New services and potential revenues mean that Jordan's airfreight future appears to be in safe hands.
New services and the potential revenue that can be gained from improvements both to Amman's major airport and the Aqaba Development Corporation mean that Jordan's airfreight future looks to be in safe hands..
With a comparative dearth of natural resources, the kingdom of Jordan must look on with a degree of envy at the resource-rich states of the GCC on its eastern borders.
Close ties with the West, together with the benefits in terms of cash grants that such a relationship entails, combined with a stable form of government, have however enabled Jordan to start to realise the potential that can be leveraged from its strong strategic location.
Jordan has become a more competitive environment for transport logistics, having addressed such issues as air services, warehousing and regulations.
Locked as it is between the combustible regions of the Palestinian Authority and Iraq, together with a northern border with Syria, a more peaceful political outlook in the future will definitely help the country's economic growth.
The Jordanian government has successfully implemented a number of reforms in order to improve activity and the country is already attracting significant amounts of foreign direct investment as a result.
For airfreight professionals, Jordan offers two main airports: Queen Alia International Airport (QAIA) and King Hussein International Airport, just north of Aqaba, which at the moment mainly handles domestic freight.
The Amman facility is currently subject to a major overhaul, the details of which were confirmed in November 2007, and include a $675 million build operate and transfer transaction involving a 25-year contract.
DHL Express' Adel Hanna, who is the firm's country manager for Jordan, believes the country is fast improving as a logistics location, a fact that is complemented by the new changes currently being addressed at the state's biggest hub.
"Jordan has become a more competitive environment for transport logistics, having addressed issues such as land and air services, warehousing and regulations," he explains. "Creating a professional culture has been a priority for the government and firms operating in the country, with emphasis on the use of express and logistics companies' services."
But what are the key factors that Jordan offers as a location for cargo operators that make it stand out amidst its competitors in the Middle East region? "In the Levant region, QAIA offers the most up-to-date cargo terminal and the most extensive network of regional freighter connections," explains Ingo Roessler, vice president of cargo, Royal Jordanian Airlines.
"This is complemented by our passenger flights, which serve many regional points twice a day, thereby offering exceptionally quick connectivity. Royal Jordanian handles the cargo services of more than 30 airline customers at QAIA, via its special-purpose 1700m² freight facility.
The cargo terminal features facilities for perishable handling, outsize cargo and a strong room to handle valuable shipments," explains Roessler. "We have a specialised facility to handle mail and courier shipments, too. As we speak, Royal Jordanian is finishing a major upgrade, which will provide our clients with a semi-automated shelving system in our import warehouse."
In order to increase security levels around the facility and airport space, Royal Jordanian has taken steps to install a digital surveillance and access control system that will monitor all activities in and around the terminal through more than 200 cameras. In October, the Jordanian operator will also go live with the implementation of its new cargo information technology platform, Cargospot.
"This platform, developed by a Swiss company, will incorporate all international messaging standards (EDIFACT and IATA), customs interfaces and is web-enabled," says Roessler. "Our forwarding and airline clients will greatly benefit from a more transparent communication and barcoding will also be introduced for all shipments going through our facility at QAIA."
Among the facilities that Royal Jordanian Cargo provides is a range of IATA-compliant stalls to transport horses on board its freighter aircraft. The first two stalls have already been purchased, at a cost of roughly US$40,000 each, and will be able to transport the animals to and from Dubai, Brussels and London on all freighter routes.
These pieces of equipment are fully collapsible and enable the operator to send the empty vessel either to outstations or its central warehouse at QAIA.
For DHL, the QAIA hub is also providing substantial dividends. "Following government support of logistics processes, Jordan has encouraged freight companies to invest and build operations," relates Hanna.
DHL is launching a new hub facility in the third quarter of 2008 based in the air cargo village at Queen Alia airport, with inhouse customs clearance, which will be the major access point for all DHL air and road shipments in Jordan. This will have a significant impact on trade in the country, with Jordan positioned as the gateway for DHL's road network into Europe from the Middle East."
What does the Royal Jordanian executive think will improve the Amman facility as an air hub? "Key requirements to improving any hub are the reliable and efficient procedures for customs," outlines Roessler.
With the expansion of our fleet, notably the recent order of 12 Boeing 787 Dreamliners, we expect wide-body connectivity to certainly attract more transit business."With scheduled improvements to QAIA in the pipeline, Roessler also expects to use the new facilities to his advantage, especially as a result of the strong relationship Royal Jordanian has with the country's main hub.
Higher frequency and daily or double-daily services will improve our timelines, particularly for smaller, time-sensitive loads," he outlines. "From 2007, where we had a total of $79 million in throughput, we have also increased our production significantly and expect to exceed $99 million worth of freight in 2008. Additional charter work has played a large part in this improvement."
In the Levant region, Queen Alia International Airport, just outside the Jordanian capital, offers the most up-to-date and sophisticated cargo terminal and by far the most extensive network of freighter-only connections.
From a sea freight perspective, the Red Sea port of Aqaba envisions a cargo throughput of 3.2 million 20-foot equivalent units (TEU) by 2030, aided largely by the input and expertise of industry giant APM Terminals, an example of the increased foreign direct investment that Jordan has recently witnessed.
Located just 300 kilometres from Amman, the facility consists of three ports, with a fourth currently being planned. During a conference last year, Nasim Al Ahmed, senior vice president of the Aqaba Development Corporation, put a focus on Aqaba's freight potential.
We have recently opened a new air cargo terminal that is located 10 kilometres away from the port," stated Al Ahmed. "Part of a joint venture with the National Aviation Service of Kuwait, the terminal has become privatised and we have big ambitions for its future."
Al Ahmed was also keen to stress the possible revenue that can be leveraged from the sea-air model, particularly given Aqaba's excellent strategic location.
The current investment in the air cargo terminal already makes Aqaba an attractive prospect, but it is yet to reach its full potential and there is plenty opportunity for expansion," he continued. "It definitely has the capability to succeed; it is not such an important airport but it is one that has room to significantly increase capacity and is free of restrictions.
"We have enough land within the airport boundaries to build logistics parks and hubs, if anything we have an over capacity and we can cater for more business. The issue is not just warehousing but airspace, both of which we have in abundance," Al Ahmed added.
DHL, too, has recognised the potential for the coastal development. "Aqaba has a new truck marshalling scheme with an automated system that allows for efficient loading and unloading," comments Hanna. "The government has also deregulated the law for freight forwarding companies doing business there."
Royal Jordanian has recently enhanced its domestic services between Amman and Aqaba, and now offers two daily flights, with a maximum of two tonnes of cargo on each service, meaning that the freight forwarding community is now able to benefit from a daily four-tonne capacity in each direction.
In total, Royal Jordanian offers 25 Airbus and Embraer passenger aircraft, each with bellyhold capacity to complement its freighter fleet. Two converted Airbus 310-300 freighters and one leased Boeing 737-200F form the basis of its cargo-only division, which operates a number of scheduled flights.
Royal Jordanian Cargo is committed to developing the quality of its services together with its logistics partners and local stakeholders in customs authorities and airports to meet growing demand of the shipping community in terms of quality and transparency," concludes Roessler.
"In addition, Royal Jordanian intends to promote the IATA e-freight initiative to make Jordan one of the first territories in the Middle East to allow air cargo shipping to become virtually paper-free."
With an economy that is strongly realising the potential of foreign direct investment through swift and effective deregulation, plus the growing importance and diversity of hubs such as Amman and Aqaba, Jordan looks set to continue to achieve both strong increases in its airfreight throughputs and more sophisticated upgrades to its facilities.
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