SPECIAL REPORT


‘E-commerce has exposed some serious shortcomings in initiating collaborative solutions in the market. But that’s not all. Overcapacity, as high as 25%, keeps the inter-system pricing under constant pressure.’


Even though export-oriented budgets and price-capacity deals are thoroughly outdated, hard and expensive to manage, and ineffective from a user perspective, they do persist. The conclusion must therefore be that this concerns all elements and not just the airline part. Issues of product portfolio, staff training, IT investments, chain management and broadening customer bases industry-wide have stalled. E-commerce has exposed some serious shortcomings in initiating collaborative solutions in the market. But that’s not all. Overcapacity, as high as 25%, keeps the inter-system pricing under constant pressure. So much so that it has been said that instead of meeting and matching end user markets, a market has been made out of the internal relations. This is not exactly the stuff an integer system is made of.


‘There are


inconsistencies in the airline industry’s cooperative model that should have been cleared a long time ago, but weren’t. Structural overcapacity is one of them and it’s not rocket science to know this will depress yields for the “volume” part of our business.’


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Too bad that at opportune moments, like TIACA’s conference, an absence was noted of forwarders and shippers. How could one part of the industry be expected to struggle its way out of a system-wide dilemma? This pressing matter of huge investments and dwindling market relations, of a multi-billion dollar business stalling, is a fascinating enough conundrum from the view of industrial history. But if some parts of the system do not bother, and the end user has given up to help focus things into services that do matter, it will develop into a major headache for all those engaged in it.


Volume and Value – a new way forward


The emergence of e-commerce exposed that the air cargo industry is little match


for new consumer logistics demands, which mandate transparency in pricing, speed and quality. The product offered by scheduled airlines featuring interchangeable capacity and forwarding services in its industry model should have made for enough flexibility to meet and match just such challenges. It didn’t, and we are still disjointed due to old school thinking. Are we to be relegated to only serving the low yield volume air cargo business, and potentially miss a $3 trillion e-commerce market, one which we can easily participate in, and a market that is expected to double in no time?


We missed out on what the integrators captured in the 90s’. We cannot allow that to happen again.


There are inconsistencies in the airline industry’s cooperative model that should have been cleared a long time ago, but weren’t. Structural overcapacity is one of them and it’s not rocket science to know this will depress yields for the “volume” part of our business. Unless the fine balance of trust and transparency in the existing forwarder and airline model changes, and it has not due to the fact that there are far too many parties


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