Time away from the sector has given Olivier Bijaoui, former president and CEO of the world’s largest air cargo handler, a fresh perspective – which he intends to employ when he returns
Life has been very different in the first 16 months since Olivier Bijaoui left the world’s largest air cargo handler, WFS, after a long and hugely successful career running the company. But it has been good. “I did so many things that I have not had time to do,” he says. “When you spend 35 years running a company like WFS and going from 25 employees to 17,000, you don’t really have time.”
Having looked forward to taking a step outside the cargo and ground handling sector at some point, he has really enjoyed the experience, although he does intend to come back once the period of restriction in his exit terms expires.
In the meantime, his life has been very varied, doing “so many things so different to what I was used to doing. I bought a bookstore, which is a restaurant at the same time, so you can have food and buy books. It’s nice and it’s doing well. I bought a music school, because I’m a musician and I have always been interested in music.” Both of these are in Paris, where he continues to live.
“I trade classic cars, because I am a collector. I’ve travelled with my family more than I was used to doing.” And he has also created a foundation to help people that need support, especially those that need help with integration, through culture and work. “So I have been busy, but in a very different way,” he says.
Perspective
But he has kept an eye on developments within air cargo handling. And watching from afar has given Bijaoui a fresh perspective.
“When you have been doing business for so long, you always ‘have your head on top of the spike’, as we say in France. So, you don’t watch at a distance to see where your industry is doing the right things, is doing well, or is changing. So this period has given the opportunity to do that.”
One change has been the continuing rise of e-commerce and its influence on air cargo and airlines. “This has been a massive support for air cargo, and is also driving necessary change,” he observes. “For a few years now it was clear that that buying a DVD for $9 from Amazon.com and getting it three or four days later in your home, via the mail, was something that will change our industry. It’s a revolution, in its own way, and that will force us to step up, especially the handlers, to adapt to these new approaches to business.”
He has followed with interest the various announcements about Amazon acquiring control of its own aircraft and starting to move cargo around. “I think it’s an interesting situation, and we see more and more e-commerce on commercial aircraft and freighters. It pushes the whole industry to make sure the supply chain is going to be faster and shorten some of the times it takes for cargo to move.”
He says there has for a long time been complaints about how much time general cargo spends on the ground versus in the air, and “whether at some point the integrators will take away all of the cargo from the other airlines, because they’re capable of doing it faster. The reality is that general cargo is very different from express and what UPS and FedEx do”, Bijaoui notes. “Now, e-commerce, interestingly, is not going on the integrators; it is going as general cargo on commercial aircraft because, from a cost standpoint, the only way is by mail. So, it is a very distinct time for the industry and for the handlers. Being part of the supply chain, you have to adapt your work to the new scenario.”
Crossroads
How the cargo handling sector will adapt remains unclear. “I think it will require some kind of disruptive push to get people to understand what is needed,” Bijaoui says. “We are at a kind of crossroads with people like Amazon and Alibaba, although Alibaba is a different model from Amazon.”
Looking specifically at Amazon, he says the US e-retail giant “will certainly need greater efficiency on the ground and faster movements between airports and their own facilities. And on an aircraft pallet, there will not be five shipments with five different air waybills, with 10 house air waybills on each air waybill. It is going to be a different scenario now. You will have many small shipments, and there is no global air waybill to cover it,” says Bijaoui.
“So, it’s a completely different treatment, I think, from a documentation standpoint. And on the ground, it will probably require a separate treatment in the warehouse to make sure that this cargo moves with the necessary speed.”
Dual treatment
But it is not just a case of building bigger mail areas or allocating more space to mail within cargo handling warehouses. “Mail will certainly need more space and more attention. But on top of this, it may also require a dual treatment − that you simply move pallets off airports really quickly, and then move them from an off-airport site to the people who are waiting for them; Amazon and other providers,” Bijaoui suggests.
“I think there are different ways to look at this and different ways to get there, either by adapting the piece that is on airport, or simply consider that these are pass-through pallets that you need to do the treatment right off airport in a specific warehouse.”
Whether cargo handlers have yet had an opportunity to really think about these changing needs and how to respond to them, he is unsure.
Comeback
But one thing Bijaoui is now very clear about is that he will come back to air cargo and ground handling. His absence has been an opportunity to confirm that he would like to return and that he can still bring something back to the industry.
“For the time being, I am restricted,” he says. “But for sure, I will get back into the industry, on the handling side − it’s the only thing I know. I’ve been doing it for 35 years, and I’m not sure I can do anything else − apart from maybe play music! So I will get back into this industry – there’s no question.”
Standardisation and centralisation
Bijaoui has never spoken publicly about the reasons for his departure from WFS, which came a year after the company’s acquisition by venture capital firm Platinum Equity, and he wishes to remain silent about this. But he is able to comment in general about the cargo handling sector and the tendency of the multinational players to push for greater standardisation and centralisation.
“I am an absolute believer in decentralisation, and managing each of the companies in each country in its own way, respecting the local culture and needs – and at the same time, it is essential for these global companies to have their own identity,” he says. “I think that complete centralisation totally misreads the local environment and therefore is not right.”
Like HSBC once described itself as ‘The world’s local bank’, “worldwide handlers need to be the world’s local handler”, Bijaoui suggests.
That means that the multinationals should give each country business “the space to give full attention to its customers, and that ensures that the customers are satisfied on each station”, Bijaoui says. “Pushing through orders, instructions, standardisation, I don’t believe in that model at all. You have to standardise a number of things, which is also the identity of the companies, to do things in a certain way.” But he believes that applying a high level of standardisation in every country, “knowing that each country is different, and each and every culture is different”, is folly. “The key thing is to have strong local management with leadership and commitment to the company and its customers,” he explains. “We always say that the employees make the difference, which is absolutely true, but if you don’t acknowledge they are different from one country to another and don’t respect their local culture, then you don’t get the right commitment and dedication.
“So, I’m certainly not a fan of centralisation.”
The company environment
Instead, companies should find a way of granting responsibility to people in the individual countries. “First of all, a country has to be run by a general manager that comes from this country, not someone from a foreign country,” he notes. “This person should then be supported to make the right decisions and to make decisions quickly, while also to be accountable for doing the right things and delivering the right service.”
But the role of the local company is also strategic – “they are remote people able to act and to manage, but do it within his own culture, which he understands and which I could not pretend to understand in all the parts of the world where I didn’t grow up”, Bijaoui notes. “And so I think standardisation can bring the identity of the company, but centralisation, no!”
But it is important to identify what type of standardisation will be helpful.
“Nobody will reinvent the wheel,” he notes. “Today, the handling standards described in an IATA contract are fairly clear; it is not through these items and services that you deliver that you will be recognised for being good or bad. You will be recognised by the service level that you deliver, or whether you are a good and bad handler; for that you’ll be remembered.”
It is through these things, combined with the company’s colours, logo, management body, and all the people that represent the company, that a handler will be remembered. “We’re talking more about the company culture rather than the standardisation of service,” he says. “The service that we deliver, through IATA 810 (IATA Standard Ground Handling Agreement – AHM 810) hasn’t really changed for 25 years. What will make the difference is service level, attitude – both of management and the local response to a problem; this is what is going to make your genes, and this is what the airlines would recognise.”
Standard SLAs
On whether there is a value to a standard SLA for the industry, something the IATA Cargo Handling Consultative Council (ICHC) has been developing, Bijaoui says: “First of all, it should go both ways. If you exceed the service levels, you should be rewarded – you can’t just be punished for falling short. A balanced agreement is an agreement that both sides believe they can gain from. If both sides are happy with the balance of the contract, that is the first step.”
But if we are talking about general cargo, he does not believe that the SLA is so different from one airline to another. “There are different levels of obligation with some airlines on security, for example, where different countries have different levels of security and the recognition of the known shipper programmes are easier in some countries than others,” he acknowledges. And there would be some differences for direct and indirect flights.
“But in most regards for general cargo, I don’t think so. At the end of the day, you just need to have the right service levels according to what the airlines’ expectations and standards are.”
IT standardisation
On need for standardisation on the IT side, he says this is less important and therefore less of a competitive advantage or necessity for multinational players than it used to be. “25 years ago, if you had 10 different airlines, you had 10 different IT systems, and used to train people in 10 different ways – on Sabre, on CargoSpot, and on a number of systems of the airlines – and it was very difficult,” he explains. “But these days, one computer system can talk to the other, and that is a big change. We needed more people than you need today, because today one talks to all.”
But elsewhere, attempts to modernise the sector have been less successful.
“Have we done the right thing about being more efficient with things like e-airway bill?” he asks. “I think we have been very poor. And Cargo 2000 was supposed to be here in the year 2000, and 17 years later I’m still not sure about how much progress has been made. But on the fact that IT has become more standard, there has been progress, and that has very seriously helped the handling agents. It is less heavy work. It is much easier today.
The common standards in airlines’ IT systems means that for a global handler to have one unified IT system “doesn’t really matter any more”.
Starbucksification
Pressed to put a number on a helpful level of standardisation versus local autonomy for cargo handling – if Starbucks is 80% standardisation versus 20% local autonomy – Bijaoui says: “I would go for a 50:50, because the 50% that would not be standardised would be enough to understand the local culture, the local attitudes, the local work, the local workers. It is to give more space to these aspects of business to be recognised.”
He continues: “You don’t do business in India the way you do business in Germany. You can train people to certain standards of work that your global company has been able to provide, but at the same time you also have to teach the decision-makers to have the freedom to make a decision in an environment that they know much better than you do.”
Customs formalities
One example is in the area of customs clearances. “If you look at the standards for customs, you have customs authorities that have for 25 years already been very active in pursuing an approach of trade facilitation – for example in the Netherlands, customs have a healthy and dynamic attitude to help the cargo at airport to grow.
“In contrast, in some countries, for example in South America, the customs authority have a very controlling attitude, where they want to control the duties and taxes. Because their focus is on this, they are very tight. This is a completely different culture. You can’t replicate what you do with a handling company in Holland in a South American country like Colombia or Brazil, because the focus is not the same and therefore the way the cargo handlers work in these parts of the world is very different.”
And if there is one body that controls cargo in an airport, it is customs. “They are the bosses at the airport,” he says. “They favour or they delay. And if you don’t take into account these things, and if you try to work in South America like you work in Amsterdam, that is not going to work. This is why working with the WCO (World Customs Organisation) is essential for handlers and freight forwarders.”
Return journey
And so, when Bijaoui does return to air cargo, where would he be likely to go?
“The only thing I can say is that I will come back; in which way is not clearly defined,” he responds. “I still think that I can bring something, and in due time I will answer that question in more detail. But I have a few ideas that I think can help change a few things.” nnn
