8 WORLD CARGO SYMPOSIUM - Worldtek Travel … · Serving the Niche Track 1 . ... El Salvador Managua Montego Bay Tegucigalpa Santiago de los ... Forwarder Ground Handler Capacity

8TH WORLD CARGO SYMPOSIUM LOS ANGELES 11-13 MARCH 2014

Serving the Niche

Track

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Items to Note: Please keep in mind the compliance to competition law

guidelines

Coffee Breaks & Lunch are located in the in exhibition hall

Kindly silence electronic devices

For all agendas and event information visit the event app:

www.eventmobi.com/wcs14

2

http://www.eventmobi.com/wcs14

Opening Remarks

↗Tim Strauss

↗ Managing Director Cargo, Hawaiian Airlines

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Success stories and case studies:

What is Branding and How Important is it to Your Marketing Strategy?

Service that sells: The art of profitable operations

↗Jaime Alvarez

↗ Cargo Director, COPA

4

CONNECTED, ANYTHING IS

POSSIBLE

Panama is Growing Fast

Multinacionals in Panama

More than 93 multinationals chosen Panama for their operations Conectivity: is a Key Player for a Decision Maker

2007 2008 2009 2010 2011 2012 2013

217

31

44

63

8693

Multinacionales en Panamá

Source: SEM del Ministerio de Comercio e Industrias. Agosto 2013

The hub of The Americas Is Possible

Los Ángeles

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Las Vegas Chicago - ORD Toronto Boston*

Washington - Dulles

Orlando

Miami

Nassau

Guadalajara

Monterrey

Nueva York - JFK

Punta Cana

Ciudad de México

Porto Alegre

Guatemala

Cáncun

La Habana

El Salvador Managua

Montego Bay

Tegucigalpa

Guanacaste

San Pedro Sula

Santiago de los Caballeros Puerto

Príncipe

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San Andrés

Santo Domingo

Kingston

Curacao Aruba

San Juan St. Maarten

Valencia Caracas

Puerto España Barranquilla . .

Cartagena PANAMÁ Maracaibo

Iquitos

Pereira Medellín Bucaramanga .

Cúcuta

Guayaquil

Quito

Bogotá Cali

Santa Cruz

Montevideo Buenos Aires

Córdoba

Santiago

Lima

Sao Paulo

Brasilia

Manaos

Asunción

Recife

Belo Horizonte

Rio de Janeiro

Your cargo through the Hub of the Americas to anywhere in the world.

-- Flights operated byCopa Airlines

-- Flights operated by Copa Airlines Colombia

* Flight begin to operate since July 2013

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México

Guatemala San Andrés

Barranquilla

La Habana

Cancún

San José

Managua Santa Marta

Bucaramanga Cúcuta

Cartagena Caracas

Medellín Pereira

Cali

Quito

Guayaquil

Leticia

BOGOTÁ

PANAMÁ

San José

It’s Possible

66 Destinations in 29 Countries

In America

Aircraft Type 2009 2010 2011 2012 2013 2014

EMBRAER-190

26 26 26 26 26 26

BOEING 737-700

20 20 20 18 18 18

BOEING 737-800

9 17 27 39 46 54

55 63 73 83 90 98

Capacity: 160 pax

Range: 5,500 km

Capacity: 124 pax

Range: 5,500 km

Capacity: 94 pax

Range: 4,000 km

It’s Possible to Grow new Markets and more Frequencies

FLEET PLAN

Average Fleet Age of 4.9 years

IT ‘S POSSIBLE TO ENJOY OUR NEW FLEET BOEING SKY INTERIOR 737-800 OFFERING GREATER COMFORT AND ENTERTAINMENT

In our new Business Class you will find:

More comfortable and spacious seats with higher recline pivot, and

leg and foot rest so you can relax.

Electrical and USB ports on all the seats to charge your mobile

devices and access your personal files.

And in both cabins:

A modern entertainment system personalized with individual

screens on each seat with a selection of movies, TV series, music,

and games.

USB ports on all the seats.

Destinations where the Premium fleet operates:

Sao Paulo, Brazil

Buenos Aires, Argentina

Los Angeles, California (March 2013)

Rio de Janeiro, Brazil (May 2013)

Santiago de Chile, Chile (November 2013)

It’s Possible to Grow Even More

Copa Freighter 1997

Things change!

Xxxx..

It’s possible to go from freighters to minivans

A Leading Cargo Strategy is Possible

• Belly Cargo Only and Full Courier Service

• Vertical integration for small stuff

• Product Oriented and Service Differenciation

• Costumer Service across the system

• Better technology

• Revenue Management

• Low cost operation

World Wide Coverage Is Possible

Door to Door Is Possible

Integrated Services Is Possible

Diferenciated Service Is Possible

Technology for Change is Possible

To Do Things Different Is Possible

We have cold carts in Panama to keep the temperature of all the products that need special care in their transportation from the origin to the delivery at destination. Also at the warehouse we have one cold room with temperature of 2º to 8º degrees and other one with temperature between 8º and 15º degress.

It’s Possible, but…

• Pax Cargo regulatory issues

• Limited capacity and service

• Parcialization

• More double handling

• Technology limitations

• Fixed cost of security and general cost dilution

• Some International Customs push for fines and limitations

Panama Air Cargo Terminal - PACT

•The most modern air cargo terminal in Panama, Central American and Caribbean Region. •With an area of 95,906 sq.ft. located near to Tocumen International Airport in Panama. This installation consists mainly of warehouses for general cargo, cargo hold securities, miscellaneous hazardous materials and cold rooms. •We have cold rooms with capacity for about 16 pallets. These coolers are divided into two chambers for use with various perishable products. It is ideal for perishable cargo in transit through Panama. •Ramp access for cargo aircraft. •Also have a high security and interconnected by the computerized inventory control, receipt and delivery of cargo, so that the cargo remains consistently safe and controlled.

“It’s possible to make many new and wonderful things

happen on one of the best airlines in the region”

Thank you !


Performance measurement:

Target achieved, Financial models, Strategic planning:

How do we excel?

↗Gary Hoyle

↗ CFO SAA Cargo

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“Bringing the World to Africa and taking Africa to the World”

Performance measurement: Target

achieved, Financial models, Strategic

planning: How do we excel?

Gary Hoyle, CFO SAA Cargo


SAA Cargo – 2012/13 Performance Review


SAA Cargo – Services

Air Freight

Freighter Charters

Road Freight

Ground Handling


SAA Cargo – Areas

South Africa

• 6 Warehouses

• Scheduled Freighter Service – Narrow Body

• Passenger Fleet – Narrow Body

• Charter Service

• Road Freight Services

Americas

• Oversight

• GSA

• Passenger Fleet – Wide Body


Europe & Asia

• Own Offices

• GSA

• Passenger Fleet – Wide Body


Africa

• GSA

• Scheduled Freighter Service – Narrow Body

• Passenger Fleet – Wide & Narrow Body

• Charter Service



SAA Cargo – Origin Markets

13%

10%

14%

22%

41%

Markets

Africa Americas Asia Europe South Africa


SAA Cargo – Performance

Performance measurement is the process of

collecting, analyzing and/or reporting information

regarding the performance of an individual, group,

organization, system or component.

Performance improvement is the concept of

measuring the output of a particular process or

procedure, then modifying the process or procedure to

increase the output, increase efficiency, or increase the

effectiveness of the process or procedure.

http://en.wikipedia.org/wiki/Concept

http://en.wikipedia.org/wiki/Measurement

http://en.wikipedia.org/wiki/Business_process

http://en.wikipedia.org/wiki/Procedure_(term)

http://en.wikipedia.org/wiki/Output

http://en.wikipedia.org/wiki/Efficiency_(economics)


SAA Cargo – History

• Initially used a Hybrid system

• Used a variable cost system to determine pricing

• Not all costs taken into account as accounting

entries had not occurred

• Entered into loss making partnerships

• Started up routes without proper understanding

of costs

• Incorrect short and long term decisions


SAA Cargo – Concerns

• Decisions relating to Fleet Capacity,

Configuration and Deployment

• Purchase of Capacity / Joint Ventures

• Lack of Information

• Pro-rated revenue vs Origin Revenue

• Poor decision making


SAA Cargo – Contribution Methodologies

• Revenue Contribution

• Cargo cost allocation

• Partial Cost Allocation

• Full allocation of cost


SAA Cargo – Brief Overview

2008 • Corrected cargo freighter cost allocation

2011

• Prior to 2011 SAA applied Cargo Cost allocation method

2012

• 2012 Introduction of Partial Cost Allocation Method

2014

• 2014 Introduction of Full Cost Allocation Method


SAA Cargo – PAX Transfer Pricing

Flight Costs Aircraft Costs

Flight Deck Crew Expenses Aircraft Insurance

Flight Deck Crew Meals Hull Insurance

Maintenance (PBTH) Aircraft Ownsership / Lease

Maintenance (cycles)

Landing Fees

Parking Fees

Navigation

Schedule Costs

Flight Crew Block Hours

Overhaul Maintenance

Cost calculated on cargo capacity to total aircraft weight

Cost allocated on free sale basis


SAA Cargo – Freighters

• Developed standard costing template for all

routes and aircraft utilised

• Implemented revenue measurement from origin

• Implemented accounting of revenue related to

freighter specific activity

• Changed accounting from fleet basis to asset

specific


SAA Cargo – Support Services Transfer Pricing

• Actual costs transferred where separately

identifiable

• Time based allocation

• Pro rated allocation on cost/revenue

• Fixed Charge for the year

• Inefficiencies not transferred

• Negotiated on arms length


SAA Cargo – Future Initiatives

• Ground Handling measurement and optimisation

• Further streamlining of Freighter operations

• Guaranteed space on Pax aircraft


SAA Cargo – History

THANK YOU


Importance of Key support staff, Leadership

↗Tim Strauss

↗ MD Cargo Hawaiian Airlines

44

Niches to Riches WCS LAX

Tim Strauss

SEOUL

TOKYO / HANEDA

SYDNEY

OSAKA / KANSAI SAN FRANCISCO

LOS ANGELES LAS VEGAS

PAGO PAGO PAPEETE

SEATTLE

PORTLAND

PHOENIX SAN DIEGO

SACRAMENTO

OAKLAND

SAN JOSE

NEW YORK / JFK

N E I G H B O R I S L A N D N E T W O R K

LIHUE

KONA HILO

MAUI HONOLULU

BRISBANE

SAPPORO / SENDAI

AUCKLAND

HONOLULU

MAUI

BEIJING

Know who you are

Holacracy

Hulaocracy

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Three Markets – Three Strategies

• International

• Domestic to Hawaii

• Neighbor Islands

-49-

Kawika versus Goliath

• Consumers make choices

• Can’t be as good as the competition

• A Culture of hospitality

• Your people

• Your service

-50-

Where should we spend our treasure?

X

X

X

X

X

X

X

-51-

Competitive Distinct Breakthrough

Product

Service

Relationship

-52-

In a service company -

Your employees are

your brand

The most important word in business

Learning to say, “Yes”

Conditioned to say, “No”

-53-

The Advantages of the not-so-big airline

• Simplified Route Structure

• Flattened HQ Organization

• Customer Relationships

• Service Performance

• Global Exposure

-54-

Getting Technology Right

Niche companies can be quick to market but

can’t afford to be wrong to market

Cloud Technology

-55-

A few things that matter

Customers always have a choice

Speed with grace wins

Remove barriers

Develop a clear, simple vision

Deliver more than Cargo

-56-

Kawika versus Goliath

• Small stones, big impact

• 5% loyalty

• 25% - 100% profits

• Quality of market share

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How to measure progress

• CTKs

• Total Revenue

• Cargo revenue as a % of total revenue

-58-

Magic

-59-

-60-

Mahalo.

Growing big in the niche market:

Technology advantage

↗Milind Tavshikar

↗ CEO SmartKargo

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Growing Big in a Niche Market TECHNOLOGY ADVANTAGE

The Air Cargo World

Category Sales Agent

Freight Forwarder

Ground Handler

Capacity Ground Handler

Freight Forwarder

Niche - Small

Partner Partner Partner Airline / Partner

Partner Partner

Niche - Medium

Airline Partner Partner Airline Partner Partner

Niche - Large

Airline Partner Airline Airline Airline Partner

Integrator / Network Carrier

Airline

Airline

Airline

Airline

Airline

Airline

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Market Dynamics for Air Cargo

• Shippers are getting fragmented – Businesses are operating from regional / local warehouses

• Walk-In shippers is a growing trend outside USA

• Consignees are placing orders over the Internet

• Airlines have available cargo capacity, larger network, higher frequency of routes

• Airlines need to have advanced technology infrastructure to compete effectively with Integrators

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17%

29% 54%

US Tonnage Distribution

All Airlines

UPS

Fedex

Cargo is Strategic for Today’s Airline

• Cargo is ‘Ancillary Revenue” which is the area most Airlines are looking

towards for improving profits

• Cargo is a Smaller Percentage of Top Line (4% to 15%) but a could be

Significant Percentage of the Bottom line (15% - 70%)

• Demand for Small Parcel Shipment by Air is Increasing due to increased

global e-commerce. (Amazon is piloting deliveries by Drones!)

• Airlines are charging extra for passenger bags thus creating space in the

belly of the aircraft that can be used for Cargo

“Airlines have moved Cargo efficiently with a network of unrelated but Interconnected Partners when adequate Technology Solutions are available”

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Factors working against a Niche Airline ?

• Cutthroat Competition from Large Players

• Low Brand Recognition for Cargo Business

• Limited Access to Marketplace

• Constrained Capital Resources

• Non-defined Operational Procedures

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Needed Factors

• Ability to Deploy Latest Technology – Most successful companies in today’s world are built upon a robust and flexible technology platform

• Faster Time to Market – Niche Players can launch strategies and initiatives in a shorter timeframe

• Out-of the Box Thinking – Innovation is more readily accepted and seen as a necessary driver to overcome competition

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• Enhance your web presence – Compare your website to Fedex.com and give yourselves a score !

• Segment Cargo Capacity in various product types and upsell based on SLA.

• Create an Online Booking Engine to book cargo in various classes at various price points

• Adopt IATA standards

• Make it easy to do business

Success Factor 1: Embrace the Internet

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Success Factor 2: Optimize IT

• Information Technology is NOT a Core Competence of a Airline – Do not try to reinvent the wheel

• Stay away from buying hardware and building data centers

• More than 1 system is 1 too many

• Adapt Industry Best Practices – No Customization

• Search for a Pay – Per – Use model for everything!

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Cargo Operations

System

Scheduling Excel Accounting

Reporting DB

Manual / Paper

ERP

Typical IT Landscape

for Cargo Management

Systems in a Non

Optimized Airline

Collections

Success Factor 3: Invest in Mobility

• Use of Mobile Technology has exploded in the past 5 years

• Enable Booking of Cargo over Mobile Phones

• Enable Easy Track and Trace using SmartPhones

• Allow SMS based bookings for users without SmartPhones

• Use Barcodes to Increase speed of operations at all levels

• Enable usage of Tablets and iPads for information processing and communication

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Success Factor 4: Business Analytics

• Air Cargo features the most granular data about the economy and its trends

• Movement By Origin / Destination / Routes

• Movement of Commodities

• Movement by Shippers

• Movement by Product Type and many more..

• Big Data Analytics is available today at a relatively low price

• Analytics can assist Decision Making in being able to offer special pricing

• Analytics can assist in improving Yields on routes

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Success Factor 5: Everything Real Time • Today’s customer is hyper connected

• Demand a Air Cargo Management system built upon an open platform allowing real time information exchange

• Share data seamlessly with business partners

• Leverage Passenger systems for schedule management and real time updates

• Connect with business partners

like freight forwarders real time

• Send and Receive Status updates real time

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Case Study: Get away from Traditional - GoAir/Sovika Aviation

• Location: Mumbai, India,

• Same Day Delivery Across India

• Direct Access to end users for Cargo Booking

• Flight Guaranteed Shipment for

Walk-In Customers

• DOUBLE Tonnage in 1

Year!

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An ideal Product Offering ?

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• Cloud Based Solution

• Minimal Capital Expense

• Rapid Time to Market Deployment Capability

• Easy to use for end users – Designed for Cargo Handlers

• Seamless Connectivity amongst business partners

• Built upon IATA Standards

Pickup Operator Delivery Operator Air Operator Warehouse Warehouse

Cargo Management System

End to End Functionality

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Sales Data Management

Capacity Planning

Agent Stock Control

Internet Bookings

Piece Level Identification and Tracking

Flight Schedule Management

Rate and Yield Management

Domestic and International Operations

Revenue Accounting

Debit/Credit Management

Spot Rate / Deal / Incentive

Management

Device / Mobility

Management

Public / Private Hosting

IATA Messaging

Access and Data Control

MIS Reporting & Business Intelligence

e-Booking e-AWB e-Accounting e-Tracking

Single Database, Real-Time information

Enterprise Neural Network Technology • ENN is a Network of Many Smart Information Collection Components (“Nodes”) that

Relay Real Time Information to Central Cloud Processors for Intelligent Decision

Support.

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E-Sensors

• Browser

• App

• RFID

• Barcodes

• GPS

E-Messages

• EDI / CIMP/CXML

• Web Services

• Alerts

E-Mobility

• Smartphones

• Enterprise Handsets

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Coffee Break in Exhibition

What is the future of niche markets?

↗ Tom Crabtree, Regional Director Boeing Co.

↗ Tina Newman, COO Mallory Alexander International

↗ Alfred Kuehlewind, CEO Commodity Forwarders Inc

↗ Betsy Bacon, MD Cargo Alaska Airlines

↗ Peter Lamy, American Worldwide Agencies

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Serving the Niche: Alaska Airlines

Betsy Bacon

Managing Director, Cargo – Alaska Airlines

March 12, 2014

Parent company of Alaska Airlines and Horizon Air

Recently announced quarterly dividends

$5 billion in annual operating revenues

Roughly 3% - 4% of US domestic capacity

A track record of profitability

- Ten consecutive years of profits

- Profitable 35 of last 41 years

Award-winning service

Excellent operational performance

Good labor relations

Overview of Alaska Airlines

Growth

Cordova

Yakutat

Ketchikan

Wrangell Kodiak

King Salmon

Bethel

Nome

Prudhoe Bay

Barrow

Juneau

Adak

Kotzebue

Fairbanks

Dillingham

Petersburg

Gustavus/ Glacier Bay

Anchorage

Dutch Harbor

Sitka

•Employees 1,600

•Daily Departures

•Today 88

•Summer 117

Our Presence in Alaska

Alaska Airlines - Alaska Region

• Regional headquarters in Anchorage

• Total Employees: 1664

• Total Number of Cities Served: 20

- Of the 20, only 3 are connected to any sort of road system

- Alaska Airlines offers the only mainline jet service

- Alaska Airlines is the lifeline to these communities

• Mileage Plan: 492,803 members in Alaska

- Population of the state is 731,449

Supporting Resource Development

• Transport multiple oil and

gas companies to the

slope

• Added capacity to meet

passenger demand

• Opportunity for additional

freighter flying

• Excited for future

opportunities (OCS, In-

state gas)

Oil and Gas

Mining

• Seeing increased demand for

travel in the mining industry

• Southeast: Kensington and

Greens Creek

• Interior: Pogo and Fort Knox

• Northwest: Proud to be the

Red Dog charter operator for

over 20 years

Fishing

• Dedicated air freight support

for the seafood industry

• 25 million pounds of

seafood carried in 2013

• Increase capacity to meet

customer demand

• Combis

• Freighter

Tourism

• Supporter of Alaska ACT

• Significant capacity addition to support tourism growth

• Active involvement in ATIA and local CVBs

Investing in our Communities

• $2 Million given back in 2012

– Angel Flight West

– University of Alaska

– Food Banks throughout Alaska

– Shriners

– Make a Wish

– Arctic Winter Games

– And many, many more.

Club 49!

Members - 345,289

Member Savings YTD -$14.1 Million

New Direct Service

• Anchorage – Kona

– 2012

• Fairbanks – Portland

(Seasonal)

– 2013

• Anchorage – Phoenix

(Seasonal)

– Dec. 18

• Anchorage – Las Vegas

– Dec. 19

Cargo

Fleet – Five, 737-400 Combi-Aircraft – One, 737–400 Freighter

Lift – 2013 - 118 million pounds – 70-75% of cargo carried to, from or within the state of Alaska – 2013 – 25 million pounds of fresh and frozen seafood

Closing Remarks

↗Tim Strauss

↗ Managing Director Cargo, Hawaiian Airlines

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Don’t Miss the Closing Plenary!

Innovation Jam Session

Launching of IATA Innovation Awards

And more…

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↗ Items of Note:

↗ Ticket Required for Entry

↗ Busses depart from The Hyatt at 18:15 – 18:30

Gala Reception & Dinner:

California Science Center

Gala Dinner Sponsor

Gala Reception Sponsor

Documents

8 WORLD CARGO SYMPOSIUM - Worldtek Travel … · Serving the Niche Track 1 . ... El Salvador Managua Montego Bay Tegucigalpa Santiago de los ... Forwarder Ground Handler Capacity