Beyond the confluence of cyclical financial and commercial trends, a range of other issues affect the global air cargo industry like varying government business and environmental regulations, market liberalization, volatile fuel prices, among others.
While the potential risks and challenges will always be there, experts are convinced the industry is still headed for growth with demand for air freight increasing as the global market opts for faster and better ways to get their goods delivered.
According to Boeing's World Air Cargo Forecast 2018-2037, air cargo traffic will more than double in the next 20 years and global freighter fleet will increase by over 70 percent to 3,260 planes from the current 1,870. The industry's revenue ton-kilometers (RTK) in 2018 jumped by 4 percent with cargo revenue estimated to have exceeded $100 billion.
At the two-day Middle East Air Cargo and Logistics Conference (MEACL) held on January 29-30 at Dubai South, industry leaders discussed at length pressing issues challenging the sector while expressing hope for better times.
The two-day conference opened up discussing the topic “The Big Picture on Air Cargo & the Global Supply Chain” with Thomas Crabtree, Regional Director Airline Market Analysis for Boeing, responsible for Europe, the Middle East and the Commonwealth of Independent States (CIS), as moderator.
Nadia Abdul Aziz, President of the National Association of Freight & Logistics (NAFL-UAE), Henrik Ambak, Emirates' SVP Cargo Operations Worldwide and Vladimir Zubkov, Secretary General of TIACA, talked at length about the issue.
Zubkov said the industry needs unity, political will and a strong partnership to overcome its challenges and facilitate much needed changes to keep up with the times, particularly in technology.
Tom Erling Mikkelsen, Head of Airfreight at Marine Harvest, shared later in the day how Norway's salmon industry keeps the airlines busy with more than 6 million salmons flown all-year-round by air to different countries.
Norway's prospect for salmon export looks better this year with solid growth emanating from the Chinese market.
On Day 2, Turkish Cargo CCO Turhan Ozen, Oman Aviation Group Business Development Executive Logistics & Cargo Sultan Al Rawahi, Oman Air Cargo Customer Service Manager Gianluca Marcangelo and ALS Logistics Solutions Marketing Executive Alexandra Deeva shared their thoughts on investments in air cargo and logistics infrastructure. Liege Airport VP Commercial Steven Verhasselt acted as the moderator.
All agree disruptive technologies will be the main driving force in aviation, air freight and logistics, as well as the supply chain, with many companies already applying AI and high-tech systems into their operations to speed up the process.
Istanbul Airport, the world's newest and biggest international airport, unveiled on October 29, 2018, Turkey's 95th Republic Day, is laden with technology and boosts of modern facilities, including in cargo, and enjoys the advantage of being in the crossroad of Europe and the Middle East.
Ozen said Istanbul Airport will enable Turkish Cargo, a subsidiary of Turkish Airlines which has a fleet of 333 aircraft serving 124 countries, aims to haul as much as 3 million tons of cargo by 2023 and one of the top cargo brand carriers globally by then.
And that goal is attainable through the company's investment on technology and better facilities. Marcus Berg, Dubai South Director of Business Development-Logistics District, disclosed the pioneering effort of the company to provide the local and regional e-commerce sector with a competitive platform through the creation of EZDubai, a 920,000 sqm purpose-built e-commerce zone within Dubai South's Logistics District set to unlock vast potentials in online commerce.
Berg said EZDubai provides a range of logistics facilities and business solutions designed for startups, SMEs, innovation labs and incubation centers to support local, regional and trans-continental businesses serving both business-to-business and end consumers.
Fatima Ait Bendawad, Business Development Manager Aid & Relief Services, DHL Global Forwarding and Nick Harris, Cargo Sales Director-Middle East Air Charter Service, enlightened the delegates at the crucial role of air freight and logistics in bringing relief to people in conflict zones and those affected by natural disasters. Liana Coyne, Director Coyne Airways, an Oxford-educated lawyer engaged in various charity and philanthropic projects in poor communities across the world, acted as the panel moderator.
Other notable speakers at the event include—Sanjeev Gadhia, Chief Executive Officer of the Kenya- based Astral Aviation; Gregory Gottlieb, Managing Director, Airships Arabia; Sunil Malhotra, Managing Partner, Bchain Consultants; Palaniappan N, DNATA Business Improvements Manager, and; Alan White, Vice President Operations at RSA National.
Mohammed bin Rashid Aerospace Hub and EZDubai open for business
Dubai South's Aviation District has formally been renamed in January as the Mohammed bin Rashid Aerospace Hub in honor of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, who is widely credited for transforming Dubai into a global business and financial center.
“With the aviation industry as one of the key growth industries, it is only fitting to name this incredibly important hub in his honor. The Mohammed Bin Rashid Aerospace Hub remains committed to elevating Dubai as the region's aerospace capital by ensuring that we advance through excellence and deliver value that will benefit millions,” said Khalifa Al Zaffin, Executive Chairman of Dubai Aviation City Corporation (DACC) & Dubai South.
At the renaming ceremony, EZ Dubai was simultaneously launched as the new e-commerce zone within Dubai South's Logistics District.
Experts estimate e-commerce in the GCC region to grow to US$24 billion by 2022 and EZDubai's six dedicated areas—Last Mile Centers, E-Fulfillment Centers, Repair & Return Centers, Supply Centers, Business Blocks (shared buildings), and Business Blocks for Regional Headquarters—are tailored for the industry's growth.
The Mohammad bin Rashid Aerospace Hub, with AED 17 billion total government and private sector investments, is designed to create an effective value chain for the aerospace sector & increase the GDP contribution of advanced industries to the emirate's economic growth. Spread over 6.7-sqm of land, the hub comprises of the commercial strip, maintenance and technical support, business aviation, education and R&D.
The Aerospace Hub is home to a five-star VIP Terminal facility which hosts some of the world's leading Fixed Base Operators for private jets, including Falcon Aviation, JETEX, and Jet Aviation, providing major business entities bespoke aviation services and seamless connectivity, and proximity advantages to the world's largest airport in the making, the Al Maktoum International Airport.
It also serves as the E2 Event and Exhibition Centre, a dedicated exhibition zone and permanent home of the Dubai Airshow and the Emirates Flight Academy.
Dubai South is envisioned to become a smart and sustainable city, preferred as the place to live, work and invest for at least one million people. As an economic platform, it is home to leading world events such as Expo 2020 and the Dubai Airshow, expected to provide at least 500,000 jobs and become an important hub for global trade and commerce.
TALLIN: The world’s first digital nation, Estonia, has once again demonstrated its unparalleled tech capabilities with the introduction of the first robot courier prototype.
Created by the Estonia-based Cleveron, a company specializing in creating robotics-based parcel terminals and developing last mile click and collect pickup solutions for retail and logistics sectors, the self-driving robot courier is designed to manage the growing ecommerce parcel volumes more effectively.
Cleveron said the self-driving robot courier will arrive at the client’s house, place the parcel to the personal parcel locker and technology,” said John Crecelius, Walmart’s VP of Central Operations.
“BrainOS is a powerful tool in helping our associates complete repetitive tasks so they can focus on other tasks within role and spend more time serving customers.”
Dr. Eugene Izhikevich, CEO of Brain Corp., said the AI-powered machines can safely maneuver themselves even in crowded environments.
“BrainOS technology allows robots to effectively and safely function in complex, crowded environments, ensuring increased productivity and efficiency across applications. We look forward to continuing to work alongside Walmart to help build intelligent, connected stores,” he said in a statement.
Brain Corp. specializes in the development of intelligent, autonomous navigation systems for everyday machines. The company is funded by the SoftBank Vision Fund and Qualcomm Ventures.
SAN DIEGO: If you’re shopping at Walmart, don’t be surprised seeing robots cleaning up the aisles as the world’s largest retailer opts for the unpaid machines to tidy up its stores across the United States.
The San Diego-based software tech company Brain Corp. says it’s providing AI services to Walmart’s fleet of commercial floor scrubbers with autonomous navigation and data collection capabilities, all tied into a cloud based
reporting system.
Walmart’s 360 BrainOS-powered machines should be all in operation by January 31, 2019. Brain Corp. explains store personnel will first take the machines to an initial training ride to quickly map a route before pressing a button to activate them to self-clean the aisles.
The robots use multiple sensors to scan its surroundings for people and obstacles, providing the industry’s highest level of safety and performance, Brain Corp said.
“We’re excited to work with Brain Corp in supporting our retail operations and providing our associates with a safe and reliable technology,” said John Crecelius, Walmart’s VP of Central Operations.
“BrainOS is a powerful tool in helping our associates complete repetitive tasks so they can focus on other tasks within role and spend more time serving customers.”
Dr. Eugene Izhikevich, CEO of Brain Corp., said the AI-powered machines can safely maneuver themselves even in crowded environments.
“BrainOS technology allows robots to effectively and safely function in complex, crowded environments, ensuring increased productivity and efficiency across applications. We look forward to continuing to work alongside Walmart to help build intelligent, connected stores,” he said in a statement.
Brain Corp. specializes in the development of intelligent, autonomous navigation systems for everyday machines. The company is funded by the SoftBank Vision Fund and Qualcomm Ventures.
For over 50 years, the annual Consumer Electronics Show (CES) in Las Vegas has been the world’s largest platform showcasing cutting-edge electronics and tech products. But this year the event also played host to global auto makers with new cars and trucks now laden with technology.
Daimler Trucks, which made record profits in its history by selling more than half a million trucks all over the world in 2018, was among the auto makers that participated at the January 7, 2019 CES.
Martin Daum, Daimler Trucks & Buses CEO and member of the Board of Management of Daimler AG, said it’s only fitting to launch their latest truck at the event as “the modern truck is all about technology: 400 sensors on board, roughly 100 million lines of software code, hundreds of thousands of our trucks worldwide constantly online.”
In his speech at the CES, Daum also noted 2018 was the company’s most successful year in its history with record sales mainly driven in the US.
“Our strong results are due to our customer focus. We want to make our customers better every day – and thus, feel an obligation to innovate. We build to provide solutions, making sure to develop and to offer the right product at the right time – and with the quality and reliability our customers deserve to expect from Daimler,” the CEO said.
New Investment
At the event, Daum announced Daimler Trucks will invest EUR 500 million (around USD 570 million) in the coming years and will create more than 200 new jobs in its global push to bring highly automated trucks (SAE level 4) to the road within a decade.
Regionally, the US would pilot the Level 4 concept in building highly automated trucks. Some 200 positions for mechatronics engineers or robotics specialists with IT and programming skills will be filled at the Daimler Trucks & Buses new Automated Truck Research & Development Center in Portland, Oregon for this project.
Daimler said the center’s experts are dedicated to all aspects of developing, testing and validating automated vehicles. Plus, its engineers work in close cooperation with their colleagues in the research and development centers at Daimler Trucks locations in Stuttgart (Germany) and Bangalore (India), thus forming a global network.
The company said a crucial success factor for the development of a safe and reliable level 4 highly automated truck is a closely coordinated system of engineering and technology development.
Level 4
In commercial trucking, level 4 is the natural next step after level 2, increasing efficiency and productivity for customers, cutting costs per mile significantly, Daimler said noting that it’s skipping the intermediate step of conditionally automated driving (level 3) as it does not offer truck customers a substantial advantage compared to the current situation with no corresponding benefits to compensate for the technology costs.
Level 4, which is Daimler’s current goal project, means there’s no driver on board at least under certain conditions.
“You may now be wondering why we skip level 3. We skip it because in the truck world all CASE technologies must also make a viable business case for our customers – otherwise they don’t invest in them. A level 3 truck is no business case – it means higher technology cost and investment without corresponding benefits. So, we’re heading directly for level 4 – and we’re doing so in a very deliberate way,” Daum, Daimler’s CEO, explained.
At the event, Daimler debuted the Freightliner Cascadia which offers partially automated driving features (level 2), making it the first-ever partially automated series production truck on North American roads.
Daum said the company pioneered automated trucking and was also the first to get road license for an automated commercial vehicle. But its accomplishments won’t stop there.
“Now we take automated trucking to the next level: we’re ready to launch the first partially automated new Freightliner Cascadia in 2019 – and next, we tackle highly automated trucks. Highly automated trucks will improve safety, boost the performance of logistics and offer a great value proposition to our customers – and thus contribute considerably to a sustainable future of transportation,” said Daum.
In 2015, Daimler Trucks introduced in the US trucking industry its highly automated trucks with the launch of the Freightliner Inspiration Truck. Since then other innovations were introduced in the trucking industry with Daimler leading the pack.
Level 2 of Freightliner Cascadia means the driver remains in control, but is supported by an advanced driver assistance system – regarding braking and accelerating as well as lane keeping.
“The benefits are significant: more safety, better fuel efficiency, and lower emissions. We have defined our strategy to move to the next level – beyond level 2. We are here today to announce two major updates in this regard,” explained Daum.
The revolutionary Level 4
Level 4 trucks offer enormous advantages in many areas says experts as they enhance safety in traffic thanks to a redundancy of systems and a multitude of sensors and systems that never get tired or lose attention – because today, a great majority of accidents are still due to human error.
Level 4 highly automated trucks also improve efficiency and productivity, among other things, through higher utilization of the vehicles – practically around the clock. They also make it possible to travel during light traffic times, for example at night, and thus avoid traffic jams by intelligent route management.
This has positive effects for truck customers and for the entire economy: the competitiveness of an economy is strongly correlated with the efficiency of logistics. This aspect becomes more and more relevant as global road freight volume is expected to more than double between 2015 and 2050.
“Level 4 trucks will have enormous benefits. First, they will – compared to level 2 – increase safety even further. Second, they will boost performance of transportation – for example by running at night much of the time, in less dense traffic,” said Daum. “Third, they will help society cope with ever-growing volume of freight – and thereby enable further economic growth and prosperity. Global road freight volume is expected to more than double between 2015 and 2050.”
“Fourth, highly automated trucks will make our economy more competitive, as the competitiveness of an economy is strongly correlated with the efficiency of logistics. Fifth, and very important for this technology to gain market acceptance: highly automated trucks will offer a tremendously strong value proposition for our customers. They will cut cost per mile considerably,” he added.
The German CEO said the transformation won’t happen overnight and will take time but it’s a good start to a future laden with technological advancements.
“All said, highly automated trucks will be great means of transportation that take logistics to the next level. They will move the world forward – and that’s what we at Daimler Trucks have stood for, for more than 120 years and counting,” he concluded.
Bangladesh’s stormy election ended on December 31, 2018 with Prime Minister Sheikh Hasina, 71, securing her third consecutive term with a landslide victory.
The daughter of Bangladesh’s founder, Sheikh Mujibur Rahman, Hasina has been in office since 1996 and is credited for steering Bangladesh from being a least-developed nation to middle-income thanks to investor confidence in its burgeoning multibillion textile industry.
Under Hasina’s watch, poverty has also been brought down to around 20% and 90% of the country’s 165 million people now have access to electricity, according to reports.
The Bangladesh matriarch is also being praised for opening up Bangladesh’s doors to over 1 million Rohingya Muslims fleeing persecution and military crackdown in Myanmar.
With her win, Bangladesh is again pinning hopes on Hasina to lead the country to new economic gains with the rest of South Asia gaining strength economically.
Sustaining economic growth of 5.7% per year since the mid-1990s, peaking at 7.9% in 2018, Bangladesh has remarkably improved its country status from that of a poor nation in South Asia to a rapidly developing economy earning the tag the “next Asian Tiger.”
The Asian Development Bank (ADB) says “Few developing countries have been able to maintain these levels of growth consistently over such a long period. Average incomes have grown. Since the mid-2000s, per capita gross domestic product has increased by 4%–6% per year.”
Bangladesh is currently working to reach “upper-middle-income country status by 2021”—the year that marks the Republic’s 50th Independence Day. ADB says the country must first tackle many challenges to reach this goal but concluded “Bangladesh has shown that there is no river that it cannot cross to achieve its goals.”
Bangladesh’s massive garment industry which in 2017 had an export value of US$30 billion is largely fueling its economic growth. The industry has over 4,500 factories and employs over 3.6 million, women accounting for about 85 percent.
Infrastructure reforms
Various trade bodies and organizations have called on the Bangladeshi government to initiate reforms on the country’s seaport and airport facilities, roads and other basic infrastructure to make it easier for readymade-garment manufacturers to compete globally.
This year, the government’s long-term ambitious plans to help the industry that brought it prosperity will begin to roll out. These include opening up for cars, trucks and trains the new 6-km bridge over the Ganges River called the Padma Bridge, shortening travel time by several hours between routes.
Bangladesh is surrounded by about 700 rivers. Two major rivers separating the capital from the south, east and north, force garment manufacturers to transport their goods via ferries first before reaching land.
Minister Obaidul Quader who oversees Bangladesh’s roads and bridges said the four-lane and two-storey Padma Bridge with funding from the Chinese government will considerably boost trade and economic activities in the country.
In 2015, the government of Bangladesh also teamed up with Japan to build the deep-water port in Matarbari, about 100-km south of Chittagong, the country’s major port station where the garment products are transported.
India has also offered help to Bangladesh to address congestion at Chittagong Port and make it easier for its export textile products to be transported.
Its proposal is to make use of the Indian Pangaon to Haldia routes to be loaded on to Colombo or Singapore-bound ships, completing the process within four days instead of the current 12 days via Chittagong.
Bangladesh, which is expanding the capacity of Chittagong Port, hasn’t formally agreed to the proposal despite India’s insistence that its two transshipment ports will ultimately cut down shipping costs benefitting Bangladeshi garment exporters.
Over the past four years, trade between India and Bangladesh grew 38 percent to US$9.1 billion. In September 2018, Bangladesh agreed to allow India to use its Chittagong and Mongla Ports to transport cargo to its eastern states.
Reforms needed
Bangladesh has succeeded in improving logistics through modernizing customs clearance procedures. But experts said the country needs to step up its reform plans to catch up with India and Pakistan which are building on the strength of their transportation sector to facilitate commercial activities easier.
The World Bank says Bangladesh should initiate plans to improve systems and procedures at its main Port of Chittagong and its cargo-handling technology. Old systems slow down processing time and prevent producers from developing efficient supply chains from the factory to the buyers’ warehouse, it added.
Global logistics leader Agility in a report titled “Agility Emerging Markets Logistics Index 2018” pointed out many reforms are still needed in Bangladesh to help its economy.
Bangladesh ranked 23rd in Agility’s logistics index and acknowledged its potential to emerge as the new Asian Tiger given the right formula after posting 6%+ economic growth for the past seven years.
The growth has significantly reduced poverty in the country but bad death and overreliance on the textile and garment industry put it at risk.
“Many reforms are needed, however. The government is planning to cut red tape so that it takes seven days to start a business, rather than 19.5, and reduce the time it takes for a company to connect to the national grid to 28 days, from 404,” said Agility in its report.
Its garment industry is also facing risks from emerging markets in Africa offering cheaper labor like Ethiopia. Bangladesh’s fashion & textiles exports amounted to $35.6bn in 2016; Ethiopia’s were just over $100m.
“Possibly the biggest concern for Bangladesh going forward is whether its core industry of clothing, textiles and ready-made garments is vulnerable. There are fears that it could lose out to new competing countries in the Horn of Africa, especially Ethiopia. While many clothing manufacturers are indeed setting up production there, the gulf between them remains enormous,” said Agility.
Another threat is that of automation which means production could be done anywhere with very significantly reduced overhead costs among manufacturers.
Agility said although it has taken a long time for technology to be utilized in the garment sector, its impact is now being felt even in the United States.
“Tianyuan Garments, a Chinese firm that produces for brands such as Adidas and Armani, has invested $20m in a 100,000 sq ft factory in Little Rock, Arkansas. Scheduled to open in 2018, the factory will have 21 robotic production lines supplied by SoftWear Automation (staffed by so-called ‘sewbots’) & will be capable of making 1.2m t-shirts a year,” said Agility.
“The Chairman of Tianyuan Garments reckons that, in a completely automated production line, the cost of human labour works out to be about $0.33 per shirt. In Bangladesh, you pay about $0.22 in labour costs at the moment to make a denim shirt,” it added.
The same labor-intensive approach in the United States cost $7.47. While widespread adoption is years away, Bangladesh’s economy is under threat from sewbots. Sooner or later, it needs to diversify.
Businesses are generally profit-driven. Companies are always on the lookout to save expenses on operations and personnel to ensure profit whilst providing customers quality service.
But no matter how much planning is done some companies still incur losses in different ways. That’s where reverse logistics could potentially reduce waste and contribute to company profits.
Defined as dealing with all things related to the reuse of products and materials, reverse logistics is more precisely the process of moving goods from their typical final destination for the purpose of capturing value or proper disposal as well as the management and the sale of surplus or returned items from the hardware leasing business.
The entire supply chain gets reversed in the reverse logistics process where companies have to correctly identify and categorize returned products for disposal. If done properly and wisely, waste could be turned into profits.
Dealing with returns
Reverse logistics seldom receive attention until something important goes wrong. Many executives go out of their way to avoid dealing with returns because it can be ugly and is thought of as nothing more than a cost of doing business.
An average manufacturer spends 9 to 15 percent of total revenues on return which creates a huge impact on customers, resources and bottom line. In fact, improving reverse logistics can help company increase revenue up to 5 percent of total sales. Poor reverse logistics functions could have a very bad effect on customer relationship and on the financial health of the company.
Companies lose a huge amount in profits, customer equation is severely dented and the external liabilities that get created have big impact on the business. But if reverse logistics is efficiently managed, companies can earn profits, improve customer relations and minimize liabilities.
Some companies are highly cognizant of the importance of reverse logistics in the supply chain and offer tailor-made end-to-end return solutions to customers.
“We give its due relevance to reverse logistics and understand how much impact it creates on profitability of a company,” said Ryan Oliver, National Head-Contract Logistics, Agility Logistics Pvt Ltd.
Oliver explained a high level of coordination and route planning among the warehouse team helps to optimize the vehicles and resources being developed on the daily basis. Load consolidation helps to bring down high transaction cost, enabling the company to trickle down the savings to customers.
Most companies face huge challenges in the management of reverse logistics despite having a robust primary and secondary distribution network. It is usually found that vehicles used for distribution of finished goods can seldom be used for customer returns.
More often than not such returns accumulate overtime causing congestion at the end user. It ultimately delays accounting and passing of credit notes to the end user.
Harpreet Kholi, Zonal Head-Operations, Future Supply Chain Solutions limited, said: “There are many challenges organization has to face while processing the reverse logistics, the team who packs and processes reverse for the point of sale are not from the supply chain background, and they are not specialized in packing, etc. which increases the probability of damage/ shortage in transit.”
Optimizing reverse supply chain
Agility maintains a high level of competition between the warehouse team and its customers.
“We help the team in route planning and in optimizing vehicles and resources deployed of the management of reverse logistics,” Oliver explains.
“It is important to understand that a large part of the company’s finished goods, particularly equipment and appliances right from the mobile phones to air conditioners, refrigerators, engineering products, etc., are dependent on a strong ‘service back-up’. A strong service backup is totally dependent on a reliable reverse logistics solution and network.”
Inefficiency in reverse logistics has a cascading negative impact on sales, forward logistics and the supply chain as a whole. A poor reverse logistics network leads to erratic vehicle deployment which results in high cost of transportation. Moreover, unprocessed credit notes due to poor reverse logistics, leads to customer dissatisfaction and reduces level of reorders from end users.
Reverse profit
Mismanaged reverse logistics has a horrendous impact on customer relationship and the financial health of a company. Often companies tend to ignore reverse logistics process until something goes wrong.
If reverse logistics is resourcefully managed then companies can explore hidden profit possibilities, improve customer relationships and minimize liabilities all in a single shot.
Executives often have the perception that if they invest the amount spent on processing returns to other supply chain activities to elsewhere they would yield greater results. Therefore, they just focus on trying to reduce the cost of return processing. In reality, reverse logistics costs are less than 4 percent of total supply chain costs for most companies.
And while maximizing efficiency is always important. Reverse logistics can also provide a wide variety of opportunities for improvements, from customer service and returns processing to supplier relations and an unexpected revenue source.
There are several key areas where companies can positively impact their revenue with reverse logistics activities. Returned products are good source of revenue. Companies save more and earn more when they ensure timely delivery which is a result of proper time management involved in processing of return of goods.
There are activities like refurbishing, repackaging and reselling to parts reclamation and recycling. With the secondary, discount market for products continuing to grow, there are even more reasons to think about returns as revenue opportunities.
If the company knows about products which will be returned and the potential place where it lands, then it becomes easier to deal with regulatory issues and evaluate returned stock for possible secondary sales channels. There are also other beneficial byproducts to disposing of products, such as avoiding excess inventory carrying costs, minimizing taxes and insurance and managing staff levels.
Mishandled or completely misplaced returns affect the efficiency of any reverse logistics process, but it also means that products could end up being a total loss for a company instead of an opportunity for resale, or a spare parts resources.
Warehousing is crucial
The need for efficient reverse logistics just can’t be brushed off and warehouses have always an important role to play in the process. Process involved in reverse logistics like return, processing, repair and replacement of products create a huge impact on customer services. Warehouse is the nerve center for al above mentioned operations.
Few important roles which are performed in the warehouse include: streamline turn-in procedures; route items with an eye to what happens to them next, and; integrate the forward and reverse pipelines
Bill Tyng, sytems consultant with Forte Industries of Mason, Ohio, gives some insights on the warehousing business of the international market.
“One hundred percent of WMS packages were designed to get the stuff out, they also had to be adapted to get stuff back in,” he says.
The situation is more critical in Europe where retailer policies tend to be more relaxed and returns can account for 30 percent of a business.
In the United States, reverse logistics is getting more attention and had also given rise to a number of niche vendors offering software or services specifically to handle returns while the larger integrated vendors are also scrambling to adjust.
“Reverse logistics can be the black hole of your warehouse,” says Mary Haigis, Chief Marketing Officer of Optum Inc. in White Plains, N.Y. “The return process involves huge inefficiencies, but they are manageable with the help of the right technology and processes.”
She cites an example of a large retailer and customer of Optum that piloted a reverse logistics application at a pair of its DCs throughout the Christmas Season.
“The company typically has a high rate of return but realized incredible savings and efficiencies with the help of a formal system,” she said.
The generous return policies offered by most major retailers these days ensure there are always a given percentage of returned products working their way up back to the supply chain. As such, reverse logistics also has different names like Aftermarket Logistics, Retrogistics, or Aftermarket Supply Chain.
Business owners have to deal with the pain of reverse logistics and its importance is further magnified in the e-commerce business. Most warehouse managers consider returns a necessary evil, thus, assign a low priority in reverse logistics. This can often result in inefficient supply chain practices such as ordering new inventory while returned products are still kept in the warehouse.
Reverse logistics could certainly deliver profits given the right attitude and planning.
With the right digital tools and clever ways to leverage different strategies that generate business, Swiss WorldCargo capped off 2018 with high volumes and revenues despite a slowdown on global trade.
Ashwin Bhat, Head of Cargo at Swiss WorldCargo, the airfreight division of Swiss International Airlines formed in 2002 as capacity wholesaler for airport-to-airport cargo, says the company continues to exceed expectations and is on a path to further digitalize its systems to ensure seamless connectivity across continents.
“While Swiss WorldCargo does not disclose its cargo sales and volumes, we can proudly state that 2018 was a successful year for us. We are continuing to exceed our own expectations by leveraging different strategies that allow us to successfully meet and satisfy the needs of our different customers worldwide,” Bhat told Air Cargo Update, noting that the company’s focus on quality service and customer satisfaction helped its team end 2018 on a good note.
The Zurich-based SWISS has at its disposal an airfreight network to over 130 destinations in more than 80 countries with access to daily truck connections between key business centers across Europe and other countries.
Going Digital
A trusted name in belly hold capacity, SWISS offers one of the most modern fleets in Europe, and a wide-range of products, including truck services.
“On long-haul flights, we operate a mix of Airbus A340-300, Airbus A330-300 and Boeing 777-300ER aircraft. For short and medium-haul flights, we offer a mix of Airbus A321-100/200, A320-200, Bombardier CS100 and CS300 and A319-100,” said Bhat.
“Our product portfolio is wide-ranging, and intends to meet diverse and often-times complex shipping and handling needs. Our selection covers different customer needs: a temperature-controlled supply chain, as well as security, reliability and speed. Our full product offering consists of SWISS X-Presso, SWISS Valuables, SWISS Celsius Active, SWISS Celsius Passive, SWISS Celsius Passive Solutions, SWISS Argus, SWISS Mail and SWISS General Cargo,” he added.
The cleverly named SWISS Argus is one of the company’s added value services designed to protect the entire supply chain and all products along the way.
“It offers increased theft protection through special storage options, as well as attendance and security checks prior to departure as well as after landing. It also provides secure product handling through the entirety of the supply chain, meaning that customers are able to handle products which they otherwise would not specifically be able to,” Bhat briefly explained.
The SWISS cargo chief said the company is bent on scaling up its digitalization programs to improve customer service/satisfaction, make the shipping process faster and enable more transparent access to company products and services.
“Digitalization will continue to play an important role at Swiss WorldCargo, and we remain focused on developing different customer-focused digital tools. Technology allows us to enhance our products and services offerings, while helping us to meet ever-evolving customer and industry needs,” he said.
For instance, Bhat said Swiss WorldCargo is implementing IoT technologies on its systems to improve tracking information. The company is also increasing its eAWB penetration as well as participating in different tech-inspired initiatives at IATA like eCargo, Message Improvement (MIP) and Electronic Consignment Security Declaration (e-CSD), to which the company is a pilot carrier.
Bhat explained the company puts high importance on its customer service and digitalization is at the core of fulfilling this to ensure fast and efficient transactions.
“As mentioned, we will focus on continuing to leverage technologies that can enhance our products & service offer, with the clear intention of meeting ever-evolving industry needs. As customer service is so important to us, we will also continue our focus on improving transparency and insights for our customers everywhere, without losing the focus on the core USPs of Swiss WorldCargo,” he said.
“And of course, we will seek to continue innovate and to develop the right services and solutions. Along with seeking ways to move ahead and developing new tools that help us and our customers to benefit and progress,” he added.
Modern-day cargo
The multibillion e-Commerce industry continues to change the global business landscape with direct impact to specialized sectors like air freight and logistics.
Bhat said SWISS is prepared to make the necessary adjustments to fully embrace this growing global market.
“We continue to see the growth of e-Commerce. While certainly not a new trend, every year we see an increasing market demand for the transportation of ecommerce goods – either as mail or as cargo. This, in turn, causes a demand for high quality, reliable and fast transportation,” he said.
“At Swiss WorldCargo, we will continue to leverage our extensive network and recognized Swiss quality, which is how we believe we can add value. We will continue to serve as a link between the various parties of the e-Commerce logistics chain, providing our customers with the necessary tools for sustainable growth,” he added.
But along with the rise in demand, comes the sustainability challenges. Bhat said SWISS WorldCargo is pinning its hope on technology to help solve these problems which include sky congestion and limitations on airport infrastructures.
“Within Swiss WorldCargo, we are developing a number of measures using the potential of technology to challenge this issue. Of course, we are also able to continue to benefit from our hub, specifically because of our short connecting times and quality-focused ground handling agents,” he noted.
Ashwin Bhat: The airfreight specialist
A chemistry graduate from the University of Mumbai,
Bhat entered India’s vast workforce as a cargo accountant at a subsidiary of Swissair. He stayed with the company for seven years before moving to Swiss Cargo AG which led him to his current role.
Bhat has been with SWISS since 2002 and climbed his way up the corporate ladder serving in various capacities and management roles, most notably as head for the Americas, the Middle East and Asia.
A chemistry graduate from the University of Mumbai, Bhat entered India’s vast workforce as a cargo accountant at a subsidiary of Swissair. He stayed with the company for seven years before moving to Swiss Cargo AG which led him to his current role.
Three years since his appointment as Head of Cargo at SWISS, Bhat has proven his capabilities to sail the company through good and bad times, living up on its name as the top belly carrier for pharmaceuticals and other specialized cargoes.
Last year, SWISS announced its total QEP (Qualified Envirotainer Provider) accredited stations have reached 36, an industry distinction and an assurance in the ever growing global pharmaceutical industry of its commitment to provide best-in-class services to its customers, which was further substantiated by receiving the IATA CEIV Certification.
Bhat who continues to steer SWISS to growth briefly describes their markets as follows:
Middle East
Swiss WorldCargo offers daily flights to Dubai and Muscat, giving us a strong presence in the region and allowing us to carry out shipments of high-value goods.
Asia
Swiss WorldCargo offers regular flights to Singapore, Hong Kong, Beijing, Shanghai and Bangkok, in addition to Phuket and Saigon seasonally. Additionally, SWISS serves Tokyo, Mumbai and Delhi which rounds out the presence in Asia. With these flights, we are able to connect major industrial and financial centers throughout Asia with Switzerland.
Europe
We fly and truck to all major destinations in Europe. This offers seamless international connections through Zurich through via hub (which offers the fastest connection time in the industry). It also offers direct city-to-city transport from Zurich to different cities on the continent.
Africa
We cover many major destinations – Johannesburg, Dar-es-Salaam, Nairobi, Cairo, and others through seasonal capacity (Cape Town, Malé), through which we can showcase our strong traffic in the region. We focus on carrying out various high-value products from the region both to/from Switzerland and to/from Africa & other destinations throughout the world.
Americas
The Americas continues to be a major market for us, and we offer daily services to Miami, New York, San Francisco, Los Angeles, Boston and Chicago year-round. We are focused on a variety of shipments that cover this region, and further destinations can be reached via a dedicated trucking route, which complements our network.
Steven Verhasselt, Vice President Commercial at Liege Airport, travels approximately 250 days a year, leaving him not much time for leisure but lots of opportunities to connect with people.
The Belgian national who lives in Hong Kong since 2003 says he travels at least once a month to Brussels to meet up with his team. And the rest of the year, he spends flying to different cities to speak with clients or to represent the company in various business activities or speaking engagements.
This interview was done in Dubai on January 30, 2019, at the conclusion of the two-day Middle East Air Cargo & Logistics Conference where Steven was a speaker and moderator. He’s back to Brussels the next day before flying to Manchester in the UK and then to Frankfurt.
Before the week was over, Steven has traveled back to the Middle East before returning to his family in Hong Kong in time for the February 5 Chinese New Year.
“I travel 250 days a year for work,” Steven told Air Cargo Update. And with Liege’s major clients—FedEx, Ethiopian Airlines, Qatar Airways Cargo and Air Bridge Cargo—spread across continents, Steven is required to travel constantly which may even be heightened with his company involved in the Alibaba project in China.
And when he finds time to holiday with his family, Steven says he ends up spending it mostly on the sofa to catch up lost sleep.
“While on holidays, I spend it mostly on my sofa,” Steven shared with laughter. “Seriously.”
A graduate of the Ehsal Business School with Master in Business Administration, Steven began his career as an investment analyst mainly tasked to do reports on aviation and air freight.
“I came in the industry 20 years ago. I was at that time working as an investment analyst for an investment firm. Those were the time when Belgium still had SABENA and everything was wonderful and beautiful,” Steven shared. “SABENA is the national airline of Belgium that went bankrupt 20 years ago (1923-2001). As an investment analyst, I was asked to analyze the feasibility of SABENA as a cargo carrier and I was captured by that project, traveled the world.”
Though the SABENA cargo project never made it, Steven opted to stay in the industry and ended up in Hong Kong where he met his wife.
Whenever he’s free, Steven plays football, voluntarily coach the HK Veterans and Amateur teams.
“When I’m not busy, I’m a football addict. I play. I coach. I watch. During holidays, I go for scuba diving, play golf or ski,” he shared.
And despite his hectic schedule requiring constant traveling, Steven is loving more the industry which he says connect him with people and the real world.
“Talk to people. Meet people. Stay informed. It’s all good to study and to read. That’s all great and well. But to me, staying connected with people and the real world, make this industry so unique,” says Steven when asked for advice on how to keep up with the industry.
“There’s no industry like ours because we’re all global connectors.”
Vantage Airport Group announced a change in leadership as Heather McCarley will no longer be Managing Director of YKA.
With more than 25 years in the aviation field, Ed Ratuski will assume the role of Managing Director as McCarley accepted a job in the company’s corporate office.
Ratuski previously served as Airport Operations Manager at Kamloops Airport from 2010 to 2016. He was also a member of the operations team at LaGuardia Gateway Partners, the Vantage-led organization that is redeveloping the Central Terminal B at LaGuardia Airport in New York.
“I’m looking forward to returning to the Kamloops Airport team with a fresh perspective from my role at LaGuardia Terminal B,” said Ed Ratuski. “It’s an exciting time for Kamloops Airport and the community it serves, and I am glad to continue supporting the safe, efficient and friendly operations that our airport is known for.”
The change comes after YKA serviced a record 351,631 passengers in 2018, 10.6% more passengers then they served in 2017.
“The Kamloops Airport Authority Society and the City of Kamloops want to recognize the impressive accomplishments of the Kamloops Airport under the leadership of Heather McCarley. And we couldn’t be more delighted by the return of Ed Ratuski, who we worked very closely with prior to his move to LaGuardia,” said Ken Christian, Kamloops Mayor and Chair of Kamloops Airport Authority Society. “We look forward to continued advancements in scheduled service and leasehold development at the airport with Mr. Ratuski at the helm.”
Cadence Aerospace, a provider of highly complex aerospace components and assemblies to commercial and defense customers, announces today the appointment of Heidi Gutermann as Group Controller, Cadence Aerospace–Aerosystems. With Centers of Excellence based in the US and Mexico, Cadence Aerospace serves the world’s leading manufacturers of aircraft, aerostructures, aeroequipment and other defense platforms.
Ms. Gutermann joins the Cadence Corporate Finance team and reports to Joyce Pae, Chief Financial Officer for Cadence Aerospace. In this new role, she will support both the Cadence Aero Design and Manufacturing and Tell Tool Centers of Excellence—delivering strong accounting and financial reporting, overseeing and monitoring an effective control environment, and providing strategic information and counsel to the Company’s Executive Leadership and Business Management teams.
“It is with great excitement that we welcome Heidi to Cadence Aerospace, knowing that her capabilities and proven financial leadership will have a strong and strategic impact on our business operations,” said Thomas C. Hutton, Chief Executive Officer of Cadence Aerospace. “She is a skilled executive with a demonstrated ability to partner with companies to drive improvements in working capital and margin expansion. By extension, her leadership and financial acumen will serve to strengthen our ability at Cadence Aerospace to provide an even higher quality of customized service to our customers while helping our Company continue to grow and become more profitable.”
A results-driven, senior financial leader with more than 15 years of progressive experience in manufacturing, aerospace, commercial services and big-four firms, Ms. Gutermann brings to Cadence Aerospace a proven track record of delivering and driving strategic initiatives focused on increased profitability and cash flow. Her capabilities and expertise across a comprehensive range of financial disciplines—reporting and analysis, monthly close, operating plans, budgeting and forecasting, financial controls, accounting and acquisition and integration of newly acquired companies—add value and complement the Cadence Aerospace mission: maintaining a continuous focus on operational excellence and achieving success with business partners through active engagement, aligned manufacturing and sourcing strategies.
Ms. Gutermann joins Cadence Aerospace after serving Stanley Black & Decker, a Fortune 500 world-leading American manufacturer of industrial tools and storage, commercial electronic security and engineered fastening systems, as Assistant Corporate Controller from 2016-2018. In this capacity, she provided oversight and governance of all aspects of accounting and controls for Stanley Industrial and Security businesses and was involved in all acquisitions and integration for newly acquired businesses. She also led the recruitment, training and career development of talent for segments of the organization as well as played a key role in the facilitation and rollout of a new Enterprise Resource Planning (ERP) System for the company.
From 2004 to 2016, Ms. Gutermann held positions of increasing responsibility at United Technologies Corporation (UTC), an American aerospace manufacturer with global service operations. She began her 12-year tenure at UTC as Supervisor, Manufacturing Accounting and was responsible for the Inventory Control Group and Manufacturing Operations. As Manager, Business Support and Controls during 2007-2010, Ms. Gutermann provided technical accounting support on newly issued accounting guidance, supported due diligence for mergers and acquisitions activity, and led the process excellence initiative for corporate finance and accounting. She later served the company as Controller, Joint Venture Pratt and GE Aviation and successfully led the transformation of the finance and accounting for the joint venture, delivering a new forecasting model for the business and supporting the sales organization—all while developing strong relationships with both parent companies to meet all financial objectives. Her most senior role with UTC was as Director Operations Finance during 2015-2016, and in this position, Ms. Gutermann led the charge in delivering the annual operating plan for aerospace, turbines manufacturing business and subsidiaries.
She served Northeast Utilities/Eversource, New England’s largest energy provider, as Senior Rate Case Analyst during 2001-2004 and began her career at PriceWaterhouseCoopers in 1998 as an Audit and Business Assurance Associate, later serving the multinational services professional network as Tax Service Associate.
Ms. Gutermann completed the Executive Management Program at the University of Virginia in 2012 and also holds a Bachelor of Business Administration in Accounting from the University of Massachusetts.
Technology has made the world smaller and faster.Real time communication with people from all over the world at different time zones through phones and gadgets
