A ‘revolution’ in quality

posted on 7th June 2018

Airlines have long complained about the difficulty finding consistent cargo handling standards worldwide. But is this finally changing? asks Will Waters

It has become almost a joke in the air cargo handling sector that there is no such thing as a multinational cargo handler with consistent standards worldwide, despite the attempts by big groups such as Swissport and WFS to expand their networks internationally. Swissport has been attempting for several years to roll out its ‘Swissport Formula’ best practice programme to its stations around the world, and yet airline heads of global cargo handling, such as Lufthansa Cargo’s Thilo Schäfer, still smile at the idea of a genuinely multinational handler (see interview on pages 46-48).

But could things now be changing, finally?

According to Barry Nassberg, COO of Worldwide Flight Services (WFS), they have certainly been changing recently for WFS, which now has “far more” of a strategy of standardisation within the group than in the past.

“Historically, we have been a very decentralised, entrepreneurially driven organisation, allowing the country heads to get on with what works best in their market; knowing what their customers need; knowing what their competitor is doing,” he says. “We were not really concerned if London is doing it differently to the guy sitting in Brussels, as long as their customers are happy.

“But now the industry has moved on and there is far more attention from the airlines to network standards. The idea that you sit down with a local handler and work out your operating procedures and systems and your SLA for that station is kind of behind us, certainly for the serious cargo players.”

He says these things are now often determined at a head office level at airlines, by people that “spend the whole time developing systems that get pushed out to the field, and everybody, whether you’re in Johannesburg or in Copenhagen, is expected to perform the same way”.

He adds: “From the handler side, we now have to respond to this new world and, while we like our devolved structure because it gives a lot of autonomy, we have to accept the airlines are looking for something more sophisticated.”

He says WFS has been “looking to stay ahead of that”, adding. “We have had quite a lot of success in making that happen. Our launch-pad for a lot of that was Bangkok, because it is one of our biggest cargo stations and we have had exposure there to some of the cutting-edge systems that airlines have in place for managing cargo handling. So it has been a great test-bed.”

Nassberg says the culmination of this has been the recent decision by Etihad Cargo to certify WFS under its new Preferred Handling Partner (PHP) programme – becoming one of only two handlers in the world to achieve that status, the other being Swissport.

Massive effort

“That was a massive effort to get to that point over probably close to a year,” says Nassberg.

Under the PHP programme, Etihad Cargo has set specific performance benchmarks covering safety, security management, regulatory compliance, training, IT interfaces, business planning and risk management. The two-year PHP certification with WFS is focused initially on six Etihad Cargo stations – London, Brussels, Paris, Bangkok, Washington and Seattle – with the hope to expand Etihad’s cargo operations with WFS at other destinations over time.

Nassberg says the certification process happened on two levels. First it is a global, companywide process, “where you look at every detail from training, to manuals and facilities”. After that, stations are certified on an individual basis, but only those where Etihad operates or intends to operate. “Or if they decide they are opening a new station, and we are there, they can come and do the audits and decide whether that station can be certified as well,” Nassberg adds.

David Ambridge, general manager for cargo at WFS’s Bangkok Flight Services operation, says this required aligning standards across three regions.

“It was tough and that was why it took as long as it did, because we had to bring everybody together and make sure we had an alignment that had never existed before. So it was a huge learning curve for us and it has made us a better company already,” he says.

Future direction

“And I think as we go further into the future we will become more and more aligned and more and more standardised, just as a result of this one initiative from one airline. It is now going to be mirrored by another airline pretty soon, and I think that is the way they are going to go.”

On the surface, one potential challenge might be if different airlines each develop global standards that are quite different from each other. Indeed, this is an extension of an issue that already affects most handlers at a local level.

So, should a handler develop its own global standards or adapts its processes to the global standards of each airline?

Stewart Sinclair, managing director of Bangkok Flight Services, comments:

“What you will generally end up with is best practice that covers your own internal standards and that will have to meet or exceed the highest standards out there in the industry. And to be honest, what we do is not rocket science: it is measuring the same tasks and the same ways of doing business. So for us it was a question of aligning everything. Once you put that together it helps us quite a lot, because it enables us to define what our best practice is within our network and use that as a benchmark.”

Nassberg adds: “Prior to this it was more a case of the lowest common denominator, and service standards fell to the minimally accepted level of a given station. You could go to places in Africa, for example, where handling wouldn’t come close to the standards that an airline really needed, but there was an understanding that it was Africa and so it was good enough, or it was India. With a system like this, it rises to the best practice, and what that does then is it raises the standards of everybody else, even those who were not participating in the programme.”

But does it potentially make you less competitive if you are applying these high standards and your competitor is operating to the lowest common denominator, as cheaply as possible?

“We haven’t seen evidence of it at the moment,” says Sinclair. “Apart from anything, when you standardise processes, that should make things more efficient. So that means you are more productive and therefore better value. And besides, for the airlines to go down this process of investing in this, they recognise that there is a cost involved.”

COAG initiatives

Ambridge says one of the other things WFS is involved in is COAG, the IATA-affiliated Cargo Operations Advisory Group, which is working on putting together simple standards that it hopes can be adopted across the industry. “While those standards may not be exactly the same in every station, we will measure exactly the same thing,” Ambridge says. “So we’re going to stop measuring different things and we’re all going to try and do the same.”

He says COAG hopes to be able to unveil that at the Air Cargo Handling Conference in Lisbon in September.

Sinclair adds: “In addition to that, where we have on the ground operations side IGOM [IATA Ground Operations Manual], we are now going to have on the cargo operations side ICOM, which will align standardised processes throughout the industry, recognised by both handlers and airlines.” That is another COAG initiative.

Ambridge adds: “That then drives ISAGO; airlines won’t accept ISAGO because their CAAs won’t accept ISAGO, because we are not measuring against a manual. We’re measuring against standards, but it is not a recognised manual. So we have got to get an ICOM so that ISAGO does what it is set out to do: to become the global standard for handlers. So all these things are interlinked.”

Ambridge adds: “We have done a lot of work on COAG in the last year and there is still a lot to do, but we’ve got a very capable group.”

Appetite for change

He believes there is a genuine appetite for some kind of global standard.

“Absolutely. We do the same thing every day, but why do we measure it differently across 50 airlines? It makes it more and more complicated, so we need to simplify the business, and to end up measuring 15 or 20 things, and these are the ones we’re going to measure. And we believe that they are the right things to measure because it is airlines and ground handlers making a decision about what we want to measure. It is not master and slave – we’re partners. It is going to be quite exciting.”

They acknowledge that airlines in the past have been dismissive about the idea of multinational cargo handlers with global standards.

“You were only as good as your worst station,” says Sinclair. “But that is the whole point of going through this process of aligning standards, and then you can benchmark across anywhere, and so it is really easy to see whether what you’re doing is actually meeting your requirements.”

Nassberg adds: “If you talk to the big Gulf carriers you will get a different perspective.” Qatar Airways is understood to be working on a programme similar to Etihad’s PHP initiative, while Emirates effectively does the same thing through a very strict set of standards.

However, Sinclair believes it will be difficult for the legacy carriers to follow the Gulf carriers down this road. “The Gulf carriers have kind of started with a clean sheet – and they have clout, because they are growing rapidly, which is a very different position to the one the legacy carriers find themselves in,” he says. “The Gulf carriers are also prepared to make the investment.”

He acknowledges that some legacy carriers are involved in programmes like Cargo 2000. “And that is fine too – we measure all those different steps.”

But he says under Cargo 2000, what gets measured and how it is measured differs from airline to airline, even though it is supposed to be a standard. And he believes it is less rigorous.

“That is because it is trying to get a number of airlines to agree on a standard, which by its nature is likely to be a compromise,” he observes.

However, Nassberg believes other airlines will probably be keen to work with handlers that have achieved standards such as Etihad’s PHP programme “because they know what it means, so in a way they can get the benefit without the investment”, he suggests.

Sinclair adds: “Especially if we can come up with a simplified SLA through COAG that is acceptable, because then that effectively becomes the rollout of the standard.”

And can the legacy carriers then adapt their SLAs to this?

Ambridge says: “They have a choice: they can either stick with their 30-year-old, 25-page SLA document that never gets measured, or they can change to a 15-point or 20-point SLA that will get measured automatically every single day on every single flight.”

He says many of the documents that carriers call SLAs are “simply their SOP manual diluted down and called an SLA. That is not what an SLA is. It really has to measure a service and measure quality. How we get there, how we do it, is up to us.”

Nassberg comments: “Exactly – it is about measuring outcomes rather than measuring

a process, and that is what some of them don’t get. They are trying to measure the process, and it is irrelevant to the outcome.”

Driving quality

Ambridge adds: “So we hope that we can get some change, make the business a bit better, and make it easier – and also drive quality. Absolutely drive quality.”

The presentation of the COAG proposed standard at the ACH Conference in Lisbon is going to be followed by a workshop on the topic. “And I’m sure there will be a lot of discussions, and I’m sure there will be a lot of airlines saying: we can’t do this!” says Ambridge. “Fine, stay out of it. But if we can get 30% of airlines, we are 30% better off than we are today.”

But he believes that once people see the benefits of participating, they will come in. “Because if you can have online access to your own SLA on a daily or hourly basis, you don’t have to ask me what my service level as – it is there,” says Ambridge. “I think that is pretty revolutionary, that we will give that amount of transparency into our business.”