Put yourself in this picture. “Mom & Pop” forwarder Julian Keeling and wife Amy put themselves into Los Angeles-based Consolidators International, but every once in a while have time to find a little pad together in paradise.

any small- to mid-sized freight forwarders are not generally portrayed as “Mom & Pop” operations, but they share many of the attributes of small businesses competing in a very tough economic climate.

     The “Mom & Pop” forwarder, like other small businessmen and women, must wear many hats.
     He must be resourceful, flexible, willing to travel the proverbial extra mile to please his customer.
     He or she must blend superior personal attention to a customer with integrated technology to provide a seamless level of service.
     He must have experience and knowledge of the markets he serves.
     He must be willing to forget the nine to five workday; to spend as many hours as needed to move freight for a customer reliably, safely, on time, and with no hassles.
     He must know his customer’s business, not in a superficial way, but almost as well as his own.
     And he must be alert to the changes in his customer’s business.


     Despite all the talk in the cargo industry that no place exists for the small- to mid-sized forwarder, “Mom & Pop” forwarders are not fading into the sunset—quite the contrary.
     Their numbers are increasing, not declining. Small- to mid-sized forwarders now make up about 70 percent of the cargo market, with a record 10,000 plying their trade from Mumbai to Marseilles.
     Somewhat surprisingly, the big multi-national’s share of the $1 trillion international market remains stagnant, at about 30 percent—in spite of claims they will dominate the cargo market. “Mom & Pop” forwarders not only are increasing in number; many are flourishing despite a harsh global economic climate.


     One of the most interesting “Mom & Pop” forwarders is Consolidators International (CII), based in Los Angeles.
     The company will reach its maturity next year at 21 years of age.
     While still considered a “Mom & Pop” operation by its founder and chief executive officer, Julian Keeling, it is hardly a shoestring operation.
     The company has grown from a one-room office with two employees in 1993, to a current staff of thirty occupying the entire original building.
     From a single facility in Los Angeles, CII now has company owned and operated offices at JFK, in Atlanta, Houston, and Chicago.
     “Despite our growth, CII retains its ‘mom & pop’ spirit,” says CEO Keeling.
     “We never forget our roots as a small, scrappy company fighting for every scrap of business,” continued Keeling.
     “When we opened our doors for business on a hot summer day in Los Angeles, I wrote a mission statement.
     “It said, in part, ‘the customer is not part of the air freight business—he is the air freight business.’
     “We still live by that motto today,” affirmed the CII head.


     Consolidators International is both a typical freight forwarder and an atypical one—typical in that it provides all the services of a traditional freight forwarder, and atypical in that the company will take on jobs that other forwarders shun.
     Jobs that other forwarders find too difficult, complicated, require specialized knowledge and expertise, or simply take too much time/effort to complete are picked up by Consolidators International.
     Many forwarders, even the largest ones, will ask CII to handle their shipments
     A wide assortment of freight passes through CII’s warehouse near LAX. Radioactive material bound for New Zealand, helicopters needed for Russia’s oil industry in Siberia, a clown’s costume for a traveling circus playing in Samoa—these are some of the wide variety of shipments CII handles in almost routine fashion.


     Although the forwarder started as an air freight company, CII soon expanded into other delivery modes.      Explains Keeling, “While our growth was consistent and solid, we found moving cargo only by air was too limited. Air freight’s share of the international transport pie was only about four percent.
     That small percentage has remained the same for the last 25 years.
     Ocean cargo by far is the dominant mode of global transport today,” said Keeling.
     Keeling and his staff carefully studied the ocean shipping industry before dipping their toes into the business.
     “We looked before we leaped,” emphasized the CII head. “Results have exceeded expectations.
     “Ocean shipping, from a zero base ten years ago, now accounts for 40 percent of CII business.”
     The forwarder specializes in two types of ocean shipping: NVOs, where CII acts as a catalyst between customer and steamship line, and the “break bulk” trade, which specializes in heavyweight cargo that cannot fit into a 20- or 40-foot container.
     “Both kinds of freight are the fastest growing segments in ocean shipping,” averred Keeling.
     “We have generated an increasing share of this business year after year.” Keeling pointed to a successful shipment of an entire brewery from Stockton, CA, to Australia as an example of CII’s expertise in break bulk.


     CII has also been developing “niche” businesses; geographic and commercial sectors that big, multi-national forwarders either believed were not worth the effort or simply did not grasp their potential.
     “American Samoa, a U.S. territory in the South Pacific, is a perfect example of a niche market that other forwarders neglected.
     “We believed the Island had great potential for new cargo business,” said Keeling.
     “We went beyond just moving freight, however. CII became a Good Samaritan, active in Samoa’s sports culture and educational system, supplying goods and services at no cost to a population that is largely disadvantaged.
     “Both the Samoan government and the business community responded with enthusiasm and appreciation of our efforts. Within a few years, CII was generating 80 percent of all air freight into Samoa from the U.S. and a high percentage of its ocean cargo.”


     All businesses must evolve if they wish to survive. CII was no exception.
     The company formed a division, Corrigan’s Express, with the belief that “small is beautiful.”
     Borrowing a phrase from the high fashion industry, Corrigan’s Express was designated as a “boutique” forwarder.
     It stressed exceptional personal service to the individual shipper.
     Its staff consists of eight people who think nothing of working around the clock to satisfy a customer’s cargo.
     Recently, a call came in from Australia at 1 AM to send mining equipment immediately. Vital equipment had broken down in the mine, located in Australia’s Outback, and production had stopped.
     By 5 AM, arrangements had been made for shipment of replacement equipment to be delivered to the stricken mine.
     Corrigan’s supervised the entire effort.
     “We didn’t fully realize how important careful, personal service is even in our hi-tech age,” stated Keeling.
     “Ronen Donde, who heads up Corrigan’s and is also President of CII, has done a fantastic job in creating a fast growing business with a clearly defined philosophy in just a few short years.”


     Keeling also eyed the lucrative business of moving cargo for the entertainment industry. It is a highly specialized niche in the cargo business.
     Keeling believed he had the personnel and worldwide contacts to make another niche business successful.
     CII has struck the right note with Backstage Cargo.
     The forwarder has moved entire film sets to Eastern Europe and concert equipment for venues throughout Asia.
     CII handled the equipment for Whitney Houston’s last worldwide tour.
     “While Backstage Cargo is not a major contributor to CII revenues, it is solidly profitable. It also provides a touch of glamour to an essentially gritty business,” affirmed the cargo executive.


     Consolidators International literally became a “Mom & Pop” forwarder when wife Amy recently joined the company as credit and accounts manager.
     “Amy is a great addition to our staff.
     “If you can’t trust the books to your wife, whom can you trust?” asks Keeling.
     With two decades of growth behind it, and a current, smoothly functioning operation guided by an experienced and knowledgeable staff, Keeling expects even greater expansion in the years ahead.
     “You don’t have to be a Wal-Mart or a Target to be successful,” concluded Keeling.
Shura

n one of his last interviews before he closed his stellar 40-year career in transportation as a major architect in building Emirates Sky Cargo, Ram Menen talked to FlyingTypers about the year 2013 and his life ahead, which, sadly, will not include an appearance at Munich Air Cargo Europe next week.
“There is little chance that the global freight market will see a major resurgence in demand this year,” Ram Menen said.
     He expects the rest of the year to follow the pattern of 2012, with small spikes each quarter linked to balance sheet management rather than any major change in demand.
     “It’s still slow; it’s not just politics, it’s the high price of fuel,” he said.
     “Household transport is a high cost, so global income is compromised and consumer goods are not really selling the way they used to sell in the past.
     “Then we have the Euro crisis.
     “We saw what happened in Cyprus with savings wiped out so people are very defensive.
     “Even if we see a little spike in the next 8-9 months, fuel will make it unsustainable.
     “The price of oil needs to go down to 50-70 dollars a barrel, which is still high, but good enough to pull the economy out of where it is right now.
     “It’s safe to say the next 3-4 years will be quite volatile.”
     However, despite Menen’s downbeat assessment on the global economy and freight markets, he remains confident that the Middle East and its major carriers will continue to outperform the global market. Emirates recorded an $845 million profit in Financial Year 2012-2013, its 25th consecutive year in the black as the company increased its fleet by 34 aircraft and added 10 new destinations to its network.
     Some 39 million passengers were carried and more than 2 million tonnes of cargo was uplifted for the first time.
     All this despite the carrier’s fuel bill rising some 15 percent and total operating costs increasing 16 percent year-on-year, respectively.
     “Managing volatile exchange rates, coupled with a persistently high fuel bill accounting for 40 percent of our total expenditures, has required continued strong resolve," said HH Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group.
     “Even with these lingering challenges, we continue to grow and remain profitable, despite the industry norms, because we continue to rely on our proven business model and understanding of the marketplace.”


     Ram believes the center of global economic activity has shifted eastwards towards Asia and now pivots at the Middle East, which also has the advantage of close proximity to India and Africa.
     “The Middle East and intra-Asia trades will continue to grow,” he said.
     “The Gulf countries are transitioning from oil to manufacturing and services, so there are lots of changes taking place; that’s where we see growth. Iraq and Afghanistan are opening up, the Arab Spring is creating a few challenges but will settle down, and markets will open up.”
     Ram also said in the future, China and India would surpass the U.S. as the world’s biggest consumer market, transforming global trade as disposable income in those countries rises.
     “The Middle East will continue to grow, we will see near double digit growth in Africa, India will play a big role, we may also see China outsourcing to the U.S. and Africa, and so shifts in production will change trade deficits and create employment in those areas.
     “This is all good news for air cargo transport, because as more components move so demand will grow. This will give more balance to many lanes.”
     He said Emirates was well placed to serve many of these growing lanes, not least in Africa and India.
     “We’ve also seen quite a lot of intra-Asia traffic between China, Cambodia, and Vietnam, and lots of traffic within the region.
     “Emirates has also done well on Australian routes and our new partnership with Qantas will help there.”


     Ram Menen said he plans to do “nothing” when he retires, apart from spend time with his family.
     “I’m not leaving the most exciting job in air cargo here to go and be a consultant, but I am overwhelmed with emotions.
     “This industry has given me a lot and I will be happy to act as a sounding board through various associations.
     “But I must get off the treadmill and make something of the rest of my life with my wife Malou and son Ram Jr., and of course the many wonderful friends that we have made over our lifetime.
     “One of my greatest achievements has been the friendships I’ve made, and maintaining them will keep me busy,” Ram Menen said.
SkyKing/Flossie

ir Cargo Germany is grounded, and its aircraft are finding new homes, as FT previously reported.
However, it seems that desperate efforts are still underway by the management to get ACG airborne again.
The German language DVZ reported on Wednesday, May 22nd, that “ACG has asked various forwarders for support (…), both in terms of financial contribution and in terms of supporting a reissuance of ACG’s operating permit by the German CAA, LBA; claiming ‘Lufthansa does not have the required competition in regard to main deck cargo capacity.’”
     ACG’s press consultant confirmed the facts of the DVZ story while downplaying them, stressing that “only one or two major players had been approached verbally and that this matter was then reiterated by means of an e-mail communication.”
     Since only a few large players would have the financial means at their disposal and could possibly benefit, DHL/DPWN, which in the past has utilized ACG, might be a candidate.
     But given DHL/DPWN and Lufthansa jointly own Aerologic, another competitor of ACG, and given the risks, a bailout of ACG by DHL, Panalpina, or Schenkers seems at best unlikely.
     A source close to the situation told FT:
     “A bailout is unlikely.
     “With overcapacity already a factor and DHL already committed to LH, there is really no one else unless the Russians change their mind.
     “The fact is LH wanted ACG out and it seems they have succeeded.”
     Another source close to the air charter business puts it this way:
     “There is always the possibility of a buyer for ACG, but the price would have to be very cheap.
     “The air charter industry will not consolidate, but shrink.
     “Look at what is happening in the U.S. to this market segment?
     “Half of the carriers are bankrupt while some others have been trying to find a buyer.
     “Many of these U.S. carriers are being supported by the DoD (Afghanistan and Iraq) or the other U.S. Government (USG) agencies.
     “By some estimates, USG spends $40 billion a year on transportation with (passengers and cargo) getting $10 billion plus.
     “With budget cuts and an end to conflicts that use ground troops against terrorism, this will dramatically be reduced and the charter companies will go into a further tail spin.
     “You will be able to pick up a 747-200 for peanuts,” the source said.
Jens/Sabiha Arend

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     A military man who served with distinction as a full Commander in the United States Coast Guard, a position from which he retired after 20 years in 1990, George Johnson died of cancer in Miami, Florida, last Friday May 17, 2013 at age 65. He was a quiet, decent, and strong man who will be deeply missed.
     We got to know George when he moved into the airline business and later was with The International Air Cargo Association (TIACA).
     George was a money guy for both Bill Spohrer’s Challenge Air and later George Batchelor’s Arrow Air in Miami, but he was as distant from being just another Scrooge as he was from carrying much of a military air, despite a lifetime career serving his country.
     George was just a wonderful human being who knew how to handle tough situations and was also very good with people.
     He was a visionary who delved into finances and industrial relations, delivering solutions that were right for all involved.
     Today, when money and labor issues can often be a contentious exercise not unlike a pot boiling over on a stove, George Johnson somehow always kept a lid on things.
     We first learned that George was in deep trouble after cancer had been detected in March 2013, just two weeks ago at CNS Partnership in Phoenix. A crestfallen Daniel Fernandez, Secretary General of TIACA, spoke softly with affection for his friend George, who served as Treasurer of TIACA from 1997 until 2010:
     “George played an important role in the development of TIACA into what it has become today.
     “In addition to being our treasurer, he was a fine friend to many of us over the years,” Daniel said wistfully.
     George Johnson is recalled by his friend and former boss at Challenge Air Cargo, “Gentleman” Bill Spohrer, who at 82, commutes between his home in Coral Gables and a bed & breakfast that he opened with his wife Lynn in Apalachicola in the north fork area of Florida.
     “Terribly sad to realize that George is gone,” Bill said.
     "At 65, he was taken from us way too soon.
     “A fine man, George actually had three lives although his efforts were always for the betterment of whatever task he undertook.
     “George Johnson, in the United States Coast Guard, was a patriot’s call as he spent 20 years in service to his country.
     “George came into air cargo with us at Challenge, where his determination and dedication were just outstanding.
     "Later after we sold Challenge to UPS, George moved over to TIACA and then finally did something that was really wonderful serving his faith, by putting his organizational talent to work to better his church.
     “I spoke to George several times in the past weeks. Although he was weak, his spirit and determination never flagged.”
     George Johnson was born in Charleston, West Virginia, on February 1, 1948, the son of Dr. Paul C. Johnson and Louise M. Johnson.
     In 1970, he graduated from the United States Coast Guard Academy in New London, Connecticut, and was awarded the Bachelor of Science degree.
     He worked his was up, serving as Deputy Commander Coast Guard Group Miami in 1985.
     Commander Johnson retired in 1990 while serving on the staff of the 7th District Commander Headquarters in Miami.
     George was church administrator at Old Cutler Presbyterian Church, followed by the Chief Financial Officer at Westminster Christian School in Miami.
     He finished his career as Director of Finance and Operations at Westminster Schools of Augusta located in Augusta, Georgia.
     George is survived by his wife of 37 years, Caroline Clary Johnson, son Paul Clary Johnson, his two sisters, Pat Denison (Bill), and Paulette DeVita (Don), and his niece and nephews.
     George Johnson will be laid to rest in Washington, D.C., with full military honors at Arlington National Cemetery.
     There’s a spirit it in the sky today.
     Keep on sailing, George Johnson.
Geoffrey

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