The Panalpina magazine 1 | 2003

Gargantuan logistics projects on Sakhalin Island

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Publishing details: Editor, owner and publisher: Panalpina World Transport (Holding) Ltd., Via-duktstrasse 42, P.O.Box, CH-4002 Basel, Switzerland. Internet: www.panalpina.com. Tel. ++41-61-2261111. Responsible for contents: Martin Spohn and Christoph Rytz. Editor: Martin Spohn. E-mail: martin.spohn@panalpina.com. Distribution: Monika Dups: E-mail: monika.dups@panalpina.com. Publication intervals/languages: ‘connect’ is published several times a year in German, English, French, Spanish and Chinese in over 100 countries. Total circulation: 60 000 copies. Photos: Peter Maurer, Weisslingen: p.19 top left, p.25, p.26 top, p.27 bottom, p.29 bottom left, p.32; Julian Salinas, Basel: p.3 (Bruno Sidler), p.4; Rolf D. Sulser, Basel: p.19 top right and bottom; Envirotainer: p.28 bottom. Getty Images: title page p.16 and p.28. Edson Reis/USI-Usina de Imagem, Brazil: p.15. Design: BBF Basel and Zurich. Printed by: bdv, Basel. Printed on 100% chlorine-free bleached paper.

interview Profitable growth – Roland Wider talks about his new area of responsibility and his goals

oil & gas Oil logistics on Sakhalin – Panalpina Oil & Gas handles huge logistics project in Russian Far East

oil & gas By barge to Kazakhstan – Knocked-down drilling rig moved

projects Giant US diesels cross the Atlantic

airfreight Highlights of ACF 2002

projects Mind the gap! – Metro trains flown to China

human resources Bringing the strategy to life – CEO Bruno Sidler addresses all staff in video

worldwide

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Pioneering spirit and dedication

Ladies and gentlemen The cover story of this edition of connect is about the exciting develop-ments on the island of Sakhalin, way out in the far eastern corner of the Russian Federation, where Moscow is 6 time zones away and where the proximity of the potent energy markets of Northern Asia bear the promise of a bright future. Panalpina has a history and an impressive track record within the oil patch, so it is no surprise that we were investing in presence and infra-structure on the island as far back as 1997. The early days were prone to long winded processes, and lots of patience and stamina was needed to ride out the dramatic changes from a Soviet style bureaucracy to a market oriented energy development policy. Today we are proud to be the leading logistics provider to Sakhalin and our international clients are able to profit from our profound local know-how. This is further compounded by solid partnerships with local subcontrac-tors plus excellent relations with the local government and the customs authorities. Long-term thinking and stamina are a must if you want to be a seri-ous player in a vertically integrated industry such as oil & gas. This is not only valid for this particular key industry, but is the very essence of Panalpina’s approach to its core business.This is further illustrated by the interest and involvement of our top management in the business of our customers, and it is therefore no surprise that our Chairman Gerard W. Fischer accompanied me on a trip to Eastern Siberia and Sakhalin Island in September last year. Our Chairman, who is celebrating his 70th birthday in March, has been instrumental in building up the oil & gas competence within our group, and has been very supportive of the company’s drive to establish its network in the emerging production areas of the Russian Federation and Central Asia. Gerard W. Fischer has been a pioneer in many respects and his achievements are many. The spirit exhibited by our staff on the island coincide with many of his own values, which are embedded in our corporate culture. We need to remember where we come from and we need to concentrate on what we know best, but most of all we need to have people who are prepared to go to places like Sakhalin. Mr. Chairman, we are proud of you and we salute you on your birthday!Yours sincerely,Bruno Sidler

Bruno SidlerPresident of the Executive Board and CEO

Gerard W. Fischer celebrated his 70th birthday in March

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Mr. Wider, you have been Chief Financial Officer of Panalpina since the beginning of September. What particularly attracted you to the job?First it was naturally the job itself: taking responsibility as CFO for the financial area and actively helping to shape the future of a very successful group. Having spent ten years abroad myself (in Taiwan, Thailand and Hong Kong), I find the international environment especially important. Also I think the freight-forwarding sector is ex-tremely interesting and exciting. What par-ticularly appeals to me about Panalpina is its flat hierarchies and its open, uncomplicated management. I was also impressed by the atmosphere at Panalpina, which despite its size is just like one big happy family. With its personal experience of the logistics business, management knows exactly what the people at the sharp end are doing. This practice-oriented management approach is exactly my style. It’s a problem for me when executive territory is teeming with consul-tants closeted with top management and thinking up all sorts of academic theories. Panalpina puts service to the customer first, at every hierarchical level.

So your first impressions are positive?Absolutely, my expectations have been more than fulfilled: I’m certain I made the right decision. The working atmosphere is very pleasant, and the ambience is open and congenial. I may not have been here long, but already I can clearly sense this ‘Pa-nalpina spirit’. Even at group-management level, discussion is frank and open, and you sense the readiness of all concerned to work together to achieve the common aim. This is

Growth must be profitable!Roland Wider on his new job and his objectives as Panalpina’s CFO

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Growth must be profitable!

not something that can be taken for granted, and even as a newcomer to the field I find my colleagues receptive to my ideas and inputs.

What’s on your list of priorities? First and foremost, we need to use the advantages arising from our regionalized management structure, not least in financial respects, and work in greater proximity to the local market. This is not yet being done as much as it should be. As part of this we must carefully nurture and encourage our local staff. We have a highly motivated, technically competent team, and we must capitalize on them by every means at our disposal – for example by offering interested, talented staff more opportunities to improve their qualifications and by involving them in decision-making processes.

Another priority is to steadily improve data quality and increase trans-parency. Among other things, that means standardizing and simplifying the reporting system.

Apart from that, in future we shall at-tach even more importance to risk manage-ment than we did in the past. The specific measures I have in mind include hedging currency risks, and credit control in the con-text of accounts-receivable management.

Which do you prefer, organic growth or growth by acquisition? Obviously it depends on the situation. Growth is very important, but whether it takes place organically or by acquisition must always hinge on the circumstances, risks and opportunities of each case. What matters most of all is that growth must be profitable, and at all levels. Growth for the sake of growth is not an option.

Corporate governance is on everybody’s lips. How do you approach the subject?You’re right, a great deal is being said and written about corporate governance at the moment – particularly because of certain du-bious business practices that really do give us all cause for thought. But basically the subject is by no means new. It’s just a matter of companies and their management teams concentrating on fundamental values, values that must be upheld as a matter of course. One example is fulfilling the responsibility that has always existed – and still exists today – vis-à-vis our employees, customers, partners, financial backers and the public. Fundamental values like honesty, openness and transparency haven’t changed, but they have to be lived – for example by presenting facts as they really are.

What qualities do you consider to be Panalpina’s particular strengths? Panalpina pursues a clearly defined strategy, concentrating on its core business. This is an enormous strength. We do not try to grow at any price, expanding into areas that we do not adequately understand. We can also react very rapidly and flexibly to market changes, because of our flat hierarchies and because we are asset-lean – which means we have very little capital tied up. On top of that we are almost 50% self-financing, a very sound position, and are well-prepared for a difficult economic environment. But most important of all – and this struck me very quickly – are our highly motivated, techni-cally competent employees. I am convinced that employee satisfaction leads to customer satisfaction. And the reverse is also true: without employee satisfaction, customer satisfaction is impossible to achieve!

What is it about your profession that excites you?Everything, actually! I’ve always worked in finance, a field that I find fascinating. But it’s not enough to concentrate entirely on the fi-nancial sector within a company. I also need to understand the operating business – that‘s essential for a good financial expert. Putting this principle into practice is not easy, but it’s very satisfying. Suffice it to mention the contact it gives me with very many people. Panalpina is a highly international concern: we are active not only in many countries but in many different cultures. This makes the work uncommonly varied. And another thing: at Panalpina suggestions for improve-ment are seen not as criticism but as a challenge, and accordingly they are treated constructively. I find that both appealing and motivating!

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Oil logistics on Sakhalin

When the Russian playwright Anton Pav-lovich Chekhov visited Sakhalin in 1890, it was for a seven-month survey of the penal colony the Tsarist rulers had created in the Russian Far East. Then home to more than 10 000 convicts and exiles, it was the source and inspiration for the 300 pages of Chekhov’s ‘Sakhalin Island’ his personal view of one of the harshest outposts of the Russian empire.

Eight years after the founding of Vladimirovka (the present day Yuzhno-Sakhalinsk) in 1882, Chekhov wrote to his publisher friend Aleksei Suvorin. …‘you write that no one needs Sakhalin and no one cares about it… I’m sorry I’m not more sentimental, else I would say it is to places as Sakhalin that we should go to worship’. He later described the island as ‘the most depressing place in our land I have been.’ So why more than 100 years later is Panalpina investing time and considerable resources in Sakhalin islands? Why is ASB-Air making daily charters from Luxembourg and eight-hour flights from

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Vast oil reserves: Oil exploration on Sakhalin Island in the Russian Far East presented Panalpina Oil & Gas with a logistics challenge on a gargantuan scale. by Mike Godfrey*

Moscow? The answers lie under the waters of Sakhalin as well as in the warm coastal waters of West Africa.

The giants of the oil worldOil and gas were there when Chek-

hov left Sakhalin and long before he mused that no one needed the place. It has taken the giants of the oil world ExxonMobil, Royal Dutch/Shell and a consortium of Russian in-terests to dispel that view. Sakhalin is now one of the world’s richest oilfields and for the next few decades will need all the help it can get. There are more than 420 000 people liv-ing on the island, the majority based in the capital Yuzhno-Sakhalinsk, but the island is also home to a colony of Europeans, Ameri-cans and Japanese who make the oil and gas industry live.

Erik Hutter, Senior VP in charge of the company’s global oil and gas services, and his team of industry specialists pointed out early in 2002 that Exxon were looking for reliable services that would make life easier

oil & gas

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and more productive for the oil industry in the Russian Far East. ‘When we spoke with them, they really wanted a complete logistics chain, an ongoing process that will service their operations in this remote region. With our background in the oil and gas stretching back more than 40 years in Houston and Africa, we knew we could offer them what they wanted.’

West African coastal services

Panalpina’s oil and gas experience stretches back to the 1970s when West Af-rica – in particular Nigeria – was an oil region served mainly by small boats and chartered aircraft from ASB-Air out of Luxembourg. Expansion of the business came through bunker deliveries to the offshore oilrigs at

the end of the 1980s and the growth in inter-coastal delivery services using a converted speedboat for delivering up to 50 tonnes in one run.

The expansion of the company’s sea services in the region meant a grow-ing reputation and an expansion into the Middle East: Dubai, Saudi Arabia and Bah-rain followed in the early 1990s. This was the stepping-stone to the Russian oilfields. As Panalpina’s reputation grew worldwide, it was also experiencing a growing awareness of its capabilities by those involved in the oil industry in Houston. It was here that the idea of a partnership and joint projects with Crowley Marine Services was formalized. Worldwide means more than geographical location though, as the ability to service and support is enhanced by an understand-

ing of the oil and gas industry. The proof of this is highlighted by the knowledge of Panalpina staff worldwide. Put in your own people, says Erik Hutter, but make sure they work with the locals. On Sakhalin, this has become part of the overall strategy and is already paying dividends.

Exemplary cooperationAlthough the first oil from Sakhalin

is not expected to flow before 2005, the oil companies and Panalpina have been on the island for a number of years. The Sakhalin consortium that is drilling for oil was formed in 1995 by a raft of foreign companies from Japan, the USA, India, the Netherlands and the UK. Russian interest in the consortium and oilfields is of paramount importance both to the local populace and the power-

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brokers in Moscow. It has been a real case of cooperation and mutual support as the oil giants have formed alliances and partner-ships with local companies and enjoyed the support of the Russian President Vladimir Putin. His insistence that foreign oil invest-ment be increased, has led to an increased demand for local knowledge, contractors and logistics. Yet the real power needed and the real support has had to be brought in by air and sea. It is here that Panalpina has taken the lead and established itself as the leading logistics player for the oil and gas industry in the region.

Logistics solutions spring into action

The establishment of Panalpina Sakhalin Projects was the response to the

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Alla Polischuk,Branch Manager Yuzhno-Sakhalinsk, and Peter Manger, Director Russian Far East

Panalpina CEO Bruno Sidler in Yuzhno-Sachalinsk with Roman Kristhal, President Atran Cargo Airlines (second from right), the airfreight partner of Panalpina in Russia.

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Russian request for at least 70% project content and 80% manpower content and it is this operation that is designated to handle the logistical services onto Sakhalin. When ExxonMobil confirmed the potential of the oil and gas reserves in late 2001, it was the signal for the support services to begin operations on a grand scale. For Pan-alpina this was not really news. Erik Hutter and his team have been involved with this project since 1997 thanks to the company’s increasing importance in the Houston oil industry. But it is at the coalface that the true face of Panalpina is most visible, with General Director Tom Moeller and Russian Far East Director, Peter Manger, based in Yuzhno-Sakhalinsk.

These are people who know the lo-cation, understand the people and can bring influence to bear to achieve the results the industry expects. In the words of Erik Hut-ter, ‘you have to know and be known in the market and you have to talk their language.’ That language on Sakhalin translates the ‘would like’ into the ‘can and will do’. Pan-alpina has shipped more than 135 000 freight tons onto the island last year, the majority of it headed for the site of the latest oil drilling operations at Chayvo Beach. The approach

from Exxon to move the world’s largest drill-ing rig to Sakhalin from Texas, came through Panalpina’s oil and gas operations center in Houston. Although the transportation of the land-based rig was handled by Panalpina Houston, the Russian part of the operation was run by Panalpina Sakhalin Projects. This was a true partnership in every aspect, with the joint venture with Crowley Marine Services a vital part of the beach landings at Chayvo.

The windswept coast of Chayvo Barrier Island

Ask Peter Manger about the place and he nods knowingly about a deserted and very windswept beach on Chayvo Barrier Is-land. The site of the current extended reach drilling project, it is a barren site on which Parker Drilling Company are now operating the world’s largest land rig. Getting the rig to Sakhalin and onto the beach was the culmi-nation of a detailed project by Panalpina and partner Crowley Marine Services from Hous-ton during the latter part of 2002. Using the MS Freya, more than 54,000 cubic meters of drilling rig, camp and rolling stock were transported in little more than 25 days to the outer fringes of the beach-landing site. The

cargo included not only the 31 000 freight tons of rig, but nearly 15 000 freight tons of drilling camp – vital for the workers when the harsh Siberian style winter descends. The biggest land rig in the world it may have been, but the power of the seas was enough to delay landing for a further two weeks.

Heavy swells postponed the original landing and it was not until mid October that the combination of 100 x 400’ barges and two 250 tonne lift cranes managed to land the en-tire cargo onto the beach. The joint venture with Crowley Marine Services is another ex-ample of the flexibility shown by Panalpina to fully support the oil industry in the Rus-sian Far East. During his visit to Sakhalin in September 2002, CEO Bruno Sidler pointed out that Panalpina has a commitment to es-tablish a long-term relationship with Sakha-lin. We have been involved in the oil industry for the past 40 years and in all the difficult places in the world! An amusing aside, but in reality a strong statement that reflects the intense planning that is still shaping the Sakhalin logistical plan.

USD 12 billion investedThe talk is mostly of 13 billion barrels

of oil lying beneath the waters of the island

The oil companies and Panalpina have been working on Sakhalin for some years.

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and how more than $12 billion will be needed to ensure that it comes out. What is less well known or spoken about are the statistics that make up the complete oil and gas explora-tion picture. Getting the essential supplies from Moscow, Tokyo, Houston and Europe to Sakhalin is not as easy as planning to do it. Distances are great, but Panalpina has the support of an ace card in its pack – the company’s own in-house carrier ASB-Air. Wolfgang Meier, Executive VP of ASB-Air, supports Erik Hutter’s view of experience backed with understanding. ‘Lots of people can move freight, lots of people can fly in and deliver. What we offer is the flexibility to tailor our services to what the oil compa-nies want. It’s this mixture that makes our support of the oil industry on Sakhalin work. The market tells us what they want – and we deliver.’

Comprehensive supply network

The 59 000 tonne Orlan offshore platform is expected to be operational sometime in 2004 and will form the next phase of Panalpina’s support operations in the region. ASB-Air is already providing air charters onto Sakhalin via Incheon, Seoul,

Vladivostok and Luxembourg, as part of a comprehensive supply network. With sup-plies coming in from the USA and Europe, the infrastructure will grow and – in line with predictions – the scope and demand for support services will increase accord-ingly. For the company, Sakhalin will grow and the oil and gas industry will expand in line with Putin’s hopes and Panalpina’s expectations.

Bruno Sidler’s observation in Yuz-hno-Sakhalinsk that it had taken a long time to develop the structure in the Russian Far East, was a statement of commitment from Panalpina. ‘Those of you who have been on Sakhalin for a long time will know that we are not new to this industry. For the past 40 years we have worked in all the difficult places in the world you work in. Our presence here to support you is a statement of faith about your business and the prospects for the region.’ It’s not Chekhov, but very much spot on.»

Over 54 000 cubic meters of freight were transported to Sakhalin by ship.

oil & gas

*Mike Godfrey is a freelance journalist and lives in London.

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By barge to Kazakhstan

On behalf of Pride International, one of its key accounts, Panalpina Oil&Gas has moved a drilling rig originating in Houston, Texas, from the Black Sea port of Mariupol to Kazakhstan. The final destination was an artificial island in the Caspian Sea off the Kazakh coast.

On arrival of the ocean-going vessel at the Ukrainian port of Mariupol, Panalpina took over the 9000-cubic meter, 2000-tonne consignment and organized transshipment onto three barges. These took the rig through the Don-Volga canal, passing from Ukraine to Russia and finally to Aktau in Kazakhstan. Following customs clearance at Aktau, the equipment was transferred to the manmade island. The rig, which had been dismantled prior to shipment, then had to be reassem-bled according to detailed plans.

Transshipment in Mariupol: Panalpina organized the transfer of a knocked-down oil drilling rig to a manmade island in the Caspian Sea. In recent years, the Group has steadily expanded its presence in the CIS countries and Central Asia.

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Spot-on timingPrecise timing was of the essence, as

the various legs of the journey had to follow a strict schedule. Early or late delivery would have interfered with construction work and incurred high costs. Panalpina made sure that the barges arrived in Mariupol dur-ing the appointed time windows and were loaded with the freight held in interim storage on the quays in 24-hour shifts. No sooner had the first barge left on its canal journey than the second one arrived in Mariupol and the same procedure was repeated for the third shipment. In addition to the port cranes, floating cranes brought alongside the vessels were used for transshipment of the bulky rig components weighing up to 50 tonnes each. It was important to ensure that the freight was firmly lashed to the decks, and customer representatives were present to supervise the operation.

In addition to the structures loaded onto barges in Mariupol, further goods (mostly containerized) were delivered by a

Don-Volga vessel. Moreover, mobile equip-ment such as trucks, cranes and building ma-chinery arrived in Aktau by rail. The freight then proceeded to the manmade island on roll-on/roll-off vessels.

Know-how and networkingPerforming services for the global

oil and gas industry is one of Panalpina‘s core competencies, so it has considerable experience and know-how in this field. The Panalpina Oil&Gas business, which employs some 800 people, operates globally and has carried out assignments in a large number of countries, including Saudi Arabia, the United Arab Emirates, China, Indonesia, Thailand, Vietnam, Nigeria, Angola, Gabon, Congo, Al-geria, Morocco, the UK, Norway, Venezuela, Columbia, Brazil and the USA. Over the last ten years, Panalpina has steadily expanded its presence in the CIS countries and Central Asia. According to Yuri Kichigin, project manager at Panalpina St. Petersburg, ‘Pan-alpina has proactively developed the neces-sary infrastructure for these operations, and employs an international team of specialists with in-depth knowledge of the oil and gas industry. That’s essential for the smooth handling of a consignment like the one for Kazakhstan.’ He stresses that ‘anyone who wants to operate successfully in the oil and gas industry must not only be familiar with the business, but must know the companies involved and how everything fits together and has to be flexible and quick off the mark.’

As Kichigin recalls, ‘Panalpina has been operating in this segment since the 1950s, and can draw on a huge fund of know-how accumulated while building up the CIS and Central Asian bases. You can’t acquire that sort of expertise overnight.’ This local knowledge is also essential when selecting the right partners at all the various interfaces and at the reassembly sites – a task that has to be addressed long before the freight is ac-tually shipped. According to Yuri Kichigin, Panalpina experts inspected all the sites in person and chose the company’s partners themselves by adopting a best-in-class ap-proach. ‘Every rig move is unique and thus calls for customized solutions’, says Kichigin. ‘Depending on the conditions prevailing, we decide on a case-to-case basis whether to set up a local office on site or whether a mobile team is sufficient for supervising operations in close cooperation with local staff.’

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‘You have to be familiar with the business, the companies involved and how everything fits together’. Yuri A Kichigin, project manager

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Big U.S. diesels make tracks

GE Transportation Systems, which is head-quartered at Erie on the southern shores of the eponymous Great Lake – has regularly requested the Panalpina subsidiary ASB-PanProjects to ship heavy diesel locomotives and other equipment from the United States to destinations around the world. The most recent major assignment involved delivering 77 locomotives for a privatized rail operator in the Baltic states. To handle this prestigious project, Panalpina chartered space on a total of six vessels over a six-month period, each of them providing capacity for between ten and 14 locomotives.

A heavy load: GE Transportation Systems (GETS) in Erie, Pennsylvania, is a major client of the Panalpina subsidiary ASB-PanProjects, which specializes in project assignments.

Stowed below deckThe locomotives had previously

been in service with various railroad compa-nies in North America. The type C30-7 and C30-7A locomotives underwent a complete overhaul in an assembly shop in Mexico to prepare them for service in Estonia. Mounted on temporary bogies, they were then trans-ferred overland to the port of Beaumont in Texas.

On arrival at Beaumont, the locomo-tives were prepared for their voyage across the Atlantic and through the Baltic to Tallinn. Among other things, this involved disman-

ASB-PanProjects has been transporting global shipments on behalf of GETS for years

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On arrival in Tallinn, the locomotives were immediately handed over to their new owners

tling and sealing the brakepipes. In addition, the 125-tonne engines were treated with a rust-protection spray to protect them from the corrosive action of the sea air. Moreover, all the locomotive were stowed below deck. Panalpina had special ‘transport pyramids’ developed to facilitate shipment of the lo-comotives and their bogies. These pyramids allowed two 27-tonne bogies to be stowed on top of each other in the ship’s hold.

Straight to Eesti RaudteeThe journey across the Atlantic and

through the Baltic to Tallinn took about three

weeks. The first task on arrival was to lift the bogies straight onto the dockside rail tracks. Then, the ship’s heavy-lift cranes were used to lift the locomotive chassis out of the hold and onto the waiting bogies. Coupled togeth-er into convoys of 4-6 locomotives, the con-signments made their way to the assembly shops of the Estonian railway company Eesti Raudtee (EVR), which brought them into service some two weeks later after recom-missioning, final assembly and testing.

Panalpina’s project specialists at ASB-PanProjects organized all the freight movements, from the assembly shop in Mex-

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ico through to delivery at the port of Tallinn. Among many other activities, this included customs clearance and the chartering of the vessels. During the preparatory phase, staff at ASB-PanProjects prepared detailed surveys for evaluating the best route and suitable transhipment ports for the Mexico-Estonia trip.

Previous destinations: Brazil and Australia

The Estonia-bound consignments were not the first project of this type. The ASB-PanProjects branch at Morristown (NJ), not far from New York, has been handling project commissions from GE Transportation Systems (GETS) to destinations around the globe for some years. In addition to loco-motives, spare parts are continually being shipped around the world.

For example, Panalpina has moved components for about 50 locomotives to the Adtranz/GE works in Kassel, Germany, where they were assembled and delivered

10-14 diesels were stowed below deck on each vessel.

direct to customers. It has also transported heavy Dash 9-44CW locomotives (each of which generates some 4400 hp) for use in Australian mines. At the Hamersley Iron project in Western Australia, these locomo-tives are used to haul iron ore along a 638-km line linking several of the company’s mines with the port of Dampier. The iron-ore trains weigh a total of 24 000 tonnes and are about 2.3 km in length.

The Matto Grosso region of Brazil is another destination for Panalpina’s loco-motive shipments: in 1997-98 it moved 50 locomotives from Philadelphia to Santos and then onwards overland for delivery to the Ferronorte Railroad Company. These Dash 9-44CW locomotives, also originating from the GE factory in Erie, arrived punctually at the assembly shops in Brazil. Other projects have been handled for companies in Canada and Kazakhstan, as well as for the mining company CVRD in Brazil.

projects

Panalpina used a total of six ships to transport the 77 locomotives to Estonia.

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Highlights of ACF 2002

When will business in the airfreight sector pick up? The International Air Cargo As-sociation (TIACA), organizer of ACF 2002, looked to the global experts gathered in Hong Kong for an answer. Asked about prospects for a rise in freight volumes over the next 12 months, 55% of the conference participants declared themselves optimistic, 10% even very optimistic. 28% were undecided, while the remaining 8% wanted to know what was meant by ‘growth’.

These reactions are likely to be representative as, according to TIACA, 70% of the 4000-plus ACF participants flew in to Hong Kong from Europe or the USA. The mood among the different contingents varied substantially. While, one year on, the Ameri-cans remained transfixed by the events of September 11, 2001, the Europeans were more concerned about the new regulations Washington might impose on global trade in the aftermath of 9/11. Having weathered their domestic crisis, the Asians pragmatically focused on current business in their boom-ing home markets. That Asian confidence inspired the whole Air Cargo Forum in Hong Kong is the good news.

Cyclical businessThe bad news is that the crisis per-

sists. 28% of the forum participants expected an upswing after one year, 41% after two, 19% in the fourth year at the latest, 7% in the fifth and 5% later still.

Three issues topped the agenda at the 21st International Air Cargo Forum (ACF 2002) in Hong Kong: the crisis in the airfreight sector, security in the sector, and freight exchanges. This article looks at the highlights of the forum discussions.

by Rolf D. Sulser*

Attention was drawn to the inher-ently cyclical trends in the airfreight sector – and faltering trade even before September 11, 2001 – by Ting Ho (Logistics Ventures) and Douglas Harned (McKinsey & Co.), who pointed to the cargo volumes between Janu-ary and August 2001. According to Harned, the cycles in the airfreight business are slowing down and the loss periods becom-ing longer: a single loss year in 1970 was followed by two during the 1974/5 oil crisis, four in the 1980s and five in the 1990s. In his view, these downturns were home-grown, triggered by overcapacities among airlines and a consequent slump in revenue. At pres-ent, there are 9.5% too many cargo planes, compared to 5.7% in 1992 and a mere 3.8% in 1990.

What might spark the recovery? The speakers at ACF 2002 all agreed that their sector could hardly kick-start the global economy on its own. One priority, however, was the elimination of obstacles to an up-turn. Ned Laird (Cargo Facts) called for an end to airfreight’s dependence on bilateral passenger-sector air traffic agreements. Da-vid Cunningham (FedEx) went further still, demanding open skies for all instead of some 3000 bilateral aviation pacts worldwide. As quality largely stems from ground-based activities, he demanded round-the-clock operation of airports, streamlined customs formalities, well-trained staff and an accept-able system of charges and levies.

Airfreight as a security risk?According to a further poll con-

ducted at the ACF 2002, the security issue ranks a mere third (with 14% of the vote) among the problems facing the sector, be-hind revenue (31%) and regulations (25%). 43% of participants wanted to pass on ad-ditional security costs to the shippers, 42% to the governments. Sudheer Raghavan (SIA) spoke out in favor of the latter: ‘Politicians create terrorists, so they should pay the re-sulting cost.’

Stephen Tisdalle (PWC Consulting) rocked the assembly with his contention that ‘airfreight is the weakest link in a passenger aircraft’s security chain!’ This allegation was leveled chiefly at the USA, where ‘frequently, to pass as a known shipper, you only have to dispatch one package every few weeks’. Tisdalle demanded implementation of the standard European ‘known shipper’ system with its central database and selective x-ray-ing of consignments.

He rejected the wholesale x-ray-ing of air cargo as this would cost USD 7.4 bn in the USA and cause three-quarters of consignments to miss their scheduled flight. Tisdalle noted that a general ban on freight shipments by passenger plane would cost airlines 25% of their turnover and spell doom for many. This point was underlined by Michael Wisbrun (KLM), who predicted that a ban on belly-freight would result in the scratching of 80% of all destinations and

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90% of services, while sounding the death-knell for many – even healthy – airlines. Supply-chain concepts would no longer be feasible; forwarding costs for shippers would skyrocket. The sole beneficiaries would be freight-only carriers and integrators.

Ian Gilchrist (Hill & Associates), on the other hand, addressed practical security issues. ‘Security personnel at airports are the poor relation of the entire sector: badly paid, inefficient, inadequately managed and hardly trained,’ was his devastating verdict. ‘The warnings issued by security officers are unspecific and belated, and aren’t passed on.’

John Mascaritolo (NCR) described the impact of 9/11 as follows: ‘Within min-utes of the attacks on the Twin Towers, public attention was focused on logistics. All of a sudden, globally operating shippers found themselves embroiled in the war on terror.’ He warned forwarders against indis-criminately passing on additional charges: ‘Shippers have a right to know why and by whom these are levied.’

More money only for more value

Additional costs and their often du-bious justification – this was one key issue addressed by Robert Frei (Panalpina). His criticisms centered on IATA Resolution 502, with which the airlines propose to change the conversion factor for volumetric charges

from 6000 cm3/kg to 5000 cm3/kg. Frei ac-cused them of trying to ‘improve their own results without creating any added value’. As he saw it, however, market forces would solve the problem. Frei was particularly ag-grieved at their – initially unsuccessful – at-tempt to enforce the resolution unilaterally as of October 1, 2002. Sudheer Raghavan (SIA Cargo) concurred on this point, calling for a ‘wider discussion of such fundamental changes’.

Frei similarly warned the airlines against attempting to impose ‘higher-rev-enue’, i.e. more expensive bids on their clients for existing freight volumes. They risked losing tonnage to those carriers seeking, ‘at fair market prices’, to maximize load factors on their new widebodies. ‘The core business of any airline is shipment from airport to airport,’ Frei stressed. ‘That’s all we expect.’

These arguments were reinforced by C.K. Lee (Exel), who bemoaned the declining status of traditional airfreight: ‘Terms such as ‘offload’ and ‘standby’ are gaining increasing currency in connection with general cargo. Airlines honor the letter, but not the spirit of freight agreements.’

Frei also championed the GF-X freight portal: ‘For years, our sector has searched for a transparent solution to iden-tify the shipping capacities available at a given price. With GF-X we have – at last – created such a tool. I am amazed it’s not

‘With Resolution 502, the airlines are trying to improve their own results without creating any added value’: Robert Frei at ACF 2002.

found more support. Were we to jeopardize the successful development of this first plat-form, a second will be doomed from the start! There is no alternative in sight – neither now nor in the next few years.’ Frei added that fresh measures were in the pipeline to at-tract Asian carriers to GF-X, thus providing global coverage.

airfreight

*Rolf D. Sulser is a freelance aviation journalist based in Basel, Switzerland (rolf.sulser@aviatica.ch)

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Mind the gap!

Panalpina’s projects division ASB-PanProjects of Hamburg achieved a ‘world first’ last November and December when, in cooperation with ASB-Air and Antonov Airlines, it had a complete 6-car metro train airfreighted from Parchim in Germany to the southern Chinese city of Guangzhou within 11 days. The aircraft was able to transport two cars at a time, so three flights were required altogether.

Never before has such a shipment been orga-nized. The required degree of precision was staggering: there were only centimeters to spare between the car-riages and the aircraft’s sides, while the carriage roofs cleared the top of the cargo bay by precisely two cen-timeters! Six hours were needed to load the freighter with each pair of cars, which were produced at the Bombardier factory in Hennigsdorf. But before loading could even begin, a team from ASB-PanProjects and ASB-Air, working in close cooperation with Antonov Airlines and Bombardier Transportation, developed a

100%-secure transshipment and forwarding plan cov-ering the entire transport chain from the Hennigsdorf works through to delivery to the Guangzhou transport administration.

At the end of November, the Metro cars were lifted onto purpose-built low-loading auxiliary bogies at the Bombardier factory. Meanwhile, experts at the air-port were assembling special ramps so that the outsize loads could be rolled from the tarmac straight into the Antonov. ASB-PanProjects had ordered the construc-tion of these 23.5 meter long ramps especially for this as-signment. After the cars had made their way overnight from Hennigsdorf to the airfield at Parchim, a journey of some 120 km, the moment of truth arrived: with the help of two mobile cranes, they were edged, centimeter by centimeter, onto the ramps and then hauled into the Antonov on special guide-rails by the aircraft‘s own winch. The bogies, guide-rails and ramps all made the trip to China along with the cars themselves.

Metro trains flown to China: To ensure that the rolling stock for the Guangzhou Metro’s Line No. 2 would reach the city in time for the line’s opening, Panalpina had some of the Metro cars flown from Germany to China.

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VIP receptionOn arrival at Guangzhou’s Bayun International

Airport, the aircraft was met by a high-ranking delega-tion led by Mayor Lin Shusen: neither he nor the of-ficials accompanying him were deterred by the heavy rain from ‘meeting and greeting’ this first delivery of the new Metro trains.

Backed up by 22 technicians and engineers from Antonov Airlines and the local handling company West True Dragon Transportation, the project experts from Panalpina organized unloading on the German-built ramps and transfer onto the waiting 32-metre hydraulic suspension low-loaders. Although it was only another 30 km or so to the final destination, numerous pinch-points and low bridges had to be negotiated. Needless to say, all had already been inspected by Panalpina’s experts. After a journey under police escort lasting some 7 hours, the convoy finally reached the transport administration‘s depot in Guangzhou. Though no-one could have doubted

Loading the coaches with only millimeters to spare.

projects

that the operation would be a success, everyone must have breathed a sigh of relief. ‘We’re very proud to have conducted this complex task to the full satisfaction not only of Bombardier but also of the Guangzhou transport authority’, said an overjoyed Nick Winderlich, Senior Vice President of ASB-PanProjects China.

Major order from BombardierThe six Metro cars delivered to China by An-

tonov AN 124-100 were the first tranche of a major order received from the Canadian manufacturer Bombardier. The entire project involves the shipment of some 20 000 freight tons between 2002 and 2004, comprising a total of 26 Metro trains plus a large volume of welding and assembly equipment. Of the 26 trains, only the first two were assembled in Germany: the remaining 24 are be-ing delivered in knocked-down form for assembly in the Chinese town of Changchun. Some of the assemblies and components originate in Europe.

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The project had been put out for tender by the joint venture Changchun Bombardier Railway Vehicles Company (CBRC). The project plan presented by Panalpina (or, more precisely, ASB-PanProjects) im-pressed the customer, who then entrusted Panalpina with all transportation logistics from the Hennigsdorf factory through to delivery to the end-user. Among other things, this assignment includes coordination of delivery dates, at-works loading, all transportation and packaging tasks, and the shipment of various compo-nents from a variety of European countries (including Italy, the UK and Sweden). ‘Panalpina‘s range of tasks is supplemented by the transportation of raw materials from China to Germany, including aluminum profiles for the construction of the coach bodies’, explains Mi-chael Brose of ASB-PanProjects Hamburg. ‘The Chinese joint-venture regulations stipulate that certain materi-als have to be produced in China’, he continues.

The first deliveries, which took place in August 2002, consisted of flat packs containing ready-sprayed elements such as the coach roofs, side panels and floors. To prepare these delicate goods for their journey, ASB-PanProjects worked together with Repack, a firm that has developed a special packaging system that avoids multiple handling and thus lessens the risk of damage during transshipment. The first consignments then left Germany aboard the ‘Altair’, a freight vessel operated by the German shipping line Rickmers-Linie.

ASB-Air and ASB-PanProjects drew up a detailed consignment plan together with Antonov Airlines and Bombardier Transportation.

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projects

Panalpina ChinaLanding and successfully handling this order would have been unthinkable without the help of the skilled and experienced Panalpina organization in China. Founded in Hong Kong in 1976, Panalpina China now has over 20 offices and about 450 staff. It is headquartered in Hong Kong, and is also present in Beijing, Chengdu, Dalian, Guang-zhou, Haikou, Macao, Nanjing, Ningbo, Qingdao, Shanghai, Shekou, Shenzhen, Tianjin, Xiamen and Urumqi.With its large network of offices, Panalpina China covers all strategically important locations in this huge country. It also has close ties with Sinotrans and EMS (it operates with the latter company in the express freight and parcels segment). Panalpina offers a full range of services in China, and has airfreight and seafreight hubs that are connected to its worldwide network. Hong Kong is home to the Asia Hub for seafreight groupage freight, while Macao boasts a weekly B747 charter flight to Lux-embourg. In 2001, over 166 000 airfreight consign-ments and more than 120 000 TEUs were handled. Panalpina China is also, of course, very active in the logistics segment: its customers include a large number of major companies operating in China in the high-tech, automotive and healthcare sectors. In Hong Kong, Shanghai and Beijing, moreover, it has large and modern logistics terminals. In ad-dition, it provides a wide range of services for the oil & gas industry and handles numerous project assignments. And finally, Panalpina China offers logistics solutions for a number of other sectors, including the food and textiles industries.

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Any strategy, however clearly formulated, is hardly worth the paper it is written on unless it is understood and consistently implement-ed by company staff. The proclamation of strategic objectives at seminars, assemblies and press conferences is all well and good. Yet the involvement of the employees is much more crucial, given that they are the ones ulti-mately responsible for putting strategies into practice. But how, in a 12 000-strong compa-ny, do you reach every single staff member? Panalpina CEO Bruno Sidler opted for video and CD-ROM as the media through which to address the global Panalpina family.

Prior to shooting the interview, a working group consulted with national orga-nizations and branches to pinpoint those as-pects of Panalpina’s strategic orientation re-quiring clarification. The resulting questions were then put to Bruno Sidler in the studio by Ingrid Bringas from the AMEC Regional Cen-ter and Glenn Barnes of Panalpina London. The outcome was an intensive and revealing 20-minute discussion in which the CEO per-sonally addressed the burning issues.

Local presentationsSo far, so good – but how do you best

present such an interview to staff members? Do they watch the film alone at their worksta-tion or in the privacy of their home? Definitely not! Teamwork and a collaborative approach to problem-solving are part and parcel of Panalpina’s corporate culture and one of the keys to its success. The film was screened at events held specially for this purpose, and in a format freely selected by the country or branch in question.

Bringing the strategy to life

In-house communication: Panalpina CEO Bruno Sidler seeks to enhance client benefit through a video address to Panalpina’s workforce.

Roadshow in Great Britain and Ireland

The Panalpina management in Great Britain and Ireland, for instance, put on a ten-day roadshow that included over 20 screenings at eight venues. ‘We visited all the branches in both countries and liter-ally gave every single employee a chance to see the film,’ Panalpina Managing Director Sandro Knecht explains. He was particularly gratified by the positive feedback.

‘Our staff really appreciated the first-hand information given on key is-sues such as strategy, standardization and operational excellence,’ Knecht adds. ‘We managed to hammer home why Panalpina has chosen this business model and what implications the Group’s global strategy has at a local level for individual staff members.’ He was pleased that the frank information policy had succeeded in dispelling a num-ber of fears and uncertainties. ‘At Panalpi-na, the aim of process standardization isn’t to slash jobs, but to give employees more time to attend to our clients.’

Many of the events witnessed by Sandro Knecht and Operations Director Glenn Barnes revealed a genuine enthu-siasm among employees for the logistics

business. The presentations triggered lively discussions that culminated in stimulating, in-depth question-and-answer sessions. The key planks of Panalpina’s strategy were made clear to all and were widely applauded. As Sandro Knecht underlines, ‘I’m convinced we have the full backing of our staff in taking these crucial steps to secure an even better service for our clients.’

Picnicking with the CEO!‘Bruno Sidler, Ingrid Bringas and

Glenn Barnes conducted the interview in English, and we produced French, German and Spanish versions,’ Panalpina’s Internal Communications Officer Marcello Corciulo explains. ‘But it didn‘t stop there: many local organizations, particularly in Asia, translated the interview into the official language of their country.’ The South Ko-rean version, for instance, had Korean subtitles. ‘We also handed out a transcript of the interview in Korean and English to all participants,’ adds Winnie Kang from the Public Relations Department. In Korea, viewings were not confined to the office; the film was also shown as part of a specially arranged picnic outing.

Ingrid Bringas and Glenn Barnes weren’t afraid to pose tricky questions.

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human resources

Different language versionsPanalpina Thailand likewise trans-

lated the interview into the national lan-guage, combining its presentation with a customer service training program. In India, the film was simultaneously screened at all branches, where staff members watched in small groups. Management representatives then answered employees‘ questions after the showing.

Panalpina China even went to the trouble of distributing two additional ver-sions of the film, in Mandarin and Cantonese, to each of its branches. Managing Director Stephen Yeung provided further details on the local Intranet and urged his employees not to skimp with their questions. As Win-nie Ho, Public Relations Officer in China, points out, ‘The film was an excellent way of directly communicating between Panalpina head office and the Chinese organization and was duly welcomed. For our personnel, the strategy has now ceased to be an ab-stract piece of correspondence, but some-

thing tangible with direct implications for our everyday routine.’ Lilian Tan from Panalpina Singapore was equally positive: ‘Bruno Sidler found clear and simple words to describe the objectives the company has set itself and how these are to be achieved. It was also important for our staff to learn about the strategic orientation from the CEO in person.’ As Lilian Tan sees it, ‘Our employees now know the strategy has the full backing of management and that each individual is expected to make his or her own contribution.’

Staff hard at work implementing the strategy.

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ASB-Air organized 21 additional flights with B747 freight-ers.

Ready to spring into actionUSA: The events of late September and early October 2002 testified once again to the speed, reliability and innovation of Panalpina in helping out its clients in a crisis. A labor dispute between port operators and dockworkers prompted a shut-down of the 29 US West Coast ports between San Diego and Seattle, which account for imports and exports worth some USD 300 bn a year. With over 200 ships forced to drop anchor outside the docks, suppliers were left sitting on their goods while deliveries to processing plants and retailers were suspended – all this bang on time for the start of Christmas trading!There was only one solution to the dilemma: an airlift! Backed by its sophisticated capacity management system and its top-performing Charter Division, Panalpina, in collaboration with in-house carrier ASB Air, managed to maintain supply chains between Asia and North America for a large number of its clients. In all, Panalpina arranged 21 unscheduled flights by B747 freighter along the Macao – Los Angeles, Macao – Chicago, Macao – Huntsville and Cebu – Huntsville routes.

Australia: Panalpina’s Detroit-based automotive-sector client American Axle & Manufacturing (AAM) was another company hit by the blockade. Closure of the ports left some 50 containers stranded at sea. These contained goods from Australian supplier PBR Automotive bound for the AAM plants at Detroit MI and Tonawanda NY. Working in tandem

with ASB Air, Panalpina Detroit drew up an emergency plan that involved chartering two Antonov AN 124-100 planes to airlift the goods to Hamilton Ontario with onward shipment to the plants. Panalpina Melbourne immediately liaised with the consignor to arrange collection at two different sites, interim storage, loading onto the planes and customs clearance. The Melbourne staff remained in close contact with their Detroit and Toronto counterparts throughout. The products were stowed on board according to a priority list drawn up by the consignee. Each Antonov carried a total of 233 crates weighing 104 617 kg, with 91 bound for Tonawanda and 142 for Detroit. Panalpina‘s triumphant achievement is a clear illustration of how the speed and efficiency of a forwarding operation can be maximized through the concerted efforts of all involved.

Panalpina chartered two Antonov AN 124-100s to supply its client AAM with goods from Australia.

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worldwide

VIP treatment for power boatsQatar: Panalpina has organized international transport for about 20 power boats taking part in the Formula 2000 World Championship in Qatar and Great Britain. Having starred in the successful British Power Boat Grand Prix at the Royal Victoria Docks in London, the boats – each weighing some 1500 kg – were loaded into containers and prepared for their voyage to the Middle East. Specialists from the Middle East Department at Panalpina London supervised transhipment into 40-foot containers and ensured that the consignment was safely stowed. As soon as the ‘Al Noof’, a container vessel belonging to the United Arab Shipping Company (UASC), had docked at its destination, Panalpina Qatar – which was a sponsor and official carrier for the Qatari racing teams – received the precious consignment and delivered it punctually to the race venue at Doha. After the races, Panalpina also handled the transportation of Formula 2000 racing boats back to Valencia, Göthenburg and Como.

Panalpina acquires a stake in LuxairBasel/Luxembourg: Panalpina acquired 12.1% of the share capital of the Luxembourg airline Luxair at the end of November 2002. Since January this year, Panalpina CEO Bruno Sidler has had a seat on Luxair’s Board of Directors.Panalpina is a major customer both of Luxair and of its sub-sidiary Cargolux. By acquiring a strategic interest in Luxair, the latter has consolidated its strong position in the area of freight handling – one of the Group’s core competencies. Pan-alpina regards the equity stake as a key element in its drive to optimize its Luxembourg airfreight hub and in the develop-ment of the two companies’ joint activities. Luxair (Société Luxembourgeoise de Navigation Aérienne), was founded in 1962 and now flies to some 50 European destinations. With an annual freight capacity of some 750 000 tonnes, Luxem-bourg airport is a significant platform for airfreight

Racing boats in action at the Formula 2000 World Champion-ship in Qatar. Panalpina trans-ported the boats from Europe to the Middle East.

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France: Each November, Panalpina Lyon is at the focus of worldwide airfreight activities as the famous French wine is rushed out to connoisseurs.The moment countless wine fans around the world wait for is midnight on the second Thursday of November. At the stroke of twelve, the race for the Beaujolais Nouveau begins. Last year, over 65 million bottles left the vineyards in southern Burgundy to find their way by the quickest route to lovers of this world-famous young red wine. The logistics involved in shipping hundreds of thousands of bottles

out of the Beaujolais region calls for careful planning and huge amounts of airfreight capacity. Last year’s vintage of over 2100 tonnes made the 2002 race a record one for Panalpina. In addition to using scheduled

air services, Panalpina Lyon – in conjunction with the Charter de-

The race to deliver the Beaujolais Nouveau

partment of ASB-Air – chartered nine flights purely for the transpor-tation of 890 tonnes of Beaujolais Nouveau to Japan. Three took off from the European airfreight hub in Luxembourg while another four departed from Lyon and one each from Amsterdam and Liège. In addition, Panalpina transported 50 tonnes to Korea and 1160 tonnes to the US.Working closely together with Group companies overseas, specialists at Panalpina Lyon organized and executed the ship-ments with painstaking care. The principal destinations were Tokyo, Sapporo and Osaka, all of which were reached by direct flights from Europe. Additional consignments went to Fukuoka, Okinawa and Na-goya. Panalpina Japan coordinated on-forwarding of the shipments to numerous distribution centers all over Japan. Consignments bound for New Orleans went via Huntsville (Alabama) on ASB-Air’s Dixie-Jet service. At precisely 2.30 p.m. on 17 November, the last consign-ments reached their final destina-tions – safe and sound as always.

Beaujolais Nouveau: This year, Panalpina shipped 890 tonnes of the young French wine to Japan, 50 tonnes to Korea and 1160 tonnes to the US.

Switzerland/Japan: Panalpina Switzerland recently handled a chal-lenging shipment using a new product launched by the Swedish company Envirotainer. The innovative freight container is able to maintain a constant temperature for 84 hours no matter how often the goods are trans-shipped. The cargo comprised small quantities of an exceedingly sensitive and very expensive pharmaceutical product urgently needed for a patient in Osaka. In the words of Pietro Albertalli, branch manager at Panalpina Lugano, ‘It was absolutely crucial that the medicine arrived in Japan as fast as possible and in sound condition.’ A constant temperature of 5°C was successfully maintained throughout the 6 000-mile journey between Lugano and Osaka – despite constant fluctuations in external tempera-tures and air pressures as the container was shifted between truck, rail and plane.Envirotainer developed the CLD (controlled logistics device) specifically for pharmaceutical items such as medicines, vaccines and blood samples that require shipment in small, even minute quantities at constant tem-peratures. As Bernhard Metzger, Envirotainer’s Executive Vice President for Marketing, Sales and Partnerships, explains, ‘Refrigerated airfreight consignments have always relied on passive cooling systems using insula-tion and cool packs. Envirotainer, however, recognized the need for an active system to guarantee an unbroken cooling chain between consignor and consignee. This is what we have achieved with the new CLD.’

6 000 miles at 5°C

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worldwide

Delphi Corporation, one of the world’s leading manufacturers of car components, has entrusted Panalpina with its intercontinental air and seafreight shipments, including warehouse handling and brokerage, for a further three years. The agreement covers shipments to and from North America and Europe, between North and South America and between Europe and South America. In addition, Panalpina has been awarded a number of new routes between Asia and South America. The products handled comprise automotive components transported from Delphi’s suppliers to factories and assembly shops around the world. In some cases, Panalpina also delivers direct from the Delphi factories to the end users. The total number of consignments shipped by Panalpina has risen to over 60 000 per annum. With the additional routes to Asia, Panalpina now handles shipments for Delphi Corporation between more than 300 stations in 30 countries. In addi-tion, Panalpina has been entrusted with customs clearance in the USA. At Delphi’s Automotive Logistics Center in Detroit (Michigan), Panalpina is also responsible for logistics services and quality control as well as for inventory management and for repacking goods in reusable containers.

Panalpina Germany played a supporting role in an expedition to the geographical North Pole organized by Dr. Victor Boyarsky, the celebrated polar explorer and Director of the Russian State Museum of Arctic and Antarctic in St Petersburg. The ten team members came from Japan, China, Sweden, Australia, USA, Switzerland, Austria, Germany and Rus-sia. A journey to the North Pole is an arduous undertaking that requires a great deal of patience as well as a thirst for adventure. From St Peters-burg the group took a scheduled flight to Moscow where they joined a chartered Antonov cargo plane for the onward flight over the Urals, via Norilsk, to the Russian mining town of Khatanga. Here, the team boarded another freighter (this time with unpressurized cabin and no heating) for the next leg via Sredni Island to Borneo, a temporary Russian ice station. The group was then taken by helicopter to the actual starting point on the 88th parallel. Temperatures during the 240 km trek (as the crow flies) periodically dipped below the -50°C mark. Classed as an arid desert, the North Pole experiences a similar amount of precipitation as a subtropical desert. The icecap chiefly comprises frozen seawater and windblown par-ticles of snow and ice. At this time of the year, the North Pole has daylight round the clock, with the sun circling the pole at an angle of 30° to the horizon. The polar region is not terra firma, but a layer of ice (2.5 meters thick on average) permanently subject to drift. Owing to this movement, the distance covered in the daytime was on one occasion lost during the ‘night’. Due to the extreme temperatures, some expedition members suf-

Vietnam/Thailand: Panalpina Vietnam was presented with the ‘Golden Award 2002’ by its airfreight partner Lufthansa Cargo. By awarding this prize, the carrier has expressed its appreciation of its close cooperation with Panalpina Vietnam and of its partner’s reliability in confirming bookings and using the freight capacity it reserves. This attests to Panalpina Vietnam’s ability to plan ahead efficiently and make capacity available to its customers at all times. Panalpina is now Lufthansa’s best customer in Vietnam in terms of both tonnage and sales.

Panalpina Thailand bags 2002 Splendor Award and Touchstone AwardPanalpina Thailand was doubly honored by Lufthansa Cargo, scooping both the 2002 Splendor Award for exceptional services and the 2002 Touchstone Award for outstanding quality. Regional CEO Lars-Ola Gunnarsson viewed the two prizes as a tribute to Panalpina Thailand’s endeavors in providing its clients with best-in-class services and products.

Panalpina backs polar expedition

fered frostbite on hands, fingers and in the face. Nonetheless, there was just cause for celebration when the destination was finally reached. Much to everyone’s joy, the temperature on this day was a ‘mild’ -30°C with practically no wind and a clear azure sky overhead.

Lufthansa Awards go to Panalpina Vietnam and Thailand

Panalpina extends coopera-tion with Delphi

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Key Accounts: The customer’s individual requirements are always the main focus of Panalpina‘s activities. Even the most sophisticated logistics solutions are of no use if they fail to match the customer‘s needs. We thus do our utmost to understand the customer and his business, to identify his requirements in person-to-person discussions, and to jointly seek the best solutions. In this way Panalpina ensures that concepts like ‘operational excellence’ and ‘total customer satisfaction’ are binding principles that lead us to concrete targets, and not just empty buzzwords. The ABB Key Account Management team’s recent meeting in Paris with the client’s representatives is a good example of this. The aim was firstly to analyze and adapt various aspects of the cooperation, and secondly to identify new potential areas for cooperation. The meeting was hosted by ABB Key Account Manager Gert Thamm, who was able to welcome the ABB representatives from Brazil, Mexico, Finland, France, Germany, Italy and Sweden.

Panalpina moves into CargoCity SüdGermany: On a site covering some 34 000 square meters at Frankfurt Airport‘s Cargo City Süd, Panalpina will operate a new 14 000 m2 freight handling centre plus offices occupying a further 2 000 or so square meters . The Group plans in future to send the majority of airfreight passing into and out of Germany through Frankfurt. Some of the freight it handles for other European countries will also pass through the new hub. The new site means that Frankfurt is joining Luxembourg and Paris as one of Panalpina’s three western European airfreight hubs. The ultra-modern freight hub is due to be completed in summer 2003.The construction project is in the hands of the Hamburger Garbe Group, which has already invested in logistics centres at various European locations.

Gary Archer, Operations Manager at Panalpina Aberdeen, has been named ‘UK Young Freight For-warder of the Year 2003’, having received the annual award of the British International Freight Asso-ciation (BIFA). 23-year-old Gary Archer joined Panalpina in 1998 and was soon entrusted with full operational responsibility for one of Panalpina’s top customers in the oil and gas industry. Since then, he has been able to gather wide experience of global logistics services for this customer segment – not least of all by working at a number of major oil and gas production sites. In 2001 he transferred to Aberdeen, the heart of the European oil industry.‘Panalpina recognized my potential early on and gave me challenges that motivated me to proactively develop my professional skills’, says Archer. ‘I was soon given management responsibility and am now in charge of a major UK branch. I’m absolutely delighted to have received this award.’Sandro Knecht, Managing Director of Panalpina UK/Ireland, stressed

ABB Meeting in Paris

Front row, from left to right: Claudia Colet, Panalpina Milan; Lialian Nagaoka, ABB Brazil; Stefanie Mosnier, ABB France; Marina Herrero, Panalpina Mexico; Kerstin Hellbom, Panalpina Sweden; Veronique Triboulet, Panalpina France; Hans Peter Frey, Panalpina Germany; Giovani Gaetani, ABB ItalyBack row, from left to right: Roland Selen, ABB Sweden; Gert Thamm, ABB Key Account Manager; Jean Marc Poret, Panalpina France; Kai Koivula, Panalpina Finland; Mats Widlund, Panalpina Sweden; Gilberto Zanon, Panalpina Brazil; Paolo Meroni, ABB Italy

Young Freight Forwarder of the Year

that ‘this prestigious award at-tests to Gary’s fantastic work and reflects the professional approach he has shown to his work for Pan-alpina in the last few years. Our fast-moving sector needs young and talented people like Gary Archer. Structured career plans like those we have implemented with Gary are decisive in ensuring that our customers receive top-quality forwarding and logistics services.’ In September, Gary Archer will be going to Bali as the UK’s official representative at the International Young Freight Forwarder of the Year Award 2003.

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USA: June 28, 2002 was proclaimed ‘Panalpina Day’ in Miami-Dade County. Alex Penelas, Mayor of Miami-Dade County, took this opportunity to praise Panalpina

worldwide

Switzerland: 8:4 was the final scoreline of a fun match between the ice hockey teams of Panalpina/ASB Air and Danzas/DHL played in Basel! Watched by Panalpina CEO Bruno Sidler, the team led by the player-manager duo Philippe Queloz and Cyrill Gaechter dis-played supreme skill and fighting spirit in coming from behind to see off Danzas/DHL by an impressive four-goal margin. Walter Isler netted the puck three times to become top scorer, with Sandra Marti, Rolf Krat-tiger, Jürg Koch and Cyrill Gaechter adding to Panalpina‘s tally. Despite the tireless commitment of both teams, fair play was the motto of the day and, muscle strain aside, all emerged unscathed.

Panalpina has demonstrated its flexibility, reliability and professional know-how in actively assisting with a project of the U.S. Department of State. Once again, Panalpina showed what it can achieve by efficiently coordi-nating the activities of its various national organizations. In this instance, Panalpina Washington, ASB-Air in Luxembourg and Panalpina Uzbekistan worked hand in hand to ensure that the challenging project was a complete success. The shipments consisted of drugs and medical supplies worth USD 60 m donated to Uzbekistan by the USA. The State Department was so impressed by Panalpina’s services that it awarded a ‘Certificate of Ap-preciation for outstanding effort’ to Ken Jones of Panalpina Washington. As Ken stresses, ‘Although the certificate carries my name, this great honor obviously goes to all those colleagues at Panalpina and ASB-Air who were involved in these shipments’.

Singapore: At the end of October, some 100 guests were invited to Hotel Fullerton Singa-pore to help Panalpina celebrate the 25th an-niversary of its presence in Singapore: Both Managing Director Volk-er Sachse and Lars-Ola Gunnarsson, Regional

Standing (l. to r.): Peter Baumgartner, Horst von Kanel, Boris Waldis, Hans Aeschbacher, Miguel Seco, Rolf Krattiger, Nick Kroebl, Philippe Queloz, Tobias Lüdin, Cyrill Gaechter. Kneeling (l. to r.): Chris Engeler, Jürg Koch, André Kaiser, Walter Isler, Christian Renz.Right: A victory sign for the sole female member of the team, Sandra Marti.

Humanitarian aid for Uzbekistan

Panalpina ice hockey triumph

for its global successes in general and for the development of its business in the Miami region in particular. On awarding the certificate, Mayor Penelas highlighted the innovative drive and dynamism that has made Panalpina one of the world‘s leading logistics companies, whose presence in Miami has contributed to the region’s prosperity and quality of life.

Panalpina Day in Miami

Panalpina Singapore celebrates silver jubilee

CEO of the Asia-Pacific Region, were full of praise for the staff: both speakers emphasized the employ-ees’ commitment, motivation and resourcefulness underpinning the Singapore organization’s success. Gunnarsson also thanked the customer representa-tives who, ‘with their initiative and far-sightedness, present Panalpina with a steady stream of fresh challenges’. He stressed that ‘a strong organization, competent staff and demanding customers are the recipe for a dynamic partnership.’ The celebration culminated in the Swiss Ambassador to Singapore, Dr. Daniel Woker, striking up a chorus of ‘Happy

Birthday’ for Panalpina, and everyone present was delighted to join in. Founded in 1977, the Panalpina Organization in Singapore now has a workforce of 230. It offers the Group‘s full range of services, including compre-hensive logistics solutions. Singapore is a major platform for the Panalpina Group’s logistics services in southeast Asia. Since 1996 it has operated the Harbour Link Distribution Centre – a large, state-of-the-art logistics centre covering some 43 000 square meters. Qualcomm Partnership Award 2002 for Panalpina SingaporeA major honor has been bestowed upon Panalpina Singapore: it was chosen by the high tech company Qualcomm CDMA Technologies Asia Pacific as win-ner of the Qualcomm Partnership Award for 2002. It conferred the award in recognition of Panalpina’s outstanding performance in terms of damage-free delivery, flawless documentation, reliability and punctuality. Panalpina Singapore’s outstanding qual-ity and its relentless quest for operating excellence have thus once again received recognition.

Aid for KyrgyzstanAlso on behalf of the U.S. State Department, Panalpina organized the transportation of a major consignment from the USA to Kyrgyzstan, utilizing the weekly B747 freighter service operated by ASB-Air. On arrival of the aircraft in the Kyrgyz capital Bishkek, the team was received by a delegation led by Kyrgyzstan’s ‘First Lady’. Also present were the Kyrgyz health minister and foreign minister plus representatives of the relief organizations involved and of the U.S. State Department. The shipment was part of an aid package for the treatment of children and cancer patients in Kyrgyzstan.

Integrated solutions for your supply chain

Part of my job is to coordinate the work of my team and to make sure that the LCL shipments from Hong Kong to Germany are handled smoothly. I like my job, because it is both varied and challenging. On the one hand, I deal with the handling of the consolidated cargo, while on the other hand I get to communicate a lot with customers, partners and other Panalpina organizations overseas. I greatly enjoy the contact with people from other countries. I have been working for Panalpina for about 10 years and like it as much as ever. If you feel comfortable with a company, you enjoy your work and therefore also carry it out more efficiently. In our team everybody ismotivated and gives his all.

Communicative and versatile

Tammy WongSupervisor LCL-TeamPanalpina Hong Kong