Stan Wraight, former air cargo executive now president & CEO of Strategic Aviation Solutions International warns Airlines that they must change their strategic approach to cargo, or they will lose high-yield traffic and be reduced to commoditised business.

He also says that, if carriers have to play to their strengths and offer a product the market wants, they should avoid a repeat of the loss of the express business to the integrators.

“Airlines have got to be on the value side,” he said.

Airfreight rates soaring and pushed airline yields to record levels due to the shortage of belly capacity, but back to equilibrium should re-establish the historic trend of declining yields.

Despite their natural advantage, airlines are not equipped to take advantage of the opportunities for growth, notably the explosive momentum of e-commerce, said Mr. Wraight.

The integrators have stolen the march on airlines in the express segment, although the latter have a time advantage. Flying straight straight between points, they can offer transit times that are impossible for any competitor, be it integrator or e- commerce, to match. They could charge significantly higher rates, if they positioned themselves to take full advantage of this, argues Mr. Wraight.

Also he believes that, where they fall behind is on the ground, owing to fragmented and poorly organised processes that fritter away this time advantage. This stands and falls with the airline-handler relationship.

According to MrWraight, handlers are regarded as levers to reduce costs, other than partners to create value and speed up flows. Basically, the  integrators handling costs are about two or four times what airlines are playing. Also he states that, the elevated yields would allow it to reward the handler adequately and still make a larger profit than today, if a carrier concentrated on high-margin business and charged accordingly. “You have to have ground services equal to, or better than, Amazon, UPS etc. Help the handler invest in equipment and processes. Or self-handle. You need dedicated staff, dedicated doors and to get customs brokerage. Organise your ground services to process your cargo within hours, not within days,” he said.

To do that, a second vital element has to come into play a more fluid and faster flow of data. The station at the receiving end can deploy its resources adequately, with all manifest information and other relevant details transmitted in advance, have sufficient staff ready to receive the cargo and set up a truck slot for pick-up.

According to MrWraight, the nascent concept of data corridors are regarded as the most promising conduit for this. He finds a better way that is Cargo Community Systems (CCS) which have been gaining traction in recent months, while individual operators can establish fast one to one flows.

“If you prepare, you know what’s coming. There are no surprises. You can plan in advance,” he said.

He also mentioned that, this can be applied to virtually all high-yield cargo, and the faster transits would render fancy and costly set-ups for special products largely irrelevant, because the cargo would not dwell at the airport.

Not only that, the infrastructure developed to  manage the high yield traffic would also go some way towards minimising the cost of managing general freight, he mentioned.

MrWraight said, if this is the holy grail for non stop point-to-point connections, transit cargo was a matter of clear understanding of the target market.

You’re probably in the 48-72-hour market, which works for certain commodities and customers,  if you compete with non-stop, or with a train, you’d better identify what markets you compete in.

“In any case, you should start handling transits the same way you handle passenger baggage. For that you need complete transparency. That’ll allow you to do things like arranging planes to be parked next to each other at the gate,” he said.

The alternative is dire according to him. It’s not an option for many airlines to remaining focused on commoditised business.

Even though MrWraight’s strategy is convincing it faces a significant obstacle to adoption. Cargo is relegated to the lower echelons of the organisation and struggles to find an ear at the top at most passenger airlines.