Air Freight Needs New Business

Air Freight Needs New Business

Copyright 2004, Traffic World, Inc.

There is a worrisome trend in air freight that transcends all other adversities. Simply put, our industry is growing too sluggishly to pay for our enormous investments in people and technology. What our industry needs is more business from existing customers and initial business from new customers.

To obtain this business, we must acquire new thinking, generate new ideas and concepts that will provide fresh strength to this once fastest growing sector in transport.

We also must learn geography anew. China is not the only country on the air cargo map. In our zeal to satisfy shipper needs between the United States and the dynamic Chinese economy, we are in danger of forgetting the other three billion occupants on this planet.

We are in a tough environment that calls for refocusing on basic selling skills combined with new ideas and methods.

Air freight people need more shoe leather and less preoccupation with the Internet. More sales calls and less time looking at computer screens. We must offer customers manageable, hassle-free delivery systems that will move freight quickly and precisely instead of presenting complicated logistic "solutions."

Of the approximately $1 trillion spent annually on worldwide transportation (air, ship, truck and rail), air cargo's share is less than 4 percent of international traffic and a scant 2 percent of domestic intercity deliveries.

Our industry cannot afford minuscule growth in the international cargo arena and an actual decline in domestic freight.

What certainly is not needed is airlines attempting to sell "direct" and cut out the consolidator, or 800-pound "gorilla" international forwarders entering the increasingly crowded, fiercely competitive domestic market. These are zero-sum games that no one wins.

What is required are fresh sources of business and a strategy to assure shippers that in an increasingly global economy, moving goods by air is the most productive, efficient and ultimately, the most profitable method of transport.

As an industry, we generally have been too content to solicit business from customers already using air to some extent. We are in effect stealing customers from each other rather than soliciting new shippers.

When air cargo was in its heady growth stage, when revenue was rising 15 and 20 percent annually, perhaps a complacent attitude was justified. No longer. Our industry must do nothing less than create a new sales and marketing environment to complete successfully this critical task.

As a first step, airlines and forwarders should strengthen their traditional roles and hone their specialized skills. Airlines are unbeatable at moving cargo from airport to airport. The forwarder is a winner in picking up and delivering cargo directly to the customer's loading dock. Greater cooperation, not animosity between every segment of our business also must be a given.

When was the last time the Air Transport Association sat down with the Air Forwarders Association to engage in a meaningful dialogue and thrash out mutual problems? The airlines must realize, in their current weakened state, forwarders can help, not hurt, them. Forwarders, too, must recognize new economic and political realities. Suspicion and resentment toward carriers must cease.

We also require new, persuasive and comprehensive rationalizations for shippers to use air transport.

The last genuine effort to provide economic and philosophical underpinning for air freight was the Total Cost Concept - and that was formulated more than 30 years ago by Emery Air Freight, a name that doesn't even exist today.

We require persuasive reasons for the use of air that are applicable to economic conditions in the year 2004, not 1975.

Our industry requires nothing less than a revolution in thinking of its role in the domestic and international transport mix. Let's once and for all climb over that 4 and 2 percent barrier. Let's bring airlines and forwarders together and create a powerful tool to convince shippers that air indeed is the preferable transport mode for the 21st century.

-- Masters is vice president of Manna Distribution Services, Mendota Heights, Minn.