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Magazine Stories September Issue 2009
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Friday, 13 February 2009
AUSTRALIAN carriers are to open new routes through Indonesia, including resurrecting the Perth-Denpasar-Singapore route cancelled by Qantas at the beginning of the northern winter 2008 season.
Despite the limited cargo space on the aircraft types to be used - at least for the time being - the developments will add a further dimension to regional air service networks.
First to move on ‘beyond Indonesia’ arrangements was Qantas, which applied to Australia’s International Air Services Commission for Jetstar to operate four frequencies weekly from Indonesia to Singapore, extending its Perth-Bali and Perth-Jakarta routes.
Qantas already held three weekly allocations for Bali-Singapore.
A few days later, Pacific Blue updated an earlier application for additional frequencies on the Indonesia route by requesting three weekly frequencies beyond Bali.
By giving the thumbs-up to Qantas/Jetstar for one extra service via Bali to Singapore and three via other authorised Indonesian points, the IASC’s acting executive director, Dilip Mathew, noted that the Register of Available Capacity showed that 20 passenger frequencies were up for grabs from Jakarta, Bali and “an additional two points in Indonesia west of Denpasar” to Singapore, points in Malaysia and a point in Thailand.
Of these, four - in addition to the three already held by QF - were available for services beyond Denpasar.
Under the Australia-Singapore air services arrangements, Australian carriers are entitled to operate between Australia and Singapore via intermediate points in Indonesia.
With four flights weekly from Bali now allocated, only three remain - these are the allocations Pacific Blue is targeting.
At our deadline no decision had been gazetted but it seemed likely that approval would be given, thereby stitching up all seven services.
Mathew pointed out that “there are no restrictions on beyond Indonesia services similar to those applied at Denpasar at other authorised points in Indonesia, apart from the overall limit on beyond Indonesia services that may be operated by the designated airlines of Australia”.
Qantas is required to fully utilise the capacity granted to it from no later than August 1 this year, unless it seeks and obtains a determination amendment from the IASC.
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Magazine Stories September Issue 2009
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Friday, 13 February 2009
WHEN Cathy Cleaver left her native New Zealand for a holiday in Australia her mother predicted she would never return. Cathy said she would. As it turned out her mother did know best! And with Cathy well and truly established as a leader in Australia’s freight forward industry a return to New Zealand is unlikely, writes Jenny Burns.
Since 2006 Cathy has been chief operating officer Australia/New Zealand for MCH Holding Aust. Pty Ltd.
In this role she is responsible for overseeing the operation of the group which is the general sales agent for Air Jamaica, Air Astana, Etihad Crystal Cargo, Jet Airways, Leisure Cargo and MASKargo.
While her position allows the occasional trip to New Zealand, where she has the chance to see her family, she admits Melbourne is now her home.
Cathy was head-hunted for the position with MCH in 2006 after leaving her previous job as service director, Airfreight Department with United Airlines.
“I had decided to take a break and look at a possible career change but then MCH approached me and I saw it was a great opportunity,” Cathy recalls.
“Now I can’t see I’ll ever leave the industry.
“This is a fantastic industry to work in; no two days are ever the same. It’s challenging and stimulating and covers so many different disciplines.
“Working in areas such as perishables always creates challenges, while I also really enjoy the staff training component of my job.
“Ensuring all our 30 employees are customer service orientated is a priority, I am a strong believer in the importance of customer service.
“Our company commitment is to make it happen, be customer focused and have the solutions.”
On joining MCH Cathy’s brief was to establish the ground-work for the new company and then to introduce an airline no one had heard of — Etihad — to the Australian market.
In more recent times Cathy’s priority has been preparing for Etihad’s expansion in Australia which now includes direct flights from Melbourne.
While Cathy is currently one of the few senior women in the freight forward industry she expects to see many more women in the next five years.
“This is a great career for women, involving many of the skills we are renowned for,” she says.
“We have excellent time management and planning skills, are good at coming up with solutions to problems in a short period of time and taking the necessary action to ensure things happen.”
Cathy cites the belief that freight forwarding was a ‘boys club’ as one of the reasons why it hasn’t attracted as many women executives in the past.
The attitude of women may be another.
“In the past it may have been that women working in this area haven’t really seen it as a career path but now that is changing,” she says. There are some fantastic job opportunities out there.”
In many ways Cathy’s own career shows what can be achieved. Her first job in the industry was in 1987 when she joined A.E.I. as personal assistant to the Queensland manager.
When the position of perishable export co-ordinator arose she then took on that role.
In 1990 she left Brisbane and A.E. I. for the role in Melbourne with United Airlines. During her time at United Cathy won a number of awards including United Airlines Cargo Employee of the Year, Most Valued Team Player Award (UA Worldwide Cargo Awards presented to Australia), United Airlines Customer Satisfaction Award and Australia Cargo Employee.
“I am a very hands-on person and basically I have always had a can do anything if you put your mind to it attitude,” Cathy explains.
The one thing she hasn’t currently been able to do is achieve a work/life balance. In previous positions Cathy has found the time to put her diploma in textile/fashion designing she had achieved into action creating evening and bridal gowns and to pursue other interests such as swimming and gardening.
Now much of her time now is spent working. Her job involves some travel, mainly to Abu Dhabi, yet given the demands of her chocolate brown Labrador, and the many communication advantages offered by the Internet, there’s not too much time in the air.
“I must admit that once I started this job my work/leisure balance disappeared,” she admits with a laugh.
“I will get that balance back, it’s just that I love what I am doing so much, but I will get there.”
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Magazine Stories September Issue 2009
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Friday, 13 February 2009
CATHAY Pacific’s cargo business is “really hurting” and according to the airline’s chief executive Tony Tyler its figures are inline with Hong Kong Air Cargo Terminals (HACTL), which has seen a 30 per cent reduction in cargo traffic in January compared with the same month last year. “That’s a massive amount of revenue lost,” he said.
Tyler was replying to questions in the airline’s magazine — CX World — about Cathay’s 2008 losses — a record HK$8.6 billion — and how the carrier will face up to the challenges ahead.
In answer to “whether the bleeding” for the airline’s cargo business could be stopped, Tyler said: “The problem with cargo is that we can’t really stimulate the market by offering price promotions.
“If importers aren’t ordering goods from the markets we serve, the cargo simply isn’t going to move. What we have to do is ensure we are capturing our fair share of whatever market is there. For example, in Hong Kong we’ve done a lot to use our strength in the market to get commitments from forwarders and shippers.”
Asked what message he had for staff at this difficult time, Tyler said he wanted employees to understand the seriousness of the carrier’s situation.
“This is not management crying wolf or scare-mongering; this is for real,” he exclaimed. “The outlook for our revenue is very poor and it could be a long time before we see the bottom of the market, let alone see any signs of recovery.
“It may be necessary to take some very difficult decisions about our network and about the company generally in order to secure the sustainability of this business. In the meantime, the way that we can all help is to focus on doing our jobs as well as we possibly can. That’s the best way we can contribute the welfare of the company.
“Cathay Pacific is a great, strong and resilient company and it’s that way because of all we’ve done as a team over the years to build it up. Now we have to use all the strength and resilience we have to keep it great so that we can get through this turbulence. We want to be around and in good shape to take advantage of the recovery when it comes. I know it will come — I just wish I knew when,” said Tyler.
On its huge 2008 loss, the Cathay chief admitted it was a worry. “A lot of those losses are to do with unrealised fuel hedging losses, but I have to stress that the our airlines — CX and KA together — made significant operating losses last year — larger than we’ve ever had before. Even if we hadn’t hedged a gallon of fuel we’d have made record losses.
“However, 2008 is already in the past — the big worry now is the outlook for the future,” added Tyler.
— John Newton
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Magazine Stories September Issue 2009
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Friday, 13 February 2009
THERE’s no doubt swine flu (now officially rebranded Influenza A by the World Health Organisation) is a nasty piece of work, with the potential to kill and cause community havoc.
But it’s disturbing that the same element of hysteria - so evident a few years ago in the SARS outbreak - has already crept in to what has otherwise appeared to be a measured and mostly very professional response by health, border protection and other official agencies.
This Chicken Little-like panic reaction could trigger a further drop in consumer confidence, affecting international trade and tourism alike.
We don’t need it. Just recall the claims that were made during and about SARS and what it did to our industry after parts of Asia more or less closed shop.
Already we’re being subjected to claims by economists and other business commentators that economies will falter, people will stop travelling, airlines will collapse, trade will wither and die.
Most of this is sheer speculation.
Irresponsible speculation, too, because even the best informed business people start to believe what they see highlighted by impressive headlines that are repeated in online news services and referred to superficially (and often quite incorrectly) on TV.
Then there’s the general public, ever-willing to believe 10 impossible things before lunch.
We are in an information-rich industry. That’s usually a boon - most of us could not operate efficiently without a constant info-stream of news, ‘analysis’ and opinion as well as consignment tracking, industry data and trade scuttlebutt.
I’m sure many people - like me - heard about the swine flu outbreak within hours of it becoming public knowledge.
Three or four people even emailed me to draw my attention to it. As is so often the case, those first reports were less than factually correct, but they set the scene and quickly became accepted as the foundation that all later claims were built on.
While not trying to belittle what could be a serious global health problem, we simply don’t know how bad the problem is. Many of the deaths may yet be attributed to other causes beside flu.
Even in Australasia, many people die of ‘ordinary’ flu every year, mainly in winter, although some are the result of the flu virus weakening victims’ immune systems, with complications such as pneumonia the actual cause of death.
But even if Influenza A is as deadly as the doomsayers claim, there’s no reason for it to close down trade, weaken economies, keep people shut in their homes or wipe out airline stocks.
Sure, Mexico is going to suffer temporarily - airlines and cruise companies will suspend services, life will go into a sort of suspended animation and the country’s economy will suffer.
But a few positive swabs in Mexico shouldn’t be allowed to close down a vibrant global industry. - Kelvin King
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Magazine Stories September Issue 2009
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Friday, 13 February 2009
FEDEX Express has launched its ‘Young Achievement Australia International Trade Challenge’ for secondary school students.
Now in its third year the awards scheme will run in eight Asia-Pacific countries in two phases - the national competition run by Young Achievement Australia (YAA) and the Asia-Pacific regional ‘International Trade Challenge’ run by Junior Achievement Worldwide (JA).
The competition is designed to engage secondary students, between the ages of 15 and 18, through the creation of an international ‘market-entry strategy’ for a product they design, and through competition with peers.
“FedEx is proud to support a new generation of entrepreneurs through this program,” said Rhicke Jennings, managing director, FedEx Express Australasia. “Young people’s understanding of business and trade in a globalised world is fundamental to this region’s continued economic success.”
For the local competition, the student teams are asked to develop a ‘market-entry strategy’ paper for the international marketing of a product. The three best entries are then selected to represent Australia at ITC final in Thailand at the end of August, where they develop a specific product and create an original ‘international marketing plan’ for a designated country.
Through this process, students work as teams and gain first-hand experience of what roles world trade, product distribution and sales play in a market environment. In addition to teamwork, participating students learn about the basics of risk evaluation in the business world and gain confidence in their analytical ability.
Entries for the Australian International Trade Program close 22 June, with final judging results announced 13 July. The six students (three teams) judged to have submitted the best entries for the national competition will then have the opportunity to travel to Thailand, 03-08 August, to compete in the International Trade Challenge against teams from across the Asia-Pacific region.
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Magazine Stories September Issue 2009
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Friday, 13 February 2009
To simplify your business, to get "back to basics," or to take the opposite tack by changing and diversifying your services to the customer is a critical dilemma facing Australian & New Zealand forwarders of every size, type and description in these perilous times.
Solving this dilemma could mean the difference between future success or failure for hundreds of forwarders now struggling to remain viable while experiencing the sharpest decline in the transportation business for the past sixty years.
To keep existing business and harness new customers, I believe the forwarder now faces three choices; each seemingly conflicting with the others.
One is to return to the "stone age" of forwarding. To go back to the nuts and bolts of running a forwarding business. To offer the customer a superior combination that consists of the "basics" of our business. These basics include competitive pricing, delivery of goods on time and when promised, accurate transmission of information from forwarder to customer and transshipment of goods from loading dock to final destination. To conduct the forwarder's own operation in a leaner and meaner manner than at any time in the past when he opened his doors with nothing more than a telephone, typewriter and teletype machine.
A second alternative is to reinvent yourself. To become less of a "delivery merchant" and more of a management and business consultant. To become embedded in your customers entire logistics system; Inventory management, supply requirements, current and future production volume and outsourcing. By offering these value added services, the forwarder heightens his role from "just" a transportation agent to an involved and integral part of his customer's business. In this scenario, the forwarder's creed becomes, "I must know my customer's business even better than my own."
A third choice is to become a niche player and become a specialist in handling certain types of cargo like electronics or apparel and/or concentrating on certain lane segments.
The niche forwarder who specialises in certain types of business certainly may have long term potential earnings, but he must position himself correctly in those markets and offer top line service to his customers if he is to succeed.
Be mindful, however, of the pitfalls in each of these three choices.
Basics: To many customers, back to basics means back to even lower rates. This is a false assumption. Moving a shipment swiftly and expeditiously whether to a nearby city or a distant continent requires a combination of skilled personnel and high quality technology. Neither comes cheaply. Impress upon the customer this blend of superior personal service and advanced technology is an integral part of his entire distribution system.
The forwarder also must be careful in assessing his own, internal operation. In providing a no frills approach, the forwarder may feel he can venture into a widespread cutting spree, reducing staff and facilities to dangerous levels. In his zealousness to reduce overhead, he may well cut into the muscle of his operation--lowering the quality of service his customers expect.
Diversifying: The forwarder who chooses to add a number of services in addition to his primary task of moving freight, faces a number of financial, personnel and organisational obstacles. Unlike the Clint Eastwood film, "for a few dollars more," costs to diversify your operation will be substantial. Funds will flow outwards at a prodigious rate.
Personnel who are genuinely skilled in modern management systems and who know the logistics business are rare and expensive. Grafting a new division onto your existing operation inevitably will cause stress and strain among your current employees. Your principal problem in this new endeavour, however, will be gaining the support of existing and potential customers. Will they be willing to pay the additional costs of your new, value-added services?
Will they be willing to try your new service when they already have an existing carrier or forwarder who in their eyes is performing adequately? Perhaps a more prudent and far less costly strategy in these circumstances would be to align your forwarding operation with an existing business management or business consulting firm that knows the logistics business.
Niche forwarding: Becoming a specialist in certain types of commodities involves a good deal of guesswork. The forwarder is gambling to a large extent on choosing those markets with long term growth potential. Also, the consolidator must have the mental stamina and financial resources to ride out the inevitable short term declines in demand for his specialised services. Becoming a niche player minimises the forwarder's ability to "break out" of the image he is creating for himself while building his reputation in the particular niche he chooses. Even when the guesswork is correct, a change in the market can disrupt your niche, destroying your model.
Whatever your decision today, it will be critical to your success or failure tomorrow. It should be made only after careful consideration of the benefits and the costs. It is not an easy decision to make amidst the complexity and uncertainty of today's forbidding economic climate. It is also a decision which will have an enormous effect not only on yourself, but your loyal employees. It is not to be made lightly.
Do you genuinely have to make a change? Perhaps not. You may be in fine shape if you have done a good job in the past positioning yourself to customers and carriers.
Perhaps you can ride out the economic storm, but remember no one, from Warren Buffet to your local banker, foresaw the severity of the current downturn and no one truly knowns when it will end. Following the same path in these very perilous times may be disastrous to your business if the projected rewards do not match your efforts over the long term.
The services of a forwarder are important, but the role is evolving. The path each owner chooses to take will impact his business for years to come.
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Magazine Stories September Issue 2009
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Friday, 13 February 2009
Multiple data input systems make the job harder, but customer satisfaction makes it all worthwhile
Tom Presnail joined Cargo 2000 in July 2008 as regional director - Area 3 based in Singapore. He started his career in airfreight in Canada with KLM in 1975 in warehousing and later, sales before KLM management changes within the same organisation over the next seven years saw him in various roles and several Canadian cities including Ottawa, Vancouver and Montreal in the next seven years. In 1995 KLM offered him the post of regional director for north east Asia based in Tokyo responsible for Japan, Taipei, Hong Kong, Korea. During this time he opened the first office for KLM in China.
In 2001 KLM restructured operations resulting in Presnail going to Singapore to take up the role of area director Asia Pacific for cargo operations, doubling the size of his territory. In 2005 he was repatriated back to Canada working on an assignment to develop Cargo 2000 within the KLM-Air France organisation. While on duty travel in Singapore in October 2007 he was asked to take up the role previously held by Ron Cessna. In 2008 Cargo 2000 management was restructured and expanded to provide better service. Cargo 2000 now operates in three specific areas, each with its own regional director. This enables the organisation to be better-managed and more focused towards the membership.
Presnail was in Sydney earlier this month, his first visit to Australia, to meet with members and the local committee.
What is the purpose of your Sydney visit?
I am here to get a feel for and understand the local market. We put a lot of value on the local associations; they know what’s going on in their markets, each of which is slightly different. The local chapter has not met for quite some time and we need to replace the previous chairman Andy Vargoczky who has taken up a new role in India. We also need to get the membership together to discuss infrastructure issues including interface issues with Customs and quality of data input. It just can’t be done from a remote office
What progress has Cargo 2000 made?
Membership has grown considerably and now numbers 72 including the recent signing of CEVA and some key ground handlers like AAT and Hactl. Most airlines have gone away from self-handling so its important to have the handling sector join.
Surely it is in the interests of airlines to be members?
This is a benchmarking system between those who are participating, but there is no rule forcing everybody to join. The idea of benchmarking is just one element of Cargo 2000; but the most critical aspect is improving the quality of air cargo.
How has the economic climate affected membership this year?
Well, considering the problems that started half way through 2008 membership growth was very positive up until December. This year, four new members have joined, we’ve lost one ground handling company and may lose others if the situation worsens, but in the main, membership has held up. A lot of members have actually had more time and resources to put into the project. Many realise this is a time when you don’t want to lose customers and better understanding of the market through projects like Cargo 2000 can really help. Retaining customers in the current market has taken on new meaning.
If the benchmarking system that is Cargo 2000 is to have any legitimacy surely you will need the participation of local airlines. Have you had any success in signing carriers such as Qantas or Air New Zealand?
I hope they will participate, because that will assist us in strengthening our benchmarking role, but we also would welcome their input to the forwarder -handler- carrier freight process, providing data to measure performance. With Cargo 2000, freight is tracked throughout the process from delivery by the forwarder to the airline, including the time it takes for it to be loaded and shipped. We know what time the parcel arrives at the carrier - what time it leaves and when it should arrive at its destination and when the cargo should be recovered for the customer.
So when the cargo goes live and the messages are actually sent, we can compare the reality with the expectation. Reporting wise at the end of a given period, say six months or a year members can drill down through the system to see how their handling is performing and where it can be improved. The system provides extremely detailed data.
Do members all use the same system for data input?
No. Members have their own systems but we are developing training for frontline staff to enable them to analyse the data. The benefit Cargo 2000 adds to the equation is to create some standards that assist the total supply chain. We all serve the ultimate customer — the shipper or consignee. As the airline industry developed over the last 30 years carriers tended to develop their own systems. There is some commonality among them but generally speaking we still have a lot of confusing data to deal with. Cargo 2000 is developing a simplified system to measure all the data that is generated and present it in a useful format that can help the industry understand better and in turn improve its performance for the customer.
Is the industry playing catch-up to the integrators in terms of market intelligence?
The integrators such as FedEx, DHL, TNT are way out in front in terms of process integrity and what is happening in their operations. They have been very efficient in collecting data on the freight process and using it effectively to give themselves a winning edge in business. Cargo 2000 aims to create a more level playing field in the industry by creating reliable freight process data on the freight process. Members can then use this information to enable them to compete more effectively with the integrators.
What is the membership fee for Cargo 2000?
Membership is open to all airlines and freight forwarders. There is also an associate membership category for companies that interface with the supply chain such as IT companies, ground handling agents etc. The big global enterprises pay an annual US$25,000 fee. That may be too high for the smaller forwarders, but they have an associate membership fee which is US$10,000. We are a non-profit organisation and as such anticipate that as the membership grows fees will be reduced.
Who owns Cargo 2000?
The membership. IATA is also actively supporting the association.
How do you communicate with membership? Is their an annual meeting or conference?
There are two annual meetings for the general membership usually run in tandem with IATA global meetings and the board meets four times a year.
This year we also are running an additional conference for members in September during the Air Freight Asia show in Hong Kong.
