FIATA, old and new

     This is the period of the year when FIATA Members meet face to face in Zurich at the Headquarters’ session. In 2021 the format had to change due to the pandemic, so the novel FIATA WEEK meeting ran for all registered Members swiftly and flawlessly: on-line only, a useful time to see old friends and listen to old and new topics that are central for FIATA and the entire forwarding sector.     
     Those who wish to read more on the event can consult the Press Release published by the Secretariat.

The Founder in 1807 Was Also Called Francesco

     My dear friend and fellow countryman Francesco Parisi, who was the President of FIATA between 2013 and 2015, is a personality whom FT readers have already met a couple of years ago, when I wrote about him and his 200+ years old company in Trieste. This year, with no chance to meet face to face, I had to make do with an online conversation, actually very informative for me, thanks to Francesco, who allowed me to summarize our talk in an article for our common friend (and FIATA Fellow), Geoffrey Arend. As you may already know the company Francesco Parisi Spa is a historical freight forwarding and logistics business, but its services include the exploitation of a handling, logistics and railway terminal in the port of Trieste for a number of years.

Waiting to Strike a Deal

     The main point of interest for me was Francesco’s deal with the German company HHLA, which had come to some surprise for some, considering he had been negotiating with a Chinese interested party for a considerable duration, to the point of even raising some attention at political level on both sides of the Atlantic.

Mediterranean Port at 45N64, 13E79, the Heart of Europe

     Francesco’s view on the strategic potential of the port of Trieste cannot be clearer: he sees the Adriatic like an enormous navigable canal to the heart of Europe, cutting transit times to the east by almost a week. A look at the map leaves no questions open on this point.
     Limes has published a report on Italy and the sea, which highlights the role of the Adriatic, and Francesco pointed it out to me (translatable from Italian).
     Francesco also recognizes that two world wars in a row had created a complicated situation, which thwarted the competitive advantage of Trieste, once the main port of the Austro-Hungarian Empire, into a noticeable decline.
     Francesco’s company is partaking in the PPP project to construct and operate a new marine terminal in the area. So our talk was focused on the circumstances that led Francesco to release part of his majority into German hands (HHLA now holding 50.1% of the shares) after his long negotiations with his Chinese counterparts.

Show Me the First Reel, Please

     Since 2016 there had been very serious negotiations with the Chinese interested party (said to be China Merchants in Trieste’s local newspaper “il Piccolo”, not confirmed directly by the parties concerned), but their conclusion had not arrived yet in 2020. As is in the public domain, the negotiations with the Chinese did not come to fruition, perhaps also due to the additional uncertainty generated by the pandemic, especially in Europe. “We both knew that time was passing, so we informed our Chinese counterparts that they could not be endlessly given exclusive rights in the negotiation, because there were other interested parties,” said Francesco Parisi, who also explained that “only then did the negotiations begin with the Germans, and they were rather swift. HHLA did not take advantage of the COVID19 situation in their approach, but they took a more strategic long-term view, which testified in their favour.”

The Germans Came with a Fast Car

     On September 28, 2020 the investment contract was signed by HHLA, and became effective as soon as the conditions for the so called "golden power clause", which the government could activate, were excluded. The Presidency of the Council of Ministers held the power to veto this kind of transaction on infrastructure, if considered strategic by the State, but in just 20 days the company received the government’s consent for the change of control. Minister Patuanelli, who is from Trieste, fully understanding the importance of this step, attended the meetings.
     The first ship arrived into the newly equipped terminal on March 20, 2021. At 04.00 am on March 21st she left after being unloaded and reloaded, with about one month’s delay on the original plans, and understandably so given the pandemic situation.

Die Geographie ist Wichtig, Oder?

     In Francesco’s view it is strategic for the German group to focus on Trieste, also with a view to finalizing a logistics quadrilateral comprising Hamburg in the North Sea, Tallinn in the Baltic, and Odessa in the Black Sea with the arrival of Trieste in the Adriatic, completing the Mediterranean part. HHLA also owns a railway company in Prague, right in the middle of the four port stations. In this light the project shows its full strategic importance. We just learnt how many billions of dollars, euros, dinars etc. have been wasted in blocking the Suez Canal for about a week: this clarifies with no room left to doubt how strategic the HHLA investment is.

The Smoothness of Silk Makes Ripples on the Waters

     That said, the Chinese had been around since 2016 and it was a very serious negotiation. Francesco maintains that the negotiation was conducted on a purely commercial basis. The Chinese team was probably uncertain that the construction of this infrastructure could be completed in time, and this was probably due to previous experiences of similar nature in Italy. However, Francesco also believes that the negotiations continued until the MoU on the Silk Road with the Italian government was signed. This triggered some debate amid Italy’s traditional allies. Then onwards, things became slightly more difficult. In the end, despite having opened important perspectives at political level, the MoU introduced greater difficulties in private sector negotiations.
     Zeno d'Agostino of the Trieste Port Authority made an interesting point that sounded like: “we are fully involved in the Silk Road, which is not identical to the Belt and Road: the latter is the project of a sovereign state making investments in a different perspective.”
     Having said that, “I'm happy we’ve concluded with the Germans. But there are no intentions to close our doors to anyone,” confirmed Francesco.

Free Trade Brings Prosperity for All, says History

     Historically, continued Francesco: “Italy has always looked north rather than south towards the sea, which has no rational explanation in my view. In Trieste there have been noteworthy Turkish investments for at least one decade and German ones starting in 2020. Rialto, the area where Venice is recognized having been founded on 25th of March 421, hosts the Fontego dei Turchi (Turks’ storehouse) and the Fontego dei Todeschi (Germans’ storehouse), situated next to each other. Within the Most Serene Republic these ancient concessions benefited from exemptions which allowed them to carry out their businesses in peace and prosperity, for themselves and for the Republic. Venice never lost its sovereignty for this reason, but it always traded with everybody. “If necessary, strongly defending its commercial interests.” I interjected Francesco’s point and suggested that Venice started to lose its sovereignty for a number of reasons, in particular when imperialism began to dominate Europe, making free trade decline into colonialism. History tells us that on May 12th 1797, the Most Serene Republic of Venice ceased to exist after 1,376 years, when the Doge, Ludovico Manin, requested the Greater Council of Venice to examine the dire situation. The abdication in favour of the Provisional Municipality of Venice, required to take power by the French invaders led by Napoleon Bonaparte, followed in due course.
     Accidentally, Francesco and I had celebrated Venice’s foundation in our conversation, precisely 1,600 years later. History is teaching the lesson that free trade brings prosperity and fine arts, thus providing food for our bodies and our souls; in these Venice excelled for well over a thousand years.
     “After the Germans, the expressions of interest in the port of Trieste have multiplied and this is certainly a good sign for the future,” concluded Francesco Parisi, the busy and cunning entrepreneur whose long career taught him to deal with every culture on fair terms. Our talk saw its positive end with the hope for a renewed period of prosperity for Trieste and the rest of Europe, based on the firm intention to cooperate on fair and reciprocal terms with all relevant parties.
     If reading this article is not sufficient and you wish to hear Francesco Parisi directly speaking on these topics, your resource of choice is POLARIS LIVE with Sarwar Kashmeri. To access, click here.
Marco L. Sorgetti

As late 2001 turned into 2002, I had just left airport consulting firm LeighFisher Associates to start my own cargo-focused firm and was managing (on a part-time consulting basis) air cargo affairs for Airports Council International – North America (ACI-NA), which needed supplemental support and I was available. Not only was it financially helpful to my then-fledgling firm but I gained invaluable insight into how an effective trade association operated and how associations cooperate when circumstances require.
     My chief responsibility for ACI-NA was to help represent the interests of airports in three air cargo security working groups established by the Transportation Security Administration (TSA) in the aftermath of 9/11. The lead for ACI-NA on this matter was Ian Redhead – now a Deputy Director for the Kansas City Aviation Department but then ACI-NA’s VP of Technical Services, including security. Anticipating that the airports community could need extra voting strength, we (ACI-NA) secured inclusion in the working groups of the American Association of Airport Executives (AAAE).

     The TSA representatives leading the working groups were receptive to such suggestions, wisely leveraging the collective wisdom of dozens of industry professionals. I hesitate to list the TSA representatives who led and supported the effort but particularly effective was Elaine Dezenski (now Managing Partner of LumiRisk LLC in Westport, CT) who served with the U.S. Department of Homeland Security until April 2006. She may have been the youngest person in the room, but Elaine proved prodigiously able to manage inter-association squabbles, reprisals of labor/management conflicts and just mercurial personalities.
     For anyone who remembers the industry and legislative panic that followed 9/11, these working groups can partially be credited for the air cargo industry avoiding what would have been unproductive knee-jerk mandates. The working groups championed threat-based approaches distinguishing between belly and freighter cargo, as well as what would become the certified cargo screening program (CCSP) recognizing verifiable protection of the chain of custody as a necessary substitute for 100% on-airport screening.
     Stephen (Steve) Alterman (left) was there to represent the Cargo Airline Association (CAA) but was the de facto ringleader of the participants from the industry side. I have no recall of our formally electing him, but Steve’s experience and demeanor naturally led to that conclusion. He had begun his aviation career in 1968 in the Bureau of Enforcement for the United States Civil Aeronautics Board (CAB) and was promoted to Chief of the Legal Division. His work for the CAA began in 1975. He had no need to cajole.
     In those working groups, I first met Brandon Fried who has now been the Executive Director of the Airforwarders Assocation since 2005. It was also where I met Debby McElroy who was then President of the Regional Airline Association before joining ACI-NA in late 2006. Debby still works for ACI-NA on special projects, including their Air Cargo Committee. Chris Bidwell was then Managing Director of Security for the Air Transport Association before joining ACI-NA in late 2008. Chris is now ACI-NA’s Senior Vice President of Security.
     I reference these contacts to demonstrate how talent sticks around in our industry and how much experience remains at our disposal. The fluidity with which representatives have moved from one trade association to another also indicates an overriding spirit within organizations that vigorously champion their individual priorities in adversarial contests when necessary but remain mindful that relationships between associations must be preserved healthily enough to reconvene for common purposes. That awareness helps dampen enthusiasm for gratuitous grandstanding.
     To check my beliefs about relationships between aviation trade associations, I called Dr. Stephen (Steve) Van Beek, (left) who is the Director and Head of North American Aviation for global consultancy Steer Group. We first met when Steve was Executive Vice President for Policy of ACI-NA from 2001 through 2006. He also would later serve as Interim Head of Economics for ACI – World. Prior to those stints, Van Beek had been Associate Deputy Secretary at USDOT and Head of its Office of Intermodalism.
     In my opinion, he is in the top echelon of aviation policy experts in the world, so I trust when Van Beek observed that on 80-90% of trade issues – certainly on COVID responses – the various trade associations work collaboratively.
     Establishment of regimens for rates and charges are more subjective and therefore fertile for disputes between IATA and ACI (championing airlines and airports, respectively) but the need for cooperation on security, for example, minimizes the temptation for “scorched earth” tactics. Van Beek observed that the “excise tax holiday” mandated by the CARES Act is exemplary of the delicate balancing act between temporary policy that may be necessary for the health of the commercial sector but impacts the ability to fund priorities maintained by the public sector.
     The Airforwarders’ Brandon Fried confirms the benefits of cooperation. “The key to success in Washington lies in coalescing with other associations representing different constituencies with similar interests. Our members continue to benefit through its ongoing engagement with ACI-NA not only with airport cargo policy issues but in partnering to produce one of the most successful annual events in the air cargo industry,” said Fried. The event that Fried references is the annual air cargo conference and exhibition co-hosted by the Airforwarders Assocation, ACI-NA and the Air and Expedited Motor Carriers Association (AEMCA). AirCargo 2021 is entirely virtual in bimonthly increments (Agenda/AirCargo Conference ). Having helped to organize a few of the conference when ACI-NA still operated alone, I can confirm the partnership allows ACI-NA to effectively access forwarders and other segments of the air cargo industry reluctant to participate in events hosted solely by an airports trade association.
     The current Chairman of the ACI-NA Air Cargo Committee is Adam Rod (left) whose full-time job is Assistant Commissioner of Planning for the Chicago Department of Aviation. The fore-mentioned Debby McElroy serves as Committee Secretary coordinating the initiatives and activities of the Committee with the larger trade association. McElroy was preceded in this function by Ashley Sng, (above right) who recently joined Amerijet International in Miami. Sng briefly worked for IATA immediately before joining ACI-NA in 2016.
     In a joint email from Adam and Debby jointly representing the ACI-NA Cargo Committee, cargo security was as much a focal point as when Debby and I first met nearly twenty years ago. “Balancing security vs. efficiency in the air cargo universe – and specifically at airports under many federal regulations like FAA, CBP, and TSA – is a perennial challenge. Safety is always paramount, and no professional wants to purposely compromise it. A current challenge for airports is complying with the ICAO-mandated phase out of the account consignor program, which essentially necessitated 100% screening of outbound international freight for cargo carriers. This is quite difficult during a pandemic, when the industry is experiencing increased cargo volume and the responsibilities associated with transportation of the COVID-19 vaccine.”
     On the subject of industry partnerships, Rod noted “the supply chain is a complicated, diverse universe, made up of various interests to accomplish an essentially unified objective. ACI-NA represents the airport perspective. To solve challenges in moving over a trillion dollars in air freight each year throughout North America, you need to engage and interact with colleagues, experts, and businesses from across the air cargo spectrum. That includes freight forwarders, truckers, brokers, airlines, and all others involved. No matter our differences. Besides efficiently pooling our resources toward a common goal, our current “AirCargo” conference structure among AEMCA, AFA, and ACI-NA pervasively keeps that communication and collaboration very strong.” Adam recognized that it has not been possible to safely convene the annual event in-person at a time when air cargo is the subject of unusually high interest among airports. One of the best-attended editions of the former ACI-NA Cargo Conference was held in Los Angeles soon after 9/11 when air cargo security challenges resulted in timely content and exceptional participation.
     In an interview with Air Transport News (February 28, 2021), ACI World’s Director General Luis Felipe de Oliveira (left) conveyed an encouragingly familiar message. “From the beginning of the crisis (the pandemic), ACI World has been active with ICAO, the WHO, IATA, global governments, and regulators, advocating for members. This year in particular, airports, airlines, governments, and regulators have looked to ICAO and its Council Aviation Recovery Task Force (CART) to provide practical and consistent guidance to the industry and governments.”
     While a few high-profile individuals in our industry changed titles and employers in the last year, I never felt any alarm that work would cease due to vacancies. People whose names may be less recognizable quietly complete critical functions – just as they always have done. Sufficient experience and wisdom are readily accessible if one simply knows where to find them.
     I have also been reassured by the applied experience of having observed how our industry – at the individual and corporate levels, as well as trade associations representing them – puts aside differences when critical challenges require cooperation. I never doubted that airlines, forwarders, handlers, trucking companies, airport operators and regulators would rise for the common good of the citizens we serve.
Michael Webber