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LONDON: May 10, 2018. According to DP World UK general manager Logistics Nichola Silveira, the biggest challenge to the proposed £10 billion merger between UK supermarket Sainsbury’s and Walmart’s UK subsidiary Asda will be logistics, not regulator approval:

Last week was a good one for Jeff Bezos. Amazon’s founder owns 78.83 million shares in the tech giant, which gained him US$5 billion after its latest earnings beat expectations.

With big bricks and mortar rival Walmart under growing pressure, its proposed tie-up in the U.K. with Sainsbury’s, the second largest supermarket, has been seen by some as a retrenchment to enable it to focus on home turf.

While Amazon’s US$13.7 billion acquisition of Whole Foods came out of the blue last year, the tie-up between Sainsbury’s and Asda, Britain’s second and third-largest food retailers respectively, is less of a surprise. The country’s embattled High Street - and in particular, its low margin food retail sector - has struggled amid stiff competition and rising costs.

The proposed combined business will employ around 330,000 people across a network of 2,800 Asda, Argos and Sainsbury’s stores to create one of the UK’s leading food, general merchandise and clothing retailers.

Real estate is by far the biggest assets these companies have. The potential, however, lies in the store locations, where Sainsbury’s convenience store network would be crucial for the new company to find a proper footing in online retail – much like with its acquisition of Argos which saw an almost overnight revival in fortunes thanks to its network.

While the merger announcement said there were no plans for store closures, the large sites in inner city areas can undoubtedly become profitable logistics hubs, serving huge amounts of urban customers.

While regulators and competitors may question the deal - which would combine the 16 percent market shares of both Asda and Sainsbury’s to surpass Tesco’s 28 percent - grocery demand continues to soar.

Silveira DP World General ManagerAccording to grocery industry research non-profit IGD, Europe’s retail market will grow by a compound annual rate of 3.7 percent between 2017 to 2022, adding €377.6 billion to the global market. It will be worth a staggering €2,289 billion by 2022 – fuelled largely by growth in Eastern Europe. The U.K. will grow from €216 billion to €250 billion.

However while disposing of surplus real estate will be relatively easy, integrating the Asda and Sainsbury’s logistics platforms will be harder to do.

In a world where connectivity is a major driver of business efficiency, the post-merger company will need to create a single omnichannel offering, providing a seamless shopping experience where its online and physical operations are fed by the same data. Right now, no supermarket combines the two, making customer profiles almost useless.

By aligning data systems, customer demand data can be used to manage inventory in order to better predict product demand cycles and make best use of physical space across bricks-and-mortar stores.

Putting customer demand data at the centre of an operation gives unparalleled insight into many areas of consumer life – areas that marketeers have laboured over for decades. The value to be captured here cannot be underestimated.

While customer offering is integral to the success of any retailer, a company cannot become a stalwart without a lean and robust logistics network. For retailers in the age of omnichannel, the supply chain is where efficiencies are gained and value created. Both Sainsbury’s and Asda have grown up through a string of mergers before the Internet. Their real estate holdings, and the supply chains that cater for them, are inefficient but are still a vital part of their profit and structure.

Re-aligning how they move goods around from A to B will take bravery but will ultimately give the two companies a competitive advantage. The new management team will have to scrutinise every aspect of their supply chain legacy, identifying where inefficiencies can be squeezed out and where new gains can be made.

As the demand for groceries continues to soar, and customers demand a greater number of goods delivered to every corner of the globe, retailers will need logistics partners with port operations that can shave hours, minutes and seconds off their supply chain.

Intermodal port capabilities, much like those that the DP World network possesses, can help retailers get their fresh produce off ships, onto rail and then onto shelves in a much shorter time than many legacy networks. This, combined with demand planning capabilities and yard transparency, gives retailers extra capacity in the areas they need it and the actionable expertise to create a competitive edge within the market.

As the Sainsbury’s and Asda deal progresses, an opportunity to reimagine the customer offering by food retailers, and the supply chain that makes it possible, will present itself. The winners will be the ones that scrutinise their legacy networks, compress their operations, embrace cutting edge technology and choose the right logistics partners.

With grocery demand only going one way, it’s all to play for.

Ms. Silveira is the former CEO of DP World’s port facility at Yarimca, Turkey. Prior to the appointment, she was APL's Regional Operations manager for the Middle East, UAE and Africa.

 WASHINGTON, DC: May 03, 2018. As China cancels nearly 63,000 tons of US soya bean exports after Donald Trump's imposition of trade tariffs against the country, over 1,000 economists have written an open letter to Trump and Congress warning against new protectionist policies.

This letter, which includes signatories from 15 Nobel laureates and former economic advisers to the Reagan, Clinton, Bush and Obama Administrations, is published on the anniversary of a similar letter in 1930 warning against the Smoot-Hawley Act that was meant to protect American jobs, but actually prolonged and worsened the Great Depression:

“In 1930, 1,028 economists urged Congress to reject the protectionist Smoot-Hawley Tariff Act. Today, Americans face a host of new protectionist activity, including threats to withdraw from trade agreements, misguided calls for new tariffs in response to trade imbalances, and the imposition of tariffs on washing machines, solar components, and even steel and aluminum used by U.S. manufacturers.

“Congress did not take economists’ advice in 1930, and Americans across the country paid the price. The undersigned economists and teachers of economics strongly urge you not to repeat that mistake. Much has changed since 1930 -- for example, trade is now significantly more important to our economy -- but the fundamental economic principles as explained at the time have not:

“We are convinced that increased protective duties would be a mistake. They would operate, in general, to increase the prices that domestic consumers would have to pay. A higher level of protection would raise the cost of living and injure the great majority of our citizens.

“Few people could hope to gain from such a change. Construction, transportation and public utility workers, professional people and those employed in banks, hotels, newspaper offices, in the wholesale and retail trades, and scores of other occupations would clearly lose, since they produce no products which could be protected by tariff barriers.

“The vast majority of farmers, also, would lose through increased duties, and in a double fashion. First, as consumers they would have to pay still higher prices for the products, made of textiles, chemicals, iron, and steel, which they buy. Second, as producers, their ability to sell their products would be further restricted by barriers placed in the way of foreigners who wished to sell goods to us.

“Our export trade, in general, would suffer. Countries cannot permanently buy from us unless they are permitted to sell to us, and the more we restrict the importation of goods from them by means of ever-higher tariffs the more we reduce the possibility of our exporting to them. Such action would inevitably provoke other countries to pay us back in kind by levying retaliatory duties against our goods.

“Finally, we would urge our Government to consider the bitterness which a policy of higher tariffs would inevitably inject into our international relations. A tariff war does not furnish good soil for the growth of world peace.”

The Washington, DC-based non-profit National Taxpayers Union organised the letter. Director of its Free Trade Initiative Bryan Riley commented: “Very few policy areas generate as much consensus among professional economists like free trade does. Protectionism is flat-earther economics.”

 

AMSTERDAM: May 01, 2018. Industry analyst WorldACD reports worldwide air cargo yield dropped to US$1.89 in March, one percent lower than the previous month but still 16.3 percent higher year-on-year. However it notes the US$ was much weaker than 12 months ago against major currencies:

“With March-figures in, at last we can write the real story of the year-over-year (YoY) air cargo performance in early 2018.

“We had to wait until the full effects of Chinese New Year (CNY) were known, since CNY-effects resonate in the air cargo community worldwide. As mentioned last month, this year the effects were visible well into March (see chart).

“In March 2018, we saw worldwide air cargo volumes increase by a mere 0.9 percent YoY. Combined with the very strong market in January and the more modest growth in February, this brings up a volume growth in Q1 of 4.8 percent YoY.

“In air cargo exports, the Southern hemisphere did best and worst: Central & South America grew by 12 percent, whilst Africa lost 3.3 percent. [For import] volumes, the European market grew by 7.0 percent while the Middle East & South Asia had to content itself with a very modest growth of 0.6 percent.

WorldACDApril2018“Of the top-30 origins in the world, the best performers in Q1 - chalking up double-digit growth figures - were Turkey (+20.6 percent), Japan (+17.8 percent) YoY and Ecuador (+12.2 percent).

“Among the world's largest ‘country pairs’, the markets from Japan to China East (+24 percent) YoY, from Germany to India (+19.2 percent) and from Chile to USA South Atlantic (+17.6 percent) stood out for the right reasons.

“Hong Kong to Germany (-9.9 percent) and Japan to Taiwan (-6.8 percent) topped a list of large country pairs losing some of their lustre.

“But let's turn to the increase in yield including charges (price/kg), which makes for an important part of the real story of this year's first months.

“We read all the time how yields are ‘soaring’. So far, the actual picture is more nuanced than that. We need only point to the fact that the YoY yield increase in Q1 worldwide was 18.6 percent when measured in US$, but only 2.7 percent when expressing it in €. [And] a similar pattern is seen when comparing yields in USD with yields in almost any other major currency.

“In other words, the large yield increase in US$ can only be understood against the background of the loss the US$ suffered against many other currencies when comparing Q1 2018 with Q1 2017. The ‘greenback’ lost 13 percent against the €, 11.00 percent against the British Pound, 8.0 percent against the Chinese Yuan and 5.0 percent against the Japanese Yen - to name some of the currencies of importance to many large air cargo companies.

“Take the case of European vs. American carriers on the North Atlantic, one of the largest intercontinental markets in the world. With a weak US$ and a strong €, one would expect incoming business in Europe and outgoing business from North America to grow fastest.

“That is precisely the case, even though for both airline groupings the larger part of their total North Atlantic business (56 percent to be precise) still goes in the Westerly direction.

“From Europe to North America, the YoY increase was 33.8 percent in US$, but a much smaller 15.9 percent in €. In the other direction, yields increased by 8.0 percent in US$, but decreased by 6.5 percent in €.

“The CFO of an US airline, thinking and accounting in US$, will be clearly pleased, but his European counterpart, thinking and accounting in €, much less so. Add to this that jet fuel prices have almost doubled over the past two years, and we understand that the recent large yield increase as measured in US$, may take on a different meaning for different parties."

WorldACD Air Cargo Market Data March 2018

LONDON: April 12, 2018. As the two largest gig-economy express delivery companies fail to deliver, David Jinks from ParcelHero asks what happened to the demand for on-demand deliveries?

“Back in 2015 express same-day deliveries from local retailers looked to be the next big revolution is shopping. Uber was valued at US$50bn as it launched its UberRush merchant delivery service, and the express local delivery company Shyp rocketed to a $250 million valuation.

“But demand has failed to match the hype and both companies have reached the end of the road this year. Both UberRush and Shyp were based on the brave new world of the gig economy that now seems to be faltering.

“In a world of increasing instant gratification, Shyp seemed a great idea as a one size fits all delivery company; delivering, for just US$5, anything from a computer to a bike. And ‘an Uber for things’, as Uber’s General Manager described UberRush at its launch, made even more sense given its vast network of cab drivers waiting for pick-ups, who could also be used for deliveries.

“Both UberRush and Shyp were part of a wave of start-ups based on the idea that many consumers were happy to pay an ‘impatience premium’ to get items fast: hence the success of Amazon Prime Now. But this assumption seems to have been false. The demand for instant local deliveries of purchases is there, but it’s not yet large or consistent enough to be a viable business model.

UberRush“Looking first at Shyp, its one-size-fits-all delivery eventually ended up being its Achilles heel. Moving a large PC for the same cost as an egg cup makes no sense, so its US$5 flat fee was doomed. By 2017 it was adding fees on returns and charging up to US$25 for extra-large packages. But with its entire business model radically altered the sinking Shyp eventually foundered in January.

“Uber’s recent announcement that UberRush is also closing, on June 30th, reveals similar problems and begs some questions about Uber’s future financing. (See ParcelHero’s report The Uberfication of Deliveries).

(Pictured: A trial UberCargo service delivery in Hong Kong. ParcelHero says Uber has never realized its full on-demand delivery potential.)

“Uber needs to break into wider markets such as the logistics industry to meet its investors’ expectations. Uber may have been valued at $69bn by 2017 - but our report revealed many analysts believe the entire global taxicab market is worth just US$22 billion. So where was Uber’s extra income potential to come from?'

“Logistics seemed to be the solution. It’s an industry that accounts for 12 percent of global GDP, so it’s potentially a lot more lucrative than cabbing. Small wonder Uber rushed into launching UberRush

“It took a long time for the truth to hit that creating a reliable delivery network is expensive and needs considerable scale to be cost effective. Just as Shyp found, a network based on delivering small express items for local merchants - such as flowers and dry cleaning - isn’t hugely profitable: and larger items such as furniture and fridges won’t fit on a cycle or in a Prius.

“The final straw was when Uber introduced UberEats in 2016– which stole many of UberRush’s most lucrative food delivery contracts. So why did UberEats eat Uber’s own lunch? Because with UberRush, Uber only received delivery fees but with Eats, orders go through Uber's App, so it earns more on every order.

“When Uber told its restaurant and catering business contracts to switch from UberRush to UberEats last year, UberRush effectively reached the end of the road.

“As our report reveals, there are still some logistics options open to Uber, such as further developing its UberFreight business, matching loads to truck drivers. But for now, it seems the lack of real demand for on-demand deliveries will leave Uber looking elsewhere for new revenues.”

AMSTERDAM: February 28, 2018. Air Cargo analyst WorldACD says the average global air cargo yield dropped to US$1.89 in January 2018 - 7.8 percent below the December level, but 16.8 percent higher than in January 2017:

"Taking the year-over-year (YoY) figures for January 2018 at face value, 2018 would seem to be off to a very good start.

"Virtually all airlines recorded US$ revenue growth, more than one third of all reporting airlines realized volume increases from 10 – 50 percent, and worldwide volumes were up by 8.5 percent (from Europe and Latin America even by more than 11 percent).

"The origin Africa was the month's outlier (exception) on two counts. It showed a negative volume growth YoY of [minus] 6.7 percent, [and] it was also the only region showing a positive US$ yield change month-over-month of 1.8 percent.

"All other origin regions recorded US$ yield drops from 1 – 10 percent MoM, bringing yields back from the lofty peaks they reached towards the end of 2017.

Top growth percentages YoY among the largest origins in Africa came from Ghana (23 percent); in Asia Pacific from Australia (26 percent) and Japan (21 percent); in Latin America from Chile (22 percent) and Colombia (14 percent); in Europe from Germany (18 percent) and the UK (10 percent); in the Middle East & South Asia from Bangladesh (9.0 percent) and India (3.0 percent); and in the USA from the Midwest (12 percent) and the Atlantic South (10 percent).

Yet, it is too early to qualify this year's start. We have the straightforward information that the worldwide US$ yield rose by 16.8 percent YoY in January, helped considerably by a devaluing US$ [as] the YoY yield increase was a mere 1.6 percent in €.

"Volume trends, however, are difficult to interpret as Chinese New Year (CNY) - a sizeable influence on overall trade – [began] on January 28 last year and on February 16 this year. CNY normally has two effects on trade: a spike in trade before, and trade diminishing afterwards. And although the negative influence is usually felt during the two weeks following CNY, the first four days (January 28-31 in 2017) bore the brunt of the decrease.

"Thus, with GDP-growth in the world continuing, one would expect January to be much better in 2018 than in 2017 - but by how much?

"Based on FTK-data for the first three weeks of January, we believe that YoY volume growth in this 'pre-CNY-period' may well have been in the range of 4-6 percent. A serious growth, surely, but hinting at an overall growth pace lower than the increase shown in the full January figures.

"Once February data will be in, we will be able to judge how the start of 2018 has really been.

"Looking one more time at 2017, we recorded the following trends in the various air cargo product categories. Average worldwide yield for special cargo (excluding perishables) was 45 percent higher than for general cargo; a year earlier, the difference was 50 percent. General cargo grew with 11 percent vs. 7.0 percent growth for other cargo categories, [while] the figures for 2016 were 3.0 and 5.0 respectively.

"High tech, flowers and pharmaceuticals showed the highest absolute growth of all special cargo. Biggest contributors to the growth in these categories were Hong Kong & Singapore, Colombia & Ecuador and India & Belgium respectively. Put differently, the biggest contributors to the growth in these three categories were DB Schenker, Cargomaster and Kuehne + Nagel respectively."

HANGZHOU: April 11, 2018. In an open letter to the U.S. political community and by inference Donald Trump, Alibaba executive chairman Jack Ma says a trade war with China kills jobs, opportunity and hope:

“As a businessman, I have been encouraged by the U.S. administration’s pro-business policies, like lowering corporate taxes. Now, like many in the business community, I am struggling to understand why a trade war with China would be good for the U.S. economy.

“The U.S. has a structural trade deficit with China because of the market forces of comparative advantage: Economies produce what they are best at making and import other things. Dollars earned from trade surpluses in China have been recycled to finance American borrowing, keeping U.S. interest rates low with favorable economic conditions. American unemployment stood at 4.1 percent in March, a 17-year low. All these economic indicators suggest that the U.S. economy is doing well, regardless of the trade deficit.

“American economic policy for the past 30 years encouraged U.S. companies to outsource labor-intensive manufacturing to China and other Asian countries while retaining the most valuable parts of American ingenuity: innovation, technology and brand.

“China embraced this American-led globalization because it was also the best path for China’s development as an emerging economy. To raise living standards for 1.3 billion people, the Chinese government promoted foreign investment and built the economy on the strength of its large and increasingly skilled labor force. As a result, China became the world’s largest exporter, with a significant trade surplus. American consumers benefited from low prices and American corporations made giant profits.

“There’s no better example of a beneficiary of this symbiotic relationship than Apple. The company designs the iPhone and develops proprietary chips and software in California. It makes the units through contractors that hire millions of workers in China, assembling components manufactured in South Korea. Through smart marketing, Apple products capture consumers’ hearts, making its brand more valuable.

“While countries like South Korea and China collect revenue from selling components and assembling the final product, Americans make almost all of the profits. Apple’s $48 billion of profits in its 2017 fiscal year will not make it into the balance-of-trade calculation.

“Under a symbiotic U.S.-China relationship, America became a preeminent technology leader, and its brands are today the envy of the world. China improved the standard of living of its citizens with a tenfold increase in per capita gross domestic product over the past 20 years.

“But U.S.-China trade relations in the next 20 years will look very different from the past two decades. The benefits of globalization since joining the World Trade Organization in 2001 have opened China’s mind to the idea of open markets.

“China is shifting its economy from the world’s largest exporter to the world’s largest consumer. Chinese citizens now have the wealth and income to pursue discretionary spending. They want to buy high-quality imported food, cosmetics, fashions and health and wellness products for themselves and their children.

“With average urban income growing at almost double digits and an emerging middle class of 300 million, Chinese consumers are already driving massive demand for imports from all over the world. Last year, president Xi Jinping said at the World Economic Forum that over the coming five years, China would import US$8 trillion of goods.

“It is therefore ironic that the U.S. administration is waging a trade war at a time when the largest potential consumer market in the world is open for business. Is America going to forfeit this opportunity?

“Instigating a trade war is the wrong solution because it will only provoke retaliation. The Chinese government responded to U.S. tariff threats with its own tariffs on American agricultural products, such as soybeans. China is the largest export market for American soybeans, worth US$14 billion annually and accounting for 65 percent of all U.S. soybean exports.

“The U.S. has been a consistent defender of free and open markets, but this time it is resorting to protectionism that will not improve American competitiveness. Any country seeking to increase exports would do better to focus on developing good products and channels to access foreign markets rather than putting up trade barriers.

“At the heart of Alibaba’s mission—to make it easy to do business anywhere—is our support for small businesses. A vibrant small-business sector is good for any economy, because small businesses create jobs.

“This trade war will hurt millions of American small businesses and farmers. I feel for these men and women, because I met many of them when I toured the U.S. last year to host our “Gateway” trade showcase in Detroit.

“Small-business owners and farmers traveled from all over the country to learn how Alibaba could connect them to the massive Chinese consumer market. Those attending Gateway saw what the future could hold for their business. I saw the entrepreneurial gleam in their eyes.

“Through our digital-commerce platforms, where more than 500 million Chinese consumers shop, Alibaba will continue to help American small businesses and farmers access the China market.

“If we encounter trade barriers, we will have to work harder. While we may face setbacks in the current protectionist environment, I remain confident and look forward to the next 20 years.”

LONDON: February 26, 2018. With Britain's Conservative government continuing its attempt to cherry-pick a future EU relationship, David Jinks, head of Consumer Research at UK express shipping company ParcelHero, says its time to clarify the difference between retaining a Customs Union with the EU and remaining in the Single Market:

"Signing up to a permanent Customs union means no new tariffs on UK- EU goods and ends the threat of new red tape and border delays.

"In a speech at Coventry University Labour Leader Jeremy Corbyn said: 'we have long argued that a Customs union is a viable option for the final deal. So Labour would seek to negotiate a new comprehensive UK-EU Customs union to ensure that there are no tariffs with Europe and to help avoid any need for a hard border in Northern Ireland.'

"Without getting into party politics, as an international company that ships thousands of parcels a month to the European Union, we strongly support Britain remaining in a Customs union with the EU.'

"Membership of a Customs union means we will continue to share external tariffs with all EU member countries post Brexit – meaning no new tariffs and taxes between the UK and EU, and no border delays and complicated Customs Invoices just to send parcels and goods to France or Germany.

"Britain currently shares a common set of tariffs with EU on imports from outside the EU, for instance there is a 10 percent tariff on cars and a 2.7 percent duty on golf clubs from outside the Union. Continued membership of a Customs union with the EU will end the threat of new tariffs and taxes being imposed on UK exports to Europe and visa-versa.

"This means British goods won't suddenly become far more expensive and uncompetitive in Europe, and EU-manufactured products won't suddenly go up in price for British consumers.

"Signing up for a permanent Customs union is very different and less contentious than continued membership of the Single Market.

"A Customs union is not at all the same as the Single Market, which used to be known as the Common Market. While a Customs union is about what happens at the borders of the EU, the single market is about free movement of goods and services within the European Union.

"The Single Market applies not only to goods but also services, investments and people.

"It is the Single Market which requires the free movement of people within the European Union, to allow for the exchange of services such as plumbing. That is likely to be far more of an issue with Brexit voters than border tariffs.

"We hope that all sides come to realize that remaining within a Customs union with the EU doesn't go against the spirit of the vote in favor of Brexit and won't impact on discussions around immigration or remaining under EU legal jurisdiction."

AMSTERDAM: April 03, 2018. Analyst WorldACD says air cargo yields climbed to US$1.91 in February 2018, one percent above the previous month and 23.1 percent higher than February 2017:

“Given the aftermath of Chinese New Year (CNY), worldwide year-over-year (YoY) volume growth in February (+4.4 percent) was way below the growth reported for January, resulting in a combined growth for the year's first two months of 6.95 percent YoY: a good start of the year by any standard (except by the standard of the extraordinary year 2017!).

“Yet, we still reserve our final judgment, as past experience has taught us that the post-CNY effects may last as long as three weeks, in other words into March. The origin [traffic] Asia Pacific and Americas grew more than average in these two months (+9.3 percent and +8.4 percent YoY respectively). Europe, Central & South America and Africa were the best destinations (+9.5 percent, +8.5 percent and +8.4 percent YoY respectively).

“Colombia, Ecuador and Kenya - in this order - are the world's flower growing powerhouses; together exporting about 75 percent of the world's airborne flowers. February, the month of Valentine's Day, brought the largest volume increase in flower exports from Ecuador (+11 percent YoY), followed by Kenya (+9.2 percent) and Colombia (+7.1 percent) – the last realizing the largest YoY US$ yield increase of 14.6 percent.

“More than 85 percent of these exports went to the USA and Western Europe.

“Worldwide yields rose by 19.9 percent in US$ and by 3.8 percent in € in the first two months. The YoY oil price increase, as well as the lower value of the US$, remain important elements in this comparison. But there is more to interpret [in] these figures.

“Take the high-yielding markets from Asia Pacific to Europe & North America. Strong pre-CNY demand caused these large markets to grow much more in February than in January, thus boosting the average yield worldwide.

“Thus, the lower YoY volume growth in February was certainly not caused by the abovementioned large markets. The main reasons were (1) Asia Pacific as a destination showed a negative growth YoY, in particular to Hong Kong, Eastern China and Taiwan; and (2) originating Europe [traffic], having shown a 12 percent YoY increase in January, fell back to a paltry 0.5 percent YoY in February.

“WorldACD is one of the few organizations researching GSA-performance, which enables us to report on GSA-developments worldwide. Around 23 percent of air cargo volume is sold via GSA's. This percentage has remained fairly stable over the past years.

“Not surprisingly the percentage is much lower for the world's top 100 country-level O&D [lanes] - some 13 percent - than for the smaller markets (27 percent). We have data for 800 GSA's on record, together operating under more than 1,000 different brand names.

“In the world's latest Top-10, accounting for 35 percent of all GSA-business, we find ECS, ATC Aviation Services, Air Logistics, Kales, Aviation Solutions, FlyUS, Worldwide GSA, Nordic GSA, ScanPartners and Global GSA.

“They are mainly active in Europe and North America, where they take over 50 percent of all GSA-business. As the GSA-market is much more fragmented in Asia Pacific and the Middle East & South Asia, they take only about 14 percent and 19 percent respectively, whilst they are virtually non-existent in Africa and Central & South America.

“The largest group of GSAs remains WFC (World Freight Company), with brands like Air Logistics, ATC, Kales and Hermes Aviation. Number 2 (ECS) has lately been most active in acquisition. YoY volume growth for the top 10 in 2017 varied from 1.0 percent to 54 percent.

“In the top 100 country pairs, in 2017 GSAs produced yields for their principals on average 12 percent below the yields generated by airlines doing their own sales. In 2016, the gap was 10 percent.”

 World ACD data

LONDON: February 08, 2018. Many British companies have already moved on from the EU and are looking at Australia as a major export market according to David Jinks, head of Consumer Research at shipping specialist ParcelHero.

"Ignore all the talk of the US or BRIC nations (Brazil, Russia, India and China) being at the forefront of British exports post Brexit. Since the vote, ParcelHero has seen a huge 54 percent rise in interest in shipping to Australia.

"Australia seems to have been overlooked in all the excitement about new emerging markets. Yet ParcelHero has seen a surge in shipments since June 2016. This is not surprising considering Australia is now the world's 13th largest economy, and our two countries have a shared language and Commonwealth heritage.

"Britain already ships £4.1 billion of goods to Australia, making it our 21st largest export market – but there is enormous potential to drive that up considerably further. It's not so long ago that Britain and the U.S. were almost entirely dominant in the Australian marketplace; now we are only its tenth largest importer.'

"Australia boasts one of the highest thresholds before there are any tariffs to be paid on imported goods, making it a highly tempting market for UK manufacturers and retailers. The AU$1,000 level means goods worth up to around £560 can be exported into Australia without incurring any duties or taxes – that's a very generous limit.

"Donald Trump's short-sighted decision to pull the U.S. out of the Trans-Pacific Partnership (TPP) that Australia was to launch with 11 other trading partners (including Japan, Canada and Singapore) has left the remaining TPP potential members regrouping and making very encouraging noises about including Britain in the Partnership, post-Brexit. This would lead to what amounts to a significant free trade deal with Australia and the other signatories.

"Australia's three major cities, Sydney, Melbourne and Brisbane, hold half its entire population. That makes targeting export sales to Australia easier than you might think, given how large the country is.

"ParcelHero is shipping products Down Under in ever greater numbers, from clothing and lighting to car parts and books. UK retailers and manufacturers are clearly building relationships and investigating markets in Australia in readiness for Brexit. We've also shipped quite a lot of distinctly British niche products recently, from ketchup and pickles to Highland dancing items – not surprising since 1.2 million Brits. have made Australia their home.

"So who knows what other markets remain untapped?"

https://www.parcelhero.com/

ZURICH: March 01, 2018. According to Alain Guerlin, director  and head of Products, Services & Technology Management at Swiss International Air Lines, air cargo is entering a new era. Digitalization and new technologies are creating the foundation for new business ideas and models. However with all the players in the supply chain now demanding high quality services, he wonders whether there's more to it than just technology:

Digital transformation is happening everywhere: travel and tourism, retail, education, automotive, you name it. Where do we stand in the air cargo industry? Even though air cargo players are quite slow on the digital uptake, technologies such as electronic messages, smart data sharing platforms, blockchain, IoT, augmented reality, artificial intelligence are already a fact today and are changing the way we are doing business.

Startup companies and micro trends are also shaping our future (and they are doing it much faster than us!). Online marketplaces already exist where shippers and logistics providers can meet, based on preferences, requirements, budget...

But is it really all about technology? Technology alone is not enough. It is a matter of connecting technology with processes, data and, ultimately, people.

It takes intelligent process co-ordination to ensure the right info is reaching the right person at the right time. And it takes smart data to ensure smart decision-making.

At Swiss WorldCargo we have started our digital transformation with a focus on projects that can really enhance the customer experience and enable us to go for smart decision-making. For instance, we are looking at use cases driven by the Internet of things (IoT): there is potential to connect virtually anything (e.g. high-end sophisticated pharma containers) to the internet and accelerate data-driven logistics.

We are also looking at big data analytics and machine learning systems, which will allow to digitalise logistics processes and, at the same time, will bring about new ways of gaining in process efficiency, new opportunities to interact with our customers and ultimately also drive new business models.

Two growing business segments have especially been on our radar that are very much driven by this absolute necessity of modernization and meeting specific customer needs: Pharmaceutical & Healthcare and eCommerce. But we have also been looking at the whole subject of customer experience: we want to create an advanced level of customer service that extends beyond basic service activities, to include a more personalized and customized approach that creates value in a customer-centric business setup.

All in all, at Swiss WorldCargo we definitely support the call for modernization and digitalization, because we believe it will help us increase productivity and gain in efficiency, stay connected with our customers and meet their needs, offer the required visibility and transparency and, most important of all, enhance the customer experience.

Listening to our customers, as well as anticipating their needs, is the most crucial thing, because this is the only way we can remain relevant as a premium service provider.

Alain Guerin is the former head of Cargo Marketing for Swiss WorldCargo.

AMSTERDAM: January 31, 2018. According to the latest data from analyst WorldACD, global air cargo yield, including charges, reached US$2.05 by December 2017, 2.5 percent above November and 23.5 percent higher than the same month a year earlier:

"December 2017 saw a year-over-year (YoY) growth of 4.5 percent in worldwide air cargo volumes. Main contributors were the origin regions of Asia Pacific (plus 8.0 percent) and North America (plus 5.1 percent). Europe's growth was 2.2 percent only, whilst air cargo originating in Africa contracted by 7.5 percent.

"MESA (Middle East & South Asia) and Central & South America saw an increase in step with the worldwide average. It was Europe that grew most as a destination (plus 6.8 percent). Yield developments, however, drew most of the attention: Worldwide yields were up by 10 percent YoY, measured in €, and by a whopping 23.5 percent in US$.

"Compared to November, US$ yields rose by 2.5 percent, another noteworthy feature, as yields usually drop between November and December.

"For the four quarter as a whole, YoY volume growth was 6.6 percent, impressive in the light of the fact that air cargo - after years of a lackluster performance - started to grow again from September 2016. Of course, this fact made it more difficult for the industry to record strong year-over-year volume growth figures in the latter part of 2017. However, that difficulty did not stand in the way of serious revenue growth for the airlines in Q4, as yields in US$ started to grow with double-digit percentages from September 2017. "Capacity shortages in a number of markets, rate-of-exchange fluctuations, and rising oil prices all had a role to play in the resulting worldwide airline revenue growth of over 25 percent in the last quarter of a truly remarkable air cargo year.

"We can safely call 2017 a real bumper year. Many records were broken, and most signs remained on green for almost the entire year. Yet, the year was no different from other years in the sense that 2017 also knew winners and losers: Origin & Destination cities, sectors and companies that grew, others that lagged behind. Here is our top level YoY overview:

"While general cargo increased by 10.5 percent, specific cargo products grew 7.4 percent, making for an overall volume growth of 9.6 percent or 10.8 percent in Direct Tonne-Kilometers (DTK). Yield improvement in US$ was also larger in general cargo - plus 9.4 percent versus plus 5.9 percent.

"The categories with the highest volume growth were Valuables & High Tech., Pharmaceuticals and Flowers, with US$-yield increases of 8.0 percent, 5.4 percent and 1.0 percent respectively.

"The Top-20 forwarders in the world remained an exclusive club in 2017, not allowing new members to join them, and their expansion was in line with the overall market growth although the Top-5 - DHL Global Forwarding, Kuehe + Nagel, DB Schenker, Expeditors Int'l and Panalpina as a group outgrew their colleagues with rises of 16 percent versus 14 percent.

"GSA's fared best in the Asia Pacific region with volume growth of 15 percent followed by Europe at 12 percent and MESA 11 percent.

"Of the 50 largest origin cities, four recorded increases of well over 20 percent: Hanoi led at 25.5 percent followed by Brussels, Colombo and Ho Chi Minh City. Hong Kong remained the No.1 origin point, expanding at 16 percent.

"Of the Top 10 origin points, Amsterdam and Los Angeles showed slightly less growth than the worldwide average. Among the largest destinations, Doha, leading with 42 percent, Shanghai, Osaka, Hanoi, Mexico City, Chennai and Campinas (São Paulo) all grew their incoming volumes by more than 20 percent.

"The shares of total business for the individual airline groups remained reasonably stable with the exception of airlines from Africa. While business from their region lagged behind, their overall growth was much higher than the growth realized by other groups. Carriers based in Asia Pacific grew a bit more than average in 2017, while airlines based in Europe, the Americas and MESA lagged behind, albeit only slightly, thus giving up a tiny part of their overall share of the pie.

"With positive trends continuing throughout the past year, the big question is of course how long all this will continue. As Mark Twain reportedly once said, it is difficult to make predictions, particularly about the future."

Just-released IATA figures show that 2017 demand, measured in freight tonne kilometers (FTKs), grew by 9.0 percent overall – more than double the 3.6 percent rise for the previous 12 months. Meanwhile capacity rose 3.0 percent in the same period, the slowest increase since 2012, suggesting one explanation for the "remarkable" WorldACD data – FW.

WorldACD_Air_Cargo_Market_Data.pdf

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