#INTHEAIREVERYWHERE

     Our reasoning behind looking as far back as 50 years ago to see what the leading thinkers of air cargo were saying and doing to build this industry is to offer some balance and perspective as air cargo surges forward in 2016.
     Today we have someone who has been involved in the marketing of freight forwarding, airline cargo, and the trucking business. He is able to talk about that experience yesterday and luckily for us from the perspective of today as well. Barry Hansen was senior vice president of Air Express International in 1977, when he spoke to Richard Malkin and made a critical statement about shippers who tended to look at the air freight budget without examining the tradeoffs. He said:
     “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, Barry said in 1977.”

Update 2016

     Today we discover that Barry Hansen is alive and well, living in Carmel, Indiana, after having moved there some years ago to serve as VP Marketing of Celadon Trucking Services
     Since AEI, Barry has consulted for 8 years, at one time representing Unilever’s forwarding interests in the U.S.
     Barry moved to the airline side during the Bill Boesch era at American, serving AA for a time as MD International Cargo Sales based in London, before returning to the U.S.
     After retiring from Celadon, Barry did some M&A work for Paul Jackson at London-based Triangle Management Services until 2008.
     “I came back to air cargo in 2013 as an advisor to a startup parcel company specializing in niche e-commerce transport,” Barry told FlyingTypers.
     “Of course, I have industry views, always did.”

Recalling 1977

     “As I look at my quote from 1977, I remember Dick (Malkin) always asked about one’s view on TCC, the Total Cost Concept.
     “If today is the era of big data, those were the days of no data.
     “While a rational person could see the validity of the concept, they had no data to back it up.
     “Proving that reducing inventory costs would more than offset increased air cargo costs was beyond the capability of most all companies.
     “But today as compared to 39 years ago?
     “It is obvious that traffic management has become logistics management and that the logistics folks are very involved in customer satisfaction.
     “In the retail universe logistics is critical to the core mission and sustainability of the enterprise and air cargo plays a major role.
     “How successful a company is in e-commerce can be determined by how they manage e-commerce and brick and mortar, either together or separately, whether they reduce their brick and mortar footprint while building up e-commerce, whether they make acquisitions to build e-commerce scale, whether they are purchased by someone seeking to increase e-commerce scale, or whether they hemorrhage cash in an attempt to compete and exit the market.”

The Power Of One

     “It is obvious that one company has established the playing field, forcing a traditional industry to react.
     “They have established in the customer’s mind an expectation of what kind of delivery service level the retailer has to provide to be competitive.
     “While of course the cost of delivery is in the price, the seductive ‘free shipping’ promotion has forced others to follow.
     “To accomplish this, scores of fulfillment facilities are opening to shorten the geographic reach to the end consumer.
     “With hundreds of thousands, sometimes millions of purchasable items on a website, you can’t stock everything everywhere, even with the best of anticipatory inventory practices.
     “This requires the dedicated movement of inventory internally, both by surface and air, to maintain customer expectations.
     “This becomes more important as other continents are involved.
     “That is added to the incredible volume of e-commerce parcels that move by air to meet committed delivery to the consumer. “Unfortunately, for the scheduled passenger carriers, most of this air volume doesn’t move on their services.”

About John Emery Sr.

     “This ‘Vital Views’ in FlyingTypers reminds me of the privilege I had to have lunch with John C. Emery, Sr., one day in 1968.
     “He was widely acknowledged as the air cargo visionary of his day.
     “John Sr. was the finest executive I ever met. He told me we were in the infancy of a dynamic industry, but he had no idea exactly as to where it was leading.
     “He passed away a year later.
     “Three years later Federal Express appeared on the horizon,” Barry Hansen recalled.
Geoffrey/Flossie