What shippers really want: Airfreight’s true customers speak out

Where it all went wrong (and right)

In December 1944, when Franklin Roosevelt signed the Chicago Convention, outlining the basic rules for civil aviation, its signatories saw international civil aviation as a bridge between nations. Over 70 years later, the airfreight industry has facilitated wealth creation and trade in ways that Roosevelt and his peers could never have imagined. Delivering high-value components and parts to manufacturing sites around the world in a matter of hours has allowed companies to truly globalize their operations, ushering in the neoliberal model that defines our modern world.

Global manufacturers continued to expand their operations, and with the rise of the internet, their supply chains became increasingly complex. For time-sensitive industries like electronics and pharmaceuticals, that meant tying up increasing amounts of their assets in transit, where they were unable to generate value.

Airfreight was the solution to this costly conundrum, but as shippers adopted more sophisticated processes and technology, airfreight started to lag. For shipments of temperature-sensitive pharma products and multimillion-dollar electronics, that lack of control was no longer acceptable.

Air cargo’s fragmentation also caused problems. Shippers would hand their cargo off to feeder trucks, which released the cargo to a laundry list of forwarders, ground handlers, border agents and carriers. Each link guarded their data, and air cargo became a black box.

An average air cargo supply chain shipment requires approximately 21 documents, sent 40 times, in 20 steps, according to research by Ericsson.

High costs are driven by inefficiencies that are caused by lack of information sharing, said Sebastiaan Scholte, CEO of Jan de Rijk Logistics. “The shippers are right to complain that the air cargo supply chain is not as efficient as the integrator supply chain.”

“From 2011 to 2015, a greater part of our cargo was transferred to road, boat, and rail,” Mellin said. “We had to set up regional distribution centers and make other internal changes to our supply chains, but we made enormous savings.”

“Air cargo is working in an old mode,” said Baertschi, who is also a member of the SAC. “The business must be reinvented.” Baertschi stressed that door-to-door solutions must be offered, despite the fact that the industry is fragmented, and that lack of transparency remains a problem. The air cargo industry, he concluded, “is too complex, too expensive and needs to be leaner, like an integrator.”