Five Questions With... John Johnston
John Johnston is the CEO of CHAMP Cargosystems, which provides IT solutions for the air cargo industry. The company is opening a regional support facility in the Middle East, and CHAMP USA will open this year, probably in Atlanta, he said. Johnston spoke with Air Cargo World about the latest technology.
1. What is the outlook for the air cargo industry during the next year?
Certainly I think the consolidation at the carrier level will continue. We’ve seen acceleration of that in the past few weeks, so I think that will continue because there is certainly significant overcapacity in the market at the moment, which impacts the yields which are so critical for the carriers to operate their businesses successfully. I think that we will march into a very even recovery…What we see is more and more demands from our customers to have services delivered through portals that they can pass on to their customers as well. So I think from how we will operate, we will be shifting more and more towards a full portal type of technology for the future.
2. What technology trends have you noticed in the airfreight industry?
There were a lot of initiatives started some years ago and I think one of the most fundamental of course is the E-freight initiative, i.e. to get the paper out of the processes, to streamline the processes and to make them much more efficient. And efficiency is the name of the game. Everyone is trying to protect their margins or in the worse cases, trying to get back to having a margin to protect in the first place. And if the markets are soft and the business is not there, the only way to do that is to cut costs and to exercise extreme cost caution in how you conduct your business…What we’re working towards is this one-stop-shop portal of the future which any participant involved in the global supply chain will be able to get all of the information technology solutions and services they require through one portal…I think if you look at other technology initiatives, you have a huge amount of data which is passing between shippers, freight forwarders, ground handlers, the carriers, the customs authorities and everybody else involved in the global supply chain. There is a massive amount of data which is repeated in various systems still today. I think when you’re buying an integrated service – software as a service – you have a much greater ability to reuse data without having to reenter it.
3. What will the role of E-freight be in cargo?
I think the word E-freight is an overused term, and I think different people will interpret E-freight different ways. But if I could change it a little bit to say that I think e-cargo is really accelerating. And it’s accelerating as a critical need in order to contain costs and be more efficient. And I think that you’re seeing the use of things like tablet computers more often…Because of the highly competitive and volatile market conditions, the people who are making the critical business decisions and the sales people that are out there trying to win business for their companies, they need access to good quality business intelligence and information much, much earlier so that they’re able to make the right decisions, rather than always having to listen to their guts…So it’s all about not only increasing the speed of data communication amongst all the parties – increasing the quality of it – but opening that data further to allow for better decision-making. And the winners are going to be those companies that are able to embrace change quickly and efficiently.
4. How well does the air cargo industry adapt to new technology?
As a whole, it’s patchy. There are some carriers, some parts of the industry, which will adopt changes better than others. There are some companies whose culture is always to embrace new technology and to try and push the envelope of what can be achieved and there are others which are very much, ‘Works today. Why am I going to change it?’ But I think that’s fundamentally changing, and it’s in the times of great stress like the economic downturn that we’re experiencing, which is unprecedented – that is one of the most significant catalysts for change because people have to think outside the box. They have to think differently if their companies want to survive.