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   Vol. 14  No. 13
Tuesday February 10, 2015

Dan Muscatello By Richard Malkin

Dan Muscatello Airport Target


     Described in its simplest terms, the design and construction of an airport are for safe aircraft takeoffs and landings; and in between is Dan Muscatello who has spent more than three decades in the public and private sectors wrestling with all manner of cargo problems and strategies. Over the years, like a planter sowing seeds he has applied his expertise and progressive outlook around the world. His proven talents as a development strategist for “both the business and physical facility planning of an air cargo complex, as well as the integration of an ancillary and logistics support services,” rank high as an authority.
     In my interviews with top-level air cargo executives, it has been a common practice to seek respective designations of the world’s three best cargo-handling airports. When I put the same question to Muscatello, he declined, asserting that to do so was “virtually impossible.” He explained that airport operations are vastly different, especially since “comparable criteria” are not immediately apparent. Also—and this is strikingly significant—the airlines, not the airport, perform the cargo handling, and “their levels of emphasis and performance vary dramatically.”
     In contrast to the above, Muscatello suggested three characteristics that a “good cargo operation” will have and open to airport contribution: (a) physical planning for transfer and/or O & D activity; (b) a rate structure that produces a fair profit for cargo operations and building management; (c) along with off-airport businesses, “strategic integration” of airport cargo operations.

Dan In Delhi and Shanghai

     Within the industry, there is frequent talk about the feasibility of all-cargo airports. What is the current status of this topic?
     In his response, Muscatello pointed out that despite existence of “well-defined” operating characteristics that suggest “potential success,” the criteria are met by extremely few locations for large cargo operations that a freighter airport required. Muscatello called attention to the fact that more carriers are becoming more “strategic” in belly-capacity utilization. He allowed, however, “there will always be exceptions—but not many.” Could he cite one such exception? His answer: “An airport created for an integrator/express carrier.” In his opinion, the opportunities for an all-cargo airport during the next couple of decades are “pretty limited”.
     Asked whether cargo management undergoes change in accordance with an airport’s location, Muscatello labeled it a factor, but not as important as the nature of the operation”. An O & D operation, he said, is influenced by throughput, quite different from a transfer hub whose requirements are wholly incompatible. Equally critical is the nature of the cargo. Where international shipments are concerned, changes can be effected by local customs requirements and police policies. Muscatello offered two keys—one for cargo management, one for airports intent on best practices: For cargo management, flexibility, for airports, ensure that comparisons are “drawn with similar operations”.

Daniel Muscatello and Abu Dhabi

     For a parenthetical comment on airline and forwarder complaints, I turn back the centuries to Horace who observed that something is always lacking to one’s fortune. The overreaching problem is identical for both: cost. Right behind this complaint is another: the condition of facilities and infrastructure.
     Muscatello further noted:
     “Sine 9/11 there has been a lot of pressure on airports to control costs, and while airports try, they face the same escalation in pricing as the constituents they serve. Airports as public entities have to prioritize service and job development in their business goals, while carriers and forwarders are hit by low yields and have to manage to the bottom line. In that regard, they pass through increased costs to their customers. I always found it puzzling that the industry takes exception when the airports do the same.”
     The primacy of airline business is the passenger. Does this fact present a negative impact on cargo facility needs? Said Muscatello: In some instances, “absolutely!” But he quickly cautioned against confusing his answer with an indication of airport neglect. Not unlike other businesses, he went on to point out, airports must prioritize “when and how” to allocate money.
     Running an airport like a private business is not an easy job. It calls for the airport manager’s “sensitivity to the politics and public relations impacts of decisions”.
     Turning to the subject of cargo handling, Muscatello was asked what he believed to be its foremost problem. Speaking from an airport point of view, he held that too many handling firms and up to a proliferation of ground service equipment that results in blocking the apron and creating problems in safety. He added: “I have seen a number of instances where the value of competition for handling business is lost by basing everything on price, resulting in poorer service and higher staff turnover for the handling companies.”
     He emphasized his conviction that performance standards should be developed for handling companies, plus penalties for unsatisfactory service.

Daniel Muscatello and Daughters

     Dan Muscatello, who earned his Master’s in business administration and executive management at Pace University, holds the position of director of cargo and logistics at Landrum & Brown. His broad experience has been translated into development strategies for business and physical facility planning of air cargo complexes. As well as the integration of ancillary and supporting logistics services. His most recent credits include what is described as “the development of the industry’s most comprehensive strategic development plan for JFK,” and analysis of California airports’ cargo capacity and facility utilization.
Jim Larsen and Dan Muscatello     During the period 2000-2004 he was employed by John F. Brown Co. as managing consultant, heading the firm’s air cargo practice. He spent three years (1997-2000) at DAMG Worldwide in charge of market feasibility determinations. Prior to this, Muscatello managed air cargo programs for the Port Authority of New York and New Jersey, described as “the largest air cargo operation in the world.” He is credited with developing one of the industry’s “most comprehensive’ air cargo plans. An item of interest is his management of more than one million square feet of new air cargo facilities at Kennedy, Newark and LaGuardia Airports. On a global basis, his prowess in planning produced in excess of 20 million square feet of cargo facilities. Notably, Muscatello was the first American contracted by a Chinese airport to lend a hand in cargo marketing.
     Do radical differences exist among airlines and forwarders with regard to cargo security? Not much. However, in some instances effectiveness is undercut by their “physical environment”. At some airports, despite airline requests, most of the shipments reach the airport loose, thus contributing an unwelcome burden to the cargo security operation. Prescreened and cleared cargo “make for a better operation”.
     To what extent do air freight forwarders and IATA-approved cargo agents come within the scope of Muscatello’s activities. Quite a bit. Periodically, market assessments are performed all over the world—“critical to a cargo operation that the inputs of the forwarders and cargo agents, as well as customs brokers and government agencies, be factored into the due diligence”. Understanding forwarder/ agent operating requirements and how they can be “best integrated” have gained in importance.
     Put to the question whether airports in a general sense, have kept apace of cargo requirements in the Jet Era, Muscatello replied, “I believe they have.” He went on to say that probably the greatest change has been “the growth in public-private partnerships to develop new cargo facilities”. Today, most airports are placing “increased emphasis on cargo as a job development tool and a revenue source”. This has resulted in some of them more amenable to “sharing risk” on development projects.

Dan Muscatello and wife Joyce

     If the expectations of major aircraft manufacturers are reasonably accurate, we will enter into the supersonic era in about a decade from now. Did Muscatello have any thoughts on this future as it related to cargo? Admitting that he had not given much thought to the topic, he suggested that in the initial stage of supersonic air transportation the emphasis will be on passenger business. Referring to the SST from the standpoint of capacity—the plane is as large as a regional jet—he said that its hold and operating cost, “only high passenger rates could make the financials work”. At least initially, he suspected, the same constraints will hold true when the supersonic airliner is introduced.
     When air cargo management people get together, especially informally, rarely do they miss comparing the cargo-related merits of airports. On the same course, Muscatello was asked to identify the factors that made an airport qualitatively superior to another. Apart from the “basic drives” of cargo, he set forth the following: well-versed staff, knowledgeable in cargo operations and the cost of doing business, and a “willingness” to develop a continuing dialogue with the cargo community (and listening); impartial and broad-minded acceptance of “new approaches” to business, including possible shared risks; and a “realistic perspective” by top airport executives on business goals that are practical and achievable.

Dan Muscatello

     “I think over the past twenty years there has been a very important shift in how carriers and airports look at cargo,” Muscatello declared. Under the powerful thrust of wars, terrorist attacks and economic reversals, the airlines have managed to oversee revenue and cost more closely. Some airports regard cargo and its potential revenue in entirely new ways.
     Consequently, the following question occurs: What can be expected to ensue?—“More productive, efficient and cost-effective levels” by the emerging partnerships.
     As the old adage proclaims, improvement is the law of life, Dan Muscatello took the liberty of applying the law to cargo-related improvement. The keys to continued growth, he maintained, point to cost control and operational efficiency. He underscored the fact that while cargo handling is not within the aiport’s province, cargo development is dependent on airport business and infrastructure for those boxes and containers. He was not without opinion on further improvement at the airport:
     “I believe that, space permitting, airports should consider an integrated on-airport cargo community with tiered pricing for ground rents. This would include higher rents for facilities with ramp access and lower rents for forwarder-type facilities that you might otherwise find off-airport.
     Do Muscatello’s responsibilities take him beyond the airport’s boundaries? The query earned an affirmative answer and the information that he has been involved with the planning of off-airport logistics parks, and on- and off-airport facility integration. The purpose is to assure seamless and secure cargo flows.
     On a final note, Muscatello was asked whether he shared the opinion of certain industry pundits that all-cargo aircraft will haul more than half of the world air freight by the next decade. He reacted negatively, pointing out that the current trend is “contrary” to that. He noted that airlines, especially those with widebodies in their fleets, are taking advantage of belly capacity “to a far greater extent than previously”. He anticipates no change for the next several years. While freighters on certain routes “make sense,” he considers it risky to make a “blanket assumption”. Regardless of Boeing and Airbus forecasts, Muscatello recommended a “tight focus on a balance between capacity and yields—that is, until, and unless, “a growth in freight can help the bottom line, carriers will target as much cargo as they can for passenger aircraft”.
Richard Malkin

Richard Malkin

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