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Silk Way West Airlines Invests in New Boeing 777-8 Freighters

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Air Cargo, Archives, Global Trade Daily, News

Silk Way West Airlines Invests in New Boeing 777-8 Freighters

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Silk Way West Airlines shows no sign of slowing down its impressive record of growth, having secured a deal to offer even more cargo capacity in the future. The Azerbaijani cargo carrier signed an order with Boeing for two state-of-the-art 777-8 Freighters with options for two additional aircraft, the two companies announced today at the agreement signing ceremony in Everett, Washington. Per the agreement, aircraft deliveries are planned for 2029 and 2030.

Silk Way West Airlines is the first customer in the whole Central Asia region to order the industry’s newest, most capable and fuel-efficient twin-engine freighter. The aircraft can carry over 118 tons of structural payload with a range of over 9,200 km. With its advanced technology, new GE9X engines and composite wing design, the 777-8 offers 30 per cent greater fuel efficiency and emission levels as well as 25 per cent lower operating costs per ton. As a result, the new aircraft will also make an important contribution to the airline’s sustainability goals.

This investment will not only enable Silk Way West Airlines, which serves 40 destinations around the world, to further expand its international network and meet growing demand for cargo transport, but will also strengthen Baku as a key international cargo hub. The Azerbaijani capital has become increasingly important for the Middle Corridor linking Europe and the Western Hemisphere to Asia through the Caspian region.

Back in April 2021, the cargo airline signed a purchase agreement for five Boeing 777s, setting the course for further fleet growth. Now, the new 777-8 aircraft complement SWWA’s fleet development plans by enabling the necessary operational commonality, enhancing a long-term strategy of sustainable growth as well as allowing the Azerbaijani carrier to continuously improve service to its customers.

About Silk Way West Airlines

Founded in 2012 in Baku, at the heart of the Silk Road, Silk Way West Airlines operates hundreds of monthly flights across the globe via its fleet of 12 dedicated Boeing 747-8F and 747-400F aircraft based at Heydar Aliyev International Airport. On April 28, 2021, Silk Way West Airlines signed a strategic fleet expansion agreement with Boeing for the purchase of five state-of-the-art 777 Freighters. The airline’s annual cargo turnover exceeds 500,000 tons, while its growing route network covers over 40 destinations across Europe, the CIS, the Middle East, Central and Eastern Asia, and the Americas. South Korea’s Incheon Airport honored Silk Way West Airlines with the prestigious ‘Cargo Airline of the Year 2020’ award.

About Boeing

As a leading global aerospace company, Boeing develops, manufactures and services commercial airplanes, defense products and space systems for customers in more than 150 countries. As a top U.S. exporter, the company leverages the talents of a global supplier base to advance economic opportunity, sustainability and community impact. Boeing’s diverse team is committed to innovating for the future and living the company’s core values of safety, quality and integrity.

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Air cargo, Archives, Global Logistics, Global Trade Daily, News

CargoAi Announces Strategic Technology Partnership with Chain.io to Facilitate Instant Bookings and more from TMS Systems  

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CargoAi, airfreight’s fastest growing digital enabler, and Chain.io, the leading cloud-based integration platform that connects partners across the global supply chain, announced a strategic technology partnership that will supercharge the freight forwarder experience. The partnership will allow most large and medium-sized freight forwarders on Chain.io’s network to easily connect to CargoAi’s platform to make instant bookings to the GSAs and airlines, while remaining on their own TMS.

The CargoAi platform provides a simple end-to-end interface for freight forwarders to make quotes, schedules, bookings, shipments, tracking, purchase orders, as well as reporting capabilities. With the addition of Chain.io, users can now complete the same experience within their TMS system, without navigating between multiple airline websites or making different phone calls.

The partnership will commence with Rates, Capacity, eBooking and Tracking information as well as CO2 calculation, bringing modern capabilities to the TMS, and enabling airlines and GSAs who are live on CargoAi to be directly accessible and visible.

About CargoAi

Launched in 2019, CargoAi is on a mission to bring the best available technologies to airfreight. Cloud native and with an API-first architecture, the company is closing the technology gap and driving the enablement of an efficient and connected airfreight ecosystem.

CargoAi offers a complete range of digital air cargo solutions to freight forwarders, airlines and GSAs, including a SaaS booking application available either as a marketplace and under White Label, an API Suite that integrates directly into TMS and ERP systems, an AI-powered Cargo Business Intelligence as well as an integrated Sustainability solution that spans the entire portfolio.

Using the CargoAi solutions, forwarders are empowered to drive every stage of the air freight procurement process with greater efficiency and visibility- from planning, booking, and executing shipments right through to monitoring cargo deliveries. The gains in efficiency, customer reach and business opportunities directly translate to top and bottom-line impact for carrier partners.

Highly acclaimed at Air Cargo India 2022 in the “Innovative Logistics Solutions in Air Cargo” category, the airfreight’s fastest growing digital enabler also won the “Digital Innovation Award” granted by Air Cargo News in the same year. CargoAi is headquartered in Singapore with teams in all continents.

About Chain.io

Chain.io is a cloud-based integration platform that connects partners across the global supply chain. Chain.io helps anyone involved in buying or moving products around the world work with supply chain vendors, customers, and software platforms more efficiently. With logistics expertise built into the heart of its software, Chain.io plugs into any ecosystem seamlessly and makes sure the right data is going to the right people at the right time.  Customers leverage Chain.io’s network to optimize critical business processes. Chain.io shines when solving complex supply chain challenges and problems that require integrating multiple types of technologies. The Chain.io network includes shippers, logistics service providers, and the software packages that support them.

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Air Cargo, Archives, Global Trade Daily

Be Nimble, Be Quick: Six Peak-Season Tips for Air Cargo Shippers

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Surge, urge and demand- the name of the air cargo game this year. The supply chain industry has been anything but predictable over the past few years, and with never-before-seen port congestions and consumer demand across the globe, 2022’s peak season is shaping up to be anything but normal.

For air cargo shippers to best prepare for the surge in demand, it’s crucial to start considering solutions as soon as possible. As shippers and the overall air cargo industry ready for an undoubtedly busy peak, the challenges and headwinds ahead are not to be taken lightly.

According to the Council of Supply Chain Management Professionals‘ 33rd annual “State of Logistics Report,” air cargo volumes rose by 18.7% and revenues surpassed $175 billion-record numbers that also represented a 36% increase from 2020. The report details expected numbers for 2022 to pull in around $169 billion-a slight decline from 2021, but still nearly 30% higher than 2020.

Data from recent International Air Transport Association research details that airfreight will account for 24.4% of total passenger and cargo airline sales, driving further capacity constraints for shippers looking to move cargo via air.

The data doesn’t decimate the underlying tone that peak will need planning. This year’s busy season is no different than the last and if shippers have learned one thing, it’s that air cargo is crucial to circumvent congestion and effectively navigate almost any delay. Preparing for a hectic stretch from August to December should be expected-and air carriers must be ready for shippers to look to them as a solution to expedite freight around the congested ports. To help mitigate and manage expectations, here are six differentiating tips to help best prepare for this year’s peak season.

PLAN IN ADVANCE

During peak, shippers should assume longer lead time and increased time in transit. It’s important to plan accordingly and be transparent, get in touch with your logistics provider far ahead of time to prevent unexpected roadblocks and coordinate freight shipments well in advance to ensure on-time delivery. Book well before the Cargo Ready Date and have a backup plan in mind.

FACTOR IN DELAY

The supply chain should be viewed as a living, breathing beast. One day it’s content and happy and the next it’s filled with angst and nothing seems to be going smoothly. When preparing for peak, factoring in disruption and potential delay will set your operation up for success. One way to best determine the length of a delay is to consider the “bullwhip effect.” When inflated demand starts in one area of the supply chain, it can create a ripple where the inflation increases at a greater rate in another area of the supply chain. As soon as a delay or increase in demand is identified, it must be communicated to all areas of the supply chain to appropriately and quickly address the problem in all areas.

TRANSPARENCY

Shippers must be overly transparent with their customer base and proactively manage and mitigate needs and issues. This can include ensuring collaborative communication with your 3PL partner to prioritize shipments to ensure that if disruption or supply chain congestion rears its head, there’s a preemptively agreed-upon game plan. For instance, assign ownership ahead of time for a disruption management team to ultimately offer problem-solving through one voice that’s qualified and prepared to address supply chain challenges.

Being transparent with your 3PL keeps them informed and in control of timely decisions while empowering them to proactively identify and execute solutions when the inevitable kink in the supply
chain occurs.

TECHNOLOGY IS YOUR FRIEND

With the holiday peak, you need every advantage you can get, and technology offers supply chain visibility that humans cannot see otherwise. Allow the advancements of technology to help you: Your transportation management system(s) (TMS) and telematics systems are your friends. The capabilities of your TMS may go beyond load booking, expanding to critical components such as a 360-view of the transportation process from procurement through fulfillment. In addition, optimizing route planning and logistics upon cargo arrival can ensure efficient cargo delivery.

PREPARE FOR EXTRA FEES

Air cargo can be one of the priciest modes of transport, and rates are fluctuating day by day. Continued supply chain disruption and unpredictability contribute to higher rates. Bottom line: The best preparation strategy includes copious wiggle room in the supply chain’s peak season budget for maximum flexibility.

BE NIMBLE

This year, it’s expected there will be a surge in mode shifts to get goods to market. The driver shortage means less truckload capacity on the road; rail worker unrest could result in delayed or halted rail deliveries; and port congestion can lead to liners waiting for weeks on end in port without the ability to unload. These factors will largely play into customers thinking about a mode shift to air. When these disruptions ease, there may be a whiplash effect as pent-up freight suddenly surges into ports and onto the roads and rails. This can set off a scramble for truck capacity that may push some shippers to again look to the skies instead.

Over the past few months, suppliers’ heightened attention to surge, urge and demand has only intensified as supply chains prove to be unpredictable and air cargo is validated as a natural solution
during times of delay. Among the increased revenue and volume, ongoing labor relations issues, port congestion, disruption and delay, the air cargo industry continues to see increased interest as shippers look to alternative modes to ensure their cargo arrives on time and in full. Shippers are already dealing with tight capacity and high volume. Are your air cargo operations ready for this year’s peak?

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Air Cargo, Archives, Global Logistics, Global Trade Daily

Why is Global Air Cargo Demand on the Rise?

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According to the International Air Transport Association (IATA), the official global body of the airline industry, the demand for global air cargo reached its highest level since IATA began collecting the data in 1990. In March 2020, the demand was 4.4 percent higher than in March 2019. This was the month before the Covid-19 outbreak. However, the statistics don’t necessarily explain why global air cargo demand is at such an all-time high. Let’s try to break down some events that have led to the current state.

The upside of the pandemic

The pandemic has taken many lives and caused numerous problems for nearly every nook and cranny of the financial world. However, this doesn’t mean that there’s no silver lining to be found. The demand for global air cargo has benefited from the consequences of the pandemic in volumes no one could’ve predicted. Following the COVID-19 epidemic, air cargo demand has been steadily increasing.

However, it’s not all rainbows and butterflies in this industry. It seems that the demand growth slowed down a bit in March. In March 2021, air cargo demand was only 0.4 percent greater than it was in February 2021. Furthermore, in February 2021, it was 9.2 percent greater than in February 2019. The lower performance of Asian-Pacific and Latin American operators could be to blame for the slowdown. This, of course, doesn’t mean that the rising chain has been broken. It’s merely settled on a slower pace. The fact that demand in March 2021 was at its highest point since 1990 supports this point.

The everlasting will to evolve

Of course, we cannot contribute the rise of global air cargo demand solely to the pandemic. People need to be willing to make lemonade out of lemons; the lemons alone aren’t enough. The cheesy metaphor aside, all it means is that airlines are taking all the necessary measures to find the needed capacity to continue working and evolve beyond their previous achievements. They are using the recent boost to improve upon significant issues such as the frequency of delayed or damaged goods.

This crisis has proven that air freight can overcome fundamental problems by quickly embracing innovations. This is how it has continually remained the most effective way of shipping. Even though a part of the passenger fleet remains grounded, it continues to meet the growing demand. By digitalizing and being open to new ways of doing business, global air cargo is a bright light in the aviation industry.

Underlying economic conditions are beneficial to global air cargo demand

The underlying economic climate remains favorable for air cargo. The manufacturing Purchasing Managers’ Index (PMI) component of new export orders, which stood at 53.4 in March, reflects this. Manufacturing growth during the previous month is demonstrated by a score of above 50. During January and February 2021, this was centered in developed countries. Deliveries for manufactured goods are also increasing dramatically, which usually means more demand for air freight in an effort to cut down on shipping time.

Global air cargo is convenient

Seeing how this way of transporting items is the fastest, there are many benefits to it. This naturally makes it far more convenient and is why people turn to global air cargo regularly. Aside from the fact that this transportation alternative is fast, it’s also very reliable. Another great pro that explains the rise of global air cargo demand is that there are no conditions location-wise. Wherever you live, delivering your goods won’t be an issue. This means that you’ll be able to cut down on additional costs such as renting storage, packaging, and insurance, especially if you’re relocating. Global air cargo allows you to plan your shipments to a tee.

Air cargo is setting new sustainability goals

One of the worst downsides of global air cargo is its environmental impact. However, the industry has been working on reducing its carbon footprint by digitalizing operations wherever possible. The fact that air cargo is trying to be sustainable is excellent news! These activities are critical for long-term success. By removing unnecessary steps and reducing the amount of time, effort, and resources needed, digitization will help advance sustainability. They’ll save paper by using e-air waybills, for example. The use of artificial intelligence will result in more efficient planning and lower fuel use. Apart from the ideas that have already been set in motion, the demand for global air cargo also motivates industry workers to keep trying to develop new ways of making air freight sustainable.

Not everything is black and white

Although we can safely speak of the rise of global air cargo demand, staying objective is imperative. It’s essential to be aware of the reality surrounding this matter. All this means is that you should by no means imagine a straight rising line of improvement. Even though the demand for global air cargo is growing, we cannot neglect the rollercoaster nature of it all.

Many factors affect global air cargo demand. For example, it varies significantly across the IATA’s regions. Africa has had the best results, while Latin America had the lowest. Strong Asia-Africa trade flows dramatically enhanced African air cargo demand by 24.6 percent in March this year compared to March 2019. Over the same period, Latin American demand on international routes decreased by 23.6 percent.

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Thomas Hendricks has been working as a consultant at primemoversnc.com with an ambition to help people get the most out of their moving experiences. When he is not working, you can find him reading about the innovations in the industry or polishing up his cooking skills.

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Air Cargo, Archives, Global Logistics, Global Trade Daily

SUSTAINABILITY LOVES COMPANY AND THE AIR CARGO INDUSTRY LOVES SUSTAINABILITY, BASED ON RECENT DEVELOPMENTS

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On Dec. 10, the final day of its Digital Air Cargo Forum, The International Air Cargo Association (TIACA) presented the 2020 Air Cargo Sustainability Award to Pelican BioThermal. 

The Plymouth, Minnesota-based temperature-controlled packaging company was singled out for its work to improve sustainability through the manufacturing and use of Crēdo, a durable and reusable temperature-controlled shipping container, and similar packaging.

“Our efforts to improve sustainability in manufacturing and our products are far-reaching—helping us and the companies we work with to achieve sustainability goals,” says Pelican BioThermal President David Williams. “We are honored that an independent panel of judges recognized the work we are doing to protect our natural resources and the environment, as well as advance sustainability within air cargo.”

Runners-up to Pelican BioThermal in the corporate category were skypooling and VRR, which also presented solutions in the area of sustainable shipping containers.

Nepal Flying Labs won in the Start-up category for its Drone Optimized Therapy System, which flies humanitarian and medical cargo drones to remote and hard-to-reach locations in Nepal. 

A total of 23 companies applied to receive Air Cargo Sustainability Awards, which recognize those making positive change by supporting social welfare, economic development and environmental protection through innovation and partnerships, according to TIACA. 

Judges who evaluated all the entries are: Chris McDermott, CEO, CHAMP Cargosystems, one of the leading industry IT solutions providers and a partner with TIACA in the Digital Air Cargo Forum; Deniz Kargaci, manager of Corporate Sustainability Management, Turkish Airlines; Eng Naif Al-Abri, CEO of TRANSOM; Steven Polmans, director of Cargo and Logistics, Brussels Airport; and Susy Schoneberg, head of Flexport. They looked at business solutions in carbon and waste reduction, drones, humanitarian aid, packaging, ULDs, process efficiencies, people focus and COVID-19 relief.

“Sustainability4Cargo” was among the topics of discussion during the first week of the forum, where it was concluded that sustainability does matter to the air cargo industry, having become a real strategic priority for cargo companies, many of which have concrete actions in place.

“Our industry remains committed to reducing its environmental footprint and many companies have implemented digital transformation, operational improvements and addressed reliability and quality of service issues putting us on track to being more sustainable,” states a TIACA follow-up report on Sustainability4Cargo. “The COVID crisis has added a new dimension to sustainability which our industry has rapidly adapted to–resiliency.”

Carriers Get in on the Sustainability Action

Among the Digital Air Cargo Forum sponsors was Polar Air Cargo Worldwide, which aims to be the world’s most sustainable cargo airline, according to Abilash Kurien, the company’s vice president of Marketing, Revenue Management & Network Planning.

“To achieve this goal, we are focused on digitizing our operations, fostering a culture of learning that makes our team best prepared for the future, and driving toward environmentally sustainable practices,” Kurien says. “These activities are critical for long-term success, not just for Polar but for the air cargo industry as a whole.”

Digitization will be key in achieving Polar’s sustainability ambitions, he adds. “Digitization will help drive sustainability by eliminating unnecessary steps and decreasing time, effort and materials used. E-air waybills, for example, will reduce paper. AI deployment will result in more efficient planning and reduced fuel consumption.”

Polar also encourages and incentivizes its employees “to raise ideas for more sustainable business practices so that we can minimize our impact on the world around us, and ultimately contribute to repairing environmental damage,” Kurien says.

“We are on the cusp of evolution in the air cargo industry; the key is embracing the change, and working with and listening to the employees who keep the business moving and deliver service for our customers that exceeds expectations. Industry participants that focus on digitization, culture and training, and environmental sustainability will be at the forefront of the future state of air cargo. With the right vision, and an openness to new ideas, the possibilities are limitless.”

The vision thing is also at play at United Airlines, which in December made a commitment to reduce its greenhouse emissions by 100 percent by 2050. How? Partly by continuing some of its existing initiatives—such as buying carbon offsets; using more Sustainable Aviation Fuel (SAF) than any airline globally; and investing in the development of SAF and other decarbonization technology—and partly by funding revolutionary “carbon-capture” technology that is expected to capture and store millions of metric tonnes of CO2 per year.

Chicago-based United is the world’s first airline to commit to investing in Direct Air Capture technology. Specifically, the carrier helping 1PointFive build the first industrial-sized Direct Air Capture plant in the country. A single plant is expected to capture and permanently remove 1 million tons of CO2 each year–the equivalent of the work of 40 million trees, but covering a land area about 3,000 times smaller.

“As the leader of one of the world’s largest airlines, I recognize our responsibility in contributing to fight climate change, as well as our responsibility to solve it,” says Scott Kirby, United’s CEO. “These game-changing technologies will significantly reduce our emissions, and measurably reduce the speed of climate change–because buying carbon offsets alone is just not enough.

“Perhaps most importantly, we’re not just doing it to meet our own sustainability goal; we’re doing it to drive the positive change our entire industry requires so that every airline can eventually join us and do the same.”

“We welcome United’s positive announcement to support the reduction of greenhouse gases,” says Patrick R. Gruber, CEO of Gevo, an Englewood, Colorado-based SAF company. “We wholeheartedly agree SAF is the fastest and most effective way United can reduce its emissions.” 

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Air Cargo, Archives, Global Logistics, Global Trade Daily

THAT BUZZING IS THE SOUND OF FREEDOM: THANK THE DEFENSE INDUSTRY FOR THE RISE OF DRONES IN LOGISTICS AND TRANSPORTATION

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The demand within the global drone logistics and transportation industry is rising at a stellar pace in recent times. The need for aviation and military drones has created a juggernaut of possibilities for growth within this market. Moreover, new applications of drones have come to the fore across several industries. This trend has paved way for increased investments to flow into the global drone logistics and transportation market.

That’s the conclusion of a recent review by Transparency Market Research (TMR), which decoded some of the leading factors pertaining to the growth of unmanned aerial vehicles (UAVs). According to TMR, the importance of aerial inspection of terrains for a multitude of industries has driven market demand. Technological enhancements in the structuring and functionalities of UAVs have additionally impelled demand.

The TMR review is not confined solely to logistics and transportation, as it also delves into the relevance of drones across military, aviation, construction and entertainment sectors.

Advancements in Military Technologies. The use of drones in the defense sector has gathered momentum in recent times. The need for increased surveillance and reconnaissance in the military industry has played to the advantage of the vendors operating in the global market. Increasing anarchy among regional territories has also generated humongous demand within the global drone market, which can therefore count on increased revenues in the years to follow.

Use of Drones in Site Inspections. The construction industry has become a haven of new possibilities and technologies. Drones are extensively used to oversee operations in that sector, with the need to inspect terrains and unexplored lands creating a boatload of possibilities within the market.

UAVs in Logistics and Transportation is Looking Up. Recent drone developments in the sector cited in the TMR review include:

-Rising investments in drones by the likes of Amazon, Walmart, Uber, Google, FedEx and UPS are ushering in technological advancements and design innovations.

-Drone strategies being employed by Uber Technologies Inc., Flirtey, Zipline International, Drone Delivery Canada and Matternet. When it comes to just the latter two, Drone Delivery Canada has agreed to serve Moose Cree First Nation communities, while Matternet and Boeing HorizonX Ventures have partnered in drone delivery as well.

-A Beijing-based online business firm, which since 2016 has operated under an agreement to deliver commercial drones in four main regions spread over China, being online to have built 150 drone delivery services in the southwestern Sichuan region by the end of this year.

-The same firm planning to expand to Japan and Indonesia.

-India’s Zomato, which took over the drone startup TechEagle, developing a hub-to-hub transportation service supported by hybrid multi-rotor drones.

The Bottom Line. The revenue index of the drone logistics and transportation market is projected to improve in the times to come. Learn more about this, including industry challenges, at: https://www.transparencymarketresearch.com/drone-logistics-and-transportation-market.html.

More Drone Developments. Speaking of UPS, the Atlanta-based delivery and logistics giant earlier this year announced a series of new initiatives and partnerships aimed at upgrading its global logistics network that includes the expansion of drone operations in the healthcare sector. An initiative to test drone delivery use cases with Henry Schein, a worldwide distributor of medical and dental supplies, will allow UPS to focus on UAVs for one of its key business sectors. A huge factor in these tests will be ensuring successful deliveries of essential healthcare products to destinations where traditional road transport may be less effective or timely, such as remote communities or areas impacted by a natural disaster, according to UPS.

The UPS Flight Forward subsidiary drone business, which was only formed last year, received a highly-restricted air carrier certification from the Federal Aviation Administration (FAA) that allows for approved UPS drones to fly over people, at night and out of the operator’s line of sight. After granting UPS Flight Forward the special certification, the FAA authorized the company to operate a drone delivery program at WakeMed Hospital in Raleigh, North Carolina. Meanwhile, UPS in February expanded its Flight Forward service to the University of California at San Diego Health. That’s the result of another Mountain View, California-based Matternet partnership. That drone program will be used to transport various medical products between health centers and labs, with the drones following predetermined flight paths within visual line of sight per FAA rules. (Matt Coker)

Thank the Military Again. Yates Electrospace Corp. (YEC), whose Silent Arrow platform is bringing disruptive innovation to the heavy payload, unmanned cargo delivery market, announced the design completion and specifications of a wide-body version of its successful GD-2000 cargo delivery drone. With a full-scale, flight-ready version of the latter having been shown off at the Defense & Security Equipment International show in London in September 2019, the coming out for the GD-2000’s bigger sister is set for the July 20-24 run of the Farnborough International Airshow in the UK (coronavirus willing, of course).

Aliso Viejo, California-based YEC responded to real-time demand from U.S. and allied foreign government Special Operators, including the U.S. Army 160th Special Operations Aviation Regiment (SOAR), for the development of the new wide-body craft. It will be 60 percent larger than the standard Silent Arrow GD-2000, with a  2,000-pound gross weight; a 48-foot wingspan (among four spring-deployed wings that are stowed in a 3.5×3.5×13-foot fuselage); and a 140-cubic-foot cargo bay that can handle up to 1,250 pounds (or five times more weight in life-saving supplies, medicines and tactical cargo than the GD-2000).

“The YEC engineering team used current flight data from the inaugural GD-2000 product line along with extensive computational fluid dynamics analysis to optimize the aerodynamics and glide ratio of this rather massive cargo delivery platform,” says Chip Yates, YEC’s founder and CEO, who noted an accelerated schedule led to the delivery of development units by the end of this past March and the setting of 10 flight test units throughout the second and third quarters of 2020. Don’t be surprised if Yates’ latest creation is a hit: The original Silent Arrow was named one of six “Unmanned Cargo Aircraft to Watch” by Aviation Week & Space Technology magazine in their 2020 Aerospace & Defense issue. (MC)

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Air Cargo, Archives, Global Trade Daily

Global Air Cargo Trends Re-Shaping Pharmaceutical Transport

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As we welcome the new decade and the exciting advances it is expected to unleash, many of the forces that shaped the past decade for transporting pharmaceuticals will continue. Price pressures, alternatives to air freight and increasing automation are just a few. However, there are emerging trends that make 2020 unique.

As we look forward, these are the air cargo trends expected to shape the transport of pharmaceuticals in 2020 and beyond.

The Greta Thunberg Effect — Flying Shame

We can’t ignore the effect that climate change activist Greta Thunberg is having on air travel that runs on fossil fuels. Thunberg’s reliance on trains to travel from her home country of Sweden to other countries in Europe connected by rail has triggered a material effect on passenger numbers in Sweden. According to Bloomberg, Swedish air travel diminished in 2019 — while train travel jumped to a record level.1

What could this mean for shipping pharmaceuticals by air? As “extinction rebellion” shows no sign of slowing down, air freight carriers — like their passenger transporting counterparts — will feel more pressure to seek alternative fuel sources and replace older planes with more fuel-efficient models. To further address the Thunberg effect, carriers and their logistics partners will also need to elevate their brand image by demonstrating they are adopting eco-friendly practices such as reusable or waste-stream friendly shipping containers made from recyclable materials. Especially for shipping pharmaceuticals, these shipping containers must still maintain strict temperature control to ensure valuable payloads arrive intact.

Global Trade Pressures Drive Down Air Freight Demand

After years of wrangling over the details of Brexit, the UK is departing from the European Union (EU) — and entering a transition period through the end of 2020. The effects of Brexit and the fact that Germany only narrowly avoided an official recession at the end of the last decade have been driving down European air freight demand. Furthermore, US tariffs aimed at four counties in retaliation over subsidies to Airbus has hit Germany especially hard.

Meanwhile, the US-China trade war began to thaw with the signing of an initial trade deal. But trading data showed the climate would have to improve significantly to combat the year-on-year 8.1% decline in freight tonne kilometers experienced in 2019.2 Price is the crudest and quickest tool at air freight’s disposal to address diminishing demand. However, long-term price cutting is not sustainable and in the face of continued change, air freight companies will have no choice but to cut flights from their schedules and mothball aircraft — and cease to exercise purchasing options that did not factor in declining demand.

Diminished Air Freight Demand Means Reduced Capacity

Air freight remains the predominant mode of transportation for moving life-saving pharmaceuticals around the globe, especially for the most valuable and sensitive therapies that require strict temperature control. Sea transport, accounting for approximately 20% of pharmaceutical shipments3, made gains in recent years as an alternative transport mode for non-temperature sensitive products and the return of containers after payloads have reached their destination. However, for the foreseeable future, pharmaceutical companies will remain reliant on air freight for transportation of products that could succumb to temperature excursions.

Declining air freight and passenger demand combine to produce a double whammy for the pharmaceutical industry. As air freight capacity becomes an even more precious and dwindling resource, there are things that can be done to mitigate reduced capacity. For example, temperature-controlled packaging systems will need to step more into the foreground to reduce volumetric weight, providing higher performing insulation and phase change materials that can considerably improve volumetric efficiency.

However, packaging systems currently available to reduce volumetric weight are typically more expensive unless they are re-used, and re-use can’t always be achieved efficiently for both financial and environmental reasons. The pharmaceutical packaging industry will need to look more closely at the installed capabilities of aircraft to manage temperature, which could make lower-grade packaging materials more acceptable. The capabilities of the aircraft will also need to be matched to ground conditions and reliable sourcing can be difficult in less developed regions of the world.

 Pharmaceutical Packaging: No Longer Rickshaw Vs. Tank

When it comes to pharmaceutical packaging, one size does not fit all — nor should it. The days of choosing between a rickshaw or a tank are behind us. Pharmaceutical packaging manufacturers have broadened their product portfolios to enable the most efficient solutions to be selected, qualified and deployed on a lane-by-lane basis across truly global supply chains. Making the right selections and performing the necessary qualifications can be daunting compared to the old simplicity of “I’ll have a tank everywhere.” But this is the challenge we must face to deliver value and make responsible use of dwindling resources such as global air freight capacity.

The good news is that cold chain consultants have the tools and resources to streamline this new approach. Packaging products have been engineered and tested to incorporate operational consistency and simplicity that might otherwise make it too complex to deploy. Networks and services have also been developed and deployed to enable efficient and reliable outsourcing of operations.

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Dominic Hyde is the Vice President of Crēdo on Demand at Pelican BioThermal.

References:

1. As ‘Flying Shame’ Grips Sweden, SAS Ups Stakes in Climate Battle, Bloomberg, April 14, 2019.

2. Air Cargo Demand Continues Negative 2019 Trend, International Air Transport Association (IATA), May 29, 2019.

3. Will Ocean Freight Be the Dominant Mode of Transport for Pharma Payloads?, Pharma Logistics IQ, July 12, 2018

Airports, Archives, Global Trade Daily, News

EFL Selects Pittsburgh Airport for Cargo Distribution Point

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Pittsburgh International Airport has been confirmed as the airport of choice by EFL – a Sri Lanka freight forwarder and Qatar Airways customer. EFL announced the utilization of Qatar Airways Cargo’s nonstop service, specifically through one of the two weekly Boeing 777 freighters Qatar currently operates, following its first successful 90-ton shipment in May.

“Today’s announcement continues moving the airport corridor forward as a manufacturing and distribution hub. Congratulations to Christina and her team for this huge success for our region. As Pittsburgh strives to make additional connections to the global marketplace, this is a big step along that path,” said Allegheny County Executive Rich Fitzgerald.

“The success of Qatar Airways, and the partnership with EFL, strengthens our ability to attract manufacturing and distribution to the airport. We are planting the seeds for manufacturing, distribution, logistics and connectivity in the global marketplace. We are excited to see it bear much fruit in the years to come, and to see the growth of jobs in these areas continue.”

A combination of proximity to major air cargo markets and cities positions Pittsburgh International Airport as an ideal choice for global freight forwarders. The Qatar Airways Cargo flights to Pittsburgh contribute to a total of 265 jobs and $42.8 million of economic output. Qatar Airways’ Pittsburgh-based flights represent the first scheduled international freighter route for the airport.

“Our goal is to build Pittsburgh into an international logistics center and with great partners like Qatar Airways Cargo and EFL, that goal is becoming a reality,” Pittsburgh International Airport CEO Christina Cassotis said. “This is cargo that used to enter into the U.S. through major airports such as New York and Chicago but instead they’re choosing to use our region as a gateway. That means jobs and business for our region.”

The addition of EFL serves as another example of how the airport’s gateway maintains competitive advantage through efficient and reliable global supply chain solutions in combination with the exemplary operations of Qatar Airways Cargo, including a 72-hour transit time from the Asia-Pacific region to U.S. regional and distribution centers.

“At EFL, it has been a constant pursuit to find efficient and innovative solutions for our customers, which has led us to this initiative with Qatar Airways Cargo, with who we have a relationship for over a decade,” added EFL’s Group Chief Executive Officer Senthil Shanmugam. “Considering EFL’s spread of seven offices in the USA, (with) five of them in (the) East Coast and Midwest, having a gateway that is accessible to these regions was important. Pittsburgh is a logical location for this operation as it allows us to have a fast turnover of cargo in comparison to more traditional and congested gateways. We’re grateful to the Allegheny County Airport Authority for assisting us with facilitating this effort.”

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Optimization Software Helping Air Cargo Carriers Address Challenges, Improve Performance, and Maximize Growth Opportunities

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For air cargo carriers, there are many factors converging to introduce new challenges to their logistical planning and operations. Changing customer expectations, new partnership definitions, and emerging competitors are all conspiring and requiring air cargo carriers to adapt to these new market dynamics. Mastering the so-called “disruptors” will require optimized strategies and processes both of which gain a significant boost from leading-edge optimization solutions. Understanding the disruptors and how best to address them will be the key for today’s air cargo carriers’ continued growth and ability to successfully compete.

Challenges and Performance Improvement Goals

There is no question that despite positive growth projections by leading airline industry groups, including the International Air Transport Association (IATA), air cargo carriers have hurdles to overcome. IATA’s prediction of a rise in cargo in 2018 came true with 62.5 million tons of cargo carried in 2018, a 4.5% increase over figures in 2017 leading to an 8.6% increase in cargo revenues at $59.2 billion. This growth boosts confidence, but air cargo carriers are not celebrating just yet. Still, air cargo carriers are not celebrating just yet. They realize that to achieve growth and profitability, they need to improve their value proposition by optimizing their processes and overall performance. This will require they get ahead of new challenges, while embracing new tools that facilitate better performance.

Among the key challenges air cargo carriers must address are:

-Those relating to the delivery of different cargo in accordance with the Service Level Agreement (SLA) for each cargo product, and recording time-stamps required for the audit trail;

-Optimal management of staff and equipment resources on the apron and in the cargo warehouse; and

-Maintaining optimum situational awareness and management by exception even in the most complex and confusing situations.

In addition to helping address these challenges, air cargo carriers also need solutions that will help them improve their performance of various tasks such as:

-Transporting of cargo between the aircraft and cargo center, as well as transports between different locations within the cargo center;

-On-time dolly availability at aircraft stands and holding areas;

-Preparation of dolly and trailer trains at aircraft and at outbound docks;

-Cargo build-up and breakdown in the warehouse;

-Loading/unloading of aircraft; and

-Loading/unloading of road feeder services.

The Disruptors

Competitors

When Amazon announced plans to launch its own delivery service, more than one carrier took note and stock of the implications. While its plans are to start accumulating a fleet of branded trucks, what is to say that the Amazon logo won’t soon appear on its own fleet of air cargo carriers? And, will Alibaba be far behind?

Blockchain

When a group of Japanese businesses operating in global trade announced their pilot program to evaluate the application of blockchain technology to streamline and improve cross-border trade operations, there was interest by air transporters as well as those in other modes of transportation. This group is not alone in exploring ways to leverage this digital database that uses linked blocks secured by cryptography to improve transactions and logistics. UPS, for one, has expressed interest in utilizing blockchain technology in its operations.

Big Data

Big Data is also causing a stir within the air cargo industry. Carriers realize that by harnessing the power of real time data, along with more flexible management of workforce and other resources, they can increase their overall efficiency. This is particularly true when it comes to better determining the number of planes needed for cargo transport during specific periods; efficiently scaling up or down accordingly.

Artificial Intelligence (AI)

Like Big Data, Artificial Intelligence (AI) is also getting a closer look by air cargo carriers. While some don’t expect AI to immediately impact the industry, there is a generally accepted viewpoint that it will ultimately help the carriers better forecast their facilities’ needs, improve cargo tracking, enhance revenue management, and optimize processes such as load planning, route planning, workforce management, and customer service. Among the top five air cargo carriers, at least two, FedEx and UPS, are known to be researching the implementation of AI.  Consolidation services are also being looked upon by air cargo carriers as a way to mitigate challenges faced by organizations with lean supply chains and/or those that need to provide a Just in Time (JIT) service even for the smaller quantities.

All of these “disruptors” have changed customer expectations; the operative words here are faster, more flexible, more transparent, and lower prices. These expectations lead us to optimization software. It is already helping air cargo carriers optimize their processes so that they can effectively address challenges, best leverage the new technologies like AI and position themselves for the changing marketplace.

Optimization Software Helping Carriers Retain Their Competitive Edge

Regardless of the challenges, air cargo carriers still have a distinct advantage over other modes of transport; specifically, they are faster and more reliable. Cargo IQ data indicates that air cargo shipments, on average, take 140 hours to go from shipper to the consignee. The reliability of air cargo carriers is another notable differentiator. That is, however, not to say that air cargo carriers don’t benefit from improved processes. Optimization software is intended to take their operations to a whole new level and enable them to retain their competitive edge.

There are advanced solutions that optimize a wide range of carrier processes, from ground handling and airport operations to turnaround management and aircraft maintenance. These solutions have demonstrated a direct impact on the carriers’ productivity, costs of operation, performance levels, communications, and resource management. They enable an air cargo carrier to achieve best practices and process transparency which help them perform with the consistent speed and reliability they tout over other modes of transportation. Let us look at how some of the challenges faced by air cargo carriers are being effectively addressed by applying optimization software.

A key operational challenge faced by air cargo carriers is that different cargo products have different Service Level Agreement (SLA) limits relating to when the cargo must be delivered to the aircraft. This requires carriers to establish and allocate the necessary resources (e.g., dolly trains) in an optimized manner and in adherence to the SLA. There also is another requirement for time-stamps to be recorded as proof and for subsequent auditing purposes. Optimization software addresses this challenge by automatically taking SLA limits into consideration when allocating tasks to resources. Additionally, each action is connected to a time-stamp so that a detailed recording of activities performed can be guaranteed.

Air cargo carriers are further challenged by today’s highly competitive industry and the demand for optimal management of staff and equipment. By applying state-of-the-art algorithms to automatically allocate tasks to staff and equipment in accordance with various parameters (e.g., availability, functional requirements, legal considerations, etc.), optimization software helps carriers achieve optimal asset management and remain competitive.

Given the many operational complexities and typical infrastructure limitations air cargo carriers must contend with, maintaining sharp situational awareness, even under the most stressful and/or chaotic conditions, is vital. Built-in optimizers in today’s most advanced software solutions alleviate much of the confusion enabling staff to fully focus on critical tasks, thereby facilitating management-by-exception.

Real Benefits Derived

Optimization software is delivering real benefits to carriers. INFORM’s GroundStar optimization software suite has made a significant difference on behalf of various cargo customers. For example, by applying the software to allocate and manage its employees, one customer is now able to turn around 350,000 express freight shipments, on average, per night. Having to cater to an estimated 65 cargo flights per night within a short window of just four hours, situational awareness and pro-active decision-making is crucial. The GroundStar solution elevates situational awareness to the highest level to facilitate optimum decision-making. On a typical day, approximately 250 loading staff and drivers are allocated in parallel for efficient workforce management. During the peak holiday season, the strength of the implemented solution is especially evident as more than 500,000 parcels must be efficiently handled per night.

INFORM’s GroundStar also is helping air cargo carriers meet the demands posed by the 5% annual increase in the number of express shipments. It is enabling these carriers to effectively manage expansion by supporting them with advanced automation and optimized and focused decision-making which, in turn, is helping them increase productivity without adding staff.

Another example of how INFORM software is benefiting its cargo customers relates to their estimated 20% increase in dolly train utilization. Prior to their application of GroundStar, the carriers’ loading and cargo transport supervisors were not always able to utilize the full capacity of a tug and its dollies to meet SLAs and other timelines. After the implementation of GroundStar, the information regarding a tug’s status (i.e., whether a tug driver has enough time to wait for another unit load device (ULD) to be collected or to leave the stand with only three ULDs instead of four) is a strategic decision automatically handled by the INFORM software.

The Way Forward

The future for air cargo carriers and their continued process optimization will include further leverage of data – small and Big Data – to extract new insights and empower all staff levels from management to technicians. In turn, air cargo carriers will be able to gain even greater clarity to support their optimum decisions on matters ranging from dynamic disruption management and efficient aircraft turnaround, to aircraft maintenance, workforce management, and supply chain management.

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DB Schenker’s “Direct Express – Australia” Creates Competitive Speed for Global Shippers

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Global logistics and transportation provider, DB Schenker, announced that it now offers speedy and reliable air cargo delivery to Australia through its newly launched “Direct Express” service. Specifically created to offer the fastest and most reliable air cargo service to the region, “Direct Express” begins every Monday morning with departure in Chicago with direct 777-300 freighter service.

“We are very excited about our new service down under,” said Chad Heller, DB Schenker’s Chief Commercial Officer in the U.S. “The U.S. is Australia’s third largest trading partner and represents a significant portion of imports to the country. A large portion of these imports include the automotive, pharmaceutical and industrial manufacturing industries, many of which are located in the Midwest. With speed-to-market becoming more and more critical, our new Direct Express – Australia service is well positioned to meet this need,” he added.

The 777-F has its advantages as well as it’s known as the most energy-efficient and environmentally-friendly aircraft. Additionally, its 102 metric ton plus payload provides more opportunities for increased capacity.

Additional benefits of “Direct Express” include cold chain storage operations, guaranteed lift during heavy or peak periods of the year for shippers, and a variety of shipping solutions for heavy and outsized products.

 

Source: DB Schenker