JUPITER SEA & AIR SERVICES PVT. LTD, EGMORE – CHENNAI, INDIA.

E-MAIL : Robert.sands@jupiterseaair.co.in   Mobile : +91 98407 85202

 

Corporate News Letter for Wednesday -  July  31,  2024. 

                                                                                                                       

::               Today’s Exchange Rates           ::

Source : The Financial Times

CURRENCY	PRICE	CHANGE	%CHANGE	OPEN	PREV.CLOSE	DAY's LOW-HIGH
USD/INR	83.72	-0.019997	-0.023879	83.73	83.74	83.7175- 83.745
EUR/USD	1.0829	0.0008	0.073932	1.0821	1.0821	1.0813- 1.083
GBP/INR	107.6961	0.223198	0.207678	107.6236	107.4729	107.5402- 107.7077
EUR/INR	90.7007	-0.047501	-0.052343	90.5893	90.7482	90.5622- 90.7367
USD/JPY	152.762	-1.258011	-0.816784	154.02	154.02	152.114- 153.345
GBP/USD	1.2851	-0.0011	-0.085528	1.2862	1.2862	1.2832- 1.2853
DXY Index	104.557	-0.007004	-0.006698	104.566	104.564	104.552- 104.705
JPY/INR	0.5408	-0.0029	-0.533383	0.5438	0.5437	0.5396- 0.545

///                    Sea Cargo News          ///

Hapag-Lloyd increases rates from India and Pakistan to Med and North Africa

German ocean carrier Hapag-Lloyd has announced increased ocean tariff rates from India and Pakistan to the Mediterranean and North Africa.

This increase will be valid from 15 to 31 August.

US$ per 20' container:

From	To	Current base rate level	New base rate level	Delta
Nhava Sheva & Mundra, IN	West Mediterranean & North Africa*	US$3,352	US$3,952	US$600
Karachi, PK	West Mediterranean & North Africa*	US$3,352	US$3,952	US$600
Nhava Sheva & Mundra, IN	East Mediterranean & Black Sea*	US$3,352	US$3,952	US$600
Karachi, PK	East Mediterranean & Black Sea*	US$3,352	US$3,952	US$600

US$ per 40' container:

From	To	Current base rate level	New base rate level	Delta
Nhava Sheva and Mundra in India	West Mediterranean and North Africa	US$2,504	US$3,104	US$600
Karachi in Pakistan	West Mediterranean and North Africa	US$2,504	US$3,104	US$600
Nhava Sheva and Mundra in India	East Mediterranean & Black Sea	US$2,654	US$3,254	US$600
Karachi in Pakistan	East Mediterranean & Black Sea*	US$2,654	US$3,254	US$600

Hapag-Lloyd noted that West Mediterranean and North Africa area include Spain, Portugal, Italy, Algeria, Morocco, Malta and Tunisia, while East Mediterranean and Black Sea area include Albania, Bulgaria, Croatia, Georgia, Greece, Israel, Montenegro, Libya, Romania, Cyprus, Slovenia, Lebanon, Turkey, Ukraine and Egypt.

MSC reorganizes its Asia-Oceania service network

MSC has announced the reshuffle of its service network between Asia and Oceania aiming to provide faster and more reliable services to its customers in China, Southeast Asia and Oceania. 

The world's largest liner operator said the Wallaby service will be enhanced and reinstated as a standalone service, offering faster and more direct connections between Australia, New Zealand and North Asia.

The revised rotation will provide coverage of New Zealand ports, including Bluff, and a connection to the company's global network via MSC's main hubs in Hong Kong, Yantian, Shanghai and Ningbo.

The first sailing is scheduled to depart from Hong Kong on 19 August with the 2006-built container ship MSC Tania.

The full rotation of the updated Wallaby service will be as follows:

Hong Kong – Yantian (China) – Xiamen (China) – Shanghai (China) – Ningbo (China) – Sydney (Australia) – Melbourne (Australia) – Auckland (New Zealand) – Bluff (New Zealand) – Lyttelton (New Zealand) – Wellington (New Zealand) – Napier (New Zealand) – Tauranga (New Zealand) – Melbourne – Brisbane (Australia) – Hong Kong.

Moreover, MSC will improve its Noumea service with the addition of Tauranga and Nelson calls, offering more options in New Caledonia and Fiji.

The new rotation of MSC's Noumea service will be as follows:

Sydney (Australia) – Brisbane (Australia) – Noumea (New Caledonia) – Suva (Fiji) – Lautoka (Fiji) – Nelson (New Zealand) – Tauranga (New Zealand) – Sydney – Bell Bay (Tasmania) – Sydney.

Lastly, the current Capricorn and Kiwi Express services will be temporarily suspended until further notice. The last Capricorn sailing will be from Singapore on 20 August, while the last Kiwi Express sailing will be from Thailand's port of Laem Chabang on 20 August. 

"For import shipments to Australia West Coast (Fremantle and Adelaide), we will continue to serve you via Sydney on our Australia Express service, while your export shipments will remain via Singapore," noted MSC in its statement.

 

Maersk announces decreases in Asia-Africa peak season surcharges

Danish ocean carrier Maersk has announced a reduction in peak season surcharges from several Asian ports to Kenya and Tanzania.

In particular, Maersk has decided to decrease its peak season surcharge from the Greater China Area, Northeast Asia, Southeast Asia and the Mekong area to Kenya, as follows: 

Greater China Area to Kenya

EQ Type	Old Rate	New Rate
20ft Dry	US$300	US$150
40ft Dry	US$500	US$200
45ft Dry	US$500	US$200

Northeast Asia, Southeast Asia & Mekong Area to Kenya (Expiry)

EQ Type	Old Rate	New Rate
20ft Dry	US$300	US$0 (expired)
40ft Dry	US$500	US$0 (expired)
45ft Dry	US$500	US$0 (expired)

  

The aforementioned changes in Maersk's surcharges has already been effective from 15 July.

Additionally, the Copenhagen-based container line has reviewed its PSS from Far East Asia, excluding Japan, South Korea and Taiwan, to Tanzania and has decided to decrease the quantum from 1 August, as follows: 

Old Tariff

Container	Rate
20ft Dry	US$400
40ft Dry	US$600
45ft Dry	US$600

 

New Tariff

Container	Rate
20ft Dry	US$200
40ft Dry	US$300
45ft Dry	US$300

 

ONE announces KVT service revamp

Singaporean container carrier Ocean Network Express (ONE) has decided to enhance its KVT (Korea-Vietnam-Thailand) service.

The updated port rotation of ONE's KVT service will be Incheon (South Korea) - Gwangyang (South Korea) - Pusan (South Korea) - Ho Chi Minh (Vietnam) - Laem Chabang (Thailand, discharge call) - Laem Chabang (Thailand, load call) - Ho Chi Minh.

The updated service will commence on 4 August.

The company said it aims to broaden its southbound coverage with this enhancement. "We now provide direct service from Laem Chabang and Hochiminh to Incheon, boasting competitive transit times. This upgrade aims to greatly improve convenience for our esteemed customers," said ONE in its statement.

DP World supercharges Asia Pacific trade with expanded network

DP World has inaugurated 51 new freight forwarding offices across Asia Pacific (APAC), aiming to enhance its position as an end-to-end supply chain solutions provider. 

This brings the number of DP World’s active trading offices globally to 161.

The expanded network, focused on air and ocean freight, is backed by DP World's infrastructure from ports and terminals to warehouses, trucks, rail and vessels.

Glen Hilton, DP World's CEO and Managing Director in Asia Pacific, commented, “Global trade is in the midst of an unprecedented era of flux in the face of growing geopolitical and economic uncertainty. We have an opportunity to help businesses navigate increasingly complex supply chains, as they seek enhanced market access and streamlined but resilient logistics from factory floor to customer door. 

The full range of logistics services, include order and origin management, port handling and freight management for ocean and air, as well as at-destination services such as customs clearance and bonded warehousing services. The company also offers a variety of value-added services including embedded trade finance, commodity-specific services, cars in containers, transload and advanced hubs and more. 

These services can all be accessed through a single digital window that is backed by an integrated Global Services Centre that centralises back-end processes and is manned by over 500 IT specialists. "This advanced digital system allows customers to track their goods in real time and easily manage their cargo journey," said DP World in a statement. 

APAC region is the largest and fastest-growing in the world for outsourced logistics, and is projected to account for 40% of global revenues for contract logistics services by 2027. This year, it is also the fastest-growing region in the world in terms of both exports and imports – at over 5% growth each. 

 

Yang Ming appoints new Chairman

Taiwan-based container shipping company Yang Ming Marine Transport Corporation has elected Professor Feng-Ming Tsai as its new Chairman.

The decision, effective immediately, was taken in the 395th Board Meeting held on 27 July. 

Chairman Tsai holds a Ph.D. in Transportation from the New Jersey Institute of Technology. He has devoted himself to research in transportation management, logistics management, and intelligent transportation systems, making significant contributions to maritime education in Taiwan. 

Feng-Ming Tsai was an Assistant Professor in the Department of Logistics Management at the National Kaohsiung University of Science and Technology, an Associate Professor, later becoming a Professor, in the Bachelor Degree Program in Ocean Tourism Management and the Department of Shipping & Transportation Management at the National Taiwan Ocean University. 

Furthermore, he served as the Director of the Internationalized Information and Planning Division in NTOU’s Office of International Affairs. Since 2022, he also held the role of Chairperson of Department of Shipping & Transportation Management of NTOU. 

Chairman Tsai’s academic background has advanced policy advocacy in the transportation field. He served as the Representative of APEC Maritime Experts Group on behalf of Taiwan's Ministry of Transportation and Communication, as well as the Education & Training Consultant of Academy of Maritime Development at Taiwan International Ports Corporation, Ltd. 

Chairman Tsai’s research contributions in developing a container demand forecasting model for container shipping companies, constructing a vessel position information platform, formulating cross-strait direct shipping policies, and innovating in cloud service applications have provided valuable insights into industry trends and advices for public policy. 

Chairman Tsai has received the approval from all board members to assume the position as Chairman of Yang Ming. 

The company said his long-term research in transportation and logistics will be instrumental in guiding Yang Ming through the challenges of stricter competition laws, the impacts of climate change, and the trials posed by digital and Artificial Intelligence (AI) transformation in shipping industry.

 

CMA CGM implements new peak season surcharges in Africa 

French ocean carrier CMA CGM has announced new peak season surcharges in Africa, which will take effect on 15 August.  In particular, CMA CGM will implement a new peak season surcharge (PSS) from North Europe, including Baltic and Scandinavia, the United Kingdom, and Marseilles, to the ports of Dakar in Senegal and Abidjan in Ivory Coast. 

The surcharge will apply only to dry cargo and will be €300 / US$300 / GB£250 per unit.  Additionally, the French box line will introduce a PSS of US$500 per TEU / US$1,000 per FEU for dry containers from India and Middle East Gulf to Djibouti.  Moreover, CMA CGM has announced a PSS of US$200 per dry container from the port of Bata in Equatorial Guinea to worldwide destinations.

 

CN analysis: Container rates out of India on major trades see sharp gains amid capacity woes

Container freight rates on trades out of India have seen strong gains in July amid heightened demand linked to early peak season bookings and persistent capacity disruptions, according to a market analysis by Container News.

On the westbound India-Europe trade, average short-term contract rates for bookings from West India [Jawaharlal Nehru Port (JNPT)/Nhava Sheva or Mundra Port] to Felixstowe/London Gateway (UK) or Rotterdam in April have climbed to US$4,200 per 20 foot container and US$4,500 per 40-foot container, from US$3,100 and US$3,200, respectively, at the end of June.

For West India-Genoa (the West Mediterranean) bookings, rates have risen to US$4,400/TEU, up from US$3,300, and US$4,600/FEU, up US$3,400/FEU, month on month, the CN analysis shows.  

However, eastbound cargo (imports into India) rates for these port pairings have seen mixed rate trends month on month. While spot rates gains have remained relatively steady for bookings from Felixstowe/London Gateway to West India, at US$1,300/TEU and US$1,450/FEU, Rotterdam-West India rates have ticked up to US$1,300/TEU and US$1,450/FEU, from US$950 and US$1,400/FEU, respectively, reported at the end of June.  

For trades from the West Mediterranean (Genoa) to West India, July rates have stood at US$950/TEU, up from US$800, and US$750/FEU, down US$1,400.  

Spot prices on the India-US East Coast trades have jumped dramatically in July because of serious capacity pressures. Average rates for shipments from West India (Nhava Sheva/Mundra) to the US East Coast (New York) have soared to US$9,500/TEU and US$10,500/FEU, from US$2,000 and US$2,300 in June.

For Indian container loads moving to the US West Coast (Los Angeles), rates have reached new highs – hovering at US$10,600/TEU and US$12,000/FEU, from US$2,650 and US$3,000, respectively, reported at the end of June.

Similarly, for the West India-US Gulf Coast (Houston) trades, average July rates have hit US$10,000/TEU or FEU, from US$3,500 a month ago, according to the CN analysis.

Rates on the US East Coast-West India trades (return leg) have generally held firm month on-month, hovering at US$550/TEU and US$750/FEU. From US West Coast to West India, booking rates have stood at US$1,950/TEU and US$2,500/FEU.  

Average rates from the US Gulf Coast to West India have also seen no changes from June averages – hovering at US$1,300/TEU and US$2,050/FEU. 

Carrier rates on intra-Asia trades out of India have continued to be in negative territory, on most port pairings, the CN analysis found. For West India-Yantian (South China), the analysis put average rates in April at US$25/TEU and US$35/FEU, and for West India Tianjin (North China), carriers are accepting bookings at as low as US$5/TEU and US$10/FEU. 

For West India-Shanghai (Central China) trades, rates have also remained in negative territory, at as low as US$5 per TEU or FEU.

Also, for West India loads to Singapore, carriers are also accepting bookings at as low as US$5/TEU or FEU. July rates for West India-Jebel Ali (Dubai) bookings have strengthened strongly to US$700/TEU, from US$250, and US$1,400/FEU, from US$300. 

Meanwhile, India’s merchandise export trade has continued to be on a positive note in the new fiscal year 2024-25, which began in April.

According to provisional government data, total goods exports by value were up 2.5% year-over-year to US$35 billion.

“Had it not been for the logistics disruptions such as lack of container availability, shipping space, irregular shipping schedule and ships skipping Indian ports, the exports would have recorded close to double-digit growth in June 2024,” Ashwani Kumar, president of the Federation of Indian Export Organisations (FIEO) said in a statement. 

Kumar also noted: “We are optimistic of better growth numbers with improved demand coming in from the European Union, UK, West Asia and the US in months to come, which will not only further give a boost to the overall order bookings but also to the labour intensive sectors of exports.”

He went on to explain: “We further expect exports to show better growth numbers with improved demand coming in from the European Union, the UK, West Asia and the US, which has given boost to the order bookings by over 10 % and has come as sign of recovery for labour-intensive sectors of exports.”

Kumar also added: “Our exports to eight of all our top ten markets including the US, UAE, the Netherlands, the UK, Saudi Arabia, Bangladesh, Germany and Malaysia were positive, except with minor declines in China and Singapore, also with many of them recording healthy double-digit growth.”

According to FIEO: “The need of the hour is to take steps on the liquidity front with deeper interest subvention support and continuation of interest equalisation scheme for five years.”

The association also appealed: "The sector also needs easy & low cost of credit, marketing support and conclusion of some of the key FTAs with the UK, Peru and Oman soon.”

 

DP World launches Senegal’s cashew export season

DP World has officially launched Senegal’s cashew export season with the arrival of the vessel Diogue, a massive shipment carrying 2,000 tonnes of cashews from neighbouring Guinea-Bissau.

West Africa is rapidly emerging as a major global player in the cashew nut market, and Senegal is thriving as a crucial export gateway for this valuable agricultural product. The cashew export season in Senegal commenced on 5 July.

Last year, approximately 180,000 tonnes of cashew nuts from Senegal and Guinea-Bissau were exported through the DP World Dakar terminal. The company played a key role in connecting local producers and exporters with international markets, significantly contributing to regional development and prosperity. India and Vietnam were the main destinations for these exports.

"The agricultural sector in Senegal and Guinea Bissau represents a significant proportion of economic activity in both countries, which need a stable supply chain that facilitates innovative, flexible and cost-effective solutions," mentioned Clarence Rodrigues, CEO of DP World Dakar.

As part of its dedication to enhancing the cashew export season, DP World supports cashew traders by coordinating with shipping lines, tracking cargo from departure through to loading onto regular routes, and managing packaging, stuffing, and weighing operations for transport to its final destination.

In recent years, DP World Dakar has partnered with multiple shipping lines at the container terminal to facilitate the efficient and seamless export of cashews from Senegal and Guinea-Bissau to global markets, including key destinations in Asia.

“Through faster administrative processes and new storage solutions – such as loading cargo directly at the terminal – we are saving customers time and money. We enable cashew producers in Senegal and Guinea Bissau to have access to international markets,” added Rodrigues.

Over the past 16 years, DP World has invested more than US$300 million in modernizing the Port of Dakar. This investment has transformed the port from handling 265,000 TEUs annually in 2008 to a cutting-edge terminal that processed 800,000 TEUs in 2023. This upgrade has significantly boosted trade, economic growth, and job creation.

Additionally, DP World is investing US$1 billion in the construction of the Port of Ndayane, located 50 km from Dakar. This project represents the largest single private sector investment in Senegal’s history and aims to further enhance the country’s trade capabilities.

 

International Maritime Organization completes port security training in Madagascar

Comorian and Malagasy national authorities gained essential skills and knowledge to help ensure the security of their ports, following a series of International Maritime Organization (IMO) training activities held in Antananarivo, Madagascar from 9 to 19 July.

According to IMO, 24 personnel representing a range of government departments, ministries and agencies in Madagascar took part in an initial tabletop exercise followed by a National Maritime Security Committee (NMSC) workshop (9-12 July). 

Participants were trained on what to do in high-risk scenarios such as entry of a ship in a port (ship reception), arrival of a ship with drugs, hijacking of a ship in transit at port, sabotage of a port facility, and dealing with stowaways. 

The aim was to promote multi-agency collaboration and a whole-of-government approach in addressing national maritime security risks and strategies. The session supported the Madagascar maritime authority in developing a National Maritime Security Committee structure to support such collaboration. 

The tabletop exercise and the NMSC workshop were followed by a regional workshop (15-19 July) focused on effective implementation of the International Ship and Port Facility Security (ISPS) Code, through self-assessments and audits. 

The ISPS Code contains mandatory maritime security measures required for international shipping. The workshop covered both theoretical and practical training on how to carry out audits and self-assessments to evaluate how effectively a Member State is fulfilling its obligations under the Code. 

The 24 participants included Port Facility Security Officers and representatives of the respective Designated Authorities of Comoros and Madagascar (Agence Portuaire Maritime Fluviale for Madagascar and Agence Nationale des Affaires Maritimes for Comoros). 

They discussed how to plan, prepare and conduct audits as well as draft audit reports. This is to ensure that ISPS Code requirements are implemented effectively within the port facilities in Madagascar and Comoros, while promoting a coordinated and standardized approach across the region.

Both training activities were delivered under the Port Security Project funded by the European Union.

 

 

///                     Air Cargo News            ///

Lufthansa welcomes B777F in Delhi, named ‘Namaste India’

Lufthansa Cargo recently welcomed Boeing 777 freighter in Delhi which is named as ‘Namaste India,’ symbolizing the significance of India as one of the most important markets for global air freight service, Lufthansa Cargo team posted on its official Linkedin page. “The team members was super excited on the day and some colleagues happened to be lucky to get the closer view of this Aircraft,” the post added.

WFS signs up airside transport fleet for HVO trial at Heathrow Airport

Worldwide Flight Services (WFS), a member of the SATS Group, is starting a three-month trial using HVO biofuel in its airside transport fleet at London’s Heathrow Airport in support of SATS’ environmental, social and governance (ESG) group priorities and Heathrow’s goal for all airport vehicles to be zero-emission or using biofuels by 2030.

Commencing on 1 July 2024, the trial Initially involves two of WFS’s airside transport vehicles. Based on the successful outcome of the trial, WFS will begin increasing the use of biofuel across its fleet of 77 airside vehicles, which conduct approximately 130,000 truck movements a year at Heathrow in support of 10 airline customers.

The biofuel provider for the trial is Airport Energy, part of WP Group.

WFS has already transitioned its airside vans from diesel to a fully electric fleet to support Heathrow Airport’s sustainability strategy ‘Heathrow 2.0’ and WFS’s sustainability initiatives. Its airside fleet also meets the Euro 6 environmental standard, which limits harmful exhaust emissions and improve local air quality.

“This trial will help us determine if biofuel is suitable for our operation and, if it is, we will move more vehicles over to HVO (hydrotreated or hydrogenated vegetable oil) over the next 12 months,” said Paul Carmody, WFS’ Managing Director UK Cargo. “As part of our close working relationship with Heathrow, we are committed to supporting the airport’s sustainability goals, and the use of cleaner biofuels is just one of the ways we aim to do this.”

James Golding, Head of Cargo at Heathrow Airport, said: “Heathrow is committed to decarbonisation, and as part of our Heathrow 2.0 sustainability strategy and cargo strategy the end goal is for all airside vehicles to be zero emissions. Biofuels play an incredibly important role in this journey, so we support WFS’ biofuel trials across their diesel trucks, which will help reduce lifecycle carbon emissions at Heathrow, benefiting both people and planet.”

In addition to this latest biofuel trial, WFS has commenced a transport fleet renewal and upgrade programme to meet new environmental standards. It is also preparing to trial an electric truck in its Heathrow transport operation and championing environmentally friendly driving standards by upskilling its driving team through increased training support and assessment.

Menzies and KLM renew long-running partnership at AMS

Menzies Aviation, the leading service partner to the world’s airports and airlines, has announced the renewal of a major cargo and ground handling contract with the Dutch flag carrier, KLM Royal Dutch Airlines, at Amsterdam Airport Schiphol (AMS).

Menzies will provide cargo warehouse and ramp handling services for all KLM/Martinair freighter operations at AMS for the next five years, with this renewed contract representing the company’s largest contract at the main international airport in the Netherlands.

The extension will see teams at the airport manage approximately 600 aircraft turns and handle almost 100,000 tonnes of cargo every year.

The renewal was announced at an official signing ceremony today at Menzies’ cargo facility at AMS where Miguel Gomez, EVP Europe and Dave Beekman, SVP Benelux from Menzies were joined by KLM Cargo’s Koen Bolster, Vice President Worldwide Operations and Paul van der Wardt, General Manager Martinair Cargo to celebrate the successful partnership.

This announcement underscores the relationship between KLM and Menzies Aviation, which stretches back decades. Menzies currently works with the airline at more than ten locations across the world, spanning Europe, Africa, India and Latin America.

Paul van der Wardt, General Manager, Martinair Cargo said: “We are glad to continue our great partnership after all these years of close cooperation. We are looking forward to further develop the ramp handling activities together with Menzies.”

Koen Bolster, VP KLM Cargo Worldwide Operations said: “We are delighted to renew our partnership with Menzies Aviation at Amsterdam Airport Schiphol.

This longstanding collaboration has been instrumental in our success, and we are confident that together we will continue to provide exceptional cargo and ground handling services to our customers. We look forward to further strengthening our relationship and delivering excellent operations.”

Miguel Gomez, EVP Europe, Menzies Aviation said: “We’re very proud to have renewed our long-running partnership with KLM at Amsterdam Airport Schiphol, marking another milestone in our long-running partnership.

 This extension reflects the mutual trust and success we have built together over the years. We are excited to continue building on this strong foundation and delivering world class cargo and ground handling services for the Dutch flag carrier at one of the busiest airports in Europe.”  

Virgin pulls out of China

The British carrier has decided to terminate its London-Shanghai flights operated with Boeing 787 jetliners, due to external factors. The last flight will take place on 25OCT24, marking the end of an era that has lasted a quarter of a century. Shanghai is the only destination serviced by Virgin in China.

Competitive disadvantages
Virgin Atlantic is the latest victim of Putin’s war against Ukraine. As a result of the subsequent sanctions imposed by democratic countries against Russia, the Siberian airspace remains closed to Western airlines, while Russian carriers are no longer permitted to fly to Europe or North America.

Since the double embargo entered into force, Virgin, BA, KLM and many others need to circumvent the vast Russian landmass on East-West air sectors, taking detours via the Caspian region and Kazakhstan. Compared to the past, this considerably increases flight times to and from China, and drives up fuel consumption.

In addition, the above-mentioned airlines and more are facing unfair competition, as carriers such as Ethiopian Airlines Cargo take advantage of the situation by continuing to use Russian airspace on routes linking China with Europe, because they rejected embargoing the Putin regime’s war on Ukraine for violating international law. In comparison to Virgin, BA, or Lufthansa, they save about two hours when navigating their aircraft through Russian airspace en route from Shanghai to London, Amsterdam, Paris or Liège.

The flights have become unmaintainable
Negatively affected by the forthcoming suspension of flights are not only Virgin’s passengers, but also its cargo services. A Virgin spokesperson emphasized the importance of air freight transportation which substantially contributes to the carrier’s revenue generated on the Shanghai-London sector.

The route is currently operated daily with Virgin’s Boeing 787 Dreamliners. Depending on the number of passengers and their luggage, this Boeing variant can carry up to 70 m³ per flight. She also pointed at “significant challenges and operational complexities resulting from the Russian airspace closure”, forcing Virgin to circumnavigate the country’s national boundaries. These unfavorable external circumstances have put financial pressure on the Shanghai flights, making them commercially unmaintainable, she argued.

Focusing more on India
Initiated by Air France-KLM’s CEO, Ben Smith, a debate has now begun in the EU about withdrawing traffic rights from airlines that continue to fly across Russia and thus take the shorter route between China and Europe. These carriers, primarily Chinese airlines, would have a clear competitive advantage over their European competitors, but also airlines from South Korea or Japan, which support the sanctions regime against Russia due to its international laws violating war in Ukraine.  

 Virgin only resumed Shanghai flights in MAY23 after a two-year break due to coronavirus. Following the carrier’s pullout, London-Shanghai will continue to be served daily by British Airways, Air China (Gatwick), and China Eastern. The withdrawal from Shanghai was linked to Virgin’s announcement that it would focus more on the Indian market in future and increase its services there.

SHJ – The Forgotten Air Cargo Hub

Think UAE, think Air Cargo, and those in the industry will immediately drop a couple of three-letter codes: DWC and DXB, denoting the United Arab Emirates’ buzzing cargo hubs.

And now, where plans have been revealed to soon transform Dubai from the UAE’s largest into the world’s largest airport for passengers and freight, the point that it was in fact the lesser-known Emirate next door, Sharjah (SHJ), that was once the heaving hub of cargo traffic, slips further into oblivion.

Yet, one particular group of people keeps the memories alive in regular, international get-togethers. CargoForwarder Global heard from Shailendar Kothari and Rohan Lobo – two of the original Lufthansa Cargo team responsible for setting up freighter operations way back in 1993.

Well before air cargo at Dubai Airport was even a tiny glimmer in the Sheikh’s eye (it literally slowly began taking off there with the humble beginnings of Emirates in the mid-1980s), trusty Sharjah Airport was already on the scene – an established, well-functioning and well-run international airport.

Having had an RAF airbase since 1932, the new Sharjah Airport was inaugurated on 31DEC76. Though but a very young child resident in the Emirate at the time, I remember that Concorde landed there in AUG77, and have a celebratory vinyl single commemorating the fact.

30 years since Lufthansa Cargo founded its SHJ Hub
“SHJ was already on the Lufthansa route map from the German Cargo times, well before Lufthansa Cargo was founded in 1994,” Shailendar Kothari explains, going on to reveal its rapid development: “SHJ Hub came into being in APR93, with the debut of German Cargo DC8F operations to the Indian Sub-Continent. Starting with 60 flights a month, traffic reached a peak of almost 450 freighter flights per month.

These included not only Lufthansa Cargo and Lufthansa Cargo India flights, but also those of Singapore Airlines, Cathay Pacific, UPS and Eva Air, to name but a few which were handled by Lufthansa Cargo in SHJ.” Kothari, along with Rohan Lobo, Eustace D’Souza, John Mampilli, Suzannah Pinto, Klaus Holler and Wolfgang Kobitz, were the first to make up the SHJ Hub team in APR93. Very soon, that team was to grow to 12 employees plus another 20 seconded staff from Sharjah Airport Authority.

Rohan Lobo illustrates the initial challenges in creating the LCAG cargo hub: “Recruitment of qualified workforce was the initial challenge and we relocated team members primarily from Delhi (DEL) and Mumbai (BOM), in the early days. Training and qualification were mainly carried out on the job as the hub was constantly running and active. And the perseverance to work in 50°C temperatures in the afternoons, with 6-8 freighters being handled simultaneously per shift, were challenging conditions. We had to recruit staff from Sharjah Airport Authorities and Lufthansa staff from Dubai (DXB) to help out with the initial station opening.”

In its heyday – 1993-2000
“SHJ connected all the main airports of the Indian Sub-Continent,” Kothari says. Here, Lufthansa Cargo India (flying as Hinduja Cargo Services – a joint venture between Hinduja Group and Lufthansa Cargo, founded in 1996 and closing in 2000, following an accident) operated with B727F aircraft.

“Commodities were mainly garments from the Indian subcontinent and sea-air traffic from the Far East.” Yet, SHJ also excelled in special loads: “Horse charters during the SHJ Hub times, was the forte of LCAG. SHJ was the go-to airport for all special loads like cattle charters, Formula 1 cars, to name but a few. Large overlapping cargo and center loads also became a routine to be handled every other day.”

For Lobo, the biggest highlight in terms of shipments through SHJ, was the fact that it was the only airport at that time to handle ‘Interchange flights’: “These were soon nick-named ‘Macarena’ flights,” he smiles. “Lufthansa Cargo (LCAG) would operate with B747F out of Frankfurt (FRA) to SHJ while Singapore Airlines (SQ) would fly a B747F from Singapore (SIN) to SHJ.

Both flights arrived at the same time, and we would interchange the full load within the given two hours’ ground time. They would then return to FRA and SIN respectively. A few months later, we even began handling ‘Double Macarena’ flights. In addition to the SQ-LCAG interchange, we started having Eva Air-LCAG interchanges with an MD11 freighter arriving at the same time as the SQ operations.”

So much more going on
Apart from being a customer of Sharjah Airport Authority (SAA – which leased dedicated warehouses to Lufthansa Cargo, adding more warehouses as the demand increased), Lufthansa Cargo was also a GHA providing aircraft and warehouse handling for a number of airlines, and was the biggest player at SHJ Airport for a long time.

It handled B747F, MD11F, DC8F, and B727F aircraft. “The cost, flexibility, geographical location and, last but not the least, the support of the decision makers of SHJ airport, were the key reasons for the success of SHJ Hub,” Kothari reasons. “Great support from Sharjah Airport Management, fast decision-making, and the willingness to get things done quickly, added to the success.”

For Lufthansa Cargo, too, the hub played an important support role to its Frankfurt base. “We built thru-ULDs for FRA and beyond,” Lobo showcases – a move that helped to reduce both workload and handling costs at the mother hub. “Due to the flexibility that SHJ airport provided, most of the flight training (Touch and Go) for new crew or new aircraft was done at SHJ. The favorable weather and low cost of aviation fuel and handling, also helped.”

All good things come to an end
Lufthansa Cargo ceased to exist at SHJ airport in 2020. Due to the extended range of its 777F fleet enabling it to fly nonstop between Europe and Asia, SHJ Hub began losing its importance. There was no longer a need for transit/fuel stops in the Middle East and thus SHJ slowly disappeared from Lufthansa Cargo’s destination map.

Keeping the memories alive
Every now and again, the Lufthansa Cargo colleagues involved in the SHJ Hub meet up informally to remember the Good Times – often ad hoc when their paths cross during trainings and meetings in Frankfurt (FRA). The first get-together took place in JUN15, when Kothari relocated to Frankfurt.

However, a very special SHJ Reunion was arranged for the first time in the backwaters in Cochin Kerala, India, at the start of this year: 06-08JAN24, to commemorate the meanwhile 30^th Anniversary of the cargo airline’s hub creation back in 1993. A smaller, 25-year celebration was held in Hallstatt, Austria in 2018.

What’s the situation today?
This time last year, Ali Salim Al Midfa, Chairman of Sharjah Airport Authority, announced a 2.4 billion Dirham Sharjah Airport expansion project due to be completed by 2026, aimed at attracting more airlines and “further reinforcing its reputation as a reliable and efficient cargo hub in the region.”

To put things into perspective, however, it has to be pointed out that while the total cargo volumes handled through Sharjah Airport during the year 2023 was more than 141,000 tons, Dubai Airport (even with a slight decrease on previous year, of 4.5%), handled 1,805,898 tons of cargo in the same period. The glory years for SHJ were those between 1993 and 2000, the original SHJ Hub team believes, and they are unlikely to return.

Russian airspace closure hits Finnair hard

Finland was once a key gateway for passengers and air freight shipments on routes between northern Europe and China. In the meantime, the former flow has become a trickle.

This is because the long-standing advantage of short flight times between the two countries has grown from formerly nine hours to twelve hours or even more. From the moment Moscow’s air space closed for Western airlines, Finnair lost a key USP that had benefitted the carrier over many years.

Hans-Ulrich Klose, the former mayor of Hamburg, was known for his clear words. During a meeting of aviation journalists, he once said: “If I want to fly from Hamburg to China, why should I first fly to Frankfurt, Paris or London to catch a long-haul flight to Beijing, Guangzhou or Shanghai, from there, only to fly, four or five hours later at an altitude of around 10,000 meters above Hamburg, where I had begun my journey towards the Far East.”

And he added: “The smarter route is Hamburg-Helsinki-China, which saves air travelers 5 hours or more.” His statement immediately caused outraged protests at Lufthansa.

Salmons demand speedy transport
Mr. Klose died in 2023. The hassle caused by time-consuming long-haul flights on routes between Europe and the Far East, has become even more acute since then. Hardest hit are passengers from Scandinavia and northern Germany, but also freight forwarders doing business there.

This is particularly a challenge for Norwegians who rely heavily on time-definite salmon and seafood transportation bound for Korea and Japan. Flight times are longer, prices have increased, and greenhouse gas emissions per flight have also risen due to the detours Finnair or SAS are forced to take to avoid touching Russian airspace.

Sharply reduced flight program
Finnair has so far scrapped flights to six Chinese cities due to cost-cutting measures. Only Shanghai and Zhengzhou are still served, albeit with fewer frequencies. Since 2020, the formerly highly frequented Helsinki-Shanghai route has been cut by 9%. Flights between Helsinki to six other Chinese cities have been stopped altogether, as data identified and evaluated by Cirium consultancy, shows. 

“Helsinki’s main attraction was its favorable geographical position enabling shorter flying times between northern Europe and China, benefitting not only many travelers but shippers and forwarding agents alike,” states Nouri Neller, Managing Director of general sales agent and cargo broker, AirCargoConcept (ACC).

Trains stopped running
Meanwhile, the number of Chinese tourists to Finland toppled from a late-2019 peak of more than 40,000 per month, to last year’s monthly apex of around 12,000, according to the Bank of Finland Institute for Emerging Economies, states South China Morning Post in a report.

Rail services crossing the vast Siberian land bridge between China and Finland, have stopped altogether. As have trains formerly running between Helsinki and St. Petersburg, with onward transportation to final destinations in China. 

Trade volumes go south
This all led to a sharp contraction of trade volumes between China and Finland. According to Chinese customs data, it reached USD 2.6 billion in the first five months of this year, versus USD 3.3 billion for the same time span in 2023.

It doesn’t take a prophet to predict that the trade volume between the two countries will continue to decline, since the Russians do not appear to be willing to end their war against Ukraine. In that case, sanctions will not be eased but stepped up instead. These are not hopeful signs for intercontinental air traffic between China and Europe, not to mention the mounting technical and financial pressure bringing Russian airlines to their knees.

 

I  hope  you have enjoyed reading this update.  Have a nice day.

 

With kind regards

Robert Sands

Joint Managing Director

 

Jupiter Sea & Air Services Pvt Ltd

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