of the
independent
WWW.AIRCHARTERSERVICE.COM
JULY 2016 SERVING THE INDEPENDENT FREIGHT FORWARDING COMMUNITY No.055
3
6
Proud members of the
WCA network since 2008
Volumes sink
Top 20 multinational
forwarders see declines
Shippers cry
‘foul play’ on VGM
Perishables prosper
Growth in the cool chain for
both air and sea
Multinational forwarders accused of ‘unjust’ surcharges
11
12
Niche is nice
QCS gets creative to boost
business prospects
Promises delivered
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Solibra
Ad for Voice_2015_.pdf
now delivered
as promised
1
ASIA’S ports were reported to
be operating normally after new
container weight rules began on
1 July, but some shippers have
claimed multinational freight
forwarders are enforcing unjust
VGM [verified gross mass]
surcharges.
“The whole export community
around the world is up in arms
crying foul play. We are urging
all exporters not to pay since
this is totally unfair,” said Hong
Kong Shippers’ Council
chairman Willy Lin.
Lin said some freight
forwarders were imposing
additional fees ranging from
US$6 for less than full container
loads (LCL) to US$25 for full
container loads (FCL), despite
shippers having already
provided
a VGM.
30/10/2014
10:42
In particular, Lin questioned
the justification for LCL charges:
“The funny thing is, logistics
companies should have been
weight checking for years when
they charge shippers LCL fees. If
this is something
new, what have they
being doing in the
past?”
He said shipper
councils around the
world would
coordinate a
summary of SOLAS
activities in order to
take united action
and petition
individual
governments and
competition
authorities.
The UK-based Global
Shippers’ Forum (GSF) was also
quick to raise the issue, claiming
some service providers were
“exploiting the introduction of
the new VGM rules by imposing
exorbitant and unjustified
charges for questionable and
unspecified
‘administration fees’
and other ‘services’”.
In China, for
example, the
shipper umbrella
group said both
Kuehne + Nagel
(K+N) and OOCL
Logistics are
charging VGM
administration fees
for FCL shipments.
According to GSF,
K+N is charging
US$12.75 for VGMs submitted
electronically and US$25 for
manual data entry, while OOCL
Logistics is charging US$15 for
“We are
urging all
exporters
not to pay
since this is
totally
unfair”
all exports from China.
DB Schenker said it will levy a
US$25 charge for all global FCL
shipments and US$15 for all
LCL shipments. The forwarder
has defended the charges,
arguing that the “VGM
declaration according to the new
SOLAS regulation requires
additional administration and
physical handling processes”.
Meanwhile, warnings that
industry confusion over SOLAS
legislation, or a lack of shipper
preparation, would cause
widespread port disruption
appear to be unfounded.
“It’s all quiet at the moment
and let’s hope this will
continue,” a Hong Kong-based
carrier executive told The Voice
of the Independent on 5 July.
Continued on page 3
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VOICE OF THE INDEPENDENT, JULY 2016
Continued from page 1
Early
SOLAS
signs are
good
Other carriers refused to
comment, with one prominent
intra-Asia line noting that it is
“too early to conclude on the
overall operational impact of
VGM implementation”.
Early reports of containers
turned away at the Port of
Shanghai due to noncompliance with VGM
requirements did not
materialise into widespread
disruption or container supply
chain delays.
In Vietnam, although
forwarders and carriers alike
have bemoaned the
government’s lack of
communication over VGM rules
and implementation, no major
disruptions have yet been
reported, although one local
forwarder said: “All containers
at Cat Lai terminal [in Ho Chi
Minh City] have been weighed
at the gate, which has caused a
huge traffic jam.”
A clearer picture of whether
VGM rules have impacted
carrier and port performance
will be available later this
month. Shipping software firm
CargoSmart, which is
processing thousands of shipper
VGM submissions, plans to
analyse vessel movements and
berth times before and after 1
July at key Asian export hubs.
CargoSmart is currently
unaware of any disruptions at
Asian or Indian ports.
In Australia, terminal
operator DP World said it had
achieved 100 per cent VGM
compliance for every export
container handled at its
terminals during the first
weekend of SOLAS
enforcement.
3
Top 20 multinational air forwarders
see volumes sink
THE top 20 global air freight
forwarders have seen volumes fall
about 3 per cent in the first five
months of this year, compared
with growth of about 2 per cent
for all other forwarders.
New data and analysis from
WorldACD also shows that yields
across the board have fallen 15
per cent, year-on-year.
The non-top 20 forwarders do
seem to be doing a little better
than their larger peers. While the
global top 20 saw chargeable
weights fall 3 per cent ex-Asia
Pacific, the other forwarders saw 1
per cent growth. Ex-Europe, nontop 20 forwarders saw a 6 per
cent rise in volumes while the top
20 saw just 1 per cent,
although this was one
of just a few markets
in which most
forwarders witnessed a
13 per cent fall in
yields while the top 20
saw a 1 per cent rise.
North America was
a bad market for the
top 20 – yields have
fallen 15 per cent this
year and volumes are
down 10 per cent for
the top 20. The
remaining forwarders
saw yields fall 12 per cent and
volumes fall just 2 per cent.
In the outbound market from
Africa, the top 20 global
forwarders saw yields sink 11 per
cent with volumes rising 1 per
cent, while all other forwarders
saw just a 4 per cent yields
decline, on volume growth of 3
per cent.
And in Central and South
America, the top 20 saw
chargeable weights fall 12 per cent
(although they enjoyed a yield rise
of 1 per cent), while the other
forwarders saw just a 3 per cent
volume fall.
The analysis supports the
industry expectation that there
will be further consolidation
among forwarders, as it shows
uneven market shares and
networks around the world.
“Looking at the 20 largest
markets in our database, we note
that the combined market share of
the world’s top 20 differs greatly
from one market to another.
Strongly concentrated markets are
Germany, Japan, USA Midwest,
France and Singapore, with shares
of the worldwide top 20 ranging
between 60 and 67 per cent.
“On the other side of the
spectrum figure the highly
dispersed markets of India, South
East China and the
United Arab Emirates
(UAE), where the
world’s top 20 have a
combined share of
(much) less than 30
per cent. These three
markets are
dominated by local or
regional forwarders
from outside the
World’s Top-100,
who together have
shares of 60, 64 and
58 per cent
respectively. The top
forwarder in India has a market
share of barely 5 per cent.”
Clear synergies between
forwarders with complementary
rather than competing markets
could hasten further M&A activity.
WorldACD also noted that May
was another bad month for air
cargo, with volume growth of 0.5
per cent, year-on-year, while
yields fell 1.9 per cent compared
with April. The news follows
Drewry’s East West Air Freight
Price Index announcement that
rates are at the second lowest
level since the Index began in
2012. It lost 1.3 points in May,
“The top
forwarder
in India has
a market
share of
barely 5
per cent”
falling to an average rate of
$2.57/kg all-in, after two
consecutive months of rate rises.
And Drewry’s not holding out
much hope for the future.
“Drewry expects airfreight
pricing to remain under pressure
through the northern hemisphere
summer season, as more
passenger aircraft are brought into
service to support the peak tourist
season, releasing more bellyhold
capacity.”
Turkish sets the
temperature for pharma
TURKISH Airlines Cargo has invested in technology for the shipment of
pharmaceuticals, in a bid to ensure a seamless supply chain for
customers.
The airline now offers Envirotainer active temperature-controlled
containers, which record any change in temperature to a data entry log,
and alerts customers.
Containers can be installed with a device to set the temperature and
delivered to customers to load. It is then taken to the active container
storage facility, while temperature and battery charge is constantly
monitored, until delivery.
Training is key, said the airline, and its employees are “equipped with
knowledge”.
“Simultaneously, we’re trying to eliminate our technical and
infrastructure shortcomings, thus reaching a level where we can offer
services complying with our quality standards, and medicine and active
container transport regulations.”
The carrier also offers passive cooling systems, to ensure all
customers are catered for.
Turkish Airlines Cargo now offers Envirotainer active temperaturecontrolled containers, which record any change in temperature to a
data entry log, and alerts customers
From Phnom Penh to the World
Turkish Cargo, providing one of the biggest transport
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Phnom Penh Voice Independent 26.2X12.5 CM.indd 1
5/10/16 3:13 PM
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Tradelanes
AirBridgeCargo opts for Phnom Penh as
Cambodia celebrates air freight growth
AIRBRIDGECARGO has expanded its south
east Asia network with the launch of a
Phnom Penh service, from MoscowSingapore-Phnom Penh-Moscow. Customers
will then be able to use ABC’s network on to
Europe and the US.
The news followed a similar
announcement by Thailand’s K-Mile, which
has also launched services to Phnom Penh
– as have Turkish, Emirates, and Malaysia’s
Raya Airways.
The move will capitalise on growing
volumes in Cambodia, which is becoming
increasingly popular with airlines.
Cambodia Airports has reported
significant increases in the air cargo
business, something airlines are keen to
capture. In 2015, air freight shipments to
and from the country rose 14 per cent yearon-year. The first five months of this year
have seen nearly 17 per cent growth, yearon-year, with March seeing 24 per cent
higher volumes, and April up 21 per cent.
Although in 2014 there were more exports
than imports, this now seems to have
reversed, although volumes are broadly
similar.
ABC has been reviewing Phnom Pehn for
some time, according to Hendrik Falk,
ABC’s Vice-President for the Americas. The
airline started its Singapore service last year,
and was pleasantly surprised that the Asian
destination gave it traffic flows to the US.
“We are moving a significant amount of
Singapore cargo from the US via Moscow,”
he said. “We were surprised – it’s not just
TransPacific traffic. If the timings are right, it
is as good as a TransPac service.”
He said the carrier spent much time
talking to customers before adding a new
AirBridgeCargo’s new service will capitalise
on growing volumes in Cambodia
destination. “We assess with them whether
there is sufficient demand for additional
capacity. If it looks good, then we develop a
mutual commitment with them. We take a
very customer-driven view, and we look at
whether we can operate sustainably in and
out, how to work into networks, can we
combine with another station?”
The Cambodian market, which specialises
in garment exports, could be boosted by
challenges in rival Bangladesh. With
restricted direct air freight exports to
Australia, Germany and the UK, shippers
have complained that goods are moving too
slowly out of Bangladesh. There has also
been severe congestion at Chittagong, the
country’s main port.
Worse still, this month’s terrorist attack in
Dhaka has spooked some manufacturers.
Uniqlo has told its staff that all but critical
travel to the country has been suspended.
Nine Italians, seven Japanese, one US citizen
and an Indian were among the dead. At least
six of the Italians were involved in the
apparel trade. H&M, which sources from
Bangladesh, as do M&S and Gap, said it had
no immediate plans to change sourcing, but
was following developments closely.
t
Markets &
5
Ashgabat attracts
Cargolux as
demand in
central Asia rises
CARGOLUX has expanded its network to
include Ashgabat once a week. The
carrier said that the central Asia region
was seeing increasing demand for air
cargo. Ashgabat has invested in
developing a new airport, scheduled to
open in September, while a modern cargo
terminal opened at the start of July.
Cargolux already flies to
Turkmenbashi, Baku, Novosibirsk,
Almaty and Tbilisi in the region, and
cooperates with Turkmenistan Airlines.
The service complements the carrier’s
existing flights to Turkmenbashi, which
started exactly one year ago. Since then,
Cargolux has expanded its Turkmenistan
services to eight per week. In July,
Cargolux will further boost its frequencies
to 11 per week.
The carrier has also announced that its
CEO, Dirk Reich, has decided to leave the
company at the end of July. It looks likely
that he will be replaced by Richard
Forson, who was interim CEO of the
airline for nearly two years before Reich
jointed.
Caribex Centre strip July16.pdf
1
27/06/2016
10:08
M
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TOTAL LOGISTICS SOLUTIONS IN CEN
CM
MY
CY
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Focus ON
K
Air cargo keeps it cool
Flowers, fruit and fresh meat prop up the airfreight market
Managing Director, Global
Accounts and Sales Strategy
and acting Head of Cargo
Sales at American Airlines.
He adds that
Argentina,
which had been
a challenging
market, has also
shown growth in
exports. “We’ve
seen pretty
robust volumes
ex-Argentina,”
he says.
Not every
carrier that flies
to Brazil has
been able to
take advantage of
the rise in perishables
exports, though. “Brazil is
doing quite well with
perishables, but you have to
THE bust of the
commodities boom plunged
the air cargo market in Latin
America from a thriving
business, seemingly
impervious to the downturn
that had pushed the rest of
the world into a steep
decline. However, the
concomitant drop in the
exchange rate of currencies
in the region – above all the
Brazilian real, which fell
almost 50 per cent vis-a-vis
the US dollar – has
benefited in exports of
perishables from Latin
America. In Brazil, where
output of hard goods
declined, perishables have
filled some of the gaps.
“Demand northbound out
of Brazil is encouraging,”
reports Roger Samways,
be close airport-wise to the
production areas. We are
not. Production is mostly in
the northeast, but we don’t
fly there,” says
Pieter Fopma,
Director,
Perishables at
Air FranceKLM-Martinair
Cargo.
Elsewhere in
Latin America
has been good
for the
European
carrier, although
the reduction of
its freighter
contingent has
reduced its capacity. “We
have seen strong increases
in the first quarter out of
Latin America. Perishables
“We have
seen strong
increases in
the first
quarter out
of Latin
America”
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Remant 1-6 square July15.indd 1
04/07/2016 11:30
out of Latin America are
booming,” Fopma says.
IAG Cargo has also
enjoyed rising volumes of
perishables out of the
region. According to Daniel
Johnson, Manager of Global
Products, particularly strong
have been “superfruits”,
produce packed with
antioxidants, fibre, vitamins
and minerals that is
particularly nutritious or
contains health benefits for
consumers.
The established line-up of
berries, asparagus and the
like has been broadened to
include mangoes and
avocados, which are in hot
demand in markets around
the globe. “Demand for
avocado and mango is really
increasing,” notes Fopma.
The latter has traditionally
been shipped by ocean
vessel, but is now sent more
and more by air, he
remarked, adding that this is
happening with another fruit
as well.
“Not long ago there was a
perception that pineapples
are ideally transported as
seafreight. Now there are
quite some flows by air –
from Africa, but also from
Costa Rica and South
America. We’re seeing more
and more of that,” he says.
One of the traditional
heavyweights among Latin
American perishables
exports has lost momentum
though. Salmon, which had
barely recovered from a
disease that had wiped out
most of the salmon stocks in
Chile a few years ago, has
been affected by a toxic
algae bloom. This has
decimated fish stocks and
hurt the export momentum,
but American is still carrying
significant volumes to its
home market and beyond to
northern Asia, Samways
reports. “Exports from Chile
are still reasonably
consistent, despite the
algae,” he remarks.
Notwithstanding a slump
in demand in Russia, which
had been an important
market, flower exports from
Latin America have held up
well, according to carriers.
In June Cargolux changed
the routing of its flower
flights from Bogota and
Latacunga from Maastricht
to Amsterdam, which means
shorter transit times to the
flower auction in Aalsmeer,
the largest trading centre for
plants and flowers
worldwide.
For Samways another
destination is gaining in
stature for flower shipments
out of Latin America. Asia,
first and foremost Japan, has
emerged as a growing
market for flowers, he notes.
Fopma is also looking to
markets in Asia. At this
point about 85 per cent of
the perishables that AFKLM carries out of Latin
America is headed for
Europe, and about 10 per
cent goes on to Asia, but
Fopma sees considerable
potential there.
“I see our volumes to Asia
growing in the near future.
We could easily double what
we carry there to 20 per
cent of our volume,
provided there are no really
bad weather influences or
diseases,” he reflects.
He hopes that a recovery
of salmon production in
Chile can fuel strong growth
to Asia. Berries, cherries
and tropical fruit have
shown strong growth,
particularly to Hong Kong
and China. “They are really
developing,” he says.
Likewise Johnson has seen
strong demand for
superfruit as well as seafood
in China.
American has
systematically cultivated
flows from Latin America
beyond its home market,
initially to Europe but
increasingly to Asia as well.
Growth in the latter sector
has been in double digits,
according to Samways. This
momentum is now building
up on the strength of strong
growing seasons in Latin
America and the expansion
of the carrier’s transpacific
flights.
In addition, transit flows
of Latin American
perishables have improved
considerably as a result of
an increasing deployment of
widebody aircraft between
American’s US gateways,
which makes for smoother
flows between Miami and
Dallas/Fort Worth, Chicago
and Los Angeles, Samways
stresses.
The carrier has also
invested in cooler
infrastructure at these
gateways, most recently in a
WADE BOLLARD
CT Freight
TRAL AMERICA AND THE CARIBBEAN
transit cooler at Dallas
with a footprint of
4,000m2.
Samways highlights the
emphasis on speed of
transits. In some cases,
especially where domestic
widebody connections are
involved, transfers happen
on the ramp, but the bulk of
American’s perishables
heads to the warehouse
after landing to cool the
cargo prior to the next leg
of the journey.
Likewise, AF-KLM’s
perishables landing at
Schiphol or Charles de
Gaulle are usually
transferred to the
warehouse, regardless
whether or not pallets have
to be reconfigured. “Transit
can be six hours, but it can
also be 12 hours,” notes
Fopma.
Stage lengths from Latin
America to Asia are very
long, both via Europe and
over transit points in North
America. Still, carrying
perishables all this way is
worthwhile, Fopma says. “It
is attractive. That’s why we
continue to focus on it,” he
says.
Still, there are constraints.
One forwarder remarks that
– unlike pharmaceuticals –
perishables are not a must
for consumers. If they find
the price of a certain fruit
too high, they will buy
another instead, he points
out.
“Those are commodities.
We cannot charge high rates
for them,” remarks Cristian
Ureta, Executive VicePresident of Cargo at
LATAM Airlines.
There is also a danger that
more perishables could be
diverted to ocean carriers.
However, some of the
experiments with new
technology to carry
perishables by boat have
not borne fruit. Last year
saw an attempt to send
fresh fish from Chile to
China by ship using a new
type of container that
controls oxygen levels.
According to one source,
the fish arrived in
China in good
condition but
deteriorated
rapidly
afterwards.
Australia’s CT
Freight is seeing
no modal shift,
since the first
move to
seafreight about
15 years ago.
Airfreight
accounts for 80
per cent of its
perishable
cargo.
While the company’s main
market has been south east
Asia, it is now seeing higher
demand from the Middle
East, while China too is
improving, says Wade
Bollard, Export Manager.
“We are seeing significant
growth in the mainland
China market which has
traditionally been tough for
Australian exporters due to
restrictive rules, which are
being loosened with the
Free Trade Agreement
between the Australian and
Chinese governments,” he
explains.
“We do handle a large
volume of airfreighted lamb
to the Middle East. Key
markets are the UAE,
Qatar, Bahrain, Jordan and
Saudi Arabia. These
markets are very consistent
due to the constant demand
for fresh Australian meat
products, particularly
carcass lamb.”
While it is a year-round
business, he notes that
Ramadan causes a spike in
tonnages, and meat can
arrive in 48 hours.
While yields are
consistent, Bollard says
perishables is really a
volume game. “With ever
increasing access for
Australian products into
global markets, we are
forecasting consistent
growth over the next five to
10 years.”
Both airlines and
forwarders have been
responsive to
market demands
and made
investments in
the cool chain,
he says.
“We – as the
final point
before export
– carry most of
the
responsibility
for ensuring the
integrity of the
cool chain, and
we have also
invested heavily
in equipment as
well as research on best
practices. Airlines around
the world have also invested
in R&D as well as facilities at
their hubs.”
He notes the temperaturecontrolled handling dollies,
introduced by the Middle
Eastern carriers which can
offset the “unforgiving
conditions” on the tarmac in
the region.
“We don’t see too many
problems in the cold chain.
The collaboration between
shippers, forwarders and
service providers has seen
greater awareness of the
cold chain in the handling of
perishable cargo by air and
sea,” he says.
“We are
seeing
significant
growth in
the
mainland
China
market”
C
Seafast goes for frozen
SEAFAST is a Felixstowe-based cold chain
specialist, which has just joined the WCA
Perishables Network.
“The WCA specialty network fits well into
our business model,” says CEO David
Halliday. “We don’t want to do what other
forwarders are doing – we want a less
competitive market, rather than just another
vanilla China-Europe service.”
Seafast specialises in frozen meat and
seafood, targeting pork exports from the UK,
New Zealand and the Falkland Islands, and
the Independence_128x183mm.pdf
cooked, Voice
frozenofchicken
imports from
t
Perishables
Thailand to the
UK, for fast food
chains. This latter
market is growing
at about 10 per
cent a year, says
Halliday.
DAVID HALLIDAY
Seafast is also
Seafast Group
looking at new
markets, in particular in Iran and Myanmar.
“There is frozen fish coming out of Myanmar,
and quite significant amounts of frozen beef
1
22/06/16
11:22
from
South America
going into Iran.”
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8
VOICE OF THE INDEPENDENT, JULY 2016
Focus ON
The reefer shift
Box lines are increasingly taking reefer business, changing the dynamic
of the world’s ship fleet
ONE of the defining
narratives of the last three
decades in shipping has been
the seemingly inexorable
decline of the world’s
specialised reefer vessel fleet
and the extinction of
conventional breakbulk
refrigerated shipping lines at
the hands of the container
carriers with a growing
abundance of reefer slots on
their ever-bigger vessels.
The entrance of container
carriers into the perishable
supply chains has
dramatically brought down
the cost of transporting
refrigerated cargoes across
the world; given smaller food
producers across Latin
America, Africa and Asia
access to the consumer
markets of North America,
Europe and urban Asia; and
provided producers with a
truly intermodal service
rather than the port-to-port
services that conventional
reefer operators offer.
“Technology and
economics is better on
container ships,” explains
David Halliday, CEO of
Seafast Group, a
UK cool chain
specialist
forwarder. “We
are making
things change,
and have been
trying to
encourage more
reefers to move
by container
ship. One of our
successes was to
win business
from the South Atlantic to
the Far East, which had been
done by conventional reefer
ship.”
Since container carriers
first began installing reefer
plugs on their vessels and
carrying reefer containers,
the conventional fleet
entered into long-term
decline. A recent report on
the sector by Dutch shipping
consultancy Dynamar found
that since 2000 the size of
the conventional
fleet has halved,
with barely a
single new
vessel ordered.
In 2000,
Dynamar
estimates,
conventional
vessels carried
some 60 per
cent of the
global reefer
trade, while in
2014 that had been reduced
to just 26 per cent.
“The core trend of the last
few years has been the
refrigerated box taking over
from the conventional reefer
ship. This translated in more
than half of all conventional
“Technology
and
economics is
better on
container
ships”
reefer vessels scrapped since
the turn of the century with
barely any ships ordered,
along with increasing liner
connections operated with
reefer heavy container
ships,” Dynamar says.
However, since one of the
chief advantages that box
ships have over conventional
reefer ships is their fuel
efficiency, the dramatic
decline in the price of oil
from US$300 per ton at the
start of 2015 to $130 a year
later meant that “many
elderly, fuel-guzzling
dedicated reefer vessels all of
a sudden became
competitive again”.
As a result, scrapping of
the conventional fleet largely
came to a halt and some
operators even began to
place orders again, Dynamar
said: “Last year showed an
almost complete reversal of
what reefer shipping had
grown accustomed to: barely
any scrapping along with a
confirmed orderbook of 11
smaller, up to around
350,000 cubic ft (cft),
conventional reefer vessels.”
Halliday agrees it’s not the
end for the reefer fleet yet. “I
think the conventional reefer
ships are ageing and will be
costly to replace, and it will
offer more opportunities to
container ship lines. I don’t
think the conventional fleet
will ever completely go. But
we will see a trend towards
container ships as technology
improves.”
Since then it has also
emerged that Japanese nonoperating owner Nissen
Kaiun has ordered four
650,000 cft units, taking the
present reefer ship
orderbook to 19 vessels,
with options for eight further
units.
This trend also partly
reflects the analysis of Yntze
VOICE OF THE INDEPENDENT, JULY 2016
9
Buitenwerf, General
Manager of the world’s
largest conventional reefer
vessel operator, Antwerpbased Seatrade Reefer
Chartering, who argues that
the global transport of fresh
produce is set to divide
neatly into three separate
segments, as conventional
reefer carriers restructure
their business models into
providing specialist reefer
logistics.
“We are talking about
specialised reefer logistics,
not specialised reefer ships
– it’s all about how fast and
how direct one can go to
your destination, and so we
talk about “specialised”
reefer vessels rather than
“conventional” reefer
vessels,” he told delegates at
this year’s Fruit Logistica
show in Berlin, adding that
this was also leading to new
designs of specialised reefer
vessels.
One example is the
conventional reefer vessels
converted to carry much
larger volumes of reefer
containers for African
Express Line (AEL), while
Buitenwerf argues that the
current overcapacity in
container shipping was
resulting in conventional
reefer operators redefining
themselves as specialist
reefer service providers.
“Container ships carry
reefers well, but it is a
different mode of transport.
But they got into the market
of specialised reefers, so we
started eating into the air
freight business by launching
Yntze Buitenwerf
Seatrade Reefer Chartering
new
services.
When fuel
prices went
up the
container lines
realised that the
costs were far higher
than they had anticipated,
and they went to slow
steaming; when fuel prices
further increased they went
to ultra-slow steaming; then
there was the overcapacity
and they countered this by
extending their schedules
where they were more or
less drifting over the
oceans.”
With global reefer volumes
set to continue to grow in
the order of 3-4 per cent per
year, he predicts that the
current annual conventional
reefer volume of 30m tonnes
per year would
likely further
decline as
container lines
ate into the
conventional
market share,
but said that
modal shares
would also
stabilise at 3m
tonnes per year
for airfreight,
20m tonnes per
year for
specialist reefer
carriers and 90m
tonnes for container carriers.
The decision for shippers,
he argued, would be about
service levels. “Certain types
of fruits, such as table
grapes, will continue to be
air freighted. For shipping,
there is a real difference in
transit time. We sail from
Peru to the UK and Europe
in 13 days. The fastest a
container lines does this is
21 days. In the old days we
were taking 26 days from
New Zealand to Europe, the
fastest container line at that
time did it in 31 days, a small
difference. Today it is over
42 days, due to slow
steaming.”
“It is the choice between a
taxi service and a bus
service. We are not asking
for a high price
because we want to
become filthy rich, but
to cover the cost – we are
doing the same as CMA
CGM and Maersk, but it’s a
different price. If you take
the taxi you pay more,” he
said.
He also explained how,
compared with the container
lines’ average of three to four
reefer container trips per
year, specialist operators get
far higher usage from their
equipment.
“In Belgium you can
offload 300 containers, strip
them and reload
them in 24
hours. We use
one box close to
14 times per
year – but the
container
basically stays
with the ship,
which reduces
your costs per
container
substantially,”
he said.
“Specialised
reefer services
are all about fast,
dedicated services. We go
with relatively small ships,
straight from the load port to
the discharge port. We don’t
go to the container terminals
– we try to avoid them
actually.”
However, Buitenwerf and
his team of vessel specialists
at Seatrade have also
embraced container
technology, for in July last
year the company ordered
four 2,200 teu box ships
from the Chinese Zhejian
Yangfan yard plus options on
four more identical ones.
These orders were
subsequently upped by two
firm and two optional ones,
all forming part of Seatrade’s
“2020 fleet renewal”
program. This will ultimately,
“Container
ships carry
reefers well,
but it is a
different
mode of
transport”
by the end of this
decade, add 20 such
container vessels to its
current fleet, currently
consisting of 86
conventional units of which
the largest 54 are ranging
between 450,000 and
650,000 cft.
As opposed to reeferheavy container ships –
defined by Dynamar as
having more than 20 per
cent total capacity taken by
reefer slots, and which are
generally deployed by
container lines in the
Southern Hemisphere trades
– the new Seatrade vessels
will be full-reefer-capacity
units, meaning they will
exclusively carry 40’ highcube refrigerated containers
connected to 670-770 plugs.
But they will also be
considerably smaller and
nimbler than container
vessels, with 20-knot speeds
and maximum draft of 9.2
metres, allowing them “to
continue calling the generally
smaller specialised reefer
ports near produce-growing
regions as presently served
with smaller specialist reefer
vessels. Hence, Seatrade can
operate its full reefer box
ships according to the tested
conventional scheduling,”
Dynamar says.
The analysts further
observed that while being the
same size and speed
Seatrade’s largest
conventional ships they will
have three times greater
capacity, as expressed in
pallets.
“The new ships’ up to
14,400-pallets average
capacity compare to the
4,000 to 5,500 under deck
pallet space for the
company’s 450,000-650,000
cft specialist vessels.
“And here’s what clearly
stands to happen: Seatrade’s
“2020 fleet” will ultimately
replace most if not all of its
largest conventional vessels,
heralding the start of the shift
of the world’s largest
conventional reefer operator
to the container segment,”
Dynamar says.
t
Perishables
Reefers get real-time
monitoring
CONTAINER shipping lines are investing in new
technology that allows real-time monitoring of perishable
cargoes while they are in transit, offering shippers and
forwarders vastly increased visibility of the refrigerated
supply chain.
The investment is being led by Maersk Line, which this
year unveiled its remote container management (RCM)
programme, the result of a five-year project which has
seen the carrier’s entire fleet of 270,000 reefer containers
fitted with a remote container device (RCD).
Meanwhile, its entire fleet of 600-plus container vessels
has been fitted with new transmitting equipment – two
antennae, one placed at the bow and one at the stern of
each vessel pick up data sent from the RCD.
This data is then transmitted from the antennae to a
VSAT dome that has been installed on the monkey deck of
each vessel – the roof of the vessel’s bridge – which then
retransmits the data to satellites owned by American
telecommunications giant AT&T which orbit the earth.
The satellites then transit that data back to Maersk’s
data centre, as well as to the vessel’s bridge, a process
that takes about 45 minutes.
The result is huge amounts of data being transferred at
any given minute, although the project was originally
conceived as a way of focusing on its cost base.
Maersk Line’s Head of Reefer Management Shereen
Zarkani says: “The starting point for this project was to
obtain visibility at a very granular level – knowing where
each container is, including when it is en route to the port;
on the sea; in the terminal; when it is gating in and out –
and so on across all the links in the supply chain.
“What we are looking to do is being able to aggregate all
the bits and pieces of data which then gives us further
insight into operations such as the equipment maintenance
and repair (EMR) programmes. The data has always been
there but it is difficult to bring it together.”
However, there could be huge potential benefits for
partner relationships given the potential for supply chain
transparency, Zarkani says.
Zarkani says improved control of reefers while at sea is
already beginning to filter into voyage operations.
“The cargo care can be improved on the ships – the
reefer technicians aboard now receive data from each
container every half hour, and if there is a problem they
will be sent an alarm and can go and check the box and
fix the issue.
“Just having those
functions in themselves will
save a lot of cases. I need the
claims to go down because
it’s a lose-lose situation for
us and our customers – you
think of all that wastage in
terms of money and time and
effort that could be saved.
For me, this is the biggest
improvement that RCM
would allow – it will hugely
increase the level of cargo
Shereen Zarkani
care,” she adds.
Maersk
10
VOICE OF THE INDEPENDENT, JULY 2016
European trade
The UK must move on after
Brexit and get trade deals done
ON 23 June 2016 the UK
voted to leave the European
Union.
Whether you put your X
in the ‘leave’ box – and 52
per cent of voters did – or
decided for ‘remain’, the
result was a democratic
choice of the citizens of the
Freightfolio Advert.pdf
UK and must
be respected.
So the UK has now
verbally resigned from the
EU, but this must still be
confirmed in writing – in
this case Article 50, which
triggers an expected
minimum two-year process
of unravelling 43 years of
membership of the single
1
7/6/16
9:55 AM
market.
However, despite all the
positive rhetoric from the
leave campaigners before
the referendum, there
appears not to have been a
plan A, or even a plan B, on
the next steps post-Brexit.
And each day that passes
since the referendum, a
politician will give his or her
differing view on when we
should submit Article 50,
ranging from immediately,
to the end of the year, or
even later.
But until such notice is
actually served, business
and trade remains in a state
of limbo, not only in the
UK, but also in Europe, and
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to a certain extent around
the world.
At present the only
certainty is uncertainty – a
muddled state of affairs that
is disliked by both investors
and consumers: it
represents a serious threat
to the UK’s businesses and
trading.
In the first instance it is
absolutely essential for
business continuity that the
UK agrees a new trade deal
(post-Brexit) with the EU’s
460-million strong
consumer market place. But
as it stands this negotiating
process cannot begin until
Article 50 is handed to
Brussels.
Assuming
that this not
insignificant
hurdle can be
overcome, the
UK must turn
its attention to
preparing to
agree new trade
deals with the
rest of the
world after it
finally leaves
the EU.
At the last
count the EU
had agreed
around 50 FTAs
(free trade
agreements) – admittedly
not all of them ‘classic’ no
tariff agreements, but
nonetheless important trade
enhancements – that the
UK needs to get working on
promptly, given the length
of time normally required to
sign off and ratify the deals.
The world wants to
continue trading with the
UK – after all it is in their
interests as well – and an
FTA means it is much
simpler to do so.
Since the referendum
result several countries
have made it clear that they
would like to start talking to
the UK about a new deal
t
Insights IN
Mike Wackett
Sea Freight Consultant, FICS
now.
For example; in South
Korea the government has
said that it urgently wants to
agree a bilateral trade deal
with the UK, and is anxious
to send a delegation to
London to get the talks
started.
South Korea signed an
FTA with the EU in 2010
and Britain’s share is
estimated to be US$700m
annually.
South Korea
is now the UK’s
third-largest
export market
in Asia, buying
luxury brands
such as
Burberry and
Diageo along
with British
investment from
financial firms
such as HSBC
and Prudential,
and energy
companies Shell
and BP.
But the UK is
ill-prepared; it has very few
trade negotiators of its own
– fewer than 40 – and
precious little time to train
people up.
The EU employs 550 staff
dedicated to trade
negotiations.
Given the need for
experts that can draft new
trade deals the offer from
one of our Commonwealth
friends, New Zealand, to
loan us trade negotiators
should be seriously
considered.
Trade discussions must
begin urgently, failing which
significant business could be
lost to the UK.
there
appears not
to have
been a plan
A, or even
a plan B,
on the next
steps postBrexit
VOICE OF THE INDEPENDENT, JULY 2016
11
t
Spotlight ON
Stephan Haltmayer
QCS gets creative
With flat air and sea freight volumes, QCS has moved into niche areas to boost business
NOTWITHSTANDING the
ongoing woes in the EU,
2016 has so far shaped up
well for Quick Cargo Service
(QCS). The first four months
of the year brought an
improvement over 2015,
both in terms of volume and
revenue, for the German
forwarder.
“In weight we were up 16
per cent in exports and 9 per
cent in imports,” said
Stephan Haltmayer,
Managing Director of the
family-owned company.
Increased sales activities
have played a major part in
this. QCS expanded its sales
force a couple of years ago,
which is now bearing fruit,
Haltmayer said.
The company’s
participation in WCA and
the China Cargo Alliance
has also played a role in the
rise in business, he added.
The single biggest chunk
of business in the first
quarter was a charter of
temperature-sensitive cargo
to Shanghai in the run-up to
Chinese New Year. The
shipment, which required
ambient
temperature
between 16 and
25 degrees
Celsius, was late,
and most
scheduled
capacity was
taken, so QCS
organised two
full charters with
one carrier and
six split charters
with another.
Nevertheless, Haltmayer is
not optimistic about the
classic air and ocean
forwarding that has been
QCS’s bread and butter.
“Air and seafreight is at zero
growth. The growth is in
e-commerce,” he
commented. He sees
forwarders in a similar
situation as travel agents
were, whose business has
been eroded by the ability of
travellers to compare fares
and book tickets online.
“Airfreight is still relatively
complex – it requires
clearance, and you handle
dangerous goods – but it’s
becoming more difficult for a
traditional forwarder,” he
said.
Despite the growth
potential in e-commerce,
Haltmayer has no plans to
pursue that business in the
foreseeable future beyond
QCS’s current involvement,
which consists of moving
some traffic for e-tailers in
consolidations. “You need to
position yourself differently
for e-commerce,” he
remarked.
Instead, QCS has been
striving to build up expertise
in niches that generate
higher yields than general
cargo and shield the firm
from the price-based
competition for general
freight. “I think firms like us
have to focus more on niche
markets,” reflected
Haltmayer. “In the general
market there is always
somebody who is ten cents
cheaper.”
A big focus for QCS has
been the aerospace sector,
which has been a big growth
segment for the forwarder in
recent years and now
accounts for about 10 per
cent of its revenues. The
firm’s dedicated in-house
division was spun off into a
separate company last year
and operates from adjacent
premises to the QCS
headquarters near Frankfurt
under the ‘Qualified Cargo
Solutions’ moniker.
“A lot is time-definite,”
Haltmayer said,
adding that the
subsidiary’s
scope has been
extended to
deal with ships
spares.
The
company’s own
set-up is only
part of the
strategy to go
after aerospace
business. To
build up a viable global
network to serve this
industry QCS teamed up
with other forwarders a few
years back to form the
‘Aerospace Logistics Group’,
an officially registered
association of mid-sized
forwarders created to
provide global coverage to
the aviation and aerospace
sector with a consistent
service level. To qualify,
members must serve three
to five aviation accounts,
they have to be reachable
24/7 and must have direct
access to the tarmac.
The group exhibits jointly
at aerospace events, and its
members gather once a year,
usually at one such show.
A more recent foray into a
new segment has established
QCS in Nigeria, managing a
cold chain of food shipments
from Germany to the
African country. Much of
this is headed for hotels and
restaurants, moving in
weekly consolidations by air.
A similar push is now
afoot targeting Iran. “A lot of
German firms are moving in
to sell their products,”
remarked Haltmayer.
A creative approach has
long been the hallmark of
QCS. The company was one
of the founders of the IGLU
consortium which was
established by a group of six
mid-sized German
forwarders in the 1980s to
pool their traffic and
leverage their joint volume
with airlines.
The flair for creative
moves into niche segments
has not blinded QCS to
established markets. The
company has recently
recruited a route manager
for the US and now has a
team of three individuals
who focus on this market.
“We want to concentrate
on the US. It is a huge
market, and it is two-way,
not one-directional,” said
Haltmayer.
QCS also employs one
specialist for the Russian
market. “It is extremely weak
now, but in the long term it
is a strong market for
Germany. It will come back,
but not in the near future.
We want to stay in touch,”
Haltmayer commented.
“it’s
becoming
more
difficult for
a traditional
forwarder”
PERISHABLES
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September 26 - 29, 2016
Prague, Czech Republic
12
VOICE OF THE INDEPENDENT, JULY 2016
Forget flown as booked – it’s all
about delivered as promised now
the lines of what customers need and their
FOR decades flown as booked (FAB) has
reasons for selecting particular carriers. This
been the standard by which forwarders have
moves their focus beyond FAB.
measured airline performance, but it may be
“This is more delivered as promised than
on its way out, to be replaced by a yardstick
flown as booked,” he commented.
that has been fuelled by the e-commerce
The concept of DAP has been around for a
world – delivered as promised (DAP).
long time, noted Stan Wraight, Executive
Christopher Shawdon, Vice-President,
Director of Strategic Aviation Solutions
Logistics Solutions, Global Transportation at
International.
IT provider Unisys, sees airlines try to
In the
latter half of the 1990s Lufthansa
leverage the
availability
of
data
and
shipment
Worldwide Logistics May16.pdf
1
09/05/2016
11:00
Cargo revamped its product portfolio to offer
visibility to tailor their offerings more along
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various delivery time windows, but the
Offices in these locations:
concept did not take off, which the carrier
SaN FraNCiSCo
LaS VegaS
atLaNta
blamed on forwarders’ insistence on FAB to
SeattLe
LoS aNgeLeS
CharLotte
waShiNgtoN dC
MiaMi
ChiCago
ensure their cargo moved as planned.
hoNg KoNg
New YorK
hoUStoN
“Flown as booked is a KPI to measure the
performance of a station,” remarked Ram
expreSS air Freight UNLiMited, iNC.
Phone: 1(718)-995-2900
Menen, the former Head of Cargo of
Toll Free (US, Canada): 1(800)-878-0303
Emirates. He added that FAB was more
E-Mail: [email protected]
Online: www.expressairfreight.com
important to forwarders as their focus at the
Headquartered in New York, New York USA
time was chiefly on moving the cargo out of
their station because of the way operations
get to the destination in time,” he continued.
were set up.
Wraight regards the developments in the
Since then shipment visibility has
Express Air Freight Earpiece New.indd 1
14/06/2016
e-commerce world, with the likes of Amazon
improved considerably, which has
in the driving seat, as the main
diminished the need for
force behind the shift to DAP.
forwarders to know on which
However, it is not merely a
flight their shipment would
matter of internal visibility, he
move. This is going to move up
stressed.
another notch as carriers put
“You need a product portfolio
RFID labels on shipments and
to offer DAP,” he said.
equip their facilities with RFID
Moreover, airlines cannot
readers, Wraight said, pointing
implement DAP on their own, as
to Air Canada’s trailblazing work
they do not control handling and
in this arena.
customs clearance. “You have to
Emirates has used DAP
have integrated control,” he said,
internally for years and built it
adding that this does not mean
into its cargo management
ownership. Airlines for the most
system, said Menen. “To me this
part do not own the handling
was the most important part of
process. To control it adequately,
our service offering and the
they need to clean up their act
success of Emirates is based on
with their handling agents and
that,” he declared.
offer them incentives to rise their
“Since a decade or so, there is more focus
performance to the levels required to make
on the integrity of supply chain operations
DAP work.
driven by the multinationals who had more
So far few airlines seem to have got that
end-to-end control of the chain. Today the
message, as most still look to their handling
shippers and consignees want guaranteed
agents first and foremost as tools to cut their
service. At the end of the day it is the
costs.
consignee who is the main actor in this stage.
Hence, for a change the industry seems to be
finally focusing on DAP rather than FAB.
Cargo might be FAB from the origin, but not
Cargo
might be
FAB from
the origin,
but not get
to the
destination
in time”
TRANSPORT
t
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