Air Cargo World: July 2016

THE SOURCE FOR AIRFREIGHT LOGISTICS AirCargoWorld.com • June 2016THE SOURCE FOR AIRFREIGHT LOGISTICS International Edition • AirCargoWorld.com • July 2016

LOGISTICS LAUNCHPADS

Can tech accelerator programs foster logistics innovation?

The Race for Track &TraceAre 3PLs ready for pharma serialization?

20

Beyond BakuAir cargo ambitions reach past the Caspian region

23

Delta Cargo expands ‘one roof’ program8

Rise of the Asia-Europe cargo alliance12

36338EYME_US_Network_Air Cargo_276x203w_Mag_1Jul_EN_#150.indd 1 8/6/16 2:42 pm

ContentsVolume 19 • Number 6 • July, 2016

Beyond Baku Air cargo ambitions reach past the Caspian region

Air Cargo World (USPS 364-590) (ISSN 1933-1614) is published monthly (except December and January are combined) and owned by Royal Media. Air Cargo World is located at 1080 Holcomb Bridge Rd., Suite 255, Roswell, GA 30076. Known office of publication is located at 80 Broad Street, Suite 1701, New York, NY 10004; telephone 212-564-8972. Air Cargo World is a registered trademark. Periodicals postage paid at New York, NY and at additional mailing offices. Subscription rates: 1 year, $80; 2 year $128; outside USA surface mail/1 year $120; 2 year $216. Single copies $20. Express Delivery Guide, Carrier Guide, Freight Forwarder Directory and Airport Directory single copies $14.95 domestic; $21.95 overseas. Opinions expressed by authors and contributors are not necessarily those of the editors or publisher. Articles may not be reproduced in whole or part without the express written permission of the publisher. Air Cargo World is not responsible for unsolicited manuscripts, photographs or artwork. Please enclose a self-addressed envelope to guarantee that materials will be returned. Authorization to photocopy items for internal or personal use is granted by Air Cargo World, provided the base fee of $3 per page is paid directly to Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, and provided the number of copies is less than 100. For authorization, contact CCC at (508) 750-8400. The Transactional Reporting Service fee code is: 0745-5100/96/$3.00. For those seeking 100 or more copies, please contact the magazine directly. Member of Audit Bureau of Circulations Ltd.

POSTMASTER: Send address changes to Air Cargo World, 80 Broad Street, Suite 1701, New York, NY 10004.

News Inside: 5 UpFront Flying salmon, China’s need for beef, DHL delivers to the

Moon, online shopper habits and more.

7 Europe Delta Cargo teams up with European carriers to share facility

space under “one roof” efficiency initiative.

8 Africa & Middle East Qatar Airways raises stake in IAG – again; Emirates SkyCargo seeks more South Asian cargo.

10 Asia Alliances are all the rage now on the Asia-Europe and Asia-

North America routes. How will they affect route capacity optimization?

12 Americas While most carriers are already battling overcapacity in their cargo holds, many in North America may soon face a pilot shortage as a result of pending legislation.

Departments 4 Editor’s Note 6 Michael Morey, Director of Advanced Cargo Solutions, Franwell13 People & Places26 Bottom Line28 Marketplace 29 Events/Advertiser’s Index30 Forwarders’ Forum

23

The Race for Track & TraceAre 3PLs ready for pharma serialization?

20

Logistics LaunchpadsCan tech accelerator programs foster air

cargo innovation? 14

The warmer weather outside indicates that summertime is upon us, but that doesn’t always mean rest and relaxation in the air cargo business. For many startup logistics companies, the hard work is just beginning – and the payoff for this effort may end up helping the entire industry.

In our cover story this month, we look at the growing popularity of technology accelerators in the logistics sector (page 14). Just last month, Lufthansa Cargo teamed up with San Francisco-based high-tech co-working firm RocketSpace to launch their inaugural “Logistics Tech Accelerator” program, designed specifically to encourage innovation in the air cargo world. While other accelerators have focused on logistics, this is the first time an air carrier’s cargo division has taken an active role in the curriculum.

In this program, eight logistics startups have been chosen by RocketSpace and Lufthansa through a rigorous vetting process to find the top candidates in the fields of smart warehouse, smart transport and smart commerce. By the time you read this, the founders of these startups – ranging from cloud-based booking platforms to manufacturers of robotic vehicles – will be immersed in an intensive, five-week course to prepare for a pilot test of their ideas. By the end of 13 weeks, the program will culminate with a Pubic Demo Day on Sept. 9 to show off the results of their labor.

Since the journeys being taken in this accelerator are just beginning, Air Cargo World will double back with the RocketSpace/Lufthansa folks this fall to see how the pilot projects of these eight promising startups have evolved – to see which ones are moving forward toward a commercial product or service, and which ones are headed back to the drawing board. This messy, but necessary, process of innovation will also be a key theme at our ELEVATE conference coming up on Oct. 10 in Miami. See elevateaircargo.com for agenda details and registration information.

In other stories for this issue, we help 3PLs prepare for the coming track-and-trace regulations for the serialization of pharmaceutical shipments (page 20). In just over a year, the U.S. government will require the individual labeling of each shipment of pharmaceuticals, in order to curb the spread of counterfeit medications. Will your supply chain be prepared for the technical challenges? Our reporter Ian Putzger also takes a deeper dive into the Caspian Sea region (see page 23) to see how this crossroads of Central Asia is coping with the oil-and-gas industry slump and discover some of the ways it is looking to expand connections to the rest of the world.

Since we’re talking about improvements, it is also my pleasure to announce the hiring of Lewis J. King as the new Associate Editor of Air Cargo World. In addition to being a talented writer and editor, Lewis has traveled extensively, recently returning to the United States after working for two years at The Business Year, an economics publication based in Istanbul, Turkey. He was also a freelance writer for several other international organizations in Turkey, Egypt and Saudi Arabia. He also holds a Master’s degree in International Relations from Istanbul’s Koç University. Lewis can be reached at [email protected].

We are thrilled that Lewis is now a part of the Royal Media team. As you can see in this issue, he’s already made some key contributions in our story lineup. Be sure to check out aircargoworld.com for more of his work in the months to come.

Randy Woods, Editor, Air Cargo World [email protected]

Editor’s Note

Randy Woods

Summer school for innovationTHE SOURCE FOR AIRFREIGHT LOGISTICS

SENIOR EDITOR David Harris

[email protected]

Randy Woods [email protected] • (206)-801-8478

ASSOCIATE EDITORS Charles Kauffman

[email protected] J. King

[email protected] EDITOR

Ian PutzgerCOLUMNISTS Doug Brittin

Brandon Fried

PUBLISHER JJ Hornblass

[email protected] OPERATIONS

Molly StewartGRAPHIC DESIGNER

Manuel SyPROJECT COORDINATOR

Michael Patten

MARKETING Breanna Punzone

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CIRCULATION [email protected]

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4 JULY 2016 | AIRCARGOWORLD.COM | @ACWMAGAZINE

Grin and bear it

Online shoppers take over

Copper River salmon descend on Seattle

Three bear cubs orphaned by devastating 2015 floods in Georgia were flown to a special-ist sanctuary in Greece. The bears were found wandering the streets of the Georgian capital, Tbilisi, following the heavy rains that hit the country last year, and were kept in the city’s dog pound, where the incessant barking of their mongrel neighbors left the cubs severely stressed and susceptible to disease, according to Adam M. Roberts, CEO of the Born Free Foundation, which intervened on the bears’ behalf. Now, with the aid of Air Charter Service, they will be cared for in Greece in conditions that exceed the “bear necessities.” Veterinary staff were on board for the Air Charter Service flight that transported the cubs to the Arcturos Bear Sanctuary in Northern Greece. At their new residence, the bears will be cared for by experts in a natural and safe environment.

American Airlines Cargo partnered with the nonprofit organization Opera-tion Honor our Heroes to transport 10,000 American flags to Washington, D.C., for a Memorial Day event in late May to commemorate the more than 1.2 million soldiers who died in service, from the American Revolutionary War of 1775–1783 to the pres-ent conflicts in Afghanistan and Iraq. The 1.04-tonne shipment contained one flag for every 120 service members who lost their lives in the line of duty. The airline provides a dedicated team to ensure the “safe and respectful transport of fallen sol-diers and memorial artifacts.” These specialists were present in Dallas-Fort Worth as the flags were loaded onto a 757 destined for Washington’s Reagan National Airport.

The Moon may soon have a postal address. Deutsche Post DHL has signed on as the “official logistics provider” for Astrobotic’s first mission to the Moon. The integrator is responsible for logistics services for Astro-botic’s spacecraft and customer payloads. DHL will ensure that “space freight” ar-rive in good condition and on time. Airbus Defence and Space will provide initial en-gineering support. This alliance of star-ship troopers is working to advance the technical maturity of Astrobotic’s “Per-egrine” Lunar Lander, which can deliver Moon payloads of up to 265 kilograms.

It has become an annual rite of passage for the U.S. Northwest – the arrival of fresh salmon in Seattle. Only this salm-on didn’t swim upstream, it flew in. On May 17, with much fanfare, three Alaska Airlines 737s delivered about 9 tonnes of the tasty fish from the pristine Copper River basin of Southern Alas-ka, launching what is expected to be a 45-tonne season. Each year, the airline works with three of the region’s larg-est seafood processors – Ocean Beauty Seafoods, Trident Seafoods and Copper River Seafoods – to deliver the “first catch” of the coveted salmon to Seattle and elsewhere across the country. The first and each successive load of fish reaches its final destination “within 24 hours of being caught,” said Jason Berry, Alaska Air Cargo managing director.

The 2016 UPS “Pulse of the Online Shopper” study confirmed what we all knew – retail is moving online and e-commerce is the wave of the fu-ture, according to respondents, all of which had made an online purchase within the three-month period preced-ing the survey. Key findings include:

• For the first time ever, shoppers made more than 50 percent of their purchases online; for mil-lennials this share was 54 percent

• 44 percent of the purchas-es were made by smartphone

• 8 5 p e r c e n t o f s h o p p e r s u s e d A m a z o n ; e B a y c a m e in second, with 53 percent

• Etsy only attracted 17 percent of shoppers surveyed, but the kitschy website scored high in the coveted millennial demographic.

Not on the tables of hungry Chinese diners – or at least not often enough nor in sufficient quantity. That seems to be the conclusion drawn by Shanghai Yiqian Trading, the Chinese company that is buying Germany’s Frankfurt Hahn Airport (HHN). According to company Chairman Yu Tao Chou, Shang-hai Yiqian Trading believes that increased air cargo connections between Germany and China will help satisfy the growing demand by Chinese consumers for Western products such as meat. The company is not planning to turn Hahn into a cargo-only airport, but does seem to have cargo as its major focus.

Where’s the beef?

American Airlines honors fallen soldiers

DHL to shoot the Moon

UpFront

@ACWMAGAZINE | AIRCARGOWORLD.COM | JULY 2016 5

CargoChat

Has RFID’s time finally arrived at cargo facilities?Radio frequency identification (RFID) is hardly a cutting-edge technology. The system of scanning

and identifying objects through the use of radio waves has roots that reach back to World War II. Since then, it’s been used in countless tracking systems to monitor the movement of trucks and goods.

In the air cargo world, adoption of RFID has been slow. However, a new track-and-trace system developed by Franwell, Inc., and View Technologies is proving that you don’t always need new technology to be innovative. The Franwell system, called CargoAware, now being rolled out at several Air Canada Cargo facilities, uses standard RFID antennas to collect data passively on individual items and ULD containers moving through cargo facilities, and record the movements in real time. To find out the latest on the CargoAware system, Air Cargo World spoke with Michael Morey, director of advanced cargo solutions for Franwell, who has been involved with the Canadian project for more than a decade – first for Air Canada and then later for the manufacturer.

How did you first get involved with RFID?

I was formerly the director of operational strategy at Air Canada Cargo. When we were approached by Franwell about 10 years ago, they wanted to conduct pilots and test different methods of using the solution in the cargo environment. After a number of years of testing, we figured this is actually a viable solution. We could market this as an actual production system, not just as an Air Canada solution, which is when Franwell decided to formally create a product that we now call CargoAware. From that point, about a year ago, I moved over to Franwell to share my expertise from a carrier’s perspective.

What problems does CargoAware seek to solve?

Piece-level tracking in real time is a major challenge for all carriers. When done manually, this creates errors and leads to a lot of non-value-added work. The real return on investment comes in the form of asset tracking in warehouses and cargo facilities. But beyond track and trace, the system collects so much data, you can discover inefficiencies in areas you never considered, such as poor forklift deployment, bad floorplan configuration and time-consuming methods in buildup. Once the infrastructure is there, we can pick up just about anything – and the technology doesn’t lie. When you show people this kind of stuff visually they just say, “Wow, we never even realized that’s what we’re actually doing.”

How does the system work?

When the goods are accepted, customers print a label with a readable barcode. We make our labels look exactly the same, with the only exception being that we add a little chip with information relative to that piece, which can be read by antennas in the ceiling. CargoAware is passive, so the antennas just track the movements of any RFID chips that move through a facility in three dimensions. With the data on the chip, we know where it’s been and we can message it back to the customers’ warehouse to tell them that the goods have been seen on the export dock, and that they are now in the storage area awaiting buildup. And we also develop rules – for instance, if you tender goods for a specific flight time, and we have not seen these goods yet at the buildup by a certain deadline, then the system will send out a warning. These are all things that we can do with the real-time tracking.

What is the next step for CargoAware at Air Canada?

Right now the full installation at Air Canada is done in Montreal and at Frankfurt. And we have since installed the system in Boston, New York JFK and Chicago. The rollout is proceeding at a pretty aggressive pace now, with about two to three station installations per week for the next several months. We intend to pretty much be completed with Air Canada by the end of November, with Toronto being the last one. Being the hub, 75 to 80 percent of Air Canada’s traffic goes through there. So that’s going to be a big one.

Any plans to bring the system to other carriers?

Yes, that will be my job. They call me the “bear trapper” – I go out and trap the bears, bring them home, and then our guys skin ’em. Without naming names, there are several clients that are doing formal site assessments. There are also a number of facilities in Europe, the Middle East and Asia that are being built brand new, and we’ve been asked for input so that they can build the solution into the new facilities rather than retrofit. I expect by year’s end, we should have some of these at a stage where they’re ready to make a public commitment.

Michael Morey

—Michael Morey,Director of advanced cargo solutions,

Franwell

... the system collects so much data, you can discover inefficiencies in areas you never considered, such as poor forklift deployment, bad floorplan configuration and time-consuming methods in buildup.


Delta Cargo expands ‘one roof’ initiative with European carriers

Last month, Delta Cargo expanded its program of shar-ing airfreight processing space with other carriers to reduce the number of drop-off points, expand the size of its cargo network and operate more efficiently.

In early June, the cargo arm of Delta Air Lines announced that all cargo sales, booking and inquiries in France and Ger-many were to be handled by Air France-KLM, expanding the scope of the North Atlantic Joint Venture (NAJV) between the carriers.

In addition, Delta Cargo joined Virgin Atlantic Cargo in outsourcing cargo handling at London Heathrow to dnata, one of the largest handlers in the world. Delta and Virgin also said they will co-locate their cargo-handling facilities with dnata at Manchester, Glasgow, Edinburgh and London Gatwick, and also at six other regional U.K. airports.

Gareth Joyce, president of Delta Cargo, explained that, “locating our cargo operations at Heathrow and across the U.K. under one roof in partnership with dnata will help real-ize greater synergies, while delivering a more seamless and efficient service to our customers.” While the two airlines have operated a codeshare since 2013, the new agreement will streamline drop-off and collection points for customers, and speed up truck turnaround times at London Heathrow.

This transfer of responsibilities is a continuation of the strategy that saw Delta’s Belgian cargo operations merged in a similar fashion in May.

The NAJV is part of a push by Delta and Air France-KLM to fully integrate sales in Europe, which Kristin Colvile, managing director of Delta Cargo revenue management and sales development, explained would, “create a trans-Atlantic network covering all major markets in the U.S. and Europe.” Delta and Air France first introduced their “one roof” initia-tive at Paris Charles de Gaulle in February 2015.

Under the U.K. deal, Delta Cargo said it was looking to capitalize on a long-standing relationship between Virgin Atlantic and dnata that dates back to the late 1980s. Virgin Atlantic is dnata’s largest cargo customer in the U.K., with the latter handling more than 200,000 tonnes of cargo per year for the carrier, according to the American Journal of Transportation. Last year, Virgin also awarded the bulk of its U.K. domestic trucking business to dnata.

—Lewis King

EUROPE Around the world

After FedEx/TNT deal closes, now what?After FedEx reached the end of its long road to the ac-

quisition of TNT, it also started down the longer – and likely rockier – road of making that acquisition work.

To begin, nothing much is expected to change. “In the near term, customers can expect to interact with each com-pany as they always have,” is the official line from the joint press release published by FedEx and TNT. This was echoed at a press conference in Hoofddorp, Netherlands, the former home of TNT and now FedEx’s European HQ. David Binks, FedEx’s Europe boss, and now CEO of TNT, was at pains to reassure all involved, and particularly TNT employees, that the integration would be carried out “with absolute precision” – i.e. slowly and carefully, and with the TNT brand main-tained “for the foreseeable future.”

Likewise, FedEx Express CEO David Bronczek said there was no plan to eliminate any hubs. TNT’s Liège hub (LGG) would join FedEx’s hubs at Paris Charles de Gaulle Airport (CDG) and Cologne/Bonn Airport (CGN) in a three-hub sys-tem. Bronczek said Paris would be the biggest of the three, serving as the point through which FedEx and TNT’s Europe-an operation would connect with the rest of the world, adding that Liège would remain as a regional hub.

Obviously, the Liège hub must remain in the near term. Even if FedEx’s intent was to eliminate it (or Cologne) as quickly as possible, it would still take considerable time. But in the longer term, it is hard to see the need for two regional hubs just 100 kilometers apart.

One thing that may help keep both the Liège and Co-logne hubs healthy in the long term is the rapid growth of e-commerce. FedEx founder and CEO Fred Smith said as much in his official statement on the acquisition: “The timing of this historic event is important, particularly in the current market environment where global e-commerce is growing at double-digit rates.” Bronczek later reiterated the theme, say-ing FedEx expected e-commerce to grow at an annual rate of 15 percent in Europe.

Of course, there is more to the acquisition (and the up-coming integration) than just what is happening in Europe. TNT has a strong presence in Brazil, the Middle East, and Asia. Of particular interest to FedEx is TNTs well-established road networks in these regions – a big gain for FedEx, and one that should be relatively easy to integrate.

—David Harris


Around the worldAFRICAMIDDLE EAST&

For the second time in less than a month, Qatar Airways Ltd. increased its stake in IAG SA, the parent company of British Airways, Iberia Airways and Aer Lingus.

Qatar Airways’ move to bump its stake to 15.1 percent in May came on the heels of a recent jump from 9.99 percent to 12 percent in April.

Qatar executives also said that the carrier may further increase its stake to 49 percent, which is the maximum limit on foreign-ownership currently imposed by European Union regulators.

Akbar Al Baker, CEO of Qatar Air-ways, said the deal is part of the airline’s “westbound strategy” to branch out of the Middle East and Asia, and into Eu-rope and the Americas.

“It gives us a huge benefit from a fi-nancial, commercial and strategic per-

spective,” Al Baker added.

State-owned Qatar Airways took its first 9.99 percent stake in IAG in Janu-ary 2015, at a time when legacy carriers in the United States and Europe were complaining that Gulf carriers were receiving unfair government subsidies which enabled their rapid growth and expansion.

As Qatar’s ownership in IAG in-creases, additional cargo synergies are also expected. IAG, exited the freighter business in 2014, while Qatar Airways Cargo continues to operate a robust freighter fleet that includes eight A330-200Fs and nine 777Fs.

IAG Cargo has, in turn, secured block-space on various QR-operated routes since September 2014.

—Charles Kauffman

Emirates’ SkyCargo connected its airfreight operations in the Far East and Indian subcontinent through a weekly freighter service from Hong Kong to Dubai via Delhi, starting June 1. The company explained its strategy as a way to “tap increasing cargo move-ments between Hong Kong, the world’s top cargo hub, and Delhi, India’s busiest cargo hub.”

The additional capacity will accom-modate key exports from Hong Kong to India that include pharmaceutical raw materials, electronics and machin-ery. Exports from Delhi include leather goods, garments, pharmaceuticals and perishables.

SkyCargo connects shippers in Delhi to more than 150 destinations around the world via its hub in Dubai. As trade continues to grow between these two economic centers, the carrier expects demand for airfreight to follow suit. The service will employ a 777F, with 100 tonnes of cargo capacity, to accommo-date large cargo consignments.

The flight departs Hong Kong every Wednesday evening and arrives in Delhi early on Thursday morning. The service then leaves Delhi and reaches Dubai the same morning.

—Lewis King

Network Airl ine Management (NAM) and TAAG Angola Airlines have signed a long-term contract under which NAM will arrange weekly 747-400F service, operated for TAAG by one of NAM’s airline partners, from Liège, Belgium, to Angola’s capital, Luanda.

With oil inching back over US$50 per barrel, Angola’s recovering hydro-carbon-driven economy relies on the timely delivery of sophisticated parts and equipment to run its oil and gas sector and meet development goals. The southwest African country import-

ed $148 million worth of thermostats in 2014 alone, and $67.6 worth of gas and liquid-flow measuring instruments.

With the 747-400F able to carry 120 tonnes per flight, plus oversize cargo up to 20 meters in length, the consor-tium hopes “to develop the service to twice weekly in the near future.” The new service will also increase export ca-pacity on the return flight from Angola back to Europe, with forwarding con-nections worldwide.

—Lewis King

Qatar Airways raises stake in IAG – again

Emirates’ SkyCargo seeks more South Asian cargo

New weekly freighter service between Belgium, Angola


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Carrier alliances are rapidly becom-ing the way for forwarders in Asia to move their airfreight to overseas desti-nations. Following All Nippon Airways’ (ANA) alignment with Lufthansa in 2014, the Japanese carrier is about to embark on a second joint venture, this one across the Pacific with United Air-lines. Germany-based Lufthansa, mean-while, has set the wheels in motion for another Asian alliance, which is due to kick off next year.

Eighteen months after they first an-nounced their partnership, ANA and United will kick off the first phase on July 5, with joint sales and aligned op-erations for cargo flowing from Japan to the U.S. and Canada. Down the road, this will be extended to cargo flows in the opposite direction, as well. Their combined network includes 175 non-stop flights a week to 12 destinations.

Lufthansa, which got the ball roll-ing through its tie-up with ANA in 2014, will launch a partnership next year with Hong Kong’s Cathay Pacific. Like ANA’s alliances, this will also begin with flights out of Asia and later tackle flows from Europe to Hong Kong in a second stage.

The Cathay-Lufthansa cooperation will cover more than 140 weekly flights between Hong Kong and 13 European destinations. In addition to the joint marketing of their combined capacity on the sectors in question, their part-nership will include an alignment of IT systems, network planning and joint handling activities – initially at their re-spective hubs in Hong Kong and Frank-furt.

Unlike the ANA alliances, however, the Cathay-Lufthansa agreement does not have antitrust immunity at this stage. According to Simon Large, direc-tor of cargo at Cathay, steering clear of antitrust issues has been the biggest challenge in the development of this partnership.

The fact that the two airlines were able to proceed at all with this says a lot about their position in the market and the motivation for this alliance. “Be-tween us we only have a small market share. We wouldn’t be in a dominant po-

sition,” says Large. “The reality is our business to Europe from Hong Kong has come down quite a bit in the last ten years. Both our market share and our volumes have been reduced significantly.”

According to some observers, these alliances are in part driven by the rise of the Middle Eastern carriers, which have been building up their capacity between Asia and Europe. By running freighters from Asia to their hubs and transferring cargo to passenger widebodies headed to Europe, they can undercut Asian and European carriers operating freighters all the way.

Peter Gerber, CEO of Lufthansa Cargo, has signaled that freighters are included in the joint approach with Ca-thay. However, Large stresses that this does not herald a reduction of Cathay’s freighter footprint in other European stations.

For the carriers, the alliances prom-ise capacity optimization and cost re-duction without reducing their net-works. But what about their clientele? The airlines have stated that their align-ments give forwarders more choice of routings, potentially shorter transit times and the possibility to access their combined networks through the book-ing site of either carrier. On the other hand, forwarders will likely have fewer carriers to pick, especially if more alli-ances spring up in the foreseeable fu-ture.

For the most part, forwarders seem unfazed. Large says he has not had any negative feedback from Cathay’s clien-tele.

Li Wenjun, head and senior vice president of airfreight at DHL Global Forwarding Asia Pacific, said he sees more pros than cons. “If the alliances re-strategize their current routing flow, there should be opportunities for opti-mization. With enhanced services being offered, there will be also more efficien-cy, flexibility and speed. Although we may see some adjustment with the rates in the market, this move should be wel-coming to most forwarders due to the ability to offer more dynamic services in

the industry,” he added.

“For us it is positive. The networks of our strategic partners are growing,” said Thomas Reuter, COO Air & Sea Logistics of Dachser Group. For one thing, the Lufthansa-Cathay axis opens the possibility for his company to use one air waybill to Australia for a transit through Hong Kong.

It remains to be seen how the alli-ances will affect available capacity, he added.

There is a widespread expectation that more alliances will take shape in the near future.

“With the current market sentiment, we believe more airlines will need to re-view their aircraft utilization, network route justification and optimization of their aircraft capacities to better posi-tion themselves in the global market,” Li predicted.

“I think there will be more alliances as carriers look to secure volume in this difficult market,” agreed Andrew Jill-ings, CEO of Hong Kong-based logis-tics firm Tigers Inc. However, he added, “I don’t see alliances changing existing forwarder relationships.”

For his part, Large said he has no other alliances on the horizon, explain-ing that developing one takes a lot of work and time. The dialog with Lufthan-sa was started years ago by his prede-cessor, he said.

Some pundits have speculated about the possible ramifications of OneWorld passenger alliance member Cathay teaming up with a carrier from the ri-val Star Alliance camp, but Large also dismissed this. “Cargo is not part of the OneWorld Alliance, which is just a pas-senger alliance,” he said. “Cargo has al-ways been separate.”

–Ian Putzger

Asia-Europe cargo alliances appearing around every corner

ASIAAround the world


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RACCA warns of air cargo delays from pilot shortageAmericans can expect delivery dis-

ruptions in the coming months unless steps are taken to address a growing pi-lot shortage, according to a recent study conducted by the Regional Air Cargo Car-riers Association (RACCA) on behalf of FedEx, UPS and DHL.

The report found that carriers con-necting small-town America to large package delivery hubs, located in cities such as Memphis, Cincinnati, Atlanta and Fort Lauderdale, are being forced to downsize due to a lack of pilots. RACCA members reported being forced to aban-don routes, furlough employees and ulti-mately sacrifice revenues for lack of pi-lots.

RACCA Board Chair Tim Komberec expressed frustration that members could not, “find the pilots to accommo-date that growth,” but remained optimis-tic because, “the good news is demand is out there.”

According to RACCA, the problem stems from congressionally mandated pi-lot requirements that became effective in 2013 in response to the crash of Con-

tinental Flight 3407 near Buffalo in 2009. The new regulations raised the number of hours required before a pilot can fly in the right seat of a commercial airliner to 1,500 – a six-fold increase – making new-er pilots ineligible. Prior to the amend-ment, a commercial certificate required just 250 hours of flight time.

While the National Transportation Safety Board and the Federal Aviation Administration said they oppose the new requirements, only the U.S. Congress can change the rule. The Air Line Pilots Asso-ciation International (ALPA), the world’s largest pilots’ union, takes a different stance, arguing that the new regulations make commercial aviation safer. Accord-ing to ALPA, it is the low pay, not the new licensing requirements, that is deterring potential pilots.

Changes may be afoot, however, thanks to an amendment introduced by Sen. Mike Rounds last month that would allow pilots to use their training flights at an airline as credit toward the 1,500-hour goal.

—Lewis King

Pharma Aero launched to improve cool-chain handlingAn alliance officially launched in June

between Miami International Airport (MIA) and Brussels Airport (BRU) es-tablished an international pharmaceuti-cal air-hub alliance that will allow the two airports, and future members, to more effectively share strategy and expertise in the movement and handling of pharma products.

The organization said it aims to build a network of airports dedicated to grow-ing the global pharma industry, which the World Health Organization projects will increase in value from US$300 billion to $400 billion within the next three years.

The new organization, called “Pharma Aero,” will focus on airport communities that support certification under IATA’s Center of Excellence for Independent Validators (CEIV) program for pharma-ceuticals. Both BRU and MIA have earned their CEIV-Pharma designations.

Miami Airport director Emilio Gon-zalez explained that the move was an opportunity to leverage the airport’s, “strength as a pharma hub by collaborat-

ing with other airports around the world who share a common goal of strength-ening pharma-certified trade lanes and extending pharma cold supply chains to reach new international markets.” The new organization will focus on three pri-mary activities – networking and events, establishing industry standards and cre-ating a “network of excellence” for its members.

Having spent the last four years work-ing with pharma companies to develop and implement the IATA CEIV program at Brussels, Steven Polmans, head of cargo sales and marketing at BRU, explained that, “there still is a lot of work to be done before we can be considered a true and reliable transport partner for them. We now want to continue strengthening our approach by bringing it to a global level and create end-to-end solutions for the pharma industry. The organization will be very much content-focused, develop-ing solutions and creating transparency in very close cooperation with MIA and the pharma industry.”

—Lewis King

AMERICAS Around the world


Third PartiesKuehne + Nagel’s recently departed

head of air freight, Tim Scharwath, was named the new chief executive of DHL Global Forwarding. His freight

forwarding credentials include serv-ing as K+N’s r e g i o n a l president of Northwest Europe and t h e U . K . The freight forwarding subs id iary of Detusche

Post-DHL, DHL-GF, has been beset by internal problems regarding its IT transformation project, the New For-warding Environment, which cost pre-vious forwarding chief executive Roger Crook his job last year. Also DHL-GF has appointed George Lawson as CEO and country manager for India. Lawson joined DHL in 1992 and has worked in a number of leadership positions, includ-ing sales, operations, marketing and general management in Asia and Eu-rope, including a stint as COO in Sing-apore. Most recently, he was the senior vice president and global head of mar-keting, and is the key architect of DHL-GF’s Certified International Forwarder program.

Meanwhi le a t Kuehne + Nagel, Yngve Ruud was tapped to be the new head of air-freight logistics af-ter Tim Scharwath announced his de-parture. Ruud, who wil l assume his new role this October, is a K+N veteran, having worked for the company for the last 26 years. He is currently regional manager for Western Europe, the com-pany’s largest regional organization.

Following closely behind the merger with FedEx, Marianne Culver, U.K. managing director of TNT Express, stepped down from her position in June after 18 months on the job and said she plans to pursue other interests. In her place, TNT has promoted Rob Peto, di-rector of finance, TNT U.K., to the man-aging director role. Peto was formerly the finance director of the now-defunct U.K. express company CityLink. Culver was appointed to the board of directors of Rexel in March.

CEVA Logistics has appointed Alain Souto as vice president for global con-tract logis-tics – aero-space sector operations. Souto joins CEVA from K u e h n e + Nagel, where he was direc-tor of indus-try and aerospace logistics. Previously, he also held management positions at Christian Salvesen and Hays Logistics. CEVA Logistics also has appointed Christophe Poitrineau as executive vice president and head of its Italy clus-ter, as well as Ching Guo to the posi-tion of senior vice president, global con-

tract logistics – technology operations. Guo joins CEVA from China-based e-commerce giant Alibaba, where he co-founded the “Village Taobao” business for the development of online product information, digital payment and last-mile logistics.

S e b a s t i e n D e s r e u m a u x has joined JF Hillebrand UK as its new man-aging director. He has 20 years of experience in logistics, and was previously the commercial and marketing director of transport solutions in Europe at XPO Logistics. Desreumaux also held roles as Norbert Dentressangle’s managing director of European bulk, and as op-erations director for Christian Salvesen.

Yusen Logistics Mexico named Jordan Dewart as its new president. He succeeds Hiroshi Shimizu, who was named president of Yusen Logistics India. Dewart reports to Ken Miyoshi, president and CEO of Yusen Logistics (Americas) Inc., chief regional officer and a member of the board of directors.

Alliance Shippers, Inc., this month announced the addition of Sherri Tip-

ton to its sales team. With more than 20 years of transportation experience, her expertise extends into intermodal, flatbed business development and bro-kerage operations.

AIRLINESRay Curtis, vice president of Delta

Cargo, is set to retire from the com-pany in August after leading the sales team for eight years, and after serving for nearly 30 years in the cargo busi-ness, starting with Northwest Orient Cargo Airlines. Meanwhile, the new Del-ta Cargo president, Gareth Joyce, took over in May, following a stint as CEO and president of Mercedes-Benz Can-ada. Joyce, a South Africa native, said he plans to make improved customer service a priority.

Wolfgang Meier has left his position as head of marketing and development at Volga-Dnepr/AirBridgeCargo without disclos-ing his next ca-reer move. Wolf-gang has been with the Volga-Dnepr Group for seven years and has had respon-sibility in several different mana-gerial positions.

MROs & MAINTENANCEMike Neder was appointed as

Vortek Aviation’s vice president for sales and marketing this month. The avionics service provider chose Neder for his decades of experience in the avi-ation industry, as well as his specializa-tion in aftermarket avionics sales and aircraft modifications with companies such as DAC International and ASIG.

ORGANIZATIONSClare Murray, former chief execu-

tive of the Board of Professional En-gineers Queensland, has been named chief executive of the Customs Bro-kers and Forwarders Council of Australia (CBFCA). Murray will re-place Stephen Morris, who will retire as chief executive after years 25 with CBFCA and its predecessor association.

Sebastien Desreumaux

Yngve Ruud

Christophe Poitrineau

Wolfgang Meier

Alain Souto

People&Places

Tim Scharwath


Wh e n B a y A r e a s e r i a l entrepreneur Vijay Harrell hit upon the idea for OneClickShip,

an online portal that allows small businesses to control most of their supply chain management needs, he knew he had a winner on his hands. But he also knew that he didn’t know nearly enough about the freight business to strike out on his own.

Enter EPIcenter, a technology accelerator that opened in Memphis in 2014 and is backed by logistics giant FedEx, the Memphis Regional Chamber of Commerce and other private sector leadership in the city. The goal of organization, said Leslie Smith, president and CEO of EPIcenter, is to provide technical expertise, teach business skills, raise funds and provide a safe haven for at least 500 companies over a seven-year period.

Noting that EPIcenter was looking to create a program specifically designed for logistics startups, Harrell jumped at the chance to join in 2015. “Coming to Memphis from San Francisco for the EPIcenter accelerator was a no-brainer,” he said. “It’s one of the best things we’ve done to move our business forward.”

According to Harrell, EPIcenter’s Logistics Innovation Accelerator provided valuable insight about international trade and the life-cycle of goods, “from cotton to the t-shirt in the retail store.” Other topics covered during the five-month program included the dos and don’ts of exporting, logistics and the supply chain, the supplier dynamics, the buyer dynamics, the freight forwarding market, customs and customs brokers, the warehousing market, the ocean carrier market, and the trucking carrier market.

“We basically got an Executive MBA in logistics and supply chain management,” he added. “We wouldn’t be where we are today without the program.”

Today, more logistics startups are turning to these innovation laboratories, using them as launchpads to start their businesses, gain expertise and attract venture capital. Even cargo airlines are getting into the act. In March of this year, Lufthansa Cargo announced that it was

Logistics LaunchpadsCan tech accelerator programs foster air cargo innovation?By Randy Woods

teaming up with San Francisco-based technology campus, RocketSpace, and Spanish logistics company, Kaleido, to create a new Tech Accelerator specifically for the logistics industry. This is the first time RocketSpace has delved into logistics, and the first time a cargo carrier has participated directly in any known accelerator program.

“RocketSpace helps entrepreneurs and global corporations bring the future to market, and that applies to a range of industries, including logistics,” said the organization’s founder and CEO, Duncan Logan. “We keep tabs on the disruptive trends, business models and startups that will impact corporations today and in the near future.” He estimated that about 100 startups across several business sectors have been helped by RocketSpace.

T h e p o p u l a r i t y o f t h e s e organizations is only expected to grow, Duncan said. “The air cargo industry ripe is for innovation,” he said, “as consumers increasingly expect speed and easy access to goods.”

What’s an accelerator?Unlike venture capital firms that

often seek a controlling interest in the firms they assist, technology accelerators tend to be more hands-off, allowing the group of startups to grow organically in a highly collaborative setting. This allows them to make smaller, riskier investments.

At EPIcenter, several startups are chosen each year through a competitive application process, Smith said. Each finalist will also receive US$50,000 in initial seed capital, in return for a modest 7 percent equity stake. Half of this investment, from venture capital firm Innova, is earmarked toward the developing the initial product and a business model. The remaining $25,000 is matched by EPIcenter, which will also provide business mentors and a challenging curriculum of business classes. Thanks to its ties to FedEx, the program also includes periodic visits from FedEx executives and tours of the logistics headquarters nearby.

“It ’s a l itt le l ike a classroom environment meets a co-working space,” Smith said. “Our secret sauce is probably the deep focus we provide on establishing industry knowledge. We want [the startups] to grow. We just want to recoup enough capital to keep the program going.”

At the end of the EPIcenter program, each team presents its business plan to a panel of investors, business leaders and community supporters at Memphis Demo Day. In addition to OneClickShip, EPIcenter’s 2015 “cohort,” as each year’s accelerator is called, there were three other companies:

• LiLoE, from Washington, D.C., was founded by a U.S. Navy veteran who is working on a solution to the doorstep delivery of unattended packages.

• L7 , of Memphis , which is developing an online marketplace for consumer-to-consumer shipping options.

• Thaddeus Medical Devices, founded by a former Mayo Clinic researcher from Rochester, Minn., is developing a device that regulates package temperature.

For Harrell, one of the key benefits of EPIcenter is the ability to test out the processes of his OneClickShip venture with little risk to the startup. “We participated in two export shipments before we built any product,” he said. “This was done through a partnership we formed by networking in the accelerator program. We learned how painful it is to export. Phone calls, faxes, emails, paper documents – it was the most important lesson we could have learned.”

Rocketing forwardThe appeal of the accelerators is

obvious for logistics startups looking for a foothold in the crowded 3PL market. But what is the appeal of RocketSpace for a large carrier like Lufthansa Cargo (LHC)? “We are not only fully supporting innovation and digitization in our own company,” said Monika Wiederhold, vice president of product management and Innovation

at Lufthansa Cargo, “we want to drive our industry forward as a whole. The logistics industry is really ripe for disruption. The question is, how long will it take?”

LHC approached RocketSpace back in March, she said, and became part of RocketSpace’s first Logisitics Tech Accelerator in April. After a call went out for logistics startups to submit proposals, RocketSpace gathered about 60 applicants. “The candidates ranged from just being at the idea stage to being pretty well established,” Wiederhold said. “We were very satisfied with the number.”

During the vetting process, the judges at LHC and RocketSpace looked at “topic, team and target,” Wiederhold said. “It was a very open process.” After a quick screening for basic ideas, to make sure there was some kind of digital component that involved the customer’s perspective, they focused next on the makeup of the team to see if they meshed together well, followed by a third look at their business plans.

Other selection criteria, said RocketSpace’s Logan, included the existence of seed funding, a product either in market or ready to launch, and a connection to the program’s key technology themes, which were smart warehouse, smart transport and smart commerce/trade. “These factors help ensure that the startup is mature enough for productive collaboration and potential partnerships,” he said.

In the end, the accelerator wound up with eight companies, “all focused on different topics -- robotics, distribution platforms, warehousing platforms,” Wiederhold said (see sidebar). In mid-June, the startups began their five-month process to develop their ideas and possibly create pilot opportunities by September. During that time, she added, LHC and Kaleido will provide guidance and mentoring advice along their journey.

Unl ike tradi t ional corporate accelerators confined to a single corporation, the Logistics Tech Accelerator uses “an open innovation


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model by including multiple corporate members, startups and industry mentors to draw from their diverse expertise,” Logan said.

The focus of the program, he added, will be on “practical aspects of a growing startup, with an emphasis on sales, fundraising, marketing and growth, and product.” Startups will share all necessary costs, participate in weekly meetups and attend speaker series and other programs.

At the end of the project, the RocketSpace accelerator model also goes beyond the “typical demo day,” Logan added, and will include pilot testing. The ultimate goal, he said, is to not just reach a “proof of concept” but to progress toward “a commercially viable product.”

The next generation Right now, the eight chosen companies in the first

RocketSpace accelerator project are in the middle of their five-week curriculum of intensive study and will move toward pilot testing of their concepts by the middle of this month. Meanwhile, the four companies in the second-annual EPIcenter Accelerator cohort have until the middle of August to complete their projects.

“Last year, we had a very broad call for logistics ideas,” said EPIcenter’s Smith. “This year, we got a more refined set of business proposals. We’re seeing a lot of emphasis now on [less-than-truckload], last-mile innovation and how do we get away from GPS-based navigation, since it does not do particularly well in an urban-core environment. They’re asking themselves, how do we disrupt Amazon and PayPal?”

Harrell, who graduated from the 2015 EPIcenter cohort, is proof that there is life after accelerator projects. Since last year, OneClickShip has changed its name to TradeLanes, and is now in growth mode. “Our product is live with private beta customers,” he said. “We raised an angel round of funding in March 2016, and we secured enough to reach profitability and to grow our team.”

Accelerators, Harrell said, can have a bright future in the logistics business. “It can be argued that supply chain logistics is the most important market in today’s economy,” he said. “It’s important for entrepreneurs to have the right advisors, mentors and experts around them. Even for entrepreneurs with a logistics background, accelerators can teach them things about product and customer development that are tough to learn anywhere else.”

Depending on the results this fall, Lufthansa Cargo’s Wiederhold said she expects to see more logistics accelerators in the future. “What’s innovative is that it’s not a competition – it’s all about collaborating openly and focusing on different fields. This will be a journey for us, and we are very excited to be taking part.”

EPICENTER LOGISTICS INNOVATION ACCELERATOR ( Mar. 23-Aug. 11, in Memphis )NovoNav – Provides a personal navigation platform that solves the issue of “last 100-foot” navigation in areas that are not mapped.

Roundabout Markets – Brings technology to create a national marketplace for secondhand shops, increasing market exposure and streamlining product marketing and delivery.

iShipdit – Expedia-like platform for matching less-than-truckload (LTL) shipments to unused space that exists on trucks every day.

SILQ – Intelligent system designed to help businesses manage their professional relationships and network.

LUFTHANSA/ROCKETSPACE TECH ACCELERATOR ( June 13-Sept. 9, various locations )CargoSteps – Frankfurt, Germany – Offers real-time track-and-trace software that allows different logistics companies of every size to easily work together.

Eurosender – London, U.K. – An online booking engine for international door-to-door shipping service.

Logyc – San Francisco, U.S. – Offers data intelligence-as-a-service.

Newport Trade Services – Newport, Ky., U.S. – Helps manage global trade technology by creating tailored solutions through project management and process controls.

OrderCircle – San Francisco, U.S. – Brings Shopify’s ease of business-to-consumer order acceptance and management to B2B wholesale orders.

OTTO Motors – Ontario, Canada – Provides self-driving vehicles designed exclusively for material transport.

SLiCK – Antwerp, Belgium – Offers a cloud-based “logistics control tower” to manage order collaboration, communication and transport management.

Skuchain – Mountain View, Calif., U.S. – Develops block-chain-based products for business-to-business trade finance and supply chain finance.

Welcome, Logistics Class of 2016!The startups selected in the accelerator

programs under Lufthansa/RocketSpace and EPIcenter represent a range of emerging industry tech sectors, and will have a chance to validate their products through pilot testing with multiple global corporations. The chosen startup f i rms in both programs are:


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Few activities require a greater degree of blind faith than swallowing a pill. The tiny capsules can be life-savers, but there are few outward signs that indicate

whether they are legitimate. Imagine being prescribed Heparin, a proven blood thinner, only to find out after the onset of a blood clot that the drug was an illegal import. Between 2007 and 2008, at least 149 Americans died from a scandal involving fake Heparin.

For most people who have the luxury of having their prescriptions filled at a pharmacy, the drugs are, more likely than not, authentic. However, as the Heparin incident and numerous other cases involving counterfeit medications have shown, even in developed countries, fake drugs have been able to infiltrate the supply chain. What, then, can be done to ensure fake medications do not enter the pharmaceutical supply chain?

In a move to enhance supply-chain security, regulators around the globe have introduced legislation that pushes for more comprehensive track-and-trace requirements. In the United States, the FDA’s Drug Supply Chain Security Act (DSCSA), Title II of the Drug Quality and Security Act, which was enacted into law in 2013, calls on the pharma supply chain to build “an electronic, interoperable system to identify and trace certain specific drugs as they are distributed in the United States.” Compliance is required gradually, in three phases, which will ultimately require drug dispensers to receive, verify and store “T3” compliance data in three parts – the history, information and a statement for each transaction – at the serialized product level by 2023.

So how will this extra layer of security affect forwarders? Pure forwarding activities will continue to move sealed pallets containing serialized pharmaceuticals through the supply chain, much like they do today, because there is no requirement under DSCSA for shippers to exchange information with transport intermediaries. However, the same cannot be said of third-party logistics providers (3PLs). Given that 3PLs often receive, store and fulfill orders and

deliveries on behalf of pharmaceutical manufacturers or a product’s brand owner, DSCSA requirements have many pharma-focused 3PLs scrambling to revamp their current practices. Any delivery to an authorized drug dispenser (hospital, pharmacy or healthcare provider) must be done in accordance with the DSCSA, and if done through a 3PL, requires collaboration with the manufacturer.

Harmonizing track-and-trace and data exchange verification capability between 3PLs and pharmaceutical manufacturers is anything but a simple task, and the clock is already ticking. Phase I of DSCSA compliance went into effect on May 15, 2015, requiring product tracing at the lot level and scanning technology upgrades to read 2D serialized barcodes at the warehouse level. This caused little more than a ripple because most warehouses were already equipped with the scanning technology. But Phase II, which goes into effect beginning in November 2017, requires item-level serialization and poses a real challenge for 3PLs.

Brian Daleiden, vice president of industry marketing at TraceLink, a cloud-based track-and-trace network, warned that many 3PLs are only starting to realize the potential issues and complications they face. “If you’re a pharmaceutical company supplying products covered under DSCSA, working with 3PLs, and you are not today having any active conversations about what your plans and expectations are, you are creating serious risk for your ability to supply products and meet the serialization deadlines,” he said. “Not to say compliance cannot be reached, but you should be having the conversation today.”

Aggregation relationships Serialization will mean that each pallet, case and item will

have its own unique 2D barcode, enabling precise track-and-trace capabilities down to the individual product as it moves through the supply chain. In theory, the enhanced capabilities of the 2D barcode is an advance for pharma security. In

The Race for Track & Trace Are 3PLs ready for pharma serialization? By Charles Kauffman


ACW

practice, however, upgrading the software and hardware required to interpret and store the data is far more complex.

Carl Ambroise, IT director for 3PL pharma provider WDSrx, said of serialization upgrades, “hardware and software must accommodate the huge increase in data transfer and storage required by the regulations, as well as be flexible to securely communicate effectively with other systems within and outside our facilities.”

In isolation, the hardware and software required to serialize and

trace individual products are not compl ica ted ; express de l i very companies for example, have been doing it for years. Aggregation – essentially the ability to know pallet/case/item-level relationships with a single scan – is where everything gets fuzzy, both on a practical and legal basis. While it remains unclear whether DSCSA will require shippers to exchange aggregation relationships with 3PLS, on a practical level it often becomes useful when pallets are broken down for further product distribution. With serialization, you are “no longer dealing with gross quantities and at

Part of what makes serialization complicated is the lack of harmonized requirements. At the macro level, serialization guidelines are not standardized from country to country. In fact, serialization requirements can vary dramatically from company to company, raising a host of questions that must be considered well in advance of item-level serialization implementation.

Lucy Deus, head of products at TraceLink, noted four key questions that serve as the foundation for Pharma-3PL compliance preparation workshops she has led:

Conflictingrequirements

• What kind of information does the manufacturer or the brand owner want to receive from the 3PL?

• At what frequency does the brand owner need the information?

• What information does the 3PL need from the brand owner?

• How can the parties exchange information at the appropriate interval to ensure the brand owner is up to date on compliance?

Varying answers to these questions mean that solutions often must be tailor-made to fit the individual needs of the shipper and 3PL. Matthew Deep, vice president of technology at DMlogic, reiterated that the difficulty comes into play when 3PLs break down shipments and try to tie cases and units to the original shipment. “Systems can’t handle that right now – no off-the-shelf, fully integrated solutions that can handle current picking processes, as well as the serialization scanning component,” he said. “To solve this issue, a lot of companies have built ‘edgeware,’ which sits on the side of the current system and receives the serial data.” The edgeware then either merges data back the product or pushes it on to be married with shipment and interface at a later point. WDSrx, for example, integrates software from three separate vendors into its current WMS system to comply with DSCSA.

the shipment level anymore,” Daleiden said. “You’re really now starting to think about individual units moving through the supply chain.”

For reverse logistics, this matter becomes increasingly complex. Say a 3PL delivers a case of serialized Heparin to a pharmacy. Prior to the drug’s expiration, the pharmacy decides it needs to relocate across town, and wishes to use the same provider’s reverse-logistics services to process a few units of Heparin. To verify the product’s authenticity, the 3PL needs to be able to link the individual serial numbers from the original shipment and requires either aggregate relationship data, or a way to make a verification query with the manufacturer.

The next phaseWith a little more than a year to

go before Phase II is mandatory, there is still time to work out kinks in the system with pilot programs, but time is running out.

“During pilots, pharmaceutical companies learned what impact serialization has on the warehouse, learned how much time it takes to scan, accept full-case as it is, minimize the additional edgeware and make sure stop-gaps are in place so that pallets aren’t shipped without serial data” said Matthew Deep, vice president of technology at DMlogic.

Moving forward, Deep and Daleiden agree that a comprehensive, integrated software solution for warehouse management and compliance with DSCSA will be the next phase of track-and-trace technology. For now, flexibility and customized solutions will have to do.

In the end, experts realize that DSCSA is about so much more than compliance. It’s giving drug dispensers a way to detect counterfeit medications without a verifiable history, with the simple scan of a serialized barcode. Deep added, “I’m passionate about this because the end-result of the countless hours spent developing these solutions is patient safety.”


If the Azerbaijani government had its way, the capital city of Baku might be called a “second Dubai.” Heydar

Aliyev International Airport (GYD) – located on the Absheron Peninsula and surrounded on three sides by the inland Caspian Sea – has one of the largest and newest cargo terminals in the Commonwealth of Independent States (CIS) region.

Seeking to emulate the United Arab Emirates’ role in turning Dubai into an entrepot between Asia and Europe, Azerbaijan doing its part to encourage the flow more air cargo traffic through Baku, the home of Silk Way Airlines and flag carrier Azerbaijan Airlines. For instance, in April, Azerbaijan signed an open skies agreement with the United States – a step warmly welcomed by Silk Way, which has been running flights to New York since May of last year. Berati Bulent Ilhan, Cargolux’s regional director for Russia, CIS countries and Turkey, said that a bilateral agreement between Luxembourg and Azerbaijan has given the all-cargo carrier a stronger standing in the region, with 17 weekly frequencies to Baku.

But does Baku really make sense as the epicenter of Caspian region trade? Is such a single hub even necessary? It doesn’t seem so. Changes in local industries and a diversifying economy have actually shifted the focus away

from Baku. Today, there are equally compell ing arguments to create large hubs in other cities around the Caspian basin, such as Ashgabat in Turkmenistan, Tbilisi in Georgia, and Yerevan in Armenia.

As Christian Becker, regional director, Russia and CIS, for Lufthansa Cargo, described the current situation around the inland sea, “it is not easy to see if a ‘second Dubai’ is needed.”

Not just oil & gas anymoreFirst of all, the Central Asian region

is no longer a one-industry community. For decades, most of the Caspian’s economy had been dominated by oil and gas exploration and extraction activity. Now that fuel prices have been cut in half since 2014 and have remained relatively low, the region is slowly pivoting away the energy business.

The region, however, can still support new maindeck activities. Lufthansa Cargo has been running a weekly MD-11 freighter through Azerbaijan and Turkmenistan since March, Becker said, noting that all but a few markets in the region are producing posit ive results . In Azerbai jan, Lufthansa had capacity constraints before the freighter came into the picture. “We had A330 widebody service to Baku in the past, but we shifted to

an A320. The freighter addresses the capacity issues,” Becker added.

He said he sees potential for more maindeck capacity into Central Asia, a region that Lufthansa today covers with narrowbody passenger planes, besides weekly freighter service through Tashkent, Uzbekistan, and Almaty, Kazakhstan. “We can possibly do more, potentially in conjunction with other markets,” he said, suggesting that Ashgabat has proven to be an attractive market, at least for imports.

Overall the region’s flows are predominantly inbound. Besides oil-and-gas-related traffic, there are few exports. Personal effects of expatriates who have finished their spell in local oil-and-gas operations constitute a significant part of non-energy-related traffic.

Inbound, the spectrum of cargo is slowly expanding. “While oil equipment shipments have dropped due to the decline in oil prices, it still remains the main commodity, but we also see more and more consumer electronics, pharmaceutical products, flowers and other perishables, livestock, cars, fashion goods and luxury items,” reported Cargolux’s Ilhan.

Larry Coyne, CEO of Coyne Airways – which has been one of the Western pioneers in the air cargo business,

Beyond Baku Air cargo ambitions reach past the Caspian region By Ian Putzger

@ACWMAGAZINE | AIRCARGOWORLD.COM | JULY 2016 23 @ACWMAGAZINE | AIRCARGOWORLD.COM | JULY 2016 23

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covering the region, from Afghanistan to Kazakhstan – said that the e-commerce boom is beginning to make itself felt in Central Asia. B2C e-commerce flows into the region are still in their early stages, he said, but this traffic already makes up 10 percent of Coyne’s business into the area and is growing. “I think there will be more when Iran comes on,” he added.

Looking to the outsideLufthansa, like other carriers active in the area, is

seeking to build up its reach beyond the main gateways of the Caspian region, which are still dominated by origin and destination traffic. “We are very active in Baku trying to build

links to other regions through regional carriers – to eastern Kazakhstan, for example,” Becker said.

Azerbaijani all-cargo operator Silk Way West Airways certainly has its sights on transit flows beyond its home base, which is reflected in its freighter lineup, consisting of three 747-8 and two 747-400 freighters. “They try to run business from China over Baku to the U.S. and Europe,” Coyne remarked.

Besides China, Southeast Asia has become a larger focus for the Azerbaijani carrier. In March, Silk Way announced a block-space agreement with MAB Cargo on a twice-weekly Silk Way 747-8 from Kuala Lumpur via Baku to Amsterdam.

Baku — the capital of Azerbaijan, has one of the largest and most centrally located of the Caspian-area airports, and the federal government would like to see it become a “second Dubai” in the region.

Tbilisi, Georgia -- Larry Coyne, of Coyne Airways said the Georgian capital has an efficient airport and relatively liberal taffic rights for the region.

Yerevan, Armenia -- Lufthansa’s Christian Becker said the Armenian capital would be a decent cargo option were it not for the customs union it joined with Russia, echoing the old Soviet Era of mandatory clearance of cargo at point of entry.

Ashgabat, Turkmenistan — Becker praised the efforts of Turkmenistan for beginning an overhaul of the Ashgabat Airport, which may make the country a more inviting cargo destination.

Wild Cards — No one yet knows how great an influence Tehran will become now that U.N. sanctions have been lifted. Also, Turkmenbashi, the traditional terminus of the Trans-Caspian Railway, may also play a role in the many land-bridge rail-ocean routes proposed between Europe and China.


ACW

“Leveraging existing interline and block-space agreements, this partnership will allow both airlines to have access to each other’s capacity across the i r respect ive g loba l networks,” said Silk Way CEO Kamran Gasimov. “The first Azerbaijan freighter arriving in Kuala Lumpur airport has started a new page in our airline history. We will continue our network expansion into Southeast region and meet the changing needs of the market.”

The freighter block-pace deal is part of a broader agreement between the two carriers that aims to build up greater collaboration on capacity, ground handling and line maintenance. It should also facilitate the development of Kuala Lumpur and Baku into regional transit hubs, the pair have indicated.

Silk Way underscored its ambition for a larger role beyond origin-destination traffic in the same month with the deployment of Descartes’ cloud-based Global Air Messaging Gateway, which helps users automate connectivity to trading partners, monitor shipment status in real time, and send status updates to forwarders and consignees.

Coyne said that the opening of Iran will bring opportunities for transit points in the region, but added that other barriers still remain. Yerevan, for instance, would be a potentially strong contender for hub status in the region, were it not for Armenia’s participation in a customs union with Russia, Belarus and Kazakhstan. This re-joining of forces has brought back Soviet Era customs practices, such as mandatory

— Kamran Gasimov, CEO of Silk Way

The first Azerbaijan freighter arriving in Kuala Lumpur airport has started a new page in our airline history. We will continue our network expansion into Southeast region and meet the changing needs of the market.

clearance of cargo at the point of entry.

In Kazakhstan, the customs practices have effectively stopped Coyne’s established strategy of serving multiple points on one routing. “Now you either leave or your plane sitting on the ground while they translate all the air waybills into Russian,” he said. By his estimate, the parking and translation fees would add US$1.50 to $2 per kilo to the rate.

There are also border disputes of a more dangerous kind. Relations between Armenia and Azerbaijan have been frosty ever since the clashes over the disputed enclave of Nagorno-Karabakh in the early 1990s. Hostilities erupted again in April this year, and trucking routes from Tbilisi to Yerevan have moved further inland as a result. But otherwise, the tension has not affected operations and cargo flows in the region, according to Coyne.

Georgia on their mindsSeeking to avoid the higher handling

charges at Baku and border restrictions found elsewhere in the region, carriers have lately shown more interest in the nation of Georgia. Coyne Airways was the first to develop the Georgian capital, Tbilisi, as a gateway for the region. “Tbilisi is a pretty efficient airport, and it has a more liberal regime as far as traffic rights are concerned,” Coyne said.

Coyne Airways flies from Tbilisi to points in Kazakhstan, while its business in Azerbaijan goes by road from Tbilisi to Baku. “We don’t have a very big stake in Azerbaijan,” said Coyne, adding that the competition there has been aggressive.

Yields in Tbilisi have sunk as a result of an influx of capacity, both

maindeck and belly lift, leading Qatar Airways to stop its freighter flights to Georgia. But other carriers are showing interest. “Tbilisi is in our sights,” said Lufthansa’s Becker. “We are watching developments there.”

Cargolux has been f ly ing to Tbilisi twice a week since 2008. Ilhan describes the cargo infrastructure there as very good and says that demand for the carrier’s road feeder service to nearby Yerevan has increased.

Becker also said he is looking forward to the opening of a new airport at Ashgabat, although the setup at the Turkmenistan capital’s existing airport is not on a par with European standards. While this does not create any problems, he added, it does mean that more time has to be allocated to loading and unloading.

Observers have stressed the likely impact of growing overland logistics links from the Asian Pacific Rim – notably China – to Europe through Central Asia. This is bound to undermine some airfreight flows but could arguably open opportunities for transit points in the region.

However, Becker doubts that these flows would come far south enough to benefit the Caspian region. “We see China overland mover via Kazakhstan,” he said. “We’ve had inquiries about capacity for Kazakhstan, but not over Baku. We are going over Almaty.”

While no single hub may emerge from this thriving crossroads of the world, it is clear that air cargo carrier interest in the Caspian Sea basin will remian high. “In the future,” said Cargolux’s Ilhan, “we are looking at increasing our footprint in the region.”

In March, Azerbaijani all-cargo carrier Silk Way West Airways began a block-space agreement with MAB Cargo on twice-weekly 747-8 service from Kuala Lumpur via Baku to Amsterdam.


BottomLine

Apr - 2015 5,394 8,508 63.4%

Apr - 2016 5,400 8,749 61.7%

YoY % Change -0.1% 2.8% -1.7 points

Jan - Apr 2015 21,425 33,163 64.6%

Jan - Apr 2016 20,398 33,919 60.1%

YoY % Change -4.8% 2.3% -4.5 pointsM

onth

lyY

TD

FATK(mil.)

FTK(mil.)

Freight LoadFactor

AAPA: Asia-Pacific Carrier Traffic, April 2016 & YTD

While the preliminary April 2016 totals for Asia-Pacific passenger traffic showed a 4.8 percent, year-over-year, increase, cargo demand over the same time period remained flat, resulting in a 1.7 percentage-point drop in average freight load factor to 61.7 percent, dur to a 2.8 percent spike in capacity. “International air cargo markets are still weak,” said Andrew Herdman, AAPA’s director general, “with year-to-date demand registering a 4.8 percent decline, compared to the same period a year ago, reflecting the lackluster global trade conditions.”

April saw an overall 3.2 percent increase in freight tonne kilometers, but it came with a in increase in capacity that was more than twice as large, compared with the previous April. So, while freight-load-factors tumbled, Europe, the Middle East and North America all saw healthy gains, measured in FTKs. Africa and Asia/Pacific were basically unchanged, while Latin America suffered another painful drop of 5.9 percent.

% Growth YoY in FTK Region FTK AFTK

Africa -0.0% -24.3%

Asia/Pacific -0.1% -2.8%

Europe 6.8% 5.6%

Latin America -5.9% -0.7%

Middle East 7.7% 11.0%

North America -4.0% 9.2%

Industry 3.2% 6.6%

IATA: Total Freight Growth by Region, April 2016

Source: IATASource: Association of Asia Pacific Airlines

International scheduled services, monthly and YTD, for Asia-Pacific Airlines


BottomLine

Source: U.S. Energy Information Administration

Monthly year-over-year percent change in intra-Europe, long-haul, and overall freight traffic (FTKs) for European airlines over the last 12 months.

Source: Association of European Airlines

U.S. Gulf Coast, kerosene-type (wholesale price) over the last 12 months

The price of jet fuel continued its slow, steady rise as the United States began to enter the sum-mer months, when air travel begins ramping up. The average US$1.29 spot price per gallon for May (a 14-cent jump over the previous month) is the highest level since last October and repre-sents the four consecutive month to see a price hike.

USEIA: Jet Fuel - Spot Price, 12-Month Change

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U.S.

$ P

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$0.50

$1.00

$1.50

$2.00

$2.50

-10%

-6%

-2%

5%

10%

15%

20%

Total Long-haul Intra-Europe Overall

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After leaping by 18.4 percent, year-over-year, in March, the April figure for intra-Europe carrier traffic settled down to a less-dramatic but still-impressive 12.6 percent growth, y-o-y. Mean-while, total long-haul traffic (6.3 percent) and overall traffic (6.9 percent) both showed robust growth in April, y-o-y, for the second consecutive month across the continent.

AEA: European Carrier Traffic, April 2016

Source: Drewry Sea & Air Shipper Insight

Weighted average of all-in “buy rates” paid by forwarders to airlines.

Drewry’s East-West Airfreight Price Index moved up 0.9 points in April to a reading of 80.4, after March’s 0.3 point gain. This followed a period of four consecutive months during which the index declined by more than 20 points after peaking in October. Simon Heaney, manager of sup-ply chain research for Drewry, said he expects airfreight pricing to remain “under pressure,” with further deteriora-tion anticipated into the Northern Hemisphere’s summer months as more passenger aircraft are brought into service to support the peak tourist season.

Drewry’s East-West Airfreight Price Index, April 2016

95

90

85

80

75

70

100

$2.75

$2.50

$2.25

$2.00

$3.25

$3.00

$3.50Index Avg. Rate ($US)

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CARGO SECURITY: ARE WE SAFER NOW?HIGHWAY FEVER:

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Events

Advertiser’s IndexAEMCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28

Aeroport De Paris . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21

Air Animal Pet Movers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28

Cargo Facts Symposium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

Cargo Systems Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28

Delta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Elevate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Etihad . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Freighter Forecast. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

Garden City Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31

Team Worldwide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28

Turkish Cargo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32

AUGUST 14-17Americargo Meet – Las Vegas, U.S.: This event is designed for independent inter-national freight forwarders to interact and develop business contacts with American forwarders, solution providers and alliances in one networking event. Meetings are op-timized to provide a business development platform via an optimized Face2Face sched-uler. For more information, visit americar-gomeet.com.

SEPTEMBER 13-15IATA E-cargo & Technology Conference – Geneva, Switzerland: The conference provides a platform for industry profession-als with a stake in e-cargo to interact with each other and be informed about the latest worldwide developments, in terms of regula-tion, standards, business processes and tech-nology. The approach will be interactive, fo-cusing on debates from experts, opening the floor for challenges and new ideas. For more information, visit iata.org/events/Pages/e-cargo.aspx.

SEPTEMBER 18-2113th Sino-International Freight For-warders Conference 2016 – Shanghai, China: Co-organized by the China Interna-tional Freight Forwarders Association (CIFA) and WCA, the conference is scheduled to attract 1,500 freight forwarders, as well as an impressive range of logistics vendors and industry-related companies, to create new, mutually beneficial partnerships around the globe. For more information, please visit sin-oconference.com.

SEPTEMBER 26Cold Chain GDP & Temperature Man-agement Logistics Global Forum – Bos-ton, U.S.: The world’s largest event for temperature-controlled life science supply chains will return this year with extended topic focuses, new session formats, exciting speakers and enhanced vendor options. For more information, visit coldchainglobalfo-rum.com.

SEPTEMBER 27-28Cool Logistics Global – Bremen, Ger-many: Stay abreast of the latest industry trends, covering supply and demand of key perishable commodities, innovative distribu-tion techniques, and new strategies for both

core and new perishable markets. The theme of this year’s event will be “Cool strategies for core markets.” For more information, visit coollogisticsresources.com/global.

OCTOBER 3-8FIATA World Congress – Dublin, Ire-land: The event, to be held at the Convention Centre Dublin, will help celebrate FIATA’s 50th anniversary by providing networking op-portunities among top freight forwarders in the welcoming atmosphere of the Emerald Isle. For more information, visit fiata2016.org.

OCTOBER 10-12ELEVATE/Cargo Facts Symposium – Mi-ami, U.S.: The Cargo Facts Symposium is where the air cargo aviation community gath-ers to network and shape the future of the in-dustry, presented by Air Cargo Management Group. This year, Air Cargo World will also present its inaugural ELEVATE conference, focusing on the latest innovations in freight forwarding. For more information, visit car-gofactssymposium.com or elevateaircargo.com.

OCTOBER 25-27AVSEC World Conference – Kuala Lum-pur, Malaysia: Hosted by Malaysia Airlines, AVSEC World unites professionals in the se-curity sphere to discuss current issues and actions to be taken to manage risks in the aviation industry today. For more informa-tion, visit iata.org/events/avsec/Documents/AVSEC-agenda-2016.pdf

OCTOBER 26-28TIACA’s Air Cargo Forum and Exposi-tion 2016 – Paris, France: TIACA’s biennial event brings together thousands of air cargo industry leaders, customers and more than 200 exhibitors from approximately 100 coun-tries. For more information, visit tiaca.org or send an email to [email protected].

NOVEMBER 16-18Logitrans – Istanbul, Turkey: The 10th edition of Logitrans will take place at the IFM Istanbul Expo Center. The international trade show features solutions in the field of transportation, logistics and telematics, all located in Istanbul – the ideal bridge between the markets of Europe, Asia and Russia. In 2015, the event attracted more than 15,000

participants and 220 exhibitors. For more information, please check logitrans.com.tr

NOVEMBER 22-23Asian Logistics and Maritime Confer-ence – Hong-Kong: This sixth edition of ALMC will bring together logistics and mari-time services providers and users, including manufacturers, traders and distributors to exchange market intelligence and explore business opportunities in the region. For more information, visit almc.hk/en/index.html.

DECEMBER 8-9Cold Chain Distribution Conference & Exhibition – London, U.K.: This 11th an-nual conference will include lively debates, market updates and a platform for del-egates to stay ahead of the lucrative tem-perature-sensitive cargo market. For more information, visit smi-online.co.uk/phar-maceuticals/uk/cold-chain-distribution.

2017

JANUARY 25-27, 201715th Annual Cool Chain Temperature Controlled Logistics Europe – Frank-furt, Germany: Europe’s largest and longest-running gathering of life sciences logistics professionals is expected to attract 500+ attendees and 60+ exhibitors. The whole program focuses on actions to im-plement when attendees get back to their offices. For more information, visit cool-chaineurope.com.

FEBRUARY 8-9, 2017Cargo Logistics Canada – Vancouver, Canada: This conference helps connect freight owners with freight movers, foster-ing multimodal synergy between diverse stakeholders in import, export and domes-tic supply chains. For more information, visit cargologisticscanada.com.

FEBRUARY 21-23, 2017Air Cargo Africa 2017 – Ekurhuleni, South Africa: This mega-event, to be held near at Casino Convention Resort, near Jo-hannesburg, enables the global air cargo community to explore and strengthen net-working corridors with the African conti-nent. For more information, visit stattimes.com/aca2017.


by Brandon FriedBuilding a stronger, safer supply chain

Forwarders’ Forum

Once in awhile, even in Washington, D.C., one gets a chance

to make an impact and do something worthwhile. Such an

opportunity came recently to the Airforwarders Association, along with the U.S. Chamber of Commerce, in our capacity as members of an advisory committee to U.S. Customs and Border Protection (CBP). Together, we are leading a team of industry stakeholders in reviewing the Customs-Trade Partnership Against Terrorism (C-TPAT) program. The task will not be simple, but CBP has all of the right people on the bus to make the program even stronger and increase the security of the supply chain.

The C-TPAT program was created in the wake of the 9/11 attacks to build cooperative relationships that strengthen international supply chains and U.S. border security. In return, American importers supposedly benefit from a reduced possibility of inspection, fewer supply chain disruptions, and faster movement of their cargo through ports and Mexican and Canadian borders. Other promised benefits include lower insurance premiums, possible mitigation on importer security filings, liquidated damage claims and an increase in public image, which may help to secure business from customers requiring participation in the program as a condition of winning their business.

CBP says that C-TPAT is the primary tool in the development of a trusted trader model that will ultimately gain recognition with other countries as they develop and harden their supply-chain security programs. But skeptics have criticized the program as being another government solution in search of a problem. Some say the benefits of joining the initiative are unclear and the security improvement value it promises is questionable. Other critics said they consider C-TPAT a big win only for CBP, while creating limited value and increased expense for traders.

However, C-TPAT is in dire need of an overhaul. Just imagine purchasing a computer 15 years ago and never installing any of the periodic updates. The machine would be slow, out of date and barely able to run new software that had been designed to reflect current trends. As with an out-of-date computer, C-TPAT has been in operation for 15 years, but has never been updated to reflect CBP’s current overall mission as the security threat continues to evolve and increase, both outside and within our country.

At a recent kick-off meeting for the C-TPAT review project, CBP provided the group with sobering facts pointing to the need for a program review. For instance, from 2006 to 2016, more than 800 supply chain terrorism events took place, equating to one supply chain attack every 2.6 days. Involving all transportation modes, these attacks

Brandon Fried is the executive director of the U.S. Airforwarders Association

are designed to cause mass casualties, economic loss and fear in our society. They are also structured to disrupt the flow of international commerce, provide funding to terrorist organizations and eliminate Western presence from source countries.

Part of the revamp will continue to include a benefits package designed to motivate program partners. These include probable enhancements to the Support Anti-Terrorism by Fostering Effective Technologies (SAFETY) Act, featuring expedited clearance to C-TPAT Tier III importers, as well as to the Advanced Qualified Unlading Approval (AQUA) Lane pilot, which has spread to six ports, improving benefits to agricultural programs and improved automation.

The working group is composed of almost 40 people, representing all aspects of the supply chain. It will be made up of six teams consisting of five private-sector representatives, including one from the Commercial Operations Advisory Committee, one from a major trade association and three representatives from C-TPAT Partner companies.

The first round of work begins with teams focusing on agricultural and personnel issues; information technology and cyber security; and non-information security technology. The second round will include groups investigating high-security seals and highway carrier issues; prevention of money laundering and terrorism financing issues; and a review of security management and administration. These two work phases began in May, and the process is expected to continue through early November of this year.

The overall strategy of the teams will be to discuss possible changes to the current criteria, review CBP’s new recommendations and provide any additional criteria or recommendations to include within the topics for each team.

Recent terror events in transportation and information technology have resulted in renewed calls for well-meaning, but unworkable, solutions to potential threats – such as 100 percent scanning of maritime containers. These initiatives do little more than slow commerce and threaten harm to world economies.

One vital lesson learned over the past 15 years is that terrorism is best fought using a multilayered, risk-based approach, where parties take pains to secure their supply chains via safe best practices. These practices should be trusted, allowing for the faster importation of goods, banking activity and commercial transactions. This team of C-TPAT reviewers will hopefully improve the program to offer more concise benefits, an increased understanding of current business realities, and a worthwhile initiative that is ready to deal with new and emerging security threats.


If You Directly Purchased Airfreight Shipping Services Between January 1, 2000 and September 30, 2006,

Your Rights may be Affected by Proposed Settlements

What are the Settlements about?Plaintiffs claim that numerous air cargo carriers conspired to fix prices of Airfreight Shipping Services in violation of U.S. antitrust laws. As a result, Plaintiffs claim that purchasers paid more for Airfreight Shipping Services than they otherwise would have paid. Air China Ltd., Air China Cargo Company Ltd., Air India, Air New Zealand Ltd., Atlas Air Worldwide Holdings, Inc. (AAWH), Polar Air Cargo LLC, and Polar Air Cargo Worldwide, Inc. (the Settling Defendants) deny liability. However, they have settled with the Class to avoid the cost and risk of further litigation and/or a trial.

The Polar and AAWH settlement provides $100 million. The Air China settlement provides $50 million. The Air New Zealand settlement provides $35 million. The Air India settlement provides $12.5 million. These are in addition to prior settlements with other air cargo carriers of more than $1 billion.

These four settlement agreements and a complete list of Defendants are listed on the settlement website at www.aircargosettlement5.com.

Who is a class member?You are a class member if you purchased airfreight shipping services directly from any of the Defendants to or from the United States from January 1, 2000 to September 30, 2006, and you did not opt out of the Litigation Class before January 22, 2016.

Will I get a payment?If you are a class member, you are eligible to submit a claim and receive a payment from these settlements. And if you did not opt out of either the Litigation Class, or the settlements with Asiana Airlines, EVA Airways, or Nippon Cargo Airlines, then you are eligible to submit a claim and receive a payment from the settlements with these three Defendants as well. The amount of your payment will be determined by the plan of allocation, which is described in the full Notice. You may request a claim form online at www.aircargosettlement5.com. Or call toll-free

at 1-855-382-6460. Outside the U.S. and Canada, call 1-513-795-0998 (toll charges apply). You may also request a claim form by writing to Air Cargo Settlement 5, c/o Garden City Group, LLC, P.O. Box 10083, Dublin, OH 43017-6683, USA. Completed claim forms must be postmarked by September 9, 2016.

What are my rights?Class members have the right to object to the settlements, the plan of allocation, the request for up to 25% of the settlement funds in attorneys’ fees, and the reimbursement of expenses not to exceed $4 million, from the seven settlements discussed above. If you object, you must do so by September 15, 2016. You may speak to your own attorney at your own expense for help. You can find more information online at www.aircargosettlement5.com. Or call toll-free 1-855-382-6460. Outside the U.S. and Canada, call 1-513-795-0998 (toll charges apply).

A Final Approval Hearing will be held at the United States District Court for the Eastern District of New York on October 5, 2016. The judge will consider approval of the settlements, the plan of allocation, and the request for attorneys’ fees and reimbursement of expenses. You may ask to appear at the hearing, but you don’t have to attend. You can find more information online at www.aircargosettlement5.com. Or call toll-free 1-855-382-6460. Outside the U.S. and Canada, call 1-513-795-0998 (toll charges apply). Detailed instructions on how to object or appear at the hearing are found on www.aircargosettlement5.com.

This is only a summary.You can find more information online at www.aircargosettlement5.com. You can also email [email protected], or call toll-free at 1-855-382-6460 in the U.S., U.S. territories, and Canada. Other countries can call 1-513-795-0998 (toll charges apply). You may write to: Air Cargo Settlement 5, c/o Garden City Group, LLC, P.O. Box 10083, Dublin, OH 43017-6683, USA.

www.aircargosettlement5.com 1-855-382-6460

Turkish Cargo, providing one of the biggest transport networks of the world, carries your business to more than285 destinations in 113 countries.

www.turkishcargo.com | +90 850 333 0 777

Flight No Sector Dep Time Arr Time Weekday Aircraft Type

TK6578 IST-PNH 01:15 19:45 6

TK6579 PNH-IST 21:45 07:30 6

**flight schedule as of 20 May 2016

A330F

Phnom Penh AIR CARGO WORLD 20.3x27.5 cm ING.indd 1 5/10/16 3:05 PM

Air Cargo World: July 2016

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