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   Vol. 23 No. 21

Wednesday May 1, 2024


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     Time goes by, things change and the conditions of the business go up and down, but FIATA meetings show stability, surprising even for those who participate.      When FIATA members meet again, year after year, all their doubts, issues and questions suddenly are lifted into a collaborative atmosphere that they share, celebrating with renewed enthusiasm their reunion, one global meeting after another. This atmosphere thrilled me back in 1992, always coming back in different waves, again and again, in particular at the Headquarters’ meeting (HQ) in spring, which mainly attracts “the usual suspects”. The FIATA World Congress (WC) is a much larger event and attracts a lot of new participants, but the HQ is the real playground of those who “make” FIATA what it is, so the degree of camaraderie is at its highest in springtime.
Antonella Strauline, Stanley Lim, Brandon Fried      Some 250 FIATA delegates from 60 different countries or more met in Geneva April 22nd to 26th. A dream for many other organisations, these are actually small numbers by FIATA standards. Please consider this happens at least four times a year, including two field meetings and the much bigger World Congress: a remarkable show of members’ participation in my view. At the opening the faces and the comments were the same as ever, yet always new. Hopefully it will always be like this for many more years to come.
     This is how FIATA introduced the spring session to its own members, under the motto Uniting for Resilience: “The 2024 FIATA HQ Meeting will delve into critical themes shaping the current logistics industry (abridged): contractual practices in maritime supply chains, the importance of data quality and electronic data transfer, regional challenges in airfreight, and new customs and border clearance regulations (abridged)) the future workforce of the industry, focusing on attracting and nurturing young talent.” The objectives stipulated by the organisation for this meeting were listed as follows: “FIATA will address challenges and opportunities such as artificial intelligence, the Digital FIATA Multimodal Bill of Lading (Digital FBL), multiple filing implementation in pre-loading advance cargo information (PLACI), and Authorised Economic Operator (AEO) programmes.”
     In 2026 FIATA will be 100 years old, a clear sign of impressive stamina, in spite of sirens evoking the demise of freight forwarders every x-amount of years. I have periodically heard and read such comments in my personal experience for 50 years by now. This must be working as medicine for us. We are all here, alive and kicking: we used to work with telexes and now we are experimenting with AI. Sometimes I dream that in 2626 FIATA will be 700 years old and will call its members to the World Congress; will it be held on Mars, Europa or Proxima B of Alpha Centauri? Who knows . . . Well, let us get back to Earth in the spring of 2024: no need to confront the Alien from outer space yet.
Willie Walsh, Stéphane Graber     The HQ started on April 22nd with a bang: Willie Walsh (left) of IATA was invited to sit and chat with DG Stéphane Graber (right) side by side at the magnificent Geneva CICG and the fact that he actually accepted the invitation was conspicuous after the uncertainties the relationship went through in recent times. The conversation was intriguing: the least I could say. In FIATA’s own words: “The IATA Director General, Mr. Willie Walsh, will join the FIATA Director General for an exclusive fireside chat at the opening session of the 2024 FIATA HQ Meeting! This is an excellent opportunity for FIATA Members to (abridged) discuss the many common goals shared by FIATA and IATA, such as: best practices in handling dangerous goods such as ubiquitous lithium batteries and unit load devices (ULDs); digitalisation, with FIATA’s digital document standard and IATA’s One Record; sustainability and decarbonisation, and scaling up the availability of sustainable aviation fuel (SAF) and other such environmentally friendly fuel options for all modes of transport; nurturing young professionals in air cargo and transport sector.”
           President Turgut Erkeskin opened the meeting and mentioned in his short and effective speech the core values of the organisation: excellence, innovation, digitalisation, collaboration and responsibility. Turgut was followed by an informative message given by the Director General, Stéphane Graber. The two introductions re-focussed the conversation in particular on the market conditions, innovation, digitalisation, human resources and the collaboration programme.
Above we were talking of actions that change but at the same time remain the same . . . Here is one that apparently never changes and seems to continue orbiting around its centre: the never ending discussion on the relationship between freight forwarders and airlines and the recent attempt to modernise it. After 10-year-plus talks about the modernisation programme and the sudden stop during the pandemic period, we have a new phase now, apparently benefiting from a more controllable atmosphere. What remains to be seen is what kind of results will be achieved in the end, as one of the senior representatives of the Airfreight Institute of FIATA had to observe after listening to the session. This was surely not the only topic that was discussed by the two directors, but it was understandably the most important for many, as clearly shown by the poll held at the Airfreight Institute meeting.
     What follows in this article is a summary of the conversation that I have heard and tried to capture in its essence. My hope and expectation is to give our readers a faithful version of the pleasant meeting hosted by FIATA. This notwithstanding, if we receive any comments that any of the statements may have been incorrectly understood or transposed, we shall surely rectify without hesitation and publish any possible amendment request.
     Dr. Graber introduced IATA’s DG Willie Walsh by saying that he was unable to adequately express how pleased and grateful he was to have him at FIATA. Stéphane took note of Mr. Walsh’s impressive career, with some 40 years in the airline industry. Both exchanged small anecdotes regarding their early morning trips on Geneva’s public transport. Soon after, Graber evoked the good dialogue that was created at the latest World Cargo Symposium. With a mind set on the global environment he said he had asked FIATA Members to share questions in preparation of this session: in focus were market trends, mindful of the turbulent time for the industry evoked by the FIATA President in his introduction. Graber was aptly mentioning that the industry had just experienced “not only a pandemic, but also some geopolitical uncertainties, conflict in different parts of the world, environmental incidents, e.g. the recent flooding in Dubai . . . We see that we have a lot of uncertainties and volatility in the market and this is also having an impact on air freight. In light of this, how do you see the preparation of the aviation industry to face these increased occurrences? And these will probably continue in the future . . . ”
     IATA’s DG Walsh had no hesitation to get in tune with the conversational atmosphere: “I would agree with you: it will continue into the future. When I listen to the list of things you read out there, I'm almost thinking that these are business-as-usual challenges that we face, because I think as an industry [in time] you will have seen some, if not all, of these issues at some stage previously. Having gone through the period of the pandemic helps to put these into context. The ability to recover is much better today than it used to be, because we've learned from past disruptions and past crises. When I first joined the industry back in the late 70s and 80s, it was a very cyclical industry. And I think those of us in the airline industry probably took the view that there was very little that we could do to influence that. In good times, it was great. In bad times, it was terrible. I think we've realised, probably going back to what happened in 2001 and since then, that there are a lot of steps and measures we can take that can significantly improve the quality of our business. That can significantly influence what happens to our business during these periods of crisis and period of disruption. And . . . the sooner you address the challenge that you face, the better it is for your business. If you look at what the airline industry went through, it was slightly different on the cargo side, because during the period of the pandemic, passenger traffic collapsed completely, whereas I think people realised just how important aviation was for the transport of critical goods and services. There was a much greater appreciation for the cargo side of the business. The fact that there are so many airlines still in business today, is a reflection of the speed with which they've responded to the crisis, and the measures they took. Many of these measures were very uncomfortable, very tough, but they had to be taken in order to survive what was the deepest and most prolonged crisis we have seen.”
     Unsurprisingly Stéphane Graber showed his appreciation: “Thank you, very interesting. I remember two years ago at the Executive Summit in the World Cargo Symposium, we were discussing about how we can keep this momentum for the cargo industry, because suddenly it appears that ‘everybody knew that cargo exists’. I had some questions coming to me asking where we stand now, because they have the impression that we start again to forget the importance of cargo.”
This was Mr Walsh’s reply: “I don't think so. Cargo is absolutely critical to the survival of the industry. From an industry point of view . . . the period between 2010 and 2019 . . . was the first time that the industry was profitable in 10 consecutive years. During that period, cargo revenues represented 13% of total revenues. In 2021, cargo revenues were over 40% of the industry's revenues. It's not just about revenue, it was the cash that was bringing . . . during that period, the cash that was the critical issue. Cargo, fortunately, was a cash lifeline for the industry.”
     Mr. Walsh affirmed that cargo had always been central in his work, but said “I don't think there were many airlines that had a full understanding of how cargo contributed to their business. But that, as I said, changed during the period of the pandemic.” Then the next questions: how to “make progress, particularly, [among] the priorities you outlined: digitalisation.” In this area, admittedly, investments in cargo had been less than on passengers’ side. It was observed, that “if we can modernise and digitalise the cargo business in the same way as we've been able to do on the passenger side” perceptible benefits would entail and Walsh also noted that “we expect cargo revenues to represent about 12% of the industry's revenues this year.”
     From the outside we could say that this is not an easy subject for airlines, as passengers and airfreight have often had to share their respective importance unevenly, and this is not always an easy discussion to have, but the way the conversation continued showed perfectly well that the two understood each other and there was no fear to fly. This looked to me like a well-prepared conversation, where both parties had a lot to gain by showing understanding for one another.
Mr. Walsh continued: “Where cargo contributes 12%, it shows how important that contribution is. Every single contribution we make: dollar of revenue, dollar of profit, dollar of cash, is critical to the industry. So I don't think the emphasis has gone, I think it's still there. I can tell you that when we're talking about the challenges and the priorities and the opportunities for the industry at the IATA Board of Governors, we are very much still talking about opportunities at the cargo and freight centre.” Mr. Graber underlined this was good news for his members and picked on the issue of digitalisation and mentioned the Digitalisation Leadership Charter launched at the WCS, where expectation exists for FIATA’s support. It was underlined that common ground exists. “I strongly believe we'll end up pursuing the same issues, the same avenue” was a notable one-liner Mr. Walsh pronounced, harbouring hope for “genuine collaboration”.
     The conversation moved on to other areas, prompted by Dr. Graber: “I think . . . one also is safety security. I think that's a very important topic for the airline. I think it's always at the top of our priorities,” adamantly echoed from Mr. Walsh, and understandably so. Despite 2023 being “the safest year on record”, frustration surfaced considering that the issues suffered by Boeing invariably seem to take the front line over the collective success of the industry. It was noted that “it's important for every single person to understand that they have a role to play in safety and security,” but Mr. Walsh also voiced some concern on possible “overreaction” from regulators “responding to political pressure. And not necessarily going to do anything to enhance or improve the safety and security.” Mr. Graber observed this was an area where “we are not in competition: we could really work together.”
     The conversation then moved on to HR and training, where “we would have all the interest to also join forces.” The ability to attract, educate and retain collaborators topped the agenda and the challenges of DG training and other examples were mentioned. Speaking of the IATA executives programme, the issue of gender balance surfaced and it was noted that “we know the challenge we have in terms of attracting more female talent into the industry . . . That's absolutely critical.” There was expectation that the gap would be closed as early as 2025, but nobody was actually in favour of quotas in this regard. Yet, it was observed that “we are still, in certain areas, male dominated, particularly in areas where talent is going to be quite scarce. In the airline industry, the areas where I think we're most concerned about is engineering and mechanics . . . an area that I think we really are going to have to work on.” The positive example of IATA’s intern programme was mentioned and there was recognition that the hierarchy in the business should not lead to frustration or dampening of enthusiasm in the younger professionals before it can flourish.

Willie Walsh

     Continuing to explore other commonalities, Graber made reference to the “collaboration through the IATA Cargo Agency Program, where FIATA is participating. We have the IATA FIATA Consultative Council that meets regularly. We participated also in the Cargo Agency Conference. We had also very good discussions with airlines in some of our meetings prior to that.” Some background was explained by the DG: “there was this project that came from IATA for modernising this program. It started with CAMP first at the Cargo Agency Modernisation Program (CAMP). And then, unfortunately, came the pandemic.” It was observed that both organisations went through important changes in the period, but “we came back. And we, as you mentioned a few times here, we think there are a lot of synergies to make and rethink this modernisation programme, trying to make something that is modern and address all these challenges that we just touched upon today. And we see that it's not really competitive. It's really about working together in making our industry more attractive and modern.” “Start again”, was the expression everybody heard.
     IATA’s DG reacted by saying: “You're right, there was history there. And I think we diverged during that period of the pandemic. I think there's work that needs to be done to bring it back together again. I think we need to rebuild trust between us.” The door appeared then open to more commonalities than differences and the conversation continued. Here are some of the notable statements that many of our readers could appreciate in their full value: “we have to recognise there are things that we don't agree on. But focusing on the things we don't agree on is going to be a waste of time. But trying to work together on things that we do agree on. Rebuild trust. Demonstrate that there is opportunity for collaboration. While recognising that we won't agree on everything, we can be professional and mature about these things, and just build on that and work forward. But it's going to take some work and it's not going to be something that can happen overnight. So I think the committee that has been established, I think has an opportunity to start putting this together. And then the speed at which we make progress I think is going to be the interesting thing. But when I listen to your introductions and I think about the things that we're focused on, there is a common agenda there. You go through phases like this, where I think you sort of try and recreate the relationship, but realise that whatever way it is, it has to be a relationship. There's no question about it. Airlines and freight forwarders will have to have a relationship.”
     Listening on, 411 additional words were pronounced by IATA’s DG, repeating the concept that airlines and forwarders were to have a relationship and this would be beneficial for both. It was a passionate speech and climaxed with a clear statement: “I'm optimistic that we can move forward in a constructive way.”
     DG Graber replied: “That's a very good, positive message. And I thank you for that. I also note that you came here. It was really something that also showed our members that there is also a kind of reset in the relationship. And I agree with you. We worked, I think, hard in the last two, three years to rebuild enough trust that we can sit here today and talk openly about the challenges of our industry. And we need to continue that way. I think that, you know, effectively what I see in some of our members is the question of speed, of the progress, because there were a lot of expectations for many years that we will solve a certain issue. And like you, I think we need to take it step by step in a pragmatic way. But I really hope that your words today, your presence will also help to create this trust, this confidence that the time has changed. We are going to do something that is different, that is new, where we can really work on the synergies and complementarity that is also reflected in the way freight forwarders and airlines work together.”
     DG Walsh said: “Well, you know, we'll stop talking . . . ” Then Dr. Graber asked President Turgut Erkeskin to join the conversation and express his judgement on the discussion. The President of FIATA expressed his appreciation and reflected on the current challenges having become the new normal, he noted that “freight forwarders and airlines are working together day in and day out. They have a great cooperation. And without that cooperation, actually, freight forwarders would not exist in the air logistics. And airlines, I mean, you have mentioned that there is a great difference between the income from the passenger side and the cargo side. And during the pandemic, I remember, I was hearing from Turkish Airlines that 35% of their revenue was coming from the cargo operations. Therefore, the cooperation between us is very crucial. And we have to bring it to certain standards, industry standards. And we need to really look for one global air cargo programme so that within the globalisation, within the standardisation, I mean, this business is performed in the same manner all around the world.” Turgut gave examples of different areas of cooperation where significant optimisation could be achieved through enhanced cooperation and standardisation. He mentioned that air freight being the fastest service in logistics there is “our responsibility is to deliver the solution in the fastest possible time.”
     DG Walsh agreed that what President Erkeskin had said was “very true. Our members work together every day. On an individual or bilateral basis, I think the relationship between individual freight forwarders and airlines is often extremely good and very personal. And therefore that gives us the opportunity to build on those relationships in a constructive way going forward. [Our relationship] proved to be the difference between life and death during the pandemic. It proved to be the difference between life and financial debts for the airline industry during the period of the pandemic.”

Turgut Erkeskin

     Turgut Erkeskin highlighted the function of the freight forwarder in dealing with shippers so that products come to the airline “in such a shape that the aircraft can accept. The airline cannot deal with each and every shipper out there. This synergy in between us is, in my eyes, second to none.”
     Walsh agreed and mentioned his experience as a pilot for Aer Lingus, where the expertise of the agent was crucial to achieve the result, then concluded, “my message is a simple one. I believe we're better serving our members working together and collaborating. I think we're old enough, big enough, brave enough to recognise that we're not going to agree on everything. But, let's try and focus on the areas where there clearly is common ground and work together for the benefit of our collective members to ensure that we continue to make this industry successful. And to make sure that people understand just how important it is. You know, we can never go back to decisions that were taken during the pandemic when people thought they could stop this industry. Fortunately, they very quickly realised how important it was to be able to transport goods by air. But they had to learn that lesson and learn that lesson quickly, because they didn't appreciate it when they were taking the decisions to stop international flight. So, I think it's great that we're able to have this dialogue and hopefully we'll be able to reflect on the progress that we make when you invite us along maybe next year to do a repeat performance on the stage.”
     Considering the number of words written, and considering this is not even half of those pronounced to state that FIATA and IATA need to work together, one could conclude that mankind is in general fascinated by its own ability to talk . . . But, on a more serious tone, we register that IATA and FIATA have re-started their conversation about a global programme. If the discussion cannot resume from the point where it was interrupted, it does not precisely re-start from scratch either, but it will need time, as was determined by DG Walsh above: we can expect a relatively long process, despite the fact that both parties seem to feel a sense of urgency.
     The self-evident truth that freight forwarders and airlines are bound to work together, and indeed have done so for decades, seems to be perceived at times as a blessing and at times as expiation. I remember many years ago – really a lot of years ago – when we were talking about similar, if not the same concepts, a late friend of mine said it “is like marriage: mostly you are happy, but sometimes you have regrets.”
     We all say that our industry is a people’s industry. In that I think the relationship between freight forwarders and airlines is the epitome of such concept: it works and manages to provide excellent services only if both cooperate in good harmony and individually they do it on a daily basis, but if you try to write it down in good order . . . There was the impression that both parties had experienced some frustration in recent times. Maybe looking for a global programme is an attempt to create a perfect world and is uncanny? After so many years in this business, I still do not know the right answer. Yet, this seems to be what everyone wants and wants to invest into. Maybe the journey is just as important as the destination? In the years this collaboration has evolved and improved in many areas. Let us continue enjoy the journey and see where we get.
Marco Sorgetti
Geneva April 26th 2024

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