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Air Cargo's Most Influential Leaders

In an industry that literally spans the globe, there are hundreds if not thousands of leaders who are taking their companies and the air cargo industry into new areas. In that spirit, the people on our list this year stand out not only as individuals but also embody the larger efforts that are underway to recast air cargo services, whether that means matching regulation to economic needs, bringing technology into a new age or forging better working relationships among disparate air freight players.

Technology and ever more sophisticated supply chains make it more important than ever for airlines and forwarders to work together more seamlessly. Online booking, real time tracking and the demands of manufacturers operating leaner, faster supply chains make industry-wide cooperation and communication essential.

That's not to say competition isn't as fierce as ever. But in order to compete, the modern air cargo operator needs to be technologically proficient and globally savvy, and that means talking to and working with other players to ensure the smooth transit of cargo.

The ten influential leaders featured here share an ability to think ahead of the curve to find dynamic solutions that better not just their own companies or organizations but the air cargo industry as a whole.

Note that there are no repeats from our 2004 list of air cargo's most influential leaders. Last year's impressive group of leaders' influence in the industry hasn't diminished in the slightest. But in a business as international and diverse as air cargo, we thought it was best to give recognition to a new group of leaders.

The following pages provide a sampling of leaders who represent various aspects of an evolving industry. We believe they also represent the ingenuity and forward-thinking vision that makes air cargo such a fascinating industry for this magazine to chronicle.

Peter Ong Boon Kwee

Peter Ong Boon KweeWhile most of the air cargo industry has been stamping its feet for years for liberal access to world trading markets Singapore has been doing something about it.

Always a leader in free trade, Singapore moved to the forefront early last year of the air trade world's push for open skies for cargo. Then the country's permanent secretary for transport, Peter Ong announced at the Air Freight Expo 2005 an open skies treaty for all-cargo services among Southeast Asian nations along with an offer to have others join in the free trade for freighters.

For Ong, a former top graduate of the masters program in business administration at Stanford University, the move on air cargo was part of a larger plan to expand Singapore's role in air, sea and land transport through an open and transparent approach to regulation. "We hope that this opens the door for others to join us in this very important area in fostering greater trade," Ong said in a keynote address the day Singapore signed the agreement with Thailand and Brunei.

Since then, he has been named permanent secretary of trade and industry, replaced as permanent secretary for transport by Choi Shing Kwok, but the open skies offer remains open.

Chuck Cocci

Chuck CocciAs vice president of global air freight services at UPS Supply Chain Solutions, Cocci is part of a team, some like him who came over in the Fritz Cos. acquisition and others brought in more recently, that has built the business into a global forwarding power with its own growing identity in the market. The UPS division's net revenue has grown nearly 20 percent in the last two years and at nearly $2.4 billion in revenue in 2004 it ranked in the top tier of global forwarders.

It is also one of the handful of businesses at the heart of a growing convergence of services in the transport and logistics world, like the larger DHL Danzas Air & Ocean a piece of a global behemoth aimed at providing the canonical one-stop shop.

Whatever crossover there may be with UPS's huge airline assets isn't terribly evident in the daily cargo market, where instead UPS SCS is forging its own brand as a global heavyweight and taking an increasingly prominent role in carrier-forwarder relations.

"It's work," says Cocci, a 30-year veteran of the industry who moved to Fritz from Lep International. "Negotiating the deals is the easy part. The real work begins when you start to execute. There are often unrealistic expectations on both sides and it takes a lot of time of working with each other before you really get it the way you want it to work."

Carrier-forwarder relations are improving, he says, but there is still mistrust. Where some of that mistrust used to include such practices as backselling it is now more focused on day-to-day business concerns. "Are you getting the best rates? The fuel surcharges are an example of that - are some carriers discounting off the surcharge? That's where the mistrust comes in."

Robert Arendal

Robert ArendalStandardization has been elusive in the air cargo industry. Operating in different nations under disparate rules, airlines and forwarders struggle to synchronize computer systems and cargo is packed in various ways depending on who's doing the handling and loading.

There are few areas where the lack of standardization is more glaring, or damaging, than in perishables shipping, that niche of the air freight business in which poor packaging and/or a slight change in temperature can lead to a spoiled product and a loss for the cargo operator.

Enter the Cool Chain Association, a non-profit organization founded in 2003 by 40-plus year industry veteran Robert Arendal to develop standards for perishables transport by air. The association aims not only to set uniform standards for carrying the delicate cargo, but also to promote a system for certifying entire "cool chains" so shippers can be confident flowers, food and other perishables cargo will not perish en route.

The CCA this year published a set of "Cool Chain Quality Indicators," guidelines that mark the first attempt to set broad standards for handling perishables and temperature sensitive products. CCA has already begun certifying operators as CCQI compliant.

Arendal was part of the management team that founded Cargolux Airlines in 1970. Arendal became the carrier's senior vice president and later deputy CEO.

Arendal is also credited with being one of the founders of The International Air Cargo Association, and was its first chairman. He remains active in TIACA and works on various air freight initiatives through his air cargo management company, ra associates.

Ulrich Ogiermann

Ulrich OgiermannCargolux Airlines has long demonstrated that an all-cargo air carrier based in the heart of Western Europe can be a financial success. The airline founded in 1970 shows no signs of slowing down and in 2004, President and CEO Ulrich Ogiermann's second year at the helm, surpassed the $1 billion revenue mark for the first time in its history. Ogiermann, a former macroeconomics lecturer at the University of Frankfurt, knows that the key to the airline's success is choosing the right lanes on which to operate its freighters. That means figuring out where profitable air cargo is moving and following its path.

"We continue to adapt our structures to grow in line with the global air freight market," he explains. "We continue to accompany our customers on potential growth markets and reinforce our position at the crossroads of the major trade flows worldwide."

Ogiermann spent nine years at Lufthansa before joining Cargolux in 1998. He was Lufthansa's Americas cargo route manager and later as the German carrier's cargo general manager for southern Africa. Ogiermann spent four years as Cargolux's senior vice president for sales and marketing before becomng chief executive in 2003.

Ogiermann oversees a Cargolux fleet consisting of 13 747-400 freighters, with two more of the workhorse cargo aircraft to be delivered this year and in 2006. The CEO says high daily utilization of aircraft is a top priority, as well as ensuring that the airline's operations mesh seamlessly with the 20 trucking contractors that help move Cargolux's freight.

Joey Carnes

Joey CarnesBAX Global once was No. 2 in a United States integrated heavy freight air cargo business that was well on the way to becoming a one-carrier market. Despite a strong presence as a forwarder in the international arena, the company's finances were deteriorating and its core air freight market was dragging. BAX's balance sheet was down even as the larger economic indicators showed the air cargo business growing, and its corporate parent was considering how to package the business for a sale.

But BAX Global today is a remade company, an energetic competitor in high-end logistics business around the world and finally, in a seemingly improbable turnaround, solidly profitable and growing.

Joey Carnes, who started his career as an agent with U.S. Customs, led a business with $2.44 billion in revenue last year and a $56.2 million operating profit. The nearly 4 percent operating margin in the fourth quarter in the face of rising fuel prices and a capacity seller's market was striking evidence of how Carnes and his team have redirected a carrier in mid-flight, tapping into larger logistics and time-definite transport trends.

"The challenge was to align our business model with what the market was actually buying," said Carnes. "Fortunately, we started this process in 1999, before 9/11 and the dot-com explosion. Our view is not to be the biggest player in the market but to be among the top five in every market we participate in and to be the leader in terms of delivering what we say we will deliver."

As an asset-based company and a logistics player, BAX is at the meeting point of debates over the role forwarders and carriers will play in supply chains.

The onetime executive vice president for North America at the Fritz Cos. doesn't see the models blending on the international side. "Relationships between carriers and forwarders will be stronger but they will remain arms length," Carnes says.

Jim Friedel

Jim FriedelJim Friedel has less than a decade in the cargo industry, but it's a decade that has been one of the most tumultuous in airline and air freight history.

With 14 freighters in his stable at Northwest Airlines, he commands the only international all-cargo business among American combination carriers, but his larger role has embodied the freight industry's tortuous path towards e-commerce.

Along with United Airlines and Air Canada, Northwest Airlines was a founding member of Cargo Portal Services, one of the three main booking portals that have evolved in the international air freight business and Friedel has used his position to boost not only CPS but the larger significance of technology. It's a key issue as the air cargo business adapts to increasingly lengthy supply chains and shipper demands for visibility and flexibility.

"There is a lot of negativity out there about e-commerce in cargo and I can't understand why," says Friedel. "Everyone is making progress. There are three approaches in booking (CPS, GF-X and EzyCargo) and all three are working. There may not be the kind of industry-wide, single-minded push that some had thought was needed, but if you take the sum total of all the initiatives out there, the air cargo industry is making good progress.

"The air cargo industry is a latecomer to e-commerce because we spent years trying to use technology to transform relationships."

Friedel came to the airline industry in 1991 as a specialist in the corporate finance and passenger reservations departments at Northwest. But his understanding of freight dynamics goes back to Mercer Management, where clients included railroads, truckers, distribution centers and overnight express carriers.

Alexey Isaikin

Alexey IsaikinWhen Alexey Isaikin was working on cost management for the Soviet Union's military in the 1980s, project cargo was a minor and little-noticed business in the air freight market. Today, it's worth billions of dollars around the world, thanks partly to the dissolution of the Soviet Union, which left huge, lumbering military cargo transports looking for goods to carry. The world events also thrust Isaikin onto the commercial stage, where he turned his career in mostly military aviation into a business that, with a host of cargo experts in the former Soviet republics and in the West, has forged a new industry in air cargo.

"The potential of this market we value at $2.5 billion, which is virtually 10 times more than the market has achieved today," Isaikin has said.

It's also a business that Isaikin has used as a platform to take Volga-Dnepr beyond its project cargo niche into broader areas of dedicated freight transport, first by seeking Western financing and then by launching a new airline, AirBridge Cargo, built on trade between Europe and Asia. Russia, he said in launching ABC, is the bridge.

An economist by training, he started his career as a planning engineer for the Soviet Air Force. During the late 1980s, he worked at the Ulyanovsky Aircraft Manufacturing Complex as an executive officer responsible for fulfillment of the USSR Military Air Transportation Department contracts for AN-124 aircraft delivery.

When the Soviets shut down the AN-124 program, Isaikin retired from the military but the best days of the AN-124 were still to come. In 1990, he headed a group of entrepreneurs and enthusiasts to form Volga-Dnepr in the city of Ulyanovsk. It was Russia's first private airline and the first civilian customer of the AN-124-100.

He also has taken a leading role with international groups, as a member of the Russian Committee for relations with the International Civil Aviation Organization and on the board of The International Air Cargo Association.

Andreas Otto

Andreas OttoNo airline in the world carries more freight internationally than Lufthansa Cargo and that puts Andreas Otto at the forefront of the direction of the industry and relations between airlines and forwarders.

It's a role Otto is comfortable and familiar with, given his background in both fields. As well known as he as perhaps the most recognized voice for Lufthansa around the world, most of his professional career actually has been spent as a forwarder. Just 43 years old, he worked at German logistics specialist Rhenus from 1994 until 2000, rising to senior vice president of sales and ending as head of sales and marketing on the company's management board.

He joined Lufthansa's executive board in 2000 as an expert in sales and marketing, a position that has seen him oversee the airline's expanded Business Partnership program with forwarders and an expanding alliance strategy that puts him at the top of the WOW cargo alliance.

Both programs, the graduate in business administration from the University of Cologne noted at an airline meeting last year, are aimed at making the airline a key player in global supply chains by expanding its ability to bring traffic into its real asset, its growing network.

The airline industry "faces enormous challenges," he told reporters last year. With their huge need for capital and cash to keep freighters flying, he says, the air carriers "are shouldering the burden in terms of investment and risk."

Airlines, he says, must satisfy customers who increasingly are accustomated to what he calls Web speed. "With end-customers using the Web demanding fulfillment in a very short space of time, we must match the Web speed and reliability," Otto says. "There must be a parallel of Web speed and logistics speed."

Mike Tomasulo

Mike TomasuloRelationships with airlines appear at times to be almost as important to Kuehne & Nagel as its relationships with customers. That's because its historical role as an almost uncommonly multinational player puts the Switzerland-based forwarder on the leading edge of logistics and makes its network especially important in realizing its business model.

Mike Tomasulo's history with Kuehne & Nagel isn't terribly long - he joined the company only at the end of 2002 - but Tomasulo has been a thoughtful and vocal spokesman on carrier-forwarder relations during a long career with some of the world's largest forwarders.

"Our relationships with the carriers are getting stronger and that is driven by our preferred carrier program," said Tomasulo, director of trans-Pacific air cargo operations at Kuehne & Nagel. Working with Senior Vice President Rainer Wunn, Tomasulo and Kuehne & Nagel have built a strong network out of the strong carrier relations in one of the world's most important trading areas, at the same time putting close attention to the areas of cost and pricing that drive business relationships.

A former senior executive at EGL and at Danzas AEI, Tomasulo has argued hard for government's to pick up a larger share of growing security costs. But the airline industry also must do its part by bringing down its operating and administrative costs, he says. "What you see with many of the airlines is really a white-collar industry with a lot of waste and a lot of duplication of jobs," he said.

Ole Ringheim

Ole RingheimAs senior vice president for air freight at Exel, Ole Ringheim commands a forwarding business that feeds billions of dollars in goods to the airlines each year. Built out of a series of mergers that has made Exel a $12 billion logistics group, the company has a keen interest in airline capacity and the health of its providers.

Ringheim has spoken of that interest frequently in recent years at industry meetings, where his plea has gone beyond the old issues of rates and service into the forward-thinking realm of closer relationships that include greater two-way dialogue.

Air freight, he says, is "an enabler in the global supply chain proposition."

Ringheim taken a broad industry role as a member of the advisory council of Global Freight Exchange, the booking portal, part of the leadership role he has taken in technology initiatives that cut across forwarder and airline boundaries.

The proper use of data, he says, "is an industry-wide problem" that can help improve customer service for shippers.

Ringheim joined Exel in Hong Kong in 1991 and was country manager in the Philippines before becoming director of global air freight in 1999.

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Copyright 2004 Commonwealth Business Media

 
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