The Handoff: What ground handlers are doing to speed up the process

Chicago O’Hare has always been a tough airport to navigate for the hundreds of tractor-trailers arriving and departing everyday with loads of air cargo. But, so far, the tightest squeeze – literally – in recent memory might be in 2015.

With a construction project under way to improve road access surrounding the crowded facilities around ORD, a new railroad overpass was placed over a key artery leading to the cargo terminal in late March. While crews were still working on the overpass, the clearance had been lowered by a few inches. There was just one small problem with this plan: Not all truckers were told about the change. At least a dozen trucks scraped the bottom of the bridge on their way to the terminal, one of which got hopelessly stuck as the trailer roof crumpled. In the gridlock that followed, fingers were pointed from all sides. The Illinois Department of Transportation said truckers ignored the detours and “hundreds” of signs placed around the affected intersection. The Illinois Trucking Association called the situation a “gross miscommunication” and that trucking companies were not warned ahead of time. In the end, the road was closed to all traffic and will remain that way into the summer – creating much worse congestion during a project designed specifically to eliminate gridlock.

The bridge incident is just one of many that have led to increased delays and frustration among shippers and freight forwarders at ORD. Similar scenarios are being played out in several other congested U.S. airports, such as JFK in New York, Logan Airport in Boston (BOS), Miami International (MIA), and Los Angeles International (LAX), said Brandon Fried, executive director of the Airforwarders Association (AfA). “These main gateway airports are where you usually have access issues, where there’s a 24-hour schedule and very little room to grow,” he said. “Forwarders will sometimes show up at a terminal and have to turn around because there was something blocking the doors.”

Lack of access, of course, leads to delays. Members of AfA have told Fried that the average wait for a truck to off-pack air cargo at JFK is sometimes as long as eight hours. With most airlines outsourcing their ground-handling contracts to third-party agents to reduce costs, there are problems with limited staffing at peak hours. Also, with ground-handling agent (GHA) contracts usually arranged in the form of short-term leases, carriers are often not making long-term investments in new equipment. “Airlines are trying to save money, and handling agents are the way to do it,” Fried said. “But the consequences of high staff turnover lead to frustration.”

Not that that appears likely to change market practice. Richard Fisher, executive vice president of forwarding firm BTX Global Logistics in the Boston area, said, love them or hate them, the GHA model is here to stay. “They sign contracts with carriers, so they are more-or-less invisible to the forwarders. A lot of GHA’s are understaffed, especially those who communicate with us.”

But according to David Ambridge, general manager of cargo at Thailand based ground handler Bangkok Flight Services (an affiliate of Worldwide Flight Services), many GHAs are equally as frustrated about the actions of forwarding agents that can lead to delays. “I can go right back to my days at LHR [London Heathrow] and the complaints about Friday night queues,” he recalled. “Agents only want to collect import shipments between 11:00 and 17:00, Monday to Friday. Outside these times there is very little activity. No wonder we still have six-day shipping cycles.”

Last year, when IATA’s cargo chief Des Vertannes challenged the industry to trim 24 to 48 hours off the six-day consignment, he meant to include everyone in the supply chain, from the shippers to the forwarders to the airlines and on down to the GHAs. While seeing ULDs sit on tarmacs and loading docks for hours may seem to indicate that handlers are to blame, there is no single villain who causes these delays.

Need for dialog

More than anything else, the key solution to the fumbles in ground handling is to break down the barriers between GHAs, airlines and forwarders, industry insiders said. Because carriers sign contracts with GHAs, and forwarders work exclusively with carriers, there is often an impenetrable wall between GHAs, forwarders and shippers.

“We hear absolutely nothing at all from shippers, as we are rarely, if ever, allowed to talk to them, either directly or indirectly,” Bangkok Flight Services’ Ambridge lamented. “Why is that?”

However, despite Ambridge’s sentiments, a lack of dialog is not the cause of all delays. At Suvarnabhumi Airport in Bangkok, Ambridge would not blame the problem of late-afternoon queuing on the lack of communication, for example.

“Even though we have an Import Collection Screen and an Export Slot Time system both available, agents ignore those and all turn up at the same time as each other, five days a week, and then complain about congestion in front of the building,” he said. The only action that reduced the Friday backlog at BKK, he added, was the implementation of a strict policy to only accept cargo 24 hours before scheduled departure. As a mid-market forwarder, Fisher, from BTX Global, said he tries to keep in touch with vendors that are tied into technology. But in most cases, he said, communication is still limited to old-fashioned phone calls – “and sometimes there’s no answer at all,” he added. “Even something as simple as email would make a big difference.”

Fisher, however, said he is starting to see some willingness to set up regular meetings to discuss bottlenecks. “Since IATA began putting a big emphasis on reducing time, carriers are at least starting to talk about this,” he said. “We need to meet with our carriers to pursue more holistic solutions involving GHAs. I know that sounds like a politically correct statement, but it’s actually factually correct, too.”

There are other causes of delays. Markus Knickmann, manager of strategic business development for Shanghai Pudong International Air Cargo Terminal Co., Ltd. (Pactl), said the largest bottleneck is the “hand-over of data between various parties and systems involved in the supply chain.” The solution, he said, is to share relevant data among certain parties well in advance. “For example, knowing what kind of export cargo is being transported on a particular truck, along with its estimated arrival time at our warehouse, allows us to precisely plan the handling process ahead of time,” he said.

Big airports, big improvements

With ground-handling operations, size often does matter. Some of the larger facilities have been able to improve communications and collaborate closely with work crews, and are starting to make a difference in processing times. At Pactl, Knickmann said recent developments at Shanghai Pudong Airport – such as the introduction of new, expedited customs procedures and electronic air waybills – have contributed to the overall improvement of the connectivity of transit shipments. Pactl also maintains close cooperation with forwarding agents, he added.

“The majority of outbound cargo is ‘agent loaded and built’ inside our premises,” he said. “This means we supply the agent with sufficient space as well as appropriate ULDs and loading material.” After the X-ray check, the agent then performs the build-up with its own staff members. Afterwards, Pactl picks up and accepts the cargo for further processing. At Hong Kong’s Cathay Pacific Terminal, “more than 50 percent of our business is in trans-shipments,” said Kelvin Ko, CEO of Cathay Pacific Services Ltd (CPSL). “We’ve done a lot to streamline the process so these shipments spend as minimal a time as possible” at the terminal. For instance, when the terminal opened in 2013, it was designed so that the areas where import and export cargo would be sent to be broken down and built up, were in the same vicinity. The thinking was that keeping cargo build-up and breakdown in one spot would save time.

And speed is important in Hong Kong. The average connection time at Hong Kong International Airport is about five hours, which includes towing and breakdown. “With a special charge, we can get it down to three hours, and sometimes even one hour, aircraft-to-aircraft,” Ko said. “From our perspective, we try to reduce cut-off time as much as possible, which is about two hours before flight departure.”

That said, missing a cutoff time is not catastrphic at HKIA. By virtue of its size, the airport gives forwarders a lot more options in case a connection is missed because of a delay. “In other airports, you may have to wait longer, sometimes spend a whole day with new shipments, waiting for the next flight out,” he said. “In our situation, we have many more frequencies.”

According to CPSL’s latest in-house performance audit for March 2015, ground crews were able to meet or exceed all of their goals, with an achievement rate of 99.7 to 100 percent in various categories, such as the limiting of truck queueing time to 20 minutes or less, and the breaking down of general cargo within three hours of the actual time of arrival for passenger aircraft and five hours for freighters.

Located right next-door to CPSL, Hong Kong Air Cargo Terminals Ltd. (Hactl) is similarly focused on getting cargo through its doors as quickly as possible. “About 70 percent of our cargo is exported, so it arrives prepackaged by the forwarders,” said Mark Whitehead, CEO of Hactl. “We also do a lot of trans-shipment of cargo. We’re not a warehouse for shipping stuff. We operate on a just-in-time inventory, so cargo is never at the terminal for very long.”

By reducing the cut-off times to load cargo, Hactl has added a great degree of flexibility to its system. “It’s extremely rare to have a bottleneck,” Whitehead said. “We can accept cargo late, if maybe the flight does not arrive on time.”

The smooth flow that Hactl has achieved at its Superterminal 1 didn’t come about overnight, but was developed as a result of constant innovation over many years, he said. Whitehead said that the cargo terminal developed long-term relationships and worked closely with airlines to develop the common platform that is Hactl today.

Here’s an example. HKIA, which had a throughput of 4.38 million tonnes of cargo in 2014, is home to roughly 1,000 forwarders of various sizes on the premises. To help ease the potential confusion that so many players can bring, Hactl has dedicated certain truck docks for certain forwarders. “They can go straight to that dock and know that cargo will be delivered there,” Whitehead said. “That cuts out a lot of time, especially when you’re doing business with thousands of trucks.”

To Whitehead, the secret to moving cargo quickly is an abundance of workers and good will in equal measures. “It all comes down to labor,” he explained. “Labor is our most valuable resource, and we make sure there are extra shifts if needed to clear a backlog.” Given Hactl’s Hong Kong location, one of the few factors out of Hactl’s control is typhoons, which are not uncommon in the region. “When we know one is coming, there are big peaks in activity just before they arrive, right before they close the airport down,” Whitehead said. By working with labor unions and forwarders, he is able to add an extra shift or two to handle the spike in activity.

“It would be very different if we didn’t have labor on our side,” he added. “As a ground handler, we tend to over-resource rather than under resource to save money.”

An app for that

Even in areas like Hong Kong, where skilled workers and cooperative forwarders are abundant, technology is stepping in to help manage the increasingly complicated ground-handling logistics. Pactl uses the Hermes air cargo management system, Knickmann said, which provides dangerous goods regulatory information, a ULD stock check process, flight-planning capability and the ability to produce integrated cargo damage reports.

WFS, the parent company of BFS, uses Cargospot from CHAMP, Ambridge said. “While this is a very adequate manifesting and messaging tool, it is not able to give me the real intelligence that I need to manage the business,” he said. “[So] we have designed our own software systems that allow me, and very importantly, my front-line managers to have clear visibility in real time on what is happening in all areas of the business. We all get pop-up alerts if any milestones are threatened.”

One type of technology that some large to mid-sized ground handlers are rolling out are smartphone apps that can provide instant status updates to forwarders and truckers, which can significantly reduce wait times. In 2013, Hactl installed a mobile status service to simplify the flow of cargo from aircraft side to Superterminal 1. “Using this mobile technology, we can now conduct cargo check-in functions at aircraft side and tow inbound ULDs direct to our cargo storage system,”

Whitehead said. This eliminated the need to wait at holding areas, key in data to produce cargo storage orders and hand over the ULDs to different staff.

Both Pactl and Cathay Pacific Services have also turned to mobile applications to enhance performance. Several years ago, Pactl began working with simulation models to investigate the impact of changes in certain process steps. “Based on these results, we are currently testing new mobile devices which are supposed to replace existing scanners,” Knickmann said.

Cathay Pacific Services, meanwhile, launched its mobile apps earlier this year to help truckers manage their day-to-day work. “Registered agents can log in, and we can tell you what cargo is going where,” Cathay’s Ko said. “You may have 10 shipments, and four are already at the loading dock, and another four will arrive at ‘X time.’ It helps them see what they need to do, and we can push notifications for any delays that occur.”

Perfecting the hand-off

Until the usage of these apps and other technologies become more common, frustrations about delays and inefficiency in ground handling operations are likely to simmer. “I’ve heard of some apps for truckers, but they are not widely adopted,” said BTX’s Fisher. “If you see from the app that a shipment is delayed and leave the line, you’ll just lose your place.”

AfA’s Brandon Fried said the seeds of discontent between ground handlers and forwarder were sown long ago, but this year the issue is gathering steam. “The West Coast port crisis caught some people by surprise, but the slowdown was long enough for retailers to notice that we have to get this under control,” he said. “This [port crisis] event might be the momentum surge that’s needed to make a change.”

The industry needs to re-examine the “ground-handler model,” Fried said. “We have to ask where can we improve customer service? And where can we improve infrastructure? These terminals can’t just be upholstered sewers.”

It’s the very idea of change, though, that may be the biggest hurdle, Ambridge said. “This issue can only really be solved with collaboration, discussion and agreement from all parties. But we have been doing pretty much the same things now for the entire 43 years I have been in this business; almost nothing has changed. It still takes us six days – the same as it was back then. We still don’t collaborate, we don’t share information or best practices. No other industry I can think of has stayed as archaic and static as the air cargo Industry has.”

“We have to realize that communication with GHAs needs to be improved,” Fisher said. Just as with the truck drivers stuck under the overpass in Chicago, there is only so much miscommunication a company can take. “Some truckers I know used to pick and deliver air cargo,” he said, “but they don’t want to be in the business again.”