Schiphol: Shippers, not freighters

In any industry, does it not make sense to study the strategies of the most successful players? Yet at a time when Amsterdam Schiphol airport is showing robust growth in cargo volumes, many of its major rivals are taking the opposite approach.
They are dispensing with cargo managers and making cargo an offshoot of the property division. At Schiphol the cargo team has actually grown and now numbers eight executives.
The figures speak for themselves. Schiphol recorded eight per cent cargo growth in the ten months to October, while Fraport managed two per cent, Paris 1.3 per cent and London 5.6 per cent. Freighter traffic grew even faster than belly, the opposite of the trend in most of the industry.
It is true that full year 2014 figures were a bit lower – at  6.7 per cent – but Schiphol attributed that partly to the diversion of freighters to the US West Coast in December due to the port congestion there.
The interesting thing is that Schiphol achieves this success without offering incentive programmes to airlines o rby even trying particularly to woo them.
"One thing that separates us from other airports is that we don’t focus on the airport," says Enno Osinga, Schiphol’s senior vice-president cargo. "Instead we are an integral part of the local economic community. Our approach is to build the market. If the cargo is here then freighters will fly here too."
So what Osinga and his team do is spend a lot of time working out the way shippers are thinking. "We always complain that we don’t have shippers at our conferences, but then do we listen to them?" he asks. "If shippers are talking about stuff, shouldn’t we be talking about the same stuff?"
He cites the Life Sciences and Pharmaceuticals Conference held by Air Cargo News in January. "We had pharmaceutical shippers present and what was fascinating was that they talked about different stuff from us." Or there was Robert Mellin of Ericcson at the Dallas TIACA conference. "He said ‘How come you can’t do this?’ and airlines said ‘We didn’t know you wanted these things’ and he said ‘How come you don’t know?’."
He is struck by the way pharmaceuticals companies always talk about the patient that the drugs will ultimately help. "They want the drugs there on time, in the right condition and with no fake articles. If in air cargo we also start talking about the patient, then we will start to look at the chain in a different way.
"One pharmaceutical shipper said that when things go wrong, the great difficulty is to know where it went wrong. Everyone blames each other because they are worried about liability.
“But the shipper just wants to know where the problem was so they can fix it. This is a good example of what I mean. We say the words but we do not really embrace the shipper."
Joined-up thinking of this kind is something that the Dutch have always been famous for, but one charge that might be levied against Schiphol is that it can afford to have a large cargo team participating in these kind of sophisticated discussions because it is the obvious central airport in Europe where freighters will naturally want to fly.
Osinga rather surprisingly refutes this argument. "No, we are not in the right place," he says. "Holland is not an industrial country and so air cargo does not need to be here. Amsterdam has been able to develop as a cargo airport even though it is not in the centre of Europe because of the strategy that has always been in place here.
"We are one of the oldest airports to still occupy the same site. We are only 20 minutes from the centre of Amsterdam but we still have space to expand. Other airports do not have this because they let people build around them."
Despite this, he says that the enthusiasm of the local government for air cargo is not one that cannot be taken for granted. Eight years ago, when he took up the job, councils in the Schiphol area were trying to discourage freighter operations.
"We are so into air cargo that we think everyone understands it, but to them it was just noisy aircraft flying at night. I asked them: ‘Have you ever used air cargo’ and they said no. But then I said ‘You have a smartphone, you buy fruit, you buy flowers.’ They had no idea they used air cargo every day."
He also pointed out the impact that air cargo had on jobs. "Passenger is a bigger business, but it does not create so many local jobs. KLM may have 3,500 flight crew but they are mostly not based at Schiphol. So then it really clicked with them. They wrote to the national government saying ‘Whatever you do, don’t touch air cargo’."
Being a successful cargo airport is not just about understanding shippers and influencing government policy, however. Schiphol has also consistently been at the forefront of trying to design new automated cargo processes.
One, which has been under development since 2008, under the SmartGate programme to automate Customs processes, is an initiative to create a central control centre from where Customs can remotely monitor shipments. The idea is that Customs will be able to look at the electronic data on shipments, decide which they want to inspect, and then have the forwarder put that container into a scanner which will upload images directly to Customs.
Only if the shipment needs physical inspection will Customs have to dispatch an officer to the forwarder premises.
All this is a bit late in coming: it was supposed to be operational by 2012 and is now targeted for 2016. "But what will be ready then will be so much more than we expected to have in 2012," Osinga explains.
Other initiatives include a mobile scanner that can be taken to smaller forwarders and nuclear detection gates for all handling facilities. Also to come is a joint inspection facility where any truck coming from a company that does not have Authorised Economic Operator status will be inspected and cleared by all relevant regulatory agencies.
Another initiative – there seem to be so many of them at Schiphol – is eLink, a local electronic data interchange between handlers, forwarders and truckers.
All information on a shipment is uploaded to eLink along with the license plate of the truck it is being carried in, and when the trucker gets to the gate of the cargo facility he puts a smartcard into a reader and is told instantly which dock to go to.
Customs is also notified automatically. If the driver needs to go to the office to present documents, he simply inserts his card into a reader there and all documents are uploaded.
This system is already being used for 30 per cent of shipments from the Netherlands, and Osinga is hopeful it will soon become part of the ready for carriage rules for the airport. "But that is a complicated process and will take a couple of years."
The Schiphol cargo team is in discussion with Hong Kong, Incheon and Paris to create a global version of this system in conjunction with Cargonaut. "We never hide what we do here and always share our developments," Osinga says. "These things should not be part of the competitive advantage of a particular airport. Our real competition is the ship and that is what we should be focusing on."