Parting shots

DAVE BROOKS had a tough act to follow when he took over as cargo president for American Airlines in 1996, the previous incumbent having been air cargo legend Bill Boesch. 
But Boesch never had to cope with turmoil such as the events of 9/11 or the crippling downturn of 2008-9.

Brooks has been a steady pair of hands through such crises and, as he retired at the end of June, sees much to praise about the air cargo industry’s performance in those 16 years.
In particular, he thinks the industry can pat itself on the back for not having a single terrorist attack in the years since 9/11.

“Had we had even the slightest incident, we would have been on the blocks in 20 min-utes,” he says. “It is a credit to all industry participants, particularly those in passenger air-line cargo divisions, that we were all extremely vigilant, and there were no slip-ups or mistakes.”

Praise too goes to the way the industry has improved its service levels. “Fifteen years ago we were just starting to define what standards should be, and what the membership profile should be for example, whether it should include handling companies,” Brooks recalls.

“Today Cargo 2000 has a robust cadre of carriers and forwarders, and they publish a report card every month. That is very compelling and customers are starting to include Cargo 2000 in their RFP criteria.”

He reckons that tighter security regulations have played a part here, introducing a level of discipline into the business that has fed through into cust-omer service. “If you’re more careful about what you are handling, you probably do a better job of making sure it is where it should be,” he points out.

He also highlights the way that carriers have responded to changing customer needs, for example by creating temperature-controlled products.
“This is something that is very difficult to do, but most carriers have managed to meet the needs of this hugely growing sector of the air cargo industry.”A common thread across all these projects, Brooks reckons, is the quality of people in the top jobs, especially in the USA.
He singles out Neel Shah at Delta, Robbie Anderson at United, Michael Steen at Atlas, Sue Shaver at Airlines for America (formerly the Air Transport Association), Michael Vorwerk at CNS and Brandon Fried at the Airforwarders Association.

“We would not have seen that spectrum of quality in the air cargo industry 20 years ago,” he suggests. “And I am not forgetting the talent at international carriers either. For example, Ram Menen has set the standard for the industry in so many ways.”

Though in the early years after 9/11 there was considerable frustration in the industry with US authorities, Brooks also has praise for the current team at the TSA, particularly Doug Brittin, general manager, Tamika McCree who acts as liaison between it and the industry, and assistant administrator John Sammon.

“At the beginning these jobs turned over every six months, but these three (people) have now been in place for years and have helped the (air Cargo) industry get through the chan-ges in regulation,” he says. “We could not have done the job we have without their expertise and assistance.”

When it comes to brickbats, Brooks’ most severe criticism is reserved for all those involved in the violation of the anti-trust laws over fuel and other surcharges. “I have lost track, but the fines must be more than a billion dollars by now,” he says.
“That is a tax we have paid and got no value from. It is money that could have been supporting the industry.”

He has no time for the argument that some in the industry may have unwittingly broken the anti-trust laws, or that the authorities have been over-zealous in prosecuting cases. “I don’t think that is the case at all,” he says.

“I think that those who paid the most in fines were the most guilty.These people should be ashamed of themselves. The mystery to me is why those members of the supply chain who did comply with the law are still doing business with those that ripped them off.  

“There doesn’t appear to have been any commercial conseq-uences from not complying, which is very discouraging.”

Brooks is also disappointed at the lack of significant progress on e-freight, although he says some of the reasons for this are understandable. 
For example, he reckons many forwarders could not see a clear business case for it, and have found it hard to weigh the benefits of paper being removed against the added work of running two different processes in parallel during a transition period.

Then there is the fact that the industry has been trying to make this change in very difficult economic times. “In 2008-9 the industry collapsed and everyone was suddenly in survival mode,” Brooks says. “Some good projects had to be thrown overboard.”

Shippers using the downturn to lock in lower rates did not help either, and the same trend has been bad news for freighter operators too. By contrast, many factors seem to have favoured pure belly operators like American Airlines.

These include the growth of passenger fleets, meaning that fewer and fewer markets now need freighters to serve them, and the growth in belly capacity as modern widebody passenger aircraft have become more fuel-efficient. 

In this context, Brooks cites the B777, with its 25 tonnes of cargo payload per flight. “The expression ‘game changer’ is over-used, but in the case of the B777 it is justified,” he says.

Pure belly carriers often get accused of undercutting freighter rates, and selling capacity for whatever they can get, and Brooks does not deny this is the attitude of some operators.
But he says many belly carriers are now smarter about pricing, focusing on the value of a particular piece of capacity to the customer rather than filling aircraft at any price.

“The naïve view of revenue management is that it is a way to raise rates, and in some markets that is true. But it is more about enabling the cust-omer to pay what the value of the transportation is to them,” Brooks says.

“If it is a high value lane, maybe in the past the customer had no access to the capacity because someone got in there first. Today’s system can predict when high value cargo will come along, and tell those customers not prepared to pay that they have to ship on a different day or route, or use a different mode.”

In his retirement, Brooks plans first to do some hiking, and then see what comes along. “My wife has already given me a long list of tasks to do around the house,” he jokes. 

He has handed over the cargo baton at American to Kenji Hashimoto, a man he describes as “very bright, very sharp”. He passes on to his successor a job which has plenty of autonomy compared to other airline roles.
“In other airline jobs you are in charge of one staff group such as food or scheduling, but in cargo you’re running a business. You are in charge of a fairly large enterprise and you are given a fair amount of freedom.

“At the end of the day the report card boils down to whether you have happy customers and whether you make the numbers.”