CNS Partnership Conference 2008
 The annual premiere event in the air cargo industry took place from May 4-7 in Palm Beach Gardens, Florida, assembling the best and the brightest in transportation. Attendees at this year's CNS Partnership Conference included industry leaders representing airlines, freight forwarders, information technology providers, and other interested parties such as representatives of surface transportation and the media. The theme of this year's conference was, "Close the 'Know-Do' Gap: Turn Knowledge into Action."
The conference began with opening comments from Jens Tubbesing, President of CNS Group, who has certainly and noticeably turned this annual gathering into a more significant and time-worthy event. Following was Mick Fountain, Chairman, CNS Advisory Board, an industry insider who outlined accomplishments and open projects from last year's conference in San Diego.
The first keynote address was given by Roger MacFarlane, CEO and director of a major west coast based global forwarder. Although tasked with the planned topic, "Building a World Class Logistics Provider," having recently visited the Evergreen Aviation & Space Museum in Portland, OR, and having met its founder Delford M. Smith, Roger instead talked about innovation and used photographs from the museum as illustrations.
The first step towards innovation Roger listed was "Set Big Hairy Audacious Goals," and the backdrop to this requirement was President Kennedy's goal for the United States to reach the moon. In his 1962 speech at Rice University in Houston, the President challenged America by saying, "We choose to go to the moon. We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the others, too."
In a noted yet apologetic "dig" to United Airlines, the second on the list was "Preserve Your Heart and Soul." Roger shared a story from Delford Smith and the Aviation Museum, who, in their search for historical aircraft, came upon and refurbished one of (if not the original) United Airlines DC-3. So important a link to their history, the Smith family wanted to give it back to United Airlines, who turned down the gesture. The idea is not only to "stay true to yourself," but to remember where you came from and what made you that successful company or individual. If you lose sight of your past, you lose direction for your future.
The remaining touch points Roger discussed included:
- Understand your customer
- Know the details and calculate the risk
- Focus on delivery - make sure what you are doing actually achieves the intended results
- Deliver the impossible
- External optimism and faith in your beliefs
One of the highlights of the first day of the event included the Charlie Rose interview of Richard Anderson, CEO of Delta Air Lines. The insightful interview provided a unique opportunity for industry "insiders" to listen to Richard discuss in detail the planned merger with Northwest Airlines. (See last month's issue of the AIT e-Newsletter for further information on this merger).
CNS and IATA have taken a leadership role in the greening of air cargo efforts by the collective industry. Featured speakers such as Sid Embree, President of AtmosClear, and Bryan Manning, Aviation Team Leader of the EPA Office of Transportation and Air Quality, outlined their efforts to protect the environment. Jens Tubbesing announced that the entire CNS Conference was "carbon neutral," having purchased "carbon offsets" for the gathering.
The second day spotlighted a subject that generated significant interest - one that caused immense consternation during the meeting and the blogs that immediately followed. The panel discussion was titled, "The Certified Cargo Screening Program - A Call to Action by the TSA." Tom Friedman, TSA Chief Inspector, joined five other panelists and a moderator discussing the 9-11 Commission recommendations that were passed by U.S. Congress and signed into law by President Bush. One provision and the focus of the conversation was the part of the law that says 50% of all cargo loaded onto passenger aircraft must be screened by July 2009, with the remaining 50% screened by August 2010.
The cause of the uproar was the presentation slide and a comment in which Mr. Friedman stated, "The end of the book has been written; now it is up to you to write the story." He went on to say, "You're on your own, now it is your opportunity to figure it out." In other words, Congress passed a law and no one determined how we as an industry are supposed to comply. It was also clear that this unfunded mandate put the burden squarely on the shipper, forwarders, carriers and others to figure out.
We will certainly hear more about this goal between now and the first implementation date of July 2009 and we will keep our readers up to date in the months to come.
The annual CNS Partnership Conference continues to offer attendees the single most important forum to exchange ideas, face mutual challenges, share interesting stories, and network as a community.
Next year's CNS Partnership conference destination: Carlsbad, California!
Strength in Numbers
NWA Gets Final Approval from DOT for Six-Way Antitrust Immunity
The U.S. Department of Transportation (DOT) granted trans-Atlantic antitrust immunity for Northwest Airlines and five of our SkyTeam alliance partners: Delta Air Lines, Air France, KLM Royal Dutch Airlines, Alitalia and CSA Czech Airlines. The expanded antitrust immunity clears the way for greater coordination among the six airlines over the trans-Atlantic.
Northwest President and CEO Doug Steenland said, "Today's ruling is good news for Northwest and our SkyTeam partners, but the big winners today are the customers we mutually serve. This enhanced ability to coordinate among the carriers will provide a more positive, seamless experience for our customers with single-ticketing, seamless baggage handling, and greater customer ease and convenience. It is also good news in light of skyrocketing fuel costs."
The expanded ATI authority builds on one of the most successful joint ventures in the airline industry: Northwest/KLM. For more than 10 years, the Northwest/KLM joint venture has been the cornerstone of Northwest's trans-Atlantic business.
Steenland added, "Today's ATI order, and the Northwest-Delta merger, will strengthen and stabilize the combined carrier and make it a more effective competitor - which ultimately benefits our employees, customers and the communities we serve."
Steenland also credited U.S. Senator Norm Coleman (R-MN) for his role in getting the DOT to grant ATI approval.
Source: EMPLOYEE NEWSWIRE FOR FRIDAY, MAY 23, 2008
Airlines - Sick & Failing, or Healthy & Recovering
Friday, May 9, 2008, the following three headlines appeared in one day on a leading internet news provider, www.cargonewsasia.com :
Air Canada plunges deeper into the red
Air Canada posted a deep first-quarter net loss of US$284 million compared with a year-earlier loss of $33.5 million because of a one-time charge of $197.27 million.
JAL narrows losses in fiscal fourth quarter
Japan Airlines posted a net loss of US$34.1 million for the fiscal fourth quarter ended March 31, compared with a loss of $66.57 million in the same period a year earlier.
Atlas Air posts $5.3m loss
Atlas Air went into the red to the tune of US$5.33 million in the first quarter compared with a gain of $6.2 million the previous year, due in part to record fuel prices.
 These three airlines and many more are reporting losses due to the ever and constant increases in fuel costs, and a related cost of defending themselves against fuel surcharge price fixing accusations by local governments. As of the posting date of this e-Newsletter, several airlines have already gone into bankruptcy or simply ceased operations: Aloha Airlines, Ocean Airlines, Holiday Airlines in Hong Kong, Nationwide in Johannesburg, and many more.
Old fuel guzzling 747-200's are being parked so fast the busiest runways are in the Arizona desert! Demand continues to rise and the price of fuel continues to soar, whether brought about by speculators, competition, OPEC, lack of refineries, or the laws of economics. Simply put, it is getting expensive to fly airplanes and equally expensive for customers to fly cargo. In some cases, the per kilogram fuel surcharge is higher than the per kilogram freight rate. Ocean freight is becoming less of a protection against ever-changing fuel prices as steamship carriers wish to implement monthly Bunker Surcharges to reflect their costs.
Are we in for a seismic change in the air cargo business? The news cannot always be counted on for crystal-ball accuracy. Case in point, on the same day, www.impactpub.com.au reported two headlines that would seem to conflict with the dire news above:
Global traffic continues to slow - IATA
International freight growth of 3.2 percent is sluggish and well below the 4.3 percent growth recorded in 2007, according to the latest International Air Transport Association (IATA) data for global cargo and passenger traffic for March.
Hactl on alert
Hong Kong Air Cargo Terminals Limited (Hactl) reports higher totals for April at 225,660 tonnes, a 6.3 per cent increase on last year. Throughput for January-April was 840,193 tonnes, up 6.5 per cent year-on-year. Meanwhile, the operator continues to monitor what it describes as an uncertain future: "While the April figures and tonnages so far are quite reassuring, we keep staying alert to any market changes amid an uncertain industry outlook," said Lilian Chan, Hactl general manager, marketing and customer service.
So is air freight simply down compared to previous reporting periods as measured by IATA, or just growing at a slower pace? Or are Hactl's figures correct balanced by a cautious approach to the market's future?
There is no doubt the landscape is changing in the United States and abroad. Last month, we wrote about the Delta/Northwest merger and American Airlines vowing to go it alone, yet their name constantly being linked to Continental, who also plans on staying independent. The fate of Alitalia is uncertain in Italy, yet the KLM/Air France partnership seems strong. Middle East based carriers such as Etihad Airways (Abu Dhabi), Emirates (Dubai) and Qatar are all posting double-digit percentage growth.
Perhaps it is merely a shift in the market - neither seismic in proportions nor tectonic in size, but a slow steady migration nonetheless. The strongest force is the market itself - it will reward the strong and healthy while the weak and sickly will be but memories, like Pan Am and TWA, until the market changes and we go through all this again. After all, the only constant we can count on is change.
The Impact of Fuel
Whether impacted by the laws of supply and demand, artificially impacted by speculation, or affected by world events such as the devastating earthquake in China, the price of fuel continues to rise. Airlines close to getting out of financial trouble (as just discussed above) now teeter on bankruptcy. Fuel surcharges applied by the carriers do not cover 100% of their fuel cost - there is always a percentage the carrier pays out of their revenue, and that number is continuously rising. Here are some headlines from the month showing the impact and steps carriers are taking:
Record-High Fuel Forces Cutbacks at Midwest Airlines
Midwest Airlines recently announced schedule reductions and furloughs. Midwest plans on cutting flight frequencies and its workforce by about 100 people in the coming months.
Midwest CEO Tim Hoeksema said recent skyrocketing fuel prices are to blame. "It's one of those things you have to do to be a long-term survivor," said Hoeksema. "We'd rather take tough action now as painful as it is while we still have good cash reserves and not be in a position a year from now to cut even deeper."
Hoeksema hinted it could have been worse for Midwest and its employees if not for the recent ownership change that allowed Northwest to become a passive investor in the company. While Northwest has no say in managing Midwest Airlines' operations, the two carriers benefit by being able to purchase fuel together. This, along with grouping Midwest's insurance under Northwest's, has reaped millions of dollars in savings for the carriers.
Friday, May 16, 2008 Fuel Fact - reported by Northwest Airlines
From 2003 to 2007, Northwest's annual fuel bill has risen by $1.8 billion from $1.5 billion to $3.3 billion, an increase of 118%.
SAS flies slower to save on fuel costs
Scandinavian airline SAS is flying slower to save on fuel costs and curb emissions of carbon dioxide in a new "green'' drive.
SAS has reduced the cruising speed of its jets to about 780 kph r from 860 kph, which has saved it an estimated US$12 million in fuel since early 2006.
A 360 km flight between Oslo and Bergen, Norway's two largest cities, at economy speed saves 130 kg of fuel and 420 kg of carbon emissions. The entire journey lasts only three minutes longer. A slightly longer flight between Oslo and Paris or London takes about 10 minutes longer than before.
To save more fuel, SAS taxies its planes to gates on one engine, turning off the other engines after landing. The same tactic is planned for taxing before take-off.
MAS net profit slips due to high fuel costs
Malaysian Airline System's (MAS) first quarter net profit fell about 10 percent year-on-year due to high oil prices.
The national carrier made a net profit of US$37.18 million in the quarter ended March 31, compared with $41 million a year earlier. Total revenue increased to $1.16 billion from $1.09 billion.
Total operating expenditure rose 6.5 percent, mainly due to higher fuel prices, which were up 28 percent during the quarter.
The carrier has hedged 43 percent of its fuel requirements for 2008 at $89 a barrel and 13 percent of its 2009 requirements at $95 a barrel.
US carriers delay launch of China flights
United Airlines and US Airways, which last year won federal approval to begin highly coveted routes to China, are to postpone the launch of the new services by one year because of high fuel costs.
Since the permission was granted, oil prices have shot up by more than 60 percent. Benchmark prices surged past US$135 a barrel on Thursday before settling at $130.81.
The routes affected are United's service between San Francisco and Guangzhou and US Airways flights between Philadelphia and Beijing.
United's request for a delay has been approved but the request from US Airways hasn't yet been received, a Transportation Department spokesman said.
United was scheduled to start its new flights in early June while US Airways had planned to start its new route in 2009.
When United received approval to fly to China in September, Delta Air Lines also won rights to launch its first flights to China with a daily flight between Shanghai and Atlanta. Delta's flights began on March 31.
US Airways has been sending letters to members of Congress and its employees saying it would seek to delay the launch of the new Philadelphia-Beijing route, noting that the cost for fuel would be more than $90 million a year - $40 million more than the original estimate of about $50 million.
US Airways received final approval for the route in December. At the same time, American Airlines, Continental Airlines and Northwest Airlines each won awards to add a new daily flight to their existing service beginning next year.
Representatives for American, Continental and Northwest said they aren't making any changes to their plans for new China passenger routes next year.
However, Northwest has applied for a waiver to suspend seven weekly round-trip cargo flights a week between Tokyo and Guangzhou, China.
www.cargonewsasia.com
May 23, 2008
American Airlines to axe 300 flights, 6,000 jobs
American Airlines bowed even more deeply to the reality of record high fuel prices by announcing steep cuts in flights this fall.
The reductions -- almost double what American forecast only a month ago -- will likely mean elimination of at least 300 flights a day from the 4,300 that it and its regional affiliates offer. That will also likely lead to elimination of more than 6,000 jobs. The company plans to retire at least 75 mainline and regional aircraft.
The world's largest airline will be seven to eight percent smaller in the fourth quarter than it was in the last three months of 2007. Most of that reduction will come in the domestic market, where American's mainline capacity will be down 11 to 12 percent. Further capacity cuts are possible late this year or in 2009.
American also announced steps to boost revenue, including a new charge of US$15 to check a single bag.
Book Review: Start Pulling Your Chain: Leading Responsive Supply Chain Transformation
Start Pulling Your Chain! presents the "how and why" companies at-large need to re-think their business purpose, model, tools, and culture in order to fully exploit emerging disruptive technologies. With practical supply chain insights, authors Donald Bowersox and Nicholas J. LaHowchic share a four-stage leadership transition process for facing the 21st Century business challenge while simultaneously continuing profitable growth and providing greater customer satisfaction. A "How to Get it Going" guide in the postscript provides senior leadership the tools needed to develop a plan for initiating their own responsive supply chain transformation.
Publication Date: 2008.
To purchase, visit the link provided below:
https://cscmp.org/cscmpStore/default.asp?XX=1
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Is your meeting green enough?
This summer, Republicans and Democrats will celebrate their presidential nominees at conventions billed as the greenest in their parties' histories. At the Democratic National Convention in Denver, Colorado, biodegradable balloons and recycled confetti will fall on attendees. Convention hall carpeting will be recycled, recyclable or both. And organizers plan on using environmentally friendly paint for the walls. Planning committees for the Republican National Convention in Minneapolis, Minnesota, are working on improving energy efficiency for the event. They have also cut down on paper use by relying more on electronic communication and will use fuel-efficient vehicles in the convention auto pool.
The measures highlight a major shift in the meetings and conventions industry toward holding environmentally friendlier events. Holding a green meeting is "no longer a quirky, nice thing to do," said Joel Makower, executive editor of GreenBiz.com. "It's something that increasingly is being asked, if not demanded, by meeting producers." If not closely monitored, thousands of conventioneers gathered in large-scale meetings over the course of a few days can accrue plenty of waste. For example, a five-day event with 2,200 people could produce one ton of plastic waste in the form of disposable serving pieces, said Bruce MacMillan, CEO of the industry trade association Meetings Professional International.
Meetings and conventions can also leave a hefty carbon footprint from air travel, large-scale paper consumption and the waste that comes from carelessly tearing down trade show exhibits, among other things, said Shawna McKinley, a project manager for Meeting Strategies Worldwide, an environmental consulting firm. But lately, greener practices have become a priority for businesses. Of the two-thirds of the world's top 500 companies that publish corporate social responsibility reports, 87 percent address climate change and 65 percent have a specific portion on climate change issues. Seventy-eight percent publish quantitative emissions data, according to CorportateRegister.com.
These types of corporate social responsibility mandates -- combined with some managers' genuine concern for the issue and a public demand that companies do their part -- has led to the growth of green meetings.
The 'green lens'
Not surprisingly, companies with the environment in mind, such as the U.S. Green Building Council and the National Recycling Coalition, have been on board with green meetings for years, McKinley said. But in the past 18 months, companies from a wide range of sectors, including technology, real estate, tourism and religion, have begun planning more sustainable events, she said. At the same time, companies have become more sophisticated in their requests. Whereas recycling is what McKinley calls the "101 level" and a firmly established standard, she said meeting planners are now moving onto more intermediate practices, such as asking for locally grown or organic food, or requesting hotels and convention centers that take energy efficiency and water conservation into account. Others are implementing programs such as tree planting to offset the carbon footprints of air travel, McKinley said.
Still, while many organizations are putting forth the effort, it's not yet a perfected science, resulting in greening efforts that are "all over the map," Makower said. "In some cases, it's sort of random acts of greenness. But in other cases, it's really strategic, thinking about conferences through a green lens including every aspect of it, from how they're produced to what the attendee experience is like to what messages it signals to the industry and the larger community," he said.
The Environmental Protection Agency is working on setting standards for its own events, which may help set a more consistent tone. (The agency already set guidelines last year to give preference to facilities with sustainable practices.) The new standards, which the EPA projects will be in place by June 2009, will regulate only the agency's events, although other government agencies may use them as guidance on best meeting practices.
For now, companies and organizations are learning as they go along. A recent convention of the Professional Convention Management Association took steps toward limiting waste by distributing recycled bags and refillable water bottles to attendees. But, unbeknownst to organizers, convention sponsors printed materials, resulting in about five pounds of paper for each bag, said Deborah Sexton, association CEO. The mishap is a lesson for upcoming events, she said.
The bottom line
Many companies and meeting planners have been pleasantly surprised that producing green meetings can be cost effective. Some elements do cost more, but the increase in efficiency can offset the expense, Makower said. For example, he said, using pitchers of water instead of individual bottles might cancel out the cost of organic food. McKinley said a meeting client recently saved money by switching from plastic disposable service ware to compostable serving pieces, because the high price of petroleum increased the cost of plastic.
Best destinations
Web and teleconferencing eliminate the carbon emissions of plane travel, but experts say that's not the only direction the industry is headed. Conventions can have a positive impact on a city's economy and it's important to expose conventioneers to different locales, Sexton said. To that end, industry professionals say they choose cities and facilities in the United States and abroad with environmentally sound practices.
Despite the unavoidable carbon footprint of flying, McKinley said meeting face to face is essential. "We need it for sales, we need it for education, we need it for personal fulfillment." Admits Sexton, "You'll never have the perfect meeting, no one will. ... But the more you do year in and year out, the better off it'll be."
Source: CNN.com, May 12, 2008
Continental Airlines - Commitment to the Environment
Continental Airlines is committed to promoting environmental responsibility within its culture.
The two primary means by which aviation contributes to global emissions are through aircraft operations and airport ground equipment, and Continental is committed to reducing emissions from these sources. In order to minimize the impact on the environment from their fleet and ground service equipment, Continental will continue to invest in the most effective technology and operating procedures feasible.
Background Information
on Continental and the Environment
- Today, Continental is nearly 35 percent more fuel efficient for every mile a passenger flies than in 1997.
- Committed to using electric rather than fossil-fuel-powered ground equipment, Continental has been using electric ground equipment in their Houston hub since 2002 and will have reduced emissions from ground equipment approximately 75 percent by the end of 2007.
- Continental is committed to constructing airport facilities according to the U.S. Green Building Council Leadership in Energy and Environmental Design (LEED) and Environmental Protection Agency Energy Star standards when feasible. As part of LEED, Continental will integrate high-efficiency components into facilities and implement programs to conserve energy, save natural resources, reduce emissions and minimize the impact on the environment.
- Continental is committed to promoting a culture that is focused on being environmentally sensitive when working with our employees, customers, suppliers, industry organizations and the communities we serve in safeguarding the environment for future generations.
- In 2007, FORTUNE magazine named Continental one of the top ten global companies across all industries in the Community/Environment category on its list of Global Most Admired Companies.
NWA Cargo Improvements - Good for Customers and the Environment
NWA Cargo now allows customers to print domestic shipment labels on its online Cargo Portal Services website. In addition to offering online convenience and speedier processing, this new feature reduces paperwork and waste by eliminating the multi-layered triplicate forms, therefore reducing its carbon footprint. This is another way NWA Cargo is improving its online tools to meet the growing needs of customers while having positive impact on the environment.
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If you have any questions or comments regarding the Air eNewsletter,
please contact Joseph Hoban from the AIT Air Department. |
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