Your lowly rating structure reflects the way in how you treat cargo. I wish you would stop saying you are in the supply chain management business. Listen, your record of handling passenger baggage has even been declining at nearly the same rate as you look after commercial airfreight. It is not about the IT systems you have in place to record the supposed movement of freight, it is about the people you employ at the coal face. In the hack-slash world of cutting costs, American carriers have brought everything down to the lowest common denominator. Pay peanuts and you get monkeys.

Cargo Heads such as American Airline’s David Brooks think they are gurus in the class of FedEx’s Fred Smith as they travel the world to standing on any platform they can to tell the world how expert they are at logistics. Dave, every time we use your crummy airline something always happens to prove how woeful your service is. If the freight is not shut out at origin, it goes missing at an intermediary point, but if it is lucky enough to get to destination it gets lost in your terminal. The worst thing is, when you are up to your eyeballs in alligators in exasperation, try speaking to anyone who has the ability to provide an answer that will appease a customer! Talk about goobly-gook and double-Dutch! So Dave, can you spend a little time with your feet planted firmly on the ground instead of your head in cloud cuckoo land and address the issues that cause your airline to constantly muck up.

Firstly, employ some key people who know something about something and pay them well. Secondly, take a look at your resources and determine what you can and cannot handle. Thirdly, teach your handling agents how to handle freight and properly record everything. You may need a bar-coding system to help you for starters. Make a manifest up for every ULD, so the split shipment nightmares become something of the past. How about holding your handlers accountable. You see Dave, American Airlines may have more aircraft than any other, but most of them are simply unsuitable for cargo. Instead of taking bookings in kilograms, why don’t you go a step further and demand the cubic measurement and preferably with the carton dimensions as well? Your aircraft do not have elastic sides, my boy.

So mate, like your American carrier competitors, get your head out of your ass, forget about the supply chain nonsense and get back to basics. You and your employer might just earn a little more respect at the end of the day, if you could just start under-committing and over delivering. We are living in solemn times and we would readily forgive you if you just became honest with yourself.

So in the last fifteen years with the leading economies moving from a manufacturing to a services base, we have seen airfreight change from a position where there was some form of equilibrium of trade between most sophisticated countries to one where it has become virtually one way. In the good old days where export and import volumes were 50-50 this allowed many indigenous forwarders to obtain great market share in their home countries. As the pendulum started turning the other way and exports started shrinking and imports growing, multi-national forwarders quickly started swallowing up the market share leaving local forwarders fight for the scraps. Nowhere better to illustrate this change than to look at what has taken place in Australia over the past twenty-five years. In the early eighties publicly listed transportation companies Mayne Nickless, Brambles, TNT and several privately-owned forwarders Fliway, CH Cargo Handling, VIP, and Simpac more than held their own against the might of the multinationals. Today these companies no longer exist. TNT lives on as a Dutch company in name only. As air imports grew all were acquired by their foreign competitors. Today few of the larger trading countries exist where a local forwarder commands any market share. This has set the stage for the new era where the top five forwarders control over 80% of the global airfreight market.

During the course of 2009, 227 freighters have been taken out of service and we are not talking vintage aircraft like the DC 8, DC 10 and 727. Most are 747’s and MD 11’s, with many of the 747’s being the latest 400 series. What trade were most of these aircraft assigned to? Yes, you’re right China. There is such a glut of capacity that even with the parking up of so many aircraft yields are still continuing to decline. Air France/KLM have just announced they are getting back to their roots and handing their freighter fleet of 21 747’s and MD 11’s over to their subsidiary Martinair and now will only offer belly space. The combined airline since merging has been losing over $1 million per day from its freighter operations. The stage has been set for a far smaller market for airfreight to emerge from this global recession.

Why will this be so? Two things; the days of rampant consumerism as it has culminated into two years ago is over never to return and as trade starts to grow once again, ocean freight will play even a bigger role. Example; Polo Ralph Lauren pre-2009 relied upon airfreight to handle the bulk of their needs. Boss, Ralph Lauren, when hit by a shrinking market, studied areas of further cost-cutting and discovered by changing modes that he could cut his transportation costs to a fraction of what they were. Even though Polo is a premium brand, most of their goods are procured from China. Earlier this year Ralph Lauren issued the instruction all imports were to now move by sea and air was only to be used in an emergency. His decision has so far produced savings in the $millions. Others will, or already have followed suit.

Presently most of the large multinational forwarders, especially DHL, are fighting for their lives and are restructuring for the changing times. The industry has been turned on its ear. The fairy tale of exponential growth in air cargo over the next twenty-five years that Boeing forecasters continued to predict even as late as last year have turned them into laughing stocks. For airfreight forwarders to be relevant in the new era that is dawning upon the industry they will have to ramp up their ocean freight departments. The golden age of airfreight is now consigned to history.

Ever since FedEx flew its first Falcon jet laden with small packages, UPS has spent tens of $millions on lobbyists whining and complaining to the politicians and bureaucrats on Washington Beltway that FedEx has an unfair advantage over them because neither their pilots nor their labor force is unionized while UPS’s is. FedEx from day one up until now has always had its employees on its side because Fred Smith has been a very generous boss making sure their take home pay is higher than any of its competitors but their retirement and healthcare plans set the bar for American industry. On the other hand the Teamsters Union has fought tooth and claw for decades with UPS to attain satisfactory levels. A FedEx executive today reminds me of where IBM executives were a generation ago. They are highly skilled, motivated and commercial. Take a look inside the UPS “mahogany rows” in the various buildings spread around Atlanta, and the lot of them resemble a bunch of worthless and sanctimonious religious missionaries all donned in their Church issue hair cuts, gray suits, white shirts, bland ties and polished black shoes. None of them could make a decision to save themselves, whereas Fred Smith has always encouraged his key men to be innovative and entrepreneurial as though they are not only running the business but they also own it.

Currently the House of Representatives appear to favor the UPS position that FedEx workers should be treated under the same act that governs UPS workers. Fred Smith, it appears has the ears of the majority of the Senate. Both UPS and FedEx have been conducting campaigns of disinformation and both in the last year have spent nearly $10 million each with Washington law firm lobbyists. If UPS can convince the Senate, then war will break loose between FedEx and UPS and I know who I would have my money in the marketplace. It is a no-brainer!