Enno Osinga, head of cargo at Amsterdam Schiphol Airport, tells Will Waters how innovation and a holistic approach can dramatically streamline air cargo handling processes
As a trading nation, the Dutch have taken a global view for hundreds of years, and this is reflected in their attitude to collaboration and consultation. In fact, all these things are very much part of the national culture, says Enno Osinga, senior vice president of cargo a
t Amsterdam Schiphol Airport, and this can clearly be seen in the country’s rather holistic approach to logistics.
“The Dutch have been trading forever, so it becomes part of the way our society functions, whereas in other countries they may have different priorities,” he says.
“Logistics makes up a very significant percentage of GDP in the Netherlands, and the government made a significant change in selecting some sectors where we really want to excel, and logistics was one of them, really identifying that this was one of our core industries.”
From this, the co-called Top Team Logistics was created, chaired by former head of KLM, Leo van Wijk, which in six months hammered out a priority agenda for improving the logistics situation in the Netherlands, through innovation and co-ordination between the various players. The implementation is coordinated by a national Strategic Logistics Platform, also headed by Leo van Wijk.
Coordination has also been happening on a regional level, for example through the Amsterdam Economic Board, incorporating all the major cities around the Dutch capital, covering several economic segments, one of which is logistics – Smart Logistics Amsterdam. Osinga is in charge of the programme committee for this, and the first project which they will start this year is called Seamless Connections.
“This means how to improve the customs process, the information process, the interface between the ports and the airport,” he says. “So we are really looking at things in an integrated sense.”
Osinga is confident this will bring progress in the coming years.
“The essence of Seamless Connections is to speed up and connect everything and strengthen everything in the region,” he says. “There are something like 25 companies involved in putting this together, and one concrete result is that we have just opened an office in Amsterdam of Dinalog, the Dutch Institute for Advanced Logistics, which was established in the south of the Netherlands. The essence of that is to bring together all those involved in the logistics area to really start making innovation work. That is a support organisation to make sure we don’t just talk about working together, but have a vehicle where we can work together.
“We also have another whole area of research and development, the Smart Services Hub. One of its very important major projects is with the universities, to assess colleges and labour markets. At the moment there is no labour market problem, but this project will help make sure that we continue to have a highly qualified labour force in the future for the logistics sector when the economy picks up again. So it is about looking at logistics in a sustainable way, which needs to be an on-going process.”
Schiphol Airport’s SmartGate Cargo initiative is another key concept that is now being implemented, and is a cooperation involving Customs, Air Cargo Netherlands, and companies involved in logistics and the airport. It involves the integrated monitoring of goods leaving the European Union from Amsterdam Schiphol, allowing rapid and efficient Customs clearances.
The related e-Link project, is just entering phase two.
“In phase one, as part of the SmartGate programme, we built an information broker system, which means the industry can put all the information in there, and we have regulated access so that customers and authorities can get out of it what they are allowed to see and work with,” says Osinga. “One of the key things is that we have now linked it to what we call the ACN pass, which is like an airport pass, and every driver that comes has to go through a security screening process to apply for one. Once he has that pass, he has immediate access to all the handling agents’ buildings and areas, so there we can reduce the security check time at the gate.
“But the key thing is that we load all the information of what is in the drivers truck onto that pass, and the moment they enter with their pass, information about everything that is in their truck is passed to Customs. And when he gets to a handling agent, he doesn’t have to walk around with a lot of paperwork – he simply puts that pass onto a reader, and all the shipments are transferred to the handling agent and he actually gets a sign-off. So it is part of a paperless process. Once you have got the information, you can really change it into an active planning process.
“We’re planning a 25% reduction in the throughput time of inbound and outbound traffic at the airport. We will start this quarter, and that will be finished by the third quarter of 2013.”
Schiphol is currently building a large new truck park, which will be fully integrated with this information system.
“That means that the truck goes to the truck park and waits until it is called by the handling agent. And instantly you reduce the congestion at the handling agent.
“So the handling agent also gets much more advanced information. If the handling agent gets the message saying there is a truck standing ready and it needs this and this stuff, then the handling agent can get everything together by the door, and when the truck arrives he opens the door and the driver puts it straight in and drives off. That is a 10-minute turnaround time rather than a one-hour turnaround time.
“So these are the sort of things we’re talking about, for reducing throughput times and also reducing congestion. It is all interlinked, which is what I find fascinating about this programme. We used to think of separate projects, but what we are now seeing is an integrated programme with many projects, and managing the integration of them.”
There is also the ‘Flower Programme’, to improve the logistics connection between the flower auction at Aalsmeer and Schiphol, which is aiming for a reduction of 10% in transport times.
Osinga says that there have been clear benefits already from a number of these initiatives in connectedness.
“The advanced information means that drivers don’t have to carry all this paperwork around, and the next phase is now is to change it into a planning programme. We’ve got the information broker system that holds all the information, we have got ‘try out’ with central inspection centres for Customs, and Customs is now in the process of the final design of their SmartGate inspection centre, together with decentralised inspection centres.”
Osinga finds the process of continuing development very interesting.
“When we started out the SmartGate project, everyone asked: ‘When is this ready?’ And I said: ‘Well, it’s never ready. It’s a never-ending evolution.’”
The initial design was for one big central inspection point, doing inspections at truck level.
“Then we went into the implementation and we sat down and realised that the concept was right, but the way we were planning to do it wasn’t – it didn’t fit the individual processes,” enthuses Osinga.
“And Customs said: Okay, then we let go of the single point, and why don’t we come up with a virtual point?’ And that means that every handling agent can actually acquire and install the scanning equipment in their facility, and scan shipments, and it will be all connected to the Customs control centre, which can be reading the scan and making decisions from that.
“So separating control from the physical goods, we have achieved massive speedups, we have achieved massive flexibility, and the concept that we designed is still totally there.”
This is what Osinga likes about having an on-going programme.
“If you make it into one project, you have one project manager, but with the whole programme that is a full partnership, then every day we sit down and every day somebody says: ‘This is really good, but it may not be the best way of doing things’, and everyone else says: ‘Okay, let’s try and find a better way of doing it’, rather than saying: ‘No, this is my plan,’” he says.
Osinga believes this is another typical aspect of the Dutch mentality.
“We’re famous for taking a long time to make decisions, because everybody wants to talk about it. But what we’re saying is: ‘Yes you’re right, but the end result is that you make the best decisions.’ It is better to take a year to make a better decision than make the wrong decision in six months and then find that you spend the next five years working with the wrong decision.”
Osinga says much of his role in the last three years has been about making connections. “We look at where things don’t go as well as you think they could go, and we try to bring the parties together and facilitate an innovation process. We will spend time on it, and sometimes a little money to facilitate the move forward, and once it is going, we step out of it again. For example, the Cargonaut community system was originally started by Schiphol. Now it is all about the whole industry, and we are just one of the shareholders.”
However, the initiatives have to pay off in the long term.
“We are a business, so my board will not just let me do this for fun. Cargo drives an enormous amount of revenue for the airport.”
One innovative development that seems to have brought rewards was the creation of airside facilities for forwarders, to speed up the process of handling. “We have got Panalpina, Rhenus, Ceva, MOL Logistics as forwarders airside,” he says. “One benefit is we have put two very large buildings on airside, so real estate has benefited. But the real benefit has been that Rhenus and Panalpina now have a major European distribution centre at Schiphol, so they will focus their traffic through Schiphol, and ultimately build the marketplace. Who benefits? The airlines and the handling agents.”
For the forwarders, the benefit on the export side is they have full control – of the packing, they can optimise the pallet, and their experience is they have less damage and so their claims go down.
“But the key thing is that, on the inbound side, when the aircraft arrives, the pallet comes directly to their facilities. So they have pallets in the facility within two hours of the aircraft arriving, whereas traditionally it goes through the handling agent and can take up to six or eight hours after the aircraft arrives to have the cargo available.”
He admits there was initially some resistance from handlers, because they saw it as a threat. “But now two things have developed: Firstly, they’ve come to realise that it helps to grow the market, so rather than losing business, they are gaining business out of it. They have also realised that, while the forwarders may be airside, they cannot do the ground-handling part, so the handlers can offer to do that part for them. And in fact, Ceva and MOL Logistics have moved into the Menzies building, who are, therefore, also providing the warehouse staff.
“So, following their initial resistance, now handlers are saying: ‘OK, let’s just change our traditional business model and look for new opportunities’, and Menzies has certainly been successful in that.”