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   Vol. 21 No. 21
Tuesday May 24, 2022

FIATA Geneva session

Dawit Woubishet     On May 18th Dawit Woubishet, (left) the Ethiopian chairperson of the FIATA Air Freight Institute, introduced the themes of his session, 'Business Recovery (eCommerce, Digitalisation, COVID, etc.)' and 'Pre-Loading Advance Cargo Information (PLACI)', hosting a high-rank panel of speakers: James Hookham, Secretary-General, GSF, Glyn Hughes, Director General, TIACA, Brendan Sullivan, Global Head, Cargo, IATA and Cortney Robinson of ICAO, gathered in Geneva or participating from remote at the first face to face reunion of the FIATA community after the FWC in Cape Town in 2019.
     Sadly, due to COVID restrictions it had not been possible for the most ethnicity and gender varied global assembly in transport and logistics to meet in person since the autumn of 2019. FIATA is the largest organisation in freight transport in the world, with one continent missing: Antarctica. Freight forwarders deal with shipments in all modes of transport, but are principal facilitators of airfreight and without their contribution there would be little on our tables and in our houses.
     Familiar faces, dear friends were there, still in smaller numbers than usual, if you count the participants at the state of the art Geneva convention centre, but really in larger numbers if you consider the remotely connected participants, with a hybrid format that deployed 3+ days of stimulating and at times even emotional convention. It was like a refreshing spring shower after a long drought. The expression on the faces of Ivan Petrov, FIATA’s President, and Basil Pietersen, his immediate predecessor, just published on the FIATA website leave no doubt on this point. The smooth and flawless operation of the HQ team in Geneva, who admittedly met its own membership base face to face for the first time after the move from Zurich, was perceptible and contributed to the spotless hybrid mode discussion that is in my view a feature FIATA should be proud of.
     The usual report on six months’ activities was read briefly and it took note of the changes intervened in the Air Cargo Programmes in the meantime, including those registered at 83rd session of the IFCC, where items of interest had been submitted to IATA for consideration. Training centres’ activity and block chain tools, as well as the new ICAO FIATA agreement on training were mentioned. Then a series of online polls started and ignited a lively and open debate which kept a reasonable balance between cliché and insightful thinking about future trends.
     The discussion was ignited by the following question: “what is the most important lesson learned for the airfreight industry from the COVID-19 pandemic over the past two years?”
Glyn HughesBrendan Sullivan     The panel instantly noted FIATA members’ replies captured by interactive ICT tools: Glyn Hughes (left) said: “these guys have all the answers” mentioning the keywords emerging from the poll. Brendan Sullivan (right) contended that “cooperation is the keyword”. They both reflected on how do we take lessons learnt forward from there and “probably there will be a new different rather than a new normal. The global economy seems to start evolving more rapidly than ever” were statements that passed unchallenged.
     As I said, the debate was interesting and informative, but I have to warn the reader that this is not a five minutes’ browse. I recommend reading on if you are really interested in the details of the interactions among the exceptional panel of speakers and their inspirational thoughts. I must also state that I tried to capture the debate with best intentions and my approach has been to actually repeat some of the statements made by the distinguished panellists. If they feel I have either misunderstood or misinterpreted any of their statements, I shall be pleased to stand corrected and provide an update.
James Hookham     James Hookham (left) expressed his view on the second question (see below): “It does not surprise me. Recovery is bound to happen, the trading environment needs more cooperation, as shippers and forwarders are noting, not only in maritime, but also in air cargo. How much passenger flow is going to come back, so that the capacity of the belly hold can return?” was the open question, no undisputable answers instantly available.
     “Can the speakers reflect on what happened in the last two years?” was the unavoidable following question from the Chair. Cortney Robinson replied that “there are two big trends: digitization is in second gear now, with contactless and multimodal exchange of documents. There is a regulatory side that needs to be developed, so a task force to work with the aviation community has been established.” Brendan Sullivan affirmed that air cargo continues to be an industry where there is a lot of change and challenge.      “Digitization will help us in many areas, such as security with a view to sharing the SC process information. Fuel is and will still be a challenge. Domestic travel is coming back, in 2023 there is expectation to go past 2021 figures, but internationally it will only happen in 2025. Air cargo has shown it can adapt extremely quickly.”
     Glyn Hughes sounded extremely happy to be back at FIATA in his new function: “What a pleasure to be back here with you guys! We do not do enough for thanking people in the industry… Freight forwarders were moving PPD’s struggling with something nobody knew. By 2025 cargo will probably be over 25% the level of 2019, so the role of the freighter is going to be crucial going forward.” He then asked a daring question that three years earlier would have sounded taboo: “Shall airlines fly people in future where the cargo needs to move?” Asking for regulations to support also cargo, not only passengers: “Cargo needs different regulatory rules than passenger and going forward we need to look at it” and continued: “I love numbers: in comparative values of tourism and cargo, 850 billion dollars were spent to promote airborne tourism, but cargo was eight times as valuable, and yet we see no ads and videos . . . In future we need to make known that the value of air cargo helps economies prosper.” This concept ran deep into the hearts of the freight forwarding community present in the hall and on-line. James Hookham observed for the shippers that the ability and the speed to react to the pandemic was phenomenal and noticeable. The responsiveness of the regulatory environment was also unprecedented and a tribute on how IATA responded should be made, he concluded.


     The Chair then asked one more crucial question: “How can we help regions in this transition?” For organisations deeply regionalised, and yet united, as both FIATA and IATA are, this is a topic second to none. Glyn Hughes observed that “we must recognise that COVID is not over yet and some parts will be disrupted for some more time. We should be flexible to adapt and avoid expecting a uniform recovery. Elements of disruption become more numerous and fragmented, so we need to use flexibility; stress is still inevitable.” In reality flexibility was indeed the so far overlooked and first in line key word submitted at the poll.
     However, Brendan Sullivan contended that we need a harmonised approach in the regulatory approach, and that is still a challenge. Forwarders and airlines move vaccines and other crucial products: our picture has changed in a way that reconnecting some areas to the rest is no easy task. In levelling the inequalities and keeping the UN SDG in sight, the rank of the values at play may vary.
     The Chairman asked about the next generation. Glyn registered that air cargo is in the same boat as other businesses: there is a scarcity of staff and the paradigm must change. We compete with other high tech, more glamourous industries, but here you can make an impact, he said. “I hate the word sexy” as others employers often refer regarding their employment. “This is about creating value and benefits, we need to use the vehicles of the new generation to convey the message, to attract the next generation.” Brendan Sullivan said that “if you wish to attract the new generation, they know what eCommerce is and we need to attract them by explaining that we do not need them just to pick up boxes. There is a skill shortage and we need to play some catch up.”
Cortney Robinson     Cortney Robinson (left) echoed implying that the challenge is also explaining how innovation and automation can help work from remote. Providing the innovation environment and the benefits that other industries have will be fundamental.
 Galo Molina    There was then a long, informative and at times challenging Q&A. Galo Molina, (right) Treasurer of FIATA asked: “what do you think of liners into the air cargo sector?” Glyn Hughes replied that he was pleased to see this, as this is a great endorsement for air cargo. Air cargo will be a lifeline for African countries now, but Glyn also contended that if the new entrants wished to bypass the forwarder that would make a mistake. The role of the freight forwarder is still insufficiently understood, there is a phenomenal amount of global knowledge in the forwarding sector that cannot be improvised or duplicated.” Brendan Sullivan observed that “ecommerce will make us all better, we need to continually adapt” and accepted that “there are efficiency gains that cannot be achieved without FF’s.” Cortney Robinsons said that the COO of a shipping line came to talk to ICAO and the call was on innovation. “They are open to look at technology and make investments”, he concluded. James Hookham sounded slightly more worried in saying that “these entities are buying entire parts of the supply chain and one should be careful to understand what part of these organisations one is dealing with. They do preferentially go after beneficial cargo… in making such investments their interest is to reassure customers that they have alternatives in times of stress.”
Paul Golland     In replying to FIATA’s VP Paul Golland, Brendan Sullivan harboured a more technical subject on the use of freighters vs. belly hold capacity in the future. With new, longer haul flights as planned using new aircraft, there may be no further space for cargo, that is why one should look to freighter. Brendan was adamant: “Ultra long route will not allow the return of air cargo into belly hold.” This attracted a counter argument from the floor: “Running freighter costs more than running belly hold, so are we looking at a longer period with higher prices?” This question was picked by Glyn Hughes who observed that it is still cost effective, if compared to today’s maritime freight rates. Some capacity issues will be resolved by aircraft that would not be used for some time on the passenger side e.g. 777. A 50/50 share will probably not come back and maybe it will settle on 60/40, was the TIACA SG’s conclusion.
     Brendan Sullivan warned that operating freighters is not a short term investment: investors are looking at well beyond the 2025 recovery line, and Glyn Hughes echoed “airlines have learnt to diversify their portfolio through pandemic, and that will include good cargo products.”
     As we shall see, in a short while the topic was resurrected by one of the prepared questions proposed to the participants. Just after registering the confirmation from all participants that capacity still is the main concern:
     Brendan Sullivan admitted that access to regular capacity is indeed an area of concern.
     During the continuing discussion capacity and the use of which equipment would satisfy tomorrow’s demand, Glyn Hughes argued that that “the poll reflects a more important role for the freighter in future.” James Hookham warned that “some of the new markets will not be served in the same way as they were in the past, there will be more shuttle services. This will place more importance on the visibility of performances and KPI’s. Quality features such as cargo trackers will justify some premium choices in this case.” This was the voice of the shippers, and forwarders are excellent listeners to the demands of their customers...
     One of the USA participants raised the issue of inadequate services received from cargo handlers, even when airlines offer good service. This was spot-on, according to TIACA, but ground handlers are faced with challenges in staffing. The industry moves boxes of high value and investments need to be made. Financial investments must accommodate environmental obligations and this is why cost effectiveness is at stake. The shippers urged the need to address these issues before they become critical as they have been in waterborne shipping.
Florent Noblet     Florent Noblet (right) from TLF, France asked what kind of fuel mix we shall have to look at in future, considering we shall not have fuel for everybody? Glyn Hughes replied that sustainable fuel will have to go up to 65% capacity and many countries (UK, Singapore, Germany, France, etc.) are investing, but we need to find solutions that do not pit speed against sustainability. If we look at the electrification happening on the roads now, there is much to learn.
marc Bibeau     VP Marc Bibeau (left) from Canada asked what area of change should come first for traditional forwarder to invest in and received Glyn Hughes’s response: “The FF community has a long service history. Just listening to Jean-Claude Delen opening up new SC routes in Africa was phenomenal. There will be an increasing role to work with producers and manufactures to open new markets to them. When it comes to technology, Glyn teasingly suggested to “replace the IT employees with 10-year-olds. The young go straight to the point and get it done. Technology needs those who can run it. Let them do it”, he said. Brendan Sullivan warned that there is still room for improvement, e.g. the lithium batteries issue: building trust is the principal function of the freight forwarder, also mentioning digital connectivity with open standard and showcasing the efficiency that FF’s are bringing to their partners.
     Cortney Robinson suggested that the challenge lies in safety in ecommerce (e.g. lithium batteries). He also mentioned that National Trade Facilitation Committees need to see forwarders represented at their meetings. James Hookham urged freight forwarders to engage with the right language: what shippers are looking for is a trouble-shooter, so “introduce yourself as a trouble -shooter and that will be a strength in your introduction.”
     The discussion continued on digitization and sustainability. Brendan Sullivan disposed of the “ontology” concept, suggesting: “We are not talking in general, we are talking of NPI’s organised to be intuitive and work practically. We talk about IATA’s One Record and use cases. Glyn added that “the picture is more accessible. Let us not be shy to commend work done well such as ICAO’s on free standards and others such as W3C standards, a very useful instrument.”
Nicolette van der Jage     The last half hour was devoted to PLACI , which is being mandated in the EU in just a few months. Admittedly Cargo IMP will not work and operators need at least XML connectivity. IATA is trying to ensure uniform standards, but “there is still a lot of work to do. This is in fact a call to action”, concluded Brendan Sullivan, but in reply to a straight question he confirmed that the IATA manual will come at a charge. Nicolette van der Jagt (left) of CLECAT announced a survey on their preparedness and announced a workshop on 6th of July on the issue, inviting everybody to join in Brussels.
     Rounding up the meeting on sustainability, Glyn Hughes gave the TIACA perspective: “not only environment, but a wider look at sustainability (people, planet and prosperity). TIACA launched a new product called “Blue Sky”, a programme launched in March to make self-assessment in terms of sustainability. Brendan Sullivan confirmed that sustainable is the only way to grow and “We are pleased to see big forwarders looking at buying greener flying power.”
     James Hookham warned of the increasing pressure on air freight users. “Air freight starts getting bad scores again, so we have limited time to clean the sheet, eventually the recognition of the demonstrable progress will be the convincing argument.” The Chair’s closing summary concluded a debated that left some of the participants breathless for its intensity and depth of concepts. Congratulations to FIATA, an organisation that resonates with value for its own members and those who are invited to participate.
     Let me conclude this long report with FIATA’s own words, which were provided in the summary received by Members and I was authorised to quote: “An important take away from the session was that freight forwarders, if agile and flexible, are here to stay, as any asset owner who thinks they can replicate the entire global knowledge bank of a forwarder spanning worldwide logistics options, customs regulations and cost effectiveness is setting themselves up for failure. The importance of highlighting the value of air cargo and the role of the freight forwarder was a recurring topic during the discussions. To the question of what the key priorities for freight forwarders should be, the speakers noted the need for continued focus on safety and security, digital connectivity, eCommerce, and showcasing that freight forwarders are the trouble-shooters in the supply chain.”
Marco Sorgetti

chuckles for May 24, 2022

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Sullivan & Hughes At FIATA Geneva

Geoffrey and Sabiha Arend

     Word Up May 22, 2022 . . . Having ducked COVID for what feels like a half a decade now, although guess it is only the past two years, we celebrated an evening out in Manhattan last week just as fat, dumb and happy as it gets after 47 years of marriage.
     Yesterday, Sabiha came down with COVID.
     Luckily for us as elders, we get the super-pills that she started on right away to add to the four COVID shots and a flu shot already inside us.
     So we cannot be at CNS this week, but we wish all a raucous good time, lots of golf, networking, business and fun.
     But allow this . . . please wear a mask.
     Forget all the bravado.
     The demon is still out there, and you can get it again.
     What I can’t figure is how fast this thing takes you down to zero.
     Joan Armatrading wrote about precipitate drops in Fortune, 50 years ago
                    “Oh the feeling
                    When you're reeling
                    You step lightly thinking you're number one
                    Now you walk with a word
                    Down to the ground
                    Down to the ground”

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