The irony is, Finland has good outbound air cargo traffic, but represents a weak inbound market. Even so, when it does come to exports, one name above all others dominates: Nokia, the telecom manufacturer.

Erik Soderholm, managing director of forwarder Wilson Finland Oy, reckons that Nokia traffic alone represents as much as 40 percent of all Finnish exports by air. That would make it easily the most dominant single shipper in any one country in the developed world.

"We do have other Finnish companies," he insists. "But, I doubt if anyone outside of Finland could name one."

Nokia then dominates the market and even, presumably, dictates the rates it pays. It has, however, been remarkably democratic in distributing its various business elements across a range of forwarders. But its mainstream traffic flows are dominated by just one name: MSAS Global Logistics, now rebranded as Exel, which holds the company's global account.

Russia Turns

It's doubtful if a local enterprise could ever have mustered the kind of global reach demanded of such a high-profile account. But, says Wilson's Soderholm, it is symptomatic of the market.

"A few years ago we were just a sideshow in Finland," he says. "Today, all the major service providers, like MSAS and Emery, are in here with their own operations."

In response, the Finnish forwarders are digging deep into their market knowledge and trying to massage life back into the Russian market. But it is a struggle.

"At a guess, we are moving around 10 percent of the volumes of Russian traffic we were handling three years ago," confides Soderholm. "As I understand it, U.S. exports to Russia have fallen by 60 percent in the last two years. We are still waiting for Mr. Putin to turn things around."

Finnish forwarder Varova is also involved in what remains of the Russian on-forwarding business. According to Jari Merilahti, the company's air freight manager, what traffic remains moves into Finland as air cargo from the United States and the Far East and is then trucked across Finland's borders. "We can reach Moscow inside two days, and St. Petersburg is less than 500 kilometers from Helsinki," he says.

Like most experienced Finnish operators, Varova maintains a strong presence in both cities supported by their own customs brokerage operations. "We have all invested heavily in developing our infrastructures and keeping them in place," says Merilahati. "What we want now is for the market to come back."

The market has at least grown enough to warrant its own direct maindeck cargo capacity. For years, most traffic has been trucked as far south as Copenhagen to make a maindeck connection. KLM Cargo has started flying an A300 freighter into Helsinki. But as a weekly service, the link with its Amsterdam hub remains tenuous.

The Scandinavian Airline System/Lufthansa Cargo combo treats Finland as its backyard and continues to push for dominance. It has recruited Singapore Airlines into its Scandinavian cargo club, looking to gain leverage from SIA's 747 freighter operation over Copenhagen.

Shiny Finnish

Finnair Cargo has taken a brave stand against such an onslaught. But it's finding the going tough.

Finnair is fielding a 747-200 freighter operation on the North Atlantic, courtesy of Polar Air. The airline flies the aircraft on a weekly New York-Gothenburg-Helsinki rotation and once a week New York-Gothenburg-New York. This latter operation had previously been a twice-weekly service and now also flies through Prestwick in Scotland in search of cargo on its final eastbound sector.

"We are faced with one simple problem," says Erik Byman, marketing and sales director of Finnair Cargo. "We have a huge traffic imbalance on the North Atlantic, with strong loads westbound, but very weak eastbound. It is difficult in these circumstances to maintain such a high-profile freighter operation that this kind of commitment demands."

There is sufficient eastbound traffic to support returning Finnair freighters, says Byman. The trouble is, it is dispersed across so many other carriers.

"We accept the principles of open competition," he asserts. "But I would make an open appeal to forwarders in Finland and the rest of Scandinavia, that if they want direct maindeck westbound capacity on the North Atlantic, then they should join us in supporting the eastbound operation. We do not want to become another Sterling Cargo, in terms of having to withdraw from the market."

Byman is referring to the summer demise of the Norwegian-backed Sterling Cargo, which ceased its Atlas Air leased 747-200F service on a thrice-weekly Copenhagen-New York run.

It is obvious he has little sympathy for the former competitor. "This was a startup operator with little professional experience of the business they were trying to get into. Its approach had an obvious damaging effect on the other players in the market who are in it for the long-term."

Most Finnish and other Scandinavian forwarders have a good idea why the Sterling operation failed, as voiced by Marti Andersson, managing director of the Finnish operation of ACE Air Cargo Express.

"Sterling Cargo was providing a good product for the Scandinavian market, which was well supported," says Andersson. "But for some reason they decided to pitch their rates at the lower end of the market. Then when they did raise them, too late it would seem, they lost business and we lost an airline."

Midland Minded

By venturing into widebody trans-Atlantic service, British Midland is banking on a serious boost to its fledgling cargo business and an end to its image as a small-time cargo player.

With the first of up to 12 A330-200s on the way, the carrier will launch flights between Manchester and Washington Dulles and Chicago O'Hare next spring. With cargo capacity of 12 tons, the A330s will be a big step up from BM's fleet of 53 narrowbodies, which stick to a short-haul, high-frequency network in Western Europe.

To feed the new flights, the carrier wants to set up trucking links in the Eastern and Midwest U.S. as well as in continental Europe to complement its intra-UK services. British Midland also plans to appoint a U.S. cargo manager, an American general sales agent and a cargo handler.

"We feel we don't have sufficient capacity for it to be cost effective to have our own staff in the U.S.," said British Midland's cargo director, Rohan Alce.

That could change if British Midland has its way. The carrier says Manchester is merely a launch point for what it hopes will be service out of London Heathrow that eventually takes in Washington, Chicago, New York, Boston, Los Angeles and San Francisco. BM is currently locked out of Heathrow's U.S. routes by the restrictive UK-U.S. air treaty.

For British Midland Cargo, the expansion is an effort to boost what the airline has viewed as an underperforming business. Since last year, BM has hired a new cargo director, reconfigured its European sales network and reorganized its cargo staff with a newly established base at Heathrow.

Alce says the carrier is on pace to boost its 2000 cargo revenue and traffic by 30 percent to $18 million and 28,000 tonnes, respectively.

... Briefly

Danzas, the forwarding subsidiary of the German post office, has created a new division to handle a logistics contract with Deutsche Telekom that Danzas says is worth some $860 million over five years. ... Air France says its operating profit for cargo grew 20 percent over the first half of the year to $260 million on an 8 percent gain in revenue tonne kilometers. ... Lufthansa German Airlines will boost its Frankfurt-Dubai service from seven times weekly to 10 flights this month and will expand flights to Nagoya, Japan, from three times weekly to five times. ... British forwarder Davies Turner opened an air freight office in Dublin. ... Hungary will sell off 50 percent, plus one share, of its national airline, Malev. ... Gulf Air named Pace Airline Management as its cargo general sales agent in Germany. ... Forwarder Kuhne & Nagle reported a net profit of $45 million in the first half of 2000, 27 percent better than last year. ... The British Freight Transport Association is throwing its support behind proposals for a fifth passenger terminal at London Heathrow Airport, arguing the increased efficiency would be a boost to belly cargo traffic. ... The Fritz Cos. will participate in the Single European Authorization simplified customs procedure. ... American Airlines is dropping its New York-Frankfurt flights Nov. 1. ... Belgium's City Bird airline named Air Rep its cargo general sales agent in the United Kingdom and Ireland. ... Sabena lost $75 million in the first six months of 2000 despite an 11 percent gain in passenger traffic. ... The airport operating Schiphol Group showed a $68.5 million operating profit in the first half of 2000, 22 percent better than a year ago. ... Bismillah Airlines of Bangladesh launched its first scheduled cargo flights to Europe with an IL-76 freighter flying twice weekly between Dhaka and Luxembourg. ... British Airways will have Telair International retrofit the lower-deck cargo handling systems of all its 747-400 aircraft. ... The European Parliament endorsed a proposal to tax aircraft fuel used for passenger flights within the European Union. ... Air France added four 777-200ER aircraft to its orders from Boeing, which will give the airline 23 of the widebodies by 2002. ... Romania gave potential investors until Nov. 7 to submit bids for a 54 percent stake in the national airline Tarom. ... Virgin Atlantic is adding a second weekly frequency between London and Cape Town, South Africa, this month. ... Beirut-based Trans Mediterranean Airways started weekly freighter service to Bergamo, Italy. ... Virgin Atlantic will take two new 747-400 passenger planes in the fourth quarter, giving the airline 18 747s. ... AviaPartner opened a cargo handling station at France's Lyon St. Exupery Airport with Lufthansa as its first customer.