X-ray of some of the 256 litres of GBL detected by ABF officers in Sydney.

Drugs in the oil

Australian Border Force (ABF) officers in Sydney have stopped approximately 256 litres of the narcotic Gamma Butyrolactone (GBL, taken as GHB) declared as compressor oil from reaching Australian streets.
ABF officers targeted an air cargo shipment consisting of 16 boxes labelled as ‘compressor oil’ for inspection. Each box was found to contain a number of bottles.

256 litres of GBL detected by ABF officers in Sydney.
256 litres of GBL detected by ABF officers in Sydney.

X-rays revealed inconsistencies in the contents of some of the bottles.
Further testing revealed approximately 128 litres of GBL secreted throughout the shipment.
On 26 April, ABF officers selected an identical consignment for inspection. Upon examination, it was also found to contain approximately 128 litres of GBL.
Both detections remain under investigation.

It’s very easy to take too much

ABF Superintendent Investigations NSW Garry Low said this detection should serve as a warning to those thinking of importing or exporting illegal substances.
“GBL can ruin your life in a single incident. It is an incredibly dangerous substance with a very high overdose rate,” Superintendent Low said.
“The ABF screens tens of millions of articles each year, and the fact we are able to pinpoint individual shipments and detect and seize these drugs at the border is a testament to the skills of our officers.”
Anyone with information about the importation of illicit substances should contact Border Watch at: www.australia.gov.au/borderwatch.

as air freight capacity becomes more available at lower costs, more companies are taking advantage of the situation.

Report finds $109bn of trade ‘flying under the radar’

A new report by Infrastructure Partnerships Australia and BIS Oxford Economics’ shows the goods travelling in the belly of international aircraft arriving and departing Australia are worth a massive $109 billion annually.
The 2019 International Airfreight Indicator, the latest report in Infrastructure Partnerships Australia’s data and measurement series, reveals that one in every five dollars of Australia’s traded goods travels via air.
“Every day, more than 550 international flights arrive and depart Australia, yet until now, we have been remarkably blind to the value, the type of commodity, and the economic contribution of goods that travel in the belly of these aircraft,” said Infrastructure Partnerships Australia chief executive Adrian Dwyer.
“The 2019 International Airfreight Indicator shines a light on a multi-billion industry that has historically gone unnoticed in our broader trade debate.
“The indicator shows that airports are crucial to our trade story, and the cargo transported beneath passengers is vitally important to airlines, airports and the Australian economy.
“Last year alone, $109 billion of international trade passed through Australia’s airports, with airfreight set to top $114 billion this financial year.
“Whilst airfreight only represents 1 per cent of Australia’s trade volume, it punches well above its weight in value.
“One in every $5 of Australia’s imports and exports travels via our airports – making the airfreight sector one of the largest value contributors to Australia’s trade position.
“In a period of heightened trade tensions and structural economic change, it’s critical that we use data like that presented in the 2019 International Airfreight Indicator to improve the way we plan, regulate and invest in our freight sector.
“Without useful data to examine and measure our freight sector we will be flying blind on our international trade.
“That is why we have called on Government to establish a dedicated freight body to independently measure and publish detailed analysis of the overall performance of our logistic and supply chain networks,” Mr Dwyer said.
Some of the findings:

  • In FY2017-18, $109 billion of international trade passed through Australia’s airports, with more than 96 per cent of international airfreight passing through the four main capital city airports – Sydney, Melbourne, Brisbane and Perth.
  • Whilst airfreight only represents 1 per cent of Australia’s trade volume, it represents 21 per cent of goods in trade value.
  • The amount of goods flowing in and out by air is now 70kg for every person – a 60 per cent rise in the last five years. This reached a record high over FY2017-18.
  • More than 80 percent of our airfreight is carried in passenger aircraft, with the balance carried in dedicated freight aircraft.

Air cargo volumes indicate worldwide trade slowdown

WorldACD reports that the enduring downward slide of air cargo volumes continued last month.
The first month of 2019 confirmed the trend we have seen for a number of months now: another volume drop, this time of 2% YoY, coupled with a yield drop (in USD) of 2.5%.
The smaller regions of Africa and Central & South America (C&S Am) again managed a YoY increase in outgoing business (by 3.8% resp. 0.6%), in the case of C&S Am accompanied by a YoY yield increase (in USD) of almost 5%.
All other origin regions were down YoY. For the origins Europe and North America, the drop hovered around 4%, but even more telling was the drop in incoming business in Asia Pacific (-6% in total, -8% from the origin North America, and -9.5% from the origin Europe).
Origin China grew by 5% YoY, but the destination China fell by more than 10%. We observed this trend also in the past two months, but it was more pronounced in January due to the early Chinese New Year (Feb 5 in 2019).
As we see it, the period preceding this day seems to have a small positive effect on outgoing business from Asia Pacific, but a more serious negative effect on incoming business.
The countries doing well in January were Morocco and Egypt in Africa, and Ecuador and Costa Rica in C&S Am. And what to say about the United Kingdom? Whilst all individual countries in Western Europe saw a YoY drop (- 5.5% in total), the UK grew by 5%…. Do we witness a pre-Brexit stocking up of goods made in Britain? Germany fared worst in Europe, with a YoY drop in outgoing air cargo of 8.7% (-14.5% to Asia Pacific).
On the product front, January 2019 was a good month for certain specific cargo categories. Apart from general cargo, valuables and dangerous goods, all categories improved YoY. The big categories of perishables and high tech grew by 6% resp. 4%, pharmaceuticals by 5% and the much smaller group of live animals by 9%.
Trying to find out which (groups of) companies may have best positioned themselves for a good performance in 2019, we looked who did relatively well in the ‘downturn’ of 2018, compared with the bumper year 2017.
In spite of an overall growth between the two years of 2%, most airline groups hardly grew: airlines from Asia Pacific reported 0.7% growth, whilst those from Africa, MESA and C&S Am languished around the no-growth point. Only the airlines from North America (+6.3%) and Europe (+3.8%) beat the worldwide average growth. Remarkably, the Europeans improved their share everywhere, except in Europe itself.
The world’s top-20 forwarders went from a 43.2% to a 43% market share. But within this elite group, differences were noticeable. The 13 forwarders with a European origin grew by 0.5% only, whilst the 4 MESA and North American forwarders did just a bit better (+1.5%). The real winners in 2018 were the Japanese forwarders, growing their business by 7.2%, mainly driven by growth in Asia Pacific and North America. Leading forwarders in perishables, such as Kuehne + Nagel, Panalpina, DB Schenker and Newport, recorded double digit growth (between 13% and 16%) in this category.
Lastly, GSA’s grew their business by 5.2%. The two groups dominating the GSA-field (ECS and WFC), representing around 30% of the total volume sold by GSAs, together grew by 3.7% i.e. less than the GSA-market as a whole. Their individual performances differed quite a bit.
January 2019 at a glance:

  • Total Chargeable Weight: -2.0% year-over-year (YoY); -6.2% month-over-month (MoM).
  • General cargo -5% YoY, special cargo +4.6% YoY.
  • Direct Ton Kilometers (DTK’s): -1.9% YoY. (Given the -2% change in volume, this means that average distance per shipment hardly changed).
  • Yield dropped to USD 1.84 (-2.5% YoY, -8.0% MoM).
  • The cargo load factor dropped by 1.9%-points YoY and by 4%-points MoM.
  • Revenues (USD) from the smallest shipments (0-50 kg) suffered least (-2.1% YoY), those from the largest shipments (>5000 kg) suffered most (-6.4% YoY).

(See www.worldacd.com/yields for more yield developments.)

‘Thrucool’ launched for pharmaceutical shipments

Singapore Airlines (SIA) has announced the launch of Thrucool, a new service to transport high-value, time-sensitive and temperature-controlled pharmaceutical cargo.
Thrucoolis a set of dedicated cold chain services to safeguard the integrity of pharmaceutical and healthcare shipments during air transport. These include priority uplift and handling, quick ramp transfers at airports, cold room facilities, as well as thermal blankets and covers for crucial insulation from external factors. Customers can also opt to place shipments in temperature-controlled containers, and track their location during shipping.
SIA has partnered with terminal operators SATS, Cargologic and Qantas Freight to launch a ‘quality corridor’ along the Zurich-Singapore-Sydney route as an initial service. Complying with standards adopted from the IATA CEIV Pharma1 program, the quality corridor addresses the industry’s need for safety, care and efficiency in the transport of pharmaceutical and healthcare products. This reduces the potential for product loss attributed to handling and environmental factors such as temperature excursions during carriage.
 

New Zealand gets closer with 767-300F freighter

DHL Express has introduced a Boeing 767-300F freighter aircraft that has 50% more cargo capacity for its Trans-Tasman lane. The Boeing 767, which replaces the Boeing 757, will offer express, overnight delivery between Sydney and Auckland five times a week as the Trans-Tasman remains one of the key trade lanes for DHL Express Australia.
Based on the latest figures from the DHL Export Barometer 2017, New Zealand remains the top export market for Australian businesses, with 61% of exporters sending goods across the Trans-Tasman trade lane and one in four of them naming New Zealand as their largest export market.
CEO and senior vice president of DHL Express Oceania Gary Edstein said: “As an international air express carrier, aviation is at the core of our business. The Boeing 767 aircraft will enhance the efficiency and speed of delivery, with the latest technology for communications, navigation, enhanced safety systems, and automated roller systems to assist with loading and unloading.
“We are incredibly proud to be the only logistics company with a dedicated aircraft across the Trans-Tasman lane. Over the last decade, trade between Australia and New Zealand has steadily increased, making New Zealand one of our largest services trade partner. And with this purpose built freighter aircraft, we will ensure that we remain competitive for many years to come.”

DHL says the Boeing 767 offers operational flexibility, and an all-digital flight deck allows it to support time-critical deliveries. It also boosts high fuel efficiency with a proven combination of light, durable aluminium alloy and composite structure, making it lighter than comparable freighters.
The aircraft is equipped with powered cargo-handling equipment, both on the main deck and in lower holds, making cargo handling easier and more seamless. The cargo-handling system and operator interface provide complete automation of the cargo-loading process. The freighter’s main deck has both interior and exterior master control panels along with local control panels to provide maximum flexibility.

Will Trump kill air freight?

The International Air Transport Association (IATA) has released demand growth results for global air freight markets for February 2018, showing a 6.8% increase in demand measured in freight tonne kilometres (FTK) compared to the same period last year. Adjusting for the potential Lunar New Year distortions by combining growth in January 2018 and February 2018, demand increased by 7.7%. This was the strongest start to a year since 2015.
Freight capacity, measured in available freight tonne kilometres (AFTK), grew by 5.6% year-on-year in February 2018. Demand growth outstripped capacity growth for the 19th month in a row, which is positive for airline yields and the industry’s financial performance.
The continued growth in air cargo demand is consistent with ongoing robust global trade flows. There are, however, signs that the best of the upturn for air freight has passed. Demand drivers for air cargo are moving away from the highly supportive levels seen last year. In recent months, the Purchasing Managers’ Index (PMI) for manufacturing and export orders has softened in a number of key exporting nations including Germany, China and the US. And the seasonally-adjusted demand for air cargo, which rose at a double-digit annualised rate for much of 2017, is now trending at 3%.
“Demand for air cargo continues to be strong, with 6.8% growth in February. The positive outlook for the rest of 2018, however, faces some potentially strong headwinds, including escalation of protectionist measures into a full-blown trade war. Prosperity grows when borders are open to people and to trade, and we are all held back when they are not,” said Alexandre de Juniac, IATA’s director general and CEO. Regional performance 
All regions reported an increase in demand in February 2018.
Asia-Pacific airlines saw demand in freight volumes grow 6.5% in February 2018 and capacity increase by 7.2%, compared to the same period in 2017. The upward-trend in seasonally-adjusted volumes has returned, with volumes currently trending upwards at an annualised pace of between 6.0% and 7.0%. As the largest freight-flying region, carrying close to 37% of global air freight, the risks from protectionist measures impacting the region are disproportionately high.
North American airlines’ freight volumes expanded 7.3% in February 2018 compared to the same period a year earlier, and capacity increased by 4.1%. Seasonally-adjusted volumes are broadly trending sideways. The weakening of the US dollar over the past year has helped boost demand for air exports. Data from the US Census Bureau shows a 10.2% year-on-year increase in air export volumes from the US in January 2018, compared to a slower rise in imports of 6.7%.
European airlines posted a 5.7% increase in freight volumes in February 2018. This was almost half the rate of the previous month and the slowest of all regions. Capacity increased 3.8%. Seasonally-adjusted volumes have been volatile in 2018 with the jump in demand in January largely reversed in month-on-month terms in February. The strength of the Euro and the risks from protectionist measures may impact the European freight market which has benefitted from strong export orders, particularly in Germany, in recent years.
Middle Eastern carriers’ year-on-year freight volumes increased 7.4% in February 2018 and capacity increased 7.6%. Seasonally adjusted freight volumes continue to trend upwards, however, they have slowed to an annualised rate of 4% since late 2017. This largely reflects the weak conditions on the routes to and from Europe which have seen demand trend downwards at a double-digit rate over the past five months.
Latin American airlines experienced growth in demand of 8.7% in February 2018 and a capacity increase of 6.9%. The pick-up in demand over the last 18 months comes alongside signs of economic recovery in the region’s largest economy, Brazil. Seasonally-adjusted international freight volumes are now back to the levels seen at the end of 2014.
African carriers’ saw freight demand increase by 15.9% in February 2018 compared to the same month last year – the largest increase of any region. Capacity increased by 3.9%. The increase was helped by very strong growth on the trade lanes to and from Asia driven by ongoing foreign investment flows into Africa. While the surge in demand on the route looks to have stabilised, volumes still increased by nearly 24% in year-on-year terms in January.
 
 

Love not lost between Qantas and Emirates, and the ACCC likes them, too

The alliance between Qantas and Emirates has not been dented by Qantas’ withdrawal from Dubai, and the ACCC has also granted re-authorisation for a further five years, subject to a condition.
The global alliance covers Qantas and Emirates’ air passenger and cargo transport operations remains in force following Qantas’ change of routing from Dubai to Singapore on the way to Europe.
The terms of the ACCC’s authorisation granted are largely unchanged from last month’s draft decision.
“The continued coordination by Qantas and Emirates of their air passenger and cargo transport operations will likely lead to a range of public benefits such as improved connectivity and loyalty program benefits,” ACCC Commissioner Roger Featherston said.
The ACCC has imposed a condition of authorisation to address continuing competition concerns on the Sydney – Christchurch route.
“The alliance must report to the ACCC on seats and passengers flown, fares and route profitability on routes between Australia and New Zealand. The condition allows us to set a minimum level of capacity on the Sydney to Christchurch route at any time, if needed,” Mr Featherston said.
Further information about the application for authorisation is available here.
The ACCC first authorised the alliance in 2013 for five years, subject to conditions on trans-Tasman routes.
Background
Qantas and Emirates were seeking authorisation for a Restated Master Coordination Agreement under which they will continue to coordinate their operations, including in relation to: planning, scheduling, operating and capacity, sales, marketing, advertising, promotion, and pricing for passengers, freight customers and agents, connectivity and integration of certain routes, codeshare and interline arrangements, frequent flyer programs and all aspects of customer service (including ground services and lounge access).
Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.

How you can join the Border Force

The Australian Border Force (ABF) has launched an awareness campaign to encourage the Australian community to support the work of the ABF by reporting suspicious or illegal immigration, Customs and border-related activity to Border Watch.
It is critical that the ABF partners with the community — including business and industry — to help keep Australia safe. Reports to Border Watch help the ABF to investigate, detect and stop illegal and dangerous activity, the organisation said.
ABF Assistant Commissioner Strategic Border Command Kaylene Zakharoff said the ABF has seen some extremely positive outcomes thanks to the reports made by industry. These reports have been instrumental in hundreds of seizures of illicit drugs, tobacco, weapons and wildlife, as well as a number of immigration and visa related operational outcomes.
“In just the second half of last year, the ABF received in excess of 21,500 Border Watch reports, which led to over 1.4 tonnes of drugs and precursors being seized,” she said.
Recently, information was received from a customs broker through Border Watch about a sea cargo consignment. The broker noticed several suspicious things about the shipment that raised potential concerns around its stated contents.
The referral to Border Watch resulted in a large seizure of methamphetamine, located within the consignment, with a street value of over $150 million. This seizure prevented the potential manufacture of over 1.5 million hits of ice.
“Business and industry members are often well placed to identify suspicious activities in their industries and local areas. You or your business can play an important role in helping to protect the border, the economy and the safety of the community by reporting suspicious activities to Border Watch. You don’t have to give your name,” Assistant Commissioner Zakharoff said.
The Border Watch program and its predecessors, Customs Watch and Customs Hotline, has a proven track record of more than 20 years of delivering positive outcomes at the border and has become an integral part of the ABF’s information gathering methods.
By continuing to report suspicious activity to Border Watch, you or your business can help the ABF to stop illegal activity.
The types of reports to make to Border Watch relate to:

  • Customs and border-related offences such as drug and precursor imports, revenue/duty evasion, illegal currency movement, movement of weapons and firearms, and imports of illicit tobacco
  • Immigration offences such as people smuggling, illegal work operations, contrived relationships, false statements, visa overstayers and employer sponsor breaches.

If you see anything suspicious, business and industry are encouraged to report it to Border Watch via the industry premium number 1800 06 1800. Alternatively, you can flag it anonymously with Border Watch at www.australia.gov.au/borderwatch  or contact the program via borderwatch@homeaffairs.gov.au.
If you or your business are involved in international trade or transport sectors, you are strongly encouraged to partner with the ABF by joining the Border Watch industry program. To find out more, visit www.australia.gov.au/borderwatch.
 

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