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Haitian earthquake disaster relief and its impact on air cargo
The eyes and ears of the world have been fixated on the heartbreaking images and harrowing accounts of tragedies in Haiti since the 7.0 magnitude earthquake hit on January 12, 2010.
In the aftermath of the unfathomable losses and deplorable conditions caused by the crisis, it is certainly inspiring to see the outpouring of relief efforts, donations and acts of volunteerism being displayed by people from all corners of the globe.
Much of the industry media coverage in January reported on how the airlines have been impacted by the ever-increasing amount of disaster relief efforts.
A Journal of Commerce article on January 20, 2010 (http://www.joc.com/print/416124) reported on how Haiti's main airport at Port-au-Prince has been bottlenecked since the earthquake hit. Traffic on the one runway airport increased from an average of 13 commercial aircraft arrivals daily to more than 200 arrivals and departures a day.
The U.S. military expected to open a second airport runway at the provincial Haitian city of Jacmel to support the overburdened Port-au-Prince. In addition to the Jacmel airstrip, officials are also looking at other sites in Haiti and neighboring Dominican Republic for delivery of relief supplies and equipment. An overland route has been established for shipments via the Dominican capital of Santo Domingo, but the flow of trucks has been slowed by clogged roads.
Navy divers, meanwhile, have been working with engineers to determine how to reopen the wrecked seaport at Port-au-Prince. A Haitian Shipping company roll-on, roll-off barge, the Crimson Clover, was able to begin discharging cargo at Port-au-Prince, using its two 46-foot extendable ramps and a top loader. The port's cranes were knocked into the water by the initial earthquake.
A New York Times article on January 22, 2010, (http://www.nytimes.com/2010/01/23/world/
americas/23cargo.html) described the sharp increases in air cargo costs for emergency supplies. Air freight costs from Europe to Haiti have increased by 10 percent to 30 percent since the quake.
According to the article, the demand for air cargo flights will only increase as relief organizations exhaust their inventories of relief supplies. Groups responding to the disaster will be turning to equipment brokers or will buy supplies directly from manufacturers in places like India, Pakistan and China that produce emergency equipment including tents, blankets and kitchen utensils.
As these acts of goodwill and humanity continue in the coming months, refer to future editions of the AIT eNewsletter to discover how the air cargo industry has undoubtedly been impacted.
NEW REGULATIONS
Venezuela Shipments Require Approval
In addition to the already existing Customs penalties for correction in Venezuela, Venezuelan Customs has implemented a fine up to US$ 640.00 for each correction presented after vessel has finished operations at the Venezuelan port. With the amount determined by the Customs officer, this additional penalty is effective immediately.
Due to these fines and the ongoing political issues, AIT requires pre-approval of any shipment originating in or destined for Venezuela. Please contact compliance@aitworldwide.com for pre-approval of these shipments. The following information must be included in your request:
- Shipper name and full address
- Consignee name and full address - this must be end user if destined for Venezuela
- Specific commodity description - for example, "Electric Equipment" or "Computer Equipment" would not be sufficient - specific information would be needed such as "HP color printers"
- Any license requirement
- Total pieces/weight
- Mode of transport being requested (air or ocean)
- Value of cargo - whether or not insurance is being requested, AIT would require the actual value of the cargo
This pre-approval process has been implemented in order to protect AIT and our customers.
New Brazil Regulation for Air and Ocean Exports
In the past, a general declaration for packages was accepted by Brazilian Customs House authorities when description of packages was entered within the Siscomex Cargo System. This process is no longer going to be accepted. Therefore, AIT highly recommends that with immediate effect, exporters be very specific in description of cargo for all shipment documentation.
Previous Declaration: 15 packages of spare parts - 900 kgs
Future Declaration: 2 Cardboard boxes 75 kgs each; 2 plastic drums 100 kgs each;
2 plastic pallets 175 kgs each; 1 wood crate 100 kgs - Total 7 pieces - 800 kgs
It is now mandatory to mention every package type separately (including the packaging material used such as cardboard, plastic, wood) and the respective weight for each package.
Failure to comply with this regulation will result in being required to issue letters of correction, which may involve fines issued by Brazilian Customs of up to $2900.00 per package amendment.
Resolution 600b - New IATA Air Waybill Conditions of Contract
An amendment conforming Cargo Services Conference (CSC) Resolution 600b "Air Waybill - Conditions of Contract" to the updated liability limits for transportation of cargo by air under the Montreal Convention 1999 was approved and declared effective December 30, 2009. CSC Resolution 600b is the abbreviated and modernized "Conditions of Contract" that invokes both Warsaw Convention and Montreal Convention.
Click on the following link to download the finally adopted amended-text of Resolution 600b:
Resolution 600b - effective 30 December 2009 (pdf)
Please contact AIT with any questions at ClaimsAdmin@aitworldwide.com.
PHMSA Moves to Improve Lithium Battery Safety
The Pipelines and Hazardous Materials Safety Administration (PHMSA) has released a Notice of Proposed Rulemaking, HM-224F, dealing with issues involving the safety of lithium batteries in transport. This proposed rule would bring sweeping changes to the way 49 CFR deals with these items, particularly for smaller batteries that currently are subject to various exceptions
from the regulations.
In HM-224F, PHMSA proposes to put US requirements for lithium batteries "largely" in line with the latest changes found in the United Nations Recommendations on the Transport of Dangerous Goods, and the International Civil Aviation Organization's Technical Instructions on the Safe Transport of Dangerous Goods by Air (ICAO Technical Instructions). However, it also incorporates US-only provisions, such as a ban on commercial shipments of lithium batteries on passenger aircraft.
The Federal Aviation Administration (FAA) has noted more than 40 incidents involving lithium batteries in air transport since 1991, and the National Transportation Safety Board (NTSB) has made numerous recommendations to improve safety. As a result of these, as well as the changes in the current UN Recommendations, PHMSA is proposing the following:
- Shipping descriptions shall be updated to separate lithium metal batteries from lithium ion batteries. This will enhance emergency response, since the two types require very different fire suppression.
- Also in line with the UN, lithium ion batteries will be classed based on watt-hours, in place of equivalent lithium content.
- Batteries must be tested for classification according to the latest revisions of the United Nations Manual of Tests and Criteria. Batteries will have to be marked that they have completed these tests successfully.
- The current special provisions that give exceptions for small- and medium-sized batteries will be deleted for air transport. Even consumer-sized lithium batteries shipped in commercial quantities by air will require special packing, marking, labeling and shipping papers. Certain exceptions for "extremely small" lithium batteries in limited quantities, such as button cells packed in equipment will still remain, as well exceptions for lithium batteries carried by consumers, such as batteries in digital cameras, cell phones and laptop computers.
- All transport modes will include language that packaging must be designed to protect batteries from the risk of short circuits.
- Consolidating information on lithium batteries in the regulations, so it will be easier to find.
PHMSA hopes that these new requirements will help cut down on the unacceptably high number of incidents involving lithium batteries in air transport, and enhance emergency response. However, because they are still not completely harmonized with the most current UN and ICAO requirements, shipment of lithium batteries by air in the United States will still be rather complex, especially for international shipments.
Text of the NPRM may be found at http://edocket.access.gpo.gov/2010/pdf/2010-281.pdf
UP, UP, AND AWAY - AIRLINE UPDATES
BA, Iberia close to sealing merger
British Airways and Iberia could seal their merger agreement as early as next month, according to the Spanish carrier's biggest shareholder, savings bank Caja Madrid, the Daily Mail reported. The regional bank's chairman, Miguel Blesa, gave no hint that strike threats by BA's cabin crew were having any impact on the planned merger. He said he thinks February will be decisive for the deal.
Source: E-Cargonews Asia 1/20/10
Korean Air swings into black on cargo demand
Korean Air swung to a net profit in the fourth quarter compared to a year earlier, boosted by an upturn in cargo demand and a stronger won and expects the improvement to continue this year, according to news agencies.
Korean Air made a net profit of 122.3 billion won (US$106 million) for the three months ended December 31 from a net loss of 644 billion won a year earlier, reported Dow Jones Newswires.
South Korea's top airline is expected to see a full recovery this year as technology exports grow, driving the high-yield cargo business, reported Reuters.
Some analysts have also said the carrier could win business on transpacific and Northeast Asian routes from rival Japan Airlines, which this week filed for bankruptcy protection and which faces a painful restructuring. Korean Air expects 2010 operating profit to increase to 800 billion won from around 130 billion won last year, while global peers predict a patchier recovery as business travel revises slowly.
"Korean Air's business will fully normalize this year as both cargo and passenger demand rises, while supply remains low," said Lee Ki-myung, analyst at Hyundai Securities.
"Booming Korean IT goods exports will support the cargo business, though the won and oil prices pose uncertainties."
Dow Jones reported Korean Air operating profit soared to 154 billion won from 22.6 billion won, while sales fell 4.9 percent to 2.57 trillion won from 2.71 trillion won.
Operating costs during the quarter fell 9.9 percent year-on-year to 2.42 trillion won and spending on jet fuel declined 22 percent to 785 billion won, boosting the quarterly bottom line.
For the whole of 2009, the airline posted a net loss of 61.5 billion won, narrowing from 1.94 trillion won a year earlier.
Full-year operating profit was 133.4 billion won, from an operating loss of 99.3 billion won.
Source: Cargonews Asia January 20, 2010
Lufthansa Cargo, British Airways face strike threats
The union for Lufthansa is demanding a 6.4% wage hike for 2010 and assurances on job security for Lufthansa pilots.
The carrier is seeking to cut costs by $1.4 billion to boost profitability following a slump in passenger and cargo traffic. Lufthansa Cargo's losses soared to $300 million in the first nine months of 2009 from a $240 million year-earlier profit. The union fearing Lufthansa will use lower paid pilots at its recently acquired subsidiaries, including Austrian Airlines, Brussels Airlines and the UK's BMI, to fly Lufthansa's passenger and freight aircraft has asked approximately 4,500 pilots employed by parent company Lufthansa and its cargo and low cost airlines units to vote by Feb 17. A 70% acceptance is needed to allow an open ended strike at Europe's second largest airline.
British Airways cargo operations also face disruption as the carrier's 13,500 flight attendants prepare to vote on possible strike action over cost cutting plans. This strike could begin as early as March if the cabin crew members vote in favor of industrial action. BA's cargo operations would be affected since much of its freight is carried in the belly holds of its passenger aircraft.
Source: http://www.joc.com/print/416085
Air France - KLM Traffic falls in December
Air France-KLM, Europe's largest cargo airline, carried 8.5% less freight in December than a year ago. The load factor and yield, however, which will more accurately reflect the performance of the cargo operation, both gained as the carrier cut its capacity and that of its Martinair unit - by 19.4% from December 2008. AF-KLM has grounded eleven of its 29 freighters and has delayed the delivery of two 777 freighters.
Source: Journal of Commerce, http://www.joc.com/print/415882
FedEx B777 freighter to enter Shanghai service
FedEx has launched its first Boeing 777 freighter service in Shanghai, according to the Associated Press.
The new aircraft, which will directly connect Shanghai with FedEx's hub in Memphis, Tennessee, where the company is based, had its inaugural flight on January 4, 2010. According to the company, the service will provide customers in Shanghai, Suzhou and Kunshan with a two-hour improvement in cut-off times in select areas, making it more convenient for businesses to ship internationally. There will be 15 B777 freighters in the company's fleet by the end of fiscal 2014. FedEx Express has a second order of 15 B777 freighters, which will be delivered between fiscal 2014 and fiscal 2019, and holds options on 15 more.
Each aircraft has a revenue payload capacity of 178,000 pounds and can fly 5,800 nautical miles.
Source: E-Cargonews Asia, January 15, 2010
Aerologic Expands Network
AeroLogic, the joint venture cargo airline of DHL Express and Lufthansa Cargo, is expanding its network, following delivery of two additional aircraft last month. The company is now introducing daily flights from Leipzig to Hong Kong, four of them non-stop, and weekend flights from Frankfurt to Atlanta and Chicago during the current winter schedule. AeroLogic took delivery of two additional B777F aircraft in December and with a fleet of four is currently the largest operator of the B777F worldwide. The B777F is the most efficient and environmentally friendly long range wide-body freight aircraft available.
Source: E-Cargonews Asia 1/20/10
Swiss Worldcargo to fly to San Francisco
Starting June 2, Swiss Worldcargo will launch daily flights between Zurich and San Francisco, doubling freight capacity between its European cargo and U.S. west coast. The cargo unit of Swiss Airlines will operate a six-times-a-week service with wide bodied Airbus A340-300 aircraft. Managing Director for the Americas Swiss WorldCargo, Jack Lampinksi, said the new services complement their North American network and Swiss is one of the few carriers which will be able to further expand their network in 2010.
Source: http://www.joc.com/print/415699
$25.6 billion debt load forces JAL bankruptcy
Japan Airlines (JAL), the flag-carrier staggering under US$25.6 billion of debts, has filed for one of the country's biggest bankruptcies amid a battle between two US carriers for control of the troubled airline. JAL, a Oneworld alliance partner of British Airways, ended months of speculation over its future by applying for protection from creditors under the country's Corporate Rehabilitation Law, Japan's version of Chapter 11, reported the Daily Telegraph.
The airline is now expected to shed 15,700 jobs by March 2013, cut pensions for retired staff, trim its route network and retire 37 Boeing 747 aircraft as part of a funding deal with the Enterprise Turnaround Initiative Corp of Japan (ETIC). To keep the carrier airborne, government-backed organizations will inject almost $11 billion of cash, while lenders will write off about $8 billion of debt. Equity investors will lose their money, with the shares delisted.
The carrier has been the subject of a tug-of-war between Delta Air Lines and American Airlines, both of which had tabled potential $1 billion-plus cash injections in return for control. It is unclear whether either carrier could yet return with an improved offer. Had Delta have won the day, it would have had ramifications for BA. Delta is part of the SkyTeam alliance that was keen to lure JAL away from Oneworld.
The bankruptcy is thought to be the fourth-largest in Japan and represents a humiliating outcome for Japan's leading airline. It was founded in 1951 and once symbolized the country's growing power. Haruka Nishimatsu, JAL president, bowed deeply as he resigned and apologized for the ignominious situation at the company. "This is our last chance,'' he said."I believe we can be reborn as an airline that can represent Japan again. "This is not the end of JAL,'' insisted Seiji Maehara, Japan's transport minister."Today is the beginning of a process to keep JAL alive."
Source: e-Cargonews Asia, January 20, 2010
AIRLINE SECURITY
Airlines want intelligence solution to find "bad people"
With airlines and their customers spending $5.9 billion a year on security, IATA's Director General and CEO Giovanni Bisignani has called on governments to stop looking for "nail clippers and rogue bottles of shampoo" and focus instead on finding "bad people."
In a letter to US Homeland Security Secretary Janet Napolitano, he said that the air transport industry could not support a 100% level of human searches. It is time for governments to invest in a process built around a check point of the future that combines the best screening technology with the best of intelligence gathering. Screeners would then have access to important passenger data to make effective risk assessments.
IATA says in the 12 months to September 2009, the global air transport industry carried 2.2 billion passengers, including 820 million international travelers of which 140 million flew to and from the U.S.
Andrew Herdman, Director General of the Association of Asia Pacific Airlines, said, "The sudden introduction by national governments of uncoordinated new security requirements, without prior consultation, makes practical implementation difficult. The fact that such requirements are unpublished, and even in some cases unwritten, inevitably leads to inconsistency of application. Far from reassuring customers, the likely result is further confusion and unnecessary inconvenience. We urge governments to cooperate closely with industry and strive for global harmonization of aviation security measures, working in conjunction with the International Civil Aviation Organization."
Source: http://www.aircargoworld, January 13, 2010
IATA, US Agree On Aviation Security Cooperation
The International Air Transport Association (IATA) hosted an historic aviation security summit with the US Department of Homeland Security (DHS). IATA Director General and CEO Giovanni Bisignani and DHS Secretary Janet Napolitano spearheaded a new era of industry/government cooperation to improve aviation security around the world.
The summit was held at IATA's headquarters in Geneva and included the Secretary General of the International Civil Aviation Organization (ICAO), top executives from 25 airlines as well as participants from the US Government.
During the meeting, IATA and its member airlines made several recommendations, including:
Institutionalizing government/industry cooperation: This would allow security policies to be written with the benefit of airline operational expertise. IATA encouraged ICAO to create a template for such cooperation to be implemented globally.
Implementation: Recognize that prescriptive, one-size-fits-all regulations with numerical targets will not secure a complex global industry. Governments must work with industry to define practical implementation measures for their security targets.
Passenger data collection: Make passenger data collection and sharing more efficient: IATA urged DHS to break down internal silos to create a single data collection and sharing program that could serve as a model for implementation by other governments.
Harmonization across borders: Governments must talk to each other to ensure that one country's requirements do not conflict with another country's laws.
Next generation checkpoint: Along with optimizing the capabilities of current screening technology, we must begin to look at future checkpoints that combine technology and intelligence. "We need a checkpoint system that focuses on finding bad people, not just bad objects," said Bisignani.
Source: IATA, January 22, 2010, https://iata.org/pressroom/pr/2010-01-22-01.htm
AIRPORT UPDATES
Dubai cargo volume up 26% in December
Dubai International Airport saw a 26% jump in cargo volumes in December. DXB Airports said growth was mainly driven by gradual improvement in the global economy and expansion by the airport's largest cargo carrier, Emirates Airlines. Maiden cargo flights at the new US$10 billion Maktoum International Airport are due to begin this year. The airport handled 182,874 tons of freight in December compared to 145,176 tons during December 2008. Cargo volumes rose 5.6% to 1.9 million ton in 2009, after booking double digit increases in the last quarter.
Source: E-Cargonews Asia, January 15, 2010
Hong Kong and other Asian Hubs
Reports emerged in mid-December that as many as 10,000 tons of cargo in Hong Kong, the busiest cargo airport in Asia, were awaiting space on planes. Other major hubs suffered from similar congestion. Delays ran from two days to as many as 14.
Shippers with long-term capacity agreements found space just as hard to come by as those willing to pay a last-minute premium for priority service. For most of 2009, air carriers have been stripping capacity out of their networks because of poor demand and even worse rates. Then, in the fourth quarter, developed economies began to show signs of recovery. Finally, demand for certain high-value, Asian-made goods spiked in the weeks before Christmas. Removal of capacity coinciding with a demand surge led to the severe backlogs.
According to Ned Laird, a Seattle-based aviation consultant, a major reason behind the spike in demand was the increasing competition between high-end phone manufacturers. There were a number of charters for the smart phones. Apple had done a number of charters for 3G AT&T iPhones. One chartered freighter, for example, could conceivably carry 800,000 iPhones.
Mr. Laird also said that due to the Cash-for-Clunkers program, he was hearing there was no physical way the carmakers (with plants in the U.S.) could ramp up production of Japanese cars using a traditional six-week marine supply chain and this further stimulated demand.
A handful of Asia-based airlines indicated they were offering unusually high numbers of chartered flights to try to meet the demand.
Cathay Pacific, for example, confirmed it was flying an average of "six to seven extra sectors or charter flights every week to North America or Europe" during the backlog. The biggest carriers at Hong Kong, in terms of transpacific cargo, are Cathay, UPS and Polar Air Cargo.
To Europe, the biggest carriers are Cathay, Cargolux and Lufthansa. Over the course of the year, those airlines have cut back on crew utilization, Mr. Laird said. Cathay, for example, has cut 25% of its capacity, but it has "been able to offset reductions in capacity by flying crews more hours" he said. "They are not returning parked aircraft to active duty."
As nice as December has been for the airlines, do not look for sweeping structural changes to the capacity situation in the months ahead. Airlines that have parked aircraft "are not to reactivate them for three weeks or a month of business," Laird said. It takes 30 to 45 days to get a typical cargo plane up and running, and carriers are entering the slowest part of the year (January through March) in terms of demand. "Why would you rebuild this capacity before the slowest time of the year?" Laird said.
In the meantime, airlines have taken advantage of the situation, charging as much as $550,000 for a charter flight when the typical rate from Asia to Europe or North America is about $375,000.00. And the freight rate for shipments, during the demand spike, had more than doubled from the usual $2.50 per kg to as much as $6.00 per kg. "Major airlines started raising rates in the August/September timelines because they were just losing so much money," Laird said. "And it worked, so when demand accelerated, it just took off."
Source: American Shipper - January 20, 2010
PREPARING FOR TAKEOFF: A THOUGHT TO PONDER
"When everything seems to be going against you, remember
that the airplane takes off against the wind, not with it."
- Henry Ford -
If you have any questions or comments regarding the Air eNewsletter,
please contact Kathleen Lally from the AIT International Air Department. |
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