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Issue #588

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Air freight will return to its roots

By: | at 08:00 PM | International Trade  

By Julian Keeling
My prediction for the 21st century; air freight will return to its roots.
Why do I make such a foolhardy prediction? At every air freight conference, at any air cargo meeting, the words “revolutionary,” “Internet,” “cyberspace,” and “B2B” pepper the talks of the speakers as they gaze into the future. At a recent CNS cargo conference, one of the leading airline cargo executives stated unequivocally that “within five years our industry will be completely changed. It will be an era of revolutionary change.”
I wonder if the word “revolution” in that airline executive’s lexicon means that airline will “revolutionize” their relationship with forwarders so that freight is not dumped on the tarmac at the last minute because of overbooking, or that the carriers will not issue last minute lo-ball rates to throw forwarders’ own rate structures into disarray, or perhaps when freight is destined for London, it does not end up in Singapore.
Other prognosticators claim that forwarders to survive in the 21st century will have to give customers “what they really want.” It is no profound secret what shippers really want from our industry—lowest possible rates. Despite all the high-flown rhetoric about our industry becoming total logistics providers and supply chain managers, shippers still focus on the bottom line and how forwarders can minimize shippers’ transportation costs.
Another prediction that I would like to debunk is that the 21st century belongs to the big forwarders, with mid-sized consolidators supposedly fading away into the sunset. If this is indeed the case, why are senior executives at the largest freight forwarders constantly running out to their customers’ headquarters attempting to explain away their mistakes, errors in judgment and downright lack of service?
Am I an air freight Luddite? Am I blind to the cargo dynamics of the 21st century? Perhaps. In conversations, however, with shippers ranging from Fortune 500-companies right down to the small business up the street, I find that a growing number of traffic managers, purchasing agents and business owners assert they would welcome with open arms a forwarder of any size who delivers what he promises and with no hassles.
I believe that many of the larger forwarders, so hypnotized by the wired world of the Internet, are forgetting their core functions of moving freight swiftly (isn’t this what freight is all about?), efficiently and with precision. Despite the computer replacing the typewriter and e-mail substituting for conventional or “snail” mail, the average international shipment still takes six days for door to door delivery—only half a day sooner than 30 years ago at the dawn of the jet age!
I further believe that “old fashioned: business virtues including a high level of personal service, loyalty to a customer, attention to detail, delivering what is promised and single-minded dedication to the task at hand will spell the difference between forwarder success or failure in our current century. When every air freight company can offer similar electronic capabilities (one of the positive effects of the Internet is that it has “democratized” technical capabilities), the difference now lies in the individual, personal service offered by the forwarder.
That is why I am convinced that the 21st century belongs to mid-sized transport companies, not the very large air freight forwarders who spend too much time debating whether to merge with each other and too little time in serving their customers.
Admittedly, there is more than a pinch of self interest in my conviction. Today, the majority of CII’s more than 300 forwarder-customers are mid-sized consolidators. When CII opened its doors seven years ago, we had less than 60 forwarder-customers. The success of mid-sized forwarders against very large competitors has been CII’s success. In fact, all signs point to mid-sized forwarders seizing more of Fortune 1000-company business. Much of this business is shared with other forwarders as customers wisely do not wish to