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AIR CARGO FOCUSBROKERS


Charters are for more than just


n air cargo charter is not an uncommon form of shipment in the project logistics business, largely because big oil and gas, power and other project industry shippers are amongst the few concerns that can afford the high cost of chartering a big freighter at short notice. But there are several reasons for a project logistics manager to turn to an air charter broker, many of which handle numerous project shipments each month and make a lot of money doing so. Andreas Wald, general manager for Germany based broker ProAir Charter Transport, is in no doubt about the value of project logistics charters to a broker such as his and, indeed, to the supply chain as a whole. “Air charters involved in project logistics are the icing on the cake of the charter business,” he said. Wald continued: “Air charters in project logistics mainly happen for two reasons: delivery is behind schedule and a penalty is threatening, or the destination location is in a remote area that can be reached only with great difficulty by trucks or ships.” But: “In economically difficult times project logistics are subject to the same parameters as other logistics business units and speed is sometimes compromised by using ships instead of highly priced charter aircraft such as the AN-124,” Wald pointed out. Richard Smith, UK trading director at one of the world’s biggest brokers, Air Partner, said that business has been hit by the general weakness of the world’s economies, but that he is continuing to handle project shipments when “the usual modes of transport do not meet shippers’ needs”. To illustrate the point, observing that demand for oil and gas-related charters


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emergencies A


Air cargo charters are so often the choice for a forwarder urgently needing to move equipment or goods in the shortest possible timeframe, but brokers can also play a vital part in the regular project logistics supply chain, discovers Mike Bryant.


continues to be relatively strong, he explained: “When critical items are needed for E&P [exploration and production] and delivery is unachievable by conventional scheduled air freight or surface transport, we have been called in to find bespoke solutions that allow delivery of shipments to meet production deadlines.” In particular, of late: “We have handled shipments to Iraq, West Africa and South America,” Smith informed.


Problem solvers


This is the crux of the broker’s role, in the project logistics and other freight segments, he said. “Our role is one of “problem- solver” in the project supply chain. Charters are usually organised in response to unexpected delays or operational issues which have a significant impact on the delivery timeframe of a project. “Such solutions are important to the success of major projects but we would not expect charters to be an integral part of the supply chain in most cases,” Smith


considered. Nevertheless, he also noted: “In some circumstances, charters may be more integral to a project, where access to surface transport is very restricted or where deadlines are extremely tight. Our role then is to provide cost-effective options to the project logistics industry.”


US brokers face a similar environment, handling many charters booked at short notice in cases of emergency lift being required, but also some pre-booked work that forms an important part of a planned project logistics supply chain. Harry Steiner, managing director of Florida based The Charter Store, explained: “We are handling many charter requests for oversized cargo requiring AN-124 and B747 freighter capacity; many of them are longer term projects and pricing was needed for budgeting.”


But, in the main: “We are more like fire-fighters – when the supply chain fails for one or another reason, we come in and rescue production lines with expedited air freight charters.” For example: “We often support oil and gas or mining projects with supplemental lift for smaller spare parts that are urgently needed to keep production running.”


Our role is one of ‘problem-solver’ in the project supply chain. – Richard Smith, Air Partner


Another broker enjoying a strong presence in the project logistics segment is globally active Air Charter Service (ACS). Group cargo director Justin Lancaster estimated that as much as 15 or 20 percent of the freight-related business at ACS comes from project charters; it may not account for a large proportion of the flights that the broker arranges – involving mostly one-off charters of large freighters – but it is a crucial revenue-earner. ACS is most frequently approached during the final phases of a project, he explained, when one or more important items of equipment have not been delivered as expected, or perhaps were damaged during sea transit. The need for such equipment may also not have been predicted, or may have been under-estimated. Whatever the reason, nearing the end of a project and when damaging penalty clauses


July/August 2013 Supplement www.heavyliftpfi.com


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