“New normal” was the air cargo industry’s buzzword once Covid-19 began spreading internationally in early 2020, heavily disrupting aviation and global supply chains. However, since Putin's war against Ukraine, it has given way to a new term: “Change”. Yet, this word illustrates a certain helplessness, because “change” only signals a fundamental shift of parameters, but is empty of content and thus still arbitrary. It is therefore now the industry’s collective and urgent task to create new structures, a framework for action, and promising perspectives in face of the turbulent times ahead. That is the summarized outcome of the Nordic Air Cargo Symposium, held in Copenhagen, Denmark, last Monday, 05APR22.
The meeting began with a dignified and appropriate gesture: Thomas Woldbye, CEO of Copenhagen Airport, asked the participants to stand for a minute’s silence in commemoration of the many war
casualties of the barbarian Russian assault on Ukraine.
In his welcoming address to the Nordic Air Cargo Summit, Lars-Gunnar Comén of Swedish event manager, Euroavia International, reminded the attendees that an incredible 909 days had passed since the last onsite European air cargo conference in Baku (Caspian Air Cargo Summit 2019). Participant opinion was positive: many interesting thematic highlights and opportunities for personal meetings on the fringes of the program, enabled by the well-planned agenda.
Logistics conferences need to reorganize
Change was probably the most frequently uttered word in the Copenhagen Radisson Blu Hotel’s conference hall. This, also with regard to the way freight conferences are organized. Traditional cargo events are a thing of the past. Social aspects, networking, and bilateral exchanges of information will play an increasingly important role in future meetings, predicted host Lars-Gunnar Comén, and Copenhagen proved successful in launching this new trend.
Crisis follows crisis, follows…
In addition to many one-on-one meetings and classic networking, the official program also tabled and debated a number of heavy topics. Recurring themes naturally included digitalization and sustainability. However, there was a great deal of focus on future issues, inspired by the Churchill quote: “Never let a good crisis go to waste,” as Max Knagge, CEO SAS Cargo, reminded in his short presentation. Lars Kongsgaard, Head of Air Freight EMEA at forwarding agent, Scan Global Logistics, pointed out that, in this case, it is not a single but a continuing chain of crises that the industry is having to deal with:
MAR20: outbreak of Covid-19; FEB21: military coup in Myanmar; MAR21: closure of the Suez Canal when the megaship “Ever Given” stranded; FEB22: Russia attacks Ukraine; MAR22: new lockdowns in China (Shanghai and other cities)...
New era of uncertainties
The disruption of international supply chains, record oil and fuel prices, inflation and higher living costs in most countries are visible consequences of these crises. In other words, a newer normal is about to replace the former new normal.
A radical change based on a single date: 24FEB22. Until that day, the industry relied on an established global, rule and value-based system of trade and contractual ties. This system has meanwhile been overthrown by one of arbitrariness, despotism, and ruthlessness. “What does this radical change mean for the global economy based on the division of labor, and especially for air freight operators? Where are the answers to this new scenario?” To this question, put forward at the Nordic Symposium by CargoForwarder Global, there were - if at all - only very monosyllabic answers echoed by panelists. In a personal conversation at the event, Glyn Hughes, Secretary General of TIACA, frankly admitted: “That was an extremely tough question for which we are currently still lacking the appropriate answers.”
In search of concepts
The general disorientation currently being experienced by the industry, was vividly described by Ashwin Bhat, CCO of Lufthansa Cargo: “When it comes to decision-making, we're no longer talking about periods of a year or a month, but weeks or even days.” The many crises leading to constant global changes, demand ultra-fast decision-making these days.
And this also became clear in Copenhagen: Air freight companies currently have more questions than answers in face of the new challenges, as freely admitted by TIACA official, Glyn Hughes, and Sebastiaan Scholte, CEO of Kales. “I have no idea which road will lead to [Covid-19] recovery,” Mr. Hughes stated, to which Mr. Scholte added: “The only certainty is the uncertainty.”
Agility and resilience are required
Yet, despite the state of shock, cargo airlines, forwarding agents, or airport managers are not paralyzed, just struggling to find adequate solutions to master the new challenges. “We are not talking about agility, we are living it,” emphasized Mr. Bhat. It is a general, but very credible response to the many challenges currently facing the industry. And, in the face of customer demand, the manager advised his peers: “We must deliver solutions, not only capacity!” How he envisions this was illustrated by a chart with the heading: Phygital Future. It implies combining a digital core with human expertise, leading to real-time and data-driven services.
Frank van Gelder of Pharma.Aero, and Anette Steenberg, CEO of Medicon Valley Alliance, among other panelists, delivered positive pictures. Frank emphasized the enormous flexibility demonstrated by the industry overnight, when urgent transports of medical and hygienic equipment, followed by vaccines shortly after, became paramount to weathering the Covid-19 storm. This flexibility and the rapid provision of solutions in the event of crises, by turning passenger aircraft into preighters, for instance, are outstanding features of the players involved in the supply chain, he said. Currently, pharma accounts for 2% of all air freight shipments moved globally, but measured in kilogram value, the commodity is top of the list.
Ms. Steenberg stunned many attendees in saying that the Medicon Valley Alliance is the largest bi-national (Denmark / Sweden) life science cluster in the EU. It provides 50,000 jobs, including hospitals, universities, and enterprises, and is a key contributor to tax revenues. The latter aspect is likely to increase in future because the dependency of Europeans on China produced Covid-19 hygiene products was a wakeup call. A strategic U-turn is key to gaining industrial autonomy. This requires active steps to re-shore important industries, including in China, Ms. Steenberg urged.
As far as digital advances are concerned, they are seldom driven from within the industry but mostly from the outside, regretted Fredrik Wildtgrube, CEO of Finnair Cargo. The players need to roll up their sleeves as quickly as possible in order to remain competitive against fast and smart disruptors such as Amazon.
Thanks to a variety of environmental measures, such as the installation of 1,200 solar panels on the roof of the cargo terminal at Helsinki Airport, Finnair Cargo will be CO2 neutral as early as 2045, rather than 2050 as targeted by IATA.
Addressing TikTok users
Finally, there was the issue of talent retention, and there too, the demand for a mindset change. “Stop talking about air cargo as being a ‘sexy’ industry,” exclaimed Glyn Hughes in his plea. “Instead, we have to convey the importance and values of our industry, and highlight the dynamic, its innovativeness, flexibility, and creativity in finding fast solutions when necessary. We need to address and attract the TikTok generation,” he recommended, with an envious glance at the thousands of followers his own daughter has. And looking at the male-dominated attendance in Copenhagen, he said: “Our workforce needs to become not only younger, but also more female.” This appeal by Glyn Hughes was general consensus among the attendees, and a main takeaway from the Nordic Air Cargo Symposium.
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