Cargo congestion at major airport hubs is often blamed for disrupting supply chains and slowing the movements of goods and it is usually cargo handlers which bear the brunt of the criticism when backlogs build.
But are handlers too easy a target and what practical and proactive steps can be taken by all air cargo stakeholders to maintain an efficient flow of shipments through the world’s busiest airport gateways?
GHI: First of all, give us an indication of the size and scope of WFS’ cargo handling operations?
John Batten: WFS has 30,000 personnel globally handling more than 6.3 million tonnes of cargo per annum for over 300 airlines at 164 major airports in 18 countries on five continents.
GHI: While the passenger industry came to a virtual standstill during Covid, air cargo volumes remained resilient but often difficult to predict due to changing airline schedules, more freighter operations, and the boom in cargo-only flights. What have been the biggest lessons for the industry over the last three years?
JB: The disruption the aviation industry has experienced in the past three years is greater than I can remember at any time in my career, including the devastating impact of 9/11 and the eruption of Eyjafjallajokull in 2010. I think one of the biggest lessons for the passenger airline industry has been to appreciate the value and importance of air cargo, which helped to keep their aircraft flying and revenue coming in at a time when passenger traffic disappeared almost overnight.
I hope a lot of airports also realised how significant air cargo is to their resilience and hopefully this will lead to more investment in airport infrastructure to support the industry’s growth. Thirdly, it highlighted the need for greater efficiency across the air cargo supply chain and the need for all stakeholders to play their part. By this, I mean the need for more digitisation and the benefits that can be derived from cargo community initiatives at airports.
GHI: Cargo backlogs at airports make headlines but what causes volumes to stack up in airport warehouses in the first place?
JB: There are many factors, and they are not only driven by the air cargo market. The severe disruption to container ships and ocean ports during Covid, for example, pushed much higher volumes throughout airport hubs as shippers and forwarders tried to keep supply lines open and meet demand deadlines.
Manpower remains another big challenge. WFS worked very hard during Covid to retain our highly trained and experienced teams of handling professionals because once this expertise is lost, the regulatory and compliance requirements, training and just the first task of finding the right candidates means it can be several months before the correct level of people resources are in place and able to meet our safety, security and service responsibilities.
And, of course, one of the biggest factors as airport warehouses fill up is the need to quickly release cargo for collection when it is cleared. On occasions, when the entire supply chain is under pressure, forwarders are less eager to collect cargo if it means moving it into their own full warehouses. So, this then exacerbates the challenge for airport handlers.
In many respects during Covid we hit the perfect storm which led to congestion beyond imagination and the emergence of the blame game. I know WFS was not perfect, but we learnt valuable lessons and are adopting these now. The biggest issue is improving communication and transparency.
GHI: As a handler, what are the early warning signs of congestion and backlogs – and what actions do you take to alleviate these?
JB: As I said, the last three years have produced some unique challenges. The global demand for PPE and vaccines placed huge pressure on the entire air cargo industry, including the added responsibility to clear and transport shipments to where they were needed as quickly as possible.
We also saw the emergence of cargo-only flights by passenger carriers, which demanded a lot of agility from ground and cargo handlers because often we received very little notice of flights being operated. The market was very dynamic. More traditionally, we obviously anticipate peak seasons and are adept at managing these busier periods.
The biggest early warning is generally when the container shipping industry is seeing significant backlogs because then a certain percentage of what would have moved by sea shifts to airfreight, and the demand to move goods, particularly Asia to North America and Europe also brings a strong increase in the numbers of freighter operations. We are engaging with airlines and freight forwarders more to understand flows and issues in the market to adapt better to congestion.
An example of a key contributor to congestion today, as an example, is in Frankfurt. The lack of people on the ramp with both Fraport and WISAG is causing major headaches to our customers, leading to congestion on the ramp for both imports and exports. These types of challenges add to the difficulties in some markets and areas of the business, but we have to manage our way through such situations, learn from them, and try to influence improvements for the future.
GHI: Is there more airlines and forwarders can do to work with handlers to clear airport warehouse congestion?
JB: We obviously work very closely with airlines and forwarders and the level of communication is generally very good, especially when the air cargo system is under pressure. It is in all our best interests to keep goods moving through the system quickly and efficiently, so there is usually a high degree of cooperation.
One of the main areas where we need support, as I said, is to improve cargo deliveries and to ensure goods are collected as soon as they are cleared. We can then manage our workflows and resources in a more predictable way and maintain the levels of service we all want to see.
This was a key outcome from the ‘lessons learnt’ exercise we did, and, to support this, we have taken additional warehouses and combined with other third parties to increase capacity in our key hubs to minimise congestion.
GHI: How big a part does technology play, or will it play, in managing freight collections and deliveries and generally improving airport warehouse operations?
JB: It plays a very important and increasingly significant part in the efficient flow of air cargo. Advance information received electronically speeds up cargo processing as we don’t want to have to rekey data anymore. We want our handling teams to be handling cargo and not paperwork.
We have many technologies in our facilities now which significantly improve the warehouse process and make our customers’ experience better and more efficient, such as CargoKiosks for truck drivers which enable them to complete deliveries and collections in a much faster and more seamless way.
We are also looking at RBA technology solutions to avoid double-entry. Technology is enabling us to utilise our resources more efficiently and it also has the same benefit for customers. This is a major focus for WFS and we have worked hard to improve this using 'Cloud’ based technologies and introducing new and more efficient HHT technology, which is also linked to other new technologies to improve communication and the flow of information with airlines.
New freight movers are on trial in key locations as is dimming/volume technology, but safety and security remains at the forefront of everything we do, so enabling all stations to link scales to the operating system has been key. Technology solutions will continue to be vital to our business and the industry and I am encouraged by the number and quality of the solutions we can see in development.
GHI: We see more airport community initiatives to improve local cargo operations. Are these effective and can you share an example of one which is working well and the lessons this might provide for other airports?
JB: Yes, we are actively involved in airport community projects which aim to benefit everyone in the air cargo supply chain and make the airport cargo process more efficient.
Brussels Airport is a very good example of how airport stakeholders are working together to improve the visibility, communication and physical handling processes which need to happen to meet the highest standards. We are keen to support these types of cooperation at airports across our global network as it also supports a number of the key technology drivers for us, such as slot bookings and kiosks to manage freight collections and deliveries more efficiently.
GHI: We occasionally see forwarders complaining about rising terminal handling charges. What’s the best way for them to avoid rising costs?
JB: If you look across the entire air cargo chain, the cost of moving cargo has increased. Airfreight rates, for example, has been over 100% higher compared to the pre-Covid level on some routes at times in the last two years. We have implemented price increases in response to our own rising costs, and the rising costs of consumables such as electricity, gas, wood and plastic but, in many cases, THCs can be reduced if companies collect cargoes as soon as they are cleared.
Another way to reduce costs is to do it right the first time when it comes to dangerous goods. This problem is often passed on to the handler as freight forwarder look to cut costs. The amount of dangerous goods being rejected and resubmitted today is crazy. We are also trying the bring the industry benefits with the development of K9 Lithium Detection Dogs. This development is being funded by WFS for the benefit of the industry, not just WFS.
GHI: In terms of airport congestion, how big a factor is the ageing infrastructure at major airport gateways – and do you see this changing?
JB: The cargo infrastructure at some of the world’s biggest air cargo hubs is creaking under pressure and not really fit for purpose to deliver the efficiencies the industry needs today. Having said this, airports which are investing in new facilities, or supporting companies which are willing to invest, are seeing strong growth in their cargo business.
WFS has made a commitment to new facilities at many major airports in the past three years, including Brussels, Liege, Paris, Copenhagen, Madrid, New York JFK, Chicago, Amsterdam, and others. I expect to see more airports finding ways to upgrade their cargo infrastructure for all the reasons referenced earlier.
But, in saying this, places like Amsterdam are not helping the whole of the industry and are potentially causing competition issues by having a blinkered approach to developments. We have an industry problem and not all companies are looking at investment in new facilities – but, it is a key driver for WFS.
GHI: How do you see 2023 in terms of the pressure on airport cargo operations?
JB: I expect another challenging year across the industry. The ongoing crisis in Ukraine is unsettling the global market, there remains concerns over Covid, and the ‘cost of living’ crisis will, inevitably, reduce consumer spending on many of the types of goods which are typically moved by air cargo.
So, this may cause volumes to slow but, overall, the airfreight market has shown so much resilience and recovery in the last three years, I still expect to see growth opportunities.
WFS will, as a result of the economic situation, look to diversify its service offerings and will engage with freight forwarders, e-commerce operators, trucking companies and mail carriers to see how we can help them to reduce costs by providing specialist solutions.
GHI: What new initiatives is WFS putting in place to manage cargo volumes efficiently across its network?
JB: We have a broad programme in place which covers investments in new facilities, digitisation, equipment, and training.
Sustainability is another core focus, so we are investing in various projects involving renewable energy, electric vehicles, bio-degradable pallet wrapping, waste reduction etc which all underpin our long-term approach to the market and support the growth of our customers as well as our own business. We all need to achieve profitable growth to keep moving forward.
WFS is always looking to the future. In Spain, for example, our Horizonte-23 (H23) project has a dedicated task force helping WFS Spain channel and develop the talent and ideas that will help us stay ahead of the game in years to come.
This is a platform for progressive thinking about the future of our industry, including major areas of focus around sustainability and workforce development. Initiatives like this aim to ensure we can consistently deliver the best outcomes for our customers, our employees and, ultimately, all our stakeholders.
The projects we have for operations excellence and service delivery are also key initiatives to improve productivity, facilities, flows and processes, and improving transparency. Across our EMEAA network, WFS has rolled out a system which gives airlines the ability to monitor their performance in real-time by flight, providing complete transparency and making a difference to how a handler works. During 2023, WFS will roll out FIW and FOW to also improve the transparency within the warehouse and on the ramp.
GHI: If you could change one thing which would ease airport congestion in 2023, what would it be?
JB: I would love it to be one thing but that is a dream too far. So, to make it short, and as close to one thing as possible, we need bigger, better, and more efficient facilities plus the ability to handle freight at all airports on the ramp. That said, the improvement in advance information to plan inbound and outbound loads will deliver other benefits. This will be achieved through a step-by-step approach because, as an industry, we have been slow to adapt to new systems – but this has to change and it is changing.
