KLM: 'Importers, are you winning a battle, but losing the war?'

This opaque question is the headline of an ad placed by KLM Royal Dutch Airlines in The Economist magazine. The point of the ad is that importers should not just look at the transportation costs when deciding to move goods by air or sea. But also at a host of other variables, such as interest charges on transit stock and insurance fees.

To calculate the full cost for an importer, the airline developed a programme called ‘The Test of Time’ which “… can analyse your procurement details in great detail… and help you to find the real costs of merchandising your goods by air.”

Nothing new there, you might say, as there are countless decision-support tools that help companies with their modal options. And you are right. But what is special about this ad is that it ran in the September 17, 1966 edition of The Economist, around the time Frank Sinatra had a number 1 hit in the Top 100 with ‘Strangers in the Night’.

Some 55 years later, the question of whether to move goods by air or ocean is still current. Many shippers are revisiting their supply chains because of the recent slump in air cargo capacity as a consequence of the Covid-19 outbreak.

The software behind ‘The Test of Time’ was arguably the first decision-support tool specifically written for the air cargo industry. It ran on a high-tech IBM 1401 computer which could store ’even’ 16,000 characters, at a cost of about $22,000 per month (in 2020 dollars). There is a brief reference to this machine in the ad: “this is what KLM’s computer thinks”. It was one of just a handful of computers, which the airline then had.

Because the system could hold just a limited amount of characters, information was not stored on a disc, but on punch cards (see image above). This piece of firm paper was used to contain digital data (by the presence or absence of holes in predefined positions), to free up space on the tapes of the computer itself.

These punch cards were also actively used in our family home in the 1970s. Not for storing digital data, but for drawing upon, building a house of cards and making paper planes. Their yellow, blue and pink colours are some of my most vivid childhood memories.

During a recent dinner with my parents, my dad talked about how he had used these cards during his early computer programming days. And that he had used them as part of a programme he had built during his tenure at KLM, which was called “The Test of Time.”

I had always thought that I was the first one in our family to use technology and data to support the air cargo industry in making better informed decisions. Not so, someone had beaten me already by a meagre four decades. This apple did indeed not fall far from the tree.

Niall van de Wouw is founder and managing director of Clive Data Services