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   Vol. 21 No. 36
Tuesday September 27, 2022

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Jan Krems

     The big Ferris Wheel branded London Eye that dominates the south bank of River Thames Borough of Lambeth skyline these days, offering a circular, high and a better view of London night and day is an exciting eyewitness back to normal after the saddened atmosphere of that long emotional goodbye to the beloved Queen during the past weeks.
     All of a sudden it's back to business, as a hopeful IATA World Cargo Symposium takes centerstage all this week.
     Here is a chance for us air cargo commoners to meet and greet the air cargo leadership Royalty, as they cameo appear from their mandated annual IATA Cargo Membership meetings for a break, or to queue up in line for some refreshments.
     Hope if you ask, “what did you discuss?” the question will not be met with the response I once heard one airline cargo chieftain give:
     'Why am I here? First thing that guy in the meeting asked us, is does anybody have any good ideas to share? I’m trying to run an airline and looking for answers and these guys are looking for good ideas, Sheeesh!'

The Winner And Still Champion

     From the downbeat of the thankfully now fading global COVID pandemic, as we review the past couple of years and the performance of all the top cargo bosses at the airlines, many of whom have packed it in or changed jobs during the crises, Jan Krems, President of United Cargo knew exactly what to do with his airline and he did it better than anybody else.
     The way Jan structured his cargo product and offered it to the world not only became the template for how to cargo airline during the worst global pandemic in the past 100 years, but also can be recalled as perhaps the greatest save in the history of commercial flight.
     Face-to-face, Jan comes across as a very broad thinker and a brilliant air cargo mind. But he also seems a very approachable guy who knows how to both motivate people and thinking, and have some fun as well.
     All of this still probably makes Jan an unlikely person to have seized the day and eventually be the person to pick up the United flag at a time of crises and save the airline.
     Born in the Netherlands, Jan worked his way into the air cargo industry starting at the bottom at KLM, and rising up the ladder to the point where just prior to arrival in the Willis Center Chicago, home of United Airlines, he headed up the fortunes of Air France-KLM Cargo USA, a $400 million plus dollar business.
     “Cargo for me is very sexy,” Jan told me right after he got the job.
     “I worked 27 years at KLM Cargo and it’s amazing but as fast as things change all around us, some basic truths about air cargo have not budged at all since the beginnings of the industry in the Post World War II modern era.
     “You simply cannot mail it in.
     “My first question speaking to customers is always: 'How is our quality doing?'
     “While quality is our top priority, added value marks the road ahead for United Cargo holding great potential and promise for our offering. Our key essential remains our management of the processes up and down the line.
     “We are developing and expanding capabilities in customer service that will deliver even more transparency to our service partners and ourselves as well moving forward,” Jan Krems said.
     No question that Jan Krems stands tall amongst the handful of top air cargo leaders in the world.
     But we are happy to report that it is love of what he does that drives this guy to taking this opportunity that he describes as his ‘best and last job in air cargo’ to new heights.
     “We have become an agile company,” Jan declares.
     “When the pandemic started, we were the first U.S. commercial airline to start freight-only flights. To date, we’ve flown more than 15,000 freight-only flights.
     “When we knew the COVID vaccine was going to be transported all over the world, we started planning months in advance and received permission to fly with large amounts of dry ice.
     “We’ve been working with governments, pharmaceutical companies, freight forwarders, and our customers to change our business model and work for the future.
     “As passengers began flying again, we had to revert back to traditional models, but still keep an eye out for the future and how to deliver for our customers.”
     Now we are entering the era of Ocean to Air.
     Here are Jan’s thoughts:
     “Ocean carriers have traditionally worked more directly with customers to move goods over one phase of the supply chain journey.
     “The capital investment they make for their ships is high, but they can spread their costs over a huge amount of cargo.
     “The purchase of aircraft, as well as freight forwarders is facilitating a shift in their business model that enables them to offer end-to-end solutions with a broader range of services, but this shift is still tied very directly to their core business–moving goods through the global supply chain.
     “United Cargo is a part of a larger entity and moving goods is not the core business for that entity.
      “Carrying passengers is the core business for United Airlines and moving goods is a niche business within the core business.
     “Moving goods on passenger aircraft provides advantages over air freighters because passenger flights take off every day regardless of whether there is freight or not and we offer service to a much broader network of origins and destinations than can be offered by freighter carriers.
     “We are a niche part of the supply chain that offers dependability and speed for the goods that are time critical.
     “Interestingly enough, when COVID impacted passenger flying, we at United Cargo were able to prove that regardless of whether there were passengers or not, we could still take off with freight.
     “A passenger airline has high fixed costs, and we had a choice at that time: park our assets and hope the lockdowns passed quickly or redeploy our aircraft to fly freight and defray some of the fixed costs.
     “That meant that we had to cover the operating costs and we were fortunate that demand was strong while capacity was limited.
     “Rates rose and we were able to cover those operational costs. We had the added bonus of keeping our widebody aircraft and our pilots flying.
     “We worked closely with the passenger side to begin adding passengers back on what, at that time were cargo routes and the end result was that United Airlines was able to recover faster than any other passenger carrier.
     “It was a great success and has strengthened the cooperation between Cargo and Passenger.

Jan Krems

     “There are lanes today where we even look at whether a full passenger load or an extra PMC in the belly is the better decision for the airline overall.
     “That would have been very challenging, had we not gone through what we went through in the early days of COVID,” Jan said, adding:
     “Passenger airlines that carry large amounts of cargo as we do, are a niche part of the global logistics supply chain.
     “That does not change with ocean carriers purchasing aircraft. We each have our own core business and we can coexist, and all be successful.
     “Cargo has been a bright spot for our business during this pandemic, as we’ve leveraged our international network and relationships to find unique, high margin cargo opportunities.
     “As passenger demand continues to improve, cargo revenue becomes a smaller portion of our business as there is less room in the belly of the aircraft.
     “We expect to contribute to the enterprise above 2019 levels.
     “While an economic slowdown may be coming, we expect our passenger business to moderate the broader slowdown.
     “One of the things we are most excited about are our planned enhanced digital offerings.
     “We will soon allow for customers to book shipments online.
     “We are also looking at new pricing model to give customers real-time pricing to book their shipments with the click of a mouse.
     “We have a lot of digital enhancements upcoming over the next few months and we can’t wait to introduce them to our customers when they are ready.
     “There needs to be more partnership between airlines and forwarders in finding efficiencies for the forwarder/airline portion of the supply chain.
     “Focus today seems to be on optimizing individual roles of the process, cutting cost/rates or moving work from one party to the other (screening, buildup, storage, special handling, etc).
     “Examples of where we could partner more are expanded use of the website for bookings and tracking, which is well documented and a current hot topic, but could also be expanded into operational aspects.
     “Also, the scheduling of dock doors for tender and recovery of freight to minimize truck queuing/wait times and ULD tracking for empty pickup and return—have great opportunities for improvement.”

chuckles For September 27, 2022

Ingo Zimmer

     Ingo Zimmer, CEO of All-Star GSSA ATC is waiting to see you in London this week.
     Just like any top executive in air cargo today, he is fixing in his mind what will be said about the condition and power of his GSSA as it moves inexorably to the very top in every measurable estimation of quality and service.
     Today Zimmer’s ATC is at the top of its form in the very competitive business of representing the cargo fortunes of airlines in markets all over the world.
     “One sentence occurs to me all the time,” Ingo said, “and it’s a simple one: ‘Take a load off,’” he smiles.
     “With all the things freight forwarders have to deal with today, it seems reasonable, offering to accept any and all consignments right now,” Ingo said.
     “So beside the standard airfreight freight and consolidations it’s Full Charter, Part Charter, Co-Loads, Long Distance & Special Loads ,what we call solutions business .We care for it all,” Ingo Zimmer said.
     ATC must be doing something right.
     Sitting in a hotel room in London while planning ahead as World Cargo Symposium takes off this week, ATC is in with a full agenda of airline meetings.
     “Our take at ATC is that 2022 has been an excellent year with yields on a very high level.
     “The air cargo industry benefited from the disruptions in the supply chain—port congestion affecting ocean freight, capacity on passenger aircraft not fully back in the first half of 2022.”
     Ingo takes a look at main markets ex-Europe and USA
     “Rates have been high in Q1 & Q2 when capacities on pax aircrafts continued to be limited.
     “After two years of COVID, Summer ’22 saw everybody travelling and flights coming back as a result, brought an increase in capacity for air cargo.
     “But you know usually somewhere there is a silver lining and currently rates are still at a good level.
     “So Q3 looks locked in.” Ingo points out that for ex-Asia the numbers are not so promising.
     “Moving ahead, inflation and very high costs for heating and energy will impact travel, meaning less capacity. Also some of those freighter orders as COVID continued, have been cancelled.
     “At the same time also no more P to F because of cabin load restrictions to and from Europe.
     “Lower capacities should stabilize, even increase yields.
     “On the demand side our expectations for Q4 is, that in terms of tonnage, the traditional peak season will be rather flat.
     “But in total the last quarter will be still good because of the yields.
     “After the great increases cargo has scored during the pandemic, forecast for 2023 is that business will not be so easy.
     “Expect the yields to drop, but hopeful that they do not go back to 2019 level.
     “ATC is on the road again and looks forward to greeting old friends and meeting some new ones here in London this week; at TIACA Miami November 8; and next spring in Latin America; and of course our favorite finally back once again, Air Cargo Europe in Munich May 9, 2023.
     “In the meantime, let ATC not only share a load . . . but allow us to take a load off!” Ingo Zimmer concluded.

The Weight

FlyingTalkers podcastFlyingTalkers

Busan FIATA Best Produced Logistics Show 2022

Flying Breezes     Richard Malkin, the greatest and first air cargo Editor, who passed away on July 11, 2017, often shared his experiences in air cargo with FlyingTypers.
     Dick Malkin, covering The Berlin Airlift in 1948 is pictured here in front what was left of The Reichstag whilst reporting on the big aerial parade of all-cargo aircraft into Berlin Tempelhof, that saved a city and also gave rise to modern air cargo.

     Malkin worked until he passed away quietly at 105 years of age.
     We went out every couple weeks for breakfast. At one encounter I asked him as he thought back nearly 70 years what stories had remained fresh in his mind that we might share today.
     Dick went to work furiously turning out reams of yellow legal pad copy filled with his distinctive elegant prose in double spaced handwriting.
     Mr. Malkin was near blind at that time but that did not slow him down.
     He ditched the typewriter and worked it out with Sabiha to get the stories written, edited and out in every case by deadline.
     When Richard Malkin died and the flame and light went out we were left with several stories.
     Rereading the lot and thinking how much these stories might mean to air cargo people, because they are all about people, we have decided to share them with you.
     The format Malkin utilized was the short story genre where his immense word power really got down to business.
     One year before The Berlin Airlift steered him into air cargo, Malkin won the coveted O’Henry Prize alongside Truman Capote for fiction.
     Here he employs a similar format to highlight different events, trends, people and their thoughts over the 70 years he covered the air cargo industry.
     We hope you enjoy this series.

Gasoline Shortage

ACN March 1975Alive In '75
     It was not the kind of a year to inspire cheerful souls. The Organization of Petroleum Exporting Countries (OPEC) had a stranglehold on the world oil market, and the airlines were put to a serious test. There was that economic phenomenon, stagflation, and America was in its grid.
 Guenter Rohrmann    Some airlines were studying plans to reduce services: others were reviewing expansion plans. But all was not dark.
     At Air Express International, a new division was introduced—Fashionair—to serve the wearing apparel industry. Among a series of significant appointments was young Guenter Rorhmann, vice president–Germany, who eventually went on to Lead AEI.
     And, yes, FlyingTypers’ daddy, Air Cargo News, burst onto the air cargo scene.

Sailing Along On Subic Bay
     Prompted by feasibility studies, which covered manufacturing and trends in trade over the ensuing three decades, Federal Express arrived at a decision to say farewell to its Asia Pacific hub in Subic Bay, Philippines.

Barry HansenBarry Hansen, senior vice president of Air Express International, in a critical statement of shippers who tended to look at the air freight budget without examining the tradeoffs, stated:
     “There is no appreciation that air freight is an element of customer service. Take the traffic manager in a staff position. He is often saddled with a restricted and unrealistic budget designed to control the expenditures on air freight. The tradeoff of repeat sales needing competitors’ delivery schedule, and customer satisfaction are seldom brought into focus.”

Robert L. Jones
Get On The Same Page

said Robert L. Jones, Jr. in 1999 on the subject of dealing with the customer.
     The late founder chairman and chief executive officer of Alliance Airlines put it this way:
     “You want to avoid problems with the customer, so you make sure that you settle all issues before the contract is signed.
     “After that, all else is easy.”
Dennis W. PatrickRefine Your Business Technique
said Dennis W. Patrick, President, Lynden Air Freight in 2002.
     He led that company for a quarter of a century before retiring in 2008.
     In a forceful comment on techniques for “everyday work,” Mr. Patrick reasoned: “You can remember one minute manager and management of objective. “You can remember how Japan and ‘quality management’ led the industrial world in their modern management and demand for ‘zero tolerance’ for errors and ‘quality management.’
     “Still, there are some principles that prevail, and I think quality as a noun, incorporated in a culture is one of those.
     “I am thinking of continuous improvement, meeting mechanics, measurement, and process improvement.”
Alan Chambers, Angelo Pusateri, Richard Branson and John Ryan
The Constant Is Change
said Angelo Pusateri, co-founder and president of Virgin Atlantic Cargo USA in 1989.
Commenting on the role of opportunity, Angelo (pictured second from left with Alan Chambers, Richard Branson and John Ryan, all of whom pioneered Virgin Cargo declared:
     “If there is anything I have learned about the air cargo business, it is that nothing ever remains the same, and as a marketing-oriented individual, I would find it dull if it remained unchanged.
     Where would opportunities then come from?”

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Publisher-Geoffrey Arend • Managing Editor-Flossie Arend • Editor Emeritus-Richard Malkin
Film Editor-Ralph Arend • Special Assignments-Sabiha Arend, Emily Arend

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