cargovision

QUARTERLY MAGAZINE AIR FRANCE CARGO-KLM CARGO VOLUME 22 ˆ NUMBER 30 ˆ SEPTEMBER 2007

E-Freight Lives
Guided Missile
Mr. Clockwork

AFFAIRS
OF THE CORPS
 cargovision editorial

AFFAIRS OF THE CORPS

Many of us in the airfreight business believe that greater cooperation would lead to more competition and better
service for our customers. In other words, it is paramount that regulators continue to approve common industry
mechanisms that facilitate air transport and leave carriers to develop their own competitive advantages for the
benefit of cargo customers.

Within the immunities granted by the US Department of Transportation and in compliance with EU Treaty, IATA
resolutions create common rules, mechanisms and practices that enable carriers to compete equally for the
benefit of customers. This forces them to differentiate their offerings through individual achievement and efforts
such as geographical coverage, service levels, cargo products and pricing strategy. These elements are in place.

Where regulators could help, not only the airfreight business but also their national economies, is to acknowledge
that the air cargo business is not like passenger transport; rather, it is a service offered as part of an international
value chain and must be facilitated in order for its customers to thrive. To operate efficiently, the chain needs the
cooperation of groups inside and outside the industry. Airfreight transport needs airport capacity as well as
exemptions for night flights and trucking services. Better partnerships between security and customs and
between carriers and forwarders could mitigate the delays and costs of the current security regime while
improving its overall effectiveness. There is also a question of whether a special security insurance program is
needed to protect the commercial entities and keep them involved in securing air cargo.

These issues concern us here at AF-KL Cargo and are also on the agendas of the Association of European
Airlines, IATA, FIATA and other industry groups. We report on some of them in our current issue of Cargovision
and examine other important subjects as well. There is a new organization, the Air Cargo Security Industry Forum
© Laurence Godart
(ACSIF), which is jointly led by IATA and FIATA, which hopes to simplify and harmonize the confusion prevalent in
today’s security landscape. Writer Ian Putzger gives us a status report on two current efforts to improve the
exchange of electronic air waybill documents: IATA’s e-freight program to reduce the paper flow and the message
improvement program. In a similar vein, Tony Carding reports on how companies are using Cargo 2000 to
monitor and manage quality and improve the efficiency of their air cargo service.

Marcia Macleod asks Clecat board member, Jean-Pierre Ennebick, how the European forwarders’ lobby organi-
zation puts the views of its member before the European Commission. Ben Darnell, managing director of cargo
at Delta Air Lines, describes his busy week helping colleagues prepare to emerge from bankruptcy. Our resident
industry analyst, Dick van den Berg tallies the latest figures from IATA in order to decide whether the large number
of wide-body aircraft on order will create more capacity than could be healthy for airfreight operators.

Michael Westlake takes us to Vietnam where we learn that a booming airfreight market is creating pressure on
the government to liberalize the current monopoly on ground handling, to allow more private airlines to compete
with government carrier Air Vietnam and privately owned Pacific Airlines, and to allow foreign companies to own
up to 49% in joint ventures.

Happy reading.

Sincerely,

Jean-Luc Servant
General Manager Industry Affairs, Air France Cargo-KLM Cargo

2 cargovision | SEPTEMBER 07
 cargovision contents

©Thomas Plettenberg
Transport Logistic 2007, page 24

4 E-FREIGHT LIVES
Two efforts to improve the exchange of electronic air waybill documents are currently underway: IATA’s e-freight
program to reduce the paper flow and the message improvement program to clean up those pesky electronic
mistakes. An update.

14 GUIDED MISSILE
In addition to serving as SVP of Southern Europe and Africa at Geodis Wilson, Jean-Pierre Ennebick is a
member of the board of Clecat, the European forwarders’ lobby organization representing the French forwarder
organization, TLF. He is chairman of Clecat’s Airfreight Committee and vice chairman of its Maritime and Air
Logistics Institute. We asked him what issues concerned Clecat and how they put their views across to the
European Commission.

16 MEASURING QUALITY
Maintaining service quality has become vital to companies at all stages of the transportation chain. IATA set up
Wolfgang Kaffka, page 19 the Cargo 2000 industry group in 1997 to monitor and manage quality and improve the efficiency of air cargo.
How well is it working?

19 MR. CLOCKWORK
A ship stops for a couple of hours in Shanghai, Buenos Aires or San Francisco, offering a narrow time frame at
a destination far, far away. To hit this mark with a package of spares is the job of Wolfgang Kaffka. How does he
do it?

20 THE CONSTABLE’S CONUNDRUM

Nothing will guarantee that every shipment on every flight is safe. But what is an acceptable risk? How can it be
Supply-chain security, achieved? Individual authorities with differing attitudes and levels of risk tolerance have published varying
page 20 responses to these two questions. A new organization jointly led by IATA and FIATA hopes to simplify and
harmonize this landscape.

24 TRANSPORT EXPO 2007

With 47,000 visitors and 1,580 exhibitors, Munich’s Transport Logistic trade fair has become one of the largest
gatherings of logistics professionals in the world. For people in the airfreight business it offers a wider selection
of exhibits, customers and partners than the biannual TIACA forums.

08 NEWS & DATELINES

22 BEN DARNELL
26 COUNTRY FILE: VIETNAM
28 MARKET MONITOR: OVERSUPPLIED
30 POSTSCRIPT: HE’S BAAACK
31 CARGOVISION INFORMATION

COVER IMAGE
cargovision 3
The freight hub G1XL at Charles de Gaulle
© Laurence Godart
E-FREIGHT LIVES
Two efforts to improve the exchange of electronic air waybill documents
are currently underway: IATA’s e-freight program to reduce the paper flow
and the Message Improvement Program to clean up those pesky
electronic mistakes. Here’s a status report.
BY IAN PUTZGER

� “You have to enter the room with an open mind,”

says Hans van Elk, director of airfreight product devel-
opment in the Netherlands for DHL Global Forwarding.
Every Tuesday, he charts a course into unknown terri-
tory when he meets with members of the working
group for the e-freight pilot program in the Nether-
lands. It is one of five markets where operational trials
will begin in December to test the standards and
processes that will be used to implement e-freight
globally. E-freight is one of five initiatives that IATA has
proposed to simplify the airline business. The plan is to
free the air cargo industry of paper, thereby lowering
costs and operating overhead. Most participants view
the trials with a sense of urgency. “If we can’t do e-
freight, we will not be able to grow in this industry and
service quality won’t improve,” Mr. van Elk says.
The initiative’s proponents say that e-freight will help
move goods and documents faster and improve
service by giving operators the confidence to extend
cut-off times. IATA says that eliminating paper from the
airfreight process can save the industry $1.2 billion a
year by reducing several costly activities: data entry
and amendment, duplicate message handling, and
errors on customs submissions.
IATA chose the Netherlands as one of five markets for
its trials based on its legal, technical and administrative
readiness. The others include Canada, Hong Kong,
Singapore and the UK. For benchmarking, the tests
will include Sweden and Mauritius.

“Nearly all of the major forwarders are participating,”

© Ton Poortvliet/Hollandse Hoogte

says Marc Aupers, IATA’s implementation manager for

the Netherlands, “either in the steering group or the
regular working group.”
“Most of these forwarders will concentrate on a single
traffic lane linking two of the pilot markets,” Mr. Aupers
adds. However, AF-KL Cargo is planning to introduce

cargovision 5
cargovision E-FREIGHT LIVES
trials simultaneously in all markets involving the pilot
and DHL Global Forwarding has opted for the whole
gamut from day one. “We want to be an early
adopter in this,” Mr. van Elk says.
For all participants, the volume of messaging will be
"It would be relatively modest at the outset of the test, predicts
Jan Vreeburg, chairman of the AF-KL Cargo busi-
worthwhile to ness working group in the Netherlands. It will
extend the increase gradually over time and this will help the
developers deal with two important questions: how
paperfree to scale up the activity and how to expand the scope
concept up the of the program throughout the industry.
transportation Most of the actors are confident that the trials will
chain" succeed. The working groups have examined their
existing processes and developed a matrix of those
still to be introduced. After analyzing the differences,
the results have been encouraging. “We did not iden-
tify any significant gaps consisting of hurdles that
cannot be overcome,” Mr. Aupers says.
However, one legal question hovers over the
program: how can an electronic message replace a
paper air waybill that serves as a contract between
two parties? While it is still unresolved, at least the
technological issues apparently pose no serious
obstacles.
“For the Netherlands, we have the infrastructure,” Mr.
Aupers adds. “The electronic messaging definitely
needs improvement, but we don’t need information
technology providers to develop new systems for
this particular market. We already have the ability to
transmit e-documents to customs.”
6 cargovision | SEPTEMBER 07
Kuehne + Nagel is deeply involved in the e-freight
program and is concentrating its activities during the
pilot on trade between Canada and the UK. “The
road seems smooth here,” says Hardy Preuss, the
company’s manager of processes and systems,
global airfreight carrier integration. “Gap analysis of
the working group has not revealed any big differ-
ences between current and future processes.”
ENTRÉE
In Paris, AF-KL Cargo is currently focusing on a new
cargo community system under development. This
will facilitate the introduction of e-freight, says Jean-
Luc Servant, who is responsible for industry affairs at
AF-KL Cargo. Another important area for AF-KL
Cargo in France is the message improvement pro-
gram (MIP). This initiative is designed to improve
message quality and penetration, establish a mes-
sage management methodology and deliver airline
scorecards and stakeholder performance tables. It
originated two years ago after Northwest Airlines
Cargo found excessively high error rates while test-
ing electronic messages for master and house air
waybills and house consolidation manifests, the
three documents that accompany 90% of its cargo
shipments.
Figures from IATA confirmed that over three-quarters
of the air waybills transmitted electronically are either
incomplete or incorrect. “We correct almost all of
them,” AF-KL Cargo’s Mr. Vreeburg says. “We must.

And I should mention that these errors occur in both
the forwarder’s and the airline’s processes.”
All of the carriers in the e-freight program are submit-
ting their data to IATA and comparing their findings in
order to identify problems and develop solutions.
With a consolidated list of issues in hand, they can
visit individual forwarders and discuss the need for
specific changes, says Jim Friedel, president of
Northwest Airlines Cargo.
FLYS BE GONE
Traxon has been working with several carriers to
develop their MIP capability, including AF-KL Cargo.
The majority of errors tend to cluster in particular
segments, so finding fixes can eliminate lots of prob-
lems, says Felix Keck, president of the IT provider.
The interface between man and machine is a major
source of error, Traxon found. Mr. Keck emphasizes
how important it is to have strong management for
this program support in order to reduce errors and
improve accuracy. Without this commitment, quality
is likely to deteriorate, he warns.
One particularly onerous source of error identified by
Kuehne + Nagel and Northwest Cargo was the
address field. Local place names and variations often
don’t coincide with the formats required in the elec-
tronic document. For example, the cargo complex
on the south side of Frankfurt airport has building
numbers but no street names. This presents a
dilemma for data entry, says Mr. Keck. The rate field
in the electronic air waybills was another element that
emerged as a common source of error, mainly
because rate codes vary from carrier to carrier.
However, after Northwest shared the results of early
tests with Kuehne + Nagel, the error rate was
reduced almost to zero, Mr. Preuss recalls. “We will
never reach 100%, but we can get very close. We
can also get detailed information back on faulty
messages to help us see what went wrong.”
The technology companies involved with e-freight
are concerned with translating the error codes into
terms that people can understand without needing a
huge manual, Mr. Keck says. The job involves
building the algorithms to do this translation.
HICCUPS
The development of the e-freight program has
caused tremendous headaches for airlines when
they receive duplicate air waybills. A single shipment
can sometimes trigger 40 or more waybills. The
system is designed to send an electronic submission
to the airline whenever anyone at the forwarder prints
the air waybill. If someone in the forwarder’s office
wants to print another copy or needs to make a
correction, the action sends another electronic
waybill to the airline. Forwarders could ask their staff
to print fewer copies, but they will still have to make
corrections, for instance when someone in the ware-
house discovers a piece missing from a shipment.
“We should try to create some sort of parking lot
where submissions are parked and only the last
version goes to the airline,” says DHL’s Mr. van Elk.
Another problem identified by K+N is the disappear-
ance of electronic messages into a black hole, says
Mr. Preuss. “There is usually no confirmation that
messages have reached their intended destination.
Today, I send and hope that the message arrives at
the other end. Some systems have handshakes that
confirm the receipt of data, but this is not end-to-
end. We need something that tells us right away
whether there is a problem.”
LE DIGESTIF
Despite such issues, most people involved in the MIP
initiative are confident that the objectives can be
reached without fundamental changes to existing IT “If we can’t do
infrastructure. However, that is not to say that the e-freight, we will
adoption of e-freight will be cost-free.
“We expect there will be a huge amount of savings,”
not be able to
says Traxon’s Mr. Keck. “But it is not clear yet what grow in this
amount of investment will be necessary. Information
technology providers will have to build their solutions,
industry and
and the carriers and forwarders will have to make service quality
adjustments to their systems.”
DHL’s Mr. van Elk looks forward to including shippers
won’t improve”
in the e-freight program. Traxon’s Mr. Keck also
welcomes the idea, “Despite any technological chal-
lenges, it would be worthwhile to extend the paper-
free concept all the way up the transportation chain.”
Aleks Popovich, global head of cargo for IATA,
emphasizes that the e-freight drive is not confined to
the five geographical pilot programs and must
expand, where possible, around the world.
IATA is already planning a second wave of e-freight
pilot programs. It will announce them at the end of
2007 after it has assessed the first batch in detail.
IATA is eager to welcome US carriers into the initia-
tive. Through its US subsidiary, Cargo Network
Services, it intends to work towards this goal in
cooperation with the US government, customs
administration, and the air cargo supply chain.
cargovision 7
 cargovision news around the world
Our quarterly review of
industry news keeps you
abreast of developments
in key sectors around
the world.
Weddings & funerals
MOSCOW
Alexander Lebedev, one of the world’s 200 richest men, knows a good
stock deal when he sees one. He decided Alitalia wasn’t one of them. Mr.
Lebedev holds 30% of Aeroflot shares through his National Reserve
Corporation. Aeroflot went into the deal with backing from Italian bank
UniCredit. However, the Russians soon said that Alitalia’s price was too
high. Moreover, they were not getting access to the financial information
about Alitalia’s commercial and operational performance they needed to
formulate a proposal to successfully restructure the business. In walking
away, Aeroflot said, “The conditions and requirements outlined for the
privatization process would significantly limit the ability of Aeroflot to
implement what Aeroflot believes to be the necessary measures to re-
launch Alitalia.
BEIJING
Chinese companies are on a selling spree, urged by their government to
form international cargo joint ventures in support of the country’s surging
exports. The Chinese airlines are partnering with the crème of the interna-
tional airfreight companies and, in essence, buying top management
expertise. As China’s airlines become more organized, they will eventually
compete more successfully with their Western counterparts on interna-
tional routes. The domestic business and the financial interests are compli-
cated, but here was the situation at press time:
First, Shenzhen Airlines and Lufthansa have launched Jade Cargo.
Second, China Southern is talking with AF-KL about a joint venture and
expects to join SkyTeam by the end of the year. It expects to have the
largest cargo fleet among the Chinese carriers by 2010, by converting six
of its A330s from passenger to freighter configuration, buying six new
B777 freighters and continuing to fly its two B747 freighters.
Third, China Eastern is trying to sell a quarter interest to Singapore Airlines.
CEA’s deal with Singapore Airlines would give SIA greater access to
Shanghai in exchange for US$100s of millions in new stock shares to be
8 cargovision | SEPTEMBER 07
issued by CEA. Air China wasn’t happy to have
another formidable airline in its backyard, Cathay
Pacific already flies to Shanghai, and to thwart the bid,
bought nearly 10% of CEA’s share. We can’t tell yet
whether the strategy has succeeded.
Fourth, Air China says it will start a joint venture cargo
airline with Cathay Pacific, both carriers own 17.5% of
each other’s stock. However, CITIC Pacific must sell its
25% of a mainland cargo joint venture with Air China
to enable Cathay Pacific to by shares.
MONTREAL
After reducing its Shanghai-Toronto freighter service to
three days a week from five days, Air Canada finally
decided to cancel the service in June and return the
leased MD-11 freighter to World Airways. It intends to
continue daily passenger flights with 90 tons of cargo
capacity per week to Shanghai. Claude Morin, Air
Canada Cargo president cited the recently launched
transpacific freighter flights by UPS, Polar, Shanghai
Airlines and Yangtze River Express that had slashed
yields.
TIANJIN
Chinese aviation authorities approved the launch of
Galaxy International Cargo Airline this summer. The
Tianjin-based cargo airline is a joint venture capitalized
with US$65 million by Sinotrans (51%), Korean Air
(25%) and minor shareholders. The new cargo airline
is expected to begin services with one B747 freighter
and two A330 freighters from Korean Air, but then fund
its own aircraft by the second year. It will apply for
operating licenses and is expected to concentrate on
routes into northern China, which are of particular
interest to the Koreans.
 cargovision news around the world
MIAMI
Centurion Air Cargo caught a break in May when Alitalia signed them up as
a partner in connection with the start of its own freighter services between
Milan and Miami. Centurion was to feed eight freight destinations in Central
and South America from Miami using its six DC-10 freighters. In June,
Centurion returned two frequencies granted by the US DOT for a Miami-
Quito-Quayaquil-Miami service because it could not operate the route
economically without the traffic support of an intermediate stop. Presum-
ably, the rest of the arrangement is still intact.
Elsewhere in Miami, ASTAR Air Cargo sold 49% of its minority equity and
24.9% of its voting interests to DHL. In 2003, DHL sold ASTAR after US
regulators limited the foreign ownership of airlines and its parent, Deutsche
Post World Net, wanted access to US markets. UPS and FedEx both
complained that DHL was ASTAR’s largest customer and still controlled it.
DHL won in court and is now buying back the cargo airline. ASTAR is also
talking about acquiring ABX Air Inc. In another transaction, DHL bought 49%
of Polar Air Cargo’s equity and 25% of its voting rights for US$150 million in
June. The transaction also gives DHL Express guaranteed access to Polar’s
capacity on its six B747-400 freighters for 20 years and to additional
capacity available through ACMI leases from Atlas Air. DPWN is on a roll.
LOME
European Cargo Services, the network of general sales agents bought
shares in Africa West Cargo Airline in June. Capacity will be available
throughout West and Central Africa on the carrier’s three 18-ton AN-12
freighters.
Beijings international airport
© Iconpix/Alamy
Commodities
STAMFORD
Shipments of personal computers are forecast to grow
11% this year, according to Gartner Inc. Shipments of
semiconductors, used in many consumer electrical
products, also increased by 2% this spring, according
to the Semiconductor Industry Association in San
Jose. These two indicators suggest that near-term
prospects are good for companies that provide logis-
tics, express and air cargo services to these industries.
WILTSHIRE
Even though logistics is now recognized as a decisive
competitive tool in the automotive industry, logistics
providers with the big carmakers will likely encounter
exceptional difficulty despite opportunities that exist in
the developing markets, says Thomas Cullen, senior
analyst for Transport Intelligence. Mr. Cullen’s latest
report on Auto Logistics was published in June and
describes a large, sophisticated and complex
segment of the logistics business. It is characterized in
some areas by slow growth and meager profits and in
others by explosive opportunities and uncertain reali-
ties. For example, manufacturers located in North
America, Europe and Japan expect less than 3%
growth and relentless pressure to cut costs. While
those in China and Russia offer huge opportunities but
difficult environments for logistics operators to begin
Gateways
TEL AVIV
Competition is intensifying at Israeli airports, causing
the nation’s airport authority to approve additional
frequencies last year. Air France, Austrian, Iberia,
Continental and Trans Aero received approval to
increase frequencies; Delta, Hapag Fly and Air Baltic
started new services; and Royal Jordanian and Korean
Air began new cargo operations. C.A.L, Israel’s cargo
carrier saw its market share drop 1 point to 67% in
2006 from a year earlier.
MEXICO CITY
Mexican airlines are always looking for additional
access to the US market. Aeropostal Cargo de Mexico
received US DOT approval to operate DC-8 freighter
charters between Mexico and the US with beyond
rights. Aero Union applied to begin A300 freighter
service from Monterrey to Chicago.
cargovision 9
 cargovision news around the world

Fly or not

MOSCOW
In early June, there was some confusion about whether production of the
AN-124 would be delayed in favor of re-establishing the Il-76 production
line in response to an order for 50 of the latter aircraft from China. Subse-
quently, at the Paris Air Show, the Russian and Ukrainian Interstate Aviation
Committee presented a Supplement to Aircraft Type Certificate to confirm
that the Ruslan AN-124-100M-150 freighter aircraft modification complies
with all international regulations and aircraft safety requirements certifica-
tion tests. The new version has a useful load of 150 tons, higher takeoff
and landing weight, and longer operational range. More AN-124s would be
good news because Russian airfreight carriers have been fighting over the
Defense Ministry’s 18 AN-124s for some time. The ministry may resolve the
issue and dispose of the fleet by year-end. It is currently operated by three
airlines: Volga-Dnepr, Antonov Aviation Scientific and Technical Complex

© Robert Harding/Alamy
and Polet Airlines. But hedging its bets, Volga-Dnepr ordered 3 IL-76TD-
90VD freighters and opted for 10 more in June.

ULYANOVSK
Also in July, Chinese authorities issued a local type certificate for a modern-
ized cargo version of the Tu-204 family known as the Tu-204-120CE. It is
built for China by the Aviastar SP, one of the largest manufacturers of aero-
nautical engineering in Russia. The new medium-range cargo aircraft,
powered by Rolls-Royce engines and equipped with English language
instructions for pilots, is the first Russian aircraft built for export. It has a
range of 3,000 km carrying 27 tons and 7,400 km with 10.5 tons.
CHICAGO
Boeing has changed course since March when it decided to shut down the
C-17 supply chain. After studying how a prolonged suspension would
disrupt its supply chain and raise production costs, Boeing will now extend
the cargo jet’s production, possibly past 2009, and restart the supply chain
even without a new Pentagon contract. The Air Force is not pushing hard
for additional C-17s, meaning that Boeing will soon need international
orders and US promises to keep the line open.
St. Basil’s Cathedral, Red Square, Moscow
return on their investment and not the nature of the
enterprises. However, the EC has not stated its reason
for reviewing the transaction.
BERLIN
German Chancellor, Angela Merkel, has indicated that
the government will not enable big US equity funds to
play a strong role in large private German companies
like Deutsche Post World Net, Deutsche Telekom and
Deutsche Bahn. This seems to indicate that the
government will keep some control over these firms
and their subsidiaries that play in the airfreight
industry: DHL and Schenker.

Intermediaries
BRUSSELS
The EC said just before press time that it would investigate the planned
takeover of US freight forwarder EGL by Ceva Logistics (formerly TNT
Logistics) in the Netherlands.
Ceva is owned by Apollo Management L.P. of New York, which has over
US$16 billion in investments worldwide. The number of private equity firms
buying into big business has sparked fears that they are interested only in a
HONG KONG
Sinotrans is restructuring its capital base and
realigning its corporate strategy. It is negotiating to
sells shares of its Excel-Sinotrans freight forwarding
joint venture to Deutsche Post World Net, which
already owns half of the business. It is also seeking to
form a US$7.2-billion shipping and logistics venture
with CCNS Group while at the same time transferring
13 of its subsidiaries in Shandong into its Qingdao
logistics subsidiary, which is located in Shandong but
based in the Qingdao free trade zone.

10 cargovision | SEPTEMBER 07
 cargovision news around the world

Environment

LONDON
Thanks to John Vidal, environment editor for The
Guardian, the world now knows that ships contribute
twice as much carbon dioxide as aircraft. Ships emit
600 to 800 million tons of CO2 annually. That is about
5% of the total and twice as much as the industry had
been claiming. Moreover, their contribution could
increase by 75% in the next 15 years if nothing is done
about them. Mr. Vidal based his article on reports from
British Petroleum and researchers at the Institute for
Physics and Atmosphere in Wessling. The new data
come as a relief to the aviation industry, which has

© Construction Photography /Corbis

been taking the brunt of criticism in the climate change
debate for its miserly 2% contribution. Shipping emis-
sions have risen nearly as fast as those from aviation
during the past 20 years, but governments and envi-
ronmental groups have ignored them. No more.

Industry Ships contribute twice as much carbon dioxide as aircraft

WASHINGTON
SkyTeam members Air France, Alitalia, CSA Czech
Airlines, Delta Air Lines, KLM and Northwest Airlines
filed an application with the US DOT in June seeking
antitrust immunity on transatlantic routes. Delta
currently has antitrust immunity with Air France, Alitalia
and CSA while Northwest has antitrust immunity with
KLM. The carriers are attempting to take advantage of
route opportunities made possible in the EU-US open
skies accord that goes into effect next year. Although
the International Air Cargo Association officially
welcomed the open-skies agreement, many people in
the cargo industry believe it sacrificed the opportunity
to liberalize the movement of cargo.
HAVANA
Cuba and Russia signed an air services agreement in
July. It will enable the two countries to develop tourism
as well as passenger and cargo service between
them, and provides an opportunity to intensify their
relations.
MOSCOW
In July, Aeroflot-Cargo joined the Multilateral Interline
Traffic Agreements (MITA) that operates under the
aegis of IATA. Aeroflot-Cargo says it is also going to
join IATA.
Carriers
ATLANTA
Delta Air Lines emerged from 19 months of bankruptcy in April after cutting
its annual costs by US$3 billion and its staff by 6,000. It also completed an
internal transformation one year ahead of schedule and accepted a
US$2.5 billion loan from 10 banks. When people hear bankruptcy, they
tend to think “terminal illness” when, in fact, a Chapter 11 reorganization,
such as Delta’s, is more like calling a timeout so a child can get its act
together. A healthier Delta is good news for airfreight shippers. More than
two years of cost cutting and job losses hit the cargo department harder
than many other parts of the company, says to Ben Darnell, managing
director of cargo. “Now the emphasis is on the investments we are making
in the cargo product. While we were restructuring, we made the case to
our senior leaders that it was time to invest in cargo in order to increase the
value of Delta’s business.
“We added 59 cargo positions since March and can now do many of the
basics that we couldn’t before,” Mr. Darnell continues. “Our new flight
controllers are getting cooperation from divisions that didn’t previously see
cargo as their responsibility. We explained how they could help improve the
product and drive revenue growth.”
Some of the other new people include managers to define and oversee
procedures, flight controllers to monitor bookings and lane segments and
prioritize freight movements, analysts to study capacity and revenue
issues, field leaders that work with warehouses, and more sale reps. The
cargo division now has about 650 people, who are supported by new
cargo management systems for revenue and capacity.

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 cargovision news around the world

“We’re now in a much more competitive position,” Mr. Darnell says. “Our
execution is better now that we have more people and a new organiza-
tion that oversees all cargo operations, sales and marketing. Bankruptcy
reorganization is not something you want to undergo, but once we got to
it everyone devoted their energy to two goals: do as much as we can
while we’re here, and do it right.”
Finance
ANNAPOLIS
The Carlyle Group, a private equity firm that manages US$60 billion fund
said it would buy ARINC, which specializes in transportation communica-
tions and ATC support that is used throughout the world. ARINC’s share-
holders include Boeing and a dozen major airlines. It employs about
3,300 people and earned US$10 million on US$900 million in revenue
last year.
MOVING ON World
Jack W. Boisen
Mr. Boisen was elected chairman of the International
Air Cargo Association for a two-year term at the
annual general meeting of TIACA held in Cologne,
Germany. He is vice president of cargo for Continental
Airlines and has served on TIACA’s board of directors
for more than seven years. Mr. Boisen is chairman of
the Air Cargo Council of the Air Transport Association,
a member of the CNS Advisory Board, and a member
of the board of directors of the Postal Supply Council.
Ahmed Mohamed Abdulla Janahi
Mr. Ahmed Janahi is the new vice-president, ground
services of Gulf Air. He has worked at Gulf Air for 24
years, first joining the company in 1983 to take care of

Special

DRINK SUNLIGHT,
RACE 3,000 KM

Delft University of Technology in Holland will try for a fourth consecutive

win in the Panasonic World Solar Challenge in October. The Nuon Solar
Team, a multinational group of 11 students from the university spent
nearly one year designing and building Nuna4 to race over Australia’s
Stuart Highway from Darwin south to Adelaide. Over 30 teams are
expected to compete in the five-day race, which is run every two years.
To conform with strict rules for this year’s competition, the ninth in the
series, the 200-kg Nuna4 has roll bars, and upright seating angle for the
driver and no more than 6 m2 of solar cells. The energy company Nuon
has been the team’s main sponsor since 2001. This year, AF-KL Cargo is
transporting the Nuna4. The company’s involvement began in 2004,
when Air France-KLM group began sponsoring a chair of maintenance,
repair and overhaul at TU Delft’s Faculty of Aerospace Engineering.
Through proximity to the faculty’s research into new materials, processes
and structures, the chair supports AF-KL’s ongoing efforts to pursue
durable forms of transportation that can reduce CO2 emissions.

© Hans Peter van Velthoven

12 cargovision | SEPTEMBER 07
 cargovision datelines
passenger services at Abu Dhabi. He subsequently October 15-17
became airport duty officer and a duty manager in Abu Cargo Facts 2007,
Dhabi, Kuwait, Manila, Dhahran and Chennai. Before 13th Annual Aircraft Symposium
moving to Bahrain in 2004 as airport duty manager, he The Weston Hotel, Seattle
worked in sales and marketing in Katmandu. In his Contact: Jennifer Brown
most recent position, was head of the Bahrain hub. T: +1 206-587-6537
F: +1 206-587-6540
E: jbrown@cargofacts.com
Lloyd Paxton
Mr. Paxton is the new CEO of Hungary’s recently October 16-19
privatized air carrier Malev Zrt. He replaces Janos SCMLogistics World 2007
Gonci who recently stepped down from the post. A Suntec Convention Center, Singapore
35-year veteran of British Airways, he held various E: Adeline.lim@terrapinn.com
positions and served as President & CEO of Air www.terrapin.com/2007/scmlog
Astana, Kazakhstan’s national airline. The Hungarian
government sold a 99.95% stake in debt-ridden Malev October 18-22
to Russia’s OAO KrasAir earlier this year. KrasAir is FIATA World Congress
51% owned by the Russian government and partly by Grand Hyatt, Dubai
Boris and Alexander Abramovich. T: +41 43 211 65 00
www.fiata.org
Mike Wiggins October 21-24
Mr. Wiggens is general manager in Manchester for 2007 CSCMP Annual Conference
SBS Worldwide. He has more than 20 years’ experi- Pennsylvania Convention Center,
ence in the forwarding and transport sector gained Philadelphia
with other global supply chain service providers, where E: membership@cscmp.org
he carried similar regional responsibilities. www.cscmp.org
October 30-
Francis Shih November 1
Ms. Shih is the new sales development and key Freight Logistics 2007
accounts manager for Etihad Crystal Cargo. Based at Sydney Convention & Exhibition Centre
the Abu Dhabi International Airport hub, Ms. Shih will Darling Harbour, Australia
manage the relationship with global and regional key Email: info@azworldwide.com.au
accounts and drive sales development activities www.freightlogistics2007.com
across the network. She joins Etihad from British
Airways World Cargo, where she gained 15 years of November 5-7
experience in commercial, customer services and 17th ACI General Assembly
operations in India and Middle East. Hilton Buenos Aires
Buenos Aires
Andrey Kalinovsky T: +41 22 717 8585
Mr. Kalinovsky became the new director general of the F: +41 22 717 8888
Chkalov Novosibirsk Aircraft Production Association www.aciworld.aero
(NAPO) on July 4.
November 6
Second Annual Middle East Logistics
Awards 2007
Madinat Jumeirah
Dubai
T: 971-4- 2976987
E: info@mela.ae
www.mela.ae
November 7-9
IX Air Cargo Americas
World Trade Center, Miami
T: +1 305 871 7910
F: +1 305 871 7904
E: info@worldtrade.org
www.aircargoamericas.com
23-25 November
International Freight Week
Abu Dhabi Exhibition Centre
Abu Dhabi
Contact: Sarah Woodbridge
T: +971 4 3365161 Ext 122
F: +971 4 3353526
E: sarah.woodbridge@iirme.com
December 4-7
Vietnam Aviation Conference & Expo 2007
Vietxo Cultural Palace, Hanoi
Contact: China Promotion Ltd
(CP Exhibition)
Hong Kong, China.
T: +(85)-(2)-25117427
F: +(85)-(2)-2511969
January 23-25
Air Cargo India 2008
Mumbai
T: +91 22 2757 0550
www.stattimes.com/aci2008/
February 12-14
The World Air Cargo Event
Bahrain Convention & Exhibition Bureau
Bahrain
E: p.cooper@aircargonews.net
www.aircargonews.net
May 12-14
TIACA Executive Conference and AGM
Copenhagen
www.tiaca.org
cargovision 13
GUIDED MISSILE
In addition to serving as SVP for Southern Europe and Africa at Geodis
Wilson, Jean-Pierre Ennebick is a member of the board of Clecat, the
European forwarders’ lobby organization representing the French
forwarder organization TLF. He is chairman of Clecat’s Airfreight
Committee and vice chairman of its Maritime and Air Logistics Institute.
We asked him what issues concerned Clecat and how they put their
views across to the European Commission.

BY MARCIA MACLEOD

RESUME Q: What are the main airfreight issues

� Since 2006, Jean Pierre
Ennebick has been CEO of
Geodis Wilson - France and
regional VP of Geodis Wilson -
South Europe and Africa.
He began his carreer with Mory,
SA in 1974, training as an
airfreight forwarder in the UK
and the US, following his grad-
uation from Paris University
Law school (“faculté de droit”)
and service in the French Air
Force. After three years as
director of Mory’s US division,
he joined the firm’s manage-
ment board and continued as
its airfreight director through
1989. Mr. Ennebick then
became MD of Saga Air in Paris
until 1996 and MD of Kuehne +
Nagle - France until 2006.
Now 57 years old, he is married
with two children and
commutes on weekends to his
residence near Biarritz, where
he and his family enjoy the
cultural and geographic attrac-
tions of the Basque region.
Clecat’s members are concerned about
today?
A: Security and airport charges are probably causing
the most worry.
Q: Can you explain what aspects of the
security regime are creating the most
problems?
A: The EC directive on aviation security is interpreted
differently by each EU member state. For example,
the French government put in place a rule governing
cargo that cannot be put through a scanner, either
because it is too big or, perhaps, because it contains
liquids that cannot be scanned. Either the forwarder
must open the boxes and examine the cargo, which
is not usually possible because of the amount and
type of packaging involved, or the cargo must be
held for a minimum of ten days before it is shipped.
France is the only country in the EU to impose this
rule, which makes it very difficult for forwarders to
operate. Many shippers with cargo that cannot be
scanned have chosen to truck their airfreight to
neighboring countries, such as the Netherlands or
Germany, so the cargo can be shipped immediately
without any constraints.
Q: What is Clecat doing to try to resolve this
situation?
A: We are discussing the problem with the EU Trans-
port Minister, Jacques Barrot, and his department.
We are in permanent contact with the people in
charge of the EU directive and are proactive in
communicating the industry’s concerns about the
varied interpretations of EU law and how they affect
airfreight.
Q: Everyone would love to pay lower
charges. Why is Clecat particularly
concerned about current airport charges?
A: Airport charges represent 4-8% of the fees
forwarders eventually pay to the airlines, yet it is hard
to know how airport authorities calculate charges.
There appear to be 27 different systems for calcu-
lating charges in Europe! Clecat has proposed a new
directive to force the airport authorities to publish
clear and harmonized charging systems, as well as a
precise definition of what charges member states are
allowed to introduce in their own countries.
In Italy, for example, Milan’s cargo handling is under
the control of the airport authority and the tariff is
much higher than at most airports in the EU. This
does not encourage Italian forwarders or shippers to

14 cargovision | SEPTEMBER 07
 © Maarten Hartman/Hollandse Hoogte

use their local airports. Even taking into account the
cost of land transport, it can be cheaper for them to
fly freight in and out of Zurich or another airport
nearby.
Another example is the Paris Airports Authority that
controls services within the airport, including
telecommunications. It gave the telecoms contract
for the entire airport to a company whose charges
are much higher than its competitors. So forwarders
at the airport have to pay more for their telecoms
than those working just outside it.
Q: You have also said that Clecat is
concerned about airports planning new
developments without consulting the
airfreight community. Can you explain how
this affects forwarders?
A: Clecat believes airports should consult users
about planned developments. We also want to see
an independent authority set up to enforce the rules
about consultation - and about charges. For
example, Paris Airports Authority is building a new
cargo terminal at Orly on the side of the airport oppo-
site to the existing cargo facility. This new terminal
will constrain the growth of airfreight because it will
take longer and cost more to move cargo around the
airport.
Q: Are there any other issues currently
occupying your time as a board member at
Clecat?
A: Yes. The number of consolidations in the industry,
including those of Air France and KLM, could have a
big impact on forwarders as it creates very large and
powerful organizations. We want to know what kind
of policies the new companies will develop and how
these policies will affect us.
We are also concerned about the environment. We
would like to see more use of fast rail services,
perhaps a fast rail shuttle between Charles de Gaulle
and Schiphol, so forwarders can move freight to the
most suitable airport.
Q: Finally, Mr. Ennebick, how do you
convince European ministers to listen to
you?
A: Clecat’s permanent administration is responsible
for producing position papers and other documents
and for speaking to EU executives. The administra-
tion acts according to the board’s wishes. The board
and other Clecat members often support the General
Secretary or other officers at meetings. The need for
a consistent voice makes it imperative that
approaches to the EU are made centrally.
CLECAT
� The European Association
for Forwarding, Transport,
Logistics and Customs services
works with regulators to
achieve a uniform environment
where its members can move
cargo freely and securely for
the benefit of international
trade. The largest and oldest
institution of its kind, CLECAT
was established in Brussels in
1958 and today represents 24
national organizations of
European forwarders and
customs agents. It also repre-
sents FIATA, the World Federa-
tion of Freight Forwarders, on
European issues and, overall,
promotes the interests of
about 19.000 companies and
1,000,000 million employees
worldwide.

cargovision 15
 MEASURING
Maintaining service quality has become vital to companies at all
stages of the transportation chain. IATA set up the Cargo 2000
industry group in 1997 to monitor and manage quality and
improve the efficiency of air cargo. How well is it working?
BY TONY CARDING

16 cargovision | SEPTEMBER 07
QUALITY � Nearly 50 airlines, forwarders, ground handling agents and
road transport operators have joined Cargo 2000 (C2K). But is
fulfilling the need for measurable quality standards to improve
performance? Most participants think it is. Some do not.
Swiss-based Kuehne + Nagel was a founding member of
Cargo 2000 and is so far the only forwarder to have achieved
phase-two certification and to have installed it throughout its
network. The company currently checks an average of
100,000 air waybills per month. It monitors them by Cargo
2000 standards, according to Werner Blaser, vice president-
Corporate Airfreight.
Originally, Cargo 2000 was designed for installation in three
phases, because the founders knew that all members could
not proceed at the same speed, Blaser explains. “The first
phase was set up to monitor performance between airports
on a master air waybill level. That involved more measuring on
the carrier’s part.”
However, during its phase-one rollout, Kuehne + Nagel
decided it should work internally on phase two, which moni-
tors activity from door-to-door on a house air waybill level. “It
was a need we felt would benefit our customers and we didn’t
want to wait,” Mr. Blaser says. “Now, we are certified globally
for phase two. But once you start monitoring the figures you
find many things you don’t quite like. Corrective action has to
take place and that does not happen overnight. There are still
areas where we are not satisfied with our performance and
adjustment is ongoing.”
“The main benefit of Cargo 2000 membership for Kuehne +
Nagel is that we don’t have to go back to each carrier and
start agreeing on standards all over again”, Mr. Blaser says.
“All of the Cargo 2000 members have agreed on those
already. Also, as in any other industry, if you can eliminate
problems before they really cause delays you have less trouble
and you have less workload. Fixing them afterwards always
costs more money than doing it right in the first place.”

BETTER DATA
Another forwarder to involve itself in Cargo 2000 from the
© Courtesy to DHL

beginning is Yusen Air & Sea Service, where Takuya Takeda,

the company’s coordinator, Cargo 2000, says: “We do not see
any tools or standards other than C2K for monitoring air cargo
transportation quality.” The company currently monitors an

cargovision 17
cargovision measuring quality
average of 5,000 air waybills per month for phase one
and last September moved on to phase two for the
Tokyo-Singapore traffic lane.
“We now have 10 measured stations,” Mr. Takeda
says. “It would not have made sense for us to have
stayed at the phase-one level, because that measures
the master air waybill progress, and operational
performance is mostly up to the airlines. However, the
major part of our performance as a forwarder is
reflected in phase two, on a house air waybill level.”
The simple and visible benefit of Cargo 2000 to Yusen
has been an improvement in data quality, Mr. Takeda
says. “Operating to C2K standards, which have data
storage functions and data analysis, improves our
company’s data quality. In turn, this benefits our
customers who need quality data about the move-
Werner Blaser ment of their air shipments.”
SIGN ON
“C2K is the new industry standard,” says Holger Bilz,
vice president and head of global airfreight operations
for DHL Global Forwarding. “All participants measure
using the same methodology to compare against
shipment planning. Plus, Cargo 2000 is a proactive,
tracking system. There are carriers that have a good
tracking system but they are not proactive, because
you have to go there and ask for the information.”
Holger Bliz DHL was a founder member of Cargo 2000 and in
October 2005 was certified to phase two for eight
stations. “We are aiming for certification on a global
basis this October,” Mr. Bilz confirms. “In May this
year, our company measured around 65,000 master
and 130,000 house bills. We have a very steep
upward trend in the number of messages. By
October, we expect to be measuring 200,000 house
bills per month.
“We have already improved our quality tremendously
by closely checking all failures and monitoring improve-
ments,” Mr. Bilz continues. “We also use Cargo 2000
for carrier management, to establish the flown-as-
planned ratio, for example. It enables us to now
compare apples to apples and measure using a
common methodology. We expect our preferred
carriers to be participants in Cargo 2000. Most of them
are. The others are under pressure from us to join.”
Mr. Bilz adds that closely monitoring the Cargo 2000
reports and identifying the root causes for any
discrepancies, will enable DHL to improve its
messaging capabilities and make the company fit for
e-freight. Farther into the future, Mr. Bilz expects to
expand monitoring to include management of truck
and warehouse operations.
18 cargovision | SEPTEMBER 07
Among Cargo 2000’s carrier members, Cargolux says
it is 100% committed to the concept, according to
Robert van de Weg, the airline’s SVP of sales and
marketing. “It is the only way we can really monitor
quality internally, in our own system, and externally
with forwarders. It is our designated quality control
system.”
Cargolux currently monitors performance only at the
master air waybill level and is checking between 3%
and 5% of its shipments, “Far too few to be signifi-
cant,” Mr. van de Weg says. “However, we are
expanding our monitoring lane-by-lane in cooperation
with our forwarder customers in accordance with the
Cargo 2000 timetable. The impact of the program will
become clear only when bookings made by Cargo
2000 represent a higher percentage of the total
number we receive. To achieve that, the commitment
of both forwarders and airlines needs to be there.
That’s the crucial factor.”
SIGN OFF
One important cargo carrier to say it has not adopted
Cargo 2000 is Emirates SkyCargo.
“Performance measurement using Cargo 2000 stan-
dards does improve service standards,” says Sunil
Patrao, the company’s cargo systems controller. “It is
lacking important elements, such as qualitative and
accurate data capture and timely data submission.
With Cargo 2000, regardless of whether a forwarder is
implementing phase one or phase two, its customers
will be affected adversely without data integrity and
timely submission.”
Alternatively, Emirates SkyCargo introduced SkyChain
in August 2006. It developed this cargo management
system in house and has made it available to other
airlines.
“SkyChain has system intelligence built-in that can
assess the syntax of data received electronically to
ensure that it is correct and to generate necessary
alerts to the operational units concerned if it is not,”
Mr. Patrao explains. “SkyChain can also verify and
correct data entered manually. In addition, based on
the shipment transportation plan defined in SkyChain,
it will trigger internal operational alerts when shipments
differ from the plan, enabling immediate corrective
action.”
Mr. Patrao explains Emirates’ decision not to join
Cargo 2000 this way: “It is based on legacy system
protocols and syntaxes. SkyChain complies with
Cargo 2000’s requirements. But it is also capable of
communicating through a variety of protocols and
syntaxes with a much larger base of forwarders.”
cargovision people make a difference Wolfgang Kaffka

MR.CLOCKWORK
� Wolfgang Kaffka knows them all: the agents that
specialize in managing the supply chain for ship
spares from Hamburg. How did this Northern city
become the world capital of ship spares? “First came
A ship stops for a couple of hours in Shanghai, Buenos Aires or San
the wharfs and the shipping companies,” Mr. Kaffka
Francisco, offering a narrow time frame at a destination far, far away.
explains. “Then came the suppliers and finally the
To hit this mark with a package of spares is the job of Wolfgang Kaffka.
agents who found good money serving the maritime
industry.”
BY HEINER SIEGMUND
Nowadays, thousands of different parts from around
the world arrive at Hamburg’s warehouses where
they are stored until a vessel breaks down some-
where. Then, Mr. Kaffka and his team come into play
to close the final link of this complex supply chain.

Today’s speedy ocean vessels tie up for only a

couple of hours in port, limiting the time that agents
and airlines can deliver spares. A typical example
was the Croatian tanker Ist, en route from Syria to
Spain through the Mediterranean: a compressor
broke the day before the ship was expected in
Marseille.

“We received the local agent’s call,” Mr. Kaffka says.

“We booked the new compressor on an evening
flight from Hamburg to Paris to Marseille. We had the
support of André Santi and Rappel Opérationel
Client, his customer service unit in Paris, to control
the flow of this time sensitive shipment proactively.”
Shortly after 9:00 am, the shipping company’s repre-
sentative in Marseille received the compressor on the
quay just in time to give it to the Ist before she
departed.

All in a day’s work for Mr. Kaffka and his team of

dedicated AF-KL Cargo managers who cope with
many such ship-spares missions in their offices.
“About 30% of our business consists of gears,
crankshafts or propellers. On just one day in July, for
example, 18 of 42 packages delivered to our ware-
house in Hamburg were ship spares.

Mr. Kaffka, who is an Air France Cargo veteran,

explains how the AF-KL team in Germany has
improved the handling of this sensitive business
since the two offices merged. Now, everyone works
together to deliver optimal service. Usually, the Air
France flights carry the larger pieces while the KLM
flights handle the smaller ones. “Air France has a
larger freighter fleet than KLM and can accommo-
date the larger shipments. But by sharing this work
we generate loads of synergies.”

© Frank Scymanska

cargovision 19
THE CONSTABLE’S
CONUNDRUM
Nothing will guarantee that every shipment on every flight is safe. But what is an acceptable risk? How
can it be achieved? Individual authorities with differing attitudes and levels of risk tolerance have
published varying responses to these two questions, forcing airlines, forwarders and shippers to navigate
a confusing and conflicting security environment. A new organization, the Air Cargo Security Industry
Forum (ACSIF), which is jointly led by IATA and FIATA, hopes to simplify and harmonize this landscape.

BY MARK W. LYON

20 cargovision | SEPTEMBER 07
 � Supply-chain security is an expensive mess,
according to the people who manage it. “Make it
simpler,” they advise. “Make it harmonious. There are
too many standards and definitions.” Since the 1988
bombing of Pan Am flight 103, aviation authorities
have issued dozens of directives that have drastically
increased the airlines security workload; for example,
turning one major airline’s two-page airfreight secu-
rity manual into a tome of 2,400 pages.
The good news is that airfreight transport is more
secure than ever before. External experts who
audited the main players found that they share
similar procedures: companies secure their prem-
ises, conduct background checks on employees and
inspect and accept cargo along common guidelines.
The larger airlines do this to ensure their own internal
security. They don’t want to lose goods or endanger
their businesses or their employees.
However, these experts also found that the elements
of an effective security program are not practiced
widely across the industry, either because people
lack sufficient knowledge of them or they cannot
agree on a methodology. Different governments and
companies have their own views on which responses
are relevant and effective and, furthermore, because
security is secretive, tend to formulate their policies
independently. People don’t necessarily know all of
the various requirements. The result is a cumber-
some system that is effective in places but could be
vulnerable where it spans national or regional bound-
aries.
PEACE OFFICER
Of the efforts to resolve the high cost and complexity
of securing global airfreight operations, the most
recent began in June when ASCIF, the Air Cargo
Security Industry Forum led by IATA and FIATA, held
its first meeting. Individuals from 14 of the 21 associ-
ations who have joined the group met in Brussels,
formed a six-member executive committee, defined
some basic principles and set priorities for the
coming year.
Simply getting industry associations to align them-
selves to a course of action was an important step,
says John Edwards, IATA’s head of cargo security.
“The industry recognizes now that it must work
proactively with regulators to solve these problems,
© Christopher Anderson/Magnum/HH
achieve cooperation between states and industry
stakeholders and start working out the fixes and who
will do them.”
The immediate problem is that government regula-
tors are focused on airports, the last line of defense,
Mr. Edwards says. “We need to move controls up the
supply chain. If we don’t, things will get worse as
each government initiates its own program. We need
to take leadership. We must keep the air cargo busi-
ness viable and must protect its key selling point,
which is speed.”
Looking at the longer term, Mr. Edwards adds, “We
need to find a way to agree on consistent baseline
measures, definitions and those solutions that are
proportional and relevant to the threats. This can only
be achieved through a dialog with security experts so
that we can continually assess threats and break
new ground in finding solutions.”
CROSS EXAM
On a broad scale, Europe and America do not agree
on how to increase security and, at the same time,
facilitate trade. However, many people are working
on this, says Marcus Hallside, who developed the
prototype of the known-shipper database for the US
Transportation Security Administration. “We have a
blueprint for acceptance of EU measures in the US.
Now, other countries are becoming involved,
including Canada and Mexico. If this effort succeeds,
a regulated agent and trusted shipper in one area
could be accepted in another.”
Even on the smaller playing field of Europe, the
German, Dutch and French do not buy each other’s
screening practices. In light of these conditions,
Mr. Hallside proposes: “Our industry has multina-
tional companies. They have multinational vendors
and they share a common interest in bringing this
together. We must pressure governments to avoid
complete cargo screening and adopt systems that
are accepted by other countries.”
Because regulators have created many concepts for
a trusted-trader, there is no recognized way to know
who is a secure partner in the supply chain. Indepen-
dent auditing and validation, as done in the UK, for
example, could solve this problem and level the
playing field for both small and large companies.
THE FINDING
An independent audit process could also help to
bridge the gap between regulations. Many industry
players, including AF-KL Cargo, welcomed IATA’s
inclusion of its existing operational safety audit as
part of airline certification. Eventually the concept
could expand into a quality assurance process that
all stakeholders in the supply chain could implement.
“There is a debate over what we mean by harmo-
nizing regulations,” Mr. Edwards says. “We mean
achieving mutual recognition. Without this, we
cannot address the growing cost and complexity of
security measures. Harmony does not mean doing
the exact same thing. It does mean achieving the
same level of security.”
cargovision 21
 cargovision a week in the life of
Ben Darnell is managing director of cargo at Delta Air Lines. His 22-year tenure at the airline includes
forming alliances in the international division and working in customer service and cargo and
passenger sales. He recounts a busy week in April 2007, about a month prior to Delta’s official emer-
gence from bankruptcy.
WITH MARCIA JEDD
SUNDAY
Peachtree City
My wife, 4-year-old boy, 11-year old girl and I rise early to attend church.
It’s a beautiful spring day. After lunch at home, we plant azaleas and
cypress trees in the backyard. I grew up on a farm so yard work is second
nature. Then the kids and I share some laughs while attempting to hit golf
balls at the driving range. It’s a blessing to live in a golf-course community.
The amenities include 110 miles of golf cart paths. The family hops on the
golf cart and we head to a nearby restaurant for dinner, spotting a deer
and several rabbits along the way. Later, at home, the kids get ready for
bed and I prepare for the week ahead in my home office.
MONDAY
Atlanta
Traffic isn’t bad on the 22-mile commute to the office, north of Atlanta
airport. I arrive at 7:30 to get ready for our daily call led by the EVP of
operations. It includes 125 participants from cargo, airport, safety and
operations. Afterwards, I review e-mail and have lunch at my desk. Then, I
meet with my boss, the EVP of sales and marketing for cargo, for a twice-
monthly update when we review service issues, revenue and industry
news. Next up is the weekly staff meeting with finance, HR and corporate
communications to fine tune the bankruptcy-emergence plan. We discuss
communicating new benefits to employees. HR briefs us on efforts to add
cargo sales and service staff. In the evening, Delta Cargo’s general
manager of revenue management and I enjoy a business dinner with one
of our software vendors.
TUESDAY
Atlanta
The day begins with my bi-weekly staff meeting. I pass information from
my boss to my direct reports in cargo, finance and HR. Reorganization
issues are high on the agenda. Next, we meet with our internal audit
group to ensure that business is running as it should. We focus on opera-
tions and cargo accounting. Again, I munch lunch at my desk and finalize
reports. Later, during another reorganization meeting, we review the
emergence plan with HR and corporate communications. We are
concluding a painful 18-month reorganization that involved job and pay
cuts. However, the mood is celebratory that evening at our sales dinner
with 25 of our domestic sales team. It is a kick-off to their sales meetings
22 cargovision | SEPTEMBER 07
the next day. I comment on our work, emphasizing operations and
revenue.
WEDNESDAY
Washington, D.C.
In the morning, I travel to Washington for the twice-annual Air Transport
Association Cargo Council meeting. My colleagues and I spend the after-
noon discussing many topics with the ATA folks, from cargo security to
the movement of military human remains. During the evening, we enjoy a
cocktail reception and dinner.
THURSDAY
Washington, D.C.
The ATA Council starts in the morning and wraps up in early afternoon:
Transportation Security Administration talks about new leadership,
programs and cargo initiatives before Congress. I catch a late afternoon
flight to Atlanta. After three nights out for dinner and being on the road,
there’s nothing like family dinner at home.
FRIDAY
Atlanta
Today is Friday the 13th so I didn’t know what to expect. However, I take
an early morning conference call and recap the emergence plan with
cargo sales and operations and then a weekly meeting with HR on the
same topic. By 10:00, I’m getting updates from our software vendor on
the IT project. Next, I meet with our tech people about revamping the
Deltacargo.com website. From noon to mid-afternoon I have a working
lunch with Delta employees who are stationed at Air France and Korean
Air offices as part of the US joint venture sales partnership. They are
responsible for all US export sales. I oversee the quarterly meetings, giving
an update on Delta. I leave work early to swing by the airport to pick up
mom, who is flying in from Memphis. We enjoy a family dinner that night.
SATURDAY
Peachtree City
I help decorate for my son’s fourth birthday party. Rain threatens so I set
up a tent. It’s a backyard affair with 20 kids, many running around as
pirates. I spend the rest of the day cleaning up and preparing for the week
ahead.
© Hollandse Hoogte
BEN DARNELL
TRANSPORT EXPO
With 47,000 visitors and 1,580 exhibitors, Munich’s Transport Logistic
trade fair has become one of the largest gatherings of logistics
professionals in the world. For people in the airfreight business it offers a
wider selection of exhibits, customers and partners than the biannual
TIACA forums.
BY MARK W. LYON
� The transportation trade fair in Munich is huge,
stunning in fact. It’s easy to reach; hotels are plentiful.
Everything surrounding this mega-event is managed
with the skill and precision you would expect in the
heart of Bavaria. Although many exhibits and presen-
tations were clearly intended for a German audience,
the hosts and exhibitors consistently respected the
interests and the needs of their large international
attendance. The presentations were tailored to
people in various modes of transportation and infor-
mation technology and we include some high points
below.
GERMANY AND RUSSIA
Jörg Hennerkes, state secretary of Germany’s
Federal Ministry of Transportation, Building and
Urban Affairs, said that Russia’s 6% economic
growth, combined with a 25% expansion of cargo
traffic along the Russian-European Corridor makes
the eastern neighbor an attractive investment and
manufacturing location. Mutual interest in building up
the infrastructure between the two nations is high,
spurred by last year’s meeting of transport ministers
and the subsequent signing of a letter of cooperation
in transport. Working groups are now busy with
large-scale infrastructure projects, road-use fees,
railway and ferry transport and sea logistics.
“We will present Germany’s smooth running logistics
activities to our Russian counterparts to convince
them to adopt modern technology,” Mr. Hennerkes
said. “For rail, in particular, we can look to a trustful
cooperation, where increasing the competitiveness
of both rail systems is a common goal. The German,
Polish, Belarusian and Russian railways decided to
create one company and shorten delivery times and
improve competitiveness. For the first time recently,
we went from Berlin to Moscow in three days. That
was an important step in connecting Trans-Siberian
railway with Europe.”
24 cargovision | SEPTEMBER 07
RUSSIA AND RUSSIA
Unfortunately, once inside Moscow, things slow
down. Average speed on the city’s roads is 4 km per
hour, according to Alexander S. Misharin, Russian
deputy minister of transport. Russia is trying to bring
more investment into the transport area and resolve
problems like this. While better laws have permitted
new fees on toll roads, ports, airports and terminals,
attracting private funds means demonstrating solid
projects that give investors the confidence to loosen
their purses. “It takes long discussions,” Mr. Misharin
said.
However, for international traffic that must traverse
Russia’s girth of 11 time zones, the nation is devel-
oping a formidable capacity. The Trans-Siberian rail
project will enable shippers to move containers from
Asia to Europe and between China and Kazakhstan
and along other, yet-to-be-defined routes. The line
complies with international safety standards and has
the support of government agreements with both
Germany and China in order to develop its network.
At the same time, Russia is investing US$800 million
to build two new terminals before the end of the year
at the port of Novorossiysk. By docking in the Black
Sea, ships sailing from Shanghai or Guangzhou
avoid traveling through the Mediterranean to
Europe’s North Atlantic ports. Moving their goods
overland from Novorossiysk shortens the total time
to Central Russia and Eastern Europe by eight days.
DISPLACED HUBS
In the Persian Gulf, Dubai is also thinking about
Central Asia. “In ten years,” said Ram Menen, divi-
sional SVP of Cargo for Emirates, “The growth of
Europe’s airports will be constrained. Two-thirds of
the world’s population is east of Dubai and half of it is
in the world’s fastest growing economies. Capacity
growth will flow to the areas with unconstrained
capability, like Dubai, and we will relieve the pressure
2007

© Thomas Plettenberg

on Europe.” Providing future capability anywhere

means that you have both hubs and regional hubs
with growth that both can sustain, said Enno Osinga,
SVP of cargo at Schiphol Airport. “It is a challenge. In
our discussions with governments, we stress that
night operations are essential for high quality cargo
service. But noise is an environmental threat. We
want quieter aircraft but manufacturers cannot
provide them.
“Building capacity also means we have airport
access and automation systems that are built for
speed,” Mr. Osinga added. “Big forwarders want to
deliver built-up pallets to the airlines so let’s put their
facilities on the airside and make this possible. We
could also change the focus in customs from
inbound to outbound cargo, as they are doing in “Building
China. Then, when the aircraft leaves, the freight is capacity also
cleared already and there is no backlog on arrival.”
means we have
RESPONSIBILITY airport access
“Airports are part of the logistics process,” Mr.
Osinga concluded. “We have looked at investing and
and automation
giving high-quality services to the airlines and systems that
charging them accordingly. However, we must take
responsibility for our role and not price ourselves out
are built for
of the market. If the airline’s profit is under pressure, speed”
so is the airport’s.

cargovision 25
 cargovision country file
VIETNAM
NEED TO KNOW
� Population: 85,262,356 (July
2007 est.)
� GDP real growth rate: 8.2%
(2006 est.)
� Economy: Vietnam joined
the World Trade Organiza-
tion in January 2007.
Poverty has been much
reduced and the govern-
ment is moving - slowly -
towards liberalization.
Foreign investment is
growing and modern, high-
tech factories are being
built. Agriculture is
becoming smaller as a
percentage of economic
output.
� Trade: Vietnam is a member
of the Association of South-
east Asian Nations’ Free
Trade Area and has a bilat-
eral trade agreement with
the United States. Exports
have increased rapidly over
the past few years and
economic reforms are
expected to continue to
boost overall trade.
� Exports: Leading the 19
listed items in the “more
than US$100 million a year
club” are crude oil, garment,
textile, footwear, seafood,
rice, wooden products,
electronics, computer,
coffee, coal and rubber.
� Imports: Major items are
petroleum products, steel,
fertilizer, electronics,
machinery and equipment.
� Currency: The Dong (VND).
Exchange rate US$1 =
15,973 Dong on 12 July
2007.
Sources: CIA Fact Book, Vietnamese
Government Web sites, European
Commission, World Bank/IMF.
26 cargovision | SEPTEMBER 07
BY MICHAEL WESTLAKE
� It’s been a long time coming, but the tip of the
iceberg is in sight: a booming airfreight market in
Vietnam. There is pressure on the government to
liberalize the current monopoly on ground handling, to
allow more private airlines to compete with govern-
ment carrier Air Vietnam and privately owned Pacific
Airlines, and to allow foreign companies to own up to
49% in joint ventures. Though there are something
like 800 to 900 freight forwarders in the country, most
are very small, almost “Mom and Pop” operations
with very little capital and very few clients. Of the
larger ones, 87 are members of the Vietnam Freight
Forwarders Association, or VIFFAS, a grouping that is
lobbying the government hard for more market free-
doms.
VIFFAS says air cargo exports totaled about 85,000
tons from Ho Chi Minh City’s Tan Son Nhat airport
(still designated SGN from when the city’s official
name was Saigon) and about 25,000 tons from
Hanoi’s Noi Bai (or HAN) in 2005. The Civil Aviation
Administration of Vietnam says growth in air cargo is
about 14% a year, and is expected to reach 576,000
tons in 2010.
The pressure on government to move more swiftly
towards liberalization is ratcheting up: there’s a
Saigon Hi-Tech Park attracting factories set up by
foreign companies. It’s a two-way street that should
be good for a couple of years, with industrial
machinery being imported by Vietnam before a wave
of hi-tech exports joins the stream of textiles and
apparel (currently 39% of the total), footwear (25%),
handicrafts (10%) and electronics (8%) that at present
form the bulk of goods leaving by air.
That’s going to need new facilities, and work is under
way on a new terminal for SGN (the airport itself is in
the city and cannot be enlarged) to carry the market
through the next few years. In the meantime, work is
© ImageState/Alamy
starting on a new US$8 billion SGN airport at Long
Thanh, about 40 kilometers from the city, to be
running by 2011/12 and HAN is to be modernized
with a new runway and terminal. Liberalization is slow,
but it is picking up: for instance, Australia’s Qantas
Airways has agreed to buy 30% of Vietnam’s Pacific
Airlines.
WHAT THEY SAY
BERNARD NOYE
AF-KL Cargo Manager, Vietnam:
“E- tools are not yet working in Vietnam, and we don’t
have any official statistics on the air cargo market, so
it’s difficult to forecast the future. Vietnam is in a big
boom, but air cargo logistics must follow the growth
of major commodities, even if those commodities
(garments and shoes) are basically supplementing
sea freight. We hope that development of hi-tech
goods will improve the air cargo market in terms of
revenue and regularity of cargo flows.
Competition in the air cargo market has been
increasing very strongly and at the same time sea
freight is becoming more efficient. Since April,
capacity from SGN has increased, especially with
newcomers Qatar Airways (four weekly passenger
flights) and Cargoitalia (two MD11 freighters). Other
airlines are also looking at the Vietnamese market, for
instance Cargolux. Most of our competitors are Asian
airlines, either operating freighters or operating twice
or three times daily, passenger flights.
Currently there is no cargo village in either SGN or
HAN. The development and the investment for this
are in the hands of the handling monopolies (TCS at
SGN and NCTS at HAN).”
 TRAVEL TIPS
� Greet people with a hand-
shake and verbally. Wear
simple, informal and discreet
clothing - no shorts, only
children wear them.
� Do not touch Vietnamese
people on the head.
� Footwear must be removed
before entering a Buddhist
pagoda.
� There can be restrictions on
photography at ports and
airports for security reasons.
It is polite to ask people’s
permission before photo-
graphing them.
� Vietnam is a Confucian-style
society, similar to those of
© Jack Hobhouse/Alamy
China, Japan and Korea in
that “face” is extremely
important, as is building a
consensus and avoiding
embarrassing your business
contacts. Do not try to make
people backtrack. Tact,

� courtesy and discretion are

vital.
� Striking a deal in principle
probably only means the
start of real negotiations.
� A contact’s apparent inability
to make a decision probably
indicates that others have a
© Nicholas Pitt/Alamy voice on the matter, and/or
one or two years as new foreign investors are more that there are hidden
PAUL GUILHELM QUANG demanding than traditional factory owners. complexities that must be
General Manager of forwarder Cargo Team: Handling is a government monopoly, but hopefully the carefully negotiated.
government will take into account the needs of the � Introductions are best made
“We export a lot of components to France as raw industry for increased facilities. Liberalization has via a mutual acquaintance -
materials for electronics, as well as garments, plus been talked about for two years, but so far not much complete outsiders may be
shoes - mostly to Britain - and we import machinery. has happened.” regarded with suspicion.
Eventually the market will shift to Hanoi. Vietnam isn’t � Small gifts such as lighters,
likely to be a cargo hub for the area until the new SGN STEFFEN TREIBER pens and liquor are greatly
airport is running, say 2010/20. Then it may be more General Manager Airfreight, Schenker Vietnam: appreciated.
important. And cargo villages may be something for � Tipping: 5%-10% of a
the new airport.” “Modernization of industry is happening, but it’s slow. restaurant bill is a small
In the Saigon Hi-Tech Park companies are setting up amount and is very much
MICHEL KHAOU factories, but it’s recent, so the factories are still being appreciated. Government-
Managing Director of DHL Global Forwarding in built. We expect some development in imports of run restaurants add 10% to
Vietnam: capital equipment, machinery and so on. This is an bills anyway. Porters and
indication that the big boys are coming. The regulatory taxi drivers will expect a
“In the next five years, there will be a new airport 40 system is changing, but slowly. Ground handling is still small tip.
kilometers from SGN. Every agent is waiting for traditional, labor intensive, and more rapid handling is
government as to when it will go for electronic docu- needed. Also, forwarders need the freedom to build Sources: US Commercial Service
Vietnam (www.buyusa.gov/vietnam),
mentation - customs services should come online in their own pallets. But things are moving.” iExplore.com, Asiatravel.com.

cargovision 27
 cargovision market monitor

OVERSUPPLIED
Major Scheduled Airlines - Global Freight Traffic Growth
20%
� Although traffic seems to be picking up, the results for 2007 thus
Growth - Quarter vs Quarter previous Year
Average Growth of Last 3 Years = 5,9% far are disappointing and below the long-term trend. Weakening
Growth - Month vs Month Previous Year
Asian markets are the main cause. China’s exports are still
15% growing, but other Asian countries show a different picture. Japan
and Taiwan report low airfreight growth. The reasons for this may
10%
be a shift of production to China and less traffic from China to other
continents due to more capacity among the Chinese carriers.
However, not all the world’s sectors are slowing. The North Atlantic
Annual Growth

5% this year grew more than in the past and so did traffic to and from
Africa. India is also becoming a more interesting air cargo market;
0%
hence the picture is quite differentiated with several bright spots on
a rather gray canvas overall.

-5%
Apr ‘04 Jul ‘04 Oct ‘04 Jan ‘05 Apr ‘05 Jul ‘05 Oct ‘05 Jan ‘06 Apr ‘06 Jul ‘06 Oct ‘06 Jan ‘07 Apr ‘07

IATA - Total FTK and Freighter FTK growth

20% � In May, IATA published the 51st edition of its World Air Transport
Total FTK growth
Freighter FTK growth Statistics. The annual publication contains lots of interesting statis-
15% tics about air transport developments among IATA’s member
airlines. Both passenger and cargo aircraft carry freight and IATA
10% gives separate figures for freighters and for the entire fleet. Using
these data from WATS publications over the last decade, we can
plot the growth of cargo carried by freighters versus the growth of
5%
the entire market. In most years, the growth in freighters was higher
than that of the total market. However, in 2006 FTKs grew more
0%
slowly in freighters. Still, it’s remarkable how similar both the growth
rates and fluctuations look.
-5%

-10%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

IATA - International FTK per Aircraft Type

100% � Due to the higher traffic growth in IATA freighters, they now carry
90% Freighters
53% of all FTKs. There are also a number of freight carriers among
the non-IATA members and we may assume that the actual share
80%
of freighter traffic is even larger than 53%. After 2003, freighters
70%
seemed to lose their ground. It could be that the large number of
60% passenger aircraft introduced by the Gulf carriers explains the rela-
50% tively higher growth in belly freight. In addition, new aircraft like the
40% B777-300 have a larger belly capacity. As of July 2007, the total
backlog of new wide-body aircraft orders was 1895 aircraft,
30%
including 281 freighters. This suggests that belly capacity will
20%
continue to increase and the traffic share of freighters may not
10% change.
Belly & Combi
0%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

28 cargovision | SEPTEMBER 07
A look at the latest figures from IATA suggests that the large number of wide-body aircraft on order will create
more capacity than could be healthy for airfreight operators. Dick van den Berg crunches the numbers.

BY DICK VAN DEN BERG

IATA Wide-Body Fleet

Number of aircraft (including freighters) in operation � Using IATA members’ fleet data we can graph the development
4000 Others
of the wide-body fleet since 1990. This fleet carries more than 90%
A330/340 of the world’s cargo, either in freighters or passenger bellies and its
3500 A300/310
B777 growth during the last decade has come mainly from additional
3000
MD-11
B767
B777s, A330s and A340s. These aircraft have shifted the ratio of
DC-10 cargo capacity to passenger aircraft because of their large belly
2500 B747
holds. While DC-10s are leaving the fleet, B747s will remain longer
2000 because Boeing is still introducing new versions. With almost
2,000 aircraft scheduled for delivery during the next ten years, we
1500
may soon be facing air cargo overcapacity. Of course most aircraft
1000 have been ordered as passenger planes and the increase in cargo
capacity is a side effect. Compared to the current growth of
500
airfreight it seems that many carriers have a very optimistic view of
0 the future.
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

IATA - Increase in Wide Body Jets 1996 - 2006

FedEx � Just 15 airlines account for most of wide-body jets introduced

UPS during the last ten years. FedEx and UPS together added 260
Emirates Airlines
wide-body freighters. Because both carriers added mainly A300s
Air France - KLM
for their domestic and regional markets, their impact on interna-
Lufthansa
tional capacity is small. The other 13 airlines added mostly
Thai Airlines

Saudi Arabian
passenger jets and some freighters. Airlines that either didn’t exist
Cathay Pacific
in 1996, like Etihad, or that were much smaller, like Emirates and
Qatar Airways Qatar, now greatly influence cargo capacity growth. Expect also to
Air China see an increase in wide-body jets in India. Note the absence of US
Singapore Airlines combination carriers from this graph. Most of them did not add
China Airlines wide-body aircraft but simply moved existing equipment from
Etihad Airways
domestic to international routes. Japanese carriers also added few
Malaysia Airlines
wide-body jets because they are replacing those used on domestic
British Airways
routes with smaller equipment.
0 20 40 60 80 100 120 140 160

Increase in number of WB Jets

IATA - Increase in Wide-Body Fleet 1996 - 2006 � The growth of wide-body fleets illustrates the capacity develop-
Relative share in increase
ment in the world: high growth among integrators, Middle Eastern
and Asian (mainly Chinese) carriers. Africa and Latin America don’t
European Carriers even register. Nor are US carriers adding capacity while they focus
15% on domestic, narrow-body operations. During the coming decade,
fleet growth in Europe may be smaller and in Asia (China and India)
somewhat larger. The Asia-Europe sector may face the highest
Integrators capacity growth because European and Asian carriers will face
36%
competition from cargo operators in the Gulf who are developing
Asian Carriers
24% strong hub systems. Both in cargo and in passenger transport, the
Asia-Europe market will face enormous growth in capacity. Only
© Olé ontwerpers

time will tell if market demand can cope.

Middle East Carriers

25%
cargovision 29
 cargovision postscript
� HE’S BAAACK
Charles D. McKinley, the American who stowed away
in a box shipped as an airfreight consignment of
computer parts from New York to Dallas, is likely to be
the D.B. Cooper of airfreight security. That is to say, his
spirit will remain with us forever. Mr. Cooper hijacked a
B727 in late November 1971. At that time, the industry
lacked a coherent defense against hijacking. The
authorities in charge of that particular fiasco placed the
US$200,000 ransom he demanded on the aircraft,
which then departed. As it flew over the Pacific North-
west, Mr. Cooper donned a parachute, leapt from the
back of plane and has never been heard from again.
The only two clues to the mystery appeared when a
boy found US$6,000 in decaying US$20 bills on the
banks of the Columbia River in 1980 and when
someone else recovered part of a sign believed to be
from the same B727s rear stairway.
D.B. inspired a movie and a legion of would be extor-
tionists, which have, thankfully, been defeated by
stronger responses from the authorities to such
threats. However, Mr. McKinley has become the inspi-
ration for a new generation of stowaways. Most
recently, a Kenyan man was taken from an air cargo
shipment in Dubai as it was being palletized in prepa-
ration for loading onto an Emirates weekly charter to
Kenya. The man was a former Dnata employee with
30 cargovision | SEPTEMBER 07
dreams of returning to his homeland and the company says it is taking the
incident extremely seriously. The rest of us, however, are secretly awaiting
the next chapter. �
� PLANE TALK I
You gotta like a guy who calls a US$5-billion profit “peanuts.” That’s how
IATA’s director general characterized last year’s 1% profit for the airline
industry. “We need US$40 billion just to cover the cost of capital,”
Giovanni Bisignani went on to tell IATA’s general meeting in June. With this
kind of miniscule return, it’s no wonder private equity funds are dropping
airlines and looking for railroads. Still, they’re unlikely to find a spokesman
in that industry as colorful and as truthful as our guy. Keep on sayin’ it like
it is, Giovanni. �
� PLANE TALK II
Who is not in favor of cleaner automobiles? Well, Detroit to name one. But
beware if thou should criticize the US auto machine, that thee first have
thine own house in order. Fred Smith has walked gracefully erect upon the
regulatory tightrope for 30 years and FedEx has reaped the rewards. Fred,
like most of us, wants cleaner cars and thinks Detroit could make them if
they had to. He has called for higher Corporate Average Fuel Economy
standards, which Detroit and other automakers oppose. “Fred Smith is
talking about how the domestic auto industry has to get with the program
and increase standards,” said Rep. Candice Miller (R-Mich.), “Yet FedEx
has a very small percentage of their fleet that has any kind of advanced
fuel technology. If you want to be righteous, you have to take a good look
© Camera Press/HH
 cargovision information

in the mirror.” Republican lawmakers, like Ms. Miller,

who support the automakers, have proposed making
it easier for FedEx employees to unionize. UPS drivers
are already unionized locally and are affiliated with the
Teamsters and the lack of unions at FedEx has been a
significant cost advantage. �
� OKAY. NOW TELL
cargovision
Cargovision is the management magazine of AF-KL Cargo.
Its function is to disseminate information on transport,
distribution, logistics, information services, and general
business developments. The editorial opinions expressed
in the magazine are not necessarily those of AF-KLM. Repro-
duction in whole or in part without written permission
is prohibited.

US WHETHER SEX
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AFFAIRS
OF THE CORPS

Mark W. Lyon, editor-in-chief

Published by AF-KL Cargo Communication, P.O. Box 7700, 1117 ZL

Schiphol, The Netherlands. Christelle Dufour Theuws, dufourtheuws@cargovision.org
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Concept & Realization: vdBJ / Communicatie Groep, Bloemendaal, The Netherlands

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AF-KL Cargo © september 2007 Volume 22 Number 30

cargovision 31