Obviously, CHAMP Cargosystems doesn’t feel like being a dinosaur, facing extinction sooner or later. Instead, the management of the Cargo Management System (CMS) provider assures that the
company is in a comfortable situation. In this context they refer to their phenomenal 85 percent market share in messaging, accounting for 53 percent of the global market share. Two thirds of
their customers belong to the top 25 leading carriers, such as Singapore Airlines, Cathay Pacific or Japan Airlines.
Impressive figures indeed, announced by CEO Arnaud Lambert on several occasions. But – caution – they are deceiving as well. Because they conceal the fact that the market position of the
SITA/Cargolux daughter is increasingly challenged by agile newcomers. This gradual loss of significance is caused by a multitude of mutually depending factors, particularly management
shortcomings and insufficient supervision by their equity holders.
These votes of no confidence should irritate the executives in CHAMP Cargosystems’ Luxembourg headquarters and the company’s stakeholders SITA (51%) and Cargolux (49%) as well: Turkish Airlines,
Asiana, Lufthansa, AF-KL, IAG, Air China, Korean, Etihad, American Airlines, United Airlines, Air Asia, Luxair and some other carriers decided against CHAMP’s Cargo Management System (CMS)
following tenders. Instead, they signed contracts with competing IT providers such as Accelya, Accenture, IBS, SmartKargo (QID Technologies) or Hermes. Other irritating example: Qatar Airways, a
once loyal CHAMP supporter, asked Wipro to develop a new Cargo Management System by blending CHAMP’s product Cargospot and Emirate’s Mercator Skychain. The result is “CROAMIS” built inhouse in
less than three years and meanwhile also in the design stage at LATAM Cargo as the Latin American carrier confirmed to CargoForwarder Global.
On way south
Obviously, a growing number of airlines is increasingly losing confidence in CHAMP’s CMS. The once proud company, so it seems, is on its way south.
But what are the causes of this visible downfall? They are numerous, not countable on the fingers of one hand.
The first alarm bells started ringing in 2008 when CHAMP’s management, failing to replace or re-develop eCHAMP in due time decided to acquire IT provider Softair AG. A company that tailored their
products before 2000. Their tools had not been designed to be extended over a long period of time especially for serving large tier 1 carriers such as Cathay Pacific, for instance.
Cargospot successively required CHAMP to dramatically increase the number of developers to maintain and extend the CMS’s functionality inherited from Softair. However, bugs remained a recurring
issue affecting many if not all accounts as evidenced by CHAMP customer satisfaction surveys
Next shortcomings
The next mistake made is still ongoing, because CHAMP missed replacing their aging system eCHAMP first then Cargospot with a new state-of-the-art IT platform easy to manage and handle. There were
some replacement initiatives such as ‘Cargospot NextGen’ for instance, but they were never realized. In contrast, two modules (Booking & Quote) were finalized but the management failed to
fund these products.
Given this situation, they knocked at Luxembourg government’s doors, asking for state aid of estimated three million euros and addressed shareholder Cargolux as well, asking for submitting a
double-digit euro amount, sources close to the case confirmed to CargoForwarder Global.
While CV rejected any financial support, Grand Duchy’s politicians approved the transfer of taxpayer’s money. However, despite these public subsidies for innovation, CHAMP failed to come up with
a final solution. As the government asked them what happened with the subsidies and what innovations were achieved, they had nobody left to answer as the CIO/CTIO had exited the company and a new
Innovation Manager was brought in as replacement. This they told Luxembourg’s government, reasoning their failing of developing new IT tools this way.
A lame excuse by the top management to secure further state subsidies, internal sources told CargoForwarder Global.
Personnel merry-go-round
This all was accompanied by internal tensions and changes of leading staff, for instance at VP and Senior Manager levels, e.g. VP Sales & Marketing, VP Sales Asia-Pacific, VP Customer
Services, CIO, CTIO or HR Managers. As result, those who departed were replaced by some “softer” ones. Together, they kept managing the company in a way that guaranteed a "sufficient" turnover
increase (roughly 10% year) and profit (estimated €4 to 3 million) to satisfy the shareholders and to also guarantee their annual bonus and privileges without too much effort.
Meanwhile their financial situation is deteriorating evidenced by the fact that CHAMP’s sales pipeline is relatively empty for more than one year with only small deals (Ground Handling companies)
on the hook but no tier 1 or big revenue generating new accounts acquired.
It can be assumed that the many personnel changes impacted the company’s entire strategy. But as the Executive Committee keeps on generating the EUR +/- 4-3 million profit annually, the
shareholders never challenged them too much, not exactly knowing what was happening behind closed doors: concerning the strategy, solutions, product development, and optimistic figures
communicated by CHAMP’s management. However, what the big shots did not tell the public: In Luxembourg, over the last 5 years, at least 12 of their managers and staff went into serious burnouts
due to the “impossibility to achieve or deliver” objectives set by the Executive Committee. This went silent and no one of these fallen “CHAMPions” was ever supported, credible insiders confirmed
to CFG.
Mounting frustration
With Cargolux’s decision to in-house all IT services related to non-cargo activities, the airline exclusively confirmed to CargoForwarder Global, a bright light was cast on CHAMP’s strategy and
market image. A source close to the case told CFG confidentially that the decision to re-insource the ERP / infrastructure / helpdesk / mail and some other functions is mainly due to “high
frustrations” on Cargolux’s side with their long-term CMS provider’s price and product quality.
However, CV’s main decision for re-integrating core IT services is obviously based on achieving a higher business process efficiency and cost reduction as part of their vision 2025 strategy, as
outlined by their communications department.
Rounding things off
In view of the many deficits and bad decisions taken in recent years, as credible sources claim, it would be recommendable the CHAMP managers sticking their heads together fast for modernizing
their product portfolio, presenting a realistic roadmap and improve service quality to regain customer confidence in order to overcome the stagnation.
However, this could well remain a pious hope since there is little indication that the CMS provider’s execs feel committed doing so. Instead, they seem to believe that “business as usual” is the
more promising strategy, in connection with scandalous attacks by their CEO defaming critical media that touch CHAMP’s sore spots, as experienced by this publication.
It remains to be seen if this circle-the-wagons-mentality is helpful at the end. The dinosaur's fate should serve as warning.
Their shareholders SITA and Cargolux, particularly CHAMP’s 500 staff, of whom 200 work in Manila, Philippines, deserve better. They all might eagerly want to know which way the Luxembourg-based
CMS provider will ultimately go. Currently, CHAMP resembles a plane without pilots on board.
Asking Amazon’s Alexa for answers doesn’t help either since this innovation never worked but turned out to be just a marketing buzz launched by CHAMP managers.
This we can easily evidence if so desired by CHAMP CEO Mr Lambert.
More in: CHAMP Chief Raises Heavy Reproaches Against CFG, published in this CFG issue.
Write a comment
News Reader (Sunday, 09 December 2018 22:54)
Highly interesting follow-up on CHAMP. Delivers lots of insights.
Referring again to your report published a week ago and the reaction by some other media it looks to me that articles published by Loadstar and AirCargoNews are more like "sponsored content" missing perhaps a "real" journalistic work. Not really masterpieces of investigative media work.
Kudos, you CFG guys do a great job!
Ku Khulainn (Sunday, 09 December 2018 23:33)
Hi
Here are a few more interesting points, not mentioned in your report but worth to be aired.
The Manila office "came with" the purchase of Softair (Cargospot), who had 2 dozen of what is called "code monkeys" in IT jargon (btw not meant in a derogatory way) in Manila , for of course cost control reasons, wrong reasons in my eyes as the quality isn't there and the huge difference in culture and mentality makes it very difficult to communicate.
Anyway, CCS started to hire massively over there, that being the only reason there are so many staff at CCS , the historic former CV IT always counted roughly 120 members (consultants included).
The turn over in Manila is an average of 12 months , that allows them to claim their bonus and claim another one by facilitating the hiring of an acquaintance, they are then gone to another company with the amassed exp and training provided by CCS.
CCS has a deal with the ministry or Phil's gov, as far as I know they pay either no or very little taxes, which are anyway not that high over there. Offices look more like classrooms , rows of benches/desks, just like in the Lux office btw, at a time they even shared 1 phone among 4 staff.
Most staff hasn't had trainings since 2007 or 2008 , others none since ... well forever.
All in the process of maximising revenue, after all why train people who are CV FTE's (full time employees), payed a fixed amount per month that was locked in an SLA and didn't allow for charging CV. So no trainings.The cash just drops at the end of the month.
The current "situation" impacts 40 people within the Lux staff (30 %), 24 will be taken back into CV, nobody knows exactly what the conditions will be and what they will do according to info from a few of them.
Some have been let go as soon as late 2016 and early 2017 as the situation with CV was getting worse and worse, starting with all consultants hired for CV, until CV finally decided to announce the end of relations with CCS, effective 31/12/2019, coinciding with the end of the latest SLA, that was just a few months ago, early summer if I remember right.
The first SLA's were signed for much longer periods and had dwindled to one year in the last 4, so this nonsense spewed about new strategy and continuing partnership with CCS is utter bollocks. CV had requested a few changes in the SLA that allowed them to work with other suppliers years ago, prior to that change they were bound to work exclusively with CCS, and even with the new clause in place , CCS is the company billed for the third party supplier services, who then rebills CV with added 10% on top, isn't that easy money ?
Another example of the parasitic relationship, CV used a fax service useable through their email interface that was later dropped, the billing went on for 4 years until a director asked about that particular service and server.
SAP versions were not up to date, making some implementations by third party suppliers impossible, after CV had it's systems checked , it came out the versions were 3-4 versions behind, hence the issues. Licenses and upgrades had been billed to CV though ....
Hardware that is already on the brink of collapsing due to age and too high loads, gets updated to lesser capacity and / or performance, but billed as higher and better with all the ensuing consequences on quality and service.
And there is Luxair: CCS somehow managed to get to host their new email infrastructure, less than a year later, after roughly 50 major downs, one of them leaving LG without email for 2 DAYS !, they eventually slammed the door.
That for the exact same reasons of cost cutting, shared hosting then billed as brand new top of the line service and hardware.
So many more things... it's just endless, every company has issues but this one trumps most of them and that in an evil way, and the victims are the ones at the low end of the scale in both companies.
The Messenger (Monday, 10 December 2018 01:36)
Yes, messaging is still a stronghold of CHAMP/Traxon and its majority shareholder SITA and they certainly defend it well. Since going to market many people wanted to used alternative modes like EDIfly (also from LUX), while CHAMP kept barring such cost-saving technology to the vast majority of their clients through prohibitive pricing, obviously to serve its 51% shareholder better than the minority shareholder Cargolux with 49%. Even internally cost savings for SITA messaging would have been realized by introducing a mechanism like EDIfly, delivering a better cost base to the CHAMP service infrastructure by avoiding excessive SITA charges for CHAMP and their clients.
Loadstar Alex (Monday, 10 December 2018 15:02)
Hi news reader,
(Sadly perhaps!) it’s not a sponsored post. We linked to Heiner’s story, which we thought was very good, but Cargolux reached out to us, as they wanted to make it clear that they were not ditching Champ, just using its IT for core cargo activities only. Which we duly reported, in the interests of accuracy. That’s quite different from this revealing new article by CFG – and agreed, kudos to CFG!
Alex, The Loadstar
Heiner Siegmund (Monday, 10 December 2018 16:53)
Dear Alex
Thx for post, clearing up any misunderstandings.
Like to return kudos. You and your team are running an excellent publication.
Good fortune for you and your fellow (UK) citizens in tomorrow's Brexit decision in plenary. Cross my fingers that the ultimate outcome will be positive with your great nation remaining instead of leaving the EU.
Kind greets, H
F Kremer (Monday, 10 December 2018 17:12)
FYI
CCS shares this building with another 15-20 companies , even CV had a few depts in there a a time
Ku Khulainn (Monday, 10 December 2018 18:34)
Further to my previous comment:
Here's an anecdote: CCS hired 3-4 consultants to handle SAP needs for CV. They were all from the same company called e-kenz, located in the same building as CCS and whose head/member of the board is none other than *drum roll* A. Lambert. Isn't life funny sometimes.
He was so proud the day prince Guillaume came to visit the company, giving orders to his underlings and stormtroopers.
The former CEO performed a few similar stunts too. He opened a hotel on the French Riviera with a long time, overpaid consultant, just after CV signed off the sale/transfer of 51 % of the CCS shares to SITA.
Coincidence ?
A Reader 2018 (Tuesday, 11 December 2018 10:02)
Hi
Excellent follow up @Heiner and it hits the nail on its head.
CHAMP is far away of being the leader in terms of market shares within cargo solutions.
And the way CEO A. Lambert is arguing is looking backwards - that's not how you LEAD a business. The market will further tell the truth and lets see how long CV and Sita keep their shares.
I personally believe that CHAMP will be acquired within the next two or so years - not because of their quality but purely to absorb the remaining customers.
Ku Khulainn (Tuesday, 11 December 2018 10:33)
Yup , saw the added pain yesterday :)
Just remembered yet another one, there are so many I loose track.
Here is another biggie:
Back in the days when the Luxairport entity was created to manage the brand new terminal (2008) and all services linked to the airport PAX facilities (finally out of the hands of LG, who themselves were quite hhhmm let's say protective of that part of the business, different story though), there was of course a need for a brand new IT infrastructure.
For months CCS bragged about how that was a done deal, who else could win the bid and so on.
Well, even with the help of CV management and SITA who wanted to place their airport in a box solution, they failed miserably and the deal went to Unisys (2008).
Another miserable lie was the CargoItalia, moto (not Cargolux Italia) "deal", when the former CEO made public that CCS had won the bid when it was IBM Italy who procured all the hardware and knowledge. That company didn't last anyway , quite a farce, a bit like another one called CargoB, operating from BRU who hosted a few servers with CCS, it didn't last long.
As for the CV staff view, it has been the same since the start, to them CCS are parasites and thieves.
Only the fact that CCS staff still got a bonus when CV stopped it for a very long time (and there again is much to say about why or why not), made them very bitter.
When CV started to ask CCS to make efforts on their pricing, one of the first aspects of support that changed was a total shift in helpdesk and technicians availability. Helpdesk wasn't allowed to help people much anymore and turned into a ticketing desk. Users were asked to open their own tickets via web interface, and were only allowed to call the helpdesk if it was business critical or if they had no other way to get a ticket open.
The cases are then sent to, you guessed it, the Philippines, where it usually bounces around for 2 - 3 weeks, with Manila (GMT +8) staff trying to get in touch with CV staff in LUX (GMT +1), see what I mean ?
When they actually get to talk to users, the issue isn't resolved and is then sent back to LUX for CCS technicians to go onsite and solve the issue, usually in a matter of minutes and/or a few clicks.
A lot of users actually rather live with an issue, as long it is not a major one than loose all that time for nothing.
Funny detail, the current head of the LUX technicians team is a Philippino, in the Philippines, how is that supposed to work ?
The Super Champion (Tuesday, 11 December 2018 12:57)
As such the articel above is the best ever written summary which can be testified by most of the ex. Champoins.
All comments in all aricles missed the following:
- Railway registry failure
- Wincargo development failure to replace Mainframe
- Nuntius Project failure (new messaging solution even advertiesed in the press)
- OCF + OCP failures because of wrong/false/not aligned architecture
- Etihad next Generation Cargo failure (with Forwardmomentum)
On top a missleading Customer list. Lufthansa is only using a little message service. The most of the big Airlines are not using any misson cirtical core cargo services from Champ.
The show is always more important than the Service quality.
Bastards (Wednesday, 12 December 2018 22:08)
Thanks to you all white Knights commenting...All comments are really helping your former colleagues which are not responsible for your initial and growing frustration. Some statements have a certain degree of correctness, some are completely wrong.
No, we will not have lunch together any time soon...
Think about it....
A Reader 2018 (Thursday, 13 December 2018 06:25)
@The Super Champion.
I agree and especially your last statement. Further to call your employees CHAMPions does not at all reflect the feedback the market is giving.
Its also surprising to see Sita being so quiet on this issue. As the 51% shareholder one would expect a clear comment - to keep quiet is also a sort of communication. Might be CEO CHAMP last Christmas as a CHAMPion.
Ku Khulainn (Thursday, 13 December 2018 14:17)
For CV, what they don't tell you is at what cost they generate revenue/profit, and the consequence and repercussions of these methods/model, that is what is looming for 2019.
Any consequent change in fuel price will put the whole mechanism at risk too (45 % of fixed cost is fuel, add the planes and you are at 85 %).
Right now they can still make a buck by refuelling in Baku (which is on every eastbound flight plan), but it's not what it used to be after Dirk Reich messed up the relation with the Azeris. Different culture means different ways to conduct business, he didn't get that concept.
Reich is a nice guy though, as a human being, must be said.
Underpants (Thursday, 13 December 2018 18:45)
@Bastards
So which one of the management drones are you? Management... The people who are actually responsible for the mess you are in, go vent your frustration with them or maybe not, because you have been scared to death of loosing your job (perfectly understandable) or worse you actually believe the stories they tell you ? Denial... Check.
There is a third possibility, you are one of THEM :)
Here's why I think you are them in some way or another, for a start and I quote "your former colleagues which are not responsible for your initial and growing frustration"
There is one noteable mistake , that first and foremost, makes me say you are not a native English speaker, the construction of your text as a whole adds to my first point, but tell me, what is the "initial and growing frustration" part about? Weird, it sounds out of place and somehow inspired by something you picked from another text. "A certain degree of correctness", literal translation from French.
So it's a little bit true ? Comparable to being half pregnant ? Even if only 5% of the comments are factual, management still deserves to get pelted with vast amounts of fresh feces and that in a name and shame fashion, in public, for everyone to see.
It does not change anything, they are responsible.
Comments are so detailed that I cannot believe anyone could just make them up, unless they are some genius Sci fi writers, and let's agree at least on the following, these guys don't need to write comments to make a living. Way too detailed in fact to not come from some high ranking insider with access to a ton of info, let's face it, some of that content has to be company confidential and on need to know basis only.
Why would any lambda staff member deny things he/she wouldn't know about on a public forum like this one, unless they are not and know the truth ? Smells fishy to me mate, nah you must be one of them or their minions (BANANA) , you just couldn't keep quiet, caught red handed as you were and desperately trying to gain some sympathy from the staff by pretending to be one of the victims. A wolf in sheep's clothing.
Very similar in style and content with comments in last week's article, try harder, looks like you're up shit creek without a paddle mate.
Ex-CHAMPion (Friday, 21 December 2018 10:03)
Well in CHAMP Philippines there are people that need to be fired!
1. Lourdes Angeles - Managing Director
2. Incompetent Cargospot Helpdesk Support
3. LA Alatan - Technical Application Support Lead
4. The Director of Software Development
5. Those people that has no technical skills and just pretending that they knew Technical Things