Wednesday, 14 March - Travel Management … MAN FFM DEP RCTFlight Acceptance Documentation Warehouse...

Wednesday, 14 March

OPERATIONS TRACK

CHAIRMAN’S OPENING REMARKS

Joseph (Chris) Notter, Head of Cargo Handling, Hub & Network,

Etihad Airways Track Sponsor

WELCOME ADDRESS Tom Choi, Chief Financial Officer,

Cargo Airport Services Track Sponsor

Operations Track “4C” the way forward through

Coordination, Cooperation, Collaboration and Compliance

Welcome Address

By Tom Choi Chief Financial Officer

Cargo Airport Services

The Stakeholders

Air Cargo Logistics Chain •Airlines/GHA/GSA

•Customs

•Forwarders/Shippers

Business Pain Across the

Supply Chain

Manual Processes

Multiple Systems

Paper-Centric

The Costs of Complacency

• Regulatory Non-Compliance Repeated Human

Errors

• Weakened Competitiveness Low Productivity

• High Operating Costs No Cross-Utilization

of Labor

• Poor Customer Service Poor Visibility

e-freight, C2K and Beyond

• Replace Papers with Electronic Messaging

• “You-See-What-We-See” C2K on Real-Time Event

Occurrences

• Reduce Costs While Increasing the Speed of

Cargo Cycle

• Improve Service Quality and Information

Reliability

• Automate SLA/Regulatory Compliance

World Cargo Symposium – 13 – 15 March 2012

Try a Little Tenderness ↗ Panelists

» Chuck Zhao, Process Engineer, Cargo Airport Services

» Vida Shaver, IT Manager, Cargo Airport Services

Process Innovation & Paradigm Shift

e-freight Platform Initiatives

Presented by Chuck Zhao

Process Engineer


• Capture data from the source

• Provide real-time cargo visibility

• Make the settlement process online


Defying and replacing old, outdated ways of doing business with emerging, entirely new business models to transform our business organization

IATA Msg Platform

Airline

FWDR

Broker Trucking

GHA

• Personnel

• Adoption of the process changes

• Multi-tenant warehouses

• Infrastructure

• Recurring Training Costs

Challenges

The Right Approach

• People-centric process

• Easy to follow

• Little to train

• Fun to use

• Simplified tasks for the warehouse

• Leveraging IATA C-IMP

• A quest to make everything very simple

Web Portals Provide

A Web-based enabler for airlines, forwarders and brokers.

• Track and Trace

• Auto-notification

• Online Payment

• Dash Board & Ops Reports

• SLA Compliance

• Integrated FWB/FHL/AES

Generation

• Multiple forwarders user base

• Shipment Info of multiple

Airlines

• Access to cargo information

from anywhere at anytime

• Meeting C2K compliance upon

real time event occurrences

• Faster cargo retrieval and

acceptance

Forklift Portals Provide

A Mobile Warehouse Management System using touch pads to run

the in-house cargo warehouse operating system to connect cargo

and data together, optimizing the processes between the

documentation department and the warehouse.

Mobile Op Modules

• Acceptance

• Buildup

• Breakdown

• Delivery

Virtual Flight Manager

MOD Shift Management

Dock Management

RCS

MAN

FFM

DEP

RCT

Acceptance Documentation

Warehouse

Data

Entry

FWB

Check Coupon

Cash

Export

Tally Pre

Alert

Load

Advice

Notify

Line

Haul

TSA

Form

Copy

Trucker

ID

ULD

Buildup

Sheets

DG

Check

list

Send

FFM/

DEP

Pallet

Dump

Send

MAN

Flight

Folder

Flight

Pouch

Drag

Sheet Check-

off List

Send

RCS

AWB

Manifest

Fax

AWBs

Turn

Over

Sheet

Gen

Dec

Drop

Receipt

Export

Mobile Warehouse e-freight Platform

Traffic AMS Documentation

Warehouse

Pick-up

Order

Receipt

Import

Tally BCL Discrep.

Report

X-fer

Pre-

alert

Inventory

Report

G.O.

List

IRP

Report

Incident

Report

C2K

FSU*

Flight

Folder

C2K FSU*

RCF – Freight Recd

NFD – Notification

AWD – Doc Delivered

DLV – Freight Delivered

DIS - Discrepancy

RCF

NFD

AWD

DLV

DIS

Import

Carrier

Cert.

Check Coupon

Cash

Carrier

Cert.

Copy

Custom

Rel.

Copy

Trucker

ID

Mobile Warehouse e-freight Platform

T 1 AL 1

AL 2

AL 3

T 3

AL 4

AL 5

AL6

Data Center

Operation Consolidation e-freight Platform

Call Center

New Ops Model Benefits

• 100% cargo visibility – “You See What We See”

• One shipment record for everyone and every time

• e-freight ready

• Capturing C2K event at time of occurrence

• Time and cost savings for everyone

• Happier customers and, yes, happier employees


Presented by Vida Shaver IT Manager


Process Innovation & Paradigm Shift

Mobile Warehouse in Action

LEADERSHIP INNOVATION EXPERTISE

Integrated Application Platform

AL/Forwarder

Portal

Online settlements

Auto-notification

Online documents

Real-time freight status

Check-in

System

Acceptance/Delivery

Bar-coded doc scanning

Trucker waiting feed to WH

Flight

Management

Mobile

Warehouse

• Dashboard view

• Real-time Flight status by AWB & ULD

• Discrepancy tracking

• Acceptance

• Buildup

• Breakdown

• Delivery

• Real-time status updates

• FSU Msging

Today’s Demo

Acceptance

Acceptance

Acceptance

Acceptance

Build-up

Build-Up

Build-Up

Build-Up

Build-Up

Breakdown

Breakdown

Breakdown

Breakdown

Breakdown

Delivery

Delivery

Delivery

Delivery

Delivery

Managed self-service

Load balancing the dock

WH Mgmt / Comm

Airline portal

Cloud Features

Forwarder Collaboration

Modules

Social network

Airline

FWDR

Broker Trucking

GHA

More “4C” opportunities …


Oh Where oh Where can my Package be?

↗ Moderator: » Steve Hill, Product Development Manager, CHAMP Cargosystems

↗ Panelists: » Mark Gilbert, Manager Postal Affairs, American Airlines

» Christophe Eggers, Manager Supply Chain Facilitation, Le Groupe La Poste

» Vida Shaver, IT Manager, Cargo Airport Services

» Marcel Fujike, Vice President Product Management & Business Development Global Airfreight, Kuehne + Nagel


Networking Coffee Break Sponsored by

RISKS IN TEMPERATURE – CONTROLLED DISTRIBUTION

Shirley Ann Feld, Global Quality Supply Chain Deputy Director,

Sanofi-Aventis Track Sponsor

Risks in Temperature Controlled Distribution for Room Temperature Products Shirley Feld Global Quality Supply Chain Erik van Asselt MSD, PDA PCCIG EU Branch Leader

Global Quality - a shared will | 47

Sanofi Group Profile

● One of the leading pharmaceutical companies

● 2010 sales more than € 30 billion

● World leader in vaccines

● 105.000 employees in more than 110 countries

● Ca. 17600 employees in R & D


Production sites worldwide

Kawagoe Seoul Peking

Hangzhou Tongi Karachi

Wah

Bandung

Jakarta

Jurong

Ho Chi Minh City

Ankleshwar

Goa Dakar

Oued Smar Tunis

Megrine

Cairo

Cyprès Zenata

Ain Sebaa

Riells Alcobendas

Alcorcon Loures

Anagni Brindisi

Scoppito Garessio Mailand Origgio

Csanyikvölgy Ujpest

Veres Fawdon

Holmes Chapel

Dagenham

Frankfurt Köln

Guadalupe

Guarenas

Cali

Guatemala City

Ocoyoacac Cuautitlan

Kansas City

Saint Louis

Laval

Waltloo

Suzano

Romainville Elbeuf

Le Trait

Grange St.-Clair

Vitry

Ploermel

Tours

Ambarès

Mourenx

Colomiers

Compiègne

Maisons-Alfort

Amilly

Quétigny

Neuville sur Saône

Vertolaye

Sisteron

Aramon

Lisieux

http://immedia.sanofi-synthelabo.com/aff_indus/sites/sitespharma/guadalupe/accueil_guadalupe.htm












More than 100 sites worldwide*

•80 Production sites

30 R&D sites

44 Distributions centers in 31 countries


Therapeutic Areas and Major Products

Cardiovascular

Diabetes

Thrombosis

Oncology

Central Nervous System

Internal Medicine

Vaccines

OTC

Generics (Winthrop)

Grippeimpfstoffe; Impfstoffe gegen Polio, Keuchhusten, Hib;

Meningitis, Pneumonie; Auffrischungsimpfungen für Erwachsene;

Impfstoffe für Reisende; sonstige Impfstoffe

Risks in Temperature Controlled Distribution for Room Temperature Products Shirley Feld Global Quality Supply Chain Erik van Asselt MSD, PDA PCCIG EU Branch Leader


Risks In Air Freight for RT Products

●Contents

● Risks

• Identification of potential risks for distribution of

temperature sensitive pharmaceuticals

and other goods

• Case examples

● Possibilities for risk mitigation


Risk Identification

●Risks leading to temperature excursions

● Loading/unloading times

● Wrong storage temperature

● Wrong freight hold

temperature

● Changes in flight plans:

• delay

• technical problems

• cancellation

● Wrong destination

● Split shipments

● Offloading

● Stopovers

● Security checks

● Customs checks

● Weekends, bank holidays

● Handling

● Strikes


Risk Identification

Loading times

i.e. how long goods

are outside on the

apron before being

loaded

e.g. Frankfurt Airport

2 to 3 h

3 to 6 h

6 and more


Risk Identification

Departs

shipper

Departs

Roissy

Storage WH Roissy

Stored outside

at Frankfurt on

airfreight pallet

“Room” temperature goods, offloaded, waiting 4 days total

Flight to Brazil

Airport WH Brazil

Unloaded in Brazil

Consignee WH

Frankfurt airport

weather +23°C

TT data from

6 of 31 pallets:

31 pallets > +30°C

24 pallets > +40°C

16 pallets > +50°C

9 pallets > +59°C

Stability data to +50°C

Loss € 550 000

25.0

15.0


Risk Identification

What happened here?

Stopover in

Doha, Qatar


Risk Identification

Handling of room temperature products during stopover

Pallets of

tablet blisters

Frankfurt

to

Saudi Arabia

T°> +70°C

Stopover on apron

Doha Qatar

Flight

Flight

WH airport

Jeddah

Tarmac

WH airport

Transport

Consignee

WH


Risk Identification

Airfreight pallet

Probable cause: direct sunlight greenhouse effect


Risk Identification

Blister after manufacture

before oven treatment

Blister after 30 min. at

+70°C in oven

Deviation Investigation

Probable cause: direct sunlight on plastic wrapped pallet on tarmac Immediate solution: direct flight Frankfurt to Jeddah


Risk Identification

Stopover + Unloading

Air freight shipment from Paris to Saudi Arabia via Bahrain

Paris

Bahrain

Riyadh

flight

Riyadh

Bahrain

Paris

max 58.2°C

Zoom


Risk Identification

Loading/Stopover - Air freight shipments from China to Frankfurt

Temperature maximum

63°C, 68°C, 80°C


Risk Mitigation

Domestic carrier

Agent,

customs

Air terminal

Agent,

customs

Domestic carrier

Air terminal

Improve and ensure communication of correct information

to every partner involved in the transport process

e.g. via SOP, Service Level Agreement, Quality Agreement,

Conferences

Shipper Consignee

Carrier

● First step for mitigation Communication


Risk Mitigation

●Further steps

● Pharma Industry

• Adverse temperature stability studies

• Packaging development

● Air Freight Industry

• Increase awareness

• Improve processes


Product Stability

The impact of adverse temperatures

on the product quality is not always

obvious visually.

Is it safe, potent and effective?

If stability data are not available

this means either costly and

time consuming tests or destruction.


● Chemical and physical properties and formulation

● Availability of long term and accelerated stability data

● Filed release and stability test requirements and shelf life

● Availability of manufacturing, packaging and distribution Time Out of

Refrigerator


5 hours at the apron!

Conclusion:

Sunshine, low wind speed and

long exposure time at daytime at

the apron at Schiphol airport

caused the high temperatures.


Questions

● What is the impact of sunshine on the inside temperature of a shipper?

● What is the impact of the shipper outside color on the inside temperature?

● What is the effect of top sheets used by airfreight logistic service providers to protect products on ULD against dust and rain?


Brown

Monitor

White Metalized

White cabin

Top

sheet

S E

N

W

Test materials

● Empty brown corrugated fiberboard shippers, white A4 paper, metalized

bubble foil, brown cardboard (under shippers), HT wooden euro pallets,

concrete foundation, white cabin (to measure air temperature), clear top

sheets, clear tape, temperature monitors (inside at the bottom of each

shipper, under the top sheet and outside)



• White and metalized shippers give comparable thermal protection and are

significantly better than the brown shipper in this test.

• Top sheets cause a greenhouse effect impacting the inside shipper temperature.


Summary

● The combination of goods standing long hours at aprons and direct

sunshine can have a severe impact on the inside temperature of

cartons and thus on the product quality

● Application of top sheets cause an accumulation of heat under the

top sheets in direct sunshine (greenhouse effect) potentially

impacting the quality of the product

● White cartons and metalized covers reduce the impact of direct

sunshine considerably


Next steps/Questions

● Avoid storage of prepared air freight pallets in the sun?

● Offloading

● Flight cancelled

● How can the effect of sun on goods on the apron be

reduced?

● Covered waiting areas e.g. during stop-over?

● Would white instead of transparent plastic on air freight

pallets have a different effect ?

● Should thermal blankets be white or metalized to function

efficiently?

● How can apron time be decreased?


Risks In Air Freight for RT Products

Questions?


Take it to the Limit – But Not More

↗ Moderator:

» Dave Brennan, Assistant Director, Cargo Safety and Standards, IATA

↗ Panelists: » Alan Wright, Vice President Global Cargo Operations, Swissport

» Dr. Gerhard Gompf, Director, Business Process Optimization Europe & Head of Global Airmail Control, Deutsche Post AG


Networking Lunch Sponsored by

A MATTER OF TRUST Carolina Ramírez – Taborda,

Assistant Director, Secure Freight IATA

Track Sponsor

A Matter of Trust. Secure Freight

Carolina Ramírez-Taborda, AD SF

IATA Cargo 78

Challenges: Industry & Governments

Inconsistent security regulatory

environment with limited international

recognition

Different understandings of air cargo

supply chain security and perceptions of

threat i.e. levels of risk

International standards and security

programs not leveraged i.e. ICAO Annex

17

Screening of cargo at the airport creates

bottlenecks, increases costs and delays

shipments

IATA Cargo

KL

2008: Secure Freight Pilot Testing Network

Malaysia Sept 2008 – June 2011

Reasoning: Inbound to the US/ EC is an industry

priority

Test suitability for transhipment cargo

Test in different security environments

Establish potential SF interconnected

locations in Asia, Africa, Middle East,

Europe, North & South America

Extending a secure supply chain around

the world

AMS

IATA Cargo 80

Board Target SF 2011

“Promote Secure Freight globally

and implement with regulatory

support in two countries where no

Secure supply chain platform

exists”

IATA Cargo

NYC AMS

KL

UAE

USA

MIA

CAN

KE

UK

SA

MY (done)

KE, MEX (2011)

CL, UAE (2012)

SA, CH & BR (under discussions)

CH

CL

MEX

EU

2012: Secure Freight Pilot Testing Network

BR

IATA Cargo

What brought us here?

The Need

Product

Advocacy

Mutual Recognition

Communication

Perseverance

Passion

Secure air cargo network

IATA Cargo

What brought us here? Political will and action

Industry & Government common goals

Simplified business process

Compliance with multiple programs through 1 set of standards

Potential reduction of

Customs inspection, transit times, theft in inventory management; Customer attrition

Potential avoidance of breaking down trans shipment cargo

Safe, secure, efficient, sustainable cargo

operations

IATA Cargo

NYC AMS

KL

UAE

USA

MIA

CAN

KE

UK

SA

MY (done)

KE, MEX (2011)

CL, UAE (2012)

SA, CH & BR (under discussions)

CH

CL

MEX

EU

Building the Trust: Secure Freight Network

BR

IATA Cargo

Building Trust: Pilot & Network

How do you build the trust between all

partners?

Supply Chain Pilot stakeholders?

Government authorities among themselves?

IATA Cargo

Building Trust – Pilot Stakeholders

Open to change

Listen to other ideas/ opinions/ positions

Recognize your own limitations/ Humbleness

Establish your credibility

Question the status quo

Accept to work in teams – strong as your weakest link

Give up some part of your scope of influence

Be focused and persevere

IATA Cargo

Building Trust – Government authorities Leadership

Tenacity

Give –in

Gap Analysis & Closure

Roadmap

Resources

Appropriate Regulations

Definitions

Validation & Quality

Product Commitment

Transitional time change

Ind & Gov Consultation

Deliver

Continuous

Improvement

Open to Recognition

IATA Cargo

: Indicative Quality

Assurance System

Regulatory Measures

Roles & Responsibilities

Organization & Management

of Operators

Staff selection, Recruitment

&Training

Facilities Security Measures

Building Trust needs an understanding of the same language

Comparison of relevant programmes complete

ISO 28000, C-TPAT, AEO- WCO, EU,, WBASCO, etc.

Cargo Acceptance, Handling &

Conveyance

Cargo Screening

Container / ULD Security

IT Security

Certificates & Declarations

Incident and non-conformance

response

IATA Cargo

SF Strategy 2012:

Building trust

89

IATA Cargo

SF Strategy for 2012 : Building trust

90

Stronger, more proactive, credible and global role

Engage more the regulators via ICAO (regions),

EC, Countries embassy reps (IRR, officers), Pilot

CAAs, WCO

Focus on added value/ deliverables for the supply

chain stakeholders

Facilitate collaboration/ recognition between pilot

participants to create a network for transshipment

IATA Cargo

Secure Freight – First Quarter 2012

91

I Regulatory:

Letter of recognition of SF principles from UK DfT this

week

APEC Workshop Feb

SF SM shared with ICAO, UPU & WCO

GACAG position paper on Supply Chain Security &

Secure Freight drafted

IP on SF during AVSECP/23, co-signed by 5 CAA’s

participating on pilots; EC supported

II Product Development:

Advanced 50% revision of Spanish translation of

SF SM - for LATAM Pilots

IATA Cargo 92

III Pilot Network Expansion:

South Africa (2012-2014) - Letter of Intent work-in-

progress

Chile (2011 – 2013) - Kick-off Pilot SG &WG

UAE (Dubai, Abu Dhabi) (2012-2015) – Kick-off meeting

2012

Brazil meeting during AVSECP/23

IV Global Promotion:

TIACA Board, KL/ APEC Workshop, WCS 2012, AVSEC

Conference (Canberra), ICAO AVSEC Panel

Secure Freight - Q1 2012

IATA Cargo

Trust is generated by trust …

…and cannot be regulated

IATA Cargo



But it starts with individuals…

IATA Cargo




It’s built by individuals…

IATA Cargo




It’s built by individuals…

And maintained by individuals…

IATA Cargo

Each of us has a role to play….

IATA Cargo


I believe in one thing only, the power of human will.

IATA Cargo



You must be the change you wish to see in the world.

IATA Cargo



Joseph Stalin

You must be the change you wish to see in the world.

Mahatma Gandhi

IATA Cargo

"We must all hang together,

or assuredly we shall all hang

separately.”

Benjamin Franklin At the signing of the Declaration of Independence

August 2, 1776

IATA Cargo

Questions

& Answers

APPLYING SECURITY CONTROLS

Adrian Kelly, Business Development,

L-3 Communications Security and Detection Systems Division

Track Sponsor

Applying Security Controls in

Cargo Screening

8200-10221-01 Rev. 05

L-3 Proprietary

Cargo Screening Background

Copyright 2011 L-3 Communications. All Rights Reserved

L-3 Proprietary

Cargo Screening background

• 2001-2012 Phase in of passenger

plane screening requirement

– All US domestic by Summer

2010

– Working on International

Inbound to US

– Better manifest data through Air

Cargo Advanced Screening

– Approved technology and

concept of operations

– Move to dual view screening

Copyright 2011 L-3 Communications. All Rights Reserved

L-3 Proprietary

Regulatory Approach - Global protocols

and standards

107

EU Australia

UK US

L-3 Proprietary 108

Approved Methods of Screening Cargo

Canines

Trace Detection X-ray Detection

Visual Detection

L-3 Proprietary 109


Canines

Trace Detection X-Ray Detection

Visual Detection

L-3 Proprietary 110


Canines


Visual Detection

L-3 Proprietary 111


Canines


Visual Detection

L-3 Proprietary 112


Canines


Visual Detection

L-3 Proprietary 113

Secure Supply Chain – Known Shipper

L-3 Proprietary 114

You want me to pay for what? – SECURITY!!

L-3 Proprietary 115

Pre-departure manifest data key to

Known Shipper

L-3 Proprietary 116

Yemen Changed Everything – October 2010

L-3 Proprietary 117

Strong focus on Information Sharing &

Intelligence

L-3 Proprietary 118

Screening mail is a concern & a challenge

L-3 Proprietary 119

2012 & Beyond – What will be the next Security

Event?

L-3 Proprietary 120

Considerations when investing in screening

technology

L-3 Proprietary 121

Smart Security Keeps Commerce Moving


Due Diligence ↗ Moderator:

» Michael White, Assistant Director, Cargo Facilitation & Standards, Cargo Network Services

↗ Panelists: » Axel Klein, Manager Handling Competence, Lufthansa Cargo

» David Bowers, Programme Manager, Postal Security, Universal Postal Union

» Rudolf Steiner, SVP Global Cargo Sales & Key Account Management, Swissport Cargo Services

DUE DILIGENCE

Axel Klein, Manager Handling Competence, Lufthansa Cargo

Track Sponsor

© UPU 2011 – All rights reserved

ICSG SUBGROUP 2

Due Diligence

March 2012

124


POSTAL TECHNOLOGY CENTRE (DOT) ICSG SUBGROUP 2

125

Standards

Development

• Work started prior to 2008 Geneva Congress

• After events of October 2010, external stakeholders looked to the UPU

for defined security standards. All we could point to were the

recommendations from Congress in 2008

• ICSG commissioned the development of the standard under subgroup 2

• Survey was completed in August/September (results summarized / 59

countries)

• Draft Standard was presented to international stakeholders at October

ICSG Steering Group Meeting

• Draft Standard presented to UPU Standards Board in February 2012 and

approved as Status 0



126

Standards

Development

• Standard documents have been socialized internally and externally

• Anticipate more feedback at these meetings and at upcoming Restricted

Union meetings

• Comments received have been taken into consideration in revising the

document

• Ultimate goal is to have a standard that we can use as a baseline for the

postal network

• One significant change from original document is scope was changed

from “entire postal network” to “critical facilities within postal network”



127

Standards

Development

• A and B ready for testing – Ghana pilot project

• Determined through ICSG meeting in December that standards need to

be put forward as mandatory minimum security standards

• Standards recently presented in Tashkent (RCC) and Bangkok (APPU)

with positive feedback

• Most are meeting the standards now, but no baseline to compare it to

• UPU – Program Manager Postal Security will attend at many RU council

meetings to stress the importance of the standards and to get support for

proposals



128

Standards Part A and Part B

• Part A: Supply chain standards for the postal sector: General

security measures defines the physical and process security standards

which is applicable to critical facilities within the postal network. The

standards comprise minimum requirements within the postal sector.

• Part B: Supply chain standards for the postal sector – Part B:

Office of exchange and international airmail security defines measures

for securing operations relating to the transport of international mail. The

standards comprise minimum requirements within the postal sector.



129

Standard Part A



130

Screening Standard

Part B

5 Screening standards

5.1 Custody of international airmail

5.2 Exempted items

5.3 Items to be screened

5.4 High risk items

5.5 Screening procedures for mail receptacles

5.6 Alarm resolution of suspicious items

5.7 Notification Procedures


131

High Level Summary

POSTAL TECHNOLOGY CENTRE (DOT)

Security Plans

Facility Design

Perimeter Security

Access Control Measures

Personnel Security

Vehicle Security

Training

Acceptance

Audit/Compliance

Screening

For the most part,

Postal

administrations are

ready

to adopt these

standards.


132

Developed Country Summary

POSTAL TECHNOLOGY CENTRE (DOT)

Security Plans

Facility Design

Perimeter Security


Personnel Security

Vehicle Security

Training

Acceptance

Audit/Compliance

Screening

Developed countries

are generally

prepared

to adopt these

standards.


133 POSTAL TECHNOLOGY CENTRE (DOT)

Security Plans

Facility Design

Perimeter Security


Personnel Security

Vehicle Security

Training

Acceptance

Audit/Compliance

Screening

Least Developed Country

Summary

Least Developed

countries are

generally prepared

to adopt these

standards, but will

need assistance in

some areas.


Charges

the Council of Administration, the Postal Operations Council

and the International Bureau, each within its own area of

responsibility, to manage the implementation of supply chain

standards for the postal sector – Part A: General security

measures, and Part B: Security of office of exchange and

international airmail.

Draft Resolution


Article 9

Postal security

POSTAL OPERATIONS COUNCIL

Amend paragraph 1 as follows:

1 Member countries and their designated operators shall

observe the security requirements detailed in the UPU security

standard and shall adopt and implement a proactive security strategy

at all levels of postal operations to maintain and enhance the

confidence of the general public in the postal services, in the

interests of all officials involved. This strategy shall include the

exchange of information on maintaining the safe and secure

transport and transit of mails between member countries and their

designated operators.


Networking Coffee Break


Up, Up and Away ↗ Moderator:

» Stephane Parrenin, Manager, Cargo Services – Australia, New Zealand & Pacific Islands, IATA

↗ Panelists: » Robert Brown, General Manager – International Services,

Australian Air Express

» James Rigby, ULD Manager, Etihad Airways

» Ir Dr. Paul Tsui, Managing Director, The Janel Group of Hong Kong Limited

Up, Up and Away

World Cargo Symposium

Kuala Lumpur – 14 March 2012

Up, Up

and Away

World Cargo Symposium

KUL – 13 MAR 2012

No ULD no business

Remember the four “I”s ?

↗Increasing ULD profile

↗Integrating ULD standards with all other Cargo standards

↗Improving IATA Manuals relating to ULDs

↗Interacting with key ULD Stakeholders

The Ambitions

↗Regulatory compliance and best practices

↗Valuable piece of aircraft equipment

↗Availability in right amount at right place at right time

↗Procedural compliance

The issue

↗Under-recognized activity

↗Associated risks

↗ULD repair = US$150-200 million a year

↗Silo activity, took for granted and misunderstood

The tool are there…

↗ULDOAG established (2010)

↗ULD Operational Guidelines (2011)

↗Training Programmes (2011)

↗ODLN (2011)

↗IATA ULD Regulations (2012)

Leveraging IATA initiative

↗ ULD Operational Task Force in Australia

↗ Achieve ULD best business practices

↗ And regulatory compliance

↗ Save cost

Australia Operational Task Force

Why in Australia…

Vibrant market with large ULD movements (dom & intl)

Large numbers of players

Widespread off airport ULD operations

Strong compliance requirement by CASA


Current Members

JMI Aerospace

Qantas

Emirates

Sydney Airport

Australia Air Express

AFIF

Nordisk-Aviation

CASA

Future Members

Melbourne Airport

BARA

AOC

Menzies

Toll DNATA

CBFCA

CAPEC


Why are we doing this…

It currently does work

But it could work better

Change cultural behavior

Make it sexy

Who is to pay for this ?


Assessing…

Infrastructure

Regulatory Compliance

Operating Practices

Training and qualifications


The road map…

Scope

Audit

Identify actions


Proposed initiatives… …and progress so far

ULDOTF established

Benchmarking

ULD numbers study

Accreditation

Training

ISAGO & IOSA

Airport

The Panel The perfect mix

Robert Brown Australia Air Express (Ground Handling)

GM-International Services

James Rigby Etihad Airways (Airline)

ULD Manager

Dr Paul Tsui The Janel Group (Freight Forwarder)

Managing Director


Testing the Temperature of the Pool ↗ Moderator:

» Ludwig H. Bertsch, President, CHEP Aerospace Solutions

↗ Panelists: » Henrick Ambak, Vice President Ground Services & Commercial

IT, Cargolux Airlines

» Bob Rogers, Vice President Industry Affairs, Nordisk Aviation Products

» Bob Lugton, Head of Freight Operations, Qantas Airways

THE

SMARTER

ULD

SOLUTION

Introducing CHEP Aerospace

Solutions, the global force in

outsourced ULD and

Galley Cart management.

TESTING THE

TEMPERATURE

OF THE POOL

WCS – Kuala Lumpur – 14th March 2012

CHEP

AEROSPACE

SOLUTIONS

CHEP Aerospace Solutions

WHO WE ARE

Testing the Temperature of the Pool 155

* Refers to Driessen Services only

World’s largest ULD and

Galley Cart repair and

maintenance network

Financial strength and

pooling experience Global force in

outsourced ULD

and Galley Cart

management

World’s leading

independent ULD pooling

provider

*


A global player in supply chain solutions with revenues in excess of USD4.6 Billion,

operating in more than 50 countries, and listed on the Australian Stock Exchange

The world’s leading provider of pallet and container pooling services, providing for

companies such as Proctor & Gamble, Coca Cola, Ford and GM from their pool of 300

million pallets and other load devices, every day, all over the world

Industry experts in the pooling and management of aviation pallets and containers, with

Air Asia X, Brussels Airlines, Cargolux, Gulf Air and SAS among their loyal customers

Considered the best in class in the maintenance and repair of non-flight critical aviation

equipment. Air New Zealand, Jetstar, Qantas and Virgin feature within their portfolio

Comprising an extensive network of MRO service centres reaching across the globe, to

support airlines such as KLM, United/Continental and US Airways


*

*Refers to Driessen Services only

WHERE WE CAME FROM


CHEP Aerospace Solutions offers the aviation industry:


The global force in outsourced ULD and Galley Cart management

The world’s largest independent network of pooled ULDs and repair centres – managing and servicing over 190,000 ULDs and airline galley carts worldwide

Coverage at over 300 airports globally, supported by 50 global certified repair centres, of which 23 are owned or managed

A professional team of over 400 industry experts, operating around the clock, every day, to provide tracking services and customer support, utilizing the latest tracking technologies.

WHAT WE DO

POOLING –

IS THE

TEMPERATURE

RIGHT?


WHAT IS ASSET POOLING?


Wikipedia Definition CHEP Definition

“Pooling is a resource management

term that refers to the grouping

together of assets for the purposes of

maximising advantage and/or

minimising risk to the users”

“Pooling is the combining and sharing

of standardised assets in a common

effort to maximise the assets’

utilization to achieve lowest total cost

and reduced environmental impact”

Strategic sweet spot for pooling:

Common platform used by multiple parties

Assets flow freely with high velocity, creating complexity

Asset ownership not a competitive differentiation to the user

Asset pooling will create (overlapping) network with competitive advantage

Asset utilisation will create economic benefits to “pooler” and users


HOW ULD POOLING WORKS


PM acquires airline’s fleet and

agrees scalable, flexible monthly

stock levels with airline, ULDs

positioned at relevant stations

(airports)

Airline loads ULDs for flights from

pool at each station, undergoing

strict airworthiness checks before

flying

Emptied ULDs are checked for

damage and returned to the pool if in

an airworthy condition

PM collects damaged ULDs and

repairs at closest repair shop.

Scrapped or lost ULDs are

continuously replaced with new

PM monitors movement data and

forecasts, tracks and traces all

physical ULD flows within the pool

including balancing, positioning and

demurrage and liaises with GHA`s

PM

Airline

2

3

Airline

PM

Airport

Airport

1

2

3

4

1

2

3

4

PM = Asset Pool Manager

5

5


WHAT FORMS CAN POOLING EXIST IN?


Alliance Pooling Open Neutral Pooling Product Specific

Pooling

We understand that “one size fits all” doesn’t necessarily work for everyone

Others ?


THE GLOBAL AIRLINE FLEET IS GROWING


Airline fleet – 2010 Airline fleet – 2030

776 large

3,688 twin-aisle

12,034 single-aisle

1,186 large

8,697 twin-aisle

27,671 single-aisle

Global airline fleet, including containerised aircraft, expected to double in size by 2030

Source: Boeing Current Market Outlook – June 2011


THE GLOBAL ULD FLEET IS ALSO GROWING


ULD fleet – 2010 ULD fleet – 2030

Approx 740,000 ULDs globally

Approx 1,650,000 ULDs globally

ULD volumes will grow in line with aircraft volumes – unless synergies are developed

Source: CHEP analysis extrapolation based on 3 large network

carriers fleet data


WHAT COULD POOLING LOOK LIKE IN 2030?


Pooling – 2010 Pooling – 2030

85% managing in-house

15% outsourced or pooled

20% managing in-house

80% collaborative pooling

85%

15%

Collaborative pooling could be outsourced, by alliance, by product or combinations

20%

80%


HOW MUCH COULD POOLING SAVE THE INDUSTRY IN 2030?

Testing the Temperature of the Pool 165 Source: Industry expert interviews; CHEP estimates

Potential to save more than $225M in direct cost by pooling and outsourcing

LD3 Container (Aluminium)

Owned &

branded

Outsourced &

pooled PMC Pallet

Owned &

branded

Outsourced &

pooled

Purchase price $1'000 $900 Purchase price $680 $600

Depreciation 8 8 Depreciation 10 10

Purchase cost p.a. $125 $113 Purchase cost p.a. $68 $60

Repairs p.a. 1.9 1.7 Repairs p.a. 0.6 0.5

Cost per repair $230 $190 Cost per repair (incl net) $110 $95

Repair cost p.a. $437 $323 Repair cost p.a. $66 $48

Unreported / Lost p.a. 5% 3% Unreported / Lost p.a. 7% 5%

Replacement cost p.a. $6 $3 Replacement cost p.a. $5 $3

Flights p.a. 150-180 200-220 Flights p.a. 100-120 120-150

Average lag per repair 8-9 days 3-4 days Average lag per repair 8-9 days 2-3 days

Pooling synergy 1.00 0.85 Pooling synergy 1.00 0.80

Direct cost per container p.a. $568 $439 Direct cost per pallet p.a. $139 $111

LD3 (Alu)

Owned &

branded

Outsourced &

pooled PMC Pallet

Owned &

branded

Outsourced &

pooled

Container % in pool 60% 60% Pallet % in pool 40% 40%

Total containers in pool 986'051 838'143 Total pallets in pool 664'337 531'469

Total cost per container p.a. $568 $439 Total cost per pallet p.a. $139 $111

Global container fleet cost p.a. $560'323'235 $367'840'001 Global pallet fleet cost p.a. $92'183'343 $58'727'353

$192'483'234 $33'455'990Potential saving by pooling & outsourcing Potential saving by pooling & outsourcing

POOLING –

TIME TO

JUMP IN?


TYPICAL ULD CHALLENGES FACED BY AIRLINES


ULD driven costs

CAPEX & OPEX

Repair & maintenance

Opportunity cost / lost revenue

Peaks & imbalances

Lost & unreported

ULD fleet change / lightweights


CAN POOLING REDUCE ULD DRIVEN COST?


• Lower OPEX as asset utilization is maximized and economies of scale shared

• Greater purchasing power for larger volumes reduce TCO

• No CAPEX at all if outsourcing to a pooling company

CAPEX & OPEX

• Improved bargaining power due to larger volumes

• Ability to repair on location, rather than return to the hub reduces turnaround times

• Standardized ULD’s optimized for durability and repair friendliness

Repair & maintenance

•Less movement of empty ULDs, freeing space for revenue-generating activities

• Having always the right equipment on hand reduces lost sales

Opportunity cost

•Overlapping network better enables imbalances to be rectified

•Peaks can be met by drawing on global pool of assets

• Courtesy moves among pool partners reduces external positioning cost

Peaks & imbalances

•Standardised global tracking platform and processes reduce overall losses

•Proactive asset management

•Critical mass to develop and implement innovative tracking solutions (i.e. GPRS)

Lost & unreported

•Greater buying power if transitioning to standard platforms

•No CAPEX limitations restrict access to latest technology (i.e. lightweight ULD)

•Pooling model allows to right size ULD fleet according to network changes

ULD fleet change


Major Airlines seem to fear a first mover disadvantage

Alliances have made little progress with regards to joint

ULD purchasing and possibility of pooling assets

ULD matters rate low on the executive agenda

Until recently nobody with the balance sheet strength,

global network and reach was able to offer a credible

long-term solution to the industry

Repair & asset management weren’t seen as part of the

same process, thus missing out on major synergies

Despite being a relatively simple asset ULD’s are in

many cases still airline specific and non-standardized

Lack of trust in ground handling processes – fear that

GHA might treat pooled assets even worse

Perception that branded ULDs support airlines` brand

strategy and helps generate revenue


WHY HAS POOLING NOT TAKEN OFF YET?


TESTING THE TEMPERATURE

“The potential establishment of an industry pool for ULDs has been

suggested and considered before. Is now the right time to reconsider

this?

Would it be beneficial for airlines to surrender or sell their ULD assets to

a pool?

Would the user fees be more palatable and affordable than the

continued purchasing, maintenance, management and system costs?”


In the opinion of CHEP Aerospace collaborative pooling is the solution, but we may be biased

So let’s hear from our experts in the panel

THANK YOU


CHAIRMAN’S CLOSING REMARKS

Joseph (Chris) Notter, Head of Cargo Handling, Hub & Network,

Etihad Airways Track Sponsor

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