A tale of two warzones

Getting project cargo into Iraq and Afghanistan remains fraught with difficulties, reports Alex Lennane

Corruption, high prices and lack of capacity continues to prevent shippers from getting goods into Iraq. Although services have improved in recent weeks, demand has reduced, and operators say imports continue to be a "nightmare.

"Since the Americans started winding down and the British pulled out, demand has just about halved, and much of this is due to the switch to surface transport through neighbouring countries" says Larry Coyne, CEO of Coyne Airways. "But our interest in Iraq has also lessened, as there is limited room for manoeuvre."

In August, UAE-based Jupiter Airlines, its subsidiary Ave. com and sister company and cargo arm Rus Aviation were given exclusive rights to control airlift into and out of Iraq in a joint-venture with Iraqi Airways. Costs of flights into Iraq subsequently rose.

In early October, FedEx issued a statement saying that cargo flights had been arbitrarily rationed, and costs had doubled. "We realised it was not possible to provide a reliable service, " explains Jim McCluskey of corporate communications.

However, FedEx resumed commercial shipments into Baghdad and Erbil less than three weeks later, while military shipments began again in November.

"We conveyed the concerns we had to the government, " says McCluskey. FedEx is now using Dubai-based carrier Falcon Express Cargo Airlines, a long-time partner. Falcon has also worked in Iraq with a subsidiary of Halliburton on US government contracts and with controversial entrepreneur Victor Bout’s Air Bas.

Difficult dealings

Other operators into Iraq have been less lucky, and continue to face difficulties in dealing with Rus Aviation, which is also active in Afghanistan.

"Traffic rights are pretty much blocked for everyone now, " says one charter broker.

"You can’t get into Iraq unless its through Jupiter or Rus, and you have to pay a ludicrous royalty. The power they have is enormous and nothing goes in or out unless controlled by them."

Volker Dunkake, head of global sales and services for Lufthansa Cargo Charter agrees. "Our service level is suffering terribly. We are trying to find an alternative but it’s close to impossible."

One of the main complaints is that each company must pay a different amount.

Some brokers may pay US$30,000 for a B737 charter between Dubai and Basra, while another is charged $32,000. "It can change by $3,000 on a charter, " says a broker.

There is a silver lining, however, according to one source.

"We don’t have to worry about the economics of a flight - if we load 10 tonnes we only pay for 10 tonnes.

"Rus did offer us the chance to put on our own flight, but at exactly the same rate as we were paying per tonne: $20,000 for 10 tonnes or $80,000 for 40 tonnes.

So why take the risk of trying to fill a whole flight?"

Only three other carriers are allowed to operate in Iraq - DHL, Etihad and Royal Jordanian. But even this can be problematic, say brokers.

"The situation is very delicate, " says one. "If we annoy Rus, our freight gets left behind. We have also looked to Etihad and Royal Jordanian. But if there’s not enough capacity with them, then your freight gets left behind. If that continues you need another solution, so you go back to Rus, which then doesn’t treat you very well."

It’s expensive

Another charter broker says: "We are using Rus right now, but it’s not the best solution. It’s expensive and the quality of service is not good.

"Rus has experience in cargo, but now they realise they need a booking system, track and trace and so on - it’s a whole new world to them."

But Russi Batliwala, CEO of Chapman Freeborn, says there has been an improvement recently.

"Things have calmed down, but there has also been a decline in traffic."

Few observers expect the situation to change soon.

"Our job is to make things happen, " says one broker. "You have to roll with what’s going on. The only way to do it is by operating with these people."

Another admits: "There is a lot of corruption in this part of the world. We don’t want to be part of it, but the system almost forces you to."

And while demand into Iraq is slowing down, it is on the rise into Afghanistan, but problems with space are causing real difficulty.

Coyne explains: "Four things need to happen to get freight in Afghanistan: you need an ISF [international security force landing permission]; a landing slot; someone to offload your aircraft; and a ground handler to break down the pallets and deliver the freight to the consignee. If any one of those is missing, you can’t do your flight.