Did IATA Deliver Bounce?

     As the air cargo business gathered in Vancouver, Canada Tuesday under an IATA banner of “Bounce Back” some conferees we talked to, sounded like the lady who once took a big bite out of a small hamburger and wondered:
     “Where’s the beef?”
     We also heard “Where’s the Director General,” and “Isn’t IATA based in Canada?” referring to IATA boss Giovanni Bisignani’s non-appearance after the IATA DG was featured in a recorded greeting as IATA‘s World Cargo Symposium IV (WCS) got underway in a sprawling hotel convention complex here.
     So much for the participation of a perennial newsmaker or for that matter breaking news (so far) at WCS 2010.
     However with Aleks Popovich Head of Cargo (HOC) having moved to a new job at IATA , a new HOC announcement is expected at some point during WCS or soon after this event along with a reveal of the host city that in 2011 will greet the next WCS.
     The opening plenary began with a blow by blow and often stirring presentation by Calin Rovinescu, (left) President & CEO of Air Canada about how the airline reached back from the brink of financial extinction last year after which the audience was immediately carried forward by a sports based, pep-rally type uplift encounter featuring former Canadian Women's Olympic Gold Medal hockey team Captain Cassie Campbell.
     Both presentations played to a fairly packed room of air cargo executives who attend this event yearly from around the world.
     Cassie is beautiful, sincere, smart and an inspiring Canadian sports and women's hero brought in to explain how the National Women's Hockey Team delivered gold medals to Canada.
     Many guessed that perhaps air cargo by application of some or all of Ms Cassie’s sports disciplines might do better and even deliver profits.
     While everyone was impressed, respectful and even quite moved by the great athlete, we wondered where were out of the gate specifics about the hard scrabble business side of air cargo and what have these annual WCS meetings accomplished in concrete terms especially after most conferees had endured long flights and short sleep and a year in 2009 that managed to lose more money for people in the transportation business than any other 12 month span in history?
     But the business offering was sandwiched into the mid morning session of the opening plenary.
     Unfortunately as the sessions moved on, more than a few conferees had broken off into networking and other pursuits.
     The roster of attendees at WCS IV, in part the familiar and always welcome faces of air cargo events, seem on balance to be quite a bit more upbeat than the group that last met in BKK last March.
     Although satisfactory tonnage volumes have yet to return to air cargo—a renewed international business pulse coupled with cost savings and creative financing programs have brought the terms “cautiously optimistic,” back into the language of the industry.
     The Trade Exhibit area at WCS 2010 is at least double that of BKK ’09 with IT companies and third party providers to air cargo, in the majority.
     One curiosity is that the trade show booths are in a glass enclosed atrium, part of the hotel complex that is uplifting, light and airy whilst the deep dish public discussion panel events meant to raise interest and heighten involvement by sharing and expanding thoughts are conducted in a part of the hotel basement euphemistically titled “The Grand Ballroom”—a place that is rather dark and even a bit gloomy.
     But we did not spot anyone dozing off or with their heads flat down on a table.
     IATA Cargo has jazzed up its discussion panels with addition of a show biz type host who both leads the discussion and sounds like a pitchman as he darts around the executives seated on the panel, raising and lowering his voice, whilst also stage managing the event.
     During the first panel of the day “Bounce Back- Rebuild For The Future” as a question was fielded from the audience, the panel host—on top of every nuance—motioned to the audio people to raise the volume of the speaker’s microphone.
     We wondered if maybe his act rather than real knowledge about air cargo is the future of air cargo panel discussions?
     In any case, in your face, like reality television can be compelling so like everyone else, we kept watching.
     IATA WCS is the latest turn of the old IATA Cargo Week that has been held almost forever as mandated in the rules of IATA.
     This year with a good deal more glitz and hype than ever before, coming on the heels of 2010 Winter Olympics in breathtakingly beautiful Vancouver, British Columbia, Canada—WCS continues until Thursday.
Geoffrey

Meanwhile TIACA
Waiting In The Wings

     Uli Ogiermann, CEO of Cargolux who has somehow found time to also serve as president of The International Air Cargo Association (TIACA), is at IATA World Cargo Symposium bringing company business and public service full circle as talk circulates that helping one another is a sure way to make the going better for everyone during challenging times.
     Uli says that there are some intriguing initiatives that TIACA will announce soon but this day we are talking what’s up for that big trade show the organization has scheduled for Amsterdam during early November and also what’s up at Cargolux?

ACNFT:  As President of TIACA, what can you report of the upcoming AMS forum?
UO:  The ACF in AMS this year promises to be an outstanding event. AMS is in itself a reason to go there - and it is also one of the important centers of logistics and airfreight worldwide. The floor space is literally "sold out" and we’ve had to add more space to accommodate additional requests. The conference program will be of great quality and will address the needs and interests of shippers, forwarders and airlines. The focus will be on having a very open event covering the entire supply chain and its current challenges. I am sure that the industry will make use of such a "cross-border" event - especially in these times the industry will have to come up with new ideas and solutions!
     Because of TIACA’s cross-sectoral membership, the ACF offers the perfect platform for companies, from shipper to consignee, to network, address industry issues and share knowledge. However, in the past, we have not been too successful in attracting the customer. I see the involvement of the customer in TIACA and the ACF as key to our continuing development. I’m pleased to announce that the European Shippers Council (ESC) and the Dutch Shippers Council (EVO) have accepted TIACA’s invitation to actively participate in ACF 2010. They will address the role of the shipper in today’s airfreight market in two dedicated shipper’ track sessions on 4th November at ACF 2010. In view of the many uncertainties in today’s market, the discussions will ask whether shippers are willing and able to become more involved and, if so, what difference this might make.
     Watch this space - there are some surprises to be revealed in the next couple of days of similarly important TIACA initiatives to get a greater participation from forwarders in both the ACF and TIACA. Getting the involvement of the shippers already offers a compelling reason for forwarders to get involved and participate. The active participation from shippers and forwarders both in the exhibition and our discussions will make ACF 2010 a truly interesting and important platform for the industry and an event no one will want to miss!
ACNFT:  What other initiatives is TIACA bringing in 2010?
UO:  We now have clear policies on customs reform, the environment and security. Our industry positions are available in a practical 20 page pamphlet and in downloadable format in the TIACA website. This now gives our members an important tool to use in their own discussions with regulators.
     Our industry action plan is especially focused on delivering greater value to our members in regulatory issues, sharing knowledge, and education. We are making our voice heard on behalf of our members throughout the industry with trade organizations and regulators. However, it’s fair to also recognize that all of the things we are focused on are initiatives that are long term.
ACNFT:  Cargolux on 2010
UO:  We have seen a stabilization of demand across all traffic areas. Whether this remains a stable pattern throughout the year remains to be seen but we are cautiously optimistic.
ACNFT:  What is most important right now?
UO:  First is to boost the morale of all our great staff after an extremely challenging year. We need to maintain a close dialogue with our customers to jointly weather the challenges around us. And of course in our agenda daily is to prepare for changing rules and regulations (such as the security regimes in various jurisdictions) and last but not least prepare the company for the delivery of the 747-8 starting in December of this year. This will be a milestone in moving towards an environmentally friendly air cargo product!
Geoffrey Arend

     By now few have to be told that last year—2009 was challenging for the aircargo sector all over the world. Some bucked the trend, others wilted, but Ram Menen, Divisional Senior Vice President-Cargo, Emirates, has faced the downturn head-on.
     Talking to Air Cargo News FlyingTypers after Air Cargo India 2010, Menen managed to say that 2009 was good and bad.
     “The first eight months were very bad but the last six months started showing a slight growth.
     “In the last quarter of 2009 the economy started rebounding.
     “We were optimistic that it would be back on track from January 2010…
     “We had a good three months in the last quarter of 2009,” he said.
     Mr. Menen hoped that the way things would go would be apparent from the loads that had been picked up from around January 10 to January 25, 2010.
     For most Middle East carriers – especially Emirates – “India has been a bright spot for us, during the course of recession.
     “India was lot more insulated than the other regions, and we were happy to bring more capacity to India.
     “The capacity increase, however, was a
pre-planned effort.” Mr. Menen went on to add that while business with China and India has been directional, “both have been very good markets for us (in the Middle-East).”
He underlined the fact that “for us Indian traffic has been stable and we have had growth.
     “For us, India, and also Sri Lanka and Indonesia were the bright spots. China, slipped for a while, but it started coming back in the last quarter of 2009 strongly.”
     So what was the secret to riding the 2009 storm?
     “All we did,” said Mr. Menen, “was we just adjusted our freight capacity a bit in 2008 before the crisis hit.
     “We sold three of our A310 freighters and then we also had a contract on 747 freighters but we cancelled that in October last year.
     “Having done that we also took on two brand new 777 freighters.
     “What we did was tailor according to the market requirements and we also slowed down our lift on freighters.”
     Pooh-poohing the present economic problems facing Dubai, Mr. Menen said:
     “I think the problem was exaggerated. “Look at Dubai Airport.
     “There is a recovery from its last year’s performance.
     “The airport has shown 9.2 percent growth in passengers and we got 2.5 percent growth in cargo.
     “To me, this growth in itself is a big achievement.”
     Speaking about growth, Ram Menen mentioned that the “key to growth is consumer buying."
     He emphasized “the automobile industry is coming back again.
     “And the automobile industry is a huge consumer of say, semiconductor chips and all kinds of this stuff.
     “If we look back in 2008 when the air cargo industry was in some kind of a cleft that was the same time when the automobile industry was also in a cleft.”
     Speaking specifically about India, Mr. Menen said that the country needed to move ahead if it wanted to address the road to air cargo maturity.
     The top priority, he said, was land transportation infrastructure.
     “Air cargo depends a lot on land transportation: the roads, the trucking and the distribution part of it.
     “These needed to be improved.
     “From the air cargo side, the facilities at airports should be modernized.” Highlighting the facilities at Mumbai Airport, Mr. Menen said, “If you go around the old cargo village area, it looks like a dog’s breakfast.      In Delhi, they have taken a very different approach …these are the areas that still need to be focused”.
     Despite these difficulties, the cargo sector in India, said Mr. Menen, is going to be very strong.
     “India had been concentrating on services for such a long time, now they are looking at industrialization” and that was a good thing.
     Mentioning the facilities offered by Deccan 360 and Blue Dart, among others, he said, “they are making domestic air cargo operations more viable.
     “You have a lot to move domestically and a lot of the movement will be time critical.
     “Air cargo and its environment have become a very critical part of supply chain management... They have become major tools,” he declared.
     Saying that the industry was on track, the Emirates cargo boss went on to point out “we are still on positive growth and I am expecting the last two quarters or the second half of this year will be stronger.”
TG Ghosh

Deconstructing WCS Panel Tracks

     Today, Wednesday there’s a new track at IATA WCS Vancouver - Ground Handling! The best thing about it might be the coincidence of the chairman’s name, Monsieur Paiement, no pun intended. The subject focuses on how ground handlers can benefit from e-freight and Cargo 2000.
     Just a thought – perhaps for a future event: combination carriers frequently have an all-inclusive SGHA agreement with costs and benefits biased on the passenger side.
     Whether cargo likes it or not, that’s what they get.
     Specifications go into Annex B, but when cargo activities are not sufficiently defined and tend to be just a ‘to do’ list, without exact timelines, detailed requirements for EDI and message transmission.
     Late, inaccurate, incomplete or altogether missing ULD information is a major contributor for excess inventory to somehow keep on top of shortages and lack of data.
     And there isn’t much the cargo organization can do because it’s the passenger operation which dictates which GHA is used.
     How about discussing how to address that?
     Or that’s something for the Ground Handling Council and its Airport Handling Manual, a group in which cargo isn’t directly represented?
     However, since IATA cargo pushes e-freight and Cargo 2000, that’s the topic for now.
     Thursday’s program features the “Revenue Optimization” track and what seems puzzling is in the opening remarks by IATA – “… will explore survival strategies and will ask the question – “How do we plan for the next crisis?”. Kind of apocalyptic come to think of it! If this is the ‘new normal’, I need a new dictionary!
     The definition one expects for ‘optimization’ is “to make something function at its best or most effective, or use something to its best advantage”. Little surprise that “survival strategies” and “..plan for the next crisis” don’t really match the revenue optimization concept as generally applied in the business world. I have a hard time imagining anyone in the airline cargo industry lining up to pay for dark visions; there are plenty of challenges to face every day as it is.
     But the IATA speakers continue in this vain with a listing of all that has befallen airlines since 2001.
Is this deliberate self-flagellation or official nay-saying?
     The speakers listed representing commercial entities aren’t that much more upbeat either, with Boeing aiming to address “…capacity introductions aligned with demand and crisis cycles”.
     One can almost envision the airplane of the future which can be expanded or contracted at will, drop or add an engine here or there, with a few pushes on a magic button.
     It get closer to what the theme implies when Raja Kasilingham of Cargo Intel will cover setting up and implementing a revenue management system – now that’s more on the mark, given Raja’s career track.
     Then it’s again IATA’s turn to do some selling, burnishing TACT with its next generation tariff solution.
TACT became an IATA company during the last decade.
     Filing tariffs hasn’t been required in a number of countries in the Western world, including the U.S. for years.
     Other players in the information business include ATPCO and UBM Aviation’s OAG Cargo with Inforwarding’s AFRA. It will be enlightening to hear where and how TACT can add value to the mix through innovation.
     The case study with Air Canada’s MD cargo, Lise-Marie Turpin will likely take the cake, because she’s a dynamo with a wealth of firsthand knowledge and experience in navigating turbulent waters.
     The all time favorite is another IATA constant – CASSLink, historically a continuous source of howls of “unfair” by the forwarding community, albeit its costs are fully borne by the airlines; these guys either don’t have a sense of humor or there’s no limit to what a forwarder believes he’s entitled to at no cost.
     I am sure it’s much fairer in other modes of transportation…. As this subject is foreseen to take up all of five minutes of the program and it’s the last thing before lunch, it may attract less controversy than it normally generates.
     It certainly can be said that Thursday at IATA WCS will be a challenge to make a coherent flow out of what appears to be panel series mish-mash as networking moves into uber-drive!
Ted Braun

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