By Chris Coppersmith, President & CEO, Target Logistic Services
Forget China! During the past five years, the air freight industry has been hypnotized by the enormous growth of the China market. The vast scope and volume of goods winging their way eastward over the Pacific has blinded many in air cargo to negative trends elsewhere. Almost all of air cargo’s other international lane segments; Europe, Latin America, the Middle East and the South Pacific, are showing little growth.
Domestic air freight actually is declining in revenues and shipment count with surface transportation substituting for air in greater numbers than ever before.
What air cargo needs now is a refocusing of our efforts. Less reliance on new fashioned technical mumbo-jumbo and greater emphasis on old fashioned salesmanship. To obtain greater business from existing customers and new business from customers who currently do not use air.
To obtain this business, we must think “outside of the box,” generate new ideas and concepts that will provide fresh strength to the once fastest growing sector of the transport industry.
We also must relearn geography. China is not the only country in the World Atlas. In our zeal to satisfy shipper needs between the US and the more than one billion Chinese and their dynamic economy, we are in danger of forgetting the other four billion occupants of our planet.
Despite a generally strong world economy, although we are hitting “soft patches,” air freight remains in a tough environment. The once common belief that air could snatch a meaningful portion of cargo from the grasp of ocean has proven to be an impossible dream. West Coast seaports continue to remain clogged with container ships trying to unload cargo, leading to delays of up to three weeks. Yet, few shippers are turning to air as an alternative.
Despite the huge delays in ocean transport, many customers are oblivious to the claims of high toned “supply chain management” theories to ship by air. We must relearn basic selling skills. Our people require more shoe leather and less reliance on the Internet. Make more sales calls and spend less time looking at computer screens. Offer customers manageable, hassle-free delivery systems that move freight quickly and precisely rather than offering complicated logistic “solutions.”
Simply stated, our industry cannot afford minuscule growth in the international cargo arena and an actual decline in domestic shipments.
Our slice of the transport pie already is too meager. Of the approximately $1 trillion spent annually on world wide transportation (ship, rail, truck and air), air cargo’s share is less than four percent internationally and even less, at two percent, domestically.
What certainly is not needed is airlines attempting to sell “direct” and cutting out the forwarder. Or 800 pound “gorilla” international forwarders entering the increasingly crowded and shrinking domestic market. These are zero sum games which no one wins.
What is required are fresh sources of business; to convince shippers that air is the transport method of choice. To assure customers that in an increasingly global economy, moving goods by air is the most productive, efficient and ultimately the most profitable method of transport. Target Logistic Services has begun a sales division that seeks out new cargo customers; shippers who currently rely solely on ship, trucks or rail to move their freight. One finger in the dike is not sufficient, however. An industry-wide sales & marketing effort must be formulated and implemented.
Finding fresh sources of business in any industry is not easy. Air freight has not been particularly successful in this endeavor. Our industry has been stuck in the two and four percent groove for far too long.
We generally have been content to solicit business from customers already utilizing air; in effect stealing customers from each other rather than soliciting new shippers. Our industry simply has not been sufficiently innovative nor adventurous enough to convince w