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Fragmented air cargo services industry

Fragmented air cargo services industry

The fragmented air cargo industry has received a promising boost towards better performance through the collaboration of strategic alliances. Through such innovative unification efforts, deliveries across the entire supply chain could show improvements in both time and cost efficiency.

Stakeholders in the air freight industry gathered at a TIACA course to learn about and discuss existing service problems. Present at the meeting were a range of industry segment representatives, including airlines, GSAs, freight forwarders and handling agents that were seeking to better understand and voice concerns and ideas that might lead to industry improvements.

One bright idea that was seriously discussed was the forming of a strategic alliance that would better organize and strengthen the entire air freight supply chain. An example was provided by the Swiss company Panalpina which has an average delivery time of eight days. It was suggested that if freight airlines, forwarders and handlers aligned, then the company could offer a three-day delivery option to its customers.

Meeting members also considered the idea of creating warehouses and off-airport facilities that could be used to store freight from a number of forwarders. This option would allow airlines to retrieve freight from these facilities and ship it as aircraft freight space became available. The idea would be much slower to launch, but it would carry the potential of reducing costs.

For example, companies providing air cargo services could bypass European airports that carry an €18 charge per square meter in lieu of off-airport facilities that only charges €6 per square meter. Storage costs would decrease by one third while little to no delays would occur in delivery time.

Air cargo delegates represented a thorough mix of industry supply chain participants that all had one thing in common, to learn more about and better understand other aspects of the industry and to discuss ways in which the entire process could be streamlined. Various areas were highlighted such as differing airline business models used by GSAs (general sales agents), key performance indicators (KPIs) used by ground handling agents, and important airline cost distribution models.

Guest speakers included Jim Edgar, regional marketing director for Boeing, Air Cargo Netherlands managing director Ben Radstaak, Enno Osinga of Schiphol and former Emirates SkyCargo director Ram Menen.

It is hoped by all involved that tangible improvements can be realized so that collaboration, efficiency and cost effectiveness throughout the air freight industry receive a much needed boost.

Jul 23, 2014
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