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airupdatecargo
Vol. 10
Issue 8
No. 63
JAN - FEB 2011
10Year
Exclusive reports from Oman, Iraq and India
www.7dimensionsmedia .com
World Improved profitabilitybut margins still low
Middle East & Africa Dubai airport sees growth
in freight volume
South Asia
Country Report - India
India Celebrates 100 Years of Aviation
Always Ahead
The first and only pan-regional Magazine Middle East - Africa - South Asia
Abdul Muttalib Mustafa Al Jaidi,CEO of Oman Insurance Company
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Air Cargo UpdateBi-monthly: Vol 10 | Issue 8 | No 63
Middle East, Africa and South Asia
Air Cargo Update serves as a platform to share news and discuss critical
issues within the Air Cargo Industry from the Middle East, South Asia and
African region.
BAHRAIN CYPRUS IRAN IRAQ JORDAN KUWAIT LEBANON OMAN
QATAR SAUDI ARABIA SYRIA UNITED ARAB EMIRATES YEMEN ALGERIA
ANGOLA BENIN BOTSWANA BURKINA FASO BURUNDI CAMEROON
CENTRAL AFRICAN REPUBLIC CHAD CONGO COTE DLVOIRE DJIBOUTI E.
GUINEA EGYPT ERITREA ETHIOPIA GABON GHANA GUINEA GUINEA
BISSAU KENYA LESOTHO LIBERIA LIBYA MADAGASCAR MALAWI MALI
MAURITANIA MAURITIUS MOROCCO MOZAMBIQUE NAMIBIA NIGER
NIGERIA RWANDA SAO TOME & PRINCIPE SENEGAL SEYCHELLES
SIERRA LEONE SOMALIA SOUTH AFRICA SUDAN SWAZILAND TANZANIA
TOGO TUNISIA UGANDA ZAIRE ZAMBIA ZIMBABWE BANGLADESH
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Tel: +971 6 557 9579, Fax: +971 6 579569,info@7dimensionsmedia.com
www.7dimensionsmedia.com
Chief Editor
Chandrima Dutta
chandrima@7dimensionsmedia.com
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Madhushal jayanath
Editorial
All rights reserved. The opinions and views expressed in this publication are not necessarilythose of the publishers. Readers are requested to seek specialist advice before acting oninformation contained in this publication, which is provided for general use and may not beappropriate for the readers particular circumstances. The publishers regret that they cannotaccept liability for any error or omissions contained in this publication.
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Editors OpinionAir Freight industry gaining lost ground
Early aviation promoters were always looking for practical uses for the airplane.
One idea was to use them as carriers of freight. Some say the rst practical
demonstration of air freight occurred in November 1910 when a department store
shipped a bolt of silk by air from Dayton to Columbus, Ohio.
Undeniably, the primitive stages of air freight business have made a remarkable
growth since.
But this has not come without challenges the recent global slowdown in trade
did affect the air cargo industry and the Middle East and other emerging markets
were no exception. However, things have started looking up now with reports of
recovery.
In fact, 2010 was, at least not as bad as 2009. Fair enough. 2009 was, in manycases and instances, one to le and forget. If only it were that easy though.
2010 was a year of peaks & troughs, and as many would say good if not best
at least. Though air freight recovery hit a peak in May 2010, in November last
year volumes fell by 7%, compared to the peak. According to IATA, Novembers
year-on-year growth of 5.4% is a signicant shift from the 14.5% recorded in
October. This was exaggerated by the exceptionally strong performance in
November 2009. In absolute terms, there was a 1.1% fall in freight volumes from
October to November. All regions, except Africa, showed dramatic drops in year-
on-year growth rates from October to November.
The Middle Eastern carriers on the contrary saw a 12.4% year-on-year growth
for November. The regions carriers handled 14% more freight in November than
they did at the pre-recession peak in early 2008.
Secure Freight has taken on new relevance in the wake of the October 2010
security incidents.
Meanwhile, the UAE raced up the ladder to become one among the top
25 countries worldwide as per the latest World Bank Group rankings (titledConnecting to Compete 2010) in trade logistics.
The UAE did extremely well in terms of efciency of customs clearance
processes, quality of trade and transport-related infrastructure, ease of arranging
competitively priced shipments, and competence and quality of logistics services.
Gulf airlines and airport operators on the other hand are still investing for
growth and have every expectation of a return to healthy air cargo volumes.
Piggybacking on this, the air cargo insurance sector is also ready for takeoff
after a quiet period. This editions cover story has Abdul Muttalib Mustafa Al
Jaidi, CEO of Oman Insurance Company speak on what it takes to remain at the
forefront of its business.
Of course as usual we have much more in the issue, including interviews
with Shashi Panicker, Head of Freight Centre at Sharjah Aviation Services, DHL
UAEs Country Head, Frank Ungerer and John Tansey, General Manager, UPS
UAE LLC.
Well, I could probably do this for hours, but I am capping it for now. I hope you
had a good 2010 and wish you a great 2011. Thanks for reading Air Cargo Update.
Chief Editor
Chandrima Dutta
Chandrima@7dimensionsmedia.com
airupdatecargo
Vol. 10
Is s ue 8
No . 63
JAN - F EB 2011
10Year
Exclus iv e rep orts from Oman, Iraq and India
www.7dimensionsmedia.com
World Improved profitabilitybut margins still low
MiddleEast &Africa Dubai airport sees growth
in freight volume
SouthAsia
CountryReport - India
IndiaCelebrates100YearsofAviation
Always Ahead
The first and only pan-regional Magazine Middle East - Africa - South Asia
Abdul Muttalib Mustafa Al Jaidi,CEO ofOmanInsurance Company
Capitalizing on growing editorial demand, circulation growth and advertising
momentum this year, Air Cargo Update, the rst and only pan-regional publication
from the stable of 7 Dimensions Media, is relaunching with its January-February
2011 issue.
As markets recover and new opportunities unfold, the need for a magazine
that covers it all with perspective and expertise has never been greater. With the
relaunch issue, we look forward to achieving a new level of success as we deliver
more relevant content to all our readers.
With great editorial and even better design, the product promises to maintain itsposition as the only magazine providing in-depth and authoritative stories on the
companies and people who move the industry.
We take this opportunity to say thank you to all our readers who have supported
Air Cargo Update over the years. This issue will be delivered regionally as well as
in South Asia.
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06. World News
Improved protability but margins
still low
13. Cover Story
Always Ahead
16. Airport
Sharjah Aviation Services at
Sharjah Airport
20. E-Fright
Forwarders need to see greater benet
before they embrace E-commerce with air
carriers, says FIATA/TIACA survey
22. Interview
Right place, right time
29. Security
Vision for Intelligent Aviation Security -
Coordinated Response on Cargo Security
32. News - Middle East & Arica
Dubai airport sees growth in freight
volume
46. News - South Asia
Country Report - India
50. News - Technology
Etihad Crystal Cargo selects CHAMP
as its Advance Cargo Information ling
partner
13
6
16
20
46
4222
29 32
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The International Air Transport
Association (IATA) revised its industry
outlook for 2010 to a net prot of $15.1
billion (up from the $8.9 billion forecastin September). Similarly the Association
revised upwards its projections for 2011 to
a net industry prot of $9.1 billion (up from
the $5.3 billion forecast in September). Net
margins remain weak at 2.7% for 2010 and
falling to 1.5% in 2011.
Our prot projections increased for both
2010 and 2011 based on an exceptionally
strong third quarter performance. But
despite higher prot projections, we still
see the recovery pausing next year after
a strong post-recession rebound. And
the two-speed nature of the recovery
is unchanged with European airlines
continuing to underperform other regions,
said Giovanni Bisignani, IATAs Director
General and CEO.
Bisignani also characterized the
improvements in terms of prot margins,
which continue to disappoint. Margins
remain pathetic. With a 2.7% net margin
in 2010 shrinking to 1.5% in 2011, we are
nowhere near covering our cost of capital.
The industry is fragile and balancing on
a knife edge. Any shock could stunt the
recovery, as we are seeing with the results
of new or increased taxation on airlines and
travelers in Europe, said Bisignani.
Shifts in the industry forecasts can appear
dramatic in absolute numbers. It is important
to relate them to the size of the industry to
understand their signicance. The $6.2
billion increase in IATAs projection for the
2010 net prot (compared to the September
forecast) is equal to just 1.1%
of the industrys projected $565
billion in revenues.
Any increase in prots is a welcome
step in the right direction. But the fact
that we can increase our prot forecast by70% and still be left with a net margin of
just 2.7% shows just how far this industry
has to go to achieve a normal level of
protability, said Bisignani.
2010 Forecast
Major drivers for the improved 2010
forecast are:
Passenger trafc growth of 8.9%
(compared to 7.7% previously forecast)
Strong passenger yield growth of 7.3%
(unchanged from the previous forecast)
Revenue growth to $565 billion
(an improvement of $5 billion on the
previous forecast)
An average annual oil price in line with
previously projected $79 per barrel (Brent)
The third quarter of 2010 was
exceptionally positive in terms of passenger
trafc volume. Airlines met increased
demand by utilizing their eets more
intensely. Fixed costs remained constant,
passenger yields rmed and the increased
revenues went almost directly to the bottom
line, said Bisignani.
In sharp contrast to improved conditions
for air travel, the prospects for air cargo
deteriorated from the September forecast.
Demand is now expected to grow by
18.5% (compared to the previously forecast
19.8%), limiting yield growth to 7.0%
(below the previously forecast 7.9%).
The post-recession rebound drove a rapid
expansion for cargo earlier in the year but it
ran out of steam by the third quarter. Since
May, overall volumes
fell by 5%. This will
only pick-up when consumers have bought
the products that are already on the shelves,
said Bisignani.
2011 ForecastThe recovery cycle will pause in 2011.
Although the $9.1 billion prot projection
for 2011 is better than we had previously
forecast, next year the industry will face
tougher conditions than what we are
experiencing today, said Bisignani.
The improvement compared to the
previous forecast comes from:
Stronger trafc growth: Passenger and
cargo demand is expected to grow by 5.2%
and 5.5% respectively. This is better than the
4.9% and 5.3% previously forecast.
Yield improvements: Yields are
expected to grow by 0.5% for passenger
trafc, an improvement on the at growth
previously forecast. Cargo yields are
expected to remain at, unchanged from the
previous forecast.
The operating environment will become
more difcult because of:
Increased Fuel Cost: For 2011, the
average oil price is expected to increase to
$84 per barrel, up from the $79 per barrel for
2010. This will increase fuel costs to 27% of
operating costs (up from 26% in 2010).
Slower GDP Growth: The 3.5%
global GDP growth expected in 2010 will
slow to 2.6%.
Taxation: Austerity measures,
particularly in Europe, are expected to
dampen demand. Signicantly increased
taxation in some European countries
(Germany, Austria, and the UK) is
increasing the cost of travel by between 3%
and 5%--signicant enough to discourage
travel and slow the industry recovery.
Improved protability but margins still low
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November 2010
Fact Sheet - Cargo Traffic1. Overall volumesMetric Number Source
Total industry freight tonnes,2009
36.9 million tonnes IATA estimate
Domestic freight tonnes,2009
11.1 million tonnes IATA estimate
International freight tonnes,2009
25.8 million tonnes IATA estimate
2. Distribution of international freight tonnes by route area, 2009Source: Airline Industry Forecast 2010-2014
International route area Share
Within Asia 21%
Europe-Asia 17%
North Atlantic 13%
North and Mid Pacific 13%
Within Europe 8%
Europe - Middle East 5%
Middle East Asia 5%
North America - South America 3%
Europe Northern Africa 3%
Far East - Southwest Pacific 2%Within Middle East 2%
Other 8%
Total 100%
3. Distribution of international freight tonne kilometer traffic by region of airline registrationSource: IATA monthly traffic statistics, September 2010
Airline region Share
Asia/Pacific 44%
Europe 25%
North America 16%
Middle East 11%Latin America 3%
Africa 1%
Industry 100%
4. Share of cargo traffic in dedicated freighters vs passenger flightsSource: Airbus Global Market Forecast 2007-2026
Aircraft category Share of total FTKs
Dedicated freighters 58%
Passenger aircraft (in cargo hold) 42%
5. Commercial cargo fleet composition, end September 2010
Source: AscendCategory Number of aircraft in service
Wide body passenger fleet 3,230
Dedicated freighter fleet 3,079
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by 4.3 percent, international freight rose
by 5.3 percent and domestic freight by
1.3 percent. Year to date in 2010, globalfreight growth reaches 18.2 percent,
with international freight at 23.4 percent
and domestic freight at 9 percent for the
11-month period.
Gittens comments, Freight growth
was exceptional in 2010 and despite a
marked slowdown in the second semester,
the overall increase of close to 18 percentmore than compensates for the 8 percent
drop in 2009. The divergence among the
regions is less pronounced than in the
passenger sector, as all regions enjoyed
double digit growth earlier in the year.
Airport participants in the ACI
PaxFlash and FreightFlash monthly trafc
reporting exercise have indicated thatpassenger and freight trafc continued to
rise in November 2010. Total passenger
trafc increased by 6.9 percent compared
to November 2009, with international
trafc up by 8.1 percent and domestic by
6 percent. For the rst eleven months of
2010, world passenger trafc increased
by 6.5 percent, international trafc
growing by 7.7 percent and domestic
trafc by 5.5 percent.
Director General Angela Gittens
comments, November reporting indicates
that 2010 will set a new record for global
airport industry trafc with total passenger
growth near 7 percent. Within that
overall increase there are marked regional
differences. While the Asia Pacic, Middle
East and Latin America-Caribbean regions
surged well beyond pre-crisis passenger
volumes, Europe and North America
lag behind previous peak performance.
Nonetheless, Europe appears to be on
track to becoming the largest trafc region
in 2010 for the rst time ever, moving
ahead of the North America market. It
remains to be seen how signicantly the
harsh winter weather will affect December
trafc results.
Freight trafc growth is still slowing
relative to its rapid rebound in the rst
half of 2010. Comparing November 2010
to November 2009, total freight increased
The companys global market forecast
anticipates the need for about 26,000
passenger and cargo planes, with a total
price tag of more $3 trillion. Replacing old
planes in favor of more environmentally
friendly models accounts for some of the
demand, but the company also foresees
large growth in new markets. The
passenger plane growth breaks down to
10,000 replacements of outdated aircraft
and 15,000 additional craft to keep up with
expanding demand. According to Airbus,
there are currently more than 14,000
passenger aircraft in operation worldwide.
Discounting the replacement planes, this
means the market will balloon to 29,000
passenger craft by 2029.
Airlines in Asia Pacic including
China and India will carry one third
(33%) of the passenger trafc by 2029,
making it the largest region, overtaking
Europe (25%) and North America (20%),
Chris Emerson, head of product strategy
and market forecast for Airbus, said in a
statement.
Though most of the aircraft boom will be
experienced in the passenger arena, Airbus
notes that cargo trafc has rebounded from
the economic slump with more vitality than
passenger travel. Cargo ights are growing
at a 5.9 percent rate, and passenger growth
has been reported at around 4.8 percent.
The recovery is stronger than predicted
and reinforces both the resilience of the
sector to downturns and that people want
and need to y, Airbus John Leahy said.
Robust growth to yield best year ever, nds ACI
Airbus sees 1,000 reighters by 2029
YOY: Year over year same month
comparison; YTD: Year to date, starting
January 2010, compared to same period
previous year; YE: Year end, based on
rolling 12 month period, compared to
same prior 12 month period
Freight trafcFreight growth has been slowing
down considerably since mid year. In
November total freight volumes grew
by 4.3 percent, the slowest growth
since October 2009. To put that gure
in perspective, however, it must be
noted that these results compare with
November 2009 which already saw a
healthy 11 percent post-crisis increase.
Overall growth was lifted by 8 percent
growth in Europe and 7.5 percent growth
in international freight in North America
making these two regions the fastest
growing in November. The hitherto
very robustly growing regions Middle
East, Latin America and Asia Pacic are
in consolidation mode as their freight
volumes surged during the reference
period at the end of 2009.
Growth stagnated in Singapore and
Dubai, while Shanghai Pudong (-2%)
and Incheon (-1%) registered negative
growth. A number of US and European
airports showed robust growth.
By 2029, the skies will be lled with
1,000 new cargo planes valued at $3 billion,
according to a report by Airbus.
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The cargo increase follows an 11 percent
decline in activity experienced between
2008 and 2009. The Middle East boasted
growth of 34.1 percent, and trafc in the
Asia-Pacic region rose 23.8 percent.
According to the report, every region
posted growth of more than 10 percent.
On the passenger side, international
trafc rose by 8.8 percent over 2009s
totals because of travel in Brazil,
Russia, India and China. Middle Eastern
countries accounted for 21 percent
of this growth, while the Asia-Pacic
region registered a 12.9 percent bump.
Oil prices could stunt further
passenger growth, but the ICAO still
expects increases in the high 4 percent
range for 2011 and 2012.
The new facilities are located in
Singapore; Venlo, the Netherlands;
Burlington, Canada; and Louisville,
Ky., and bring the total amount of UPS
dedicated healthcare distribution space
to more than four million square feet.
We are seeing increased demand
from healthcare manufacturers wanting
more agile supply chains. This clear
industry trend is driving companies
to look for more global solutions and
deeper supply-chain partnerships,
said Bill Hook, vice president, global
strategy, UPS Healthcare Logistics.
Opening in the rst quarter of
2011, UPSs new 43,000-square-foot
pharma facility in Singapore will
include cold chain capacity to support
an increasing number of companies
locating manufacturing operations
in Asia. Also opening by June 2011
is a 177,000-square-foot center in
Burlington. It is the 10th UPS healthcare
facility in Canada.
Finally, in the fourth quarter of 2011,
UPS will complete a 144,000-square-foot
extension to its existing healthcare terminal
near its Louisville, Ky., global air hub. The
new building will provide next-day delivery
for orders received as late as 11 p.m. as well
as ground deliveries within two days or less
to 70 percent of U.S. locations.
Cargo trafc year-over-year rose 18.9 percent in 2010, according to the UN International Civil
Aviation Organizations (ICAO) freshly released annual trends report.
UPS is expanding its network of healthcare distribution centers for pharmaceutical, biotech
and medical device companies to 30 worldwide.
ICAO nds huge cargo growth in 2010
UPS expands global pharma network
The Middle East experienced a 34.1 percent cargo growth rate in 2010
A new 245,000-square-foot facility in Venlo, the Netherlands an hour away from UPSs European hub
in Cologne, Germany (above) is expected to open during the second quarter of 2011 after an existing
terminal in Roermond, the Netherlands, reached its capacity in less than nine months
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World nEWs
The estimate is an amplication of
the companys Strategy 2015 outlook,
which was announced last year. The plan
focuses on two dening segments of the
organization: mail and logistics. Though
the mail division will end 2010 with a
prot of EUR1.1 billion to EUR1.2 billion,
according to a press release; yearly prots
to 2015 will hover around EUR1 billion.
Of course, these growth predictions
assume the industry wont experience
another major recession. If the economy
is relatively stable, the company is looking
forward to a 7 percent annual average
growth in its express division and an
average annual growth of 6 to 8 percent
in its air forwarding division. The supply
side will see the largest increase, with an
expected growth of 8 to 9 percent annually.
The companys goals will be achieved
through product development, expansion
of its customer base and by establishing
a greater presence in the healthcare,
technology and energy elds.
DHL Global Forwarding recently
partnered with Interstate Transport and
Trans World Forwarding to increase
its perishable handling offerings from
Latin America to North America. In the
partnership, DHL will handle air transport,
TWF will handle all air cargo at DHLs hub
in Miami and Interstate will truck shipments
out across North America. The deal gives
DHL access to TWFs 270,000-square-foot
cooler storage area in Miami.
We are systematically adapting ourselves
to meet the needs of our customers and are
developing solutions in every business area
that will make their lives easier, Deutsche
Post DHL CEO Frank Appel said in a
statement. By taking this approach, we will
accomplish our goal of remaining the postal
service for Germany and becoming the
logistics service provider for the world as
well as completely unlock the full potential
of Deutsche Post DHL for the benet of our
customers, employees and investors.
In the next three years, the airline
expects to increase its all-cargo capacity
to North Asia from 74 percent to 77
percent of total availability, while
bellyhold capacity to South America is
expected to increase from 28 percent to
30 percent.
The company said it will begin ying
an MD-11 freighter twice a week to the
free-trade zone of Manaus, Brazil, in
January next year in response to a high
demand for capacity from Asia.
With India and South Asia bellyhold
versus freighter capacity remaining
constant for the next three years,
LH Cargo is planning to develop a
major pharmaceutical products hub at
Hyderabad in partnership with GMR
Hyderabad International Airport, the
airport manager. At the same time,
the airline will open a new facility in
Frankfurt for temperature-controlled
shipments in late 2011 and introduce
its new eet of Opticooler containers to
handle trafc between the two hubs.
Speaking in Frankfurt, LH Cargo board
member Andreas Otto said harmonization
of security procedures is still far away
and the pending court decision over night
bans at Frankfurt airport was delaying a
decision to build a new cargo terminal.
He added that a decision is now expected
by the autumn of 2011.
With a spectacular turnaround from a
loss of 171 million ($223 million) in
2009 to a prot of 229 million ($299
million) by the end of the third quarter
this year, LH Cargo said it expects to
continue to focus on growing its ground
and air-related operations in the next
three years.
In addition to its airline network,
group cargo brands include the cargo
community system Traxon; the Time
Matters courier operator; container lessor
Jettainer; and a specialist in temperature-
controlled transportation, LifeConEx.
Deutsche Post DHL has predicted its DHL divisions will experience an
annual growth of 13 to 15 percent through 2015. DHLs year-end prot is
expected to be EUR1.3 billion.
The Lufthansa Cargo Group (LH Cargo) expects to acquire an additional 540
tonnes of freighter capacity by 2015 to meet a 5 percent per annum growth forecast.
DHL sees revenue increase through 2015
Luthansa to need more reighter capacity
Lufthansa Cargo Group board member Andreas Otto
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CovEr story
Always AheadIn an exclusive interview with Chandrima Dutta,
Abdul Muttalib Mustafa Al Jaidi, CEO of Oman
Insurance Company talks on what it takes to
remain at the forefront of air cargo insurance
business.
Abdul Muttalib Mustafa Al Jaidi, CEO of Oman Insurance Co. (OIC), the UAEs largest in terms
of gross premium written believes that ultimately, it is sheer consistency that wins the race. I can
certainly understand his point of view as he has always focused on maximising OICs business
opportunities and increasing efciencies to remain higher on the growth curve.
For Al Jaidi, the thirst for challenges and quest for greater heights drew him to this industry.
Though he is the man who has been credited with the burgeoning growth of the insurance company
since he took over, he comes across as someone who has his feet rmly placed on the ground and
says humbly, this industry still fascinates me.
Abdul Muttalib Mustafa Al Jaidi, CEO of Oman Insurance Company
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CovEr storyairupdatecargo
In his 36 years tenure in the company Al Jaidi has taken OIC
to great heights with his deft management and interpersonal
skills. And, this is indeed a proven fact as OIC has managed
a 6 per cent increase in its overall revenue in 2010 over
the previous year. Considering the overall scenario in the
insurance sector most would agree that this is no mean
achievement.
In a climate where transparency with regard to the media
when it comes to anything but good news has been traditionally
resisted, it was heartening to see a change when he disclosed
the gure.
This made me more inquisitive to know the inside story of
their air cargo business, as that was the whole purpose of my
visit. According to Al Jaidi, Air cargo insurance is a specialised
line of business. It requires adequate industry knowledge &
experience, and we have it all. This makes us the market leader
once again (in the UAE).
OICs years of experience and wide knowledge of the cargo
industry will be tremendous assets as we continue to enhance
products and services in this market.
ChallengesThe regional airfreight market in general is going through
some tough times now, he said. The Gulfs airfreight market
is heavily inuenced by re-exports. The global meltdown has
lead to the recent decline which again has affected the ancillary
industries of which we are one.
But, the air cargo business has always been very uid and
we have had to deal with the peaks and troughs over the years.
However, turn of events in the recent past has changed the way
we do business for the better, and has highlighted the need to
innovate.
While we havent changed our plans very much, in the short-
term we had to modify our approach to ensure that we retain our
market share and also nd ways to stimulate new business even
in these tough conditions, said Al Jaidi.
Before recession, we were experiencing fairly buoyant
conditions. Much like everyone else in the industry I envisaged
that these conditions would continue for some time. It was
bit of a rude awakening when the market started tumbling and
our growth plans in the air cargo division which looked very
realistic at that time started looking very optimistic, he said.
Currently, our air cargo business contributes about 8 per cent
to our overall revenue, he added.
But does this mean the current gures could not stand up to
your nancial projections?
Well, the market is down and we cannot expect anything
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CovEr story
better, so we gave
ourselves a more realistic
target and were happy
weve successfully
achieved
that,
said
Al Jaidi.
But Im optimistic that this
region will come out of recession
quicker than others. We are already
seeing signs of recovery here and I
think that will continue.
Having said that one must also
realise that OIC is a hot performer,
our challenge will be staying
ahead of the game as we face new
competition, of both high and low
quality. We need to perform so we
can create opportunities rather than
waiting for opportunity to come, he
remarked.
StrategiesThe straight talking man is clear about his
mandate maintain healthy margins, expand reach and keep
business as usual.
But what does it take to achieve all this? A major reason for
his companys success, says Al Jaidi, is the belief ingrained in
the staff to be empathetic to customers. We want our employees
to rise to the expectations of our clients. Your body language,
facial expression, everything count.
We know that though it is important to get more new
customers each day, the majority of a companys success is due
to repeat business.
A company captures a larger market share by understanding
its customers and providing them with a consistent positive
experience. Through a customers interaction with the company
a relationship can be formed which may develop into high
loyalty to a brand and its organization. The more uniquely a
company positions itself and its product offering the better
chance there is for the rm to make an impression on the
marketplace.
He explained that the company constantly endeavours
to orient young employees who later go on to represent the
organisation.
When you train people, you teach and reinforce your
standards and values and processes and procedures so that
people are reminded about it and are enabled to deliver a better
experience to your customers, he reected.
I think that is the time when a customer needs special
care as he is already vexed with the problem on hand.
And that is the differentiating factor for a company
to market itself and to make a
permanent mark.
Besides, we have adopted
the approach of improvingquality rather than
reducing cost for cost
sake, stated Al Jaidi.
Plus, we
conduct seminars
and conferences
regularly to
keep our
e x i s t i n g
as well
as potential
customers well
informed of our
latest product/service
offerings. Actually, insurance
is a concept that everyone of this
region have started to leverage on recently,
but it will be a while before they realise the full potential,
he explained.
Marching aheadIt is said that an organisation must constantly be on the
move to remain successful. History is replete with examples
of companies that struggled to stay apace with the market,
which made promises they could not deliver and which failed
to capitalise on opportunities available.
Amazon founder Jeff Bezos once said that a brand image for a
company is like a reputation for a person. You earn a reputation
by trying to do hard things well.
And much like some people, some companies start out with
good enough intentions, but run out of steam owing to many
reasons: they cant stay faithful to their image, send confusing
or irrelevant messages to others, cannot reinvent themselves or
simply end up folding under pressure.
However, Al Jaidi understands the tricks of his trade too well
he knows to sustain and manage a companys reputation, one
has to manage the experience it offers. And the rst element
of that experience is the product/(s) after all, one cannot sell
bad products or services for long. To this add OICs unmatched
service levels.
Therefore, one cannot but agree that ultimately, it is sheer
consistency that wins the race.
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While the northern Emirate was not untouched by the global
nancial crisis, it has been kept relatively stable by more
prudent policies over the past years. By holding on to the
surpluses earned during the boom years and increased focus on
human capital development, Sharjah is on a steady growth path.
The Emirates air travel sector is clearly on a roll. The Airport
managed to grow signicantly by demonstrating high levels of
exibility and service excellence.
The Airport saw positive passenger development as numbers
reached 6.31 million passengers compared to 5.7 million in
2009, an increase of 9.41%. The statistics also show a growth
of 6.43% in aircraft movement from 61,451 ights in 2009 to
65,401 ights in 2010.
Air Arabia, the largest low cost airline in the region has
predicted an annual average passenger trafc growth of 14-15%
over the next four years and an increase in the number of routes
from 67 to 75 by the year end.
The Airport also has a strong-hold in the cargo sector and been
successful in maintaining its reputation for efcient handling
and on-time deliveries. Sharjah handled 360,094,718k of cargo,
up an impressive 46.51% compared to last year.
The UAE is traditionally a re-distribution hub and Sharjah
Airport nds itself well placed to capitalise on the various
opportunities and potential that exists. With its strategic
gateway location and clear and efcient regulations, the Airport
has positioned itself as freighter friendly.
One of the most unique features that distinguishes it from
the rest and wins new business is its adaptability and ability to
tailor its services to an airlines specic needs. This has brought
in major cargo carriers and then one step follows the other.
2010 was also a year of continued growth with several new
passenger and cargo contracts being secured. Mach Air Cargo
now operates a new route from Sharjah to Kazakhstan while
Thai Airways began operating a cargo service in October last
year with a weekly freighter schedule from Suvarnabhumi to
Schipol via Sharjah. January 1, 2011 saw Sharjah welcome
UPS 1562. Plus, Saudi Airlines Cargo Company (Saudi Cargo)
has chosen Sharjah Airport as its hub for freighter ights to
West Africa. Saudi Cargo is expected to operate 3 weekly
ights to Lagos, Nigeria and to NDjamena, Chad. The ights
will be operated with B747 freighters.
As Sharjah charts out its ambitious plans, Mr. Shashi
Panicker, Head of Freight Centre at Sharjah Aviation Services,
shares his thoughts on what made Sharjah emerge ahead of its
game. Heres an excerpt.
A lot of things work in synergy to pick up cargo
volume. What according to you has worked in
Sharjahs favour?
Sharjah Aviation Services at
Sharjah AirportNo stopping us now...
Sharjah Aviation Services at Sharjah Airport is going from strength to strength
and shows no sign of slowing down even during economic crisis.Chandrima Dutta reports.
Shashi Panicker, Head of Freight Centre at Sharjah Aviation Services
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airportairupdatecargo
18
Sharjahs productivity revolves around our exibility to do
business, our approach to customers and more importantly
knowing our customers businesses well. This enables us to
tailor manage and offer them a smooth handling process at an
affordable cost without compromising on mandatory standards.
In addition, I feel competitive pricing, and the service that
goes along with use of modern and state of the art facility and
equipment are denite advantages to our customers who choose
to operate from Sharjah. Our connection and cut off timing for
connecting freight within the Airport and between Airports adds
to our strengths.
Besides, we are served with a home-based carrier Air Arabia
which is prominent and outstanding both at passenger and cargo
uplifts. We also have a unique and dedicated handling facility
for livestock, which forms a large part of our commodity
movements. Much to our customers advantage, we serve a
wider range of trafc ow to Europe, Africa, the Middle East
and the sub continent, which are important buoyant markets.
Overall, user friendly technologies, greater connectivity, and
our efcient and friendly approach to business have helped us
cope with rapid growth and stiff competition.
What infrastructure facilities are you providing to
airlines and cargo handlers operating at Sharjah?
At Sharjah, we offer bonded warehouse facility to agents
allowing them to independently handle cargo making it easy,
cost effective and user friendly. In addition, Sharjah Aviation
Services offers larger storage facilities for additional and
oversized cargo as well.
Our cargo centre comprises of 5 terminals serving our
customer demand. This extends to 45,000 Sq meters of
handling facility.
Sharjah accommodates almost all of the aircraft including An124.
We are also able to accommodate A380 should the need arise.
How has the Airports performance been in terms of
cargo trafc in 2010?
Against an international slowdown in airfreight volumes,
Sharjah has remained a solid performer in recent years.
In 2010, we have managed to handle 360,094,718k of cargo,
up an impressive 46.51% compared to last year. Cargo trafc
spiked to an incredible 33,595,971k in August, historically one
of the busiest months at the Airport.
Outstanding on-time performance was achieved, consistently
exceeding 96% throughout 2010. 97.75% on time performance
was achieved in August 2010.
Besides positioning yourself as a key stop-off location
for airfreight being transferred between Europe and
the Far East, what other marketing activities are you
carrying out to spread awareness?
Our marketing efforts are focussed and targeted to our in-
house operators and scheduled carriers who operate in and out
of Sharjah. We have positioned ourselves as a company that
emphasizes personalised and timely service and market best
pricing.
While our research shows that this is already a great strength
Odd size piece loading at Sharjah Airport
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airupdatecargo
19
airport
of our organization, we seek to improve continuously in this area.
Plus, we operate relief cargo flights carrying medical
and humanitarian supplies to disaster-stricken areas
around the world.
Are you investing in technology/solutions to stay on
top of the game?
We have an in house smart cargo solution system, whichsupports our auditable activities in every/all areas of our
operation. The solution is C2K and EDI compliant and includes
all industry improvements that are brought forward offering
total system solution to all our customers.
How do you defend your position with neighbours
who are market heavy-weights such as Dubai and Abu
Dhabi Airports?
The sheer number of Airports in close proximity offering
somewhat similar services and facilities is something we have
to deal with regularly.
However, we pursue and service a niche market and our
facilities and operational advantages are there for the industry
to recognise. We focus on value creation and not on costs.
Your assessment of the impact of the global
slowdown on the air cargo industry and how can its
effects be minimised?
Recession has hit us all. But we have adjusted to the market
trend in understanding todays customer requirement both at
price and service. This has enabled us to sustain our position
and performance.
Are you reviewing security policies to avert the
recent incidents? Does this have massive nancial
implications?As a company we are conscious and very vigilant to all
security matters that come up and we follow instructions
given to us by the governing authorities that are very keen on
investments and improvements on security measures.
What are your plans for Sharjah Aviation Services
going forward?
Sharjah has been successful in maintaining its reputation for
efcient handling and on-time deliveries. The biggest challenge
this year would be to maintain and improve our service
commitment to existing customers.
Undoubtedly, infrastructure and resources will also need to
grow to cope with the continual increase in tonnage handled,
and we have a growth plan in place for that. Plus, this year would
see us investing more on our staff - our most important asset is
our employees their knowledge and expertise contributes to
growth and success of our organization.
Jointly owned by Sharjah Airport Authority and Air
Arabia, Sharjah Aviation Services is the one-stop-shop
for all cargo, ramp and passenger needs. No matter how
big, small or specic the requirement from transporting
perishable or hazardous goods to vulnerable cargo such
as equine or marine life, from warehousing to track and
trace or ensuring the comfort and safety of passengers
with the dedicated Hala Welcome Service and luxury
Lounges, Sharjah Aviation Services has it covered and is
working hard to propel its growth as a preferred destination
by airlines, cargo operators and investors worldwide.
To cope with increasing pressures of growing passenger
and freight volumes, Sharjah Aviation Services has made
substantial investments in purchasing new equipments
across all its operations including 35 tonne state-of-the-
art hi-loaders. New warehouse racking, increasing import
capacity by 35% and export capacity by 12% has been
installed, providing a dedicated dangerous goods storage
area in addition to a new customs delivery facility.
Sharjah Aviation Services has 1,950 highly competent
staff on hand 24/7/365 and the regions newest Ground
Support Equipment eet of more than 200 specialised
vehicles.
Perfectly situated for easy access to Port Khor Fakkan
on the Gulf of Oman and Port Khalid on the Arabian Gulf,
Sharjah Aviation Services operates its own Cargo Trucking
business and provides a fully intermodal air, land and sea
service globally.
Boasting the fastest turnarounds and shortest connection
times in the region - for both passenger and cargo
operations during 2010, Sharjah Aviation Services
handled 360,094,718k of cargo for major customers such
as Singapore Airlines, Martinair, Cargolux, Lufthansa,
Maximus and Egyptair Cargo.
Throughout 2010 Sharjah Aviation Services was an
active supporter of a number of relief efforts. Last year, it
waived the handling costs, including all landside and airside
charges, on two Martin air and one Atlas Air humanitarian
ights from Sharjah to Haiti and donations were also made
to the Red Crescent Society.
Work has commenced on a new AED 500 million CAT II
runway at Sharjah.
Fact File
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E-FrEightairupdatecargo
20
Freight forwarders need to see
realizable and signicant value added
to the airport to airport portion of the
air cargo supply chain before making a
commitment to e-commerce such as the
IATA led e-freight program, according
to a global survey of some 450 freight
forwarders conducted jointly by FIATA,
the International Federation of Freight
Forwarders Associations and TIACA
The International Air Cargo Association.
Freight forwarders from 84 countries
responded to FIATA and TIACAs poll
to ascertain their views on e-commerce
with the largest number of participants
from Australia, Canada, Egypt, India,
Netherlands, Pakistan, Singapore,
South Africa, Spain, Taiwan, United
Arab Emirates, United Kingdom,
United States, Vietnam and Zimbabwe.
According to the survey, some 55%
of respondents stated they were aware
of IATAs e-freight project yet less than
20% said they were participating in the
initiative.
Bill Gottlieb, Immediate Past
President of FIATA, who helped
lead the research, said, The initial
ndings clearly show a positive shift
in forwarders attitudes to e-commerce
with forwarders willing to invest
only if airlines do likewise. They see
themselves evolving and becoming more
recognized as the carriers customer in
the air cargo supply chain and pursuing
modernization of the documentary
process to entice them towards
technology led industry initiatives.
Whilst many positive messages
came out of the survey, it is clear that as
an industry we have much more to do to
make forwarders embrace e-commerce
in the air mode, as they have already
done successfully with land and marine
transport. With nearly half of the
forwarders claiming not to have heard
of e-freight, we have to nd ways to
reinforce the message. It is clear the
industry has to evolve to a new way of
doing business utilizing e-commerce but
we need to broaden the approach and
think outside of the box in terms of how
we embrace technology, he said. IATA
was successful in thinking outside the
box when it implemented paperless
ticketing, making life simpler for
passengers and less costly for carriers.
We have therefore asked IATA to
collaborate with FIATA to create a new
cargo documentary and data ow driven
by technology, to simplify the process
thereby eliminating an antiquated
process. This should also drive change
in the status of the forwarder and airline
relationship.
Gottlieb added, There is great
potential for companies to embrace
todays e-commerce standards so they
benet from the efciency and enhanced
customer service capability but we have
to focus on value added if everyone is
going to win in the future. Air cargo
remains woefully behind other modes
of transport in terms of e-commerce. We
know that for every industry it takes time
and investment to build momentum, but
right now there clearly isnt enough
value added to entice many airlines
and the wider international forwarding
community to come to the table.
Daniel Fernandez, Secretary General
of TIACA, said, The IATA led
e-freight program is clearly the most
signicant e-commerce initiative in
our industry, as highlighted by the
latest announcement that DHL Global
Forwarding and Emirates SkyCargo
are pairing up in a new project to
sufciently reduce errors and eliminate
tons of paper documents across their
networks by becoming the leading
implementers of e-freight. However,
the survey clearly shows that for other
forwarders around the world, we as
an industry still have a lot to do to
promote the full benets of trading
electronically and eliminating paper
from the air cargo process.
He added that the need to work
together with industry partners to
facilitate important new e-commerce
developments can also be supported
through the new global industry
advisory group being created TIACA,
FIATA, IATA and the Global Shippers
Forum (GSF).
Daniel Fernandez said, E-freight
is making some progress in terms of
moving the air cargo supply chain to
an electronic, paperless environment.
That is vital when you consider that
air cargo shipments can require as
many as 30 paper documents. This
unnecessarily slows the air cargo
process and is an undue strain on
resources. It is estimated that the
volume of paperwork that currently
accompanies airfreight shipments is
the equivalent of 7,800 tons, which
is sufcient to ll 80 747 freighters
annually. That isnt sustainable in
modern day business, particularly for
an industry needing to optimize cost
efciencies so as to remain competitive
and in prot.
We strongly support automation and
paper-free transactions and, as such,
TIACA endorses e-freight as a viable
means for achieving these goals for the
air cargo supply chain. Nonetheless, we
cannot ignore the feedback from freight
forwarders that completed the survey
and we want to share the subsequent
analysis with our industry partners to
see how we can make e-commerce more
viable and an even bigger priority for all
players in the air cargo supply chain in
2011. Everyone needs to see how it is
going to lower their costs and improve
their efciency.
Forwarders need to see greater benet
beore they embrace E-commerce with air
carriers, says FIATA/TIACA survey
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E-FrEight
IATA e-freight is an industry-wide program that aims to reduce the use of
paper documents in the airfreight supply chain by moving to a simpler, paper-free, electronic environment. It involves among others: airlines, shippers, freight
forwarders, ground handling agents, and customs authorities.
Target for 2011:
Focus is now on volume: 100% e-freight by 2015
Benets:
Industry cost savings of up to $4.9 billion annually
Speed: reduction in transfer time by 24 hours
Accuracy: Electronic documents eliminate manual entry errors
Visibility: Electronic messages allow for online tracking and tracing
Better for theenvironment: IATA e-freight will eliminate more than 7,800 tonnes of paper documents, the equivalent
of 80 Boeing 747 freighters lled with paper.
Status:
The project is aligned with WCOs and UNs global e-customs initiatives
IATA e-freight business process, standards, and documents developed
39 live IATA e-freight locations
Austria, Australia, Belgium, Canada, Chile, China, Chinese Taipei, Czech Republic, Denmark, Dubai, Egypt,
Finland, France, Germany, Hong Kong, Hungary, Iceland, Japan, Luxembourg, Malaysia, Malta, Mauritius,
Netherlands, New Zealand, Norway,
Romania, Singapore, Slovakia, Slovenia, Spain, South Korea, Sweden, Switzerland, Thailand, UK and USA
894 live major airports
A commercial vendor community has been established to support the IATA e-freight vision, pilots, and e-messaging
quality measurement
IATA e-freight Handbook, the comprehensive guide to IATA e-freight, now published and available online
20 documents have been replaced by electronic messaging standards
Savings:
Up to $4.9 billion per year when fully implemented
Fact sheet IATA e-reight
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22
What if you need to send an important
package quickly to a recipient you may
have forgotten about?
And what if you are confronted with
a set of conditions or a particularly
intimidating set of logistical challenges?
Or, working under constraints of a tight
schedule that allows almost no room
for error? Well, the global leader in air
freight, DHL is the name which can get
onto its feet and get the impossible done.
The company, with all its innovative
initiatives has taken the air freight and
express service to a different level.
DHL can organize scheduled ights and
chartered planes from a wide range of
major carriers, as well as competitive
services on its own carrier, making it
exible enough to help everyone from
rst-time shippers to regular importers
and exporters of freight.
From serving only documents during
the 70s, DHL now caters to more
complex requirements involving heavier
weight shipments, real time track and
trace, customer automation, guaranteed
transit times and consignee-sold range of
services.
A global network composed of more
than 220 countries and territories and
300,000 employees worldwide, the
company offers customers superior
service quality and local knowledge to
satisfy their supply chain requirements.
Though a global name, Think
globally, but act locally is what DHL
has always practised. And this has not
only enabled the company to spread
extensively across the region but also
reach the pinnacle of success in the UAE.
This is the sentiment that was reected
in the statement made by DHL UAEs
Country Head, Frank Ungerer, when he
said, At DHL, we form partnerships that
respond to the unique needs of the UAE
customer - partnerships that can draw
from the global resources of DHL and
years of experience.
The No One Knows campaign
focuses on DHLs expertise in combining
global leadership with local expertise to
help businesses across the region grow
and capitalize on the economic recovery.
Not that Ungerer is peddling any of
the usual clichs underlying the success
of the company he was unravelling the
truth behind DHLs local success.
Up until three decades ago, DHL was
little known in the UAE. However, the
company catapulted to success soon
after. Clearly, Y 2010 though not a good
one for UAEs some business sectors due
to the global meltdown, was not that bad
for the express giant.
Robust performance
amidst gloom
The impact of the economic downturn
reached the UAE later than other global
markets and we observed that the effects
were also less dramatic. In our industry,
we saw signs of a slowdown starting at
the end of the rst quarter of 2009, and
picked up the rst signs of a potential
recovery as early as the fourth quarter of
2009, he said.
Right place, right time
DHL UAEs Country Head, Frank Ungerer
Global heavyweight DHL continues its growth as a trade facilitator as
companies move to establish inventory and distribution hubs in the UAE.
Chandrima Dutta reports.
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intErviEWairupdatecargo
24
Today, economic recovery is gaining
momentum in the UAE with the country
expecting to grow GDP between 3
to 3.5 percent in 2010. Despite these
encouraging statistics, the country
continues to be cautiously optimistic
about the outlook.
Another key factor in the 2010 success
story was DHLs focus on its strategic
role as a trade facilitator. The UAE has
a strategic position in the Middle East
and is set to cement a signicant role as a
regional distribution hub.
Foreseeing growing demands from
businesses, DHL has already expanded
its air network with a new Aerologic
connection linking the UAE to China, the
fastest growing trade partner of the UAE.
As far as the UAE is concerned,
companies are increasingly interested in
expanding market share in here. Going
by that, we are anticipating an uptake
in demand for logistics support as
companies move to establish inventory
and distribution hubs in the UAE.
For example, high tech multinational
companies are increasing their investment
in Dubai both as a distribution point
into the GCC as well as a hub linking
Europe/Asia supply chains. DHL has
long established capabilities to manage
the growing logistics demands from the
technology sector, explained Ungerer.
Plus, motivated people are key to
the success of our business and our
employees are all fully engaged and
driven to offer the best possible service
to our customers. This is particularly
evident when you look at the results of
our Employee Opinion survey which
continue to show marked improvements
in employee satisfaction levels year on
year, he added.
Speaking on the fate of Middle East air
cargo industry, Ungerer said, Although
2008 2009 was a difcult time for air
freight in all regions, Middle Eastern
airlines bucked the general industry trend
in 2009 with a freight growth of 3.9%.
It was also the rst region to pull out of
contraction by exhibiting FTK* growth
in July 2009. By December, the region
had carried 7% more air freight than in
early 2008.
In the rst quarter of 2010, Middle
Eastern airlines beneted from regional
economic growth and enjoyed robust
freight growth. By June, regional carriers
had grown at an annualized rate of more
than 30%. As 2010 came to a close,
they carried 14% more freight than pre-
recession levels. Even as some developed
economies continue to struggle in the
face of sluggish consumer demand, the
emerging markets continue on its uphill
trajectory which is likely to support end
demand, and therefore trade.
As the global nancial crisis became
synonymous with a manufacturing
crisis, the Middle East, which is more
of a conduit for goods exchange and
re-exports rather than a manufacturing
centre, was somewhat cushioned from
the effects of the global recession. The
existence of the GCC Customs Union
which facilitates trade between GCC
states, coupled with an increasingly
bigger number of exporters in Dubai kept
exports buoyant in 2009.
While the UAE continues to drive
growth and act as a regional logistics hub,DHL has achieved signicant milestones
across the region. This includes
the strengthening of infrastructure
capabilities in Oman and Lebanon,
and industry recognition of service
excellence and contribution to the region
as a partner of growth in Jordan, Turkey
and Morocco.
While remaining the undisputed
market leader in the Middle East,
DHL has strengthened capabilities
with investments and enhanced
service offerings for customers. As a
facilitator of trade, DHLs position has
been bolstered by the global economic
recovery which is gradually spreading
throughout the region.
The emerging markets are also
expected to continue on its uphill
trajectory which will support end
demand, and therefore trade, he said.
Further challenges
Though 2010 was a good year for the
company, it has to deal with some obvious
problems to see itself permanently in
green.
Currently, security has been a primary
concern for all air cargo operators.
Security is a top priority within DHL
and our in-house security measures
have always been very robust. As a
consequence we have not had to make any
major changes to our physical processes
to comply with the new rigorous freight
screening or reporting regulations issued
by the TSA in the US and various EU
countries. The majority of our airside
facilities around the globe are already
TAPA certied, which indicates our
existing investment in cargo security.
As such, DHL has not had to invest a
massive amount of capital to comply, due
to our previous and ongoing investment
in security, which has limited the cost
impact on our business, said Ungerer.
As a truly global and major
stakeholder in the airline and airfreight
market DP DHL is proactively working
with all stakeholders to see how our
experience can positively contribute
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intErviEW
towards making airfreight movements
safer today and in the future. Sufce to
say, in this regard we are fully compliant
with all global screening and reporting
protocols with regards to moving freighteither on our own eet of aircraft, or
when using commercial carriers to move
freight.
Talent crisis remains to be a major
challenge even during the worst of economic
times. Though market conditions are such
where the jobs are almost not available,
attracting and retaining qualied personnel
remains to be a major issue. According
to Ungerer, There may be fewer jobs
currently so employees are perhaps pleased
with the status quo, but not necessary loyal
and engaged. That will not last long and the
moment the economy sees a slight upturn
(which we are already seeing in the Asia
Pacic region), it is these employees that
will be in high demand. Employers that
are seeing positive growth indicators
are recruiting ahead of the curve and
using this opportunity of not having to
compete for talent to get key employees
into their business.
Organizations that have been complacent
and ignored retention strategies in tough
times will have a high cost to pay in the long
run. As leaders, we cant be thinking only
of the current situation. If a company has
to come out of this recession stronger and
ready for the future they will only be able
to do it with their best people. Therefore the
retention and recruitment talent challenges
should be top of mind for all managers.
You always hear of companies saying that
employees are their most important asset.
But how many companies actually walk
the talk and more importantly value and
nurture the talent in their organizations. I am
very proud that one of the pillars of DHLs
strategy focuses on Motivated Employees
which encompasses retention, attraction and
development of talent within the network.
This will give us the leverage and skills
needed to take us into the future.
Customer service
at its best
On the other hand, customer needs have
become increasingly sophisticated over
the last three decades. DHL has invested
signicantly in the development of wide
range of service offerings, facility expansions
and more presence in retail outlets.
Listening and responding to the needs of
our customers is a critical success factor for
DHL in the UAE, stated Ungerer.
In October 2010, DHL partneredwith Dubai Customs to launch a new
and improved programme aimed at
modernizing customs procedures in
Dubai. The new customs clearance
platform, called Mirsal 2, will create a
simplied and more transparent customs
clearance process for customers, and
will reduce costs as well as the time
spent processing shipments in and out of
Dubai.
DHL has also expanded its presence
in the UAE with the opening of a retail
service point in Mirdif City Centre. The
new service point ensures that DHL
continues to meet the growing logistics
needs in the UAE by offering increased
accessibility for its customers. DHL
currently operates 23 service points
across the UAE.
Going Forward
In 2011 we will offer more services
and solutions for the SME sector. We
have recently partnered with the Dubai
Government Export Council, which has
allowed us to communicate and build
more effective relationships with the
SME sector across the UAE. Our aim is
to not only inform them of our products
and services that will ultimately help
grow their businesses, but also make
them aware of important customs and
industry related news that may impacttheir businesses.
In addition, we will also continue to
look at ways in which to improve our
service offering, offering our customers
with the choice and convenience they
expect, and deserve. DHL has been
a leader in the Middle East logistics
industry for the past 30 years through
our innovation, service excellence and
commitment to providing customers with
superior logistics solutions.
Middle Easts freight growth trends
have returned to pre-recession patterns
and the region is likely to enjoy freight
growth through 2011, albeit at levels
lower than at the initial stage of economic
recovery in 2010.
Additionally, the Middle East
and North Africa (MENA) region is
forecasted to grow 4.3% in 2011 while
GCC states are expected to grow nearly
5%. As more Middle Eastern countries
continue to focus on non-oil industries
and develop export-oriented economies,
we can expect air freight growth in the
region to remain strong.
*FTK freight tonne kilometer
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As the global freight business is poised
to continue its strong recovery UPS is
feeling pretty condent. The company is
upbeat about its performance last year,
as more companies in the UAE began
outsourcing their logistics to enhance
efciency and enable them to focus on
their core competencies.
UPS got off to a strong start in 2010.
The company saw increased activity at
its brokerage/import operations in Abu
Dhabi Cargo Village and brought itssuperior customs brokerage services to
customers in Abu Dhabi and Fujairah,
in addition to the Dubai gateway.
Abu Dhabi operations were equipped
with DIAD IV technology to ensure
maximum exibility in eld transmission
capabilities and connectivity options.
DIAD IV was the rst such device
in the industry to incorporate Global
Positioning Satellite (GPS) technology.
2010 also saw us introduce Import
Control it enables customers to further
their reach in the global marketplace by
allowing one party to be in control of
inbound shipments, wherever they are
initiated. This minimises delays that can
be generated by communications, billing
or commercial invoice reasons and thus
reduces potential costs to the customer in
both time and money, said John Tansey,
General Manager, UPS UAE LLC.
We also signed a memorandum of
understanding with Dubai Customs in
October supporting Emersal 2, business
to government initiatives. The agreement
enables UPS to submit all customs
declarations through its internal ITsystem, pre-clearing packages before
they physically arrive in the country. This
increases the speed of UPS shipments to
market, by obtaining electronic clearance
from Dubai Customs whilst the package
is still en route, thereby streamlining the
processing of the package once it has
arrived in the UAE.
In addition, we launched a new global
communications platform to demonstrate
the full extent of its logistics capabilities.
The theme, We g Logistics,
reects UPSs passion for deliveringtransportation and supply chain solutions
that can help businesses better compete
in the global marketplace.
Globally, resumed growth in
industrial production and international
trade is increasing demand for UPS
transportation services. Recent results
reect an improving global freight
environment with demand across the
business segments improving. In the
rst nine months of 2010, UPS achieved
global revenue of $36.1 billion as
compared to $32.9 billion in the same
period of 2009 (an increase of 9.7%),
while net income was up 69.8% globally
as compared with the same period last
year. In volume terms, UPS globally
delivered an average of 14.4 million
packages a day, a 3.8% increase in the
rst nine months of 2010 as compared
with the same period in 2009.
This is backed by more than a century
of experience as UPS continues to deliver
logistics solutions that help businesses
get their products to market rst, gain
operational and cost efciencies, and
improve customer loyalty, said Tansey.
Inventing ways to successUPS has more than 100 years experience
Innovation and qualitypay o or UPS
John Tansey, General Manager, UPS UAE LLC
by Chandrima Dutta
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intErviEW
in this business. We stared out in 1907 as
a messenger company in Seattle, and have
grown into the worlds largest package
delivery company and a global leader in
logistics services. We achieved this growth
precisely through a philosophy of service
excellence which remains a pillar of UPS
culture to this day.
However, without constant nurturing
and reinventing, any company would fail
to strike a chord. So how has been able
to sustain itself over time? Its nothing
but service excellence, said Tansey. And
how do you achieve that?
By using our integrated global
transportation network, unique in the
industry; by offering a broad portfolio
of products that ensure each and every
package or freight shipment gets the idealservice level; by making the necessary
investments to ensure our eet and assets
are up-to-the-minute, ready to respond to
the needs of our ever-growing customer
base around the world; by making use
of the most sophisticated technology
to power our services and to provide
our customers with complete visibility
of their shipments; and perhaps most
importantly, by investing in our workforce
of more than 400,000 committed UPS
employees who make delivering service
excellence their priority each and every
day, explained Tansey.
We also offer a range of products
for the transport of packages (up to 70
kg) and freight (more than 70 kg). This
exibility means UPS customers can
always nd the right service option fortheir shipments, and we can adapt to our
customers changing requirements over
time. Global trade is here to stay, and as
world markets move closer together, UPS
will be there to facilitate that trade.
Working its way through
recessionJust like everyone else, UPSs business
was affected by the global economic
downturn in 2009, in the Middle East
and beyond. We remained competitive
by continuing to do day-in and day-out
what we have always done: provide the
most reliable and most efcient service to
customers globally in the transportation
industry. We also made the necessary
investments to ensure we emerged from
the recession stronger than ever, he said.
One of the reasons why UPS has
weathered all the recessions in its 103-year history is that we have always
focussed on the same key principles
reliability, efciency, speed, value and
customer service. In this respect we dont
feel our industry has changed much in the
last century, let alone the last few years.
But now, as we enter 2011, we are
denitely looking forward rather than
behind. Our global nancial results
for the rst three quarters of 2010 (last
quarter earnings due February 1st) have
been very positive indeed, so were
optimistic about the future of our industry
everywhere we operate, including the
Middle East. Global trade is here to stay
and as the global economy recovers,
UPS will be there to help its customers
take advantage of new opportunities.
Speaking on the Middle East as a
market Tansey said, While we dont
make public country-or region-specic
growth gures, the Middle East is an
important market for UPS, where we
see much potential. We are committed
to growing our business here, as we are
to growing the business globally, and
we are condent that UPS is in a great
position to achieve those goals.
We believe the industry has
bright prospects in the Middle Eastand beyond. Economic growth will
resume, with global trade leading
the way, and UPS will be there to
benet from and help promote this
growth. We have a diversied, global
product portfolio thats helping us take
advantage of growth opportunities. And
UPS employees around the world are
working diligently to help our customers
compete in the global marketplace.
World markets are moving
inexorably closer together, and as
long as people wish to trade acrosscountries and continents, companies
like UPS will be there to provide
that service and help their customers
prosper, Tansey concluded.
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sECurity
Giovanni Bisignani, IATAs Director General and CEO
By close of last year, the International
Air Transport Association (IATA)
called on security regulators around
the world to work together to make
the skies more secure by addressing
the challenges related to cargo
security and data collection. IATA
also unveiled plans to lead a global
effort to build an airport checkpoint of
the future, which will tighten security
and ease passenger hassle.
We are much more secure than
in 2001, but there is room for
improvement, said Giovanni Bisignani,
IATAs Director General and CEO.
Bisignani identied several areas where
more progress is needed to further
improve aviation security:
Cargo Security: The events in
Yemen have put cargo security at the
top of our agenda. Air freight drives
the world economy. The products that
we carry represent 35% of the total
value of goods traded internationally.
In 2009, airlines carried 26 million
tonnes of international cargo. By 2014,
that will increase to 38 million tonnes.
Transporting these goods safely, securely
and efciently is critical, said Bisignani
who commended all the governments
for their swift, coordinated and targeted
response. Bisignani noted four principles
to drive air cargo security programs.
Supply Chain Approach: Theentire supply chain, from manufacturer
to airport, has a responsibility for secure
shipments. The supply chain approach
must be driven by government and
industry cooperation on investment,
processes, technology and risk
assessment. Many countries, including
the UK and the US, have advanced
supply chain solutions. The industry
is committed. IATAs Secure Freight
program is helping to promote this
critical component of our cargo security
efforts, said Bisignani.
Technology: Airport screeningcannot be our rst line of defense but it
is an effective complement to intelligence
and supply chain solutions. Currently, there
is no government certied technology to
screen standard size pallets and large items.
There is some promising technology but
it is taking far too long to move from the
laboratory to the airport. We must speed up
the process, said Bisignani.
Vision or Intelligent Aviation Security -
Coordinated Response on Cargo Security
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E-freight: IATAs e-freight programgives governments an important
information tool. By converting some
20 freight documents to an electronic
format, we are improving efciency andproviding the tool for accurate insight
into who is shipping what and where. As
the industry increases e-freight volumes,
governments must expand the use of
e-freight from inbound shipments to
outbound as well, and use this data to
intelligently manage freight security,
said Bisignani.
Risk: Industry has cooperated withgovernments to help mitigate risks
identified through their intelligence
operations. But effective solutions
are not developed unilaterally or in
haste. We have seen many cases where
these have unintended consequences.
It is still early days. Industry is
cooperating with government
directives on targeted actions for
Yemen-origin cargo. If there are any
longer-term adjustments required,
we must do so with all the facts in
hand with measures targeted to meet
specific risks, said Bisignani.
Checkpoint of the Future:IATA called on regulators and
industry to collaborate to modernize
the 40 year old airport screening
process. IATA has a short and long-
term vision for the next generation
checkpoint. In the short- term, IATA
is already working on concepts and a
new process.
Belts, shoes and
shampoos are not
the problem. We
must shift the
screening focus
from looking for
bad objects to finding terrorists. To do
this effectively, we need intelligence
and technology at the checkpoint.
The enormous amount of data that
we collect on passengers can helpgovernments to identify risks. The
overall process must become much
quicker and more convenient. It is
not acceptable to treat passengers as
terrorists until they prove themselves
innocent, said Bisignani.
My long-term vision is for
passengers to be able to get from
the entrance of the airport to the
door of the aircraft in a seamless
and uninterrupted process, said
Bisignani.
Standardize Data Collection:Data is critical to aviation security as its
effective use helps governments to vet
travelers and identify threats. Through the
International Civil Aviation Organization
(ICAO), governments agreed to global
standards for data elements and a
process to collect that information. Not
all governments follow the standards
which are adding to the $5.9 billion that
airlines spend annually on security. It
takes about $1 million to build systems
for each country with a non-standard
data requirement. Adding just one non-
standard element to data collection
is a $50,000 system cost. Bisignani
highlighted concerns about new data
requirements in India, China, South
Korea and Mexico. All these exceptions
consume money and resources but none
improve security or border control.
The challenge is to work with
governments
t o
implement harmonized standards, said
Bisignani.
IATA presented ve recommendations
based on these principles:
1. Implement formal consultation
with all airlines including non-US
carriers
2. Rene existing emergency orders
to address the international
environment
3. Streamline the data collection
process
4. Strengthen government to
government outreach for greater
harmonization and coordination
5. Start developing a next generation
checkpoint
Dening coordinated security
responses with collaboration between
industry and government have made
more progress in the last one year than
at any time since the tragic events of
2001. Governments and industry are now
aligned with a common goal. We must
use this momentum to move from words
and agreements, to actions and results,
said Bisignani.
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