It has been eight months since Jan Krems came to Chicago and took up the reins at United Cargo, leading the company back to the future with his own special combination of air cargo knowledge and enthusiasm bolstered by a stellar career in top management posts at KLM and AF/KL/MP Cargo.
     Right now, as 2015 crawls out of a deep freeze in the U.S., Jan is up and working every day before sun up, uniting the world inside the airline with the huge global customer base the carrier serves with its air cargo offering.
     “I’m in office every day at 0600.
     “That way I have an opportunity to contact people all over the world and to keep tabs on our cargo business with limited interruptions,” Jan said.
     “I like to speak personally with five customers each day if possible. By connecting in this way, nothing is assumed or taken for granted by our customers or us.
     “If one thing is a constant during all my years in air cargo, it is that personal contact eliminates most misunderstandings. It’s not about ‘Show me the money’ or ‘How are we doing?’ but rather ‘I am available to work with you one-on-one: no confusion and no excuses.’”

About The Market

     “Everybody at United Cargo is quite positive looking at near-term and longer-term business prospects ahead.
     “The tough part is that business recovery is not operating full tilt in all countries, so it’s a challenge to predict which markets will perform better than others. So we are positioning ourselves as business accelerates out of Europe with the dollar strengthening versus the Euro.
     “There are positive signs in pharma overall and from Asia to Latin America among other markets as well.
     “The West Coast of the U.S. has been very strong with the effects of the port strike, and with eight-week backlogs still in place the benefits to air cargo are continuing.
     “Our focus is now on building partnerships with new customers who have recently transitioned from sea freight. We have the capacity to continue to move these goods, so we’re doing all we can to reverse the longstanding trend toward ocean. We think we have the opportunity to retain some of that business now that these customers have experienced the benefits of air freight.”

Business Returns

     “Our business is advancing quite well in 2015—in fact, better than expected thanks to a growing, loyal customer base that recognizes the effort of a truly dedicated team here at United Cargo.
     “We saw the first signs of the turnaround during the second half of 2014 as we recovered from the difficulties of implementing our new UC360 technology system. We switched from our excessive internal focus and put our attention more toward our customers and our market position.
     “With these issues behind us, we took the opportunity to get a better story out to our customer base. Customers responded to our ‘back to the basics’ message since we based that target on what they told us we needed to do.
     “All these efforts led to a momentum shift as United Cargo began to reassert itself in our customary role as a quality provider in the marketplace.
     “We have rebuilt United Cargo from the bottom up with our team solidly focused on creative solutions, despite continuing over-capacity and declining yields. With GDP growth pegged at 3 to 3.5 percent, and capacity growth above that, the only way to succeed is to get your house and message in order—so that’s what we have done.
     “We offer our service partners a complete menu of value-added products and the ability to deliver. I have learned that customers will stay with your offering as long as you keep close enough to them so you can not only serve but [also] anticipate their needs. And of course you need to be able to execute operationally and keep your promises.
     “We recently held our Annual Worldwide Cargo Meeting with over 300 of our employees, service partners, and sales partners. I was really impressed with the level of enthusiasm the team showed, and the most exciting thing is our 2015 business plan contains so many new elements.
     “We will soon begin rolling out the first new brand concept for United Cargo in many, many years. We have a new service that really allows us to optimize our great network—this enables us to say ‘yes’ to business we have had to say ‘no’ to in the past. And our Revenue Management team has developed and begun rolling out a number of innovative tools that will make us the industry leaders in this area.
     “There’s only one path to success in our industry: you must be better than your competition in your service offering, your customer relationships, and your delivery of quality and value. That in a nutshell is United Cargo’s goal and purpose in 2015,” Jan Krems declared.
     “Simply put, we are improving everyday—from our operational performance to the quality and quantity of our customer contact. We have reorganized our leadership, we have some new faces with fresh ideas and we have empowered everyone in the organization to think about better ways of doing things. We say that ‘business as usual’ at United Cargo is an unusual level of attention to detail and service. Customer satisfaction is job one because we only succeed when our customers succeed.”
Geoffrey

Jan Krems
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Dan Muscatello
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     February has been quite a month for news related to IATA and IATA Cargo.
     First, the man who headed IATA air cargo for three years and hosted the last World Cargo Symposium (WCS) in Los Angeles in 2014 (and, after WCS, quickly “retired to spend more time with . . . family”), Des Vertannes has almost as quickly regenerated himself and “unretired.” He is back in air cargo reportedly having joined a Boston-based IT firm.
     IATA has announced that it is offering cash on the barrelhead for anybody with the best idea willing to travel to PVG for WCS on March 8. So far, only three companies have made the cut and are scheduled to present their ideas; all are Dutch.
     We have reported in the past that IATA Cargo has called for ideas at other WCS gatherings, but handing out bucks for brainstorms is something entirely new for air cargo.
     On one hand, the gambit confirms IATA doesn’t really have anything in its bag of tricks that can be construed as a breakthrough for the delegates at WCS this year.
     On the other hand, pitching to the strength of air cargo—the thousands of companies and tens of thousands of people who make this industry great—may just be the winningest idea all by itself.
     We just wonder how all of the smart people landed in the Netherlands.
     But let’s suspend disbelief and see what they have to offer, as we will certainly share our thoughts, dear reader, right here, as time goes by.
     This is about a paper IATA recently put out, which we suppose was created out where that organization thinks some of its big thoughts around beautiful Lake Geneva in Switzerland.
     In Europe tensions have recently risen between the newly elected Greek government (led by Prime Minister Alexis Tsipras of the leftist Syriza party) and other members of the Eurozone, as a so-called Greek exit or “Grexit” from the EU Zone looms large on the horizon.
     Grexit is also the subject of a recent paper from IATA titled “What would a ‘Grexit’ mean for the Eurozone air passenger market?”
     The paper is impressive in presentation (linked here) put out by by some economic folks in Geneva.
     But upon closer examination we wonder if these people really know what they are talking about.
     In truth, this report actually says very little, providing a lot of figures but scarce background and no clear guidance on how Greece’s “Grexit” might impact European aviation.
     For example, in the analysis of the passenger traffic streams, both domestically within the various European states and intra-European, IATA has either forgotten a few significant factors impacting European aviation or voluntarily decided not to mention them:
     While Germany, as the economically strongest EU member, plays a significant role in IATA’s analysis, the considerable impact of strikes occurring in the last few years, which have taken down German aviation to a practical standstill, appears to have been disregarded in this report.
     Likewise, IATA forgot to mention that the German Passenger Tax (GPT) imposed on all tickets in Germany has driven sizable numbers of German air passengers in parts of the country with other air options to utilize gateways such as Zurich, Schiphol, Brussels, and Vienna.
     IATA outlines that “Indeed, some economists think that euro exit could actually present the weaker members of the Eurozone with better long-term prospects than remaining in the euro, and potentially lead to faster growth in the region as a whole in the long term.
     “This would particularly be the case if some Grexit-type event resulted in a pick-up in domestic demand in the ‘healthier’ parts of the region—notable in Germany,” IATA writes.
     How an exit of Greece from the Eurozone is supposed to stimulate the domestic growth in Germany is unexplained in this report.
     Thinking into it a bit further, we wonder why Germans would fly more (or other European nationals might commence flying via Germany or on German air carriers) because Greece left the Eurozone?
Greece is a popular holiday destination in Europe.
     But supposing Grexit occurs and the Drachma returns, vacationing in Greece would actually be less expensive for Eurozone citizens as IATA has outlined that that Germany alone would have to write off 83 billion Euros (US $94.5 billion), something German Chancellor Angela Merkel has promised “could not and will not happen.”
     Grexit has a number of ramifications IATA has overlooked, including its political effect on the rest Europe.
     In some quarters, the thinking follows that writing off Greece’s debt entirely could also boost the advent of anti-European, anti-Euro and nationalist movements throughout Europe.
     IATA’s analysis does not take into account that while a “Grexit” would have Greece expelled from the Eurozone, the nation would still be a member of the European Community.
     But while the Rome and Maastricht European Treaties provide ample guidance on accession to the EC and member states’ commitments and obligations, they do not provide for an exit mode.
     IATA’s economists and report writers utilize information from many sources, including the Bloomberg and Reuter’s newswires.
     Not a bad idea to add some Mark Twain words to the mix:
     “It's tough to make predictions, especially about the future,” wrote Samuel Langhorne Clemens (MT).
Jens

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