the EU that will take effect in March 2008 couldhave major implications for the air cargo market. The biggest change is that European airlineswill be able to fly from any point in Europe to any point in the US. Peter Conway looks at whatthis means for the cargo business.

BY PETER CONWAY


PIEIN THE SKY

■ Effective March 30, 2008, the skies will open overthe North Atlantic. A German carrier will be able to flyfrom Madrid to New York, or a French carrier fromLondon to Houston. In the past, these carriers couldfly to the US only from their home countries. Carriers on both sides of the Atlantic also get unlim-ited fifth freedom rights, allowing, for example, aEuropean carrier to fly beyond the US to LatinAmerica, or across the Pacific to Asia. In addition,European freighter operators get unlimited seventhfreedom rights; that is, the right to base an aircraft inthe US and fly it to a third country. US airlines get nonew seventh freedoms, but FedEx and UPS alreadyhave such freedoms within and from Europe underexisting bilateral agreements.What impact the new rights will have on Europeanfreighter operators is not yet clear: airlines such asCargolux in Luxembourg and Ocean Airlines of Italysay they are considering starting new routes fromother European countries, but are not revealing anyspecifics yet.

NEW HUBBING?One possibility for freighter operators might be to setup a second cargo hub in Europe, away from theirmain base. Air France, indeed, has had such a hub inHahn for many years where it has consolidatedcargo from Germany to truck to Paris. With theairport runway recently extended to 3,800 m, it istechnically feasible to operate 747 freighters fromthere to the US. However, Air France has no imme-diate plans to start freighter flights from Hahn or fromother parts of Europe, says Dominique Patry, theairline’s vice president of International Affairs &Alliances. Both France and the Netherlands already enjoygenerous traffic rights – including fifth and seventhfreedoms – under their existing national open skiesagreements with the US. Sixteen of Europe’s 27member states have such deals, and are alreadybenefiting from many of the freedoms now beingextended Europe-wide. Several airlines have madecreative use of them already. Cargolux, for example,stops at Prestwick on the way to the US, and for awhile this year flew across the Atlantic from Gothen-burg in Sweden. For US carriers, a major benefit of the deal is accessto the UK. FedEx has long campaigned for more fifthfreedom rights from the UK, but the big US airlineswant to do business at London’s most congestedairport – if they can get slots. Reports say that the

furious trading has raised their price to $40 million.Air France and Delta have figured out a way aroundthe slot problem. In October, they announced plansfor Air France to fly from Heathrow to Los Angelesthis coming summer, and for Delta to fly from NewYork and Atlanta to Heathrow. Both carriers will sharerevenues and costs on these routes.They will get the additional slots for Heathrow byreducing the number of Air France flights betweenLondon and Paris. Air France expects that theNovember opening of high-speed rail servicebetween London and Paris will reduce demand forair travel between the two cities.

NEW BELLIESOther European carriers, including British Airwaysand Virgin Atlantic, are also looking at transatlanticpassenger services from European cities outside oftheir home countries, and so is Rynanair, which hastalked of starting a low-cost transatlantic airline,using as many as 50 A350’s or B787’s and chargingfares as low as €10. The European Commissionreckons that the open skies deal could generate 25million extra passengers a year. A report by BoozAllen Hamilton for the Commission translates thatinto as much as 423,000 extra tonnes of bellycapacity for cargo. How much of this new capacitywill be useable by cargo is open to question,however. It is also unlikely that open skies will givemuch of a boost to such a mature air cargo marketas the transatlantic, particularly since it already offerscompetitively low rates. As the Booz Allen Hamiltonreport points out, most Europe-US markets alreadyhave enough cargo capacity.In particular, this new belly capacity would be likely totake business away from freighter operators, exceptthose operating in markets that currently have morerestricted bilateral regimes. As candidates, the BoozAllen Hamilton report identifies Ireland, Hungary, andSpain, which do not at present have open skies andhave relatively low percentages of cargo trafficmoving on freighters.

cargovision 21

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JAN KREMS&SONS


© Jan Krems

SUNDAYKenilworth, IllinoisRising at 7:00, I play tennis with some friends. I have a late breakfast withmy wife, Manon, and my two boys, Boris (7) and Max (10). My sons playsoccer in the afternoon and later, around 5:00, we have drinks and dinnerwith some Dutch friends who live close by.

MONDAY Chicago O’HareTo avoid traffic jams, many of the KLM staff in Chicago start at 6:30. Theearly hour also makes it easier for me to contact the head offices in Parisand Amsterdam . This morning, I make phone calls to my six regionalmanagers in the US: Lori Burrell, Canada; Eric Mauroux, Mexico; GilbertLaveisierre, Brazil; Maria Arana, Andean-Caribbean, and Patrick Bazelot,Southcone (Argentina, Chile, and Uruguay). Next, I walk down the hall totalk to Sanjay Tiwari. We discuss events of the previous week, informa-tion I will need for upcoming meetings in Paris. Then, we have an officelunch with the staff to celebrate our positive results of the previousmonths before I catch a 3:00 flight to Toronto. There, I meet with ourground handling company to discuss quality issues before having dinnerwith our Canadian staff. Afterwards, we have drinks, play pool, darts, andtable soccer. The Dutch team is beaten badly!

TUESDAYTorontoAt 9:00, the staff and I discuss continuing issues. Our area controller, DirkVoermans, gives a financial update. Our meetings include interactivesessions that give time for everyone to express their ideas and ask ques-tions. Today, we are discussing Model Office and C2K. At noon, I havelunch with a customer and then catch AF353 to Paris. My travel scheduleincludes monthly trips to Paris and Amsterdam. On the long flight, I doemail and reading to catch up on industry developments. I also enjoywatching the latest movies and catching a bit of sleep.

WEDNESDAYParisI meet with colleagues from Asia, the Middle East, India, South Africa,Europe, and the French overseas departments and territories, along withmy manager Jean Charles Foucault. We discuss budgets, integrationissues, networks, customers and competitors. At 18:00, I fly toAmsterdam where I have dinner and drinks with my friends and end up atmy parents for the night.

THURSDAYAmsterdamA busy morning. First, breakfast with a global account. Next, a short visitwith people at our hub. By 10:30, I’m on flight KL611 to Chicago. Arrivingin the office at 1:00, I start forecast calls with my six area managers thenclean up my desk and attend to pressing issues. Our manager of Equa-tion and Commercial Support, Jura Fish, and I evaluate the Joint Amer-icas Teams Meeting held during October in Mexico. We decide to surveythe attendees as a way to test how we might use feedback to improvefuture meetings. We decide to hire our new administrative assistant,Stephanie d’Amore, after checking with our human resources depart-ment in New York. Finally, at16:00 I call it a day and go home where I helpmy children with their homework. We decide that we will have pizza fordinner on the couch while watching a movie. At 20:00, I crash!

FRIDAY ChicagoBecause of the jet lag, I am up early to run a few miles. I have a quickbreakfast with the family and take the boys to school before heading tothe office to prepare for our bi-weekly Area Management Team call. Alldisciplines of the Americas team participate: finance, operations,network, human resources, integration, and sales. Everyone sendsupdates on Thursday and we discuss specific issues during the call. Atnoon, our Chicago Sales Manager, Rich Haus, and I have lunch with alocal customer. The afternoon I leave open for the staff. I must. I am awayso often. At 17:00, it is cocktails with a few colleagues then home by19:00. I pick up the babysitter on the way home so that I can take mywife for a nice dinner.

SATURDAYKenilworthFriday was a late night, but the children finally wake us at 9:30. After alate breakfast, we go to the pumpkin farm to choose our Halloweendecorations. The weather is chilly, but the family has a great time huntingpumpkins. That evening, the movie Shrek 3 entertains us for a few hours.We have sushi. We all love it!

Jan Krems, AF-KL Cargo’s vice president for the Americas, has 21 years’ experience with KLM. He spentmost of the last two years with the Air France Cargo-KLM Cargo merger team as VP Customer Service inParis, before taking on his current position in Chicago. His broad experience with KLM includes positions inAmsterdam, as area manager for EMEA; in Singapore, as area manager for Asia; in Dubai, as regionalmanager for the Middle East and South Asia; and in Europe, as cargo manager in both the UK and Spain.

WITH ANDY WESTON

cargovision a week in the life of

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■ “TAPA was founded in 1997 in the US,” explainsPieter Groeneveld, director – High-Tech & FashionIndustries at AF-KL Cargo. “The organization’sobjective is to fight international cargo crime byachieving cooperation among various parties in thesupply chain.” In its original form, TAPA concerned itself with itemssuch as computer chips, mobile phones, and MP3players. They are attractive to consumers, easily soldon the street, and accessible to staff employed in thesupply chain, says Mr. Groeneveld, who is respon-sible for the AF-KL Cargo security product VariationSafe 2. With changing times, however, the organiza-tion has evolved and now works to help protectother valuable commodities, including pharmaceuti-cals, fashion and other high-value items that need asecure supply chain.AF-KL Cargo is a member of TAPA and works withthe association to improve the Freight SecurityRequirements (FSR) for warehousing, handling, andtransportation of cargo, says Mr. Groeneveld. “Forexample, we are one of the airlines participating inthe working groups to set the freight security require-ments for air cargo handling (ASR).”Security standards already exist for general ware-housing, handling, and trucking, Mr. Groeneveldsays. “The challenge now is to have standards alsofor the airport handling activity, both the airfreightpart and the warehousing part.”

HIGHER GROUNDAirfreight carriers are already subject to a plethora ofsecurity and safety requirements from a range ofauthorities, Mr. Groeneveld says, particularly since

September 11, 2001. “Now, the working group istrying to set up a general ASR for airlines and airportsthat fits with all of the other existing requirements.”David Reid, TAPA vice chairman, says that work isalready underway to ensure that the FSR’s do fit theother requirements, regardless of the facility’s loca-tion. TAPA counts Emirates, Qatar Airlines, AirFrance-KLM, and Lufthansa among its members. Ithas formed a working group with them and withground handlers and IATA to write security require-ments for cargo handling facilities.Mr. Reid believes that TAPA differs from other secu-rity organizations because it already has a standardin place: its freight security requirements. “We arenow working on the airport cargo handling securityrequirements and this is the kind of backbone thatmeans something to the association.”

Mr. Reid, who is also in charge of security at TNTExpress, explains why the integrator chose to joinTAPA and what value it gains from membership. “Inthe first place, all of our major global customers areTAPA members. We would rather be workingtogether to improve security in the supply chain fromthe inside than from the outside. Second, TNT hasadopted the TAPA freight security requirement as itsminimum security standard. We did this because allof our worldwide units are autonomous and theyhave varying degrees of quality in their securityaudits. By adopting the TAPA FSR, I now know that ifany one of our facilities is asked to do business witha TAPA member the standard of that facility isconsistent, whether it is in Brisbane, Buenos Aires,Berlin, or Birmingham, because they now all use thisglobal standard.”

This year, the Technology Asset ProtectionAssociation was renamed the TransportedAsset Protection Association. The newname reflects TAPA’s growing influence intransportation security, as it expandsbeyond its original mission to protect high-tech shipments.

BY TONY CARDING

PROTECTYOURASSETS

cargovision 25

THINGS YOU CAN DOWITH SAFE 1 AND SAFE 2

AF-KL Cargo’s Variation Safe 1product is for high-value itemssuch as gold, diamonds, andbanknotes that need vault stor-age , says Pieter Groeneveld.Safe 2 protects pallet-sizedshipments for many of theworld’s largest suppliers ofmobile phones, semiconduc-tors, high end fashion goods,pharmaceuticals and consumerelectronics.

Safe 2 supplements the generalcargo product with additionalsecurity measures, includingstorage in a secure area withvideo surveillance and rampsecurity at Schiphol and Charlesde Gaulle, Mr. Groeneveld says.“We limit the number of ‘touchpoints’ and people involved withthis product. Those involved inthe process have a thoroughoverview of the shipment fromorigin to final destination.”

AF-KL Cargo is currently stan-dardising the Safe 2 productthroughout the networks of bothairlines, Mr. Groeneveld contin-ues. “In Shanghai, thisSeptember, we had a high-techcustomer event to launch thealigned Safe 2 product from theAsian market. From Asia, youcan now have the same highsecurity standards on the AirFrance network via Charles deGaulle as you do with KLMthrough Schiphol. We expect tohave Safe 2 aligned globally bythe summer of 2008.”

© K-photos/Alamy

■ It’s the reverse of the situation in most developingcountries – instead of a burgeoning airfreight exporttrade and limited backhaul, Nigeria has a largeairfreight import trade and limited – though growing –exports. The reason is simple: a huge chunk ofNigeria’s economy depends on exports of oil andpetroleum products, which travel by sea.The country’s farming industry is mostly subsistencelevel and it does not have self-sufficiency in food. Itsindustries are developing, but many items such asmanufactured goods and food products are stillimported. Domestic companies are striving to buildup their manufacturing abilities, helped by govern-ment rules that protect new and developing industriesby controlling imports of certain items.For airfreight managers, Nigeria’s exports comprisemostly oil-industry equipment being shipped out forrepair or refurbishment, plus personal effects, withload factors of around 15%. Figures are hard to comeby, but estimates for Nigeria’s four major centers forair cargo are: Lagos, about 450 tons a month,including consignments trucked from Port Harcourt toLagos by agents; Kano, about 80 tons a month; andAbuja, the capital, about 40 tons a month. Therunway at Port Harcourt was scheduled for repairwhen a fire in August 2006 closed the airport. It is dueto reopen in March 2008.Half of the tonnage exported from Lagos is oil industryequipment, which originates from Port Harcourt.Personal effects from the large expatriate communityrepresent another 20%, telecommunications equip-ment 5%, and tropical fish 5%. Nigeria was the firstAfrican country to export ornamental fish.


The other half of Lagos’s outbound air cargocomprises clothing and food to the United States andEurope. From Abuja, exports are mostly personaleffects and diplomatic goods; from Kano, exports ofgoatskins are big business.Of Nigeria’s total air exports, about 100 tons go toother destinations in Africa, 150 tons to the UnitedStates, 220 tons to Europe, and 100 tons to Asia.The import trade is much busier, with most of themajor airlines from Europe and the Middle East oper-ating passenger flights offering belly space, plus a fewall-cargo carriers – almost all full. Half of the importtonnage is oil industry equipment and spare parts,20% is telecoms, information technology and elec-trical equipment; 10% is personal effects, and the restis food and medicines. If there has been a problemwith exports, it has been the lack of motivation.Nigeria is the biggest oil exporter in Africa. Incomefrom oil accounts for about 20% of general domesticproduct and provides about 95% of foreign exchangeand about 65% of government revenue. There hasbeen little incentive to change.However, the government is now pressing to expandnon-oil revenues. Plantations are finding anexpanding role in producing raw materials for localindustry and manufacturers for making lightconsumer goods. Import substitution is the name ofthe game. Major economic reforms are underway,furthering privatization and liberalization.To this end, the government is getting out of thecargo-handling business, selling off its stake inNigerian Aviation Handling Co. plc, and seeking toprivatize the smaller Skypower Aviation Handling Co.

NIGERIA BY MICHAEL WESTLAKE

NEED TO KNOW

■ Population: 135,031,164 (July2007 est.)

■ Capital city: Abuja■ Major financial centre: Lagos■ Language: English (the official

language), Hausa, Yoruba, Igbo(Ibo), and Falani

■ GDP real growth rate: 5.3%(2006 est.)

■ Economy: Oil-rich Nigeria isundertaking reforms under anadministration that came topower this year, hoping todiversify the economy awayfrom oil dependency and toimprove the agricultural sector.The country is at present a netimporter of food – agriculture islargely subsistence farming.Economic reforms in progressinclude liberalization, debtrestructuring, curbing inflation,and modernizing the bankingsystem.

■ Trade: Nigeria’s exports gomainly to the United States(49.8%), Spain (8.1%), Brazil(6.3%), and France (4.3%).Principal import partners areChina (10.6%), the UnitedStates (8.3%), the Netherlands(6%), Britain (5.7%), France(5.5%), Germany (4.5%), andBrazil (4.4%). (2006 figures.)

■ Exports: Oil and petroleumproducts (95%), cocoa andrubber.

■ Imports: Major items arerefined petroleum products,machinery, transport equip-ment, manufactured goods,and live animals.

■ Currency: The Naira (NGN).Exchange rate US$1 = 125.865naira on 11 October 2007.

Sources: CIA Fact Book, NigerianGovernment Web sites, World Bank/IMF.

cargovision country file

© Peter Marlow/Magnum/HH

cargovision 27

Ltd. as well. The Ministry of Finance has set up a rela-tively simple procedure controlling all customs fees –the so-called Form M that must be issued by a bankto cover imports by an agent. Importers pay customsduties at the bank issuing the form, and the bankreports these transactions to the Central Bank ofNigeria. The challenge now is to grow viable exportmarkets in items such as perishables (pineapples andfish would be good examples) instead of leaving themto cater only for the domestic market.

WHAT THEY SAY

CLOGGING THE SYSTEMBassam Dina, Managing DirectorQuicka Nigeria

“Airport facilities are too small. Therefore, parts ofcargoes are left outside. We need faster cargo clear-

ance – bureaucratic delays need to be cut. Also, PortHarcourt needs another runway. The airport there hasbeen closed since 2006. It takes two weeks total timefor cargo to transit from Port Harcourt by roadthrough Lagos. It’s 800 km. This means everything islanding in Lagos and causing bottlenecks. Just onesmall problem at Lagos and everything gets delayedstill more.”

CONCRETE PROPOSALNicky Longahni, Senior Vice-PresidentSDV (Port Harcourt)

“I wish Port Harcourt would open its airport again veryquickly. It should be open in March 2008. This wouldgo a long way towards helping us. Customs clear-ance is no problem at Port Harcourt because if thereis a snag, I can drive over to the airport customs officefrom my office, but I can’t do that in Lagos becauseit’s 800 km away.”

TRAVEL TIPS

■ Handshakes are the usualform when greeting as wellas leaving. Women shouldcurtsey when meetingpeople, and it is polite to askabout relatives. Simple,casual clothing is usuallyworn – lightweight suits arenecessary only for businesspeople attending formalmeetings.

■ Beware of unauthorized“meeters and greeters” atairports, and look out forpickpockets and other streetthieves. Use cash whenpossible and leave creditcards in a safe place.

■ There are more than 250different peoples, languages,and sets of tribal customsforming this diverse nation.

■ The climate varies greatlyacross the country, mostlyhot and with high humidityon the coast, while inlandthere are two distinctseasons: a dry season fromNovember to March and awet season from April toOctober.

■ Health can be a problem.Immunizations of variouskinds are advisable. Consultyour medical advisors aboutthe various tropical diseasesfound in the country.HIV/Aids is widespread.

■ Small gifts such as lighters,pens, or other corporateitems are greatly appreci-ated.

■ Tipping: 10% of a restaurantbill is normal. Taxi faresshould be negotiated before the trip, and theagreed amount will alreadyinclude a tip.

Sources: Wordtravels.com,Worldtraveltips.net, Lonelyplanet.com,iExplore.com

© Andrew Holt/Alamy

Oct ë06

Major Scheduled Airlines - Global Freight Traffic Growth

-5%

0%

5%

10%

15%

Jan ‘07 Apr ‘07 Jul ‘07Jul ‘04 Oct ‘04 Jan ‘05 Apr ‘05 Jul ‘05 Oct ‘05 Jan ‘06 Apr ‘06 Jul ‘06

Ann

ual G

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th

Growth - Quarter vs Quarter previous Year

Average Growth of Last 3 Years = 5,1%

Growth - Month vs Month Previous Year

International Air Transport ForecastsBoeing and IATA

0%

Pax travel Air Freight

Boeing 2006 - 2026

IATA 2007 - 2012

1%

2%

3%

4%

5%

6%

7%

5,5%

5,1%

6,2%

4,8%

IATA: FTK Growth Forecasts for next 5 years

-5%

-10%

0%

5%

10%

15%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Actual Values

Forecast 2001

Forecast 2002

Forecast 2003

Forecast 2004

Forecast 2005

Forecast 2006

Forecast 2007

Jan - Sep

PASSENGERS OR FREIGHT?

Fig.1.■ Airfreight traffic recovered to its long-term trend of 5% during thesummer, mainly because of renewed strength in the Asia-to-Europe sector. Traffic in Africa, Latin America and the Middle Eastalso supported this recovery, but the transpacific did not, mainlybecause of slowing growth in the US. The coming year does notlook favorable either. The IMF and OECD lowered their outlooks for2008: prices for oil and other commodities are rising; the USlending crisis could hurt consumer spending and the indexes ofproducer and consumer confidence are declining, suggesting thatworld trade and airfreight traffic may slow.

Fig.2.■ Both IATA and Boeing published new forecasts during the lastquarter. Boeing raised its outlook for passengers to 5.5%, but keptits forecast for inernational airfreight at 6.2%. Boeing’s predictionsextend to 2026, while IATA’s extend no further than 2011. Basedon input from its members, IATA believes growth will be 5.1% forpassengers and 4.8% for freight. Boeing anticipates higher growthfor freight than for passengers, while IATA says the opposite.Boeing sees more growth overall than IATA does, probablybecause its forecast is a marketing tool, whereas IATA’s reflectsshort-term consensus within the airline industry.

Fig.3.

■ Previous IATA forecasts and their outcome show that actualgrowth was close to forecasts, except for 2001 and 2004. In 2001,the high-tech market crashed, halting air cargo shipments fromAsia, while 2004 saw unprecedented growth in freighter flights toand from China.


cargovision market monitor

Fig. 5■ Who is contributing to growth? Cargo-only airlines like FedEx,UPS, and Cargolux show no growth on the passenger axis. BritishAirways and Japan Airlines show no growth on the cargo axis, andeven negative passenger growth, which is surprising in an era ofhigh economic growth. The major passenger airlines with a lowfreight profile are all US carriers. However, many other combinationcarriers saw similar rates of growth for passengers and freight.Most top-10 carriers are close to the 4% to 5% average. The twoexceptions are Cathay Pacific, whose volume has grown as a resultof the take-over of Dragonair and Emirates, which is generatinggrowth by constantly adding capacity. The size of the circles indi-cates the relative volume of freight traffic.

Fig.4■ The myth that freight traffic will always grow faster thanpassenger traffic may not be true. Based on IATA traffic data,airfreight and passenger traffic have similar growth rates, althoughrecently passenger traffic has grown faster than freight. BecauseIATA figures do not include all the cargo airlines, actual growthrates for freight may be higher. Passenger growth rates will behigher also because IATA does not include low-cost airlines, thefastest growing segment for passenger traffic. Clearly, passengertraffic is growing faster than freight traffic, yet so many forecastsassume the opposite.

cargovision 29

Passenger and freight traffic will grow, but not at the rate predicted by industry forecasters. Although conditionsvary for each airport and airline, freight traffic will, in general, grow less than passenger traffic.

BY DICK VAN DEN BERG

Fig.6■ There are cargo airports and passenger airports. However, largepassenger hubs always have high freight volume, because ofabundant belly capacity. In general, more passenger traffic equalsmore freight. Honk Kong is an exception, because it handles lots offreighters, and the same goes for London, where most freightersuse Stansted, which has less passenger traffic than Heathrow andGatwick. We have plotted the top-10 airports for internationalfreight and the top-10 for international passengers. There are only14 in total, because most of them are in both lists. Bangkok andGatwick are not in the freight top-10 while Miami, Shanghai, Taipei,and Seoul are not in the passenger top-10.

IATA: Growth of FTK and RPKYear 2000 = 100

140

130

120

110

100

90

FTKRPK

2000 2001 2002 2003 2004 2005 2006 2007

Major Airports for International Passengers and FreightAnnual numbers 2006 / 2007

0

3

4

0 10

2

1

20 30 40 50 60 70

Passengers (millions)

Fre

ight

(mill

ions

of

tonn

es)

PVG

MIA TPE

HKG

ICN

LGW

LHR

FRA CDGNRT

AMS

SIN

DXB

BKK

Growth of RPK and FTK - Top 15 IATA in FTKAverage annual growth 2000 - 2007

-5%

0%

5%

10%

15%

20%

25%

-5% 0% 5% 10% 15% 20% 25%

RPK growth p.a.

FT

K g

row

th p

.a.

EK

CXCA

OZ

JL

UPS

BA

CV

FX

CI KEBR

SQ LNAF-KL

RPK growth > FTK growth

FTK growth > RPK growth

© O

lé o

ntw

erp

ers

30 cargoovision | DECEMBER 07

cargovision postscript

ANEMOTAXIS■ In a move to ban dirty old aircraft, Andy Harrison,easyJet’s chief executive, wants England to tax allaircraft according to their emission performance anddistance flown. Cargo aircraft, private jets, and transferpassengers do not currently pay the country’s airlinepassenger tax, which doubled as of last February. Mr.Harrison say that the current tax regime is ineffective atprotecting the environment and limiting gas emissions,because it does not reflect the climate-changedamage caused by each flight, exempts 40% of avia-tion activity, and makes everyone pay the same fee. ■

IS YOUR DIET STINKINGUP THE SKIES?■ Okay, the number one cause of global warming isburning fossil fuels for electric power. At least that’s theword from the National Resources Defense Council, anon-profit organization based in New York. Now wealso learn that the United Nations Food and AgricultureOrganization reported in 2006 that livestock accountsfor 18% of global warming emissions worldwide, morethan the entire transportation sector. Creating each pound of feedlot beef produces 8 lb ofcarbon dioxide, according to Cornell Universityprofessor David Pimental, who is quoted by author LizGalst in her article for Salon.com. That is the equivalentof burning a third of a gallon of gasoline. Cows alsoburp methane and livestock emits about one-third ofthe human-caused methane and two-thirds of human-caused nitrous oxide. US bovines emit about threetimes more methane than the American coal industry.With this knowledge, some people advocate goingvegetarian to save the planet - or at least switching tochicken. The birds are more efficient than livestock atconverting grain to protein. A chicken requires 2 lb ofgrain to produce 1 lb of meat, compared with about 6lb of grain for a feedlot cow and 3 lb for a pig. Poultrywaste produces only about one-tenth of the methaneof hog and cattle manure.

It takes 12 times as much fossil fuel to produce acalorie of beef as it does to grow a calorie of grain. This led researchers at the University of Chicago tocalculate in 2005 that a vegetarian, who also eats dairyproduce and eggs, causes 1.5 tons less carbondioxide emission than someone on a typical meat-richAmerican diet, when both consume the same numberof calories. A person switching to a vegan diet andgiving up the cheeseburgers will save around 2 tons ofgreenhouse gases a year. Since the average Americancreates about 26 tons annually, switching over theentire US population would reduce US greenhousegas emissions by 6%.The prospect of giving up meat is as unpalatable tosome people as giving up fresh fruit and fish flown infrom afar is to others. Giving up meat reduces carbonemissions 6%. Giving up all flying reduces them 2%.With so many facets to the environmental question, it is sometimes difficult to know how and when to actresponsibly. ■

© Nature Picture Library/Alamy

cargovision 31

Cargovision is the management magazine of AF-KL Cargo. Its function is to disseminate information on transport, distribution, logistics, information services, and general business developments. The editorial opinions expressed in the magazine are not necessarily those of AF-KLM. Reproduction in whole or in part without written permission is prohibited.

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FINANCIAL ALERT■ Following the problems in the sub-prime lendingmarket in America and the run on Northern Rock BSin the UK, we learned from a friend on the internetthat uncertainty has now hit Japan. In the past sevendays, Origami Bank has folded, Sumo Bank has gonebelly up, and Bonsai Bank announced plans to cutsome of its branches.

Yesterday, it was announced that Karaoke Bank is upfor sale and will likely go for a song, while todayshares in Kamikaze Bank were suspended after theynose-dived. Furthermore, 500 staff at Karate Bankgot the chop and analysts report that there is some-thing fishy going on at Sushi Bank, where it is fearedthat staff may get a raw deal. ■

© Ia

in M

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/Ala

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cargovision

Published by AF-KL Cargo Communication, P.O. Box 7700, 1117 ZL Schiphol, The Netherlands. Christelle Dufour Theuws, [email protected] Hemmer, [email protected]

Concept & Realization: vdBJ Communicatie Groep, Bloemendaal, The Netherlandswww.vdbj.nl, [email protected] in Chief: Mark W. Lyon, [email protected] Manager: Urtha Ririhatuela, [email protected] Direction: Sok Visueel Management, Amsterdam, The NetherlandsEditorial Office: Vijverweg 18, 2016 GX Bloemendaal, The Netherlands, T +31(0) 23 541 1701Circulation Manager: Herman Brijssinck, T +32 2752 90 51, [email protected]

AF-KL Cargo © december 2007 Volume 22 Number 31

cargovision

HUNTINGHEADS

Venus RisingProtect Your Assets

Pie in the Sky

Mark W. Lyon, editor-in-chief

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