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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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airupdatecargo

3

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

BHUTAN INDIA PAKISTAN SRI LANKA NEPAL

PO Box: 9604, SAIF Zone, Sharjah - UAE

Tel: +971 6 557 9579, Fax: +971 6 579569,[email protected]

www.7dimensionsmedia.com

Chief Editor

Chandrima Dutta

[email protected]

Creative Director

Yoosuf Hamid

[email protected]

Head - Sales & Marketing

Israr Ahmad

[email protected]

Production Head

Zainul Abedeen

[email protected]

Research & Market Development (RMD)

Jamal Ahmad

[email protected]

Photographer/s

Shanawaz

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.

WORLDWIDE MEDIA REPRESENTATIVESFrance, Belgium, Monaco, Spain:Aidmedia, Gerard Lecoeur; Tel: +33 (0) 466 326 106; Fax: +33 (0) 466 327 073India:RMA media, Faredoon Kuka;Tel : +91 22 5570 3081; Fax: +91 22 5570 3082Taiwan:Advance Media Services Ltd, Keith Lee;Tel: (886) 2 2523 8268; Fax: (886) 2 2521 4456Thailand:Trade and Logistics Siam Ltd, Dwight A Chiavetta;Tel: +66 (0) 2650 8690; Fax: +66 (0) 2650 8696UK, Ireland, Germany, Switzerland,Austria: Horseshoe Media, Peter Patterson; Tel: +44 208 6874 160

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

[email protected]

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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ContEntsairupdatecargo

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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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World nEWsairupdatecargo

6

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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8

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


International freight tonnes,2009


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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airupdatecargo

9

World nEWs

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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10

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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airupdatecargo

11

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


14/5214

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


15/52

airupdatecargo

15

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.


16/52

airportairupdatecargo

16

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


17/52

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18/52

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


19/52

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


20/52

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


21/52

airupdatecargo

21

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


22/52

intErviEWairupdatecargo

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.


23/52

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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


25/52

airupdatecargo

25

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


26/52


26

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


27/52

airupdatecargo

27

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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29/52

airupdatecargo

29

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


30/52

sECurityairupdatecargo

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.


31/52

MIDEX AIRLINES

Operates from the UAEAirports. Our home base and main hub for our international

Air Cargo andAir Charter operations isAlAinAirport.

Operates Six (6) A300B4-203Fwith a capacity of 44,500 Kg each.

Operates Three (3) B747-200F(Nose Loader) with a capacity of 108,000 Kg each.

Transports dangerous goods, valuable cargo, deep freeze food and fruits and vegetables.

For any charter requirements, please contact us directly at:

Call: +971 50 2730020 or E-mail us at [email protected]

*PS We offer Regular Charters to Iraq andAfghanistan

Email: [email protected]: www.midexairlines.com

PO Box 9636, Dubai, UnitedArab EmiratesTel +971 4 2146808, Fax: +971 4 2146809

Itsontimeoritsonus!

CharterServices

ScheduledServices

CourierServices

Relief andAid Project

LogisticsSolutions

ACMIServices


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nEWs - MiddlE East & aFriCaairupdatecargo

32

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