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Family Aid 2020
   Vol. 21 No. 25
Thursday June 16, 2022

Ram Menen Looking At Tomorrow

Ram Menen

     In late May we wrote of the enduring friendships formed by people in transportation that outlast companies, careers, and in the case of Ram Menen and Des Vertannes, still going strong with expansive thinking and on point after 40 years.
     We asked the gentlemen about some current issues in cargo.
     Here Ram Menen opens up on a variety of subjects.
     Who is Ram Menen?
     Ram and his team built Emirates SkyCargo from the ground up; from a couple of leased in aircraft in 1986 to one of the world’s mightiest air fleets and a top market share, when Ram retired in 2014. Mr. Menen is also the visionary industry leader that reenergized TIACA when Dubai hosted TIACA’s Air Cargo Forum in 1996.

FT:        Best definition of Sustainability you might share?
Ram:   Sustainability has become a buzz word that people are using all the time, sometimes with no understanding of reality. The rush to conserve resources long term has got to be the objective, however, I find some of the targets set are not really achievable, e.g. the move towards SAF. The challenge is that there simply isn’t enough production to cater to the demand and is a lot more expensive than the current fossil fuel. Can an airline sustain such expenses and still be competitive and survive ? I don’t think so . . . what is happening at the moment is more PR-generated, not reflecting the reality. Same goes with Hydrogen cells and electric engines. Still a lot of R&D has to go into creating SAF as affordable fuel and I would say targeting 2035 to 2040 would be a more appropriate goal.

FT:        Moving ahead, Emotional decisions in Business versus Process Mining, or is there room for both, and if so in what measure?
Ram:   Pure emotional decsions can be detrimental to business process. Emotions can make you subjective, however in business, objectivity has to rule. To have a great team all around, a mix of subjectivity and process/data mining is very important to create the basis for objective decision making. You have to add a touch of subjectivity in the process to keep the team together. In short, subjectivity is human and allows for good human interaction but when it comes to decision making, objectivity should be the prime criteria.

FT:        What can be improved in 2022?
Ram:   Improvement is a continuous process. 2002 sees the world healing and coming out of a world shut down. Though it has had negative effects on life and trade, it has also had a lot of positives. It has transformed human behaviour. More people are now used to buying anything and everything online. It has accelerated the growth of e-commerce and people, and companies have realized that you don’t have to be in an office envioronment all the time for a company to function.      Working from home or working remotely is equally effective in most cases. It has also proven to be very productive and has also helped in creating a work/life balance. Working within a hybrid model can be very beneficial for companies, which can shed expensive real estate and save on costs. Supply chain operations have been badly disrupted and folks have been working on patch works to accommodate capacity constraints as well as shutdowns of production.      
     We will need to be vigilant to work on adapting the original supply chain management aspects by incorporating the new lessons learned, thus improving the old processes. In the air cargo industry, digitization has to be a very high priority.

FT:        What if air cargo keeps things the same and does not do anything?
Ram:   Those who don’t change or make the changes, are likely to be extinct in the future. Digitization is a key element in today’s transactions and will be the norm going forward. Digitization also facilitates active implemenation of artificial intelligence which can help make the physical, as well as, decision making processes more efficient resulting in improved cost efficiency. Those who don’t change will carry the burden and drown in legacy costs rendering them noncompetitive in the market.

FT:        What did you want air cargo, airlines, forwarders, other cargo resources and truckers to know about that they may be missing ?
Ram:   The demand created by the pandemic and the resultant lack of available lack of capacity has, in the short term, allowed yields to improve. It was long over due for the airlines. However, greed/opportunistic activities have raised the cargo rates to an all-time high and bred arrogance.     This, in the long term is not sustainable as it contributes to the rise in inflation and at some stage, the market will not be able to afford the inflated cost of logistics and the demand will wane. And as the capapcity slowly comes back, we will all sink to pre-pandemic era levels, which will be detrimental to the airline air cargo industry in the longer term. It is in the industry’s interest that trade volumes continue to grow.

FT:        What have you learned in retirement you wish you knew during your career?
Ram:   I guess, the biggest lesson has been that there is a life out there that I knew nothing about. Having said that, there wasn’t any other way we could have accomplished what we did. Being out of the game, one gets a better overall perspective of the industry as one is able to see all aspects of the game . . . it is like sitting in a gallery seat and being able to see the entire game rather than what is immediately around you while on the job.

FT:        Proudest moments during COVID? Most worrisome? How has COVID changed air cargo?
Ram:   The proudest moments during Covid was how the air cargo industry came into its own and became the lifeline for survival, reacting with great speed to keep the world connected. They helped bring in more capacity by deploying Preighters. Air cargo kept a lot of airlines alive when the pax business was shut down and helped with the airline’s recovery process. What was worrisome is what the cost of logistics was doing to the end product and the consumer. The importance of aircargo to any airline operation was very obvious and has been the subject of discussion in many airline Boardrooms. Pax airlines who have treated air cargo as marginal business are now more focused on developing their cargo business. Covid has given a boost to the airline cargo industry, which, hopefully will result in increased available capacity for air cargo to grow.

FT:        If you could have your career again what would you do differently?
Ram:   If I had to start all over again, I don’t think I would do anything any differently. What we did was build a strong foundation and platform for the air cargo industry to grow without any constrains. It was/is an evolutionary process.

FT:        As you look at the global market and consider options, what is exciting?
Ram:   The excitment comes from the evolutionary/revolutionary changes taking place in technology that allow us to manage logistics and transportation more efficiently. The move to create more independence from reliance on China for manufacturing activities; new markets in development; changes to ecommerce; and bricks and mortar buying creating more demand for air cargo . . . all of these are very exciting and challenging shifts.

FT:        What about Russia?
Ram:   Russia’s senseless invasion of Ukraine will change the dynamics of the market place. Depending on how long this war goes on, the world could be thrown into a massive recession. It has basically divided the world. Depending on what happens/how long this war will continue, whether the war spills over to other countries/teritories, we could in the long term impair trade and commerce. At this stage it is very difficult to predict what the outcome is likely to be.

FT:        Is One Record the totem for which IATA decided to ditch its IATA FIATA program? Was the entire IATA FIATA negotiation just a straddle strategy?
Ram:   The One Record initiative actually goes to facilitate improved communication and brings better efficiency in the transactional process. I don’t think it had anything to do with the breakdown in communication between IATA and FIATA.

FT:        Regarding their negotiating power with the airlines, many forwarders say they are worse off today than they were ten years ago, is this correct?
Ram:   Of course at this stage, when available capacity is very limited, their negotiating power is very limited and the suppliers, in this case the carriers, call the shot. Then again, the last two years and the next couple of years cannot be taken as the norm. This is an anomaly right now and cannot be used to determine long term trends. Once there is sufficient capacity in the market and supply and demand start getting back to normal cycles, freight forwarders will be able to negotiate better terms.

FT:        Why are U.S. forwarders different from the rest of the world, why have they not had any interest in joining forces in FIATA? If forwarders were united globally, could this have a different significance for IATA?
Ram:    the U.S market in itself is such a huge market, a world of its own, that forwarders tend to focus more internally than externally. They have their own associations that deal with their unique affairs. Even IATA has its own sister association CNS that only deals with the U.S. market. They are in a cocoon of their own. I don’t think their coming into FIATA would make much of a difference.

FT:        Airlines have suffered during the pandemic, and IATA was not very vocal, appearing to be at a crossroads. Discussing health measures with authorities, in particular with the WHO, was not always as straightforward as IATA’s mission statement boldly declares. What is missing in IATA for it to establish itself as the reference model in a global emergency?
Ram:   IATA Cargo seems to have lost the ball a bit. Their focus has been in trying to deal with governments in opening of borders rather than focusing on world trade, which to be honest, was very robust and grew to normal volumes very quickly. Looking in from the outside, I see them focusing more on operational aspects, rather than facilitating commercial/trade related activities. I hope they can maintain their relevance as we go into the future.

FT:        With few exceptions, the balance of power in the market between traditional airlines, who are typical IATA members, and other operators has changed substantially in recent years and is still changing. Is this conversion reflecting the attitude of the traditional airlines or IATA’s deficiencies?
Ram:   Very relevant point. Today the landscape of operators is changing, there are the traditional airline, integrators, e-commerce operators, LCC (low cost operators) and shipping lines who are also adding air to their portfolio. Traditional operators have been the slowest to change.      Barring a few, especially the passenger airlines have not really kept pace with the changing envioronment. Folks like Amazon CGA-CGM are going to eventually force the changes. They are small in numbers at the moment and the traditional airlines still tend to dominate the air cargo operations, so they aren’t predisposed to change their attitude.

FT:        For many years, airlines publicized their services with an aura of wealth, consumption, luxury and even a lack of consideration. Has the time come for operating with consciousness, with total respect of society and environment, or are we carelessly flying into the abyss? What can be done to show the way?
Ram:   I don’t think it is fair to say that the airlines have not been operating with conciousness or with total respect for the society and environment. As I had mentioned earlier, they have been singled out as polluters and then burdened with various kinds of taxations, eroding their margins. They tend to operate in an extremely regulated and competitive market where survival is a challenge. From an environmental and sustainibility view, they have come a long way and are continuing to do their best within the cost constraints they have to exist in. You just have to look at engine technology, which continues to improve in fuel efficiencies. What can help further improvements is for the governments to invest a bit of the tax money they collect into avaiation-related infrastructure.
     The development of more cost-effective unmanned commercial freighters like Natilus will bring in further efficiencies and contribute better to sustainability.

If You Missed Any Of The Previous 3 Issues Of FlyingTypers
Access complete issue by clicking on issue icon or
Access specific articles by clicking on article title
Vol. 21 No. 22
Amar Is The Phoenix At CNS
Chuckles for May 25, 2022
Memorial Day 2022

Vol. 21 No. 23
Bharat Thakkar Heart Passion & Wisdom
Another Opening Another Show
ATC Hosts VIP Lounge
Ram & Des in 2022

Vol. 21 No. 24
May Was The Month That Was
ATC Best In Show
Adani India Big Time Operator
Chuckles for June 9, 2022
Throwing Caution In The Wind
D-Day In Bernay


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