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For the past two years, Brandon Fried
and I have been looking at how best we can improve the efficiency of air
cargo and at the same time lower the costs for all stakeholders and get
them passed on to consumers. This effort is supported in Washington, D.C.
as a bipartisan movement and we will be having tours and presentations
to further familiarize the hill with the issues in the next several months.
This has pretty much consumed my time, and as you can see from the article,
there are a lot of challenges that we as an industry need to address.
But for the first time, we are looking at a way forward. The RACOS (Regional
Air Cargo Operating System) concept is important for people to understand,
that this is not an airport problem, it is a series of system challenges,
that can be addressed. I know that our lives are full of acronyms, but
this is one we need.
We are beginning to see signs that
air cargo volumes, although still normalizing, are not yet at pre-COVID
levels.
This makes it an ideal time for the
industry and the broad spectrum of private and public stakeholders to
take a hard look at how to prepare for the future. “
History teaches us that growth, if not steady, is eventually, inevitable.
The FAA, Boeing, and other forecasting entities are calling for roughly
four percent annual growth over the next 20 years. In virtually every
region where cargo is a meaningful element of the economy and airport
revenue, this growth cannot be sustained without a substantial upgrade
of the supporting operating and physical infrastructure, facilities, and
technology. The result will be a loss in cargo throughput efficiency and
increased delays in the processing of extremely high value, time sensitive
goods, and higher operating costs for all stakeholders, that to be recovered
will eventually be passed on to shippers and consumers.
Recognizing the need for identifying the key issues and potential solutions
the Airforwarders Association (AFA) and the National Customs Brokers and
Forwarders Association of America (NCBFAA) assembled a Committee to create
a way forward. This Committee of industry stakeholders and experts identified
five major areas of concern – Technology and Communications, Infrastructure
and Facilities, Service, Staffing, and Government Regulations. A nationwide
survey was developed and distributed to the full spectrum of industry
stakeholders, and nearly 400 responses were received, identifying regions
where there are the greatest challenges and ranking the five areas of
concern and details related to each. This provided a basic blueprint for
resolution, what is perhaps most significant, is that throughput issues
are NOT the sole responsibility of the airport, but are a combination
of all the entities involved and the most effective solutions will depend
on a universal approach meeting all stakeholder needs that is best met
through a dedicated federal funding program.
The data demonstrate that:
1.
Substantial air cargo facility and infrastructure improvements are needed,
but that the enabling costs (those that are needed to enable the facility
to be built and operated efficiently) produce limited or no return on
airport or private investment, and hence no significant incentive to these
stakeholders, which often represents a barrier to development. These can
include demolition of existing facilities, mitigation of certain environmental
costs, land side and aeronautical infrastructure (roadway additions and/or
modifications, and accessing taxi lanes and aircraft parking), and expansion
of an airport’s electrical grid.
2.
Efficiency of all stakeholders (public and private) will be enhanced and
their operating costs (with flow through to consumer pricing) will be
reduced. The inhibiting factor is that participation must be universal,
and the initial cost of new technology is a challenge for smaller stakeholders.
Pilot programs indicate that after three years the initial investment
will be covered. State-of-the-art electronic communications will have
an immediate impact on efficiency. Truckers, freight forwarders, handlers,
the airlines, and federal agencies will be better able to stage pickups
and deliveries for both inbound and outbound cargo. Freight forwarders
in particular, will be able to time pickups of inbound and outbound cargo,
reducing the need to let the freight remain over a weekend and eat up
capacity while potentially constraining handler operations. This will
enable government agencies, with dual responsibilities for interdiction
and facilitation, to better assign staff and adjust schedules.
3.
Service levels are down throughout the industry due to changing perspectives
on work that evolved from COVID— lower levels of training, and higher
turnover rates. Training and job development, while at the lower end of
the financial scale, it is essential that every stakeholder understand
their role and how it relates to throughput enhancement.
4.
For staffing, one of the biggest problems is lack of public access to
the cargo areas. At many airports, this represents a barrier to employment
for a substantial number of job applicants. A second major issue is security.
To secure the appropriate access badging can take up to six weeks after
a potential new “employee” is hired. In the interim, job applicants
are lost because of the delays. This is both a staffing and regulatory
issue and a very real problem for cargo handlers and airlines where a
trained and available staff is essential. TSA and CBP staffing is also
a concern particularly where operations are not 24/7. While the agencies
make every effort to be responsive to sensitive shipments, the human resources
are frequently unavailable on a timely basis.
5.
Federal regulations, based on local operating requirements, and/or physical
constraints, are often subject to field interpretations designed to assist
in the processes. Nevertheless, these changes, if not familiar to a stakeholder,
can cause delays, that could not otherwise be anticipated. An additional
delay factor is the lack of universal federal participation in the electronic
communications element of the clearance process.
What is clear here is that the air
logistics chain within a region, is a tightly integrated system of stakeholders,
whose effectiveness depends on each other.
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Regardless of the condition of the facility and infrastructure,
handlers cannot operate without staff.
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Staff without training, a service ethic, and an understanding of
their role are ineffective.
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Good service does not have a significant impact if there are physical,
operating, and/or technology constraints.
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Policy and regulations can be a limiting factor if applied inconsistently.
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All the other factors, impacting every stakeholder in the regional
chain, need to be connected through sophisticated technology and communications
systems.
These elements, and their clear interconnectivity,
support the need for a holistic approach to resolution, which is the core
thinking behind the RACOS. Because we are looking at a regional system,
the federal allocation of funds would have an immediate benefit for all
stakeholders, and in the long term, for shippers and consumers. It will
encourage private investment, and give airports greater flexibility in
how to allocate funding for environmental mitigation, sustainability initiatives,
safety, and security. Legislation for funding the Regional Air Cargo Operating
System initiative is moving ahead in Washington, without pushback and
with bipartisan support in both the House and Senate. It is extremely
important that the industry understand and support the concept, and help
to advance it as appropriate.
Dan Muscatello
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