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Innovation, such as strategic alliances across the supply chain, and cost-efficient time-definite deliveries would boost the air cargo industry, delegates at TIACA’s professional development workshop heard recently.
Bringing stakeholders – from handling agents to airlines, from forwarders to GSAs – together enabled better collaboration in what is a fragmented industry, it was said.
“One of the ideas discussed was forming strategic alliances, which could give the industry a tremendous boost,” said Stan Wraight, executive director of SASI, which ran the course.
“Panalpina made the point that, actually, air freight generally delivers in eight days. But if you formed an alliance across handlers, forwarders and airlines, you could create a new first-class product, and have a three-day transit time.
“Whoever starts a strategic alliance that can do this will have a competitive advantage,” he added.
Another idea discussed was the launch of a slower, but time-definite product. Using off-airport facilities, warehouses could be operated by a consortium, with space available for several forwarders, allowing airlines to draw cargo from the facility whenever there was capacity available.
“It might have a ten-day transit time, but with cargo off-airport, it would knock cost out of the equation,” said Mr Wraight.
“European airports may have a warehouse cost of €18 per sq metre. But off-airport in the same place you could get a warehouse for €6 per sq m. But you can get cargo out of the warehouse just as fast.”
The air cargo industry has long suffered from its lack of cohesion – especially when compared with the integrators. But the TIACA course has been designed to introduce stakeholders, and their concerns, to each other while looking at improvements that can be made.
“The course helped me to understand even better what the key topics are for different types of companies of the air cargo supply chain,” said Markus von Hesse, corporate air freight product services manager for Panalpina.
“Discussions on specific topics allowed me to deepen my knowledge, too. Good examples of this were cost distribution models for the airline industry, relevant KPIs for ground handling agents and different business models for the airlines’ general sales agents (GSAs).
“The course was not only about learning, though. It was just as much about educating the other participants, about explaining the freight forwarder’s situation and perspective.”
Delegates heard from industry stalwarts like Ram Menen, former director of Emirates SkyCargo; Enno Osinga, svp cargo for Schiphol; Ben Radstaak, managing director Air Cargo Netherlands; and Boeing regional marketing director Jim Edgar, as well as consultancy SASI.
“I very much appreciated the fact that you had the opportunity to talk openly to some of the industry’s most experienced and respected experts,” added Mr von Hesse. “But it was also a good mix in terms of the players that were represented.
“It was the mix and bringing different people and perspectives together, learning from each other in discussions. Something that might be a given for one party, might not be a given for another.”
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Comment on this article
Dave AmbridgeJuly 07, 2014 at 1:33 pm
With the greatest of respect we have all been saying this for quite some time. As is usual with the Cargo Industry we are just very slow to act and move forward. COAG has been focused on this so it’s great to see TIACA focus on the same issue. I think we all know that it is the before and after Cargo Terminal part of the process where we lose the most time.
Cargo delivered 2 days ahead of the flight for example. Cargo not cleared at the weekend as the Agent and/or Customs are not working etc etc.
As a GHA we may have the Cargo for as little as 5-6 hours in the entire process. So where is the 6-8 days it actually takes?
The flying part is not the issue either so let’s see how we can reduce the average shipping time by 48 hours at least as IATA wants us to.
Joined up dialogue can certainly help.
John ParrottJuly 07, 2014 at 3:51 pm
One such opportunity would be to utilize the liberal cargo transfer regulations that apply in Alaska to serve the Asia – North America lanes.
Ed KerwinJuly 07, 2014 at 6:02 pm
This is a great expansion of the discussion needed to re-energize the industry. Over the years, the air cargo industry has adapted to the market and found ways to provide value to its customers. Today the industry is facing a new environment that is creating challenges to profits and stresses to the perceived value of the air cargo mode. It would be interesting to hear more about the Panalpina service through Huntsville and their experience in that style of collaboration and the average transit times relative to the industry benchmarks. It seems to work for Panalpina, but then there doesn’t seem to be anyone else following that lead. In the end, I believe the industry will figure it out and reinvent itself, but how long that will take and what the cost will be is not clear,
Mahesh.AGJuly 09, 2014 at 4:02 am
In India and the sub-continent the delays are basically due to many challenges like increased paperwork, unwanted customs formalities, delays, lack of infrastructure at airports.
The Indian cargo industry must resolve these constraints at the earliest. What is required is a collaborative effort to create a platform for introducing information & technology across the entire supply chain, use technology to create a combined initiative from all cargo industry stakeholders.