Forwarders rally response to congested US air hubs

Forwarders rally response to congested US air hubs

After losing 20 percent of its air cargo volume over the last decade due to a lack of infrastructure on and off the airport, JFK will undergo a $13 billion revitalization. Photo credit: Shutterstock.com.

Shippers willing to pay a premium price for air freight to ensure speed and reliability in major US markets are often shortchanged on both, as shipments are regularly delayed on and around traffic-snarled, truck-congested airports.

The Washington, DC-based Airforwarders Association (AfA) is trying to change that, pushing airlines, ground handlers, truckers, customs brokers, airport officials, and their own members to communicate with each other to resolve these costly logistical logjams. In the last 24 months, the association, a nationwide trade group of air freight forwarders working on behalf of importers and exporters of high-value and time-sensitive cargo, has held town hall meetings at airports in in Los Angeles, Seattle, Dallas, Chicago, Boston, and New York.

‘Holding the bag’

Brandon Fried, executive director of the 300-member AfA, has made smoothing out the kinks in air cargo shipper supply chains and protecting the role and relevance of forwarders top priorities for the association. One reason for this is that ground handlers and airlines that operate their own cargo terminals are imposing wait time and storage costs on truckers dropping off or recovering shipments, and forwarders who book the airport run are stuck paying the penalties.

Fried and his fellow AfA board members have been relentless in organizing the meetings, bringing in between 90 and 125 air cargo service providers, including senior airport management. He said the goal is not to find a quick fix for these issues, but to shine a light on them and get stakeholders to share and collaborate on potential solutions.

“If we’re able to discuss solutions that may include some compromise and leveraging of technology, then we can begin the process,” said Fried, who owned a freight forwarding firm for 25 years before selling it 14 years ago to take the helm of the AfA.

“I’ve been a freight forwarder, and I know where they sit,” he told JOC.com. “Having to pay a trucker to sit in line at a freight terminal for hours and hours is abhorrent to me. Not because they don’t deserve to be paid for waiting, but because the congestion challenge is beyond our control. Our customers — the shipper — [don’t] want to pay airline and ground handler [imposed] wait time and storage fees. Truckers can’t absorb them. Brokers won’t pay them. These are unrecoverable costs, and we’re left holding the bag.”

Citing New York City’s John F. Kennedy (JFK) International Airport as an example, Fried contended that if airports neglect the air cargo community, the cargo might land elsewhere. “We had 120 cargo people show up at our JFK town hall last November, and you could feel the passion, the heat, the concern in that room,” he said. On Jan. 31, Fried returned to New York and made a presentation at a JFK Air Cargo Association meeting that drew 75 people, including Mike Bednarz, manager of air cargo business for Port Authority of New York and New Jersey.

“For a long time, JFK rode the coattails of its reputation as the primary East Coast air cargo gateway,” insisted Fried. “But lack of infrastructure on and off the airport resulted in JFK’s 20 percent loss of cargo volume over the last decade. There’s truth to the old expression, ‘If you don’t take care of your customer, your competitor will.’”

According to Fried, this lack of investment in infrastructure deteriorated JFK’s value proposition relative to other airports in the region, and as a result, United Airlines moved its major New York operations from JFK to Newark Liberty International Airport in New Jersey, while American Airlines shifted more assets and flights to Philadelphia International Airport following its acquisition of US Airways in 2013.

The AfA chief said airplane manufacturers also had an “unwitting hand” in denting JFK’s dominance by introducing smaller, more economical long-range aircraft “that could make money on the thin routes — Providence or Hartford to Ireland — which siphoned off passengers and belly cargo from JFK.”

After 10 years of declining cargo volume, however, “JFK’s legendary attitude of entitlement is also beginning to change,” said Fried. “There is light on the horizon.” New York Gov. Andrew Cuomo in October unveiled a $13 billion infrastructure investment plan for JFK that includes a widening of the “notoriously congested” Van Wyck Expressway, one of the primary access roads to and from the airport. “We are starting to see glimmers of hope,” he said.

Fried said part of the reason the plan was so long in coming is that some of the corrective actions previously floated for JFK were unrealistic. “There were some pretty disappointing talks two years ago, when Governor Cuomo suggested relocating JFK’s cargo operations to little Stewart Airport, a former air force base 75 miles up the Hudson River. I couldn’t see Qatar Airways flying to Poughkeepsie to drop off or pick up freight. Thankfully, they abandoned that notion.”

Pointing fingers

Given the way things are now, however, forwarders who work with JFK remain skeptical. Sol Green, export and import manager for All-Ways Forwarding, told JOC.com JFK’s freight operations have not kept pace with its passenger business, especially with regard to technology. “The passenger side at JFK is very up to date and the cargo side is very manual,” he said. “There’s no automation. We have to pick up the phone on practically everything.”

Green said there’s a “disconnect” between the flight arrival and when the ground handling agent takes over, resulting in a “blackout” period during which shipments are largely unaccounted for. “While the handler’s website says the shipment has arrived, is broken down, and ready for pickup, our driver gets there, and it’s not broken down at all and he has to wait. There’s a tremendous amount of trucks hanging out on the highways and airport roadways, creating bottlenecks, because of this misinformation.”

Much of the blame, Green said, lies with ground handlers at JFK, the largest of which, World Freight Services (WFS), is controlled by a private equity firm that may not fully appreciate the unique challenges air cargo presents. “They have a near monopoly, they’re understaffed with low-wage employees and can’t handle the large volumes of cargo moving through today. We’re talking about JFK, a major hub airport. It is mind boggling that in 2019, with all this technology, there is no automation. We’ve still got to pick up the phone and wait on the line for a half hour until a ground handler answers. And if they can’t get correct data on the shipment’s availability, it doesn’t help even if a dock door is available. I can have 10 to 15 people waiting on the phone to find out about the status of different air shipments. It’s really shocking.”

All-Ways and its competitors have suggested airlines and their ground handling agents team up to tackle the cargo misinformation problem, but Green says the message fell on deaf ears. “Passenger data and information is constantly updated on the airline’s website but cargo data is not,” he said. “It’s because passengers make noise when they’re unhappy and boxes do not make noise.”

Tom Staub, president of Interfreight Harmonized Logistics in New York, says truck congestion at JFK is “neither improving, nor getting worse. It’s about the same. It’s bad.” And he’s not optimistic about seeing real improvement anytime soon.

“It used to be that almost every airline at JFK had a separate cargo terminal with good paying union jobs handling their freight,” he told JOC.com. “Today, we have a few handling agents squeezing as many airlines as possible into one terminal and hiring employees who are paid wages that are often less than for a fast food restaurant. It takes four to six weeks for TSA or Customs to approve a job applicant’s background check — ‘badging’— so turnover is high and the terminals are constantly short on people. The employee has no motivation to move quickly. Usually, they’re working two jobs to live in New York or on Long Island and they’re exhausted.”

Staub noted that there are exceptions, pointing to Lufthansa, American Airlines, and Air France/KLM as examples of airlines with smooth, responsive freight handling at JFK. “But in [cargo] building 151, there are 14 different airlines, including some major cargo airlines, and truckers can wait five to six hours to get a dock door. If you have a shipment of 600 kilograms and you [the forwarder] are charged $600 in wait time fees, forget it. In building 86, there is no way you can pick up or deliver a shipment faster than two to three hours.

“When we complain to airlines, they blame ground handlers — the terminal operators — and are not willing or are unable to help,” Staub lamented. “I never understood this. Terminal operators are subcontractors of the airline. Why do they claim they have no control over the terminal? It is an unacceptable situation, a mess.”

WFS, which has been a frequent target of forwarders’ and truckers’ ire, will move into a new 300,000-square-foot terminal, currently under construction on airport property, in two to three years. Rinzing Wangyal, vice president of business development at WFS, said it’s too early to say how many dock doors will be available or which airlines will move in once the terminal is operational. Wangyal noted, however, that the development is being funded by an outside firm and not the Port Authority of New York and New Jersey.

In an interview with JOC.com, Wangyal disputed allegations of delays and a lack of communication at the terminals WFS operates at JFK. “Most of them serve passenger flights, and they are almost always on schedule.” The company is “having issues in building 151, which handles mostly freighter flights that arrive late at night and on weekends and can be up to 12 hours late. We are having a tough time finding [ground handling] people who will work midnights and on weekends. It’s our biggest problem and we’re working on it," he said.

Turning talk into action

JFK’s Bednarz wasn't available for comment. AfA is planning another town hall meeting later this year in the hopes of opening up a dialogue on these issues.

In the meantime, Fried’s two-year campaign for “constructive communications and compromise” is already generating results. Boston-based AfA directors Richard Fisher of BTX Global Logistics and Rick Bridges of Roanoke Trade Group coordinated a town hall meeting that pulled in an audience of 90 from the city’s air cargo community, including officials from Boston Logan International Airport and the Massachusetts Port Authority (Massport), which oversees it.

Massport in January began the first phase of a pilot program that allows all transfer and long-haul trucks to stage along Harborside Drive in the South Cargo area between 12 p.m. and 5 p.m. daily while waiting for a dock door. It’s a small first step, but an important one in that it gives rigs a specific area in which to wait that is out of the way, as opposed to parking in any available space.

“It’s not a holding lot because the airport doesn’t have the space,” explained Fisher, executive vice president and director of BTX Global’s Boston operations.

Fisher said Boston Logan and its cargo stakeholders have been feeling the squeeze, mainly because Massport “has done a really good job” in attracting new international flag carriers in the last eight years and is seeing higher volumes of both passengers and freight move through the airport.

Both Fisher and Bridges started meeting with Massport officials about four years ago to convince them of air freight’s importance at the space-constrained but busy airport. “It took us a while to get Massport to spell cargo, but we think they really understand it and its value,” said Fisher. “They are starting to take some baby steps toward making the process more efficient. Nothing like Brussels Airport, which has embraced technology to improve cargo handling, but Logan is listening.” Borrowing an idea from the passenger side, Brussels Airport last year began a program that allows forwarders to reserve guaranteed slot times and designated warehouse dock doors with ground handlers, so their truckers can quickly discharge loads or collect shipments.

Fisher concedes the reaction from Boston’s trucking community has been “mixed.” Some dispatchers, he said, “have told truckers ‘you can’t wait any longer. Move on.’ But it varies by individual truckers and load size.”

Truckers with small loads — a couple pallets — have begun avoiding the airport during peak traffic times, both on import recovery trips and export drop-offs, Fisher said. He added that ground handlers at Logan are also “short staffed” and that sometimes drivers are told to return to their trucks and wait for a phone call from the handler which may not always come

Working closely with Fried, Fisher said AfA is “still trying to convince Massport to modernize a bit, realize that [air] shippers are price and time sensitive and that a certain amount of export freight goes down to JFK where major consolidations are built.” Massport and its primary ground handler, also WFS, “are paying attention,” said Fried.

According to a spokesperson for Massport, ground handlers report the dedicated truck parking pilot program is already “alleviating congestion.” The spokesperson said the authority is exploring new ways to expedite the flow of cargo through the airport, but there are no plans for new cargo facilities at Logan. A planned expansion of international passenger Terminal E, however, could include a cargo bypass road in its design.

Contact Chris Barnett at chris@cbarnmedia.com.

 

Comments

Airport congestion

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