Air cargo ground handling profit margins squeezed

WITH margins ‘extremely tight and under constant pressure’ in the ground handling sector, businesses are facing mounting obstacles to delivering better quality.
Carriers on the look-out for ever-lower prices has become a major bone of contention.
Patrik Tschirch, managing director and chief operating officer at Germany’s LUG aircargo handling, argues: “Whilst our tonnage has been increasing steadily in the past few years profits have not grown proportionately.
“Margins continue to be unsatisfactorily low in the air cargo [handling] industry. Our [airline] partners need to realise that we need to make a fair profit and return on investments. Airlines will ultimately benefit from this in the long run,” he adds.
Improving operational efficiencies, reduced handling errors, and faster, more accurate information, are among the daily challenges operators face.
Regulatory changes in security (European Union Air Cargo Carrier Third Country – ACC3) and additional air transportation compliance (new EU GDP guidelines) are only adding to their woes.
Not surprisingly, calls for standardisation to streamline processes are gaining momentum.
Barry Nassberg, group chief operating officer at Worldwide Flight Services (WFS), is among them.
“We share the broadly held industry view that a global air cargo security standard would make more sense for regulators, businesses and security compliance than individual countries or trading blocs enforcing their own regulations,” he observes.
“How long that will take to achieve however remains to be seen and, of course, it will have to reflect the different threat levels at different airports around the world.”
Read Thelma Etim’s full feature on the ground handling industry in Air Cargo News 21 April – Issue No.775