May 2009 - Issue 36 IN THIS ISSUE: Ocean Fast Facts Ocean Fast Facts Which North American port handled 1.4 million TEUs inbound and outbound and acts as Reminder: U.S. exports remain fresh water direct ocean port alternative to the ports of New York / New Jersey and Halifax, steady - be prepared Nova Scotia? May Day! = May Holidays Click here to see the answer! throughout the World M aersk Line steps up Anti-Piracy Answer: Montreal, Quebec Canada. In 2008, the port of Montreal handled 1,473,914 TEUs. Efforts The port of Montreal is one of North America's leading container ports and offers an alternative to the larger and occasionally more congested United States east coast ports such as New York/New Trans Pacific Market Update - TSA Jersey. Several leading ocean carriers call on the port of Montreal and offer transportation into the Carriers plan for the 2009-2010 United States interior midwest, Ohio Valley and eastern region cargo. shipping season Source: http://www.port-montreal.com/ste/1_0/1_6_4.jsp?lang=en The "weight" is never over! Relay Freeboard << Return to eNewsletter Home Back to top Reminder: U.S. exports remain steady - be prepared In last month's AIT customer newsletter, it was reported that because of the decrease in import freight and inbound container equipment, the supply of export containers had dwindled in certain markets. This was especially the case in key intermodal markets within the US such as Chicago, Minneapolis, Kansas City and St. Louis. AIT also advised exporters to plan early for booking export shipments, and this remains especially critical when scheduling for multiple full container load (FCL) bookings within your supply chain. Planning ahead ensures equipment availability in origin cities to satisfy the container size and type for your booking needs. Less than container load (LCL) booking availability remains wide open. Be mindful to plan early for standard dry equipment, but also plan carefully for special equipment such as refrigerated and flat rack/open top equipment. Please speak with your AIT representative to address your specific container needs. Back to top May Day! = May Holidays throughout the World Throughout the globe, May is a month that is chock full of holidays. It is important to be aware of these holidays, as it may delay the delivery of freight. Key holidays in May are as follows. Office closures may be in effect in certain countries. Several bank holidays also exist in May, so please check with your AIT representative to ensure accurate information regarding closures: May 1 - Labor Day (throughout the globe) May 3 - Constitution Day (Japan) May 4 - Labor Day (throughout the globe) May 5 - Cinco de Mayo (Mexico) May 8 - VE Day (France); Israel Independence Day (Israel) May 11 - Victory Day (Russia) May 17 - Constitution Day (Norway) May 18 - Victoria Day (Canada) May 25 - Memorial Day (USA) May 28 - Dragon Boats and Dragon Festival (China and Taiwan) Back to top Maersk Line steps up Anti-Piracy Efforts As a result of increased piracy activities off the coast of Somalia and the recent seizure and release of the Maersk Alabama, Maersk Line said it will step up measures to guard ships against pirates and called upon governments to cooperate in fighting piracy. While Maersk has said it will not arm container ship crews, it will keep ships running at full speed while moving through the Somalia coast and Gulf of Aden region. The company is also taking other security precautions as well but were not provided in detail. With the initiative, Maersk aims to make access to their vessels more difficult to seize. "We have expanded the area off the coast of Somalia where only vessels with a certain freeboard or capable of sailing certain speeds are allowed to enter," said Søren Skou, a partner in A. P. Moller - Maersk Group and Maersk Tankers CEO." These are among the measures Maersk is taking to safeguard their ships and crews working the region. The trend of piracy within the Somalian coast and Gulf of Aden region has had minimal inpact on cargo destined to or from the USA. The cargo mostly impacted is traveling on tradelanes such as Asia-Europe or Europe-South Africa. Source: Journal of Commerce, Online; April 29, 2009 >> Ocean Buzz Word: Freeboard Back to top Trans Pacific Market Update - TSA Carriers plan for the 2009-2010 shipping season The Transpacific Stabilization Agreement (TSA) member carriers are recommending an unprecedented schedule of minimum base freight rates from Asia to U.S. for their upcoming service contracts. The recommendations arrive as the TSA is making efforts to stabilize revenues and services based on the recent activity in rate reductions. Members of the TSA are proposing the establishment of floor rates to help ensure rate stability and keep freight rate levels profitable for the member carriers. According to an April 9th announcement on the official TSA website, www.tsacarriers.org, the member lines have not been as successful as initially anticipated in balancing acceptable rate levels during the off-peak period, considering lower cargo demand and the resulting overcapacity. The carriers are faced with two challenging choices: either set their pricing at minimally sustainable levels or experience significant losses in the 2009-2010 shipping season, which would have a significant impact on the stability within the trade. It is anticipated that the TSA will attempt cost recovery indicated by the following proposed actions by the member lines: ● Current spot rates initially set to expire on June 30, 2009, should now be expired within 30 days' notice from the earliest day possible, and by no later than May 15. ● New minimum rates (per 40' container) should be applied in all contracts not yet concluded, as soon as possible but no later than July 1, as follows: (cid:0)m US $1,350 to the west coast (cid:0)m US $2,500 via east coast all-water service ● Guideline minimums have also been adopted for selected mini landbridge (MLB) and inland point destinations. ● Guideline minimum rates per high-cube 40-foot container have been recommended at levels $100 above those for standard 40-foot units. ● All 2009-10 contracts should expire by no later than April 30, 2010, the traditional cycle in the Transpacific. ● All contract offers should be subject to full, floating bunker charges per TSA's revised formula, with quarterly adjustment and separate charges for west coast and east coast sailing. The TSA member list of carriers includes the following carriers: APL, Ltd., China Shipping Container Lines, CMA-CGM, COSCO Container Lines, Ltd., Evergreen Line, Hanjin Shipping Co., Ltd., Hapag Lloyd AG, Hyundai Merchant Marine Co., Ltd., Kawasaki Kisen Kaisha, Ltd. (K Line), Mediterranean Shipping Co., Nippon Yusen Kaisha (N.Y.K. Line), Orient Overseas Container Line, Inc., Yangming Marine Transport Corp. and Zim Integrated Shipping Services. Several AIT customers are already inquiring about the "new" post May 1 rate levels. As indicated in the highlights of the TSA's 2009-2010 contract negotiations plan, carriers are aggressively seeking cost recovery. As May unfolds, floor threshold levels being presented by the TSA carriers represent an increase over many of the current rate levels being offered in the current marketplace. The carriers will attempt to expire existing rates by mid-May rather than June 30th of this year in an effort to reset the market levels for the 2009 season. For those customers seeking new rates, please bear in mind the shifting market conditions on the Transpacific tradelane and contact your AIT representative to clarify rate validity as needed. Back to top The "weight" is never over! Often times, AIT customers ask questions about acceptable cargo weight before booking containers. In April, AIT received numerous inquiries from existing and potential clients about weight restrictions. There are different weights to consider: commodity as well as vehicle and chassis weight. While the maximum payload within containers may be over 50,000 pounds, containers moving within the United States are subject to local municipality, state and federal guidelines for acceptable gross weights of containers moving over the road and rails. This guideline is well below the 50,000 lbs. container payload. It is important to keep this in mind when planning your inbound and outbound container loads. The chart below can be used as a reference; however, it is subject to local, municipality, state and federal guidelines. For example, over the road weight restrictions in the United States are governed by the Federal Bridge Law. Additionally, ocean carriers, railroads and overseas governments may also have additional weight restrictions, so please check with your AIT representative if you have questions. Gross Maximum - Commodity Weight in Pounds (lbs) 20' with slider chassis: 38,000 20' with triaxle chassis: 45,000 40' with gooseneck chassis: 44,000 40' with ultra light chassis: 47,000 Weight Restrictions in Pounds (lbs) 20' slider 40' Triaxle Steer Axle 12,000 12,000 7,000-8,000 Drive Axle 32,000 34,000 32,000 Trailer Axle 32,000 34,000 42,000 Gross Weight 80,000 80,000 80,000 Back to top Relay Definition: A shipment that is transferred to its ultimate destination port after having been shipped to an intermediate point. Source: Directory of International Trade, 7th Edition; 2006 Edward G. Hinkelman. Relay or Transshipment? That is the question! Most often, the "slower" mode of ocean transportation (when compared to air freight) moves on direct service. Direct ocean service is when a container is loaded to a single vessel from one port to another port directly by the given vessel on which that container is loaded. Occasionally, if a quick transit time is not required, customers may opt to send their cargo via "relay," "indirect," or "transshipment" service. Transshipment service is when a container is loaded at a port on one vessel and transferred to another vessel for a second sailing leg of the ocean journey. Transshipment generally involves the movement of cargo from origin to destination utilizing two or more vessels in addition to any other modes of transport such as truck or rail. One example of relay service would be the Port of Hong Kong to Port of Tampa via the Port of Kingston Jamaica. This indirect service may be compared to routing air or passenger cargo via an airport hub. Relay or transshipment may or may not provide a lower cost alternative to traditional direct sea freight modes, depending on the origin and destination combination. The transit times will be longer, but it may be worth the overall savings. Please speak with your AIT representative to investigate whether or not "relay" or transshipment service would be a benefit to your supply chain. Freeboard Free as a board! A bonus ocean "Buzz Word of the Month" Freeboard: Distance between the level of water and the upper surface of the freeboard deck amidships at the side of a hull: regulated by the agencies of various countries according to the construction of the hull, type of cargo carried, area of the world in which it sails, type of water, and season of the year. Sometimes compared to load line. Source: http://dictionary.reference.com/browse/freeboard Last month, the world was alarmed when pirates off the coast of Somalia overtook the container vessel the Maersk Alabama. The pirates were able to board the container vessel with little assistance, endangering the lives of the crew as well as the safety of the ship and others around her. The size and speed of the of the 1,092 TEU Maersk Alabama is quite small in comparison to one of Maersk's largest and more speedy ships, the Maersk Emma. At 11,000 TEU, the Maersk Emma can move along at sea at approximately 25.5 knots, which is the equivalent of 47.2 kilometers, or 29.3 miles per hour. The Maersk Alabama maintains a speed of 18 knots, or the equivalent of 33 kilometers (20.68 miles) per hour. Quite a difference in speed between the small captured ship and the larger and faster vessels. Professional water skiers compete at speeds sometimes up to 36 miles per hour - and for a pirate to attempt boarding a 1,300 foot vessel moving at nearly 30 miles per hour takes some skill. In the case of the Maersk Alabama, the ship was slower and smaller. It also had a smaller "freeboard," which may have made it easier for the pirates to board. Back to top The Parting "Wave" The AIT Ocean Systems team would like to thank you for your support during the month of April. As we enter May, we look forward to seeing where the markets unfold as Peak Season approaches. Will 2009 be a Peak Season? The month of May will hopefully unravel some of the clues to answer that question. Preview June 2009 AIT Ocean eNewsletter: An ocean "fast fact" from south of the equator! If you have any questions or comments regarding the Ocean eNewsletter, please contact Kevin Krause from the AIT Ocean Department. Copyright © 2009 AIT Worldwide Logistics, Inc. All Rights Reserved eNewsletter Home Feedback Unsubscribe AIT Home May 2009 - Issue 36 IN THIS ISSUE: Now What? Now What? The most recent outbreak of swine flu prompts us to reflect on the various disasters and epidemics AIT Introduces Ocean-Air Services we've experienced in this century so far. When 9/11 occurred in 2001, planes were not only grounded AirTran No. 2 in airline rankings; for several days - people were generally afraid to fly during that catastrophic event in American history. Delta No. 12 In fact, the driving force behind the United Airlines marketing campaign that was incepted several years later - "It's time to fly" - was the inherent fear of flying caused by the events that transpired on 9/11. Emirates SkyCargo welcomes SARS (severe acute respiratory syndrome) hit in early 2003, Boeing's new-generation freighter causing a dramatic downturn in global air traffic. People simply U.S. $214 Million Fine for Price stopped flying to Asia or flying all together, resulting in a severe Fixing decline in revenue to passenger airlines. This epidemic had longer-range repercussions on air cargo, as buyers moved their Forwarders mull more use of air purchases to India and the Middle East rather than flying to China freight as prices fall and other Asia destinations, affecting the trans-Pacific balance of F eatured Airplane: Lockheed trade. Constellation In 2005, it was bird flu that once again caused travelers to limit their business and pleasure travels in China, impacting the revenue of international carriers. Book Review: Evolution of Now in 2009, the concern is swine flu, and although not Asia-based, the global carriers, especially International Aviation: Phoenix North American based carriers, are being forced to brace for the impact. Rising Airlines can't catch a break; last year it was the price of fuel that negatively impacted their bottom lines. Airlines Go Green: Those that hedged the price of fuel were heroes at first, and then as the market suddenly stabilized, they became the "goats." Later in 2008, the bottom dropped out of the global economy; passengers cut ● Korean Air helps L.A. mayor's vacations, less cargo was flown as air freight, consumers purchased less and global trade stalled. trees to blossom downtown Companies are using existing inventories or diverting less time-sensitive freight to ocean modes of transportation. Two recent articles follow; the first from The Atlanta Journal on how Delta and other carriers are << Return to eNewsletter Home preparing for the current swine flu pandemic. The second from The Independent is titled, "Confusion over 'don't fly' advice." As with the 9/11, SARS and bird flu calamities, it will take months to determine the full impact this latest heath crisis will have on the airline industry. Delta, other airlines plan for swine flu pandemic Atlanta-based Delta Airlines and other major carriers have contingency plans for how to manage their operations in the outbreak of a pandemic, but industry observers are closely watching to see what impact swine flu could have on carriers' finances. Before this week, Delta and other carriers had already seen a significant drop in international travel because of the recession. Six years ago, the outbreak of SARS, or severe acute respiratory syndrome, contributed to an 18.5 percent drop in global passenger traffic in April 2003, along with declines in later months. "What we saw in the SARS episode is it took several weeks of flying empty before airlines started to cancel [flights] in advance," said Port Washington, N.Y.-based airline consultant Robert Mann. It's too early to tell what impact swine flu could have on the airline industry. Investors reacted to news of the outbreak Monday, with Delta shares falling 14.3 percent and AirTran shares falling 6.6 percent. Standard & Poor's Ratings Services in a statement said the outbreak of swine flu raises the risk that airlines could suffer a steep drop in international traffic. The U.S. Centers for Disease Control and Prevention in Atlanta on Monday recommended no nonessential travel to Mexico, while Delta, AirTran and other carriers have offered to waive fees for travelers who want to change their travel plans to Mexico. Delta flies to Mexico City and other destinations in Mexico, though it is not one of the largest carriers to the country. AirTran Airways started flying to Cancun in February, and it said at this point it is continuing the flights. "We evaluate every market on a daily basis, and we have to make decisions that are best for the airline," said AirTran spokesman Christopher White. If the situation worsens, airlines may waive broader flight cancellation fees, Mann said, which could have a more significant impact on airlines' finances. A European Union health commissioner's comment urging Europeans to postpone nonessential travel to the United States and Mexico could have an effect on carriers, including Delta. The International Air Transport Association, which developed guidelines for managing communicable diseases, has recommended that airlines review their preparedness plans. Hartsfield-Jackson International Airport in 2006 ran through a drill on how to handle an avian flu outbreak. The airport has a special area for incoming flights that need to be handled away from the main terminal and a CDC quarantine facility on Concourse E. "We feel that we are well-prepared at the airport, because we do have a comprehensive pandemic plan should we need it," said airport spokesman John Kennedy. By Kelly Yamanouchi The Atlanta Journal-Constitution Tuesday, April 28, 2009 Confusion over 'don't fly' advice Businesses and travel companies were facing the prospect of multimillion-pound losses yesterday following a surprise announcement by the European Union's health chief urging travelers to avoid non-essential trips to the USA and Mexico. The news came on a turbulent day for the international stock markets which saw shares in major airline and travel companies plunge, while those in drug companies soared. Speaking at a summit in Brussels, the European Commissioner for Health, Androulla Vassiliou, urged people "to avoid non-essential travel" to areas affected by the global flu pandemic. "They should avoid traveling to Mexico or the United States unless it's very urgent for them," she said. The advice - in stark contrast to that issued by the Foreign Commonwealth Office and World Health Organization - was particularly unnerving for the transatlantic business travel sector which, since 2007, must abide by the Corporate Manslaughter Act, legislation that was introduced in 2007 to bring companies to justice over the death of employees. "Companies have to be mindful of any international travel because firms are all too aware that if one of its employees is taken ill during a business trip, it can be held liable," said Martin Ferguson, a journalist at Travel Trade Gazette. Nigel Cooper, the managing director of Motivcom, an international business events group, added: "Statements like this can be cataclysmic. I am not underestimating the potential for a medical disaster, but such judgments should be left to health professionals." The warning came on a day when shares in international airlines and travel companies tumbled. British Airways fell at one stage more than 9 percent, while Thomas Cook and TUI Travel were down 5 percent and 3 percent respectively. North America Travel Service, one UK tour operator specializing only in travel to the US, called for things to be "kept in context." "Although this directive refers to travel to the USA, we have to remember that the US is two-and-a- half times the size of Europe and the mild cases reported so far are in just five of the 50 states," said Karen Farrar, the firm's marketing manager. The Independent By Kunal Dutta Tuesday, 28 April 2009 Back to top AIT Introduces Ocean-Air Services In January of this year, AIT Worldwide Logistics introduced a new international product named "Ocean- Air," which combines sea freight, air freight, and surface transportation throughout the United States into one seamless service for customers. "Sea-air" has been an industry staple for many years. In these times when customers seek alternatives to "all air" or "all ocean," something less expensive than air freight and faster than ocean freight, this hybrid gives the customer a price and service alternative. Ocean-Air was created with Swift Freight, headquartered in Dubai, UAE, the leader in Sea-Air service from Asia to Africa. The following article appeared in the April 3, 2009 issue of Air Cargo Weekly, and explains in more detail the advantages of an "Ocean-Air" product: Sea-air has a bright future, insist the new owners of Swift Freight and SAT When Barloworld bought the Swift Group, owner of the Swift Freight brand, on April 1, 2008, one could have been forgiven for thinking Barlow-who? The company has not, to date, had any pedigree in the airfreight business, but it is a famous name in its home country of South Africa. With the acquisition of the Dubai-based Swift Freight - and at the same time sea-air specialists SAT of Germany and Hong Kong forwarder Flynt International - it has now taken a major step into the air cargo arena. Barloworld's history goes back to 1902 and for a time it was the 49th largest company in the world. That was in the apartheid era when it was prevented from investing outside South Africa and so turned instead to owning as much as possible inside it. Warren Erfmann, chief executive officer of Barloworld Logistics, Middle East and Asia, says the company basically became a brand manager, and - much slimmed down - that is what it remains to this day. For example: it is the world's second largest Caterpillar dealer, owns the Avis franchise in South Africa, plus various car dealerships, and is the world's largest dealer in Hyster forklifts. Logistics has been a fourth pillar of the business ever since 2001 when the company set out to diversify a trucking business it owned in South Africa away from asset-intensive work and into supply chain management. "We were a trucking company with a big dream of not owning trucks in the future," is how Erfmann puts it. Internationally, that led it to logistics operations in Spain and a software business in the UK and US, which provides network modeling, forecasting and planning software. Swift, SAT and Flynt took that strategy to a new level, however, and have given the company a global forwarding and logistics structure. Swift Freight in particular was attractive because of its strengths in markets such as the Middle East, India and Africa. As Erfmann puts it: "Why should we compete for peanuts on the major trade lanes, when there are better opportunities in niche markets?" In particular, along with SAT, Swift Freight gave Barloworld a commanding position in sea-air traffic out of Dubai - some three quarters of the market to Europe, Erfmann reckons. This might seem to be an unhappy choice of niche just at present, when rock bottom sea freight and airfreight rates must surely be eroding demand for this hybrid form of transport, but Erfmann insists that such conditions cannot last. "There has been a knee-jerk reaction from airlines because their planes are empty and they want to fill them, but they will get wise soon and bring rates back to a level that makes sense," he says. Meanwhile, he believes that sea-air remains a highly marketable product, one that many customers are still not aware of. "A lot of customers simply don't understand what sea-air is and how it can benefit them," he says. "Once they do understand, they are attracted to the product. Even before the downturn started, we had embarked on a sales campaign to bring sea-air to the market's attention in a way that had not been done before, and that initiative is starting to bear fruit." Traditional cargo for sea air has been garments, but Erfmann says that IT products and white goods also move well by this method. Forwarders have traditionally been reluctant to use it, he says, because they worried about what might happen during the transfer between air and sea. "But now we can offer them a good partner in Dubai, that specializes in fast transit between ship and air. We can achieve six to seven hours from ship to plane, which is quite incredible. When customers see that they can half the transit time and half the cost, it is a very attractive option." Connection times between sea and air should get even faster once the Al Maktoum International Airport opens next to the Jebel Ali Freezone in Dubai. Swift Freight was one of the first companies in to sign up for a facility in the adjacent Dubai Logistics City (DLC), and it also has an airside facility reserved at the airport itself. Erfmann confirms that the idea is to control the whole process from port-to-tarmac, which he hopes will drastically speed up connection times. "Once everything is up and running, it will be 20 to 30 minutes from port-to-airport," he says. "When we control our own destiny with our own handling, there will be no stopping us." Having said that, the vision looks set to stay on hold for the immediate future, as plans to open the new airport have recently become fluid. Erfmann sympathizes with competitors whose facilities in the DLC are already complete but cannot be used. Swift Freight has been more cautious and has not yet started construction in either location. "We still believe in it all, but it is a matter of timing," he says. "Perhaps in a downturn, a delay is not such a bad thing." While traditional sea-air took cargo from the Far East or India, sailed it to Dubai and then flew it to Europe, Swift Freight has also been a pioneer of a whole new market for the concept since 2006 - from Asia via Dubai into Africa. The forwarder charters freighters to fly on a scheduled basis to such places as Kinshasa, Brazzaville, Lagos, Accra, Kigale, Lomé and Bujumbura. It also works in partnership with Ethiopian Airways to cover other destinations on the continent. Traffic from China and other parts of Asia into Africa is a mainstay of this business southbound, which has so far remained robust in the downturn, according to Erfmann. "Ocean freight rates to Africa are very high, and direct airfreight from the Far East to Africa is almost non-existent," he points outs. "Meanwhile, you can get ridiculously low rates for sea freight from China into Dubai at present." There is also the fact that sea freight can only deliver to ports, and that road and rail infrastructure to carry cargo onwards inland is a major problem in Africa. "The ideal solution is one that gets the product as close to the market as possible, and that usually means flying it into an airport," Erfmann points out. Add in Barloworld's South African links as well and the result is a market with a lot of growth potential. "It is a sleeping giant, not just in geographical size, but in opportunities, and there are not many people taking advantage of it." Chinese investment in the continent - for example, in areas such as mining - also seems to be continuing despite the global economic slowdown. Northbound, Swift Freight charters are filled with perishables, and again this ties into one of its key specializations. The company has its own perishables arm - Swift Perishable Logistics - which operates out of the Dubai Flower Centre. Erfmann says the company has also just opened a perishables operation in Ethiopia. "This business works very nicely for us - we go direct to buyers, which has brought us a lot of success," he says. "This is another thing that attracted us to Swift Freight, because it is a market leader in this area." Key destinations for the perishables include Dubai, the Commonwealth of Independent States and also Europe, though markets further afield, such as in Australia, are also developing. Erfmann says there is no sign yet of the flower business slowing down, even though it might seem to be a luxury in times of economic woe. "Funnily enough, we had a very good Valentines Day (14 February) this year," he says. Barloworld will be keeping the Swift Freight brand name. "There is a lot of brand equity in the Swift name. It has been around for over 20 years," says Erfmann. Swift Freight's founder and head, Issa Baluch, also remains actively involved with the firm. "You don't lose experience like that. He is very much part of our plans," comments Erfmann. However, he says that there is already co-branding and he hints that eventually the Swift Freight name might disappear. "As we go along, we will see what brand fits the business. But we are already marketing Barloworld and ultimately, yes, it will probably be that all around the world." As to what the Barloworld Group can add to Swift Freight's business model, Erfmann sees some openings on what he calls "the intellectual side of things" - that is the sort of planning and modeling that is offered by Barloworld's software in the UK and US. "We can't teach Swift Freight much about forwarding and logistics, but they may not in the past have had the capacity to come up with the kind of complex supply chain solutions we market in South Africa," he says. One definite forum for this will be the Gulf Cooperation Council countries, where reduced customs barriers have led to a growth of trucking and logistics in recent years. This is one of the plans for Swift Freight's future Dubai Logistics City facility, and it is a market where Erfmann predicts growth in the coming year or two. "Without a doubt, companies in the region are starting to see the benefits of outsourcing their logistics business. In a downturn, customers need smart supply chain solutions more than ever, and in that side of the business we have seen something of an upside." However, he also expects it to become very competitive. "There are a lot of forwarders who have built their business on traffic from Europe or Asia and are now going to be looking at regional markets instead," he predicts. He is convinced that with operations in Africa, Europe, the Middle East, China and India, Barloworld Logistics is well placed to be one of the winners in the downturn, however. "It is a bloodbath out there and only the strong will survive. There will be a lot of consolidating and a lot of casualties, and companies who have not built a sustainable business will suffer. But we were strong before and we will come out of the downturn stronger." The Peter Conway Interview Air Cargo News April 3, 2009 Back to top AirTran No. 2 in airline rankings; Delta No. 12 WASHINGTON - Airlines with large operations in Atlanta ranked second-best and worst, according to the 2009 Airline Quality Rating study released Monday. AirTran Airways ranked No. 2 behind Hawaiian Airlines in the study that measures on-time performance, baggage handling, customer complaints and denied boardings. At the other end of the spectrum, Atlantic Southeast Airlines ranked last, according to the study by Wichita State University and Saint Louis University. Delta ranked No. 12 on the list, down from No. 10 a year ago. Delta, the biggest carrier at Hartsfield- Jackson International Airport, fell in part because of a significant spike in customer complaints, perhaps related to its ongoing merger with Northwest Airlines. "I'm speculating, but if (customers) don't know who's flying what, what routes are left, that could be part of the problem," said Dean Headley, a Wichita State University marketing professor and co-author of the report said in an interview here. The nation's airlines all improved their performance records for the first time in five years in 2008 - and they might get even better in 2009, the study said. Headley attributed the overall improvement by all airlines last year in part to the fact that airlines were beginning reduce capacity and routes and focus more on customer service because of the recession. Since most airlines also started charging for baggage, they also probably felt more compelled to improve baggage handling, he said. As fewer people fly for both business and for leisure because of the poor economy, Headley predicted that airlines' quality could improve even more this year. That's the good news. The bad news is airlines will likely fly fewer routes and prices will likely rise as demand for flights decreases, he said. "You're going to see a lot of full airplanes, a little higher price and fewer flights," Headley said. But "that helps change the congestion problem, which makes the system work better." By BOB KEEFE The Atlanta Journal-Constitution Monday, April 06, 2009 Back to top Emirates SkyCargo welcomes Boeing's new-generation freighter Emirates SkyCargo's first Boeing 777 Freighter has arrived in Dubai after completing its inaugural commercial flight from Hong Kong. The carrier took delivery of the new-generation freighter at Boeing's Everett, Washington facility this past weekend. From there it went directly to Hong Kong, one of the carrier's most robust routes, where it was loaded with cargo bound for Dubai and beyond. The Boeing 777F, with its range and environmental advantages over other freighters in the market, will play an integral role in Emirates' freighter fleet. It boasts the longest-range capability of all twin-engine jets, able to fly non-stop between Dubai and major cargo centers such as Frankfurt and Hong Kong with a full 103-ton payload. Renowned for its fuel efficiency - the Boeing 777F uses less fuel per ton of cargo than other freighters available, significantly reducing the fuel bill - it is also the quietest freighter flying today (QC2 compliant). The new aircraft will complement Emirates existing fleet of Boeing 777 passenger aircraft. This year, the airline will become the largest Boeing 777 operator in the world, with more than 70 already in operation. Sixty five percent of all Emirates SkyCargo traffic travels in the belly of its wide-bodied passenger aircraft. Ram Menen, Divisional Senior Vice President Cargo, said, "This freighter is part of our long-term investment for Emirates SkyCargo." Menen acknowledged that while the air cargo industry was currently experiencing its toughest period since the beginning of the jet age, world air cargo traffic was still forecast to triple over the next 20 years, and said that Emirates needs to be prepared when these predicted growth levels return. "In the last 15 years a tremendous amount of work has gone into developing the science of supply chain management. Inventory and logistics management are two of the most critical elements of the supply chain and with globalization of manufacturing and of the marketplace, reliability of transport plays a very important role. Just-in-time and vendor managed inventory is what creates a very cost efficient supply chain with time becoming a crucial factor. "Emirates has opted for these brand new, super-efficient aircraft to ensure we are best placed to serve the industry's requirements in the long term. Freighters have a greater role in today's supply chain - transporting cargo directly from production to consumption." Emirates SkyCargo will take delivery of another Boeing 777F later this year, with two additional aircraft on order. AJOT (American Journal of Transportation) On-Line April 14, 2009 Back to top U.S. $214 Million Fine for Price Fixing Three international airlines have agreed to plead guilty and pay fines totaling $214 million for conspiring to fix prices on air cargo shipments, the U.S. Department of Justice has announced. Asiana Airlines Inc., Cargolux Airlines International S.A. and Nippon Cargo Airlines Co. Ltd. have agreed to cooperate with the Department of Justice's ongoing investigation into the air transportation industry, the agency said. Under the plea agreements, which are subject to court approval, Luxembourg-based Cargolux will pay $119 million. The agency said it engaged in a conspiracy in the US and elsewhere to eliminate competition by fixing cargo rates for international air shipments from September 2001 through February of 2006. Japan-based NCA, which will pay a $45 million fine, engaged in fixing cargo rates charged to customers in the US and elsewhere for international air shipments from April 2000 until at least early 2006. South Korea-based Asiana will pay a $50 million fine for fixing both cargo rates and passenger fares from at least as early as January 2000 until 2006. Last week's announcement brings to 15 the number of companies that have pleaded or agreed to plead guilty in the Justice Department's investigation, the agency said. British Airways Plc, Korean Airlines Ltd, Qantas Airways Limited, Japan Airlines International Co. Ltd., Martinair Holland N.V., Cathay Pacific Airways Limited, SAS Cargo Group A/S, Société Air France and KLM Royal Dutch Airlines, LAN Cargo S.A., Aerolinhas Brasileiras S.A., and El Al Israel Airlines Ltd. have also pleaded guilty. Collectively, the companies have paid or agreed to pay fines totaling more than $1.6 billion. "Fifteen airlines and three executives have been prosecuted to date for their participation in price-fixing agreements that inflicted a heavy toll on American businesses and consumers as well as the global economy," said Scott D. Hammond, acting assistant attorney general in charge of the agency's antitrust division. "The Department will continue its investigation into this criminal conduct until all co- conspirators are brought to justice," he said. Separately, Cargolux will begin a weekly B747-400 freighter service to Toronto's Pearson airport from Luxembourg this month with a return via Prestwick, Scotland. The airline already flies to Calgary twice a week. Air Cargo World Online April 14, 2009 Back to top Forwarders mull more use of air freight as prices fall Battered air freight operators are wondering if some moves back to the air may bloom into a proper trend that could alleviate the pain they are experiencing from the downturn. Some shippers have apparently reversed the shift from air to ocean and are finding more reasons for sending goods by air, even as the economic slump reinforces the emphasis on cost savings. However, so far carriers have not seen any relief from the relentless downward pressure on yields that the downturn has sparked. Onno Boots, regional managing director for Asia of TNT, has seen the phenomenon in recent months, most pronounced among clients from the high-tech sector. A large Asian manufacturer of laptop computers has re-emphasized its use of air freight, he pointed out. "It is too early to call it a trend, but a number of customers in our portfolio are showing an interest in more use of air freight," he said. Frank Allard, senior vice-president for air freight at Schenker in Canada, has observed similar developments. "We're seeing more interest in air freight," he said. In his opinion, rate developments have played a major role in this change of strategy. The rate differential between air and ocean transportation has shrunk dramatically as fuel surcharges melted with the rapid decline in the price of oil. "A year ago flying a ton of cargo from China cost you an arm and a leg. With fuel down so much, the picture is very different. Now, how much do you save if you put the cargo on the ocean for 30 days? It's a no-brainer. Fly it," he said. The need to speed up cash flow is another major factor behind this, Boots reckoned. "In the market of today, cash is king," he said. "To reduce that cycle of cash to cash and reduce capital tied up in moving a couple of million kilos of laptops by sea, a lot of cash can be freed by moving the goods by air." Another reason for the newfound interest in air freight is the ad hoc nature of much business at the moment, as forwarders and shippers find it difficult to plan for the longer term. For their part, importers have veered towards smaller orders for fear of being stuck with inventory. Smaller orders placed with relatively short lead times make air the most appropriate form of transportation, despite the higher cost compared to shipping by ocean vessel. Martin Bittner, senior director of cargo sales for the Americas of Air Canada, has not come across any mode shifts back to air, but the nervous state of the market would favor air, he agreed. Nobody can plan any more, and that should translate into a need for air transportation," he said. "We certainly see a lot of spot quotes. We don't see a lot of consistent business, consolidations that you could count on," he added.