CEVA’s Sidler calls for air cargo collaboration

CEVAÆs Sidler calls for air cargo collaboration    A senior executive of a large freight forwarder said while the worst of the economic crisis may be over, new market conditions will dictate the need for changes in the way the air freight business is managed going forward.

Sidler

   “Volatility is the new normal,” Bruno Sidler, CEVA Logistics’ chief operating officer, told attendees at The International Air Cargo Association’s conference in Amsterdam on Wednesday. “We don’t have stability in capacity levels, rates, fuel costs, or currency exchange rates.”
   Sidler said shipper inventories are being held at minimal levels, creating immense pressure on cycle times. “Forecasting has been a roll of the dice. That must improve,” he said.
   Forwarders, in particular, have struggled with this change in air freight business conditions.
   “When we went into the crisis it was the airlines that took the pain,” Sidler said. He cited International Air Transport Association figures estimating airlines' losses at $26 billion in 2008 and 2009. Civil aviation as an industry had a combined loss of $7.9 billion from 1993 through 2010.
   'Coming out of the crisis it was the forwarders turn to bleed,' he said, referring to the scramble to secure scarce capacity to meet shipper demand. 'Forwarders had to eat some losses. Shippers without leverage were pushed to the wall.”
   Sidler called on shippers, forwarders and airlines to build trust though transparency, risk sharing and performance-based gain sharing. He cited common interests in supply chain improvements, long-term commitments, and compliance and security as the basis for this collaboration.
   Sidler also challenged forwarders to do more than “ride on the backs of the asset providers” by refocusing on service delivery and productivity increases.
   Speaking to shippers at the TIACA Air Cargo Forum, he suggested the need to develop long-term, binding contracts with their service providers.
   “During the downturn the procurement department took over and years of work on achieving total supply chain excellence went out the window,” Sidler said. He called this a short-term view that has been detrimental to the overall understanding of total cost and achieving stability.
   “It is not business as usual,” he warned. “There are more crises to come and the time intervals between them will be shorter.”