Is shipment consolidation the big barrier to cutting transit times?

DOING the same thing over and over again and expecting a different outcome is a clear sign of madness, it is said. Exposure to the air cargo industry’s disjointed processes only endorses that aphorism, writes Thelma Etim, deputy editor.

With the industry’s golden era long gone, and despite the e-commerce boom, it continually battles against modal shift and lost market share to the integrators’ seamless supply chains yet, bizarrely, is reluctant to relinquish its antiquated, illogical ways of operating.

Murray Kid, vice-president and global head of iCargo sales at software provider IBS, says nothing much has changed in the last decade. “Some 15-16 years ago I did a study with Unisys which proved it was actually taking a minimum of six days lead-time to deliver products between forwarders and airlines,” he recalls.

“In fact it was often actually taking six to 15 days – and sometimes 21. That was 15 years ago and nothing has changed much since then. One of the issues I identified during that study was that freight forwarders and their consolidations – when airlines hand out the containers – hold up that shipment until the containers are [profitably] full. That is where the delay was – and still is,” he concludes.

Since taking up his position as IATA’s new global head of cargo, Glyn Hughes has continued to urge members of the airfreight supply chain to cut transit times by 48 hours. “Freight, when it is moving, generates revenue. Freight, when it is stationary, incurs costs,” Hughes remarks.

“It is very disappointing to admit to what we call the ‘air cargo paradox’.  On one hand, we are transporting the latest and most advanced products (iPhone 6, pharmaceuticals etc) but, on the other, we are actually using last-century processes and technology.

“We’ve got to do things differently. The dwell is everywhere. We have to virtually rewrite [the way the industry operates] from start to finish,” he adds.

The industry should focus on product quality and cost control. “We are here to serve the customer,” he warns.

With US$6.8 trn of goods transported by air every year, representing nearly 35 per cent of total international trade, what is holding things up? David Ambridge, general manager of cargo at Bangkok Flight Services and a member of IATA’s Cargo Operations Advisory Group (COAG) committee, which was established to bring airlines and ground handling agents (GHA) together to develop best-practice, proffers his own theory: “I know what the problem is and I think we all know what the problem is, it is not the airline and it is not the ground handlers,” he remarks.

“If you look at an average shipment, the longest point-to-point flight leg that I know of is about 16 hours and 30 minutes. So an airline has it for a maximum of 16 hours and 30 minutes, the ground handling company may have real ownership of it for about eight hours. So, there are 24 hours which we can account for – flying and handling."

Read Thelma Etim’s full feature on the ground handling industry in Air Cargo News 6 October April – Issue No.787