Shipper, forwarder, carrier, handler, airport, and trucking representatives debate what needs to change to ensure air freight’s future success
This year’s Air Cargo Handling Conference, held at the JW Marriot Marquis in Dubai, culminated in a much-anticipated panel discussion featuring industry heavyweights from across the air cargo community.
Dubbed ‘The Magnificent Seven’, representatives of shippers, forwarders, carriers, handlers, airports, and trucking firms debated what needed to change to make air cargo more efficient.
Andrew Lester, global director healthcare at Expeditors said: “Temperature control is a horror story. The share of pharma moved by air freight has fallen from 17% to 11% in the last five years because customers are seeing 25-30% temperature excursion rates with air freight – so it represents a huge risk in comparison to sea freight.”
He said an estimated 57% of these excursions happen at handover points, the so-called ‘black holes’ in the supply chain. “Things are improving, with collaboration getting better – for instance at Brussels airport, which is taking a true community approach,” he added. “We have to look at the whole transport process as a relay race. In pharma, if one member of that relay team drops the baton, a patient could be at risk. We need to work as a team, not in the silos that have been traditional until now.”
For Jason Breakwell, commercial director at road feeder service (RFS) operator Wallenborn Transports, that team spirit needs to extend beyond the airport. “I don’t expect to see an air cargo trucking conference, but RFS deserves more recognition and appreciation,” he said. “It’s not a cost or a nuisance; it can add yield, and put more dots on the map for airlines, while helping them to manage their revenue.”
In fact, communication and community formed a thread that ran throughout the 2016 Air Cargo Handling Conference, with many speakers expressing a desire for the whole industry to come together more in order to direct its own course. Youssef Beydoun, head of cargo planning and compliance at Dubai Airports commented: “I would like to see us expand beyond our own boundaries; we need to break down the barriers and work together so we can go back to the regulators with ideas.”
Panelists noted that it does tend to be the regulators who drive change in how air freight is handled and transported, much more so than is the case with the passenger sector – where the customer determines how services evolve to a much greater extent.
Henrik Ambak, SVP for cargo operations worldwide at Emirates SkyCargo, observed: “The requirements are changing tremendously; the questions asked today were not asked 10 years ago – for instance, pharma is getting a lot more attention and effort. The industry is catching up with the changing environment – and the regulators are helping us to do so.
“We act when we’re forced to do so; the challenge is when we try to go forwards by ourselves. We’re good at doing things when we have to; but when we want to, it’s hard to find those ‘Facebook moments’. We have to be prepared to try lots of ideas to find the ones that work.”
David Ambridge, director cargo operations Asia and Africa at Worldwide Flight Services agreed, summing up: “We react very well and very quickly when the regulators tell us to, but not when we know it makes sense and it’s what our customers want.”
The things that ‘make sense’ such as increasing efficiency through new technologies, improving safety and security, or reducing temperature excursions for the pharma shipments to which Ambak refers, ultimately benefit the customer as well as the service provider and its employees. Such changes are, perhaps, rendered inevitable by their necessity. How they are effected, however, could be in the hands of the industry if stakeholders were to take the initiative.
Beydoun suggested: “We need to innovate to keep up with the growth in volumes. First, there are still security issues – the regulators and authorities need to be ok with the trusted shipper programme, and so on. Second, we need to involve other programmes such as regulated agents in the US, and apply the system globally. We need to get approval in every area with agreed standards and procedures.”
Breakwell warned: “If we don’t do something, the regulators will force it on us.” But it is not an impossible task. He cited TAPA, the Transported Asset Protection Association, as an example of true industry-wide collaboration, bringing together the supply chain, insurance companies, and regulators. Conferences, such as this one, in his view, demonstrate that there is the power and inclination to change things. What is required is to “identify the problem, come up with a solution and take it to the regulator – as TAPA has done successfully”.
What, then, did the panellists feel was necessary to ensure the future success of the air freight industry as a whole? asked moderator Chris Notter, vice president operations at Saudia Cargo.
From an airport’s point of view, Beydoun said there is a need to treat everyone equally across the board to provide a fair playing field. Airports must offer the same opportunities and services to all users.
Breakwell reiterated his point regarding the need to communicate across all segments. “We need to listen, respect, and understand. We have different expectations and needs and we need to understand each other,” he considered.
That willingness to listen and understand must be extended beyond immediate relationships such as the forwarder-airline, handler-airline or shipper-forwarder contract, Ambak recommended. Instead: “There needs to be participation at industry level, not just directly with our own partners. We need to be willing to work for the community, not just for our own benefit.”
Ambridge responded: “As a ground handler, we need true and meaningful partnerships with airlines. We need to see them as service partners. Also, relationships with forwarders are long overdue. We are a fragmented industry; I hope the next generation and the one after will become partners.”
Respect for handlers
According to Lester, a collaborative approach to finding solutions for the customer is necessary. “Handlers should not be the ‘whipping boy’, blamed for everything. We should bring the customer into the conversation and truly work as a relay team.”
All panellists agreed with Notter’s request for joint action for the benefit of the industry over the coming 12 months, based on the session’s discussion and the various suggestions that had been made. However, Lars Droog, supply chain and general affairs manager at Tosoh Europe, was keen to point out that every member of the supply chain must remain profitable; without profitability, companies would have to cut services or capacity, or even cease to exist, and ultimately shippers would suffer. Already, the double squeeze on handlers is hurting shippers, he said, and it is not sustainable. Commercial considerations can lead to unscrupulous or disloyal behaviour, creating fear and division among the industry.
But Ambridge was optimistic. “If we become partners, then we become equals, and then there is no fear. Fear is hurting us and we have to take it out of the business.”
Only by doing so, by working together to improve as a team, can the industry and all its stakeholders hope to remain competitive in the long run, the panelists agreed. As Ambak put it: “If we don’t respond to what the customer wants today, we won’t be here tomorrow.”
For a more comprehensive overview of the event, view the full feature from page 26 of the Winter 2016 digital edition