There is fear he said, “whether the customer will come to us and what do we have to do to keep the contract,” he said in reference to all parts of the air cargo supply chain. Saying that the industry needs to keep things as simple and consistent as possible, he urged the industry to embrace change.

The need for change is multifaceted – from the steaming growThof e-commerce, to security and regulatory changes, the push for e-freight, mode and modal competition, changing production and consumption patterns, the need to deliver as promised and the associated push to strip 48-hours out of the average end-toend shipment time and on, and on.

Similarly Barry D Nassberg, group chief operating officer of Worldwide Flight Services noted that, “every year we talk about the same things but do we ever accomplish anything?

“We need to change and we need to come up wiThsolutions to the problems that we face in our industry.” Nassberg went on to remind everyone that in the early 1950s the industry air waybills and typewriters. “Now if you go to 2015 we have a computer and we type all those air waybills and we still make the same mistakes – on weight, commodities, destinations and everything else.

“For us to be successful we need to put information down on airway bills correctly and transmit that information so that we can work on it and be ahead of the game,” he said, adding that C2K (the ‘rebranded’ Cargo 2000) is the key tool for measuring the quality of the product.

All about ‘change’

In reality the topic is not so much ‘fear’, but change. As David Ambridge, general manager cargo at Bangkok Flight Services noted, “there is a diff erence between doing the right thing that we all know is right and being proactive and making that change.”

In part this fear of change has intensifi ed over the last fi ve or six years, at least from the global fi nancial crisis, noted Glyn Hughes, global head of cargo at the International Air Transport Association (IATA).

“I think that during that very diffi cult business environment people became quite fearful of making change because you think how precarious certain business environments are and your concern is that if you make a slight tweak, or change, the customer goes running. So it’s more of a case that you want to try to hold onto as much as you’ve got and when you try to hold on to what you’ve got, you’re then most reluctant to try to do something diff erent.”

“I think the industry is now of the same view, that if we try to hold on to what we’ve got we are actually going to lose it.” But Hughes is confi dent that over the next 12 months “we will start to see quite a signifi cant amount of change.”

Relatively new to the industry, Jonas van Stekelenburg who recently took over as head of cargo at Amsterdam Airport Schiphol is also optimistic. “I look at it diff erently being new on the job – I see lots and lots of opportunities,” he said adding that in all his discussions with industry players there is a strong desire to make changes. He also used the example of the integrators who are widely seen as doing a better job than the traditional air cargo segments, saying “we also have a very good competitor, so it’s an ideal situation to improve.”

Similarly optimisitic is Henrik Ambak, senior vice president, cargo operations worldwide, Emirates SkyCargo who says the “meaningful” change that is needed will come because of the fact it is an open and very competitive market. Ambak noted the common fear 20 years ago when C2K was fi rst formed. At that time the big fear was that if nothing was done within the mainstream industry, the integrators – then fresh-faced on the scene – would take over the entire air cargo industry and airlines and forwarders would close shop.

“But if you look what’s happened since, the integrators haven’t taken over the whole thing and Cargo 2000 hasn’t been as successful as was hoped and meanwhile the integrator-forwarderairline relationship has tripled the cargo volumes.”

Airfreight is airfreight?

Part of the problem is perception, Ambak says. “There’s also this perception that airfreight is airfreight – it’s not.

Diff erent parts of the airfreight market are serving different needs. Federal Express and UPS are a very standardised product serving some people wiThvery standardised needs – they have great, fantastic execution if that is what your product needs.

“But there are other sectors of the market wiThcompletely diff erent needs in terms of speed and certainty and in terms of pricing for sure. To me what is missing in this discussion is also the element of what is airfreight and what diff erent segments we are serving.”

This prompted Ambridge to suggest that maybe the industry is not off ering the service that the customer wants. “But that depends again,” said Ambak, “because a lot of those customers moving cargo through forwarders and traditional carriers are quite happy, so again I have diffi culty seeing an industry like this one being unsuccessful – we’re the ones everyday satisfying certain needs.”

One of the key problems to getting change within the industry according to Michel Fiorani, manager global ground handling, Cargolux Airlines International, is getting all the diff erent stakeholders at the same table and getting them aligned. “Agreeing to change takes time, however we are living in an industry that is changing, it’s simply slowly changing.” But he did add the caveat as to whether the industry is changing to the needs of the customer. “That’s also a question that has to be answered,” he said.

The COAG way

Hong Kong Air Cargo Terminal Ltd’s chief operating officer, Tan Chee Hong expressed his view that it was time to come together and forget about talking about the past and how the industry never cooperated or put things into action. It is important to learn from the past and now come together to seriously work together and put something into action, he said, citing the work of COAG (Cargo Operations Advisory Group). Created in 2012 under the auspices of IATA, COAG brings together airlines and ground handlers to move on issues common to them.

“In COAG we see a lot of people with really strong passion and commitment together as an industry, to really say enough is enough, it’s really time to take action and hopefully that will start the momentum and I’m confident that the next year it’s not going to be about the fact nothing is being achieved. But lets work together and move forward and let’s put something in place.”

Sensing the uniformity of the theme coming from the roundtable participants, Ambridge noted that the message seemed to be one of, “we need to make changes before they’re forced on us.” He went on to note that, that day was drawing ever nearer with the US ACAS (Air Cargo Advanced Screening) and the EU’s similar security programme, Precise (PREloading Consignment Information for Secure Entry), all on the near horizon.

“We all know that we’ve got Acas and Precise coming our way in the very near future and that’s going to change how we communicate wiTheach other by an enormous amount – we don’t really know how much yet, but we’re going to have to rely a lot more on electronic information and that’s going to be a great change for us, but it’s sad that we haven’t made that change already.”

Raising the crucial issue of the e-AWB process, that while growing still continues to struggle to meet penetration targets, Hughes tapped a concern raised earlier. “What we’re trying to do in the industry wiThthe e-AWB process is just automate the paper process, rather than actually look at whether this is the right process that we need for today’s industry.”

He noted that essentially all the e-AWB process is doing is taking the old process and taking the message slightly more modern wiThslightly more information being exchanged. “I think that’s another area where we need to say, if we were to write the industry blueprint right now, would we start with peer-to-peer messaging? I don’t think we would – that’s not how the fi nancial services industry works, it’s not how all the e-commerce is operated for us as individuals, as consumers.

“So I think we have to look at how we use that information diff erently, we have to look at the ability to exchange information, not just between parties, but wiThcommunities and we have to look at using the data not in an A to B to C to D process, but in terms of whether it’s web services, or at least in a better utilisation of the data.”

A well-known advocate for e-freight, Ambridge described the reluctance to
give up paper processes as “40-yearold nonsense”. “I know for fact in
my business if we had E-freight we would save hundreds of thousands, if
not millions of dollars in the ground handling community,” and savings are
there for airlines as well, he added.

“In the short term there may be a little bit of pain, but my point is
whether there is a savings or not, it doesn’t matter,” said Ambridge. “My
point is we do it when we’re told to do it by the regulator because we have
no option, even though probably most of us know it’s the right thing that we
should’ve done fi ve years before anyway and I think that’s one of the problems
we have in the industry – we don’t like change and we have to get around that
somehow, period.”

The push within

At this point an audience member raised an interesting question: “To
what extent has the rise of diff erent players like the Middle East carriers
and the demise of some legacy carriers in Europe, had on the evolution of
change?”

From a European all-cargo carrier’s perspective, Fiorani responded: “The
emergence of the Middle East carriers has brought change, especially for us as
Cargolux, it’s a huge competition and they push us to think outside of the box
and I think as far as we are concerned, being a pure freighter airline, we are
day-by-day looking for alternatives in order to stay on top of these guys.

“We brought in a number of changes that will potentially give us advantages
compared to them, however the blocking factor is, and still remains,
the forwarding industry because when we talk about e-AWB, yes we have guys
working on it and the forwarders are working on it, however they say we have
e-AWB but they still print the paper air waybill.

“Unfortunately I think the only way to come up wiThrevolutionalised change
is when you have the legislation kicking in saying you do it now.”

Fiorani added that this goes back to an earlier discussed issue that there
are too many stakeholders and they are never all sitting together in the same
room. “Here we are again – ground handlers and airlines – we can talk, and
talk, and talk again, but it’s not a change that is only going to impact us. There
are other players in the game, but they have to play too.”

Citing the need for the industry to truly work together on all levels, Hughes
recited the well-worn industry mantra: “The shipper beats up the forwarder,
who beats up the carrier, who beats up the ground handler.

“If we retain that as an industry modus operandi then I think none of the
things we talked about will be achieved.

We need to go to the horizontal where everybody looks at the shared value
dimension, the neutral value we can drive out of the system by providing
solutions for the shipper.

“To be honest,” Hughes said, “if the industry doesn’t change there’s no need
for IATA Cargo – you don’t need us to facilitate change if nobody wants to
change.”