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The Cargo Letter
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Section A: Section: 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
- Not Yet Mended ........ as the U.S. airline industry
could easily lose US$8Bn by the end of 2002, exceeding the record breaking
losses of 2001, said the Air Transport Assn. Losses expected: US$1.5Bn to
US$2Bn in the 3rd quarter & US$2.5B to US$3.5Bn in the 4th quarter.
Meanwhile, Airports Council Int'l reports global air-freight traffic
increased 3.2% in June, primarily because of a surge in volumes at Asia
Pacific airports. Total air cargo volume handled by 745 airports worldwide
in June amounted to 5.26 million metric tons, up 3.2%. Specifics: Asia
Pacific airports posted a volume increase of 14.7%, to 1.55 million tons;
North American airports saw volume drop 2.2%, to 2.18 million tons; Europe
was flat, amounting to 1.07 million tons; Middle East had a 13.9% volume
gain, to 223,200 tons; Africa saw volume rise by 5.9%, to 78,300 tons; Latin
America & Caribbean suffered a 10.1% fall in traffic, to 162,100 tons.
***But Encouragement From Boeing ......... as it projects world air cargo
traffic to grow on average 6.4% a year for the next 20 years. Asian markets
are expected to lead the growth with China contributing most. The
projections come after world air cargo traffic plunged 5.9% in 2001, the
worst modern-day decline. The decline resulted from the economic slowdown
that began in 2000 & was aggravated by the Sept. 11 terrorist attacks.
Boeing expects percentage growth for 2002 to be in the mid-single digits. In
2000, world air cargo traffic increased 7.1%. Boeing released its overview
in Hong Kong at the biennial meeting of the Int'l Air Cargo Assn. The
company also projected the world fleet of freighters to grow from 1,775 to
3,078 planes over the next 20 years, mostly widebody aircraft.
- Security Freeze ......... as the U.S. Transportation
Security Admin. has imposed a hiring freeze in the midst of its effort to
meet fast-approaching congressionally imposed deadlines to check all
passengers & baggage at commercial airports. Congress capped TSA at
45,000 full-time employees when it created the agency in response to the
Sept. 11 attacks. The agency will have closed to that number by last
weekend, when a new batch of screeners came on board.
- Stay of Execution ......... as forwarders &
shippers are relieved by a 1 year delay of in implementation of a
controversial Int'l Air Transport Assn. (IATA) resolution after fearing
shipment costs would soar if/when it passed. IATA's Resolution 502, which
calls for a change in the rate of calculation for low-density cargo to drop
from the present 6,000 cubic cm. per kg to 5,000 cubic cm. per kg. The new
rule was expected to come into effect Oct. 1, but is now expected to be
implemented late next year. If the change had been adopted it would mean
that bulky shipments, which are charged on a volume basis, rather than
weight, could face significant cost increases. See "Crying Foul"
in The Cargo Letter [380].
- Wolf At The Door? ......... as the 6 biggest unions
at United Airlines have offered to make wage cuts totaling US$5Bn over the
next 5 years, falling short of the US$9Bn that had been sought by executives
& raising the prospect that United may still file for bankruptcy this
autumn. In another saving move, American Airlines has raised US$617M through
an aircraft-secured bond financing in public capital markets. American
Airlines is the world's largest carrier, serving more than 250 cities in 41
countries & territories with approximately 4,400 daily flights. Donald
J. Carty, the CEO of American Airlines unit said Sept. 25 that a war with
Iraq would likely necessitate new government help for the industry, or the
nation's air transportation system would be crippled.
- Shut Door? .......... as European airports have
warned that they could shut down if the European Union forces member
governments to stop providing state-backed liability insurance. European
airlines will be forced to return to the commercial insurance market for
coverage of 3rd party war & terrorism risks, after the European
Commission urged governments to stop providing state-backed insurance from
the end of Oct. Insurance coverage is commercially available, but from few
companies and at considerably less favorable conditions & rates to the
aviation industry than prior to 11 Sept. Can things get any worse for the
industry? Likely yes.
- American, Not German? .......... as DHL Airways has
denied, in a filing with the U.S. Dept. of Transportation, that it is a
German company, as alleged by competitors FedEx & UPS. Under the U. S.
law, in a true American corporate citizen at least 75% of the voting rights
must be in American hands, and at least 66% of the board & managing
officers must be genuine U.S. citizens. The DOT has previously stated that
DHL Airways is a legal American company, but according to UPS & FedEx
things have changed. The Germans are the boss at DHL, they say. According to
DHL it still complies with the rules, it stated in its filing. Competitors
point out that Deutsche Post already owns 50.6% of DHL Int'l, and is to buy
another 25% from Lufthansa. DHL airline is another entity, according to
Deutsche Post. In a Sept. 6 PRNewswire release, DHL stated that its largest
shareholder is William A. Robinson, a private investor. Robinson, a U.S.
citizen, controls 75% of the voting stock and appoints 75% of the airline's
board of directors, each of whom must be citizens of the U.S. Stay tuned...
- Spanish, Not German? ......... as Deutsche Post has
increased its stake in Spanish parcel service provider Guipuzcoana Euro
Express from 49% to 51%, thereby becoming majority owner. Guipuzcoana Euro
Express plays a key role within Deutsche Post Euro Express's Europe-wide
network and provides comprehensive coverage within Spain & Portugal. The
Guipuzcoana Group, founded in 1947, has a team of 4,400 professionals in 85
branch offices throughout Spain & Portugal. And to further fuel the
enterprise, Deutsche Post World Net will now increase an over-subscribed
bond issue to 1.5 billion Euro (about US$1.45Bn). "The original size of
the issue has been increased by half a billion Euro to 1.5 billion Euro as
it was oversubscribed six times, the company said.
- Varig's Life Preserver ............. as it is the
main beneficiary of a US$320M rescue plan from the Brazilian government
directed at the airline sector, by means of tax breaks & forgiveness of
debt.
- Air France Strike of The Month Club Selection
.......... as more problems are looming for shippers & travelers as
French unions plan yet another 24-hour strike on Oct. 3. Perhaps dates for
the remainder of the year could be selected by lottery in order to increase
the entertainment level. This month's 4 day event cost the airline US$58.8M
because of the disruption to flights. The French government is expected to
push ahead with privatization of the national airline & risk a
confrontation with its unions. Meanwhile, Air France is in negotiations with
KLM about taking an equity stake in the Dutch carrier, French business paper
Les Echos has reported.
- UPS Achieves Technical Success .......... as after
more than a year of negotiating, the world's largest transportation company
& its aircraft mechanics struck a tentative contract agreement Sept. 10
that UPS said makes the mechanics highest paid in the industry. The 5 year
contract would be retroactive to Aug. 1, 2001 & remain in effect until
Nov. 1, 2006. It covers 1,140 aircraft mechanics, flight simulator
technicians, utility workers & maintenance controllers working for UPS
Airlines. In the contract's final year, some aircraft mechanics would earn a
top rate of US$43 per hour.
- UPS Worldport Debut .......... as it has showed off
the newly named & completed a US$1.1Bn Louisville hub expansion that
will speed parcel processing by 40% at the company's main air hub. The 7
year project, most expensive in UPS history, more than doubles the
Louisville hub's sorting complex to 4 million square feet - the equivalent
of more than 80 football fields. The expanded facility features cameras
& scanning equipment to navigate packages through a labyrinth of
high-speed conveyors for sorting & eventual shipment to places around
the globe. "This system virtually eliminates missorts, almost
eliminates damages & increases safety," UPS chairman & CEO
Michael Eskew said. Once packages are off-loaded, most aren't touched by
employees again until being reloaded onto other planes. Before automation,
packages went through the hands of 4 or 5 employees during sorting. The
automated system will free workers from much of the lifting & repetitive
motion that can carry risk of injury. The expanded hub, named "UPS
Worldport," will be capable of sorting 304,000 packages per hour, or
more than 84 packages every second. Before expansion, UPS could sort 215,000
packages hourly at the hub, which has about 8,500 employees, most of whom
are sorters & loaders.
- Being Fuelish ......... as carriers now move to
increase the surcharge.. United Cargo increased its fuel surcharge for Int'l
shipments to 10 cents per kg. from 5 cents, on Sept. 23. Northwest Airlines
Cargo will raise its fuel surcharge to 10 cents per kg, or 5 cents per pound
on actual weight, effective Oct. 1. Airborne Express will increase its fuel
surcharge from 2.9% to 3.5% for all air express shipments effective Oct. 7,
2002. UPS will raise its fuel surcharge from the current rate of 0.75% to
1%, effective Oct. 7.
- Delta Air Logistics Goes To The Net ........ as the
cargo division of Delta Air Lines is preparing to join Global Freight
Exchange (GFX), the Internet based online cargo booking solution.
- US Air Goes To Ground .......... as it has new
business agreement with Menlo Worldwide Expedite! to provide door-to-door
air & ground emergency shipment services to facilitate transportation of
the airline's PDQ (Packages Delivered Quick) product. Menlo Expedite! will
assist US Airways with pick up & delivery of the small package product
by managing ground transport between US Airways PDQ customers and the
airport. Menlo Expedite! will also provide package tracing through its
customer service department.
- LAX Roars Back ........ as for the 1st time this
year, air freight tonnage figures reported by 77 airlines serving Los
Angeles Int'l Airport (LAX) showed year-over-year increases for 4
consecutive months (May, June, July, & Aug). In Aug, airlines tallied
greater domestic tonnage shipped in 2002 than in 2001. Domestic shipments
were up 4.9% to 78,605 tons, while Int'l shipments were flat -- 78,229 tons
compared to 78,950 in 2001. For the month, total shipments were up 1.78%
over 2001 -- 156,834 tons versus 154,086 tons in 2001. Year-to-date figures
show Jan. through Aug. 2002 only 0.19% below those same months in 2001.
Year-to-date, July 2002 again almost pulled even with the same period in
2001, 1,032,888 versus 1,034,447 tons. Domestic shipments advanced to
509,137 tons, while Int'l tonnage was slightly behind in the 1st 7 months of
2002 -- 523,751 tons versus 541,924 in 2001. These tonnage increases are
occurring even in the face of stiff competition for airlift because of
rising demand & prior airline service cutbacks last year.
- Gathering of Eagles ........ as for the 1st time in
40 years, 4 Goodyear blimps graced the skies near Akron, Ohio following the
Sept. 5 christening of the fleet's newest airship, the "Spirit of
America." The newest ship was christened by Letitia Driscoll, mother of
NYPD officer Stephen Driscoll who was lost on Sept. 11. Joining "Spirit
of America" were 3 of the company's most famous airships: the
"Stars & Stripes", based in Pompano Beach, Fla.; the
"Spirit of Goodyear", based at the Akron facility; and the
retiring "Eagle", from its Carson, Calif., home. At 192 feet long
& 59 feet high, each blimp can hold more than 202,000 cubic feet of
helium & air & has a maximum speed of 50 MPH, with a pilot & 6
passengers. All airships have EagleVision, a unique aerial sign technology
for promoting non-profit, public service & product information.
- Daryl Is In VERY BIG Trouble. ......... as an
executive whose company sold customized cigarette lighters pleaded guilty in
Los Angeles to shipping flammable material on commercial jets in violation
of Haz Mat regulations. Federal prosecutors said a whistle-blower had been
prepared to testify that workers knew the compressed-gas lighters were
hazardous & joked that they should "stuff extra paper in the
shipping boxes so if a plane went down, the fire would 'burn up the
evidence." Daryl E. Schumacher, 50, a (former) VP at Int'l Trading
& Marketing, pleaded guilty to unlawfully transporting hazardous
materials in air commerce. He acknowledged that he authorized 22 of the
deliveries via FedEx & UPS in 2000. Int'l Trading, which bought lighters
in bulk & put logos on them for clients, is a corporate defendant in the
case, with charges pending. The Lancaster, CA company has since ceased
operations. Daryl, pray hard.
- Volumes >> Amsterdam Airport Schiphol for Aug.
rose 9.2% to 96,716 tons compared with same month of 2001. >> Hong
Kong Int'l Airport handled 24% more cargo in Aug. over same month last year,
bolstered by rising exports, to a volume of 208,000 tons. >> Southwest
Florida Int'l Airport (SWFIA) had biggest Aug. in the airport's 19-year
history with 2.7 million pounds of cargo moved through, an increase of 4.3%
over Aug. 2001. >> Gulf Air, national carrier of the UAE, Bahrain,
Oman & Qatar, says carried 10% more cargo in 1st half this year as
compared with 2001. >> Korean Air Cargo, world's 2nd largest
airfreight carrier, said that despite last year's terror attacks & its
most abysmal year ever - its worldwide freight volumes grew by more than 50%
by volume from the end of 2001. Wow!
Please click below for other sections:
Section A: Section: 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
Written from wire stories, the Associated Press,
Reuters, Hong Kong Shipping News Lloyds & other world sources.
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