Vol. 8 No. 48                                            WE COVER THE WORLD                                                          Monday  May 4, 2009

Change In The Air At CNS

As CNS Partnership Conference gets underway in Carlsbad, California this week we wonder how does the air cargo industry benefit from highly visible and well attended IATA cargo themed conferences, including the Bangkok-held IATA World Cargo Symposium this past March? We also would like to know what are the next steps IATA will take toward enhancing speed, efficiency and quality along the supply chain. Two of a number of questions IATA Cargo’s head Aleks Popovich goes into deeper in this exclusive interview.

Q:  Aleks, what are the big takeaways from your recently held Bangkok meeting and what are the main actions arising?
A:   There are two main themes to highlight. First the tremendous positive feedback received from delegates and second the importance of delivering on the industry promises made at the concluding plenary of the Symposium.
Q:   How many responses did you receive from the Bangkok participants?
A:   From a total of 730 attendees 28 percent responded to our survey, the highest response rate so far from all our previous meetings. Last year in Rome the response rate was 25 percent and Mexico City in 2007 was 19 percent.
Q:   Which issues got a high rating, which topics were criticized?
A:   One of the key questions for us was how the delegates rated our WCS event compared to any other cargo meetings. There, 75 percent voted WCS as either best in class or much better than other industry air freight meetings. Only 1 percent is seeing Bangkok as a less important gathering. A very high rating was received for the networking opportunities the WCS provide. Obviously there is great demand for business meetings aside from the official agenda. We intend to offer more networking facilities and tools during our upcoming Vancouver symposium in 2010.
Q:   Where else can IATA Cargo enhance the annual meetings?
A:  By offering more half day tracks at complementary times where we minimize overlaps on topics of common interest. It’s great to know we now have so much “talk to action” content competing for the precious time of our delegates! This is a key lesson we learned from Bangkok where many tracks ran parallel so the participants could only attend a relatively small number of tracks. We want to put ourselves in the shoes of different types of cargo professional participating in future events, and make sure we tailor the event to meet their needs.
A:   For example, take the CEOs that have little time and might be interested only in the Opening Plenary, the Cargo Economic Outlook, the Cargo Executive Summit and the Cargo 2000 AGM before having to take on other obligations. Another example is the Dangerous Goods professionals who are likely to be mainly interested in a dedicated Dangerous Goods track. We intend to offer a full day for this topic as an exception. It’s about designing the most effective journey for each type of cargo professional participating in the Symposium. It’s also about responding to demand for new content. For example, for the first time in 2010 we intend to introduce a Customs track.
Q:   The big shots of IATA’s Cargo Committee have not been seen much at Bangkok. Any changes coming up there?
A:    Yes. Next time there will be much more visibility of the key decision makers who are present, for example, members of the Cargo Committee who are sponsoring the IATA Cargo agenda, as well as top forwarders who are championing change in the air cargo supply chain. This is another lesson we learned from the feedback I mentioned. I’m pleased to say the CNS Partnership Conference already applies this lesson with our new CNS President Michael Vorwerk and members of the CNS Customer Advisory Board playing active roles within the event.
     The CNS Partnership Conference will pick up a number of themes developed in the Bangkok IATA World Cargo Symposium and apply them to the needs of the total cargo supply chain in the USA. For instance: Focus on the customer, Battling the Crisis and Building the Future, e-freight, Cargo 2000, Protecting the Cash, and the Environment. There, airline legend Bob Crandall will give us his “outside looking in” views on lessons of leadership in how to battle the crisis and build the future.
Q:   Bangkok’s session concluded with a number of promises made by IATA Cargo. How about their realization?
A:   We identified four main areas for taking action along the entire supply chain: a) protect the cash, b) improve efficiency and speed of cargo flows, c) deliver quality and product reliability, and d) keep shipments secure. Two examples illustrate our efforts to put this to action.
     First there is the CASS expansion with at least ten additional CASS operations we intend to implement in 2009. Pakistan is one major candidate we’ll put on the map, thanks to tremendous support from the Pakistan Forwarder Association and the carrier community. Mexico and its domestic market is another new CASS target, followed by CASS imports to Canada, Australia and the Gulf area, just to name a few.
     In addition to extending the reach of CASS we take forwarder feedback very seriously. A current key issue is the time it takes for an airline to respond to a billing error raised with them by the forwarder. We are taking this issue very seriously and intend to solve this matter once and for all. Therefore, by October we plan with the cooperation of the airline community to not only propose working practices but also to implement them.
     A second example where we take action is e-freight. Five more locations and fourteen additional airports have been identified for paper-free flows of goods during 2009. In addition we want to take action for increasing the volumes of e-freight shipments.      Finally, we will meet small and medium sized forwarders at airports where e-freight already exists to listen and respond to their views as to what are the remaining obstacles to their participation in e-freight.
Q:   Environmental questions will be a major focus next year at your Vancouver Symposium. Do you really think it is the right time to pushing this topic for an industry battling for survival?
A:   Yes. IATA remains committed to a global and effective approach on climate change. The economic crisis has not shifted our vision in this regard. Indeed no other industry has been as proactive as ours and we must keep it that way, continuing to be ahead of the curve in influencing Environmental policies.
That’s why environmental issues will be placed prominently on Vancouver’s agenda. Indeed 2009 will be a critical year for determining the post Kyoto protocol framework. Decisions taken by the UNFCCC at Copenhagen in December this year will include economic measures, which will impact aviation. We can’t wait and see. We need to be prepared to influence.
Q:   Despite improvements due to Cargo 2000 and e-freight there is still a lack of effectiveness and decisiveness. Should IATA airlines therefore lose their membership if they don’t fulfill certain basic quality standards?
A:   I believe a more effective strategy here is to promote and recommend improvements by positively motivating supply chain members to become Quality Cargo Operators – i.e. you operate to e-freight, Cargo 2000, and Secure Freight standards within a quality organizational culture. ‘If you want to be successful in the business and be part of a supply chain selected by the customer, you need to be a quality cargo operator’, that’s the message.
Q:   The crisis is still with us. Any recommendations from IATA’s head of cargo?
A:   The circumstances certainly remain with harsh volume drops in the last three months showing demand at -22% to -23% below the previous year. We need to see if the industry has bottomed out on this unprecedented fall off in demand. Although the global situation looks gloomy, it’s clear based on previous crises (e.g. 9/11), that now is actually the best time for forwarders and carriers to accelerate industry transformation.
Heiner Siegmund

 

In The Picture At CNS This Week

    As CNS Partnership 2009 Implementing The Vision opened at LaCosta Resort and Spa Carlsbad California setting the scene and tone of welcome at this most important event are Michael Ludovici, Rocio Vegas and Carlos Molina. Mr. Ludovici joined CNS in February 2008 as Vice President and Head of Operations.
    “People are excited and looking forward to the program,” Michael said.
    Taking up the forwarders side of things Jenni Frigger Thomas Huchler of EMO Trans VP USA Southeast and Southwest. Mr. Huchler is featured in a Tuesday session with “Forward Thinking Strategies,” for small and medium forwarders.
    “We are about delivering a competitive edge in a volatile marketplace,” Thomas declared.

    LAN Cargo is moving main deck B777 service into big time lift all over Latin America with connections into Brazil and elsewhere after receiving its first B777F last week with another to follow into the LAN fleet next month.
    Pictured making a change are (L to R), Claudio Silva, Vice President The Americas, LAN Cargo, Margaretha Laseen, Cargo Manager Western USA, Cathay Pacific, Tomas Silva, Vice President Global Accounts & Alliances, LAN Cargo.


Up Close & Personal
Peter Burn
Air Menzies International

New CNS President Details Agenda
Aleks Popovich IATA head of Cargo (right) and Michael Vorwerk President of Cargo Network Services, CNS (left) move forthrightly into “Implementing The Vision,” all this week in Carlsbad.

     Now it is happening.
     Cargo Network Services is holding the most important air cargo event of the year in the USA and maybe in the 19 year history of this organization starting today in Carlsbad near San Diego, California.
     CNS Partnership Conference 2009 opens to a backdrop of unprecedented world financial upheaval.
     To make matters worse, reports of the continued spread of Swine Flu are raising the specter of the SARS disease episode that a few years back wrecked havoc on people in China and elsewhere, while heavily impacting transportation and business worldwide.
     Michael Worwerk who arrived on the scene earlier this year, is the third CNS President in that organization’s history.
     Coming from a solid airline and forwarder experience background, Mr. Vorwerk hits the ground running here fielding questions with a hands on grasp of what’s important now and what lies ahead.
     About the only question the manager did not answer was if he had known then what he knows now—would he still take the job?
     But we never asked him that.
FT:   What is the main message of CNS this week?
MW:   Our conference theme “Implementing the Vision” is about having defined the key elements that should underpin the future air cargo industry and the need now to implement them.
Despite the difficulties imposed on the industry by the current economic crisis we believe that this more than ever is the right time for the industry to work together to tackle supply chain issues that will ultimately deliver benefits for all and add value for all.
A crisis always offers an opportunity to be better prepared for the future, and our message is that the industry needs to seize this opportunity to make real progress towards delivering the future vision.
FT:   What programs will be emphasized?
MW:   The programs that support the Air Cargo Agenda for the Global Supply Chain have already been defined as e-freight, Cargo 2000; secure freight, financial management and the environment.
During the conference we will focus on what our priorities should be for the U.S. industry, discuss the projects already underway such as CASS Domestic, e-freight expansion, Cargo 2000 promotion, and how we can effectively make all the Air Cargo Agenda programs more accessible to more U.S. supply chain participants?
FT:   Are there any surprises in store?
MW:   Our industry is constantly subject to “surprises” whether it is the rocketing price of fuel, the collapse of the global economy, the sudden collapse in the price of fuel, or the arrival of swine flu so I don’t think we need to manufacture anything extra for our conference delegates.
That said, if we all knew all the answers there would be no need to come together like this to discuss the future, so I fully expect to discover some surprising facts and information about our industry in the next few days as I hope will all our delegates.
FT:   You have just moved over from the private to the public sector. What surprised you most?
MW:   Whilst IATA/CNS might be seen as "public sector" it is actually managed like any other professional company. That is to say we are a result-oriented organization, structured to both anticipate and deliver our customers’ needs.
Just like any other business, if we can’t deliver quality products efficiently, we will not survive.
The one difference being that any surplus we generate from our business activities is 100% invested into new product development or supporting industry initiatives.
I was pleasantly surprised by the high quality of the people within the organization and their genuine enthusiasm for our industry and the supporting role they provide.
FT:   How can CNS membership benefit industry stakeholders?
MW:   In fact, CNS doesn’t have members as such, but we exist to serve the entire industry in the USA. Participation in CNS activities such as this conference, our support activities for industry initiatives and the use of CNS products do however bring industry stakeholders a number of benefits.
These include the sharing of ideas within a group of peers with similar values; the sharing of industry infrastructure for non competitive tasks such as our CASS service; the sharing of technology and development costs for industry products such as e-billing and CASS domestic; a platform to develop and voice industry positions; access to, and representation in, the development of the Global Cargo Agenda and its supporting programs; and significant influence over the development and delivery of these programs within the USA.
FT:   What is CNS going to do for the small to medium forwarder?
MW:   We recognize that the small & medium forwarder continues to play a key role in our industry and that CNS needs to do more to support this group’s participation in the global air cargo agenda.
We have already started to make ourselves more accessible with initiatives like our road shows that we introduced two years ago and we are now building on this with other outreach programs under e-freight and through Cargo 2000 local associations to provide platforms where they can raise ideas and issues, and we can more effectively address their requirements.
At the same time we are exploring with the Air Forwarders Association the coordination of our agendas and efforts in order to reach out further to this group and drive forward key topics together.
FT:   Which main results - in short - do you expect from this week’s meetings?
MW:   I hope that we will get more stakeholders behind the global agenda and secure their buy-in to implement it more aggressively in the USA. I also hope that this will improve the adoption of local programs such as our CASS domestic product as well as increased support at ground level for our e-freight and Cargo 2000 initiatives.
My goal is to make CNS even more relevant and inclusive tomorrow than it already is today and to hopefully dispel the old myth that it is an elite club for big companies only.
FT:   First came the global crisis, now followed by the outbreak of the swine influenza.
How does the spreading of this pandemic flu possibly affect the global cargo biz?
MW:   We are monitoring developments but it is too early to make any reliable predictions on the impact of the swine flu virus.
Obviously people are drawing parallels to the SARS crisis of recent years, but this is simply speculation at this early stage.
Certainly the industry doesn't need another crisis, especially with the economy in such a fragile state already. We can only hope that this does not in fact develop into a global pandemic.
FT:    What role do environmental issues play for CNS and what does CNS do to move the industry towards a green supply chain?
MW:   Like any company today CNS realizes the importance of environmental issues in the decisions we make in running our business.
Reviewing the environmental policies of hotels when we shortlist venues for our conference is just one of the ways that it has changed how we do business on a daily basis.
Similarly we believe that many of our industry participants have already initiated environmentally aware programs or actions within their companies, but the greening of the supply chain remains a key focus for both CNS and IATA.
As an industry we are perceived as high contributors to the environmental problem, and whilst this is not necessarily factually correct, there is no doubt that we need to do more to raise awareness of this issue within the industry and to better coordinate our efforts to reduce the overall impact our industry is having.”
Heiner/Geoffrey

 

Feliz Cinco de Mayo!

     On May 5, 1862 France at war with Mexico, attacked City of Puebla where two forts blocked the advance of the French troops.
     Before the day was over, one of the forts was destroyed and the Battle of Puebla went to Mexico.
     The battlefield is now a city park, with a statue of General Zaragoza, Mexico’s hero of the encounter on horseback near a war museum.
     Cinco de Mayo is celebrated as a national day of celebration in both Mexico and USA.
     This year as the Swine Flu impacts this festive time and CNS meets in Carlsbad, California this week, we raise our glass May 5 to better times all around.
     Feliz Cinco de Mayo!

 
 

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