Building predictable cargo processes

posted on 6th December 2022
Building predictable cargo processes

The last three years have been a tough time for most airports, with Schiphol facing additional challenges including new lowered annual flight movement limits and restrictions to its cargo footprint to make way for expanded taxiways, reports Will Waters

The last three years have clearly been an enormously tough time for most airports. And while the latest phase in the recovery from Covid, bringing the return of significant levels of passenger air capacity, is positive news in most respects, many airports have struggled this summer and autumn with personnel shortages that have led to delays to passengers and cargo and have caused some airports to limit flight numbers accordingly.
The return of passenger air services also has particular implications for Schiphol and its cargo community, in part because it brings back into play historical airport capacity issues and slot-use rules that had been pushed into the background during the pandemic, when the loss of passenger flights and the relaxation of airport slot rules allowed more or less unlimited numbers of freighter flights – something that had been restricted prior to the pandemic.
The previous Dutch government, recognising the economic importance of Schiphol’s hub and cargo connections, had set out a pathway for Schiphol to grow to a maximum of 540,000 annual flight movements, up from the previous 500,000 movement limit. But in June, the government of the Netherlands unveiled a plan to cut the number of annual flights at Schiphol to 440,000 from the end of 2023.

Maastricht partnership
While the airport continues to work with regional and national government and stakeholders on minimising the impact of those slot limits, one interesting linked development is the recent partnership agreement between Royal Schiphol Group and Maastricht Aachen Airport (MAA), where Schiphol is to take a 40% stake and work together with MAA on a number of areas. MAA is the second-largest cargo airport in the Netherlands, and the two airports said the handling of cargo “is an important part of the collaboration between MAA and Schiphol”.
There has been speculation that the partnership may lead to some freighter activities at AMS in the future transferring to MAA, but Schiphol says there are no definite plans and it is too early to make any statements on what this partnership will mean.
Meanwhile, developments continue at Schiphol, including building a new airport terminal pier and creating additional taxiways – developments with significant implications for the cargo infrastructure at Schiphol Airport, requiring the relocation of some cargo facilities and associated adjustments to operations and processes.
And despite the limitations on the airport’s future capacity to grow flight numbers, the airport remains a popular location for cargo and logistics businesses. One of the key responsibilities of the airport’s cargo team is to ensure this remains the case, and find ways of keeping the airport and the region attractive to cargo businesses and their customers, highlights Luc Scheidel, cargo strategy director at Schiphol.
“We do that by having a good network, seamless cargo processes, while also looking at safety, security, sustainability, etc.”, Scheidel notes. “And that all needs to be supported by digitalisation.”

Cargo strategy review
Those were among the conclusions when the airport reviewed its cargo strategy last year, when it also appointed two additional cargo partnership directors, Olaf Van Reeden and David Van der Meer, to join Roos Bakker “to shape and develop cargo processes at Schiphol”, as part of a restructure bringing together all airline and cargo commercial and operational businesses at the airport.
Explaining the restructure and re-evaluated cargo strategy, Schiphol’s head of cargo Anne Marie van Hemert notes: “The future of Schiphol Cargo will be about collaboration, and the cargo partnership directors are focused on re-connecting with the cargo community and moving towards the future with energy. Our aim is to optimise connectivity, realise state-of-the-art digitalisation, create a green airport, orchestrate seamless cargo processes, and deploy empowered partnerships.”
Optimising connectivity
The strategy’s ‘optimising connectivity’ element puts an emphasis on the team working with the cargo community and local government towards resolving the hub’s slot issues, she adds.
Key elements to achieving these aims also include optimising its use of Cargonaut – which operates the Cargo Community Information Platform at Schiphol and since late 2020 became fully owned by and integrated within Schiphol Group – and the airport’s Smart Cargo Mainport Programme (SCMP). The SCMP “is our programme, together with the community, to execute this”, says Scheidel, who also manages the programme. He knows SCMP and Cargonaut well, having served until the end of last year as director for innovation and expertise at Cargonaut.
Described as a “drive for constant optimisation of air cargo processes in and around Schiphol”, SCMP projects “revolve around smart landside logistics, data sharing, and innovations”. Under SCMP, Schiphol aims to “integrate data and digitalise the air cargo supply chain by optimising landside processes and launching new sustainable innovations”.

Digital projects
Digital projects progressing this year include ‘Digital check-in’, and ‘Digital Handshake’ initiatives, along with the continued modernisation of Cargonaut’s Port Community System airport cargo information platform.
Scheidel comments: “Digitalisation is very important, but it’s an enabler of improved processes.” Implementing new processes is another challenge, although Scheidel believes one thing in Schiphol’s favour in this journey is “our Dutch culture” – which emphasises collaboration and straight talking.
From the outside, he says observers of Dutch collaborative air cargo meetings may think that those involved don’t like each other. But “it’s because we are very direct in saying what’s not going well, and what needs to be improved”, observes Scheidel. And that can help when holding one another to commitments made, he believes – something very important when implementing process change.

A plannable process
A key element of optimising the airport’s cargo capacity and operations is “to have a plannable process”, emphasises Scheidel, and the airport and the cargo community have created a roadmap to achieve that. And this is even more of a priority because the airport’s cargo activities are set to become confined within a smaller area.
“A lot of cargo needs to flow through the cargo area. That cargo area is now being reviewed, because of all the different things that will happen at the airport,” says Scheidel. “Things need to be moved, so the cargo area will be more crowded.”
Key changes to improve the infrastructure for airlines include making the airport’s Quebec taxiway a two-lane system, like the taxiways elsewhere at the airport, to reduce air traffic bottlenecks. The first phase, completed at the end of last year, involved building a second aircraft bridge over the A4 motorway. The second phase requires dismantling several cargo buildings at Schiphol-South in 2024 and finding new premises for the occupants.

Schiphol-South closures
Dnata is currently located in Cargo Building 5/6 at Schiphol-South, one of the buildings that will be demolished in 2024. It plans to move to a major new €200 million advanced cargo facility in the South-East cargo area, where Schiphol also plans “investments to implement seamless cargo processes with zero-emission ground operations by 2030”.
Scheidel says KLM may also move into that area at a later stage, which would mean all of the airport’s cargo will be handled in the designated area at Schiphol South-East. Concentrating all the cargo activities in one area, where the customs authorities are also located, will make some things things potentially easier, says Scheidel. “But we will have to review how we do the processes in this area, to be prepared for the future. And this is an opportunity to think about data exchange. So, it’s a structural thing, that we will use this cargo area more intensively.”

South-East developments
He continues: “In order to ensure that all flows continue seamlessly both airside and landside, we are working on the processes and digital part (‘bytes’) and the layout of the roads and other physical constructions (‘bricks’). We are working towards a situation where all information about cargo, drivers, and trucks is exchanged upfront and an appointment is made for when to deliver or collect cargo.”
Some of this work has already made progress, as Schiphol has accelerated some of the SCMP initiatives since last year. On the import side, so-called ‘automated nomination’ this year became a new standard, under the airport’s new tariffs and conditions published at the first of April. Automated nomination means import shipments will automatically be assigned to the correct forwarder before they physically arrive at Schiphol, rather than via a manual process, helping ground handlers and forwarders plan their operations more efficiently and reducing errors.
This was implemented this summer, and Schiphol and its stakeholders are getting more experience with it and working through the initial teething troubles, Scheidel says, adding: “In April, we said this is a new process, and then we have a kind of grace period, and then it becomes a little bit stricter.” But it is too early to quantify any of the noticeable benefits.
Important stepping stone
Scheidel says it’s also an important step in the wider advance information and plannability aim. “Because if you reuse that information, you can plan the process of the handler, you can plan slots of the forwarders or the transporters on their behalf to collect the cargo.
“So, at the moment, it’s about information sharing. In future, that can be connected to: ‘This is your time slot’, or ‘please go to the website to book your time slot’. So that’s also one of those important stepping stones.”
A key part of a plannable process is that a truck driver working on behalf of a forwarder “will come to the airport and knows his time slot, and he knows when to do what – and he will get a dock door at that moment”, says Scheidel. And that is the case of imports as well as exports.

Export digital pre-notification
On the export side, another of these stepping stones is digital pre-notification, which has increasingly become the new standard for all ground handlers at Schiphol, facilitating faster handling of export cargo. “That is the process where on the outbound side, the forwarders need to notify that the shipment is coming and who is coming there to bring it,” explains Scheidel.
And here the benefits are already visible. “That will speed up the process at the counter. And we now see an 80% adoption of that process,” he notes. “That’s going very well and has rapidly moved up. I think when we started one and a half years ago, it was 20%. So from 20% to 80%. So, that’s one of the things we need celebrate.”
He believes celebrating successes are important on the road to greater air freight digitalisation and efficiency, where from the outside progress can sometimes appear relatively slow.

‘Milkrun’ expansion
And another project worth celebrating that’s also progressing this year is the successful ‘Milkrun’ initiative, including an expansion of the project to include exports, where previously it had only been available for imports.
“Rather than each forwarder bringing his own cargo with one truck to the handler, these are now combined. And we see that the load factor of the trucks increases tremendously, going up from, say 30% to 90% load factor,” says Scheidel. “For sustainability, that’s really a very good project.”
And for efficiency of use of the airport’s cargo space as well.
“That’s also a stepping stone, because the trucking company will also share its information. So the data quality is also helped. So forwarders will have lower costs for the transportation, sustainability increased because the load factor is increased, and data quality is increased, because it’s a more regulated process.”

A clear business case
Scheidel highlights that the project manager of the Milkrun is a manager at DHL. “So, it’s something not only for smaller forwarders. If they have only a few shipments, there’s an obvious benefit for the smaller ones, but also for the larger ones there is a benefit. So, then you come to a cultural thing,” he points out.
“There’s a clear business case, but do you take the time and the efforts to participate? For all these things, you need to adapt your process a bit.”
Cultural change is not easy, although again he is hopeful that the Dutch character can be helpful. “We may say to each other we are going to change it, and parties don’t do it,” Scheidel notes. “But then people in Amsterdam tend to say to each other in the face: ‘You’re not doing what you told me yesterday’. And that gives me hope that, in the end, parties will change.”
In an environment where sustainability is increasingly valued, some will be surprised that average trucking load factors in air freight are still as low as 30%.
“Typically, it’s small distances; it’s high-value goods; the price is in the air, not at the land,” Scheidel points out. “So, typically the trucks are not so full, because the forwarders think it’s not that important. But the result is we have a lot of trucks which are almost empty. That’s a waste.”
Not just a waste of trucking resource, but also adding potential congestion in a congested airport cargo area.

Balancing speed and efficiency
But Scheidel is sympathetic to the thinking of forwarders that lies behind this low load factor level.
“Air freight is a premium product, so it’s important that the cargo is there in time. So (the thinking is, therefore, that) ‘it’s better to do it dedicated because then you have full control’. But now with the milkrun, if there’s another process which is also reliable, I think it’s a good thing for parties to think about that alternative.”
Developments to the Milkrun product include updating the IT environment, “and they are now expanding the number of participants – both on the handler side and forwarder side”.

Export pilot
The product has been running for several years for imports, but has only recently run as a pilot for exports. “They did a pilot with a small group, and now they are expanding the group,” Scheidel says.
In terms of why it has come so much later for exports, Scheidel notes that a lot of things during Covid were put on hold for a while. “The only project which continued was the digital pre-notification; the rest stopped for a while,” he says.
One possible further explanation for the later development of a Milkrun Export product may be that forwarders view export timings as more crucial, and so they wanted to keep control where possible.
“I think a lot of people in the industry tend to think that,” Scheidel acknowledges. “And airlines often say that once it’s at the airport of destination, it’s there; it’s done. But the end customer, the consignee, the last part is also crucial. You have not completed the whole service.”
He concludes: “I think we need to be more aware of serving the end customer; that we need to bring it to the consignee. The consignee is typically not paying for the journey; that’s typically the origin. But we need to have a good product. Imports are is also important.”

Predictability and efficiency
Scheidel strongly believes that making the airport’s cargo processes plannable and predictable are vital for all stakeholders and optimising all aspects of the air logistics chain – from truck driver and vehicle resources, handling resources, the workforce as a whole, speed of transit, sustainability, the use of space, safety, but also for the service to the customer.
“If you want to have a good product for the shipper, then a plannable process is vital,” he says. “Plannable also means predictable for the shipper. So, plannable is the key to predictability and efficiency.
“The alternative is that there’s a lot of waste – wasted time, waiting around, etc. So, the plannable process is vital in being an attractive hub.”