The Cargo Letter

Section A: Trade, Financial & Inland News | Section B: FF World Air News |
Section C: FF World Ocean News | Section D: FF in Cyberspace |
Section E: The Forwarder Broker World

OUR "B" Section: FF World Air News

3. Freight Forwarder Trade Briefs

• TWA Now American .......... as the U.S. Dept. of Transportation (DOT) has now approved the transfer of Trans World Airlines (TWA) to American Airlines. American & its subsidiary TWA Airlines LLC (LLC), which will operate TWA's services until all operations have been merged into American. LLC plans to operate TWA's current Int'l operations to cities within the U.S. & Canada, the Caribbean, Mexico, the Middle East, Paris & London, as well as to continue operations at TWA's St. Louis hub. American also plans to hire most of TWA's employees. On April 15, 1926 _ almost exactly 75 years ago _ Charles A. Lindbergh took off from Chicago for St. Louis (home of TWA) in a DeHavilland biplane with 1 bag of mail. That became the 1st regularly scheduled flight for what was to become American Airlines -- now the world's largest.
• Air Antitrust? ......... as Congress is considering legislation (H.R. 1407) that would authorize the U.S. Secretary of Transportation to grant limited antitrust immunity so airlines could meet & discuss schedules in order to reduce flight delays at U.S. airports. Known as the "Airline Delay Reduction Act," the bill would authorize airlines to file with the Secretary of Transportation a request for:

         * Authority to discuss with one or more other airlines or foreign airline agreements or cooperative agreements limiting flights at an airport during a time period when scheduled air transportation exceeds airport capacity.

* Approval of such agreements or cooperative agreements with respect to limits on interstate air transportation.

The bill would direct the Secretary of Transportation to approve such requests if the discussions & resulting agreements are not adverse to the public interest, & improve air service to the public. The bill bars participants from discussing or agreeing on rates, fares, charges, or in-flight services.

• Five More Free ........ as U.S. Transportation Secretary Norman Y. Mineta & representatives of Brunei Darussalam, Chile, New Zealand & Singapore signed a multilateral open-skies agreement today.The agreements will eliminate barriers to free trade in aviation services between the 5 trading countries.
• Memphis & LAX Lead .......... as Int'l Transport Journal says that of the world's top 20 cargo hubs, 10 are located in the U.S., 6 in Asia & 4 in Europe. This breakdown shadows the current cargo flow worldwide. In the U.S., the top cargo port remains Memphis which is the HQ hub for FedEx shipments. Its throughput last year was 2.48 million tons, an increase of 3.2% over its 1999 figure. Los Angeles Int'l (LAX) was 2nd at 2.25 million tons of cargo, an increase of 5.2% on its 1999 total. Hong Kong was 3rd with 2.24 million tons of cargo. The full top 20 was: 1. Memphis (2.48 mt); 2. Los Angeles (2.25 mt); 3. Hong Kong (2.24 mt); 4. Miami (1.99 mt); 5. Tokyo Narita (1.875 mt); 6. Anchorage (1.872 mt); 7. Seoul Kimpo (1.84 mt); 8. New York JFK (1.18 mt); 9. Frankfurt (1.73 mt); 10. Singapore Changi (1.7 mt); 11. Chicago ORD (1.64 mt); 12. Louisville SDF (1.51 mt); 13. Paris CDG (1.5 mt); 14. London Heathrow (1.3 mt); 15. Indianapolis IND (1.28 mt); 16. Amsterdam Schiphol (1.21 mt); 17. Taipei Chiang Kai-Shek (1.19 mt); 18. New York Newark (1.08 mt); 19. Osaka Kansai (0.966 mt); and 20. Dallas Fort Worth (0.898 mt).
• Volums Up .......... as World air cargo traffic increased 5.85% last year, to 64 million metric tons, according to yearly statistics published by Geneva-based Airports Council Int'l. North American cargo traffic rose 2.3% last year to 29.2 million tons. Traffic for Asia Pacific airports soared 11%, to 17.2 million tons. European airports' cargo traffic rose 7.9% to 12.8 million tons.
• Yankee Went Home ......... as an American cargo ship owned by Crowley Liner Services of Jacksonville that was to arrive in Cuba on Aril 21 with donated goods bypassed the island for unexplained reasons the night before, delaying plans for resuming regular shipping between the U.S. & Cuba after 40 years. Crowley was the 1st shipping company to get a federal license for such service. Shippers also must get licenses for sales.

• Bigger Said Not Better .......... as consolidation in the U.S. airline industry is contributing to a painful escalation in big carriers' overheads, rather than generating the cost savings that typically accompany takeovers in other sectors. Read the Financial Times article:
  http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3ST4LIPLC&live=true&useoverridetemplate=ZZZFKOXOA0C&tagid=ZZZYF7I2B0C&subheading=transport

• FedEx Deal Too Sweet? .......... as auditors are looking into whether U.S. Postal Service managers misinformed their governing board by claiming that a contract with FedEx will save the debt-ridden agency more than US$1B. A spokesman for the Postal Service Inspector General, which reports to the presidentially appointed Board of Governors, said it is reviewing the US$6.3B, no-bid contract with FedEx. Emery Worldwide complained to the Postal Service governors last month that they were "materially misinformed" before approving the deal in January. The FedEx contract will "cost USPS much more, both now &in the future, and will lead to reduced service levels" for the American public, said the letter from Emery. Postal Service recently notified Emery & another carrier that their postal contracts will be terminated, with FedEx replacing both. Emery challenged the FedEx contract in U.S. Claims Court but lost. The Justice Dept. it is continuing to look at possible antitrust implications of the FedEx contract.
• Boeing Alters Course .......... as it has scrapped plans to build a superjumbo commercial jet called the 747X. Boeing Co. said April 13 it may build a larger version of the 747-400 for longer-distance flights. The new aircraft would only add 8 more seats to the existing 747-400, which seats 416 people in a typical configuration, & has a range of 8,400 miles. But it would enable the plane to fly an additional 775 miles without affecting its speed or cargo capacity.  The Seattle aerospace company dropped a planned 747X last month after it received no orders & will instead focus on a smaller commercial jet that can travel at nearly the speed of sound.
• Incheon Int'l Opens ......... as the new airport opened on March 29 after the completion of its 1st phase of construction. To date, a total of US$5.8B has spent. The airport has an annual capacity of 1.7 million tons of cargo. With the completion of the 2nd phase expansion project planned for 2020, Incheon Int'l airport will add 2 new runways & its cargo capacity will reach 7 million tons.
• Chittagong Reinvented ......... as 60 year old MA Hannan Int'l airport at Chittagong has been developed into a new US$100M facility capable of receiving all types of aircraft including B-747 & DC-10. Bangladesh prime minister Sheikh Hasina said: "With the inauguration of this airport, Chittagong as a commercial capital will now be directly well connected to the world." The project was completed in 33 months. The terminal building is 18,600 square meters & will annually handle around 220,000 Int'l & 520,000 domestic passengers & 5,700 tons of cargo.
• For Sale: Sydney Airport ....... as the Australian government is to privatize the country's biggest airport, Sydney's Kingsford Smith airport. The sale is expected to raise more than US$3B.
• Athens Takes Flight ....... as its new airport at Spata, some 30 km south of the Greek capital, is open for business. The inaugural flight of an Olympic Airways B-737-400 took off on Mar. 27. The old airport at Hellenikon closed that midnight. The US$1.9B project is aimed at establishing Athens as a regional hub for air routes from Asia, Africa & Europe. Initially, the new airport will have a capacity of 16 million passengers annually, with a potential expansion to 50 million a year. The airport's 2 runways allow simultaneous takeoff & landing for up to 600 aircraft per day.
• UPS Picks Its Hub .......... as it will establish an intra-Asia hub in the Philippines. The plan has been developing for some time, with several locations within the Asia Pacific region being contenders for the development. The Philippines got the nod due to the country's central location & open skies policy. UPS' Asia Pacific president Ron Wallace said: "The Philippines' central position in the region makes it possible for cargo aircraft to reach all major Asian cities in less than four hours. This is vital for maximum operational efficiency, giving UPS the ability to dramatically improve delivery services." Several locations are under review for the new hub, with a favorite being Clark Int'l Airport in Pampanga. The former U.S. Air Force Base offers complete airport facilities -- 2 runways with 4 parallel & 9 connecting taxiways.
• FedEx Picks It's China City ......... as it will create China's biggest express handling center at Shanghai's Pudong Int'l Airport, in addition to opening 4 new express handling facilities in Hangzhou, Nanjing, Ningbo & Dongguan.
• "Hybrid Mail" ........ as the U.S. Postal Service will launch a blend of electronic & physical 1st class mail. Letters are electronically sent to a newly acquired UPS company & then printed & inserted into the U.S. postal system nearest the final destination. Large-volume mailers that want expedited delivery of cash-critical first-class mail, such as bills & financial statements use this service.
• Air Bolero .......... as Bolero.net, the London-based electronic document communications system provider, has signed freight forwarding  giant Danzas Group to use its system. Danzas AEI Intercontinental will initially use the system throughout its operations, including air and ocean freight & forwarding functions. Basel, Switzerland-based Danzas Group was acquired by Deutsche Post World Net in December 1998. Deutsche Post acquired Air Express Int'l in Feb. 2000 & merged it with Danzas.
• FedEx LAX Maintenance Facility Sees The Light ............. as it donated the cost of the annual safety check for the world's only flying eye hospital -- the ORBIS Int'l DC-10. FedEx Aircraft Maintenance Technicians have spent 2 weeks preparing the aircraft for upcoming medical missions throughout the world. On April 21, FedEx Express employees & their families toured the airplane to celebrate the completion of the task and announced the company's continued commitment to ORBIS. The DC-10 is the centerpiece of ORBIS Int'l, a non-profit organization committed to ending unnecessary blindness in the developing world. It serves as ORBIS's central training facility, making it possible to transport a first-rate medical school to developing countries, where more than 90% of the world's blind live, & where access to medical treatment is often extremely limited. In the DC-10's operating room, local doctors, nurses, anesthesiologists, & biomedical technicians work side-by-side with ORBIS's volunteer faculty -- top ophthalmologists from around the world -- in performing surgery. Bravo!
• They're Down, Down Under ........ as the Civil Aviation Authority of Australia (CASA) on April 12 grounded the entire B-767 fleet operated by Ansett Australia, a wholly owned subsidiary of Air New Zealand & the country's 2nd largest airline, because of repeated failures by Ansett to properly maintain the aircraft to Australia's high aviation standards.
• Qantas Bankrupt ........Qantas New Zealand, an independent franchise of Qantas is bankrupt. The Qantas Ltd you know does not have any equity in Qantas NZ. 
• Swiss Shake Up ......... as Swissair Group is reorganizing its logistics activities & upgrading airfreight to a strategic Group division. The existing SAirLogistics companies are integrated under Swisscargo. Ludwig Bertsch has resigned from operative management. The restructuring involves all existing activities of the Group division SAirLogistics, which in future will be included in one integrated organization under Swisscargo. Consequently, the business units Swisscargo, Cargologic, Ixedius, & GlobePool will become organizational parts of a new Swisscargo.
• Atlas Goes Global ........ as Atlas Air bought a 49% minority interest in a new U.K.-based cargo airline, Global Supply Systems Ltd. The new line will initially lease aircraft, crew & maintenance of B-747 freighter aircraft to airlines in the U.K. Global Supply Systems expects to begin operations in autumn 2001, when it will wet lease two B-747-700s to British Airways under a multiyear agreement. In related news, Atlas Air, Inc. has been ranked number 1 for the volume of cargo it handled at Miami Int'l Airport in 2000 -- 300,756 metric tons of cargo at the MIA last year, an increase of almost 28% over 1999 volumes. While overall cargo volumes at MIA have been declining for the past 2 years, Atlas Air & its customer lines have continued to grow.
• Airborne Goes to Ground ........ as it has launched a nationwide ground delivery service in the U.S. - a landmark in the company's 55-year history. The move into the ground delivery business allows Airborne to compete for an increasingly important business segment. Watch out FedEx & UPS.
• Con-Way Transportation Goes To Air ........ as the U.S. national LTL truck division of Consolidated Freightways (CNF) will enter the airfreight forwarding business by opening Con-Way Air Express on May 14, with 13 service centers, each having its own dedicated operations. Con-Way Air Express is headquartered in Forest Park, GA, near Atlanta's Hartsfield Int'l Airport.
• Singapore Goes Separate ........... as Singapore Airlines Cargo Pte Ltd, a wholly owned subsidiary of Singapore Airlines Ltd, has received its Air Operator Certificate (AOC) in preparation for operations as a separate all cargo airline this July. SAI Cargo commenced operations in 1988 with one freighter, gradually building up to the nine B-747-400 freighters known as "Mega Arks" currently in the fleet. Another 8 are currently on firm order.
• A Yugo With Wings ......... as Malev, the Hungarian state owned airline, will again once try to become attractive by restructuring, after failing many times to attract a merger partner. Privatization is foreseen for 2003 after shedding 1000 jobs, or over 25% of the workforce.
• Ice Picked By Teamsters .......... as UPS employee Roderick Carter, alleged stabbed by union members for working during a strike, has settled his lawsuit against the Teamsters. The former Univ. of Miami linebacker settled the case against Teamsters Local 769 on April 10 for an undisclosed amount of money. "The union knew this was a case where it was caught red handed,'' said Carter's lawyer, "send a message that union violence does not pay." Carter continued to drive a UPS truck during the union's 2 week national strike in Aug. 1997. A day after he told a T.V. reporter that he needed to work to support his family, he was alleged pulled from his truck & stabbed with an ice pick. Carter, who currently works as a UPS supervisor, was unable to work for nearly 2 months after the attack.
• Miniature Prison Sentences? ......... as employees of airline caterer Sky Chefs Inc. allegedly stole hundreds of cases of miniature bottles of liquor worth US$1.5M from a storage room at JFK, authorities said April 12. The liquor was stolen over 16 months from stores destined for American, TWA & Lufthansa airlines. The men took the liquor to local delis & neighborhood grocery stores for resale. Each case, worth US$768, was allegedly resold for US$100 -- great math work guys! Each defendant was charged with grand larceny and/or criminal possession of stolen property & faces up to 15 years in prison if convicted. 
• Cathay Pacific's Nutty Pilot ............ as a senior Capt. was fired for throwing nuts at the airline's boss in a bar. Capt. Scott Munro was dismissed in early April after David Turnbull, CEO of the Hong Kong airline, accused the pilot of showering him with nuts. ''The (sacking) decision was taken the same afternoon after a disciplinary hearing,'' Cathay said. Munro could not be contacted for immediate comment. ''He was dismissed for throwing things at me. We have to operate a disciplined company and you do not throw things at the CEO,'' Turnbull was quoted as saying in the South China Morning Post. ''He's the captain of the ship. It's not what you expect of him ......if the cabin crew did that to a passenger, they would be dismissed,'' Turnbull added.  Replacement interviews will be conducted a a "Nut Free" zone.

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Written from wire stories, the Associated Press, Reuters, Hong Kong Shipping News Lloyds & other world sources.