HANDLING TRENDS: Working in partnership

posted on 3rd April 2018

Long-term partnerships and a holistic approach to service failures are key to improving performance, Swiss WorldCargo’s head of quality and services Christian Wyss tells Will Waters

Swiss WorldCargo has gone through some significant changes this year, including rolling out a new organisational structure it says is needed to keep pace with the modern challenges of global logistics and to align with the rapid transformation taking place across the supply chain.

The new structure has been in place since the beginning of 2017 and divides the company into three units, or “pillars”: Business Development & Customer Experience, Area & Contribution Management, and Quality & Services. The aim is to offer “solutions to meet customers’ needs today − and strengthen the company’s position as a service and quality leader”.

The Business Development & Customer Experience unit is expected “to understand market demands to improve products and services for customers”, while the role of the Quality & Services division is to deliver these improved products and services, along with increasing process efficiency and simplification. The unit is led by Christian Wyss, who has a long history with the airline after beginning his career with predecessor Swissair in 1992. He joined SwissWorldCargo (SWC) in 2002 as manager for pricing and capacity distribution, moving on to become head of cargo procurement in 2010.

QUALITY ON THE GROUND

Wyss says the role is mainly it is about improving quality, but also “to design the product to deliver the customer promise into the air cargo world”. That includes taking account of and complying with industry and regulatory standards.

With quality determined primarily by what takes places on the ground, and with most of Swiss’s cargo handling physically outsourced, communicating these needs to the carrier’s cargo handling providers is key. “Intensive dialogue with our suppliers is needed to make sure they deliver what we expect and that they understand what our customers expect,” Wyss says.

As a founding member of Cargo iQ, the quality initiative is “in the DNA” of SWC, although Cargo iQ is currently only a foundation of service quality. “Industry quality standards like Cargo iQ give you an indication on quality, but they don’t really identify the key issues you have in your transportation chain,” Wyss notes. “Our standards and figures are at the higher end of the scale, so to identify issues or holes you have in your quality chain at that level is quite difficult.

“Therefore, we try to systematically gather feedback from our customers, as well as our people in the outstations, as well as our service providers, on what could be potential issues or problems in delivery of a certain type of service.”

Wyss says you also have to involve suppliers early on if you come up with a new need or something you want to implement. “The earlier you involve them and you talk to them, the better the solution will be in the end, because they will also give their advice and do a reality check on their side and tell you what works and what doesn’t work.”

HOLISTIC APPROACH

He believes in a “holistic” approach to service failures, “sometimes telling our people we should actually anticipate service failures − because, if you dig into it and actually see where the issue happened, most of the things are chain reactions”. An issue develops at an early stage somewhere and is compounded during subsequent stages, creating “a snowball effect”, he notes, adding: “So, we should actually be factoring in those things, smelling it at an early stage,” and heading off potential problems. “Obviously, we are in aviation, where there is bad weather, snow, fog; so you’ll never have 100% quality. But those are the things you have to fight against.”

Although Cargo iQ may not be currently sufficiently sensitive or sophisticated to identify specific quality issues, Wyss is a strong believer in it “as far as standardisation goes”, allowing stakeholders to make comparisons and to know “you’re talking about the same thing. But, based on Cargo iQ alone, I could not necessarily find out whether I have a particular issue with the ground handler in a particular station. It gives me a wonderful picture overall and it’s very useful from that side”, but to really identify the issue often requires several issues to be untangled.

“Sometimes you have more than one party involved in the same process and then just reading the figures will not tell you anything about what actually happened,” he notes. “So, that’s why the system alone will not tell me, at least not at the maturity it is, where the issue happened.”

SMART DATA

But recent moves within Cargo iQ to use ‘smart data’ will give increased information that may be useful. “Potentially, that will certainly help and increase transparency; I think it’s moving into the right direction,” Wyss agrees. “But we don’t have everybody on board, so we will still have gaps in the chain.”

Those gaps include handling agents and customers, for example, despite “a great effort to expand the number of participants”.

He says big customers often tell SWC “that Cargo iQ is not something you really have to focus on because your quality is already so developed and mature”, adding: “Of course, we are committed to it, we work with it, we try to improve it, but we actually want to grow beyond the standards and be even better than that.”

As well as using feedback from customers, SWC staff in its outstations, and from its service providers, one new way to help identify issues is “the track and trace tool that we just recently upgraded with the implementation of the new webpage. We are still going into another cycle of further improving it and that helps us to identify weaknesses and weak spots in our transportation chain. But again, that’s only a system, so usually you need somebody to interpret the system, the figures, and ensure that this is really the issue. And normally you still need to talk to somebody and do a reality check − whether this is really the issue or where it really happens. So, you need people who are capable to interpret the figures.”

TRACKING SHIPMENTS

While Cargo iQ only tracks a certain percentage of cargo movements, Swiss tracks every shipment that is in its custody. “We use it for our own quality improvement initiatives,” explains Wyss. “If we see that we are particularly weak in a certain area, then we dig into it and look at it whether it’s down to that particular station or particular process or whatever the root cause of the issue might be. We look into it and try to improve it and fix it.”

That tracking information is made available to customers via the company’s website, while “the backside of the system is used internally on our side in order to identify the quality levels and where potentially we need to adapt or improve something”.

Although SWC had some issues in the past with its track and trace system, since the relaunch in March, it has “substantially improved”.

Like most of the air freight sector, that is not yet at piece level. “We are not there yet, but we are working on solutions going in that direction as well,” Wyss says. “Industry working groups are looking into that issue and we also try to work on this on our side because we believe this is required in the future, definitely.”

END-TO-END VISIBILITY

Although shippers often accuse the air cargo industry of lacking transparency or visibility of where the shipment is, Wyss says: “I think from a shipper’s perspective, it’s that he doesn’t have the visibility end to end, typically. From our side, he has got it from airport to airport, but there is a first mile, there is a last mile, and there are many miles in between.”

He continues: “Because we (as an industry) have lots of players that need to be orchestrated and work together, that obviously doesn’t help transparency, because you have contractors and subcontractors and it’s very challenging to orchestrate it efficiently and to have the visibility everywhere every time. Sometimes, certain players also don’t want that visibility to be shared, so there is still quite some work ahead of us.”

To a certain extent, forwarders profit from that lack of transparency, some in the industry observe.

“I think it’s really the shipper that has to push in this direction and claim that transparency,” Wyss suggests. “We try to explain to them that we are only a solution provider and not a customer of theirs, so it’s typically the customer that needs to ask for those things.”

ON-BOARD TRACKING

Last November, SWC launched a service offering real-time visibility for sensitive shipments, allowing approved active tracking devices on board flights and also providing a 24/7 dedicated intervention team that “can influence transportation quality in real-time”. That was introduced to meet “the need for timely information and transparency in supply chain logistics, since, despite careful planning, cargo irregularities can occur, such as temperature deviation, misrouting, or pilferage”, SWC says.

Wyss says this is currently mainly of interest to shippers of temperature-sensitive pharma goods − “those who most actively want to know each and every moment where the shipment is, what the condition around the shipment is. And it’s helping the transparency.”

But apart from this active tracking premium service, cargo is generally tracked “by milestones − where you map the whole transportation chain into certain milestones and in every milestone your service provider sends you a message or you yourself key in the message”.

That might be done manually, or via barcode scanning. “Once you miss a milestone, then you would potentially know that something has happened. So it’s a rather passive kind of tracking,” Wyss notes. These milestones are broadly the same as those used for Cargo iQ, although “you can add further ones or make it more explicit”, Wyss notes.

PARTNERSHIP WITH SUPPLIERS

In general, Wyss says cargo handling suppliers are usually able to provide what is needed, and where there is a mismatch in terms of what they are able to provide, most of the time “it’s about the infrastructure requirements: building a safe environment for the most valuable products that we transport, or putting up coolers, freezers or ambient temperature infrastructure − because obviously that requires investment.

“That is something where they were very hesitant in the past because we only offered them open contracts with 60 days notice period – which, honestly speaking, I would have also not invested into such things with these conditions. But now that we are turning these into more long-term agreements, that is less of a problem − if they also see the potential on their side and know how to make use of that and how to market it.”

Those infrastructure shortfalls have tended to be the most difficult problems to resolve, “because you cannot solve it within two weeks because it needs construction; it needs careful planning; you need authorisation from the airport authority”, he explains.

“From a pure service delivery point of view, if you’re ready to pay, there is always a solution that they offer to us. Sometimes it may not be mature enough or stable enough, but typically they can deliver what we request from them. And otherwise we don’t choose them.”

Of course, there are parts of the world where carriers don’t have a choice. “Sometimes you have to work with a partner in a monopoly situation where they will not provide the whole range of services you might require,” he acknowledges. “But if there is competition, we do not choose (a supplier) if we think they cannot fulfill.”

QUALITY IMPROVEMENT

That move from 60-day contracts to longer-term partnerships took place around five or six years ago. “We do most of our procurement jointly with Lufthansa, and it was basically a result of the feedback that came from suppliers at that time,” explains Wyss. “We were quite demanding, asking for a lot of things, so they also wanted to have a long-term perspective − and our business is pretty long term.”

Typically these contracts now are for three years. “It depends a little bit on the location, but we are ready to go into such long-term agreements,” Wyss says. “I think it was an important step to give them the confidence as well… we really want to work in a partnership and not just in a supplier-customer relationship.”

He believes it has delivered a quality improvement. “Not everywhere, obviously; it’s not a guarantee; but it helps to give them a long-term perspective – they are ready to build up something more stable and more long-term than just thinking for the next 30 days.”