DHL airfreight volumes decline as it turns away business to protect margins

Freight forwarder DHL Global Forwarding's decision to turn away airfreight business to protect profits in the first half of this year resulted in a decline in volumes.
The Bonn-headquartered forwarder recorded a 7.2% year-on-year decline in airfreight exports during the second quarter to 530,000 tonnes, while the half-year result was down by 3.6% to 1m tonnes.
Second-quarter airfreight revenues, meanwhile, increased by 3.1% against last year to €1.27bn and for the half year there was an increase of 7.3% to €2.39bn.
It said that the decline in volumes was the result of withdrawing from some major transactions in order to counteract a decrease in margins, while revenues benefited from exchange rate gains.
"Whilst the measures we implemented in the previous year to increase profitability are in fact showing success, margins are still low when compared with the historical average," it said.
Asked whether it would turn away further business in the remainder of the year, chief financial officer Larry Rosen said the decision on whether to "pass out further on loss making routes and customers" depended on market developments.
If the market improves there would be less need to "pass out" but if it worsens the need to be selective would continue.
Airfreight gross profit increased by 1.7% in the second quarter to €246m.
The overall division saw revenues increase by 5.7% in the first-half to €7.57bn. It said the majority of the increase was down to exchange rate gains of €367m.
The DHL forwarding division's earnings before interest and tax declined by more than 62% at the half year to €57m, which it put down to the cost of implementing a turnaround initiative and tough market conditions, although this was offset by the €99m generated by the sale of shares in Sinotrans.
The turnaround initiative has been divided into three parts: the first, which is complete, is to adjust organisational structures, re-empower countries, re-establish stronger accountability and re-enable staff and adjust incentives.
The second stage, which is being implemented at present, involves improving gross profit, improving cost
and service performance and developing a specific country focus.
The third stage will sharpen commercial focus, see investment in skills and capabilities through training and and the renewal of IT with a business-centric approach.
The cost of the turnaround project of €81m was more than offset by the €99m generated through the sale of the stake in Sinotrans.
Following the announcement of its first-quarter results, DHL parent Deutsche Post said it was suspending the forwarding division's transformation programme as its roll out was affecting business performance.
It reasoned that the project had been too ambitious and more attention should have been paid to the results of pilot projects.
DHL airfreight volume decline for the first-half period was the largest posted so far by the major European forwarders that publish figures, although its position as airfreight leader was unaffected as DHL is by far the largest in this sector.
In comparison, Kuehne+Nagel recorded half-year air volume growth of 5.2%, Panalpina was down at 2.1%, DB Schenker saw growth of 1.1% and DSV's half-year increase came in at 8.7%.

Source : http://www.aircargonews.net/news/forwarders/single-view/news/dhl-airfreight-volume-decline-as-it-turns-away-business-to-protect-margins.html

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European airports record growth in H1 2015, but only just

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European airports just managed to drag cargo volumes into positive growth for the first half of the year thanks to improved performance in June.
Figures from the Airports Council International (ACI) Europe show that freight volumes for the first half of the year increased by 0.5% against a year earlier.
The organisation was not too optimistic for the rest of the year.
ACI Europe director general Olivier Jankovec said: "For freight, the situation in Russia as well as slower growth in emerging markets is likely to keep constraining traffic performance."
The increase came as a result of an improvement in June when cargo volumes increased by 3% year on year.
June was the third month of the year to record an increase in volumes compared with the prior year, and it was also the highest increase recorded so far in 2015.

Source : http://www.aircargonews.net/news/airports/single-view/news/european-airports-record-growth-in-h1-2015-but-only-just.html 

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Swiss and Lufthansa to launch new cargo pricing structure

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Swiss WorldCargo and Lufthansa Cargo are to launch a two component pricing structure - a net rate plus airfreight surcharge – to reflect the "volatility of external cost factors".
A joint letter to customers states: “The new airfreight surcharge will be significantly lower compared to the combined fuel and security surcharges, which will be eliminated with the start of the winter flight schedule.
“As the surcharge level will be decreased, the change in the pricing structure will subsequently lead to a re-aligned and increased net rate that will reflect the real value of our service in an adequate way. Overall prices of transportation will remain at current levels.”
In countries that are subject to state regulation, such as Japan and Hong Kong, the airlines will retain the current surcharge structure.
Customers will be informed about the applicable airfreight surcharge levels in individual countries in a separate email.
The pricing structure is not an all-in rates offer, as first introduced by Emirates SkyCargo in January this year, a move that prompted several airlines, including Qatar Airlines and IAG Cargo, to introduce similar pricing structures.
The airfreight surcharge will be adjusted “whenever one of these external cost factors changes significantly and thus will display necessary price adjustments in a transparent way”.  
The airlines added: “This would not have been the case with an all-in rate, which we also investigated in detail. An all-in rate would have required a less transparent adjustment mechanism in the event of significant fluctuations in costs beyond our control.”
The letter is from SwissWorld Cargo’s Chief Cargo Officer, Oliver Evans, and Alexis von Hoensbroech, Lufthansa Cargo board member responsible for product and sales.
It continues: “Pricing structure has been the most dominating discussion in our industry in the recent past. Market developments have shown that we need to continue working on our pricing system in order to remain agile and sustainable in the future.
“We have been listening closely to you, our customers, who have been demanding a new and comprehensive pricing concept, to meet your needs and fulfill our own business requirements.”
The letter adds: “The new, market oriented airfreight surcharge reflects the volatility of external cost factors, such as fuel, exchange rates, flight dependent cost such as airport charges and fees, which are beyond our control.
“As in the past, we aim to be a straightforward business partner for you. The new re-aligned surcharge will allow us to largely avoid special processes such as negative rates and thereby shorten our transaction and response times to you."
It continues: “Our talks have shown that both reliable planning and flexibility are becoming increasingly important to you and your customers.
“For an insurance add-on, we will offer you the option of securing stable total rates for certain types of long-term contracts. We will also offer you more opportunities to sign long-term contracts with us whenever your or your customers’ needs arise for such contracts, and even when they extend beyond a single season.”

Source :  http://www.aircargonews.net/news/airlines/single-view/news/swiss-and-lufthansa-to-launch-new-cargo-pricing-structure.html

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Logistics sector losing the price war

 
A large section of the logistics sector is losing the battle to implement planned price increases, coupled with an extremely low success rate when introducing new products and services.
These are the results of the most recent Global Pricing Study*, based on responses from approximately 1,600 managers, conducted by the global strategy consulting firm Simon-Kucher & Partners.
According to the results, logistics firms succeed with only 40% of their planned price increases. And almost 80% of the companies are experiencing higher price pressure compared to last year.
Logistics providers blame these poor results on “fierce competition” and on customers having more negotiating power. As a result, the percentage of logistics companies that only compete on price is twice as high as in other industries.
Dimitris Hiotis, partner at the London office of Simon-Kucher, comments: “The intense competition in the market has led logistics companies to focus negotiations on price; thus self-fulfilling a prophecy of low prices, which further intensifies competition.
“However, focusing instead on value and differentiating the product offering accordingly will allow logistics companies to trade-off value versus price and get the right price for the right product to the right customer."
Hiotis adds: “When a logistics company clearly differentiates their services and products, customers are able to trade off the price they are willing to pay against the level of service they value. This can be a win-win situation for both the logistics company and the customer.” 
Blame is quickly placed on the competitors, although the inability to raise prices is generally self-inflicted, says Philipp Biermann, partner at the Cologne office of Simon-Kucher: "Logistics firms often lack confidence and negotiation tactics.
“They are frequently at the mercy of their customers' professional purchasing departments. Recognising the value of your services, developing a negotiation strategy and turning this into an implementable price - logistics managers must get this into their heads”
The combination of external pressure and low confidence in their own performance has caused almost two-thirds of the respondents, to “suffer from price wars” says Simon-Kucher.
All of them, however, say that it was the competition who started it.
Explains Kornelia Reifenberg, senior director at the Bonn office of Simon-Kucher: "The phenomenon that companies make concessions to their customers in the heat of the moment that they actually cannot justify is very widespread in the logistics industry.
“In the process, they often don't see the signals that their dumping prices give to the competition. They don't grasp that these 'isolated cases' ultimately have a negative impact on the market price level."
When it comes to launching new products and services, the logistics industry has also been struggling: Only 18% of all new products achieve their profit targets, which is the lowest rate ever recorded  - with a benchmark of 28% in other industries.
* Approximately 1,600 participants, of which 39% are C-levels, from companies of all industries and over 40 countries across Asia-Pacific, the Americas and Europe, took part in summer 2014 in an online study conducted by Simon-Kucher.

Source : http://www.aircargonews.net/news/forwarders/single-view/news/logistics-sector-losing-the-price-war.html  

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Brussels launches probe into FedEx’s proposed TNT takeover

The European Commission has opened an in-depth investigation into FedEx’s proposed $4.8bn takeover of TNT Express over concerns the deal could reduce competition and push up prices.
The Commission said it had concerns that on a number of European markets for international express and regular small package deliveries, the merged entity would face insufficient competitive constraints from the only two remaining players, UPS and DHL.
This could lead to higher prices for business customers and consumers, it said.
Both TNT and FedEx described the probe as a phase 2 review and said it was a customeray part of the Commission’s investigation process.
Commissioner Margrethe Vestager, in charge of competition policy said: "Many businesses, and in particular e-commerce, rely heavily on affordable and reliable small package delivery services, and many consumers depend on these services to ensure rapid and safe delivery of goods they have bought.
“The Commission must therefore make sure that FedEx's takeover of TNT would not impede effective competition and would not lead to higher prices for consumers.”
A preliminary investigation conducted by the Commission indicated that DHL and UPS would be the only significant competitive constraint on the merged entity for most international express services, with a destination within or outside the European Economic Area (EEA).
As the proposed transaction would reduce the number of integrators competing in the EEA from four to three, the competitive constraint on the merged entity would be significantly reduced, leading to a concentrated market in several member states for international express delivery services to a destination within or outside the EEA.
The Commission's initial investigation also showed that the merged entity would have very high market shares for services to some destinations leading to potential competition concerns.
The Commission now has 90 working days, until 8 December 2015, to investigate the proposed acquisition and to determine whether initial concerns are founded.
FedEx said the transaction is also being reviewed by other antitrust agencies, including the Ministry of Commerce (MOFCOM) in China and Conselho Administrativo de Defesa Econômica (CADE) in Brazil.
FedEx Express Europe president David Binks said: “We will continue to work together with TNT Express to meet the European Commission’s need for additional due diligence and are confident that the combination of both companies will increase competition and create benefits for customers.
“We continue to make progress on all of the necessary regulatory steps around the world that would allow us to complete this transaction in the first half of 2016 and unite two great teams that share a passion for customer service.”
TNT said it looked forward to the success of the intended acquisition.
“The company will continue to cooperate with FedEx and the European Commission with a view to a positive outcome,” it added. “During the transaction approval process, TNT remains focused on executing its Outlook transformation and turnaround strategy.”
FedEx had sought to assuage competition concerns by promising to sell the TNT air fleet of 54 freighter aircraft would be sold to a third party.
On announcing its half-year results, TNT said it expected the deal to be completed in the first half of next year.
The takeover of TNT is based on an all-cash offer by FedEx for all issued and outstanding ordinary shares, including shares represented by American Depositary Receipts of TNT Express for a cash offer price of €8.00 per share.
FedEx started the formal process to obtain merger control approval from the Commission by submitting the required filing to obtain regulatory clearance on June 26.

Source : http://www.aircargonews.net/news/airlines/express/single-view/news/brussels-launches-probe-into-fedexs-proposed-tnt-takeover.html

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Tough June for Europe's air cargo carriers

European airlines continued to struggle with the continent’s weak economic conditions last month with volumes and load factors continuing to lag behind last year’s levels.
Combined data from the IAG Group, Lufthansa Group, Air France KLM and Finnair show that demand at the airlines they own declined by 4.6% year on year in June in terms of revenue/cargo tonne km.
Meanwhile, capacity in available tonne km terms from the airlines owned by Lufthansa, Air France KLM and Finnair was down by 2% on last year.
As a result, average load factors slipped to 61.3% compared with 63.3% a year earlier.
The year-to-date figures made for even more painful reading with demand for the first six months down by 5.3% against last year while supply increased by 0.8%.
Average load factors for the year so far stand at 60.7% compared with 65.6% a year ago.
The only real bright spot that can be drawn from the figures is that load factors have reached their highest level since March.
The figures are also indicative of the fact that the airlines have now entered the more steady summer period, with demand historically peaking in the February/March period in line with the Chinese New Year and in October/November ahead of the Christmas period.
Of the individual airlines analysed, Finnair saw the largest year-on-year decline in volumes (14.8%) in June but its capacity was down 15%.
Finnair said: “The cargo overall figures reflect a structural change from the comparison period, as Finnair withdrew from the use of leased NGA freighter aircraft capacity in Asian traffic.
“In June, the cargo traffic consisted almost entirely of belly cargo on scheduled flights.”
IAG’s volumes at British Airways and Iberia were down 6.1% during the month, although it also ended freighter operations recently, affecting year-on-year comparisons.
Air France KLM saw June volumes slide by 6.6%, although it is also greatly reducing freighter capacity – down 22% on last year. Overall capacity at the airline was 5.2% behind last year.
The Lufthansa Group saw June volumes decline by 1.4% on last year, while capacity was up 2.3%.
Lufthansa Cargo, which accounts for more than 80% of the group’s overall cargo volumes, said it was “holding its own” in “a challenging market”.
Lufthansa Cargo chief executive Peter Gerber said: “After an exceptionally good start to 2015, we were aware of the challenging market situation again in the second quarter.
"We are monitoring the market very carefully and can react by adjusting our routes flexibly and quickly to changes in demand.
“This allows us to meet the needs of our customers while at the same time guaranteeing the profitability of the individual connections.”
The weakening performance compared with last year should come as no real surprise for European airlines as the economies of many countries continue to struggle.
In its wrap up for May, IATA said: “European carriers saw demand decline by 1.3% in May, compared to a year ago while capacity grew by 2.7%.
“Consumer confidence remains subdued in the region, and the region is at risk of economic contagion if a disorderly ‘Grexit’ from the Euro were to occur."
Director general and chief executive Tony Tyler added: “The expansion in volumes we saw in 2014 has ground to a halt, and load factors are falling.
“Some economic fundamentals still point to a rebound in the second half of the year, but we have to recognise that business confidence is flat and export orders in decline.”


Source: companies
Notes: IAG figures are cargo tonne km (m), the rest revenue tonne km (m)

Source: companies


Source : http://www.aircargonews.net/news/airlines/single-view/news/tough-june-for-european-airlines.html 

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UPS expands express freight service

UPS is adding eight origin and five destination countries to its Worldwide Express Freight service, designed for urgent, time-sensitive and high-value international heavyweight shipments.
The expansion adds five countries in Latin America and three in Europe.
UPS now offers the guaranteed service – targeting product launches, inventory shortages or equipment failure replacement parts – to 58 origin and 56 destination countries and territories.
Countries adding origin service include: Bulgaria, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Romania and Serbia.
Countries adding destination service include: El Salvador, Guatemala, Honduras, Nicaragua and Panama.
The service offers guaranteed palletised shipments, over 70 kg, for door-to-door and day-definite delivery, with customs brokerage service included.
“Eastern Europe is experiencing growth in the manufacturing and automotive industries and Latin America is undergoing rapid expansion of general industrial, healthcare, apparel, and high tech businesses,” said Nick Basford, UPS vice president of international marketing.
“We expanded the number of countries we serve due to consumer requests and anticipated future demand.”

Source : http://www.aircargonews.net/news/airlines/express/single-view/news/ups-expands-express-freight-service.html

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Airfreight demand growth "comes off the boil" in May

 
Cargo demand growth “came off the boil” in May, while capacity additions have resulted in a further weakening of load factors.
Figures from the International Air Transport Association show that demand growth in freight tonne km terms increased 2.1% year on year in May, which is the slowest growth rate recorded this year, compared with growth of 4% for the first five months.
Meanwhile, capacity expanded by 4.3% during the month and as a result of supply increasing ahead of demand, load factors slipped to 44.3% compared with 44.7% in April.
IATA said that carriers in most regions, with the exception of those based in the Middle East, saw weak demand growth or even contractions.
Airlines in North and Latin America and Europe reported that their freight business was smaller in May 2015 than in the same month of 2014. Carriers in Asia-Pacific experienced slow growth as a result of poor import/export performance.
“Cargo growth has undoubtedly come off the boil,” said IATA director general Tony Tyler. “The expansion in volumes we saw in 2014 has ground to a halt, and load factors are falling.
“Some economic fundamentals still point to a rebound in the second half of the year, but we have to recognise that business confidence is flat and export orders are in decline.
“There is also the risk of a shock to the economic system of a ‘Grexit’ from the Eurozone.”
The IATA figures show that Asia-Pacific carriers reported demand growth of 2.8% in May compared to May 2014, below a capacity expansion of 6.7%.
European carriers saw demand decline by 1.3% in May, compared to a year ago, while capacity grew by 2.7%.
North American airlines reported a fall in demand of 2.9% year on year while capacity was cut by 4.2%. Stronger growth, however, is expected in coming months as the effects of poor weather and US seaport congestion fade.
Middle Eastern carriers saw demand grow by 18.1%, on the back of increased trade within the region, as well as shippers taking advantage of the Gulf carriers’ hub strategy. Capacity expanded 19.4%.
Latin American airlines reported a fall in demand of 10.5%, while capacity grew by 4.7%.
“A general increase in regional trade activity has not yet manifested itself in stronger airfreight demand, possibly due to continued weakness in Brazil and Argentina, two of the region’s largest economies,” IATA said.
African airlines experienced a 3% rise in demand and a 1.3% increase in capacity.
Analyst WorldACD also reported a weakening of growth in May, with its figures showing a 1.8% improvement on a year earlier.
“The areas Europe and North America, volume-wise among the best performing areas only one month ago, were the laggards this time around, together with Central & South America, an area that has been suffering for a while,” it said.
“The growth in May came specifically from Africa and the Middle East & South Asia (MESA), with year-on-year increases of 8% and 5.5% respectively.
“MESA was also the fastest growing destination. Interestingly, the Americas did best when it comes to yield comparisons with May 2014.”
Perishable and pharma cargoes led the growth, increasing by 7% and 13% respectively.

Source: IATA

Source: World ACD

Source : http://www.aircargonews.net/news/airlines/single-view/news/airfreight-demand-growth-comes-off-the-boil-in-may.html

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Hong Kong airfreight chief steps down

Hong Kong Association of Freight Forwarding and Logistics (HAFFA) chairman Paul Tsui is to step down and will be replaced by Cliff Sullivan, senior vice-president of A-Sonic Logistics. Mr Tsui is a 30-year veteran of the airfreight industry and in 2001 founded Janel Group, which now employs 250 staff in offices throughout China. Mr Sullivan has been a HAFFA executive committee member since 2001.

Source : http://www.aircargonews.net/news/people/single-view/news/hong-kong-airfreight-chief-steps-down.html

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FedEx-TNT deal edges forward

FedEx’s potential $4.8bn takeover of TNT has edged further forward as the US express giant has filed regulatory paperwork to the European Commission.
Over the weekend, the New York Stock Exchange-listed logistics company confirmed it had submitted the required filing to the EC to obtain regulatory clearance in connection with the intended recommended public cash offer for all issued and outstanding ordinary shares in the capital of TNT Express.
It added that it expected to submit a request for review and approval of its offer document with the Netherlands Authority for the Financial Markets before June 30, as required under Dutch law.
“Based on the required steps and subject to the necessary approvals, closing of the Offer is anticipated in the first half of calendar year 2016,” FedEx said.
Other approvals will also need to be gained, with the offer conditional on FedEx also obtaining the required competition clearances in China, Brazil and, to the extent applicable, the US.
Under the planned deal, the relatively small TNT air fleet of 54 freighter aircraft would be sold to a third party, to assuage the competition authorities in the European Union and elsewhere. This had been one of the major sticking points in the previous proposed UPS takeover.
TNT's owned and leased fleet includes B777Fs, B747Fs, and a combination of BAe 146, Boeing B737Fs and B757Fs. 
The two sides reached a conditional agreement on the deal earlier in April. The agreement recommends an all-cash offer by FedEx for all issued and outstanding ordinary shares, including shares represented by American Depositary Receipts of TNT Express for a cash offer price of €8.00 per share.

Source : http://www.aircargonews.net/news/airlines/single-view/news/fedex-tnt-deal-edges-forward.html

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Shift from ocean to air, but for how long?

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  The air cargo industry has won marketshare from ocean rivals over the last year, but analysts have warned there will be a return to sea transport.
  In its weekly insight analysis, Drewry Maritime Research highlighted the modal shift that had taken place as US west coast port congestion caused by difficult negotiations between container terminal bosses and union officials resulted in a shift to air.
  During the messy negotiations, port representatives accused labour of working to a go slow while unions accused the terminals of turning away workers.
  Drewry said that the port delays forced shippers to switch to “more expensive airfreight”.
  Drewry data shows that the spike in demand caused eastbound transpacific airfreight rates to shoot up from just over $4 per kg in the first half of last year to around $5.25 per kg towards the end of the year, although prices have since dipped below the $4 mark and are now below last year’s level.
  
  Drewry said the decline in rates has come in line with the end of the shopping season and also because “US port operations have sharpened up”.
  Other figures also point to a shift from ocean to air and also suggest some of that changeover has been maintained, even though ports have improved operations.
  US Census Bureau data shows that airfreight only increased its share of US import containerisable trade from 2.4% at the start of 2014 to 2.8% in May, looking at individual commodity types reveals a greater shift.
  The analyst said in normal circumstances there is very little overlap in the goods that ocean and air cargo move but the small bubble they do fight over in the middle include items and parts from the hi-tech, fashion, and automotive industries among a small select group that require expedited transportation.
  However, Census Bureau “provide evidence of the general upwards trend for air cargo services in the last year or so with the high-tech commodities registering the most significant rise”.
  It added: “Fashionable clothing, here represented by women’s blouses, has been switching to air in recent months in readiness for the summer season.
  “The need to get more mundane everyday clothing such as men’s vests and T-shirts is less pressing, but even here there has been a small move towards air cargo.”
  Drewry’s long-term prognosis for modal shift towards air was not positive.
  On a more positive note, it said the current capacity oversupply and nosediving ocean freight rates could help maintain the modal shift for a while longer as shipping lines suspend and miss sailings to try and correct the situation, forcing shippers to use air to maintain supply chains.
  It said: “The big picture is of the far cheaper ocean freight sector growing at a much faster rate than air cargo with greater demand for the sorts of goods that are typically moved by containers and the fact that more higher-value goods, the bread and butter for air traffic, are increasingly being trusted to ocean carriers.
  “As port operations improve on the US west coast the reversal in the long-term shift towards ocean will resume.
  “The prospects of missed sailings in the peak season as ocean carriers look to redress the supply-demand imbalance could potentially prolong the blip for a small number of high-value goods.”
  
  
  
  
  

   Source : http://www.aircargonews.net/news/airlines/single-view/news/shift-from-ocean-to-air-but-for-how-long.html

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DHL, K+N and DB Schenker the leading airfreight forwarders

 
DHL Global Forwarding, Kuehne+Nagel and DB Schenker have maintained their position as the world’s leading airfreight forwarders, while the top 25 forwarders recorded a total increase in airfreight demand of less than one percent.
The latest top 25 Global Freight Forwarders List from consultant Armstrong & Associates, based on revenues and ocean and airfreight demand, revealed that the leading companies recorded a 7.7% year-on-year increase in revenues in 2014 to $213bn.
Airfreight demand amongst the top 25 increased by 0.4% to 13.5m tonnes and containerised ocean freight was up 2.3% on 2013 to 22.9m teu.
The leading three forwarders in terms of revenue were once again DHL, K+N and DB Schenker, with all three recording an increase in income during the year.
These three forwarders were also the three busiest airfreight forwarders, with all three growing faster than the 0.4% average recorded by the leading 25.
DHL saw air volumes increase by 2.6% year on year in 2014 to 2.3m tonnes, K+N recorded a 5.3% increase to 1.2m tonnes and DB Schenker’s were up 1.8% to 1.1m tonnes.
The company which recorded the largest increase in airfreight demand was Geodis, which saw a 28.9% jump to 270,600 tonnes. It also recorded a 55.8% rise in ocean volumes.
These two increases propelled the French logistics company eight places up the table to 13, but while volumes rapidly increased, 2014 revenues were up by a lower amount of 2.3% on 2013 to $5.6bn.
The volume increases appear to be the result of new contract wins, with parent company SNCF stating that 2014 figures included wins from Alstom, ABB, H&M, Lego, amongst others, while it also extended its international network of operating hubs, particularly the hubs dedicated to the oil and gas industry.
The company which dropped the most places on the list was troubled AP Moller-Maersk-owned Damco.
The forwarder saw 2014 revenues remain flat at $3.2bn, while air demand was down 16.2% on 2013 at 190,000 tonnes and ocean volumes slipped by 0.7% to 786,000 teu.
New entrants to the list were: Hitachi Transport Systems, Dachser and CJ Korea Express.

Source : http://www.aircargonews.net/news/forwarders/single-view/news/dhl-k-n-and-db-schenker-the-leading-airfreight-forwarders.html

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FedEx and TNT deal on track but clearance could take a year

TNT Express has provided an update on its planned $4.8bn takeover by FedEx, stating that the two companies are making timely progress on preparations for the offer but reiterated that it could take a year to gain regulatory clearance.

TNT said that FedEx expects to submit a request for review and approval of its offer document with Dutch financial service regulator Netherlands Authority for the Financial Markets (AFM) before June 30, which is the date by which under Dutch law a request for approval must be submitted to the AFM.

Other approvals will also need to be gained, with the offer conditional on FedEx obtaining the required competition clearances in the European Union, China, Brazil and, to the extent applicable, the US.

“FedEx and TNT Express remain confident that substantive anti-trust concerns, if any, can be addressed adequately and in a timely fashion,” the companies said in a statement.

“Although FedEx and TNT Express aim to obtain the required regulatory clearances as soon as possible, it is noted that completing the formal clearance procedures could take up to one year. As such, it may be required to obtain an exemption from the AFM to (further) extend the offer period.
“FedEx and TNT Express confirm that the companies are making timely progress on the preparations for the offer,” they said.

The two companies are confident they will receive regulatory approval, with FedEx chief executive David Bronczek arguing that the takeover would increase competition in Europe by creating a third strong competitor, which would benefit customers over the long term.

Under the planned deal, the relatively small TNT air fleet of 54 freighter aircraft would also be sold to a third party, to assuage the competition authorities in the European Union and elsewhere. This had been one of the major sticking points in the previous proposed UPS takeover.

TNT's owned and leased fleet includes B777Fs, B747Fs, and a combination of BAe 146, Boeing B737Fs and B757Fs. 

The two sides reached a conditional agreement on the deal earlier in April. The agreement recommends an all-cash offer by FedEx for all issued and outstanding ordinary shares, including shares represented by American Depositary Receipts of TNT Express for a cash offer price of €8.00 per share.
Earlier this week, TNT reported a 1.3% year-on-year increase in first quarter revenues to €1.6bn, but operating income for the period slipped to a €11m loss from a €15m gain last year and net profits slipped to a loss of €19m this year from a neutral result for the same period of 2014.



Source: companies
Notes: TNT financial figures converted using XE.com 31/12/2014 exchange rate for comparision purposes only
News URL: http://www.aircargonews.net/news/airlines/express/single-view/news/fedex-and-tnt-deal-on-track-but-clearance-could-take-a-year.html

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FedEx updates on freighter retirements and TNT acquisition

FedEx has provided more details on its decision to retire freighters early, while also providing an update on its proposed takeover of TNT Express and saying that it will continue on the acquisition trail.
Speaking shortly after the announcement of its fiscal year fourth quarter results, the US express giant said its decision to retire 15 aircraft and 21 related engines and also adjust the retirement schedule of an additional 23 airframes and 57 engines was part of a profit improvement plan.
FedEx chairman, president and chief executive officer Frederick Smith said: “We’re getting rid of very inefficient fuel burning aircraft of high maintenance to a newer fleet, better maintenance, better reliability, better fuel efficiency.
“So we’re balancing our fleet in the US and around the world and that’s part of our profit improvement plan.
“We need to buy [to modernise the fleet] 12, 15 airplanes a year and we continue to do that and you can count on us continuing to that because they are aluminum, they oxidize, they wear out and the new models fortunately burn a lot less fuel and are much more reliable.
“One of the reasons that the fleet can go down is that we don’t need as many spares with the new technology airplanes as we did with the old ones.
FedEx Express president and chief executive David Bronczek said the planes that were to be retired were “basically parked in the desert”.
“They were in engine repair that was going to be too expensive to bring back,” Bronczek said.
The company also said it hoped to complete the acquisition of TNT earlier than expected, although no new time line was provided.
In May, it predicted it would take a year for the purchase to gain regulatory clearance.
Executive vice president, general counsel and secretary Christine Richards said: “We’re doing a tremendous job. We are preparing to submit our initial offering documents as required by Dutch law by the end of this month.
“And we are well underway with the preparation of the necessary filings with competition authorities.
“We have been in consultation with European Competition Commission and continue to believe FedEx and TNT operations are highly complementary in Europe and we do not believe that the transaction faces any competition issues for the commission.
“So we’re in good shape. We’re going to try to get this done as quickly as we can.”
FedEx said it would also continue to be “aggressive in the acquisition space” over the coming years.
“As to any specifics about any specific space,” said executive vice president and chief financial officer Alan Graf. “I will just say that depends on the fit, the culture, the price and all three of those things are vital.”

Source : http://www.aircargonews.net/news/airlines/single-view/news/fedex-updates-on-freighter-retirements-and-tnt-acquisition.html

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Boeing ups aircraft demand expectation

Boeing has upped its expectation for demand of new aircraft from last year’s forecast, predicting that 38,050 new airplanes will be needed over the next 20 years.
The company predicted that by the end of the 20 year forecast period, the commercial airplane fleet will double, from 21,600 airplanes in 2014 to 43,560 airplanes in 2034.
Last year, its forecast was 3.5% lower than its newly issued estimate.
It said 58% of the 38,050 airplanes delivered over that time will be to accommodate growth.
Boeing Commercial Airplanes vice president of marketing, Randy Tinseth, said: “The commercial airplane market continues to be strong and resilient.
“As we look forward, we expect the market to continue to grow and the demand for new aircraft to be robust.”
During the period cargo traffic is expected to grow at about 4.7% per year.
“The air cargo market continues to strengthen, and will drive demand of some 920 new airplanes over the 20-year forecast,” Boeing said.
"We've seen two years of solid growth in the air cargo market and we expect that growth to continue," Tinseth added. "That's great news for our line of production freighters, including the 747-8, 767 and 777."
The single-aisle market continues to be the fastest-growing, largest overall segment, requiring 26,730 airplanes over the coming two decades.
Boeing said these aircraft are the “foundation of the world's airline fleet”, operating more than 70% of the world's commercial aviation routes.
Emerging markets and low-cost airlines were fuelling the need for this type of aircraft.
Boeing forecasts that the widebody segment will require 8,830 new airplanes, led by small widebody airplanes in the 200- to 300-seat range such as the 787-8 and 787-9 Dreamliner.
This year's forecast reflects a continued shift in demand from very large airplanes to efficient new twin-engine products such as the 787 and new 777X.
While airline growth still accounts for the majority of new demand, a large and growing number of aging aircraft will require replacement. About 2 to 3% the installed fleet will require replacement each year.

Source: Boeing



Source : http://www.aircargonews.net/news/airlines/single-view/news/boeing-ups-aircraft-demand-expectation.html

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American goes further east with FlyUs

American Airlines Cargo has extended its reach in eastern Europe with the appointment of FlyUs as its general sales agent (GSA) in both Hungary and Poland. 
Both countries are currently off-line destinations in the American Airlines network, with cargo being trucked from both Budapest and Warsaw to London, Frankfurt, Munich or Paris for direct entry into the system.
Zsolt Szabó, FlyUs country manager, said that all eight American Airlines gateways in the US, as well as onward destinations in Mexico, Central America and South America have appeal for customers in Hungary.
Said Szabó: “A wide range of commodities - including electronics, pharmaceuticals, automotive and healthcare equipment - are already featuring in the kind of shipments for which we are receiving bookings. 
“We have potential business from across the whole of Hungary and are expecting demand for service to the new pharmaceutical facility in Philadelphia too, as there are several pharmaceutical factories here exporting goods all over the US and onwards to the Latin American countries.”
In Poland, customers have started sending shipments destined for the airline’s east coast hubs, with car parts, ships spares, electrical devices and cosmetics featuring in the early bookings. 
Country manager Pawel Wlodarczyk said: “We are a young and enthusiastic team and have already identified areas of business where we can win traffic for key locations in Brazil, Argentina and the Caribbean from Warsaw, central Poland and the industrialized south of the country.”
 In both countries, a dedicated sales staff has been appointed to handle the American Airlines Cargo business.

Source : http://www.aircargonews.net/news/airlines/gssa/single-view/news/american-goes-further-east-with-flyus.html

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Etihad teams up with WCA

Etihad Cargo is offering World Cargo Alliance (WCA) members special rates for certain destinations when they use the Worldwide Information Network (WIN) booking platform.
WCA members who are participants in Etihad's loyalty programme, CargoConnect, and who also use the WIN for booking and air waybill transactions, will qualify for special rates on selected origins and destinations on the Abu Dhabi-based carrier's network.
The platform offers instant pricing for all online Etihad origins and destinations, e-booking, e-air waybill plus track and trace.
Etihad Cargo vice president David Kerr said: “Part of our continuing growth story will be underscored by our ability to meet the needs of our customers, in a rapidly evolving cargo market, whether they are a large multi-national company or a small and medium-sized enterprise (SME) user that needs to send goods and services around the world to grow their business."
Membership of CargoConnect is free and gives members the benefit of exclusive pricing as a WCA member, while allowing users to earn Etihad Guest Miles for all cargo shipped on Etihad Airways.

Source :http://www.aircargonews.net/news/airlines/single-view/news/etihad-teams-up-with-wca.html

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Sharp decline in load factors

Airfreight demand growth began to ease off in April, resulting in a “sharp” decline in load factors as they reached their lowest level for a year.
The latest IATA figures show that airfreight volumes increase by 3.3% year-on-year in April compared with growth of 4.3% for the first four months.
It said that the slowdown was mainly the result of a weakening in demand in Asia Pacific, where freight tonne km (FTK) increased by 4.5% in April against the year-to-date figure of 7.3%.
“The slowdown is consistent with a reversal in earlier gains in regional trade,” IATA said, adding: “Part of the recent decline in emerging Asia exports is reflecting economic weakness in Europe, which dampens demand for manufactured goods shipped by Asia Pacific carriers.”
One contact at a European logistics firm confirmed this assumption earlier today, saying the weaker Euro was having an effect on consumers' buying power.
Conversely, exports from Europe were increasing as goods manufactured on the continent became cheaper elsewhere.
“Results have been mixed,” IATA added. “Carriers in the Middle East continue to show strong growth, with a rise of 14.1% in April year-on-year, reflecting continued expansion in capacity and network, as well as robust trade with Middle Eastern economies.
“In Europe, by contrast, airfreight volumes carried by regional airlines fell 0.3% in April year-on-year.
“Recent improvements in business confidence in the Eurozone are yet to translate to increased demand for airfreight and consumer confidence remains subdued.” 
As a result of the growth slowdown and capacity increases, the association said load factors “dipped sharply in April” to 44.7%.
In March, the figure stood at 47.9% while in April last year, load factors stood at 45.4%.
“Levels are now the lowest they have been for the past year, on a seasonally adjusted basis. All regions except Africa recorded an increase in capacity in April compared to March.”
The region with the weakest load factor in April was Africa, at 30.9%, while Asia Pacific was the best preforming with 53.2%.
IATA was not confident of a major improvement in the year ahead, although it still expects there to be growth in 2015.
“Acceleration in the airfreight growth trend is unlikely in the near term. Globally, April data show no increase in business confidence compared to the start of the year.
“Furthermore, export orders have shown gradual decline throughout the first quarter, and are now indicating no growth.
“That said, for 2015 overall, moderate expansion in air freight is expected alongside anticipated improvements in the global economy.”

Source: IATA

























Source : http://www.aircargonews.net/news/airlines/single-view/news/sharp-decline-in-load-factors.html

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FedEx takes axe to 15 freighters

US parcels and logistics giant FedEx has "permanently retired" 15 aircraft and 21 related engines as it continues to “rationalise capacity and modernise its aircraft fleet to more effectively serve FedEx Express customers”.
FedEx has taken a non-cash impairment charge of $246m recorded in May 2015 and has also adjusted the retirement schedule of an additional 23 airframes and 57 engines, with an associated $30m in cash charges.
In April this year, FedEx made a $4.8bn bid to acquire rival operator TNT Express of the Netherlands, with both sides reaching a conditional agreement on the deal, which is expected to receive regulatory approval in early 2016.
FedEx in a short statement on its investors website said: “These combined retirement changes will not have a material impact on near-term depreciation expense."
The permanent retirement of FedEx aircraft and related engines includes: seven MD11 airframes and 12 related engines; three A300 airframes and three related engines; four A310-300 airframes and three related engines; and one MD10-10 airframe and three related engines.
As of February this year, FedEx fleet totalled 673 aircraft, including 383 jet aircraft.
During the four quarters ended February, 2015, FedEx spent $3.15bn on 1.14bn gallons of jet fuel.
“The B767 provides similar capacity as the MD10, with improved reliability, an approximate 30% increase in fuel efficiency and a minimum of a 20% reduction in unit operating costs,” said FedEx.

Source :  http://www.aircargonews.net/news/airlines/express/single-view/news/fedex-takes-axe-to-15-freighters.html

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DB Schenker to charter from Etihad for new US freighter service

DB Schenker has revealed it is chartering an aircraft from Etihad for its new weekly freighter service from China to the US.
The forwarder, through its JetCargo division, this week announced it had launched a freighter service travelling between Hong Kong, Chicago and Houston.
A company spokesperson told Air Cargo News it was a fully dedicated service using a Boeing 747-8 freighter chartered from Etihad.
The service will target the oil and gas, automotive and industrial sectors with freight moving from southeast China to the US southwest, Gulf of Mexico and northern Mexico.
As is the current trend, DB Schenker is offering three service options: first class, business class and economy, which have defined lead times and end-to-end tracking.
The company recently opened a 14,000sq m facility comprised of 11,500sq m of warehousing space, 2,500sq m of office space and a two hectare laydown yard in the Houston area.

Source : http://www.aircargonews.net

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Optimistic airfreight forwarders

European airfreight forwarders are expecting volumes to continue to increase over the coming two months.
The latest monthly Danske Bank forwarder index for expectations for the coming two months came in at 57 points, with any figure above 50 suggesting that participants expect volumes to grow over the period.
The April survey also shows an improvement on future expectations compared with the March survey, when the index stood at 54 points.
Current volumes are also ahead of where they were two months ago, with this index standing at 57 points, again suggesting an improvement over the period.
However, there has been a slight tailing off in growth levels as the index stood at 63 points in March.


Source : http://www.aircargonews.net/news/forwarders/single-view/news/optimistic-airfreight-forwarders.html

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Agility's airfreight yields boost Q1 performance

Improving airfreight yields have helped push logistics firm Agility to a 5 percent year-on-year improvement in profits during the first quarter of the year.
During the first quarter, the Kuwait Stock Exchange-listed company recorded a 1 percent improvement in revenues on last year to KD318.1m ($1.06bn), while net profit increased by 5 percent to KD11.8m.
Its Global Integrated Logistics division saw margins for the first quarter improve to 24 percent from 23 percent during the same period last year.
The improvement was driven by “continued growth in contract logistics in emerging markets, coupled with improved yields in the airfreight business”.
Agility chief executive Tarek Sultan said: “Although the global economy continues to be in stop and start mode, we are cautiously optimistic about our start to this year.
“We started out on a good note, driving margin expansion in GIL and revenue growth in our Infrastructure portfolio.
“GIL will continue to sharpen its strategic focus in terms of customers, markets, and products, as well as build capacity in its business through operational transformation and a commitment to strong execution.”
The company's full-year 2014 results also benefited from improved airfreight yields.

Source : http://www.aircargonews.net/news/forwarders/single-view/news/agilitys-airfreight-yields-boost-q1-performance.html

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Vessels collide in same 2013 sea mishap spot

Talisay City, Cebu — A chief engineer was hurt when a fast craft collided with a cargo vessel late Wednesday afternoon at Lauis Ledge off Talisay City, the same spot where a passenger vessel and cargo ship collided two years ago, killing 116 passengers and crew.
The Lauis Ledge has become an eerie spot for vessels traveling from Cebu to Bohol and passengers on board fast craft Starcraft 9 went into panic when the sea craft collided with cargo vessel MV Our Lady of Faith at 5:50 p.m. last May 13.
Fortunately, all 262 passengers and crew of the Bohol-bound fast craft were unharmed, except for chief engineer Romeo Astillejo, who was thrown off into the sea during the collision.
Astillejo was rescued by fellow crewmen and was rushed to the hospital for treatment.
The Philippine Coast Guard (PCG) said the collision damaged the fast craft’s right portion but Our Lady of Faith suffered no significant damage and her crew were safe.
The cargo ship, manned by Captain Jose Adaptar, was en route to Bacolod City from the port in the City of Naga while the fast craft, under Captain Roman Pialago, was bound for Tubigon, Bohol.
PCG Central Visayas District Chief-of-Staff Weniel Azcuna said the PCG is now questioning the captains and crew of the vessels.
He said there is a “need to monitor the traffic situation” in Lauis Ledge because it is the entry and exit point of vessels heading to or from Cebu.
Right in that same spot where the two vessels crashed last Wednesday is where passenger vessel St. Thomas Aquinas and cargo ship Sulpicio Express Siete collided on August 16, 2013. The mishap caused the death of 116 passengers and crew.
The Cebu Coast Guard earlier said a naval highway will be set up to guide vessels coming and going out of that part of Cebu, but this plan has yet to be realized.
Based on the plan, the PCG will set up a Vessel Traffic Monitoring System (VTMS) to monitor vessels using the Cebu Harbor Channel.
Just like a national highway, the VTMS will put up lighted buoys to guide entering and exiting vessels, especially in the Lauis Ledge.

Read more at http://www.mb.com.ph/vessels-collide-in-same-2013-sea-mishap-spot/#VXiOgYMTwoOlMv5a.99

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NGA to cease operations at the end of May

Main-deck cargo airline Nordic Global Airlines will cease operations at the end of the month after overcapacity in the market took its toll on the operator.
NGA, which operates a fleet of four MD-11F freighters for customers, was launched in 2011 but faced continued pressure on pricing.
Finnair Cargo, which owned a 40% stake in the company, leased freighter capacity from NGA for its mainly Asian cargo traffic until the end of last year.
In a statement released to the Nasdaq Helsinki exchange last week, Finnair said the decision to close NGA was “unavoidable” because of  “overcapacity in the sector and depressed freight pricing”.
“NGA grew to fly main-deck cargo in four continents with its low-cost and thin-organization model,” it said.
Finnair, like others, is switching its focus to bellyhold capacity and discontinued separate operations at the end of last year.
At the time, it said the decision to end its MD-11F freighter service between Helsinki and Hong Kong and instead rely on daily bellyhold via an A340 passenger service was due to “deteriorating yields” caused by currency fluctuations and overcapacity.
NGA is also owned by Neff Capital Management, Daken Capital Partners and the mutual pension insurance company Ilmarinen.
In August last year, NGA chief executive and chairman Jim Neff announced the start-up of all cargo carrier Western Global Airlines utilising MD-11 freighters.
The company will begin operations with a fleet of MD-11Fs leased from Neff Air, an affiliated leasing company which owns ten GE powered MD-11Fs and two GE powered 747-400BCFs
NGA leased its four MD11Fs from Neff Air.
Neff was also the founder and chief executive of Southern Air from 1999 until 2010, when he sold the company and became a minority stakeholder.

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Damco sees $9m loss as airfreight dives

Damco, the troubled logistics arm of Danish shipping giant AP Moller-Maersk (APMM), made a $9m loss in the first quarter of 2015 as its airfreight volumes fell 19%.
The division's total supply chain revenue fell nine percent, year on year, to $683m for the January to March 2015 period, of which eight percent was due to exchange rate movements.
Netherlands-based Damco saw controlled ocean freight volumes decline by two percent, as airfreight throughputs dived, with the latter due mainly to "project shipments in prior year which were not repeated in 2015," said APMM.
It added: "Restoring growth in the ocean and airfreight segments is a key focus area to improve overall Damco profitability."
The $9m first quarter loss was actually an improvement on like period 2014, when Damco made a loss of $10m.

Source : http://www.aircargonews.net/news/forwarders/single-view/news/damco-sees-9m-loss-as-airfreight-dives.html

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Frankfurt freight disappoints

Frankfurt’s airport operator Fraport’s airfreight and airmail tonnage dropped by 2.4 per cent year-on-year to around 500,000 tonnes in the first quarter of 2015. However, the group as a whole recorded “noticeable growth” in revenue, which rose 10.8 per cent to €575.9 million.  Contributing factors included growth in traffic and fees, consolidation of two new subsidiaries and currency effects. 
Frankfurt Airport recorded a 2.7 per cent rise in passenger figures to 12.5 million in the first three months of 2015, despite strike and weather-related flight cancellations.
Cargo and passenger traffic at Fraport-owned airports other than Frankfurt also largely improved, said the company.

Source : http://www.aircargonews.net/news/airports/single-view/news/frankfurt-freight-disappoints.html

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FedEx-TNT deal to create third force in express

FedEx’s planned takeover of rival carrier TNT would create a third force in the express market – and unlike UPS’ attempted takeover 2½ years ago, it would succeed, the leaders of the two companies predicted at a press conference this morning.
The acquisition would bring TNT’s “exceptional” road platform into the FedEx fold, helping to strengthen what had been a relatively weak part of the FedEx portfolio, said the latter’s chief executive, DavidBronczek, with around 86 per cent regional coverage.
In contrast, FedEx has a strong air network in Europe, as well as in other parts of the world.
TNT chief executive, Tex Gunning, anticipated that the European road network created “would be the envy of the industry.”
At the same time, the relatively small TNT air fleet of 54 freighter aircraft would be sold to a third party, to assuage the competition authorities in the European Union and elsewhere. This had been one of the major sticking points in the proposed UPS takeover.
TNT's owned and leased fleet includes B777Fs, B747Fs, and a combination of BAe 146, Boeing B737Fs and B757Fs. 
Bronczek argued that, far from reducing competition, the takeover “would increase competition in Europe by creating a third strong competitor…which would benefit customers over the long term.”
Gunning said that the deal was attractive to his company because it would lead to a more certain future.
He predicted that, this time, the takeover would clear the regulatory hurdles because “this is much simpler than the UPS deal – there, the overlaps were far bigger.”
However, the lower synergy between the two companies was reflected in the price that FedEx would pay for TNT - €8 per share compared with the €9.50 that UPS had been prepared to offer.
The lower price was also a reflection of a “more complex” European economy that had developed in the intervening period.
Bronczek said he did not expect the relatively low price to lead to rival bids for TNT, saying: “We feel very comfortable with our offering.” Gunning said that Post NL had indicated that it would be willing to share its 14.7 per cent share in TNT.
The offer launch is anticipated during the second quarter of 2015 and the transaction is not expected to complete until the first half of 2016, a reflection of the slow pace of government and regulatory authorities, said Gunning.
The transaction is subject to a €200m break fee.
But questioned on how the two companies had managed to agree a takeover in principle within six weeks of a TNT capital markets day, Gunning said: “Like the girl next door, you already know each other very well.”
No decision has yet been made on the tricky question of brand identity. The FedEx name is very strong in North America while TNT is well known in Europe and other markets.
Gunning added that the deal would improve job security for TNT employees and that he anticipated that there would be few if any redundancies as a result of the takeover.
TNT’s main air hub at Liege would be maintained and extended, and FedEx’s hubs in Paris and Cologne would also be retained.

Source : http://www.aircargonews.net/news/airlines/express/single-view/news/fedex-tnt-merger-to-create-third-force-in-express.html

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FedEx set to buy TNT Express for $4.8bn

US parcels and logistics giant FedEx has made a $4.8bn  bid to acquire rival operator TNT Express of the Netherlands, with both sides reaching a conditional agreement on the deal.
The agreement recommends an all-cash offer by FedEx for all issued and outstanding ordinary shares, including shares represented by American Depositary Receipts of TNT Express for a cash offer price of €8.00 per share.
The surprise transaction gives TNT Express an implied equity value of approximately €4.4bn ($4.8bn).
Fred Smith, chairman and chief executive of FedEx Corp, said: “We believe that this strategic acquisition will add significant value for FedEx shareowners, team members and customers around the globe.
"This transaction allows us to quickly broaden our portfolio of international transportation solutions to take advantage of market trends – especially the continuing growth of global e-commerce – and positions FedEx for greater long-term profitable growth.”
Tex Gunning, chief executive of TNT Express, said: “This offer comes at a time of important transformations within TNT Express and we were fully geared to executing our stand-alone strategy. But while we did not solicit an acquisition, we truly believe that FedEx’s proposal, both from a financial and a non-financial view, is good news for all stakeholders.
"Our people and customers can profit from the true global reach and expanded propositions, while with this offer our shareholders can already reap benefits today that otherwise would only have been available in the longer run."

Source : http://www.aircargonews.net/news/airlines/express/single-view/news/fedex-and-tnt-express-agree-on-recommended-all-cash-public-offer-for-all-tnt-express-shares.html

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Hong Kong will be a three-runway airport by 2023

Hong Kong's government has approved a third runway for the city’s international airport.
Expected to open by 2023, it will help the island maintain its status as the world’s busiest air cargo hub and help Hong Kong maintain its position against other Asian rivals in China and Singapore.
The HK$141.5bn (US$18.2bn) scheme will be funded from internal funds, borrowings and user fees, including a HK$180 (US$23.20) additional passenger fee.
The new runway would be to the north of the airport and will be for landings only. It is expected to boost the airports capacity from 68 flights an hour to 102.
The news was welcomed by local carriers. Cathay Pacific chief executive Ivan Chu said his airline “reiterated its unequivocal support for the development of a third runway which it believes is necessary to maintain the long-term competitiveness of Hong Kong as a premier aviation hub".
Chu said the announcement was “a remarkable milestone" in the third runway project and welcomed the endorsement by the Executive Council.
He added: "Building third runway is the only viable way for our airport to keep pace with future growth and to continue to support Hong Kong’s pillar industries in tourism, international trade, logistics, and finance and professional services.”
Joe Ng, vice chairman of the Board of Airline Representatives in Hong Kong, which represents 76 airlines, said he believed the third runway would “strengthen Hong Kong’s status as one of Asia’s premier aviation hubs.”
He added: “Aviation is an industry that contributes some  eight per cent to Hong Kong’s GDP and accounts for eight per cent of employment in the city; the third runway is urgently needed to maintain the airport’s competitive strength and to ensure continued growth for the benefit of Hong Kong.”

Source : http://www.aircargonews.net/news/single-view/news/hong-kong-will-be-a-three-runway-airport-by-2023.html

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Cargojet network expansion

Canada’s Cargojet is expanding its domestic air cargo network from the beginning of April.
Cargojet, operating overnight services across North America plus global charters, has a total freighter fleet of 24 aircraft, including the recent introduction of five B767-300ERFs, three B767-200ERFs and one B757-200ERF.
The carrier did not outline in detail the extent of the network expansion.
Ajay Virmani, Cargojet’s president and chief executive, said “With additional overnight frequencies; more direct flights; and wide-body freighter service to ten major Canadian cities, this new enhanced air cargo network will provide our customers with the consistent operational reliability that they demand.”
Dr Virmani added: “As demand for premium air cargo services continues to grow, especially in response to e-commerce business activity, Cargojet will continue to expand our range of value-added services and overall capacity available to our customers.”

Source : http://www.aircargonews.net/news/single-view/news/cargojet-network-expansion.html

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WCS: Shippers slam poor service

If the air cargo community was under any illusion that its efforts to speed up door-to-door delivery and eliminate paper documents are winning over shippers, it may have to think again, writes Martin Roebuck.
Two major shippers tore into the industry for its poor service quality and communication in a no-holds-barred session at the World Cargo Symposium (WCS) in Shanghai.
Of more than 330 shippers who responded to a recent global IATA’s survey, 94 per cent ship some product by air, explained Tom Windmuller, the association’s senior VP airports, passenger, cargo and security. Scoring the industry from zero to 10, they gave the industry an average performance rating of 7.08.
Asked to give his own satisfaction rating, Robert Mellin, head of distribution logistics at Ericsson, awarded the industry a five. Alex Xu, associate supply chain director at Lilly Suzhou Pharmaceutical, said that five years ago he would have rated airfreight at seven or eight, but now it would be between six and seven.
It is not so much that standards are deteriorating, but the industry is perceived as struggling to keep up with customers’ evolving demands.
Windmuller said seven per cent of survey respondents were unhappy with their air freight service provision on some level. “That’s $4bn at risk [in terms of potential lost revenue],” he said. “But it’s more. We all know what unhappy customers do - they talk.”
Ericsson has reduced its use of airfreight “quite drastically,” but still flies up to 80,000 tonnes of freight per year to more than 160 destinations, Mellin said.
“We don’t it for fun, but because it’s essential.
“Speed and agility, the ability to act the right way when things happen, is vital for us. We are very keen to have better service but we haven’t seen so much happening in the last 10 years.”
While the slow migration to e-air waybills (e-AWBs) was welcome, Mellin said that “at the same time we’ve seen surface transportation moving rapidly forward. Everybody knows the problem – crucial information doesn’t go through, documents are missing - it’s so old fashioned, somehow. We’re totally disconnected. The technology is there, but information sharing is not. We’re protectionist.”
Xu said that air is Lilly’s major international transport mode, and as the company develops new bio-medicines, more products will be temperature sensitive.
“New regulations are controlling the external business environment, pushing us to try and find the most effective ways to manage quality control and logistics. But talking with air freight forwarders, they say ‘I don’t understand, we don’t have this information’ when there is a temperature excursion between Europe and China.”
Lilly discovers whether there has been a problem on the truck, in the aircraft or while awaiting loading only when it interrogates the shipment afterwards, Xu said. “We have other modes we can choose, such as shipping, which can provide a more stable temperature.”
Fellow panellist Chris Welsh, secretary general of the Global Shippers Forum, said that recent conversations with retailers and automotive, pharmaceutical and electronics shippers mostly only use airfreight when they really have to.
“It’s a distress purchase and if can ship by another mode, they will do it for reasons of cost or sustainability. The airfreight supply chain needs to be so much slicker than it is,” Welsh said.
Airfreight forwarders see pharmaceuticals as a major opportunity, but shippers have told Welsh that the industry is trying to sell a product without understanding the pharma industry’s requirements.
“Road and even rail offer total integrity in terms of temperature control. There are gaps in the air cargo supply chain when it goes from the warehouse on to the ramp. That’s where you get the product failures,” Welsh claimed. But an industry that is highly dependent on airfreight – “or was” – is discovering that suppliers “can’t get their act together”.
Asked if shippers were prepared to pay for better supply chain data, Mellin said a cloud-based IT solution in the next 12 to 18 months was necessary if air freight was to maintain its transportation share. Greater efficiency would “drive cost down, not up,” he said. “But we are part of the problem too. We need to collaborate, we’re not optimising.”
Third-party logistics providers were not happy to let shippers have three-way dialogue, so Ericsson had very little contact with airlines, Mellin said. Astonishingly, he admitted: “The first time I walked through an airport and saw the whole process was last Friday. The 3PLs hate that, because they worry what else I will see.”

Source : http://www.aircargonews.net/news/single-view/news/wcs-shippers-slam-poor-service.html

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FedEx sees peak season bounce

US parcels giant FedEx saw third quarter revenues up four per cent to $11.7bn.
“We had a very successful peak season as volumes grew across all transportation segments, and our profit improvement programs are moving ahead as scheduled,” said Fred Smith, FedEx Corp chairman, president and chief executive officer.
Operating results for the third quarter ended February 28 improved due to volume and base yield growth in all three transportation segments of ground, freight and express.
There was also a “significant net benefit” from fuel, benefits from profit improvement program initiatives, a lower year-over-year weather impact and reduced pension expense.
These improvements were partially offset by higher variable incentive compensation accruals.

Source : http://www.aircargonews.net/news/single-view/news/fedex-sees-peak-season-bounce.html

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DHL right in the heart of Texas

DHL has opened a service centre facility in Houston, Texas, mainly to serve the oil and gas sector.
The $2.5m, 28,000 sq ft facility can process more than 2,500 shipments per hour, nearly double the existing capacity and will allow for earlier delivery times and later drop off times.
DHL Express says it has seen an uptick in emergency shipping of machinery parts and replacement tools.
The facility will handle anything from international small parcels to palletised and container freight.
The new facility is to the west of the city centre. DHL Express also has a Service Center north of the city in Humble, Texas, an aircraft ramp at George Bush Intercontinental Airport and its US Customer Finance Support Center.

Source : http://www.aircargonews.net/news/single-view/news/dhl-right-in-the-heart-of-texas.html

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UPS extends pharma network

UPS customers can now ship biological substances, dangerous goods in excepted quantities and shipments using dry ice to more than 20 additional international destinations.
The US-based global express and logistics’ operator says that the expansion is a direct response to a growing demand from biopharmaceutical manufacturers, diagnostics companies, laboratories and distributors.  
“The UPS global transportation network has been enhanced to move biological specimens to and from more than 50 countries around the world,” said John Menna, UPS vice president of global strategy, healthcare logistics.
“The expanded programme was guided by our customers to include the locations that are most important to them.”
UPS is now able to pick up and deliver packages under regulation UN3373 (Biologic Substances, Category B, Diagnostic Specimen and Clinical Specimen) as well as UN1845 (Carbon Dioxide, solid or dry ice) in Australia, Bulgaria, Croatia, Estonia, India, Indonesia, Israel, Latvia, Lithuania, New Zealand, Panama, Romania, Russia, Saudi Arabia, Slovakia, Slovenia, South Africa, Taiwan, Turkey and Ukraine.
UN3373 and UN1845 are guidelines issued by the International Air Transport Association (IATA) to regulate the safe transportation of goods using air transportation modes.

Source : http://www.aircargonews.net/news/single-view/news/ups-extends-pharma-network.html

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Lieb to quit DB Schenker Logistics

Thomas Lieb, management board chairman of Schenker AG, will leave the German logistics company at the end of this month “by best mutual agreement”.
The 56 year-old will take on new responsibilities outside the German railway parent company, Deutsche Bahn Group.
Dr Lieb has resigned “immediately” as head of business unit at DB Schenker Logistics and as management board chairman of Schenker AG, the company said in a statement, adding that Dr Lieb and DB group had decided this “by best mutual agreement”.
Karl-Friedrich Rausch, member of the management board of DB Mobility Logistics, responsible for transportation and logistics, said: “Dr Lieb achieved a lot for DB Schenker.
“Under his leadership the Business Unit DB Schenker Logistics enlarged its global network of today 2,000 locations in more than 140 countries and became a leading provider of global transportation and logistics solutions as well in future markets.”
In late February, Deutsche Bahn dismissed a claim for damages against three airlines in its billion dollar lawsuit relating to an air cargo cartel between 1999 and 2006.
DB added at the time: “Schenker will continue to pursue its claims against other air carriers and seek damages relating to the air carriers’ anti-competitive conduct alleged in the US cartel lawsuit, based on the legal principle of joint and several liability. Schenker plans to pursue its rights vigorously.”
Until a decision about Dr Lieb’s succession is made, Lutz Freytag, member of the management board of Schenker AG for finance/controlling, will take over the position as  management board chairman of Schenker AG on an interim basis.

Source :  http://www.aircargonews.net/news/single-view/news/lieb-to-quit-db-schenker-logistics.html

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