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Family Aid 2020
   Vol. 22 No. 26
Wednesday August 9, 2023
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Think Ahead To RACOS

Dan Muscatello and RACOS


      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.
        Regardless of the condition of the facility and infrastructure, handlers cannot operate without staff.
        Staff without training, a service ethic, and an understanding of their role are ineffective.
        Good service does not have a significant impact if there are physical, operating, and/or technology constraints.
        Policy and regulations can be a limiting factor if applied inconsistently.
        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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