Cargo alliances await technology
Oliver Evans, chief cargo officer at Swiss International Airlines, says there is a compelling logic to having cargo alliances, but it takes a major effort to extract benefits. He says there is an opportunity to develop common processes on the cargo side, but it will take much longer than it did on the passenger side. He adds that unlike the passenger, side there are fundamental differences on the cargo side when it comes to alliances.
“In the cargo world, we write very detailed processes for our handlers and even when we move under one roof, you find that the process descriptions of the airlines and the freight forwarders are fundamentally different,” Evans says.
Evans says cargo has very different understandings of how alliances work.
“SkyTeam is a passenger alliance that has now developed a cargo alliance model,” he says. “With the Star Alliance, to which my company belongs, that is not the case. We will collaborate in terms of common facilities where that make sense, but we maintain an autonomous business model because that is what is driving value for our customers.”
Freight forwarders have a decidedly different perspective from the airlines.
“From a passenger perspective, if my favorite airline has an alliance with another carrier so that as a passenger I can make a transfer, I am excited,” Brandon Fried, executive director of the U.S. Airforwarder’s Association says. “As a freight forwarder under the same circumstances, I am nervous because I am hoping and praying that the same standards are used and there is a linking of synergies. I might trust my first carrier, but I really don’t know about their code partner. I am not saying it’s good or bad; it just leaves open the possibility for issues.”
Fried says members of his association report that there is not always a defined benefit from shipping within an alliance, but airlines are working closer together.
Des Vertannes, IATA’s global head of cargo, says if the air cargo industry can become more E-centric, it can be far more transparent with its services.
“We are keen to drive things that catalyze a future benefit to the air cargo side. If the forwarders can see electronically as we develop alliance partnerships, it gives them a greater choice This is about information reaching them where today it’s not visible.”
Vertannes says FedEx and UPS offer the industry a model to follow in terms of technology sharing.
“If you look at FedEx and UPS today, do you think they operate on all continents and every city? No they don’t. They have subcontractors, but what they give to subcontractors is their IT platform,” Vertannes says. “It allows seamless service to its customers that FedEx or UPS controls from start to finish. We don’t have that in our world today, but I believe as we develop standards you will begin to see it in the years to come.”
Fried says it’s vital that forwarders not be left behind as cargo alliances and the technology to run them are developed.
“There needs to be a market-driven solution,” he says. “Forwarders come in all shapes and sizes, and customers pick forwarders based on many different criteria.”